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ARCHIVED DISCUSSION FROM 10/14/1999 All times are U.S. Mountain Time View Yesterday's Discussion. Black Blade (10/14/99; 22:58:06MDT - Msg ID:16406) Coinguy and Coins! I too should add that I collect Morgans with a leaning toward CC mintages as well as liberty gold peices. I would like to start into US Territorial gold issues and Au commemoratives, but I think that they are a bit out of my price range. Anyway...Good luck! Black Blade (10/14/99; 22:52:13MDT - Msg ID:16405) Trading range......maybe, but not for long! Indeed, are guesses are close. I think that we may be in a trading range between $315 and $325 for the next few days, or at least until the sleepers (sheeple) awaken. I think that perhaps gold will become gold.com before long though. Once the traders find that they can't take delivery, all "hell" will break loose! Leigh, sorry about my use of the "american" language. I would say "english", but having worked with Brits, they probably would take exception ;). CoinGuy (10/14/99; 22:40:41MDT - Msg ID:16404) Black Blade Thank you my fellow goldbug. I see our guesses for next weeks close are .50 in difference. Good luckCoinguy Black Blade (10/14/99; 22:38:11MDT - Msg ID:16403) Essays on natural resources and GOLD, etc. http://www.thebullandbear.com A few nice essays by some analysts on the natural resource industries (including gold and mining stocks). And speaking of bears, where's Sir Koan lately? Bill (10/14/99; 22:32:17MDT - Msg ID:16402) andrew the kiwi Sounds like we think alike. I purchased a couple of puts on the dow and s&p yesterday. Thought it would rise a little and maybey even make new highs before the tumble..... guess not. This looks like it's probably it.Gold today... ouch! though not suprising. Looking at the charts it seems quite normal and infact it hasn't been a 50% retracement. I was trading 15-20 options on the high and lows for some decent profits.... a little nerve racking though. I didn't want to miss out on a nice jump. If price remains low at the open tomorrow, I'll buy a few more longer out. I still feel very confident we will see 400 before the end of the year. Oh yeah, bought a little physical for keepsake. Keep your chin up and good luck to you and other knights. Black Blade (10/14/99; 22:28:57MDT - Msg ID:16401) Coinguy and s&p futures http://www.mrci.com/qpnight.htm Try this link. Also has up to date PM numbers when Kitco is screwy. Lot's of other info as well. CoinGuy (10/14/99; 22:19:45MDT - Msg ID:16400) Black Blade Where are you finding the S&P future's at?Coinguy Black Blade (10/14/99; 22:06:42MDT - Msg ID:16399) Dec. gold *----$323.00----+> The October surprise will continue! with the s&p futures down currently at -12.20 and the widening A/D line, the scramble for safe haven will continue. As I said previously as we approach Y2K, sentiment has changed. The sheeple will look for safe haven as we approach the end of the year. October has been more and more a period of concern with tax loss selling, and an effort to "beat the other guy out the door", the sheeple will break ranks from the flock. One of those safe havens of course is the PM market. Perhaps monday or tuesday may be the "Black Day" for the markets. Watch out the thundering herd is approaching....can you hear them in the distance? I have transfered a greater portion of my investments into PM's for this reason. Will shall travel across into the new millenium together, yes? the talking heads and beaureacrats bleat louder and louder with the approach of the sleepin giant (GOLD), but their cries of "all is well" will ring hollow. As far as Y2K is concerned, computer software isn't the major problem....I'ts the embedded date sensitive chips!!!!! These are the controlling "brains" in much of our modern equipment. What happens when oil isn't pumped from the oil fields? pipelines seize up? water isn't coming from the local utility? sewage backs up? electricity grids go down or brown outs are common? Telecommunications go offline? travel is curtailed? and if government takes this as an opportunity to do god knows what? Where will the sheeple be then? Will any of the foregoing happen? I don't know. I don't pretend to know. But I will take precautions, as I know many on this forum will. Y2K is not far off. The October surprise is on us. If the DOW drops below 10000 tomorrow or on monday....look out below, and prepare for the rush to safe havens such as gold, silver, and PGM's. Just something to think about before you go to sleep tonight! Sweet dreams! elevator guy (10/14/99; 22:05:26MDT - Msg ID:16398) @Gandalf the White Forum is working fine. There are some lengthy posts in Todays Discussion, that may be slowing your download time. I get it all in T1 speed, so it doesn't make any noticeable difference to me. (Brag, Brag, Brag!) CoinGuy (10/14/99; 22:04:47MDT - Msg ID:16397) My Perspective.... >>>>>----------323.50-------------->I've followed gold and have been a goldbug for sometime. I'm also a collector of rare numismatics. My specialties: Morgan Silver Dollars(esp. VAM's top 100), Walking Liberty Halfs, Barber Dimes, Half Dimes, and Indian head pennies. In the last few years I haven't collected anything else. I also have a substantial collection of pre-33 Gold coins in various conditions. Our Country produces the most beautful pieces.As far as the price of Gold, I don't care how high it goes. I believe gold is the true reserve asset, and the only port in the storm for what lies ahead. I wish you all good luck, and close with my favorite writing from Thoreau. Why should we be in such desperate haste to succeed,and in such desperate enterprises?If a man does not keep pace with his companions,perhaps it is because he hears a different drummer.Let him him step to the music which he hears,however measured of far away.Contrarian Coinguy Gandalf the White (10/14/99; 22:01:40MDT - Msg ID:16396) Calling JEFF !! Please tell me that it is my magic spelled AppleII that is so slow tonight and that the FORUM is operating A-OK !!!<;-) she-gold (10/14/99; 21:58:49MDT - Msg ID:16395) uh... oops kept getting this error message ... and... so... i just kept trying.. and... uh... well...anyway, it's a good read, i think she-gold (10/14/99; 21:56:30MDT - Msg ID:16394) Quite the good read... and they reference www.gold-eagle.com and www.lemetropolecafe.com http://www.contraryinvestor.com/mo.htm THE END OF THE INNOCENCEMarket Observations - 10/14The End of The Innocence...Bear markets are a process. They are a process of confidence destruction. They are the flip side of a bull market experience where confidence is continually built until risk is no longer a consideration. In bear markets, risk is a constant consideration at the exclusion of opportunity. To quite vaguely quote John Templeton, "bear markets are borne in euphoria and die in the depths of pessimism". It seems quite clear that we are witnessing the birth of a bear market. The Advance/Decline experience of the stock market speaks to the fact that a bear market was born 18 months ago. The child bear is slowly beginning to walk and talk. It won't be long before it can stand on its own two feet. We are in the midst of a process of confidence destruction. Sector by sector. Stock by stock. Day by day. Largely the destruction of confidence has been confined to the "professional" investment community up to this point. Looking ahead, it will be critical to monitor public confidence in the stock market. The public, via the mutual funds, control the keys to the kingdom. We are seeing some cracks around the edges. Mutual fund sales have fallen off this year relative to the prior three year-to-date periods. There is just about zero chance of a fund sales catch up in the months ahead as we are headed into the "quiet period" where funds prepare to distribute annual capital gains. Online trading activity is certainly slowing as witnessed by the results of the ebrokers over the last five months. As of now, index fund "lobotomy patients" have realized a year-to-date return comparable to that of a money market fund. Human greed is impatient. How much longer will the public remain confident that stocks are "the place to be" with the type of action we are witnessing in the current market?Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves. Although we do not vouch for the quality of research or opinions expressed, you can check out www.gold-eagle.com and www.lemetropolecafe.com (2 week free trial, otherwise a paid subscription) for more insights and commentary into what is happening in gold. For us, this is yet another example of excessive and reckless leverage in one "corner of the market" having much broader ramifications for the greater global financial markets as a whole. Moreover, there is simply no way that the Fed was unaware of the imbalance that existed and the extensive leverage used in the gold market. Clearly, the Fed simply chose to close its eyes and hope for the best. By the time you see articles in the NY Times and the WSJ describing the extent of the problem in the gold market, it will be near resolution. As you know, as of yet we've seen nothing in the domestic press critically addressing this ticking time bomb.It is quite interesting, and possibly telling, to note that today's drop in the price of gold seemed completely driven by the gold futures. It seemed that out of nowhere today, the futures just plunged on volume. We've seen the stock market react much the same way to gaps up in futures that seem to come from thin air. Clearly this type of activity does not come from thin air. We'll leave you to speculate who may be doing this and why. Enough said. What Gains?...It's mutual fund tax loss selling time. Everyone knows it happens between mid-September and mid-October of each year. The mutual funds close their tax books as of October 31. A lot of the market sloppiness in the last few weeks or so has been blamed on loss selling. Our only observation is that gains this year in the broader market have been subdued at best. Outside of technology and Internet related issues, year-to-date gains are rather modest in many sectors. The gain in cyclicals was largely given back. Oil service sparklers early in the year have toned down considerably in the last few months. In like manner, tech really didn't begin to be sold until just a few weeks ago. If this is truly tax loss selling, against what gains? As of today's close, the S&P is up 4.5% (not including minimal income) for the year. This sure doesn't speak to the fact that there have been massive gains realization opportunities. Quite the opposite. Our view is that not only are the mutual funds dabbling in a little bit of loss selling, but they are also raising cash in anticipation of possible near-year end redemptions by selling their losers, regardless of the loss. We are hearing that lenders have informed the mutual funds that credit will be tight (costly) in December. Rather than facing the potential of having to borrow at prohibitive rates to meet possible redemptions, the mutual funds are probably beginning to raise a bit more cash the old fashioned way - by selling. As you would imagine, they are clearly retaining their nifty 50 holdings at the expense of all else. Stuffing the Nuclear Winter Ballot Box...Unisys is now the umpteenth casualty of the nuclear winter scenario. The stock suffered its largest ever one day drop today falling close to 40%. The company directly admitted that a Y2K slowdown is effecting them and will continue to do so into the end of the year. As you know, Unisys has really pushed the services side of the business in its illustrious turnaround. Very much along the lines of IBM. Despite the UIS news today, IBM was actually up a few points. Maybe IBM is immune from a slowdown on the services side of the business. Maybe investors have already punished IBM enough. Or maybe IBM hasn't fessed up yet. We'll have to see what happens as IBM reports soon. Until they admit it, there isn't a problem, right? Expect the Bmer to have stock buybacks up its sleeve for the quarter. It's Not Officially a Correction (Yet)...According to the gurus on CNBC, the Dow was all of 38 points away from being down 10% from the top prior to today's open. In the CNBC dictionary, it's not a correction unless we officially close below the magic 10% number. Actually, this wouldn't be so funny if they weren't delivering the message with straight faces. The volatility continues to concern us. Admittedly, we all know tomorrow is expiration, but the up-down action over the past few weeks has been incredibly dramatic. The run from 10,200 to 10,600 last week was accomplished on negative breadth. The drop back down was accomplished on much worse breadth. The bonds just can't seem to catch a bid. They drip down every day, virtually regardless of stock market action or economic news. It appears to us that someone needs liquidity and is selling bonds (and stocks). For all of you technical aficionados, the 6.4-6.45% yield area is critical for the 30 year bond. Every chart cowboy and their brother know that the long bond breaks a 20 year yield trend line at 6.45%. You can bet Alan G and the Bubblemiesters also know this. Uncharacteristically, the Fed has been a huge buyer of U.S. treasury debt this year. All the way up, as a matter of fact. At this point, there is simply no way the Fed is going to lower rates. That's out of the question (except in a crash, of course). Likewise, the bond vigilantes may not be too pleased if rates are not raised on or before the 16th of November. The Fed as fewer and fewer choices for action as the months go by. If long bond yields do not back down, our bet is the Fed must increase rates to retain credibility. If this causes heart pains to the stock market, so be it. It's still early enough to try to salvage the financial markets in time for the election. To us, it has been many moons since an environment like this has faced the financial markets. The confluence of higher rates, an extremely overvalued market, a potential gold leverage problem, and an uncertain Y2K outcome are all coming together at once. Will the market climb another "wall of worry" or descend the slippery slope of fear? Our advice? Better check your brakes. Pre-Mortem?...Greenspan spoke before an OCC (Office of the Comptroller of the Currency) conference today. When the speech was released, the S&P futures immediately dropped almost 20 points. As of our writing, they are down 10. Greenspan warned the bankers that they should increase reserves for loans made whose backing are financial securities (stocks, bonds). About two pages into the speech, Greenspan launched into a discussion that included the following words: panic, collapse of confidence, bubble, etc. This is what got the futures going. If you would like, read the speech for yourself at this link. Our sincere guess is that Greenspan is slowly preparing the markets for the fact that at some point he will not be able to save them. Copyright 1999, ContraryInvestor.com she-gold (10/14/99; 21:53:49MDT - Msg ID:16393) Quite the good read... and they reference www.gold-eagle.com and www.lemetropolecafe.com http://www.usagold.com www.contraryinvestor.com/mo.htmTHE END OF THE INNOCENCEMarket Observations - 10/14The End of The Innocence...Bear markets are a process. They are a process of confidence destruction. They are the flip side of a bull market experience where confidence is continually built until risk is no longer a consideration. In bear markets, risk is a constant consideration at the exclusion of opportunity. To quite vaguely quote John Templeton, "bear markets are borne in euphoria and die in the depths of pessimism". It seems quite clear that we are witnessing the birth of a bear market. The Advance/Decline experience of the stock market speaks to the fact that a bear market was born 18 months ago. The child bear is slowly beginning to walk and talk. It won't be long before it can stand on its own two feet. We are in the midst of a process of confidence destruction. Sector by sector. Stock by stock. Day by day. Largely the destruction of confidence has been confined to the "professional" investment community up to this point. Looking ahead, it will be critical to monitor public confidence in the stock market. The public, via the mutual funds, control the keys to the kingdom. We are seeing some cracks around the edges. Mutual fund sales have fallen off this year relative to the prior three year-to-date periods. There is just about zero chance of a fund sales catch up in the months ahead as we are headed into the "quiet period" where funds prepare to distribute annual capital gains. Online trading activity is certainly slowing as witnessed by the results of the ebrokers over the last five months. As of now, index fund "lobotomy patients" have realized a year-to-date return comparable to that of a money market fund. Human greed is impatient. How much longer will the public remain confident that stocks are "the place to be" with the type of action we are witnessing in the current market?Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves. Although we do not vouch for the quality of research or opinions expressed, you can check out www.gold-eagle.com and www.lemetropolecafe.com (2 week free trial, otherwise a paid subscription) for more insights and commentary into what is happening in gold. For us, this is yet another example of excessive and reckless leverage in one "corner of the market" having much broader ramifications for the greater global financial markets as a whole. Moreover, there is simply no way that the Fed was unaware of the imbalance that existed and the extensive leverage used in the gold market. Clearly, the Fed simply chose to close its eyes and hope for the best. By the time you see articles in the NY Times and the WSJ describing the extent of the problem in the gold market, it will be near resolution. As you know, as of yet we've seen nothing in the domestic press critically addressing this ticking time bomb.It is quite interesting, and possibly telling, to note that today's drop in the price of gold seemed completely driven by the gold futures. It seemed that out of nowhere today, the futures just plunged on volume. We've seen the stock market react much the same way to gaps up in futures that seem to come from thin air. Clearly this type of activity does not come from thin air. We'll leave you to speculate who may be doing this and why. Enough said. What Gains?...It's mutual fund tax loss selling time. Everyone knows it happens between mid-September and mid-October of each year. The mutual funds close their tax books as of October 31. A lot of the market sloppiness in the last few weeks or so has been blamed on loss selling. Our only observation is that gains this year in the broader market have been subdued at best. Outside of technology and Internet related issues, year-to-date gains are rather modest in many sectors. The gain in cyclicals was largely given back. Oil service sparklers early in the year have toned down considerably in the last few months. In like manner, tech really didn't begin to be sold until just a few weeks ago. If this is truly tax loss selling, against what gains? As of today's close, the S&P is up 4.5% (not including minimal income) for the year. This sure doesn't speak to the fact that there have been massive gains realization opportunities. Quite the opposite. Our view is that not only are the mutual funds dabbling in a little bit of loss selling, but they are also raising cash in anticipation of possible near-year end redemptions by selling their losers, regardless of the loss. We are hearing that lenders have informed the mutual funds that credit will be tight (costly) in December. Rather than facing the potential of having to borrow at prohibitive rates to meet possible redemptions, the mutual funds are probably beginning to raise a bit more cash the old fashioned way - by selling. As you would imagine, they are clearly retaining their nifty 50 holdings at the expense of all else. Stuffing the Nuclear Winter Ballot Box...Unisys is now the umpteenth casualty of the nuclear winter scenario. The stock suffered its largest ever one day drop today falling close to 40%. The company directly admitted that a Y2K slowdown is effecting them and will continue to do so into the end of the year. As you know, Unisys has really pushed the services side of the business in its illustrious turnaround. Very much along the lines of IBM. Despite the UIS news today, IBM was actually up a few points. Maybe IBM is immune from a slowdown on the services side of the business. Maybe investors have already punished IBM enough. Or maybe IBM hasn't fessed up yet. We'll have to see what happens as IBM reports soon. Until they admit it, there isn't a problem, right? Expect the Bmer to have stock buybacks up its sleeve for the quarter. It's Not Officially a Correction (Yet)...According to the gurus on CNBC, the Dow was all of 38 points away from being down 10% from the top prior to today's open. In the CNBC dictionary, it's not a correction unless we officially close below the magic 10% number. Actually, this wouldn't be so funny if they weren't delivering the message with straight faces. The volatility continues to concern us. Admittedly, we all know tomorrow is expiration, but the up-down action over the past few weeks has been incredibly dramatic. The run from 10,200 to 10,600 last week was accomplished on negative breadth. The drop back down was accomplished on much worse breadth. The bonds just can't seem to catch a bid. They drip down every day, virtually regardless of stock market action or economic news. It appears to us that someone needs liquidity and is selling bonds (and stocks). For all of you technical aficionados, the 6.4-6.45% yield area is critical for the 30 year bond. Every chart cowboy and their brother know that the long bond breaks a 20 year yield trend line at 6.45%. You can bet Alan G and the Bubblemiesters also know this. Uncharacteristically, the Fed has been a huge buyer of U.S. treasury debt this year. All the way up, as a matter of fact. At this point, there is simply no way the Fed is going to lower rates. That's out of the question (except in a crash, of course). Likewise, the bond vigilantes may not be too pleased if rates are not raised on or before the 16th of November. The Fed as fewer and fewer choices for action as the months go by. If long bond yields do not back down, our bet is the Fed must increase rates to retain credibility. If this causes heart pains to the stock market, so be it. It's still early enough to try to salvage the financial markets in time for the election. To us, it has been many moons since an environment like this has faced the financial markets. The confluence of higher rates, an extremely overvalued market, a potential gold leverage problem, and an uncertain Y2K outcome are all coming together at once. Will the market climb another "wall of worry" or descend the slippery slope of fear? Our advice? Better check your brakes. Pre-Mortem?...Greenspan spoke before an OCC (Office of the Comptroller of the Currency) conference today. When the speech was released, the S&P futures immediately dropped almost 20 points. As of our writing, they are down 10. Greenspan warned the bankers that they should increase reserves for loans made whose backing are financial securities (stocks, bonds). About two pages into the speech, Greenspan launched into a discussion that included the following words: panic, collapse of confidence, bubble, etc. This is what got the futures going. If you would like, read the speech for yourself at this link. Our sincere guess is that Greenspan is slowly preparing the markets for the fact that at some point he will not be able to save them. Copyright 1999, ContraryInvestor.com Gandalf the White (10/14/99; 21:53:42MDT - Msg ID:16392) THX-1138 "horse of no name" Quote Strange things happen at that other Board !! The MRCI night quotes show Jan Plat down $2.50 !!!! Maybe that is what one gets if they jump around instead of staying at the TableRound ?<;-) she-gold (10/14/99; 21:52:29MDT - Msg ID:16391) Quite the good read... and they reference www.gold-eagle.com and www.lemetropolecafe.com www.contraryinvestor.com/mo.htm THE END OF THE INNOCENCEMarket Observations - 10/14The End of The Innocence...Bear markets are a process. They are a process of confidence destruction. They are the flip side of a bull market experience where confidence is continually built until risk is no longer a consideration. In bear markets, risk is a constant consideration at the exclusion of opportunity. To quite vaguely quote John Templeton, "bear markets are borne in euphoria and die in the depths of pessimism". It seems quite clear that we are witnessing the birth of a bear market. The Advance/Decline experience of the stock market speaks to the fact that a bear market was born 18 months ago. The child bear is slowly beginning to walk and talk. It won't be long before it can stand on its own two feet. We are in the midst of a process of confidence destruction. Sector by sector. Stock by stock. Day by day. Largely the destruction of confidence has been confined to the "professional" investment community up to this point. Looking ahead, it will be critical to monitor public confidence in the stock market. The public, via the mutual funds, control the keys to the kingdom. We are seeing some cracks around the edges. Mutual fund sales have fallen off this year relative to the prior three year-to-date periods. There is just about zero chance of a fund sales catch up in the months ahead as we are headed into the "quiet period" where funds prepare to distribute annual capital gains. Online trading activity is certainly slowing as witnessed by the results of the ebrokers over the last five months. As of now, index fund "lobotomy patients" have realized a year-to-date return comparable to that of a money market fund. Human greed is impatient. How much longer will the public remain confident that stocks are "the place to be" with the type of action we are witnessing in the current market?Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves. Although we do not vouch for the quality of research or opinions expressed, you can check out www.gold-eagle.com and www.lemetropolecafe.com (2 week free trial, otherwise a paid subscription) for more insights and commentary into what is happening in gold. For us, this is yet another example of excessive and reckless leverage in one "corner of the market" having much broader ramifications for the greater global financial markets as a whole. Moreover, there is simply no way that the Fed was unaware of the imbalance that existed and the extensive leverage used in the gold market. Clearly, the Fed simply chose to close its eyes and hope for the best. By the time you see articles in the NY Times and the WSJ describing the extent of the problem in the gold market, it will be near resolution. As you know, as of yet we've seen nothing in the domestic press critically addressing this ticking time bomb.It is quite interesting, and possibly telling, to note that today's drop in the price of gold seemed completely driven by the gold futures. It seemed that out of nowhere today, the futures just plunged on volume. We've seen the stock market react much the same way to gaps up in futures that seem to come from thin air. Clearly this type of activity does not come from thin air. We'll leave you to speculate who may be doing this and why. Enough said. What Gains?...It's mutual fund tax loss selling time. Everyone knows it happens between mid-September and mid-October of each year. The mutual funds close their tax books as of October 31. A lot of the market sloppiness in the last few weeks or so has been blamed on loss selling. Our only observation is that gains this year in the broader market have been subdued at best. Outside of technology and Internet related issues, year-to-date gains are rather modest in many sectors. The gain in cyclicals was largely given back. Oil service sparklers early in the year have toned down considerably in the last few months. In like manner, tech really didn't begin to be sold until just a few weeks ago. If this is truly tax loss selling, against what gains? As of today's close, the S&P is up 4.5% (not including minimal income) for the year. This sure doesn't speak to the fact that there have been massive gains realization opportunities. Quite the opposite. Our view is that not only are the mutual funds dabbling in a little bit of loss selling, but they are also raising cash in anticipation of possible near-year end redemptions by selling their losers, regardless of the loss. We are hearing that lenders have informed the mutual funds that credit will be tight (costly) in December. Rather than facing the potential of having to borrow at prohibitive rates to meet possible redemptions, the mutual funds are probably beginning to raise a bit more cash the old fashioned way - by selling. As you would imagine, they are clearly retaining their nifty 50 holdings at the expense of all else. Stuffing the Nuclear Winter Ballot Box...Unisys is now the umpteenth casualty of the nuclear winter scenario. The stock suffered its largest ever one day drop today falling close to 40%. The company directly admitted that a Y2K slowdown is effecting them and will continue to do so into the end of the year. As you know, Unisys has really pushed the services side of the business in its illustrious turnaround. Very much along the lines of IBM. Despite the UIS news today, IBM was actually up a few points. Maybe IBM is immune from a slowdown on the services side of the business. Maybe investors have already punished IBM enough. Or maybe IBM hasn't fessed up yet. We'll have to see what happens as IBM reports soon. Until they admit it, there isn't a problem, right? Expect the Bmer to have stock buybacks up its sleeve for the quarter. It's Not Officially a Correction (Yet)...According to the gurus on CNBC, the Dow was all of 38 points away from being down 10% from the top prior to today's open. In the CNBC dictionary, it's not a correction unless we officially close below the magic 10% number. Actually, this wouldn't be so funny if they weren't delivering the message with straight faces. The volatility continues to concern us. Admittedly, we all know tomorrow is expiration, but the up-down action over the past few weeks has been incredibly dramatic. The run from 10,200 to 10,600 last week was accomplished on negative breadth. The drop back down was accomplished on much worse breadth. The bonds just can't seem to catch a bid. They drip down every day, virtually regardless of stock market action or economic news. It appears to us that someone needs liquidity and is selling bonds (and stocks). For all of you technical aficionados, the 6.4-6.45% yield area is critical for the 30 year bond. Every chart cowboy and their brother know that the long bond breaks a 20 year yield trend line at 6.45%. You can bet Alan G and the Bubblemiesters also know this. Uncharacteristically, the Fed has been a huge buyer of U.S. treasury debt this year. All the way up, as a matter of fact. At this point, there is simply no way the Fed is going to lower rates. That's out of the question (except in a crash, of course). Likewise, the bond vigilantes may not be too pleased if rates are not raised on or before the 16th of November. The Fed as fewer and fewer choices for action as the months go by. If long bond yields do not back down, our bet is the Fed must increase rates to retain credibility. If this causes heart pains to the stock market, so be it. It's still early enough to try to salvage the financial markets in time for the election. To us, it has been many moons since an environment like this has faced the financial markets. The confluence of higher rates, an extremely overvalued market, a potential gold leverage problem, and an uncertain Y2K outcome are all coming together at once. Will the market climb another "wall of worry" or descend the slippery slope of fear? Our advice? Better check your brakes. Pre-Mortem?...Greenspan spoke before an OCC (Office of the Comptroller of the Currency) conference today. When the speech was released, the S&P futures immediately dropped almost 20 points. As of our writing, they are down 10. Greenspan warned the bankers that they should increase reserves for loans made whose backing are financial securities (stocks, bonds). About two pages into the speech, Greenspan launched into a discussion that included the following words: panic, collapse of confidence, bubble, etc. This is what got the futures going. If you would like, read the speech for yourself at this link. Our sincere guess is that Greenspan is slowly preparing the markets for the fact that at some point he will not be able to save them. Copyright 1999, ContraryInvestor.com JA (10/14/99; 21:52:06MDT - Msg ID:16390) GOLDZAHAVGOLD What was the point of post Msg ID:16362)?It came across to me as a poorly disguised attempt to ridicule or make light of those who attempt to expose conspiracies that not only have existed throughout history, but continue to exist in today's world. It was a bit lengthy and I found myself saying why am I wasting my time reading such udder nonsense. But then knowing of the high caliber of posters we have at this site, I thought there must be something that I am overlooking. Please feel free to provide further enlightenment. I did like your projection for a hike in gold tomorrow. she-gold (10/14/99; 21:51:56MDT - Msg ID:16389) Quite the good read... and they reference www.gold-eagle.com and www.lemetropolecafe.com http://www.contraryinvestor.com/mo.htm THE END OF THE INNOCENCEMarket Observations - 10/14The End of The Innocence...Bear markets are a process. They are a process of confidence destruction. They are the flip side of a bull market experience where confidence is continually built until risk is no longer a consideration. In bear markets, risk is a constant consideration at the exclusion of opportunity. To quite vaguely quote John Templeton, "bear markets are borne in euphoria and die in the depths of pessimism". It seems quite clear that we are witnessing the birth of a bear market. The Advance/Decline experience of the stock market speaks to the fact that a bear market was born 18 months ago. The child bear is slowly beginning to walk and talk. It won't be long before it can stand on its own two feet. We are in the midst of a process of confidence destruction. Sector by sector. Stock by stock. Day by day. Largely the destruction of confidence has been confined to the "professional" investment community up to this point. Looking ahead, it will be critical to monitor public confidence in the stock market. The public, via the mutual funds, control the keys to the kingdom. We are seeing some cracks around the edges. Mutual fund sales have fallen off this year relative to the prior three year-to-date periods. There is just about zero chance of a fund sales catch up in the months ahead as we are headed into the "quiet period" where funds prepare to distribute annual capital gains. Online trading activity is certainly slowing as witnessed by the results of the ebrokers over the last five months. As of now, index fund "lobotomy patients" have realized a year-to-date return comparable to that of a money market fund. Human greed is impatient. How much longer will the public remain confident that stocks are "the place to be" with the type of action we are witnessing in the current market?Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves. Although we do not vouch for the quality of research or opinions expressed, you can check out www.gold-eagle.com and www.lemetropolecafe.com (2 week free trial, otherwise a paid subscription) for more insights and commentary into what is happening in gold. For us, this is yet another example of excessive and reckless leverage in one "corner of the market" having much broader ramifications for the greater global financial markets as a whole. Moreover, there is simply no way that the Fed was unaware of the imbalance that existed and the extensive leverage used in the gold market. Clearly, the Fed simply chose to close its eyes and hope for the best. By the time you see articles in the NY Times and the WSJ describing the extent of the problem in the gold market, it will be near resolution. As you know, as of yet we've seen nothing in the domestic press critically addressing this ticking time bomb.It is quite interesting, and possibly telling, to note that today's drop in the price of gold seemed completely driven by the gold futures. It seemed that out of nowhere today, the futures just plunged on volume. We've seen the stock market react much the same way to gaps up in futures that seem to come from thin air. Clearly this type of activity does not come from thin air. We'll leave you to speculate who may be doing this and why. Enough said. What Gains?...It's mutual fund tax loss selling time. Everyone knows it happens between mid-September and mid-October of each year. The mutual funds close their tax books as of October 31. A lot of the market sloppiness in the last few weeks or so has been blamed on loss selling. Our only observation is that gains this year in the broader market have been subdued at best. Outside of technology and Internet related issues, year-to-date gains are rather modest in many sectors. The gain in cyclicals was largely given back. Oil service sparklers early in the year have toned down considerably in the last few months. In like manner, tech really didn't begin to be sold until just a few weeks ago. If this is truly tax loss selling, against what gains? As of today's close, the S&P is up 4.5% (not including minimal income) for the year. This sure doesn't speak to the fact that there have been massive gains realization opportunities. Quite the opposite. Our view is that not only are the mutual funds dabbling in a little bit of loss selling, but they are also raising cash in anticipation of possible near-year end redemptions by selling their losers, regardless of the loss. We are hearing that lenders have informed the mutual funds that credit will be tight (costly) in December. Rather than facing the potential of having to borrow at prohibitive rates to meet possible redemptions, the mutual funds are probably beginning to raise a bit more cash the old fashioned way - by selling. As you would imagine, they are clearly retaining their nifty 50 holdings at the expense of all else. Stuffing the Nuclear Winter Ballot Box...Unisys is now the umpteenth casualty of the nuclear winter scenario. The stock suffered its largest ever one day drop today falling close to 40%. The company directly admitted that a Y2K slowdown is effecting them and will continue to do so into the end of the year. As you know, Unisys has really pushed the services side of the business in its illustrious turnaround. Very much along the lines of IBM. Despite the UIS news today, IBM was actually up a few points. Maybe IBM is immune from a slowdown on the services side of the business. Maybe investors have already punished IBM enough. Or maybe IBM hasn't fessed up yet. We'll have to see what happens as IBM reports soon. Until they admit it, there isn't a problem, right? Expect the Bmer to have stock buybacks up its sleeve for the quarter. It's Not Officially a Correction (Yet)...According to the gurus on CNBC, the Dow was all of 38 points away from being down 10% from the top prior to today's open. In the CNBC dictionary, it's not a correction unless we officially close below the magic 10% number. Actually, this wouldn't be so funny if they weren't delivering the message with straight faces. The volatility continues to concern us. Admittedly, we all know tomorrow is expiration, but the up-down action over the past few weeks has been incredibly dramatic. The run from 10,200 to 10,600 last week was accomplished on negative breadth. The drop back down was accomplished on much worse breadth. The bonds just can't seem to catch a bid. They drip down every day, virtually regardless of stock market action or economic news. It appears to us that someone needs liquidity and is selling bonds (and stocks). For all of you technical aficionados, the 6.4-6.45% yield area is critical for the 30 year bond. Every chart cowboy and their brother know that the long bond breaks a 20 year yield trend line at 6.45%. You can bet Alan G and the Bubblemiesters also know this. Uncharacteristically, the Fed has been a huge buyer of U.S. treasury debt this year. All the way up, as a matter of fact. At this point, there is simply no way the Fed is going to lower rates. That's out of the question (except in a crash, of course). Likewise, the bond vigilantes may not be too pleased if rates are not raised on or before the 16th of November. The Fed as fewer and fewer choices for action as the months go by. If long bond yields do not back down, our bet is the Fed must increase rates to retain credibility. If this causes heart pains to the stock market, so be it. It's still early enough to try to salvage the financial markets in time for the election. To us, it has been many moons since an environment like this has faced the financial markets. The confluence of higher rates, an extremely overvalued market, a potential gold leverage problem, and an uncertain Y2K outcome are all coming together at once. Will the market climb another "wall of worry" or descend the slippery slope of fear? Our advice? Better check your brakes. Pre-Mortem?...Greenspan spoke before an OCC (Office of the Comptroller of the Currency) conference today. When the speech was released, the S&P futures immediately dropped almost 20 points. As of our writing, they are down 10. Greenspan warned the bankers that they should increase reserves for loans made whose backing are financial securities (stocks, bonds). About two pages into the speech, Greenspan launched into a discussion that included the following words: panic, collapse of confidence, bubble, etc. This is what got the futures going. If you would like, read the speech for yourself at this link. Our sincere guess is that Greenspan is slowly preparing the markets for the fact that at some point he will not be able to save them. Copyright 1999, ContraryInvestor.com Skip (10/14/99; 21:42:51MDT - Msg ID:16388) TownCrier: After the Close... Truly this is an amazing and thought-provoking forum.Although there have been many excellent posts over the months that I've lurked here, your "After the Close" posting today stands out among the best. It belongs in your Hall of Fame postings. THANK YOU for the insights!!!Sincerely,Skip THX-1138 (10/14/99; 21:41:50MDT - Msg ID:16387) Platinum up Kitco shows Platinum up $17. Hill Billy Mitchell (10/14/99; 21:38:11MDT - Msg ID:16386) Contest Closing price of gold on 10-22-99 $338.50 Hill Billy Mitchell (10/14/99; 21:30:21MDT - Msg ID:16385) What happened today I have been watching the market very closely for about a year and a half in a certain way. I thought that when stocks went down and bonds went up(or vice versa) on the same day, that the manipulators were simply rotating from one to the other for trading profits and commissions.I assumed that when this ceased to happen that the money would move into precious metals.For the last couple of days I have seen something that I do not recall seeing during this year and a half. I did not expect to see everything go down (stocks, bonds, and metals)I was puzzled. Where did the money flow if it did not flow into these three categories. About an hour ago a light came on. The money flowed (flew) into cash! Does this make sense. I am exposing my amatuerish knowledge of this world of money flows. Some one please comment on this. Am I on the wrong track. If the money went the parking place wouldn't that indicate that a lot of investors are freightened and are non-investors for a while until they can find the direction. Seems to be a healthy sign for we bugs who are getting overly impatient for the big turn.I must admit that I have mixed feelings. I want the move to commence and yet I have inwardly hoped that it would wait for me to accumulate at these fire sale prices.Too many words for such little substance. Sorry.Hill Billy Mitchell Simply Me (10/14/99; 21:17:48MDT - Msg ID:16384) Wecome, Trader Vic Welcome in from the cold! It's been very cold for goldbugs outside this cozy forum.PS. If you're from the Sunshine State, we may be business acquaintances. Your introduction sounds familiar. Trader_vic (10/14/99; 21:01:28MDT - Msg ID:16383) Closing price of gold on 10/22/99 contest! >>>>>-----349.50-------->Thanks for the opportunity to post here, I love the site! But my first concern and interest is GOLD! I have been trading gold for over 20 years and saw the rise and fall of the 1979-80 gold market, the fall of oil from $32/brl, the day that the bull market in stocks began in 1982, the crash of '87, and the MANIPULATION OF THE GOLD MARKET IN 1997-99! and the biggest breakout in gold history two weeks ago!!! I am a technician and a fundamentalist and I actively trade the gold markets.... My estimate is based upon the selloff to the lowest fib. retracement and then a spike up to the new highs/resistance. Anything below $310 will be snapped up faster than a hungry frog in a garbage can full of flies!My all time high for gold will exceed $10,000/oz on the final blowoff.... FOA (10/14/99; 20:52:14MDT - Msg ID:16382) Paris, Friday, October 15, 1999 http://www.iht.com/IHT/TODAY/FRI/FPAGE/brit.2.html Blair Gathers Force for Battle of EuroCross-Party Coalition Seeks to Counter Conservatives' Anti-EU ThrustBy Tom Buerkle International Herald Tribune LONDON - Assembling perhaps the broadest political coalition since Britain joined the European Union a generation ago, Prime Minister Tony Blair on Thursday began an all-party campaign to extol the benefits of EU membership and promote the Labour government's finely nuanced position on the euro. The appearance of Mr. Blair and his foreign and Treasury secretaries on the same stage as two prominent pro-European Conservative politicians,Michael Heseltine and Kenneth Clarke, and the Liberal Democratic leader, Charles Kennedy, was an extraordinary event that underscored Europe as probably the defining political issue in Britain today. With William Hague, the Conservative leader, under increasing fire within his own party for having hardened his skeptical stance toward Europe last week, Mr. Blair sought to exploit the opposition's divisions. He labeled Mr. Hague an extremist flirting with withdrawal from the European Union and contended that EU membership was a ''patriotic cause'' vital for British jobs, investment and influence in the world.''To be part of Europe is in the British national interest,'' Mr. Blair said at the inauguration of a cross-party lobbying group called Britain in Europe. ''The people here represent a patriotic alliance that puts country before party.'' Mr. Heseltine, a former deputy leader of the Conservative Party, sought to contrast Mr. Hague's Euro-skeptic attitude with the pro-European policies of former Tory leaders like Edward Heath, who led Britain into what was then the European Economic Community in 1973, and Margaret Thatcher, who signed the 1986 act that created Europe's single market."Each weighed our national self-interest and took us further, deeper and more irrevocably towards that vision'' of European integration first sketched out by Winston Churchill after World War II, he said. He also gibed at Mrs. Thatcher, who whipped up Conservative skepticism last week by saying that all Britain's problems had come from mainland Europe. ''You can't wield a handbag from an empty chair,'' Mr. Heseltine said. But for all the rhetoric, it was a measure of Mr. Blair's own hesitations and conservative instincts that he carefully avoided any suggestion of campaigning to join the euro, which was the original purpose for forming the Britain in Europe group. He simply reiterated that he favored the euro in principle but would make British entry conditional on several economic tests laid down by the government two years ago. That was ''a sensible position,'' he said, while Mr. Hague's promise to rule out joining the euro in the next Parliament, and perhaps even longer, verged on ''madness.'' Mr. Hague accused Mr. Blair of hiding his real intention to abolish the pound. In an article in The Times, he promised to step up the Conservative campaign to keep the pound and to renegotiate EU treaties to allow countries to opt out of future policies. ''The battle for the soul of our countryhas begun,'' he wrote. In the short run, Mr. Blair should have little difficulty in maintaining a pro-Europe stance without becoming pro-euro. Mr. Hague's stridency and the growing opposition to it from Conservatives like former Prime Minister John Major and Britain's EU commissioner, Chris Patten, threaten to split the party or narrow its appeal to a nationalist core. Mr. Heseltine said he saw ''some similarities'' between the Conservative turmoil over Europe today and the divisions over nuclear disarmament and nationalization that split the Labour Party in the early 1980s.''The Conservatives are a party in the throes of a nervous breakdown,'' The Guardian said in an editorial.''Not since the gang of four broke from Labour has a party witnessed such passionate dissent voiced, in concert, at such a level,'' it said, referring to the establishment of the Social Democratic Party by disenchanted Labour politicians in 1981. In the longer run, however, many politicians and business leaders believe Mr. Blair will have to give a clearer commitment to the euro or risk seeing the prospects for entry recede. Some pro-euro Labour members believe it will be difficult to call and win a referendum on the euro early in the next Parliament if Mr. Blair continues to sit on the fence in the next general election, which must be called by May 2002. Major companies also will need a clearer signal from the government in ''months, not years,'' before they will invest to prepare for the euro, said Graham Bishop, an economist at the brokerage firm Salomon Smith Barney. Trader_vic (10/14/99; 20:27:40MDT - Msg ID:16381) Town Crier - Thanks! Thanks for taking the time to post "After the Close" it is my very favorite nightly read!!! I'm sure it means a lot to all here as well....once again thank you! Trader_vic (10/14/99; 20:25:36MDT - Msg ID:16380) Andrew the Kiwi - Option URL Use this one, it is about 30 min. delay but has all the strike prices and option premiums...http://quote.cboe.com/SimpleQuote.asp?TICKER=djx&ALL=1 SteveH (10/14/99; 20:13:41MDT - Msg ID:16379) repost Greenspan www.kitco.com What do you think the significance is of the Greenspan now having given two doom and gloom speaches in the last two months (the first in Jackson Hole, WY., and now this one below)? I read it as an omen, but then that may be overeacting a tad, eh?Date: Thu Oct 14 1999 20:54AzusaGold (Greenspan raises concerns about stock risks: story) ID#255250:Copyright © 1999 AzusaGold/Kitco Inc. All rights reservedBy Caren Bohan WASHINGTON, Oct 14 ( Reuters ) - Federal Reserve Chairman Alan Greenspan on Thursday advised banks to set aside more money as insurance against a big market downturn, a sign he is concerned about a potential bubble in equity prices. While emphasising he was not predicting a stocks crash, Greenspan told a banking-related conference that sudden losses in investors' confidence ``will inevitably emerge from time to time'' and said financial institutions should boost their reserves to account of that possibility. He said diversification among different types of assets -- a common strategy used by portfolio managers to guard against market risks -- may not be sufficient to account for all types of scenarios in which the value of their investments might decline sharply in value. ``At a minimum, risk managers need to stress test the assumptions underlying their models and set aside somewhat higher contingency resources -- reserves or capital -- to cover the losses,'' he said. The Fed chairman noted that equity premiums -- the amount of return investors demand to cover the risks associated with investing in stocks -- had declined in recent years but he said it was unclear why. ``The key question is whether the recent decline in equity premiums is permanent or temporary,'' he said. If the decline was only temporary then portfolio managers may find they were underestimating the credit risks of individual loans and could be too optimistic about how protected they were by spreading their risk. He said investment professionals who specialise in risk management should take this factor into account and weigh carefully whether investors' were not paying enough heed to the risk associated with holding stocks. ``The decline in recent years in the equity premium ... should prompt careful consideration of the robustness of our portfolio risk-management models in the event this judgment proves wrong,'' he said. Greenspan shocked financial markets in December 1996 when he asked whether U.S. equity prices were affected by ``irrational exuberance.'' Since then he has repeatedly questioned whether the prices of U.S. were justified by corporate earnings. But the Fed chairman, who was sharply criticised for appearing to second-guess investors with the famous 1996 comment, has in all of his discussions of the stock market since then been careful to be more circumspect. In Thursday's speech, Greenspan noted that economists had failed to anticipate sharp reversals in market confidence. He also repeated his line that the prices of assets were determined by millions of investors, ``many of whom are highly knowledgeable about the prospects for the specific investments.'' 20:41 10-14-99 SteveH (10/14/99; 20:09:29MDT - Msg ID:16378) repost http://www.cnnfn.com/1999/10/12/investing/merrill_survey/ NEW YORK (CNNfn) - Global fund managers are betting increasingly on Europe's recovery while moving away from U.S. equities, which they perceive as risky, according to a Merrill Lynch survey released Tuesday. Strad Master (10/14/99; 19:39:14MDT - Msg ID:16377) GOLDZAHAVGOLD Re. your (10/14/99; 16:32:36MDT - Msg ID:16362) Woah! What a fascinating and entertaining bit of "Twilight Zone" stuff that was!! I guess if the world doesn't go to hell in a handbasket tomorrow we can safely assume that Bill Clinton flew to Houston to sign the mysterious Blue Book? Boy, I sure hope he sees the error of his ways before tomorrow morning. Sweat'n bullets... Strad flierdude (10/14/99; 19:26:43MDT - Msg ID:16376) Andrew Options Site Try http://bohl.minot.com/Bohl And AssociatesMike SteveH (10/14/99; 19:20:39MDT - Msg ID:16375) Getting good at explaining this stuff in one sentence... Other person, "What is this I hear about gold?"You, "Yeah, there was some secret deal in the 70's to keep gold cheap in dollars so folks could get cheap oil; to do that, they had to borrow lots of peoples gold and sell it to drive gold lower -- about 12,000 tons of it -- and now it is pay back time. Stand by, here comes $10K per ounce."Ok, that was two sentences with E.B. White punctuation techniques to make it so. TownCrier (10/14/99; 19:11:58MDT - Msg ID:16374) Sage words from the Chairman of the (Fed) Board (of Governors) Remarks by Chairman Alan GreenspanBefore a conference sponsored by the Office of the Comptroller of the Currency, Washington, D.C. October 14, 1999 ---Measuring Financial Risk in the Twenty-first Century---"As I have indicated on previous occasions, history tells us that sharp reversals in confidence occur abruptly, most often with little advance notice. These reversals can be self-reinforcing processes that can compress sizable adjustments into a very short period. Panic reactions in the market are characterized by dramatic shifts in behavior that are intended to minimize short-term losses. Claims on far-distant future values are discounted to insignificance. What is so intriguing, as I noted earlier, is that this type of behavior has characterized human interaction with little appreciable change over the generations. Whether Dutch tulip bulbs or Russian equities, the market price patterns remain much the same. We can readily describe this process, but, to date, economists have been unable to anticipate sharp reversals in confidence. Collapsing confidence is generally described as a bursting bubble, an event incontrovertibly evident only in retrospect. To anticipate a bubble about to burst requires the forecast of a plunge in the prices of assets previously set by the judgments of millions of investors, many of whom are highly knowledgeable about the prospects for the specific investments that make up our broad price indexes of stocks and other assets. Under these circumstances, fear and disengagement on the part of investors holding net long positions often lead to simultaneous declines in the values of private obligations, as investors no longer realistically differentiate among degrees of risk and liquidity, and to increases in the values of riskless government securities. Consequently, the benefits of portfolio diversification will tend to be overestimated when the rare panic periods are not taken into account.[Again...]Consequently, the benefits of portfolio diversification will tend to be overestimated when the rare panic periods are not taken into account.[Worth a third look...]Consequently, the benefits of portfolio diversification will tend to be overestimated when the rare panic periods are not taken into account.[TRANSLATION: You might think you are wasting your time on something such as gold if you have not considered the infrequent but inevitable financial shock.]The uncertainties inherent in valuations of assets and the potential for abrupt changes in perceptions of those uncertainties clearly must be adjudged by risk managers at banks and other financial intermediaries. At a minimum, risk managers need to stress test the assumptions underlying their models and set aside somewhat higher contingency resources--reserves or capital--to cover the losses that will inevitably emerge from time to time when investors suffer a loss of confidence. These reserves will appear almost all the time to be a suboptimal use of capital. So do fire insurance premiums." elevator guy (10/14/99; 19:04:29MDT - Msg ID:16373) First paragraph of the Golden View Dear Town Crier, you give me too much credit! If I were to get scared by what I read in the first paragraph, that would mean I would have to understand it first!(But of course I jest! No, really! Ah kin read, cuz iham smart, "S-M-R-T", smart!) elevator guy (10/14/99; 18:57:30MDT - Msg ID:16372) @andrew the kiwi http://www.cbot.com Hello, Andrew. I sure appreciate the perspective from your country, along with others, as it adds to the depth and worth of the discussion in this forum.You can find futures contracts on the Dow at the Chicago Board of Trade website. Please share what you find out. I'm interested in buying puts on that bubble we call the Dow. Seems ideally positioned for a fall. TownCrier (10/14/99; 18:52:18MDT - Msg ID:16371) Yikes! A quick warning Don't let that overly dry first paragraph throw you. The contrast was intended (you'll see if you get to the following paragraph), but I'm afraid I might have lost readers half way through before they ever get to the good stuff that follows in the GOLDEN VIEW. TownCrier (10/14/99; 18:45:21MDT - Msg ID:16370) After the Close: the GOLDEN VIEW from The Tower Losing 19/32 today, price of the 30-Yr Bond is plumbing depths not seen since Fall, 1997, and the yield has risen to 6.316% on losses every day since last Wednesday. The retail sales report came in just slightly higher than analysts expectations, so traders feel that an adverse release of the September Producer Price Index tomorrow at 8:30 a.m. EDT is being priced into the market. Analysts are forecasting a PPI gain of 0.5%, with the "core" PPI that excludes the staples of life--food and energy--predicted to rise by 0.4%. The universal fear among those who walk "The Street" (Wall, that is) is that strong numbers will prompt the Fed to raise interest rates at the FOMC meeting on Nov. 16."Enough of that financial mumbo-jumbo," you're probably saying. "What the hell happened with gold??" Well, I'll tell you. Grab a chair because you'd better be sitting down for this...gold is...(wait for it)...$60 higher now than it was 18 market days ago. That's right folks, UP nearly 25%. Surely nobody in their right mind would think that the technical traders--the "paper boys" that push derivatives around like so many leaves driven by the wind during a breezey Autumn day--would not succeed in bringing about some degree of price retracement. Again, even after this latest effort, gold remains up 25% from 18 trading days ago when the UK hosted their most recent gold give-away to help bail out beleaguered bullion banks in need of metal...no other excuse holds water.At this pause, the weak hands (and weak minds) are uncurling their fingers to let their gold go to the willing bidders, thinking that this price runnup is too good to be true, given the various offerings of the mainstream media, spouted by those who have no reason to put anyone's interests ahead of their own. "Why be bullish?" asks Ted Arnold of Prubache. "Where's the demand going to come from? The bottom line is that there's too much gold in central bank vaults. Gold is a commodity in over-supply..." [C'mon, Mr. Arnold, wake up and smell the gold-demand reports burning. According to stats of the WGC, the last quarter was a record setter. The current one will likely set a new one, as those who suffered through the Asian contagion have learned the best lesson...taught by experience. And if that were not enough, in a report, the CIA sees forthcoming supply disruptions as a result of Y2K glitches, and as a consequence, they expect a flight to "safe haven" assets such as gold.]So despite the uncommon wisdom found by the various visitors to the USAGOLD.com Forum, thanks to the endless spew of the media little old ladies that held gold since 1980, and kids that have recently inherited their parents' estate and gold, have each had their attention aroused by the coverage given to this price "explosion." They're using the *opportunity* to sell (on bum advice) an asset they probably hadn't given much thought to lately. Why sell? Because the media says to sell. Or, to raise cash in order to either buy this dip on the DOW, or else meet one of their margin calls on something that has gone south on them. That's right...as long as they don't think for themselves, they'll cut their winners (gold) and let the losers (mutual fund fodder du jour) run. Don't believe what you're reading? Just ask yourself where those lovely pre-1933 coins come from. Or for that matter, ANY gold coin (such as Gandalf's K-rands) with a date other than 1999. They don't come from the mines or the central banks, folks. They come from weak hands. And as gold savers, the gang here at The Tower remain thankful for their paper greed, otherwise gold supply would approach zero, and MK would have nothing for you or me.The Street.com summed it nicely when they said, "Investors straddled the fine line between bravery and stupidity today, bidding up blue-chip stocks in the face of another big downturn for bonds." The DOW gained 54 points (Nasdaq up 5), but the fact remains, the underlying market is weak. On the NYSE, decliners led by a ratio of 18 for every 11 advancers. Stocks reaching new lows for the year outnumbered new highs, 344 to 25. Since when is walking into the whirring blades of a fan deemed an act of bravery? On second thought, The Street.com only got it half right.So as described above, the weakest of hands will lose their gold first, and each prgressive runnup in prices will find fewer willing sellers as it becomes apparent to ever-more people that the media has sold them a bill of goods, and that gold is truly the world class financial asset to be held before all else. This is stage one. Paper will be sold aggressively to reinforce the notion that those with gold had best sell it before the price collapses again. In the meantime, they hold their breath in advance of the UK's November auction. We've already seen what a spot-overbid and an oversubscribed auction did to the price (up $13 that week.) Now with many speculators and producers staring at adverse hedge books following the announcement that gold sales and lending operations would be curtailed by 15 prominant European central banks, the next UK auction is sure to be viewed as the next chance to square many positions. Fireworks may likely follow because there, the supply and demand truth can't be hidden as within the prices established by the endless paper of the futures markets.Today, sellers of December wager-paper were more agressive than buyers (though they matched one-to-one by definition), and the December price was brought down by $7.60. The spot markets took notice, but were grounded more in reality, being swept lower only by $6.90 to the final NY quote at $312.90. As we go to shout this report into the night sky, the spot price has already rebounded by $3.60, at $315.50 in Australian trading. A buck or two here and there over a day or two counts for little when the greater truth and laws of Nature are on your side. So relax if you're tense, grab a beer and your favorite coin, and contemplate the guy scratching out a living in a mud hut in Indonesia. He'd call you wealthy by situation, but he just might have more gold than you...an entire life's savings.This extended period of higher interest rates offer to those willing to risk gold for lending has drawn enough new gold forth from the "mattress accounts" to facilitate an easing of the offered rate of (no)return. Gold lease rates at days end:1-month 3.0000%2-month 3.3100%3-month 4.1875%6-month 4.0950%12-mnth 4.2450% NY Precious Metals Review: Dec gold dn $7.6; Dec silver dn 26cBy Tina Petersen, Bridge NewsWashington--Oct 14--NYMEX Dec gold extended its mid-session losses ondealer selling, settling down $7.60 [-2.4%] at $314.2 per ounce after hitting a 11/2 week low of $312. Dec silver futures followed the same scenario,settling down 26 cents [-4.6%] at $5.34 per ounce after reaching a 2 1/2 week lowon trade selling. Traders said the markets were somewhat thinly traded,exacerbating the moves.Leonard Kaplan, chief bullion dealer for LFG Bullion Services, said acombination of a softening of lease rates, quiet market conditions,unsteady long positions and the triggering of stops provided the perfectingredients for a softer gold market.Stops today were triggered at the $315-318 level amid quiet rangeboundtrade. "It seems everyone's turning into a seller," said a trader.Another trader said that attempts to break through the $325 resistancelevel had been failed at "too many times and there's too much rangetrading.Everyone's throwing in the towel." He said the longs at $320 did not havethe momentum to push it above $325.One trader said large brokers offered Dec gold down near the $318level in the morning "and there were no buyers to match it, so it justeroded quickly." [!!!!!! see following note *] Mid-session dealer buying trimmed some of those losses after the lows were made, but late speculative selling brought Dec back down.[ * ATTENTION K-MART SHOPPERS---don't you see it clearly now?...that if no one is found to buy into these future paper-wager contracts (for fear of counterparty risk or whatever), the price could fall to the floor. That has a potential psychological impact on the weak hands holding real gold, but ultimately cannot override the international supply and demand fundamentals. Especially in light of the huge "overhang" of gold lent into the market that must incrementally be paid back. Now might be a good time to read the Forum's Hall of Fame posts on this subject if you haven't already.]Gold had been up overnight on short covering and producer buybacks,and traders said in the morning that gold futures had been expected to seetechnically-inspired buying interest today as spot gold was able to stayabove $320 support overnight."We continue to be stuck in a range," said a trader. "There's not alot behind these moves." He said profit-taking is expected inrange-trading market conditions. "We are still well entrenched in aconsolidation mode in rangebound, technical trade." Support in gold isseen at $305 and then at $295.Most said they still are looking for higher prices in gold over thenext several quarters. "We probably have to come back to push theremaining shorts out of the market," one trader said. Most said rangetrading at $316-325 is expected through next week.COMEX gold warehouse stocks fell 99 ounces Wednesday to 918,729ounces, while silver stocks were unchanged at 79,285,583 ounces. He saidgold continued to decline after if broke through the $325-226 supportarea.Kaplan said he does not see today's volatility in the gold and silvermarkets as anything significant. "This is the kind of action we see in amarket that is highly leveraged. This is just an aberration and a goodbuying opportunity."Kaplan said he expects gold and silver to trend higher Friday.Jan platinum settled up on continuing tight supplies. "The marketlooks rock solid," said Kaplan.***(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:http://www.futuresource.com/internet.shtmlNo further reproduction without written permission from FWN---There was no movement of metal today within the COMEX gold depositories where 918,729 ounces can be found therein. Open interest at day's end yesterday was unchanged for Oct-Nov, while December futures dropped to 115,597 (down 2288). Total open interest fell by 536 to 216,402 on all COMEX gold contracts through June 2004. Delivery intentions on the October contract stood firm at 2,510.The release of Department of Energy data today did little more than confirm Tuesday's American Petroleum Institute data showing a 7.139-million-barrel decline for crude stockpiles. The DOE data exceeded it slightly, showing a drop of 7.2 million-barrels. So when you think about it, it was non-news, and traders (out of boredom?) sold their November paper down 61c to settle at $22.45.Pakistan's military spokesman, Rashid Qureshi, told reporters that the military would not be issuing a policy statement today. They might have something scratched up within another 24 hours, however. In very encouraging news, Qureshi told an interviewer the reason for the delay. "These are important decisions, and important decisions take time. Democracy is still intact in Pakistan despite the bloodless coup 2 days ago." The Tower wishes them well, and hopes the citizen's interests are put uppermost in any final policy.And that's the view from here...after the close. FOA (10/14/99; 18:44:58MDT - Msg ID:16369) Comment Hello Yellin of Troy, Nice write up in 16355. I have a question? In the minds of average citizens, what would you think the difference is between a $10,000 dollar bill and one ounce of gold at $10,000? I know that these old "big bills" are out of use, but when they were around their buying power must have been at least equal to $30,000. Of course I'm assuming that one of these currency units managed to slip into circulation, but it was still legal tender never the less. So, do I spend it, no way it's to large, yet it's still worth $10,000. Let's say I put it under the bed with the gold piece. As a simple person, how do I come to the conclusion that gold must be sold before it loses value and not the large dollar bill? Especially if people are trading with both of them. Is one money and the other not because I can pay taxes and debts legally only with the paper unit? I have often found that the saving of wealth is an end unto itself. The more people hold what is perceived dear, the more dear it becomes. Irrational human nature that defines the physical laws, no? ALL: Somehow, I believe the CB of China is playing a part in today's gold moves. They may have replaced a lenders demands for gold by not calling for delivery of some other contracts. Thereby balancing (or should I say unlocking) the market. It's not as it seems because their move may be what was needed to force trading to continue?? Honestly, this is totally conjecture on my part coming from some items heard. I do know that demand for physical is strong now as I am "in line". We may run tomorrow if this action has free up the gears? On the road................FOA andrew the kiwi (10/14/99; 18:28:33MDT - Msg ID:16368) put options on the dow anyone know of a suitable web site to view strike price, month and premium data for options on the djx? Bill, how are things with you?i have heard 2nd hand the fed have just announced something that has sent the 24hour Dow market into a spin..... andrew the kiwi (10/14/99; 18:28:33MDT - Msg ID:16367) put options on the dow anyone know of a suitable web site to view strike price, month and premium data for options on the djx? Bill, how are things with you?i have heard 2nd hand the fed have just announced something that has sent the 24hour Dow market into a spin..... andrew the kiwi (10/14/99; 18:28:31MDT - Msg ID:16366) put options on the dow anyone know of a suitable web site to view strike price, month and premium data for options on the djx? Bill, how are things with you?i have heard 2nd hand the fed have just announced something that has sent the 24hour Dow market into a spin..... RossL (10/14/99; 17:01:39MDT - Msg ID:16365) GOLDZAHAVGOLD GOLDZAHAVGOLD (10/14/99; 16:32:36MDT - Msg ID:16362)GOLD TO GO 'LIMIT-UP' TOMORROW ? +$75 ? Is there anything in your post relevant to gold? DD (10/14/99; 16:49:41MDT - Msg ID:16364) Peter Asher, FOA, Buena Fe Hi guys - Thanks for the kind words. Coming from you it is especially gratifying as I greatly enjoy and respect your ideas and opinions.Just to finish a thought. It's been my experience that people generally don't change until forced to do so by the changing environment. This premise seems to hold up for executives, government "leaders" and, yes, manipulators of gold. I see a lot of this in businesses with problems caused by their inability to change with the environment.Most, rather than change, tend to do more of what's not working in the new environment. I call this the "more-better-different" approach to change. People tend to do "more" of what's no longer working, or what's not working "better", or what's not working "different". I believe that, for the most part, this is exactly the strategy that most of the shorts will take. They won't see that the environment has changed in a way that makes these efforts ineffective or, worse yet, exasterbates their problems. Most will only get it when the emotional/fiscal pain becomes so great as to be intolerable. At this late juncture, escape will be impossible and the shorts will change, painful as it might be. So, expect more of the same that we experienced on the way down. Except this time it's not going to work. Why? because it's the end game. The shorts play a dangerous game that only works if there is an ever increasing supply of paper. They will continue to throw paper at their problems. However, only physical will relieve their plite. Sadly (for them), there's not enough real gold. The jig is up.I bring this up because we sometimes, like our executive counterparts, become too focused on the short term. Today, gold went down. I know some are concerned. However, I believe we must fall back on the bigger picture...our vision, really. The world is changing, including the world of gold. We are the pioneers. Yes, we're taken more than our share of arrows. But the environment is shifting in our direction and we shall be vindicated.However, we must remember that there are no straight lines in the universe. Only waves. Even things that look like they're going straight only do so in a wave-like motion. Direction is much more important short term moves. The direction for gold is, I believe, UP. The shorts will fight to the death against this tide. To no avail. Their paper castles shall be swept away. It will probably be much like our fight on the way down. One step forward, two back. Twenty year direction? Down. Fourteen day direction? UP! Have faith all. The truth shall make you free. Best, DD HLime (10/14/99; 16:34:08MDT - Msg ID:16363) Heads up Aussies All right Botany Bay it is your turn to show those paper pushers in New Yorkthat there is a WORLD price for Ag & Au. Lets have a little disagreementin price between us colonials so the Mother Country knows which way to go.Give em hell Aussies,Harry GOLDZAHAVGOLD (10/14/99; 16:32:36MDT - Msg ID:16362) GOLD TO GO 'LIMIT-UP' TOMORROW ? +$75 ? http://www.rumormillnews.com URGENT URGENT URGENT, This website was shut down few minutes agoso I am providing the full newsletter:( http://www.rumormillnews.com/ )Subject: [RuMills] RMNews Sources say Watch This Friday!!! Date: Thu, 14 Oct 1999 03:24:07 EDT===================================================================RUMOR MILL NEWS AGENCY===================================================================Dateline:10.13.1999RMNews Sources say SOMETHING is going to happen this Friday In a telephone call that was a little more cryptic than usual, an RMNewsSource from the civilian side of Faction Three stated that something wasgoing to happen this Friday, October 15, 1999.Rumor Mill News asked what we could expect. For the first time, ourSource refused to give us information which we felt pertained directly towhat we were being told. Our Source said, "The last time we told you guys what we were doing,you put it up on the webpage and everyone is Washington knew our plansbefore we had even completed them. This time, we are keeping it underwraps."The Rumor Mill News webmaster confirmed that the RMNews page haslots of hits from agencies that end in ".gov", both in this country andaround the world.RMNews kept pressing our Source for more information. While we never recieved an answer to our question about Friday, we did receive information that is intersting and timely.RMNews: "Does what is goingto happen Friday have anything to do with the stock market?"Source: "Indirectly, you could say it does."RMNews: "Does it have anything to do with the biological attack on NewYork City?"Source: "No, we took care of that. They won't try that trick again. If it hadbeen Saddam he would have planned the attack in a three part attack. Thefirst wave of biologicals would resemble a bad flu season. The youngest,the oldest and the people with impaired immune systems would die.No one in government would pay much attention, because it would justlook like an ordinary flu season. The second wave would be a far morevirulent strain of the same flu. It would be hard to tell the difference fromthe first strain, and the government would just think that it was aparticularly strong flu virus."By the time the third wave of the virus was loosed upon a major city, itwould be too late. Everyone would already be infected, and all infectedpeople will die."The type of biological that will be used is one that will die outside of thehost within 24 hours. You don't think we would have armed SaddamHussein with biologicals that would wipe out our major cities forever doyou?"The New World Order wants the cities of the United States to survive,they just don't want Americans living in them."RMNews: "Have you read the report the News Hawk sent around todayregarding the Chemtrails being vaccine?" (Newshawk story inserted at end of RMNews article)Source: "I thought you said you had the patent to that?"RMNews: "I have a copy of a patent that appears to be a delivery systemfor an aerial vaccine."Source: "So what's your question?"RMNews: "Is his story about "a benevolent faction in the military" tryingto vaccinate the population true?"Source: "What do you think?"RMNews: "I think it's true. I have checked the story out with a researcherin Canada plus one here in the United States, and both of them say thatwhat is being dropped from the tankers is consistent with the patentformula that I have. But that is only my opinion. What do you think?"Source: "Have you seen airplanes flying over metropolitan areas makingthat criss cross pattern over major population areas?"RMNews: "I don't remember any reports of this happening over the majorcities."Source: "Why is that?"RMNews: "I don't know. You've got all the answers."Source: "Could who ever is doing the vaccinating not want the majorcities to be vaccinated?"RMNews: "Are you saying that whoever is doing it wants part of us to liveand part of us to die?"Source: "That's what it looks like to me."RMNews: "Why are they doing this?"Source: "For racial purity."RMNews: "What? That doesn't make any sense at all."Source: "Where are the largest groups of non whites located?"RMNews: "Are you saying that the majority of non whites are located inthe major population areas?"Source: "I think that's what I just said."RMNews: "Are you saying that whoever is doing the spraying is trying tovaccinate the white race?"Source: "I think they prefer to call you European Americans."RMNews: "But there are a lot of 'European Americans' living in themajor cities. Are all of these people going to be killed also?"Source: "It depends."RMNews: "Depends? What do you mean?"Source: "It depends on whether the virus is one that only attacks certainDNA patterns."RMNews: "Are you talking about the viruses that were created under Operation Raindance?"Source: "I don't know. What is Operation Raindance?"RMNews: "It was a US government directed operation to create a virusthat would target certain ethnic groups."Source: "Bingo!"RMNews: "So you are saying that the biologicals that will be released inthe major cities will be "race selective?"Source: "Honey, the men who created these 'animals'.... these viruses....are proteges of Dr. Mengele, if you get my drift. In their mind, anythingthat is racially mixed, black, brown or yellow, doesn't deserve to live."RMNews: "So you are saying that the NWO wants to kill off all the nonwhites."Source: "I didn't say that."RMNews: "You just said that anything that is black, brown or yellowdoesn't deserve to live."Source: "Yes, but I didn't say the NWO is trying to kill them off."RMNews: "Well, who IS trying to kill them off?"Source: "Let's just say that the NWO is going to kill off as many people asthey can in order to reduce the population of the planet. The men whohead the NWO could care less about who lives and who doesn't. So theyassign the project to men who will carry out their orders. These menbelieve in racial purity based on an Aryan ideal."RMNews: "That's a technicality. It is still the NWO who is killing all thenon whites."Source: "You're missing a very fine point here. The NWO has grown toolarge. It has too many factions within it. The factions of the NWO don'tagree on much. Racial purity is just one of the many little items they don'tagree on. Some of the highest born of the NWO are racially impure,therefore, if the virus infects them, they will die. But has this little pieceof information penetrated their thick skulls yet?"RMNews: "You're not saying that a faction of the NWO is vying forcontrol are you?"Source: "Honey, they aren't just vying. They are actively plotting to pulloff a coup."RMNews: "A coup? Are you saying that Faction One is splintering?"Source: "After Germany surrendered, the scientists were split up into threegroups, this isn't counting the group we saved and took below ground.One group went to work at secret bases all around the world working forthe New World Order. You should visit the island off Formosa where theNew World Order cloning laboratory is located. There are NWO labs likethis all over the world. "These labs were started by German scientists that were working underHitler. Just because these men are now working for Jews, or Africans orAsians, does it mean that they have changed their stripes? Do you thinkthat just because these men are being housed and fed by racially impurepeople that they have given up their hatred on non Aryans?"RMNews: "I think you are telling me that the NWO has a cancer in itsmidst that is getting ready to kill it."Source: "Bingo!"RMNews: "But if you know this, aren't you complicit in the killings if youdon't stop them?"Source: "We are trying to save as many people as we can. We can't stopthe biologicals. Too many terrorist organizations have been supplied bythe NWO and the NWO part of the United States government."RMNews: "Can't you go public with the information and warn the majorcities?"Source: "Oh yeah right. Just like that reporter for the New York Magazinethat published the article about the mosquito biological attack. Do youknow what happened to him? He got paid a little visit and was told that ifhe didn't start back tracking he could start looking for a new job. And ifhe tried to write anymore about biologicals, he should start looking for anew family. You think we are that crazy? You can't warn the public. Thepublic would go crazy and kill themselves trying to save themselves. Youhave to use other avenues."RMNews: "What do you mean?"Source: "Well, we have something planned for this Friday. And if theother two groups don't agree to play along with us, then I guess we aregoing to have to blow them out of the arena."RMNews: "That sounds ominous."Source: "God won't let us kill. Remember that. We aren't the ones thatblow the airplanes out of the air, cause the car crashes, or random acts ofviolence. It's the other teams that use those methods."RMNews: "So how are you planning to blow them out of the arena?"Source: "There are many ways to destroy a man without killing him. Youcan kill his reputation in many ways, and if you do this, he might as wellbe dead."RMNews: "Who are you going to blow out of the water?"Source: "The people in power."RMNews: "What people?"Source: "The Democrats and the Republicans."RMNews: "What do you mean?"Source: "I mean if they don't read the handwriting on the wall and signthe Blue Book, then they can all kiss their careers good bye. We alreadyhave all their ill gotten gain in our bank accounts. The only money any ofthem have any more is their salaries, and if they lose their jobs how arethey going to support themselves? We drained all the money they stolefrom the taxpayers. They don't know how to hold down a real job, so howare they gong to send their kids to college and keep up the payments?"We're not asking for anything but equity for all people. Now what is sobad about that?"RMNews: "And if they refuse to sign the Blue Book, what happens."Source: "If I tell you that, then the Enemy will know what we haveplanned."RMNews: "I have heard from another Source that Faction 3 is going tocrash the stock market this week. It looks like it is happening."Source: "Yes, and it will continue to happen until they sign the BlueBook."RMNews: "What are you doing with the money you are pulling out of themarket?"Source: "We are using it to free up trusts we have created."RMNews: "What are you doing with the money from the trusts that isfreed up?"Source: "We are circulating it."RMNews: "What's that mean?"Source: "It means we are returning it to the people who gave it to us, themembers of our group who believed enough in our cause to help us createthe original trust. Once we figured out how to drain the bank accounts ofgovernment crooks, we started adding this money to the trusts. Once wepay off the liens and free up these little trusts, we can return the money tothe people the crooks stole it from in the first place. A lot of the moneywill go to the third world countries because they are the ones who havepaid the highest price."RMNews: "Is the market going to crash this Friday?"Source: "Is that what you think?"RMNews: "After listening to Neal Cavuto on Fox this afternoon, it seemslike he is preparing the big boys for a "market correction."Source: "I guess Neal must have been briefed. I hope he didn't let out toomuch. Panic never does anyone any good."RMNews: "Then you are saying that the market is going to crash thisFriday."Source: "There is a way to stop it. But it requires that the United Statessign on to the Blue Book. It's not just President Clinton who is standing inthe way. It is the Bush family and high level Republicans and Democrats.They can't see that the world is changing and if they don't keep up with usthey will be left behind."RMNews: "Left behind?"Source: "If the Democrats and the Republicans don't play ball we willfind another game to play, and we will take the field away from them.Why do you think that all this fuss about movie stars running for politicsis causing such a ruckus? Do you think that Oprah Winfrey could be anyworse than Bill Clinton? Oprah loves people. She doesn't know how tolie. If she were president, the American people would be told the truthabout everything. If Warren Beatty runs, he will win."RMNews: "I don't believe that. He's a Communist. He's a joke, he'llnever get elected."Source: "You're sure of that, huh?"RMNews: "How can you even say that? You know he's ShirleyMacClaine's brother and you know who their father was. They were bothraised in the New World Order."Source: "Warren doesn't get along with any of them. You can'tjudge all people by their families. If you do that, you aren't giving Godand the individual soul the room to grow and be different. Warren wokeup a few years ago. If he runs, he will win. He will pull all the liberals towhatever ticket he is heading. If he and Oprah run together, it will be alandslide. Believe me, they have better advisors than G.W. or Al have."RMNews: "Are you blackmailing the NWO with Hollywood?"Source: "We aren't blackmailing anyone. We are simply stating that ifthey don't sign on to our plan for redistributing the wealth of the worldthat they have stolen and then we stole it back, that we will throw themout of the game and start our own."RMNews: "That sounds like blackmail to me."Source: "Hardball is a better word. We have offered all of them a win winsituation. If they don't want to play a game where everyone wins, then it istime for them to get out of the game."RMNews: "So what is going to happen this Friday?"Source: "If we are lucky Bill Clinton or Janet Reno will come to Houstonand sign the Blue Book. If that happens, then all the disasters that areplanned for the new year will be put on indefinite hold. If it doesn'thappen, then we will have to contend with Clinton wanting to be presidentfor life, and Armageddon in Israel, World War Three and possibly thedestruction of nine tenths of the population. It doesn't have to be this way.There is another way, and it's not that third way that Bill keeps talkingabout."RMNews: "What third way?"Source: "You haven't heard him talk about the Communist way and theCapitalist way and that neither of them worked so he has a third way thatwill work... and will make the trains run on time?"RMNews: "Are you talking about Fascism?"Source: "Bingo! You got it! Billy wants to turn the US into Mussolini'sItaly. And you see how successful that country is run."RMNews: "So what is your third way?"Source: "A world where equity rules. A world where everyone starts outequal. A world where laws are meant for everyone equally. And anyonewho works hard and respects the laws of the land can prosper and make agood life for himself and his family."RMNews: "What planet is this world on?"Source: "God didn't make certain families richer or better than others.This royal blood nonsense is something man started by himself. Everyoneon this earth is a child of God and as such each person is a Prince or aPrincess of the Kingdom.... or Queendom for all the women who I'veoffended. It is time people remembered who they are and started actingthe part. A soul is a soul. Souls don't come in colors. Do you follow what I am saying?"RMNews: "Yes I do, but I doubt if any bluebloods or Aryans will believeyou. I think they believe they have souls that are different than they rest ofus."Source: "Yes, they believe they come from other planets and thereforethey aren't subject to the laws of our God. Stupid people. There's only oneGod, and He happens to be in charge of this Universe and this planet. Ifthey are on this planet, they are playing by His rules."RMNews: "You still have said what is happening this Friday."Source: "No and I am not going to. There is enough information in what Ihave said to let both Faction 1 and Faction 2 know what is going tohappen. Just send this out and let them start to sweat. If they will come toour dance, everything will make the transition so easily that they won'teven know anything has happened. If they don't, then just prepare for theend of history as we know it. There will be an entirely new game in townand the old boys won't even be allowed to sit in the bleachers. Maybe itwill be time for role reversals. Maybe some of the people who have beenplaying the roles of kings should get experience playing the roles ofbeggars."END The conversation became too rambling from there on to continue totranscribe it. At one point it was said that whenever Jon Benet is brought up, realizethat something is happening that is very critical to the rest of the world. Itwas compared to the OJ trial. It was related that Clinton and the NWOentrenched their power while the people's attention was on OJ.In the past, RMNews Sources have predicted that the market would crashabout 6000 points. It has also been said that Faction 3 needs to sell off itsstocks to pay off the lines of credit and liens that are on their trusts. It hasalso been rumored that one of the big trusts is going to be opened on the A HREF="http://www.rumormillnews.com/"/A 15th. I wonder if any of this has anything to do with what is going tohappen on Friday? We will all have to wait and see.Visit the RMNews Forum A HREF="http://www.rumormillnews.com/" The Rumor Mill News Agency /A There is some every good information up there from RMNews readers.10.11.99Chemtrails said to be mass inoculation against biowar© 1999 NewsHawk® Inc.rights of unaltered reproduction/distribution waivedA source in the New York area which we've had for longer than any othersingle source has relayed to us the following information, which we'vedecided to make public.This source has significant, active ties to what claim to be anti-NewWorld Order factions of the U.S. Air Force--that is, they CLAIM they arein favor of maintaining a democratic republic in the U.S.This contact of ours is knowledgeable about the entire situationregarding chemtrail spraying of substances from great numbers ofaircraft on a global basis.What this source says is that he's been TOLD by elements of the AirForce he understands are working with the so-called "Omega"/"Faction 3"group--said to be opposed to many NWO agendas such as massdepopulation/genocide schemes--that the contrail spraying being observedworldwide is being done by Omega/Faction 3 elements of the U.S. military(and apparently of other nation's military agencies) to COMBAT thebio-war attacks NOW BEING DIRECTED against the human race as a whole bysome "force" or consortium of extensive power, which utilizessignificant numbers of terrorist organization members worldwide.The actual bioterrorism itself is reportedly being implemented on thelocal levels by terrorist groups of several nationalities--some said tobe of fundamentalist Islamic persuasion.Although reportedly no especially hi-tech equipment or highly trainedpersonnel are required to strategically disperse biowar substances intotargeted regions, the extensiveness of this campaign strongly arguesthat the entire scheme is being masterminded by some significantlypowerful global-wide group.Up to 30 differing biological warfare materials are said to have beendispersed in various locations. Because of the wide variety ofsubstances already released, what's being used as an inoculativematerial, says this Omega/Faction 3 Air Force crowd, is agenetically-altered SPIROCHETE--related to both Lyme Disease andSyphilis; the spirochete has been gene-spliced so that it can inoculateagainst most or all of the various biowar substances.I asked our contact if he had reason to believe he was being told thetruth by his AF contacts. He said, "maybe".He DID tell me that laboratory analysis of many blood samples collectedin the northeastern US DO confirm that tremendous numbers of people havebeen exposed to both Anthrax AND to a genetically-manipulated spirocheteorganism. These people are NOT sick with Anthrax however; yet neitherare they getting syphilis or Lyme disease. Nevertheless this inoculativespirochete organism does not completely ERADICATE the Anthrax from thesubject's system.What's undeniable though, is that even if our contact's AF connectionsare saying what they BEL Twice Discipled (10/14/99; 16:27:23MDT - Msg ID:16361) Fed Loaning money to keep US going Today has been really interesting for me as you can see from this msg and the last one.While cutting my hair today, the stylist proceeds to tell me that a young man she knows who just graduated from college just bought a house. The bank financed 100% of all of the costs -- this kid had nothing except a job. I think my mouth hit the floor.This demonstrates that what many have speculated that the bankare trying desparately to lend money to keep the system going.We are in deep trouble folks. Twice Discipled (10/14/99; 16:20:51MDT - Msg ID:16360) It's my money! Yeh right! Point 1 ...Just a note to let out some of my frustration. I took out a substantial portion of $ out of my brokerage accounts today and walked the checks to my bank. I wanted to lock in some more gold today with the dip and I thought the usual 3 day waiting period would allow me to lock today. FORGET that! I called the bank and they said "3 days is the earliest. You may have to wait up to a month and a half for that amount of money to be cleared before you can spend it." UNBELIEVEABLE.Well, needless to say I will put more of that money in gold than I had originally intended when I get access to it.Point 2 ...When I was talking to my local coin dealer he showed me of lot of gold which he had just purchased in the past few days from people SELLING. I couldn't believe it. It seems as though some people who have held gold for a number of years see this little spike as a chance to make up a little and get out. I really feel sorry for these people -- exchanging gold for paper that will burn.Oh, well live and learn -- the hard way. Leigh (10/14/99; 15:28:45MDT - Msg ID:16359) Goldspoon Cool, Goldspoon! Now that FOA's getting a "Russian white" horse you'll have to make sure you have an Arabian. You guys can ride together into the golden sunrise of a new day of honest money.Where's Koan, anyway? Goldspoon (10/14/99; 15:21:26MDT - Msg ID:16358) FOA ...Horse race.... FOA, you said...Talk about spreads?? Is spot platinum wide open or what? Goldspoon, it's just you and me, silver dropped out (smile). I hope everyone knows we are just playing a game here. Anyway, lets watch the HK market later. FOA****i say..... you lead awhile...after seeing the spill Silver Moon took.... the track ahead looks mighty rough...maybe a more experienced rider should lead for awhile???Or as the Tin Man said in OZ "What's wrong with you teachin' them a lesson?" Poker... eh?... it shows!! (smile) All,...Remember...i said awhile back "a cornered rat would fight" ....hang on... i beleive we have him by the tail....just don't let go!! FOA (10/14/99; 15:13:31MDT - Msg ID:16357) Comment canamami, Thanks for taking the time to offer your thoughts. This is indeed a giant chess game that will keep everyone guessing on the sidelines. Interesting about the CNBC question. As I said earlier, I'm going to bid on some bullion during this break (if it turns out to be a real physical one) and may add some platinum to the mix. I offered before that My mix had some silver (small amount) and now I must buy some of "the other white metal" just to keep up with Goldspoon. If it falls some, I'll have it. Now if only the spreads on (all) the metals will fall some, we just may find something. I have my doubts that this is a real pullback because every large player is looking to not only buy metal for cover, but to also buy time. In addition, some real long "hard hands" are into adding any physical they can get as this proceeds. We shall see. FOA Gandalf the White (10/14/99; 15:09:35MDT - Msg ID:16356) >>>>>----------$321.0-----------> GC9Z on Fri 9/22 close.WHY am I, Gandalf the White at the FORUM ?BECAUSE it is the BEST webpage on the WWW! Can anyone show me a better page ? --- I have not found anything to match it in my travels of the web. --- I feel as if I am amoung friends and enjoy soaking up the wisdom of the posters. -- Time is important to me and the FORUM is my daily web home. --- Thanks MK for having me !<;-) Yellin' of troy (10/14/99; 15:06:48MDT - Msg ID:16355) more monetary musings -- yes, relevant to gold My exchange with ORO prodded me to think more about these issues, and I now realize that our differences aren't as academic as I had supposed, but may have interesting implications for the future of gold, dollars, and the monetary system generally. Unfortunately, I still need to lay out a lot more theory on the way to the payoff.The problem with "concept money" is that it is vulnerable to "reverberant doubt." I accept it only because I believe others will, which requires believing they believe still others will, and so on. If the guy n steps down the argument may lose confidence for any reason, that can give #n-1 a better reason to lose confidence, and the whole thing can blow up. Actually, though, a certain amount of doubt can be absorbed in psychological inertia. (Analogy: Iterated Prisoners' Dilemma with exactly, say, 10,000 trials: In a world of perfect logicians, this unravels from finish to front and there is no cooperation at all, but in the lab it doesn't work that way, because real people don't think that way.) Moreover, even for perfect logicians, if this money, though risky enough to be lousy money, is still the *best* kind of money available, then just because there is a chance it might find no takers when I want to spend it does *not* mean I should spend it all now and refuse to take any more. For that would mean giving up *all* the benefits of holding some assets in this highly liquid, flexible form. No doubt I would get in return whatever I bought now, but the reason I was planning to hold *this* number of (say) dollars was precisely that this marginal dollar of money, of ultimate liquidity, was worth a bit more to me than what I might buy with it right now. If the liquidity of money becomes somewhat chancy, it becomes worth somewhat less (and the loss is the greater because it is a risk to the whole wad, a risk of zero effective money), but this is still only a marginal shift, much like that produced by expectations of moderate inflation. It becomes right to hold less money/liquidity, but not to hold none; *some* amount of liquidity really is *very* valuable. Only a small spending spree is called for, not all-out panic. My demand for money diminishes but does not vanish. And the same goes for #n, and in the aggregate; in fact, if the money has an issuer or other central authority who can reduce the supply as appropriate -- more likely for concept money than a physical commodity --, the price of a unit of money need not even change, and this price stability can itself bolster confidence. As long as we are in this regime, the doubt inherent in concept money does not reverberate: #n *isn't* going to reject the money as not-money, so there's no reason for #n-1 to do so either. Yet there is some threshold level of doubt above which it does become reasonable (or at least thinkable) to reject the money totally and dump all one has, or all but a small amount needed for special purposes. For there is always *some* alternative form of money available, things like cigarettes (not to mention junk silver, foreign currencies, etc.). And it is always possible -- if not as an individual then as an extended family, a church group, a business, a warlord-and-clients -- to hold one's flexibility in kind, by stocking up on whatever might be needed one day. As soon as the present money becomes so bad that such tactics seem sane, as soon as other people might plausibly dump all, then the reverberant doubt goes to work and makes doing so not only reasonable but the only sensible thing to do, for now the risk of loss from holding the money approaches 100%, the money must be expected to become worthless, worth less than anything you can get for it right now. So a monetary system needs to stay on the right side of the critical point, and needs to be designed (if only by trial and error) to do so. (The Keynes quotation posted here recently can be thought of as an estimate of such a tipping point.)There are a couple of classic ways to keep the system in the stable region. Laws requiring payment of taxes in a particular kind of money or making it legal tender for debt and other contracts assure everyone that there will always be at least a limited, specialized demand for the money, which reduces the risk of loss from getting stuck with it when the music stops. But the main tactic I want to discuss is "commodity money": using as money something that has considerable value as non-money, for "real" use. This assures everyone that even if the money ceases to be money, you won't lose all, since you could still use it yourself or sell it to someone for physical use. So long as the nonmonetary value is high enough (net of expected transaction costs in the sale of no-longer-money) that the loss from getting stuck with it if it ceases to be money is obviously less than the loss from abandoning the money (and perhaps the money economy) now, there is no reason to do so, and the money is stable. The key point to note here is that it isn't good enough for the money to have merely *some* commodity value, it needs to have *enough*. What matters is the ratio between monetary and nonmonetary value. If demonetization would cost holders only a small fraction of the wealth they were holding in the money, the system will almost surely be stable (unless better money is at hand), but if the ratio is high enough that the demonetizing hot potato would lose a very large fraction of its value, that's not so different from losing it all, the alternative of dump-now may be attractive, and the system may tip. "Commodity money" whose monetary value is too high is, in the relevant way, hardly different from pure concept money.Perhaps I have been speaking too loosely of non/monetary values. Of course, at any one time, the price and marginal value for commodity use and for use as money must be about the same, otherwise stocks would shift from one use to the other. The division between the two uses is cleanest on the demand axis. The point is that when a commodity becomes money its demand curve shifts, since it is now the sum of the regular, physical demand curve and an additional curve of demand for use as money. The latter is downward-sloping, since the higher the price -- the more you can get for a unit of money -- the fewer units you need to serve your liquidity needs (assuming the money is reasonably divisible). So there will be a new equilibrium, at a higher price. And at this higher price, actual physical demand will be less, as users shift to substitutes or do without or reduce their own outputs. Conversely, if money is demonetized, if the monetary demand vanishes, the price will drop, and this reduced price is what I have been referring to as the nonmonetary value. Pure concept money, having no nonmonetary use/demand to speak of (apart from a few collectors, historians, etc.), becomes (nearly) worthless if demonetized.Now, these transitions have several interesting features. For starters, the price changes would usually overshoot or undershoot initially simply because it takes a while for physical demand and supply to adjust -- there are sunk costs to depreciate and inventing to do. So a sudden new form of commodity money, with a sharp increase in monetary demand, will start out as money at a price that is not sustainable in the long run. Which is not an attractive feature in a money, and may cause disillusionment and doubt. Similarly, upon demonetization, the price may go considerably lower, for a while at least, than it would have been if the stuff had never been money; which only enhances the fear and instability. But it's even worse than that: These transitional effects are large and always in the direction of overshooting, because of the fact that money *circulates*. Once it's established as money and the desired balances have been built up, one person's monetary demand is another's supply, so the aggregate monetary demand to be met by new physical supply is only whatever additional money is needed to kep up with a growing economy (or perhaps widespread changes in people's financial practices). But when the money first becomes money, the whole circulating balance has to be obtained, creating a much higher demand, temporarily; and the effect on price will be all the greater since suppliers know the demand is temporary and won't turn their businesses upside down to meet it. Conversely, on demonetization the whole monetary balance, no longer wanted, gets dumped into the supply side of the equilibrium, but only as a one-time thing, until it is absorbed. (Essentially, this is what was happening to gold in recent years.) These transitional effects are much less a problem for pure concept money, which can be created and destroyed by mgic wand as needed, but for commodity money they are serious, making the stuff less attractive and more risky as money, and thus perhaps preventing it from becoming or remaining money. The principal moral here is that commodity mnoney is best introduced gradually, perhaps by slow growth or accretion of communities that use it as money, rather than by any centralized decree about its monetary position; it is best as a "natural," "living" money, and doesn't mix very well with fiat status, other than official ratifications of the status quo. And a final point of some interest: The fact that the monetary use/demand is large or small compared to the physical demand doesn't necessarily imply that the key price ratio is too. It all depends on the details of the supply and demand curves. That's much less accessible information, and this uncertainty might affect the fear level.OK, with all that background we can now finally get to some applications. Let's consider the claim that has been made around here that gold is going to $30,000/oz. When I first saw that, I wondered, like others, what those $s will buy. It appears the claim is that the change will be about equally divided between gold and dollars: The price of gold will rise by an order of magnitude and the price of dollars fall by an order of magnitude, both relative to things-in-general. Now I have my doubts about the dollars part, but that's for another day; let's talk aboiut gold. Is it at all plausible that the price could go up by a factor of ten? As I understand the claim, the proponents are not talking about a mere brief spike in the price (caused by a short squeeze or some other aberration), but about a fairly stable price level, a new equilibrium. (If I am wrong about this and the prediction is only for the peak of a spike -- coinciding with or following after the predicted plunge in the dollar --, then I would like to point out how hard it will be to take advantage of. Knowing when you are at the peak isn't easy. And even if you can figure that out, selling *physical* gold -- which seems to be the recommendation that goes insistently with the prediction -- isn't an instant process of clicking the icon or calling your friendly, idle broker. You have to pry up the floorboards and transport the gold to the dealer, and when you get there you will find no parking nearby, and the line will stretch around the block, since dealers can't add space and staff fast enough to cope with a spiky market.) Now, no one is predicting some huge technological or aesthetic change in physical demand (or supply), so the idea must be a flood of new *monetary* demand, a remonetization of gold. But what all that theory tells us is that at ten times the present price, gold will not be such good money. I don't know enough about the gold market to know what price would clear a purely physical mrket, so offhand I have no quarrel with the $600/oz figure that has been going around here. (I would like to point out, though, that for gold the "physical" and monetary demands aren't totally separable, since a lot of gold jewelry around the world is held as a store of wealth, with monetary overtones and assumptions vulnerable to a demonetization and disillusionment.) But that isn't the number in the public mind; what will come to mind when people envision a loss of gold's monetary status is the $300 it was at for so long before the New Monetary Order. To make things still worse, there's the overhang of all those official gold holdings. In the last demonetization of gold, these were mostly retained, but if gold is tried again as money and fails again, this time spectacularly and on its own demerits, won't the official rejection be more convinced and total? Mightn't all those official holdings come onto the market and drive the price into the ground for a long while? Then there's the overshoot upon monetization: If gold is to settle down at 3000, it will first go higher, increasing the potential losses. Conclusion: For someone holding newly-monetizing gold, the potential loss if the monetization fails or is reversed will be at least 80% and probably 90 or 95%. Intuitively, I don't believe most people will treat this as much different from 100%. At such prices, gold will be the softest "hard money" you can imagine. (Really quite appropriate metaphorically in view of its physical properties.) For practical economic purposes, it will be almost like concept money. And unlike pure concept money, this will represent a *change* in its economics. If people have once accepted and gotten used to money with a key ratio of infinity, a rise to twice infinity hardly seems to matter. But if you thought of gold as good money precisely because its ratio was low, because its commodity value provided security, then an effective loss of that state of affairs is an *event*, a news peg, an occasion to reconsider one's policy. I cannot believe that gold at those prices will be stable money. The system will be on the wrong side of the tipping point, and gold will cease to be money. Only, of course, thihgs will more likely never get to that stage. Monetary confidence comes with actual practice and experience and custom; it's much easier to think of something as money if "we've always done it that way." Hence, other things being equal, it's much easier to *keep* something money than to *make* it money, to introduce it successfully as a new money. So if, as I have argued, gold at those high prices would be such lousy money from the start that it would crash, then it will simply not become money in the first place. (A caveat on this later, though.) Monetized gold at $3000/oz (in constant dollars) is a mirage.I'll admit it could make some difference if the demand comes from central bankers, based on an agreement for a New Monetary Order. They can all get together in a room and lean on each other. But unenforceable cartels are notoriously prone to cheating; think of OPEC. If every central bank is sitting on pile of gold that it could sell surreptitiously for five or ten times what it's "really worth," how long before one does? The system would require tighter international controls and inspections than for nuclear materials (which we know are *not* secure), raising howls about wounded sovereignty. And even if it could be done, that still leaves plenty of gold in private hands. It can't work.Next application in a day or few, when I get it written. This has gotten too long anyway -- my thanks to anyone who's read it all. canamami (10/14/99; 14:48:22MDT - Msg ID:16354) Broken Pledge Not to Post - Various This will indeed be my last post for the month. I would have kept my promise not to post (way, way too much work on the go right now) but the big drop in gold and silver has agitated me too much. Mercifully, I was doing a hearing out of town today, and missed the action. The POG was up when I went to work. When did it start tanking? When (what time of day) did the worse losses occur? Were any announcements made today to account for the pummelling (sic?) gold and silver took? What is the Forum's consensus as to cause?Next topic: FOA has opined that the U.S. will default on its debt. The $U.S. is the world's reserve currency. Most transactions (certainly those involving U.S. firms) are denominated in $U.S. How then can the U.S. default if all it has to do is print dollars to make payment? I know individual companies or individuals may default (can't even procure enough $U.S. to pay off debt), but this is just an instance of private entities going under. However, a few weeks ago on CNBC, someone asked a "guru" about rumours the Middle East countries will ask for "currency basket" oil settlement instead of $U.S. The "guru" replied that this idea had been mooted and kicked-around for a long-time, but it would never happen. However, I submit that if oil ever went to something like "SDR + gold" settlement, or a basket such as "40% $US, 35% Euro, 20% yen, 5% gold", then the US companies or government could default, because then payment would have to be made in currencies the US could not print -i.e., the US would have to "earn" its imported oil. Even a small % of gold in the basket would cause the POG to rocket.Finally, I was in a hearing last month. We asked a French epidemiologist a question about double-blind experiments. He replied they were the "gold standard" of medical, clinical experiments (the "gold standard", not the "dollar standard"). I guess the yellow metal still possesses a certain special cachet as the most credible, bottom-line, ultimate money. FOA (10/14/99; 14:09:03MDT - Msg ID:16353) More on story rumours? The CB of China is rumoured to be in the background to take delivery of ASL gold, without holding the BBs to further margin? Put this in the FWIW department. I won't say anything more unless this is confirmed. Perhaps their talks for WTO is involved? Oh well, we shall see. megatron (10/14/99; 14:00:59MDT - Msg ID:16352) gold drop In the near term we will see a lot of volatility in POG, as the wheels come off. There will be desperate moves made by the usual suspects in the 2000 run-up, so hang on tight. Buena Fe (10/14/99; 13:58:33MDT - Msg ID:16351) DD (10/14/99; 12:25:30MDT - Msg ID:16338) Great post "Fear" vs "Faith", that is what life is all about! In a sideways sort-of-a-way the movie Matrix portrayed this conflict well. I once read some where that "PERFECT LOVE CASTS OUT ALL FEAR!"Along with gold ....get love! TownCrier (10/14/99; 13:54:41MDT - Msg ID:16350) MUST READ by The Independant--London http://www.kitco.com/_a/news/2075.htm The Independant--London with a piece that bucks the trend of "standard media fodder" in a most remarkable way... "The negative wisdom of industry Cassandras like Ted Arnold of Prubache and Andy Smith of Mitsui Commodities had become conventional. In an era of low inflation and runaway equity markets, holding on to gold was a literal waste of money. The eagerness of central banks to swap their sleepy gold reserves for more energetic assets had created an overhang of supply that seemed to preclude future rallies."And Ted Arnold hangs tough..."I still to this day do not understand why the central banks did what they did. It was like firing on their own troops. It has taken down Ashanti and Cambior and there could be a lot more. It is still a very bloody battlefield and no one is quite sure what's going on." Well, Mr. Arnold, sometimes troops are killed in the process of winning the war. Physical gold has the best management team money can buy! The Independant goes on to observe that many gold producers were the authors of their own downfall. FOA (10/14/99; 13:34:56MDT - Msg ID:16349) ASL I see where Ashanti Goldfields (ASL) is down and discounted from their takeover bid?? Michael, something is very wrong with this picture. I heard one of those rumours (???) that some banks could be actually buying out the gold loan package so as not to force margin. If yes, some major backup money is being applied for free here. This could get explosive is someone decides to "cut and run"!FOA TownCrier (10/14/99; 13:28:20MDT - Msg ID:16348) Hear ye! Hear ye! A call to contest! The master of the Castle, our gracious host at Centennial Precious Metals, has made it known that he will yield up gold and silver prizes--for it would please him to see the Knights, Squires, Ladies, and honest Townsmen at play upon the green fields under these golden leaves of Autumn.Good People of the land, hear ye, and may you walk away heavier with riches than upon your arrival. Your participation, comradery, and good times is all we seek...so please step to the field of play when you have prepared yourself for the simple task at hand. To wit, one arrow each, and your best effort to strike nearest the mark.THE RULES:So draw forth your truest arrow, toe the line, take aim, and let fly your best prediction for the closing COMEX December gold futures contract price (as quoted that day by TownCrier) for next Friday, October 22, 1999. All arrows (predictions) must be leap from the bow and be in flight no later than this Sunday, October 17 at midnight according to the clock kept at this Round Table.All entries into the contest must use standard arrows in the subject line as demmonstrated here, or a reasonable replica:*>>>>------$500.00--------+>Contestants must ALSO provide a brief oratory (at least 30 words) upon release of their arrow explaining either the method of their aim, or a pleasing tale explaining what role gold or this Forum has played in your life. These won't be judged, but we must hear your voice as you take aim at your target.THE PRIZES:To the arrow nearest the mark: One beautiful French 20 franc gold coin, bearing the likeness of lovely Liberty and a bold Rooster to usher in the dawn of a new era.To the next two nearest arrows: One silver Eagle, each.To all first time posters throughout the duration of this contest: by simply gracing us with your voice on any gold related subject, you will receive One silver Eagle, each. But you must also e-mail the Castle (Centennial Precious Metals / USAGOLD) at cpm@usagold.com to let us know that you are a first-time poster. We will confirm the record, and the precious metal will be yours for sharing your time and interest in this most important of monetary subjects.LET THE GAMES BEGIN! FOA (10/14/99; 13:24:13MDT - Msg ID:16347) (No Subject) PH in LA (10/14/99; 12:24:58MDT - Msg ID:16337)FOA & Another's MeaningThank you for the explanation! Exactly right!---------------------------------Peter Asher (10/14/99; 12:37:58MDT - Msg ID:16341)Michael, Jeff, AllRe >>>DD (10/14/99; 12:25:30MDT - Msg ID:16338)<<<<Peter, I agree. It's a prime example of an individuals personal experience. DD allows us to see the economy through real eyes! 2nd it!----------------------Buena Fe (10/14/99; 12:49:33MDT - Msg ID:16344)all Au correctionBuena FE, they nailed silver today. I just read where even Ted Butler (good kitco poster) is disgusted and promoting physical as the way to go. They managed to get some margin money to throw at the paper gold markets. In a way this may be educational as we can now watch and see if some real bullion flows from this. I did all of my buying much earlier (in the spring), yet I'm about to bid this dip for physical. If I'm right, the people that need physical the most will now be "right in there" also. I said this would not be a trading market (talking physical) because the spreads and premiums would not allow one to gain much advantage on any dips. We shall see! Talk about spreads?? Is spot platinum wide open or what? Goldspoon, it's just you and me, silver dropped out (smile). I hope everyone knows we are just playing a game here. Anyway, lets watch the HK market later. FOA jaydeevee (10/14/99; 12:58:43MDT - Msg ID:16346) To the guy that owns SPOT & SPIKE!!! Make sure SPOT & SPIKE get plenty of rest tonight!!! They should be VERY, VERY ACTIVE in OZ & Asian markets tomorrow! Who was it said 'you can't fool all of the people all of the time'??? With the INTERNET, there is too much disclosure out there now!!! Methinks the world has had an absolute gutful of 'shorting' antics on COMEX; and tomorrow punters should DROOL at the opportunity to buy gold at such a lovely low price! Just watch SPOT & SPIKE GO!! when Sydney OPENS!!! Golden Truth (10/14/99; 12:55:01MDT - Msg ID:16345) TO PHinLA I think i got it now, F.O.A meant the dollar "itself" would not surge during this crises, right?G.T Buena Fe (10/14/99; 12:49:33MDT - Msg ID:16344) all Au correction get a weekly chart of oil. look at the bottom in Dec....then the strong 1st move up in Jan..... then a several week decline to test everyones convictions........then a steady climb!!!!!! Markets are immensly complicated animals (especially au), after 15 years of study I'm still a student only. But I bet 6 to 12 months from now the adage "buy the dips" will apply to gold and not the dow.Keep Well Peter Asher (10/14/99; 12:47:43MDT - Msg ID:16343) Arem The answer to all of those questions is of course, YES! Will anyone divulge the data to an investigative commitee? FAT CHANCE! This 1999 "Washington Project" probably has the same ultra top secret classification as the 1940's Manhatten Project.And has the equivelent explosive potential.In this case the bomb shelter is physical gold. Golden Truth (10/14/99; 12:44:54MDT - Msg ID:16342) TO PHinLA Thanks for clearing up the "flight status" concerning the Euro and The Dollar,yes i agree not everyone will flee to the dollar by default now that the Euro provides a choice.Though my question to F.O.A still stands with regard to the meaning "I think it's now to late for the dollar to "initially" surge with gold during this crises."\G.T Peter Asher (10/14/99; 12:37:58MDT - Msg ID:16341) Michael, Jeff, All Re >>>DD (10/14/99; 12:25:30MDT - Msg ID:16338)<<<<I would like to recommend an HOF section titled General Economics, for posts such as this superb essay. phaedrus (10/14/99; 12:26:30MDT - Msg ID:16340) gold takes a hit today, silver crushed, but that's ok Down 7 to 8 bucks as I write this at $314 in the December.Just writing this to remind everyone who is freaking out right now that nothing goes straight up or down. As an example, take a look at a chart for November crude oil. At first glance it looks like crude was just shot out of a cannon- before succumbing to the latest big correction, it doubled in price in less than eight months. But if you'll look closer at the crude chart you'll see that before it doubled there were plenty of 5-10% along the way. For gold this is comparable to seeing it drop off ten or twenty bucks every now and then. So nobody should be committing hara-kiri or anything. Golden Truth (10/14/99; 12:26:06MDT - Msg ID:16339) GOLD WAY WAY DOWN!!!!!!!!! SPOT $312 Down $7.80 :-( DD (10/14/99; 12:25:30MDT - Msg ID:16338) OVERHERD - Prisoners in the Workplace Joe - I think I know where you're coming from. I've been a consultant and trainer for the last 10 years, primarily in high-tech and manufacturing industries. I believe that work becomes a prison for most people as companies grow. In Aerospace, most companies are large and getting larger as a way to survive. It seems like this is the case for many industries. Additionally, Wallstreet has caused executives to become so short-term focused as to be ludicrous. How do you build a company when the primary objective is to make the quarter, collect your bonus and keep your job. In essence, executives must act short term in order to survive, too. As we all know, people in survival will tend to focus on their own needs at the expense of other people, including, of course, the people who work for the enterprize. I believe this focus on personal gain or personal survival is at the root of why we have lost our humanity in the workplace. Interestingly, this focus has filtered out the recognition of the greatest asset of any organization, its people.In high-tech, most companies tend to be small, fast paced and driven by energy and initative. Most are driven by a vision of some sort as opposed to short term numbers. Many are fun places to work. However, as numbers become more important than visions and people, high-tech begins to suffer the same prison-like problems as other industries. IBM is, in my opinion, one of the least creative, most bureaucratic organizations on the planet. Notice how they're continuing to cut costs at people's expense. Are they as bad as Aerospace? No, I don't think so. Why not? I have my own theory.I believe that the closer one gets to government, the more the aliveness of the companies and their people dies. I also believe that, in general, the larger the organization becomes, the more oppressive too. The root cause. FEAR!!! People are meant to be energetic, creative, thoughtful and emotive. Fear steals this aliveness. Fear steals our humanity and replaces it with false security. It takes great courage to trade ones security for ones happiness. Still, it's a worthy exchange, I do believe. Best, DD PH in LA (10/14/99; 12:24:58MDT - Msg ID:16337) FOA & Another's Meaning Golden Truth: Regarding your (10/14/99; 11:28:23MDT - Msg ID:16334) question to TC about FOA's meaning, maybe I can shed some light on the subject."To quote F.O.A "I think it's now to late for the dollar to "initially" surge with gold during this crisis. As an old, indebted currency, the dollar will have to share any flight to quality with the Euro." End of quote."If I recall correctly, FOA was responding to Leigh's question about Another's famous quotation that one day "we should not be surprised to see gold and the dollar rising at the same time." This had been a statement that was not well-understood at the time that Another made it, several years ago. Many interpretations were offered, and it was recalled several times, always looking for a clue to the statement's meaning. It almost assumed a mythical life of its own, a mysterious mystical quality that helped garner publicity for Another's writings. In retrospect, it almost seems that this was part of Another's intention, since it caused us to focus our attention and interest on his message. FOA explains now that the "flight to quality" that benefited the dollar during, for example, the Asian Contagion should not now be expected to be a factor in the present state of evolution of events. Gold will now rise against the dollar and "flight status" will now be shared with the Euro; gold will be considered the ultimate "flight to quality". Hope that helps. Golden Truth (10/14/99; 11:57:34MDT - Msg ID:16336) GOLD WAY DOWN!! SPOT now $314 down $5.80Looks like the road we're on is heading for a ditch. Remember "SPOT" keep it between the lines!!! Golden Truth (10/14/99; 11:46:38MDT - Msg ID:16335) GOLD GETTING FLOGGED AGAIN? Spot Down $2.10 @ $317.70Gold is being flogged today why? I tink we know why but it's the "when" will it stop? Is what i'd like to know once and for all. Golden Truth (10/14/99; 11:28:23MDT - Msg ID:16334) TO TOWN CRIER MY question to F.O.A is in reference to his (10/09/99,19:21:08MDT-MsgID:15945)To quote F.O.A "I think it's now to late for the dollar to "initially" surge with gold during this crisis. As an old, indebted currency, the dollar will have to share any flight to quality with the Euro." End of quote.This is what my question was referring to, and i still do not understand what the above portends exactly?Maybe you T.C can help me in this also? If not, i respecfully wait to hear from F.O.A on both my questions. G.T MidEastGold (10/14/99; 11:14:03MDT - Msg ID:16333) Women's gold Leigh,One more comment and then I'll let it drop. You're right, the women here are not afraid of Government confiscation of their gold. Their reason is entirely different. Arabs buy two things to stay off inflation...gold and housing materials. In Israel, the people went through a fast inflation period in the 1980's that was "solved" by revaluing the currency. Unfortunately this high inflation caused building prices to soar. People began buying a bag of cement (typical building supply) instead of putting it into the bank because the money in the bank was quickly devalued and the bag of cement actually went up in price. Gold was the same way. It maintained it's value through these periods and actually became more valuable. Bedouins actually use silver and gold jewelry. The jewelry is portable, adorning and protected (by the men in the family who would use gun and knife to protect the women.)Today, the woman's gold is sold as a last resort if the family has a critical need. I have been astonished at certain weddings to see no less than a kilo of gold on a woman!As far as confiscation in the U.S., with the advent of GPS's, satellites that view postage stamps, car security systems that are tracked by sattelites,or even a simple metal detector, I don't think that confiscation would be too hard for the gov't if they wanted to do it. Heavy taxation sounds like a probability as well. Who knows? gidsek (10/14/99; 10:48:31MDT - Msg ID:16332) Robert Mundell http://www.polyconomics.com Jude Wanniski learned econ at the knee of Mundell and Laffer and runs a very interesting website. His book, "How the World Works" is a great read. I believe Judes' latest opus is regarding Robert and his award.gidsek AREM (10/14/99; 10:47:59MDT - Msg ID:16331) Reminder to All From the posting of SteveH (10/14/99; 6:37:52MDT - Msg ID:16305)Article in N.P."More than that, he elaborates on the story going the rounds of one major Wall Street investment dealer having failed to deliver a big hunk of gold to the buyer of a call or calls. In a chat last week, he cited a short-wave radio broadcast item from South Africa to the effect that the amount of gold involved was 10 million ounces -- and that, wait for it, the U.S. Federal Reserve came to the rescue and made the delivery."This kind of BS has got to stop. Bill Murphy recently submitted a list of questions that he wanted us to send to our Congressmen and Senators regarding the US government messing around with the gold market. I added a couple of sentences to his questions to work up a letter that I used for that purpose. Feel free to use my sample letter or modify it anyway that you care to. =======================Dear Senator (Congressman):There is a strong suspicion that various departments of the Federal government are fraudulently manipulating the price of gold rather than letting it trade freely and openly in a democratic market place. Please research the following questions to see if this is true, and if it is, take steps to halt these illegal actions. Questions for the Federal Reserve Board and the U.S. Treasury Department1) 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? It is vital for a free market that any clandestine action by the Federal government that constitutes restraint of trade, be exposed and stopped. Sincerely, Your NameaddressPhone #e-mail=================If you haven't already done it, DO IT TODAY. AREM OverHerd (10/14/99; 10:47:11MDT - Msg ID:16330) DD Msg ID:15866 DD (10/08/99; 12:10:47MDT - Msg ID:15866)DD, you brought up a very important point and I don't think it's has been touched on before, especially in regards to Y2k remediation and the Y2k problems that need to be fixed now or in the future. This could prove to be the biggest untold story that has implications beyond Y2k.I may be a little biased because I work in the aerospace industry and I have experienced the stagnation of our wages and a significant drop in the standard of living of the majority of the employees. This coupled with the lack of respect and poor treatment of the workers has spawned an atmosphere that breeds apathy. This causes your job to be as you put it "more like a prison sentence for most people than an experience of growth, contribution and adventure" that I am living every day.I am not sure that this phenomenon is limited to the aerospace industry or the service industry, yes as an aircraft mechanic I am considered to be part of the service industry just like a McDonalds ® worker or a customer service worker. I would like to know if this is the case in the high tech industry and I ask any forum members for their opinions on this, ET, AEL any thoughts.DD, sorry it took so long to get back to you. Like I said I'm not sure if this is a process of supply of workers versus demand for the services that these workers perform or if it is a new paradigm in the relationship between the employees and the employer. I know many posters here are self employed, business owners and/or retired but there are many people in this country that are in this relationship and it could have major implications for the future. I thought that that was a very good post and thank you for taking the time to write it.joe Leigh (10/14/99; 10:44:15MDT - Msg ID:16329) MidEastGold Dear MidEastGold: It can't be that the women are afraid of confiscation, because gold jewelry goes all the way back to Bible days. Is it because the jewelry is part of their dowries? And maybe husbands would be less likely to take their wives' jewelry and sell it since everyone would know about it? Just guessing.About U.S. confiscation -- I'm still of the opinion that what the government can't find, it can't steal. It would look foolish trying. FOA thinks gold won't be confiscated, but that owners will be taxed unmercifully. We'll probably know soon enough.Thanks for your info! TownCrier (10/14/99; 10:39:48MDT - Msg ID:16328) Tea leaves: Most IMM currency futures lower, yen sags in range http://biz.yahoo.com/rf/991014/nz.html Retail sales rose 0.1 percent, U.S. Treasury bonds fall sharply in price. TownCrier (10/14/99; 10:23:47MDT - Msg ID:16327) Y2K: Don't Relax Yet http://www.pcworld.com/pcwtoday/article/0,1510,13260,00.html The obvious systemmic threat due to the programming shortcomings regarding year 2000 are at least a known enemy, and given enough time, attention, and resources could be diligently tested and fixed. The great unknown is a potential host of computer "viruses" waiting in the wings as hackers play at a game of one-up-manship to gain notoriety. TownCrier (10/14/99; 10:14:19MDT - Msg ID:16326) Hello Sir Golden Truth I enjoy Sir FOA's posts immensely, and read them all...but I can't recall the context of the quote you've provided: "P.O.G would not be allowed to run," and on its own it looks quite puzzling.Maybe that was a typo, and should have said "POG would NOW be allowed to run." It often helps if you provide the message ID # or a bit more info about the text. But hopefully Sir FOA will recognize such a tiny snip from his vast collection of posts, and will be able to shed more light on this for you. MidEastGold (10/14/99; 10:11:58MDT - Msg ID:16325) Leigh My gut feelings? I think that the U.S. Gov't will turn toward confiscation once again. It may be done as an alruistic appeal at first, but then those that hold back will be looked for. An interesting aside. As my Post name denotes, I live in the Middle East. MOST of the muslim women here wear their family fortunes. Gold coins they do have, but they are strung on a gold chain and as such they are "jewelry". Why do you think the women do this? TownCrier (10/14/99; 10:04:52MDT - Msg ID:16324) CIA says Y2K may disrupt global supply chains--(and increase in demand for gold) http://www.computerworld.com/home/news.nsf/all/9910133overseas The CIA expects to see what they call a "'safe havening' of financial assets by some foreign governments and businesses in the U.S." due to the potential for supply disruptions taking its toll on the profitabiliity of businesses.Nick Gogerty, an analyst at the London-based firm International Monitoring, said U.S. officials were "potentially reckless" with the optimistic Y2K messages being put forth by prompting some to disregard the Y2K risk. He agreed with the CIA's assessment, saying a flight to quality out of traditional assets could lead to increased demand for gold and the U.S. dollar. Golden Truth (10/14/99; 9:53:30MDT - Msg ID:16323) TO F.O.A Hello F.O.A, Something you said a few days ago in a couple of your posts are really "Baking my Noodle".Item one,was that you think the "P.O.G would not be allowed to run" What do you mean by that? does that mean the the market will now fail due to implosion. Due to lowering the price of "paper gold" again?Or do you mean the P.O.G will just explode with no warning?Item two, what do you mean by "I now think its to late for the mines to cover?" Again to me that would imply that the P.O.G will explode before they can cover or does it have some other esoteric significance?Thanks, as always we all really appreciate your being here. G.T :-) Leigh (10/14/99; 9:53:03MDT - Msg ID:16322) MidEastGold, FOA Thank you for the information. One more question, please: do you think it's more likely that the government is doing this, or criminals? FOA, that was an interesting post! When you talk about "digital currencies," it makes me wonder what you think about cash. Do you see a future for it, or are we headed fast toward smart cards? TownCrier (10/14/99; 9:48:58MDT - Msg ID:16321) Y2K Horseless Carriages Bought http://currents.net/newstoday/99/10/14/news1.html After spending $18 million to fix "all" of their potential Y2K problems, the State of Maine now has found that new 2000-model "horseless carriages" are taking over the roads! MidEastGold (10/14/99; 9:32:43MDT - Msg ID:16320) Leigh First of all, let us assume that whoever is interested in tracing you down is not wanting to do so for your benefit. Let us take a scenario where the Gov't or the Police have a "reason" to track down PMs (think about what has happened in Russia just today with confiscation of "Russian Mafia's" gold (5 kgs I think)).Or, take my experience. I was in a position that "hate" mail had been written. It was reported to the police and within hours! they told me of the exact computer in a school that it had been traced to! So, the authorities have the know how.There are sites that tell how to trace personal email though in a different situation than this forum. But, even this forum is not fool proof to those who have the know-how. I personally use an "encryption" that the program writers claim would take a month to decrypt. I read just a few months ago that my encryption program had been "broken" within hours by knowledgable hackers.Let's say that one has already admitted on line to holding physical and some people even describe how much. (Remember, whatever is written is traceable, especially to those with "authority" to trace it) When I spoke of knowing first had,the following is the experience that I had.My only point in my last post was to be careful to whom you admit holding physical to. Although, I am not as stringent as some that I've read that say you shouldn't even tell your spouse! TownCrier (10/14/99; 9:20:52MDT - Msg ID:16319) Is the UK ready for the euro? http://news.bbc.co.uk/hi/english/business/the_economy/newsid_474000/474518.stm Britain considers five key tests for determining when participation in the EMU would be favorable. FOA (10/14/99; 9:20:06MDT - Msg ID:16318) Comment Strad Master (10/12/99; 23:48:43MDT - Msg ID:16216)---- 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 bullion become the only negotiable currency? If so, what good would a one oz.buillion coin be? It can't be cut apart into small pieceswith a pair of garden shears. Beyond that, Goldbugs are notorious for holding onto their physicalholdings long past the time of maximum return. ----(((NOTE: Strand: I find it interesting that goldbugs have become "notorious" for bad moves when their present universe has only existed some 20 years? and the lady has not sang the song yet?))) You continue:---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.---- (((Note: I know people that have been buying through this entire span of time! True, they have timed their buying on a cost averaging basis, but that concept has made then almost even today. In the believe it or not department. Ask MK about "cost averaging" using a fixed dollar amount. Then I suggest you see the show "Rollover" with Jane Fonda. You would not believe how true it is!)))Hello Strad, I'm going to ramble on a bit, so I hope this helps your perspective. Back in the early oil days I was very close to some of the largest oil men in the country. When in Texas we would visit at the country club and shared a lot of our perceptions. Usually over a poker table. Looking back, I find their (and mine) viewpoints had much in common with the gold outlook today. When oil went from around $3.00 to $5.00 everyone that had local reserves thought they had made a fortune. You wouldn't believe how many sold off not only their storage barrels but their best (lowest cost production) reserves for cash. The feeling was that oil had just zoomed in price and would quickly go back down. The percentage gain on those leveraged assets was simply huge. Then oil went up to around $8.00! Good god, we were so stupid to have sold. What a bunch of buying fools out there. Those idiots buying $8 are going to get killed. Everybody knows the major producers can pump for $1.00. Oh well, it just a political thing. When oil hit $15, some of them knew they had missed out on a train to $20. But they still thought oil would one day return to around $5.00. So as not to miss out completely many of the early sellers jumped on the Natural Gas wagon, using everything they had gained from their first sale. At first this new move made money, big time. Then something funny happened, oil soared and later returned to a more normal $18 to $25 range, but gas plunged from the higher supplies. The "oil boys" turned "gas boys" lost it all. Even into today, gas has never returned. Truly, they used the silver vs gold concept, thinking the more leveraged natural gas would out run oil and regain their fortunes. It made sense as gas (like silver) was more industrially useful and "CHEAPER". You might even say it was the "poor mans oil" (smile)! Also: Just like silver, gas proved to exist in much larger amounts that the "statistics" demonstrated. As it's price "coat tailed" oil, it brought out the massive increase in production that wasn't needed as long as oil was available. Incredibly, this was the exact same story for silver. All the stories about people buying silver as gold went up saw them sell the silver and keep the gold because people just didn't need both of them. The same will happen when gold runs this time. People will keep the high unit cost gold in their vaults, use the digital currencies for trade and sell the silver as it floods out of the woodwork. Onward: You see, oil in the early 70s is like seeing the prevalent gold concept today. The perception was that oil could never go up from the $1.00 production range into the $20s (just an unimaginable increase to those in the business) because such a price would flood the world with production. It was thought that there was so much unfound oil in the world that every home owner would have an oil drilling rig in their back yard at $20+. Just as $10,000 gold will have people taking gold from sea water. Here is where reality gets in the way of concept based on perceived conditions. Yes, the $20 and $30 oil did bring out the rigs and production soared. But, even at the higher prices, the world found uses for this great new gusher of oil. The same human traits that dictate that "you can never have enough money in the bank" also said "we can never use too much oil"! If all the oil reserves in the world could produce at $2.00 then the price would return to $2 plus a profit. But, we want and use all oil produced from fields that pump from $2 cost on up to $30. Gold and oil are not like any other commodity, because under the right circumstances, people find both of their qualities useful and can never get enough of them at any price. It seems we accumulate assets until we die?! The "paper boys" try and paint a picture of gold like "old oil men" looked at values "back then". They were wrong and so are the "paper boys" today. The Smiths and Arnolds of the world try to convince us that the supply of gold is never used up and creates a glut as it grows. They say that unlike oil that is consumed, gold holdings have become a stockpile that refining cannot use up. I bet these guys would have also sold their oil reserves in the mid 70s also. Where they miss the boat is in their assumption that people will get enough gold. Not if it's money, they won't! People do consume money just like oil, rather it's just in the form of "savings consumption". Gold, just like money has an "unlimited demand". Again, have you ever seen anyone that said "I have too much money and have no more use for it". "No, don't give me any more of that cash, I've got a glut of it now, go away"! Yea, right! Often, we read where people say, "oh what am I to do with all this gold if it hits, $30,000?". Funny how Bill Gates never says "what am I to do with all these MS shares". Well, you too will act like anyone with to much cash or assets, just stash it away until you need to spend it. The old "what will I do with all this high priced gold I can't get change for" logic just doesn't compute when dealing in reality? Ever see someone in a flea market rolling around a cart full of $100 bills,,,and frantically trying to unload it because it buys so much and they can't get change? Help me out here, am I not seeing something? I'm afraid that even the very poorest of people have a better grasp of spending and saving value than some of the "big time investors" present about gold. (I'm talking about the brokers, Strand)Onward: Anyway: The amounts of gold in vaults today is no where near enough to represent the only circulating world money. It would have to be priced at $++++++ to do that. So, if mine production can continue, the world will take any and ll they can produce. Be it 3,000 ton a year or 10,000 a year because the demand for money (even a parallel supplement money) is unlimited. Personally, I would take all of it (smile) and let the rest of you keep the paper. The reality of this is that people hold cash in banks as it is lent out and earns interest. If no one lent their cash and just saved it (like gold) to spend in later years, it would take an enormous amount of paper money. This is why the US goes to great lengths to identify gold to the public as a commodity, not money. They want you to know that it must be sold as soon as it goes up. Trade it, don't save it. Most Western investors have brought into this and are going to pay dearly because of it. Again money demand is "unlimited". The same will be true for gold. As people begin to buy gold as a currency supplement, to be spent "as needed", the price could reach enormous levels.....and be seen just like oil............a useful asset you just can't get enough of.On the road.........FOA AEL (10/14/99; 9:19:12MDT - Msg ID:16317) relations RossL (10/14/99; 5:53:44MDT - Msg ID:16301)"I have to hand it to Gary North. Despite his increasing end-of-the-world shrillness on the Y2K issue and his bias to look for conspiracies, he has accomplished a major feat by getting millions of ounces of gold coins into the hands of the people." .......... is it not possible that the one is related to the other? Perhaps "because" is more appropriate than "despite"... :) TownCrier (10/14/99; 9:15:05MDT - Msg ID:16316) Hear ye! Hear ye! An update at USAGOLD... http://www.usagold.com/wgc.html THIS WEEK IN GOLD has now been updated for the past week of October 4 - 8 with the weekly gold market commentary of the World Gold Council...recounting the second week of market action as the gold price reached a new plateau. Leigh (10/14/99; 9:04:36MDT - Msg ID:16315) MidEastGold There you are, MidEastGold! I've been waiting for you to come back so you could elaborate on your post of Saturday. Can you tell me (because I'm not at all computer-savvy) who you think might be monitoring websites such as this, and how they would do it? Are there ways to protect ourselves, like encryption? Thank you! MidEastGold (10/14/99; 9:00:01MDT - Msg ID:16314) Interesting Post that I picked up at Kitco Discussion http://www.dowguru.com/99crsh.htm Worth viewing. USAGOLD (10/14/99; 8:54:45MDT - Msg ID:16313) Today's Gold Market Report: Gold Driven by Physical Demand Overseas MARKET REPORT(10/14/99): Day Fourteen of the Big Breakout....Gold stubbornly trudges upward and was as much as $6 higher (at $325) in the overnight access market before falling back to current levels... The story in the paper market is no longer short covering but fresh long positions taken by speculators betting the price will go higher. Traders report some very large outstanding short positions that could spark another big rally when covered.....In the physical markets, gold dealers are reporting mine company buying to square forward and call positions........Standard Bank of London makes the same observation we did a few days ago: "Gold appears to be developing a daily pattern of strength in Hong Kong and London followed by a weaker tone in New York."....The overseas markets are being driven by a demand for the physical metal and paper players in New York are trying to offset the effects of that demand by shoring gold in the options' markets......... Standard also says that "There is possibly a cloud on the horizon for the gold bulls – an unconfirmed rumor that Russia is about to scrap its 5% export tax on Precious Metals. This would bring into play potential new supply with gold that has been stockpiled over the last 12 months coming on to the market" ......My thinking is that Russia could offer a one or two day jolt to this market but that about it. They simply do not have enough metal to make any impression beyond a psychological one......... Investor demand at Centennial Precious Metals/USAGOLD continues to run very strong -- a continuation of a trend which started late last week when the heated activity calmed somewhat giving investors a chance to assess the situation.....The PPI comes out on Friday.There could be fireworks......The UK government has given in to the age-old practice of talking down wages and prices to combat inflation. Some of us recall the old Whip Inflation Now nonsense of the 1970s when the U.S. government attempted to convince Americans that the results of monetary inflation could be constrained with the right rhetoric and wearing WIN (Whip Inflation Now) buttons. In that slightly absurd tradition, our old friend, British chancellor of the Exchequer Gordon Brown "appealed to employers to restrain wage increases, as a sharp jump in average earnings added to pressure for further rises in interest rates."........It's always the employers' fault, or the peoples', but never the government's or the central bank's.................Gold lease rates continue to ease. We are beginning to wonder if this does not have to do with the sidelining of most of the big players while the Ashanti, Cambior and associated messes are sorted out by the participants..............Poor Newmont Mining. It no sooner joins the hedging game than gold rises $70 the equivalent of a left hook to the jaw. The U.S. mining company reported late on Wednesday "hedging activity in August would result in a non-cash, pre-tax charge of $63 million against third quarter earnings under the company's present interpretation of U.S. accounting rules," according to a Reuters report this morning. At the time of Newmont putting on its hedge, the talk in the industry was that their friendly neighborhood gold banker forced them to do it. Some friends......................Along these lines, Ashanti stock re-opened for trading yesterday and sold at a worrisome discount to Lonmin's conditional merger offer........... Question of the Day: If the World Gold Council is correct that signatory selling rights cannot be transferred to another central bank, what will happen to the price if Swiss voters fail to pass a referendum to sell 1300 tons of their gold? Only 2000 tons can be sold over the next five years and 1300 of it is supposed to come from Switzerland.................. That's it for today. See you here tomorrow. Have a good day, my fellow goldmeisters. Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving a trial subscription to our widely read newsletter, News & Views: Forecasts, Commentary and Analysis on the Economy and Precious Metals. Or you can go to our ORDER FORM and submit your request by E-Mail. You will also receive our introductory packet on investing in gold. elevator guy (10/14/99; 8:48:50MDT - Msg ID:16312) Sharp drop in POG, well, ok only $2 drop. http://WWW.quote.com/livechartscom/ Does anyone know why the Dec futures contract took a little dive there?Outside forces at work?Someone selling a bunch of paper contracts to depress the price?Seems like the powers that be are trying to reduce volatility, and hold the line, until the mass of Dec 390 calls expire?Anyone? mike55 (10/14/99; 8:28:31MDT - Msg ID:16311) Why, It's a Revelation! http://www.computerworld.com/home/news.nsf/all/9910133overseas My gosh, might there in fact be some basis to this date rollover thing? See what our friends at the CIA have to say. And the article even mentions gold! Leigh (10/14/99; 8:15:50MDT - Msg ID:16310) Two Dollar Rule Is anyone feeling as though we're back under the "Two Dollar Rule," where gold couldn't go up or down more than two dollars a day? TownCrier (10/14/99; 8:07:33MDT - Msg ID:16309) Mexican peso plunges on U.S. interest rate fears http://biz.yahoo.com/rf/991014/ke.html Out of the frying pan, into the fire. Traders were said to be bailing into the dollar and "heading north" where the investments were less risky. Why the urgent NEED to be invested somewhere? It's October, the bubble markets are looking shakey, and Y2K is less than 80 days away. They should be holding pure money...gold. Goldspoon (10/14/99; 7:04:59MDT - Msg ID:16308) Dittos to this post...as Townie would say couldn't have said it better my self!! Horse With No Name is feelin' spry today...this is good news for Golden Sun... Gold lease rates are lookin leaky though....wonder where the supply is commin from?? FOA??SteveIS (Nymex is giving away money right now.) ID#297380:Copyright © 1999 SteveIS/Kitco Inc. All rights reservedThere is a simple commodity trading proverb, "Cash is King". The cash or spot price is the real price. When the spot price is over the future price ( backwardation ) there is strong demand. The precious metals don't usually go into backwardation because they have to overcome the loss of interest that future delivery implies. Platinum is in major backwardation. There is a major shortage in platinum right now. There is an interesting way to take advantage of this on the Nymex. Last I looked spot platinum was trading at 437. January platinum is trading at 411. The January 420 calls were trading at $12 yesterday. You can probably by them today for $14 bucks. If you add 420 to 14 you get 434. which is less than the spot ( cash ) price. The SPOT price is the real price. Its like they are giving you three dollars to buy the January $420 platinum options. Besides the price of platinum is heading north bigtime. We aren't in Kansas anymore. Jon (10/14/99; 6:56:05MDT - Msg ID:16307) Msg. For Steve H re: Institutional Strategist Would like to see a copy of their newsletter. Am unable to find them on the web. Do you have a phone number or web site for them? Thanks. transparent (10/14/99; 6:51:02MDT - Msg ID:16306) Will a rise in oil prices bring inflation/rise in POG?? What happens to the price of gold if oil rises?? Will war in the middle east cause oil to go ballistic? Could the following scenario unfold?.Koenigs international news (www.watch .org) reports Kelly PagatpatanSource: Randal from WeekEnd Discussion GroupFriday Aug 27,1999 -- Joseph de Courcy, editor of thewell-respected "Intelligence Digest," says in a mailing deliveredto subscribers this week: "While NATO congratulates itself onbombing the Serbs into submission, Israel's Mossad and other MiddleEastern intelligence sources have discovered that Kosovo was onehumiliation too many for Russia. Now Moscow has agreed to backSaddam's secret plan of revenge.With this all-important Russian backing, Saddam is joining withhated Iran and Syria to launch one final war against Israel.Amazingly, Saddam will allow Iranian troops to cross Iraqiterritory to join the attack on Israel. And to keep America frominterfering, Moscow has given Osama bin Laden and other terroriststhe means to attack American population centers with weapons ofmass destruction. The threat is real...and the implicationsterrifying..."On Monday I read that there are massive war preparations going on in Russia see this link : http://www.worldnetdaily.com/bluesky_nyquist/19991011_xcjny_dark_rumor.shtmlAre there y2k glitches in the weapons systems of Israels enemies that have them thinking use it or lose before January first?? Is this the Ezekiel 38,39 scenario on the horizon? Only time will tell. SteveH (10/14/99; 6:37:52MDT - Msg ID:16305) Article in N.P. http://www.nationalpost.com/financialpost.asp?s2=columnists&s3=bloomfield excerpt: -- Choose --News|- Canada|--- News|--- Reporter|--- Politics|--- West to East|- World|--- ObserverFinancial Post|- Canadian Business|--- News|- World Business|- Investing|--- Hot Stock|--- Personal Finance|--- Investing Briefs|--- Stock Quotes|--- Your Portfolio|- FP Comment|--- FP Editorials|--- FP Columnists|--- LettersArts & Life|- Arts|--- Book Review|--- Arts Digest|- LifeSports|- Hockey|- Basketball|- Baseball|- Football|- Outdoors|- Soccer|- Tennis|- Golf|-- Gordon on Golf|- Auto Racing|- Boxing|- Sports DigestCommentary|- Editorials|- Columnists|- LettersSpecial FeaturesNP CareersDiversions|- Horoscope|- Word Puzzle|- Crossword|- Comics|- TV listings|- LotteriesForums|- Site Search|- Site Map|- Feedback|- Weather| NP Info|- Contacts|- FAQ|- Letters to the editor|- Subscriptions Thursday, October 14, 1999What's keeping gold afloat?The long and the short of price prospectsPatrick BloomfieldFinancial Post After many years in the doghouse, them golden markets continue to lead the rest these days -- as they did yesterday. Why should markets in this barbarous relic stay aloft while others sink? The simple answer continues to be that too many players were selling it short. And the aggregate of all those shorts continues to provide the "longs" (the people who buy the call options the shorts have been selling) with ample incentive to keep the party going. The fact is that, if one should be rash enough to believe all one is told, we may well have a more serious imbalance than that caused by currency plays of that unhappy hedge fund that goes by the name of Long Term Capital. At any rate, that is the view of one Larry Jeddeloh, the globetrotting consultant and portfolio manager who is advisor to the Toronto-based University Avenue World Fund. Both his numbers and his past prescience lend him credibility. The fund he advises is ahead more than 28% in the first nine months of the year and has put on 39.4% over the past 12 months. And some of that gain speaks for his conclusion back in January that Japan was going to be a good place in which to invest, a conclusion repeated in this column at the time. Mr. Jeddeloh and his team in Minneapolis, who are responsible for the global market review The Institutional Strategist, estimate global gold markets are short 3,500 to 8,500 tonnes. More than that, he elaborates on the story going the rounds of one major Wall Street investment dealer having failed to deliver a big hunk of gold to the buyer of a call or calls. In a chat last week, he cited a short-wave radio broadcast item from South Africa to the effect that the amount of gold involved was 10 million ounces -- and that, wait for it, the U.S. Federal Reserve came to the rescue and made the delivery. SteveH (10/14/99; 6:06:24MDT - Msg ID:16304) RossL www.mrci.com First thanks for using your real first name (a bias on my part). Next, that link you look for would be nice to read.Here is pm's and oil this morning. Gold just jumped over $1.7 in the last 10 minutes on my 20-minute-delayed mrci link:Market Mth Open High Low Last Change Date Time Ask Bid Gold(CMX) Dec 322.5 324.9 322.5 324.9 +2.1 10/14/99 4:49 324.9 323.8 Silver(CMX) Dec 561.0 567.5 560.0 567.5 +6.5 10/14/99 4:47 567.5 566.5 Copper(CMX) Dec 79.70 79.80 79.00 79.65 +0.10 10/14/99 4:49 79.80 79.50 Platinum(NYM)(Access) Jan 408.5 411.7 408.5 411.7 +3.3 10/14/99 3:34 414.0 408.5 Market Mth Open High Low Last Change Date Time Ask Bid Crude Oil(NYM)(Access) Nov 22.92 23.01 22.78 22.78 -0.28 10/14/99 4:47 22.78 22.76 SteveH (10/14/99; 6:02:43MDT - Msg ID:16303) Must have left the Greenspan reference in the text of the speach Feel free to check out at least the last few pages. The reference to the Fed using gold as an inflation indicator is in there. RossL (10/14/99; 6:01:42MDT - Msg ID:16302) Mundell, Greenspan SteveH,I remember a Wall Street Journal editorial page article written by Greenspan several years ago. The subject was a proposal to use the POG to target monetary policy along the same lines as the Mundell link you provided. I will try to dig it up if I have the time. RossL (10/14/99; 5:53:44MDT - Msg ID:16301) Gary North http://www.garynorth.com/y2k/detail_.cfm/6497 I have to hand it to Gary North. Despite his increasing end-of-the-world shrillness on the Y2K issue and his bias to look for conspiracies, he has accomplished a major feat by getting millions of ounces of gold coins into the hands of the people. SteveH (10/14/99; 5:49:24MDT - Msg ID:16300) Robert Mundell http://www.columbia.edu/~ram15/LBE.htm These are two paragraphs found on the last page of Mr. Mundell's 1997 talk. Note the reference to Mr. Greenspan using gold as an inflation indicator. I guess the Fed figures inflation is 20% right about now. And if they or someone holds gold down (not allowing a free market, which contradicts the first paragraph) then there must not be any inflation. So when gold goes above $1000 from this level, that would mean inflation is 300%. Ah, the web (pun intended) we weave...."But I do not think that we will see the time when either of those two great economic powers, the United States and the European Union, will ever again fix their respective currencies to gold as they have in the past. More likely, gold will be used at some point, maybe in 10 or 15 years when it has been banalized among central bankers, and they are not so timid to speak about its use as an asset that can circulate between central banks. Not necessarily at a fixed price, but a market price. The more countries start to think about gold as an index, as a warning signal of inflation, the more the monetary authority will try to keep the price of gold from rising. Imagine that tomorrow the price of gold rises form $350 to $400. Don't you think that immediately the Fed will see that as a signal of an increase in inflationary expectations and the need to tighten? Europe has already done that. There are long periods when it appears that Europeans have been stabilizing gold whenever the dollar has been depreciating against gold. This will be a major factor in moderating the exchange rate fluctuations between these two great blocks. This is vital to Europe, because nothing could make Europe more uncomfortable than to have big fluctuations in the Dollar-Euro exchange rate. Looking at gold would be one way to circumscribe these fluctuations." Leigh (10/14/99; 5:42:22MDT - Msg ID:16299) Gary North Gary North has really been pushing gold lately! He has three gold articles already on his list this morning, and a number of others have appeared this week. Goldspoon (10/14/99; 5:32:07MDT - Msg ID:16298) The race at this moment in time... GOLD 322.50 323.50 +2.70 +0.84% SILVER 5.65 5.68 +0.03 +0.53% PLATINUM 437.00 442.00 +9.00 +2.10% Horse with no Name has extended his head start of $100 to $120..... Goldspoon (10/14/99; 5:06:15MDT - Msg ID:16297) FOA ...Arabian Horses.... FOA (10/13/99; 20:27:47MDT - Msg ID:16282)FOA said...Goldspoon,I was just thinking. (smile) Perhaps you should switch to a fine Arabian horse? Like Golden sun,no? They are proven winners from long before your entry was ever seen. They even run strong during economic storms. Just a thought, my friend.Goldspoon says..Scriptures say not to covet another man's horse... i must say.... your horse makes one's purity difficult....It is sad to be afraid of a "free democratic" government..that is why i own a stable of different horses... My government covets your horse also... and their honor and purity is questionable...i was drawn here to learn from you...You my friend.. are teaching me to ride!!...i will repay you by losing in the end...meanwhile the race apears to be mine .... Goldsun (10/14/99; 4:30:29MDT - Msg ID:16296) Simple Systems Elevator GuyThinking about how other things work is a natural product of, and good training for, thinking about gold.Mother Nature has some unresolved emotional issues with vacuum, but radiation does not share her intolerance.Try thinking of light as visible radiation.Goldsun Strad Master (10/14/99; 1:55:08MDT - Msg ID:16295) FOA and SteveH Thanks for your warm welcome to this site. I am honored. I was speaking to a friend today about gold, the markets, and the possiblilty of a meltdown in stocks. Basically he is asleep at the wheel, financially, as so many seem to be. To his credit, he couldn't undertand why there would even exist a gold carry trade - the leasing of gold, etc. The whole concept made no sense to him, just as it has never made logical sense to me. Therefore, I assume he is a potential goldbug - albeit a bit late to the party. Of course, all his assets are tied up in Mutual Funds, which he is now debating whether or not to get out of. I hope there is time for him if, indeed, he is embarking such a radical step at all, but with my dismal track record I hesitate to offer any trading advice. Yesterday, being the anniversary of the '29 crash made my conversation with him all the more eerie. As I write this, the S & P, Dow, etc. are substantially up in Globex trading. Wonder if the dipsters are out in force to pick up "bargains". STRAD YGM (10/14/99; 1:17:11MDT - Msg ID:16294) Link from last nite- Reginald Howe http://www.goldensextant.com/commentary.html#anchor674427 Helps to insert in right space--Sorry YGM (10/14/99; 1:13:55MDT - Msg ID:16293) Late Nite Musings--Reginald Howe & FOA had the same Professor?? Anyone besides me see many parallels in the paper of Reginald Howe and events postulated by FOA & Another?? Seems to me we should be seeing more of these views expressed soon. Most after the fact, unfortunately for many!http://www.goldensextant.com/commentary.html#anchor674427 Click Here to view yesterday's discussion.
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