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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

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ARCHIVED DISCUSSION FROM 8/15/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Horatio (8/15/02; 22:52:27MT - usagold.com msg#: 83100)
Options
I heard of a study today that said 30 % of the S&P corporations would not show a profit if they had to expense options.A Senator quipped "why would anybody buy a stock where management took ALL of the profits".An interesting point....
By the way Cisco even paid thier Rents and Leases of buildings with options.Can you imagine? no expense for Real Estate Leases!!Its a Virtual Company !!It only exists if you believe it exists ,as soon as it enters the real world where there are expenses it disappears!!!!

Horatio (8/15/02; 22:35:00MT - usagold.com msg#: 83099)
fees
Many brokerages have instituted maintenance fees this year where they didn't have any before,like $50.00 per year and IN- activity fees $50.00 per year,custodial fees $50.00(IRA) and transfer fees of $100.00.
There are still some that don't have any fees... be aware of the fine print....
Don't let them steal your money.

darkhorse (8/15/02; 22:16:56MT - usagold.com msg#: 83098)
@sector
Your quote:

"The Kurds aren't all on the same page and without those guys... well... the US will have to round up a whole new army of donkey-riding mercenaries up there. Shouldn't be too tough though... a suitcase full of nude Brittany Spears photographs and a thousand assorted MTV Videos will do the trick. Might have to throw in a truckload of Winstons."

Attitudes like this are why the US doesn't have any more friends around the world than we do. Let me state for the record I have no connection/allegiance/like or dislike towards whom you speak. I'm willing to bet you don't know a single thing about these people that was learned from personal experience, but you're so quick at degrading their intelligence and capabilities. What an arrogant lot we can be! Our own intelligence should come under scrutiny when we have to ask why so many people carry the attitudes they do against us. I love my country, there's no better place I'd rather be, but I'm not blind to our faults, either.

sector (8/15/02; 21:58:11MT - usagold.com msg#: 83097)
Companies not in date filing compliance with the SEC demand for re-certification of financial reports.
http://www.sec.gov/rules/extra/ceocfo.htm
I have taken some time to extract this listing of non-compliers for your review:

Coca-Cola Enterprises Inc. [Not to be confused with Coca-cola, Co.]
Comdisco Inc.
Consolidated Freightways Corp.
DST Systems, Inc.
Exide Technologies
Foamex International Inc.
Gentek Inc.
Hercules Inc.
Hub Group Inc.
IT Group Inc.
Jones Apparel Group Inc.
Mariner Health Care Inc.
Qwest Communications Intl Inc.
U.S. Industries Inc.
US Airways Group Inc.
Weatherford International Inc.
Zions Bancorporation
++++++++++++++++++++
This list was compiled by sorting the sec website list first by due date [August 14, 2002], then by actual filing date. The above corporations had no filing date thus they have not filed.

There are many other corporations that are due to file later in the year.


Ray Patten (8/15/02; 21:51:49MT - usagold.com msg#: 83096)
Cyberat....
I forgot to tell you that any overnight trade can be off-set on the Comex. So you can sell at 6 AM and cover at 7:30 or 8 AM and make nothing but money every day. Again, good luck.

DOWNUNDER (8/15/02; 21:51:17MT - usagold.com msg#: 83095)
@MIKAL Re PRECIOUS METAL STORAGE (post 83073)
Thank you for your reply and thoughts re Bank Safe Deposit
Boxes.From what you have said it is obvious that various Banks operate differently: ie --some bring the box to a private room & others let the client carry it. I would certainly favour the latter!

I guess the btm line is that I don't trust Banks period.I rang 3 Banks here in Australia & not one would store Gold & acknowledge its safekeeping ---nor do they sell gold.As Gold
is the ultimate "reserve" currency I deduct that banks must see gold as a threat & that indeed they are the enemy.Nor will they allow "gold holdings" to be used as collateral!

Why then give them the uninsured real metal to guard? In a real crunch locked doors may stand between the owner & his stash-- It is a big problem but goldbugs are used to adversity & I'm sure alternative plans are in place--such as your own. Keeping ones mouth shut is by far the most important security device --cause no one will come looking if lips haven't been flapping! Cheers


sector (8/15/02; 21:20:29MT - usagold.com msg#: 83094)
Kurd chief shuns talks on deposing Saddam.....Absence of Barzani is blow to the U.S.
http://www.iht.com/articles/67849.html
Patrick E. Tyler The New York Times
Friday, August 16, 2002


WASHINGTON The most powerful Kurdish chieftain in northern Iraq, Massoud Barzani, refused an invitation from the administration of President George W. Bush to attend the meeting of Iraqi opposition figures at the White House last week, Kurdish and administration officials said.

The absence of Barzani, whose father, Mustafa Barzani, led the largest Kurdish rebellion of the last century and died in exile in the United States, was a blow to Bush administration officials who had orchestrated the meeting in part to demonstrate that Iraqi opposition forces were unified behind a new campaign to depose Saddam Hussein.
+++++++++++++++++++++
Looks a bit dicey for the Northern Iraqi Invasion boys. The Kurds aren't all on the same page and without those guys... well... the US will have to round up a whole new army of donkey-riding mercenaries up there. Shouldn't be too tough though... a suitcase full of nude Brittany Spears photographs and a thousand assorted MTV Videos will do the trick. Might have to throw in a truckload of Winstons.

Nation building... wow... it's harder than one might think.

When any Administration changes the subject from a crashing economy to...fill in the blank...it is time for everyone to take defensive action with personal assets. Start with gold.

Name another asset [Besides silver] that, because it is manipulated, has a near zero downside potential. That is the definition of a good investment.

cyberbat (8/15/02; 20:31:25MT - usagold.com msg#: 83093)
@ Ray Patten
Thanks for the info Ray. If what your telling me about stop loss orders is right, then I would just have to watch it all night and close the trade myself. Right ?
Thanks much!!
Cyberbat

Trurl (8/15/02; 20:25:53MT - usagold.com msg#: 83092)
Have you ever tried to sell a diamond?
http://www.theatlantic.com/issues/82feb/8202diamond1.htm
A very interesting and relevant link. This article is about diamonds, but it could be about stocks, bonds, or numismatic coins. There is nothing wrong with any of them, iff ( if and only if ) you know what you're doing.

The point is that they create a market and sell what they have to unload.

snippit:
DeBeers devised the "eternity ring," made up of as many as twenty-five tiny Soviet diamonds, which could be sold to an entirely new market of older married women. The advertising campaign was based on the theme of recaptured love. Again, sentiments were born out of necessity: older American women received a ring of miniature diamonds because of the needs of a South African corporation to accommodate the Soviet Union.

end snippit.

On the other hand, I have sold gold. So far the only reason I have sold is to buy real estate. But I do know it is a viable round-trip value storage.

Trapper (8/15/02; 20:07:58MT - usagold.com msg#: 83091)
Sir Operative
Sept dates
I have seen some here pan on you about your choice of methods by which you attempt to asertain movements in the price of gold etc. Pay them no mind, as anything that might have a reference to God, the Bible, or any sacred texts give them a problem. As for me I'm of the historical/spirtual persuasion in my eschatology and this would be of no value to me. Gold is a funny thing. Controlled by some worshiped by some, and rejected by many. Hang in there it WILL go up and big. The biggest problem is thinking in a straight line in a life that has a cycle. Live small.
RJ

Ray Patten (8/15/02; 19:56:04MT - usagold.com msg#: 83090)
Cyberat....
http://www.mrci.com/qpnight.asp
Most commodity brokerage companies have a night trading desk that will allow you to trade in the Comex ACCESS market. It trades for 4PM New York time to 6 AM. All Gold trades are in US$. No stop loss orders are allowed so it is very dangerous.

Click on the above link to watch the ACCESS market all night long. Good Luck.

Black Blade (8/15/02; 19:28:57MT - usagold.com msg#: 83089)
Mirant May Have $1.1 Bln in Errors on Balance Sheet
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APVrk.hPcTWlyYW50


Snippit:

Atlanta, Aug. 14 (Bloomberg) -- Mirant Corp., the biggest North American natural-gas trader, said an accounting review turned up mistakes that may have inflated its balance sheet by as much as $1.1 billion.

Black Blade: Here we go again.



cyberbat (8/15/02; 19:28:28MT - usagold.com msg#: 83088)
Help Anybody
I need someone's info. After watching the gold charts, it is plainly visible that the short boys are really active right at the opening whistle every morning on the comex. Their pattern seems to be to let gold take it's upward movement from Hong Kong right up thru the London opening and then smash it down on the Comex opening. That being their modus-operundi,

I want to trade long during that time and then short with them on the Comex all during the same day. I will sell the long's on a day trade during London hours and then go short with the hedge boys during their comex activity.
Can anyone tell me how I can conduct commodies trading in Hong Kong from the U.S.and still be able to close my trades in dollars U.S. there?
If I am going to have to contend with this mass of paper trading, then I shall keep my physicals, keep my gold shares, and piggy back the hedge boys with their shorting until it finally stops or they run out of money. I'm getting tired of the same old crap every day and if everyone else does it, then they may eventually cease operations or at least move to another time zone.
Any thoughts ?

Black Blade (8/15/02; 19:22:36MT - usagold.com msg#: 83087)
Merrill, Morgan Stanley, J.P. Morgan May Be Cut
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APVvCABKsTWVycmls


Snippit:

New York, Aug. 15 (Bloomberg) -- Credit ratings of Merrill Lynch & Co., Morgan Stanley and J.P. Morgan Chase & Co. may be cut by Standard & Poor's Corp.


Black Blade: The rumored concerns about liquidity problems don't help much either.



Waverider (8/15/02; 18:06:16MT - usagold.com msg#: 83086)
Operative
Please don't curtail anything - I enjoy your posts! And thank you for your answer to MarkeTalk's question - it's very interesting. I saw the connection to Gold (and I suspect most here did) but thanks anyway for spelling it out for anyone who needed it! Cheers, and keep up the great contributions here!
Waverider

Blackjack (8/15/02; 17:55:58MT - usagold.com msg#: 83085)
We are entering a historically strong season for PMs
http://www.321gold.com/charts/seasonal_gold.html
Check the seasonality chart for Gold and Silver.


Operative (8/15/02; 17:36:56MT - usagold.com msg#: 83084)
@ Belgian
"It stays
my opinion that crude oil will dictate what the past and future US$ will be worth. Oil has the
intention of valuing the dollar-reserve and the management of it. That's what's WAT is for."

As each day passes I am beginning to think that Bush's War on Terrorism has actually very little to do with the terrorists. Bin Laden has provided an opportunity for Bush to plough into the Middle East and right through the heart of OPEC. Want to control the price of oil, break up OPEC.
Afghan down, Iraq next, and when political infrastructure of Saudi breaks down, go for the brass ring. Sounds like a plan to me.? Kuwait is for all practical purpose in "our camp".
Iran, which is Persian, not Arabic in attitude (thats why the long standing trouble/wars between Iraq/Iran) will enter into a new age of "friendship" with its old ally USofA. It's possible the oil man from Texas will be the next Oil Czar of the world.

Blackjack (8/15/02; 17:28:25MT - usagold.com msg#: 83083)
Saudi Princes don't want democracy in Iraq?
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=28629
Intelligence sources believe that Saudi Arabia is quietly helping the establishment of al-Qaida in northern Iraq and nearby Syria, according to Geostrategy-Direct, the global intelligence news service.

Saudi princes are desperate to ensure the status quo and that means keeping Saddam in power, Geostrategy said.

The key Saudi fear is that the United States will create a democratic, pro-Western Iraq. Such a state would win tens of billions of dollars in foreign investment while its neighbors are ignored. At that point, why would Washington need Saudi Arabia?

The sources believe the leak of the Pentagon briefing last month on the future of Saudi Arabia was the clearest U.S. signal to the royal family that Washington is the only real friend Riyadh has. Take away U.S. protection and Saudi Arabia will be eaten by the wolves.

The sources point to another Pentagon briefing -- by Max Singer, a longtime consultant to the Pentagon on the Soviet Union. Singer is considered a quiet and taciturn man who brought some cutting-edge strategic thinking to Washington on the post-Cold War era.

Singer's message to the Pentagon was that the United States should support a Shi'ite separatist movement in eastern Saudi Arabia. There, the Shi'ites already comprise a majority of the region, which contains most of the kingdom's oil and natural gas reserves. The Wahabis can keep the empty desert in the west.

This is likely why the Saudis have blocked a decision on the development of natural gas reserves in southeastern Saudi Arabia. Abdullah wants to launch the $30 billion project to explore and produce gas as well as build infrastructure. But the other Saudi princes are concerned that they will never ever see the results of such a gas project should Washington target the royal family.

misetich (8/15/02; 17:05:08MT - usagold.com msg#: 83082)
US Stocks Post Meager Gains; Philly Fed Surprises To Downside Aug 15 / 13:45 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1029433500000&sn=1&banner=mainwire
Snip:

CHICAGO (MktNews) - U.S. stock market indices held only modest
gains Thursday even as regional manufacturing area data fell into
negative territory for the first time this year.
...........
Indicators used to monitor Philadelphia area manufacturing activity
fell in August, with the general business conditions index falling to
its lowest level this year at -3.1 versus 6.6 in July, according to
Federal Reserve Bank of Philadelphia economist Mike Trebing Thursday.

Speaking to reporters following the release of the survey, Trebing
said that the survey's indices indicate a general overall weakness in
the regional manufacturing economy.

"For the first time this year, manufacturing firms' responses from
the Business Outlook Survey indicate a slight decrease in activity.
Indicators of general activity, new orders, and shipments recorded
negative readings for the first time since December 2001," Trebing said.

Trebing explained that few of the firms polled this month expect
general business activity to decline further going forward.
**********

Misetich

Yep, O'Neil's economic recovery - GDP growth of 3 to 3.5% in the 2nd half is on target....well maybe...then maybe he was misquoted on which year.

Hopefully investors will not be taken in by O'Neil positive spin and make their plans in accordance with economic reality -

The 3rd quarter is 2/3 gone and things appear to be getting worse than the anemic 1.1 GDP reported growth in the 2nd quarter

Layoff notices have picked up considerable speed and S&P warning of investment bankers future possible downgrades, airlines industry woes, slower retail sales growth with higher inventory levesl, lower corporate spending does not add up to an expansionary economy.

Investors would be prudent to initiate/add to their defensive positions through PHYSICAL GOLD

Got gold?


Operative (8/15/02; 17:02:06MT - usagold.com msg#: 83081)
@MarkeTalk
Last year the Fast of Gedaliah was on September 20 (Tishri 3) I do not have the 2002 Hebrew Calender handy at the moment. Hope this is of some help. The slaying of Gedaliah can be found in Jeremiah 41:1-2, IIKings 25:25.

What's this got to do with gold?
One of the trigger events that may set loose the bondage of gold is a war in the Middle East. Saddam is currently at the forefront of this war. It is my personal opinion that Saddam is highly unlikely to play this second round as he did during Desert Storm. The buildup/preparation of his military force (once 4th largest in the world) was destroyed as his forces were bombed into oblivion. The 100 hour ground war that followed was mostly a mop up operation. Not that Saddam is the most reasoning of men, but I feel even he has had to rethink his posture for the next battle. Perhaps a first strike instead of waiting for the sounds of U.S. Aircraft overhead. Saddam has rebuilt a great city of past reknown. He is openly comparing himself to a great leader who long ago invaded and conquered Israel. Thats the short version to explain why September may be of interest to not only Goldbugs, but for the world at large. Is it a stretch? Yes.
Am I setting dates? No. Is it something to be aware of? From the potential it has to explode the price of gold...you bet.
Perhaps another important question is, with the sounds of clashing sabbers in the air, have you got enough gold?

Belgian (8/15/02; 16:56:52MT - usagold.com msg#: 83080)
Crude Oil
POO (Brent-London) went through its (important) resistance line and all momentum indicators, when technically interpreted, show upwards potential.
Since 1971, the US$ left (officially) the gold standard and found it more opportune to adhere to an oil-standard. Being in friendly control of the vast Arabian, cheap, oil reserves. It stays my opinion that crude oil will dictate what the past and future US$ will be worth. Oil has the intention of valuing the dollar-reserve and the management of it. That's what's WAT is for.

Will the US, as the US$ manager, succeed in getting those cheap Arabian oil reserves under its (hostile) control ?
Will other oil consumers (Euroland and China), ally with the US, in order to co-operate on this new (?) oil control, this time implemented by force ? Or will the euro-Gold-oil concept come into application, when the US fails to regain control of the whole ME oil region as such ?

Desert storm (1990) was aborted to avoid the widespread ME anger against the west and as to not shock US allies of that period. But it didn't turn out that way and the crusade between cheap oil and oil consumers is on its way to full deployment.

No matter what the outcome on the ME might be, the US$ will be forced to unhook from the oil standard and ultimately show its true worth. Russia favors the euro above the dollar, as does China, the fastest grower in oil consumption ! The US might all of a sudden stand it whole alone at a critical moment. How will this play out and what are the odds ?


misetich (8/15/02; 16:47:53MT - usagold.com msg#: 83079)
Star telecoms analyst Grubman resigns from Salomon
http://www.forbes.com/newswire/2002/08/15/rtr697445.html
Snip:

NEW YORK, Aug 15 (Reuters) - Jack Grubman, the well-known Wall Street analyst under fire for his dogged support of disgraced telecoms giant WorldCom Inc. <WCOEQ.PK>, resigned on Thursday, a spokeswoman for Salomon Smith Barney said.

The news is the latest twist in an ongoing saga that has tarnished Salomon's reputation and highlighted perceptions of treachery on Wall Street.

Grubman, widely acknowledged as a guru of the once high-flying telecoms sector, is at the center of Congressional probes into conflicts of interest at the nation's top securities firms.
***********
Misetich

ANOTHER - joining the ranks of "more time with my family" and probably ANOTHER ploy by Salmon (Citi)

Got gold?


misetich (8/15/02; 16:38:47MT - usagold.com msg#: 83078)
Brazil markets slide, shrugging off CenBank moves
http://www.forbes.com/newswire/2002/08/15/rtr697342.html
Snip:

By Todd Benson

SAO PAULO, Brazil, Aug 15 (Reuters) - Brazil's battered financial markets fell on Thursday for the fifth straight session as investors shrugged off new Central Bank measures aimed at stemming capital flight from the country's troubled mutual funds.

Hoping to head off a rout in financial markets that threatens to spill across borders, the Central Bank unveiled plans late on Wednesday to buy back domestic debt and increase bank reserve requirements. It also reversed a prior change in accounting rules that had required mutual funds to mark asset values to daily market
...........
Encouraged by the Central Bank measures, Brazil's currency, the real <BRBY>, jumped more than 2 percent after the opening bell, but the rally didn't hold. In a see-saw session, the embattled currency ended the day at 3.210 per dollar, a shade weaker than Wednesday's close of 3.205.

The Central Bank confirmed that it sold dollars to stop the real from sliding further.
..........
"Only an improvement in the political outlook, with either Serra moving up dramatically in the polls or Ciro Gomes and Lula adopting a firm commitment to measures aimed at guaranteeing Brazil's solvency, or a return of international bank credit lines would sustainably reverse the current crisis," Ricardo Amorim, head of Latin American research at IDEAglobal in New York, said in a research note.

"None of those events seem likely until the end of next week," he added.
************
Misetich
Brazil (Latin America) is reminiscent of SouthEast's Asia a few years ago - at that time gold got dumped (July week-end) on the "announcement" of Australia's CB selling- If my memory serves me correct gold broke from the $335 to 315 -320 over the week-end.
The flight to safe haven (US $) ensued - things appear different this time - the US and not Japan is the "wheel" in the middle this time as Latin America is a major trading partner and big importer of US goods and services
We all know how badly Japanese banks got hurt during the SouthEast contagion -

Could the same thing happen to US interests in Latin America's contagion?

Got gold?



misetich (8/15/02; 16:25:00MT - usagold.com msg#: 83077)
JP Morgan, Merrill, Morgan Stanley Ratings May Be Cut by S&P
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APVwRLxPGTWVycmls
Snip:

By Emma Moody


New York, Aug. 15 (Bloomberg) -- Merrill Lynch & Co., Morgan Stanley and J.P. Morgan Chase & Co., suffering from slumping investment banking revenue, may have their credit ratings cut by Standard & Poor's.

Goldman Sachs Group Inc.'s short-term ratings also may be reduced by the largest ratings company and Lehman Brothers Holdings Inc.'s ratings now carry a negative outlook, meaning the rating is more likely to be lowered than raised.

An expected gain in business hasn't materialized, S&P analyst Tom Foley said and Wall Street firms are having the steepest drop in profits in 10 years. Stock sales and mergers are at their slowest pace in five years and losses from bankruptcies of corporate customers are mounting.

"We're not seeing an improvement," said Foley in an interview. "We're taking a dimmer view of their operations."

............
Merrill, Morgan Stanley and J.P. Morgan all have AA-long-term ratings at S&P, the fourth-highest on the 22-level scale. Their A1+ short-term ratings are the highest for debt that matures in nine months or less. S&P's review, which likely will be completed next month, probably won't result in downgrades of more than one level, Foley said.

The firms rely on high credit ratings to keep down their cost of borrowing. A rating downgrade could cost the firms as investors demand higher returns to compensate for increased risk.

For a bank such as J.P. Morgan, which sold $4.5 billion of bonds this year, a downgrade could cost an extra $800,000 in interest a year for $1 billion of borrowing.
...............
J.P. Morgan's 6 5/8 percent notes maturing in 2012 dropped to $1,057 per $1,000 of face value from $1,060, pushing up the yield to 5.84 percent from 5.79 percent. The spread was 7 basis points wider at 167 basis points.
............
While all firms are likely to remain profitable, the lower earnings make firms increasingly vulnerable to "shocks" such as bankruptcies of large clients, Foley said.

More downgrades might be warranted for the banks, which are increasingly using derivative products to bolster revenue, said David Hendler, an analyst at CreditSights Inc., an independent research firm.
.............
As well, J.P. Morgan, Merrill and others are accused of helping energy trader Enron hide debts before the company filed for bankruptcy protection last year. The firms are also facing probes over analysts' conflicts of interest.

"Of concern to me are any surprises that may come on the regulatory and legal front," said Touchstone's Policinski.

Moody's has a stable outlook on Morgan Stanley's Aa3 rating and negative outlooks the Aa3 ratings of Merrill and J.P. Morgan. A negative outlook indicates a firms' rating is more likely than not to be lowered, though a reduction isn't necessarily imminent.

S&P has those ratings on Creditwatch negative, meaning it is actively considering a downgrade in coming months.
.............
*************
Misetich
No mention of JP Morgan's dividend. Yet it seems reasonable to conclude that their dividend will be reviewed (cut) as earnings deteriorate.
FARFEL once said, lets see which bank flinches first - and turn the knives on each other- and it is at that point that gold will free lose
We wait patiently to see which bank(s)volture smelling blood, goes after the other vulnerable banks.

Got gold?

Operative (8/15/02; 16:19:37MT - usagold.com msg#: 83076)
@ Sierra Madre
STAY ON TOPIC, Your point is noted and I thank you for the reminder. I realize that my attempts to inject a little humour here with a post may not be appreciated by the audience at large. I will curtail the storytelling. My goal is to add what little information, understanding, current world events that may impact on financial aspects, especially gold, to others here at this table. I am gratefull for all the information that this forum has provided. I have spent several years trying to catch up and increase my knowledge of finance and have found this organized manipulation of gold to be of great interest. So many parts of the puzzle have been placed together by reading, studying, and trying to understand what greater minds have offered here. My posting is an effort/attempt to repay, as best I can, the debt owed to all who share. Even if sometimes all I can do is add a smile or chuckle.

I have no hidden agenda but I am a seeker of ideas and truth.

I can be somewhat dense at times. Slow to pick up in the readings between the lines as Mr. Gresham(?) points out.
Not sure if its a mental defect on my part or just going in so many differant directions that I bump into the trees on my way to the forest. If in the future when anyone feels I have left the fold I would consider it a great kindness if someone would point out exactly where I have left the golden trail. (yes, I really can at times be that dense)

The stability/depth found here at USAGOLD is the main reason why I hope to participate. It truly is a gentleman's place of gathering as compared to some of the other web sites that I have seen/monitored. I am wise enough to value this fact.
However, may I humbly request that some of you great minds give us hobbits a little running room here to explore the side trails but to also understand when we have gotten lost in our thoughts and help us to return. Soon, perhaps very soon, there are going to be hundreds/thousands of lost and confused hobbits searching for the answers provided by this great group. Having had thier life's savings decimated, tired of the lies from the media and the trumped up government statistics, they will come in search for the truth. Might I suggest that USAGOLD begin preparations of "aid packages" to be handed out in masse to the coming flood of refugees who will seek solace within these walls.

STAY ON TOPIC, I really am trying.

Mr Gresham (8/15/02; 15:37:24MT - usagold.com msg#: 83075)
BillinOregon
So much news is posted here, I'll bet most of us don't have to go very far to get what we need to read, so I'm grateful to those who regularly bring us pieces from outside.

Roger Arnold's writing keeps hitting home in the sharpest way. With a credit crunch happening, he says, small business is going to be frozen out almost simultaneously around the country.

"How long is it going to be before the equity traders realize that the bond traders already decided what the outcome of this is going to be and start racing for the doors like someone just shouted fire in a crowded theater?"

That means that, while everyone working at a struggling small business, or just laid off, assumes that their case is unique, and that business is going on as usual elsewhere, the recognition may soon flash across the vision of them all nearly simultaneously that it's all crunching in parallel.

That is really a set-up for a very sharp panic and freeze-up of nearly every part to the finance system, beyond even the Fed's ability to re-liquefy. And that's what their consequence will be for plugging up every little leak -- monetary and statistical -- so efficiently, as each of them first appeared on the horizon. (Kudos for masterful Economic Management! Boos & hisses for forgetting about larger Economic Reality!)

Gold, of course, is one of their "little leaks" BOTH monetary and a statistical indicator, so it's had more than its fair share of "attention paid to it."

As in Dresden, it's always us civilians who are the "collateral damage." "So it goes."

Thanks, Bill!



Black Blade (8/15/02; 14:50:52MT - usagold.com msg#: 83074)
A Deflationary Mosaic by Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20020815-thu.html#anchor0


Snippit:

I continue to believe that the balance of risks on the price front has shifted away from inflation to deflation. The evidence, in fact, is building that more than a casual whiff of deflation is already in the air in the United Sates. Unfortunately, that's exactly what the model of the post-bubble economy would predict -- an overhang of excess supply that could lead increasingly to widespread price destruction. How serious is this risk?


Black Blade: Interesting article where Stephen Roach states his case for deflation. The markets today are rather confused. After the Philly Fed gave a gloomy picture of the economy, stocks fell -- but only for a little while, then turned higher. Is this rational? There is no other news to even suggest any improvement in the US (or global) economy. Earnings are at best flat though there are some who claim that earnings are improving. I am however, referring to real actual earnings and they are referring to phantom earnings such as "pro forma" or "operating" earnings. The recent August 14th deadline for certification did not reveal much but then there were no extraordinary penalties and so it appears now that the whole event was a publicity stunt engineered by the SEC. It is already illegal to knowingly misstate earnings. Those who are misstating earnings are not likely to suddenly come out and say: "gee I guess I was lying before". We could see some wild volatile trading sessions ahead. Meanwhile the Middle East question is coming to the forefront again as US air strikes in Iraq's "No Fly Zone" have resumed. As a result oil and natural gas prices spiked higher. Also, the drought in the American breadbasket is taking a huge toll on grain production. That's OK though as unimportant items like food and energy aren't including in the "core rate" of inflation. Hmmm... The debate about "inflation" vs. "deflation" will still have to be resolved as events play out.

It's a virtual minefield with a weak US dollar, corporate scandals, rising geopolitical tensions, record level debt, etc. Note: Henry Kissinger will be on CNBC's "Capital Report" tonight to discuss the possibility of another US-Iraq war. You may have noticed the rise in petroleum prices lately coupled with sharply declining inventories.

Off to the gym!!!



mikal (8/15/02; 14:44:17MT - usagold.com msg#: 83073)
@Downunder
Re: msg.# 83042 last night. You made some good points last night about PM storage: "Loose lips sink ships" and the "wild cards" of bank safe deposit boxes, possible confiscation or bank closure. These are the reasons I will empty my boxes if there are any rumors, serious war, state of emergency, or martial law. Of course, this could happen overnight, especially if there's another major act of terrorism. According to the law, bank closure cannot interfere with reasonable public access to safe boxes. And I know that lawyers, police officers, prominent businessmen, etc. use them. As for your concern that a "renegade employee" might dissappear with the goods- my banks have no access to my box without my keys, or a blowtorch. Each box has two keyholes, one key stays with the bank at all times. I remove the box after the box door is opened, and carry it to a private room, FWIW.

Blackjack (8/15/02; 13:59:26MT - usagold.com msg#: 83072)
Switzerland heading down the road to Deflation?
http://www.bloomberg.com/feature/feature1029334376.html
London, Aug. 14 (Bloomberg) -- I've often thought that if the world fell apart, I could always retreat to Zurich. Now I'm reconsidering.

Swiss retailers had their worst month in one and half years in June, with sales dropping by three percent compared with June 2001.

Consumer prices fell in July at the fastest annual rate in more than three years. The consumer price index declined at an annual rate of 0.1 percent from July 2001, the first drop over a year since the 12 months ending in December 1998, according to the Federal Statistics Office.

The Swiss Purchasing Managers Index fell this month for the third month in a row, suggesting most companies expect output to decline further.

The country I once regarded as the world's ultimate safe haven may be following Japan down the road to deflation.

The Swiss corporate sector reinforces this impression. Swissair Group has already gone bust. The engineering giant ABB Ltd. is in crisis.

Swiss pharmaceuticals companies have been performing poorly. Roche Holding AG said this morning that its first half profit dropped 28 percent as the drugmaker paid higher taxes and earned less from investments.

Swiss banks are in trouble. Credit Suisse Group posted a greater-than-expected second-quarter loss this morning, and proposed cutting its dividend for the first time ever.

pinetree (8/15/02; 12:37:38MT - usagold.com msg#: 83071)
From pension fund to gold
As reported in the Sacramento Bee on August 12....

James E Burton, the head of the nation's largest public pension fund, has accepted a position as chief excutive of the World Gold Council in London.
The decision follows Burton's announcement in May that he planned to leave this year as head of the California Public Retirement System.
He wll leave his current post on Aug. 23 and report to work in London on Oct. 1.
Burton belives that the timing is ripe for gold to become much more prominent in the investment world.

Pinetree....Burton did a bang-up job with the California Public Retirement System(CalPERS). He was the CEO of
CalPERS for the last seven plus yrears.

MarkeTalk (8/15/02; 12:00:12MT - usagold.com msg#: 83070)
Operative--September date for Gehaliah?
I am not familiar with the story of Gehaliah. Do you know exactly on which day in September 586 B.C. he was slain? By the way, you mentioned the rebuilding of ancient Babylon. This is a fact which I have seen in various publications. Saddam has spent millions of dollars doing this. Why? Because he fancies himself to be the modern reincarnation of Nebuchanezzar, the famous Babylonian king who took the Jews captive. We get our Bible story of Daniel in the lion's den from this period in history.

And I have heard it rumored that Saddam has some strange, life-threatening illness and that he wants to leave this life in a "blaze of glory". What better way than to attack Israel with Scud missiles. We could be looking at a repeat of the 1973 Yom Kippur War when the Arab nations attacked Israel on its holiest day. Another possibility is that Hamas and Hezbollah (with the backing of Saddam and our Saudi "friends") will unleash multiple suicide bombers on several Israeli cities all at once, thereby creating mass confusion and panic. All in all, I just don't have a good feeling about Middle East events for the month of September. Gold should be a big beneficiary of all this chaos.

barnaclebob (8/15/02; 11:41:08MT - usagold.com msg#: 83069)
USA Today: In uncertain times, gold beckons again
http://www.usatoday.com/money/markets/2002-08-14-gold_x.htm


Violence in the Middle East. A drop in the value of the U.S. dollar on world currency markets. The worst bear market since the Great Depression.

In short, it's a glorious time for the gold market -- the best since 1999, when a computer glitch threatened to leave the world living on bartered corn and rainwater. The worst brings out the best in the precious metal:

Gold has spiked to $314 an ounce, from a three-year low of $256 in April 2000.
Mutual funds that invest in gold-mining stocks have soared 37% the past 12 months, vs. a 23% loss for the Standard & Poor's 500-stock index. Investors have poured $650 million into gold funds this year -- so much that some funds, such as Vanguard Precious Metals, have closed their doors to new investors.
The gains have sparked a new gold rush. The U.S. mint sold 48,000 gold Eagles in July, 60,500 ounces in all, up 20.6% from a year earlier.
"July sales were up 50%," says Michael Byrd, president of Austin Rare Coins, which sells gold bullion as well as collectible coins. "We're having a Y2K kind of year."

Fervent gold investors believe the government is desperately trying to squash gold prices and prop up the stock market. "The last thing they need is a gold rush," says Doug Casey, editor of International Speculator, a gold-oriented newsletter. He thinks gold will win out. "Gold is like a coiled spring," he says. He predicts it will top $1,000 an ounce.

Gold is a direct bet against the monetary system: Gold investors figure an ounce of gold is always worth something, even if the government is in shambles and currency is worthless. For two decades, the powerful U.S. economy kept the dollar strong and gold prices low. But lack of confidence in the financial system and the specter of more terror attacks are pushing gold prices up -- and individuals back into the gold market.

Gold dealers report that business hasn't been better since, well, December 1999, when Y2K fears were at their height and gold popped to $318 an ounce.

"Through June of this year, we've sold as much gold as we did in 2001," says Carl Wright, president of International Precious Metals in Brookeland, Texas.

"We've had retail customers buying 200, 300 ounces every other week," says Michael Kramer, head gold trader at Manfra Tordella & Brookes in New York City. "Every few days, we do a couple of large trades -- couple thousand ounces. I don't remember the last time it was this busy."

But most gold transactions are private, so there's no way to tell exactly how much gold has changed hands this year. Privacy is a big reason people buy gold. Cash purchases greater than $10,000 have to be reported to the government, but you can buy an unlimited amount by check. Once purchased, gold can't be tracked by anyone, including the Internal Revenue Service. "Many of my clients' wives don't even know about their purchases," says Kevin Boulais, president of Atlantic Rare Coins in Mason, N.H.

Why are investors racing for gold?

Shaken trust. Clark Peterson, 54, was a public relations officer for a military recruiting office in the Murrah Federal Office Building in Oklahoma City in April 1995, when a bomb ripped into it, killing 168.
"I'm a survivor," he says. He has been buying gold for a couple of years. And the collapse of Enron deepened his suspicion of corporate accounting. "When I see big boys like that go kerplunk, all I can say is that a lot of others have been dishonest with the books," he says. Gold coins have solid value, he says. "With a stock, I'm not in control of how a firm handles itself," Peterson says.

Shaken dollar. For many years, foreign investors rushed to dollar-denominated investments, such as U.S. Treasury bills, when war or bad economic news made the world seem dangerous. But this year, a falling U.S. economy and an open-ended war on terror has forced the dollar lower on world markets, prompting many investors, including foreign buyers, to purchase gold instead.
Shaken savers. Many gold buyers are simply looking for an alternative to the stock market, or the 2% to 5% they could earn in money market mutual funds, bank CDs and bonds. "We've seen a lot of new buyers come in, including my stockbroker and my sister," says Marc Watts of Gaithersburg (Md.) Coin Exchange.
But many newcomers to gold investing run the risk of doing the same thing they did in the stock market: buying just because the price is rising. "It's a funny thing -- they don't want to buy gold when it's at $250 an ounce," says Leon Hendrickson, a gold dealer in Winchester, Ind.

Some think the rise in gold prices comes from a fall in confidence in the entire monetary system, not just the stock market and corporate accounting.

The government recalled and melted its gold coins in 1933. The dollar has been backed only by the government's good word since 1973, when the country came off the gold standard. The value of the dollar today is a reflection of the world's belief in the U.S. economy. When confidence in the dollar is low, people start buying gold. To gold fans, the fall of the dollar and the rise of gold is a long-awaited -- and frequently predicted -- vindication of the gold standard.

Economists and politicians have debated the wisdom of taking the U.S. off the gold standard for decades.

"It was a mistake," says Jack Kemp, a former New York congressman and secretary of Housing and Urban Development. A floating-rate currency system has led to disasters in Latin America and other developing nations, he says. "We need to get a distinguished group together to rebuild the monetary system."

Rep. Ron Paul, R-Texas, says the legacy of leaving the gold standard has been a 30-year bout of inflation manifested in different ways, such as increased debt. "The Federal Reserve is inflating like crazy," he says. His solution -- which he has no illusions about becoming law -- is to legalize gold as an alternative currency.

Few mainstream economists agree with the idea of returning to the gold standard. "It's a stupid idea," says David Wyss, economist for Standard & Poor's. A currency tied to gold means the government can't stimulate the economy in a recession. And just as floating-rate currencies tend toward inflation, gold-based currencies tend toward deflation.

But some deeply distrust the government's ability to manage the economy. To them, gold's ability to protect against inflation has become an item of faith. In theory, gold prices will rise along with inflation. But the price of gold has fallen from $875 in 1980, while inflation has risen an average 3.8% a year.

"Gold languished for so long that it looked like soggy cereal," says Mark Bass, a financial planner in Lubbock, Texas.

Why has gold fallen? Some say the Federal Reserve and other central banks have deliberately pushed down the price to maintain faith in paper currency.

"Government intervention in the gold market was at the heart of the Clinton administration's strong-dollar policy," says J. Taylor, editor of J. Taylor's Gold and Technology Stocks newsletter.

Adds Paul: "There has been a concerted effort by the government to discredit gold."

To newsletter editor Casey, it's inevitable that gold will triumph in the end. "The dollar is an unsecured liability of the U.S. government, and the government is bankrupt," he says. "It's an IOU of nothing." To Casey, gold is the answer because it's always worth something -- and it can't default. His prediction: Gold isn't going through the roof -- it's going to the moon.

Gold fans argue that the yellow metal is good in any situation, even if the economy sinks into a period of falling prices, as it did during the Great Depression.

"Gold is best looked at as a crisis hedge," Casey says. "If your bank won't let you get your money out, it's best to have something of value in your hand."

But gold fans have argued for a monetary collapse ever since the country went off the gold standard. It hasn't happened yet. There's an element of apocalypse in hard-core gold literature. Buy gold, it implies, and the world can fall apart -- but you'll still have your money.

Those looking to gold as a cure for all the world's financial ills should remember that gold can be every bit as risky as stocks. Plenty of people who bought gold at $800 an ounce are still down by 60% -- and even more when you consider what they could have earned in a bank CD in the meantime. Central banks are still selling gold and can push the price down sharply. And when gold prices get high enough, mining companies can reopen mines that were unprofitable when gold was at $260 an ounce, but quite profitable at $350.

Even ardent gold supporters recommend it be used in moderation as a kind of insurance against utter catastrophe.

For example, Taylor predicts the Dow Jones industrial average will plunge to 5,000, and that real estate prices will collapse, too. It would be a disaster on nearly every level -- except for gold. Taylor is selling his house and investing 10% to 20% in gold bullion coins. A financial catastrophe would push up the price of gold enough to offset losses elsewhere.

Nearly all advisers say that gold is best used as disaster insurance, not as your sole portfolio holding. Owning gold does involve special problems -- like what to do with it once you own it, particularly if you value your privacy. In a small town, you can't walk into the bank with a bag of cold coins "without everyone knowing what you have," rare coin dealer Byrd says.

And what if you think your bank will be out of business when you need it most? "Some people bury it," says coin shop owner Watts. "It's kind of weird, to work hard to accumulate wealth and then hide it."

If you hide gold, you have to worry about someone finding it or stealing it. Even if you put it in a safe-deposit box, the cost of storage and insurance will eat away at your gains.

Most coin dealers say that if you buy rare coins, buy them for their intrinsic beauty and collectible value first. Gold investor Peterson acknowledges that his gold bet is more than a little speculation. "If you look at the history of coins, they do shoot up at times," he says. "When they get to the point where they just go wild, you have to get out."

Investors have felt gold's allure for centuries. These days, the allure is its store of value, if only in comparison with the stock market. "I've had farmers, businesspeople, people from all walks of life" as customers, says gold dealer Hendrickson. They might not be able to sell real estate or stocks quickly, but they can call Hendrickson and turn gold into cash. "It's always worth something."

From USA Today no less: The Bull shall lift off in earnest very shortly........

TownCrier (8/15/02; 11:23:57MT - usagold.com msg#: 83068)
Missing the obvious
As reported in today's WGC Daily Gold Market Commentary:

The meeting held yesterday between Anglo American and De Beers with South African government leaders was followed by a statement to the effect that the government would not nationalise any part of the mining industry, nor would it specify target levels for black ownership in the mining industry.

This is a more pragmatic stance than some observers had initially feared when the proposed mining charter was leaked to the press a few weeks ago -- although the government had made clear that it was merely a starting point for negotiation.

The joint press release from the government and the mining companies refers to the need to transform the industry, but equally that it is important "to offer investors complete security and competitive returns".

---end excerpt-----

If it were TRULY "complete security" and "competitive returns" that they desired to offer investors, then they would be cooperatively emphasizing investments in the PRODUCT (gold) itself and not in the COMPANY that merely mines for it among the world's depleting reserves. Think about it.

No, really. Think about it.

Give yourself credit for seeing through the standard haze of the corporate finance machine and governance as usual. Call USAGOLD - Centennial for the kind of assistance and square dealing that you deserve.

Randy

BillinOregon (8/15/02; 11:18:44MT - usagold.com msg#: 83067)
Roger Bently Arnold's Comments
General Comments

Spreads

Even as the equity indices increased yesterday credit spreads continued to widen for speculative and investment grade debt. Most speculative grade debt is now being priced in anticipation of default resulting in bankruptcy. What this means is that they are being valued at what the anticipated equity particpation would be for the bond holders when the company goes under rather than if the company goes under.

On May 15th, 3 months ago, speculative grade credit spreads were at 875 basis points.

On July 23rd, the start of the near term equity run, or bear market bounce, they stood at 1205 basis points.

Yesterday they increased again to 1385. During this same time frame investment grade spreads have increased from 202 to 258.

The marginal cost of borrowing for the 80% of US companies that fall in speculative grade has increased by 250% in just the last 3 months and that assumes they can still access the capital, which of course they can't.

The 20% of companies falling within investment grade have experienced an increase in their costs to a lesser degree but they already have too much debt and aren't borrowing any more.

Companies are being suffocated. The only option left for many of them is to begin firing people and shutting down.

If consumers don't have jobs or income it doesn't matter how cheap mortgage rates or car loans get.

And when the ones that do have jobs catch on they won't spend either.

How long is it going to be before the equity traders realize that the bond traders already decided what the outcome of this is going to be and start racing for the doors like someone just shouted fire in a crowded theater?

The probability of a debt bubble implosion is 100% according to these numbers. The most probable result being a defaltionary spiral.

Could the bond traders be wrong? Absolutley.

But, buying or trading equities while the bond markets are sending this signal is like playing russian roulette with your money.

At the very least equity buyers and traders had better understand what the bond markets are signalling about equities. They are getting ready to foreclose.

Date Index Value* (Credit Spread Level/Divisor) Credit Spread Level(bps) Divisor Duration (years)
08/14 1385.3 922.6 0.66599 4.0
08/13 1378.2 920.2 0.66771 4.0
08/12 1358.6 907.1 0.66771 4.0
08/09 1343.6 923.6 0.68742 4.0
08/08 1315.9 904.6 0.68742 4.0

http://www.spglobal.com/indexmaincredit.html

Bankruptcies by Public Firms Set a Record
By Dena Aubin

NEW YORK (Reuters) - U.S. corporations set a record for bankruptcies this year after US Airways Group Inc. sought protection from its creditors on Sunday.

Assets of publicly traded companies filing for bankruptcy have reached $267.6 billion this year, according to BankruptcyData.com, as accounting scandals and crippling debt toppled some of America's biggest firms.

Assets in bankruptcy year-to-date have now surpassed the previous record, of $258.6 billion for all of last year, BankruptcyData.com said.

Three of the 10 largest bankruptcies ever came this year. Phone giant WorldCom Inc. , with $103.9 billion in assets when it filed last month, was the largest bankruptcy ever, smashing the record set last year by energy trader Enron Corp. , which had $63.3 billion in assets

U.S. 2nd-Qtr Personal Bankruptcies Rose to Record
By Siobhan Hughes

Washington, Aug. 14 (Bloomberg) -- Americans filed for personal bankruptcy at a record pace in the second quarter, figures from the Administrative Office of the U.S. Courts show.

Personal bankruptcies totaled 390,991 between April and June, a 5.9 percent increase from the previous three months and the most for any quarter, the courts office said. That brought the number of such filings over the previous 12 months to an all-time high of 1.47 million.

Americans had a record $7.9 trillion in personal debt, including credit card loans and home mortgages, at the start of the second quarter after borrowing to purchase cars, clothing, and other goods at a breakneck pace in the second half of the 1990s. The repayments are coming due as unemployment is rising amid a slow recovery from recession.

"This is the debt hangover from the 1990s," said Sam Gerdano, executive director of the American Bankruptcy Institute, a research group whose members include lawyers, accountants, and consumer advocates. "At some point you have to pay the bill and if that comes during a period when the economy is softening, it makes it that much harder."


NEMO me impune lacessit (8/15/02; 11:05:14MT - usagold.com msg#: 83066)
JEEZZ !!!
Five minutes ago an TA-analyst on CNBC said that gold could
go to $400.

NEMO


TownCrier (8/15/02; 11:01:10MT - usagold.com msg#: 83065)
Central Bank Insider update!
http://www.usagold.com/centralbank/current.html
Federal Reserve Board of Governors now fully staffed...

Alan Greenspan KBE...

Classic tension between finance ministries and central banks...

Football after banking...

Japanese banknote redesign...

Rudi Dornbusch passes. "When they (Brazil) call 1-800-BAILOUT, just let it ring. Say our operators are busy." [Dornbusch in opposition to the IMF's 1998 bailout of Brazil.]

Click the URL for all the details.

Mr Gresham (8/15/02; 10:09:38MT - usagold.com msg#: 83064)
CoBra(too)
"different board" -- not sure what you read, as I've only had limited time to read and none to post -- but if anything seemed dis-inviting to you, please remember all that goes said, and unsaid, read, and unread in the spaces between posts. The Forum is an impossible vehicle for the perfect communication we all desire, so we must make allowances, and give many benefits of many doubts, mustn't we?

We are all in the room together, we just can't see each others' faces...so I will still see -- ALWAYS! -- a great chair at the Table marked with the name "CoBra(too)"

Sierra Madre (8/15/02; 10:05:49MT - usagold.com msg#: 83063)
Here's an interesting LETTER FROM ARGENTINA

"Is what Brazil got, assistance? Is it possible to live under a debt load such as Brazil's? I am not saying LIVING OUTSIDE THE IMF, but each passing day I like more the idea of developing a country on the basis of its OWN capacities and possibilities.
"Take note that at this time, nobody is too much interested in COUNTRY RISK and yet we are still alive. The lesson was violent and traumatic, but it did us no harm and who is to say that THANKS TO THE IMF, Argentina may not find its true destiny, its road ahead independent of financial needs.
"A little help doesn't kill, but to live indebted is deadly. I'm already hearing of several industrialists who were liquidated, talking again about reactivating their small or medium industry. Today I heard about a businessman, who makes blades for working leather, say that he was looking for a larger shop space and personnel, in view of the increased demand. What do you think?
"The problem is large projects, access to technology, medicines that we don't have and thinks of that sort, but, importing lettuce from Taiwan, fruit from Australia, cheese from Ecuador, always seemed crazy to me. What if we learn to live ON OUR OWN (as Aldo Ferrer wrote?
"As LÛpez Murphy said: "for some time, ten years, we are going to have a HIGH DOLLAR", so trips to Miami to buy T.V.s or cameras is OVER.
"What will it be like to live without debts? How will it be to LIVE OFF OF OUR OWN?
"Luis
"Buenos Aires"

Translator's note: Notice that what happened to Argentina may be showing the future for the U.S. and how its trade balance will be corrected eventually, as well as HOW PEOPLE IN THE US WILL BE PUT BACK TO WORK AGAIN: BY GETTING THE US DOLLAR OFF ITS HIGH HORSE OF RESERVE CURRENCY OF THE WORLD. In other words: going back to GOLD!

Sierra


sector (8/15/02; 10:02:59MT - usagold.com msg#: 83062)
Global: A Deflationary Mosaic
http://www.morganstanley.com/GEFdata/digests/20020815-thu.html#anchor0
Stephen Roach (New York) Morgan Stanley

I continue to believe that the balance of risks on the price front has shifted away from inflation to deflation. The evidence, in fact, is building that more than a casual whiff of deflation is already in the air in the United Sates. Unfortunately, that's exactly what the model of the post-bubble economy would predict -- an overhang of excess supply that could lead increasingly to widespread price destruction. How serious is this risk?
+++++++++++++++++++++++++++++++
Roach paints the deflationary picture. A post-bubble(s) predicament that features a declining general price level.

Gibson's Paradox stipulates [Recall we are now in a six-year forced gold standard due to manipulation] that real interest rates and the general price level vary inversely while on a gold standard.

IF, as Roach indicates, we are headed for deflation and a declining general price level, then EITHER real interest rates OR gold MUST rise to compensate.

Real interest rates are plummeting and the FED simply cannot raise the Fed Funds rate without devastating the stock, credit and mortgage markets... which is the US and World economy. Wait longer and see real rates fall further and further. In reality there is no bottom to the rate fall until the only other countervailing force is applied.

That leaves gold to rise. But it can't be allowed to rise without destroying the Fed's second largest bank JPM due to its outlandish gold derivatives position. The BIS is far worse off with 27, 000 tonnes of gold derivatives hanging.

The Fed is trying to fight hundreds of years of economic data that supports Gibson's Paradox. The Master of the Universe finds himself in a no-win situation:

(1) Raise gold to re-establish Gibson's economic equilibrium and wreck JPM, the BIS and severely damage the FED itself... or

(2) Raise real interest rates and wreck the US and World economy.

Greenspan's fatal personality flaw has always been an inability to make timely decisions. LTCM proved this as he mistook the DEFERRAL of a solution to BE a solution. Now he has come face to face with a decision that cannot be pushed aside.

Do we have a year? A Quarter? A Month? A week?

The answer regarding timing is found instead by asking how much damage caused by falling real interest rates can be accepted. Money will and IS flowing to the historic safe harbors of gold and other hard assets... in spite of the manipulation of corrupt United States cronies. That flow of money can only accelerate.

The above is true if Roach is correct an deflation envelopes the US.






Socrates964 (8/15/02; 09:41:57MT - usagold.com msg#: 83061)
Brazil
Interesting profile of presidential contender - looks like elite is swinging behind Lula. Ciro has also made noises about confiscating domestic savings.

From today's Estado de S"o Paulo (my translation) -- 8/15/2002 p. A12

ëDamn the Market. I'll do what's in my manifesto'

Ciro becomes irritated at questions and a dinner with executives and bankers ends in an argument.

SONIA RACY

Before some 30 executives and bankers gathered at a private dinner in a house in the Jardins suburb in S"o Paulo, on Tuesday night, the presidential candidate Ciro Gomes made another of his grand campaign statements: ëDamn the Market. I'll do what's in my manifesto, that's on my website. I repurchased the debt of the state of Cear· at a discount to face value and never defaulted'.

The house belonged to the executive, Ricardo Steinbruch of the Vicunha group. The statement, uttered at the end of the meeting left the guests perplexed. Ciro was giving a reply to a question from one of the attendees, "What would be required to calm the market".

The candidate's short fuse triggered complaints and discussions throughout the room, while Patricia Pillar [NB a famous actress and Ciro's wife] sitting next to Ciro, tried to calm him saying ëListen! Listen!¥. To no avail. Ciro felt offended and added "I'll cut off my hand before I sign any deal with the bankers". It was at this point that the guests fell silent. And according to many of those present, decided that between Ciro and Lula, they prefer Lula.

ëHe's aggressive, it's in his blood. It's only after he's struck that he tries to tone things down', said one of the guests, according to whom, Ciro showed no restraint in his statements and didn't explain how he plans to implement his economic plan in the light of Brazil's current situation.



mikal (8/15/02; 09:31:08MT - usagold.com msg#: 83060)
@Waverider
Re: Your msg. #83053. Good story, but it fails to mention that a large number of Indians have switched to buying gold in offshore markets, at a much lower cost.

Sierra Madre (8/15/02; 09:17:24MT - usagold.com msg#: 83059)
Operative: STAY ON TOPIC!

STAY ON TOPIC.

Thanks.

Sierra

Horatio (8/15/02; 09:12:29MT - usagold.com msg#: 83058)
Israel ,Jordan,Iraq
It appears the U.S. is preparing troops and equipment for movement to Jordan.I predict Israel will strike Iraq with support from U.S. forces stationed in Jordan.Due to lack of support from Europe and Saudi Arabia, this looks like the most likely outcome ,probably in Oct-Nov period. This most likely will trigger gold prices.

Horatio (8/15/02; 08:56:19MT - usagold.com msg#: 83057)
Cycles
The decennial cycle indicated that the year ending in two as in 2002 has a 80 % positive factor in stock prices for mar-apr period
also for apr-may,a 100 % posive factor for jul-Aug,followed by a 80 % positive factor for Aug-Sept .This is followed by a 100 % NEGATIVE factor in Oct-Nov period and 80 % NEG factor for Nov-Dec turning positive for Dec-Jan by 80 %.
This was followed by NEGATIVE factors for 2003 all the way from Jan to Nov-Dec.In other words a peak will occur in Aug of 2002 followed by very Negative forces for almost all of 2003 for stock prices..
If stock prices are contrary to Gold ,the bottom should be this month August followed by a BIG Bull market for almost a whole year.Stay the coarse.................

Waverider (8/15/02; 08:40:27MT - usagold.com msg#: 83056)
S.Africa says will not nationalise mine industry
http://www.reuters.com/news_article.jhtml?type=search&StoryID=1328878
Snippit:
"The South African government said on Wednesday it would not nationalise any part of the mining industry, after three hours of talks with global mining giant Anglo American and its diamond and gold subsidiaries.

It also said it would not target any percentages for ownership by blacks in the mining industry, which is still dominated by whites. It is vital as we aim to transform our industry that it continues to offer investors complete security and competitive returns," the statement from the mine executives and four senior government ministers said."

Waverider: I don't know how believable this is...maybe one of our South African Goldbugs would comment? TIA!

Horatio (8/15/02; 08:29:13MT - usagold.com msg#: 83055)
Cycles
In 1938 a study was done buy Dr. William Peterson .He determined that the PH level (acid-alkali)of the blood followed a pattern that coincided with the stock market prices for that year.A peak in stock prices occured August followed by crash in sept-oct period followed exactly by PH levels in the blood.
Food for thought......The Ph was effected by weather and barometric pressure 'sun flares etc.It was determined that a percent change in weather was followed by a similar percent change in stock prices measured by the deviation from the norm.
Drought and Hurricanes have coincided by changes in stock prices as measured by % deviation from the norm.

USAGOLD / Centennial Precious Metals, Inc. (8/15/02; 08:27:21MT - usagold.com msg#: 83054)
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