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ARCHIVED DISCUSSION FROM 10/1/1999 All times are U.S. Mountain Time View Yesterday's Discussion. AllanC (10/01/99; 23:45:01MDT - Msg ID:15167) Seamless logic FOAI appreciated reading your response to Mr Phaedrus.Your analogy about the gambler in all of us should serve as a lesson to all those who think they can outrade the mob!Physical is the only way to go. elevator guy (10/01/99; 23:30:53MDT - Msg ID:15166) @ Marius, and others. Regarding gold call options. Ok, I'm not one of the "bullion boys". I did'nt get the big picture, 'cause I started late. Now get off my back, will 'ya? Sheesh!My question is for anyone who has tried to sell their call options. Have your orders been filled? What kind of order did you place? If you tell your broker that you want to sell "at the market", does that mean that they may sell your position at any old price they come up with? (Is there any skill to it, or do they just lower the price until someone buys?) What is a limit order? Is that where you tell your broker to sell your option for no less than a certain price, and that order stands until it is withdrawn?I knew this stuff once, a few years ago, but only traded once, and then I got busy with work, and didn't look into the markets until recently. (Thats my story, and I'm sticking to it!) koan (10/01/99; 23:29:29MDT - Msg ID:15165) dollar volume small Dollar volume on both the Vancouver and Alberta exchanges was small v - 8.8 mil and A - 6.7 mil. koan (10/01/99; 23:14:33MDT - Msg ID:15164) USA GOLD or any coin shop You think gold is going through the roof before Monday, the above places can sell you all you want. The fundamentals look good for gold and all of the PM's, but it will take time. As I have said before speculation is hard to quantify. When any of the PM's rise or fall it has an effect on the other PM's. Remember ALL PM's rose this week and it was all a change in psychology and technicals of trading (i.e. short covering, etc) - nothing fundamental changed. If COMEX gets short of gold and gold rises India can sell gold and silver until the cows come home - whatever that means - if the price is high enough. Peter Asher (10/01/99; 23:10:15MDT - Msg ID:15163) Uh Huh! http://news.excite.com/news/r/991001/22/financial-ltcm LTCM may be out of business, Fed's McDonough says Peter Asher (10/01/99; 23:06:29MDT - Msg ID:15162) Marius Phadreus and PH From — Peter Asher (9/28/99; 21:18:44MDT - Msg ID:14805)>>>>>The Comex was not guaranteeing limit orders today, due to thechaotic activity, and market orders were at the floor traders mercy.<<<<<I bought three Nov. 550 Silver last Friday morning for $100 + comm. each. I called my broker when they were trading at .29 ($1450) He, in his panic gave me the quote for the Dec. 550, of .37 and I decided to sell one contract into the "blow-off" I thought was occurring. That's when he told me that "because trading was so fast, Comex was not guaranteeing any limit orders even if the price traded through."I took the chance and got the .29 high of that period. (I consistently get good aggressive executions from the Comex floor with this company. Later, when the blow-off actually occurred (Spot ran to $5.95) To .40 then down to .18 then to .32 then to .20 and the .27, all in two hours. So who knows what would have occurred later with market order? The November options are actually calls on the December contract that expire on the second Friday of Oct. instead of November. They are a very thin issue! The broker and I have been going around a bit over the "Would have could have" of his false quote. Later I figured out a strategy that is viable when you have an 'in the money' option. You can sell the future itself and then exercise the option to call in the buy side. You have both the liquidity of the futures market and the probability that future will be trading a little higher than the equivalent option price. (When well in the money) PH in LA (10/01/99; 22:29:28MDT - Msg ID:15161) RossL & Marius "I fail to see the logic in a prediciton of a downward spike. Who is going to dump their physical gold right now? Russians? Pakistanis? Buy whatever you can before Monday morning !!!"RossL:We have discussed, disected and guessed for many hours over many years about what exactly is the POG or the Spot Price. It seems to be a very strange animal; part supply/demand, part derivitive/paper/option, part sale of leased material, whatever that means (derivitives) in this crazy, modern world of gold. FOA and Another have predicted a separation of physical, street gold from paper/option/futures market gold. No one can say exactly how or when that will occur. Would the price of physical follow the futures' price down one more time? Or would this be the event that uncouples the two? There is logic in both answers. Certainly, those who have watched these 20 years have seen the price fall, even when no one is "dumping their physical gold...Russians? Pakistanis?" You are correct in that there is little logic to be found here, (except in a convoluted, illogical sort of way). The modern world has never seen an outright default in the gold market's "dirty float" as it has functioned since 1971. Anyone who claims to see which way it will go by the simple use of logic had better be prepared to explain many things unknowable to many of us.BTW, where do you propose that we "buy whatever (we) can before Monday morning"?Marius:I remember Another speaking to this question of execution long ago: "Your plan is a good one... but the question at that time will not be 'How good is your plan?' But rather 'How good is your broker?'Truly, this market is not "as before". koan (10/01/99; 22:24:27MDT - Msg ID:15160) Kaplan is Bearish I have more to gain than most with a continuing gold rally; but its hard to argue with Kaplan on gold. He says lease rates have declined from 9 to 4.8% and the shorts have been covered. We are really only $15 above the pre BOE debacle. Gold has been freed, but I think the chances are better than even that Kaplan is right and we will see a correction. My guess would be to $285. I believe if there was a real shortage in gold the world community would right now be bidding it much higher than it is. For those who search for objectivity you must consider Kaplan's statistics. Both gold and silver are running total deficits, but both have overhangs that will be adjusted over the next year or two with some sort of supply/demand equation. Last several of us ( the stranger was one, I believe, I miss his posts) felt gold would find a floor at 250 - we were pretty adamant, for those who remember! Others talked about $200, $100 and even $10. So far those of us who were talking $250 floor while not being very sexy, were correct - it looks like. Just trying to inject a little sobriety. RossL (10/01/99; 22:03:56MDT - Msg ID:15159) Marius Marius (10/01/99; 21:45:29MDT - Msg ID:15155) Sez:"Is anyone aware whether a market order can be canceled once initiated?" I'm not sure about the rules at COMEX, but generally, you can cancel an order if your "cancel" gets to the floor traders before they execute your order. I suggest you contact your broker before the Monday open. Afterwards, fire your broker! FOA (10/01/99; 21:59:26MDT - Msg ID:15158) Comment PH, Everybody, I have more to say than could possibly write now. When I get back we will have an awful lot to cover. We'll all understand later. Golden Truth, The "Bullion Boys" did OK today. Golden Sun just about outran (percentage wise) everything. Easy to do when one horse (Silver Moon) hits the rail and flips his rider, "backwards", no less! (smile) Goldspoon, my vote is "horse with no name" for Platinum. I now remember the song by America. ALL: The Russian announcement was in some ways like the English sale. They were asked to publicly say it to drive others to lease before they did (and lower the rate). A ploy only, as some bank shorts withdrew their bid to cover now, waiting to see what would happen (this also lowered demand (and rates)). The USSR was always the very best at gold trading. Cut your shirt clean off and you never knew you lost it! Dumb, stupid Russian dealers??? No more so than us. Russians good at poker, oh yes. Russians announce deal before the fact to bid themselves a lower rate?? Did anyone buy that one? I bet Michael still has gold for sale. Still at a good price for a while at least. All you paper traders better take the advise of this old Western Scout, "watch your top knot out there"!Be back when I can................FOA Beowulf (10/01/99; 21:51:19MDT - Msg ID:15157) LTCM may be out of business, Fed's McDonough says http://biz.yahoo.com/rf/991001/bbl.html a little sample:"The near collapse of Long Term Capital Management LP, which specialized in highly riskyinvestment bets, last year prompted its main creditor banks to come up with a $3.5 billion dollarsalvage package. The deal was arranged by New York Federal Reserve President WilliamMcDonough amid fears that the firm's demise could devastate the entire global finance system." Cavan Man (10/01/99; 21:46:09MDT - Msg ID:15156) Other Cultures & FOA Here in the west, we would do well to consider the wisdom of the east and of cultures and peoples who have been engaged in commerce for over 5000 years. We complain about and comment upon contemporary media. However, egocentricity has created a historical bias in education towards the "Western Heritage" which has robbed us of valuable lessons learned centuries ago by peoples who walk this earth still. Marius (10/01/99; 21:45:29MDT - Msg ID:15155) A comment to Phaedrus & PH 15134 & 15152 Phaedrus"And a side note to those of you who pooh-pooh paper over actually buying physical: those who bought out of the money gold options are sitting on anywhere from five hundred to five thousand percent returns right now, while the physical metal is still up less than 40%. I could cash out half myoption positions right now, buy physical with it, and be miles ahead of anyone who invested the same amount of capital in physical from the getgo." I felt much the same way prior to today! I was convinced by my broker to at least liquidate my Feb 2000 290 calls. As of 4:45PM EST, more than 2 hours after COMEX closed, no transaction had been made. He would only offer a market order (no limit orders accepted), and could not assure me a timely fill. Hmmm. Yes, this trade makes me rich "on paper", but it's worthless if it can't be executed. Don't count it 'till it's in the bank! Is anyone aware whether a market order can be canceled once initiated? Cavan Man (10/01/99; 21:34:46MDT - Msg ID:15154) FOA 15148 FOA,I would gladly meet you anywhere in the continental US to enjoy a very fine meal at my expense if only to discuss anything and everything (even rugby) EXCEPT the subject of gold with you. My meager words cannot express the respect and admiration I have for you. Cyberspace is a very strange place to meet someone and to assess motivation and character. However, I am with you on that road no matter what the final destination might be. Many thanks for your time...CM RossL (10/01/99; 21:18:23MDT - Msg ID:15153) Is time running out? Or has it already run out? PH in LA (10/01/99; 20:41:09MDT - Msg ID:15150) Sez:"Do you know anything about this? What effect on the physical market would such a move imply? Would it bring about a final spike downward to give us one last chance to load up at Michael's Company Store?" I fail to see the logic in a prediciton of a downward spike. Who is going to dump their physical gold right now? Russians? Pakistanis? Buy whatever you can before Monday morning !!! PH in LA (10/01/99; 21:03:18MDT - Msg ID:15152) Any reactions over here to this? Date: Fri Oct 01 1999 22:41 flierdude (Can somebody help me out here?) ID#341249: Copyright © 1999 flierdude/Kitco Inc. All rights reserved Up until June of this year I had never bought an option. I loaded up on Dec gold calls and Dow puts. In the last 3 days I have tryed to unload 10 of the calls, and, my target price had been hit each of the three days. But, no execution of the trade. I have a very poor opinion of options right now because of this. I am just wanting to sell ten 320's to get back my original investment on all these option plays from June that I made. The rest I will let ride for 2 or 3 weeks. I have a very strong feeling that the entire gold options market is going to default. My question to you is this. Do you think this is possible? If so, at what gold spot price will it default? What would be your best guess of the timing of this default? Thank You, Mike Golden Truth (10/01/99; 20:50:03MDT - Msg ID:15151) TO F.O.A Bravo F.O.A, Bravo!!!From all in the "Bullion Boyz Club".Hope to hear from you in the near future again. G.T :-) PH in LA (10/01/99; 20:41:09MDT - Msg ID:15150) Is time running out? Or has it already run out? Thanks, FOA, for you fine comment today.Like most here, I marvel at how your predictions are being fulfilled. Recently you said that a move to $300 would bring about the first defaults. You have described what is going on beneath the surface during this pause. It certainly sounds like turmoil and devastation. And this after only a move to ±$300, a level that seemed like a floor only a few months ago. Andy Smith goes on record that gold is suddenly money again... after proclaiming that it was a mere commodity for how many years? He now pleads with the Europeans to reconsider their new position in order to avoid dire consequences. What will be happening when spot reaches the $400 area, if the system is threatened with collapse at $300? Most of us remember $400 (and higher) POG. The world funtioned just fine then. The world of gold is "not as before" Another has been telling us for years. Obviously!You (and Another) have said many times that the other side will fight furiously to preserve their system. And we know that Big Trader/The Writer/Another has tried to show us how close to collapse their system has been since December of 1996. Today Bill Murphy strongly hints that no settlement by delivery will be allowed on the Comex beginning as soon as this Monday. Has the situation deteriorated so far so fast? Do you know anything about this? What effect on the physical market would such a move imply? Would it bring about a final spike downward to give us one last chance to load up at Michael's Company Store?You recently said that small purchases of street gold might remain available until November 99. Is that timeline running out?How much time do we really have? onlychild (10/01/99; 20:40:33MDT - Msg ID:15149) Snowy Thanks so much for the info on firearms. I am afraid that our own government is taking advantage of several senseless incidents of violence here to move closer to confiscation in the US. Any student of history should be scared stiff at the ramifications of a disarmed public. If only Tom Jefferson and his cronies were around to explain what they meant in the Second Amendment......P.S. Isn't it funny that many of the gun control advocates are what we call "pro-choice". What has become of a society when it believes that deadly force against the unborn is acceptable, but deadly force against an assailant is not. FOA (10/01/99; 20:11:14MDT - Msg ID:15148) Comment All: I just finished reading all the posts today and must say that this is a wonderful group. It's not just the information that's presented as it's great to see it all assembled. Rather, it's good to see everyone offering their feelings (not just their projections) as this market evolves. It's becoming impossible to discuss with everyone because so many people are entering here. Each with their own slant or take on the day's moves. Very, very good! Michael has created a "one of a kind". Gold always has been an emotional subject. Especially if you buy it for it's future monetary value instead of trying to quickly trade it for cash. I know there are traders here. It's seen in their cool style and council. For them gold is but a quick paper liquidation and "if I ever need to" it's "off to USAGOLD" to purchase. Hmmmm. Yes phaedrus, in your world "it ain't going to happen". The failure of paper, that is. But please consider that I move in a different world from you. No, not the high speed "connected" "mover" environment. Rather it's a world attached to a timeline of "ages old" events and "reoccurring human nature". This realm exists today in the minds of a people you will mostly never know. Yet, they hold the very destiny of our modern currency system in their hands. Intelligent, sharp, and filed with "the simple Thoughts", they do very well understand the western differences of common sense. Up vs down, rough vs smooth and most especially "I have" vs "they owes"! Presently, in your world, the concept of holding "paper gold "they owes"" can and does gain the great percentage returns you reference. I expect your ability to trade will move you quickly ahead of all others before you when the time comes. Then again, it strains credibility to suggest that one could "out trade" every other player when "lightning strikes in the night". I think I saw a movie where it was counselled "a man's just got to know his limitations". I have been given a view of this storm and my feet are not that fast. My message (as an extension of Another's) is for the ones that are so very slow. That's me, too! We are doomed to trod the slow path as do the giants, because, in the end things go up faster than traders can revalue paper. Funny as it may seem, all of us will most likely again meet the "fast traders" though our location in the race will somehow change. Imagine, if you will the logic of Another:"This world be still round, my friend. And days have changed with modern toys for boys to play. Though they circle the earth with much speed, full circle bring them but one step "behind me"" Some people may not like the connotations that presents, but boy, it sure keeps my brain clear. ALL: The end of this currency game will see people trading their hearts out only to use all their winnings to buy the same amount of gold (or much less) they could have purchased in the first place. They did the same thing in Rome, still fighting over economic contracts as the war raged just outside the walls. Trading IOU paper will never create more gold for anyone until they liquidate and buy. Mostly we don't and what we usually truly gain is only more paper with an "attitude" to prove it. It is against human nature to expect anyone to leave a paper crap table while they are ahead. Millions and millions of gamblers try to convince themselves and others that they can do it. 99.9% of them never have and never will. It's a siren song as old as time itself. It's the same in the modern stock markets. When the game "truly" ends, few walk away with what they thought they had. We are on the road of returning to the natural, true monetary values of gold. Values that will not be the one ounce for a suit some still proclaim relevant. It value will be magnified 100 times by the modern advances this society has created. Some will lose their jobs, some will lose money, but the world will not end. Babies will be born and employers will employ. Only the yardstick for measuring wealth will have changed. As events unfold this truth, Another will respond to reference this journey we all will travel. Truly, "events will prove all things". Thanks ALL FOA PH in LA (10/01/99; 19:52:08MDT - Msg ID:15147) Re: Bill Murphy's Bombshell http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=11423193 "For what it is worth, Alan G has been PERSONALLY jawboning big money Gold Buyers to not add physical stockpiles positions since Late March, so this bombshell of Murph's is nothing new."--ole 49r @ Silicon Investor Gold Price MonitorThe poster at SI who calls himself "Ole49r" seems very sure of himself. Bill Murphy's bombshell was news to me. Anyone else heard anything about this before today and "since late March"? Snowy (10/01/99; 19:45:55MDT - Msg ID:15146) Gun Controll in Australia @onlychild (10/01/99; 08:30:04MDT - Msg ID:15086)The Firearm confiscation in Australia followed a Masacre in a tourist restraunt in which 26 people(I think) were killed.The killer was an heir to a large gambling fortune who also it seemes has the maturity of a pre-teen, a deadly combination. Tha arms subject to confiscation/with compensation were Semi-automatic shotguns and rifles of any caliber as well as pump action shotguns. Hanguns which are strictly controlled were not considered within the framework of the policy/legistlation. The rumour is the additional work to ban handguns would have caused the anouncement of the new legislation to fall after the 6.00Pm News time slot.Any political or social commentater in Australia who speakes favourably toward the shooting sports or firearms for self protection is howled down and derided as a "redneck". During the formutation of the new gunlaws representatives of the shooting sports and representatives of the firearm industry were excluded from presenting their views or offerin advice on formulating a workable system of regulation.I myself am a sporting pistol shooter and have suffered many derogatory taunts about my "fixation" with firarms. I might also add that I served in the Australian defence forces in the Infantry man as a younger man.God bless,Snowy. Gold Power (10/01/99; 19:41:41MDT - Msg ID:15145) The New Golden Bull We are now less than two weeks into a new bull market in gold. I am reminded of the first two-week drop in the Vancouver Stock Exchange in June 1996. Very few of us believed it was for real then. The VSE Index then fell from a high of 1480 to a low of 380. It took less than 30 months.I think the current sea change in the markets is much greater than the final touches on the gold bear market that is now over, Bob Prechter notwithstanding.These investment interests that are so massively short gold, might consider gold stocks as a hedge to their gold positions. It may not be the best hedge in the world, but it may be the best hedge available in the world.The world has allowed the U.S. to export its inflation while the U.S. wallowed in the success of its extravagance. No more. The dollars that have flooded the globe should now start finding their way back into the U.S.So in terms of U.S. dollars, hard goods of all sorts should start rising in price.This is my first post on this forum. I think I'll step back now and see how it is received before saying more.Thank you. Cmax (10/01/99; 19:40:06MDT - Msg ID:15144) Millhouse @Gold Eagle This excerpt is undoubtedly being used out of the context that the author intended, but I just couldn't resist undelining this part in my mind's eye:".....THE STOCK MARKET DISCOUNTS THE FUTURE, which is why a bull market invariably ends when the short term outlook for earnings growth appears to be at its brightest and commences amidst the worst stages of an economic decline. This discounting mechanism, applied to the Y2K phenomenon, may mean that the negative impact of Y2K on the stock market will be felt prior to 1/1/00...."...........and inversely, such a discounting mechanism will proportionately reinforce the POG, all other new factors aside. Goldfly (10/01/99; 19:29:47MDT - Msg ID:15143) Oh, Oh, HOHOHOHOHO HEE HEE HEE HAHAHAHAAAAAAA....... Angel - ROFL!! ROFL!!Oh my.......oh, let me catch my breath.....Hey Gandalf! You should have bought the rights to "I Got AU Babe" when you had the chance! Ha Ha HAAA.....Angel, I surely appreciate the thought, but you couldn't be serious......Could you??? NewGold (10/01/99; 19:23:27MDT - Msg ID:15142) Another South African Top ANC MP attacked! http://www.iol.co.za/news/newsview.php3?click_id=79&art_id=qw938813941868M100&set_id=1 That make it 2 in 48 hours, looks like something BIG is going on in South Africa against the marxist ANC Gov ? RossL (10/01/99; 18:15:45MDT - Msg ID:15141) TownCrier After the Close http://www.nymex.com/markets/cont_all.cfm?cid=15&cont_name=term_sched#1999 TC sez: [Can anyone confirm what the deadline is to provide delivery on a gold contract? Last day of month, maybe? That question was raised yesterday, and we've yet to confirm the answer.]I posted the answer this morning at 04:39 while you were still in bed. Msg ID:15060See the link above!Also, TC sez:"And so the buck gets passed as sellers turn buyers, and only if a seller is found prepared to deliver gold at the new price does this cascading meltdown (meltup?) find some relief. Otherwise, someone at some point has to turn to the spot market. And we must ask ourselves again, why didn't the buyers simply seek spot gold in the first place? We seem to recall positing that size can't be gotten at spot markets without gunning the price. Any other suggestions? Open interest for all COMEX gold contracts total 209,241...theoretical obligations to mobilize 651 tonnes. Hah!"The textbooks on futures markets all say that a trader shouldn't worry about delivery until the last day or so. Most contracts typically get closed out and/or rolled over into the next month. Futures are for hedging price risk and speculation. If the COMEX gold market becomes a venue to force delivery in quantities, then the gold market has indeed siezed up.Are you ready for gold to take off like a rocket? Chicken man (10/01/99; 17:54:39MDT - Msg ID:15140) phaedrus - Reflexivity Hi....I take it you are familiar with this "theory"......there is a lot to be gleaned from reading his books.....Enjoyed your take on the markets.... 16-penny (10/01/99; 17:41:03MDT - Msg ID:15139) street price the cost of a 1oz kruggerand at the only coin shop in a town nearby is $335+tax unless you buy $1,000 worth then it is tax free GFD (10/01/99; 17:35:25MDT - Msg ID:15138) Eyes Wide ?? phaedrus: I feel that the key here is to go in eyes very wide open and take a balanced approach. Sophisticated traders should be playing both sides using successful paper trades to build a larger position in bullion. I would say that not having a position in bullion at this stage given all the warning signs out there is tempting fate.Having said all of that, I would like to add that I am still amused at the idea of COMEX being a "fair and free" market... RossL (10/01/99; 17:22:13MDT - Msg ID:15137) Hedge posture of Dayton Mining http://www.dayton-mining.com/ I don't know for sure. See their web site. It has a vague statement about hedging. The share volume this afternoon was over a million. I don't know what that means except there are plenty of buyers and sellers for a gold stock that costs 9 cents a share. ORO (10/01/99; 17:19:48MDT - Msg ID:15136) dayton The Company realized an average gold price of US$336 per ounce in 1998 compared with US$402 per ounce in 1997. Dayton's hedging program for 1999 consists of 84,000 ounces of puts at US$340 per ounce. These hedges are spread evenly over the year at 7,000 ounces per month. nickel62 (10/01/99; 16:44:10MDT - Msg ID:15135) Hedge posture of Dayton Mining I have found many of the comments on the USA Gold Link to be very helpful and wonder if anyone has any idea of the hedge posture of Dayton Mining. Thanks phaedrus (10/01/99; 16:39:36MDT - Msg ID:15134) Bombshell Regarding the possibility of suspending trading in the futures markets or limiting ability to take delivery: no way. Not gonna happen. In today's financial climate, that would be like dangling a bloody steak in front of a pack of starving wolves. It would broadcast a message to the world that there was no gold to be found and that the powers that be are desperate. Gold would have to get to $900 an ounce again before they took measures that drastic, because such a move would expose their terror in full. And furthermore, since there is no manipulation to point to as reason for intervention, as there was in the case of the Hunt brothers, such a move would completely destroy the credibility of the exchange- which would be immediately slapped with billions of dollars in lawsuits, by the way. The COMEX, a privately owned entity, has no desire to destroy itself, regardless of the government's needs or interests.And a side note to those of you who pooh-pooh paper over actually buying physical: those who bought out of the money gold options are sitting on anywhere from five hundred to five thousand percent returns right now, while the physical metal is still up less than 40%. I could cash out half my option positions right now, buy physical with it, and be miles ahead of anyone who invested the same amount of capital in physical from the getgo. Soros pointed out that not only do you want to find divergences between perception and reality, you also want to ride the false trends as long as they are profitable. Also: five days is usually about the time that clearing firms start getting nasty in regards to margin calls, which means next week shorts should really start feeling the heat. Suggestions that this was a short-covering rally that is almost over are completely ludicrous; if that were the case we would have seen open interest fall off rapidly. Ain't happened. PH in LA (10/01/99; 16:36:18MDT - Msg ID:15133) SteveH Re: (10/01/99; 15:47:05MDT - Msg ID:15128) http://www.geocities.com/TheTropics/Shores/6299/Karachi.html SteveH:Karachi is in Pakistan. (See Link) Cavan Man (10/01/99; 16:07:24MDT - Msg ID:15132) AEL 15129 Thanks you for asking. I enjoy your posts.Yes, undoubtedly there is "something" special about printing FRN. Certainly, the paper(stock) is different and that is 50% of the job. The printing business is very complex and highly specialized as well as fragmented. There are many niches. I took the liberty of taking this particular opportunity to imply that Mr. North may not have all of the facts straight across the board on other issues relating to you know what as well. That's because I am SO weary of all the gloom and doom talk everywhere. BTW, I am guilty as anyone.Moreover, what he represented was not pure, unadulterated truth (I believe there is such animal). If I see misinformation, I like to point it out. Thanks again for asking now, back to gold. ORO (10/01/99; 16:00:23MDT - Msg ID:15131) Ph in LA - they already did that http://www.wallstreetuncut.com/wsuArchive.htm We are in the middle of the bear raid. Why do you think the futures were in backwardation? If you expected delivery on the COMEX you would have bought the futures when they were selling well below spot. News has been coming out to supress:Russian selling/lending, response +$6. Why? it means there might be delivery, thereby getting some to buy futures instead of waiting on the sidelines as cash is freed up from their stocks.Besides, there used to be a mint at Placer, and minting and minting equipment is really a cheap if quality control is not that much of an issue. All producers can hire minters to get their product to the public. Great interviews, Granville - his musical analogy is marvelous:http://www.wallstreetuncut.com/scripts/audiohurl.asp?format=ns&target=wsu19991001-finalhttp://www.wallstreetuncut.com/scripts/audiohurl.asp?format=rm&target=wsu19991001-finalOthers at link above, including Faber, Flecky, Tice, Dent, Eliades, Montgomery, Bianco... TownCrier (10/01/99; 15:58:09MDT - Msg ID:15130) After the Close: the GOLDEN VIEW from The Tower There is much excitement and talk in The Tower about the gold-quest movie "Three Kings" (opening today) so everyone here is making haste to wrap this up for the grand opening. This TownCrier is typing as fast as possible, so please for give the mistakes. We'll give you the review when The Tower is re-manned.Yesterday's stock market rally in hindsight seems to have truly been driven by quarterly position adjustments as we described yesterday, and the selling resumed today right from the start. Only a late day rally saved the indices from bigger losses on the day. The DOW lost nearly 64, and the Nasdaq gave back nine points.The 30-Yr Bond took a beating on a surge in the National Association of Purchasing Management's manufacturing index. This was discussed in an earlier report, so suffice to say that the long bond lost 1-9/32 in price, driving the yield up to 6.145%.In currencies, the dollar lost 1.22 yen over the previous close, and the euro climbed to $1.0724, gaining .29 cents.Turning now to gold, the day's price gain of $6.30 beat the $5.80 seen on the December contract. We wonder when this will become standard operating procedure. For now, spot prices were last quoted in NY at $304.00. We'll turn it over to Bridge News for comments on today's futures trading: NY Precious Metals Review: Dec gold up $5.8 after NAPM figuresBy Melanie Lovatt and Tina Petersen, Bridge NewsWashington--Oct 1--COMEX Dec gold settled up $5.80 at $305.3 perounce, boosted by the dip in bonds, stocks and the dollar's continuedslide against the yen. The financial markets were hit by the jump in the US Sep NationalAssociation of Purchasing Management index, with the price componenthitting its highest level since May 1995.The US NAPM Sep price index was at 67.6, up from August's 59.8. Thebig NAPM number is fueling inflation fears, a positive for gold which isoften used as an inflation hedge.However, some are concerned that it will encourage the US FederalReserve to hike interest rates at its meeting next Tuesday and Wednesday,which could prove a short-term negative for gold.Nevertheless, traders said that the gold market remains bullish andthat it was simply following its recent trend, which resulted in Tuesday's1 1/2-year high of $329.Leonard Kaplan, chief bullion dealer at LFG Bullion Services, notedthat while lease rates have fallen back from their highs of over 9% for 1month this week, they remain "enormously high at 4.8%." He noted that theyare "10 times what they were a few months ago" and should continue to fuelgold's price rally.[Here's our interjection of the gold lease rates at day's end:1-month 5.1510% -1.74902-month 5.2200% -1.25103-month 5.5850% -1.49806-month 4.9610% -0.500012-mnth 4.5400% -0.4950 ... now back to our tale...]With lease rates at these levels and the continued need for manyplayers to cover options exposure, the price could rally up to $340-360,Kaplan said.He noted that gold had held support when Dec slipped back to $295.10Thursday and could now head higher. "It is a bull market and it will tendto move higher when there is no significant news," he said.Bill O'Neill, director of futures research for Merrill Lynch saidtoday that gold prices should at least average $300 per ounce in thefourth quarter of this year, with a near-term range of $280-340. O'Neillsaid this week's announcement that European and Swiss central banks willcap gold sales and limit lending alleviates the major negative for themarket.David Meger, senior metals analyst at Alaron Trading, said that on apurely technical basis, he could call for a "blow off top," which is aspike that would end the move higher. However, he said that he can't agreewith this on a fundamental basis. "There are too many leasers and peoplewith options exposure still," he said. He noted that he expected to seethem try to gradually cover their positions in small tranches on theLondon open. "They'll try to cover gradually because they've alreadygotten enough attention," he said.Dec gold reached a high of $310 in the morning, its highest levelsince Wednesday's $322.40. Traders said they expect gold to continue to besupported on the breaks. "This is the first time I am having a reallypositive view toward the market," said an analyst.***(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:http://www.futuresource.com/internet.shtmlNo further reproduction without written permission from FWN---COMEX delivery intentions so far for October is now up to 1,603 contracts (5 tonnes). Today, 120 notices were added to yesterday's First Notice Day sum of 1,483 contracts. +We'll walk you trough this if you're interested, if not, skip ahead my merry friend. When COMEX trading began yesterday, there were 2114 October contracts in open interest...a theoretical buyer on one side and a theoretical seller on the other side at the price agreed upon at the time they put up their margins and "shook hands" on the deal. The market changed from under them when it became obvious to others following the European central bank announcement that gold would not be "abandoned" as the important financial asset which it truly is. The resulting scurry of these new "investors" to get in on the action pushed prices up to these new levels, as buyers were much more aggressive than sellers. +From records now available of yesterday's events, we can see that of the 2,114 open October gold contracts, by the end of the day that number had been reduced by 1,502, and stood at 612 open contracts this morning. Recall from earlier that yesterday morning, 1,483 contracts were called for delivery, so of the 1,502 contracts that were closed yesterday, we can see that only 19 of them chose to settle with cash. That translates to over 98% of the contracts as being settled with metal. Wow. [Can anyone confirm what the deadline is to provide delivery on a gold contract? Last day of month, maybe? That question was raised yesterday, and we've yet to confirm the answer.]+This morning began with a whopping (by comparison) 126,972 open December contracts. With each contract theoretically representing the potential for 100 oz to be called up "front and center!", that could mobilized 395 tonnes of gold that isn't necessarily in the hands of the theoretical "seller." If their contract were called for delivery, they'd probably pass the buck by immediately purchasing another December contract and announce delivery intentions on that with which to settle their other obligation. And so the buck gets passed as sellers turn buyers, and only if a seller is found prepared to deliver gold at the new price does this cascading meltdown (meltup?) find some relief. Otherwise, someone at some point has to turn to the spot market. And we must ask ourselves again, why didn't the buyers simply seek spot gold in the first place? We seem to recall positing that size can't be gotten at spot markets without gunning the price. Any other suggestions? Open interest for all COMEX gold contracts total 209,241...theoretical obligations to mobilize 651 tonnes. Hah!Wouldn't it be nice to take a similar walk throught the LBMA? Always keep in mind as you read this that the COMEX is dwarfed by both size and type of operations occurring through the LBMA.Bottom line on futures: the contract pricing by supply and demand forces acting upon the contracts themselves may (or may not) earn you a dollar profit, but there is no guarantee that this trading will reflect the realities of the physical supply and demand, or that your contracts could be successfully exchanged for physical. Stepping over now to the less theoretical, more tangible side of the COMEX operations, the gold depositories saw a little reshuffling action today. Registered gold at the Scotia Mocatta vault was transferred to the Registered inventory at Republic National. 14,609 ounces to be exact. Apparently somebody wanted it a little closer to home. Meanwhile, 385 oz (12 kilos) of Eligible gold fled the Scotia Mocatta scene altogether. We're sure the new owner is quite proud of his London Good Delivery Bar...if that's what it was. Total COMEX gold inventory stands at 927,620 ounces (less than 29 tonnes). Given the high rate of contract exchange for physical, it becomes somewhat within the scope of reality to compare that amount with the 395 tonne potential sitting in current December open interest. This could get interesting. And then there's alway the LBMA, which could be imploding even as we speak...we'd never know 'til it was too late.The Towers scouts are kept busy in their quests for news of gold, so we don't see a change to provide additional comments of the pale precious metals as occasionally requested. MK over at the Castle (CPM) has available the various metals, but here in The Tower it is gold that holds our interest and keeps us plenty busy. This following commentary was taken from Bridge News, and underscores The Tower's reluctance to track the white metals:----Despite the run-up in platinum and palladium, traders said they areseeing very little consumer interest.------ Traders said that profit-taking sales were being offset by trade house purchasing.As you'll see, there is a fundamental difference between the PGM's and the monetary driven market of gold. Only gold is exactly gold, so to speak. This is also shown in the following comments Bridge reported regarding silver:-----Silver is seeing a lack of follow through from the recent gold run-up,but a trader explained that the reasons that gold has rallied do not apply to silver.Nevertheless, he still expects silver to act as a "tag along" commodityand to reach $5.70 in the near term.-----November crude future opened strongly, reaching the day's high of $24.85 before settling back for a 3c gain on the day, closing at $24.54 in trading that was described as boring on thin volume.And that's the view from here...after the close. AEL (10/01/99; 15:50:20MDT - Msg ID:15129) cavan man Cavan Man (10/01/99; 14:36:12MDT - Msg ID:15123): are you saying that it is (rather) easy to counterfeit U.S. currency? North may have some of his tech details wrong (uniqueness of "intaglio"), but his point was that authentic FRNs have a measure of "specialness" (is it the paper?) and cannot be duplicated at will. If this is incorrect, perhaps we should all get into the printing biz, while FRNs are still worth something... ;) SteveH (10/01/99; 15:47:05MDT - Msg ID:15128) Gold trading halted in India? http://www.dawn.com/daily/19991001/ebr7.htm ? AEL (10/01/99; 15:32:06MDT - Msg ID:15127) marius, angel, other lurkers (?) Welcome to the party! Looks like its gonna be a hummdinger, here, very soon! Other lurkers: come out of the woodwork.(Angel, are you really an angel? :) ) PH in LA (10/01/99; 15:31:48MDT - Msg ID:15126) Re: Bombshell!!!! Point well made! GFD.Since it was the futures exchange who brought down the Hunts by changing the rules, there is no reason whatsoever that they might not do it again.In one of his last posts, FOA mentioned that they might push down the price one last time before it goes completely ballistic. It seems like a move such as this might do just that. An announcement over the weekend... something like the exchange is in suspension, all contracts and options to be settled in cash within 6 months (with interest), etc. That would drive the price through the floor as everyone ran for cover. Later, things could reopen under completely different rules. ie. street gold vs. paper contracts, big taxes on physical sales... etc.Where is FOA on this? Goldspoon (10/01/99; 15:21:41MDT - Msg ID:15125) Phos http://www.kitco.com/lease.rate.html Platinum is a special animal....a must have for militarys and industrys....Some industrys stockpile for hard to get times 40 times rarer than gold...So whith this stockpile laying around lets lend it and make some more platinum for our time...A same (simular as gold carry trade) except x10 due to i being rarer and fewer sources of rescue....Thus the lease/forward trade has degraded into loan sharking.Youse knows what happens when youse don't pays the loan eh, Guetio??? Where's my stuff Guetio?? kraaacckckkkk..... POPEYE (10/01/99; 15:08:53MDT - Msg ID:15124) No Subject My first post. I've been a viewer of this site for years and have learned a great deal from all of the participants.For this I am truly grateful. Your posts gave me the courage to keep buying gold when the horizon looked dark and menacing. I was fortunate to hear and act on, "GOT GOLD ANYONE", and decided to commit to purchasing on a monthly basis as the price of POG went down.Then some one said watch your allocation of assets and then I stopped. I don't know how to give back to this forum,and admit that I have been a sponge at this site. I am registered at a number of other investment sites and do not have time to keep up with all of them on a daily basis. I submit the following that comes from a daily news alert. I hope this is appropriate to the last few days of discussion.Date: Fri, 1 Oct 1999 10:08:16 -0400From: dailyreckoning@agora-inc.com GOLD AT $380/OZ? A COMMENT FROM JAMES PASSIN... I just got back this morning from South Africa. We met with some "institutional analysts" near Johannesburg. The gold analyst gave us a very bearish presentation on gold and gold shares. He talked about cental bank selling, etc.-and predicted further declines in gold and gold shares. The next day, gold began a 3-day rally of $50. As you may know, I have been waiting for a massive gold rally all year. Gold looked like the classic "bull trap" -- the market was building up a huge short position and universal pessimism, while physical inventory was being squeezed out of the market (evidenced by the doubling in lease rates). The strength in other commodities, weakness in dollar/yen and resurgence of inflation created a fundamentally bullish environment. The move reveals the poverty of robotic "trend following," which keeps you short at the bottom and long at the top, and only seems useful in explaining yesterday's price action. The trend followers are trapped: the popular trade was to borrow gold at 2%, sell it into the market ($270 - $255) and then invest the proceeds into U.S. treasuries at 6% on 20X leverage. With the dollar weak and gold strong, this trade has turned into a total disaster. Stop losses are getting triggered. There are rumors of hedge fund implosions (including the Tiger fund). The central banks are brilliant: they trapped the shorts by staging a bogus gold auction which created trivial overhang but overwhelming bearishness. Whether the unexpected demand came from jewelry wholesalers or short sellers, the demand is there...The new central bank policies of restraining leasing and curtailing sales have altered the economics of producer hedging (since producers short against future production and recapture the spread between the lease rate and treasuries on the proceeds) and speculative short selling. I believe that gold could trade as high as $380. However, the central banks are still intent on liquidating their inventories. Unless an inflationary spiral emerges (which is now possible), I would expect central bank supply to flood the market if gold in fact reaches the upper $300s.Yes I like The expresion "GOT GOD ANYONE?" Sorry my sense of humor got in there. Should be Gold also. Popeye . Cavan Man (10/01/99; 14:36:12MDT - Msg ID:15123) Mr. Gresham 15117 Gary North is wrong on this one. I know. I am in the printing business. "Intaglio" is a reference to rotogravure printing where cylinder is engraved with the image to be reproduced on paper. The engraving is below the surface of the cylinder and creates microscopic cells which hold microscopic amounts of ink. The depth of these cells is measured in microns. This type of process is suited for very long and continuous runs (yeah, that sounds like the FED right?)and will provide excellent color consistency. Offset printing on the other hand is on par with gravure as regards quality; no one outside of the printing industry could tell the difference between the two processes and many within the industry cannot tell! I have seen the same job printed offset and intaglio, laid side by side and could only "tell the difference" by looking thru a printer's glass.While some sort of a special press might be required to print money, there is nothing special about the process. The company I work with has two "intaglio" presses.I wonder what else Gary North is not entirely clear about? GFD (10/01/99; 14:29:18MDT - Msg ID:15122) RE: BOMBSHELL!! Tsk, tsk... Such rhetoric. One would think that people ran the futures exchanges for the benefit of the poor suckers trying to do business with them! ;^)This sound like a replay of the Hunt Brothers. It might be worthwhile to point out a couple of things:a.) The Hunt Brothers lost. The way they lost was that the exchanges changed the rules on them. b.) Seeing a futures exchange as "fair" or a "free market" is horrifically naive for any "informed observer" of the markets.c.) What the futures exchanges do or not do, in colusion or not in colusion with the Fed is utterly irrelevant to the big picture. All this paoper manipulation has masked and, in fact aggravated, a large and widening spread between supply and demand for the physical bullion. Why it may still be possible to "buy bullion in Belgium" the day may not be too far off where it is not. Unless Al has the combination number for Fort Knox, all this "bombshell" stuff is "market stablization". In other words the Plunge Protection Team will do what Plunge Protection Teams do.What is VERY interesting about this is basically that the physical gold markets are very, very close to official force majeur for large physical bullion positions. However, this has largely been the case unofficially for the last couple of years according to BT/The Writer/Another.So what happens when Tifany stops doing gold? TownCrier (10/01/99; 14:16:56MDT - Msg ID:15121) Sir gidsek, I wasn't after credit... was simply being "at your service." gidsek (10/01/99; 13:40:53MDT - Msg ID:15120) TownCrier Russian Link My humble apologies. Credit where credit is due!! Very tired here (I see little scrollbars when I close my eyes).gidsek gidsek (10/01/99; 13:38:08MDT - Msg ID:15119) Oro, that may not be the only one.. If this has been posted already I apologize.Date: Fri Oct 01 1999 14:33crazytimes (the BOMBSHELL from Bill Murpy!!!) ID#344326:Copyright © 1999 crazytimes/Kitco Inc. All rights reserved"BOMBSHELL !" In the last Midas, I reported to you that several sources told me that the Federal Reserve was "jawboning" futures commission merchants not to pressure firms to "deliver gold." In other words, they know that the gold is not there for the shorts to deliver and, as I have long suspected, it appears that they are protecting the positions of certain bullion dealers and of other financial institutions that are short gold. This corroborative information is clear evidence that the gold market has been manipulated as the Gold Anti-Trust Action Committee has alleged. Two days ago, I received information that a futures commission was told by another futures commission merchant that it was prepared not to deliver gold on its " gold forward or futures contract" obligations that was expected by a client of the firm who was standing for delivery. In essence, the shorts were declaring "force majeure" - WE CANNOT DELIVER. This is not a Comex problem as far as I know. From what I am hearing, it is an OTC problem, where few people really know what is really going on behind the scenes. The firm that expected delivery was stunned. It was about to be "floored." According to our sources, this firm then got a phone call from the Federal Reserve requesting that they do not pressure the shorts into making delivery and that they would make sure that the longs received their gold. I am not privy as to exactly how that would happen. According to another source, there were actually a couple of firms that told the longs that they were not prepared to deliver "forward" contract gold in the size expected. Goldman Sachs is one of the firms mentioned to me that is not prepared to fulfil its obligations. That is what my sources in the market place are telling me. It should be of no surprise to any of you that Counterparty Risk Management Group Co-Chair's, Goldman Sachs and J.P. Morgan were all over London CNBC this morning talking down the gold market. Sources tell me that Goldman suggested on the tube that the big gold shorts covered on the run up while Morgan's Kevin Crisp was calling for $275 to $280 gold when this blip was sorted out. Whose risk are they both concerned about? Strange. Today, Goldman Sachs and Chase banks were big buyers of gold options on Comex. Why buy options if you are not bullish or you believe the gold market has topped out for the time being. Yes, the buying can be for clients. Are their clients not listening to them? On that note, for maybe the first time in Comex history, the gold option volatility is higher than that for the silver contract. There are other Goldman Sachs stories out there, but I want more confirmation of them before I present them to you. Last night, I received a phone from a "very plugged in hedge fund manager" who confirmed to me that George Soros is long "forward" gold. NOT COMEX GOLD. That is not a rumor anymore; that is a fact, according to my source. Soros is also long aluminum and silver according to that same source. This source also tells me that George Soros most likely does Comex business with Refco as do many of the big hedge funds. I do not know about who he does his OTC business with or who he trades with in London. However, according to this hedge fund manager, one should start at Refco as a starting place in tying this altogether. This extraordinary development is an affront to all that believe in free markets. There has been an orchestration by some bullion dealers and some of our own "officialdom" to hold down the gold price so that their own selfish interests can be served. In the meantime, gold miners are out of work, gold companies are going bankrupt, gold stock shareholders have been decimated, etc. This is an outrage of the highest order and it has been going on for some time. gidsek ORO (10/01/99; 13:37:09MDT - Msg ID:15118) Marius Perhaps Murphy answered your question.I like his pointing out that putting kitties Morgan and Goldman in charge of determining the risks to the milk bowl is not done in the interest of other hungry kitties. Mr Gresham (10/01/99; 13:34:40MDT - Msg ID:15117) Why Paper Money? http://www.prorege.com/north/6348.html Gary North answers a reader. TownCrier (10/01/99; 13:18:28MDT - Msg ID:15116) Strong Sept NAPM stirs market's US rate hike worries http://biz.yahoo.com/rf/991001/uo.html We'll know next Tuesday what the Fed thinks. But for now, investors were spooked by the National Association of Purchasing Management's manufacturing index which jumped to 57.8 in September. This greatly exceeded analysts' forecasts for a slight rise over August, predicting 54.3 for September. TownCrier (10/01/99; 13:11:58MDT - Msg ID:15115) Swiss Nat Bank says will be prudent on gold sales http://biz.yahoo.com/rf/991001/xh.html SNB Chairman Hans Meyer said on Friday, "It will be in our own interest to exercise the necessary diligence when converting part of our gold holdings into interest-bearing assets."Now, we all know full-well that interest is a product of the business contracts and NOT of the asset itself as some of our Knights have discussed previously. As we watch gold lease rates go sky high it is abundantly clear that gold can be utilized as an interest bearing asset. Mr. Meyer is not telling the straight story. Could it be that when the interest generating gold lending operation collapses upon itself that all future gold lending will be prohibited? Whouldn't that be nice. You can borrow national currencies for repayment with interest, but gold supply will henceforth not be allowed to be artificially expanded.Yes, The Tower does like that thought! In a world of freely floating currencies, gold will always be the unadulterated yardstick. ORO (10/01/99; 13:01:14MDT - Msg ID:15114) gidsek A glimpse of things to come. I was not aware of the closure of the Karachi gold exchange. It is telling that they fell apart at $290. LBMA is still functional. I wonder at what price they keel over at the point of no possible short term supply being able to save them?The wide anticipation of a plunge will assure the lack of such a plunge coming from the Karachi market's demand. Could eveybody be witholding buys because of this expectation? Bodes well for the future of POG.PH in LA and Mr Gresham, thanks.I am sorry not to be writing much on the analytical side now, but hopefully there will be some time later. Phos (10/01/99; 13:00:35MDT - Msg ID:15113) Platinum Lease Rates Does anyone know why platinum lease rates have gone so high today? Does it have any relevance to other precious metals? TownCrier (10/01/99; 12:52:29MDT - Msg ID:15112) Sirs gidsek and Golden Boy...the Russian link was provided at my 10:46:04 - Msg ID:15097 http://biz.yahoo.com/rf/991001/t4.html Here it is again.The jist of the situation is that if gold holding Russians are more inclined to hold cash than gold, it is now less "taxed" for them to export the gold than to sell it to the Russian central bank (by 0.5%). If they sell it to the bank, the bank has the gold, and they get the cash. If they instead export the gold out of the country, they give up 5% at the time of the operation...however, this gold may be moving under a cash sale motive, or for deposit in outside bullion banks to earn the high lease returns. There is no way to know for certain, except the easing lease rate indicates some of the immediate pressure has come off. If I were in Russia, I'd rather hold my gold given the uncertainties, but if forced to move it, I'd far rather lease it than sell it outright for the obvious reasons. But as just said, the risks are too great to part with it, although some will anyway I'm sure. Phos (10/01/99; 12:49:42MDT - Msg ID:15111) Bill Murphy's bombshell "In the last Midas, I reported to you that several sources told me that the Federal Reserve was "jawboning" futurescommission merchants not to pressure firms to "deliver gold." In other words, they know that the gold is not therefor the shorts to deliver and, as I have long suspected, it appears that they are protecting the positions of certain bullion dealers and of other financial institutions that are short gold. This corroborative information is clear evidence that the gold market has been manipulated as the Gold Anti-Trust Action Committee has alleged. Two days ago, I received information that a futures commission was told by another futures commission merchant that it was prepared not to deliver gold on its "gold forward or futures contract" obligations that was expected by a client of the firm who was standing for delivery. In essence, the shorts were declaring "force majeure" - WECANNOT DELIVER. This is not a Comex problem as far as I know. From what I am hearing, it is an OTC problem, where few people really know what is really going on behind the scenes. The firm that expected delivery was stunned. It was about to be "floored." According to our sources, this firm then got a phone call from the Federal Reserve requesting that they do not pressure the shorts into making delivery and that they would make sure that the longs received their gold. I am not privy as to exactly how that would happen. According to another source, there were actually a couple of firms that told the longs that they were not prepared to deliver "forward" contract gold in the size expected. Goldman Sachs is one of the firms mentioned to me that is not prepared to fulfil its obligations. That is what my sources in the market place are telling me. It should be of no surprise to any of you that Counterparty Risk Management Group Co-Chair's, Goldman Sachs and J.P. Morgan were all over London CNBC this morning talking down the gold market. Sources tell me that Goldman suggested on the tube that the big gold shorts covered on the run up while Morgan's Kevin Crisp was calling for $275 to $280 gold when this blip was sorted out. Whose risk are they both concerned about? Strange. Today, Goldman Sachs and Chase banks were big buyers of gold options on Comex. Why buy options if you are not bullish or you believe the gold market has topped out for the time being. Yes, the buying can be for clients. Are their clients not listening to them? On that note, for maybe the first time in Comex history, the gold option volatility is higher than that for the silver contract. There are other Goldman Sachs stories out there, but I want more confirmation of them before I present them to you. Last night, I received a phone from a "very plugged in hedge fund manager" who confirmed to me that George Soros is long "forward" gold. NOT COMEX GOLD. That is not a rumor anymore; that is a fact, according to my source. Soros is also long aluminum and silver according to that same source. This source also tells me that George Soros most likely does Comex business with Refco as do many of the big hedge funds. I do not know about who he does his OTC business with or who he trades with in London. However, according to this hedge fund manager, one should start at Refco as a starting place in tying this altogether. This extraordinary development is an affront to all that believe in free markets. There has been an orchestration by some bullion dealers and some of our own "officialdom" to hold down the gold price so that their own selfish interests can be served. In the meantime, gold miners are out of work, gold companies are going bankrupt, gold stock shareholders have been decimated, etc. This is an outrage of the highest order and it has been going on for some time. " Marius (10/01/99; 12:49:04MDT - Msg ID:15110) Thanks for your comments Thanks, everyone, for your comments about what could be going on with my broker. I did cross my mind, after posting the question, that they might have someone desperate for having sold calls in this climate. He's usually pretty good at not "churning", plus the broker doesn't get a commission for closing the position. I had already decided to try switching to on-line, discounted commission service, and this latest situation reinforces the idea! I agree that it doesn't seem likely enough gold could just show up to shut this run down. I am familiar with the opinions here re: "paper" gold, and don't intend to stay in options indefinitely. I'd definitely consider the physical metal or stocks with some of the options profits. I close with Bill Murphy's recent battle cry: Be strong, go long! Angel (10/01/99; 12:45:59MDT - Msg ID:15109) Hi Guys and Gals This is my first post but I am unable to allow my shyness to continue in the midst of all this excitement. I have been lurking here since early March. I made the decision last January to liquidate stocks and mutual finds because of a growing fear of loosing everything to the Y2K horseman.I found Michael's book quite by accident (it shouldn't have been in the book section of Barnes and Noble that I was perusing) and since I have always lived by the premise that "everything happens for a reason", I read the book, made the call to MK and sent him a check. This is certainly atypical behavior for me since I am not a very trusting perosn especially where money is concerned. As soon as i heard his voice on the telephone I KNEW this was a man I could trust and with whom I would have a long and prosperous association.I feel now as if I know each and everyone of you personally. You have made me laugh out loud and at times have brought tears to my eyes. Such a wealth of sensitivity, intelligence and grace. I have learned so much not only about gold and economics but about life. Thank you. If you will allow me, i would like to be a contributor to this incredible forum of wise ones.P.S. Goldfly.....I live about 60 miles north of Nashville and may be able to help you with your song writing career. gidsek (10/01/99; 12:30:22MDT - Msg ID:15108) Russia leasing The last I read was the the Russian CB had increased the discount at which it buys domestically mined gold to %5.5 from well below that.This is a greater hit than the %5 export duty so whereas once it was less advantageous for miners or whomever to export gold now is more.Sorry no link, was from Yahoo I think. Read this on Kitco last night.Remember this is a battle, and battles that are worth winning never go your way over their entire course.gidsek gidsek (10/01/99; 12:25:16MDT - Msg ID:15107) Sorry, link http://www.dawn.com/daily/19991001/ebr7.htm gidsek gidsek (10/01/99; 12:24:32MDT - Msg ID:15106) Gold trading remains suspended Don't know the import or verity of this one.http://www.dawn.com/daily/19991001/ebr7.htmgidsek Mr Gresham (10/01/99; 12:17:48MDT - Msg ID:15105) Oro 15096! ORO! You surpass yourself!Clear vision is such a pleasure to see put into clear writing.My Oro WP document (30 pgs.) grows daily.I relish the thought of re-reading it soon, and returning to today's posting later for a refresher. Golden Boy (10/01/99; 12:00:39MDT - Msg ID:15104) Russia Leasing Could someone please direct me to a report stating that Russia is now leasing their gold. Russia has publically stated that they are now selling but I haven't seen any statements regarding them leasing. At the end of the daily report, michael comments on Russia leasing. Peter Asher (10/01/99; 11:52:24MDT - Msg ID:15103) Marius Possibly there is a sell gold campaign being circulated by the big guys, who control the analysts as much as the news people.Otherwise, it's the usual --"Find customers with profits and get them to sell", this is the best way to churn accounts. Cavan Man (10/01/99; 11:32:33MDT - Msg ID:15102) Marius Glad to have you here. Please, don't be a stranger. IMHO, I'd get another broker. I'd avoid the ups and downs of trading paper. You will sleep sounder and live longer if you buy the metal and lock it up. If you have been watching for awhile, you probably agree with me that the best analysis is right here. Our host is undoubtedly one of the most knowledgable gold analysts in the US and perhaps the world. I'd give him a call at 800-869-5115. PH in LA (10/01/99; 11:26:43MDT - Msg ID:15101) Strange Calls and Used-Car Salesmen Agreed, ORO, that the present situation is a fantastic glimse of "what the banking system is actually like." Maybe a little imagination coupled with your astute comments and observations can help illuminate the "strange call from (Marius') broker" (10/01/99; 10:52:01MDT - Msg ID:15098) who tells us that: "Several analysts are calling for a big drop on Monday."Welcome Marius! If you have been reading here for any length of time you certainly know that analysts' calling does not determine drops (or rises) in markets. In fact, I find it a much better perspective to recognize analyists' "calls" for what they really are; explanations invented after the fact for poorly understood events, then backdated to convince the gullible that they were delivered early enough to qualify as predictions.No one knows the future. We all extrapolate from the present to prepare ourselves for it. But that is not knowing. It is guessing. Sometimes educated guessing...sometimes not. If your broker was unable to offer "a satisfactory answer" it would suggest that he is unprepared and/or uneducated in his extrapolations. It can be very hard for us non-professionals to admit that most brokers are about as qualified to extrapolate the future from the present as, say, used car salesmen.It sounds like yours got a directive from his boss coming down through the chain-of-command to cover all calls, no matter what. How could he even hope to know what will happen from now until June 2000? You should be pondering FOA's many warnings about paper and defaults rather than whether or not a big drop is coming before monday that will not be corrected before next June.Just my 2-cents worth. After all, you did ask. Again, welcome. Your information is very interesting and does fit perfectly with the view we are getting here. Thanks for your contribution. Phos (10/01/99; 11:09:07MDT - Msg ID:15100) @Marius - gold The only thing that could tank gold on the weekend, I would think, would be an announcement of a large amount about to hit the market. It cannot be the Europeans. Could the US dishoard onto the market without Ccongressional approval? I don't think there is enough elsewhere to do the trick. Everyone else is buying. Or alternatively, they could announce that the market is closing until....... Don't know the answer to that one. I take it your broker did not divulge any sources? granny (10/01/99; 11:08:42MDT - Msg ID:15099) Govt. Confiscation of Gold So, if I have my gold buried somewhere, let's presume in a place secured enough to hamper metal detection of it all... what measures can the govt. take against me, physical and legal to confiscate it?? How do they know that I have not "bartered" it all away? Marius (10/01/99; 10:52:01MDT - Msg ID:15098) A strange call from my broker Good day, all! I've been reading this board for quite a while, but this is my first post. I just had a rather unsettling call from my broker, who seemed rather emphatic that I should exit my long position in gold. (I have Feb 00 290 calls, & June 00 290 calls). He said: "Several analysts are calling for a big drop on Monday." I asked him if those analysts explained what event could lead to such a drop, when (a) the carry trade has been curtailed, and (b) the shorts are going nuts trying to buy at virtually any price. He couldn't (wouldn't?) give me a satisfactory answer. I've been considering taking some profit before any major pullback, so I went ahead and placed the order to liquidate the Feb calls. He was still upset that I wanted to hold on to the June calls. (I don't think we're anywhere near done with this bull rush.)Is anyone aware of some major event that could tank the price sufficiently to make a broker behave in this manner? Have seen nothing here or at GATA that suggests this, and the demand still seems very strong. Any comment would be greatly appreciated. TownCrier (10/01/99; 10:46:04MDT - Msg ID:15097) Russia c.bank amends precious metals pricing system http://biz.yahoo.com/rf/991001/t4.html Rouble? What's a rouble? Here's a look at Russia's real money and the cost of transactions. ORO (10/01/99; 10:45:47MDT - Msg ID:15096) Lease Rates Looks like a short term bottom in gold lease rates is in today. The Platinum lease rates are still through the roof.Once the newly borrowed gold finishes reaching the market, the next tranche from Russia, if it ever gets off the ground, will be absorbed. Then we will see the market go in to the next upswing. The exposure of the BNY deals with Russians probably had to do with the refusal of the Russians to send out the gold to market.We rarely get to see what the banking system is actually like. This glimpse through the gold market is the most public ever. The banking system gets overextended in a cyclical fashion as bankers chase in turn after borrowers or depositors. As this herd of bankers (they could barely hide the fact that they are Zebra herds, hence the pinstripes) changes short term rates to at once entice depositors or borrowers, we see these huge moves. Why is this system so unstable? Afew reasons, but one of the main reasons is psychological. The banker is usually conservative, as any dealer in leverage should be, and thus tends to seek backing in consensus. Consensus leads to everyone moving to the one side of the boat, eventually leading to a noticeable lilt to one side as leverage is employed. The second point is the borrow short, lend long strategy, from which the banks earn their spread, allways imperfectly balancing risks and rewards. Inevitably, the trouble caused by one view dominating the direction of leverage ends up pushing the other way.Bankers cooperate. They are risk averse as the munitions warehouse is. They know each sits on a barrel of powder and there are live fuze lines connecting all of them. That is why they put together the Federal Reserve system, to stabilize the daily dealings and avoid small disasters on the one hand, and to palm off their losses on the poppulation at large. Banker's schemes to save themselves have backfired as all attempts at cornering and regulating markets allways do. The creation of the ultimate market regulator, the Fed, has created a shared risk, as a portion of all the powder kegs is put into one big one, to which all fuze lines, now bigger and more reliable, connect. As in 29-39, there is no escape from an explosion of the whole system. The international interconnectedness of all banks and central banks, has created a new doomsday mechanism. Banking business revolves arround avoiding its detonation while attempting to profit from the sale of matches (in return for more powder). Government, of course, would like nothing better than to continuously extort the bankers and have been doing this since the gilded age and before. In this routine the politician is allways in a banker's pocket. Through obvious and public cooperation, we have learned to follow the bankers and their representatives in congress and the executive branch. Together they determine the policies that shape economic and international life.While in centuries past the world at large was less affected by the banks, their tie with government and the money printing press has eliminated all chances of isolation from the doomsday mechanism. The match lit in Mexico at the end of 94 lit the fuze and has been steadilly blowing up one deposit of powder after another. We all watch as instead of severing connections to the powder kegs now burning, the bankers attempt to snuff the flame by smothering it with more powder while replacing the old powder with new powder and laying down fresh new fuze lines. Meanwhile, the advancing firefront approaches the central barrel of the doomsday mechanism. We put on the golden sun glasses and walk away from the center hoping that we are far enough away and that the glasses will allow us to watch safely. TownCrier (10/01/99; 10:35:22MDT - Msg ID:15095) Fed added $4.316 bln in wkend, $1.345 bln in 6-day RPs http://biz.yahoo.com/rf/991001/qe.html At what point will the Fed start accepting beanie babies and baseball trading cards as collateral to replenish the banking system's reserves? TownCrier (10/01/99; 10:30:04MDT - Msg ID:15094) Japan recovery is key for world economy -Summers http://biz.yahoo.com/rf/990930/bgh.html The SecTreas carefully tip-toes around a strong-dollar question (and doesn't reveal its fate), as Japan is made out early in the article to be the key to the world economy. That's a lot of weight to bear for an island nation, isn't it? We should change their name to Atlas. The dollar and the yen have a fate that is tied, that's why there is all this "concern."You know, it wasn't long ago (days) that an ECB official said a strong Japan would be preferred, but that the European Union would prosper regardless the outcome in Japan. Leigh (10/01/99; 10:25:30MDT - Msg ID:15093) granny Hi again, granny! You know, it would be inappropriate for any of us to give you advice on gold buying since we're not dealers. Luckily, Mr. Kosares IS a very experienced (and nice) one; I imagine he will be happy to help you. There's a phone number on the "Info Packet" page, or you can e-mail him. Good luck! TownCrier (10/01/99; 10:20:04MDT - Msg ID:15092) New York Fed details Y2K liquidity measures http://biz.yahoo.com/rf/990930/ber.html In a nutshell, the Fed will accept a broader array of collateral for longer periods when banks need to "borrow" cash as their customers' deposits are withdrawn or spent down in advance of Y2K. granny (10/01/99; 10:09:40MDT - Msg ID:15091) Delayed delivery of Gold Eagles Received a call this a.m. that delivery on a few 1 oz. Gold Eagles will be delayed for about 2 weeks. Reason given that mint is behind, or something like that. Is this usual at "ordinary" times or does this have anything to do with what is going on right now? (I'm not a "dealer" by any means; just ordering from one.) granny (10/01/99; 10:03:53MDT - Msg ID:15090) Bonedaddy Bonedaddy,Thanks for the welcome. I'm granny enough to know "BUSY" so no hurt feelings here.So what do I do with this dreaded "legal tender"?????????I love horses and in all colors, cautious pale or flashy white or golden royal. As I ask of all my critters, I require all to earn their keep most of the time. All work to some extent, even if only to sleep in the front yard at night (big doggies) for physical presence (If burglars, murderers, rapist, terrorist, etc.. did make it through the canine brigade and into the house, and if they survived our arsenal, they would probably trip over enough big doggies to cause enough injury to seriously slow down or arrest retreat!!!) FROM LESSONS LEARNED IN THE "REAL" WORLD (much observation and minor "experience").... DO NOT resist ANY "officers" of the law, no matter how innocent you are!!!!I haven't had enough time to get in prerequisite reading with such a sudden turn of events (shame on ME) to be able to make very wise judgments right now. I imagine many "ol timers" are scratching their heads, wondering what to do. Granny is about to pull out her hair!All post are studied; looking for more direction or even specific ADVICE. Be well all NORTH OF 49 (10/01/99; 09:36:36MDT - Msg ID:15089) What's gonna happen to the little guys? Given the opinions of some of our esteemed Knights that the POG is charted for rather lofty levels, a thought comes to mind. For the most part, I have been picking up physical from the Bank of Nova Scotia. Primarily I do this because the manager is a close friend, and the bank itself is within easy walking distance. They (BNS) give me (as Sir Canamami pointed out earlier) a pretty good routing, both coming (buying) and going (selling, if I chose to do so) on several levels such as currency exchange, service charges, armoured car charges, and a couple of others that I can't recall without getting steamed up again. As the POG begins its' journey to the stratosphere, these "little extras" start to become very annoying!!Now, there are alternatives. Those being some larger and well established companies such CPM, and more prevalent smaller "Mom and Pop" operations operating out of tiny little shops that have been around since we were kids. The latter, are the ones that I see facing a financial timebomb. All of a sudden, inventory costs may multiply, wholesale financing may come into question, if even only in the form of operating loans. How will these small operations survive with the POG at, say, $3,000/oz, requiring an inventory that may be valued in the hundreds of thousands, if not into the million catagory. My thoughts are that banks, the ones that will have been smacked in the hindquarters by the very industry that is now coming to them for financial backing, may be somewhat less than enthusiastic about "sleeping with the enemy".Thoughts anyone??No49 USAGOLD (10/01/99; 09:02:39MDT - Msg ID:15088) Today's Gold Market Report: Day Five of the Big Breakout; The Cruellest Month (for equities markets) Begins MARKET REPORT (10/1/99): Day Five of the Big Breakout....Here comes October -- the cruelest month in investment markets -- living up to its reputation....Dow down 75. Bonds getting hammered. Yen, euro very strong. Gold up $7.50 (was up $11.50 earlier) after a strong European market. Merrill Lynch presciently goes out on limb, raises Q4 gold price estimate to $300. Courageous call since gold is already $306 and has been as high as the $320s. Bridge News reports that "NYMEX is currently trying to resolve some of the complaints it has received from customers who were unable to get their gold option orders executed on the COMEX division this week." Funny. We never had the problem when the shorts dominated the market action. Nor did anyone raise the margin requirements on COMEX gold contracts until the small investor deluged the market with buy orders this past week. That might backfire on the exchange since it amounts to a higher capital requirement in order for the shorts to cover. Standard Bank London is calling support in the $290-95 range and overhead resistance at $315 - 30. Gold lease rates down on Russia saying they will offer gold to the lease market. That's it for today, my fellow goldmeisters. Have a good weekend. (See the links below for more info.) The October edition of News & Views will be ready early next week and we invite all our visitors to take advantage of a free trial subscription to one of the most popular, widely read and quoted gold newsletters. Last month we predicted an explosion in the gold price. This month we deal with the nettlesome subject of paper assets in this tenth month of the penultimate year. And we all know what that means. October brings with it our annual Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most fateful stroke of midnight only two months away. October. When markets crash and assets go bump in the night........." We think you will gain by taking advantage of our offer........... Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving a trial subscription to our widely read newsletter, News & Views: Forecasts, Commentary and Analysis on the Economy and Precious Metals. Or you can go to our ORDER FORM and submit your request by E-Mail. You will also receive our introductory packet on investing in gold. Buena Fe (10/01/99; 08:37:43MDT - Msg ID:15087) Side Show -30 yr T-Bond = new low (within this cycle)-$ = new lows (same)-SP 500 = soon to follow?The financial earthquake of the past weekend has many tremors!!!!!!!!!Keep Awake onlychild (10/01/99; 08:30:04MDT - Msg ID:15086) Hey MK What are the chances of getting a "search" function on the forum so we can search for a topic by keyword or poster name? Broncos and Jets, who to bet on......... onlychild (10/01/99; 08:04:50MDT - Msg ID:15085) Question for the folks "down under" Can any of our Austrailian posters enlighten me on the confiscation of weapons there? What is public sentiment? What ploy did the government use to justify such a radical action? What weapons were affected? mike55 (10/01/99; 07:41:22MDT - Msg ID:15084) Daily Quote As I opened my planner (brain substitute) to today's date, I read the daily quote and believe it is apropos for veterans and new visitors of this site."No trumpets sound when the important decisions of our life are made. Destiny is made known silently." Agnes DeMille Bonedaddy (10/01/99; 07:31:53MDT - Msg ID:15083) Cavan, ...Man... a .380? Do you speak IPSC? Bonedaddy (10/01/99; 07:28:37MDT - Msg ID:15082) Why Granny, It's You! Welcome Granny! The talk here is quite excited at the moment, so new posters may not be afforded all the cordiality that is normal on this forum. (Shame on us) In regard to your investment question, you have very nearly arrived at the proper answer. You have come here, to the round table of gold. Your only decisions now are how much and what form to aquire. If you choose to purchase physical metal and take possession, your gold will be "close at hand in any emergency". Let's peer down the road several years. If the dollar has collapsed, I doubt you will be kicking yourself because you bought Maple Leafs instead of Angels. There are advantages to both. The pre-1933 gold was exempted from the last government gold confiscation. It is selling at a small premium now and there is currently no requirement for dealers to report it if you choose to sell it back through a dealer. If you trade it to your neighbor for a few buckets of wheat, any gold is probably not reportable. Of course gold is only a money question, the best investment one can make now, or at any other time, is time spent in prayer. mike55 (10/01/99; 07:07:30MDT - Msg ID:15081) SteveH - Carry Trades You're exactly right -- all carry trades are manipulated in the manner wished by those who administer the particular trade. FWIW, in Michigan, three adjoining counties with fairly similar demographics administer the CCW law in completely different manners. In Oakland County, only 10% general permits are issued, the balance being restricted permits; in Macomb County, virtually all applicants are issued general permits; and in St. Clair County, as noted in the case you cited, virtually no CCW permits are issued.The activities over the last week certainly have made me confident that I've been carrying the right metal -- the bright, yellow, shiny kind! Thanks to all who frequent this place of great thinking. elevator guy (10/01/99; 06:57:16MDT - Msg ID:15080) @quote.com/livechartscom/ Spot 308!Here spike, good doggy!(Loved that analogy, Goldfly!) Black Blade (10/01/99; 06:55:34MDT - Msg ID:15079) (No Subject) Previous post "special" thanks to Cavan Man and ss of nep! Black Blade (10/01/99; 06:54:05MDT - Msg ID:15078) s&p futures Thanks for the links all. s&p futures are sinking fast -6.90. apdchief (10/01/99; 06:48:50MDT - Msg ID:15077) Rich Man's Gold http://www.kitco.com/lease.rate.html Lease Rates for platinum at 27%!!!!! What's going on? Cavan Man (10/01/99; 06:48:46MDT - Msg ID:15076) Black Blade www.mrci.com Cavan Man (10/01/99; 06:46:07MDT - Msg ID:15075) SteveH 15069 A .380 in the proper holster with the right attire is CC.BTW, Colt is exiting the consumer toy business. ss of nep (10/01/99; 06:33:15MDT - Msg ID:15074) (No Subject) http://www.cme.com/cgi-bin/gflash.cgi S&P 500and more Black Blade (10/01/99; 06:18:36MDT - Msg ID:15073) Goldspoon I heard the s&p futures over the radio, but I think that they can be accessed on the CNBC site, or on their station. I would like to know a www link as well. Black Blade (10/01/99; 06:15:46MDT - Msg ID:15072) Steve, CW laws Steve, very interesting. I am fortunate enough to live where there is relatively little problem in getting a CW permit. The only requirement is a short course dealing with the legal issues and some time on the range with the instructor. My take is where the laws are patently absurd, why bother with a CW permit? Better judged by 12, than carried by 6. Goldspoon (10/01/99; 06:07:34MDT - Msg ID:15071) Black Blade Thank for the input... i picked up on the song connection and wondered if someone else did....What is your link to look at the S&P futures contract? Black Blade (10/01/99; 06:07:11MDT - Msg ID:15070) Goldspoon your horse sure is fast! "Rich man's gold" is charging hard down the backstretch at $28 (420), "Yellow gold" at $7.30 (305), and "Silver moon" (5.66) at 0.10. "Horse with no name" looks to be hung up at the gate? The race is on! SteveH (10/01/99; 06:06:30MDT - Msg ID:15069) Gold carry, Yen Carry, Concealed Carry... http://www.us.net/potomac/pencak.html but first Dec gold up $6.50!This was a case in a may carry state. My take on it is that the courts look for legal arguments without logic that support their bias. You decide.The Carry Trades all seem to hurt somebody. Protecting that gold:Christopher PENCAK, Plaintiff, v. CONCEALED WEAPON LICENSINGBOARD FOR the COUNTY OF ST. CLAIR;County of St. Clair; Marion Sargent, in herofficial capacity and individual capacity;Jean Gibson Sturtbridge, in her official andindividual capacity; Det. Sgt. Michael Waite;in his official and individual capacity;Sgt. Michael G. Bloomfield, in his officialand individual capacity, jointly and severally,Defendant. No. 94-73073. United States District Court,E.D. Michigan,Southern Division. Dec. 16, 1994. Applicant for concealed weapons permit brought action chaltenging county's alleged policy of blanket denial of licenses and denial, of license to him. On board's motion for, summary judgment, the District Court, Edmunds, J., held that: (1) county licensing board was legal entity which could be sued; (2) Second Amendment does not apply to states; (3) denial of license did not infringe upon applicant's rights to interstate or intrastate travel; and (4) denial did not violate due process. Judgment for defendant. 1. Federal Civil Procedure [key]2546 Mere existence of scintilla of evidence in support of nonmovant is not sufficient to avoid summary judgment, as there must be sufficient evidence upon which jury could reasonably find for the nonmovant. Fed. Rules Civ.Proc.Rule 56(c), 28 Ll.S.C.A. 2. Counties [key]208 Michigan county concealed weapons linsing board is an entity that can be sued, t merely department of the county. C.L.A. § 28.426(1). 3. States [key]4.1(2) Weapons [key]1 Second Amendment does not apply to the states. U.S.C.A. Const.Amend. 2. 4. Constitutional Law [key]225.1 Second Amendment does not provide invidual fundamental right to carry concealed weapon as to which strict scrutiny analysis would be applicable under equal protection guarantee of Fourteenth Amendment. U.S.C.A. Const.Amends. 2, 14. 5. Constitutional Law [key]83(6) Weapons [key]12 Refusal of county concealed weapons licensing board to grant permit did not deny applicant the right to travel, even though he claimed that it deprived him of the right to migrate to that county from another county iere he had a license. 6. Constitution Law [key]83(6) Right to intrastate travel is a basic freedom under the Michigan Constitution, and analysis of government burdens on intrastate under that Constitution is identical to analysis applied to government burdens on interstate travel under the United States Constitution. 7. Constitutional Law [key]83(4.1) Not every policy that possibly burdens the to travel triggers strict scrutiny, as court must consider whether policy at issue deters migration or serves to penalize the right to travel. U.S.C.A. Const.Amend: 14. 8. Constitutional Law [key]277(1) Property interests protected by due process clause do not arise whenever person has only abstract need or desire for or unilateral expectation of a benefit; they arise from legitimate claims of entitlement defined by existing rules or understandings that stem from independent source, such as state law. U.S.C.A. Const.Amend. 14. 9. Constitutional Law [key]287.1 Weapons [key]12 Applicant for concealed weapon ficense who had been ucensed in prior county of residence did not have due process rights violated by county's alleged policy of blanket denial of concealed weapons pernuts. U.S.C.A. Const.Amend. 14; M.C.L.A. § 28.426(1). --------------------------------------------------------------------------------Christopher Pencak, Warren, MI, for plaintiff. Laura Amtsbuechler, St. Clair Shores, MI, Eric Eggan, Lansing, MI, for defendant. MEMORANDUM OPINION AND ORDERGRANTING DEFENDANTS' MOTIONTO DISMISS OR FOR SUMMARY JUDGMENTEDMUNDS; District Judge. This matter has come before the Court upon Defendants' Concealed Weapon Licensing Board for the County of St. Clair; County of St. Clair; and the members of the Board, Marion Sargent, Jean Gibaon Sturtbridge, Det. Sgt. Michael, Waite, and Sgt. Michael G.. Bloomfield Motion to Dismiss or for Summary Judgment. Background Plaintiff Christopher Pencak is an Attorney and "Pharmacy Consultant." For many years he carried a concealed weapons license issued by Concealed Weapons Licensing Board for the County of Macomb, restricted to two years while licensed as an attorney. The license expired on September 10, 1993. Some time prior to September 10, 1993, Plaintiff moved from Macomb County to . St. Clair County. Plaintiff applied in St. Clair County for a renewal of his license. He alleges that he was told by the county clerk that he should not spend his money for the renewal application because "nobody gets a CCW permit in St. Clair County. That is just the way it is." Plaintiff requested the renewal application nonetheless and paid the fee. He also requested an appointment with the prosecutor. Plaintiff alleges that the prosecutor told Pencak that the county had a policy of not issuing CCW permits, that the county licensing board would hold a hearing for him but that it would be futile, and that others have sued concerning this policy in St. Clair County Circuit Court but have been denied relief. Plaintiff appeared at the hearing November 18, 1993 and presented his reasons for requiring his CCW permit to be renewed and his compliance with applicable law. Plaintiff contended that in his work representing criminal defendants and visiting pharmacy clients late at night he is subject to physical danger and therefore must be allowed to carry a concealed weapon. The Board denied Plaintiff's application because it determined that Pencak did not provide compelling reasons for the issuance of a permit. Plaintiff filed a complaint in this Court under 42 U.S.C. § 1983 asserting that the denial of his application to have a concealed weapons license by the St. Clair County Concealed Weapons Licensing Board violates the Second Amendment's right to bear arms, and the Fifth and Fourteenth Amendments and Michigan Constitution guarantees of due process and equal protection because he met all the statutory requirements to carry a concealed weapon, but was not awarded a permit pursuant to Defendants' blanket policy of denying such permits. Defendants' filed this Motion to Dismiss or for Summary Judgment, arguing that the St. Clair County Concealed Weapons Licensing Board is not a legal entity that can be sued, that the Board's exercise of its discretion to deny Plaintiff a permit was reasonable, and that Plaintiff has failed to establish a liberty or property inierest in either a license to carry a concealed weapon or to have his license renewed. II. Standards of review A. Standard for a motion to dismise In considering a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) this Court "must construe the complaint in the light most favorable to the plaintiff, accept all factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of his claims that would entitle him to relief." In re Delorean Motor Company, 991 F.2d 1236, 1240 (6th Cir.1993). A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint. Elliot Co., Inc. v. Caribbean Utilities Co., Ltd., 513 F.2d 1176, 1182 (6th Cir.1975). . The complaint must include direct or indirect allegations "respecting all the material elements to sustain a recovery under some viable legal theory." In re Delorean Motor Company, 991 y F.2d at 1240. (citations omitted). A motion to dismiss a complafnt for failure to state a claim should not be granted "unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (citations omitted). B. Standard for summary,judgment In considering a motion for summary judgment, the Court may grant the motion only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). I As the Supreme Court ruled in Celotex, "Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The court must view the allegationa of the complaint in the light most favorable to the non-moving party. Windsor v. The Tenneasean, 719 F.2d 155, 158 (6th Cir.1983). "Tho evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc." 477 U.S. 242, 256, 106 S.Ct. 2506, 2619, L.Ed.2d 202 (1986). [1] But the mere existence of a scintilla of evidence in support of the non-movant is not sufficient; there must be sufficient eviice upon which a jury could reasonably for the non-movant. Liberty Lobby, 477 U.S. at 252, 106 S.Ct. at 2512. "The movant has the burden of showing that there is no genuine issue of fact, but the plaintiff is not thereby relieved of his own burden of producing in turn evidence that would support a jury verdict." Id. at 256, 106 S.Ct. at 2514. "Where the record taken as a whole could not lead a rational trier of fact to find for the moving party, there is no 'genuine issue' for trial." Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir.1989) (citing Matsuda ELectric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, lO6 S.Ct. 1348, 89 L.E2d 638 (1986)). III. Analysis A. Whether the Board is a legal entity that can be sued. [2] Plaintiff has named as one Defendant Concealed Weapons Licensing Board for County of St. Clair. Defendants argue the Board is not a separate legal entity but rather, a department of St. Clair County thus not a legal entity that can be sued. Hughson v. County of Antrim, 707 F.Supp. 304 (W.D.Mich.l988). The Concealed Weapons Licensing Board for the County of St. Clair is a creature of state statute, not a department of St. Clair County. Section 28.426(1) of Mich.Comp. Laws Ann. provides that [t]he prosecuting attorney, the sheriff, and the director of the department of state police, or their respective authorized deputies shall constitute boards exclusively authorized to issue a license to an applicant residing within their respective counties, to carry a pistol concealed on the person and to carry a pistol, whether concealed or otherwise, in a vehicle operated or occupied by the applicant. The county clerk of each county shall be clerk of the licensing board, which board shall be knows as the concealed weapon licensing board . . . . Mich.Comp.Laws Ann. § 28.426(1). Further, the concealed weapons license itself makes clear that the concealed weapons licensing boards are state statutory creations. The top of the license reads "Michigan Department of State Police," "Michigan Concealed Pistols License." The license provides that the applicant is "hereby licensed by the Concealed Weapons Licensing Board to carry a pistol ..." and at the bottom of the license lists the issuing county. Based on the foregoing, the Concealed Weapons Licensing Board for the County of St. Clear is a state, rather than county, department. Therefore, it is a proper legal entity against which a suit may lie. B. Second Amendment [3] Plaintiff asserts that Defendants deprived him of his right to carry a concealed weapon guaranteed by the Second Amendment to the United States Constitution. Plaintiff's Second Amendment claim is not viable because the Second Amendment does not apply to the states. "The Second Amendment declares that it shall not be infringed, but this . .. means no more than that it shall not be infringed by Congress. This is one of the amendments that has no other effect than to restrict the powers of the National Government. Presser v. Illinois, 116 U.S. 252, 265, 6 S.Ct. 580, 584, 29 L.Ed. 615 (1886). Federal courts still follow Presser. E.g., Quilici v. Village of Morton Grove, 695 F.2d 261, 269 (7th Cir.1982), cert. denied, 464 U.S. 863, 104 S.Ct. 194, 78 L.Ed.2d I70 (1983). C. Equal protection [4] Plaintiff argues, that Defendants' denial of a concealed weapon license violated the Fourteenth Amendment's guarantee of equal protection: Plaintiff apparently argues that Defendants deprived him of the fundamental right to carry a concealed weapon and travel, thus triggering strict scrutiny. The Second Amendment, however, does not provide Plaintiff with a fundamental right to carry a concealed weapon. An individual has "no private right to keep and bear arms under the Second Amendment . . ." United States v. Warin, 530 F.2d 103; 106 (6th Cir.), cert. denied, 426 U.S. 948, 96 S.Ct. 3168, 49 L.Ed.2d 1185 (1976). [5, 6] Nor does the St. Clair County Concealed Weapons Licensing Board's refusal to grant Plaintiff a permit deny him the right to travel. The right to interstate travel is a basic constitutional freedom. Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969). The right to intrastate travel is a basic freedom under the Michigan Constitution, and the analysis of government burdens on intrastate travel under the Michigan Constitution is identical to the analysis applied to government burdens on interstate travel under the United States Constitution. Musto v. Redford Township, 137 Mich.App. 30, 34, 357 N.W.2d 791 (1984). [7] Plaintiff contends that through their blanket policy of denying residents concealed weapons permits, Defendants have unconstitutionally deprived him of the right· to migrate to St. Clair County. But not every policy that possibly burdens the right to travel triggers strict scrutiny. The court must consider whether the policy at issue deter migration or serves to penalize the right to travel. Memorial Hospital v. Maricopa County, 415 U.S. 250, 257, 94 S.Ct. 1076, 1081-82, 39 L.Ed.2d 306 (1974). Further, the "right to interstate [and intrastate] travel must be seen as insuring new residents the same right to vital government benefits and privileges in the States [and Counties] to which they migrate as are eqjoyed by other residents." Id at 261, 94 S.Ct. at 1084. Plaintiff has cited no authority for the proposition that denial of a concealed weapon permit deters migration, penalizes the right to travel, or that a concealed weapons pernut is a "vital government benefit[ ) arid privilege[ ]." While Plaintiff may feel a bit less secure not being able to carry a concealed weapon on his person or in his car when he drives into urban areas, the denial of a license for a concealed weapon is not tantamount to the denial or waiting period for the right to vote, Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972), or to receive welfare or medical benefits, Shapiro, supra, and Maricopa County, supra. A con cealed weapons license is not even a government benefit that rises to the level of benefits deemed by the United States Supreme Court as not vital, such as lower university tuition, Starns v. Malkerson, 401 U.S. 985, 91 S.C. 1231, 28 L.Ed.2d 527 (1971), or suing for divorce, Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975). Based on the foregoing, Defendants did not deprive Plaintiff of the right to travel and strict scrutiny is not triggered. Therefore, the court must apply the rational basis test. This test is easily met. The state has an obvious "legitimate interest in limiting access to weapons peculiarly suited for criminal purposes." People v. McFadden, 31 Mich.App. 512, 516, 188 N.W.2d 191 (1971). D. Due Process [8, 9] Plaintiff finally argues that Defendants deprived him of due process of law by its blanket policy of denying concealed weapon permits. Nevertheless, Defendants are entitled to judgment as a matter of law because there is no genuine issue of ,material fact that Plaintiff has a property interest in obtaining ,a license to carry, a concealed weapon.1 Property interests protected by the Due Process Clause of the Fourteenth Amendment do not arise whenever a person has only "an abstract need or desire for," or "unilateral expectation of," a benefit. Board of Regents v. Roth, 408 U.S. 564, 677, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). Rather, they arise from "legitimate claim[s] of entitlement . . . defined by existing rules or understandings that stem from an independent source such as state law."' Id. In Erdelyi v. O'Brien, 680 F.2d 61 (9th Cir.1982), the Ninth Circuit Court of Appeals considered a claim by a plaintiff who had been denied a license to carry a concealed weapon and who brought suit under § 1983 alleging that the denial of the license violated her right to due process. The court rejected plaintiff's constitutional challenge, holding that plaintiff had no property interest in carrying a concealed weapon. The court reasoned: Concealed weapons are closely regulated by the State of California.... Whether the statute creates a property interest in concealed weapons licenses depends largely upon the extent to which the statute contains mandatory language that restricts the discretion of the (issuing authority] to deny licenses to applicants who claim to meet the minimum eligibility requirements. Section 12050 explicitly grants discretion to the issuing officer to issue or not issue a license to applicants meeting the minimum statutory requirements. Where state law gives the issuing authority broad discretion to grant or deny license applications in a closely regulated field, initial applicants do not have a property right in such licenses protected by the Fourteenth Amendment. Id. (citations omitted). The Michigan Concealed Weapons Law similarly grants discretion to the issuing authority. It establishes boards for each county exclusively authorized to issue a license to applicant residing within their respective counties. Mich.Comp.Laws Ann. § 28.426(1). The statute establishes minimum criteria for concealed weapons permit. An applicant for a permit to carry a concealed weapon must be at least 18 years old, a United States citizen and reside in the State of Michigan for at least the past six months. Id The statute further provides that "[a] license shall at be issued unless it appears that the applicant has good reason to fear injury to his or her person or property, or has other proper reasons, and is a suitable person to be licensed. Id. The St. Clair County Concealed Weapons Licensing Board Policy Manual in effect at the time Plaintiff applied for a license there makes clear that Pencak does not have a legitimate claim of entitlement to a concealed weapons permit. First, the Policy Manual grants the Board a large degree of discretion in issuing permits. It provides that [l]icensing may be available depending iupon the facts and circumstances presentred to the Concealed Weapons Licensing Board in support of an application. The Concealed Weapons Licensing Board will ievaluate all applications uniformly and exercise its discretion as it deems proper to assure the safety, interest and well-being of the citizens of this County and State. Manual, page 4. Moreover, the manual makes clear that the County Board normally will not issue concealed weapons permits. The manual provides for two types of permits: general and restrictive. General permits are restricted to "those persons connected with the criminal justice system, where there is a legitimate threat of bodily injury because of past, present or future dealing , with criminal defendants." Manual, page 5. Further, the manual provides that "[t]his Board will require the applicant to establish by clear and convincing evidence that the presumption against issuance of [a general] license should be overruled in his or her case." Id. The manual specifies four categorieg of restricted licenses, two of which Plaintiff conceivably could avail himself. One category is the "Direct Transit between BankBusiness/Home" permit. To obtain this permit, an applicant must, among other things, demonstrate the dangerousness of the area in which he or she transacts business and the unreasonableness of alternative measures which would accomplish the same purpose without the necessity of a concealed weapon license. Manual, page 8. Moreover, "[a] license of this nature will not normally be issued . . ." and an applicant "must establish by clear and convincing evidence that this presumption against licensing should be overruled in his or her individual case." Id. The other category of which Plainiiff might fit is an "employment-related" permit. But to obtain one of these restricted permits, the applicant should be a security or bank guard. Manual, page 10. Based on the foregoing, there is no genuine issue of material fact that Plaintiff does not have a property interest in obtaining a concealed weapon license. Plaintiff argues that Erdelyi only applies to initial applications for licenses and that he has a property interest in a license renewal. This argument has no merit. First, the manual, expressly indicates that one should not expect to have his or her permit renewed as of right. The manual provides that [l]icense holders who move here from another Michigan county are not automatically issued a St. Clair County. License. The fact that the applicant has a previous permit will be noted, if a photocopy is provided to the Board, but the application will be considered as "new" and not a "renewal," and will be judged pursuant to St. Clair County standards and procedures. Manual, page 13. Second, the structure of the Michigan concealed weapons statute shows that each county is responsible for determining to whom it will issue concealed weapons licenses. The statute establishes county boards and vests them with the exclusive authority to issue such licenses. Mich. Comp.Laws Ann. § 28.426(1). "[P)ower to issue and revoke [concealed weapons] Black Blade (10/01/99; 06:00:13MDT - Msg ID:15068) Horse with no name Goldspoon, "Horse with no name" sounds like a good enough name, after all a band named America had a hit with the same title. BTW, s&p futures down 5 pts. I don't know what fair value is but looks like a the market open will be down if it holds. Gold is at $303 in London. Off to the races! Goldspoon (10/01/99; 05:59:43MDT - Msg ID:15067) "only straw" ....."only straw" !!! not staw Goldspoon (10/01/99; 05:54:49MDT - Msg ID:15066) Leigh, my apologies for being sooooo confusing. There are two stories going on...the first one is not a race..it's an escape from the evil owner...remember Stocks was just running around in the corral showing off to the bidders that were buying him and when he stumbled from running so hard Ritch Man's Gold and Yellow Gold jumped the fence to excape and run free..... and now the evil owner is trying to recapture them with a rope made from the S&P 100 stock index (it's 200 day moving average is very important to the future direction of the stock market if the average on the downside can be broken agressively money will come out of stocks to power gold higher....i expect to see a battle here today over this).....Horse Race....FOA, KOAN, and myself were in a heated discussion about leadership of this race FOA favored GOld, Koan favored Silver, i did not tell them that i would be riding platinum.....So i named these horses different names so as not to be confusing.....Golden SUN, and Silver Moon, and when platinum fell first (signaling the retreat of the rest) FOA quiped "it was a horse with no name" thus it neads a name...any suggestions from anyone or shall i name him myself.....if suggestions are submitted i have the authors privlige to pick....after all i'm trying to ride this unruley beast.... and the trick is he needs a good winners name...My fault.... "only staw".... RossL (10/01/99; 05:53:06MDT - Msg ID:15065) Timing the squeeze The October contract is relatively thinly traded and the shorts _could_ borrow to cover their obligations. It is possible that the day of reckoning could be postponed until the end of December. The Dec contract has 128505 contracts open. What happens if 100000 contracts holders get delivery notices? That is ten million ounces! It hurts my head to think about it. To put that in perspective, Anglogold produces seven million ounces per year. They are the biggest! Of course, this analysis is centered on the COMEX. There are other contracts to consider. Gold leases do not have any specific schedules and a large lease could come due at any time. The end is near for the shorts. There is not much time to accumulate physical. Leigh (10/01/99; 05:31:14MDT - Msg ID:15064) Silver MOON That was a typo. Goldspoon (10/01/99; 05:31:11MDT - Msg ID:15063) WAC...................Woah...horse with no name....easy.... Every time the gold bug gallery lets out a cheer... it spooks him....easy Goldspoon (talking to myself) you don't want to fall off again and hit your head or we'll never get where we're going.... Leigh (10/01/99; 05:29:50MDT - Msg ID:15062) Goldspoon Goldspoon, you've got me baffled!! The horse with no name is the palladium horse, who is half dead right now. I thought the platinum horse was Ritch Man's Gold, and that he was running in the same race as Golden Sun and Silver Mood (I figured you'd changed the names of Yellow Gold and Hi Ho Silver). So now there are TWO races going on? What's the difference? I can't think of a good name for the palladium horse because I don't know anything about palladium. Isn't it invisible or something? I mean, has anyone ever seen any?I want the bear and the bull to come charging in and mess up the race. Can you work them in somehow? Goldspoon (10/01/99; 05:22:36MDT - Msg ID:15061) Leigh....horse race... Leigh, i told FOA, Koan yesterday that i was getting back on (ole horse with no name) and to resume the race...must have caught them by surprize,,,,at this moment $422 up $31.Maybe they don't know their way around the track,,,,no matter i'll gladly be their escort.....BY the way...would you have the honor of naming my horse?? a good noble name perhaps... one that will motivate him???Names are important ya know,,,, each one contains a certain karma....a winner/leaders name for he has assumed the leadership role from the start....as he goes forward the others then follow.... as he retreats the others still follow....looks like gold and silver are caught in my wake....OH well, Higher! Horse with no name!!The other horse story, Ritch Man's Gold and Yellow Gold are getting tired of the evil owner stalking them with his S&P 100 rope.... they will try and charge him today, look for a fight to break out.....i may be a little spooky.. but harmless... what did you expect to find in such an enchanted place as this...a scarecrow with no brains??? ...only straw..(sigh)...Love and Peace to all........and follow the Yellow Gold Road!..... RossL (10/01/99; 04:39:07MDT - Msg ID:15060) Delivery on COMEX gold contracts http://www.nymex.com/markets/cont_all.cfm?cid=15&cont_name=term_sched#1999 Delivery on COMEX gold contracts is usually the last Friday of the month. Trading on the October contract ends on Oct 27 and delivery is due on Oct 29. Expect a squeeze in about 3 weeks. <grin> WAC (Wide Awake Club) (10/01/99; 04:33:31MDT - Msg ID:15059) Goldspoon Platinum up $26?? Goldspoon (10/01/99; 04:29:07MDT - Msg ID:15058) elevator guy http://www.metalsman.com/masterprices.htm Try this one..... 714 (10/01/99; 04:07:08MDT - Msg ID:15057) SteveH re: Chapman Chapman doesn't seem to take insolvent hedge funds into account. Or am I missing something? In 1998, we saw a crisis develop after LTCM was going belly up. The meltdown was averted by an astute Alan Greenspan and Robert Rubin. Since then, the re-established stability has been a fragile one and it was recently jolted by gold's new life. We don't yet know the full consequences of this jump in POG, but it's a pretty safe bet that some big financial houses and hedge funds are deep underwater. Furthermore, what happens to the US dollar hinges on what the Japanese do. If they start bringing their money home, taking it out of US Treasuries, Wall Street and the dollar go down much, much sooner than 6-9 months. And as for the carry trades, they're dead. They leave very nasty burns.Maybe I'm being a pessimist, but I wouldn't be surprised to see Clinton on TV by the end of October, talking to the American people about the deepening economic crisis. I've been wrong plenty of times before, but we haven't seen all the fallout from gold's resurgence. WAC (Wide Awake Club) (10/01/99; 01:20:35MDT - Msg ID:15056) Leigh - Belgian Gold Leigh, we received 0.75kg with the other 1kg due for delivery next week. It was on wednesday 29th september, that all the branch managers of BBL were called to an emergency meeting in Leuven regarding gold sales. I do not yet know the outcome of the meeting, but it would appear that they are still deliverying gold. Perhaps someone with some inside access to the BBL structure can enquire and enlighten us. FOX? SteveH (10/01/99; 00:48:28MDT - Msg ID:15055) Chapman http://www.gold-eagle.com/gold_digest_99/chapman100299.html "...That money was used to provide liquidity for world stock and bond markets, particularly the U.S. markets. That source of liquidity is now dead. Next we expect the yen at 103 to be borrowed and sold, the carry-trade and the funds will be used to keep the stock market correction at 15%-20% and 30-year bond yields at 5 3/4% to 6%. That action and with the help of central banks the yen will be moved down to 118 again. We can assure you the Japanese were reamed at the G-7 meeting for acting unilaterally. Unless the yen goes lower, that game will end in a few months and two sources of world financial liquidity will be gone. The third, carry-trade in the Swiss franc is over. The currency should trade down to 1.55 and could go to 1.65, but that's it. Thus, if these three sources of liquidity dry up, the gold carry-trade finished and yen and franc carry-trade limited, then banks will be forced to create liquidity. They'll do this by monetizing debt. That is the Fed buying U.S. Treasury Paper, which is immediately inflationary. Otherwise they'll print money which will show up in inflation in 6-12 months. Gold went to $329 and corrected back to $309. It will consolidate between $300-$320, then by the end of January should be attacking $350 an ounce. The bad news is the stock market will trade between 9200 and 11,306 for 6 to 9 months, then head lower...." SteveH (10/01/99; 00:24:52MDT - Msg ID:15054) propoganda? http://biz.yahoo.com/rf/991001/l.htmlbelow's link. oops. SteveH (10/01/99; 00:24:06MDT - Msg ID:15053) propoganda? Friday October 1, 12:16 am Eastern TimeGold price falters as signs of liquidity emergeSYDNEY, Oct 1 (Reuters) - A unexpected injection of liquidity overnight and expectations of more gold hitting the market soon were threatening to end gold's dramatic bull run this week, bullion dealers and analysts said on Friday.Spot gold was fetching US$297.50/$299.50 per troy ounce at 12:56 p.m. Sydney Time (0256 GMT) after slipping below $300 an ounce on Thursday, a first sign that the market's short covering rally had lost a step, dealers said.Lease rates -- as high as 10 percent at the height of gold's dizzying ascent -- have recoiled to a still-higher-than-usual but more palatable four-to five percent, possibly responding to the Thursday announcement by African miner Ashanti Goldfields Co Ltd (Australia:AHA.AX - news) that it had restructured 80 percent of its hedge book, equivalent to 80 million ounces.Lower lease rates encourage more borrowers.``Gold must return to around $305 to regain the momentum,'' Keith Goode, an analyst for Bell Securities Ltd in Sydney said.``It is looking quite vulnerable right now, and there is the danger of a bull trap,'' Goode said.Gold rocketed to a momentary peak of $327.30 an ounce earlier this week as short position holders scrambled for bullion to minimise losses after 15 European central banks vowed to cap gold sales at 400 tonnes a year and keep leasings in check.The ceiling on gold sales was largely in line with what the banks had been collectively disposing of in the past, but served to remove uncertainty over how the banks would manage their reserves.Since the Sunday announcement, rumours of other official holders of gold taking up the slack with fresh disposals of bullion have abounded, although no banks have stated they were new sellers.``Lots of fingers are pointing to Russia and other parts of western and eastern Europe, but so far it's just talk,'' said a bullion dealer in Melbourne.The Ashanti announcement may have more do with market sentiment and perception than any actual new gold entering the worldwide trough, the so-called ``gold pool,'' where borrowers go for their bullion.Ashanti said the restructuring was initiated before the gold rally as part of its contingency planning, Bell's Goode noted.Also, it included converting a substantial component of the forward sales positions into synthetic put options.``It means the gold didn't enter the system,'' Goode said.Synthetic puts are established by purchasing of call options and a long or short underlying position.In a further sign of diminishing volatility, the spread between bid and offer prices for spot gold narrowed to between $1.50 and $2.00 an ounce from around $3.00 on Thursday.Spot gold and forward prices were for a period in backwardation in which spot gold is dearer than the future gold price -- an unusual situation for this market -- but prices had now converged, traders said. SteveH (10/01/99; 00:09:38MDT - Msg ID:15052) Dec. gold up 1.7 to... $301.10.This just in from GATA:Good read!9:15p EDT Thursday, September 30, 1999Dear Friend of GATA and Gold:Here's an essay by GATA's vice chairman and treasurer, John D. Meyer, founder of Berkshire Financial Advisors in Great Barrington, Mass., and a 30-year veteran of the money-management business, posted at www.lemetropolecafe.com.Better than anything else I've seen, John's essay explains the meaning of the decision by the European central banks to stop facilitating the gold carry trade.Please post this as seems useful. CHRIS POWELL, SecretaryGold Anti-Trust Action Committee Inc.* * * THE WORLD DECLARES MONETARY INDEPENDENCE FROM THE U.S. DOLLAR AND HANNIBAL'S WORST NIGHTMARE BEGINS www.lemetropolecafe.comBy JOHN D. MEYER Vice Chairman and TreasurerGold Anti-Trust Action Committee Inc.September 28, 1999 Three cheers for Midas Murphy! Pinch me quick and tell me I'm not dreaming. How can this be? Fourteen European central banks plus even the English Poodle announce that they will restrict gold sales and lending for the next five years. In one dramatic sweeping step the reign of terror besieging the gold bullion market has been broken. But the question remains: Why would the European central banks wish to reassure the gold markets? For many years the gold world has been throttled by perceptions and short selling. Central banks gold sales were in fact never the problem, but the gold lending and the well-orchestrated propaganda directed by the United States was. Since early 1996 the threat of central bank gold sales and a raising volume of gold lending strategically timed and presented by the mainstream financial press attacked gold whenever an uptrend threatened. This has now ended. THE TWILIGHT OF THE DOLLAR With the monetary system facing the greatest defaults since the 1930s, the manipulation of gold, the ultimate preserver of wealth, serves precisely to conceal the bankruptcy of our current monetary system. Single events often appear distant and unrelated, yet with a more critical eye they can be seen to be part of a pattern. It is my position that the European central bank announcement is a defining moment in monetary history. The propaganda windmills, mostly English speaking, would have you believe that money is a creation of government. As Martin Armstrong liked to say, gold has been demonetized. We hold a different view. Namely, that money is determined by a market process. The European central bank decision is a major part of this market process, which has two consequences. First, it partially restores gold's monetary role. Second, and more importantly, it is a determined attempt to turn away from the dollar as a reserve currency. The reality is that the greatest crisis in credit since the 1930s is under way. While the problem may appear to have begun in Asia, in fact its origin is a monetary system that allows the United States to have "deficits without tears." Every nation in the world has suffered as they have been forced to import our inflation (that is, to buy dollars and U.S. debt) because it is the reserve currency of the world's financial system. The dollar as the reserve currency forces other countries to accept our paper as payment for their goods and services. Jacques Rueff named this dirty little secret "The Monetary Sin of the West." Our global monetary system is dysfunctional. The Asian currency epidemic was the first act in a play destined to take down the U.S. dollar. Starting with Mexico in 1995, Asia in 1997, and Russia and Brazil in 1998, we have experienced an escalation in each crisis as larger and larger countries are ravaged. The monetary mischief of competitive currency devaluations claimed its first victim in North America with the collapse last fall of Long-Term Capital Management. As 1998 was ending the Japanese authorities (December 22) blind-sided the financial markets, saying that they would cut back their purchases of Japanese government bonds. Japanese long term bond prices were pummeled and the U. S. dollar crumbled. Then on Jan. 1, 1999, Prime Minister Obuchi proposed the establishment of a monetary system composed of three key currencies -- the yen, the dollar, and the euro. Japan signaled its intention to internationalize the yen turning it into the key currency of Asia. On Sept. 20 this year, despite warnings, the Bank of Japan refused to ease monetary policy to curb a rapid rise in the yen against the dollar. A week later the European central banks befriended gold. The Russian default in 1998 launched us into a new phase of this meltdown, which directly affected the derivative arena. Default has been staved off for decades through credit expansion (i.e., bailouts). New debt piled on the old. Finally, when the excesses are too great and the economies too anemic, default becomes the final solution. Default immediately exposes systemic weaknesses. Since derivatives are leveraged contracts dependent upon an underlying "asset," default of the underlying asset immediately wipes out that derivative. The wizards' computer model programs are not programmed for events that might cause a non-standard deviation movement. For the Federal Reserve to admit that a single hedge fund, with a mere $4 billion in equity, jeopardized the entire financial system is an admission of a profound failure in the Federal Reserve policy. What can be the justification for bailing out a den of gamblers? It proves the mutual dependency and just how cozy the alliance is between Wall Street and Washington. LTCM was bailed out because government officials realized other hedge funds and Wall Street trading desks had similar leveraged positions. This crisis is still largely unknown to the public. It is the story of the "carry trade," the naked borrowing of yen and gold to finance these extraordinarily leveraged positions of the financial community. Between August and October 1998 the yen fell from 147 to 112. Then, on Oct. 15, facing a breakdown in the interbank payment system, the Fed initiated the first of three rate cuts. As 1999 commenced the U.S. financial system had been brought back from the brink by another massive ballooning of credit. These fixes have merely exacerbated the underlying systemic risks. After decades of a policy of "too big to fail," the Fed's unwillingness to address underlying structural problems of debt has led to putting the entire system at risk. The Bank of Japan and the European central banks are declaring an end to this state of affairs. The U.S. financial markets have become a fool's paradise, and the affairs of LTCM down to the current scandals involving Martin Armstrong and others have not been lost on the global banking community. As a young man Alan Greenspan wrote an essay titled "Gold and Economic Freedom," detailed the cause of the 1929 crash. It appears to me as though he repeats the mistakes he accused the Fed of committing in 1927-28. That is, Greenspan has created a bubble (hyperinflation) in our financial markets. Wall Street has become a casino. The greatest fear for the central bankers of the world is the U.S. dollar, which comprises the bulk of their monetary reserves. For years now the mainstream gold analysis has been fixated on the supply of gold. This is not the issue. The critical determinant in the price of gold ultimately is the supply of DOLLARS. As the United States is the world's largest debtor nation, with endlessly mounting trade deficits, negative savings, and inflated security markets, it is not hard to image the fear motivating recent developments by the Japanese and the Europeans. Enough is enough. Gold reserves are not the problem for central banks but rather their excessive position of dollars, which has entered a major secular downtrend. THE COMING DOLLAR BACKLASH The European central banks' new gold policy must be viewed as an aggressive escalation in their policy to establish monetary independence. The world has crossed the threshold into a monetary system that will be comprised of three reserve currencies. Gold is no longer to be held hostage to American monetary policy. On this point it is quite interesting to see that the English Poodle, in an obvious break with its American friends, has turned its leash over to the Europeans. It will be interesting to see what response the Bank of Japan will make to the European central banks. An Asian yen-backed currency has a long way to go to equal the gold reserves backing the dollar and the euro. Until now the currency world has been engaged in a competitive race to the cellar. It could be that the race for competitive legitimacy has begun. Central banks' bids for gold are likely to far exceed the sale limits just established by the Europeans. The historic actions by the European central banks and Japan over recent days are extremely bearish for the dollar and U.S. financial markets. So far the markets have failed to understand this. WHERE DOES GATA GO FROM HERE? As treasurer of GATA I wish express our sincere appreciation for the support from hundreds of people who have rallied to our cause. Your letters and notes have been a source of strength to the committee. We salute and thank you. We are likewise indebted to a select and courageous few within the gold-mining community. Unfortunately most mining companies have yet to come on board. Clearly the surge of events is vindicating and confirming the task set out by GATA. No matter how sweet this first victory may be, a long battle still lies ahead. We need to capitalize on this moment by moving on to the next level of our investigation. It would be gratifying to see some of the senior gold mining companies step forward to support GATA publically. GATA Chairman Bill Murphy has detailed one of our failed attempts (the "Vancouver Affair") to find major corporate support. "Hannibal" seems to have a long reach. We have made many other attempts to enlist the larger mining houses. One senior North American producer approached us last spring and actually explored a relationship with us for nearly a month. We cooperated in every way, opening all our work for the company's review. Then suddenly the company disappeared without explanation. Phone calls were not returned. We were just plain dumped. Someday we may tell the world about that episode too; the story rivals the "Vancouver Affair." For now we continue patiently with restraint, but hope that the larger members of the mining industry will awake and throw aside their fears. One way or another GATA is here for the duration. Keep up the support. We will prevail. A FINAL WORD Murphy's heroic effort and foresight are only now beginning to be understood. Bill and his Internet site, www.lemetropolecafe.com, have nailed the events that are now unfolding. If the Bank of England's gold sale didn't convince the world that the gold market was being manipulated, maybe a $60 explosion in the gold price will. The recent extreme price action in gold should show that the market has been suppressed. One wonders how much it will take to generate an acknowledgment of Bill's tremendous performance. -END-------------------------------------------------------------------------eGroups.com home: http://www.egroups.com/group/gatahttp://www.egroups.com - Simplifying group communications elevator guy (10/01/99; 00:02:27MDT - Msg ID:15051) blackout! Is anyone else having trouble accessing Kitco and /or Quote.com info?I can bring up Quote.com, but it wont display the spot price overseas. Just a blank window, where it usually shows the spot/ask/settle 30 minutes delayed.Kitco wont come up at all.Does anyone have a good site where you can see the spot price overseas in real time? Click Here to view yesterday's discussion.
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