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ARCHIVED DISCUSSION FROM 8/11/2000
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Boxman
(08/11/00; 21:39:29MT - usagold.com msg#: 34812)
CoBra(too)'s Post #34802- More on dwindling supply
http://www.goldensextant.com/commentary13.html#anchor143635
Golden Sextant letter from Murray Pollit to Central Bankers.
It amazes me that the dam continues to hold. When this thing blows, the only time "the great depression" will be mentioned, is when the historians ask, didn't they learn anything from studying "the great depression"? The talk will of the pain, suffering, and anguish that the people of this era suffered through, because the woes of the 30's will pale in comparison.
I know that we see it daily on this forum, but to those new to lurking here, the phrase "Gold, get you some!" is some of the best, if not the best advice you can get from interland. It's not the idea that riches are soon to be had, it's insurance for your familys protection against the most historic financial calamity to ever hit mankind, in my opinion anyway.
JavaMan
(08/11/00; 20:10:07MT - usagold.com msg#: 34811)
Aristotle, All...
http://www.murabitun.org/documents/economics/beyond.html
Aristotle, you said: "The simple point I was trying to bring to the forefront for some of the young gunslingers out there who fancy themselves as savvy traders is that their strategy seems lacking."
Immediately, I thought of "The Outlaw Jose Wales" when the bounty hunter walked into the bar looking for Jose Wales. Clint Eastwood asked him if he was a bounty hunter and the guy responded..."a man's got to do something for a living." Then Eastwood responded with a classic line..."dying ain't much of a living boy." I loved it. And perhaps the same fate awaits the gold contract traders.
All...
On another note, I stumbled across this old bookmark (the link above) that I thought worth posting even at the risk of it being old (redundant) news. From the link above:
"Our job here is to break the idols: burn the paper-money or print it in enormous amounts, introduce computer virus in the banking nexus, sabotage their information records, boost the figures, erase the debts, etc. Money is today electronic impulses, what can be more fragile than that? These will inevitably become the practice of the future."
Could this be the fifth horseman? These people sound serious...and, perhaps, with good reason. Worth the read.
Also, I was impressed with the generous response to the questions from the newcomer, bambie. Many of the regulars here stepped up to offer responses and suggestions that just caused me to want to say..."impressive".
And, of course...Trail Guide...you and your insights have been sorely missed. Welcome back. I'm sure I'm not alone in my anticipation of what you have to share as your time permits.
Aristotle
(08/11/00; 19:08:56MT - usagold.com msg#: 34810)
Hi CoBra(too)--you're a gem!
I can't recall the last time anyone suggested that I had "style" in any way, shape, or manifestation. But seriously, regarding your point that the comments of a U.S. bond default were not my style, I'm certain that my core position hasn't in fact changed significantly over the many months I've been here. Rather, I've merely attempted new ways to express these same thoughts because different people learn in different ways.
I've talked about the U.S. default in the past, but felt the time was right to revisit this topic, drawing the very close parallel between some forms of the Gold derivative markets of today as the modern equivalents of the pre-1971 U.S. bonds. Because our dollars were internationally convertible to Gold prior to 1971, our U.S. Treasury bonds were truly just another form of Gold derivative--specifically, an interest bearing Gold loan "contract". When the U.S. Government ceased the dollar convertibility, that was a defacto default on the Gold loans represented by the bonds.
The simple point I was trying to bring to the forefront for some of the young gunslingers out there who fancy themselves as savvy traders is that their strategy seems lacking. They are akin to pre-1971 bond owners who held it as unthinkable that the mighty U.S. Government would default as a counterparty in their tidy little financial affairs. But lo and behold, the government defaulted. I do not think it takes much imagination to see a similar default play out in the private/commercial bullion banking sector here thirty years later. And if a person pauses long enough to give it even a modicum of thought, I'm sure you will agree that that same person will quickly realize that COMEX Gold contracts will be seen as even less than nothing, too far removed to have a binding claim on Gold, and unable to reflect the rising physical price because the futures prices are determined by their very own supply and demand dynamic for themselves as contracts--and no one in their right mind will want them.
Gold. Get you some. ---Aristotle
Hill Billy Mitchell
(08/11/00; 17:03:29MT - usagold.com msg#: 34809)
Official release
http://www.bog.frb.fed.us/releases/H15/update/
Official: Federal Reserve Statistical Release
Release Date: August 11, 2000
Rates for Thursday, August 10, 2000
Federal funds 6.52
Treasury constant maturities:
3-month 6.25
10-year 5.76
20-year 6.00
30-year 5.68
upside-down spread FF vs long bond = (0.84%)
CoBra(too)
(08/11/00; 16:01:56MT - usagold.com msg#: 34808)
Sir Aristotle - I'm at a loss and I feel I may have missed ...
something - since it's not your style telling the world that the US has defaulted on bonds or treasuries in 1971?
Even if that may have been the case (anyway) - the US has defaulted on the international convertability of the US $ vs GOLD . No dot com - full Stop!
After defaulting and depriving their own citizens of their constitutional right to real money in 1933 - and as the change over from the declining power of the Common Wealth's Sterling Pound or gold Guineas to gold $'s was a sea change - of a colony to a or THE world power - exacting their assumed right to print (seignorage) reserve paper $'s. A currency, which may even have become MONEY, as some (war) veterans still believe it is - Alas, would anybody believe in a delinquent convicted of the same crime twice repeated? - vs their own and international victims?
$'s - sell some for money - cb2
schippi
(08/11/00; 13:35:54MT - usagold.com msg#: 34807)
Select Gold Hourly Chart
http://www.SelectSectors.com/agpm70.gif
FSAGX Moving Up!
wolavka
(08/11/00; 12:23:30MT - usagold.com msg#: 34806)
signs of major move coming
We shall see.
SHIFTY
(08/11/00; 12:12:09MT - usagold.com msg#: 34805)
Kitco Chart
Its Alive!
Looks like gold aint dead afterall!
$hifty
wolavka
(08/11/00; 11:32:38MT - usagold.com msg#: 34804)
I can't believe it
you pushed it back up to 279.10, let's try to break 280
Aristotle
(08/11/00; 11:25:09MT - usagold.com msg#: 34803)
It still boggles the mind that the United States Govt defaulted on its Bonds
While it might be within the grasp of comprehension that a country like Ecuador would default on its debts, as unimaginable as it seems that the mightly United States would also default on its Treasury bonds, the fact remains that they have indeed done so. Plain and simple, one for the record books.
A Lesson in Perspective
It has been said that after a man has fallen so low as to commit murder, he will not be much impressed or restrained by laws against lesser crimes such as larceny. Essentially, once he's killed a man, it becomes trivial to pick pockets with an easy conscience.
The Gold traders who choose to ignore the very real risk of counterparty default or of systemmic meltdown within their realm of Gold derivatives are failing to recognize that such collapse is small potatoes compared to the U.S. bond default in 1971. It is now just a trifling thing to have their pockets thusly picked by a Gold derivative failure.
In a world of questionalble honor, only physical Gold will do.
Get you some. ---Aristotle
CoBra(too)
(08/11/00; 11:17:42MT - usagold.com msg#: 34802)
The tale of the two golds - re A/FOA ...
and thank you both for your more than wellcome thoughts, is now starting to be played out for all - ever willing, wanting or striving to see - to see!
As new mine supply will not only NOT cover current demand (1500 tons supply deficit this year) future supply is dwindling rapidly as less and less new sources to known reserves are developed (see Goldfield's CEO remarks in Paris) - and in view of potential short position in physical (see Venoroso) - BB's et al scummy scam screams - game over!
The BoE Pub's, Gold (S-)ale's "last call" before closing shop is here. Beer, get you some - cb2
SHIFTY
(08/11/00; 10:48:57MT - usagold.com msg#: 34801)
Rudolf Gunnerman
http://www.rbbi.com/folders/fuel/a-21.htm
I have kept an eye on Rudolf Gunnerman for a few years now. I thought if any are unfamiliar with his work you may want to look at this link. Below is just a taste of what he has been doing !
====================================================================================
"Caterpillar" is the single word that brings a degree of credibility to Gunnerman's claims.
The Peoria, Ill.-based heavy- equipment manufacturer entered a joint venture with Gunnerman in July 1994. Together, under the name Advanced Fuels, they've conducted experimental uses of the A-21 fuel - made up of 70 percent naphtha, a crude-oil byproduct, and 30 percent water.
And now, Paccar Inc. is throwing its trucking weight in Gunnerman's corner.
The Bellevue-based manufacturer of Kenworth and Peterbilt trucks recently sent a truck to Peoria for testing with the A-21 fuel. Paccar changed out the engine to add a Caterpillar engine and modified the cylinders and fuel injectors to handle more fluid volume.
They also did a series of baseline tests of noise, cooling, drivability and fuel economy, said Jim Reichman, Paccar's technology-development manager.
Back at Paccar's Mount Vernon technical center, Reichman is enthused. "We're pretty pleased with it," he said. "We've actually had it out and driven it and are in the process of doing some tests on it."
Paccar's goal is to get the truck in a customer's hands to get continuing feedback on its performance.
Caterpillar would not allow photographs to be taken of the beige vehicle, saying the exterior looks no different than any other Peterbilt and the interior changes and specific test results are proprietary information.
Secrecy is not uncommon on the A-21 project or on a local endeavor financed by a South King County pair, Tim Shadduck, 42, and Rick Course, 49. For a demonstration, they fetched a gallon of regular unleaded gas from the station down the street and water from the garden hose, run through a charcoal filter.
"I've got a more exotic filtration. But for demos, this will work fine. We'll do it real backyard style here so there's no question," Shadduck said.
Shadduck uses a clear, viscous emulsifier to suspend water within the fuel. Injecting the "magic bullet" into a container turns the water-fuel mixture milky white. Like Gunnerman, Shadduck reveals little about the biodegradable substance.
He said Gunnerman's fuel "kind of brought down the walls of disbelief," but skeptics abound. "I keep waiting for that big brick wall to come up in front of me and say, `You can't do this.' "
Shadduck eases a brown 1975 Nova, "Injection Research" etched on its side, onto the roadway. He uses a laptop computer to regulate fuel intake and punches the gas pedal to nudge the speedometer arm from 60 mph to 80 mph within seconds.
The pair are targeting race-car drivers, who now pay $5 a gallon for racing fuel.
Gunnerman is expanding his reach to governments that run municipal bus systems, agencies increasingly mindful of more stringent emissions standards in the coming years. For that reason, some are willing to investigate a fuel - and even pay a bit more for higher fuel usage - to meet new guidelines.
============================================================
$hifty
wolavka
(08/11/00; 10:17:24MT - usagold.com msg#: 34800)
gold
Are you gonna run it up moc or are you closing dec @ 278-79 and gap it sunday nite monday morning?
Why wait? just run it
wolavka
(8/11/2000; 9:14:22MT - usagold.com msg#: 34799)
soybeans and silver
let's go up.
Black Blade
(8/11/2000; 8:47:41MT - usagold.com msg#: 34798)
@CoBra(too)
Yeah your right. I should have said drill rigs that were committed to the mining industry (exploration), but then they are also likely include those for water well drilling, etc. There are a few Reverse Circulation rigs from Nevada and Montana going to the methane plays. Mostly independants I would guess. When I see some of the drillers I know in N. Nevada I'll have to check out whether or not the main players are getting involved. It sounds like a "gold" rush of sorts in Wyoming, and it is only likely to intensify.
Black Blade
(8/11/2000; 8:41:08MT - usagold.com msg#: 34797)
What? No inflation here!
Wholesale Prices Were Flat In July, But Retail Sales Climbed Above Expectations
Friday, August 11, 2000 08:42 AM ET
A WSJ.com News Roundup
WASHINGTON -(Dow Jones)- Wholesale prices were unchanged in July as falling energy prices offset a surge in prescription drugs. But consumers stepped up their spending in the month -- a possible signal that the economy's slowdown could be reversing course. Retail sales grew 0.7% in July to a seasonally adjusted $270.55 billion, boosted by sharp growth in purchases of automobiles and other big-ticket items, the Commerce Department said Friday. Outside the auto sector, sales increased 0.6%.Economists surveyed by Thomson Global Markets expected total retail sales to grow by only 0.4% and sales excluding autos to rise 0.3%.Sales in June were revised to show a 0.4% increase in total sales from the originally reported 0.5% increase. Excluding cars, sales were revised to show a 0.3% increase from 0.2%.
In the July report, sales of durable goods -- those meant to last three or more years -- rose 1.2%, their strongest gain since February. Within the category, auto-dealer sales advanced 1.1%, also the biggest advance since February. Sales of other durable goods strengthened, as well. Sales of furniture and related items rose 1.3% while purchases of building materials and hardware rose 1.3%. The gain in building materials was the sharpest since March. By contrast, purchases of nondurable items recorded slower growth in July, posting a 0.4% rise after June's 0.7% increase. Gasoline station sales, which had been reflecting sharp price spikes in recent months, slipped 0.1% as oil prices moderated. Sales of apparel slowed, dropping 0.1%, on cooler-than-anticipated weather. Purchases at general merchandise stores rose 1.6% while sales at drug stores were up 1.5%.Meanwhile, last month's flat performance for wholesale prices, reported by the Labor Department, followed a 0.6% surge in the producer-price index for June. The so-called core index, which excludes the usually volatile food and energy items, rose 0.1% last month after dropping 0.1% in June. Economists surveyed by Thomson Global Markets expected the July PPI and the core index to inch up 0.1%.Producer prices rose just 4.1% in the 12 months through July, down from 4.3% in the year through June. The Labor Department attributed the steady prices in July mostly to a 0.7% slump in energy prices after a 5.1% surge in June that caused gasoline prices in some parts of the country to rise above $2 a gallon. In July, gasoline prices fell 9.1%. But natural-gas prices rose a record 6.2% and electricity prices rose 2%, the biggest gain in more than nine years. The decline in overall energy prices was offset by a surge in prices of prescription drugs, which rose 0.5% last month, the fastest pace in three months. Prescription drugs account for 2.3% of the overall producer-price index. Tobacco prices rose 0.1% after a 1.4% decline in June. Wholesale food prices were steady in July, but most other prices declined. Prices of passenger cars dropped 0.5%, the same rate as in June. Prices of computers fell 0.4% in July after dropping 1.6% the month before. Inflationary pressures further up the production pipeline moderated. Prices of crude goods fell 1.1% while prices of intermediate goods rose just 0.2%. Excluding food and energy, prices of crude goods fell 1.8%, the biggest decline since November 1998.
Black Blade: Prices are up, but no inflation. Take a little hedonic statistics, mix with a bit of Core Rate manipulation, add a few lies, and like magic - no inflation!
CoBra(too)
(8/11/2000; 8:40:08MT - usagold.com msg#: 34796)
@ Black Blade
Maybe the gold miners can help out with some additional rigs for a short while, though only until oil sells for gold only contracts. cb2
USAGOLD
(8/11/2000; 8:39:24MT - usagold.com msg#: 34795)
Wall Street, Main Street : Differing Views on Inflation
http://www.usagold.com/Order_Form.html
DAILY COMMENTARY
(8/10/00) www.USAGOLD.com . . .Gold improved in the
early going at one point trading $1.80 over yesterday's close
before selling from some un-named source nipped the rally in the
bud. The surge was no doubt related to government reports
indicating a burgeoning inflation that Wall Street spends a good
deal of time denying both by word and deed and Main Street
cannot deny no matter how much it would like to.
Producer Prices came in a bit benign at .1% higher,
but the optimistic report belies a festering reality likely to show
up in future reports. The dovish report was carried by a drop in
the oil sector (down .7%), a trend not likely to continue into the
future given the push from the base -- crude oil and natural gas
are both on the rise. Today's PPI in all likelihood will be written
off as small comfort by those with an analytical bent, and this
could show up as early as today in the markets.
Retail sales came in this morning a surprising .7%
higher revealing a consumer mind-set driven by the
buy-now-before-prices-go- higher psychology that often
accompanies an inflationary economy. Of course, such behavior
only accelerates the inflation rate. How long before we are
topping off our gas tanks and plugging in that freezer out in the
garage?
Of course this all gravitates back to gold ownership,
as a little yellow stored safely nearby has historically been the
most reliable hedge for those concerned with government money
printing. Wall Street knows this and so does the beltway and the
liberal/ socialist mainstream press. That's why these groups
spend so much time, capital and energy trying to persuade people
through one machination or another not to own gold -- an
exercise, I might add, in futility. The World Gold Council
yesterday reported worldwide gold demand running near record
highs despite all the rhetoric and political/financial muscle
employed against it. In both instances -- when watching gold's
critics and inflation's naysayers go about their business -- one is
reminded of the good king Canute commanding the tide to
remain at sea.
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Black Blade
(8/11/2000; 8:33:40MT - usagold.com msg#: 34794)
@Henri
Thanks for the link. I just printed 49 pages. It should keep me busy this morning. I did forget about the Rig-Count in the last post. There is a shortage of drill rigs. Even rotary drill rigs are being taken to Wyoming to drill into the coal bed methane plays. People in the industry know what's coming down in the near future. The next 5 to 7 months should begin to look very interesting. Again, thanks.
Henri
(8/11/2000; 7:53:04MT - usagold.com msg#: 34793)
The return of FOA
Welcome back Sir Trail Guide! We have missed you at this round table. I raise a toast to your return.
Henri
(8/11/2000; 7:45:13MT - usagold.com msg#: 34792)
Whither Oil
http://www.worldoil.com/WO_RESEARCH/Research/whitepaper.pdf
Great Post Black Blade. The link above further substantiates the impending price rise.
CoBra(too)
(8/11/2000; 7:21:01MT - usagold.com msg#: 34791)
Re- yesterday's cafe alert - substantiated or not -
Fact is oil turned higher after almost touching a low 27. The reaction of King Fahd of Saudi Arabia to Mr. Liebermans
nomination to Gore's/VP doesn't bode well for lower oil prices in the forseeable future - and winter stocking (not Santa's) is still ahead.
BTW - PD - the new addition to XAU is marvelling, as all the goldbugs are, about their dubious honor to be included in a gold and silver index.
Somebody seems to be getting desperate - the winch on gold can't possibly be more tight - something's bound to give!
My humble gut feelings of getting close to an explosive
breakout of the precious - without anybody construing this as buy recomendation - may not be all that far off - or do you think otherwise? A/FOA may,in terms of paper gold see further erosion against paper? ... though the real price of gold will manifest itself.
Best cb2
wolavka
(8/11/2000; 6:56:30MT - usagold.com msg#: 34790)
let's go
You already broke the resistance, step on it. next 284
Black Blade
(8/11/2000; 6:55:28MT - usagold.com msg#: 34789)
Hedged vs. Unhedged
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B28025693700785D26
Link to South Africa, recommending heavy weighting in GOLD and HGMCY. Why? Because they're unhedged. Go figure! Maybe all are beginning to see the light. He gets down on AU for being hedged.
LeSin
(8/11/2000; 6:52:35MT - usagold.com msg#: 34788)
Spelling --- "Shrinking"
Apologies "S"
LeSin
(8/11/2000; 6:49:38MT - usagold.com msg#: 34787)
LBMA Shrinkin Volume Turnover - Gold Moving to Other Markets
The BIS & China taking up the Diffference? If not BIS & China - who else?
Thanks Black Blade for your regular reports, I am aware that you posted this a few minutes ago. I think it is very telling re the gold market changes that are in rapid change. "S"
Updated Fri Aug 11 07:20 ET
BRIDGE UPDATE--PRECIOUS METALS: LBMA gold turnover at new lows
Aug 11--1120 GMT/0720 ET
.................................................................
TOP STORIES:
LBMA July daily gold turnover down 25% to new lows, silver dn 4%
London--Aug. 11--The London Bullion Market Association said Friday average
daily cleared turnover for gold in July fell 25% on the month to 20.5 million
ounces--the lowest ever level recorded by the LBMA. The average price fell by
U.S. $4 to $281.58, and the average daily value fell to a new low of $5.8
billion from $8 billion in June. Silver ounces transferred fell to a new low of
93.3 million. (Story .13372)
SWISS GOLD: SNB reserves down 119.3 mln Sfr to 37.987 bln Sfr
Zurich--Aug. 11--The Swiss National Bank disposed of 119.3 million Swiss
francs' worth of its gold reserves in the first 10 days of August, it announced
Friday. This is equivalent to just under eight tonnes, roughly in line with
analysts' expectations that the SNB would dispose of about one tonne daily until
end-September, when new quotas take effect. The SNB's stated goal of selling a
total 120 tonnes by then may require heavier sales in the coming weeks. (Story
.11824)
.................................................................
OF INTEREST:
World Gold Council says Q2 gold demand 789 tonnes, 2% dn vs 1999
London--Aug. 10--World gold demand for the second quarter of 2000 held
steady at 789 tonnes, 2% down on the same period in 1999, according to the World
Gold Council's Gold Demand Trends report released Thursday. Jewelry demand for
the quarter was 695.3 tonnes, up 1% on year. However, investment demand was 93.7
tonnes, down 22% on 1999's levels. Total demand for the first half of 2000 was
1,584.2 tonnes, 1% down on the first half of 1999, the WGC said. (Story .14156)
Black Blade
(8/11/2000; 6:33:24MT - usagold.com msg#: 34786)
"Morning Wakeup Call!"
Source: BridgeNews
THE EASTERN FRONT:
Asia Precious Metals Review: Gold moves within a narrow band
Tokyo--Aug. 11--Spot gold moved within a narrow band of around U.S. $273 per ounce in Asia on Friday in extremely thin trading due to the lack of new incentives, dealers said. As the price of gold moved within a boxed range this week, players in Asia were reluctant to take positions prior to the weekend, they noted. Expectations of stable demand continued to firm spot platinum prices, while the price of palladium was weakening as Russian materials are expected to start being shipped to Japan soon, dealers said. (Story .2200)
Black Blade: Yesterday was the 55th anniversary of Japan's surrender to Allied forces shortly after the US dropped the Big-Burrito on Nagasaki. Nothing so dramatic on the PM markets overnight as the metals were somewhat comatose.
THE WESTERN FRONT:
French consumer prices cool in July amid summer sales
Paris--Aug. 11--French consumer prices fell an unadjusted 0.2% in July from June and were up 1.7% from a year ago, as a decline in energy, clothing and fresh food costs more than offset price gains in transport, communications and services, according to preliminary data released Friday by national statistics institute INSEE. The figures were in line with consensus forecasts from market analysts. (See table .6660) (Story .1660)
Black Blade: "There are three kinds of liars in the world - Liars, Damn Liars, and Statisticians" - Mark Twain. Hedonic statistics maybe? Taking their cue from the US.
LBMA July daily gold turnover down 25% to new lows, silver dn 4%
London--Aug. 11--The London Bullion Market Association said Friday average daily cleared turnover for gold in July fell 25% on the month to 20.5 million ounces--the lowest ever level recorded by the LBMA. The average price fell by U.S. $4 to $281.58, and the average daily value fell to a new low of $5.8
billion from $8 billion in June. Silver ounces transferred fell to a new low of 93.3 million. (Story .13372)
Black Blade: Oh yeah. Maybe their catching on.
SWISS GOLD: SNB reserves down 119.3 mln Sfr to 37.987 bln Sfr
Zurich--Aug. 11--The Swiss National Bank disposed of 119.3 million Swiss francs' worth of its gold reserves in the first 10 days of August, it announced Friday. This is equivalent to just under eight tonnes, roughly in line with analysts' expectations that the SNB would dispose of about one tonne daily until
end-September, when new quotas take effect. The SNB's stated goal of selling a total 120 tonnes by then may require heavier sales in the coming weeks. (Story .11824)
Black Blade: Yeah, they gave me a bar with a swastika on it! What gives!
Meanwhile, Au is up +$1.40 at $273.10 as it is beginning to look as though Au hit bottom and is set to rise, Ag is up +$0.03, Pt is down -$17.00, and Pd is off -$8.00 at $777.00. Traders are milking the market makers by buying contracts, rise a bit, sell, etc. all the while, PGMs are in short supply, and the yesterdays new that GM and Exxon are going to unveil a Fuel-Cell powered vehicle (proto-type) within the next 18 months. S&P Futures are up +1.70, Fair Value +8.29 indicating a moderate rise at the open, probably a "Tale of Two Markets" as the DOW and NASDAQ diverge in opposite directions - maybe Value vs. Growth.
Black Blade
(8/11/2000; 6:07:47MT - usagold.com msg#: 34785)
Wake Up to a Brave New World!
Petroleum prices are on the rise again, topping $31.00/bbl in yesterdays trading, and settling at $31.20/bbl. High energy prices have played a major role in every major post world war II recession. When OPEC declared an oil embargo in the early 1970's, the economy cratered, during the Iran-Iraq war in the early 1980's, there was another recession, the Persian Gulf conflict in 1990 also affected petroleum prices. Now we are experiencing another rise in petroleum prices. The major difference this time, is that the reasons are not political or because of war, but rather the fundamental issues of supply and demand. This time we are faced with a long-term imbalance of supply and demand. Exploration and production had all but ceased over the last several years with low petroleum prices. The touts said that this new economy ran on "the ether", not on oil. Whoops! These budding rocket scientists forgot that goods had to be delivered, products manufactured from petrochemicals, that the electricity that powered the "new economy" came from petroleum. But then what do you expect from people who think that burgers come from a stupid clown named Ronald McDonald (not cattle), eggs from the supermarket (not chickens), and that electricity comes from that "thing" in the wall. Now crunch time is upon us. The Petroleum industry is about to find that it has more of a problem than not having enough hydrocarbons, but that their experienced people (geologists, drillers, engineers, etc.) have gone on to other careers, retired, or to others areas within their disciplines. They will find themselves stumbling about with inexperienced personnel without mentors because the universities have not attracted people willing to go into those careers. The situation is about to reach critical mass, especially if this winter is a normal winter. The problem is going to be a long-term problem. In the mid 1980's, daily oil production was roughly 73 million barrels. Today, it is more than 80 million barrels. Add to that the price pressures that are sure to develop as emerging economies of China, India, SE Asia, etc. demand more energy, and you have a recipe for economic disaster unless substantial fuel supplies are secured. Oh yeah, in this uncertain world another armed conflict or oil embargo would certainly intensify the problem. There is even the strange ironic thought that comes to mind where a future President George W. Bush ends up kissing Saddam's butt for oil, hmmmmm…….. The only way around this mess now is conservation motivated by much higher energy prices.
What about the "New Economy"? Gimme a break. Electricity demand is increasing about 3% per year. That is about 50% faster than the 1985 to 1995 growth rate. Technology is a massive consumer of energy. The crunch of the electrical grid can partly be traced to the increased use of computers, the Internet and related technologies. The major oil pools are at their peak, or maybe even past it. The Alaska field, Gulf of Mexico and North Sea pools are mature production areas. Equivalent exploration finds have not been forth coming. Europe may look to the former Soviet states for some relief but it is not enough and the pipeline projects are years away from completion. But thats all folks! What about other energy sources? Nuclear? Yeah, right. Mention Nuclear Power in some circles and you would have thought that some one just broke wind. Coal? Not likely, electrical power producers are getting away from coal, especially the high-sulfur coal mined in the eastern states. Wind? No, kills birds and windmills offend the eyes. Solar? No, takes up too much open space. That leaves Natural Gas. Here is another big problem. The NG power plants can't be built fast enough. GE turbine orders are back-logged for three years. Even though we are experiencing warm temperatures, NG prices are flirting with all-time highs, currently at $4.48 bcf. Also, NG storage is at only 45% of last years levels. My suggestion is that you buy warm clothing now.
What does all this mean for precious metals? Well now, you cal either dust off your WIN (Whip Inflation Now) buttons, or get prepared. Yeah, I know, I'm preaching the choir here on the forum, but bear with me. Now is great time to buy the classic hedge "Gold". I would even suggest Silver and platinum as well. Platinum? Sure, the push toward fuel-cell technology will likely be intense. And platinum figure prominently in fuel-cell technology. Silver? Sure, I would diversify some into the poor mans gold. But Gold has done very well during past recessions and periods of economic uncertainty. And boy are things going to get uncertain. Besides the price is right. It's dirt cheap! I also have unhedged and very profitable PM mining shares in order to participate fully exposed to the upside potential of a sustained rise in the POG. Hey, then again, maybe electricity does come from that "thing" in the wall.
SteveH
(8/11/2000; 5:39:50MT - usagold.com msg#: 34784)
FOA then BOJ rate hike or is it...
http://www.foxmarketwire.com/wires/0811/f_rt_0811_2.sml
BOJ rate hike and FOA return?
Nonetheless, dare I say this is not a coincidence?
So, what is the effect of a raising interest rate environment in Japan from here forward?
Sorry, but I have nothing but questions this morning, eh?
wolavka
(8/11/2000; 4:32:09MT - usagold.com msg#: 34783)
Don't sell out
Many who purchased gold will think to cash out on a run up.
This will be different than the 70's.
Fat lady sings,
gidsek
(08/11/00; 03:40:32MT - usagold.com msg#: 34782)
BOJ
has raised interest rates %1/4.
gidsek
Topaz
(08/11/00; 00:59:34MT - usagold.com msg#: 34781)
@all
The "two Golds" posting as offered by FOA from the hand/mind of Another certainly is vastly removed from his previous "style" No?
Let's put it down to not attempting to converse in English for so long----------- Yup, thats it!
Isn't it???
Topaz
(08/11/00; 00:29:45MT - usagold.com msg#: 34780)
B/Day greetings- FOA.
Townie & Simply Me:
Many happy returns both of you.
FOA:
Your input has been sorely missed- welcome back!
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