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ARCHIVED DISCUSSION FROM 12/1/1999
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ORO (12/1/99; 23:54:38MDT - Msg ID:20038)
THC - Accumulation
As I have worked it out, the purchase is done on paper. The accumulation is slow but steady. They obtain the gold for gold loans from themselves and buy it back. The rates of accumulation are not the same today as they were in the past. The 1995-1997 period was the main thrust where 8000 tons were committed and 4000 tons of their own gold were used to back that up (sums in total for the period). Trades were executed in the second and third quarter of every year. Prior to that, the accumulation was significnatly slower, probably on the order of 12000 tons gross since 1987, going into 1994, a large minority of that in paper form. I believe the current gold in hand would be about 10000 tons 6000 or so in Saudi hands. The Oil Royals paper gold position outstanding was probably in the 8000 ton range in the end of 98.
I would need to expend a significantly larger effort to put all that together into better estimates with something beyond back of the envelope calculations. Right now, obtaining information before 1995 is quite difficult.
The main point is that in 98, as Asians dumped their gold, the Arab Oil countries were getting delivery.
Because of many Westerners dumping their gold holdings after a disappointing 20 years, right at the beginning of a new gold bull - right after the first spike, it is in the interest of all gold accumulators to use the opportunity of collecting more gold at a discount to do so, even if one needs to delay a long plan from executing.

Golden Truth (12/1/99; 23:45:42MDT - Msg ID:20037)
A BIG THANK YOU TO "ORO"!!!!!!!!!
Oro, your message ID:20019 is definately a keeper. Thanks also for filling in the cracks, in the Oil for GOLD dealings. They are complicated, but you have easly mastered them and helped to shine a light on this contentious issue.

You are also a intellectual (Giant) how you find this stuff out is beyond me? Thanks so much i,am sure many here tonight have learned alot. I made a print out of your comments since to me they are quite lucid!
G.T P.S ORO i agree about what you said about it being a great honor to find out it was her. Thats why it "hurts me" so much to divulge it! :-( I will not speak of it again.

ORO (12/1/99; 23:25:41MDT - Msg ID:20036)
THC - US position as protector
The pulling of the golden trigger is something the Arab oil countries did not do before, because of the US being in recession despite much help from the world in the period immediately after Russia. In the post 96 period, they were met with European support for their direct gold trading concept and Europe added the gold backing to their currency. The problem was that this would force a delay. The delay was accomodated by Arab Oil and Japan.
The Japanese in summer 97 were making rather nasty noises. Today they stopped talking to the US about the key issues and are only doing things internally. They have stopped buying US notes in 97 (as has Europe) and started cashing them in. The internal discussion revolves around financial restructuring ("big bang"), throwing out cronyism in the legal and business world, and most significant, changing attitudes about militarization, the prohibition of which the US wrote into their postwar constitution. The story of a militarilly capable Japan is not one of danger to the world, but of expected decline of the US and the summoning of the required resources and will power for self defense. The US has been payed more than enough by the Japanese for their protection. What Japan must hope for, is that as its poppulation ages, they can rely on their dollar reserves to support retirement expenses. Japan is the first to face the baby boom retirement problem. Unfortunately, the dollar is valuable only as long as it is accumulated. The moment one needs to cash it in its value disappears.

The Euro plan was supposed to make the transition to gold exchange market paralleling the currency exchange market, with gold banking set free from central bank control, somewhat along the lines of Scotch free Banking of the 18th and 19th century (so far as I can understand it). Currencies were supposed to be valued according to gold backing, and the appropriate gold bubble would form, to the benefit of Oil Royals and all that have substantial gold holdings in hand or below ground. So far as I can tell, all evidence points to this still.
Oil issues were touched on in the previous post. Do not think of Kuwait being the beneficiary of US action in the Gulf against Iraq, and in its prior playing of Iran and Iraq against each other. Europe and Japan were the beneficiaries, as were South Asia and other EMs.
The US was thus let to perform the deeds it has been payed for. What the US did in Yugoslavia during this period had many purposes, one was to show its standing in favor of the Islamic side, one was to maintain an active presence in Europe, to be used as a threat to France in particular, but to Germany as well. The US can't play that bluff, and it was grossly interfered with by the French and ignored politically. The Russians snuck in, this was also intended to show the Russians what the US could get away with even in today's "open" information systems, TV and all.

As I have said before, the only protection a country may have today, is a nuclear arsenal. To this effect, all countries will be armed before long. The Americans, Russians and Chinese will proliferate nukes to the point that any country of substance would have them. They will do it whether it is legal or not. Americans who do this are still patriots, because they are preventing the US from self destructing and taking the world with it. We have two Sadams today, one is semi functional and sits in Washington.

In the realm of international economic agreements, the recent bilateral agreement with China was close to US capitulation on all the "nice" items and significant withdrawal on the important ones. Global discussions are now ocurring without any US participation at all. Clinton is being ignored. The US military umbrella is not only unnecessary for the world, it is unwanted. In 97 the US credit card was torn up, and no further official treasury bond buying of significance has come up since. Notice of this was given to Bush in 92 and Clinton's "balanced budget" is the first attempt to live up to this promise.

What the countries of the world expect to see is a free market among them, without any further manipulations in the markets. The ECB has stated it so often that it no longer makes an impression. The US is attempting to fight back, but its bullets will turn back at it.
The raids against the falling bond, the attempt to coax M1 into M3 so that less gold would be required to back it, the support of the stock market, the continuation of the option compensation plan when they have grown out of all proportion to the initial intent and now dominate the structure of the market altogether. These are tools to keep dollars flowing into the US. These are tools of desparation. Just to hold it together till the elections.

YGM (12/1/99; 22:52:56MDT - Msg ID:20035)
Iranian Oil and Y2k
International Repercussions??? Noooooo ...Really....
Iranians Warned of Y2K Breakdowns

The Associated Press
Wednesday, Dec. 1, 1999; 10:25 a.m. EST

TEHRAN, Iran �� The government is warning Iranians they could face breakdowns in public services at the end of the year because of the Y2K bug.

"It is expected that with the arrival of the year 2000 some unexpected incidents may happen and some public services may be disrupted," Mohammad Sepehri-Rad, head of the Supreme Council for Information Technology, said Tuesday.

Speaking on television, Sepehri-Rad suggested there could be breakdowns in the oil, electricity, communications, transport and health sectors, saying his team had singled out these industries for attention.

Any disruptions in Iran's petroleum industry are likely to have international repercussions.

Most of Iran's computer-controlled systems were bought from the United States before the 1979 Islamic revolution. But it has been unable to get U.S. help to modify the computers for the millennium bug because of hostile relations with Washington dating from the takeover of the U.S. Embassy in Tehran by revolutionary militants in 1979.

The average plane in Iran's fleet of commercial airliners is about 20 years old. The aircraft are likely to be affected by the Y2K bug. It is not known what steps have been taken to repair the planes.

Sepehri-Rad said his team had accomplished its goal to a large extent and hoped that few problems would be faced.

"However, it should be remembered that no 100 percent guarantees can be given concerning the solution of this problem anywhere," he said.

� Copyright 1999 The Associated Press

Buena Fe (12/1/99; 22:45:09MDT - Msg ID:20034)
Golden Truth (12/1/99; 16:37:31MDT - Msg ID:20007)
Please be patient kind sir! Although many of us do empathize with the emotions that you have expressed. My instincts still scream at me that the late Sept. move was mere'ly the invitation to the party!! I hope many have RSVP'd. The next stage will begin at the appointed time and hor d'oeuvres will be served followed by a full eight course meal. My GUESS for timing is Monday,Dec 6.
Keep Well

THC (12/1/99; 22:44:19MDT - Msg ID:20033)
@Oro & Galearis re ME Oil/Gold

Good evening and thanks for sharing your thoughts.

Galearis, I too recently moved my emphasis here from Kitco, as I am more interested in the discussion of long-term scenarios that takes place at this forum.

"Given this premise, it seems to beg the question that since fiat currency is given little value in that particular cultural landscape, would it not serve those states better in their view to keep the POG, as expressed in fiat currency, as low as possible in order to maximise the exchange of oil for gold?"

I understand this theory and have no problems with it. The problem I see is if they have truly been accumulating gold over the past decades, where could this gold have come from?

To Oro & Galearis:

I hope you can help me straighten this out. I see a major contradiction in the 2 major themes in the gold market.

Major Theme 1: Supply Demand Deficit
*Supply of 2500 tons per year does not satisfy demand of 4000 tons a year. The gap has been filled by CB sales and loans, which now amount to as much as 12,000 tons, or nearly half of CB holdings.

Major Theme 2: ME Gold Accumulation
*ME oil producers have been accumulating gold in exchange for oil, and have accumulated anywhere from 1000 to 3000 tons per year. That would amount to, say, anywhere from 20,000 tons to 60,000 tons over the past 2 decades.

Now, my problem is that if the supply/demand story is true, there is no spare physical gold for the ME to accumulate. If we assume that theme 1 is true, then they must have accepted paper gold.

If they accepted paper gold, then the West owes the ME 20,000 to 60,000 tons of physical gold (ME holds paper IOUs). This is certainly more than is left in the CB vaults.

So��..assuming that the ME has accumulated major gold paper holdings and that the gold to pay them does not exist, what is the outcome?

How can the ME demand payment?

If a local storeowner loans the local mafia leader $10K a year for 10 years, and then demands payment of $100K in the 10th year, what will happen? The mafia leader will rip up the IOU, and make various threats, yes?

Can someone pls point out the holes in my numbers and how the ME would have the strength to "demand payment of their gold"?

Thank you!!!

THC

YGM (12/1/99; 22:38:06MDT - Msg ID:20032)
(No Subject)
WHAT INSULTS AND FOCUSING ON SECONDARY ISSUES TELL YOU ABOUT SOMEONE

1) Whoever consistently refuses to answer crucial questions or insists
on sprinkling insults is someone who can't think clearly, or someone
who is just abusive and taunting, or plain ignorant of what he sounds
like to others. (the key term here is "consistent." All of these things
make a post interesting from time to time as long as they are not
indulged in. Perhaps the difference between a connoisseur of fine wine
and a wino applies here as well.) In each of these cases it is a
mistake when responding to abusive arguments to imitate his method
because it makes you as muddled in your thinking as he is in his. Why
be abusive and ignorant on purpose? So rather than join him, focus on
what is most vital to your case and ask him focusing questions that
force clarity.

2) Insults and picking the weakest point to attack also tell you that
the person you are with is at a loss as to how to deal with your
argument. Of course this may be because your argument is insufferably
stupid and no matter where he picks it up it's weak. But assuming you
are on target, it is a sign that if you keep zeroing in through brief
questions and statements you can usually force him to really hate you
and run for his life. After all, that is what his style is for, to
intimidate you and get you chasing your tail. Stay focused.

3) If you have just got your butt kicked and you don't want to admit
it, then start insulting and looking for logical and formal errors.
Attack because the other guy wasn't perfectly polite to you anything
that takes the mind of the fact that you haven't a leg to stand on..
The more invective the better, here, because your goal is to lay down a
smoke screen and retreat but not let him know you've been blown away.
Which is to say, of course, that your goal is to go through life a
childish, abusive, self-centered idiot rather than learn how to think
andframe a sound line of reasoning.

Golden Truth (12/1/99; 22:37:07MDT - Msg ID:20031)
TO STRANGER
Howdy Stranger! Yes you have helped, in making me realize that alot of what has been said here by ANOTHER and F.O.A is pure propaganda, to the highest, say $30,000/oz.
It really makes me mad that someone who you thought was on your side, can't tell you like it is, and go on to embellish, because they think we are stupid enough to believe it, so they keep running with the same hyperbole.

Thanks Stranger you always were the only one here that never lost his head. I know you've brought me back down to earth once before. This time i,am here to stay, and your advice was very well recieved.

I guess my only lament is that i don't have 10 years to wait this whole thing out. I wish i did but in 10 years my whole life could of changed 2 times over, if i,am lucky enough to even be here then or even this forum. I,am sure one day M.K will want to retire also.

Yet thanks for your kind words and shrewd yet practical thinking and advice.
I'll try and hang in for 6 more months after that we'll see where this puppy is really going.

Thanks a ton! Stranger.

Galearis (12/1/99; 22:13:40MDT - Msg ID:20030)
@ Canuck and Balmertown and dangerous mines....
The nostalgia continues. I worked at Campbell Red Lake Mines in the late 60's and as a young'un in my late teens, it was a real "grow up fast" or "get out" kind of place. The local town was Balmertown -with the segregated section of the mine barracks somewhat separated from the town itself - undoubtably the town slept more calmly in being a little isolated from the Saturday night life and death struggles during out of control parties. Essentially it was a two mine town (the other name escapes me at the moment), but the underground environment was a nightmare of accidents waiting to happen to the unwary - your description of some of the perils rings quite true.

If memory serves, even riding the ore trams was perilous and one continually had to watch out for the chute timbers located at regular intervals of some dozens of feet separation - which would overhang (just) the engine. Backing up ore trains for long distances was very dangerous unless one was completely focused in moving out of the way to one side as each passed. Forgetting this by being distracted or through tomfoolery with ones partner was often fatal if the individual was caught from behind and dragged under these structures and over the engine. Evisceration was the messy and fatal result. The mine was a screaming case for unionization. I worked here for $1.87 per hour.

Shute pulling was another lovely obligation. The muck would get hung up in the vertical shafts and one of us would have to climb up inside with a bar or to plant explosives. The number of times when my partner would climb right up inside there and that ominous creak, groan and rattle would sound from deep inside - out he would come with a yell -with several tons of ore crashing against the stops behind him. One had to do this in order to maximize the paultry bonus the company offered. I remember also the number of times we would high-grade the sample car (find all the v.g -visible gold material - we could) to put in the last car so that the company would move us to 1) a schute that would produce better bonus or 2) one that wouldn't get hung up so much (and hence produce better bonus.) Safety was secondary for us when so young and foolish!

Other underground experiences:

Three days track-cleaning on my first days underground stuck on #3 (the really cold and wet one) with a violent sociopath who spent the whole time, describing how good he was with a knife. The reminiscence he loved best was the gang rape of a sixty year old woman.

I worked there with a fellow whoes life ambition was to invent the world's first nuclear powered cigarette lighter!

One of the miners was run out of his town in Quebec when caught copulating with a cow. (The cow it was said appeared to have its ears down - which, as described by the teller of this story, who was familiar with farm animals, indicated some enjoyment was shared here.)

As known mineral collectors (rhody and I) we came under the covetous gaze of the local high-grade detachment of the O.P.P. (Ontario Provincial Police). They even placed the house we were living in under surveilance for a week or so - and finally raided it. (But forgot to get a search warrent!)

Other horrendous experiences abounded that long summer and it really deserves a different setting for the telling. I beg the pardon of those who consider this forum a place of more academic tales, but this is part of my particular Ontario heritage and the theme is still gold mining . It underlines, however, that there is "more than gold in them thar hills."

I had both the best and most terrifying summers of my life in that place. I heartily recommend it for it turned out to be a superb character builder for all us survivors.

The Stranger (12/1/99; 21:56:17MDT - Msg ID:20029)
Golden Truth's Frustration
Golden Truth - You sure have a way of keeping the debate going around here. Anyway, congratulations on having vented what so many others have been thinking. I'll bet you feel better already.

I may be the one person at USAGOLD who has taken FOA to task more than any other. But it was never his irrational forecasts, per se, that caused me to speak up. Rather it was the sad spectacle of his being treated like a demigod by those who desperately wanted to believe and didn't know any better. And now, though it may sound harsh, I suggest that those who so willingly surrendered their judgement in this manner have only themselves to blame.

None of this really matters now, of course. What does matter is whether your gold is still worth hanging on to. I am about to tell you why I think it is.

I started here in January telling anyone who would listen that a major historical shift in dollar policy was underway. Two decades of disinflation had culminated in a serious threat of dollar deflation during the "Asian Contagion" of 1997-8. The Fed's prescription was to turn on the money spigot to a degree that hadn't been tried in many years. That spigot is still wide open today.

I further predicted that the ploy would work. America would not slip into recession, Southeast Asia (including Japan, BTW) would turn around, and 1999 would be a year of world economic recovery. The cost of this rescue plan, of course, would be re-emergent inflation. In other words, excess dollars would save the economy, but so would they begin pushing prices up as the months ticked by.

So there we were: Oil was at multi-decade lows. Gold was at multi-decade lows. Grains and metals were at multi-decade lows. All of this was because Wall Street was convinved that, if anything, the world economy was slowing down and 1999 was going to be a year of mild DEflation.

Imagine that. Here were all these assets priced for deflation, and yet we weren't headed for deflation. We were headed for INflation. I said so on January 19 in this forum and predicted that it would reach 5 or 6% (I am not quite so given to hyperbole as some who may attract a greater following). Clearly, here was a chance, I believed, to catch the rest of Wall Street napping and make some hay.

Today, inflation has arguably already reached 4 to 5% in the United States. Since the February lows, most commodity indices are up 15 to 20%. Oil is up 150%+. My Newmont Mining Stock is up 28% year-to-date. And now, despite the untimely action of the BOE, even bullion has risen some 14% from its lows. My Japanese portfolio is up 50% this year (on Feb.18, somebody announced here at the Forum that Japan was in a deflationary death spiral that would suck the world down with it). Compare all of that to how bond portfolios have done this year or even how most U.S. stocks have done.

See how smart I am? I hit just about everything right on the nose. Well, trust me, I can be plenty wrong, too. But, for what it is worth, G.T., I am not about to give up on gold, not at $289 and not at $325 either. As is so often chronicled by Town Crier, the Fed is still talking one game and practicing another. If anything, money growth is now accelerating. The world is AWASH in dollars.

The last time we saw anything like this scenario was in the 1970s. Back then, to gain the full benefit of the gold bull market one had to stay in his seat for TEN LONG YEARS. Along the way, gold often shook some terribly unfortunate investors out of the tree. In fact, one time, after climbing from $35 to about $200, it fell all the way back to almost $100. (Wow, would we ever have been mad at FOA back then).

So, finally, here is my point. This kind of market action is hard on everybody. You may be about to do very well in the months and years to come. Ironically, if you do, it may be for reasons you hadn't even counted on. But if you are going to survive emotionally, you may have to develop a better understanding of what you are doing. Perhaps you have already figured out how that includes knowing a man's performance record before you start believing exaggerated claims. That goes for Batra, Prechter, FOA, et al.

Thanks for all the encouragement. I hope I have helped.

Al Fulchino (12/1/99; 21:56:00MDT - Msg ID:20028)
The HEAT ***IS***on
Golden Truth, that was quite the post. I am very impressed with your efforts at deduction. In my case, I have invested in precious metals for wealth protection. I appreciate that someone here such as yourself feels so deeply about what he writes. Thank you for your thoughts and for expressing them. I think everyone and I mean everyone appreciates your passion.

-Al

Black Blade (12/1/99; 21:55:34MDT - Msg ID:20027)
nickel62

I was going to drop this on you but I forgot. I was engaged in the annual ritualistic family feeding frenzy which requires that red-blooded Americans devour charred foul carcass. This news may be both good and bad....nickel increased over $800/ton.....Inco couldn't deliver, bummer!

Inco Ltd. Declares Force Majeure At Manitoba Division
Wednesday, November 24, 1999 09:03 AM

TORONTO (Dow Jones)--Inco Ltd. (N) said it will declare force majeure under certain sales contracts, due to the continuing lockout at its Manitoba Division.

In a press release, the company said the declaration affects certain electrolytic nickel products normally produced at that division. It said the total quantity of products that it expects to be unable to supply represents about 15% of its average monthly primary nickel sales for the first nine months of 1999. Inco said it can't predict when the Manitoba Division will be back in production.

Imagine if some major Au producer declared force majeure. Well then, hmmmm............

Black Blade (12/1/99; 21:39:56MDT - Msg ID:20026)
Didn't these guys say there was no y2k problem? hmmmm.........
LONDON--The International Energy Agency (IEA) has drawn up plans that could include emergency oil supply and rationing if the Y2K computer bug plays with global energy flows, a spokesman for the West's supply watchdog said today.

The plan, to go for approval before the Paris-based group's board of governors on Dec. 10, would kick in if computer failures occur at the new year and cut deeply into industrialized countries' normal oil supply.

"In the documents setting up the IEA the director is given right to apply crisis mechanisms when there is turmoil in the oil markets," said IEA spokesman Scott Sullivan.

Mechanisms available to the IEA for dealing with major supply crunches include allocating oil reserves and restraining demand, for example with brief oil rationing, he added.

Y2K would have to cause massive problems to trigger the plan. The IEA's normal definition of a crisis occurs when 7 percent or more of world's oil supply is threatened.

Industrialized OPEC countries consume about 45 million barrels per day (bpd) of oil, so about 3 million bpd would have to be cut to reach that watershed.

Sullivan declined to say how much oil the IEA plan would allow for release and added that the likelihood of supply chaos as a result of Y2K is low.

"We plan a response if there are major problems but we do not foresee that happening," he said. "The most likely outcome is a few small problems here and there."

Black Blade (12/1/99; 21:36:19MDT - Msg ID:20025)
Y2K Mockumentary Returns, Feds Keep Quiet
A little change from last nights post!

November 30, 1999: 11:03 p.m. ET

WASHINGTON, DC, U.S.A. (NB) -- By Robert MacMillan, Newsbytes. A short, fictional film detailing a supposed US Army- instigated race riot in Times Square on New Year's Eve 1999 is back online despite the fact that the Federal Bureau of Investigation and the US Attorney's Office successfully persuaded the filmmaker's Web host to take it down.
Mike Z. released the seven-minute film on his Website earlier this month, with a short introduction saying that a cousin in the Army had sent it to him and was not sure if it were a hoax. The film is a fictional Army briefing with tips for launching a race riot during pre-Year 2000 festivities.
Several viewers, believing the film to be real, had contacted the FBI, which is hard at work on Project Megiddo, an effort to short-circuit anticipated religious and/or paramilitary fanatics who may use the so-called millennium date change as an apocalyptic backdrop for violent acts.
Mark Wieger, president of the BECamation Web company, told Newsbytes that FBI Agent Joe Metzinger and US Attorney Lisa Korologos told him that the tape could be used to "incite a riot and their jobs were to insure that this did not happen." Wieger said neither filmmaker Mike Z., nor the law enforcement community clarified whether legal action already had been taken when the FBI and the attorneys office asked him to remove the site.
Wieger now believes he was the victim of a lie, saying that the FBI told him that if BECamation would not take down the site, then BECamation's own ISP would pull the site.
"Not knowing what had transpired with our provider, without any information from Mr. Z., and with the FBI's pressure, we felt we had no choice but to pull the site until further clarification could be obtained," Wieger said in a statement. "Until we could talk to all parties involved (and) obtain the information to make an informed choice, we kept the site down."
Although Mike Z.'s film wound up being posted on several mirror sites, BECamation still lost more than a $1,000 in business, he says.
Wieger personally has been receiving threats on the phone and via e-mail from "very disturbed people," he says. Wieger said that an article in the Village Voice about the incident, as well as information reported on the Slashdot.org Website resulted in BECamation being overrun with "flame" e-mail and threatening telephone calls because of the company originally backed away from First Amendment principles in light of government pressure.
"We were getting flamed big-time," Wieger said. "E-mail bombs, threatening phone calls at home and at work and on my cell phone... One guy said 'You're afraid for your Lexus and your mortgage payments.' I said 'Excuse me, I drive a four-year-old Ford van.'"
"Now that the situation has been clarified by all parties we are happy to offer the site again on our servers. The site is up and running," he said.
Since the Web host and filmmaker said the law enforcement agents did not produce a warrant or any sort of court order, the American Civil Liberties Union (ACLU) and other groups have raised the question of whether the FBI and the Attorney's Office used subtle threats or intimidation to restrict the filmmaker's First Amendment rights, he said. The FBI and US Attorney's Office may find themselves on the business end of a free speech lawsuit, he says.
Mike Z. told Newsbytes that he is meeting with the ACLU to discuss the case. An ACLU representative said, however, that there are no concrete plans to pursue the issue with Mike Z. at this time.
US Attorneys Office Spokesman Marvin Smilon told Newsbytes that since there is nothing about the case (if there is one) on the "public record," law enforcement may not comment on Wieger's and Mike Z.'s allegations.
Smilon said that law enforcement would release further statements on the case if any civil or criminal charges are filed against Mike Z. or BECamation.
The FBI Website is http://www.fbi.gov .
The US Department of Justice Website is http://www.usdoj.gov .
The film is available at http://www.crowdedtheater.com .
Reported by Newsbytes.com, http://www.newsbytes.com .

Farfel (12/1/99; 21:33:35MDT - Msg ID:20024)
Thoughts on a Cold Winter Night About GOLD
Gold market performance is truly pathetic, we have settled into a trading range again, and I am predicting that gold will range AT BEST between 288 and 291 until year-end, although there is a possibility that gold might reach 291.50 if y2k concerns heat up.

The chart for gold does not look particularly good, unless you turn it upside down, in which case it looks a bit better.

I wouldn't be surprised if gold collapses completely when the DOW breaks 13,000 in late December. The resultant euphoria should lead to mass intoxication and even if people wanted to buy gold, they would be too hung-over to lift a phone and place a trade. Amidst DOW 13,000 euphoria, gold should free-fall to somewhere in the area of 200- 201.

There will be some positive benefits to a gold collapse: for one thing, all the Canadian executives from Duuuh??ville, Ontario who are running the senior gold producers will find themselves out of work and the hiatus will allow them sufficient time to complete their junior college courses. Some will finally learn how to count past 10, others will finally learn that gold bullion is a metal and NOT a jellied soup.

Another benefit is that Canada can finally fold its gold mining industry and concentrate upon developing a substitute export industry utilizing Canadians' highly specialized talents. The most likely candidate: snow exportation -- an industrial activity requiring bending, scooping, and throwing. These skills can be readily acquired by most Canadians once Ontario's junior colleges are able to locate
adequate numbers of properly trained teachers. The major difficulty will be in locating Canadian teachers who can bend, scoop, throw, and chew gum at the same time. Although some former senior executives from Canada's major gold producers will wish to enter this exciting new export industry, in all likelihood, their chronic inability to put 2 + 2 together and arrive at 4 could be somewhat limiting. Most likely, the new snow export industry will need to hire some shrewd brains from Wall Street's bullion banks to captain the fledgling enterprise.

Although many people imagined gold might soar above 300 this year, these same people also believed the following phrases:

1) Yeah, the check is in the mail.
2) Yeah, I promise I won't come in you.
3) Yeah, let's do lunch someday.
4) Yeah, of course, I like you for your mind.
5) Yeah, we'll have your car ready by Five today.

Thanks

F*

YGM (12/1/99; 21:27:50MDT - Msg ID:20023)
USA Gold Forum Wizards & Giants
Make Sure You Register For Talk W/ Ron Paul etc.
Welcome to our first live 60-minute Precious Metals Webcast at Liveinvestorsforum.com

Date: Thursday, December 2, 1999
Time : 10:00pm EST, 7:00pm PST

During the webcast you have the opportunity to pose questions LIVE to our experts via the Question Manager interface.

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(click on a name to read more)

Our leading experts: Congressman Ron Paul,( R) of Texas, Adrian Day of President of Global Strategic Management, and John Lutley of the Gold and Silver Institute will give you crucial insights into the outlook for precious metals markets. Jacques Luben of Platinum Guild International will moderate the forum. Please join us by asking questions that will help you make important decisions for your portfolio.

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Recent Bull Market in Precious Metals: Reality or Mirage?
Ask the Experts
In September of 1999, the IMF and the major European central banks clearly shifted their strategies toward gold. This move was a catalyst for a major short-covering rally that has had a positive impact on gold as well as platinum and silver prices. Many investors are, however, concerned that they have witnessed too many "false starts" in the volatile precious metals markets.

Role of Central Banks in the day-to-day fluctuations of the gold market.

Correlation of rising energy prices with inflation/precious metals.

Impact of Gold fluctuations on the Platinum and Silver Markets.

Potential for government manipulation of Gold prices

$ 300.00 Gold: Hurdle or Launch pad

�Should precious metals (gold in particular) continue to play a critical role in international monetary affairs? �If Central Bank holdings of gold are re-valued to current market prices, will this relieve official pressure to sell gold in future years? �With rising energy prices in 1999, will we see a follow-through for higher precious metal markets next year? �Since central bank gold loans are tighter, will we see higher lease rates? Implications for price outlook. �Will LDCs attempt to re-inforce the credibility of their currencies by increasing their private and central bank gold holdings? �Outlook for the U.S. dollar in 2000. Implications for precious metals. �Environmental issues that will impact on mining in the U.S. and elsewhere.

DIRECTOR (12/1/99; 21:23:02MDT - Msg ID:20022)
SUNSHINE
Hello,to all of you dedicated people on this Forum.I have never posted here before,and I do not have time to say much now.Just keep a little SUNSHINE in your life,for it will be shining brightly on our GOLD tomorrow. Have a great day.

YGM (12/1/99; 21:17:45MDT - Msg ID:20021)
Live Interactive Audio w/ Ron Paul/Adrian Day/John Lutley
@ Kitco Dec 2nd

On December 2, 1999 at 10:00PM EST, kitco.com in conjunction with Platinum Guild International and Coin Connoisseur Magazine will be presenting a first-time live interactive 60 minute precious metals audio webcast. U.S. Congressman Ron Paul (R-Texas) will be joined by Adrian Day, (president of Global Strategic Management) and John Lutley (president of the Gold Institute) for a roundtable debate about gold and precious metals. Jacques Luben (executive director of Platinum Guild International) will moderate the forum. For details point your browser to liveinvestorsforum.com

�

TownCrier (12/1/99; 20:17:57MDT - Msg ID:20020)
The GOLDEN VIEW from The Tower
As we stand atop our towering outpost watching the sunset skies give way to stars, we can't help asking, "Are we free to make up our own minds, or are we being arm-twisted into doing something or else restrained from doing something else?" Freedom is a fine thing, especially when you realize you have it. Amid the various protests in Seattle over the World Trade Organization meetings this week, we have this report on *freedom* for contrast...

Ivory Coast decree bans mass demonstrations for 6 months
Abidjan--Dec 1--The Ivory Coast government has decreed a ban on all marches
and mass demonstrations in public places on working days for 6 months. President
Henri Konan Bedie announced this on television late Tuesday, the night before a
protest march planned for Wednesday by the opposition RDR party in the
commercial capital Abidjan.***[Reprinted at USAGOLD with permission. For details please go to: http://www.crbindex.com/reviews/index.htm No further reproduction without written permission]

Nobody ever guaranteed that being a free adult in a semi-civilized world be easy. Although many would like to think that education stops the day you leave school, the harsh reality is that if you subscribe to that line of thinking, you'll forever be getting the short end the various sticks that life has to offer. At all points along the way you must take the responsibilty to educate yourself on the various issues that impact your life, and make your decisions accordingly. What else do you have for options? You gould either make wild guesses at the best course to steer through life, or else have someone else decide for you...like we see in the report above from Cote d'Ivoire. Here at USAGOLD, our unabashed goal is to help facilitate your monetary education so that you may conduct your life in a more purposeful manner. Understanding what money is, and more importantly, understanding what money isn't (or should I say, what isn't money,) is vital to the ultimate success of your productive endeavors through any span of time. While money is the universal language of nearly all men, the national currencies require a translator. Gold speaks all languages more fluently than any local/national politician could ever hope to do.

While on the subject of freedom, a little bit of platinum found freedom today as the US Defense Logistics Agency sold a total of 5,377.38 troy ounces from its Web site sales. More platinum should also soon be hitting the streets from Russia. The Russian parliament's lower chamber, the Duma, approved the third and final reading of a legislative amendment to allow the resumption of platinum exports--of which Norilsk said they would refrain from "flooding" the market when the amendment is approved later this month by the Federation Council (paliament's upper chamber.)

In gold, some traders are still unsettled by the results of Monday's gold auction by the Bank of England. Bridge News reported today that "Traders said that prices fell on light commission house selling, more fallout from Monday's worse-than-expected UK auction result." If we give some thought to the matter, what more could reasonably be expected? In a repeat of the Monday GOLDEN VIEW, "...heavy currency intervention from Japan which strengthened the dollar while weakening the yen. All other factors being equal, this alone would drop the gold price. The sum of these effects brought the morning gold fixing in London to $293.10. When the auction deadline later arrived , it was revealed that in the closed bidding process, parties were willing to take the full 25 tonnes offered at prices at or above $293.50. Though some market participants had higher expectations and were depressed with the results, a fairer assessment is in order. The truth of the matter is that these 25 tonnes were not rejected, but were in fact TAKEN by professionals at a price $40 higher (up 15%) than a short two months ago at the September auction. That, my friends, is what we call a Reality Check. The reality is that these prices are solid. Unfortunately, many market participants were expecting fireworks, so in a fit of disappointment they threw reason out the window, and gold traded down throughout the day."

A fair degree of the common trader's consternation is that the auction was only oversubscribed by 2.1 times. Think about it this way...why should any party go to the trouble of bidding at an auction when a 'round-the-clock gold market exists to meet your golden needs? Given that the LBMA is headquatered in London, to make an analogy, why would we reasonably expect an excess of shoppers to participate in an auction of shoes in the parking lot of a shoe store? And further, in this brief time since the second auction in September, didn't we all witness the world easily absorb the additional supply provide under the arrangements of the Kuwaitis, and courtesy of Jordan? Yes, we did.

Here's another way to take a fair assessment of the auction. When they were first proposed less than a year ago, the gold price was in the same neighborhood it is now and the physical market was tight. Any casual review of gold lease rates should easily confirm that. The announcement and initial auction dropped the price to the $250's, and now that we've rebounded to the original levels (after first shooting far past it to $330's before settling back) it is a fair assumption that many small weak hands have been unnerved into parting with gold at these prices...whereas before the auction announcement they were at least holding if not buying also. We have simply returned to the conditions that existed when the auctions were precipitated, but the recent price history has undoubtedly shaken loose enough shoes to temporarily restock the store shelves at these prices. Anyone capable of absorbing all of the news of the past months has no trouble seeing the inevitable trend is strongly to the upside.

As it is, the post-auction effect is still hanging heavily over the market, and spot prices last quoted in NY were $289.20, down 90�. COMEX February gold futures settled down $1.10 at $291.90. The FWN gold review had this to offer:

"David Meger, senior metals analyst at Alaron Trading, noted that the
dollar's strength versus the euro and other currencies such as the
Australian dollar, but with the notable exception of the yen, is
"hampering foreign demand potential." He pointed out that there were some
Australian sales before the UK auction, based on the Australian dollar's
slip against the US dollar.
Traders noted, however, that today's gold market was relatively quiet.
"We're still in that lower part of the range after the auction," said one
trader. Meger said that support for Feb gold remains largely intact at
$288.50-291."

Open interest on the COMEX December futures fell yesterday by another 4550 to begin today's trading at 6,954 outstanding contracts.

From yesterday's GOLDEN VIEW: "COMEX delivery intentions on this first notice day totaled 3,057 contracts (305,700 ounces). The Bank Of Nova Scotia was tapped for the most postions to deliver-- 2,622 contracts (262,200 ounces)--while Deutsche Bank Futs was seen taking delivery of the largest postion with 1,406 contracts (140,600 ounces), and Goldman Sachs was a significant second, on the receiving side of 684 contracts."
+
On this second day of notices for delivery on the December futures, Duetsche Bank led the way with 319 and Goldman Sachs was second (on the receiving end of 181 contracts)...helping form the bulk of another 601 COMEX gold contracts (60,100 ounces) that received notice, bringing the two day December total to 3,658...that calls for 365,800 ounces, folks. Yet how much gold have we seen shuffle through COMEX depositories in consequence?

Yestaday's vault action saw only 162,650 ounces enter the COMEX system, with a net increase to the Registered stocks of only144,308 ounces. And today, only 57,484 ounces arrived to the Registered stocks from an outside source, while 22,296 were transferred to registered status from within...depleting the Eligible gold inventory to a scant 80,974 ounces...the lowest ever in my personal recollection of observation.

OIL

January crude settled up 41c at $25.00 after trading as low as $24.10 today after overcoming the bearish news that OPEC's supply cuts through March 31, 2000 might possibly be lifted. According to an FWN report, a Persian Gulf source said OPEC's output ceiling could be lifted early "if WTI crude stays above $25.00 per barrel and global oil inventories continue to decline." FWN continued, " The source did not explain the reason for the shift in position by the export cartel, but said members are in continuous consultation to review the market situation." It smells to The Tower like a behind-the-scenes deal is possibly being struck, or at least entertained. Traders were able to see past this news, or should I say buy into this news completely, as the price rise today brought crude up to exactly $25. This came on the back of Department of Energy data showing a decline in US crude stockpiles of 4.4 billion barrels last week, exceeding yesterday's API reported decline by nearly a million barrels.

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

ORO (12/1/99; 20:13:56MDT - Msg ID:20019)
Golden Truth - The Issue of Oil
Oil
I don't know if the deals were renewed for one more year. I can say that there was much running around and waving of hands having to do with Ashanti and less revolving around Cambior. The action looked more like last minute transactions to save a bum deal than anything else. The fact that the bankers got a 15% chunk of Ashanti, is an indicator of there being a deal - pretty much a completed one. The Arabs holding the loans must have cut a lending deal to save Ashanti from going under and the gold flow from being stopped by the Ghana government by their nationalizing the property. Bin Tallal's involvement on such a public affair and open bidding on the news wires tells of its importance. That the bullion bankers did take a stake in the miner, as are many others around the globe means that they expect gold prices to rise.

I think the Arab Oil countries were intending on pulling the plug on the dollar in 1997 and had raised oil prices then and going into 1998 as part of the maneuvering. The rise in oil prices coupled with the slight tightening by the Fed and the BIS' pulling of the rug from under Asia that got the ball rolling on the Asian Flu (if I remember rightly it started with a tightening of bank equity requirements by the BIS in 1997 - and gauging by their data collections, they must have known the "flu" would be the consequence). The main deal was that the BIS and Oil are allies. The Fed tightening could have been done either with or without participation in the deals and played a minor role for the bulk of the crissis.
The main point is that there is a grab for real assets going on. The Asian crissis was part of it. The Oil for Gold scheme is part of it. In Asia, there seem to have been two issues that irked the West, that their growth had taken so much Western capital resources, and that the Asian government's "crony capitalism" (worse than ours in the West, if you can imagine that) kept even the biggest names outside of very lucrative markets and with no access to asset ownership there. I think the instability in Asian economies was intentional and was intended to serve both gripes noted above as well as stop Asian physical gold accumulation from competing with Arab Oil (which would have made oil way more expensive in Europe and the US). As an anecdote, I read an interview with a Rothschild banker specializing in restructuring in Korea speaking of trying to get the point across to the management of a plant they foreclosed on that they do not have a choice about firing people, that there is no one in the government to bail them out anymore (Business Week). The plant was obtained as part of a bankruptcy proceeding with the borrower. I believe the main intent was to obtain the assets, not to obtain interest payments.

Back to the Oil for Gold issue. The Oil royals have been buying gold in paper form for 20 years. They, particularly the Saudis, don't want the deal to go on further because they know that the situation is not tennable, that if it were to continue, they would be out on both the value of the deals short term, and would see gold producers go under and their assets not delivered, followed by their bankers going under. They would not get their gold, already paid for, and would be forced to bid openly on the market to both replace their orders and to get paid for the current output. That would actually have been the worse road to travel, and would have brought a more virulent confrontation with the US.
With gold flows in order, and the gold price heading upwards there was a better chance to resolve things without resorting to big actions. The prolonged US presence in the Gulf since the war there was intended to both reasure and threaten. The key is that the cost of securing oil by military means is very much higher than the cost of getting gold to pay for it. Furthermore, the action required by the US to secure the oil supplies to Europe and Japan would have to be payed for by them. I do not believe they would have payed the required price. The US would have been alone, they would have control of the oil, but the enmity of the whole world. Not only would the dollar have been but a soggy rag, but the whole system that keeps the US going would have been shut down. We would have food, some oil, most of the natural gas we need, but no parts for anything, some electronic items would have completely disappeared. The Reagan, Bush and Clinton regiggering of military contracting towards off the shelf items lowered costs by 50-80% for major military components, but had removed control supply of many key components overseas. What manufacturing was already controlled by Western Europe was ammended by the Pacific Rim making most semiconductor manufacturing in the US uneconomic. Same goes for low volume precision mechanical parts. The military might needed to control the oil would have prevented the US from having significant military might just a few years later. Selling this to the public here (yes it still matters) would have been next to impossible.
There is no way for one country to have significant military force on a long term basis if it is in isolation. That is the lesson of Russia. The complexity of supply structure needed to complete military hardware at an economically acceptible price within one country, or even a large bloc is well beyond prohibitive. Only the setting of the world on a printed dollar standard backed by gold for oil could make it work.

Back to the main line, there is no more gold available to supply an investment deficit of the 4000-6000 tonne per annum scale while still supplying the needed gold for jewelry etc.. The paper is no longer being bought, but I would need to check out the statistics when they become available (US statistics in a few days, BIS not till March or later) to confirm this for 99 Q3 as well. In this context, I should point out that the latest BIS data show a steep rise of Europe based shorting in Q2 with a decline in US based shorting in the same period. The indication would be that London is in way bigger trouble than NY. I would take the abrupt departure of BT (Deutsche Bank) from its substantial bullion business in Q2 as a very strong indicator of the "in the know" rats leaving the ship.

As ANOTHER pointed out, the US would play along and do what it had to do, because obtaining oil by force was not possible without more severe consequences than having to pay real money for it. Besides which, only a very minor portion of US oil comes from there.

At this point, I think the unexpected fallout from the oil for gold deal at first revaluation in the form of Ashantis of various sizes falling face first into the muck was not quite the intended effect. Therefore, a slight delay had to be installed, that gave warning to many bankers. The Euro is now being held hostage to this reorganization. The ECB may have been surprised to find casualties among friends in Europe (who were warned before) and called a halt before things got out of hand. Such birth pains are normal. No engineers are perfect. If you remember the period just before the Washington agreement, the ECB and the several member CBs were constantly being pestered by the financial community to announce sales and increase lending. No amount of press releases and statements could bring the deaf to hear anything but the good old song sung to them in childhood (gold-en bridge is falling down, falling down...). Even now, after the announcement, none wish to believe the statements and actions for what they are. Particularly this side of the pond.

As far as the last auction is concerned, there was most probably a planned response of the hedgers and their Bankers not to bid. The plan relied on their maintaining solidarity and not bidding. They knew that having AU bid was enough, since the gold made it back into the banker's hands anyway.

FOA being Harujo Fukuda, I hope it is true, and see some interesting points coinciding with that being the case. It would have been a great honor to find out it was her.

The next bid for gold should come at or slightly before the middle of Dec, in time for the next ECB quarterly report.

beesting (12/1/99; 19:58:31MDT - Msg ID:20018)
STORY-TIME!
This story was told to me 25 years ago, I don't know if it's fact or fiction:

Seems a certain man, name unknown'spent his whole life prospecting for Gold in what is now the State of Nevada.
He always managed to find a little bit,but nothing worth while......He spent his whole life searching in vain for GGooold!.....Well the man fine-ly died....broke!
A relitive was summoned to clean up his belongings after his death. The dead man had built a mud hut to live in.
When the relitive arrived he gathered the dead mans belongings and noticed something strange about the walls of the mud hut.Well,he broke off a dried peice of mud from the wall and took it back to the city for mineral analysis........FULL OF SILVER!!!! I heard that this was how the richest Silver mine in old Nevada was discovered..The Comstock Mine! The irony is,the dead old man had been surrounded by tremendous wealth most of his last years....and didn't even know it. Something to think about.........beesting.

Rhialto (12/1/99; 19:54:11MDT - Msg ID:20017)
The Believer
Well said. If we were to summarize the millions of words posted here about gold being the only real money, then we buy physical and do not care about supply and demand. We are secure in our viewpoint no matter what COMEX prices tell us. That is faith in our position. If we are gold speculators and traders, that is a different matter. And one thing is clear when it comes to speculating: a buyer or seller had better understand the issues themselves and not rely on an anonymous poster or his/her friend on the internet who cannot clearly articulate an obscure and arcane theory about gold pricing.

WilloTheWarthog (12/1/99; 19:49:11MDT - Msg ID:20016)
rsjacksr
I think that the bankers actually believe that they can create a single currency system for the whole world based on fiat. While I bemoan the fact that most private citizens (at least in the US) own little gold and are vulnerable to a collapse of the present system, and I know that central banks still own most of the gold, this in itself does not prove to me that these bankers can foresee the future very well.

I think that world events will, by accident or Providence, foil these plans. I have seen first hand how even the people in the highest positions of wealth have been deluded by it.

The aim is to discredit gold, to demonetize it. Big bankers know that honest money and fiat money cannot exist for long side by side.

But there are cracks appearing. If the arabs own anywhere near what some authors have posted here, they are a force to be reckoned with by the bankers. There is a religious difference there that cannot be settled by negotiation. China also sees gold as a strategic resource. And the ECB's announcement cannot be ignored as a partial remonetization of gold, even though the ECB is part of the same fiat money cabal.

Gold is money. Money is a powerful, primal force, generated by the will of men. At this point in history, a group of people think that they have successfully tamed this force, having channelled it into canals and reservoirs that they control, and having taken away its substance. They do not think that it could ever jump the banks. They are in their own bubble, where the laws of nature seemingly do not apply. They are wrong.

This will end, but not in the way they expect. And the longer it keeps on going, the worse it will be when it does end: economically, socially, and politically.

This is my opinion and should clarify why I made my statement.

nickel62 (12/1/99; 19:18:34MDT - Msg ID:20015)
Interesting Comments Tonight!
Those who are perhaps feeling some anguish as it appears gold has been stifled yet again should remember that what gold is really about is truth and the lack of it in our current system. You can stop believing in gold if you find that necessary but you can't stop refusing to be bamboozled by the various manipulators that have grabbed control of too much of our lives. Gold is nothing more than the solid basis of measurement that we all need to live our lives. The sad thing is that it seems for this moment at least as if the bullsh*t artists are winning. They can't ,they won't and even the Clinton era of corruption will end of its own dead weight in the not too distant future. Gold is after all only the yardstick to measure money in. One that can not as easily be fabricated by the charletans.For the moment they have got us all beaten down to the point where we are beginning to believe their bullshit. There ain't no way these stocks are worth anywhere near the prices they have kited them to. They have used the ability to create US currencey and credit to hyper-inflate and distort the world monetary system. Like all frauds this one too will collapse.It is golds function to provide a lifeboat to those who can see its role as a preserver of value and the output of one's work. FOA appeared to be a bizarre creation when I first read his stuff in the archives several months ago, and then I realized the wisdom of what he said ,transcended the hyperbole he sometimes appeared to use in making his points. He is after all a teacher using parables to convey very difficult topics. Topics which are tricky and difficult even for those among us who have fancy degrees and many years of experience in the financial business.Take my word after twenty-five years in the investment business specializing in the value of common stocks this bullshit can't go much further. The crash in 1929 peaked with stock market valuations at 89% of GDP,the peak in Japan was 157% of GDP. Today in the US markets we are at 160% of GDP. It took Japan ten years and they still haven't recovered. Today the US dollar is so weak it can't hold its value against the Yen which represents a bankrupt banking system and is actively being debased ,publically by its own issurer.Hang in there you are learning more than you think.

Peter Asher (12/1/99; 18:58:53MDT - Msg ID:20014)
canamami (12/1/99; 18:35:22MDT - Msg ID:20013)
Well written brief, Councilor.

canamami (12/1/99; 18:35:22MDT - Msg ID:20013)
Ad Hoc Premises and Symbiotic Relationships
Ad Hoc Premises

There are a lot of ad hoc premises on the thread again. The FACT is the $US value of the POG matters. The Forum was hopping and full of joy when the POG rallied after the Washington Agreement; now come the comments that the BOE sale wasn't important, and one doesn't invest in gold to make a quick buck, and FOA will be proved right at some point in human history, etc., etc.

I don't mean to whine and complain, and gold may one day rally as never before. My beef is the spin (1) that the $US price of gold doesn't matter, (2) that gold is the only true money, and (3)that timing doesn't matter - all three are false. Re (1) even if the $US were a penny ante fiat currency, it is still outperforming gold over the past 20 years, so what does that say about gold (2) try buying lunch or gas with gold (3)if one had invested in a decent tech stock over the past couple of years, one could acquire gads of physical, and be far ahead of someone who got into physical alone two years ago.

Symbiotic Relationships

A few weeks ago I posted about the symbiotic relationship between true believer goldbugs and speculator goldbugs, but didn't complete my point. In short, the speculators need the true believers to generate the undercurrents for the price moves the speculators can exploit. The true believers also need the speculators: The speculators provide the magnitude of swing in the POG in fiat currency which validate that gold is true money to the true believers, such magnitudes also being necessary to the recruitment of new true believers (and speculators)to keep the cycle and the symbiotic relationship going. For example, how often one hears repeated references on gold sites to the $800 ounce gold of the late 70's/early 80's, to prove that gold is still money and still worth speculating on.

I submit the enemies of gold may win even if they succeed only in suppressing the swings which attract new true believers and speculators, said swings also providing the raw material for speculation which is the lifeblood of the penny-stock exploration sector, which provides resource to the miners, etc.

The Believer (12/1/99; 18:00:34MDT - Msg ID:20012)
Canuk
Canuk my friend,
To buy gold in todays market in not to make a quick buck
and get out like it is some dot-com stock.
My personal hope for gold is to create real wealth and
security when the dot-coms and the dollar tank.
I don't really expect gold to take off until then.
It's fun to watch the POG daily, but I don't worry about
it. Just get it and hold it!
You'll be glad you did!

Twice Discipled (12/1/99; 17:47:44MDT - Msg ID:20011)
Golden Truth & Canuck
I too am frustrated, BUT I did not buy gold to get "rich". I bought it for insurance against devastation and the transition to whatever will be in the future -- I think most of us agree it will not be the US$ or stocks.

I looked a few factors, and believe me I am a very simple person and cannot even come close to some of the understanding here ...
1) The US dollar fiat scam -- the Fed is and has printed $ left and right with no backing and I personally believe this will cause a major financial collapse or at least extremely wild inflation. As stated here many times, the US$ is really the primary medium of exchange in the world, if what you say is true about the EURO, then do you not think that these US$ will return home and create massive inflation.
2) I want to do everything in my power not to be a part of continuing their ability to manipulate us -- although my contribution in itself is quite small, I must take responsibility for what I know and act to make change.
3) The stock market mania -- ok maybe the bubble will continue to get bigger, but I know for certain that I sleep much better at night knowing that I have some gold tucked away which will not loose 50-80% of its value in a single day for one reason or another.

Also, I recall FOA stating that it may take up to 5 years for this all to come about.

Dear Sir, gold for oil, or oil/gold manipulation to force movement to the EURO, does it really matter?

In the turpulent times ahead (no time table attached, but it seems real soon), gold seems to me to be the best asset I can own.

Canuck (12/1/99; 17:23:19MDT - Msg ID:20010)
Golden Truth
Was posting to Galearis and almost missed your last message.

I too am frustrated. I took all my cash and bought physical.

I have been astonished with the money and derivative discussions in the past months and have for the most part stayed away from it. However, my locked up money has been used to play with mining stock. I was burned bad around the expiry of the Dec. Comex contract and burned again Monday.
I played the 'unhedged' rule (FN, GOLD etc.) and was flogged anyway. I am a rookie in the stock game so I have no one to blame but myself. Like a little whining kid I haved cashed out and will await the rollover. Meanwhile this dork at work bought a high flyer 'tech' stock a month ago that has since risen 35%.

I keep thinking back to that 58 page PDF federal document
that laid out the several year plan to extinguish gold.

I feel lousy and I know a few other people here do but I will not risk names.

What do we do? What's the plan?

TownCrier (12/1/99; 17:07:53MDT - Msg ID:20009)
Sir CoBra(too)
Have you solved the mystery surrounding your past posting woes? Browser problems? Bad connections in Vienna? ...glad to see you still able to get through to the Castle.

Canuck (12/1/99; 16:53:29MDT - Msg ID:20008)
Galearis
Your mention of Red Lake blew me away. I was up in Balmerston the winter of '80/81, the winter we saw $852 POG.

Is Campbell the Placer Dome mine, I forget? The 2 mines where within a couple kilometres of each other. I worked at
Campbell, the non-unionized one. Just about died a dozen times, walked into a blast, just about fell down an ore pass, ran over a sac of AMEX with a train, got pinned to a wall with a jackleg, scaled a boulder that the next crew had to drill snd blast. My second day on the job was a little quieter. Just kidding about the second day but the mishaps are true. Can't believe I survived, a 20 year old punk looking for trouble and finding it easy.

Ask Gandalf about the 'little rock' I found.

Golden Truth (12/1/99; 16:37:31MDT - Msg ID:20007)
TO CANUCK,ANOTHER,F.O.A AND ALL!
Hello Canuck, i to have become dissapointed in the so called GOLD shortage. If you read Robert Chapman's "Gold'silver,Platinum and Diamonds" 25November1999 at G-E .com, Chapman says on page 6 that "There has been some inventory buildup,but it is hard to say how it will effect total yearly volume" Unquote.
To me if somebody was short Gold why would they at least not purchase what Gold they could get their hands on right up to the production amount and still not worry about driving the price higher? This makes no sense to me!
His data comes from the World Gold Concil. He also says Gold demand should be higher in the final quarter figures due to strong holiday, millenium coin purchases,and Middle East demand due to higher Oil prices.
This doesn't sound to me like the Middle East is swimming in cash!
I think it was ORO forgive me ORO, if I,am wrong but i remember reading that the alledged Oil for Gold contracts ended in this year back in Jan/99, because the Oil producers found out or whatever, that the Gold contracts they were promised for their Oil could not be honored?
I think thats why ANOTHER always said watch the price of Oil. The recent run-up in the price of oil sort of matches ANOTHERS thoughts, if not and the price has gone up only due to OPEC cut backs and a small increase in demand, then i say the Oil for Gold contracts are over done.It really makes me wonder when KUWAIT lends 79m.t. Yet at the same time wants Gold for Oil and maybe holds contracts for future GOLD in the Ground that they will maybe never see?

This leads me to believe the Oil producers were used as a Chess pawn to set the "EURO" trap. They knew that every one would "go for it" and short Gold and not be able to repay in physical. There for the only available subsitute would be repayment in EURO's. BINGO instant demand for EURO dollars. Oil and Gold were used to get the EURO going bigtime and now the Oil producers are trying to play both sides by pretending they knew nothing about all this, by lending them 79tonnes of GOLD, because they are COWARDS, and aren't quite sure who to support, i think the lending of 79m.t supports my COWARD analogy.
If not then this is the biggest internet scam in the "History of the World" Don't forget all this was supposedly reveiled to us as the threat of DEFLATION was swooping down upon the World. I say throw together a fews good rumors mixed with some half truths and who can prove it completely right, or false for that matter, but it sure sells alot of GOLD to anyone who buys the story!
I,am sure some of it, is very true ,but will it really have a huge affect on the P.O.G? This is where i get very suspicious especially when the B.O.E Gold sale is said to be only 2 times oversubscribed and "Robert Chapman" says there is a Gold surplus in the 3rd quarter.

In summary i think there is so much mixed data out there, it's almost impossible to get to the real truth. It appears that all this is happening at once and every one has a different aggenda. In short the GOLD market isn't the Worlds great Chess game. Its just a big can of WORMS. A.K.A "White Old Rich Men" With nothing else better to do than torment the rest of us!
Firstly with promises of riches, then hand us a stinking dead corpse stuffed full of more lies and how Superior they are to the rest of us.

In short we will never win not in this life at least and probably not for at least another 10 years, if we don't blow ourselfs skyhigh by then, and when GOLD hits $320-325 I,am cashing in my chips. I'll keep a couple pieces for souvenir's because GOLD is beautiful to look at and maybe i'll turn some of it into jewelery, but as it making a come back as real money, i say in a pigs eye.
They'll lanch a nuclear warhead before that ever happens so lets all enjoy our little bit of Gold, but don't expect to get rich off of it any time soon.
Even Robert Mundell said $600/oz in the next 10 years, ****
BY THE WAY after reading Mundells profile. I strongly believe him to be "ANOTHER" simple logic, first he is a Canadian,and started posting on KITCO first, 2nd he is the "Father of the EURO" 3rd he is about the right age of anothers profile.

Now for the the real Bombshell F.O.A is not a MAN, F.O.A is a Woman, think World Gold Concil, I think U.S.A Gold put it together shortly after the "Washington agreement" or maybe sooner?
For me it became obvious when F.O.A called us her "Bullion Boys" a man wouldn't say it that way, 2ndly when Miss Fukuda(sp)
said she had trouble converting her thoughts into english sometimes, plus the round about way of her Phonetics or "System of spelling" i know it has more to do with sounds, but couldn't think of a better way to explain it.

F.O.A is a more than wonderful person and i thank you for all you've taught me. Yet on the other hand i think it only fair to level the information field here in this case.
Since i believed alot of what you said to the point of ruining my life and telling everyone that GOLD was going to $30,000/oz. Them in turn, thinking i was crazy, quoting someone off the internet going by the name F.O.A?
I feel that i,f someone can come on the internet and promise GOLD is going to the Moon, they should be accountable for that, if at least not morally, Yes?
What say you "ANOTHER"? F.O.A?

I remember STRANGER was once asked, who he was, and stranger did reveal his identity. I also remember him upset about ANOTHERS prognostications and his timing on the P.O.G not being very accurate?
I to feel frustrated as in i've been fed a line of Fairtales!!! Boy do i feel like a sucker! If it was not for the 5 Dec GOLD $390 call options i would be down thousands of dollars!

That brings me to my last question F.O.A. You knew about the upcoming freeze on GOLD lending from the 15 C.B,S
Why not mention here at the forum, for the average person to pick up a couple Gold contracts. So what if a few traders picked up on it, it would of squeezed them forward sellers all the harder had they had to pay out more money.

I can see you wanted to protect the miners from that kind of exposure, but look at what you've protected them from, an honest price increase, because the other stubborn and wicked managers (Barrick) still refuse to cover and are working out "weasel deals" as we sleep!

Any ways enough said, i hope i didn't burst anyones bubble but this all had to be said sooner or later. There is to much at stake to be COY about this anymore, time to get down to business.
G.T
P.S As Another said in the footsteps of Giants "The cat is out of the Bag" YES???

rsjacksr (12/1/99; 15:51:33MDT - Msg ID:20006)
Re: WilloTheWarthog (12/1/99; 14:25:56MDT - Msg ID:20003)
"Manipulators"

"The manipulators may be successful in the short term, but when the market moves, they will be chewed up and spat out by the inexorable power of real money."

I disagree. The manipulators have real money and control the fiat market. They can't be both that smart and controlling and that na�ve at the same time.

Sorry about mis-post

Galearis (12/1/99; 15:49:49MDT - Msg ID:20005)
@CoBra(too)
"What got my attention was your reference to Bridge River (second part of my handle derives from Bra-(lorne)- an area I really know more than well and done some placer mining - do you recall a guy "Woodchopper Eddy"? - and even had my son go over for several summers to muck out old adits a/or work underground on the Peter vein extensions."

Hello and thanks for the welcome. My we are mining the nostalgia today! But to answer your question, we met few locals up on the Bridge River. The year was 1977. The spot we were working was that section where the gorge narrowed as it wound down to the Fraser. Only a matter of a few hundred metres upstream, the paying ground ended, and it was obvious that the gold had come out of the numerous quartz veins and lenses exposed in the walls. I seem to recall, however, an old adit perched on high in the canyon and this may be the one you remember. I also recall that during the turn of the century, when this area was a placer mining frenzy of activity and they had to import Chinese labourers for this work, the Chinese in turn developed a healthy side venture themselves of removing the large boulders of nephrite jade that was also present in this outwash. Near our little operation one could stand on one of these boulders that was simply too big for them to winch out of the canyon. An acquaintance of ours a half century later took a little "run" up the creek (I forget its name) that emptied(in a an almost virtical fashion) into the bridge right at our campsite, and discovered the source of the jade "in situ". It has been over twenty years since those hands-on mining days of mine and the names are gone. The fellow who owned our particular claim was a wonderful old timer (with the hat and the chewing tobacci - right our of the movies) called Ned. And except for a group of "hippies" that used the big salmon pool just down from our workings for skinny dipping, we did not see a soul. The good old days! Oh how I miss 'em....

CoBra(too) (12/1/99; 14:36:32MDT - Msg ID:20004)
@Galearis
Sir, I haven't posted for some time - anyway wellcome.
What got my attention was your reference to Bridge River (second part of my handle derives from Bra-(lorne)- an area I really know more than well and done some placer mining - do you recall a guy "Woodchopper Eddy"? - and even had my son go over for several summers to muck out old adits a/or work underground on the Peter vein extensions.
The Bridge River/ Bralorne area, after being the largest gold (Bralorne, Pioneer and King) producers in Western Canada from the 30's`to the early 70's - were abandonded due to low POG.
Today a fully permitted new co. (BPN), with all facilities in place (including plant, mill and all the rest of equipment stands ready to go into production again as soon as the POG stabilizes above $300/oz. This was achieved after
exploring across the main faaults (Cadwaller, Ferguson -) aand by picking up the extensions, while the maain areas are far from being depleted.
By making a point you've made an impact - Best CB2

WilloTheWarthog (12/1/99; 14:25:56MDT - Msg ID:20003)
Gurn Blanston-Price of Gold
There are a few things one can do. Of course, buy as much physical gold as you can. You alone cannot move the market, but every little bit helps. Then, show some small coins to friends and relatives. Remember that the price of gold is a vote, so the more people buy it, the more the price will go up. And there is something to be said for seeing and feeling the stuff as far as motivating people to buy it.

Educate yourself on the history of money (especially fiat money) and be able to explain and defend your position. Explain that non-ownership of gold by citizens (whatever country you're in) is a strategic weakness.

If every person owned a couple of ounces of gold, the situation we are currently in would be nowhere near as threatening as it currently is. The manipulators may be successful in the short term, but when the market moves, they will be chewed up and spat out by the inexorable power of real money.

Peter Asher (12/1/99; 13:38:42MDT - Msg ID:20002)
Stranger
>>>> When you are toting up the wealth of the nation, equities certainly belong among your "M"s. <<<< -----Part true. Only the value attributable to replacement value of plant and equipment, royalty value of patents and copyrights, goodwill, and a P/E based on current long term interest rates, should be considered a physical equity. The bubble value composed of postulated future growth should not be in any "M" equation.

PS, Thanks for the gentlemanly acknowledgement.

Galearis (12/1/99; 13:19:46MDT - Msg ID:20001)
@TownCrier and WilloTheWarthog
"Over these many months, I don't believe I've ever before been accused of having a point."

My Goodness! My first post on this famous forum and I have already established a first!

I also enjoyed your little parable about introducing someone to gold for the first time, as I can really relate to that at first hand.

As a kid I developed a fascination for mineralogy, and the king of minerals for me (and others) was gold. Hence as a young pre-university student I found myself in the cool, dank, dangerous underground relm of Campbell Red Lake Gold Mine near Red Lake Ontario. Here I saw a great deal of the yellow and also learned a great respect for those who toiled with me in what most people would consider as appallingly dangerous conditions (they were!). For those of us who have shared these toils, the place of the common labourer will never be seen as something lower - no matter what the income. (The mine had a "good" summer that year and only one miner was killed and only one was maimed.) Some years later I worked a placer claim by hand with two others (one of whom you know as rhody on that other site) on the Bridge River in British Columbia. It was not nearly as dangerous, but at an average breathless temperature of near 100 degrees F. the discomfort was equally appalling. We did not get rich, but the small vial of nuggets that we brought represented a new level of richness for me that was not just measured in troy ounces. I still have my share and would not for any urging trade it for ten times the product of someone elses labour.

In some ways we must all have been that person who sees gold in a significant way for the first time- there is likely some similar causal event with all gold bugs as a basis for their affection for the metal and it certainly can't just be a wealth thing.

Sorry for sharing this personal meander into life and times.

WilloTheWartHog:
"they are a canny lot. So I would say that you are right, they have enough money right now that accumulation of gold is the agenda. As long as the West wants to give it away, they'll take it!"

A gold bug is as gold bug does, yes?!

Thanks.

Gurn Blanston (12/1/99; 12:57:54MDT - Msg ID:20000)
Can we drive the gold price up? (gurnblanston)
http://www.usagold.com/cpmforum
1. It is amazing to me to see the gold cabal "machine" systematically finding ways to drive the price of gold down. They sell at the open on the Australian exchange, when the market is thin, etc. They obviously have teams of traders looking for opportunitites to drive the price down. They're good at what they do.

2. Is there anything on the horizon that we gold bugs can do that WILL drive the price up and break the back of the cabal? Soon? The cabal says it cannot stand a price above $340 or so. Any way "we" can drive it past that and MAKE them stop their game?

Damage from Y2K will probably not make much impact within the first week or so in Janury. That will deflate the gold bug balloon and give the cabal the window to drive the price WAY down. That bodes ill for us gold bugs.

Comments?

Thanks
Gurn Blanston

beesting (12/1/99; 12:51:47MDT - Msg ID:19999)
@ Sir Aristotle---Or any other banking expert-Searching for the truth in banking.
Aristotle,I am still in the process of cerebral download when it comes to your fine essay and explanation of banking,many months ago.
One small question:
If an enterprising person legally hand carried $8000.00 in Gold and $2000.00 in cash to an established off-shore locality where banking requirements on opening a bank were very low,could they do this:

Open a bank of their own using the $2000.00 for start up fees,than write a check using the value of the Gold as a reserve asset,and buy more Gold,or any other financial instrument,but keeping on hand the original $8000.00 of Gold.Untill they reached maximum asset requirements set by the LOCAL governments.

The reason I'm asking is I just finished a book by: Jerome Schneider who explains the benifits of having an off-shore bank of your own,and locations where a bank could be established for under $2000.00.

My main question is:Would this banks checks be honored outside of it's established domain??
Or is banking completly controlled worldwide,by the few?
Showing my ignorance....beesting.

Mr Gresham (12/1/99; 12:15:18MDT - Msg ID:19998)
Rollover
It occurred to me to try for message #20,000, but I'll leave that honor to another. Numeric rollovers have been too much on my mind these past two years; I'm now in recovery, and hoping that "normal" life will prevail, in as many ways as possible.

My own rollover "5-0" is tomorrow; I'm taking it very slowly, step by step, thoughtful, grateful for so much...

And so much to read -- you knights and ladies continue to surpass yourselves both in exciting times and quiet.

Another rollover, you'll see if you occasionally come in through the USAGold front page, will be Hit # 900,000. That means there are many lurkers reading us. Among them must be many who have good insights to share with us; much about commonsense life and economics is welcome here amidst the stuff about shiny metals. Please don't be shy in helping us put our puzzle together.

The Stranger (12/1/99; 12:14:39MDT - Msg ID:19997)
ORO, Lafisrap, Canuck
Oro - Please forgive the presumption of my re-emphasizing your comment to SteveH:

"ORO (12/1/99; 6:18:27MDT - Msg ID:19981)
SteveH Journeyman 'flations
SteveH - the point is that the growth in monetary substitutes necessary for the growth of output (however bloated that figure may be) has expanded significantly. This means that the marginal effect of more "money" - even that created by the markets themselves is going to near 0."

In a world where most people have never spoken on a telephone, most have never owned an automobile, and many exist under deplorable living conditions, it is a shame that what you contemplate here is, at times, true. It is possible for the money supply to outgrow production. Despite excess money growth this year (which, in recent weeks, has begun to reaccelerate, BTW), signs of a slackening are actually increasing. But I suspect higher bond yields having shut down the mortgage refinance business has a lot to do with this.

It will be interesting to see if a possible slowdown in GDP can dampen rising prices. It certainly didn't work in the 70s when companies used price hikes to conceal stagnating revenues.

Lafisrap - (Parsifal, if you will) - thanks for your thoughts. I hope you don't mind my having stolen from them earlier this A.M.

Canuck - Maybe all this talk of desperate shorts unable to find the real stuff is just goldbug puffery, eh. I think the situation still favors the longs, my friend, but you make a good point about the degree of (or lack of) agony out there.

Rhialto (12/1/99; 11:36:36MDT - Msg ID:19996)
Canuck
Good question. Perhaps, tho, the question is too general. It assumes that supply is limited and that demand is increasing. Someone yesterday stated that equities are a zero sum game, and I believe that is also true in general in the paper gold market. The paper gold market is not demanding physical, at least not today from looking at the spot gold price which is down. It helps me to realize that noone that I know has any interest in gold as money and therefore do not demand any. They don't collect coins, don't wear much gold jewelry, and prefer procelain crowns for their teeth. Therefore I perceive that people in general have no apparent demand and what limited amount there is is easily supplied. Demand has not increased the price of gold and for whatever manipulative reasons gold has decreased in price for a long time. Therefore we can conclude that there is not a present political or monetary policy based demand for physical which is driving up the price.

This leads to Farfel's Despair, which is simply that what we choose to think about gold's value (demand) is not a present fact (supply).

Facts are important to answering the question in any case, particularly when formulating investment plans, and we need to have them here to verify demand. For example, we might assume that a bullion bank which is short is required to deliver physical on maturity. But I have not seem a bullion bank gold lease ageement, and do not know that this is a FACT. If the bank can supply the demand of the lessee by delivering currency or rolling the lease over etc., then physical supply and demand is lessened in importance.

WilloTheWarthog (12/1/99; 11:23:05MDT - Msg ID:19995)
Galearis Oil and Gold
I too have been pondering the Arab gold situation. Aside from the obvious embracing of gold as money by some factions of the Muslim world, there is no obvious activity. My own speculation is that the Arabs are content to sit back right now and let the elephants fight. I think that we will see global conflict sometime in the next five years. From what I have read about the Saudi rulers, they are a canny lot. So I would say that you are right, they have enough money right now that accumulation of gold is the agenda. As long as the West wants to give it away, they'll take it!

Galearis (12/1/99; 11:08:23MDT - Msg ID:19994)
@TownCrier
((:>).

TownCrier (12/1/99; 10:35:33MDT - Msg ID:19993)
Sir Galeris, thank you for your words...
Galearis (12/1/99; 10:03:55MDT - Msg ID:19991)
@ TownCrier
"I take your point..."

Over these many months, I don't believe I've ever before been accused of having a point.

Assisting others with a financially-oriented worldly education in an entertaining and enjoyable setting...that's what it's all about. That's my "map."

TownCrier (12/1/99; 10:26:35MDT - Msg ID:19992)
The Fed Added $3.55 Billion in Wednesday's Overnight Tri-party System Repos
http://biz.yahoo.com/rf/991201/lq.html
Economists expect the Fed to be adding additional permanent reserves to the banking system through a coupon pass, also.

Yesterday a.m. fed funds were trading at 5-3/4 percent. This morning they were at 5-11/16 percent. Looks like the Federal Reserve Open Market Committee might as well hike their target rate to 5.75% when they meet in December...the market is already preferring that level.

Galearis (12/1/99; 10:03:55MDT - Msg ID:19991)
@ TownCrier
I take your point and will plunge into the uncharted depths of past wisdoms of this forum.

Here in Canada where I make my home there is a joke that one hears from time to time about Americans. With our continuous obsession with our wanting to define ourselves with a sense of separateness from those of the south, it does pertain to a provincial "blinkers on" concept of cultural identity, values, and world view. Canadians too have their fair share of this blindness, but the joke is the only one I know that makes this point. I hope I do not offend, but the joke is: "How does one tell a Canadian from and American? Answer: the American is the one that needs a map to tell him where he is..." obviously this partly pertains to insular outlooks that are not just the sole trait of the US citizen. A cultural landscape erects borders, not just political, that may limit views in many ways. The perceived value of gold in the ME is just one of them.

Thank you for your kind words of welcome. I hope I can continue to learn from you all, and in time from time to time contribute meaningfully.

TownCrier (12/1/99; 9:38:29MDT - Msg ID:19990)
The all-important parsing of official statements
http://biz.yahoo.com/rf/991130/bd4.html
Bank of Japan Governor Masaru Hayami issued a rare statement, saying: "The Bank of Japan supports the recent action by the Ministry of Finance in the foreign exchange market and strongly hopes that market stability is restored as soon as possible."

Think about those carefully chosen words. I'm willing to wager that you probably thought the market already was stable, or at least in relative terms. As you can see, apparently it is quietly coming apart at the seams.

The Stranger (12/1/99; 9:30:41MDT - Msg ID:19989)
Is That Not Vast Excess?
Oro, once again, you astound me with your scholarship, and the same goes for Journeyman and SteveH.

There is not much I can add to this flurry of brilliance, but I will at least respond to ORO's question, since it appears to have been addressed to me.

In a word, "no".

When you are toting up the wealth of the nation, equities certainly belong among your "M"s. Their influence, however, should not be considered proportionate to that of the traditional "M"s in terms of there effect on supply and demand on Main Street. For one thing, equity investments are usually intended for long term wealth creation and not for short term spending. For another, equity valuations are famously unstable (often for demographic reasons as much as for economic ones). As such, they can revert to the mean or beyond at any unforeseen time.

I might just as easily have pointed you to the officially-released inflation numbers of the last several years. Although I don't have much more faith in them than anyone else at this table, the truth of your claim should have shown up in them long before now.

TownCrier (12/1/99; 9:18:10MDT - Msg ID:19988)
Hello Galearis, and welcome to our calm corner in a wild world
http://www.usagold.com/halloffame.html
Before you, I, and anyone else attempts to move forward with your line of questioning, have you first had a chance to review the oil/gold related post by Aristotle in the Hall of Fame link provided above?

As for thoughts on keeping the price of gold low...your idea is a good one, but at some point, those who have have purposely acted to acquire their monetary savings in gold would want to ensure that it was fairly valued upon the time of spending it. Gold can't become so discredited through propaganda and manipulations that others would view it as akin to the Russian ruble. Fortunately, gold is quite resilient and can take take a savaging with no lasting effects. In testimony to that, put a real gold coin into the hand of any child (or hold up a gold chain to any "savage" taking his first steps into civilization from the jungle) and witness their reaction. In this regard, a recent post by Tanglewild is most instructive...
---------
Tanglewild (11/28/99; 8:22:58MDT - Msg ID:19797)
Aristotle, Perhaps the quote about civilization and being relearned comes from the 1968 book by Will and Ariel Durant, The Lessons of History. A quote:

"If education is the transmission of civilization, we are unquestionably progressing. Civilization is not inherited; it has to be learned and earned by each generation anew; if the transmission should be interrupted for one century, civilization would die, and we should be savages again. So our finest contemporary achievement is our unprecedented expenditure of wealth and toil in the provision of higher education for all. .�.�. We may not have excelled the selected geniuses of antiquity, but we have raised the level and average of knowledge beyond any age in history.

None but a child will complain that our teachers have not yet eradicated the errors and superstitions of ten thousand years. The great experiment has just begun, and it may yet be defeated by the high birth rate of unwilling or indoctrinated ignorance. .�.�. Consider education not as the painful accumulation of facts and dates and reigns, nor merely the necessary preparation of the individual to earn his keep in the world, but as the transmission of our mental, moral, technical, and aesthetic heritage as fully as possible to as many as possible, for the enlargement of man's understanding, control, embellishment, and enjoyment of life."

The Stranger (12/1/99; 8:45:35MDT - Msg ID:19987)
Peter Asher
Marvelous, Peter! I knew I was leaving myself open on that one. You make me feel like a newbie again.

USAGOLD (12/1/99; 8:30:30MDT - Msg ID:19986)
Today's Gold Report: More Strange Goings-On -- The Big Addition to Comex Warehouse Stocks
MARKET REPORT(12/1/99): The strange goings-on surrounding Monday's
Bank of England gold auction carried over to New York yesterday where
162,650 ounces of gold were deposited at the COMEX warehouse. (Please
see yesterday's report below.) This is an unusually strong addition to
stocks that will show up as a little more than a blip, and the fact that
it occurred on First Notice day suggests that somebody is asking for
delivery -- a rather large delivery -- and someone else is
accommodating. In fact, that is the largest addition we have seen in
some time of tracking activity at the COMEX warehouses. Lenny Kaplan
tells us this morning that "demand has been good lately especially from
Asia." Standard Bank attributes yesterday's weakness at the close as "a
Fund related sell-off." Standard also reports open interest declining to
168,186 lots -- the lowest level since March.

That's it for today, fellow goldmeisters. See you here tomorrow.

Galearis (12/1/99; 8:02:17MDT - Msg ID:19985)
@ THC: ME gold/oil relationship
I am a lurker and now a refuge from the Kitco Forum. I have read with ever increasing interest and respect the thoughts of the posters on this forum and have come to the conclusion that his is as good as it gets in discussion groups on the gold market. "Good as" is very good indeed!
I ask you in advance to please pardon me if this point has already been discussed, but it seems to me the question of the price of oil to gold (or visa versa) hinges on the cultural dynamic here. My understanding is that the ME countries do not value highly fiat currencies and at best use this exchange medium as a short term intermediary step in order to acquire gold- their measure of true money and wealth according to religious and cultural values. Given this premise, it seems to beg the question that since fiat currency is given little value in that particular cultural landscape, would it not serve those states better in their view to keep the POG, as expressed in fiat currency, as low as possible in order to maximise the exchange of oil for gold? Would this not enable those countries to purchase a wealth base very cheaply in exchange for oil. So, these people are not of the CABEL, but perhaps they exploit the situation with a chorus of smug snickers directed at those of the gullable west for allowing them to do this. To (some?)greater extent this would explain Kuwaite's behavior and that of Jordan in dumping physical supplies on the market. Would this not be in their eyes an investment for the future?

Comments?

nickel62 (12/1/99; 7:04:08MDT - Msg ID:19984)
Thank you Black Blade for the information on Inco Voisey Bay
If these guys don't settle this fairly soon I'm going to have to change my handle.

Black Blade (12/1/99; 6:42:35MDT - Msg ID:19983)
POG down $2.00 to $288.10 at NY open......ouch!
New York is unkind to Au this morning after an uneventful overnight trading session.

THC (12/1/99; 6:37:43MDT - Msg ID:19982)
(No Subject)
To Oro & Others re "Who Dares Pull the Gold Trigger?"
Good morning, all!

Master Oro, thank you so much for the very lucid explanation of your calculations and your through process regarding the dollar index. While you have clearly shown that it is not easy to arrive at an appropriate dollar index calculation, we can state with certainty that the dollar�fs reserve currency status has allowed the US to claim a disproportionate amount of the world�fs resources and products during the past decades.

The reserve status and relative strength of the US$ has also been a cornerstone of the US�f political, economic and military influence in the world. A weaker dollar would severely threaten the status of the US, and for that reason an action that would damage the dollar is in a sense an act of �geconomic warfare�h that will most likely be taken very seriously by the US.

It is clear that gold is a key competitor with the dollar, and that we must always consider the above when evaluating gold scenarios.

If you don�ft mind I would like to delve into this for a while.

From a post of yours at Kitco (Date: Wed Jul 21 1999 05:31
ORO (Is the "final" gold rally coming? Part I) ID#71231:)

�gFrom the 50s to the 60s oil use in general and Gulf oil in particular rose in significance. But the gulf does not believe in fiat and very much believes in the value of the oil and in the value of gold. Furthermore, true democracy is not at issue in these countries and the rulers can take a long term approach to obtaining value for their oil. Naturally, they would try to obtain as much gold as possible for their oil. When they think as much gold as is going to be obtainable is in their hands, they will force their view of gold's value on the world so that all know their riches.�h

Much of the debate here at USA Gold centers around the ME countries�f �gpulling the trigger�h that destroys our gold paper pyramid. This would clearly be an act of war on the US – would they really do it?

-Kuwait would not exist today if the US/Britain had not fought Iraq.
-The US offers major military support to SA.
In a sense, these countries are almost like �gStates�h of the US, and I have doubts about their ability to act independently of the US on the world stage.

How is it conceivable that they will take an action that will destroy the dollar and will surely ruin their relationship with the US?

The only possible scenario I can see is where there is a pan-ME/Islamic alliance that turns the ME away from US/British control. But this also seems to be far away�c�c..

Thoughts?

Japan is also sometimes mentioned�c�c.they have a huge pile of US$, and they will be acquiring many more in the upcoming fight to save the $/yen rate (http://www.bloomberg.com/bbn/topsum.html?s=c70f7a1d4dc220a2273e0b3df16a4a86). But Japan too has long lived under US protection, and I don�ft know if they would dare step away from that relationship. They were supposedly warned not to buy gold with $ in the 70�fs, and they seem to have been faithful to the warning.

The only one who would have both the will and the strength to seek independence appears to be Europe, and perhaps this is reflected in their recent announcement to freeze lending gold.

-------------------------------------------

One other question/topic – ME gold purchases:

�gORO (11/01/99; 00:17:23MDT - Msg ID:18006)
Canuck Gold (10/30/99; 22:41:40MDT - Msg ID:17946)
Though not posted for my attention, I think this can be answered in quite a straightforward manner.
1. Oil is traded for gold now, and always has in one way or another. My estimate is that Arab oil is trading its output at a minimum of 1500 tons per year, and a probable 3000, top possible value is 4500 tons per year.�h

**My question:
If we have ME gold purchases of gold (monetary demand) of 3000 to 4000 tons, this would be equivalent roughly to global non-monetary demand, and more than global production. Where could they find 4000 tons per year in addition to the 4000 tons to fill non-monetary demand?

Do I misunderstand the figures or is there another source of gold?

TIA for sharing your thoughts,

THC

ORO (12/1/99; 6:18:27MDT - Msg ID:19981)
SteveH Journeyman 'flations
SteveH - the point is that the growth in monetary substitutes necessary for the growth of output (however bloated that figure may be) has expanded significantly. This means that the marginal effect of more "money" - even that created by the markets themselves is going to near 0.

Journeyman - deflation follows inflation. Prices rise in the deflation stage much more than they do in the inflation phase. Why? because the central bank fights the destructive deflation by pumping up the monetary base - M1 to replace lost money substitutes destroyed in the deflation. The M1 currency is what used to be convertible to gold. It is that which is important in determining price levels in the currency.

Peter Asher (12/1/99; 5:11:47MDT - Msg ID:19980)
It's baaaa-ack
Journeyman (11/30/99; 21:16:09MDT - Msg ID:19968)
The Great Flation Debate: Terminology II, The Application

Isn't this the (I shudder to use the word)Stagflation that some of the group was having definitional fits over awhile back?

Canuck (12/1/99; 3:51:54MDT - Msg ID:19979)
BOE Auction #3
MK,

From yesterday,

"Though the shorts are being unwound in the paper markets without much
difficulty, unwinding the shorts in the physical market are another
matter entirely, and the activity surrounding yesterday's auction is a
good example."

Can I ask why the auction was so horribly 'undersubscribed'?
Since physical is still so short, conversely, demand should be high, why were there so few bids? I am completely perplexed and confused by the outcome.

MK, anyone?

SteveH (12/1/99; 3:34:47MDT - Msg ID:19978)
ORO
Oro,

Below are your last words of your last post. Assuming your source figures are accurate and allowing for computational inaccuracies, I see a significant finding in your numbers, but I am not sure exactly what it is. Let me explain. You have created an addendum to currently money supply theory. I presume this is your add-on (M5-9) and certainly worthy of deep consideration. In essence you have accounted for all liquid to semi-liquid financial assets and then tracked their growth over time. To aid in interpreting the significance of the various rates of growth in each asset class, I think we need to evaluate the level of risk to each M-class were the overall stock market to 1) remain steady (an unlikely event), 2) fall 10%, 3) fall 20%, 4) fall 30%, 5) fall 40% 6)finally, fall 50%. First we must define Stock Market. For argument sake we could assume the stock market is the broader indices and any representation of all stocks in the market or held in funds. Certainly the curve is skewed in favor of index stocks. Nonetheless, taking into account the various considerations of stagnant through a 50% correction to the "stock market," what would the affect be on each M-class as it fell through these various levels? I ask this because it seems that each M-class builds on a more fragile and less liquid asset base such that any redemptions from a higher M-class, of necessity, knocks value from the underlying class such that a cascading affect would work its way exponentially through to M-1, drying it up significantly. In other words, M-1 is now held hostage to a new financial era that can't afford a falling stock market, as the cascade or trickle through affect would devastate it. Any move to a cash position in any M-class above M-4 would devastate the system. The higher up the M-class you travel to liquidate the greater the cascade affect against M1-3. Finally, M-6 through M-9 are built on equities (for the most part). It is here first that the waterfall would begin. Any cash positions created from redemptions or sell-off here may go into bonds or checking but as redemptions ensue in equities, less cash would be redeemed and the corresponding build in bonds or checking would of necessity be reduced. If one were to plot the affect of M1-5 from a sell of in M6-9, I would guess one would see an expansion in M1-M5 but inherent in M1-M5 would be a loss of confidence in any form of paper asset. That could further starve M1-3. It is fascinating to think it through but your model shows an otherwise stable system out of equilibrium and any adjustments could be swift and unmerciful as it tries to find homeostasus(equilibrium?).

Oro -- Putting it all together, and ignoring small discounts we have:
M4 M3 + Short term bonds at face value held outside retirement accounts..
M5 M4 + Intermediate bonds and long bonds at market value held outside retirement accounts.
M6 M5 + All non retirement holdings of mutual funds (not including money markets)
M7 M6 + Individually held stocks outside of retirement plans.
M8 M7 + 50% of vested portion of 401K plans.
M9 M8 + 50% of total vested retirement accounts excepting 401ks, + 25% of 401 K plans.

So we can now look for a shortcut to obtain these figures for total liquidity. This liquidity figure essentially relates all financial assets; currency and currency equivalents, securities exchangeable on the open market for currency - tradable assets.

In Tables L100 and L9 in the Fed Flow of funds report (URL above), is a figure that is easily converted to reflect this: Total financial assets - Q2 standing at over 32 $t, less Pension assets, just under 10 $t, less equity in non-corporate business, just over 4 $t. This leaves 18 $t in the hands of individuals. From Table L101 we have cash and securities of corporations at 7.7 $t less 6.5 $t in illiquid or non-financial assets. Leaving 1.2 $t.
Total 19 $t. In 1993, this total was 11.4 $t, growing to 12.6 $t in 1995, and 15.2 $t in 1997, giving 10% growth in the first two year period to '95, 20% in the 95-97 period, 25% in the next.
Is that not vast excess? Would it not be vast excess if during this time nominal GDP rose less than 5% per year annually, and only 22% over the whole 5 year period in which liquid assets grew 51%? If incomes grew only 24% over this period? If in parallel, personal indebtedness grew 30% and the rate of growth in liabilities grew from 7.4% to 9.2%?

Journeyman (12/1/99; 2:54:57MDT - Msg ID:19977)
Greenspan doesn't know what money is either @Goldfly #19972, ORO etc.
Representative [??]: "As the stock market reaches dizzying heights, does that not represent, in a sense -- in a sense -- an increase in the money supply, and is the FED concerned specifically about that?" _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ "That, that's an interesting question, because what we're dealing with is distinctions between money and credit in certain respects, or claimings. And the issue of asset value changes, which clearly are not the same thing as an increase in the money supply, are none the less interrelated and I think what we try to do, with hopefully some success, is to be able to understand the inter-relationships between money on the one hand, asset value changes on the other, and how both impact on the real economy. I wish we knew more about a lot of these things. They continuously change and we continuously get proxies for what we think real money is, and find out that it's not a useful proxy." -Federal Reserve Chairman Alan Greenspan, semi-annual Humphrey-Hawkins testimony (Day 2) to House Banking Committee, 24 Feb 1998 _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ Regards, Journeyman

Black Blade (12/1/99; 2:32:41MDT - Msg ID:19976)
Small player creating a buzz in Au country
Some here in gold country think that this could be the real deal. It would appear that this could be similar to Franco-Nevada's deposit near Midas, NV (same region). I don't own any shares, but it looks interesting. They are a small player and I don't know their book shapes up, anyone have more info?

Great Basin Gold (GBG:VSE;GBGLF:NASDAQ) reported that ongoing continues to delineate what it is calling very extensive high-grade gold/silver vein systems at its Ivanhoe property in Nevada. The company says that 42 completed holes confirmed pervasive and extensive feeder vein systems to the overlying Hollister gold deposit, which currently has a resource estimated at 2.8 million contained ounces of gold and which is now interpreted as a near surface leakage
anomaly to an extensive, structurally controlled gold system below.
In the holes drilled to date, the company says that a total of 64 vein intersections were made. The grades of vein intercepts range from 0.21 ounces per tonne (oz/t) gold-equivalent to 5.77 oz/ton gold-equivalent, and include highlights of 10.6 ft grading 4.96 oz/t gold, 11.4 ft grading 2.94 oz/t gold, 4.3 ft grading 4.84 oz/t gold,
2.0 ft grading 1.86 oz/t gold, 3.8 ft grading 1.90 oz/t gold, 9.9 ft grading 1.07 oz/t gold, 2.9 ft grading 4.11 oz/t gold and 19.0 ft grading 2.51 oz/t gold. The latest results include highlights of 19.0 ft grading 2.66 oz/t gold-equivalent, 2.9 ft grading 4.22 oz/t gold-equivalent and 4.0 ft grading 0.94 oz/t gold-equivalent.
Great Basin reports that core drilling is outlining and extending multiple vein systems on the property that trend east-west and dip to the south, two of which, Clementine and Gwenivere, were reportedly confirmed over strike lengths of 1,400 ft and 1,000 ft, respectively. Gold/silver mineralisation was extended over 500 vertical ft by
drilling on several sections along the trends. The Clementine and Gwenivere vein systems remain wide open to depth and strike, and Great Basin says it anticipates significant extensions to both trends.

Black Blade (12/1/99; 2:12:12MDT - Msg ID:19975)
Some news for nickel62
Inco (N:TSE,ME) and the Government of Newfoundland appear to be close to a deal that would spur development of the Voisey's Bay nickel deposit, reported The Financial Post. The company was scheduled to meet with Brian Tobin's government Tuesday to hammer out an agreement so work could start on the project as early as June. Mr.Tobin reportedly hinted on Monday that Inco was ready to budge on the issue
of processing ore in the province, which has been the sore spot in negotiations surrounding the deal for over a year. An Inco spokesperson declined to comment about the talks and would not discuss whether the company is prepared to move from its position that building a smelter in Newfoundland was not economically viable, but did say that Inco remains hopeful and optimistic that it can 'get an agreement by the end of the year.' However on another note, the provincial minister for energy and mines, Roger Grimes, warns that although there are signs of progress, 'the government and Inco do not have a deal'. He adds that the government has not yet received a formal proposal from Inco. There was little information released on costs and development of the proposed plant, but analysts estimate five years and almost $2.0 billion.

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