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ARCHIVED DISCUSSION FROM 5/11/2001 All times are U.S. Mountain Time (Yesterday's Discussion.) Journeyman (05/11/01; 23:58:19MT - usagold.com msg#: 53456) Regulation & currency controls @Trail Guide (ORO), Randy, Tree, ge, Peter Asher, Mr Gresham, ALL Must be short!Hi TG!Regards more U.S. regulation to compensate for falling dollar: (much more skipped for lack of time)Because currency controls, in the age of instant electronic transfer & sophisticated fund managers, no longer work (proved originally by Spain about a decade ago and more lately Mahathir of Malaysia, Indonesia, etc.) U.S. will not dare attempt regulations, nor will they work if they are attempted.ALSO Randy & TG regards corruption of money: 1. It's first and foremost a matter of degree. Central banks turn a scratch into a severed artery as far as dilution of the money supply through fractional reserve lending. Thus while there would be some corruption & dilution in a transactional gold economy, it would simply not be physically possible for it to be as rampant as in a pure megabyte situation where the money supply could simply be doubled or for that matter multiplied by 100 instantaneously. 2. Just because corruption might occur is no reason to quit the field in favor of the greater of two evils, namely pure fiat; Your house may eventually rot and fall to ruin but that's not a good reason to live in a cave!!Regards,Journeyman ORO (05/11/01; 23:37:00MT - usagold.com msg#: 53455) Randy - JP Morgan was not a CB What you seem to ignore here is that JP Morgan used his own funds and his own client's money for the purpose of making a profit and avoiding further loss of business if his trade counter parties were to fail and their assets and those of their clients locked up in bankruptcy courts. Central banks and governments use Other People's Money, without their consent and for both the purpose of imaginary assistance to the financial markets and for the purpose of gaining stature and widening their authority and patronage. The Abominable Communist Eccles who's name is carved into the Fed building stands as proof final and incontrovertible of the origins and purposes of that institution. These do not include any of the oft stated items of faith regarding its character and function. It was not what it seems today, and its present fiduciaries, however benign, still must contend with the power granted the institution in its charter and the simple fact that such power should never have been bestowed on one organization in any country seeking to enjoy the rich fruit of free trade. The central bank is entrusted and authorized to do the impossible: make the one single decision that replaces billions of decisions by the whole of a country's people, and to isolate these decisions from those made in other countries. That alone is sufficient to negate any claim of beneficial association between central banks and the financial marketplace. working-kirk (05/11/01; 23:32:42MT - usagold.com msg#: 53454) interest rates cuts As you might have noticed, a lot of people are hoping for a rate cut next week. One of the claims is a rate cut is anti-inflationary. Can someone explain to a simple working man how a rate cut is anti-inflationary? Black Blade (05/11/01; 23:19:12MT - usagold.com msg#: 53453) Got gold? Asia banks haven't got much http://pacific.bcentral.com/pacific/stories/2001/05/07/daily39.html Snippit:Asia central banks have scant gold holdings compared to their total reserve, a World Gold Council meeting in Honolulu has been told. "They're surprisingly low when compared to those of the United States, Europe and the Middle East," says World Gold Council regulatory affairs specialist Dick Ware. He says Asian central banks typically hold 1 to 5 percent of reserves in gold compared to 34 percent in Germany, 41percent in France, 45 percent in Italy and 56 percent in the United States.Black Blade: If sentiment should change, and Asian central banks decide that gold reserves are preferable to US Treasuries, then the POG would probably rocket higher. The former Japanese finance minister made that suggestion a couple of years ago. Hmmm... Black Blade (05/11/01; 23:08:30MT - usagold.com msg#: 53452) Gold funds shining above the rest http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BFD69FC24%2D4C57%2D4C48%2DA288%2D8D69122F6913%7D Snippit:NEW YORK (CBS.MW) -- Like a phoenix rising from the ashes, gold funds have flown to the top of this year's performance charts, returning 15 percent so far in 2001, Lipper Inc. said Friday.Black Blade: Gold equities prices usually lead the price of gold itself. This could be positive news. Black Blade (05/11/01; 22:51:59MT - usagold.com msg#: 53451) US Energy Secretary Blames OPEC for High Gasoline Prices http://www.slb.com/ba.cfm?baid=1&storyid=223899 Snippit:Energy Secretary Spencer Abraham said OPEC was at fault for high fuel prices, conflicting with comments made earlier in the week by Vice President Dick Cheney that a shortage of U.S. refining capacity, not the cartel, has caused gasoline prices to soar.Black Blade: I'm afraid that Spencer is wrong and Dick is right on this one. The problem isn't so much the supply of oil, OPEC production cuts, or implied threats by certain OPEC members. The problem is the ability to refine and distribute the EPA mandated reformulated fuels that vary in grade and content without any uniform standard from one region to another. Bureaucracy in action and incompetence at the EPA. This does not mean that OPEC is completely out of the picture. They could very well cut production in order to maintain a desirable price for their crude. Who can blame them if they do? The real focus on the energy crisis should be on electricity as that is where the US is most vulnerable. Gasoline standards could be relaxed with the stroke of a pen, electricity is a bit more problematic. Netking (05/11/01; 22:51:28MT - usagold.com msg#: 53450) Randy @ The Tower Randy(53438) - Do you have any more details on this PRC coin issue, sizes & content, prices in local currency, number minted & issued etc? Black Blade (05/11/01; 22:28:58MT - usagold.com msg#: 53449) Bonedaddy - again BTW, you mention that X-ray testing is not such a viable method for testing. How about Dye penetrant or Magnetic Particle (Magnaflux) testing on pipe? It is cheaper and yet can be a quick means of checking welds. On the subject of pipelines, Questar (STR) purchased the ARCO oil pipeline that goes from New Mexico to S. California, and they are converting it to a NG pipeline. I think that the California politics is somewhat screwy and that they will get burned as there is a strange tariff imposed by California on "undesirable" NG, even though they desperately need NG. Go figure. - Black Blade Black Blade (05/11/01; 22:19:26MT - usagold.com msg#: 53448) Bonedaddy I hear ya! I have been rather busy as well. I closed up my office in Nevada gold country as the mining business has effectively destroyed their own business (forward sales, high-grading, inept management, etc.). Actually I have begun marketing my services for NG in the Powder River Basin (Gillette, Sheridan, and Casper). It looks very positive here. I know that one could not find a drill rig very easy. I have a client who is struggling to find enough rigs and drillers before their leases expire. That is one major bottleneck for NG production. I also have talked to some drillers in the Metals exploration side and they have expressed an interest in getting into the CBM game as well. I talked to one driller/owner who bought his rig 3 years ago. Last year he was 3 times as much by another driller. This year he was offered about 9 times as much. There is very strong demand - but no rigs. I think that NG prices will remain high from here on. There are many NG-fired power plants coming on line over the next few years and that alone should pressure prices further. I guess that we both have interests in the same area of work and investments. Natural resources should do very well for the next several years. The gold price fixing is likely to come unglued as these economic pressures from high energy costs are factored in (squeezed profit margins, inflationary - stagflationary pressures, etc.). Base metals look to do well as infrastructure will need to be upgraded and new infrastructure will need to be added. Times are about to get "interesting." Cheers!- Black Blade ge (05/11/01; 22:17:14MT - usagold.com msg#: 53447) Trail Guide Trail Guide writes:Begin QuoteI borrow 100oz of money gold from ten people so as to spend that gold doing commerce business. The hard money theory has us thinking that if I fail and cannot pay back the gold, this little portion of the money supply contracts. Thereby the gold system is perfect, as it slows the economic excess.This is a minor example of gold banking. On a tiny scale. It works, as long as we don't act out our motions in a political way.Conversely, if gold was not part of a banking,,,,, credit,,,,, lending system,,,, rather it is just a tradable, non-lendable non-official money asset,,,,, then those ten people would have given me their gold and became part owners in my (ours now) enterprise.End QuoteThe second case would be acceptable if I, as a lender (or owner, if you like) could make claims against the remaining assets of the failed business, as a lender/owner. However that gate is closed since, that would be "enforcement of collateral attachment anytime physical gold is traded, lent or involved in a trade", and forbidden by international law. Wouldn't gold be useless under such a law?There is another danger namely; a vast business potential is created for mafia: Gold loans made under special contracts, fees paid to mafia for every contract signed and and private gold contract enforcement agencies flourish. Bonedaddy (05/11/01; 21:42:29MT - usagold.com msg#: 53446) Ground Zero in the NG arena. Black Blade, it is good to see that you are still posting your erudite energy commentary. I have been too busythrowing dirt in the air to visit the table much in the last few months. I'd like to offer a few tidbits on where it looks like natural gas is going for the 2001-2002 heating season. The conventional wisdom is that enough new production is comming on line and enough new pipe is being laid to meet the higher demand. The price projections I am hearing from some very astute marketing types place NG in the mid $3-$4 dollar range for the next twelve months. However, the progress that gets reported to management is often beyond "best case scenario". What I see happening in the Powder River Basin is that most of the work is actually a couple of months behind schedule. The single biggest hold up is the lack of water discharge permits for CBM wells in the Campbell-Johnson County areas. There are alot of folks with a dog in that fight, so I won't go into it right now, but producers are going to have a tough time meeting projected production numbers. The other hold up is construction. A big inch line from Natural Bridge to the Cheyenne hub was supposed to begin construction in May and complete in November. This line is the key to the door out of the basin. Until it is completed, there is now where for new production to go. The offical word is that all is well and right on schedule for November line pack. But, so far nobody is clearing ROW and May is half over. The tough thing about large diameter gas pipe is that it is so slow to weld. It takes two welders to make each butt weld and the pipe must stay heated between each pass or the welds can crack. From what I've seen, five months to build 130 miles of 30 inch is pretty optimistic. If every thing goes well, a good contractor can do it. If you get a good old Wyoming winter, beginning in October like last year, there is a risk of welds cooling down too fast and cracking. Repairs can really add up. X-ray also takes a lot longer on big pipe because it is so darn thick. The last major hurdle before start-up is hydrotesting. 30 inch probably holds about 20 gallons of water per linear foot. 100,000 gallons of water per mile more or less. You my friend, have no doubt worked with water in Wyoming/Montana winters. So, officially every thing is fine and that information is what the marketers use to determine both gas price and basis for transportation rates. It's kinda like John Wayne said in Rio Bravo, "If anything goes wrong... your fault,.... my fault,.... nobody's fault,.... I'm gonna blow a hole in you I can read a newspaper through." Canuck (05/11/01; 21:14:16MT - usagold.com msg#: 53445) Test Testing Last 4 posts (including this one) were tests. Canuck (05/11/01; 21:12:40MT - usagold.com msg#: 53444) Canuck Canuck Canuck Canuck (05/11/01; 21:11:13MT - usagold.com msg#: 53443) http://www.sharelynx.net/Photos/Gold/PMCityGold.jpg Canuck (05/11/01; 21:09:41MT - usagold.com msg#: 53442) Did I just see a little yellow window? Tree in the Forest (05/11/01; 20:34:41MT - usagold.com msg#: 53441) Randy In reading over your last post to me, I find only one major thing which you said that I disagree with. This may surprise you but it is where you said that banks do not charge income tax. While they do not charge this directly, I believe that the income tax was very much inspired by the banking system in particular the inauguration of the Federal Reserve. It is no accident that the income tax followed close on the heels of the Fed. The Fed is a private, primarily European banking cartel and the owners of the Fed (and all banks) make money by giving loans. It is the interest on these loans that generate their income.I knew several individuals, doctors and architects, who subsequently went into the banking business. I could never figure out why they would seemingly abandon their "calling" to run a bank. It is only in the last several years that I have learned the explanation for their actions; banks print money! The largest conglomerates in the world have banks at their center and this is no accident. Banks print money!You have to see this through a greedy banker's eyes; pretend for a moment that I am a greedy banker. I love money! And I always want more. Once I understand how banks make money through loans, it becomes obvious that in order for me to make even more money, I must make more loans. But a problem arises: when I print money to make the loans, it causes inflation. How to solve this? Well I could make fewer loans, but then my income drops so that's unacceptable. I know. How about this: I'll make more and more loans and become very rich and to solve the inflation problem, I'll use my influence (and my money) in the American congress to pass a tax that will force people to give back some of their money. Now I can make as many loans as I like and just mop up the excess liquidity through taxation. And my "friends" in congress can get re-elected by using the same system to spread the patronage around. The excess liquidity is taxed back preventing inflation. So my friends and I are now very happy. We're awash in money!As you can see bankers and the congress support this income tax because it works very much to their benefit allowing them to pursue their goals, and still hold the system together. This income tax was inspired by and supported by the Rockefellers, members of the Fed through Chase. They worked hard to insure that they had sufficent means to avoid the resultant taxation through trusts, foundations and other tax loopholes. Ignore what you read in the press and Forbes about the wealthiest people in the world. The wealthiest people in the world keep a very low profile and will never be listed in the Forbes 400 or whatever. They are fabulously wealthy, probably trillionaires. Their tax burden is undoubtedly miniscule compared to their wealth. Good people have trouble seeing how some can be so greedy and selfish. But these people exist. And the rest of us pay an unjust and "non-constitutional" income tax to help them get richer. If you have not already done so, please review the legal underpinnings of the Fed and IRS in my post of April 22 #52341. Good night Randy and thank you to all who read my posts. R Powell (05/11/01; 20:07:37MT - usagold.com msg#: 53440) Beowulf Centaur's 1.61 million ounce hedge book I believe if 12 troy ounces make a pound, then 1.6 million ounces is about 66.5 tons. Thursday, May 10 3:46 PM SGT Gold Market Keeps Eye On Australia's Centaur Mining HedgeSYDNEY (Dow Jones)--Immediate short covering by Australian gold miner Centaur Mining & Exploration Ltd. (A.CTR) to close its hedge books could give gold prices a short boost but wouldn't sustain a rally, dealers told Dow Jones Newswires Thursday. Although news of the beleaguered miner's position sent gold prices up by around US$5 a troy ounce in New York trade Wednesday, the rise petered out in Asian trade Thursday as the market sat back and took a closer look. The market now believes Centaur's short position isn't substantial enough to trigger a sharp ascent and that it would also depend on how soon it chose to close its positions. "Who in their right mind would buy 1 million ounces at once?" asked a Sydney-based dealer. According to Centaur's report for the quarter ended December 31, 2000, the company has hedged a total of 1.61 million ounces of gold at an average price of A$423 a troy ounce from 2000-01 to 2008-09. "That's not an insignificant amount and could tighten the position in the market," said John Macdonald, a mining analyst with CIBC World Markets. But it would depend on the market conditions when the company closes its books, which in turn depends on who would be responsible for that, he said. Receivers, for instance, could be less amenable to any exposure, while counterparty hedges would want to liquidate at better prices, he said. U.S. bondholders appointed PricewaterhouseCooper receivers in March in a bid to recover a US$225 million debt from Centaur. Centaur itself appointed administrators the day before, which in Australia gives an insolvent or near-insolvent company breathing space to deal with its financial difficulties. Centaur's creditors are set to meet Monday in Perth, and could put the company into liquidation. Despite initial excitement during early Sydney trade Thursday that gold could test US$272/oz should Centaur liquidate, some other participants said Wednesday's rally was mainly due to technical factors. "There was mainly buying from funds between London and New York, and not related to Centaur, which triggered stops at US$267-US$268/oz," said another Sydney-based dealer. A third Sydney-based dealer concurred, adding the talk on Centaur could have been spread by those trying to tempt funds to cover. Joseph Gutnick, Centaur's chairman and managing director, couldn't be reached for a comment. Neither could administrators or receivers. At 0742 GMT Thursday, spot gold was quoted at US$269.40/oz, down from US$269.90/oz in New York late Wednesday. -------------------------------------------------------------------------------- Black Blade (05/11/01; 19:17:18MT - usagold.com msg#: 53439) Saxulum and Camel SaxulumYour post reminds me of when we last had two major oil shocks in 1973 Arab Oil Embargo, and the Oil Shock of 1979. Tankers in the Atlantic would sometimes turn around in mid shipment and go to either Amsterdam or the US depending on which refiner would pay the higher price for the crude oil. I imagine that the Europeans will not be too happy if we in the US cause the price of petroleum to rise by drawing off supplies to the US. It is bad enough that they are gouged by their governments on petrol taxes. Definitely cause to hedge ones bets with a bit-o-gold insurance. CamelEven though NG stocks have risen I would still expect there to be a shortage of NG. First of all, stocks usually begin to rise in the Spring months as it is not too cold or too hot (sorta like Goldilocks and the 3 bears ;-) ). Come this summer there will be as much as 20% more electricity consumed for air conditioning alone. Virtually all new power generating plants and planned power plants are NG-fired. There are at least 275 new plants to be built by the year 2006. It was only a couple of years ago that summer NG production was injected into storage. This is a problem as the "New Economy" requires a lot of energy for computers, server farmer, telephony, internet manufacturing and service industries, etc. So instead of storing NG during the Spring and Summer, more and more is being consumed. You may have noticed that even as though storage has increased some, it is still 30% below the 5 year average levels. This Summer, we could see a lot more consumption and a lot less storage. We may get a slight jump in storage in the Fall, but come Winter we just might get bit. Now Dick Cheney. He had no experience in petroleum prior to his stint at Halliburton. His position as CEO just might have been a political payoff for favors given when he served under Daddy Bush as Secretary of Defense. However, he is correct about the critical energy situation that we face in the US. Bubba Clinton and Al Bore certainly dropped the ball on energy with misguided wacky environmentalism that could well cost us much more in energy costs (both financially and environmentally) than was necessary. We have fallen behind the production curve and they also locked up public lands from further petroleum exploration and production. Of course when people become uncomfortable (especially Americans), they demand that something - anything be done - they believe that abundant cheap energy is a guaranteed right. Now we have our backs to the wall as far as energy is concerned. The Market Miracle of the 1990's Bull Market was fueled in no uncertain terms by the abundant supply of cheap energy. That expansion of course required that even more energy be made available for even more growth. That is where I think (and hope) that Dick Cheney as the CEO of Halliburton may have learned that a vigorous petroleum exploration and production program must be initiated in order to either continue to fuel future growth, or prepare for what I believe to be the inevitable economic collapse as the costs of energy are likely to never see the low prices of the 1990's ever again (barring the discovery of cold fusion perhaps). Reason number one why I buy gold, silver and undervalued energy shares.Hybrid vehicles. Might be OK for those in urban settings, however, I would need the power train to get into rough terrain and to make quick repairs in desolate areas. However, it would be difficult to encourage over 200 million Americans to pony up several thousand dollars apiece to purchase a new vehicle, just as unlikely is to encourage everyone to junk their appliances and computers and to pony up even more to buy green energy saving devices. This is especially true of former "New Economy" and "dot.com" investors. At this point it is a tough sell as many hope to just remain employed. Hybrid vehicles will take several years to cycle through and replace the vehicles currently on the road.Peggy Noonan? She was one of Ronny's speech writers. Now she writes editorials for the Wall Street Journal. BTW, did you know that Ben Stein of Comedy Central TV was one of Richard Nixon's speech writers? Now he has a TV show where you can supposedly win his money. Hmmm... I don't read religious texts very much. Just not my thing. However, I am currently reading The Seven Military Classics of Ancient China translated by Ralph Sawyer and Mei-Chun Sawyer. I am reading the first book - T'ai Kung's Six Secret Teachings. It is purportedly T'ai Kung's political advice and tactical instructions to Kings Wen and Wu of the Chou Dynasty in the eleventh century BC. I am also reading Miguel De Cervantes Don Quijote de la Mancha (vol. 1) in the original Classical Castellano. It has a better feel for the almost dry humor than in the English version. My friends say that I'm a sick man. I just have the philosophy that if one does not at least learn one thing new each day, then that day has been wasted. That is why I come here and let Trail Guide, ORO, and even the Stranger twist my brain now and then ;-)Cheers!- Black Blade Randy (@ The Tower) (05/11/01; 16:56:56MT - usagold.com msg#: 53438) Interesting phrasing on this Bridge News report from China Hong Kong, May 11 (BridgeNews) - The People's Bank of China, the central bank, will issue a new set of gold and silver commemorative coins on May 15, the official Xinhua News Agency said Friday. The set will include three gold coins and two silver coins, that will be the legal currency in China, the report said. The central bank has a monopoly on gold in China.---------------------A good time to throw in the reminder that the bigger steps toward gold market liberalization are just days away.I'll leave you with that thought. Duty calls... Randy (@ The Tower) (05/11/01; 16:50:24MT - usagold.com msg#: 53437) Steep learning curve on that! Meanwhile...The Federal Reserve added $3.5 billion in temporary reserves to the banking system today through 6-day repurchase agreements. Fed funds were trading below the target rate. Centennial Precious Metals, Inc. / USAGOLD (05/11/01; 16:42:39MT - usagold.com msg#: 53436) Hard assets... easy access.
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