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

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ARCHIVED DISCUSSION FROM 11/11/1999
All times are U.S. Mountain Time

View Yesterday's Discussion.

Netking (11/11/99; 23:33:01MDT - Msg ID:18964)
Platinum / GOLDEN TRUTH / BEESTING
Platinum - "Platinum made a bearish reversal on Thursday, November 11, 1999 by rising to its highest price ($431) since a nearly identical spike on April 14, 1998 before closing with a net loss. A peak at this level is an annual event like the Halloween parade, and should be appreciated in a similar spirit. Mortgage your house and kids and sell short platinum, covering at $340. Platinum will see its steepest losses after its lease rates collapse, since the
money currently available from lending it is the only reason for holding platinum at this lofty price level."(S.Kaplan)

GOLDEN TRUTH - Golden words indeed Sir. I am an apprentice in the school of life...the more I learn, the more I realize there is still so much more to learn, but I am encouraged as I have an excellent teacher.

BEESTING - Yes there will be a major shortage of Gold down here. The media has done a good job. We had a Y2K simulation a while back here which was a non event. Most people expect the real McCoy to also generally pass without too much fuss.

Goldy Locks Guy (11/11/99; 23:05:41MDT - Msg ID:18963)
phaedrus
Hmmm....I can see your point to a degree, but I will have to say that I find the casual nature of this forum amusing as well as informative. I consider this forum a type of research/work and feel that if you can have fun while you work then so much the better.

The TownCrier dude is pretty kewl to me. I find his/her posts easy to read, entertaining and informative. There are some nights however when its late and I just skip over the "goofy" stuff to find the real "meat" for the day, but all in all, I think the more serious gentlemen like yourself, balances out the ones that like to have alittle imagination and fun and are just happy to be here.

Of course I wouldn't want things to get out of hand with sword swallowers and court jesters dancing around at every post but the tone of this BB as it is suits me just fine.

I've been a large player in the metals market and while I think I have a good sense of humor I can also see beyond the playful bantering to get the good stuff too. So, perhaps our clients can do the same.

By the way, I did post a poem about gold that I was somewhat proud of....I hope it wasn't one of the ones that you thought was really bad.....:)

In any case, I consider access to this place a blessing. And roll with the punches on the topics that don't peek my interest.

Oh well..that' my two cents.....I say "Say on good fellows..let us stuff our turkeys with gold nuggets and stove top stuffing and drink a briney tot to boot"

Goldylocks......(gee...hope my name is ok..) :)

beesting (11/11/99; 22:53:06MDT - Msg ID:18962)
For Al Fulchino
Al, I've been watching these Gold forums for over 2 years and this is the first time in my memory that a fabricated price has been posted.I stumbled over it by accident yesterday.
I used to get Barrons newspaper and it was posted in there.
Soooo in my humble opinion "fabricated" is the REAL price of physical Gold in large amounts. FORGET "SPOT" IT'S MOSTLY PAPER!!!!!...beesting

Goldy Locks Guy (11/11/99; 22:50:00MDT - Msg ID:18961)
Gandolf platinum

Hi...I'm just curious about your post....it's kind of in direct contridiction to the news concerning the metal...considering the alleged tightness in the market, russians etc....Unfortunately for me, I have a rather large position short right now and am getting the snot beaten out of me, so if your post has any merit to it, it would be great news.......

Comments about the near future of Platinum anyone?

GoldyLocks

Gandalf the White (11/11/99; 17:46:20MDT - Msg ID:18934)
Comment from SJ Kaplan on "Horse without a Name"
THOUGHT OF THE DAY: Platinum made a bearish reversal on Thursday, November 11, 1999 by rising to its highest price ($431) since a nearly identical spike on April 14, 1998 before closing with a net loss. A peak at this level is an annual event like the Halloween parade, and should be appreciated in a similar spirit. Mortgage your house and kids and sell short platinum, covering at $340. Platinum will see its steepest losses after its lease rates collapse, since the money currently available from lending it is the only reason for holding platinum at this lofty price level.

Simply Me (11/11/99; 22:44:22MDT - Msg ID:18960)
megatron/gold "limiter"
megatron:"if you look at the resultant output on a scope it looks just like the kitco graphs for the last few weeks. The trigger/threshold depends on the velocity of the incoming signal."
"another strange thing about this is that analog signals rarely look like that. Digital signals do, though. The only time analog signals mimick the square wave efffect is when the underlying 'pre' signal is of tremendous amplitude and velocity, causing instant limiting. Someone has a very serious 'look-ahead' attack time and ratio setting on their gold 'limiter'."

Thankyou for furthering the analogy. I'm trying to understand how a gold "limiter" might work in the same way as an audio frequency limiter. I spent a few years in a radio production room, so some of the terminology is familiar. But my experience is from the days when we used big reel to reel Ampex's and cutting blocks to do our editing. Got out of the biz just as digital was coming in.

The idea of "the velocity and tremendous amplitude" being the trigger for the limiting effect seems to fit. The chopped off peaks seem to happen at definite "lift off" points. At first they seemed to happen frequently, as though someone had the limiter set too low. Today's "chop" happened just as gold was about to reach $300. Isn't $300 where most of the Dec. Gold Calls are? It seems they've refined their limiter so that it's not so obvious to someone who's not watching daily.

As for a "serious look-ahead attack time and ratio". When I switch to the livecharts.com page and watch GC99Z in the "all sessions" mode, I can watch "bids" and "asks" go back and forth, and see the size of the deal before the settlement is made. Would I be paranoid to think that whoever might set a "limiter" on gold, might have a much closer and immediate view of the ongoing gold trading process?...and maybe even the power to "adjust" either the trade itself or the communication of the trade results (the output signal)?

Powerful or not. Whoever would make such a "limiter" so obvious must be desparate, or they wouldn't be doing something the likes of me could see! That's why I keep "rubbing my eyes" to be sure it's not an illusion. But it looks SO REAL!

If the "limiter" is real. If they (whoever they are) are that desparate. It's a better sign to me, than all the words I've read lately. IMVHO, our wait will soon be over.

Got your golden parachute packed? It's almost JUMP time!
simply me

Al Fulchino (11/11/99; 22:35:42MDT - Msg ID:18959)
Beesting ///and a comment
I shouldn't still be up. I checked back here and there was your post. Based on what you put forth, my first observation is that 15-20 dollars US is not a large amount at first glance. And I would follow with....does this "mark-up" increase or decrease based on price level of the actual bullion. I know of no historical charts reflecting this mark-up. However, I am sure someone who has a history of watching the market would know more. Also, are these two entities, the only ones fabricating the products? I am not sure this has ever been discussed on this forum. We talk about gold mines and banks etc, but imagine if all the mines had to deliver their product to only two companies for fabrication! What an industry and what a temptation. Beesting! You have caused me to have too many curiosities! How will I sleep tonite? lol

You also mentioned numismatic bullion. The ones I have purchased were very close in price to bullion coin i.e. A. Eagles.

Tomorrow, I will have to remember to do a search on these two entities.

Comment: I mailed to my disbelieving brother some potassium iodide for his family (they are near a nuke plant), he always naysays my thoughts on gold and anything to do with preparations of safety. After a week in posession of the reading material and pills that I gave him..he called to thank me for the pills. He had given it all some thought and said it made sense ....one day...one battle won...

elevator guy (11/11/99; 22:23:25MDT - Msg ID:18958)
options expiry
Do I dare to ask this question in here? Maybe I should ask my broker.

Oh, well, here goes...

Does anyone know what time Dec gold options expire? Is it by the NY close?

beesting (11/11/99; 22:18:41MDT - Msg ID:18957)
Correction
Next to last line should read: $50.00 to $100.00 ABOVE SPOT.
Sorry.....beesting

TownCrier (11/11/99; 22:07:31MDT - Msg ID:18956)
After the Close: the GOLDEN VIEW from The Tower
http://biz.yahoo.com/rf/991111/ug.html
Gold is like the little critter in the famous math story-problem that tries to crawl out of a slippery well. He crawls up three feet during the day, then slides back two feet during the night. How many days does it take to get out from the bottom of a ten foot well? From its low September price we've watched gold climb $80+ and slide back $50 before resuming its upward direction again. These larger climbs and slides take place over several days, but we also see this on a smaller scale. Yesterday, you will remember that gold climbed $5.90. Today it slid $4.20. In small scale, a gain of $1.70 (0.6%) from Tuesday...taking a step back we see a bigger gain above the revisit over a week ago of the $280 level, and yet a bigger gain over the $255 we saw a month-and-a-half ago. Not a straight line from here to there, to be sure, but the story has a happy ending. The critter eventually gets out of the well.

DOES IT STING OR BITE?

From the rooftop here, we can't tell for certain what kind of critter it is or whether it is one to be squeamish about. We can tell you this, though. If this "critter" is anything like the Y2K bug, if you're an Argentine you've already taken so many lumps at the hands of the banking sector that you'd probably react as though it were business-as-usual...a commonplace ant or caterpillar or the like.
+
In our featured link today, Reuters begins an article from Buenos Aires "When you've survived 5,000 percent hyperinflation and seen your hard-earned savings turned into government bonds overnight, not much can scare you about your finances -- not even the sci-fi sounding "millennium bug."" The article goes on to describe some of the retooling that the banking system in Argentina has undergone in recent years due to repeated, systemwide meltdowns. In fact, the 1994/95 crisis resulted in the halfing of the number of banks, with foreign banks gobbling up much of what remained. Today, 60% of deposits sit within foreign owned banks. While that is little more than an interesting statistic, of particular note is that many Argentines remain outside the banking system, with less than 40 percent of the population having accounts. Of those with accounts, only 3.5 million have opted to have their wages direct-deposited into a bank.
+
Its' no wonder a teller was quoted as saying, "Everything is operating as normal and it's November already. We haven't been given any special instructions." (To help ward off bank runs in the past, as recently as 1989, upon hearing rumors of a possible run on savings bank managers would order cashiers to stack piles of cash in plain sight near their tills in the hope of calming panicky depositors in the back of the line...hoping they would eventually wander away appeased, but without their cash.) The bottom line here is that in Argentina we see an entire population that in the course of their normal life is already prepared for any Y2K disruption...too many lessons already learned the hard way. In another interesting note, Argentina in 1991 took steps to bring about a zero-inflation economy and restore confidence by pegging the peso one-for-one to the U.S. dollar. Their Convertibility Law mandates that all pesos in circulation are backed by equal reserves of dollars. This effectively means that Argentina can't print currency with reckless abandon, but anyone may freely swap pesos for dollars.
+
Hmmmm...now what would the US peg to if had to bring about currency stability and also had the resolve to balance the annual books on government spending and on trade? Argentina deserves a pat on the back for their efforts, but perhaps somebody should tell them that Bretton Woods collapsed 28 years ago. They're pegging to a dollar that fades daily through inflation at the hands of a body they have no ability to control. The Tower suggests if thy can hold an effective peg to the dollar, they can do it to gold, too...and be better off for it in the long run. However, in recognition of certain worldly realities, The Tower suggests the ultimate course of action is to let it all float freely, hold only gold in the national reserves (marked frequently to market), and allow/encourage your citizens to engage in commerce with the national currency (which would ever be inflating) but to save with gold. That, obviously, goes well beyond the scope of this article, but check it out if you have the time.

WALL ST. "...Houston, we have a problem."

Does this look like EVERYBODY is making money except you? In trading on the NYSE, 891,350,000 shares passed hands. In the process, when the day was over 1,714 corporations saw their share value decline, while only 1,260 gained. Stock in 138 corporations fell to fresh new lows on the year, while only 81 visited new high ground. Even life on the Nasdaq's over-the-counter trading is not as fresh and rosey as the steamrolling Composite Index would like you to believe. Near-record volume of 1,384,479,000 shares were traded amongst the salivating masses, and when the last market-making computer program matched the final pair of willing buyers and sellers, companies gaining value barely outnumbered those who lost value ("Please, say it isn't so! A company's stock can decline on the Nasdaq??") ...uh...yeah,...as I was saying, gainers beat decliners by the thinnest of margins, 2,015 to 1,983. The exuberance expresses itself, however, when you look at the select handful of extremes. There were 242 stocks reaching new 52-week highs, while 88 dogs somehow found a way to wallow in their own filth...yes, even on the Nasdaq exchange.

The ever-more meaningless Dow Jones Industrial Average (even WITH its recent facelift/retooling) broke even on the day (-2.44 points). The Nasdaq Composite Index has officially become the poster child of irrational exuberance, and will surely be the one referred to 70 years from now when they talk about THE great crash. The index plowed its way to its ninth record high in the last ten sessions of trade, peaking at 3201 before settling for a gain of 41 points at 3197 (+1.31%). Makes you wonder how much of this is driven by short covering by those who saw the end too early. Otherwise you have to ask the question, has the economic outlook suddenly become so very much improved to fundamentally justify this wanton investment behavior? The Tower feels itself to have a front row seat for a calm and detached viewing of a trainwreck. Ponderous, yet we can't look away.

The 30-Yr Bond remained at 6.090%. The bond market was closed in observance of Veterans Day...as was the US currency markets. Tomorrow market participants will have an eye on two key economic reports. A Reuters poll of economists expects that productivity will rise 3% with unit labor costs rising 1.4% when the preliminary report of third-quarter data is released. Also on tap is the retail sales for October, which economists expect to remain unchanged overall. "Core" sales are expected to be up 0.3%. Because Fed Chairman Alan Greenspan has often mentioned accelerated productivity and slower unit labor costs as one of the fundamental components keeping domestic price inflation in check, you'll want to take note of the productivity data. He is joined in that view by a colleague currently stuffing his face with Sacher Torte...if he knows what's what, that is.

SACHER TORTES, and ALL THINGS "VIENNA" (That's "Wiener" to you, Mr. CoBra(too))

New York Federal Reserve President (and vice-chairman of the Federal Reserve's Open Market Committee) William McDonough said today while attending a conference in Vienna, "One should not assume that the business cycle is dead. One should not assume that the American economy can keep growing faster without inflation." As reported by Reuters, in suggesting that the inflation-free economic growth in recent years might not continue indefinitely, he said it couldn't be predicted at what level the growth of productivy would abate. "It's a nice thing if it levels off at a higher level...[and in making the prediction for policy and whatnot]... You have to make a bet. It is not subject to analysis as to how long this ever increasing improvement in productivity will continue."

GOLD, AGAIN...(A GAIN?)

It depends on where you stand on the hill. If you camp out at the "desk" overlooking the London PM Gold fixing action, you'd see an addition to yesterday's $5 gain in London again today. Yesterday's fix was $295.75 (up from $290.75 on Tuesday), and today it gained another $0.25 to fix at $296.00 per oz. I guess we can't blame London for this one. As mentioned earlier, this critter slid $4.20 to a final spot quote in NY at $293.30...giving back much of yesterday's gains. This 1.4% decline was nothing compared to the ravashing endured by the miners. The Philadelphia Stock Exchange Gold and Silver Index lost 3.9% on the day. Speaking of miners, one of the early basket cases, Royal Oak, was in the news today. FWN tells us that an Ontario court approved Northgate Exploration's $180 million purchase of Royal Oak's Kemess South gold-copper mine in British Columbia. An appeal from Royal Oak noteholders to re-auction the mine on claims that recent gains in the price of gold would attract a higher bid fell on deaf ears.

The Decmeber COMEX futures contract for gold also gave back $4.20, trimming yesterday's $6 gain back down to $294.90 per theoretical contract-ounce. Bridge News talked with David Meger about todays action. The senior metals at Alaron Trading said that ahead of Friday's expiry of December COMEX gold options, players were "jockeying for position," trying to keep $300 calls and puts from being exercised. Because of that action, Meger expects gold to remain confined within a $290-300 range. "Gold could test above $301/302, but I do not expect many trades up at this level. I think it will settle below $300 because those on the short side won't want calls to be exercised." He said that would be especially true if the calls are held by locals. (You know, the bums in the pit that get you coming AND going.)
+
At stake is the following open interest in options:

10,169 contracts at the $300 call level, and
6,555 contracts at the $290 call level.

And on the other side of the fence...

9,304 contracts at the $300 put level, and
9,350 contracts at the $290 put level.

Remember folks, assuming you attained an "in the money" position, these options were exercisable at any time prior to tomorrow's deadline. Should the option holder exercise his right to buy the underlying asset at the strike price, he will receive the long side of a December futures contract if he exercises a call, the short side if its a put. Should they choose to hold their newly acquired futures contracts, their in-the-money position could either swell or evaporate, depending on the price movement on these contracts between now and when they expire on December 29.

As noted, banks were closed today, and the COMEX gold resting in vaults at Scotia Mocatta and Republic National Bank of New York had nowhere to go. Gold stocks total 948,079 troy ounces. In yesterday's trade, Open Interest on the December futures fell 7,772 contracts as 40,953 positions changed owners. December OI ended the day at 81,766.

SOME GUYS HAVE ALL THE LUCK

Nevermind the Nasdaq. Reuters reports that within two minutes of being shown how to work a metal detector, thirty-three year old Kevin Elliott became rationally exuberant when he uncovered the largest hoard of Roman coins ever found in Britain. Apparently his cousin Martin said something like "Here, you have a try." That was all the urging young Kevin needed, and he proceeded to discover 9,377 silver coins on his father's dairy farm. The coins were silver, but the story was gold.

OIL

Volatile trade was the way of it for NYMEX energy futures after three straight winning sessions. Weak longs were shaken out by profit taking, and December crude settled down 14c at $24.33.

Here's a good reminder that there's more factors built into the price you pay at the gas pump than just simply the price of pumping crude out of the ground and subsequent refining. There is also delivery. Here's a report you might enjoy...helps you appreciate the global scale of all this business that takes place behind the scenes.

New worldscale rates for tankers announced effective Jan 1, 2000
Bridge News
London--11--The worldwide tanker nominal freight scale, or worldscale,
used for calculating the cost of shipping oil in bulk, will be revised
with effect from January 1, 2000, a press release from the Worldscale
Association in London and New York announced Thursday.

Changes will include an increase of the worldscale rates from Offshore
Terminal, Bonny in West Africa to New York by 1.6%, and an increase 2.6%
of the voyage from Ras Tanura, Saudi Arabia to Yokohama, Japan. The voyage
from London to Rotterdam will drop by 3.2%.

The rate from Ras Tanura to the Loop Terminal via the Cape is 0.4% higher,
Sullom Voe to the Loop is up 0.8%, but down 1.3% from Sullom Voe
to Rotterdam.

The rate from San Carlos Island to New York will drop 0.5%, and from Dumai to
Los Angeles it will rise 1.3%.
The rate from Es Sider to Lavera has been adjusted down to 3.2%.

A new worldscale rate is issued every year, taking into account
updated port changes and average prices of bunker fuel, as well as voyage
miles, average speed, and capacity of the vessel.
Rates are calculated and quoted in US dlrs per tonne of cargo for
voyages performed by a theoretical "standard vessel" with a total capacity
of 75,000 tonnes. The average speed is 14.5 knots on a daily bunker
consumption of 55 tonnes of 380cst fuel oil and a fixed daily hire of
$12,000 daily.
Cockett Marine Oil Ltd. assessed the bunker cost over a period from
Oct 1, 1998 through to Sep 30, 1999 and set the level for 2000 at $86.50
as a worldwide average.
Today's 380cst price for Rotterdam quoted by Cockett Marine was $127.00.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
LOOSE ENDS

He made it out on the eighth day...the critter. The Y2K bug will surface in 50 days. If he sees his shadow, does that mean we will still have 6 hard weeks of winter? No, wait...that's a Bill Murray movie.

And that's the view from here...after the close.

YGM (11/11/99; 22:05:06MDT - Msg ID:18955)
The Gaucho
Your Concerns 'ARE' Well founded--IMO
As one who has spent some time in W. Africa I think you have legitimate concerns. That said however, I think most here at the forum would agree that there are other forces at work that will have the desired effect on Gold pricing long before we have to worry about S.A. Mine takeovers etc.
Glad to see and read your posts. Regards to you Cowboy, Buenos Tardes.......YGM.

beesting (11/11/99; 22:03:46MDT - Msg ID:18954)
The real price of Gold continued from yesterday. For Al Fulchino!
http://www.kitco.com/_a/news/2928.htm
Thursdays World Gold Prices Time: 11:50 AM Eastern.
Source: Associated Press

Since I'm in the U.S. I'm only going to post the U.S. prices.
1.NY Handy & Harman:$296.00 up $0.25.(from yesterday)
2.NY Handy & Harman fabricated: $316.72 up $0.27.
3.NY Engelhard: $297.15 up $0.25.(from yesterday)
4.NY Engelhard fabricated: $312.01 up $0.26.

Comments:We see the "SPOT" or mostly paper derivitive price coincides with numbers 1 and 3 with a difference of $1.15, almost the same as the charts at about 11:00 A M eastern time today.
Now Handy & Harmans fabricated is selling for about $20.00 over "SPOT", and Englehards fabricated is selling for about $15.00 over "SPOT".
Fabricated may be 400 oz bars,Gold sheet for jewelers,large amounts!!

USAGOLD is selling numismatic or semi rare Gold coins.Because of the age,valuable to collectors worldwide!!
When the price of Gold goes way up these may show the greatest appreciation in price,when the general public starts buying Gold.

So, the real price of Gold depends on what "TYPE" of Gold you hold or are interested in!!!
Paper Gold is the world"SPOT" price.
Fabricated Gold is the large amount wholesale price of unfinished Gold.
Bullion coins(numismatic)and jewelery, is finished Gold in it's final state,therefore should always command a much higher price,because of the added labor involved,and marketing costs.

In summary;If the supply of physical Gold dries up as our New Zealand poster(Sir Andrew???)said is already happening in New Zealand,you should be able to name your own price($50.00 to $100.00 or more) to willing buyers,who cannot obtain Gold anywhere else at any price,and come to realize it's real value as the price rises and gets mega media attention.....beesting

Golden Truth (11/11/99; 22:01:46MDT - Msg ID:18953)
TO Netking and Cavan Man
Hi Netking i,am impressed, you know your Gospel quite well, that is very encouraging to me. Also your knowledge about GOLD is an awesome bonus for us all, many thanks! :-)

Hello Cavan Man of course you are right about me and i personally think it will be soon. The big guy upstairs told me so many months ago. "I will be bringing something at the end of the year" I've not told anyone one this for fear of ridicule not even my wife, it was spoken to me one morning while reading the Good Book.
With increased knowledge comes increased sorrow, all the best my friend!
G.T

jinx44 (11/11/99; 21:51:06MDT - Msg ID:18952)
JW&M
I think we are both preaching to the choir. I have lived in pre-Mandela RSA and have travelled there post Mandela. It is a beautiful place beset with iniquity on many sides. I was in Rhodesia before that. The worse of the two systems of govt--apartheid vs. marxism-- is the marxism kind. That system of oppressive political tyranny has more blood on its' hands than any others I know of.

As to anarchy- a very very misused word. Every day, each one of us wakes up to anarchy. I eat what I want without being told, I drive the speed limit without being forced, I keep from killing my neighbors without govt force, etc. All good people choose to live by what has always been considered common or biblical law. The tyranny of a federal govt is far worse than any local tyrant--one reason being that the local tyrant cannot command an army of one million killers with nuclear bombs. The local oppressor is more easily dealt with. In a time of chaos, most people will not take to the streets and slaughter the innocent. That is what the agents of the govt tell us will happen , that no man can be trusted with his own freedom. To that I say &^%$#@! Communities of all stripes and traditions regularly get along with their own on the local level. No one in his right mind can believe that a self proclaimed elite can rule well or at all over 260 million poeple. The system was originally set up to rule from the town and county level. That way one could vote with his feet if he didn't like the politics.

Our current system is quickly heading towards a fascist police state that will cause the death of millions of us from internal and external war . Already our misguided attacks on other sovereign nations has made the whole country hostage to the people we've have made enemies of. I find that egregious. Most poeple think that "it" cannot happen here in america. It is already happening. They have only just begun.

Scrappy (11/11/99; 21:47:32MDT - Msg ID:18951)
YGM
Thank You for the link
to the "Gold Companion". It will help me greatly, as I try to learn all the terms & actions involved in this Great Historical Play we are witnessing. {It will help me understand it all.} :}

Solomon Weaver (11/11/99; 21:45:09MDT - Msg ID:18950)
Paper chasing metal or Will chasing Roadrunner
YGM (11/11/99; 12:32:53MDT - Msg ID:18915)
My Limited Understanding of Bullion Trade asks?
the question---is it possible that the endless up & down spikes we continually have seen over the past months are "Paper sales to short and drive spot down in order to flush out Physical"?---- Accumulate Physical while selling paper that can be defaulted on? This may be my dumbest question ever...........................YGM.

------

I don't think that the players are that sophisticated.

Mainly they are greedy and the gold carry trade seemed like such a sure fire bet....easy money. Gold leasing made sense to jewelers because it was a form of hedging which did not require high interest loans, margin calls, etc. Jewelers needed the metal in ounces and would eventually sell it. Forward selling made sense to mining companies (particularly the little ones) who needed to raise some money...borrow gold today based on the promise to return gold tomorrow.

Then the paper guys stepped in and tried to take advantage of it all....

This is obvious in the silver market where the amount of paper shorts are so far beyond even the physical supply....reminds me of the scenes in those "Roadrunner" cartoons where Will E. Coyote runs off the cliff with the road runner ahead of him...they both realize that they are out in thin air...the Roadrunner zips back...Will E. Coyote looks....and then....vvvvveeeeewwwwww....splat.

Poor old Solomon

YGM (11/11/99; 21:41:51MDT - Msg ID:18949)
Scrappy--
Patience yes Parience no
Sorry my typing skills are worse than my vocabulary.

YGM (11/11/99; 21:39:33MDT - Msg ID:18948)
Detective Scrappy
Always
Thanks for that old post. Combined forces lead to better insight. Parience is definately the key. We have time and w/o time we have no need of Gold or other worldly possessions IMO..............YGM.

Scrappy (11/11/99; 21:20:32MDT - Msg ID:18947)
Ahem,
Excuse me.
Am I making sense? :}

Scrappy (11/11/99; 21:19:27MDT - Msg ID:18946)
Rejoice, rejoice,
the price of gold is low,
buy what you can, while 'they' are busy cleaning up their messes. We know what's happening. The world will be as new, as the new currency, whether euro, yen, or whatever, takes its' place, sitting firmly upon a throne of gold!
Patience, patience. We WILL see.

Scrappy (11/11/99; 21:15:51MDT - Msg ID:18945)
Ahem.
Uh, excuse me.
9/23/98; Msg. Id.#102, Friend of Another.
"We should see each pullback in gold stop at a higher price. ...These pullbacks will be used by major buyers to complete their acquisitions of gold, and hence, the distribution of dollars." "Look to U.S. balance of trade deficit and fast changing negative exchange rate for the dollar to chart the course"
9/23/98; Friend of Another, msg. #121 "World gold transforms from being a dollar settlement system." :...part of a financial panic that witnesses default/liquidation of billions of dollar/gold assets built up over many years",..."Trading gold in dollars will stop as these losses are worked out".

Being that 'we' see little of what actually is going on, could it be that they are 'maintaining' a false front pog, while all the hedge losses are being worked out behind the scenes, in real-price terms? So as to not cause a panic?

Canuck (11/11/99; 20:53:44MDT - Msg ID:18944)
Censorship and free trade
Just Weight & Measures,

I am not the censor, we are the censors; freedom of speech.
This is what we boast here at USAGOLD.

We plead for free trade of gold, " ...when gold trades without introvention and manipulation .... the price will
rise ...no?"

Therefore the analogy is struck, free trade of gold is free
trade of speech; a cursing, arrogant slob is as well taken
as a 'shorting' villain of gold, as least in this little
paraphrase of an example.

We, at USAGOLD, are a self-governing body that does not need
outside guidance, we discuss what we will, when we want. We
are an entity, within ourselves but simultaneously without
borders.

If markets were free we would be talking less but we would still be taking with the same open, uncensored spirit, no?

JLV (11/11/99; 20:29:03MDT - Msg ID:18943)
Let's see...

Oil $24
Platinum $450
Gold $293

Does anyone think these numbers look odd?

Which number doesn't belong?

Just Weight & Measures (11/11/99; 20:08:37MDT - Msg ID:18942)
Jinx44, Turbo, Journeyman
Canuck, Please permit me one last aside that is only slightly related to gold.

Jinx,
My middle name is Offensive and I see I have provoked some discussion in my absence. Certainly what passes for freedom today is a far cry from the way is ought to be just like what passes for money today is a far cry from what is ought to be. Our oh so lovely social democracy will likely devolve into a Tyranny and from their I suspect we will move to anarchy, but not the good kind of anarchy that Journeyman posted a link to (thankyou Journeyman for an excellent post). I certainly am in favor of decentralized government. The type of anarchy I refer to is where terror reigns! Every man becomes a law unto themselves doing what is right in their own eyes. People aren't free within the constraint of law, but they are enslaved to the strongest local tyrant who steels all their gold. Business ceases to function without armed guards as is currently the case in South Africa and the former Soviet Union.

I agree with you Jinx, our current system must eventually collapse because it is opposed to individual responsibilites and freedoms. My nightmare is that what we end up with when this system collapses is people acting like animals rather than knights and ladies acting kindly one to another. No I do not look forward to the collapse of the USD or our current system, not so much because I approve what the fed does with our currency or what the ruling kings & princes decree, but rather because the transition will likely be full of bloodshed.

What does this have to do with gold? Well gold is one of the few economic assets that would maintain its value though a transition such as what might be heading our way. (who knows how soon this transition will be or how long it will take) So be sure and get some more!

P.S. Utopia for me is a bennevolent dictatorship!

The Gaucho (11/11/99; 19:49:03MDT - Msg ID:18941)
Reply to Cavan Man's MSG: 18935
http://www.usagold.com
Cavan Man: It was not my intention to create any
hostility at all-it was merely to point out an existing possibility which has already occurred in Zimbawe as
we know,whereby the White farmers' lands were expropriated
and many had to leave the country-I wanted to emphasis
a potential existing point.One week ago,I had dinner
with a UK client who travels quite a bit to South Africa
on business,and he did confirm to me the fact that the
tension & danger in Johannesburg is today a reality.

YGM (11/11/99; 19:47:38MDT - Msg ID:18940)
Cavan Man
This IS the best site (tell me something I don't already know!)
The Gold Companion site is just a Gold Encyclopedia nothing more.

Canuck (11/11/99; 19:16:15MDT - Msg ID:18939)
Phaedrus and whoever
I lean to a degree in agreement; the forum sometimes wanders
off. I'm not going to say 'goofy', but sometimes irrelevant topics drag on.

I also agree that with Ari that the secondary, polite 'spin'
is not a liability.

Our host, if I could be so bold to suggest, is not here solely for his health and goodwill.

I pointed out a couple months ago, " ... if we all walk out of here at the end of the day wealthier (be it financially or otherwise) we have succeeded ..."

Let's keep it simple, no swearing or facsimiles of, no slander, religion or 'suicidal silver', discussions of gold
and its related topics and let's make a bundle.

Anyone disagree?

ET (11/11/99; 18:32:06MDT - Msg ID:18938)
Gordon Gecko

This is from Yourdon's site. Gordon Gecko works in the oil business and writes occasionally about the industy's y2k efforts.

Article follows:

Finally some good hard hitting Y2K info from a reputable source. This snippet is from OPIS who is
a widely respected oil rag. Most of the industry probably reads this one daily in the US R&M
sector. I'm glad to see someone step out and say what has been in the works for some time now. Let's
hear three cheers for Williams for having the balls to say this stuff. They are concerned that the 300
or so utilities they depend on may have problems. They are concerned that their may be product
shortages due to a panic. And they're actively pursuing efforts to mitigate problems which might
occur. I have to say, better late than never.

PS-may I also take this opportunity to forum readers to say that crude has been flying here of late.
Passing all market highs like they were checkered flags at Indianapolis Raceway. Look for this to
continue. If the Iraq thing plays like I think it will, then he will cancel oil for food following the
opec meeting on the 20th. Crude will fly like an eagle. Keep prepping, you need to keep prepping.
I'm still firmly in the 7-8 magnitude camp for crude and refining. Most of the executives in the
industry are probably only at a 3-4 as most of the flotsam below them has kept them woefully in the
dark due to the severe social phobia and stigma associated with anyone not blustering with bravado.
They will begin to wake up here shortly and realize they've been dorked once again by the IT guys.
To bad for them, and to bad for you. Keep prepping.

For educational and research purposes only:

Pipeline and terminal company Williams is looking at creating regional supply centers in sensitive
markets just in case there's a year-end melt- down. While Williams has completed its own Y2K
testing and is relatively sure that it will have no problems of its own making, the Tulsa-based
company is not so confident when it comes to some of its business partners, including the 300 or so
utilities upon whom it relies. "We're still forming a final contingency plan, but we're looking at
setting up central locations in the system where we know there's a potential for problems," Shawn
Barker, Williams marketing manager told a SIGMA meeting in New Orleans last week. For
example, if the Topeka terminal can't operate, a regional supply center will be established at Kansas
City with employees available to manually operate terminals, fill out bills of lading and to ensure
that equipment is working. Other areas being looked at for supply centers include Tulsa,
Minneapolis and Des Moines. Williams is also trying to decide whether to follow the lead of
Colonial and Kinder Morgan pipelines and close down altogether from 8 p.m on Dec. 31 to 6 a.m on
Jan. 1. "We're looking at the value of that, but we don't want product contaminated or some kind of
spill because an alarm didn't go off," he says. Williams met with shippers on the Y2K issue about a
month and a half ago. Various consultants have predicted that consumers and gasoline dealers will
fill their tanks and "if that happens, there's no way that refiners will meet demand," he says. One
shipper in Houston is even talking about shutting down operations on Dec. 30 and not reopening
until Jan.3, he says. "We may be chasing a horse we can't catch if we're loading it in and they're
taking it out just as fast at the other end," he says. Williams has spent $60 million-$75 million to test
its system, using a 236-strong employee task force, and has replaced software and hardware where
it might have encountered problems in its 23 million barrel storage system. Meanwhile, Williams is
concerned about moves by Kansas City to switch fuel grades. "There's only so much storage in the
system and Kansas City wanting to go to RFG is not the best news for us. It's hard to keep terminals
wet when there are too many different grades of fuel." There is a high demand for conventional fuel
from marketers in outlying areas around Kansas City and Williams is using every barrel of available
storage already. If RFG becomes mandatory, Williams will "have to decide which grade to reduce,
and that's when you get outages," says Barker. "It's a big issue for us to handle and we're working on
the plans now."

-- Gordon (g_gecko_69@hotmail.com), November 11, 1999

Cavan Man (11/11/99; 18:14:17MDT - Msg ID:18937)
Two More Birds
GT: Everytime you get down on AU the price goes up. Shalom.

Holtzman: Your "paranoid" fellow is a Saint in the estimation of both the Eastern and Western Christian Churches. He and we of the New Covenant have immense respect for the Old Covenant. Whether you "covenant" or not, you're out of line big guy; good thoughts though.

Chicken man (11/11/99; 18:09:43MDT - Msg ID:18936)
Blue Sky - ? - Name me 1 person you know who went broke paying taxes..?
When I read your post and you were talking about the "tax credits" you would get by buying a new tractor (on the farm we use to call it 'new paint fever') it brought back memories of 70-80's when I was farming ......had the VERY same thoughts as you......bought new machinery and built silos and cattle sheds....the whole bit!......my thinking was I either pay Uncle Sam a chunk of change or I could buy more equipment and get a tax credit.......so I spent like there was no tomorrow on expansion....(at that time Agriculture exports payed for all imports..!) the bank could not give the money away fast enough...!
But things changed.....and how...! my 8% loan had to renwed at 16%.....and the Russian grain embargo (political thing to keep food prices low) sent all farm prices into the cellar....all of us farmers were hurting...and bad...! the new paint we had bought 2 yrs earlier was worth .50 on the dollar (if lucky)....our profit margin was zilch.....not even enough to cover the interest on all that debt we acquired (so we would not have to pay taxes)...lost the farm so to speak in more way than one.....

Which brings me back to the question..."Name me 1 person you know that ever went broke paying income tax.....!"

I wish some one would have taken me aside and told me to make a list of what could go wrong that might put a damper on my farming dream...

Best of luck...chicken man...

Cavan Man (11/11/99; 18:09:24MDT - Msg ID:18935)
Two Birds
YGM: This is the BEST gold site on the net.

the Gaucho: Sir-Do I detect a hint of enmity in your perspective on indigenous and non-indigenous peoples in SA?
If so, apology accepted. Thank you.

Gandalf the White (11/11/99; 17:46:20MDT - Msg ID:18934)
Comment from SJ Kaplan on "Horse without a Name"
THOUGHT OF THE DAY: Platinum made a bearish reversal on Thursday, November 11, 1999 by rising to its highest price ($431) since a nearly identical spike on April 14, 1998 before closing with a net loss. A peak at this level is an annual event like the Halloween parade, and should be appreciated in a similar spirit. Mortgage your house and kids and sell short platinum, covering at $340. Platinum will see its steepest losses after its lease rates collapse, since the money currently available from lending it is the only reason for holding platinum at this lofty price level.

megatron (11/11/99; 17:04:15MDT - Msg ID:18933)
simply me/limiter
another strange thing about this is that analog signals rarely look like that. Digital signals do, though. The only time analog signals mimick the square wave efffect is when the underlying 'pre' signal is of tremendous amplitude and velocity, causing instant limiting. Someone has a very serious 'look-ahead' attack time and ratio setting on their gold 'limiter'.

The Gaucho (11/11/99; 16:54:48MDT - Msg ID:18932)
ANOTHER VIEW POINT
http://www.usagold.com
I sincerely want to thank USA Gold Forum for opening a
new world to me. For many years,I've been a Gold Bug.In
fact,back in 1964,we purchased shares in Campbell Red
Lake Mines/Canada'since I thought back in the good old days
days,the USA was bankrupt,due to large deficit spending
policies,but was afraid to admit it.The shares were sold
in 1981.
I totally agree with many of the good postings I've been
reading daily. However,I do believe one aspect has been
left out,which I've read:
"WHAT WILL OCCUR IN SOUTH AFRICA AFTER NELSON MANDELA IS
NOT AROUND TO CONTROL THE DIFFERENT S.A.FACTIONS WHICH
INCLUDE SEVERAL NEGRO TRIBES,EVEN THOUGH HE HAS GROOMED
A SUCCESSOR??"
One has to ask:"Will we see a great deal of blood-shed
again in that country?"
"Will the whites be kicked out of S.A.as has occurred
in Southern Rhodesia(Zimbawe)?"
"Or will the gold mines be expropriated or shut down,
causing a scarcity in the metal??"
This possibility always exists,& the end result would
be a run in the gold price.
I dear friend of mine travelled to Johannesburg in Aug.
'98 on business & had to hire an armed guard,while he
was in that city just 3 days.
I would appreciate some feed-back from other posters
in the Forum regarding my thoughts.
Thanks.

YGM (11/11/99; 16:49:18MDT - Msg ID:18931)
Gold Companion Site
Just Posted
I should explain better. The site has everyting you ever wanted to know about Gold in all aspects listed in alphabetical order. Truly awesome.

YGM (11/11/99; 16:41:02MDT - Msg ID:18930)
Best A-Z on Gold Site You'll Find on the Net.
http://www.pamp.ch/
Have patience it's slow, but well worth the wait.--YGM.

megatron (11/11/99; 16:34:41MDT - Msg ID:18929)
simply me
if you look at the resultant output on a scope it looks just like the kitco graphs for the last few weeks. The trigger/threshold depends on the velocity of the incoming signal.

JLV (11/11/99; 16:27:11MDT - Msg ID:18928)
Simply Me
A limiter, used in recording, chops off high amplitude spikes so that the recording is not distorted thtough overmodulation.

The Kitco spikes that you see, that 'have their heads wacked off', is a perfect example of limiting.

Journeyman (11/11/99; 15:36:38MDT - Msg ID:18927)
Revised POG???
If the price of gold calculates out to about $21,000 per oz. assuming a USA Corp. "national" debt of about $5.6 trillion, what would POG be taking into account that Sen. Phil Gramm (R-Texas), with the aid of Harvard economist Martin Feldstein, calculated that the additional debt incurred by USA Corp. for so-called "Social Security" plus Medicare is about an additional $11 trillion "off budget?" Estimates put other "off budget" expenses, such as clean-up of government nuclear sites (Hanford Wash., etc.) and gvt. pensions, etc., at as much as another $7 trillion or so, for an additional total of about $18 trillion. This brings the total USA Corp. debt to about $23.6 trillion. . . . . . . . Regards, Journeyman

Simply Me (11/11/99; 15:07:35MDT - Msg ID:18926)
Megatron's Limiter at Work?
All: I'm not into technical analysis. (Seems to me somewhat akin to astrology...Predicting the future from lines and angles overlaid on past performance.) However, has anyone who keeps a close watch on Kitco's 24-hr Gold Spot Chart seen a pattern of chopping the tops off potentially big upward spikes? It happened again, briefly, this morning at 8:00am Eastern Time. I had noticed the odd pattern for days when I read a post from Megatron (sorry don't have reference...maybe Megatron would be so kind as to repost)comparing the pattern to a "limiter" in a sound recording studio, that keeps very high and very low frequencies from disturbing the music's balance. (If you're around Megatron...your explanation was much clearer.)

I see evidence of a "limiter" on the POG in the Kitco chart...but I have no idea what that "limiter" might be...or ,indeed, if it may be a mirage!

I would be very interested in seeing others' reactions to this "limiter" idea.

One of the things that makes this forum such a wonderful learning situation is the insight one gains from seeing things from so many perspectives. Who better to notice a "limiter" effect than a music producer! Thanks, Megatron.

Journeyman: " None of us, Jinx & Turbo included, will likely enjoy the process much, but it's necessary if our grandkids aren't to be complete slaves, and I'm not kidding. . . . . . . . As for "anarchy," it's a word much abused by the establishment. Most of the bad connotations of "anarchy"
come when it is applied to situations of disorder caused by governments."

Although, I'm behaviorally conditioned as most to be afraid of anarchy. I am increasingly more afraid of central government's agenda to restrict personal freedoms. I also don't think I'm very different from most reasonable, intelligent people in the U.S. Therefore, is the balance among the general populace tipping more toward anarchy?

There's a popular talk-radio host on WWTN-FM Radio in Nashville, TN, who claims that he is an anarchist (the philosophical kind...not the bomb throwing kind). I find that I agree with him more often than not. Sign of the Times?

Welcome to all new posters. And thanks to all on this forum who've increased my understanding of Gold and Life!

Get a Golden Parachute.
(Whether you carry it down a gentle slope, or it carries you down a steep one....you can build a nice tent out of it at the bottom.)
simply me

Netking (11/11/99; 14:50:30MDT - Msg ID:18925)
Golden Truth
Golden Truth(18917) - Good Morning, Yes Sir, there is a bit
of "ledger correcting"to be done before we walk on the
"golden streets", but then they are not beyond redemption
(eg Saul to Paul).So I guess some repentance (aka changing
direction) before it's too late would be appropriate for
them. Either way we win Sir, no weapon formed against us
will propsper. regards NetKing

nickel62 (11/11/99; 14:18:37MDT - Msg ID:18924)
Thanks Journeyman The libertaion quote is one of the best I've ever heard
Unlike small groups, large groups produce enough surplus to support and attract government infestations. In small groups where most people
know each other face-to-face, "leaders" as far out of line as most modern ones, wouldn't survive the night.

Riechard White The Libertarian Enterprise

Peter Asher (11/11/99; 13:52:53MDT - Msg ID:18923)
Aristotle!

>>>. If the money "spoils" before you have a chance to use it to improve your lot in life, you are nowhere.<<<<

Whether Gold is up, down or sideways, "This truth shall be self evident". Perhaps the Forum "Holy Grail" ?

Journeyman (11/11/99; 13:44:51MDT - Msg ID:18922)
Ahem, Ah, the "anarchy clarification link"
http://www.webleyweb.com/tle/le960907.html
Didn't post it right -- or something. So here it is: <http://www.webleyweb.com/tle/le960907.html>. Regards, Journeyman

Journeyman (11/11/99; 13:38:48MDT - Msg ID:18921)
Just Weights &Measures, Turbohawg, Jinx44 Re: anarchy

JW&M, you're assuredly correct: What we're going to see if "the system" comes apart as anticipated won't be pretty. But Turbohawg and Jinx44 are also correct -- we won't have change from/by the establishment. The people in power would have to de-throne themselves, and while such things happen, especially in fairy tales, don't hold your breath. Change requires, in the terminology of Austrian and economist Joseph Shumpeter, etc. "creative destruction." . . . . . . . . . . None of us, Jinx & Turbo included, will likely enjoy the process much, but it's necessary if our grandkids aren't to be complete slaves, and I'm not kidding. . . . . . . . As for "anarchy," it's a word much abused by the establishment. Most of the bad connotations of "anarchy" come when it is applied to situations of disorder caused by governments. You might check the URL above for a clarification of this assertion. . . . . . . Regards, Journeyman

phaedrus (11/11/99; 13:33:54MDT - Msg ID:18920)
@Aristotle
Okay, I deserved that.

As a rule, I try not to let the markets get to me. I did today. Instead of putting a fist through my quote screen, I vented here (among other places).

For what it's worth, I apologize to all.

JLV (11/11/99; 13:05:05MDT - Msg ID:18919)
BOE/MAWS?
BOE traps itself:

Man Are We Screwed acronym now a slash attachment.

Ted Butler makes an excellent point. With a POG that no longer trades in its 'pre-defined range', it is now quite likely that winning bids will come in substantialy over the current gold price.

BOE manipulation will likely result in accelerating movement in the opposite direction they intended. And there is no easy way out.

Pick one: Amputation or Chinese water torture.

Cancel the auction and watch pog soar ( while your reputation tanks ) .

--OR--

Watch the gold price jump after every auction as more British gold disappears forever.
( The BOE auctions are unpopular with the British people. Known as the 'great gold giveaway', they have become a political nightmare/minefield. The public outcry after each 'sale' will become golden bullets for the loyal opposition. )

Float that trial balloon:

The rumor started by BOE ( that the sales would be cancelled ) , served two purposes. To see the market reaction ( gold plus $6 in 90 minutes ) and the chance to state a fact, by omitting one.

Denying the rumor, the BOE said it intended to complete its planned sales of 75 tons. Conspicuously absent from their statement was any mention of the remaining 290 tons originally called for.

A wild card: If they cancel the auction, they get to keep the gold.

What would you do?

Rhialto (11/11/99; 13:04:18MDT - Msg ID:18918)
Hedging explained
http://www.financialtimes.com
London Financial Times - "Opening the Cover of the hedge Book - Gillian O'Conner explains the intricacies behind hedging in the gold mining sector"

Go to link, type "hedge book" in search, 1st article in list

Golden Truth (11/11/99; 13:03:44MDT - Msg ID:18917)
TO NETKING!
What did i tell you? They would beat the crap out of "mellow yellow" Don't yah just love this action.
I say "bring on the pain" you scumbags we will win in the end. Oh yes we will!
P.S May you all burn in Hell for stealing from the people for all these years.
No amount of GOLD will save you come the the day of your death and judgement!!!!
I know because I'll be there to point my finger at you along with billions of other innocent people you have stolen from and Murdered directly or indirectly.
I look forward to that day for the "KINGDOM OF HEAVEN IS NEAR" and don't you forget it. I hope you will all enjoy an eternity in HELL because thats we're you're going.
Have a nice day, for it may be your very last one!
G.T

YGM (11/11/99; 12:38:42MDT - Msg ID:18916)
HOW TRUE
From Goldie @ GE Forum
(goldie)Nov 11, 11:43

Genius, in one respect, is like gold; numbers of persons are constantly writing about both, who have neither.
Charles Caleb Colton (1780-1832)

YGM (11/11/99; 12:32:53MDT - Msg ID:18915)
My Limited Understanding of Bullion Trade asks?
the question---is it possible that the endless up & down spikes we continually have seen over the past months are "Paper sales to short and drive spot down in order to flush out Physical"?---- Accumulate Physical while selling paper that can be defaulted on? This may be my dumbest question ever...........................YGM.

Aristotle (11/11/99; 12:30:58MDT - Msg ID:18914)
Hey there, Mr. phaedrus
I hope that IS your real name, otherwise it would appear that you have also been caught up in some of the whimsy that so easily offers itself through a communication medium such as this internet provides.

You said "Quite frankly, I have friends (and clients) who have an interest in gold, and who would benefit from the great info and discussion on this site, but I'm hesitant to send them to this site because I'm embarrassed by all the goofiness."

Well, that is very gallant of you to play the role of censor for the world. Do you also making any mention to people of the existance of England--where they actually live and breathe this "knight" stuff? Sir Isaac Newton, Sir Alfred Hitchcock, Sir Paul McCartney, to name a few. Good heavens, I now hesitate to solve physics problems, watch classic movies, or listen to the Beatles. God forbid that I point any friends or colleagues in that direction--it would surely be a bad refection on ME.

Come on! Give people a little credit. Most of your associates are far more tolerant than you would expect. Do we not have art in our culture to accompany all the cold, clinical science? In truth, money is more in tune with the emotional side of human behavior than it is with the mathematical attempts to harness its energy. That's why history is full of fiat currency experiments that went horribly wrong. Greed and fear are not mathematically quantifiable, and neither is confidence.

Many companies and governments often employ "round table" discussions in their course of doing business. Canuck Gold summed it up nicely when he said "it quickly became apparent (to me at least) that the use of Knights and Ladies was a subliminal means of ensuring that a certain level of decorum is maintained."

Any hope you may harbor for a forum of technical analysis devoid of the cultural and emotional elements that you seem to find inapproptiate would surely miss the boat on seeing what the future holds for Gold. You certainly don't need a discussion forum for a bunch of chartists to draw their clincal lines on sterile graph paper in their vain attempt to predict the future of the world. You might just as easily draw you lines on price charts of soybeans, hogbellies, or bond prices in your attempt to turn a quick buck.

Posting at a forum doesn't just "happen." It takes time and work. You read, you think, you write. Anyone who takes the effort to do so ought to be afforded the freedom to express their ideas in any manner consistent with the guidelines of the forum's host. Freedom is what it's all about, my friend. I would venture a guess that the vast majority of those who rally around Gold do so not because it has emerged on the radar screen as a better profit alternative to cattle futures or tech stocks (which is certainly has now become, but that's beside the point.) The point is, the majority rally around Gold because money is an emotionally driven commodity, and Gold is the pinnacle of everything that tries to pass as money these days. The people gathered here strive for the best that life has to offer while they are on earth. They want the ideal, not only for themselves, but for all mankind. What a lonely place this would be if you and a small number of others walked about with Gold in your pocket while everyone else on earth were held in secluded cages, unable to participate in your life. My life is enhanced if my neighbor is well. I have artwork in my modest living quarters that came from around the world. How boring my time here would be if those artists were so oppressed by failing economic conditions that the struggle for survival eclipsed their ability to thrive and create new and wonderful things for those willing and able to engage them in fair trade.

My money does not improve my life. The things that I can buy with my money, however, does. If the money "spoils" before you have a chance to use it to improve your lot in life, you are nowhere. The Asian Contagion was a brutal case study attesting to that. The strife in Russia today is another. As we gather here, our discussion certainly has a flavor of the profit motive to it. That is unavoidable when you know you hold an asset that is so tremendously undervalued. But our discussion is also akin to any group of freedom-fighting revolutionaries who want to pave the way for a brighter future for all, casting off the existing source of oppression. Sure it seems like a high-minded, ideallic endeavor--hence the natural gravitation toward King Aurthur's court. Like intrepid knights, errant on a most daunting quest. I don't give a damn whether the lines are currently sloping upward, downward, in a pennant, or something else. I know the truth of the matter, and have bigger fish to fry. In the end of this currency experiment, the truth shall win the day and Gold's true value will be recognized by all. The little people of the world have spoken.

To others, I hope this unfortunately long reply is not seen as an off-topic waste of space. I tried to give a respectable answer to a questionable question that still contained material on Gold suitable for continued on-topic discussion. If anyone else feels compelled to express their thoughts on such an off-topic and trival matter as the artistic flavor of our discussion, I hope you will do likewise. Otherwise, I'd suggest that "Silence is Golden."

Gold. Get you some. Enjoy your life as you please. ---Aristotle

Blue Sky (11/11/99; 12:23:19MDT - Msg ID:18913)
Just Weights And Measures
What I did was not gutzy, I may have mistated it.
Come April 14, 2000, I would have had to write a check to the IRS for $15,000.00. By purchasing the new truck, existing equity in old truck provided the down payment, I gained capital investment writeoff and depreciation against earnings in 1999.
So, instead, I will write a check to the IRS of $5,000.00, Plus, I have a fist full of gold and silver.
On a taxable income of say $49,000.00, I gained a write off of $29,000.00. A net taxable income of 20,000, then deducting normal personal write offs, 10,000, leaves 10,000. taxable income.
Next year a Ford 4X4 pickup. If I had School age kids they would get free school lunchs...Food Stamps ???? HUMMMM
I had an extra $3500 sitting in a broker money market, bought AEM and dollar averaged down on acouple loosers I had. That was gutzy and not too smart,all down..Should have bought gold.
No guts No Glory No Gold No Groceries
Blue Sky

USAGOLD (11/11/99; 11:44:10MDT - Msg ID:18912)
The Rest of Holtzman....
As pointed out by Goldiehawk in (11/2/99; 9:05:22MDT - Msg ID:18169), these price contortions are only slightly influenced by the buying and selling of odd-lot gold coins. But Joe Sixpack devoutly believes that the Spot POG on TV is the One True Number, and Joe outnumbers us by thousands to one. By selling his own odd-lot gold coins en masse because the TV told him so, Joe has just caused that fiat money in your wallet to be worth more Krugerrands today than was the case two weeks ago.

It all goes back to the "Here boy!" comment above. Because so many participants in these markets are willing to do precisely as they're told, when someone points out a price of gold $20 lower and says "Go there," Joe Sixpack goes there. So much the better for those of us who wish to keep buying.

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Small steps
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However, I still would not advocate rushing right in and turning every paper you own to gold. Despite being the "contrarian response" to Joe Sixpack's current herd instinct, you'd be acting just like Joe if you did anything of this sort at a rush.

Aristotle's oft-mentioned investment in himself is an ideal model to follow. The more the masses want to disown something which has historically held value, the more I want to acquire it, but I want to do so gradually.

My rationale is simple: I have a long time horizon. Back in the 1960s, I recall a debate between some stiffly dressed elder statesman versus a long-haired hippie. The statesman's stance was that he and his kind were in control and the unruly young man had simply best get used to it. The hippie's response was, "We shall outlive you." You lot elected Sonny Bono to your congress, and he proved by all accounts to be a valued member there. But think back to how unlikely that future would've seemed in 1971 (even to Sonny himself).

This is why the scenario described by elevator guy in (10/31/99; 22:30:14MDT - Msg ID:18002) seems increasingly likely. There's so much ability to maintain smoke and mirrors among the paper set, and there's so much willingness to believe same among the populace. Yes, it's quite possible that the nominal dollar price for an ounce of gold may be held down long after such a price makes any sort of balanced sense. Of course, that will be a welcome circumstance for anyone who, like Aristotle and myself, gradually transfers excess salary out of dollar denominations and into troy denominations.

But this is very important: do invest in other things than simply gold coins. You should invest a little in a lot of things.

While the Indiana Jones scene ended quickly with the death of the aerial combatant, in reality we shall see different variations of that scene replayed over and again until there's only one world reserve currency. That campaign may not resolve itself for years, and while it often seems a foregone conclusion here that the euro will conquer as the dollar disintegrates, don't bet your life on that. It may happen, it may even be the likeliest outcome, but it's not guaranteed to happen.

On the gold front, it is quite possible that the recent 34% surge ($252 to $338) has already set POG's high for the next five years. The previous surge in 1993 was a mere 26% after all ($326 to $411). In that event, you'd be wise to own other assets in addition to physical gold and/or gold mining shares.

Remember, the last time gold was this low in real purchasing power was in 1919. Throughout World War I, POG plummeted. That it did ultimately rebound into the Roaring 20s was little consolation to those who bought in 1907 only to sell out in 1919.

On the other hand, it is just as possible that POG may rebound tomorrow and never look back. There's simply no way to tell which will happen, so lay your plans in order to survive either possibility.

Many years ago, a chief petty officer in the submarine service warned me: "Never go into any compartment until you know at least three ways of getting out of it. You only need one escape route, but you never know which one will be clear when you need it."

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The immense above ground reserve of gold
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With that in mind, is gold any more reliable an escape route than dollars? As Solomon Weaver wrote in (11/1/99; 22:21:10MDT - Msg ID:18120), "Gold has an immense above ground reserve compared to yearly production (about 60 years at current demand)..."

To answer you, Solomon, let me rephrase your sentence and toss it back to you: "The U.S. Dollar has an immense above ground reserve compared to yearly production..." To which you'd most likely respond, "Well, I should certainly hope so." After all, it is not the above ground supply of dollars which is important to the average holder of dollars, but instead the rate at which that above ground supply is increased by printing press inflation. And the lower that rate, the better (i.e., the more decades of yearly production needed to match the immense above ground reserve, the better).

The key to realising that your concern is truly not much to be concerned about, is to realise that gold is not like oil. Gold is much more like the dollar. Gold is a currency, not a commodity. Gold's primary value to humanity comes from the fact that there Is a significant amount of it which remains in existence indefinitely and is added to but slowly. Indeed, the longer POG remains low, the less the mining community is able to inflate the above ground supply.

Let's get down to basics here: in order to survive long enough to reproduce, a human must have food and shelter from the weather. The pallet of rice or the cord of wood mentioned here recently are true wealth. Gold is one step removed from true wealth. Gold is not edible (swallowable, I suppose, but not nutritious). Gold cannot be burned for warmth or for propulsion. Gold is simply a nearly indestructible and somewhat rare substance which humanity as a whole has historically valued as a temporary placeholder for excess food and shelter.

While a paper currency is given value by the decree (fiat) of an issuing government, gold is given value by the decree (fiat) of humanity past and present. And because humanity outlives specific governments, the only significant difference between gold and a paper currency is that gold's value outlives whichever government might have coined it.

Had Krugerrands been made of aluminium, would anyone have valued them as highly during the ugly years of apartheid? Would anyone have assigned any value to them after Botha's government was torn down in favour of the more egalitarian yet less experienced government of Mandela? When the new, politically correct Krugerrand 2000 enters circulation, will the Street value of apartheid-era Krugerrands drop dramatically in value? Of course not. They're gold.

Oh, it's not out of the question that the old Krugerrands might drop a very few percent, should the face of apartheid ultimately become as hated as the swastikas which emblazoned Reichsbank gold bars in the 1940s. Of course, now as then, all one has to do is melt them down and recast them with a brand new Swiss assay mark and all will be well... at least until the Swiss become politically incorrect <smile>.

Besides, to chime in with what FOA said in (11/2/99; 5:50:52MDT - Msg ID:18153), the above ground reserve is not really all that immense.

As I mentioned several posts ago, if you took every fleck of gold ever brought above ground and equally distributed it among every human alive today, each human would find in his hands only about .73 of an ounce (about as much gold as is contained in 3 sovereigns).

So long as gold is not being used as a circulating world currency, this sparsity is of no never mind. But let gold begin to reacquire its historic status as the one world currency, and a scant 3 sovereigns per person will be far too little rather than far too much. It will become immediately imperative to recreate a fractional reserve system based on units of gold in order to deal with the resulting volume of transactions.

Again, think in terms of fiat money for a moment. The quantity of paper dollars in existence throughout the world is many times larger than the annual creation of new paper money (and even that growth is lessened by the official destruction of worn bills).

But the world could not possibly use the dollar as a reserve currency if it were limited to using only paper dollars. The overwhelming majority of "dollars" world-wide are electronic notations in accounting computers. And it must be so because it would be ridiculous for a British freighter to offload Jaguars in New York only to take on millions of one-dollar bills for the return trip.

If gold wins out over even the euro and regains world currency status at the individual level, few of us will want to walk about with pockets full of pendulous 1 ounce coins. How many of us walk about with great wads of hundred-notes in our wallets? Rather, we'll want to retain the benefits, the efficiency, the amplification, of electronic funds transfers. In that scenario, a "Gold card" would finally mean just that, and its monthly statements would denominate your short-term debts in either ounces or grams of gold.

A growing number of UK residents are beginning to acquire euro-denominated savings in addition to pound-denominated ones because, although it's fairly certain where the future lies, it's not certain that the final conversion rate will be as favourable as the current one. Averaging into it gradually does mean missing out on the best case, but it also means not being as vulnerable to the worst case. Those of us who see several candidates for top currency (euro, gold, dollar, even yen) allocate across all of them for the same reason. We're not out to make a killing. We're out to avoid being killed.

A table with many legs is not easily toppled even should someone saw off one leg. I cannot say it often enough: allocate your wealth across many assets, including (but not exclusively) physical gold and gold mining shares.

Yours,
I.V. Holtzman

JCS (11/11/99; 11:23:50MDT - Msg ID:18911)
jinx44 (11/11/99; 9:52:13MDT - Msg ID:18903)
I agree with you.
True freedom in this Country was lost on Dec. 23, 1913, when the Federal Reserve Act was passed, allowing a central bank owned by banking magnates, both domestic and foreign, to determine the fate of the money and the economic path that our Nation would take. I radical move, which has probably begun, will ultimately, bring them back to some semblance of reality with a gold standard which covers our national indebtedness. BTW, that would peg the price of gold at $21,000/oz at today's national debt level. As radical as this may sound, something needs to be done because the ship will sink from the weight of debt amassed by a credit happy central bank, aka, AG.
All given IMHO.

USAGOLD (11/11/99; 11:23:44MDT - Msg ID:18910)
The Latest from Holtzman....
Holtzman here,

Netking wrote in (11/10/99; 02:54:26MDT - Msg ID:18792), "There is a game of chess going on here friends & this is far from over." Far from over, indeed, Netking. Chess in some respects is a very apt description: two players, in this case Dollar/IMF versus ECB/BIS, competing largely by manipulating the pawns in between them. But the pawns in this game are alive, and follow their own rules of engagement based on emotion and instinct.

The recent level of angst on this forum has prompted me to step back and try to objectively look at what's going on in this market. What seems both mystifying and stacked against us, as seen from one point of view, is in fact very clear and stacked in our favour, as seen from another point of view. It all boils down to a single question each of us need to contemplate:

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Do you see yourself as predator or prey?
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The most powerful force acting on any market is the kneejerk emotional reaction of the masses. If you want to benefit from a market rather than be trampled by it, there are several rules you must take to heart:

- Humans retain strong animal instincts.
- Humans have both predator and prey instincts.
- Most humans react on prey instincts most of the time.
- Humans who give in to their prey instincts can be exploited (used as pawns).
- Humans who suppress their prey instincts tend to out-manoeuvre those who do not.

Everyone loves the gentle dolphin, yes? But how many of you I wonder have any notion of how these charming animals catch fish? It's quite brilliant, actually. Most prey fish instinctively cluster into schools as a way of finding safety in numbers. That instinct was developed over a billion years of evolution, during most of which time the primary threat was other fish. Solitary predators like sharks plunge at high speed straight into a school, mouth open, with hopes of glomming up at least one victim before the school scatters into a thousand reflections of light.

But dolphin are mammals, distant cousins of wolves in fact, who've only been in the oceans for less than 10% as long as have sharks. Dolphin are smarter than the average fish. Dolphin don't play the game by the fishes' rules. Rather, they use wolfpack tactics. As a team, they surround a school of fish, swimming very rapidly in orbit. Then, one by one, each dolphin in turn falls out of his orbit and leisurely swims open-mouthed through the centre of the school. The fish at first try to scatter but their every escape route is cut off, so instinct tells them to remain in school. Swallowing in satisfaction, the first dolphin exits the school on the far side and resumes his position in orbit. Moments later, the next dolphin dives in for a bite. This process goes on for as long as the dolphin are hungry.

So how in the world does this apply to the gold market? Simple. Tell me how this in any way differs from what professional futures traders do to the vast school of eager first-time options investors.

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It's only a conspiracy if you feel you're a Fish
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You might at first expect that most participants on this forum would see themselves as Dolphin rather than as Fish. We are, after all, constantly sharing our plans and points of view in hopes of taking a bite out of the market. And yet, forum participants are to be found at nearly every point along the line between Extreme Fish and Extreme Dolphin.

When the Price Of Gold is rising in terms of dollars and euphoria takes hold, we mostly drift towards the centre and are content. But when POG falls, or simply fails to soar, many of us become like Wojciech Jaruzelski and Pope John Paul II... poles apart. It saddens me that so many of us can so quickly swing from euphoric unity to frightened antagonism.

Prey instincts are a weakness which can be exploited. The Christian conquistadors of the early 1500s were most assuredly Not dreading any sort of End Times within the span of their own lives. The fact that the Aztecs WERE dreading their version of same is precisely why the Aztecs allowed themselves to fall before a vastly inferior military force.

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Bilderbergs, Rothschilds and Gold, oh my
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To one extent or another, we are all frightened. I mean, that's pretty much the definition of life: "I am still able to experience fear, therefore I must not have been eaten alive yet." However, those at Extreme F have thought processes more akin to the powerless child sent to his room awaiting an inescapable spanking when his father gets home. By contrast, those at Extreme D have thought processes more akin to the typical resident of a large city who, while constantly wary, is still confident that he has it in his power to evade most dangers.

People who lean towards Extreme F are absolutely certain that an irresistible something (personification, glitch, bad luck, cabal, whatever) has spotted them and is moving in for the kill. They firmly believe they know who their devil is. Not that that knowledge helps them. An observant gypsy or jew in 1930s Germany at least had the option of fleeing out of central Europe. But people at Extreme F have mentally painted themselves into a no-escape situation. Where in all of creation can anyone run and be out of reach of an omniscient god of evil, or a countdown clock to anarchy, or a lifelong spell of imagined bad luck? Even if the Evil On Earth they envision is some sort of new world order consisting of mere mortals, Extreme F people typically hold little hope of outsmarting "Them."

So how does someone at Extreme F defend himself from people or events whom he believes are specifically out to get him? Sadly, he does not. Like the child in his room awaiting the hand of doom, Extreme F people allow themselves to believe that their lives are destined to be miserable unless yet another supernatural personality deems them worthy and so intervenes to rescue them. Their only solace on earth is found in trying to bring others into that same paranoid world.

The epitome of Extreme F was John, the fellow who originally dreamed up the book of Revelation. John was a desperately paranoid man who led a miserable life while others around him lived quite happily under the rule of John's supposed antichrist. Nineteen hundred years after John first put his paranoia down on paper, his writings still needlessly terrify the easily frightened. There's more information on this at http://www.usagold.com/cpmforum/archives/1619997/default.html ...search for post 8986. In fact, the more strongly you hear the call of Extreme F, the more I beg of you to go read that whole post. It may help you sleep more soundly. In any event, you'll never think of the phrase "Fishers of Men" in quite the same way again.

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It is by will alone I set my mind in motion
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By contrast, people who lean towards the other extreme, D, see no such inescapable cabal or personification of evil. Rather, we see a world where everyone is equally capable of being beneficial or damaging to us, and capable of alternating from the one to the other without advance notice. We further assume that, when others make such abrupt moves, they do so without a thought in the world as to any effect their actions might have on us.

That might at first seem to make our lives more Broadly paranoid, but it actually makes our lives less Deeply paranoid. Like the resident of a large city, people at Extreme D must always accept that the next passer-by might suddenly attack us for no readily apparent reason. On the other hand, we regard as quite tiny the likelihood that any particular passer-by will do so. And even if one should, we regard as better than even the likelihood that we can make him regret having done so.

In general, people leaning towards Extreme D find comfort in the expectation that most of the world doesn't give a damn about us. Mind you, the world may still blindly tread on us, but at least it is not going to go out of its way to do so.

The epitome of Extreme D was Nicolo Machiavelli. Both he and his best-known book (The Prince) have acquired a bad reputation over the years because Nicolo was coldly analytical in his writings. Indeed, he was one of the earliest true scientists. He gathered empirical evidence from history and drew practical conclusions: "If 22 rulers reacted in one way and were all killed, and if 13 rulers reacted differently and all lived, I recommend the latter reaction." Where Nicolo earned his reputation was that he still recommended the successful reaction even when that reaction was dishonourable or cruel or ungodly. After all, it's not how you play the game. It's whether you survive.

On the other hand, Machiavelli wrote many things which readers here would find to their liking. For example, "Above all things a prince must keep his hands off the property of others, because men more quickly forget the murder of their father than the loss of their wealth." Most of the U.S.'s founding fathers, especially Thomas Jefferson, deeply admired Machiavelli. Hence the words two centuries later which spell out what happens when a prince neglects Machiavelli's warning: "That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it."

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How you are being used
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It is the prevalence or absence of Extreme F posts on goldbug forums which analysts such as Steven Kaplan use as an emotional thermometer when trying to gauge sentiment among individual gold investors.

But now that I've let that cat out of the bag, I've broken his thermometer, yes? Actually, no. Most Extreme F posters have already long since made up their minds (as have we at Extreme D, for that matter), and nothing I might post here is likely to change their minds (nor is any dissertation on Nostradamus or astrology likely to change mine).

Rather, I write this for the majority of forum readers who find themselves near centre. And be reassured I am not attempting to use you to influence the price of gold by "talking my book." If every single one of you reading this were to go out today and either sell all your gold, or buy all you could afford, your unified effort would still be too small to have any impact on the publicly quoted Spot POG. We simply aren't in the same league with, say, Kuwait's 79 tonnes. Further, I'm not even on the same continent with most of you, so it's very unlikely we will ever buy individual coins from one another. Simply put, I have no way to profit by inspiring you to take any action.

However, as someone who has experienced dread yet managed to rise above it, I feel compelled to tell you that you are not alone. It is natural to feel you're a fish in a net, but it is imperative that you overcome that dread if you wish to survive and thrive. The world is not overcast. You are wearing sunglasses. You have the power to remove them at any time you wish.

Try to keep in mind that, were your great great grandparents able to read a sampling of the apocalyptic postings on this forum, their reaction would be bewilderment. The notion that something as natural, normal and frankly taken-for-granted as simple coinage could possibly be entangled with supernatural evil would inspire them to lovingly pat you on your head and tell you not to think such thoughts just before bedtime.

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How Technical Analysis works
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Speaking of talking one's book, Technical Analysis works because a sufficient mass of market participants believes that it does. In a very applicable sense, TA is a religion. When the majority of TA evangelists prophesy $298 POG as the point where POG will either carom back up or crash down through, and when the majority of TA faithful accept this vision as gospel, massive tension builds round that price point and the prophecy becomes self-fulfilling. Watching this from a distant vantage point, there's little difficulty in seeing the team of dolphin getting the school of fish to do precisely what's wanted.

Step back and think about that whole prophecy again. While POG was up near $320, they said, "POG will either crash through $298 or it won't." Not much of a prediction, was it? I mean, no matter what might have happened, the TA prophets could come back after the fact and say they'd made the right call.

Do you see now that the most important word in the whole pronouncement was $298? "Here, boy! Here, boy! Come to where we're pointing."

The masses' religious adherence to technical analysis is what allows large players in any market to manipulate same. Goldman Sachs, big as it is, is yet much too small to significantly move a market on its own. Ah, but the masses perceive GS as more dangerous than it truly is. Goldman Sachs makes its move, then lets it be known publicly that their intentions are thus-and-such, and you'd best get a firm grip on your skull because that market's going to move.

Watch for that subterfuge the next time one of the talking heads begins spouting predictions. You'll discover you can read between his lines quite easily now that you're in on the secret.

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Birds of a feather spook together
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Let's switch from water to air for a moment. Anyone recall the scene from one of the Indiana Jones movies where Sean Connery starts running at a flock of birds while flapping his umbrella? A few of the birds paid him no mind, but most panicked and blindly hurled themselves into the path of an oncoming fighter plane. Same notion, only it is we who are the birds, and it is entirely up to us as to whether we are birds who F) panic or D) look before we leap.

Goldman Sachs is no more demonic than was Sean Connery's character. Both simply knew a bit more about animal nature than the rest of the animals around them, and both used that knowledge to their benefit. There's nothing supernatural about that. Indeed, by definition, the whole strategy is entirely natural.

Analysts can do a decent job of predicting the unpredictable random motions of a market... because many of those motions are neither unpredictable nor random. And because a well placed "Boo!" can direct all sorts of energies in the desired direction.

The various cabals feared by the Extreme F crowd are simply doing what each of us should do: they suppress their own prey instincts and concentrate on their predator instincts. Does that mean they're always right? Not a chance. Had Sean Connery's character been after food, the Extreme D birds who stood their ground would have been those who made the wrong choice.

Victory doesn't always go to the calm and logical, but that's the wise bet far more often than not. Although not explored in the movie, it's natural to expect that the surviving birds laid claim to the real estate of the dearly departed and thereafter enjoyed the lebensraum unintentionally given them by the German pilot. Likewise, Europeans who were still alive at the end of plagues tended to enjoy far better living standards than did their parents' generation.

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Rejoice when POG falls
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As we watched POG inexorably slide back from this October's peak, our dread increased that we ought to have done what Steven Kaplan says he did: sell off at the top with plans of buying back in again at much lower levels. But we didn't. We can only hope that holding will, in the long run, turn out to have been the right decision.

In the meantime, yes, the physical gold in our possession has less buying power today than it did in early October. But unless we're in need of using that gold to buy something today, why should we care? I imagine very few of us are being paid our salaries in a set number of ounces of gold, so we should be rejoicing at POG's having pulled back because it means we can acquire more physical gold for fewer pounds or dollars or euros. Additionally, those of us acquiring gold stocks can likewise do so at discount prices.

Indeed, the recent surge-then-fall of POG has shaken loose many opportunities. The truly speculative stocks have been shown up for what they are, allowing us to more clearly see which are good to buy and which are best avoided. In answer to EZVX (11/3/99; 2:24:17MDT - Msg ID:18262), while I don't have details about specific mining companies, I can refer you to a short list of the possible events which might separate a gold shareholder from the in-ground physical gold he thinks he owns. Go to http://www.usagold.com/cpmforum/archives/12199910/default.html and search for post 16171.

In the coin market, as aunuggets pointed out in (10/26/99; 12:23:51MDT - Msg ID:17498), Joe Sixpack dishoarded gold coins of all descriptions as soon as the market surged. Thank you, Joe Sixpack. You've no idea how much we appreciate your letting us cheaply acquire your safety net.

These capitulations by the masses are typical of long-term bottoms. Desperately demoralised people seize on even the weakest opportunity to regain but a small fraction of their original investments. They've just volunteered to be Sean Connery's panicked flock of birds careening into the path of a German Fokker.

And who benefits from their panic? Those who do not panic. Those who say Thank You and buy up what's abandoned at wonderfully low prices. You do not have to be an active predator to benefit here. You simply have to refrain from thinking like prey.

Other people on this forum have been stocking up on rice recently. If the price of rice should begin to fall, would they agonise over the declining resale value of their foodstores? I wouldn't. I'd be relieved. After all, the neighbours would then have less reason to storm in with pitchforks and torches. On a lighter note, my thanks to Solomon Weaver (11/2/99; 22:57:28MDT - Msg ID:18248) for mentioning semi numismatic rice... that's the best laugh I've had in months!

I find one particular exercise quite comforting: figure out your total net worth in terms of ounces of gold rather than in terms of pounds or dollars. You spend so much of your braintime thinking "If I sold my gold for dollars this afternoon, how many dollars would I get?"

Try thinking the other way. "If I sold my dollars for gold this afternoon, how many ounces would I get?" Get used to thinking that way. That's how you'll find yourself thinking sooner or later. And if Another and FOA are on the right track, it'll be sooner.

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Spot still governs Street
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In (11/1/99; 22:07:02MDT - Msg ID:18118), FOA wrote: "I did not think supplies would last for the small bullion trader, yet they still are available without a large premium." To which I reply, never underestimate the herd mentality of Joe Sixpack. But I agree wholeheartedly with FOA's next sentence: "I would not count on that lasting much longer."

Even though the bid/ask spread initially widened to double-digits, and even though lease rates initially shot to 10%, still the Street price of a Krugerrand didn't significantly wander from the officially quoted Spot POG. Nor has it done so as Spot has retreated. That means things haven't begun spinning completely out of control. Oh, bits of it like Ashanti began twirling, yes, but the system as a whole has maintained self-control.

And how did "They" manage that?

For the same reason technical analysis works: mass belief. Only a very few of us believe that Street and Spot CAN EVER diverge. I believe it because I've seen it happen in history, but most market participants don't know their history. We're still in France's 1788, not in 1793. We're still in the Confederate States' 1861, not in 1864. We're still in the U.S.'s 1928, not in 1931. Realisation hasn't set in yet.

So long as the overwhelming majority of coin buyers, coin sellers, and coin traders remain confident that Street and Spot are one and the same, they will remain inseparable. Oh, the difference between Krugerrands and Maples narrowed considerably during this first furore, and some dealers were purchasing Krugerrands at as much as $6 over Spot. But Street and Spot rose together, and Street and Spot have fallen together.

Embrace that gift of good fortune. The fall in Spot POG and its closely interwoven futures POGs is a very engineered thing, and it is unlikely to hold permanently.

I mentioned Indiana Jones in particular because that fictional scene beautifully illustrates what's going on here. Swooping down like the fighter plane from the superior position was the Dollar/IMF crowd, intent on keeping the vulnerable euro on the ground. But the ECB/BIS crowd, like Sean Connery's character, managed a devastating counterattack (by simply issuing a statement), spooking the masses in between the two combatants. The flock of birds who panicked in this case were the novice paper gold investors (including some mine CEOs) and also the fresh-from-university institutional investors who now wish they hadn't taken on the opposing sides of those paper investments.

The evident reason Why paper POG is now being engineered down is that doing so will relieve pressure on significant Dollar/IMF friends who were trapped by the ECB surprise. Once those friends are out of the trap, that particular motivation to talk down the price of gold will be gone.

But other motivations will remain. It's a strike against credibility whenever the price of gold begins rising against any paper currency, and the dollar is by far the most at risk in terms of credibility. Much as Alan Greenspan dreams of the good old days of the gold standard, be assured he will fight tooth and nail to avoid a repeat of the 1970s.

As to How they're lowering Spot and futures POGs, it all boils down to which deals are publicly settled and which are done behind the scenes. As I wrote in an earlier post, I daresay some horrid deals have already been settled at effective prices per ounce far below any public POG. Likewise, producer forward sales from several years ago continue to be honoured in the vicinity of $400. Add a dash of sweet, then a dash of sour, and you can make the tart any flavour you wish.

As pointed out by Goldiehawk in (11/2/99; 9:05:22MDT - Msg ID:18169), these price contortions are only slightly influenced by the buying and selling of odd-lot gold coins. But Joe Sixpack devoutly believes that the Spot POG on TV is the One True Number, and Joe outnumbers us by thousands to one. By selling his own odd-lot gold coins en masse because the TV told him so, Joe has just caused that fiat money in your wallet to be worth more Krugerrands today than was the case two weeks ago.

It all goes back to the "Here boy!" comment above. Because so many participants in these markets are willing to do). ----P�X�qpn Japan's bu�}@ economy burst. They have been struggling ever since. -- In 1994 through 1999, hedge funds shorted the gold market in earnest further increasing the gold shortages above. The BRE-X scandal broke gold's back and almost destroyed the gold mining as an investment further depressing the price of gold. -- In 1999, the Bank of England announced a public gold auction of half of their gold reserves. The Euro was announced. The IMF became embroiled in a scandal (see below). The European Union announced they won't fund any more gold leasing except for 2000 tons over four years. Gold hit a 20-year low. Gold rose from $252 to $338 in one week. Rumors are floating currently that the Bank of England doesn't want to aution any more of its gold. Ashanti and Cambior (two gold mining companies) actually loose money when gold rises $80, because they (like many others) were threatened with a lower credit rating by bullion banks if they didn't further hedge their production. Many gold mining companies and hedge funds scramble to cover their short gold positions. Gold lease rates rise to nearly 10�uring the $80 price move. Inflation indices of the US government start to show signs of inflation. Greenspan gives the doom and gloom (for him) Jackson Hole speach. The long-term bond yield continues to remain above 6ubr> Conclusion: BRE-X almost seems as though, in retrospect, it was orchestrated to lower the price of gold, something not really mentioned then but makes sense now. The pace of chess moves has increased in frequency and intensity in 1999. Where it took years to see these changes before they are now coming weekly and daily. This indicates that the end-game is near. The stock market bubble seems to inversely track the efforts to contain gold in a box. In other words, as the stock market finishes up the greatest bull market; gold and the Euro promise to bring in a new gold and Euro market at the expense of the DOW, NASDAQ, and dollar. Predictions (general and specific): -- Long-term bond yield above 7�r higher. -- DOW and NASDAQ to converge, where the NASDAQ will rise to meet the DOW as the DOW lowers to meet NASDAQ. As that becomes evident, folks will begin to question values (as if some aren't already, for example Greenspan). -- An increase in volatility and a divergence in COMEX and London Bullion Market Association gold prices from actual physical gold prices, where physical will continue to gain a premium over paper such that the paper markets either fold or certain large players fold. -- Bubble market to be held together until after election next year. -- Gold to rise above $1,000 after election. -- Banking and dollar crisis after election next year. -- Rumblings of gold backed US currency. -- More nationalization of gold mines overseas as more hedge positions put additional minings companies at risk. -- Several large gold mining companies to fold or be taken over by their banks. -- Gold to continue to play in the news on an ever increasing basis. -- IMF to value their gold at market. -- OPEC to eventually accept Euros in payment for oil. -- More financial scandals similar to PEI and Armstrong (scapegoats?). -- Talk of new regional currencies. -- China to dishoard dollars and buy more gold. -- Paper millionairs from bubble market to loose fortunes by buying on dips as the markets eventually correct. -- Political rumblings of gold confiscations, gold mine taxes, and new dollar currency based on gold. -- Euro to rise significantly against the dollar after the election. -- European Union to create a standing army and navy. -- India to become a more dominant world player. -- Solar and wind power to become more popular. -- Big push to get off oil dependency as gasoline goes above $2.50 per gallon after the election. SteveH STRATFOR.COM Global Intelligence Update November 11, 1999 Shakeup At the IMF, And the Global Shakeup Yet to Come Summary <b

Journeyman (11/11/99; 11:03:04MDT - Msg ID:18909)
Re: Phaedrus MID# 18609
When I first started visiting here, I felt similarly: This "knight and lady" stuff kind of put me off. However, the first thing I realized -- quite quickly, I might add -- was that it didn't detract one iota from the quality of the information. . . . . . . . . . . . . . . . The second thing I realized is that overall and for whatever reason, the ambiance set up by this Midieval metaphor tends to keep the civility (chivalry?) level quite high. I've been lurking or participating in this forum for about three months now, and I haven't seen one flame. In fact, I see apologies for things I didn't even realize were sparks. . . . . . . . . . . . . . . . If we had a chance to visit with Einstein or Ayn Rand, should we be put off because they had accents, dressed strangely or chose wierd hair-doos? Only to our own detriment. If we visited a foreign country, should we attempt to change their culture? . . . . . . Regards, Journeyman . . . . . . . . . . . . P.S. Do you take your handle from Pirsig's "Zen & The Art of Motorcycle Maintainence?"

TownCrier (11/11/99; 10:52:40MDT - Msg ID:18908)
To several good knights and ladies...
Scrappy (11/10/99; 20:54:29MDT - Msg ID:18872)--"Here am I, back from a an hour or two in the Archives. Sure is glittery, in there. All the dust is gold dust. And the wisdom; many thanks to all of you who patiently, gently, try to lead us clueless newbies. ... If you find me missing from here, I'll be in the archives, getting caught up. Originally, I started with the 'Important Posts'. I re-started today, with 9/22/98, where I have found some historical gems, indeed."

Please take note that the early days at the Round Table were divided into two timeframes, and are also split within the archives. Each day is divided into an a.m section (Midnight to Noon) and a p.m. section (Noon to Midnight). Be sure to make note of this, or you will miss half of the posts. Simply pay carefull attention to the header and links atop the archive page and you will have no problem knowing where you are as you navigate through these catacombs. Don't hesitate to bring up excerpts that you think we should all be reminded of. There are many among us who have never walked where you are now treading.

Goldy Locks Guy (11/10/99; 21:35:45MDT - Msg ID:18878)--"Hi....I've read several comments referring to MK and buying gold.....Who or what is MK? And do they have better prices on coins?"

Hello kind sir! Nice to see you back with us. Have you been out on the archery range lately? As Sir JLV was quick to explain, MK is the nickname for our good host here...Michael Kosares. He is the proprietor of Centennial Precious Metals and is "king" of this Castle wherein sits the Round Table at which we all gather. He pays the woodsmen to keep the fireplace here stoked with fuel. MK has been doing this for ages because he knows the importance of gold. If you look in your phonebook yellowpages, you just might see a listing there for Centennial Precious Metals. Establishing this USAGOLD website in recent years was simply a natural extention to utilize technology. (like the fax machine!) MK is pretty hip to technology, and uses MacIntosh equipment...which is what we have here on The Tower rooftop, too.
Sir Blue Sky's post (11/10/99; 16:52:28MDT - Msg ID:18854) said more than I could ever hope to convey--he said, "For me purchasing from MK was quite a savings, no 5% sale tax, and about $10.00 a coin less than I was paying here in Iowa."
Thank you for considering CPM / USAGOLD for your next purchase...we'll keep the fireplace burning for you.

ORO (11/10/99; 22:02:52MDT - Msg ID:18883)--"Town Crier -Camdessus:Your sharp observations of official mumblespeak were grand - very enlightening. The Camdessus resignation take - change of policy needs new caretakers who can think the "new math"."

Thank you, Sir ORO. Your words are always admired and revered...your compliment is very well received. (Didn't realize you were among the half-dozen that daily suffer through the GOLDEN VIEW)

Canuck Gold (11/11/99; 10:42:25MDT - Msg ID:18907)
phaedrus
Whoa! I think someone needs to take a valium or something. I haven't been around this forum very long, but it quickly became apparent (to me at least) that the use of Knights and Ladies was a subliminal means of ensuring that a certain level of decorum is maintained. I, for one, appreciate the fact that most of the posters adhere to the principals of respect for the opinions of other posters, whether one agrees with them or not. If you have a problem with these principals, you are perfectly at liberty to conduct your conversations at the alternate site you mentioned, though I'd be surprised if the intellectual level of interaction comes even close to that experienced here. So Sir phaedrus, you have expressed your opinion, and I don't disrespect you for it, but I doubt that you'll get much (if any) support.

CG

phaedrus (11/11/99; 10:16:57MDT - Msg ID:18906)
i think this forum needs to grow up a little
With all due respect, folks, what is with this "knights and ladies" thing that seems to be an ongoing theme? I'm not a "knight," I'm a trader, and anyone who refers to me as a "knight" will lose my respect very quickly. What the hey, why don't we start crowning each other and talking in old english while we're at it?

Quite frankly, I have friends (and clients) who have an interest in gold, and who would benefit from the great info and discussion on this site, but I'm hesitant to send them to this site because I'm embarrassed by all the goofiness.

So let me just get this straight: Are we intentionally trying to keep people from taking this forum seriously or what? Also, it's not just here. I go to the other major gold forum site, which I'm sure most of you are familiar with, and see people posting sixth grade level poetry about gold, I mean REALLY bad poetry, about how we should stay up late because gold is great and gold is neat it can't be beat, crap like that. So maybe it's a problem with goldbugs in general, not just this forum.

So, in conclusion I ask, what is this supposed to be? Is this a place for serious discussion or some kind of goofy version of camelot where everyone pats each other on the head and says any dumb thing that comes to mind?

I've probably offended the snot out of lots of people with this post. Well, sorry. If this forum is a private party for a select group of people, fine. Then ignore everything I've said. But if you genuinely want passers by and newcomers interested in gold to take these issues seriously instead of snicker, then this forum, and others too, needs to cut waaaay back on the cheese factor. In my humble opinion.

There, now rip on me all you want.

Canuck Gold (11/11/99; 10:16:26MDT - Msg ID:18905)
BOE sale cancellation rumour
Here's a thought regarding the BOE sale cancellation rumour. Someone sent up a trial balloon to see what sort of reaction the cancellation might invoke. Well they found out pretty quickly. Just a rumour of cancellation sent gold flying, so they retracted pretty quickly. But as TC noted last night, they only confirmed the sale of 75 tons this fiscal year, with no mention of the remaining 290 tons earmarked for sale. I would say they're hedging their bets. That the omission is very significant. The first sale was 5 times oversubscribed and the second sale was 8 times oversubscribed. If the next sale is even more heavily oversubscribed, then the writing will be on the wall and gold will probably take off.

There are probably some heavy thinkers behind the scenes trying to come up with any means of sapping confidence in gold to trigger another slide downwards. The problem is, they're running out of options and running out of time. Removing the November gold from sale could have been a tactic to seed uncertainty into the market but it didn't work. I wonder what they'll try next? I agree with those who subscribe to the theory that the BOE sales were meant to buy time for the Bullion Banks who have dug themselves a huge hole by over-shorting the market. Unfortunately for them, the ever-increasing supply of leased gold that has fuelled the paper gold gravy train up until now has been shut off and there is no other supply (other than Kuwait's 79 tons at what lease rate, I wonder) to bail them out. The huge gap between supply and demand will soon become apparent to everyone, and the scramble will be on to get on the gold train before it pulls out of the station. All aboard!!!!

CG

rsjacksr (11/11/99; 9:54:08MDT - Msg ID:18904)
Bubbleboy
http://www.microsoft.com/
An anti-Bubbleboy software
patch is downloadable at Microsoft's Web site. PROTECT YOURSELVES.

jinx44 (11/11/99; 9:52:13MDT - Msg ID:18903)
JW&M
What makes you think anarchy is worse than the slow "death of a thousand cuts" that we are suffering now? From your post, you sound like you approve and support the current kings and princes that dictate what we do and how we do it. Do you really believe that what passes for freedom in this country is the way it ought to be? Do you think we are trending to fewer laws and regulations? Will our govt soon wake up and reverse the course they have resolutely steared for decades? Will the system heal itself? We are not a constitutional republic anymore, but a social democracy. If you are familier with the political course of nations you should know what devolves from democracies.

Of course, it is easy to talk about hard money, but do you think that ANYONE in the USG would allow 1/10% of a hard money system to take hold? The govt we have could not exist without social democracy and fiat money. It would perish. I surmise that you want it to continue, in any form of its' current incarnation. You are willing to trade liberty for security?

You allow that disruption is inevitable in a change from now to the future, how can you hope it to be pleasent when the entire system we all live in is diametrically opposed to individual rights, free markets and sound money? I think you are dreaming. Don't get mad when someone tries to wake you from your sleep.

USAGOLD (11/11/99; 8:43:43MDT - Msg ID:18902)
Today's Gold Market Report: Could Be an Interesting End to the Week
MARKET REPORT(11/11/99): Gold gave up some of yesterday's strong
gains in today's early going with Comex options expiration looming
tomorrow. Trading might be somewhat subdued today due to the Veterans'
Day holiday in the physical market but we might get some fireworks in
the options' markets. Please see below.

The market was moved by a trio of events yesterday:

First the Bank of England denied rumors that it was about to back down
from its upcoming gold auction sale. Where the rumor started no one
knows, but it accomplished its task. Gold moved up rapidly as the
thought of BOE backing out of the sales settled in. Apparently quite a
few traders were of the opinion that there might be something to the
rumor, so they didn't sell on the disturbingly quick denial.

Second, the PPI numbers published yesterday point to a strong
inflationary undercurrent that the Fed might be forced to do something
about. Oil was strong again yesterday for the second day in a row
indicating that investors feel that underlying trend might become a more
obvious aspect of the U.S. economy as we go into the year 2000. That
interest concurrently went to work in the gold market. This morning the
New York Fed heavyweight Will McDonough is quoted in a Reuters article
saying that "one should not assume that the American can keep growing
faster without inflation." This is all code of course to talk down stock
speculation and postpone Fed tightening as an antidote to the stock
bubble. It hasn't worked in the past and I doubt even Mr. McDonough
would put much stock in it working now. This is all part of the mantra
that comes with working for the Fed these days. The market will not
respond until somebody acts. So why don't they? That's the troubling
question more than one economic commentator has asked over the last
several months.

Third,we still have the year 2000 looming and quite a few investors have
yet to complete their Y2K gold preparations. Yesterday, some apparently
decided it was about time to get that nettlesome chore off the
things-to-do list now while the price is down from recent highs. As the
deadline nears, we could see some substantial private investor purchases
simply as a precaution.

When you put that all together, it seems like this last upside move in
gold might have some substance. If that's the case any down tick today
might be temporary.

Friday we have COMEX options expiration and we could get a jolt from
that to take us well over the $300 level. In the past, options expiry
has usually been preceded by downside action. We'll see what happens
this time around. Reuters reports this morning that there are a large
number of call options at the $300 level. The issuers might have a
vested interest in doing what they can to keep a lid on the price until
after Friday. If gold goes up in these circumstances, it could prove to
be very bullish in the weeks ahead.

That's it for today, fellow goldmeisters. See you here, tomorrow. Please
read on:

Bulletin

Last Minute Y2K Gold Buyers

December 10,1999 Deadline

We are rushing the December issue of News & Views to you in order to
provide the maximum amount of time to complete last minute Y2K
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canamami (11/11/99; 8:31:41MDT - Msg ID:18901)
Dec POG starting to take a beating
The POG now down $2.40.

I stick to my point that the POG requires a deus ex machina, like an Asian CB adding aggressively to its reserves, to break this thing open. It seems the PPT can contain, at least to a great degree, the ordinary increases in grassroots demand from increased inflation numbers, etc. We need some big official demand, not merely a crimp in official supply which can be reversed at the stroke of a pen.

JCS (11/11/99; 8:29:38MDT - Msg ID:18900)
BOE auction
Can anyone confirm if the next leg of the BOE auction has been cancelled? I keep picking up rumblings but can't get confirmation from anyone. Thanks.

Just Weight & Measures (11/11/99; 8:14:13MDT - Msg ID:18899)
@Turbohawdg
In your zeal to see our current system collapse, please realize that that anachy is NOT pleasant. I would suggest that our current system, though fraught with injustice, is a far cry better than what you appear to be hoping for.

I would propose a shift to a hard money standard based on gold & silver with as little disruption as possible though I fear disruptions would inevitably accompany such a transition.

I too would appreciate communication without profanity . . . as knights and ladies ought to address eachother.

Gold Power (11/11/99; 7:38:47MDT - Msg ID:18898)
The Market
Earlier this week we talked about a key reversal on Monday for gold. Since it occurred, gold has rallied about $8 in two days.

Until we get a breakout to the upside, I'd remain short-term bullish as long as the low on Monday is not taken out. (I think the low on Monday was $286.60 -- a long way below where gold stands now.)

Gold Power

PS. I want to protest turbohawg's use of profanity this morning. I would hope this will not degenerate into situations similar to certain other gold forums. Mr. turbohawg should either learn to express himself in a civil manner or else keep his thoughts to himself.

canamami (11/11/99; 7:08:30MDT - Msg ID:18897)
POG doing OK, perhaps, given currency action
It looks like the US$ is up today on the futures, while the yen is heading down. Thus, perhaps the POG isn't doing too badly today, given the action in the currencies.

Black Blade (11/11/99; 6:59:19MDT - Msg ID:18896)
The prelims
Au action is very interesting this morning with sharp spikes up and down. Currently Au down -$2.50 at $295.00, yet platinum and paladium are up $16 and $11 respectively. s&p futures are up 1.50.

Cavan Man (11/11/99; 6:15:50MDT - Msg ID:18895)
SteveH
Really good!

The upcoming presidential election in the US rivals I think the turning point reached after Washington had completed his second term. It will be critical to choose the right leader and make the right decisions moving ahead now. Unfortunately, I do not have confidnce in the outcome.

FOA (11/11/99; 5:14:09MDT - Msg ID:18894)
(No Subject)
ALL:
I find myself involved in extended dealings that will require more time. Sometimes these things happen? In any event, I hope everyone enjoys the current rebound in gold! As soon as possible, I will read through all of the excellent commentary presented here and offer some of my own.

thanks FOA

K (11/11/99; 1:27:11MDT - Msg ID:18893)
Market Perception and the forces of momentum
Market momentum are based on peoples perception and beliefs in a commodity and how it will perform.
BoE Auction cancelled or not is a no win situation for BoE.
The English public do not agree with public gold used to make up the shortage due to the gold carry and leasing game.
Y2K, Oil prices up, inflation figures looming at the door, Microsoft losing their grip and giving way to competitors ahead on products. Overinflated values on underperforming stocks, how long will it last? The dollar based on a debt which keeps escalating to keep the whole thing afloat, bound to sink.
The reality is for gold it is no longer leased by the big C.B.'s who signed the agreement, about 80% of all gold held by C.B.'s. We have a few banks talked into leasing to make up the short fall, it can't last. When the real value of gold is known and the perception of it takes hold on the market as we are beginning to see, this factor will overwhelm the opposing attempts to supress, we can have it on our terms or have the powers to make the terms and then they only will benefit and not the market and the investor.
The reality for gold at this point is that the shorts on gold are sweating and hoping that some bank some where will lease, this can't continue and will not meet the shortfall of supply needed to meet the demand as mine production is way short of the market needs.
25 tonnes on an oversubscribed auction will not do the trick either.
European C.B's recognise that gold will have great significance and monetary value in the coming of a new millenium bringing change to our present collapsing system.
Fiat based on debt or currencies based on the tangible and valuable Gold.

turbohawg (11/11/99; 1:04:02MDT - Msg ID:18892)
word from the front
My friend in the currency movement business says that, as we gathered given Townies excellent monitoring of Fed activities, demand for cash has grown substantially, particularly in the last three weeks. Banks and credit unions are ordering currency in multiples of their normal orders ... double, triple, and more.

Ain't this exciting !? Living thru a historical period that will probably be appreciated only thru the rear view.

While in no big hurry to see it all come apart (I'll concede a little hurry), my hope is that, like my buddy Jinx, when it finally does come apart, it blows the f**king doors off. I've had enough of socialism, fascism, central banking, manipulation, treason, cowards, taxes, attacks on gun rights and property rights, the drug war, ..... freedom ?? yeah, right.

SteveH (11/11/99; 0:42:05MDT - Msg ID:18891)
my friend Leroy
www.stratfor.com

Leroy,

Finally Stratfor gets part of the picture correct regarding world finanicial problems. They are missing the gold and oil link but seem to grasp well what you and I have discussed before. There is actually a battle for reserve currency between the IMF/$ faction and the Bis/Euro faction. Throw in a mixture of what Stratfor discusses, especially the regional currency issue and this spells financial difficulty. This contention between the two above factions isn't good for the dollar longer term as it will cause a loss of world-dollar market share. It will have to compete for the same market share with the Euro. Rumors are flying that any new currency initiatives will include gold valued at a much higher rate. Just remember that per Frank Veneraso and Bill Murphy the world gold markets are naked short (no gold to back the contracts) between 8 and 14K metric tons of gold -- that is gold that CAN NOT be delivered against contracts. This would ultimately result in a similar rise in the price of gold that we saw between 1971 and 1980, where gold went from $35 to $852/ounce or a 27 time increase in the price of gold. What does that mean for the dollar? It would mean a large devaluation in which the Euro may end up being the new currency to purchase oil. Should that happen then expect gasoline to be 10 or more times higher some time in the future, inflation to run much more severely and instead of inflation being seen in a run away stock market, we will see it in a scramble for hard goods or commodities, as the worlds more valuable currencies battle over the same amount of goods (Buffet buying millions of ounces of silver and Gates buying parts of silver mines, hmmm?). How soon? That is the trillion dollar question.

What we are witnessing is the death of the dollar as we know it. This is a chess game where the looser's currency devalues greatly. All the moves from all corners of the world are centered around gold, the dollar/IMF (see below), and the new Euro currency. This is the achilles heal of our new-age bubble economy that will blind-side most Americans when they wake up and see gold revalued 20 or more times higher. They will ask, "Where did that come from? I thought gold was dead." The answers we get will miss the point. Perhaps it will be blamed on Y2K or on horders or LTCM or hedge funds or derivatives. The correct answer is (and remember this) currency needs a basis of discipline that will prevent money from being printed, credit being created out of thin air as the dollar has been since 1971. That is why the Euro is backed by 15% gold valued at market. In 1971, President Nixon removed us from the gold standard. That is when the present situation started in earnest. Since then we have been in a dollar exportation game that has flooded the world with over $400 billion dollars, mostly held overseas in Central Bank accounts to purchase oil and other world-trade settlement items.

With the advent of the Euro, the destructive actions of the IMF, and the large dollar overflow, we are seeing desparate moves by desperate players -- all in the background to an otherwise goldilocks economy. So, how soon becomes more an issue of how can we tell we are getting close?

Watch the players move their pieces.

-- First, the US was taken off the gold standard in 1971.

-- Oil went up in 1973.

-- Next, gold was demonitized in 1976-1978 and made cheaper in dollar terms, while OPEC bought up gold-repayment contracts from the mining companies as they were loaned OPEC petrol-dollar profits through bullion banks. The BBs, in turn, leased private and some Central Bank gold into the gold markets that made gold cheaper and cheaper as it was sold into the world paper gold markets. They did these moves even to the point of hedge funds jumping on board to short the gold market. Now many of these gold contract repayments are near default as gold is no longer available in quantity to pay back the oil countries their gold that they had been receiving from the mines. Some of these folks are obviously concerned (BIS/Euro/Asia/OPEC).

-- In 1982, the great bull market of the Century started. Much of the money in the bull market came from excess liquidity resulting from credit expansion in our banks. Since gold was no longer needed to back the dollar, banks and the Fed were free to create money without a resulting rise in the price of gold (this is the lack of discipline brought on by not having gold backing. As gold should have been allowed to rise as the dollars were created).

-- 1988-89 was when Japan's bubble economy burst. They have been struggling ever since.

-- In 1994 through 1999, hedge funds shorted the gold market in earnest further increasing the gold shortages above. The BRE-X scandal broke gold's back and almost destroyed the gold mining as an investment further depressing the price of gold.

-- In 1999, the Bank of England announced a public gold auction of half of their gold reserves. The Euro was announced. The IMF became embroiled in a scandal (see below). The European Union announced they won't fund any more gold leasing except for 2000 tons over four years. Gold hit a 20-year low. Gold rose from $252 to $338 in one week. Rumors are floating currently that the Bank of England doesn't want to aution any more of its gold. Ashanti and Cambior (two gold mining companies) actually loose money when gold rises $80, because they (like many others) were threatened with a lower credit rating by bullion banks if they didn't further hedge their production. Many gold mining companies and hedge funds scramble to cover their short gold positions. Gold lease rates rise to nearly 10% during the $80 price move. Inflation indices of the US government start to show signs of inflation. Greenspan gives the doom and gloom (for him) Jackson Hole speach. The long-term bond yield continues to remain above 6%.

Conclusion: BRE-X almost seems as though, in retrospect, it was orchestrated to lower the price of gold, something not really mentioned then but makes sense now. The pace of chess moves has increased in frequency and intensity in 1999. Where it took years to see these changes before they are now coming weekly and daily. This indicates that the end-game is near. The stock market bubble seems to inversely track the efforts to contain gold in a box. In other words, as the stock market finishes up the greatest bull market; gold and the Euro promise to bring in a new gold and Euro market at the expense of the DOW, NASDAQ, and dollar.

Predictions (general and specific):

-- Long-term bond yield above 7% or higher.
-- DOW and NASDAQ to converge, where the NASDAQ will rise to meet the DOW as the DOW lowers to meet NASDAQ. As that becomes evident, folks will begin to question values (as if some aren't already, for example Greenspan).
-- An increase in volatility and a divergence in COMEX and London Bullion Market Association gold prices from actual physical gold prices, where physical will continue to gain a premium over paper such that the paper markets either fold or certain large players fold.
-- Bubble market to be held together until after election next year.
-- Gold to rise above $1,000 after election.
-- Banking and dollar crisis after election next year.
-- Rumblings of gold backed US currency.
-- More nationalization of gold mines overseas as more hedge positions put additional minings companies at risk.
-- Several large gold mining companies to fold or be taken over by their banks.
-- Gold to continue to play in the news on an ever increasing basis.
-- IMF to value their gold at market.
-- OPEC to eventually accept Euros in payment for oil.
-- More financial scandals similar to PEI and Armstrong (scapegoats?).
-- Talk of new regional currencies.
-- China to dishoard dollars and buy more gold.
-- Paper millionairs from bubble market to loose fortunes by buying on dips as the markets eventually correct.
-- Political rumblings of gold confiscations, gold mine taxes, and new dollar currency based on gold.
-- Euro to rise significantly against the dollar after the election.
-- European Union to create a standing army and navy.
-- India to become a more dominant world player.
-- Solar and wind power to become more popular.
-- Big push to get off oil dependency as gasoline goes above $2.50 per gallon after the election.

SteveH

STRATFOR.COM
Global Intelligence Update
November 11, 1999

Shakeup At the IMF, And the Global Shakeup Yet to Come

Summary

International Monetary Fund (IMF) Managing Director Michel
Camdessus tendered his resignation Nov. 9, citing personal reasons.
In the midst of several investigations into money laundering of IMF
loans in Russia, the timing raises questions over the extent to
which the institution has been tainted by the scandals. In
addition, the internal debate over the IMF's future direction will
now play out in the choice of a new managing director; Asian
nations seek more influence over the IMF. A battle is now brewing
over the future leadership and the viability of the IMF is
ultimately at stake. A discredited and paralyzed IMF, in turn,
would threaten the fabric of the global financial system.

Analysis

Michel Camdessus, managing director of the International Monetary
Fund (IMF), announced that he would step down by mid-February 2000.
Camdessus cited personal reasons, and said it was a good time for
transition in the institutional leadership. Camdessus suggested
that he took the appointment in 1997 knowing he wouldn't serve the
full five-year term - but he didn't want a change in leadership in
the middle of Asia's financial crisis. Camdessus said that for him
to complete his current term "would be inappropriate in a world in
permanent need of renewal of its institutions."

His move comes as investigations into possible misappropriation and
money laundering of IMF funds from Russia intensify. In addition,
the IMF and other international lending institutions have recently
admitted that assistance programs linked with stiff austerity
requirements may have actually added to the difficulties in some
recipient nations in Asia.

His action may be linked to opposition to the IMF's unpopular
practice of linking aid to austerity measures as well as the need
to keep the IMF from being dragged into the Russia money laundering
scandal. Whether IMF officials were directly involved in the
Russian bank scandal, or it was simply a case of mismanagement, the
IMF is nonetheless faced with a crucial leadership decision.

The debate over the next IMF leader may well leave the institution
paralyzed, as factions push for a leader who will redefine policy
in their terms. The fundamental battle is between the United
States, the IMF's biggest donor, which demands that loans be
conditioned on radical free market reforms, and other donors and
recipients, who argue that loans should be sensitive to individual
concerns and situations.

A key example is found in the underlying tension over whether
capital controls are legitimate economic tools. Since Asia's
financial crisis, when Malaysian Prime Minister Mahathir Mohamad
refused IMF assistance, opting instead for capital controls, the
issue has triggered hot debate. Malaysia's economic recovery,
independent of IMF assistance and without severe economic reforms
and social consequences, has inspired other Asian IMF recipients to
support, or at least not condemn, limited capital controls
[ http://www.stratfor.com/asia/aiuarchive/b990226.htm ].

Beyond capital controls, the debate is between proponents of a
unified, global economic system and proponents of more regional
options. With Camdessus no longer at the helm, these factions will
attempt to wield their influence during the search for a new
managing director.

This will pit nations like the United States - advocates of the
one-solution-fits-all free-market policy - against countries like
Japan, which is supportive of more regional economic security nets,
including an often-proposed Asian Monetary Fund. The United States
will likely call for more auditing, tighter controls, transparency
and restrictions in light of the Russian bank scandal. However,
these very principles have been tearing the IMF apart all along, as
they contrast with the desires of nations like Japan and recipient
nations, forced to accept stringent reforms while begging for
assistance.

As with the long-running debate over the choice of the World Trade
Organization (WTO) head earlier this year
[ http://www.stratfor.com/SERVICES/GIU/050699.ASP ], the selection of
a replacement for Camdessus will likely paralyze the management of
the IMF. If accusations of institutional complicity, or even gross
mismanagement or neglect, in the Russian scandal are raised, the
IMF will be further discredited. The debate opened by Camdessus'
resignation, then, threatens the very viability of the
organization.

The IMF is the key proponent of the idea of a unified global
economy. If it is crippled by infighting and potentially
discredited by scandal, such a global economic system itself is in
jeopardy. This, in turn, would lend credence to calls for regional
systems operating under differing rules. It may also trigger new or
relapsed economic crises, as donor nations call in loans and the
IMF suspends new distributions. While Camdessus may indeed have
resigned for personal reasons at a time of relative financial
stability in the world, the result may be an accelerated
realignment of the global economy.

(c) 1999, Stratfor, Inc.
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Golden Truth (11/11/99; 0:23:35MDT - Msg ID:18890)
GOLD DOWN $1.25
Thats it bring her down nice and slow so nobody notices or cares, you guys really SUCK!!!

Black Blade (11/11/99; 0:13:45MDT - Msg ID:18889)
The Prez Sez

WJC says that Y2K is not going to be much of a problem. This from an admitted liar who suffered impeachment. hmmmm......

You all know the old joke:

Q: How do you know a politician is lying?

A: His lips are moving.

Unfortunately, this guy is no joke.

Click Here to view yesterday's discussion.

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