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ARCHIVED DISCUSSION FROM 11/14/1999 All times are U.S. Mountain Time View Yesterday's Discussion. MKL (11/14/99; 23:38:43MDT - Msg ID:19102) Confusion? Re: Chicken Man >>Chicken man (11/14/99; 20:54:55MDT - Msg ID:19098)>>MKL @ Joe 6 pak>>IMHO...ok? [snip] now if it became the "in" thing of th>>Roaring Nineties to "own" gold,Feel free to correct me, but so far as I know the "roaring nineties" come to a close in about 46 days, no?>>Owning PMs could turn into a very "trendy" thing overnight>>btw..saw your ad in the yellow pages of the Tucson AZ>>phonebook...sort of caught me by surprize...!I don't know who you think I am, but I can assure you: I have no advertisements in any yellow pages, anywhere.More to it, I don't think you've really refuted or added to anything I wrote.I may be guilty of oversimplification... Joe Six-Pack comes in many shapes and forms, and though we may collectively have various stereotypes in mind when we write of "Joe Six-Pack," I doubt the idea is something universal, like the idea of something simple, like a square, or a circle, might be. My idea of Joe Six-Pack may not be the same as yours.But that doesn't mean we can't find common ground from which to discuss things.No doubt, there are many Americans who have accumulated sufficient wealth to benefit from converting that wealth to gold, should things unfold as many have projected here.Unfortunately, I'm not one of them.Buying gold, as much as I can afford to buy with cash (not credit), might benefit me if the price rises in a timely fashion. But it may not rise in a timely fashion.Again, for most people who are in a similar position-- people who are in the first third of their careers, like myself, people who are trying to save money, but have not yet accumulated a big pile of it-- buying gold still seems to be an unwise idea.Again, feel free to correct me. I'm here to learn as much as I can.FWIWMKL Golden Truth (11/14/99; 22:32:38MDT - Msg ID:19101) THE GOLD TRAIL IS GETTING VERY COLD! The P.O.G is really booming tonight eh? No matter how many people talk about the price going up it still doesn,t. I think we've been sold a dream. The reality is for GOLD to go to $30,000/oz. Gold would have to increase $3000/oz for the next 10 years, if over 5 years it would be an incredible $6000.00/year. So even over the next 10 years on a monthly average it would have to increase by $250/month. GOLD i must admit is really neat, but i really think the "Fantasy" must end. For anything to be set free in this World,it has always ended in blood shed. So unless we are willing to die or fight for "freedoom!" from finacial slavery. All the wishing ,hoping and dreaming is counter productive. We must unite and fight, until i see some proactive moves that can crush or Kill the controlling bullies, the outcome will never change! Tell me how can it? they will never give up their power base. It took 15 of the Worlds C.B's to get the P.O.G to move and even then the rotten and corupt powers still hold the true value under their thumbs. In the past two U.S Presidents have been assassinated when they tried to bring in honest money. So the bankers had them murdered so they could charge interest on the money they printed. I say what goes around comes around. Its the old adage of "You can run but you can't hide" I will find you!and so will others. BE AFRAID,, VERY AFRAID, I COMING TO GET YOU! Others its time we do something! There are evil forces in high places that do nothing but conspire on how to kill us all off or turn us into such slaves you,ed wish you were dead! Its time to break out of our Dreamworld and wake up!This is the Truth, and the World we live in,is one were "Power grows from the barrel of a gun" This is all they understand "Raw Power" i say it's payback time!!!!Unite and Fight or live the rest of your life on your knees.The choice is yours? G.T Marius (11/14/99; 21:41:55MDT - Msg ID:19100) Joe 6-Pack & gold The only way "Joe 6-Pack" is going to own gold is if he charges it to his Discover card (or insert your favorite plastic money-like substitute)! Most of the stuff he thinks he owns he actually co-owns with a cardmember bank. In today's economy: no debt= no wealth. beesting (11/14/99; 21:33:19MDT - Msg ID:19099) @ Al Fulchino--Sorry I'm so late in responding--other obligations. Thanks to the link for Handy&Hardman.Months ago I tried to research Johnson Matthey with about the same results,not much information about Gold.My brother and another long time close friend, have worked at large jewelery manufacturing plants in the north-eastern U.S. They both said the same thing,"Large sheets of refined Gold and other PM's enter the manufacturing plant under the tightest security possible".But, they didn't know where the Gold came from,or wouldn't tell, and my brother was a Vice President in the company.Second thought to ponder! If the drug lords and others worldwide are making so much money,and most of it is U.S. Dollars, that banking laws are being changed to catch them.(money laundering)...Why aren't those people demanding final payment in Gold? Are they being duped by the main stream anti-Gold movement also? If those people ever figure out that paper money no matter who issues it is not worth what they thought it was....Their volume buying of physical Gold in large amounts, could be enough to drive up the price over the long haul,especially if it's true about an annual 1000 tonne Gold shortfall worldwide. Another thing,a dis-honest person could do very easily is, change malleable Gold into another form, which could be worth more than the original form when completed.(jewelery)Just random thoughts on a slow Sunday night....beesting Chicken man (11/14/99; 20:54:55MDT - Msg ID:19098) MKL @ Joe 6 pak IMHO...ok? I can see your point in a way,but...If Joe wants "something".Joe has somehow managed to get it.....! (take a stroll at the mall..?) now if it became the "in" thing of the Roaring Nineties to "own" gold, Joe will have some.....we must remember that emotions of people drive the markets....plain ol' fear and greed....Joe will just get another new credit card and max it out right over the phone.....any business man will take their money.....you are more than likely to sell Silver to the poor people and Gold to the rich people though...thats the way it just is....more oz for the same buck.....Owning PMs could turn into a very "trendy" thing overnightbtw..saw your ad in the yellow pages of the Tucson AZ phonebook...sort of caught me by surprize...! MKL (11/14/99; 20:27:31MDT - Msg ID:19097) Regarding Joe Six-Pack Regarding:>>Blue Sky (11/14/99; 9:05:56MDT - Msg ID:19076)Re: Joe-Six PakMy view of Joe Six-Pak is that he doesn't have any gold to dishoard. I'm as close to being Joe-6 as possible. <<So am I. And it seems to me that one of the best reasons for owning gold in quantity is having significant wealth to protect. But I suspect that most Joe Six-Packs don't have very much wealth which needs shielding, or can be shielded. One may have a house, some savings, and other assets which are not liquid (like guns, for example, or the wife's china, and so forth), and some which are almost liquid but not exactly accessible (like a 401(k)). How could a person in such a position benefit from gold ownership? Clearly, they might benefit if they had a few coins or a few ounces and the price appreciated considerably. But in the big picture, I can't convince myself that buying gold is a necessity for them, or for me, if I'm going to be honest about it.Like it or not, my world is largely dollar-based. Sure, there are exceptions... I can trade my friend a nice bottle of Bordeaux for a couple Havanas, or maybe in a pinch I could pay my lawyer or some other service-provider with Krugerrands or bullion. However, I'm paid in dollars, pay all my bills in dollars, and don't foresee this changing in the immediate future... no matter how much the dollar is devalued. I can't force my employer to cough up in one-ounce gold coins.I suppose if I had considerable money, I might opt to convert it to gold or some other precious metal. But I have not, just like the majority of Americans.Even so I have benefitted (considerably, in my opinion) from reading this forum over the past couple of months, and I am grateful for everyone's input here.I just felt compelled to point out what seems obvious to me... most people live in a state which is not too far from hand-to-mouth. Ignorance is bliss...FWIWMKL Gandalf the White (11/14/99; 19:58:53MDT - Msg ID:19096) Tks Cavan Man ! Far too many glitches on that one for me. -- Note that the upbounce started before Downunder EVEN OPENED ! -- Just another RED HERRING ! -- MRCI with a fifteen minute delay shows GC9Z at the High of the day $292.5 which is +$0.4<;-) THX-1138 (11/14/99; 19:40:15MDT - Msg ID:19095) Tribesmen blow up pipeline News story out of local paper:SAN'A, Yemen - Yemeni tribesmen have blown up a pipeline operated by the U.S. Hunt Oil Co., a government security official said Saturday.The pipeline was blown up on Friday by members of the Bani Jabr tribe, said the official on condition of anonymity.Tribesmen have often targeted the Dallas based hunt's oil line in the past, mostly to try to force the government to imporove services to the area.*******P.S.: Add this to the list of refinery fires. Lafisrap (11/14/99; 19:37:21MDT - Msg ID:19094) LBMA as a "clearing centre" ? Could someone who knows please describe what a "clearing centre" does in the financial world? Is a "clearing centre" just a "place" where a "middle man" facilitates a transaction between a buyer and a seller? The LBMA's web site says not much about itself. It discloses who LBMA members are, London price fixes, volume statistics, and a very few other things. As to what the LBMA actually does, here is the only statement I could find:***London is the global clearing centre for gold and silver in much the same way that all US dollar transactions ultimately clear in New York or Japanese yen in Tokyo.***The quote is taken from:http://www.lbma.org.uk/clearing_bkgrd.htmThanks, Lafisrap Cavan Man (11/14/99; 18:12:19MDT - Msg ID:19093) POG http://www.kitco.com/gold.live.html Hello Gandalf. Only up .4 now. Don't know how accurate this is. JLV (11/14/99; 18:11:19MDT - Msg ID:19092) Crude $25.12 +21 cents Gandalf the White (11/14/99; 17:46:31MDT - Msg ID:19091) Help, -- Cavan Man Where are you reading that POG ?I only see changes of + or - a few tenths on Spot the Dog and GC9Z -- HELP<;-) Cavan Man (11/14/99; 17:07:15MDT - Msg ID:19090) POG Gold up $2.20. Bid = $293.80. FWIW. CoBra(too) (11/14/99; 16:45:03MDT - Msg ID:19089) After a week of absence ... It is a great feeling of coming "home" to USAGOLd, a home not away from home, but a permanent home of belonging to a likeminded family. A family with no boundaries, only bound by the same quest for freedom and liberty in the strive for real value(s).Among the wealth and wisdom of all posts lately, I've been particularily touched by both of Holtzmans posts, which I would recommend to not only "must read", but worthy to later reference. I therefore would commend Holtzman to be eligible for HOF. Thank you CB2 Journeyman (11/14/99; 16:40:11MDT - Msg ID:19088) Options compensation scam NOT off-topic! In my opinion, for what it's worth, the options compensation scam is NOT off-topic. We're supposed to be learning about gold and economics here, and the bubble economy, how it works, what might bring it down and what the results might be are definitely related to such discoveries. Please don't take this info elsewhere!! Regards, Journeyman CoBra(too) (11/14/99; 16:13:33MDT - Msg ID:19087) Banking Overhaul becomes Law! "Banking has changed so much since the Depression that decades-old regulations have become obsolete!" ... Pres. Clinton has signed into law sweeping measures that lifts Depression-era barriers and allows banks, securities firms and insurance co's to merge and sell each others products.God save America, and the rest of the world by the same token. It's not so much the mega mergers I envisualize, no, it's one more step closer to total Orwellian status, when all walks of life are scrutinized, observed, accounted, X-rayed,evaluated and decidedl ccontroled and potentially EVALUATED as to be-ne(mis)fitting whatever ult-sup-erior goals, I FEAR.The l. t. Kontratieff cycle is turning from late fall to winter, as I can now see just looking into the first snowy night of this new winter. Bears may hibernate on one season's accumulated fat alone - don't risk your fat on one winter only, - accumulate the only fat (gold) for potential (not virtual)eco-winters, which are bound to come; @ MK - Fall was great, but eventually winter sets in - As my late friend Al Hayutin said - you only need one winner to succeed, no, make it - I've smoked a cigarette at the Browns Palace bar instead - and didn't heed his advice as I should've! Best CB2 Canuck (11/14/99; 16:04:17MDT - Msg ID:19086) 6:00 Eastern Showtime .. go Sydney go. Canuck (11/14/99; 16:02:09MDT - Msg ID:19085) Comment @ Netking" ...Y2K purchasing gathering pace."I went out to get a couple of things at 'Canadian Tire' (giant hardware store) and 'Home Depot' (giant building material store) at about 3:00 this afternoon. There seemed to be alot of people, too many people for the time of day. It looked like a Saturday morning a week before Christmas.I should of spent a moment watching what people were buying.Anyway, I see your point ... loud and clear.Canuck. Netking (11/14/99; 13:53:43MDT - Msg ID:19084) Canuck Canuck(19080)... a hot sunny morning elsewhere in the Commonwealth! Sir, I would expect much more volatility than we have experienced in recent days (great traders conditions). I expect resistance lines to be tested both on the upside & also on the downside in the days & weeks ahead. There are obviously a number of stops in place 286/285 & if we breach this intraday we could see a bit of a short term implosion. In the same way that Platinum has put on a speculative rally we would expect Gold to follow it's white metal cousin possibly fueled by latest BOE results, post Comex option exp. market adjustments & Y2K purchasing gathering pace. Lafisrap (11/14/99; 12:08:04MDT - Msg ID:19083) ORO (11/14/99; 11:39:40MDT - Msg ID:19082) from Msg ID:19082***Options compensation.I intend to work a few more mega cap stocks for this figure. If you would like additional figures posted please say so, since the issue is of importance, but is somewhat off-topic in this forum.***Yes, please post them. Thanks.Lafisrap ORO (11/14/99; 11:39:40MDT - Msg ID:19082) Thank You Thank you all for the kind words.The basic insight comes from FAME and Dr. Hein's short stories/articles on Gold-Eagle.Thanks again.Options compensation.I intend to work a few more mega cap stocks for this figure. If you would like additional figures posted please say so, since the issue is of importance, but is somewhat off-topic in this forum.I hope that Bill Parish's work is obtained for the Gilded Opinion, his insights are broad yet sharply focused. ORO (11/14/99; 11:21:57MDT - Msg ID:19081) And now for GE (something completely different) http://www.freedgar.com/Search/ViewFilings.asp?CIK=40545&Directory=40545&Year=99&SECIndex=7&Extension=.tst&PathFlag=0&TextFileSize=421100&SFType=&SDFiled=&DateFiled=3/25/99&SourcePage=FilingsResults&UseFrame=1&OEMSource=&FormType=10-K405&CompanyName=GENERAL+ELECTRIC+CO GE reported for 1999 ended Mar Net Income 9.309 $BIncome tax benefit 0.65 $B (calculated from excercise figure)Implied wage benefit 1.85 $BTotal benefit of stock option plan: 2.5 $BEarnings adjusted for options cost to investors: 6.8 $BEarnings if no stock option plan were used: 2.04 $B At P/E 43, with 120 mil options, a price rise this year of $1 will translate to a future benefit of 0.12 $B in earnings, or $0.04 per share. At this valuation level, the stock would gain $1.54 the next year as a result of the rise of $1 in the previous year reducing wage costs and producing a tax benefit. "The 1998 cash generation provided most of the resources needed to repurchase $3.6 billion of GE common stock under the share repurchase program, to pay $3.9 billion in dividends to share owners, to invest $2.0 billion in new plant and equipment and to make $1.5 billion in acquisitions." Canuck (11/14/99; 11:10:29MDT - Msg ID:19080) Speculations? Good day everyone, hope your week-end is going well. It's a balmy 9 degreees C.(45F.) here in Ottawa; a lovely fall day.Just finished putting away the patio furniture, thinking about changing the oil in the 'blower later this afternoon.Sydney opens in 5 hours; just wondering how anyone feels about the recent Comex expiry? Recall the little dive at2:15ish. I feel good about things tonight and this week.Thoughts? CoBra(too) (11/14/99; 11:05:20MDT - Msg ID:19079) @ MK - Grant's Interest Rate Observer... Also states on Glass Steagall that speculation was expressively forbidden to deposit taking institutions as the safety and soundness of commercial banking vs investment banking would always be compromised by the latter. Sir Michael, you must have assumed that I was astounded, not to say flabbergasted, that no one here took up the topic. Probably it was already dead wood and "mainstream-in the market 'knowledge'", though I still feel it bears real significance of passing the congress at this particular stage of "bubble'nomics".Allow me to expand on some historical perspectives of Market Cap to GDP (courtesy of Ned Davis' Research).The medium norm of market capitalization as a percentage to nominal GDP has been 51,3% since 1925. According to the norm any valuation above 61 to 70% spells overvaluation, above 70% extreme overvaluation.Today's mkt cap of the NYSE is 128% to GDP, more ominous is the entire U.S. market capitalization at 158%. This compares to the G7 curreent mkt cap at 107%, the Japanese mkt cap at 57% (Japan's mkt cap peaked during the bubble in 1989 at 158% to GNP?!), while in 1929 the U.S. mkt cap vs GDP peaked at 89%. The US has driven G7 market capitalization as a percentage of G7 GDP this decade, whereas Japan drove it in the 80s.Food for thought not with glee but with a lot of concern.Best regards CB2 USAGOLD (11/14/99; 9:09:44MDT - Msg ID:19078) Another correction (I'll get the hang of this, don't worry.) The Grant's issue is dated 11/5/99 USAGOLD (11/14/99; 9:08:31MDT - Msg ID:19077) Excerpts from the latest Grant's Interest Rate Observor (10/5/99) http://www.grantspub.com/ These two snippets relate to my previous post. Just for you COBRA 2..........."The essay you hold in your hands was provoked by the outpouring of glee over the news about Glass-Steagall. To us, there is nothing to gleeful about. Great booms produce large abuses, which usually do not seem abusive until after the up cycle ends."The history of Glass-Steagall teaches many lessons, one of which is that the law of the land is cyclically variable; there is one set of rules for bull markets, another for bear markets."Also of interest from Mr. Grant:"Just the other day, an e-pundit proposed that Murphy's Law had been superseded: Everything that could go right, would."MK Comment: Here in Colorado the temperature will reach the mid 70s two weeks before Thanksgiving in this endless summer with nary the faint breath of winter. Stocks that go up forever. A dollar that never fades. And a summer that never ends........Then why do I keep getting these deep feelings of anxiety......"A balloon in search of pin," as another notable pundit put it. A cheek in search of the waking pinch......In the same Grant's....Federal Reserve Bank credit up 13.2% in the last three months; Equity mutual funds down 13.6% in the last three months; Money market funds up 18.3% in the last three months. And Goldman-Sachs Commodity Index is up 13.6% over the past 12 months.Perhaps that pin is inflation, as the Stranger so notably suggests. We have said many times that inflation is not dead and buried; it is hiding in the stock market. Now that inflation is coming out of stocks and going into money market funds. Next stop: Price Inflation. Blue Sky (11/14/99; 9:05:56MDT - Msg ID:19076) Re: Joe-Six Pak My view of Joe-Six Pak is that he doesn't have any gold to dishoard. I'm as close to being Joe-6 as possible. Joe-6 has dirt and grease under his finger nails but 90% of his friends donot have gold. he may have some pre-64 coins with silver content, he may have some 18ct jewelery, he now has a 401k retirement plan invested in the MARKET, but he doesn't have gold coins. If gold does shoot up to $800.00 an oz, you will see scrap gold sold by Joe-6, but not coins. I purchased my first 1/10 oz coin2 years ago through my sisters net-work marketing. I did so to shut her up. The ability to own gold was not even a possibility. I had an IRA, my wife had a 403-b, we had as many pre-64 coins as we could sort from our change, and we had a six-pak (a six-pak lasts about a month here). Thank you sis for introducing me to gold. I have seen the startled looks of bewilderment in the eyes of the Sheeple when the Market has corrected, but many didn't even notice, they haven't a clue. If I were to suggest gold, I would get polite silence. Later, amoungst them selves "He's getting goofy again". In my immediate household I get tolerance not encouragement. So, I donot see Joe-6 divesting gold. I do see some selling to take rewards, some selling to reduce debt, and some selling to participate in opportunities, but not by Joe-6.Blue Sky USAGOLD (11/14/99; 8:29:13MDT - Msg ID:19075) Northie and Gandalf.... I talked briefly with "Mr. Insider" on Friday but he really didn't have much to add.Here's my own take in talking not with just "Mr. Insider" but others in the industry and what's going on right now inside the gold business. None of this is a direct reflection on Mr. Insider who runs one of the soundest books int he business -- one of the few who still plays it straight up and squares things by day's end.........It seems that the unwinding of the "carry trade" and the carnage and devastation in the wake of gold's run-up has created mental depression in the trading ranks. Many stand to lose their jobs and upper management is po'd to put it mildly. I would compare what's going on in the "trade" to the highway between Kuwait and Baghdad about a week into Desert Storm -- the carnage and wreckage a grim visage of the battle that preceded it. This part of the gold business is being unwound and some careers with it. I have heard that many of the mining companies are claiming that they never really understood what they were getting into with these options/carry trade strategies. There are law suits cooking in the background and if the market goes north again, it could get ugly.The net result of all this is that business is down. I think the rising gold interest rates could be a sign that the Kuwaiti gold has gone its merry way and the this group of traders could be heading for a mad scramble again -- especially if the next BOE auction turns out to be another oversubscribed blockbuster. It is that very prospect that leads some to believe that the auctions might be curtailed -- if not the November offer, perhaps the next.All in all, the trading business will survive this institutionally, as it always does. However, it appears there will be quite a few traders looking for jobs in the near future. Cavan Man (11/14/99; 8:25:59MDT - Msg ID:19074) ORO Yes, I would like to second if I may. You are so right MK! SteveH (11/14/99; 8:24:14MDT - Msg ID:19073) ORO Seconded. USAGOLD (11/14/99; 8:16:37MDT - Msg ID:19072) Correction.... The message reference below should be MSG # 19061 USAGOLD (11/14/99; 8:14:30MDT - Msg ID:19071) HOF Nomination... Every once in awhile a poster produces an insight so profound and fundamental that it breaks the glass between us and reality .....verges on truth...and creates a new understanding. These "moments of truth" provide great satisfaction for me as the founder of this site. They remind us all how important this FORUM is to those who are regulars here. They also serve as beacons to all those who follow our footsteps to this place -- snippets of wisdom that point up the importance of sound money in our daily lives and the importance to the rest of society of the people -- though minority we are -- who hold these views.I nominate the small quote below (just the excerpt as shown here) to the Hall of Fame and respectfully request the necessary seconds from my fellow knights and ladies. And thank Cavan Man for lighting the way on this one........MSG# 1906 ORO...."You may have seen the movie Matrix. The story is of humanity being used as production plantfor something, the people live a life completely within their heads, controlled by computersimmulations. The key to the hero's survival and success is realizing that the world around him,in which he grew up all his life, is completely false. Walking through a room full of peopletrying to free themselves from the images bombarding their brain, he crosses a kid bending aspoon. He asks the kid, how did he bend the spoon. The kid says, its simple, there is no spoon.What is played before us in the world is a hoax that you have been conditioned by daily experience to accept as reality. But there is a cost to the charade and a cost to you. But you can't bring yourself to come to the conclusion, when you watch CNBC, Read the Journal or Investor's Business Daily, see Moneyline, Ruckeyser, etc. that they are involved in a theatrical production, that they are like well trained actors in a drama about money that never was.Remember. There is no spoon." Blue Sky (11/14/99; 8:02:18MDT - Msg ID:19070) Chicken man A good morning and a thank you for your cautionary words.I too, know many many victims of the "new paint fever", you would be amazed at the number who have had to resort to driving over the road. I too could become a casuality, and resort to driving a company truck, before that I will attempt to work locally. The perils, effort required, and pain related to constantly leaving home are not compensated adequately as an employee of someone else. The tax laws are a tool, just as my truck is a tool. If I choose not to use that tool it is my loss. The statement of electing to purchase a new truck verses paying taxes was a symplified version of the desision to do so. Many hours (what else can you do sitting behind the wheel hours on end) of thought went into that decision. Hopefully the data in and the resulting decision will work. My grey matter computer has not always been right but it does as best it can. There is no way for me to have factored in all the variables ie; y2k, fuel prices, or shortages, freight prices or availability. Thankfully the education presented at this Forum by all the Knights, Ladies, Tradesmen, and Wizards has allowed this serf to make decisions based on thought rather than emotion. If I can load a small corner of the ox cart with a handful of gold coins, might I not return from the market with the cart brimming with trade goods for the merchants. If I attempt this with a cracked and worn axle I may find myself sitting aside the path a victim of brigands with tools. Phaedrus try this its fun. All, look up, view the golden glow of the sun, if it is clouded, smile they too will pass. Blue Sky tedw (11/14/99; 7:25:31MDT - Msg ID:19069) Why Gold?Hypnosis,Counterfeiters, and American Traitors I thought I would post a little of my own philosphy towards Gold since I have not seen it expressed in this forum.When counterfeiters print US notes, it passes for money and buys real goods and services in the marketplace until people wake up to the fact that it is not real then it becomes worthless.When I was a young boy,just prior to 1968 when Lydon Johnson illegaly removed the silver backing from the US dollar, a friend of mine took copper pennies and coated them with electrical solder; they looked like dimes if you didnt look to closely and he successfully passed them at the school cafeteria for lunch. Of course , only until they got wise and looked at the money closely. So we can see from the above example that money has something to do with belief. I can assure you that it would be quite possible for an experienced hypnotist to take a group of people, hpnotize them, and give them the post hypnotic suggestion that Monoply Money is real money.The monoply money would then function as currency to the group and the people in the group would be perfectly content to sell all they possess for gobs of monoply money. Of course,when they woke up from the trance they would realize the monoply money is worthless.Now relate the above to paper fiat money. Is it real money?Or is it mind control? The runaway inflation of german mark in the 1930's, the inflation of the American dollar in the late 1970's, and (for you students of American history) even the inflating of the Continentals during the revolutionary war, werent these times when people realized that fiat paper currency was not real money. Im sure there are many other examples in world history where fiat currency has become worthless. If you were a Southerner in the US during the Civil War and put all your wealth into Confederate notes you would have lost all, but if you had put in into Gold you would have preserved all.Throughout all of recorded history Gold (and silver) has been real money. Governments and their "money" pass from the scene but Gold has alway retained its role as money. It has a long traditon of being recognized by human beings in all cultures as money. It is beyond the power of any government or central bank to change this state of affairs.In the United States we were blessed by Founding Fathers who recognized the mischeifs of paper money.They wrote into the US Constitution that the federal government only had the power "to coin money" and that the various States could not make anything but "gold and silver as tender in payment of debt" If you read the history of fiat "Continentals" and the Constitutional Convention you will see their intent was to end forever in these United States the issuance of fiat paper currencly. Indeed, they did this until Abe Lincoln issued fiat currency (unconstitionally) during the civil war.The current state of affairs in these United State is that the Federal Reserve illegally and unconstitutionally (with the aid and comfort of the US Treasury, the Federal Courts,Congress, and the President) issues counterfeit paper money. Of course, just like the copper coated with solder, it functions as real money.Legally and constitutionally, money in the United States can only be Gold and Silver.And those government Officials who have subverted our money system can rightly be described as Traitors, knowingly or unknowingly, they are still traitors to this Constitutional Republic.Gold is money. During the coming times of hardship and inflation, Americans will again begin to wake up to the fact that Gold is money and paper fiat currency is not. When that happens you will again see the flight from counterfeit US Federal Reserve Notes to real money: Gold.Wake up!!! Gold is money. tedw (11/14/99; 7:25:04MDT - Msg ID:19068) Why Gold?Hypnosis,Counterfeiters, and American Traitors I thought I would post a little of my own philosphy towards Gold since I have not seen it expressed in this forum.When counterfeiters print US notes, it passes for money and buys real goods and services in the marketplace until people wake up to the fact that it is not real then it becomes worthless.When I was a young boy,just prior to 1968 when Lydon Johnson illegaly removed the silver backing from the US dollar, a friend of mine took copper pennies and coated them with electrical solder; they looked like dimes if you didnt look to closely and he successfully passed them at the school cafeteria for lunch. Of course , only until they got wise and looked at the money closely. So we can see from the above example that money has something to do with belief. I can assure you that it would be quite possible for an experienced hypnotist to take a group of people, hpnotize them, and give them the post hypnotic suggestion that Monoply Money is real money.The monoply money would then function as currency to the group and the people in the group would be perfectly content to sell all they possess for gobs of monoply money. Of course,when they woke up from the trance they would realize the monoply money is worthless.Now relate the above to paper fiat money. Is it real money?Or is it mind control? The runaway inflation of german mark in the 1930's, the inflation of the American dollar in the late 1970's, and (for you students of American history) even the inflating of the Continentals during the revolutionary war, werent these times when people realized that fiat paper currency was not real money. Im sure there are many other examples in world history where fiat currency has become worthless. If you were a Southerner in the US during the Civil War and put all your wealth into Confederate notes you would have lost all, but if you had put in into Gold you would have preserved all.Throughout all of recorded history Gold (and silver) has been real money. Governments and their "money" pass from the scene but Gold has alway retained its role as money. It has a long traditon of being recognized by human beings in all cultures as money. It is beyond the power of any government or central bank to change this state of affairs.In the United States we were blessed by Founding Fathers who recognized the mischeifs of paper money.They wrote into the US Constitution that the federal government only had the power "to coin money" and that the various States could not make anything but "gold and silver as tender in payment of debt" If you read the history of fiat "Continentals" and the Constitutional Convention you will see their intent was to end forever in these United States the issuance of fiat paper currencly. Indeed, they did this until Abe Lincoln issued fiat currency (unconstitionally) during the civil war.The current state of affairs in these United State is that the Federal Reserve illegally and unconstitutionally (with the aid and comfort of the US Treasury, the Federal Courts,Congress, and the President) issues counterfeit paper money. Of course, just like the copper coated with solder, it functions as real money.Legally and constitutionally, money in the United States can only be Gold and Silver.And those government Officials who have subverted our money system can rightly be described as Traitors, knowingly or unknowingly, they are still traitors to this Constitutional Republic.Gold is money. During the coming times of hardship and inflation, Americans will again begin to wake up to the fact that Gold is money and paper fiat currency is not. When that happens you will again see the flight from counterfeit US Federal Reserve Notes to real money: Gold.Wake up!!! Gold is money. turbohawg (11/14/99; 7:03:57MDT - Msg ID:19067) hey Cavan Man >However, I believe timing and wisdom conspired against us.<... or *for* us, maybe ? Cavan Man (11/14/99; 6:53:06MDT - Msg ID:19066) SteveH 19062 The melody is a little different but the lyrics sound remarkably similar to FOA. TQ neglected to mention what will become of those who are left behind; after the effects are fully realized and appear in USA Today and CNN. Well, it's a big world out there. Cavan Man (11/14/99; 6:42:49MDT - Msg ID:19065) ORO (the spoon) " But uou can't bring yourself to come to the conclusion when you watch CNBC, read the Journal, Investors Business Daily, see Moneyline, Ruckeyser etc., that they are involved in a theatrical production; that they are like well trained actors in a drama about money that never was".Thank you ORO. We were having dinner last night with friends and I made a similar comment although not a specific reference to the discussion here and certainly not as well postulated as yours. As you would expect, I was met with several blank expressions. The subject was quickly changed. ORO (11/14/99; 4:42:23MDT - Msg ID:19064) Dell viewed like MSFT http://www.freedgar.com/Search/ViewFilings.asp?CIK=826083&Directory=950134&Year=99&SECIndex=3281&Extension=.tst&PathFlag=0&TextFileSize=251501&SFType=&SDFiled=&DateFiled=4/27/99&SourcePage=FilingsResults&UseFrame=1&OEMSource=&FormType=10-K&CompanyName=DELL+COMPUTER+CORP Viewing Dell in this same way, Dell reported for 1999 ended Feb 1Net Income 1.464 $BIncome tax benefit 0.444 $BImplied wage benefit 1.268 $BTotal benefit of stock option plan: 1.712 $BEarnings adjusted for options cost to investors: 0.196 $BEarnings if no stock option plan were used: -0.248 $B (loss)"During fiscal year 1999, the Company repurchased 149 million shares of common stock for an aggregate cost of $1.5 billion, primarily to manage the dilution resulting from shares issued under the Company's employee stock option and purchase plans. "That is more than net income.At P/E 64, with 244 mil options, a price rise this year of $1 will translate to a future benefit of 0.33 $B in earnings, or $0.12 per share. At this valuation level, the stock would gain $7.7 the next year as a result of the rise of $1 in the previous year reducing wage costs and producing a tax benefit. ORO (11/14/99; 3:15:55MDT - Msg ID:19063) Virtuous cycle - un-productivity and dis-earnings http://www.freedgar.com/Search/ViewFilings.asp?CIK=789019&Directory=1032210&Year=99&SECIndex=1375&Extension=.tst&PathFlag=0&TextFileSize=295551&SFType=&SDFiled=&DateFiled=9/28/99&SourcePage=FilingsResults&UseFrame=1&OEMSource=&FormType=10-K&CompanyName=MICROSOFT+CORP The US is enjoying a virtuous cycle of mutually reinforcing economic and financial phenomena. But there is a problem inherent to the debt based monetary system in that liabilities continue to build at each turn in the cycle and they are not abated. There is no equivalent buildup in unobligated "cash" currency matching the build up of liabilities. Though the Fed has done much to add reserves to the system, recently resuming its coupon passes and extending its repurchase agreements, the reserves are still woefully inadequate to counter even a mild decline in economic cash flows that provide the income which pays the interest on the debt bomb that Al built. When a virtuous cycle builds in context of extreme growth in debt relative to economic cash flows or income, it is called a bubble. We indeed have one.The debt gas caught inside the bubble will escape sooner or later. The economic figures of productivity growth would not be suspect if there were not a profound movement of production offshore accompanied by rapid growth in final sales of the industries most intensely involved in the establishment of these offshore production bases. The productivity boom is real in some sectors of software and design, elsewhere it is temporary or a distortion of the figures. In the case of temporary gains, it is achieved by removing necessary functions (such as maintenance) which are simply not performed. In many cases, outsourcing of less essential or "non-core" activities is done in order to lower head count in the higher payed production worker class. These workers continue with similar work and similar locations, with minor improvement in productivity, or none at all. The plant productivity, however, improves as production per head is increased. Services do not enjoy any better or different reality.Even in the booming software and electronics, communications and chip design, there is continued acceleration of the movement to place activities offshore in Israel and India, Taiwan and Singapore. The one area where great strides are being made is in sales and purchasing. Sales people and purchasers are being replaced at the junior level by internet commerce, particularly business to business. End of cycle effects. At the end of a business cycle boom, the economy is functioning at apparent peak efficiency. Plant and other capital are utilized to a high degree. Today, official statistics indicate a low capacity utilization. The figures are not correct, because they are not adjusted for the low maintenance levels in many marginally profitable operations in the heavy industry and resource sectors. Even utilities suffer from a heavilly aged capital base that has less than rated capacity. This figure is not worthwhile as much of an indicator for long term economic comparisons. It is useful for observing shorter trends up to 3-4 years.Profitability of operations affected by equity markets. As discussed in prior posts, there is a gearing in corporate balance sheets and income statements to allow the substitution of wages with stock options. This causes otherwise unprofitable operations to proceed as pillars of the "new economy" and is a key part of the "new paradigm". Bill Parish makes the case for Microsoft(http://www.billparish.com/msftfraudfacts.html), many other companies do the same. The lack of wage cost growth in many areas of the technology arena is the result of this method. Earnings are a product of a book keeping loophole that allows the buildup of a financial pyramid structure based on employees, government and investors supplying the funds that run Microsoft. Dell, and many others do likewise. Revenue: $20 B, Operating income $9.8 BNon Operating Income $2 BNet Income: $7.8 BOptions outstanding: 800 million Average weighted life 4 years, average weighted excercize price $17 (stock is at $90)Options excercized, Due this Dec. 175 mil last year-1998. about 18% per year.Exercisable Options, in 1999 400 mil at about $10Wage savings: $9 B recognized by IRS as cost of stock issuance. Each $1 rise in stock value raises wage savings sum by $0.8 B. Tax deductions: Microsoft deducts the paper cost of options excercize from its income resulting in an additional 35% savings on top of the wage savings. This is 35% X $9 B = $3.15 B. $1 rise in stock value causes $0.28 B in future tax deductions. Each $1 rise in the stock contributes $1.08 B to the bottom line within 5 years, of which at least $0.20 B come in the same year This year possible excercizes are to $0.5 B of benefit. This is $0.035 to $0.086 per share. Considering that the stock options values are considered as part of expected income by the employees, the 800 mil outstanding can all be expected to be wage savings, if not tax savings.At the market valuation range of P/E 50 to 70 recently, the added income resulting from the options compensation in the next year is $4 to $6 from each $1 rise in the previous year. Considering the additional wage savings obtained, another $0.1 per share should be considered, giving a stock price rise next year of $7 to $10. This year, the stock is up $20 (so far). This is expected to contribute at least $0.70 and up to $2.80 to next year's earnings per share. Last year's $40 rise, contributed $9 B in compensation savings and $3.2 B in tax deductions, totaling $12.2 B, far outweighed the company earnings from operations. The company can attribute $2 per share of earnings to this options strategy, out of the $1.42. The company is not paying its employees. The stock market is, as are the employees themselves, who funnel 175 mil shares to the markets in 98 with a benefit to Microsoft of about 20% of the proceeds. Bubble enough for you?Here is more:Once a company is in the SP500 index, particularly the larger ones, there is a constant stream of funds that goes its way through dumb index funds, index lookalike funds and pension plans, stock index futures and the new SPDR, XLK and QQQ index packages. The low float of the younger companies promises a disproportionate allocation of funds since the stocks are market capitalization weighted. Thus a % rise in the stock of Microsoft against the indexes causes the fund managers to purchase Microsoft stock. However, only 74% of the shares are available in public hands for purchase (40% in institutional hands). Thus a $100 buy of MSFT would have the impact of $100/74%=1.36 times that of a completely public corporation. Microsoft also supports its shares by selling puts. Selling an underpriced put (which is what an aggressive sale of puts ammounts to) brings out arbitrageurs to buy the put option and the stock and make the risk free difference between the fair value of the put and the price at their sale by Microsoft. This price support operation, though endangering Microsoft's existence, contributed over $0.76 B to their bottom line.My conclusion is that Microsoft is a money loosing operation heavily subsidized by our retirement accounts and their own employees, using a loophole in accounting rules. From Microsoft last 10-K:"Employee compensation Microsoft employees currently receive salaries, incentive bonuses, other benefits, and stock options. Fiscal 2000 salaries will be enhanced, with the mid-point salary range raised from the 50th to the 65thpercentile of competitive positions. Additionally, new government regulations, poor stock price performance, or other factors could diminish the value of the option program to current and prospective employees and force the Company into more of a cash compensation model. Had the Company paid employees in cash the equivalent of the Black-Scholes value of options vested in 1997, 1998, and 1999,the incremental pretax expense would have been pproximately $620 million, $850 million, and $1.10 billion."Also from cash flow statement:97, 98, 99. (In millions) Stock option income tax benefits 796 1,553 3,107Put warrant proceeds 95 538 766Some discussion of the effect of options compensation is given in Table 19. SteveH (11/14/99; 2:22:12MDT - Msg ID:19062) repost www.gold-eagle.com repost -- @Flambeur, re your Nov 13, 2:55 (TQ) Nov 13, 23:28 I wanted to thank you for the great post. Many of us have wondered how the 'expected' correction was averted in '87, then postponed permanently. I hope that I'm not spinning my tires here in Mudsville when I make the following suggestion: what if we take your idea that AG is the Keynes of central bankers and review some history. For example, let's connect the Yen carry trade (which provided liquidity to the world financial markets) and the gold carry trade (which also provided easy credit to a world seeking liquidity as the central bankers struggled to steer the 'Titanic' through the cold Atlantic.) As Singlion has hinted, the Japanese banks need to repair the damage done when the Nikkei collapsed and when the attempt to recoup by lending to Korea, Indonesia etc. ended in the disaster of '97. As these and other economies in that region are important suppliers to the US and I expect are needed soon as consumers of US products to repair the trade imbalance, the new-found $ (from the plan to raise easy money through the yen-carry and gold-carry trade) would be needed to rebuild Asia and South America to keep the US economy from collapsing and taking the world into the Black Hole that would create. (This may be part of the AG's overall plan.) And now for the fun stuff. It seems to me that the US policy makers are attempting to create several trade regions, the Asian, the South American, and others, to form a foundation for greater world trade. The Euro group see the opportunity this provides as the US group is vulnerable to competition in the role as provider of the world's reserve currency. The US may be overextended, both financially and in its ability to adequately manage the change to the next level. The Euro group would like some of the action. Europe has a number of issues to resolve (an aging population, this means fewer workers supporting more retirees; and other expensive programs which require productivity gains to sustain the current standard of living; this means there is a need for much new investment to enable more to be done.) To attract this investment Europe has united and opted for a gold backed currency. This may attract the oil rich nations to the Euro. Thus the needed cash arrives, gratefully. If the Euro group snatches the 'reserve currency' status from the US, the price of gold and oil may rise, together in US$ terms, as the US$ falls out of favour. It would fall as it is dumped. Sellers of US$ would buy Euro denominated investments 'to catch the train before it leaves the station', to borrow a current metaphor. As this would best occur so slowly as to be invisible to the general public (in order to ensure a stable transition) we would likely see any number of false moves in oil, gold, the Euro, the Dow etc. Some of these false moves would occur naturally. Some would be created to discourage those wishing to capitalize on the trend. This trend would have to be run by very sophisticated strategies in order to remove from the play the destabilizing effects of 'hot money'. (We have seen what that money can do as it entered and fled the Asian and South American theatres.) My best guess is that the 'sea change' would occur slowly over a period of many years. I would expect that if it went 'well' that most would be unaware of the trend until the late stages. (These are defined as those which are then being described by university professors, as they will have had years to study them.) To counter the Euro moves the US$ group would employ several strategies. To block the oil rich group from moving too quickly to the Euro camp, the US group simply provide 'protection', (as in the Gulf War.) Also note that the Euro group would thus be tempted to develop its own military 'defense' capabilities. The US$ camp would also employ strategies to convince those wishing giga gains to invest in America. This would drain investment from Europe and growth there would be less. See the gains in the Dow since '96. ('The trend is your friend.') The slow growth in Europe would delay the development of 'defense' capabilities. If the Euro camp simply wants to develop a larger 'share' of the 'market' without damaging the US$ hegemony, the transition would need to be 'smoothed' even more. The Euro camp would likely (in the initial stages) want the US$ to be stable as Europe would be hurt in any rapid collapse of the dollar, I expect. This would suggest (if correct) that those in the US$ camp (and to some extent the Euro camp)would overlook (wink,wink, nudge, nudge) the huge inflation in the money supply required to bankroll investment in Asia and South America. They would have a vested interest in 'playing by the rules' and not destabilizing the American dream of a world economy awash in dollars and rising standards of living. Thus I see AG as the Keynes of central bankers. TQ. Click Here to view yesterday's discussion.
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