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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...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

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ARCHIVED DISCUSSION FROM 9/13/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

DOWNUNDER (09/13/02; 23:57:11MT - usagold.com msg#: 85077)
LETTER TO NEWMONT 23rd APRIL - - - NO REPLY
After my 2nd letter to Wayne Murdy (copy to Pierre Lassonde)
reminding that I had had no reply --I received a very friendly E/mail fom Murdy's personal assistant.She said that both were currently travelling & would be back in Denver the next week & that they would both see my letter on their return. That was on 23rd April & no reply to date.
It makes what I said in the letter even more relevant.
-----------------------------------------------------------
THE UNANSWERED LETTER
Mr Murdy I am in my mid 50s, live in Perth W. Australia & have considerable investments in Gold equities & physical gold & silver. I am currently invested in 6 gold stocks ---including Lihir & Newmont. Having been a strong supporter of Gold transparency for the past 2 years I am currently
"totally" disappointed with Newmont for the following reasons:

Press reports have indicated that Newmont is reneging on its promise to get out of NDYs hedges ASAP. I have not seen any announcements by NEM to refute these claims and cannot understand why silence is regarded as an appropriate response. Right across the planet gold "friends" supported NEM in its battle to win the bid for NDY because it was seen to be a non-hedging, gold friendly Co. Personally I took the time to fax & E/mail editors & reporters & make them aware of what really was the main difference with the 2 bidders for NDY. One was a mega-hedger & the other wasn't ! To not follow through on the stated promise is a bit rich to say the least.

Without warning NEM has dumped its large holdings of LHG on the market & at a discounted price. This has been seen as a monumentally stupid act , done as it was at a time when gold share confidence was in the balance. Gold itself was valiantly holding above $300 & for just on a week ---and then the dump by a supposed friend of gold! LHG shares have so far dropped 20%+ here in Australia & the weakness has spread to all other gold shares. Here's a comment from Le Metropole Cafe :
"Then there is Newmont Mining, which recently took over Normandy Mining on the Aussie stock exchange and then gained a listing on said exchange. No sooner had the Aussie Gold index hit a multi year high of 1341 (a 100% increase in a year) on April 2 than Newmont decided to dump their entire (220 million plus) shareholding of Lihir Gold. That took the wind right out of Gold stocks, all Gold stocks, not just Aussie Gold stock

NEM has been accused of being arrogant & of not responding to its shareholders or its critics. I hope this is not true.
The above points certainly worry me & I look forward to you addressing them in a helpful manner. Thank you.
----- -------
Perth W.Australia.


kasperjack (09/13/02; 23:44:46MT - usagold.com msg#: 85076)
Cockerill On The Power Of Hedge Closures
http://www.mips1.net/mggold.nsf/Current/4225685F0043D1B242256B83006C0627?OpenDocument


Cockerill on hedging

"One of the most important facts about hedging that one needs to understand is that in a declining market,
hedging is a source of supply onto the market. Conversely, in a rising gold market, hedging rapidly turns into
a source of demand for gold as producers scramble to cover their positions," said Cockerill.

"I propose to you that in this one year-old rising market, hedging has the potential to become a potentially
explosive contributor to gold demand as companies close out their hedges," he said.

"At a gold price of $312 an ounce and at current exchange rates, the non-US gold book goes under water.
This is exacerbated for some producers by currency hedges that are also under water…the hedging of
prevoious years is now coming home to roost and companies who have pawned the family gold, may have
to face serious challenges and tough questions from shareholders," said Cockerill. He added that the fall out
from a protracted
*****
The $312 an ounce figure was based upon a 52 cent Australian Dollar......
Thompson and Cockerill were singing the same tune back in feb-march. I believe Thompson elsewhere went on to imply that he would take out the overhedged companies for cheap prices when gold hit $330 per ounce(based on 52 cent Auzz dollar-). In yesterdays Mining Web there is a speculative piece that Newcrest and Gwalia have hired the banksters to seek buyers. Their problem is with hedge (currency and gold) strategies that have gone awry.

Gandalf the White (09/13/02; 23:34:08MT - usagold.com msg#: 85075)
LOVE YA Sir Steady ! <;-)
steady (09/13/02; 23:22:54MT - usagold.com msg#: 85073)
===
Thanks Sir Steady, for the offer, BUT may I suggest that you just call Marie or George and place a personal order for some coins to help support the USAGOLD Webpage.
<;-)

DOWNUNDER (09/13/02; 23:25:26MT - usagold.com msg#: 85074)
@KASPERJACK - - - -GATA V GOLDMINERS (85070)
Good post & I agree with a lot of what you said.There is however good reason(until proved otherwise) not to expect a miraculous turnaround from the WGC.This group has been ANTI-
GOLD for so long now that Thompson & the new CEO will have a very difficult job fighting entreanched minds.There is the strong possibily that they are being manipulated by the US Govt

I will believe otherwise when the WGC via Thompson invites GATA publically to debate.In the past the WGC has totally ignored GATA & I see no reason to expect that to change.

Because of the reputation of Lassonde I invested a good deal of hard earned into Newmont as they had "PROMISED" to
get out of the NDY hedges after they took over.They have essentially reneged on that promise to a large degree.There are still around 7+ Million ozs hedged & NO concrete plan has been announced to divest.Their share price has been a bloated disaster area & as opposed to others I could name has done poorly. Before I invested in NEM I had heard that they don't answer shareholders letters.I thought that was just some disgruntled remarks BUT I can personally testify that it unfortunately is true.

Lassonde & Murdy have to get their act together -- they have been trusted & found wanting.



steady (09/13/02; 23:22:54MT - usagold.com msg#: 85073)
gandalf the white re honesty/responsibility
im sure it was an error and since u handled it so beautifully, with integrity, honesty, full disclosure while taking full responsibility, all qualities sorely missing in the usa financial markets, im going to call cpm and get there address send them a lil fiat to help defere your personal expense. think they can sort out the nick names and get the fiat into the right account. im looking at my lil sign right now that hangs on the wall that says honesty the best policy.

Gandalf the White (09/13/02; 23:07:20MT - usagold.com msg#: 85072)
OOPS -- The Wiz owes Sir Wky_Woodman the GOLD ALSO !
Max Rabbitz (09/13/02; 20:48:09MT - usagold.com msg#: 85069)
Wky Woodsman
It looks to me like you beat me out. Rats. Somehow you got deleted after being listed yesterday. Must've been my magic stick.
Max
===
Wky_Woodsman (09/13/02; 19:07:31MT - usagold.com msg#: 85068)
Contest
Gandalfs Prognostication list @84965
Wky_Woodsman entry @84961
Ahoy in the Castle!
Point of order question from the Wky_Woodsman:
Always enjoy the excitement of contests. If settlement was $318.1, then how is runner-up determined?
Back to the woods, seeking the truth.
Thanks, Wky
+++
THE TWO OF YOU are TOO KIND ! I admit A BIG ERROR !
I owe BOTH of you the recognition and award of the Tenth ounce Phili. IT SHALL BE DONE. NOW, let me also advise anyone running a multi-day Contest to NEVER accept and run a Microsoft Critical UPDATE notice during a CONTEST !
One never knows what can happen ! <;-)
I am sending SIR MK my apology and request to Recognize BOTH Sir Wky_Woodsman AND Sir Max Rabbitz as WINNERS, with the extra cost of the prize and S&H to be deducted from my CPM Account !
Thanks Sir Wky for catching the BIG ERROR !
GW



Carl H (09/13/02; 22:36:26MT - usagold.com msg#: 85071)
@kasperjack WGC, GATA
I was very hopeful that the WGC would do somthing useful when Chris Thompson took over. I was further encouraged when about 3 months ago one of their VP's was talking big about an advertising campaign. I sure haven't seen anything. I think USA Gold probably puts more effort into advertising gold than the WGC. I am willing to change my mind, but I need to see some action from them first.

I would like to make a second point about closing out hedges -- that is that we don't know if that acutally had any effect on the market. The gold may or may not have actually been returned to the vaults of the lending central banks. Personally, I suspect it was not. This would mean that the closing of the hedges had little effect on the price of gold because there is no effective reduction in production.


kasperjack (09/13/02; 20:49:20MT - usagold.com msg#: 85070)
Gata Versus The Goldminers?
Gata is Great There's No Debate
Speaking of Gata I'm all for them. However in my attempts at discussion
with posters on another board I came to realize that many supporters of
gata have no idea of the magnitude of the contribution the anti hedging
gold miners have made to the cause. Gata is about education and lobbying
on behalf of gold. They and their fellow travellers have shaped our
conciousness as far as hedging goes, exposed JPMs role in the gold scam,
exposed the gold leasing scandal, the need for investing in physical gold et
al et al et al.. However gold is sitting above $300 per ounce because Lassonde and Murdy
stepped up and took out the gold hedging Normandy. The close out of 2.3
million ounces of hedges in about 45 days in the first two months of this
year forced Anglo Gold to join the antihedging camp and to close out a
further 1.7 million ounces in the first quarter as well. The rest is history as
far as gold prices go..The anti hedging movement in the person of Chris
Thompson is now chairman of the the world gold council. He has hired
Burton from Calpers and Burton will begin his stewardship on Oct 1st. He is
there to create physical gold based investment products for the pension funds
and other institutional investors et al et al. And all I got from the Gata crowd was static. The wgc is crap. I'll see it to
believe it. It is only paper etc etc etc. CRAP! Those guys don't even know
who Chris Thompson is! They turned turtle when I mentioned Lassondes
prognostication(diggers and dealers conference) that the wgc plan intended
to consume between 500 tonnes and 1000 tonnes per year. Obviously they
don't know who Lassonde is either. How can something big happen for gold
without the Gata supporters knowing what the hell is actually going on in the
industry? If you get in the way of the golden juggernaut. From the zenofile

Max Rabbitz (09/13/02; 20:48:09MT - usagold.com msg#: 85069)
Wky Woodsman
It looks to me like you beat me out. Rats. Somehow you got deleted after being listed yesterday. Must've been my magic stick.

Max

Wky_Woodsman (09/13/02; 19:07:31MT - usagold.com msg#: 85068)
Contest
Gandalfs Prognostication list @84965
Wky_Woodsman entry @84961
Ahoy in the Castle!
Point of order question from the Wky_Woodsman:
Always enjoy the excitement of contests. If settlement was $318.1, then how is runner-up determined?

Back to the woods, seeking the truth.
Thanks, Wky

Max Rabbitz (09/13/02; 19:00:34MT - usagold.com msg#: 85067)
Thank you Sir Michael and Sir Gandolph
What a nice way to end the week. A beautiful little 24kt gold Austrian Philharmonic. It's been decades since I won something that didn't come with strings attached. I had a hectic afternoon and couldn't check back until just now to see how that furious paper battle turned out. Others are far more deserving...... but with no hesitation I gratefully and quickly accept the gold.

In reading posts this last week I was struck by some of the political opinions. This world is in a mess and there's lots of blame to go around. I believe the American constitution was/is visionary in its balance or powers and protection of the individual. The founders had a clear idea of what lies in the hearts of man. Alas, no system can forever shield a nation from the folly of its people. But people can change when they see the need or feel the pain. It's a mistake to extrapolate current trends indefinitely. My fear is that the old totalitarian ideologies of national or international socialism or "religious" cults will exploit the coming world economic trauma. They might even get together for this, like Timothy McVeigh's possible mid-east connection.

Life is an adventure if you want one or not. Be prepared. A good part of this is to have some physical gold on hand. Thanks again for the assist MK.

Sir Gandalph: I'll return the crystal ball tomorrow. I promise. I was just practicing.


Waverider (09/13/02; 18:46:07MT - usagold.com msg#: 85066)
Congratulations
YES.....to Wiley, Max Rabbitz and VanRip for their esteemed prizes! And a HUGE THANK YOU to GANDALF for being such a WIZARD at running these contests - they're far TOO MUCH FUN! A thank you too MK for hosting the contest and for providing such generous prizes...I think it's a wonderful idea to have some of these reasons archived - I'm all for it...now to get ready for the Dance of the Veils this evening! Cheers,
Waverider

kasperjack (09/13/02; 16:50:39MT - usagold.com msg#: 85065)
Noting Like A kick In the Jewels
World gold Council At work

SINGAPORE, Sept. 13 (UPI) -- Asian central banks are likely to
increase their gold holdings as
they reassess their international reserves' overdependence on the
U.S. dollar given the current
economic environment, a senior official from the World Gold
Council said Friday.

"I suspect that Asian central banks are starting to relook at their
position in gold, and it would not
surprise me if they start buying gold," said Ralston Thiedeman,
WGC's director for East Asia.

"We have seen 4 or 5 central banks which are now committed to
writing a policy on gold, though
I'm not at liberty to tell you who they are. But I have been
assisting them," he said.

Thiedeman indicated that one central bank, appreciating that
U.S. interest rates are at a 40-year
low, is looking to reallocate its assets, reducing its exposure to
U.S. Treasuries and increase its
holding in gold.
http://www.upi.com/view.cfm?StoryID=20020913-011754-8182r


slingshot (09/13/02; 16:28:04MT - usagold.com msg#: 85064)
Contest
WINNERS
Congratulations to the Winners!

We are all WINNERS here at USAGOLD.
POG still cheap so get you some more.
Slingshot-------------<>

MK (09/13/02; 16:21:06MT - usagold.com msg#: 85063)
Congratulations. . ..
Congrats to Wiley, Max Rabbitz and VanRip. And thanks to all the participants. I really enjoyed all the reasons why you own gold. Some of those were small masterpieces that should be available for anyone to contemplating gold ownership. Maybe we should make those a special file at USAGOLD, so anyone can read how the investing public views gold!! What's the general consensus for such a thing??

And last but not least, thanks to the esteemed Contest Master -- Gandalf the White -- who makes these contests so enjoyable for all.

Boilermaker (09/13/02; 15:59:22MT - usagold.com msg#: 85062)
Congrats to the winners!!!
So close but no gold (or cigar) for me. Congratulations to Wiley, Max Rabbitz and VanRip. The typical Friday gold bashing kept the game lively to the end.

Sir Gandalf has conducted another outstanding contest. I hope the Lord of the Castle will duly reward this remarkably gracious, diligent and tolerant master of ceremonies. My regards and thanks to MK for keeping the forum lively and hosting these contests.

wiley (09/13/02; 14:58:55MT - usagold.com msg#: 85061)
Serendipity
WOWZERS INDEED Gandalf, unbelievable--in my 20's I won a T shirt, now, @ almost 62 its a 1/2Oz Maple..Good things come to he who waits.

"A lot of good luck is undeserved, but then so is a lot of bad luck"( Don't Squat With Your Spurs On by Texas Bix Bender)

Great job, as usual, Wize Wiz, and to Mr. MK for providing this Great Hall as a watering place for anyone and everyone with whatever degree of thirst, a large muchisimas gracias. I'm a master lurker (certified) for the usual reasons but my sense of belonging here is not diminished by that fact. Here's another Bix Bender along this subject--
"Don't get mad at somebody that knows more'n you do. It ain't their fault"

I seldom, if ever, get mad at any of the posters on this Forum. Thanks for having me, thanks a ton for the Maple MK and Good Lurk to all of you I see in the shadows every day....

Kodie (09/13/02; 12:44:55MT - usagold.com msg#: 85060)
$$$$ Gold Contest $$$$
Gandalf the White, thanks to you and USA Gold for the contest. Being only .30 cents away from the winning spot makes it even more meaningful. I really wanted that gold coin! But after all, it was only a WILD GUESS on my part.

I extend my congratulations to Max Rabbitz, wiley and VanRip.

Back to lurking...

Kodie

Gandalf the White (09/13/02; 12:30:49MT - usagold.com msg#: 85059)
"The Happy Birthday GOLD PRICE SETTLEMENT CONTEST WINNERS"
TA TA TA TA TATATATATATATATATATATATAAAAAAAA!!!!!!
The Paper has finally settled on the COMEX !
The SETTLEMENT Price for the Dec '02 Contract was $318.1
while that price today ranged from a High of $321.4 and a LOW of $317.0
Looking at the OFFICIAL Listings of PROGNOSTICATIONS, one sees that Sir Wiley hit the target on the BULLSEYE !
AND, Sir Max Rabbitz and Sir VanRip were the close RUNNERSUP.
These "results" are being sent to the USAGOLD Castle for required actions.
======
$$$$ 318.3 $$$$ Max Rabbitz (09/10/02; 16:13:39MT - msg#: 84755)
$$$$ 318.1$$$$ wiley (09/11/02; 13:14:39MT - msg#: 84830)
$$$$ 317.9 $$$$ VanRip (09/05/02; 12:20:50MT - msg#: 84415
=====
CONGRATULATIONS to the three WINNERS !
Please would each of the WINNERS provide Jill the correct snailmail land address for mailing of the GOLDEN prizes.
Jill can be reached at email address of:
jill@usagold.com
===
Please notice that the following entries were at one time TODAY atop the pole.
---
$$$$ 321.4 $$$$ balzac (09/04/02; 17:22:15MT - msg#: 84353)
$$$$ 321.3 $$$$ goldquest (9/11/02; 00:01:10MT - msg#: 84795)
$$$$ 321.1 $$$$ The Knife (09/04/02; 16:30:43MT - msg#: 84345)
$$$$ 321.0 $$$$ Gandalf the White (09/03/02; 12:29:20MT - msg#: 84221)
$$$$ 320.8 $$$$ Neubie (9/11/02; 08:25:55MT - msg#: 84810)
$$$$ 320.5 $$$$ cwa (09/10/02; 21:39:38MT - msg#: 84784)
$$$$ 320.3 $$$$ Aureo Speedwagon (09/11/02; 15:00:12MT - msg#: 84835)
$$$$ 320.2 $$$$ 18K (09/03/02; 13:18:00MT - msg#: 84226)
$$$$ 320.1 $$$$ Truthcaster (09/11/02; 17:28:21MT - msg#: 84843)
$$$$ 320.0 $$$$ Zhisheng (09/03/02; 15:06:26MT - msg#: 84240)
$$$$ 319.9 $$$$ Draco (09/10/02; 18:38:08MT - msg#: 84763)
$$$$ 319.8 $$$$ Bound Spirit (09/03/02; 17:20:54MT - msg#: 84257)
$$$$ 319.7 $$$$ slingshot (09/03/02; 16:57:17MT - msg#: 84254)
$$$$ 319.6 $$$$ NTgeo (9/6/02; 01:56:11MT - usagold.com msg#: 84477)
$$$$ 319.5 $$$$ davefinger (09/03/02; 14:52:14MT - msg#: 84235)
$$$$ 319.4 $$$$ koala bear (9/4/02; 04:08:54MT - msg#: 84299)
$$$$ 319,3 $$$$ Shanti (09/11/02; 15:09:35MT - msg#: 84836)
$$$$ 319.2 $$$$ Bulldog (09/03/02; 21:53:40MT - msg#: 84288)
$$$$ 319.0 $$$$ Just waking up (09/10/02; 13:46:21MT - msg#: 84737)
$$$$ 318.9 $$$$ Graham (9/11/02; 09:01:37MT - msg#: 84812)
$$$$ 318.6 $$$$ Kodie (09/03/02; 12:41:26MT - msg#: 84222)
$$$$ 318.5 $$$$ Broken Tee (09/11/02; 12:50:41MT - msg#: 84829)
$$$$ 318.3 $$$$ Max Rabbitz (09/10/02; 16:13:39MT - msg#: 84755)
$$$$ 318.1$$$$ wiley (09/11/02; 13:14:39MT - msg#: 84830)
$$$$ 317.9 $$$$ VanRip (09/05/02; 12:20:50MT - msg#: 84415)
$$$$ 317.2 $$$$ Artie Farkle (09/04/02; 20:02:53MT - msg#: 84369)
---
I also wish to thank EVERYONE that participated for your kind consideration and I do hope that ALL had fun !
<;-)


Brett Woods (09/13/02; 12:15:22MT - usagold.com msg#: 85058)
Exchange controls:
Thanks Sierra. This is a good read.

Carl H (09/13/02; 11:52:30MT - usagold.com msg#: 85057)
U.S. consumer sentiment slips in early September
http://biz.yahoo.com/rf/020913/economy_consumers_5.html
NEW YORK, Sept 13 (Reuters) - U.S. consumer sentiment fell for a fourth straight month in early September, a report released on Friday showed, with people becoming more downbeat even as they flocked to buy new autos and homes.

While some analysts wonder how long consumers can keep spending at such a pace, August retail sales data also released on Friday showed no sign of a let-up, even as shoppers claimed in a University of Michigan survey to be in a gloomier mood.

--- SNIP ---

CarlH:

Perhaps they are spending to help their gloomy mood.
One must wonder how gloomy they will be when:
1. Their retirement funds finish evaporating.
2. Their credit lines max out.
3. They loose their jobs.
4. They loose their houses.
5. They loose their SUV's (Heaven forbid!)

Got Gold?


Gandalf the White (09/13/02; 11:42:21MT - usagold.com msg#: 85056)
WOWSERS ! In the LAST 15 Minutes these were POLESITTERS!
$$$$ 319.5 $$$$ davefinger (09/03/02; 14:52:14MT - msg#: 84235)
$$$$ 319.4 $$$$ koala bear (9/4/02; 04:08:54MT - msg#: 84299)
$$$$ 319,3 $$$$ Shanti (09/11/02; 15:09:35MT - msg#: 84836)
$$$$ 319.2 $$$$ Bulldog (09/03/02; 21:53:40MT - msg#: 84288)
$$$$ 319.0 $$$$ Just waking up (09/10/02; 13:46:21MT - msg#: 84737)
$$$$ 318.9 $$$$ Graham (9/11/02; 09:01:37MT - msg#: 84812)
$$$$ 318.6 $$$$ Kodie (09/03/02; 12:41:26MT - msg#: 84222)
$$$$ 318.5 $$$$ Broken Tee (09/11/02; 12:50:41MT - msg#: 84829)
$$$$ 318.3 $$$$ Max Rabbitz (09/10/02; 16:13:39MT - msg#: 84755)
$$$$ 318.1$$$$ wiley (09/11/02; 13:14:39MT - msg#: 84830)
$$$$ 317.9 $$$$ VanRip (09/05/02; 12:20:50MT - msg#: 84415)
$$$$ 317.2 $$$$ Artie Farkle (09/04/02; 20:02:53MT - msg#: 84369)
++++++++
PAPER is FLYING on the COMEX !
Hold on to your hats.
The WINNER will be known soon.
<;-)


Sierra Madre (09/13/02; 11:30:03MT - usagold.com msg#: 85055)
Brett Woods: Glad to oblige by some comment on exchange controls.

It's very difficult to imagine the U.S. with exchange controls, because of the worldwide importance of the dollar and the immense advantage that dollar acceptance gives to the U.S. economy. But, such controls have been a fact in many countries in the past century, including Great Britain. The once great British Empire faded at the last, and the pound had to be removed as sharing equal place with the dollar as a reserve currency. The B.Empire contracted itself and protected its weak currency with exchange controls and controls on the purchase and export of gold. (This, was the situation back in the 50's - check History Book for more precise info.)

It seems that a U.S. with exchange controls would be a country that has given up its imperial designs; the controls would be the recognition of defeat and retreat.

Exchange controls means that a "Law" imposes a control on Banks and other dealers in foreign currencies, that prohibits them from selling pounds, euros, yen, renminbi or whatever, for dollars.

For instance, an importer of cars, who has to pay for them in euros, or yen, would have to have a permit to buy the yen or the euros needed to pay for the import.

The government decides who gets permits and what he is authorized to buy.

The government also decides other details, like more favorable rates for purchasing foreign currency, for favored "sectors".

The US has a tremendous overhang of foreign debt - $2.5 trillion (?) in foreign hands of instruments which the foreigners may want to get rid of at any time - and if the foreigners want to get out of dollars and into some other currency at the same time, they can collapse the dollar to practically - well, awfully way down.

Third world and socialistic countries have typically gone in for exchange controls, instead of taking a huge devaluation which is required to restore "Balance of Payments" - a similar level between value of imports and value of exports.
Currently, the US is running a current account deficit of probably more that $500 billion for THIS YEAR ALONE.

Devaluation to correct a trade imbalance of that magnitude, might just be unpalatable to the U.S. rulers. They might decide to go the way "third worlders" have gone: exchange controls - a socialistic device, which of course always fails in the end - but it can be used to put off the inevitable, and politicians love to do that.

What has me thinking, is that "exchange controls" would also have to include GOLD, because gold is money, whatever the economists may say about it, and if you are going to control the sale of foreign money, you have to control the sale of gold, also.

What if exchange controls are imposed to save JPM/C, for instance? Then they would have an excuse not to fulfill their derivatives at market prices, because there would be, "officially", no market, no transactions, no sales of gold. There would be a "black market" - the real market now become illegal - but that would not affect settlement of derivatives at a given official price, in green bills.

As for the gold owed to foreign Central Banks for gold loans or gold leases, well, "Sorry, we have exchange controls and are forbidden to export gold or deal in gold, and so for the moment, we are unable to return your gold."

Could this be a way out for the likes of JPM/C?

As you can see, I am ASKING questions. I am not saying such and such things will happen. It just seems to me that WTSHTF, the pols and banksters might just think of exchange controls. Not a solution of course, just a typical mess on top of another mess.

We have enough to worry about, I guess, without thinking about ONE MORE THREAT. Perhaps I should not raise this subject, which for all I know is utterly out of the question. It haunts be because past experience has shown that governments regularly have resorted to exchange controls, and the US, with the same problems ... could they?

Sierra









Tommy P (9/13/02; 11:02:35MT - usagold.com msg#: 85054)
$315.00
That's gotta hurt!

Mr Gresham (9/13/02; 10:20:16MT - usagold.com msg#: 85053)
Thanks
http://www.financialsense.com/metals/sinclair/general/0909_091602.htm
Great posts today -- I can't keep up -- frustrating, about a week behind, with real life throwing curves and fastballs. I guess sometimes you get to choose between either doing it, or reading about it.

Thanks, krash, for the Greider. "Left" and "Right" converge, when you realize it's just a gang of apolitical crooks pilfering the community.

Sinclair (above link) seems to be working hard, adding throughout the day, with a menu of weekly servings rich enough for an FOA fan's appetite, perhaps.

Especially things like yesterday's ""WHY DOESN'T THE ASIAN/ISLAMIC INTEREST TAKE GOLD HIGHER?"

"A: That is unprofessional and total contra-productive because:" and there follow 10 reasons why Sinclair thinks they're buying gradually and not running the price up.

I get it -- and don't get it -- (maybe someone could enter some of our FOA questions into Sinclair's Q&A? I don't have time now...) -- What I don't get is, aren't there _multiple_ buyers out there who would be trying to beat each other to the limited physical available? Sure you would run the price up, but YOU'D have it, and not the others. (Maybe China is coordinating some kind of Asian buying pool? Allocating shares as it comes in.)

Sinclair's view seems to me to work only if there's basically ONE buyer ("monopsony") in the market, which can then bide its time in acquisition. He also, like most commentators seem to do, lumps all CBs together (including ECB, I guess) as resisting gold's displacement of the USD.

On the other hand, nearly everyone is acknowledging the Euro's arrival now; FOA was certainly early in his enthusiasm, but he was hearing things from/about ECB which prompted that, I guess. Maybe they ran into hitches in their acceptance, we'll find out about later. Anyway, timing diminishes in importance when you look at a really nice long-wave bull.

I don't know enough about Sinclair to have any corrective vantagepoint on the great deal of info/opinion he is offering. Perhaps he would be one to look into, or be prompted to, some of the things we have discussed here. He certainly seems to be willing to work hard to share knowledge with us, a la FOA.

So I guess I'm saying "Thanks" to all the hard workers on the front line of knowledge. Freely offered; gratefully received.


Brett Woods (9/13/02; 10:18:23MT - usagold.com msg#: 85052)
Sierra Madre
Would you please explain more about possible exchange controls?


a nation of one (9/13/02; 10:07:41MT - usagold.com msg#: 85051)
Spartacus (9/13/02; 06:55:25MT - usagold.com msg#: 85044)

The statement: "Debt securitization is guerrilla warfare against a sound credit system."

I think that is a pretty accurate description.

Waverider (9/13/02; 09:57:00MT - usagold.com msg#: 85050)
Crude Oil Jumps on Report Iraq Rejects Weapons Inspection Plan
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APYIDcxaAQ3J1ZGUg
Snip:
"Crude oil jumped after a Reuters report that Iraqi Deputy Prime Minister Tariq Aziz has rejected U.S. demands for the unconditional return of United Nations weapons inspectors to the Persian Gulf country. ``The return of inspectors without conditions will not solve the problem,'' Aziz said, Reuters reported, citing a preview of an interview to be broadcast today by Dubai-based MBC television."

sector (9/13/02; 09:54:30MT - usagold.com msg#: 85049)
BEANED IN BOSTON
Credit Swiss First Boston in the Bull's Eye
By JESSICA SOMMAR
------------------------------------------------------------------------

September 13, 2002 -- The top regulatory cop in Boston is getting set to throw the book at Credit Suisse First Boston.

Massachusetts Secretary of State William Galvin, investigating analyst conflicts at CSFB, is appalled by the evidence his office has turned up so far and could ask that criminal charges be brought against the Swiss-owned investment bank.

"We take this issue very seriously here," said Galvin about Wall Street analysts who give high ratings on companies they privately disparage.

"Some of this conduct could reach criminal referral. It's the only way to put an end to this stuff. You have to start putting people in jail," Galvin said.

One damaging e-mail obtained by the Post from an anonymous source is dated March 21, 2001, from Gilbert George, a CSFB tech analyst. He wrote to Elliot Rogers, head of CSFB equity research, describing the actions of top tech services analyst Mark Wolfenberger.

The e-mail suggests that Wolfenberger pushed initial public offerings of companies "that never should have gone public" and that he did so despite "structural problems" because "we all got our bonuses for a good year."

Wolfenberger now covers such tech services firms such as Razorfish, Inc., Viant Corp. and iGate Corp., according to Bloomberg data, some of which were taken public by CSFB.

Gilbert and Wolfenberger did not return calls for comment.

Still, the e-mail seems to imply that the problems of analyst conflicts of interest uncovered at Merrill Lynch by the New York attorney general's office this year are not confined to one firm.

"The implicit message of this [Gilbert] communication . . . is that the companies were not fit for a public offering, but that CSFB nonetheless took the companies public because it knew it could place the securities so long as the stocks were sufficiently hyped," said Christopher Bebel, a securities law expert and partner at Shephard Smith & Bebel.

"This is an indication that there is a significant amount of egregious misconduct that took place behind the scenes at major Wall Street brokerage firms," he added.

CSFB declined to comment on the e-mail.

A probe by New York Attorney General Eliot Spitzer against Merrill Lynch made public scandalous e-mails that rocked the firm, causing the stock to drop more than 25 percent and forcing Merrill to pony up $100 million and institute reforms to settle the case.

But CSFB had many more underwritings under star tech banker Frank Quattrone than Merrill did.

Quattrone and his crew made CSFB the top underwriter of tech IPOs during the tech boom in 1999. They underwrote $6.08 billion worth of IPOs on 62 separate issues, according to Thomson Financial.

In 2000 CSFB slipped to No. 4, behind Goldman Sachs, Morgan Stanley and Deutsche Bank, with $4.72 billion and 44 separate issues.

Galvin's probe into CSFB is a continuation of Spitzer's investigation.
+++++++++++++++++++++++++++++++++++++++++++++

Adios investor confidence.

sector (9/13/02; 09:46:47MT - usagold.com msg#: 85048)
BRIDGING THE GAP / 'Payoff' system the wrong medicine
[Update on the Removal of Deposit Insurance in Japan] Yomiuri Shinbun

Ryuzo Sato

Ever since the so-called payoff system was reinstated in April and deposit insurance on term deposits was capped at 10 million yen, there has been an ongoing debate over whether the government should stop protecting the full amount of deposits in the remaining ordinary accounts and current accounts.

Although the government had taken the position that the protection cap on all deposits would go ahead as scheduled April, recently it changed its tone and said it was exploring the possibility of continuing full protection for settlement accounts. This essentially means a postponement of the protection cap, so the question is: How will Prime Minister Junichiro Koizumi resolve the contradiction between protecting settlement accounts and taking decisive action to cap deposit insurance as part of his plans for structural reform?

If we look at protection policies for depositors in the United States, on which Japan has modeled its own plan, a single account (regardless of whether it is a term deposit, current account or ordinary account) is protected up to a maximum of 100,000 dollars (around 12 million yen) in the event the financial institution in which it is held goes bankrupt.

That means a married couple could have a total of three protected accounts (300,000 yen) at the same bank: a joint account, an account opened by the husband with the wife as beneficiary, and an account opened by the wife with the husband as beneficiary. In addition, according to one interpretation of the law, protection could also extend to individual accounts held independently by the husband or wife, since money earned by a spouse generally is regarded as joint property in the United States.

In Japan, it is a relatively recent trend for both spouses to be in the workforce. Moreover, Japan does not permit free and untaxed gifts between husband and wife--hence, the 10 million yen limit per couple is too rigid. What is more, in the United States, settlement deposits (checking accounts, payment on demand, and ordinary accounts) are widely used by individuals and corporations alike; there is absolutely no distinction between them and term deposits in terms of protection. Consequently, the fact that Japan is considering full protection for settlement-type accounts as a permanent arrangement beginning April means it will be introducing a system without precedent in any other leading industrialized country.

===

Zero interest corrodes finance


I continue to oppose the protection cap on term deposits that went into effect this April. It has now become apparent that it was wrong to push recklessly ahead with the plan. If the government forces the rest of the plan through next April, chaos is likely to occur at small and midsize financial institutions. The government is well aware of this. The period between January and June saw an accelerated shift of funds out of term deposits into ordinary accounts, which are fully protected. Term deposits declined by 32 trillion yen and ordinary deposits increased by 54 trillion yen; postal savings accounts have increased by more than 1 trillion yen since the end of March. There are fears that if deposit insurance is capped on ordinary accounts and current accounts next April, money will converge on a very small number of elite banks (assuming such banks exist in Japan) as well as on the postal savings system, precipitating a new financial crisis. Not only that, it would also create the ironic situation of enriching even further the postal savings system that is the target of Koizumi's structural reforms.

The financial system in Japan is currently being attacked by two diseases unlike anything ever seen before--zero interest rates and ever-increasing bad debts. I do not know about saving face on Japan's international commitments, but if Koizumi, Japan's chief consulting physician, were to stop drip-feeding his seriously ill patient and put her on a fortifying diet of structural reforms with the aim of improving her constitution, what would happen to the patient's perilously weakened internal organs? Particularly in Japan, under the seemingly endless reign of near-zero interest rates, there is virtually no difference between term deposits, ordinary deposits and current deposits, except for restrictions on when withdrawals can be made.

Be that as it may, the responsibility of the chief consulting physician is to put an end to the pro forma debate over the rights and wrongs of the deposit protection system and give the highest priority to plans for combating deflation--such as drawing up a budget with a view to cutting taxes in order to fight the disease that is gnawing away at Japan.

Sato is C.V Starr professor of economics at New York University.
++++++++++++++++++++++++++++++++++++++++++++++++++

Here we see the construction of an unstable financial structure ready to implode at the slightest push. Gold is a highly visible alternative to the changing safety of Koziumi LDP government rules.

Some Japanese elders have already acted, more have noticed and yet more are potential buyers of hundreds of billions of $USD of kilo bars.


Buena Fe (9/13/02; 09:34:50MT - usagold.com msg#: 85047)
Socrates964
i couldn't agree more, the market machinery is spewing out smoke in all directions, it appears we're within days of a major earthquake event. Heaven Help Us

Go GATA Go

Socrates964 (9/13/02; 08:39:57MT - usagold.com msg#: 85046)
Hmmm...
Looks to me like we're seeing some kind of concerted intervention in FX markets to prop up dollar - note sudden strength against Sfr/Y. Not surprising, therefore that gold is doing nothing.

We are at a key point here, as Dow is sitting on support at 8,300. I will bet that it breaks - if not today, then next week.

CoBra(too) (9/13/02; 07:49:04MT - usagold.com msg#: 85045)
Only store of wealth left - Gold!
... Once upon a time ... there was the Maastricht Treaty. A criteria among the euro participants in the EU limiting the nations budget deficits to 3%. It has also been the criteria to to join the club. While some may have been window dressing, others took it seriously.

In the meantime we've seen tiny Portugal and mighty Germany missing the goal in a big way - and avoiding repercussions from the EU Commission. - Now Portugal, reaching a deficit of 4.1%t has been warned, while Germany got away scot free France and Italy are joining the fray.

The storm troopers of the EU are already beleaguering the stability pacts' (ef)-fort. It now seems only a question of time when the EU and the ECB will unconditonally surrender. The global recessionary forces will be the welcome excuse, as the last resort of the global economy - the US consumer -also throws in the towel.

As paper wealth is rapidly eroding - Gold - once again fills the void as the eternal store of wealth.
cb2

Spartacus (9/13/02; 06:55:25MT - usagold.com msg#: 85044)
Perils of the debt-propelled economy
http://www.atimes.com/atimes/Global_Economy/DI14Dj01.html

Perils of the debt-propelled economy
By Henry C K Liu

---Banks used to be the sole intermediaries of debt. For this reason, a central bank was formed to supervise and provide liquidity to the banking system. Thus a central bank came into existence in the United States in 1913 on the assumption that the existence of a healthy banking system is in the national interest. And to protect the national interest, the central bank, which in the US version is a government institution privately owned by the banks in the Federal Reserve system, is allowed to act as lender of last resort to the nation's commercial banks with public money, or more accurately, through government authority to create fiat money.
-------------
More ominous, the US credit system has broken through the banking system - the bulk of debt now is intermediated through the unregulated credit markets by debt securitization.
---------------
Debt securitization is guerrilla warfare against a sound credit system. Debt proceeds can be disguised as current income, distorting the financial performance of the debtor. In these brave new credit markets, the government is generally only an interested bystander, so far quite unwilling to regulate even over-the-counter (OTC) derivative trading by banks, which are suppose to be regulated, with an "if I don't smoke, someone else will" mentality.

OTC derivatives are traded off exchanges, directly between counterparties, and as such are not subject to disclosure rules. Adding estimated data from the Bank for International Settlements for OTC derivatives to published figures for exchange-traded derivatives, the total notional principal balance of the reported derivatives market in June 2001 was $119 trillion, about four times the gross domestic product (GDP) of the Organization of Economic Cooperation and Development (OECD) countries and twice the value of global trade. The amount unreported remains unknown.

This shows that derivatives performed more than a hedge function, as apologists claim. Derivative trading has become a profit center for banks and non-bank financial institutions. True, the notional principal amount is never at risk, because no principal payments are exchanged. The interest payments that are linked to that notional principal amount are at risk. A loss on a derivative contract becomes possible when (a) interest rates or commodity prices move in a direction that makes the contract more or less valuable, and (b) the counterparty on the other side of the contract defaults. Derivatives credit exposure is the present value of the cost of restoring the economic value of a contract should a counterparty default.

All kinds of street rumors are flying at this very moment that one of the world's biggest banks is exposed to derivative trades that would cause serious counterparty credit problems if the market capitalization of this bank should fall below a triggering level, or the price of commodities or interest rates should move against its derivative positions. Because there is no way to dispel or confirm such rumors, and the bank involved remains tight-lipped about its true financial conditions, the uncertainties weigh down on the economy.---



misetich (9/13/02; 06:39:31MT - usagold.com msg#: 85043)
US warns Russia over Georgia strike
http://news.bbc.co.uk/2/hi/europe/2254959.stm
Snip:

The United States says it takes strong exception to the possibility of Russian military intervention against Chechen rebels in Georgia.
...........
He said Georgia's own military operations had failed to achieve tangible results, and he has told his armed forces to draw up plans themselves.

Observers said Moscow's message was to Washington as much as to Georgia.


For the past four months American troops have been stationed in Georgia, helping the country's army to tackle Chechen militants - but with limited results.
..........
Some observers believe it is Moscow's last-ditch attempt to stop Washington from attacking Iraq, where Russia has sizeable economic interests.
..........
********
Misetich

The self-appointed world cop is discovering how other empires have fallen in their goal to control the world and and utilization of its resources

Got gold?

Spartacus (9/13/02; 05:51:25MT - usagold.com msg#: 85042)
EU sets penalties in trade fight
http://news.bbc.co.uk/2/hi/business/2255104.stm

---The European Union (EU) has published a list of American goods which could become targets for sanctions in the biggest transatlantic trade war in history.

The EU won the right to impose sanctions worth $4bn (£2.5bn) two weeks ago, after the World Trade Organisation (WTO) ruled that a US tax break for exporters amounted to a massive illegal subsidy for exporters.

The target list ranges from nuclear reactor parts to chewing gum and farm products like cereals, wheat gluten, nuts, vegetables.

If US companies are to avoid the sanctions, the Bush Administration must persuade Congress to approve an unpopular change to the tax laws ahead of mid-term elections in November.

The WTO approved the sanctions - the biggest yet by far - after the EU claimed the tax break was costing European companies billions of dollars in lost trade.

But Robert Zoellick, the US Trade Representative, has warned that if the EU imposed the sanctions, it would be detonating a nuclear bomb in the world trading system.

The European Commission hopes it won't come to that, according to the BBC's Europe Business Correspondent, Patrick Bartlett.---



steady (9/13/02; 05:28:16MT - usagold.com msg#: 85041)
theft of that barbarac metal
http://www.gulf-daily-news.com/arc_Articles.asp?Article=32300&Sn=WORL&IssueID=25176

WORLD
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Gold consignment theft


A shipment of gold worth more than $400,000 (BD151,200) has been stolen and a guard killed in the Russian region of Siberia, the Russian interior ministry said yesterday. The gold belonged to the Lena mining co-operative and was in transit between the towns of Kadalikan and Ridaibo in Siberia when it was stolen on Tuesday, the Interfax news agency said, quoting the ministry. A security guard was found dead in the convoy vehicle while the driver and a co-operative member disappeared along with the gold.

Bad weather in the region has held up the search for the missing gold, the ministry said.





Black Blade (9/13/02; 04:59:35MT - usagold.com msg#: 85040)
Terrorist Threat

Clarification - Now CNBC and NBC say that it is 25 mile stretch of I-75 (aka "Alligator Alley") that is closed with 3 in custody and K-9 bomb sniffing dogs searching a vehicle. Probably a story blown all out of proportion - we'll see.

- Black Blade

Topaz (9/13/02; 04:59:00MT - usagold.com msg#: 85039)
krash, SteveH.
krash:-
What a good read...may be obsolete by it's Dateline tho ;-)
(ie: all he suggests may happen HAS happened by 9/23/02)
SteveH:-
Great to see your handle again Steve..best wishes to you.

Black Blade (9/13/02; 04:54:28MT - usagold.com msg#: 85038)
"Breaking "- Freeway Closed - Terrorist Threat

Just over the wire - "Terror Alert" - A stretch of Highway 25 in Florida is closed down due to what is termed a "Terrorist Threat". Three Middle Eastern men in custody so far and search is underway for others. Authorities are searching vehicles for explosives. No other details yet, but according to CNBC this is the "real deal".

Who knows, just might be some Cuban-Americans absconding with ballot boxes from South Florida. Hmmm...

Black Blade (9/13/02; 04:07:52MT - usagold.com msg#: 85037)
Systemic Risk and Comparison to The Great Depression?
http://search.ft.com/search/article.html?id=020913000581&query=gold&vsc_appId=totalSearch&state=Form

Snippit:

"Miners have been buying back the gold they sold forward in hedges against a price decline. This closing out of hedge positions has been the biggest source of demand at the margin for gold for the last year. The reason they have been reducing their hedging is because there is no 'carry' [interest earned on gold sold for delivery in the future] in it."

There is another story to be told here, and it does appear to have something to do with both systemic risk and inflation. US gold mining stocks began to rise in the late 1920s for example, well before the gold standard was abandoned by the US in 1933. They did, in effect, predict the systemic risk of the early 1930s, which was followed by the reflation of the later 1930s.

John Hathaway, whose Tocqueville Gold fund has grown by 26 per cent over the past three years, says: "A deflationary environment in which people have to service debt by selling assets, such as we have now, leads in the end to inflationary consequences." And, indeed, gold stocks were rising in the early 1930s, as assets were being liquidated and prices fell by 30 per cent or more. Like other gold bulls, Caesar Bryan, manager of the Gabelli Gold fund, believes that the relatively unhedged gold miners are going to continue to be better performers in the future than the large "hedgers" such as Barrick and AngloGold.


Black Blade: The "day of the hedger" is over. Much of the economic data suggests that we are coming full circle and are nearer to a "New Great Depression". What form that takes no one knows for certain, however, the recent strength in precious metals may be a strong signal today as it was in the past.




Usul (9/13/02; 03:51:34MT - usagold.com msg#: 85036)
Eurostocks Slide on NY Losses
http://biz.yahoo.com/rb/020913/markets_europe_stocks_9.html
...............snippets...............
"The outlook for economic growth globally looks dreadful and sentiment in the market place is very fragile," said Chris Johns, a global strategist at ABN AMRO.
...............
"Credit quality issues will get worse for banks as growth decelerates while insurers will stay under pressure from weak equity markets. Insurers are highly geared to stocks through their portfolios," he added.
...............
"People are now talking about deflation everywhere a la Japan which is dreadful for companies as the real value of their debt rises, consumers stop buying and the value of their inventories fall," said ABN AMRO's Johns.
...............

krash (9/13/02; 03:24:28MT - usagold.com msg#: 85035)
The End of (the U.S.) Empire (from the Nation)
http://www.thenation.com/docprint.mhtml?i=20020923&s=greider
Here's some food for thought re. Bush's design's on Iraq....excerpt:

The End of Empire
by WILLIAM GREIDER

[from the September 23, 2002 issue of the Nation]

The imperial ambitions of the Bush Administration, post-9/11, are founded on quicksand and are eventually sure to founder, but for fundamental reasons not currently under discussion. Bush's open-ended claims for US power--including the unilateral right to invade and occupy "failed states" to execute "regime change"--offend international law and are prerogatives associated only with empire. But Bush's greater vulnerability is about money. You can't sustain an empire from a debtor's weakening position--sooner or later the creditors pull the plug. That humiliating lesson was learned by Great Britain early in the last century, and the United States faces a similar reckoning ahead.

The US financial position is rapidly deteriorating, due mainly to America's persistent and growing trade deficit. US ambitions to run the world, in other words, are heavily mortgaged. Like any debtor who borrows more year after year with no plausible way to reverse the trend, a nation sinking deeper into debt enters into an adverse power relationship with its creditors--greater and greater dependency.

These creditors are both private investors and governments from Europe and Asia; now none of them have any incentive to disrupt their lopsided relationship with the superpowerful leader of the world. After all, it works for them: Their exports have unfettered access to the largest consumer market in the world, producing trade surpluses and gaining greater market share. Their capital, meanwhile, reaps good returns on the loans and investments in the American economy. But history suggests that with sufficient provocation, the creditor nations will eventually assert their leverage over the United States, however reluctantly. That critical juncture is likely to arrive either because the American debt burden has become so great that additional lending would be too risky or because the creditor nations want to jerk Washington's chain, perhaps to head off reckless new adventures. Either way, it will be a humbling moment for American triumphalism.

No one can know exactly what circumstances will prompt our old friends to give a sharp elbow to Washington and Wall Street--that is, refuse to lend more or threaten to withdraw capital--but US finance is currently getting a small taste of what it would feel like. Saudi Arabia (not the government but its wealthy private investors) has pulled as much as $200 billion out of US financial markets in recent months, perhaps to diversify holdings but clearly provoked by the Bush hawks, who are demonizing the Saudis as the "kernel of evil" behind Islamist terrorism. An investment consultant in Riyadh told the Financial Times, "People no longer have any confidence in the US economy or in United States foreign policy." Extracting $200 billion from US stocks and bonds may have contributed to the weakening value of the dollar, but by itself it is not a major blow. If Asian money or Europe's were to undertake a similar exit, the financial quake would send damaging tremors through virtually every dimension of US economic life. If severe and sustained, it could shut down economic growth and lead to a lower standard of living.

The threatening implications are seldom discussed with any clarity or candor, but the numbers are not secret. The US economy's net foreign indebtedness--the accumulation of two decades of running larger and larger trade deficits--will reach nearly 25 percent of US GDP this year, or roughly $2.5 trillion. Fifteen years ago, it was zero. Before America's net balance of foreign assets turned negative, in 1988, the United States was a creditor nation itself, investing and lending vast capital to others, always more than it borrowed. Now the trend line looks most alarming. If the deficits persist around the current level of $400 billion a year or grow larger, the total US indebtedness should reach $3.5 trillion in three years or so. Within a decade, it would total 50 percent of GDP. Instead of facing this darkening prospect, Bush and team regularly dismiss the worldviews of these creditor nations and lecture them condescendingly on our superior qualities. Any profligate debtor who insults his banker is unwise, to put it mildly.

The specter of America's deepening weakness seems counter-intuitive to what people see and experience in a time of apparent continuing prosperity--and contradicts everything they are told by authoritative voices. But the quicksand is real. We are already in up to our knees.

Deep-running tides of history have been steadily undermining America's economic hegemony for decades................

The European Union, meanwhile, is patiently assembling the economic girth and institutional confidence to act as the leading counterpoise to Washington. That is the essential idea of the euro--a competing world currency other nations can use for trade and as a reliable storehold of wealth. As the euro establishes its durability and comes into wider usage, the dollar will no longer be the only option. At that point, it will be easier for Europe or others to exercise their financial leverage against the United States without damaging themselves or the global financial system as a whole. Europe is not quite there yet, but the euro is rising and so is European anger. The Saudis' financial withdrawals this summer may be a hint of what Americans can expect--episodes of veiled pressure until Washington gets the message.

The Bush warriors' reckless American unilateralism can only hasten the day when the creditors' conclude that they must assert their leverage over us, perhaps in order to defend peace and stability in the world. How will Americans react when they discover that "U-S-A" is a lot less muscular than they were led to believe? Assuming Americans do not really yearn to become latter-day Roman legions, many people may be relieved to learn the truth. Stripped of imperial illusions, this country could concentrate on building a different, more promising society at home. But while we can hope that the transition ahead will be gradual and without national humiliation, it's more plausible that America's brave new imperialists will plunge ahead blindly, until one day they encounter their own intense reckoning with the bookkeepers.



Black Blade (9/13/02; 03:16:47MT - usagold.com msg#: 85034)
European Markets Look Ugly
http://quote.yahoo.com/m2?u

Euro markets extend damage from Asia. Meanwhile US market futures look deep into the red as well. "Entertainment" on tap for Wall Street.

- Black Blade

SteveH (9/13/02; 01:46:10MT - usagold.com msg#: 85033)
Gandalf
Thanks for remembering.

Steve

Black Blade (9/13/02; 01:11:15MT - usagold.com msg#: 85032)
3 Former Tyco Execs Charged With Fraud
http://biz.yahoo.com/rb/020912/manufacturing_tyco_10.html


Snippit:

NEW YORK/BOSTON (Reuters) - Tyco International Ltd. swept out the last remnants of L. Dennis Kozlowski's reign on Thursday as prosecutors accused the former chairman and his top lieutenants of using Tyco as a private bank while fleecing the company and shareholders out of $600 million. Kozlowski, who faces massive fines and up to 30 years in prison, took about $270 million from Tyco's key employee corporate loan program and used most of the money on personal expenses such as yachts, fine art, jewelry and vacation estates, the U.S. Securities and Exchange Commission said.

The SEC and Manhattan prosecutors said Kozlowski, 55, was indicted for perpetrating the fraud with former Chief Financial Officer Mark Swartz and former general counsel Mark Belnick. The three men, who were marched into the Manhattan courtroom in handcuffs, all pleaded not guilty. They must return to court on Sept. 19.


Black Blade: Remember when Prudent Bear manager David Tice raised questions about the phoney book keeping at Tyco and he was subsequently pilloried on CNBC by Tyco apologists (various fund managers and economists). Looks like he was a few steps ahead of the pack on this one – good call. Dennis Kozlowski was interviewed at the time and said that everything was in order. Now he is looking at spending some time at the "Cross Bar Hotel".



Spartacus (9/13/02; 01:05:45MT - usagold.com msg#: 85031)
IMF says further US stock market declines a considerable risk
http://www.ananova.com/business/story/sm_669422.html?menu=business.currencynews

The IMF identified further US stock market declines, an accelerated slowdown in net US capital inflows, and continued weakening of financial firms' balance sheets as considerable downside risks to the global economy "in the immediate future."

In its quarterly Global Financial Stability report, the IMF cited "the possibility of further equity price declines, and in the worst case scenario panic selling by both institutional investors" as one of three "considerable downside risks ... in the immediate future."



Spartacus (9/13/02; 00:59:32MT - usagold.com msg#: 85030)
Greenspan warns Bush over spending
http://news.bbc.co.uk/2/hi/business/2253811.stm

---Alan Greenspan has warned lawmakers that their inability to balance the federal budget threatens the country's economic stability.

Mr Greenspan, chairman of the US Federal Reserve, urged Congress and the administration of President George W Bush to restrain the desire to cut taxes while raising levels of public spending.

Failure to preserve rules which rescued the US from its last period of deficits would be a "grave mistake", Mr Greenspan said. ---

Black Blade (9/13/02; 00:59:22MT - usagold.com msg#: 85029)
House Subpoenas Global Crossing Execs
http://biz.yahoo.com/rb/020912/telecoms_globalcrossing_7.html

Snippit:

WASHINGTON (Reuters) - The House Energy and Commerce Committee said on Thursday it had subpoenaed Global Crossing (OTC:GBLXQ.PK) Chairman Gary Winnick to testify about deals that may have inflated revenue at Qwest Communications International Inc. (NYSE:Q). "Based on our interviews, Mr. Winnick appears to have been a lot more involved in the day-to-day operations of the company than he has admitted," panel spokesman Ken Johnson told Reuters. The committee has been investigating whether Global Crossing used contemporaneous deals for network capacity to inflate revenue and has expanded that probe to determine whether Qwest has made similar deals, Johnson said.

Black Blade: Rumor has it that Global Crossing Chairman Gary Winnick is scheduled for the morning "Perp Walk". It is suggested that Democrats are getting very uneasy about the link between Democratic Party Chairman Terry McAuliffe and Global Crossing Chairman Gary Winnick as the November elections approach. Also, former Qwest CEO Nacchio may be next for a "Perp Walk" but so far no news. Another rumor is that the heat is being turned up at bankers JP Morgan Chase and Citigroup for their Enron involvement. More scandals are sure to break out before this mess wraps up.



Black Blade (9/13/02; 00:45:47MT - usagold.com msg#: 85028)
Jobless Claims Raise Economy Worries
http://biz.yahoo.com/rb/020912/economy_1.html


Snippit:

WASHINGTON (Reuters) - Reports on Thursday emphasized troubling trends in two areas of the U.S. economy that worry most economists -- trade and employment.
The current account -- the broadest measure of trade with foreign countries since it includes investment -- mushroomed 15.6 percent in the second quarter to a record $129.96 billion while initial claims for jobless benefits last week climbed by 19,000 to 426,000, the highest level in over four months. The dollar weakened slightly on the reports, which also weighed on the stock market. The blue-chip Dow Jones industrial average finished down by more than 200 points.

Black Blade: This is very important info to keep an eye on so it deserves looking over again. Meanwhile Asian markets got crushed tonight and Euro markets are set to crash too. So far the CAC40 is open and plunging hard!!! Lotsa "entertainment" on tap for Wall Street tomorrow.

Interesting news is that CalPERS (the largest pension fund) fired Goldman Sachs for incompetence and underperforming the market. Hmmm...



Gandalf the White (9/13/02; 00:28:23MT - usagold.com msg#: 85027)
From the Forum Archives come one of my favorites ! <;-)
Peter Asher (9/22/2000; 0:44:21MT - usagold.com msg#: 37164)
******CONTEST #1*******
I, a USAGOLD poster keep returning to this Forum because as follows --

"Best Place In Town"

Another long day! It sure is nice to get out on this beautiful September evening. What's great about this place is that it never closes. No matter how late my work runs, I can always find good company and real conversation.

There it is. "The Olde Round Table Inn." All lit up tonight for the second birthday celebration, I'll bet it's really jumping inside.

Whoo-boy, that door is heavy. Hi, Townie. You look in good shape. Had to bounce anyone this week? No? That's great. You need to do it sometimes to keep the decorum up to snuff, but it always leaves a bad feeling for a bit afterwards. All dressed up for the party tonight I see. Hope you don't have to go down in the cellar to fix the lights tonight.

Javaman! How you feeling after that stint in the chophouse? Glad they didn't take anything else out. Thought we'd see more of you after you sold the two-wheeler. Speaking of which, is TheStranger here tonight, or is he out chasing the moon on the ‘cicle? Yeah right, he'll show up later for sure.

Hey guys hold me a place over there at the Big Round. I want to go over to the back booth and chat with Leigh and CavanMan. How's that foot doing, Milady — better? That's great! CM, sure was good they didn't keep you on the road today. Would have been a shame to miss this. Ho! There's the Wiz. Gandalf, come over here and show these folks that nugget around your neck. I knew you'd wear it tonight. Boy, that's gorgeous. Just lies there in the river like that? Amazing!

There's Aragorn and Ari over in the other corner. Got their heads together about something.
Is that a large book they're huddled over? You don't suppose it's ORO's manuscript, do you?
That would really be something.

Oh yes: YO PEOPLE!! Just ‘cause it's a big party night is no excuse not to show up for TG's hike tomorrow. Yeah, I know, but my head hurts too sometimes when I try to follow him, and I don't drink.

Has anyone heard from Tomcat lately? I last talked to him in early June. He said that what he got out of all that Y2K prep was discovering that incredible place in the Rockies. Says he's going to stay there forever.

Journeyman, Black Blade, Bonedaddy, let me squeeze in here. Hi Phoenix! Glad you discovered us in time for this. You guys got this oil crisis solved? How ‘bout using SUV's for ship moorings? Gandalf tells me they're using ‘Macintoshes' for small boat anchors up his way. Hey Al, how's this price thing affecting the business. I'll bet your having nightmares over the thought of gas lines again. Evening wolkava; Heard a full paragraph from you the other night. Careful there, you don't want to lose that unique image. You've made ‘succinct' into an art form! Shifty, knew you wouldn't miss this. Hey there Ross. mad day on the floor after the Intel news? I wonder if Canuck and canamami make it down here tonight? Speaking of distance, maybe next year we should pass the hat and get some plane tickets for CB2, Topaz and Zenidia.. Oh yes, Hi- Hat! what IS the story behind that weird new name?? --- Whew! Glass is empty,, excuse me a minute; I'm going up to the bar for another one of these alcohol-free mead drinks.


Hello, Jeff. Being the Server as always, I see. You never seem to get in on the discussions, I notice, and I was just wondering — Do you ever go incognito under another identity? Not saying, huh? OK, just a hunch. Give me a large portion of that golden stuff in one of the silver goblets, if you don't mind. Need to have the proper image tonight. I'm glad you guys are still taking Fiat for the drinks; I guess one of these days ----

You know, the other night, Michael was saying how Steve always talks shop? Well, you remember that time he was in the middle of that huge multi-car wreck? He came right in here to talk about it. I think it really says something about this crowd that when someone has an upsetting experience in life, they feel that the folks here are people they can share it with. Turned out the incident was even "on subject," as in, "I am Authority" After he had helped several folks, when the ambulance driver finally got there, the guy's only words were, "Just get back in your car, sir." Robin and I use that phrase now to come to instant agreement whenever we run into one of these creeps.

I sure get a lot out of coming here. When it first opened, I used to just look in the window. Felt I wasn't up to the caliber of the clientele. But one day, Michael started these special welcoming events with prizes and all, and I took the chance. Now when I look back, it seems I can't quite remember who I was then. This place really has a powerful effect on you.

It's funny; I was asked the other day why I keep coming back here. I don't go anywhere else. I tried those places up the street but they're basically downers. Up at "The Kit ‘n Kaboodle," they're always carrying on, throwing beer-nuts at each other. Raucous bunch, mostly, although there are a few really good thinkers that hang out there, I figure there are enough people that show up here after making the rounds, if there's anything noteworthy, I'll find out about it. Same goes for getting the drift from "The Eagle Saloon". Meaningful data from there too, but I hear the proprietor 86's you in an eye-blink if he doesn't like where you're coming from. Nope, for me, this is it. I have a lot to do in life, and I just need one place to call home for relating to the outside world.

I just wish the rest of that world communicated like everyone here does!

Well, enough of pouring my heart out to the bartender. Hey, here comes MK! Is that Gold thread woven into that jacket? Perfect! Best wishes to your establishment on its second birthday, Michael.

May there be Many Happy Returns!!!!
===
Here is ANOTHER Happy Birthday Essay Contest post from a long lost Goldheart on the 2nd Birthday.
The Hobbits are looking forward to see what SIR MK has up his sleeve for the NEXT CONTEST !
<;-)



DOWNUNDER (9/13/02; 00:12:33MT - usagold.com msg#: 85026)
@BLACKJACK - - - THANKS
----And I agee with your reply. Cheers. I will certainly refrain as much as possible to reply to redneck comments--



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