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

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ARCHIVED DISCUSSION FROM 10/12/1999
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View Yesterday's Discussion.

Goldspoon (10/12/99; 23:49:40MDT - Msg ID:16217)
In 1hour and 30 minutes .......Platinum lift off!!! in Zurich
Platinum once again rallied hours before golds revival...
Platinum is already and pumped before nocking the door off of it's hinges going into Zurich...and Launched into a whale of a London fix....New York will be stunned....be there......when the warm up band (Platimum) turns the stage over to the Star of the Show.....Gold!!!

Strad Master (10/12/99; 23:48:43MDT - Msg ID:16216)
Questions for everyone - especially FOA
The "conventional wisdon" holds that gold will now languish around this level and eventually drop back into the high $200's with an eventual drop into the high $100's. It seems quite clear that the "conventional wisdom" is not all that wise. My first question, though, is this: If gold should rise to , say, $30,000 per oz as FOA predicts, how, at that time could one's gold holdings be unwound? For what? $30,000 in paper money? Or would the actual gold buillion become the only negotiable currency? If so, what good would a one oz.buillion coin be? It can't be cut apart into small pieces with a pair of garden shears. Beyond that, Goldbugs are notorious for holding onto their phsical holdings long past the time of maximum return. In fact, I'm sure that some older people who post at this forum have held gold through several (albeit relatively minor by comparison) upmoves in gold only to kick themselves for not having sold at or near the top.
Question two: I have a bit of physical gold and a much smaller portion of physical silver and even smaller still - platinum. Platinum is on the move up as is silver to a lesser extent. Is the consensus here that it is better to sell off platinum at some point soon to obtain more gold or is the diversification I describe likely to prove useful?
Question three: Is it not true that Mr. Greenspan and several other Fed personages are connected to Goldman Sacks in some way? That would seem to make the recent rise in the POG particularly troubling since their buddies are directly involved with the first wave of big losses. Comments?

For the information of anyone interested, I tried to post something here on Sunday night but it failed to go through. The "Test" that appeared today (yesterday?) was done in my name by USA Gold. What follows is the text of the posting I had attempted earlier:

ALL: I've recently started lurking here at USA Gold. Perhaps some of you will remember me as an old-time poster from the Kitco site. Finally, my dear friend and musical colleague, PH in LA (who lives just round the corner) got me visiting over here and I must say that the level of erudition with regard to gold and finances is truly awesome, especially when compared to the (now somewhat degraded) Kitco site. (Apologies to a selected few of my old buddies over there!) Despite the fact that the PM market practically bankrupted me (that's another story for another time) I did manage to get a nice little stash of physical PM's - mostly gold (bought around $308 in the summer of last year) with a bit of silver and platinum thrown in. It will be difficult for one like myself, who is a musician, to know the best moment to unwind those holdings but by frequenting here, maybe I'll have a better chance. I must say it is fascinating to read extraordinary postings such as the ones by FOA yesterday (Saturday), and compare them with the general market understanding of gold. I was speaking with one person today who said "Oh yeah, gold has gone up, but CNBC just reported that it was merely a 'dead cat bounce' and so I won't have anything to do with a preposterous investment like that." Old perceptions die hard, no? The complacency out there is truly staggering.
Anyway, I rarely have much time to post these days - minding three kids and all. Even as I finish this it will be time for logging off. Nevertheless, I just wanted to make my presence known and will try to post whenever I have something of interest to write. Best to all of you.
Strad

Hill Billy Mitchell (10/12/99; 23:42:00MDT - Msg ID:16215)
Journeyman
You are on to something? Your brain functions better than most.

Hill Billy Mitchell (10/12/99; 23:39:07MDT - Msg ID:16214)
RUMBLE
I think I'm catching a faint sound like a distant rumble in the night. Could it be thunder?

Journeyman (10/12/99; 23:38:53MDT - Msg ID:16213)
DOES THIS HOLD WATER?
There now seem to be indications (Tomcat Msg ID 16162, etc.) that SOMEONE is intervening to keep POG from an immediate moon shot. If I understand the situation as it has been presented here, the shorts are in a "tragedy of the commons" / "prisoner's dilemma" bind. ......................................... ................................................................. ...............One of the classic commons tragedy situations was grazing of cattle on the open range. The range had a limited grass capacity, but so long as all ranchers using the same range area showed judgment and restraint in how many cattle they grazed, things worked OK. But as soon as a few started increasing the number of cattle they had, the other ranchers did too, destroying the range completely for grazing in rather short order. As long as that 1st rancher didn't break ranks, things could be controlled. .................................................... ................................................................. ............... If the shorts all hold the line and don't try to cover by buying gold, etc., then they may prevent a further sudden run-up, maybe prevent some defaults, etc. Otherwise ................................................................. ..... ................................................................. ............... In the case of LTCM (Long Term Capital Management) Greenspan got grilled pretty thoroughly by Congress, and maintained that the Fed had provided only office space for a meeting and guidance, nothing more (no money, etc.). Combine that with Goldman Sachs agreeing to not pull the plug on Ashanti, and you have part of a possible strategy for the shorts and their allies, holding them together and perhaps inhibiting a panic buying spree. ................................... ................................................................. ............... OPEC might provide a model of the difficulties of such an attempt. But OPEC developed over decades, so it seems unlikely to me that gold shorters could develop even the cohesion of that oil producing cartel over just the last two weeks. ................................................................. ....... ................................................................. .............. How much influence would the FED have and could it even locate enough of the potential panic buyers and calm them? What about the rest of the world's shorts? How many would have to hold in order to prevent the "melt-up?" How many different organizations world-wide would have to be involved? What tracks would such an effort leave for 'us' to follow? ....................................... ................................................................. ............... FOA/Another would have anticipated the possibility of such a move wouldn't they? ................................................................. ...............Regards, Journeyman

Gandalf the White (10/12/99; 23:26:57MDT - Msg ID:16212)
Stop counting those coins -- Coin Guy!
Spot the dog is 322.10 at 1:25 NY time !
<;-)

CoinGuy (10/12/99; 23:17:16MDT - Msg ID:16211)
OOPS..
make that $319.50.

It's late, what can I say?

go spot go,

Coinguy

CoinGuy (10/12/99; 23:14:10MDT - Msg ID:16210)
Gold Power & Plat
Gold Power,
Thought you probably didn't see that small tribute to Skousen at the top. I've read your posts with great interest in the past, look forward to repeating same in the future.

Platinum is looking strong in overseas trading; trading up $25.50, looks like the yellow metal is gaining ground as well. Up 3.00 @ 19.50 bid.

So long and go long...

Coinguy

Gandalf the White (10/12/99; 23:07:41MDT - Msg ID:16209)
Keep Jumping SPOT --- HIGHER !
Spot at $321.30 at 1:06 NY time.
<;-)

Gold Power (10/12/99; 23:06:25MDT - Msg ID:16208)
Banks Selling Gold?
Ted Arnold and Others
On Monday, GATA distributed an article in which Ted Arnold said the central banks were selling enough gold to keep the price from spiking up further.

This seems ludicrous to me for if the banks know the price pressure is upward, then why would they sell their assets now?

Anyway, on Tuesday I was talking to a mining company in Toronto and the guy told me that he was privy to his company's dealings with the bank, and that the banks' European trader told him that the European banks were selling some gold to keep the price from soaring again.

I got no insinuation this guy had heard of Ted Arnold's article.

He went on to say that the European Bankers were flabbergasted at the forces they had unleashed. They didn't want the mining companies to all go out of business. So they were letting out enough gold to occasion a gradual climb in the gold price, not an explosion like we saw the past two weeks.

Now I don't vouch for the accuracy of this, it just held more credibility to me because of the T. Arnold article and the seemingly angry response to it from GATA.

I welcome comments on this. I'm trying to find out what's going on with gold myself.

Gold Power

Gandalf the White (10/12/99; 23:04:27MDT - Msg ID:16207)
Jump SPOT ! -- Jump!
Goldfly, did you not tie up the dogs? Looks as if Spot the Dog and Spike are doing their thing tonight! -- 1 AM in NY and the world's Goldhearts are restless.
GO GETUM Spot !!!!
<;-)

Gold Power (10/12/99; 22:58:54MDT - Msg ID:16206)
Holtzman & (Which Mines?)
Holtzman, there is a science to knowing which mines in the world should be able to produce gold profitably in the future. Such things as grade, depth of mineralization, geographic location -- and surrounding politics, management, etc. You don't have to go into a situation blind.

As for Bre-X, that never could have happened without us first having the big legitimate hit with Diamondfields (C$3.50 to C$140.00 in 11 months). This created such a mania that the entire industry became blinded by the fear of not catching the next "big one." Normally rational and expert mining analysts were completely overwhelmed by the story surrounding Bre-X.

If you recall, Placer Dome offered to merge with Bre-X, one share for one share.

That was the result of a mania worse than the one now taking place on Wall Street.

Back to mine investing, Town Crier wrote: "Reuters quoted one dealer "There are a lot of bad things to come out, especially if gold goes higher. If it went to $350 and held there, it would cause.... the same problems as Ashanti. If it goes to $400, it would bring more people in."

This has me moving more and more toward stocks of deposits with no current production. Mining companies I have talked with in the past week still see no chance of gold rising above $400 and staying there for the next two years. They think their spot-defered contracts will let them get out when the price comes back down.

Companies with a deposit and no production, have no hedge book. This is not a solicitation to buy, but you might check out GGFI:CDN, LYDX:CDN, LLL.M, MFL.T, KIT.T, and AZS.V . They fit the bill nicely.

Besides this, maybe we should stay with companies that have an announced policy of no hedging.

Gold Power

Reuters quoted one dealer "There are a lot of bad things to come out, especially if gold goes higher. If it went to $350 and held there, it would cause.... the same problems as Ashanti. If it goes to $400, it would bring more people in."

Hill Billy Mitchell (10/12/99; 22:45:30MDT - Msg ID:16205)
Platinum spot
Overseas = 432.50

Gold Power (10/12/99; 22:44:54MDT - Msg ID:16204)
Coinguy and Gary North
CoinGuy, from your 16163, I stand corrected. You are right, GN printed an article from someone else.

So my statement: "As it is, he's just taking a set of events, attributing motives to unnamed persons, and selling it to the public" was inaccurate and uncalled for.

No blood, no foul. I'll try to be more careful next time.

Gold Power

Goldspoon (10/12/99; 22:37:50MDT - Msg ID:16203)
FOA said.....Watch OIL!!!
The man said "watch oil".....
OIL indeed!!! i'm pullin Horse with No Name to the inside of the track so as not to get run over as you go by....
Ride as the Wind FOA!!!!

Black Blade (10/12/99; 22:04:01MDT - Msg ID:16202)
All, Leigh and Bonedaddy
last time I checked s&p futures down -9.80, could tomorrow be a continuation of the "October surprise"? The talking heads are saying "all is well". I think that alone should give one pause to think.

Leigh, platinum at $25.50. You don't supose that Kitco has gone haywire again do you? Did you see the near month lease rates on Platinum? WOW! Goldspoon.....Saddle up!

Bonedaddy, got ya! I had a girlfriend once from that general area...now I'm addicted to granola!

TEX (10/12/99; 22:00:18MDT - Msg ID:16201)
AEL - Link
Thanks for the link! So much so, I have set it up as the opening page on my browser. Just about everything I need to access once I warm my computer up to the net. Sorry I take so long to respond......I'm a late night owl and don't get on until after 10:00 pm MDT (yep, I am one of those "ugly Texans" living in Colorado).

Bonedaddy (10/12/99; 21:34:59MDT - Msg ID:16200)
Black Blade
Somewhere near N42 15' W105 30' Not terribly far from Big Sky Country. (pronghorn in the yard instead of mulies)
I said Montana because, when people mention hardware, we always try to divert attention to our better known neighbor to the north. None of that stuff around here. I had a handgun once, but it was evil and tried to get me to do bad things. So I turned it in at a buy back program. Now I just pick wildflowers and eat only organically grown vegetables. (But, If I did someday get a sporting rifle, a .257 would be very fine indeed!)

TownCrier (10/12/99; 21:10:30MDT - Msg ID:16199)
After the Close: the GOLDEN VIEW from The Tower
Well...it IS October. And things out there are getting pretty surreal. Bullion dealers are saying that due to industry-wide hedging practices, more gold producers will face serious financial problems as the price of gold rises. Reuters quoted one dealer "There are a lot of bad things to come out, especially if gold goes higher. If it went to $350 and held there, it would cause.... the same problems as Ashanti. If it goes to $400, it would bring more people in." So today we see stock and bond markets tank, a military coup occur in a nation with nuclear arms, oil surging, and gold finishes at the lower end of its recent trading range. Woof.

How did we get here? Here's a guess. US Treasury prices opened weaker this morning in sympathetic selling from the sell-off in european bonds. After the European Central Bank left rates unchanged at its meeting last Thursday, investors are beginning to fear the ECB will announce a tightening as soon as its next meeting on Oct 21. Bundesbank President Ernst Welteke recently commented on a favorable outlook for the euro zone, but that the ECB had to watch money supply and credit expansion.
+
Then following that start, morning reports that an army-led coup ousted Pakistani Prime Minister Nawaz Sharif, helped partially lift bonds and the dollar from their worst levels earlier in the day (in a flight to safety?), though the news added further insecurity to an already unsettled equity market.
+
There had been reports of a rift between the army and the civilian government in recent weeks, particularly after Pakistani Prime Minister Nawaz Sharif ordered militants to withdraw this summer from Indian territory in the Kargil region of Kashmir, ending a bitter 2-month border dispute that teetered on the edge of escalating into full-fledged war with nuclear rival India. The withdrawal allegedly did not have the support of military chief Pervez Musharaff who reportedly orchestrated the takeover of Indian territory in Kargil. Musharraf's term as army chief was set to expire April, 2000, but Sharif ordered him replaced by the head of the country's secret service (Gen. Zia Uddin) who was considered a close ally of Sharif's. Here was the progression of FWN headlines to summarize the events...
+
09:19:18 --Martial law imposed in Pakistan, official sources say
09:44:23 --Military sources say Pakistani PM Sharif under house arrest
09:56:15 --Govt sources say fired military chief now back in Pakistan
10:20:19 --Army surrounds Pakistani Punjab governor, premier's homes
10:41:23 --Eye-witnesses say shots fired in Pakistani capital Islamabad
11:08:02 --Officials: Pakistan's new army chief besieged by rival troops
11:25:42 --Govt sources say Pakistani troops surround President's House
12:20:07 --Pakistan's PM and government dismissed, state TV says
+
So why did gold close at the lower end of its trading range? Perhaps speculators thought a renewed threat against India might eventually lead to aggression that inhibits their future performance as the world's biggest gold buyer. Just grasping at straws...

The DOW steadily tanked (-231.12 (-2.17%)) throughout the day, as did the Nasdaq (-43.49 (-1.49%)). In New York Stock Exchange trading, declining issues beat advancers nearly 3 to 1 (Nasdaq loser beat advancers by 2 to 1), and new 52-week lows topped new highs 196 to 32 on the Big Board.

On their fresh return from a three-day weekend, the bond traders seemed to have had a change of heart over the implication of Friday's jobs report, and on top of the sell-off in European government bonds, the US 30-Yr Bond lost 14/32 in price to drive the yield to 6.226%.

In currencies, the dollar lost 0.47 yen, while the euro gained 0.74 yen, leading to a closing increase against the dollar of 1.16 cents.

All has not been smooth under the sudden onslaught of volume as speculators and "firefighters" place bets on the dirtections of gold's future price. In response to complaints from customers who were unable to get their gold option orders executed on the COMEX division, the New York Mercantile Exchange announced plans to spend several million dollars to revamp its COMEX futures and options order execution procedures.

In that same arena of trading gold derivatives, Bridge News reported that the US Commodity Futures Trading Commission is confident that Friday's Commitments of Traders report for gold futures is correct. The COT report surprised some market participants because it showed virtually no change in the overall speculative short position despite the huge rally in the gold price. The COT report covered the 2 weeks up to and including Oct 4, when COMEX Dec gold futures traded at $318.00 per ounce, up from $261.80 at the end of the previous reporting period on Sept 21. Market participants had expected the non-commercial total short position to have declined during the reporting period, assuming that short covering by these large speculators was what had fueled the massive rally. However, the gross short position decreased by a only 126 contracts during this runnup.

As we've beat the drum before, the pricing on these markets has more to do with the level of aggression of one side or the other than it has to do with volume traded or the presence of real gold. It would appear that given the central bank news, the buyers were simply much more urgent than the sellers were for these futures contracts. This comment by a trader would tend to confirm that notion: "Traders were stuck not knowing what to do, and they rushed to buy calls and held their shorts to see what would happen." The Bridge report ellaborates:
By purchasing call options to offset a pre-existing short futures
position, a trader would hold an essentially flat total position above the
options strike, while remaining short below the strike. This would be
accomplished for only the cost of the option premium.
Under this scenario, the net-short fund position in the futures ring
would have been hedged somewhat in the options ring; if true, today's
Commitments of Traders report for futures and options, due out after 1530
ET, will show a significantly shorter non-commercial position when
compared with the futures-only report.

For your own conclusions, here's that report, though the columns will shelled out after posting:
non-commercial . . . . . . . . . .Long . . . Change / / /\ Short . . . Change
long or short only_______59,567 -4,091 / / /\ 31,672 -9,396
long or short spread____150,927 37,950 / / /\ 150,927 37,950
commercial___________188,456 16,130 / / /\ 281,702 20,158
Total________________398,950 49,989 / / /\ 464,301 48,711
non-reportable position__113,657 -11,977 / / /\ 48,306 -10,699
Total open interest______512,607 38,012 / / /\ 512,607 38,012

While the contracts for December settled $2.1 lower on the day, spot prices were quoted down only $1.70 in NY at $316.50 to end the day. Gold lease rates remain above 4%...
1-month 4.0060%
2-month 4.1100%
3-month 4.7730%
6-month 4.7820%
12-mnth 4.6100%

Bridge Offered this review with comments by those in the trenches...
NY Precious Metals Review: Dec gold down $2.1 on dealer sales
By Tina Petersen, Bridge News
Washington--Oct 12--COMEX Dec gold settled down $2.1 at $318.2 per
ounce on late dealer sales amid choppy, technical trading conditions.
Dec gold vacillated throughout the day between $317 and $323. Gold
opened higher following overnight short covering, which brought Dec to a
high of $225.3 per ounce. Mid-morning local selling and profit-taking cut
those gains as traders said gold's failure to break through the overnight
highs spurred the sell off by the trade who were long at the opening.
Mid-session bank and dealer buying brought Dec back into positive
territory, but gold closed lower following light dealer sales just before
the close.

Traders said the selling was sparked after Dec broke through the $320
level in the afternoon.
One trader said the market continues range trading, "and part of that
is profit-taking." While most are bullish on the market, a trader said he
expected gold to trade within a $10 range "until someone has to make a
major move in their portfolio."

Dealers said technicals continue to drive gold's performance today, as
there is little in the way of fresh news. Gold has seen 3 straight days of
retracement following its powerful rally which started in late September,
and some believe the metal has seen enough of a pullback from its highs
and further upward progress may be attempted in the near term.

Traders said they continue to be bullish on the market and many expect
further short covering in the near term. "We should see a fair amount of
short covering yet to come through the market," said a trader. Traders
said gold remains caught in a range of $315-325 in very technical trading.
Support lies at $317-318 and resistance at $326-329.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
In our watch of gold futures delivery intentions, in what apeeared as a carbon copy of yesterday, another 2 contracts were called for physical settlement to bring the October delivery intention total to 2,508 contracts. October futures open interest fell yesterday by 2 contracts to 111, December open interest rose by 1616 to 119,266, and total open interest in COMEX gold futures increased by 4316 to 217,344.

COMEX Registered gold inventory was drawn down by small withdrawals from both depositories totalling 1,809 ounce, leaving 832,424 oz of Registered stock and 86,404 oz Eligible inventory.

Blurring our lines between gold news and oil news, the Iranian government has decided to expand its economic opportunities by opening its mining and metal industries to foreign investors, including from the US. Deputy minister for mines and metals Mohammad Javad Assemi-Pur stressed that US firms were among those invited to Tehran to take part in an international conference on Oct 19 and 20 aimed at attracting investment in Iran's mining industry. Assemi-Pur was reported by FWN to say at a press conference, "We want to replace oil little by little because Iran is extremely rich in minerals." He said 4 contracts would be signed at the end of the conference, including 2 for gold-mining with South African interests.
+
For several years Iran has been seeking foreign investment and aid to exploit its mineral wealth, with the aim of boosting exports and countering a fall in revenue from oil. Last year administrative formalities governing mineral exports were abolished, including the prior authorization required from the mines and metals ministry. Assemi-Pur said "We want to reassure our foreign partners that there is security for investment in Iran," adding, "Foreigners can invest in Iran up to 100%, but we prefer them to establish joint ventures with Iranian firms." Representatives of 67 foreign companies, mainly from European countries like Britain, France and Germany, are expected to attend.
+
FWN reports that Iran currently earns 85% of its foreign currency from oil, ranking third highest in the world with proven reserves at 90 billion barrels. Iran is currently the second highest producer among OPEC, with output of 3.7 million barrels a day.
+
On the political side, Washington accuses Tehran of sponsoring terrorism and has therefore banned trade and investment deals with Iran. However, D.C. is under great pressure from US companiesto ease these sanctions, particularly US oil firms concerned at seeing lucrative drilling contracts going to rivals in Europe. In a foreshadowing of the likely policy direction, the United States has recently eased the restrictions on giant US food companies trading with Iran.

Stepping more fully into oil news, NYMEX energy futures rose sharply reportedly in short covering and new fund buying ahead of the release of American Petroleum Institute data, which were expected to show a drop in crude stockpiles of 1.5-2.0 million barrels last week. November crude futures settled up $1.03 at $22.30. After the markets closed, traders were floored by the data...

15:38:27 --API: US crude stocks down 7.139 mln barrels in latest week

As a result, NYMEX energy futures surged an additional 62c in overnight Access trade. One broker said, "There's nothing but buying on Access after these supportive numbers. These numbers look so good that they are almost hard to believe, so we will be waiting to see on Thursday if the DOEs will confirm this large crude (stockpile) drop." Normally the Dept of Energy data would be available Wednesday, but the Columbus Day holiday has pushed the release of that data back a day.

The horses are on the track...it's October, Y2K is growing nearer, the Stock market is running low on momentum, oil is finding new footing (with a Bloomberg report saying the current price, when adjusted for inflation, is at values that predate the first oil crisis price shocks of 1973), the dollar is slipping against other currencies, and premiums charged on gold are rising. What other things will we find to go bump in the night in addition to our collection of Horsemen?

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

YGM (10/12/99; 21:02:06MDT - Msg ID:16198)
Aragorn
Yes point made and taken. Just thinking aloud again. Thanks for reminder.----YGM

Canuck (10/12/99; 20:59:14MDT - Msg ID:16197)
pdf. paper
Phos,

Thanks for link, will have to re-read, 3 months ago it seemed to be hysteria. After reading Gary North today I
wonder what is up the CB shirt sleeve. I still don't follow
the BOE 'announced' sale in May. 'We're selling, we're selling, we're selling ... Sept.26, we're not selling.'
Is it the intention to screw the 'majors', take them over and run the gold in the ground. We know they want and do run the gold above ground. If I read the 'pdf' document correctly the first time the intention is for CB's to control ALL gold (above and below ground) and squash this gold thing once and for all.

USAGOLD,

Please thank your e-mailer.

canamami,

If you have the chance try to scan the doc. Personally, I don't understand the gold business at all. One day I'm super-bullish (ie this am. bought $2,000 in a junior), the next day I'm thinking the CB's have more power than all other collective souls and their wishes will be the outcome.
Does the positive sentiment outweigh the other? Have the CB's or whatever the collective negative forces 'allowed'
gold to reach 325? The 'forces' brought the POG down to 250,
co-incidentally just above production cost, to scare mines to 'hedge/forward sell' themselves into their own graves. The CB's then for reasons that certainly I do not understand
reverse (on a dime) their gold policies. The supply/demand thing is not running the POG at this juncture. I'm waiting until the Comex contract closure (I think Oct.27?) to pass judgement. If a) we get a high PPI/CPI in the next week and
b) if we get Comex hysteria in the next 2 weeks and gold does not respond then I will be quite convinced that CB intervention is still at play and we may not see $600+ gold.
On the other side of the golden coin is that the pdf. document alludes to my theoretical dissention of gold and I would be playing right into their hands.

How do you like that, bearish to bullish in one minute, fickle or what?

FOA (10/12/99; 20:58:20MDT - Msg ID:16196)
OIL
NEW YORK ( CBS.MW ) -- Oil futures on Wednesday are poised to rally for a second straight day after the latest inventory data revealed a drop in crude oil supplies more than three times market expectations, restoring market watchers' faith in OPEC's promises to control supplies.

"This is going to be a shocker!" exclaimed
Phil Flynn, vice president and senior
market analyst at Alaron.com.

The data on crude oil will "catch
everybody off guard" and make investors
think the recent selloff was probably
overdone," Flynn said. The market
appears to have hit its low and could test
the highs. On Sept. 29, the November
contract hit an intraday high of $25.12 a
barrel, only to plunge to a low of $20.55
only nine days later.

After the markets closed on Tuesday, the
American Petroleum Institute reported a
7.14 million barrel decline in crude oil
inventories. Analysts had expected
supplies to fall less than a third of that
figure, with estimates averaging around a
drop between 1.5 million to 2 million
barrels for the week ended Oct. 8.
Supplies now total 298.9 million.

"So where's all this cheating by OPEC?" asked Flynn. The enormous drop in crude oil supplies could renew the market's confidence in OPEC's attempts to keep a cap on global oil production levels, after weaker-than-expected compliance last month, shook investors' faith.

Ahead of the news on the New York Mercantile Exchange, November crude gained $1.03 cents to $23.30 a barrel by the close. As soon as the API data was released, however, November crude exploded, jumping 50 cents in overnight trading.

FOA (10/12/99; 20:32:26MDT - Msg ID:16195)
My turn to Comment!
canamami (10/12/99; 16:18:35MDT - Msg ID:16174)
Bad Day for POG Anyone care to speculate as to why?

Hello Canamami,
Yes, I'll have a word. But first to all.
I found an old Another post(see below)written for him in Dec. 1997. In it he described what may be about to happen today or perhaps during tomorrow's tomorrow. Surely it is a council given to high profile people of means. Entities that can't turn on a dime what it took a lifetime to build. Yet, even us regular people must walk the same road of reason.

My purpose for showing it was to point out the longevity of gold and how it transports wealth better than paper. Anyone that purchased bullion around the $360 or $370 range at the time that post was written, is only down some $30 to $40 and is currently in an atmosphere that may even erase those loses. Yet during this past time span, gold options, futures and leveraged contracts savaged an investor's account. In addition, most all mine shares were crushed and some disappeared all together. Ironically, some mine shares may now suffer if gold does rise. Insult heaped upon misery?

All the while, a bullion holder was in total control, never waiting for the annual report or the unsettling news. Truly, they were holding an asset that could "run like the wind blows" when the storm clouds gather. With a full understanding of gold money dynamics, they were all the while expecting a greater real return with less risk. You see, for most conservative investors and portfolio hedgers, gold only needs to make one real run in a lifetime. Indeed, in some crisis circumstances, even running in place will win the race and be more than one could ask for! Gold works, because the history of paper money has shown that the timeline of every "extended family" suffers through at
least one such world crisis. During these times wealth holdings of most every other asset is lost or impacted beyond one's years to repair!

Today, I believe we stand right at the edge of one of those moves. A gold move that will more than justify ten, twenty or thirty years of bullion accumulation. Unfortunately, most Western minds will not or cannot imagine gold ever running so far, so fast. So they grasp for leverage in every form of gold paper, even extending that reach into Platinum and Silver. I, and a few others of "Western mind" now fully see this storm and anticipate it's unruly effects on all asset classes.

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

Canamami
If we look at the last few days, Dec. gold trading during comex hours has bottomed right at $318:
Low
10/12 $318.00
10/11 $318.20
10/08 $318.00

It has done this as oil has crashed from liquidation of paper traders. Yet, gold does not fall as it should. It doesn't fall because the supply of crude is being cut further and the oil futures are about to reverse this drop. This is a public statement that goes far beyond OPEC considerations. It points to a transition of economic structure such as we have never seen. The risks to world wealth that this change will bring will now drive major portfolio adjustments.

I think massive physical gold buying has arrived in the form of "full allocation" demands from all gold depositors and lenders. Those demands will now fracture our modern gold markets. Be they from Hong Kong, The Middle East or Europe, these present bullion holders are buying more gold by recalling their paper derivatives. Truly, a gold run of world class proportions laid upon the steps of a failing price fixing arena. These demands constitute the "exercise of a corner" on gold that has long been in place.

This demand will now not only make an end run around the carry trade, it will gun the price so fast that most all "working gold contracts" without "official guarantees", will fall into negotiations and litigation. This corner will crack the markets because the ECU/BIS has said "make it so". These effects will now be seen in our entire financial structure.

Is this a good viewpoint to hold? We shall see!

So today was a good day for gold, if you are a bullion holder, that is. A good day, indeed!

thank you FOA

Date: Sun Dec 07 1997 18:45
ANOTHER (THOUGHTS!) ID#60253:
Will we have "Deja-vu" again?

Some people have followed the gold market from 1970. Some have followed it all their lives, depending on when you were born. Some say they were right, as the market has fallen and they held "no gold". They council from experience and a short life.
But, some have traded gold from times before. Those who trade with the sun know we will never have "Deja-Vu" again. This market is unlike anything from the past. And those with a "short life" of investing will learn from this coming future as gold will show their knowledge was limited to where they stood on the mountain!
Unlike the past, this market has an end. And this end will not be for those who have waited to buy! They see this bottom at $100 or $200 or $250, and they will buy at the turn as no fool should have held from $360! But, I say they will buy only paper if lucky!
All should make ready and be holding metal only, as the turn will move $100+ the first day and $200 the second day as comex is closed! It will trade no more from the 3rd day on! The gold market of your youth will be no more! For those who were smart from experience not to buy at
$400, will look at $600 as "the deal of a lifetime".

To close,
Try to live in this outcome and see how different the world will be. It will not be the end of all things, only the changing of most things in "western thought". The "Digital Currencies" will still trade, but we will value them as not before. Anyone who has sold gold they do not have will not be allowed to cover that position. Anyone who has brought gold they do not have will not be allowed to cover that position. Many will lose all they have in a world without honor! Looking back , one will ask, "how could I have thought that noone wanted gold, when more of it was being brought than existed"?
Indeed, more gold than exists or will be produced in the next ten years! And some say, "only a fool would say the market was cornered". During that time, a gold stock in the hand will not trade on an open market! And the government of the country, of the land, of the mine, will no doubt speak with you of new taxes on GOLD!
A year has passed as the winds of change have started to blow. Waste no more time on paper gold, you have suffered enough. Play paper games no more, as the future of your family waits a decision.

elevator guy (10/12/99; 20:26:00MDT - Msg ID:16194)
@canamami
Have a nice trip, and keep your chin up!

Gold will have its day!

Leigh (10/12/99; 20:21:58MDT - Msg ID:16193)
Goldspoon
Goldspoon, quick! The Kitco chart is saying that platinum is up $25.50!! No kidding!

megatron (10/12/99; 20:06:56MDT - Msg ID:16192)
anyone.
The problem is this. If gold hits $500 how could one bleed it off for Sw.Frncz without an observable capital gain? Very serious.

megatron (10/12/99; 20:00:31MDT - Msg ID:16191)
alchemist
Just missed you! 2 big local dealers, not Benny Lee, told me they need picture ID and then it is sent to the RCMP, every day! And forwarded/filed for god knows who! I absolutely refuse to do this. Can anyone make a sugestion?

canamami (10/12/99; 19:56:04MDT - Msg ID:16190)
Various Replies
Canuck, I see some other posters have already replied, and provided you with a copy of the document. I never had the opportunity to read it closely.

I'd also like to thank Aragorn III and PH in LA for having responded to my earlier posts.

I now have to take a posting holiday for the rest of the month. A prosperous rest of the month to MK, TCrier, all the Knights and denizens of the Forum, and all goldbugs in general.

megatron (10/12/99; 19:55:34MDT - Msg ID:16189)
alchemist
Hey dude! What happened to ya? I hope your still around. I really need that info about PM buyers that don't take ID when they buy from YOU. thanx.

Alchemist (10/12/99; 19:54:44MDT - Msg ID:16188)
Megatron
Last time I sold I don't remember about I.D.; too long ago to remember. I have only been buying the last number of years

Chris Powell (10/12/99; 19:54:12MDT - Msg ID:16187)
Writing to Congress made easy
9:30p EDT Tuesday, October 19, 1999

Dear Friend of GATA and Gold:

If you're a U.S. resident and are willing to
join the campaign against further
manipulation of the gold and stock markets by
the U.S. Federal Reserve and U.S. Treasury
Department, please adapt the letter posted
at...

http://www.egroups.com/group/gata/251.html?

... and then send it to your U.S.
representative and U.S. senators.

You can identify your congressmen by typing
your ZIP code into a form at the Project Vote
Smart site on the Internet. Just close up any
spaces below:

http://www.vote-smart.org/ce/congresstrack/c_index/c_index.phtml?category=Congress&titlehead=Current+Members+of+Congress&checking=

Or you should be able to find their names and
addresses in your local telephone directory.

Give their offices a week or so to respond to
your letter or email and then don't be shy
about following up with phone calls to their
offices in Washington or back home.

We have to let the government know that we're
watching and want answers.

Please post this as seems useful.

CHRIS POWELL, Secretary
Gold Anti-Trust Action Committee Inc.

-END-

USAGOLD (10/12/99; 19:49:10MDT - Msg ID:16186)
Cannuck....
One of our lurkers forwarded me a document for you. Please e-mail me and I'll send it to you.

SteveH (10/12/99; 19:42:48MDT - Msg ID:16185)
TownCrier
Your question. No I have no proof, but pass it through as it was an interesting comment. I do have this from ORO, though:

It may interest you to peek at this report, Table 3.13 and note the loss of foreign gold deposits in the Fed's custody.
http://www.bog.frb.fed.us/releases/bulletin/pagea51.pdf
End of 95, 277 M oz
96, 265 M oz
97, 255 M oz
98, 245 M oz
May 99, 245 M oz
There was a 1000 tonne drawdown during this period. Some 300 tonnes per year supplied to the markets? repatriated?

Phos (10/12/99; 19:33:10MDT - Msg ID:16184)
@Canuck - Fed Reserve Gold Paper
The paper you are looking for is at:
http://www.federalreserve.gov/pubs/ifdp/1997/582/ifdp582.pdf

megatron (10/12/99; 19:11:10MDT - Msg ID:16183)
alchemist
Hey thanx for the info!! But I guess I worded my question ambiguously. I meant to say when They BUY from YOU. Please reply soon. Thank you!!

Alchemist (10/12/99; 19:06:21MDT - Msg ID:16182)
Vancouver Dealer Megatron
Try Benny Lee on Hastings street. They haven;t asked for ID when I purchase Maple Leafs

megatron (10/12/99; 18:44:16MDT - Msg ID:16181)
Viper
As you may have observed, many strange things happen in the world of gold, and lately wild swings are one of them. Today's drop was caused by Hillary Clinton shorting contract's to buy playoff tickets to the Yankee's.
All seriousness aside, can anyone tell me of a metals dealer in the Vancouver area who does NOT ask for picture ID when buying gold or silver? Thanx.

Canuck (10/12/99; 18:24:58MDT - Msg ID:16180)
canamami and all
Does anyone recall the 58 page report,(about 3 or 4 months ago) I'm trying to remember, it was in pdf. format, I think from a high US government department outlining the CB intent to control the POG, bankrupt mines and then take over all physical gold.

I seem to recall many posts scoffing at the report and today
Gary North's site/link depicts a possible similiar scenario.

Thoughts?

PH in LA (10/12/99; 18:07:53MDT - Msg ID:16179)
Reply to a Reply
Canamami:
Thanks for your prompt reply. Granted, if you assume that the return to a gold standard would take place more or less in the same environment that we find around us now, there would be many dislocations. However, if the maintanence of this present environment is not assumed to be included in the "return to a gold standard" there could be plenty of gold to go around, merely by adjusting the price (which could easily be allowed to be defined even by the market place. Since you mention Another/FOA, I believe they have spoken of severe restrictions that would probably be put on mines since the privilege of digging "money" out of the ground (or thin air) has long been reserved to government. This could be accomplished in many ways, including windfall profits taxes, outright confiscation (nationalization) of mines and/or a myriad of other ruses and tactics that could be invented as the need arises.

As far as "having been tried before" goes; a return to a gold standard would find many more supporters after a crash of the greatest stock market bull run in history, the seizure of the gold market, a severe Y2K experience, a repudiation of the world reserve currency and a hyper-inflationary depression than it does now.

Viper (10/12/99; 17:55:25MDT - Msg ID:16178)
Hello
I have been reading this forum for a couple weeks. I find it very interesting. After what seemed like a
L * O * N * G wait, they finally sent me a password to allow me to post. I will begin by asking, What in the world happened with Gold today? Started out pretty good, only to settle down again today.
Thoughts & opinions appreciated.
Viper

canamami (10/12/99; 17:25:56MDT - Msg ID:16177)
Reply to PH in LA
PH in LA,

Assuming arguendo that the POG went to $U.S.30,000 an ounce. Would the cost of "production inputs" increase correspondingly? Probably not. Hence, the excessive valuation of gold would lead to excessive production, creating inflation, just as the influx of excessive gold into Spain in the 16th century led to inflation. Attempts to go back onto the gold standard have failed in the past (e.g., after WWI) when the "peg" was inappropriate. It is doubtful that such an effort now, after 25 years off a gold standard, would be successful. My understanding, however, is that FOA/Another are proposing a different use for gold - i.e, the use of gold reserves to lend credibility and discipline to a digital currency. I stand to be corrected if I'm wrong re FOA/Another's theories. Such a modified use for gold, or perhaps the other alternative of using gold clauses to provide indirect discipline, could work because getting the "peg" right is not as important as in the traditional gold standard.

PH in LA (10/12/99; 17:09:39MDT - Msg ID:16176)
Gold: Putting a Price on Its Head
"Thus, there is not enough gold to match outstanding dollars, pounds, etc., at a reasonable and usable price or exchange level." CANAMAMI (10/12/99; 16:18:35MDT - Msg ID:16174)

This familiar misconception carries its only morsel of truth in the words "reasonable and usable". For certainly, gold can be divided until its measure is counted in grains, and the numerical concept of value can be denominated in whatever numbers chosen. The truth of this is apparent the moment one steps out of the box of conventional thinking and realizes that there need be no upward limit placed on the value of gold whatsoever. Only if Sir Canamami feels bound by the number of digits on his calculator can any measure be given to "reasonable and usable". Any other limits one places on the value of gold versus fiat can be solved by simple arithmetic. There is plenty of gold on our fair planet, both above and below the ground to serve as real money. It only depends on the price placed on its head.

Jack (10/12/99; 16:21:22MDT - Msg ID:16175)
How Long?
What I wonder is... How long will the US Treasury, CBs and other institutional gold hoarders give away their gold at these prices?

It's just not like them.

God they must be in a royal fix! It must cause them PHYCICAL pain to let mere people, (Asians, Americans, Europeans) get such a good deal.

I feel a little sorry for them, knowing how much they LOVE their precious gold, and to have to watch as the demand for hard, phycical, shiny, heavy, real, permanantly elegant gold demand skyrocket, and their treasured reserves walk out the door and go bye bye FOREVER at $319/oz! What conflict they're in!

Went and bought 30 Eagles today (took a while to find a dealer that had some) and I couldn't believe how cheap they were. Only $337 ea. YES!

Picked up a thousand $ face silver US coins too. Had to lug all that REAL money out to the car. Whew!

The dealer's store was packed! Says he's been swamped!

Well, just another great day, nearer the end of the century, USA.

canamami (10/12/99; 16:18:35MDT - Msg ID:16174)
Bad Day for POG & Reply to Aragorn III
Today: The Dow took a major hit on inflation concerns, crude oil futures were up substantially, the yen rose against the dollar, which fell against most currencies, all the other PM's were up....yet...the POG gets smacked around like a speed-bag at the close of the day, landing seven dollars off its high. Anyone care to speculate as to why?

Aragorn III, I was referring to the traditional definition of the gold standard - i.e., x dollars per ounce of gold. The world has not been on a gold standard for over 25 years, and thus there has been a correlative decline in the increase of supply. Thus, there is not enough gold to match outstanding dollars, pounds, etc., at a reasonable and usable price or exchange level. That's why I looked to encouraging the use of gold clauses, and the encouragement of government to mint sufficient gold coins so that the use of such clauses would be viable. For example, if all long-term government contracts contained a gold clause, there would be a palpable incentive for the government to act to suppress inflation, lest the other party to the agreement make demand for payment in gold coin of the same quality and fineness that existed at the time of the contract. This way, gold could indirectly act to suppress inflation in the manner it did directly under the gold standard.

Reply to your second point: Sentiment is important to the POG, and gold's role. If enough people are convinced the POG will go down, and act on that belief, the POG will go down. So too, if everyone decided tomorrow that gold were worthless as money, it would be worthless as money. It is because gold possesses certain characteristics that it has been and continues to be viewed as store of value and also, to an extent, a unit of exchange. A useful albeit imperfect analogy: Think of Rand's secular parable about the 20th Century Motor Company. It wasn't the mere company mark that made the motors valuable (as the Starnes heirs thought), but the useful characteristics the motors possessed. When the motors were poorly manufactured under the Starnes' heirs' socialism, they couldn't give the motors away. Let us use a hypothetical: If mountains of cheaply mined pure gold were discovered tomorrow, such that supply was so great that any scarcity value or use for gold were wiped out, gold would be worthless.

TownCrier (10/12/99; 15:36:23MDT - Msg ID:16173)
Sir SteveH, you re-posted a comment by Golden Sails who claimed...
"The US Fed has been buying gold hand over fist -- not to mention the Japanese who are holding all that US paper --with the purpose of lending support to the dollar."

Can this claim be substantiated?

For example, here are the latest figures on U.S. Reserve assets (up $187 million) released by the Treasury Department. This 8,000+ tonnes of gold have not changed materially for ages.

Oct 8 Oct 1 (Week ending)
_____________________________________
73,226 73,039 Total U.S. reserve assets (values expressed in millions of $)
=====================================
11,046 11,046 Gold stock (Note: gold stock valued at $42.22 per troy ounce)
10,250 10,284 Special drawing rights
16,000 15,857 Exchange Stabilization Fund
16,003 15,860 Fed open market account
19,927 19,993 Reserve position with the IMF

The Fed's own books are yet another story, but like I said, some substantiation of the claim would be nice to see if available. If Golden Sails offers something, please be sure to keep us informed. Thanks for your continuing efforts, Sir SteveH.

Scrappy (10/12/99; 15:24:03MDT - Msg ID:16172)
Thank you, M. Holtzman
From a little guy, thank you for a voice of calm in all this raging sea of overthinking and zealousness.

USAGOLD (10/12/99; 15:10:47MDT - Msg ID:16171)
Holtzman's Latest....
Holtzman here,

Hello, Gold Power. I'm pleased to find someone else who feels that not all gold mining stocks are doomed. Inasmuch as owning different classes of assets tends to make one's portfolio safer, I find myself hoping that you and I are correct.

Having said that, there remains the nightmare of wondering if you've successfully identified and acquired the mining stocks which will survive, and successfully identified and avoided the stocks which will collapse. True, come what may economically, a million ounces of proven reserve in the ground will remain a million ounces of proven reserve in the ground.

But several things may conspire to deny you possession of that future value. Stockholders are generally last in line when creditors begin demanding their money. Banks as creditors tend to foreclose on assets with no inclination to sell them for any more than the banks themselves are owed. Governments haven't abandoned their penchant for acting capriciously, taking what they can lay hands on. There's most likely at least one more Bre-X out there in some other guise, its creators stringing everyone along until the last possible minute.

And never forget that well-intentioned but inept managers are a highly efficient destroyer of stockholder value (my sympathies DD, that story you told in (10/08/99; 12:10:47MDT - Msg ID:15866) is frightening close to a bad memory in my own past).

Still, even with those risks, I cannot completely abandon mining stocks as an asset class to be owned. I own more physical than I own shares, and I own more fiat currency than both of the others combined.

Although I'm quite confident at least one of those asset classes is going to become worthless faster than I can abandon it, I cannot say with the slightest confidence WHICH class it will be.

To my mind, it is no less likely that, come *500 POG, mining production will come out of the woodwork and double the above ground supply in even fewer than the 30 years it took to most recently double.

Yet, if FOA and Another are right, remaining entirely in mining stocks is just as dangerous as remaining entirely in physical or entirely in dollars. To illustrate:

--------------
Welcome to 1491
--------------

I'm an Aztec citizen, and I have a significant portion of my wealth invested as a 1/25th stake in my nation's largest privately held gold mine (Holtzman will quickly admit to having no notion of whether Aztec mines were private or national during this period, but play along with me for a moment).

It's become increasingly apparent that my nation is tearing the heart out of its relations with neighbouring states. Seeing as how my mine is near the border, should this risky policy continue, it may place a cap on the capital gain I expect I'll be able to demand when someday I sell my domestic mining shares.

Not wanting to keep all of my eggs in one basket, I've diversified my investments by becoming a 1/17th owner of a distant international stock, the largest privately held silver mine in the Inca Empire. I've even bought (at an incredible bargain) a 1/4th stake in a long-abandoned mine in the former Mayan Empire. Worst case scenario, I can move down there and mine the site myself.

Barely a year on, my carefully selected investments have become vulnerable in a way I never imagined. But even when I begin hearing about marauding bands of Christian extremists raping and burning everything in their path, still I think that my civilisation can hold against them.

Several months later, the Christians discover the gold mine to which I claim 1/25th ownership. Do the heathens consult me for purchasing rights, even at a "distressed" price? Not a word of it. They simply seize the hole in the ground, post guards with odd sticks which throw invisible arrows, and my investment isn't mine anymore.

Ah, but I still have my other stock investment safely tucked away at high altitude in the Andes. The Christians probably haven't even heard of the Inca anyway: they're approaching from the East after all.

Barely two months later, I receive a message from the Inca mine's CEO: "Does the name Pizarro mean anything to you?" The next day, I realise my bargain investment in the Mayan jungle was, from its inception, a pyramid scheme.

Depressed beyond all hope, I volunteer to be a sacrificial victim in my religion's last-ditch effort to bring our gods to bear against the invaders. As I tumble down the temple stairs following the ceremony, I catch sight of the man who sold those stock certificates to me, running towards the city limits lugging a large purse full of something heavy. Sigh. I just don't have the heart to chase after him.

--------------
Look before leaping
--------------

This message is for Granny, and for anyone else reading here who feels dollar overweighted and gold underweighted.

Numismatic gold coins (including pre-1933 U.S. issues) should be bought for a different set of reasons than bullion gold coins such as modern U.S. gold Eagles. They are dramatically different assets which rise and fall somewhat independently of one another. Both can be excellent investments, but the knowledge needed to profit from the one is different from that of the other.

I would recommend that you buy gold only from reputable dealers, seeking out a dealer who takes the time to help you identify your investment goals.

I would also strongly recommend that you NOT go entirely into gold, or entirely into gold mining shares, or entirely into euros, or entirely into stocks, or stay entirely in dollars. Have some of many things.

But most importantly, make your transitions from market to market based on calm consideration, not knee-jerk "I've got to do this quickly else I'll miss it" reactions. Please heed this advice: on the one very unpleasant occasion I mentioned above to DD, I lost more dollars than you own, precisely because I leapt without looking.

Humour me for a brief moment: point your browser to http://www.usagold.com/cpmforum/archives/1619997/default.html and then Find the word Lynch. Please read that paragraph and the next dozen or so before you act, and my best wishes on your balanced and safe financial future.

--------------
Downs and Ups
--------------

One additional thought to everyone here: don't panic. Gold took two decades to drop from $800+ to $250+, and it did not get there by anything approaching a straight line. So while the past few weeks have been simply brilliant, it is by no means going to be gentle sailing during the coming two decades. Rumours of pending massive POG drops are the result of a very real expectation: the ECB & Friends' announcement dealt a painful wound to the gold bear's rear leg, but the bear is by no means going to roll over and submit.

Whiners such as Andy Smith aside, there are significant vested interests who still wield enough resources to throw good money after bad in attempts to force POG back under various psychological (and paper-triggering) barriers. While I was impressed at POG's first managing to hold above $300 then rebound from $299 to close the first week at $304, don't believe for a minute that the bears have given up.

Especially since the United States Government has every reason in the world to prevent its dollar from plummeting in value in the footsteps of Indonesia's rupiah (or even giving the slightest appearance that it might). And the time to try stopping such a trend is in its beginning, before it can build momentum.

We may yet see a rocket down below $280 on Spot POG, much like an upside-down version of the initial leap towards $330. The bears may even be able to hold it down there for a time. Whether the Street POG (Krugerrand) follows Spot at that stage is anybody's guess at the moment.

So far, though, the various reported futures POGs, Spot POG, and Street POG have remained relatively in proportion to one another. There have been moments of slight backwardation, and many dealers now purchase Krugerrands at a few dollars above Spot. These are noticeable but not overly dramatic differences from months past. Until and unless the various POGs strongly diverge from one another in public, the system as a whole will be seen as maintaining an orderly (if volatile) outside appearance.

And yet, Another's $10 POG may have already come to pass in the various panic unwindings which have occurred (and which are quite likely to carry on occurring). The German citizen who held a 100 deutschmark bill in his hands in 1920 watched that note devalue to nearly nothing within three years, but at no point did it become Less than nothing.

By contrast, various derivative and margin investments are perfectly capable of first losing all of their original investment value then worsening into a debt against the unfortunate investor. In such instances, a man who placed $256 per ounce on a paper gold bet may be grateful for the chance to sell his paper at Positive $10 per ounce, considering that the alternative (holding and praying) might result in it quickly becoming a Debt of Negative $50 per ounce. Such a transaction would hardly be reported to the public as a $10 POG sale, but a rose by any other name can still make one bleed.

Those of you who have been buying and holding physical gold patiently should not suddenly change your plans as the storm rages outside your doors. Those of you who are wondering when to jump in should first seek the advice of someone like Michael who's navigating that storm on a moment by moment basis. But all of you in both camps should not panic and make sudden moves in either direction. On that path lies danger.

Survey the situation as it applies to your world, plan a strategy which benefits you, and only then act on that plan.

Yours,
I.V. Holtzman

Scrappy (10/12/99; 14:41:54MDT - Msg ID:16170)
Thanks for the education; some asks
Living at the bottom of the pile-single mom, two kids, no welfare or child support. Kids now in college. Looking for ways to help through college if things continue 'as is'. also looking for ways to survive if the 'worst' occurs. Have a very small egg. Questions. Should I put it all into physical metals? Should I put it all into herbs and food? Quarters and dimes? Egg was a surprise. Am now at sea-have sudden hope and no experience and it's the eve of 2000. Practical advice, please, if you care to.

Mr Gresham (10/12/99; 14:20:39MDT - Msg ID:16169)
G's Law, Applied
Thank you, Journeyman. It is so hard to keep up with everything that is written about one over many centuries, esp. if one must push aside the (genuine copper) pennies from one's eyes to do so.

And so -- Phos, AEL, ET, HillBilly -- what happens when the "paper" dollar market separates from the digital dollar?

We use the term "paper" loosely here, especially as colored by the paper gold markets. But gold IS a physical element. The Crane Co. paper printed on by USTsy is as "physical" as the "dollar" does get.

What happens when people with dollars decide to "get physical"? Yes, OK. And then what? Hmmm-hmmm, and after AG does that, THEN what? Not as before, indeed.

arlen (10/12/99; 14:00:02MDT - Msg ID:16168)
"THE CRASH OF 1999...1929 Revisited & Magnified"
http://www.angelfire.com/ok3/oz/index.html
This is a prediction, a forcast, a augery and an intro into
a UNIQUE body of research work available only from the
author. It is UNCENSORED and entitled:

"MILLENNIUM FINANCIAL FORCASTING"
-------------------------------

visit the link plus the following
website:
http://www.viettexas.com/myhome/OZ.html

arlen (10/12/99; 13:52:24MDT - Msg ID:16167)
"THE CRASH OF 1999...1929 Revisited & Magnified"
http://www.angelfire.com/ok3/oz/index.html
This is a prdiction, a forcast, a augery and an intro into
a UNIQUE body of research work available only from the
author. It is UNCENSORED and entitled:

"MILLENNIUM FINANCIAL FORCASTING"
-------------------------------

visit the link plus the following
website:
http://www.viettexas.com/myhome/OZ.html

Journeyman (10/12/99; 13:39:42MDT - Msg ID:16166)
GRESHAM'S LAW IN CONTEXT (TownCrier @ MID#16156, etc.)
"Gresham's Law," as normally stated only operates when so-called "legal tender laws" are enforced. Otherwise the inverse happens, that is, good money drives out the bad: .............................................. "If the paper is the least bit shakey, which do you think will be tendered when there are legal tender laws, paper or gold? If you've ever gotten a check you thought might bounce, what do you do? Obviously basic strategy is to always keep the gold and always trade the paper --- and as soon as possible. If there was a "legal bread law," you can be sure you'd always get stale bread at the store if they had any. You'd also try to avoid the store. If there were legal tender laws, you would find only the "bad" paper curency offered to you in trade. If you know that $20 gold piece is really worth $31 but if you spend it, you'll only be able to buy $20 worth of goods, what would you do? People keep the valuable gold safe at home; they "hoard" it. Thus WHEN THERE ARE LEGAL TENDER LAWS, bad money drives out the good."........... ................................................................. "An English financier, Sir Thomas Gresham, was given credit for first formulating this observation, and it bears his name, Gresham's law. It is odd that it is never stated as part of Gresham's law that it applies only to situations where legal tender laws are in effect. As a result, it is incorrectly but commonly assumed to apply to honest money circumstances where the complement (good money drives out the bad) applies instead."..... ................................................................. Gresham's law [after Sir Thomas Gresham (1519-79), Eng financier, formerly thought to have formulated it] the theory that when two or more kinds of money of equal denomination but unequal intrinsic value are in circulation, the one of greater value will tend to be hoarded or exported; popularly, the principle that bad money will drive good money out of circulation. -WEBSTER'S NEW WORLD DICTIONARY OF AMERICAN ENGLISH ................................................................. "At any rate, legal tender laws had NEVER worked well when same denomination "hard money" and paper were in circulation at the same time. Symbols alone do not value make. The value of paper notes ALWAYS began to deteriorate relative to gold --- that was inherent in the purpose of the paper notes. Thus people would charge higher prices if paper were tendered. This was the logical thing to do." -L. Reichard White, MONEY, (Brownsville, Penna: WhiteINK, 1996) ........................Regards, Journeyman

Phos (10/12/99; 13:33:42MDT - Msg ID:16165)
Gold markets
There is a Ted Butler piece reposted earlier on USAGOLD. In it he agrees with what Another/FOA have said before. The paper and physical markets seem to be coming to a parting of the ways. GATA is trying to get some answers from Congress on what is going on in the gold market. Are we in some kind of endgame here? I have read on the internet that the price of physical has now risen above the quoted spot price if you want to buy some. If that is the case, what meaning does 'spot' have? I would be very interested to hear other's views on Ted's assertions. Do others feel the Fed is manipulating the market now to protect the shorts?

elevator guy (10/12/99; 13:30:30MDT - Msg ID:16164)
Keep up the good work, GATA army!
No one claims to have stopped the manipulation of the POG. All Bill Murphy has been trying to do is sound the alarm, to alert those in mining and government as to the fix in the POG.
Re-post his Midas commentaries to your senator, and congresman.
We must continue to be vigilant, before the shorts find a way to recover, by Fed selling paper, or whatever.
The more universally the collusion is known to the public and governments, means the less the shorts will be able to duck and cover.
As FOA pointed out, the manipulation still goes on. The more we scream foul, the more likely the ref will be forced to put his glasses on. Our government counts on the sheeple to know nothing, and do nothing. Lets get the crowd cheering!

CoinGuy (10/12/99; 12:48:04MDT - Msg ID:16163)
Gold Power
Not to dig, but I got a different conclusion from the GN article. First of all, GN didn't write it. If you look at the top line he states, "a Joel Skousen article from The World Affairs Brief". I think the stab at GN was uncalled for. Also, Joel Skousen has an impeccable reputation.

To all: The shorts have covered? The price is being manipulated again? Heck, spot and spike, are on vacation.
What's going on?

Coinguy

Tomcat (10/12/99; 12:34:35MDT - Msg ID:16162)
Repost: Ted Butler. Is The Gold Game Fixed?

Date: Tue Oct 12 1999 10:54 ted butler (@the moment of truth) ID#370209: Copyright � 1999 ted butler/Kitco Inc. All rights reserved

Another day and still no one fessing up to owning a part of the $30 billion short gold loss. This is serious folks. It has never happened in history before that a loss of
such magnitude has been so blatently contained. I don't see how it's possible that Goldman, AIG, Chase, UBS, and the Morgans, could hide such losses ( over a billion each, in my estimation ) without overt Fed involvement.

In a day or so, Barrick will report earnings. It is not legitimately possible for them not to show a big hit. They had the lowest real mining profits for the quarter in their history - look at the prices for the third quarter. Their hedge book was clobbered by the rise in gold and the fall in fixed income securities. What could go wrong, went wrong. If they report decent earnings, all it will prove is that
the accountants were also got to by the Fed. I know these are serious charges, but I've made serious
charges and accusations all along and not one of the vermin from Barrick or the Banksters will stand
up and refute them. I stand by everything I've said. What should that tell you? It should tell you this - if Barrick reports everything is allright - the game is fixed at an unbelievably high level. In that case you should run, not walk, and buy as much physical gold and silver as you can afford and take it home and put it in a safe place and keep quiet. Do not let anyone hold it for you. It pains me to
write this. Hopefully, Barrick and the accountants won't lie. bbl

TownCrier (10/12/99; 12:04:57MDT - Msg ID:16161)
Schroeder Says Germany Must Meet 2% Deficit Goal
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=b796dd4442e69d4b3522714357b3499c
German Chancellor Gerhard Schroeder on the need to reach budget targets: "In February this year, the then Finance Minister Oskar Lafontaine agreed with the European Commission that the German deficit in 2000 would not exceed 2 percent [of GDP]. If we now allowed a higher deficit we would come into the same situation as Italy this year."
"If it weren't Italy but Germany there could be a real crash. There is no alternative to budget consolidation."

In regard to the situation faced when the EU finance ministers' had to come to terms and allow Italy extra leeway on its 1999 budget, Mr. Schroeder said it "weren't pretty."

Sounds like they're taking this Maastricht stuff for real.

Strad Master (10/12/99; 11:47:39MDT - Msg ID:16160)
It woked!!!
ALL: Hey, I'm back in business! Hi PH! Now Goldspoon won't fall off his horse. Yippee!

TownCrier (10/12/99; 11:45:50MDT - Msg ID:16159)
Is $25 Oil Too High? Not By Some Inflation Measures
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Commodity%20Spotlight&touch=1&s1=blk&tp=ad_comspot&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=108c109a7bdc5592aad6e9a75314b94c
Even priced at $25 per barrell, when adjusted for inflation, oil costs the same as it did October 1973, just PRIOR to OPEC's oil embargo which set off the first oil crisis and price shock of the 1970's.

An economist elaborates that given the current U.S. economic boom of nine years of growth, oil prices would have to reach $72 before the impact would be felt to the degree it was following the 1970's.

Mr Gresham (10/12/99; 11:45:29MDT - Msg ID:16158)
TC: Reserves?
http://www.bog.frb.fed.us/releases/H3/Current/
TC -- Thanks for your regular postings on reserve injections, a crucial stat to monitor in the months ahead.

Now, to understand it. (ORO & any -- appreciate your help.)

As per the link above, banking system required reserves seem to be in the $40B+ range. This must be what they're trying to maintain as required level.

Are the amounts you're bringing us from Yahoo cumulative?
(So, do they show up on Fed balance sheets? Or on Fed's banking system stats? I haven't seen it under borrowed reserves -- but then, isn't that what repos are designed to hide?)

Are they rollovers from prior repos come due?
Or are they replacements for reserves that have gone out into cash-hungry public hands? (Which I think is the import you have been giving it -- if so, refresh us on the mechanism this goes out by.)

I'm also searching on the link to the BEP's currency-printing order for this year -- a press release I think it was on Reuters or some such. Was it GN who had the link to it originally? (Couldn't find on BEP site. I'll do some more looking before I come back to this again.)

Thanks to all for the stimulating high-power educational symposium you've created together here. (Still catching my breath!) There is brilliance here at all levels.

It has been an HONOR and a PRIVILEGE to be in your company these past two weeks!

Strad Master (10/12/99; 11:39:16MDT - Msg ID:16157)
Huh?
GANDALF THE WHITE: Did my post of a few days ago go through? When I posted it I got the message that my password was no good. Subsequently, I e-mailed the home office for clarification. As of yet, no response so I was going to e-mail again when I saw your message. This is an experiment. Hope it works.

TownCrier (10/12/99; 11:26:45MDT - Msg ID:16156)
Fed ads $13.29 billion to banking system thru tri-party repos
http://biz.yahoo.com/rf/991012/i8.html
The Federal Reserve said it injected reserves to the banking system Tuesday through a round of tri-party overnight system repurchase agreements that totaled $8.29 billion, which followed an earlier operation of 90-day tri-party repurchase agreements that totaled $5.0 billion.

Are the banks now depleted of their "best" collateral, or making use of these tri-party operations simply a natural extension of Gresham's law?

Gandalf the White (10/12/99; 11:25:41MDT - Msg ID:16155)
Come on Strad Master and Quabblin !
Jump into the TableRound, before Goldspoon falls off his horse! Good to see you're back A3, the Hobbits missed you.
<;-)

TownCrier (10/12/99; 11:16:55MDT - Msg ID:16154)
Tea leaves: Most IMM currency futures higher in early trade
http://biz.yahoo.com/rf/991012/lb.html
Not a good day for ANY type of dollar currency futures so far...
December
yen up $0.000097
euros up $0.0056
sterling up $0.0042
Swiss francs up $0.0044
Mexican pesos up $0.000150
Canadian dollars down $0.0008
Australian dollars down $0.0008

Gold Power (10/12/99; 11:03:35MDT - Msg ID:16153)
Gary North Scenario
I am very unimpressed with Gary North's analysis. He talks as if he is sure of what he's saying, but he actually admits that he and his buddy worked together for days -- after the fact -- trying to figure out why the insiders were doing it.

If North knew what he was talking about, he would have been able to tell us before time what the insiders were doing.

As it is, he's just taking a set of events, attributing motives to unnamed persons, and selling it to the public.

His "insiders" are about as realistic as Sherlock Holmes' "Moriarity." Anyone can concoct some mythical set of conspirators and then -- after the fact -- attribute certain events to their operations.

If North knows of their existence, then he should be able to predict what they will do before they do it.

Gold Power

TownCrier (10/12/99; 11:02:24MDT - Msg ID:16152)
Richmond Fed--labor supply "extraordinarily" short
http://biz.yahoo.com/rf/991012/ku.html
Rising prices in the wind...
"The unemployment rate in some areas is below 2.0 percent. There is some suggestion that very low rates of unemployment, unavailability of workers, is pushing wages up. We are looking at pronounced worker shortages in some areas." --Richmond Fed's senior economist Raymond Owens

Strad Master (10/12/99; 10:56:18MDT - Msg ID:16151)
test
test

Quabbin (10/12/99; 10:55:18MDT - Msg ID:16150)
TEST
TEST

RossL (10/12/99; 10:03:59MDT - Msg ID:16149)
Interesting hypothesis from the Gary North Site
http://www.garynorth.com/y2k/detail_.cfm/6466
This is from Joel Skousen's latest WORLD AFFAIRS BRIEF (Oct. 8).
* * * * * * * * * *
RESURRECTION TIME FOR GOLD--BUT MOSTLY FOR INSIDERS
After years of central bank gold sales, artificially driving down the price of gold, the establisment has suddenly switched strategies and is allowing the price to rise. This deserves some analysis since none of this has happened by accident and is still the subject of heavy manipulation. I will give a very brief analysis at this time, and hope to have a more complete picture later on this year. I am indebted to my good friend, Steve Tomczak for doing the extensive research and analysis on this. The big players in this manipulation of gold have been US and European central banks, Russia, Middle Eastern Oil countries, the IMF, bullion banks/brokers, and the big mining companies. It's much more complex than I have room to explain, but here is a capsule version: US and European central banks, in collusion with Russia (for unknown secret promises--probably future cash and loans to the elite), began dumping gold on the market several years ago in order to drive the price down. This, we now believe, was intended to negatively impact the gold mining industry and put them in distress. Geo-politically, it also destabilized several African nations who were highly dependent upon gold production and sales in order to finance internal military and economic stability. But unknown to the general public, a huge market developed among insiders to "short" the gold market and make millions of dollars as the price went down. Giant hedge funds, all closely connected with the PTB, also got into gold short contracts in order to profit from what they knew was a guaranteed downward direction of gold prices. Because of the phenomenol profits in gold short contracts, central banks and bullion banks (who broker and store the physical metal for producers) began leasing out the physical gold to insiders, as well, who then would sell at a markup, counting on their ability to buy back the physical gold later, at cheaper prices, when demanded for repayment. This only works as a profitable strategy as gold is going down. If gold rises, they have to buy it back at a higher price, which is disasterous financially. Gold market watchers began to observe last year that the total amount of gold leases and short contracts (a difficult quantity to ascertain without insider connections) actually exceeded the total supply by many fold. So it became obvious that whenever the price started to rise, those insiders shorting gold and leasing gold were going to be unable to recover. When the price of gold started to rise dramatically (biggest one day rise in history) following the announcement of European banks and IMF to stop gold sales for the next five years, I knew that this was the death knell for those insiders shorting gold. The central banks have also agreed not to increase their gold lending arrangements and derivative operations above current levels for the next five years. Never before in history have the big boys been told what they were going to do in advance. Their openly giving out the five year date guaranteed a bull market in gold. It wasn't meant to benefit those who would now buy gold, but rather to destroy those who had been induced to short the market. Not only would the price of gold rise, but there wasn't enough gold available at any price for them to pay off their contracts.

Steve and I went back and forth for days trying to figure out why the establishment would let their buddies (whoever they were, and who had been encouraged to short the market) get caught in a no win situation. Steve may have found a major part of the answer in analyzing WHO the actual players were who were shorting the gold market. By and large, it was the big mining companies themselves, coupled with hedge funds connected to mining interests. Apparently, the big mines were induced by bullion bankers to enter into the hedging game (shorting the market, and selling future production forward) as a means of surviving the downward market in gold. Little did the big mines know that they were being set up for bankrupcy by these insider bullion banks/brokers when the price of gold would finally rise. Since the number of short contracts outstrips even the mine's production, there is no way the mines can pay back the gold that shorted. Rather than be able to take advantage of the increasing price to recover (as the public thinks), the mines are now in BIG trouble. Steve's analysis is that the PTB have set them up intentionally so as to be able to buy them out and control the world's biggest gold mines. If this is true, it is a very important prelude to depression and war. When the insiders go out to control most of the world's gold, you can bet that the inflation of paper currencies is not far off.

AEL (10/12/99; 9:47:32MDT - Msg ID:16148)
TEX
http://www.provide.net/~aelewis/gold/goldbear.htm
TEX (10/11/99; 23:21:14MDT - Msg ID:16122): welcome to the party! In case you missed it, above is my money page URL -- lots of essential links for metals people.

Goldspoon (10/12/99; 9:19:43MDT - Msg ID:16147)
Metals price snapshot + curriences
http://www.metalsman.com/masterprices.htm
Gift from ole Goldspoon...now you can't say Goldspoon never gave you anything but a hard time...

Goldspoon (10/12/99; 8:56:46MDT - Msg ID:16146)
FOA
Let me make one thing clear...i beleive what FOA says, if he says watch oil you had better watch oil... FOA is connected..... i also beleive my own 4 eyes... as to price actions of platinum fortelling the near term fate of Gold!!.....How many times does an apple have to drop before you beleive in gravity??? When gold violates the platinum rule i will formulate a new rule....ie until the apple falls up gravity still stands....

USAGOLD (10/12/99; 8:50:22MDT - Msg ID:16145)
Today's Gold Market Report: Short Side of the Market a Financial Minefield for Big Speculators
MARKET REPORT(10/12/99): Day Twelve of the Big Breakout....Gold went into
recovery mode this morning up as much as $5 in the early going, up $2.30 as we go to
fetch this over to the server........News of the Ashanti merger talks with UK's Lonmin
dampened expectations for gold yesterday as traders felt that Ashanti's $570 million short
position would not have to be unwound. Ashanti, a company valued in total at about $600
million, is also facing a $270 million margin call with the prospect of that going even higher
if the metal continues to rise. Since then a closer look at the numbers and a realization that
Lonmin will back off if the hedge book situation is not resolved has lit a fire under the
yellow metal again. Beyond that, the market is beginning to wonder how many Ashanti's
are out there making the short side of the market a financial minefield for big
speculators..................... Conspicuously absent from lists of counterparties damaged in
the fallout of mining companies and hedge ablaze in the gold carry trade inferno: London's
N.M. Rothschild, the centuries old gold trading firm usually thought of as the center of the
gold universe. Conspicuously present on that list: Wall Street's Goldman Sachs and
Morgan Stanley along with Union Bank Switzerland.........................Says one London
dealer this morning: "What's driving gold is still the fear of further moves to the upside.
There are still positions that have to be adjusted as they are not going to go away unless
gold dips back $40, which it's not going to do. The higher it goes, the more some will have
to focus on what they have to do." ...Oh, the life of the London gold
trader!..................Gold was up $5 in Europe overnight on bullion bank buying
presumably to cover their short positions associated with the carry trade. Bullion banks are
the guarantors of gold loans to the central banks. If Ashanti, for example, bellies up, their
bullion bank counterparties will have to make good on the gold loans..........By the way,
trading has been halted in Ashanti shares ostensibly because of the merger talks, but in
reality so investors don't drive the price through the floor............Gold lease rates are
down again this morning but clinging stubbornly to the 4% level...................... Euro up
three quarters of a cent today........ Treasuries, dollar getting hammered across the
boards...........Dow down 91 as this is written..................'Tis October after all -- when
securities howl and markets go bump in the night.......................Speaking of
conspicuously absent: Avid Yankees fan, Hillary Clinton, whose photo in a Yankees' hat
appeared in every newspaper in the country recently, has yet to be seen at a Yankees playoff
game, according to this morning's New York Post. Reason:
BronxCheerPhobia...................That's it for today, fellow goldmeisters. See you back
here tomorrow.

The October edition of News & Views is on its way to our readers and we invite all our
visitors to take advantage of a free trial subscription to one of the most popular, widely read
and quoted gold newsletters. Last month we predicted an explosion in the gold price. This
month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
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Commentary and Analysis on the Economy and Precious Metals. Or you can go
to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.

Goldspoon (10/12/99; 8:47:35MDT - Msg ID:16144)
Platinum/gold's indicator
Platinum went up last night gold then followed...Platinum was sold off this morning in New York gold soon followed..
The powers that be go into a huddle and decide it is time to sell off (push the PM markets down) the buy up or sell down will show up first in the platinum market. WHY? Because it is so thin it is affected first... Want to know the very next move in Gold?? Watch Platinum the BIG MONEY telegraphs their intentions VIA their actions with Platinum!!

JCTex (10/12/99; 8:43:32MDT - Msg ID:16143)
Re: FOA comment about watching oil: "London Oil Surges..."
"Oct.12-FWN--London crude oil rose sharply today--the second straight day--as the market continued to retrace last week's steep losses.

Prices for November Brent crude were up as much as 57 cents a barrel earlier in the session, after having risen 53 cents Monday.

N.Y. crude oil futures are expected to trade higher, following London's price gains.

Traders noted that the bias is upward on sentiment follow through.

News that the oil ministers of Iran and Saudi Arabia planned to meet at a gas summit early next month, is expected to underpin today's rebound.

Last week's sell off came on a survey that revealed a 180,000-barrell-per-day rise in well output in September. The survey also showed a dip in compliance with production cutbacks among members, excluding Iraq, to 81% in September from 84% in August.

Special to FWN by the editors of CapitalistEdge.com.
Transmitted: Tue Oct 12 09:12:13 1999

Goldspoon (10/12/99; 8:31:19MDT - Msg ID:16142)
RossL- Platinums Moves
You said...
Kitco charts show platinum up to $430 in Zurich this morning, but now back to $405.50 in New York. Is that a real move or a figment of the chart wizard over there at Kitco?

Ross this is exactly the price action to which i have been refering to in my posts of late.... notice the rise in gold began after the jump in platinum not vise/versa.... The powers that be in New York are merely acting as fire fighters and are trying to contain the fire the Swiss Gnomes keep setting... The New York crowd have a lot at stake....

i will change my "rule" when my rule is violated by the game being played......else continue to watch and learn...

elevator guy (10/12/99; 8:14:47MDT - Msg ID:16141)
Look at the DOW this morning!
http://www.quote.com/livechartscom/
I you look at quote.com/livecharts/ you will see that the DOW is tanking this AM.
Anyone know why? Something must have spooked the herd, or maybe its just the morning after a holiday, or what?

RossL (10/12/99; 8:11:56MDT - Msg ID:16140)
Platinum
Kitco charts show platinum up to $430 in Zurich this morning, but now back to $405.50 in New York. Is that a real move or a figment of the chart wizard over there at Kitco?

The Invisible Hand (10/12/99; 5:54:01MDT - Msg ID:16139)
Margin Calls
Sorry, I didn't catch up with yesterday's discussion before posting my question. Steve quoted Bloomberg in # 16058 and this said:
"Margins are deposits traders must make when buying of selling futures contracts to help ensure their obligations will be met."

SteveH (10/12/99; 5:43:20MDT - Msg ID:16138)
repost
www.kitco.com
Oro, you have been working overtime. Keep it up (but get some sleep too).

from kitco:

Golden Sails (Worth a repost: Fed gives green light to gold!!! (IMHO)) ID#374132:
Copyright � 1999 Golden Sails/Kitco Inc. All rights reserved
Golden Sails ( It seems as clear as a bell to me ) ID#374132:
Copyright � 1999 Golden Sails/Kitco Inc. All rights reserved
I believe the Fed is FULLY SUPPORTIVE of the U-turn move to allow gold to float in a free market, to realign itself in price relative all the fiat paper
out there. ( Recall AG's recent affirmation of gold being respected worldwide and supporting a country's currency. Also recall RR's vote for the IMF to
sell gold, and his subsequent departure... Dissention in the ranks? AG, true goldbug, won out, me thinks! ) The US Fed has been buying gold hand over
fist -- not to mention the Japanese who are holding all that US paper --with the purpose of lending support to the dollar ( to the extent that it can be
supported ) when gold reaches $2,000 to $3,000 per ounce. They see this as the end of the road, i.e. the end game of the paper trail and are taking the
only viable ( and least painful ) option available to them, by allowing gold to move higher in a newfound free market. Return to the gold standard of
yore, I surmise.

Opinions, anyone??

from GATA:

Le Metropole members,

John D. Meyer, GATA Treasurer, has served
commentary at the Matisse Table entitled,"An Open
Letter to the Gold Mining Community."

"Several months have passed since we last wrote to you.
The months have been filled with the bitter and the
sweet. Certainly the Bank of England announcement on
May 7th was a painful period for the gold community.
The "reign of terror" intensified as June approached
and the bears' siege continued to hold us hostage
throughout the summer. Then on Sunday September
26th the world of gold was stunned by the announcement
of the European central banks. In one dramatic move
the "reign of terror" was broken. For
GATA it has been a defining moment validating our cause.
The power of the advance has furnished the clearest
evidence to date of how aggressively the
gold market has been manipulated."

Cafe members and internet,

Some public credit is coming my way. I would like you to
know what a time consuming and courageous effort that my
colleagues, John Meyer and Chris Powell, have put into
GATA.

Our credibility grows mightily every day. Much of it is
do to their efforts. We have become lifelong friends as
a result of our trench warfare like battles. They are
great guys and gentlemen of the highest calibre.

They have some company. Sir Harry Schultz, the newsletter
wizard of Switzerland and Monaco, has been one of our
staunchest supporters right from the gitgo. What a class
act he is and, boy, is he ON THE MONEY!

The following is from Sir Harry's latest newsletter.

Gold

Glitters a Gain!

Oh, how sweet it is! After years of immoral & illegal
manipulations by bullion dealers, bullion banks &
bullion brokers, aided bycertain govts, gold broke
loose. The price-fixers haven't given up; they still
don't want a free mkt for gold, but they know they're
in for a battleroyal. There is so much to tell I'm in
the same position as with Y2Kreports. I've got 1000
pages of notes, but limited space, so (as with Y2K)
I'll suggest (below) how U can get more info & how
to keep up on the dailygold in-fighting. It's a very
exciting, bloody battlefield I assure U. Thestage was
being set for a price breakout before the Euro central
banks (CB)made their dramatic announcement that CB's
would freeze/limit gold sales &halt gold loans for 5
yrs. The news ricocheted around the world in minutes
& bullion burst its 20-year shackles. But, as Sunil
Madhok, of UAE, says on http://www.gold-eagle.com ,
"The CB's didn't do this to help gold bulls. But
they didn't want the bears slain (so they permitted
some sales). They had no option. Speculators (eg, NY
bullion banks & the anti-gold mafia) were hammering
gold with no regard to the massive supply/demand gap.
If CB'shadn't acted, the imbalances would have proven
catastrophic (in light of the huge short position)."
Pressure was also being brought to bear on Euro govts
by developing gold-producing nations. And GATA was
revealing the illicit tactics of the dealers/bankers.
UK's fluky gold sale was being exposed as a political
favour. Blair was in hot water.

Gold mines who hedged (sold gold forward or bought
puts) heavily, found themselves in trouble, as we forecast,
& we don't bleed for them; we said it was like eating
your young. Some were "forced" into it by bullion
banks who threatened them with lower credit rating
if they didn't. Blackmail! Shows how vicious the
greedy price-fixers are. Ashanti Gold was example.
Gold rose $8, but stock fell $4 same day. Margin
calls killed them, only avoiding bankruptcy, so far,
via the bankers "Red Cross." Goldman Sachs was
Ashanti's "brilliant" dealer who got them short
over their head. Barrick is another over-hedged mine
& stock is under-performing non-hedgers. Stockholders
screaming for true mkt exposure info.

The price-fixers keep feeding the press & producers
misinformation about the size of the gold short
position, hoping to jawbone the price down. Ted
Arnold apparently gets paid for trashing gold, as
he has for years. Other mistaken info (intentional
or otherwise) comes from Chase, Deutsche Bank,
JPMorgan, AIG, Goldman, says Bill Murphy of GATA
(Gold Anti-Trust Assn) who calls this "one of the
great financial scandals of all time." CNBC/CNN give
lots free airtime to gold bad-mouthers, but won't
let Murphy speak. Of course, TV is owned by insiders.
Freedom of the press has always meant freedom for
insiders to press their case. For true stats on gold
mkt, contact John Hathaway at the Toqueville Gold
Fund & Caeser Bryan at Gabelli Gold Fund.

For daily update on the gold war, download free at
popular http://gold-eagle.com , & subscribe to GATA
website, the attack force for gold freedom at
Lemetropolecafe.com or US fax: 413.528.6903. GATA
also needs contributions for its anti-trust fight
against price-fixers. 2 Hslms sent big cash last mo.
Thank U. Need more. If U want goldfreedom &
goldhigher, send $. �Murphy foresees $600 gold a bit later.

Says Fed is biggest worry; the price-fixers want Fed to
intervene; report is they already have, selling gold
futures. But gold genie is out of bottle, & aside from
setbacks, it's unlikely the gold bull mkt can be
stopped. As a chartist I note, basis London PM fix,
a pullback to 289 would be a 50%normal technical
retracement of recent up-swing & a great buy-more spot.
But U'd have to place orders now, not after the event.
Traders hope for pullback to 300-310. One day soon
U'll wake up to a $100 overnight rise, so don't be
naked out. Producer buy-backs are coming. �As with
Y2K, I've only used 10% of my notes, so please
access gold fax/web sites. The gold war has barely
begun. We'll win/lose battles, but win the war &
get a free gold price.

PS:

Bill Gates bought 10% of a silver company. Silver
will be exploding also.

Harry Schultz
http://www.ihsl.com
hsl.mentor@skynet.be
Tel +32 (for Belgium) 16 533 684 --
Fax +32 16 535 777
Postal address: HSL, PO Box 622, CH-1001
Lausanne, Switzerland
12 October 1999

<A HREF="http://www.lemetropolecafe.com/scripts/products.cfm">Le Metropole Cafe</A>

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

12:40p EDT Tuesday, October 12, 1999

Dear Friend of GATA and Gold:

Today I met with my U.S. representative, John B.
Larson, D-Conn., to express my concern that the U.S.
Federal Reserve Board and the U.S. Treasury Department
are intervening surreptitiously in the gold market to
rescue the financial houses that have been manipulating
the price of gold.

I asked him to try to get answers to the following
questions from the Fed and the Treasury. He said he
would.

Since a bailout by the Fed and the Treasury along the
lines of last year's bailout of Long-Term Capital
Management is now the greatest threat to the
restoration of gold to its rightful place in the world
monetary system, I urge gold's friends and all gold
share investors to put the same questions to their U.S.
representatives and senators. We must put the spotlight
on the Fed and the Treasury and force them to operate
in the open. In secret they can get away with anything.
But not in public.

Please post this as seems useful.

CHRIS POWELL, Secretary
Gold Anti-Trust Action Committee Inc.

* * *

Questions for the Federal Reserve Board
and the U.S. Treasury Department

1) Do the Federal Reserve Board and the Treasury
Department have a policy toward the price of gold? If
so, what is it?

2) Do the Fed and the Treasury trade in gold or in
securities, futures contracts, or options related to
gold, or otherwise influence trading in gold? If so,
how?

3) Do the Fed and the Treasury trade in any financial
instruments besides U.S. government bonds? If so,
which ones and what do the Fed and the Treasury try
to accomplish with their trading?

4) Do the Fed and the Treasury have or control
brokerage accounts? If so, with which brokers?

5) Do the Fed and the Treasury try to influence the
stock and commodities markets? If so, how?

6) Do the Fed and the Treasury lend or lease gold? If
so, to whom, for what national purpose, and under what
terms?

-END-

RossL (10/12/99; 5:42:19MDT - Msg ID:16137)
question: Margin Calls?
Your broker and The COMEX currently require $2000 margin to long or short a 100 ounce gold futures contract. If I shorted one contract when gold was $260 and it is now $325, then I have lost $6500. Since I started with $2000, I now owe $4500. That phone call from my broker telling me to pay up is a margin call.

SteveH (10/12/99; 5:35:00MDT - Msg ID:16136)
Dec. gold now...
$324.40, up $4.20!

ORO (10/12/99; 4:56:41MDT - Msg ID:16135)
Clarification
It is currently not known to me what treck would be followed, how transparent or artificial the inflation of gold would be, and how people would actually respond.

I can say that Joubert's study of market volumes in sharp price swings indicates that during the major portion of a price rise volume is very low, though it may be high at the beginning and high towards the end. (see recent pickup of volume on the dow)

As told above, the markets include only the most reluctant of sellers on the way up, and the most reluctunt of buyers on the way down. These limit volume despite high demand, and bring about the market's search for a price to induce the unwilling to move their stuff.

ORO (10/12/99; 4:45:33MDT - Msg ID:16134)
RossL
Faced with a steep long climb before, it is our nature to expect it to continue. It is further in our nature to hold on to that which served us so spectacularly well while still trying to cash in some of it. Immobilization through leverage is the great danger. Like so many tech stocks held on margin.

The Invisible Hand (10/12/99; 4:44:58MDT - Msg ID:16133)
question: Margin Calls?
A margin account is an investment account whose assets are used as collateral to secure a loan. An investor might borrow money against his investments in order to purchase a greater quantity than would be possible on a cash basis, or to raise cash without selling investments. (Harry Browne)
But what's a margin call? Or what are the margin accounts in the gold carry trade?
I apologise for my ignorance.

ORO (10/12/99; 4:41:48MDT - Msg ID:16132)
one more, Aragorn
There is no problem in getting enough gold to supply liquidity.
Some Indian ladies will buy washing machines, and get the house fitted with new water and cooking fixtures and appliances.
This force in revaluing gold makes the worst of the known reserves mineable. If, in real terms, the $ price would be equivalent to $6000 of today, then viable reserves will more than tripple and more exploration will be conducted.
Gold production will grow as autoclaves and mining equipment are produced instead of everything else.
The real questions are (1) how long will it take, (2) how far will the ECB go, (3) will any of the gold actually hit the market, or (3a) get absorbed into the producer countries' CBs, or (3b) be kept by the miners and expenses just borrowed against it. (3c) Would you actually let go of it? would you just borrow against it?
The latter is what bugs me most. If it is predominantly used as collateral like Tokyo real estate used to be, then the whole thing will become as much a bubble as anything that preceded it. Again, Immobilization through the self-fulfilling expectation of continuous price increase till it all crashes. I shudder just to think of it.

RossL (10/12/99; 4:40:06MDT - Msg ID:16131)
ORO
Quote

Some things have changed.

3.2 The issue of further paper to chase after the gold to maintain its price (and hence % backing of the currency) will cause further price inflation as the extracted gold hits the markets and is absorbed by the CBs.

3.3 The private gold owner, having borrowed heavilly currecy against his gold, in a reversal of the current pyramid, would be crushed upon the collapse of gold values. A deflation to follow the inflation.

4 Immobilization, which I argued before, and ANOTHER had alluded to as well, would result from the preferred method of cashing in gold when it is in flight, by borrowing against the holding rather than using it (just as in real estate), till the CBs stop sucking gold in.

Unquote

Could you spend a moment to clarify a point? You seem to be calling for a switch from paper money inflation to deflation in a few years after gold production gets ramped up. A gold holder will suffer if he has borrowed paper against his gold. But in item 4, this is stated as the preferred method?

ORO (10/12/99; 4:12:42MDT - Msg ID:16130)
Aragorn III
Thank you for the link, I'll read it.
It is a pleasure to see your comentary on my writing. An honour.

The main point is this. The gold standard was the closest we have come to a pure market derived money. However, the bimetalic standard would have been better if the government let a gold $ and silver $ compete in the marketplace rather than try to fix their ratio. Why? because the markets would have one more degree of freedom in choosing their money.

Some things have changed.

1. The silver hoards of old are gone, but will be built up again. Silver will compete with an inflated gold.
2. The PGM metals, having similar properties to gold will rise with it as alternative money. These were barely known to exist, not to speak of the technology of extracting them in quantity, during the heyday of the gold standard.
3. The interest of the ECB and other paper printers in getting something for nothing through this gold backing scheme is a strong driver for the distortion of the markets. Most likely, it would start with a world scamble to pick out and develop gold deposits. 3-8 years later, gold will be supplied into the economies of the world at a rate that would swamp the CBs at the $30k level (if they allow it to come near that) with a $ devalued to 20% of its current value.
3.1 The movement of resources into gold production would cause the price of production competing for these resources to move up tremendously at the initial stages.
3.2 The issue of further paper to chase after the gold to maintain its price (and hence % backing of the currency) will cause further price inflation as the extracted gold hits the markets and is absorbed by the CBs.
3.3 The private gold owner, having borrowed heavilly currecy against his gold, in a reversal of the current pyramid, would be crushed upon the collapse of gold values. A deflation to follow the inflation.
3.4 The wildcards - PGM and silver (copper?) or surrogate commodity basket reciepts. The preference of the one medium over these without accepting market determined exchange rates between them as equivalent to gold would be a distortion. To avoid it, the CB must give up its existence altogether, and give up the power to choose what money is. Choosing the top 3-6 items chosen by the markets as acceptable substitutes for gold could do the trick, and avoid the market's vengeance when these are ignored.
4 Immobilization, which I argued before, and ANOTHER had alluded to as well, would result from the preferred method of cashing in gold when it is in flight, by borrowing against the holding rather than using it (just as in real estate), till the CBs stop sucking gold in.

There is much more to discuss. But that's it for now. Got to take a break.

I'll come back later in the afternoon.

ORO (10/12/99; 3:35:14MDT - Msg ID:16129)
Modern econ
It takes years of professional training to shed one's common sense.

Applying basic principles and avoiding the pitfalls of arguments made for the purpose of obfuscation and self promotion, one can go through the current cloud of smoke filling the academic texts and minds of the students, the practitioners, and their teachers.

The bottom line is that most economists would be working today in microeconomic analysis and would not deal in macroeconomic issues if the principles of Austrian economics were practiced. There would be no Central Bank, almost no fiscal policy to be determined by treasury, no World Bank, no IMF, no OECD etc...

The whole business of being an economist dealing with monetary policy and financial tracking would disappear, simple as that. Modern economics is more a matter of finding an excuse for people getting hired than it is a matter of finding out how economies work. In a way, it is the buying of support from the academic community to for the government's policies and its interest in expanding its powers or benefiting one group or another.

Aside from economists at the Fed and treasury, most every financial company employs teams that try to guess what fiscal and monetary policy are going to be, and how certain events will change them, and then figure out the impacts and where money is to be made.

Aragorn III (10/12/99; 3:28:58MDT - Msg ID:16128)
This was the link I referred to
http://www.usagold.com/whithergold.html
ORO, perhaps you've addressed some of the elements raised in this post to Yellin of Troy...I have only read the first lines when realization hit that the link was omitted from my post. I will read further, but must leave the computer for a time. Your thoughts on this link would be welcome.

Aragorn III (10/12/99; 3:20:29MDT - Msg ID:16127)
Some questions and comments
canamami:
In your post (10/09/99; 12:55:04MDT - Msg ID:15928) you commented "There probably isn't enough gold extant to effect a return to the gold standard".

Putting aside the issue that this is not to be the gold standard of recent memory, how many more grams would be required for you to reevaluate "not enough"?

And also, you have expressed recently a concern surely shared by others "The POG is off to another poor start. Things better turn around soon, or negative sentiment will start driving the POG down".

Take note when FOA says "we are on the road" for truly, we have been run over by a Brinks truck (in a good sense), and to trouble over sentiment at this time is to worry whether it is crows or eagles that come to pick your bones. Either way, you are borne away on wings. With or without points for style on method of arrival is of small consequence, for the destination is the same.

YGM:
You said in your post (10/08/99; 19:01:25MDT - Msg ID:15903):
"Would someone enlighten me as to whether or not one of the present 11 member Nations currencies would be better to hold for later (Jan?) conversion to the Euro? If so which one. Thanks--YGM. **I'd just like to think I had a head start in the race coming soon"

The legacy currencies are fixed, so the choice is no more consequential than deciding whether quarters or dimes make the better change for later conversion to a dollar. Introduction of euro tender is not planned until January 2002, but why buy euros for a "head start in the race" when you may yet buy (or work your Yukon mine) for gold which will put you already at the finish line? You may then sit back while others run, and your value will be delivered on wings (crows or eagles?) far ahead of euros.

ORO:
You offered these ideas ORO (10/07/99; 22:31:54MDT - Msg ID:15823)
"...there are problems in this conception. Which, in some years into its establishment, will cause a disaster no different from that of the $. Gold would then suffer severe discredit."...
"The secondary flaw is the imposition on the markets of a preference to gold that is not of the market's own choosing. So far, my thinking indicates that this will cause the junior, but more rare, PMs to push gold out of the marketplace and replace it with these surrogates for which the governments do not bid. Again, a gold bubble would form since that is what this system is all about, then the markets will find retribution through the other metals.
Has there been any thinking in this regard?"

Perhaps you could discuss with canamami the point at which rarity becomes a burden or an asset in monetary use. On the point of the PGM's as a pure alternative for which the governments do not bid, could that advantage, as you see it, be rendered undone quickly and easily with one bid at any time...by government?
And also your related follow-up post:

ORO (10/08/99; 10:06:21MDT - Msg ID:15855)
"Though a question of detail, I think the concept is flawed at its root. The structure itself is still as dangerous as any paper structure. The mispricing of gold as a result of the arbitrary decision to use it as money backing for an inflated currency with heavy interest in strength, has way too much economic damage and dislocation built into it.
Is it better than the current system? Yes, that's easy. But it will have its' own quirky ways to make sure the distortion is obvious."

In each post you seem to say that the monetary value of gold would be a fiction, propped up by the will of government, and doomed to eventual collapse. Consider by way of contrast the value the marketplace puts on identical 15.8 cm x 6.6 cm paper slips by Crane & Co. printed with green and black ink, differentiated only by the numbers printed thereon...1's, 10's, or 100's. Or more bizarre, consider the similar value placed on intangible digital records of the wider scope of lending and transactions. One might easily make the argument that both these "dollar commodities" are mispriced, yet who are we to argue with the market which has found these to be useful and valued as such?

The dollar is to collapse in value because its global use is to be replaced by a superior (more stable, "fair", etc) method of "keeping the world score". Gold will be rewarded for its perfection accordingly; with high value no more bizarre than that conferred on paper or electrons. The threat of collapse to this new gold value would come only on the heels of a score-keeper better still. There is no such replacement that my simple mind can imagine, though I am content to leave that distant future to those who strive to make that distant future a better place to live upon that day's state of the art.

ORO, I believe you will enjoy the thoughts found in the link given above as first provided by the TownCrier. It may give you additional thoughts on the notion of a government "arbitrarily" deciding to force gold upon mankind...a mankind that demonstrates a willingness take it all with open arms.

got gold?

ORO (10/12/99; 3:03:43MDT - Msg ID:16126)
Yellin' of troy - IOU the treasure of Troy
Let me start by saying that the argument here begins by separating the forced demand portion of the determinant of money, and the concrete issues involved in concept money vs. commodity money. I state outright that the value of concept money is 0. The value of the concept OF money, is great and imesurable.
Stright concept money is devoid of value of convenience, devoid of any value but that provided by its forced demand. It is exclusively the ability to settle a debt, a specified transaction, or pay taxes denominated in it. i.e. as the equivalent of shorting Amazon.com, only Amazon.com shares will settle the debt. If the central banks of the West come to an agreement to denominate oil and gold transactions in Amazon.com stock, one must buy it (directly or indirectly) if one wants either of them, at least outside the country of production. Taxes denominated in a particular currency forcibly put one into a denominated debt. These are the sole sources of value of a currency outside of the power of
the legal tender laws. Ultimately, for one not indebted and not in need of the denominated items, the latter is its only source of value.
A reciept money is just as easy and convenient as backing free paper or electronic money. All debts, taxes and transactions may be settled in a money chosen by the markets rather than forced upon them. The ultimate value of money must reside in the cumulative effort put into its production and its scarcity. Otherwise it is either a debt or a fraud. Legal tender laws make sure that it is both.

The final abstraction of the concept of money as that which buys things and services, and settles debt is the abstraction of the concept of money into meaninglessness. Here, Julian Jaynes is as wrong as ever and applying Daniel Dennett's reasoning is wrong as well. A common barter item accepted by most in trade is money, whether one is aware of it being so or not, the concept is there implicitly, but the thought of a theoretical pure concept money is not necessary at all. Quite frankly, the pure abstraction money is exactly the error of mistaking the mention for the use. It is ignoring the practical, historical, and conceptual significance of the issue of value in money. The ultimate issue in the VALUE of fiat concept money is that it is a claim against all FUTURE individual labor (or its products, or accumulated assets), a claim FORCED upon all for collection. In its core, it relies on the concept of slavery.
In the short or long term, when holding pure concept money you are penalized in inflation and granted a windfall in deflation. Though the banking system is built arround the creation and destruction of debt in what may be claimed to be a free market, its medium is the claim for a note issued by a government related agency, and its credibility is based on the ability of that agency to supply infinite ammounts of notes to cover the bank's obligations to its depositors. The note in itself has value only because of the obligations denominated in it, and most of all, by the government decree of the use of government sponsored violence against any who would not accept it as payment.

Asynchronous deals involve the creation of a deferred obligation, a.k.a. debt, or the short term use of money as a store of value, until the second part of a deal is concluded. The multiparty deals are indeed another part of the usefulness of money. But one thing should be remembered; the concept money may actually provide for these just as well as a commodity money (in the form of a receipt or in physical form). However, the big difference is in the labor of its creation and replacement. Commodity money is produced through labor and will trade at the value of the labor (including accumulated labor in the form of capital) necessary to replace it in the quantities needed for its use as money. Concept money is just printed out or electronically produced with an indirect input of government police, courts and military held for the purpose of forcing its acceptance. Beside the need to pay taxes, settle debt, and buy products available only in exchange for the particular currency (as decreed by government), the concept money has no intrinsic value deriving from its actual use as money. Any attempt by the poppulace at large to redeem the concept money in goods and servaices, quickly reveals its value.
The only times this sort of money has ever managed to survive have been those in which a carefully adjusted chanism kept it from being challanged. The mechanism is controlled by the Central Bank of the issuing country and its allies, adjusting supply and demand for the currency to achieve stability in some financial or economic indicators. The tools of the trade for the balance of the volumes of debt and the economic activity that services it, are the regulated interest rates (interbank and at the Central Bank window), the supply of reserves, as well as the determination of the level of reserves required. Fiscal policy is used to balance the supply of money from economic activity. Various choices in the regulation of the economy and selective taxation of particular activities can also be used to assure the desired balances. The degree of apparent success in this manipulation of economic and financial activity, and the longevity of the success, dictate the size, scope and duration of the failure. But fail it must. It is not IF, but WHEN.
In simpler form, the fact of apparent success is a measure of the scope of the failure during the unwinding.

Why must the system fail? There is no way, known or knowable to humanity, to adjust the various tools of the trade without forming gargantuan economic distortions on the scale of billions of people spending their life digging ditches while another set of billions fills them in, providing nothing of value. The simple presence of the fiat money is the main distorting force. Anything done to correct the distortions creates new ones, the effort to correct these creates others. The longer the system survives, the deeper and more elusive the distortions. Finally, two things happen approximately simultaneously (1) the people bearing the weight of the distortions either buckle or revolt, (2) the people benefitting from the distortions try to turn their "money". into things.

Some numbers later.

el St.One (10/12/99; 2:58:39MDT - Msg ID:16125)
POG DEC Futures
3:30 to 4:15 EST Straight up From 318 1/2 to 325 in a fast 45 Minutes London must know something new.

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