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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.

 

FORUM ARCHIVES
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Archives date back to September 22, 1998


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ARCHIVED DISCUSSION FROM 2/16/1999
All times are U.S. Mountain Time

Phoenix (2/16/99; 23:50:00MDT - Msg ID:2473)
In the beginning,
there is light.

Do YOU see the light?


Gandalf the White (2/16/99; 22:50:51MDT - Msg ID:2472)
WOW -- any more "Lurkers" about in the woodwork ?
Keep on "coming out" and letting loose with the knowledge you "Lurkers" !!! Now we are going to get places much faster. WELCOME "Newbies"
<;-)


Aristotle (2/16/99; 22:13:22MDT - Msg ID:2471)
Quick addition...
I also meant to encourage you, No49, to share more of your stories. You seem to be the Indiana Jones of the Forum, and the air I breathe is crisper with each new awareness of the richness of a fellow's life. "Inspiration" should be added to the daily list of required food groups! Thanks!

Aristotle (2/16/99; 21:59:11MDT - Msg ID:2470)
NORTH of 49, and anyone else that may spare a moment
Excellent!
It is precisely these "trophy hunt" operations that help to reveal man at his very best, pursuing something with a passion that cannot be explained away otherwise as necessary for survival. It is living life for life's sake. To explore that fully would take us quite off topic and beyond the interests that brought us to this site, so I'll put on the table some thoughts in this area as they relate to gold.

Here's a bold beginning..."All men are created equal." If you don't want to take my word for it, I refer you to the U.S. Declaration of Independence. Sure, someone (Socrates?) might play devil's advocate for awhile, but we would only be led to reinforce the original premise. The key word allowing us to agree is "created", because following birth an individual's particular course of development soon reveals little that approaches "equality" among men. Some are faster, some smarter, some artful, some skilful, etc. In no way should this be interpreted as a judgement on what qualities may be good or bad. This statement should help make my point: Civilization is not inherited; it must be relearned by each new generation. We start with equal footing as infants, and as we grow as individuals our concepts of civilization and our rightful place in the world ultimately define our lives. Some among each generation attain a calm, satisfied view of the world--the smallest fraction. Others are constantly beating their heads upon walls. The satisfied fraction are more often than not viewed by others as individuals who march to the beat of their own drummer. There is an easy explanation for this phenomenon.

In a modern society such as we now have, there is a wide margin of safety against anyone's unmitigated demise. As a result, many people are content to simply get by, look for the occasional free lunch, and never really reach for the zest that life has to offer. The nature of our money can be cited as the single largest contributing factor to man's unenlightened malaise. During the developing years for each individual, there are no doubt countless challenges; and the victories, when aptly recognized or rewarded, become infectious. Now, imagine that every single victorious grasping of the brass ring actually leaves you cluching not the prize that you sought, but instead, a wreath of withering leaves or maybe just a ring of smoke. Such is the paycheck at the end of every job, no matter how well done. Sure, you can try to convince yourself that the reward has value, as many people do, and you therefore continue to strive for more. But...you see your savings lose value over time. And...

Under a government that practices wealth redistribution, to see someone receive a form of public charity has an undeniable unsettling effect. The money you strive for is given away such that the reward for nothing is the same as your reward for something...and it was quite painless for the government to do under a fiat system of currency. So painless in fact, that it becomes the easy solution to many of societies problems. Over time, more and more come to expect the free lunch, while those that do continue to work might begin to wonder what is the point of it all...why can't the government simply issue EVERYONE checks so we could all have time to be philosophers, artists and dreamers in a perfect world. (Ok, so you've identified one flaw...the incentive to work remains because the working checks tend to be larger than the charity checks.) Money from thin air, paid in charity, has a twofold debilitating effect over the long term. First, it destroys morale as I've mentioned. It also results in an inflationary increase of the money supply that erodes the purchasing power of the worker's savings over time, leaving him with limited means during retirement, reinforcing his lowering morale, and perhaps requiring him to also join the ranks of the charity seekers.

Don't mistake my words as a identifying charity as a fundamental problem. It is not. As a productive person witnesses public or private charity to a person PAID IN GOLD, the productive person knows that this money was originally hard-won by somebody, and the government is not so apt to wantonly tax hard-won earnings of individuals--they would revolt! Instead, the government would rather have a hidden tax through the inflationary effects of deficit spending in a fiat money scheme. What they fail to realize is the dire effect this has on morale, and on the evolution of civilization over the long term.

Anyone visiting these gold forum pages is surely doing so because as an individual they have independently managed to learn elements of civilization that are not handed out to the rank and file. Despite its shotfalls, America remains a country (as do many others) where you can live under your terms. We ARE on a gold standard. I think I recall an old post by the venerable Aragorn III that suggested we might as easily be on a pizza standard...its all contingent upon what YOU do with your extra earnings. I am happy to step to the lectern and declare that I am living on a gold standard. I never see my salary. It is directly deposited into my checking account. I pay for nearly EVERYTHING with a plastic card, and I write a check to pay that off at the end of the month. Oh, sure, I carry some dollars for the petty expenses in life like taxi fare or a trip to the deli. But what happens with the balance of my account when bills are paid off? Well, I could invest some of it if the risk/reward looked favorable for any particular venture. But here is what I've done for the "enlightened" period of my life...a check is written to someone (such USAGOLD) who can generally be expected to handle the transaction with nary a complaint, and feed this personal gold standard with an assortment of new and old gold coins from across the planet. Amazing isn't it?

You've been created equal...what you do after that is in YOUR hands. Live well my friends. ---Aristotle


Peter Asher (2/16/99; 21:05:01MDT - Msg ID:2469)
Michael, Steve.
Here comes another one of those "analogies". There's an old definition of a split second being the time between the light turning green and the guy behind you blowing his horn. This seems to be the case when there is a sudden reversal in Dollar/Yen. Late last year when Spot gold was climbing through $306. @ 5:15 A:M:, the same thing happened. The yen had been climbing for weeks, the gold chart was gorgeous, and The yen opened sharply lower and there was in immediate sell off . There appears be a "knee-jerk" reaction with the funds when this occurs and they all head for the fire exit at once.

So, maybe we're oversold here and we had a minor selling climax ??


SteveH (2/16/99; 20:34:19MDT - Msg ID:2468)
April gold now $287.20...
See...if you wait long enough it goes back up.

Opinion. So much negative world financial news. Also just got word from highly respect junior-type person who got word from some TA guy, NASDAQ going down big tomorrow. DOW too, maybe. Dell reports worse than expectations (if that is possible).



Richard, Oregon (2/16/99; 19:30:03MDT - Msg ID:2467)
Re: Peter A - Msg #2434
Just a note from a small guy who relates to your views on the "Gang". I can see how stalling an economic crash till years-end would provide the sacrificial lamb (Y2K) for the altar on Wall Street. It's always somebody elses fault, isn't it? (Even though you've had your had in the cookie jar more than once.)

I liken our current situation to an old steam engine barreling down the track. The engineers (our "Gang") are greed and envy. As of late, some of the logs used to fired the old engine are wet, many are very wet. And she's a slowin' down. (Russia, Brazil, LTCM, bonds, etc., etc.) Passengers on this train are those thinking this "Happy-Days" train will never stop, therefore they keep buying. Inertia makes a quick stop (turn) impossible but soon it will. There are signs, it seems we're seeing new ones every day now. Are you ready! By the way, I believe if there is too much time between those very wet logs it will take that much longer to turn or crash! Just my two cents!


Toz (2/16/99; 18:23:46MDT - Msg ID:2466)
TEST
TEST!

NORTH OF 49 (2/16/99; 17:43:42MDT - Msg ID:2465)
Very observant Aristotle
Although it makes little economic sense, I have been envolved in a few "trophy hunts" that had no hope of profiting from the outset. As a matter of fact, I am up to my ears in such a project on Sakhalin Island, Russia, right now. The project I am consulting on has little or no hope of attaining a profitable operation, but---the technology that is being uncovered may well be "guilded" itself. That may be where the money is in the Japan subsea play. The value of the comodity recovered (if indeed there is any) may pale in comparison to the technology developed in accomplishing the project.

No49


Aristotle (2/16/99; 17:00:30MDT - Msg ID:2464)
North of 49
I caught a brief blurb on CNN...never enough info to form an independant conclusion without further investigation. My own guess from the hazy footage shown as gathered by (an unmanned(?)) exploration submarine was that the gold formations or deposits were the result of some gold-bearing geothermal fluids piping out from vents upon the ocean floor...not unlike similar such deposits of other minerals.
Among the sketchy details given, mining would be very cost intensive, as the depth would require robotic extraction of the ore.

If this deposit is verified (AND nearly pure), cost of recovery may not be a determining factor in such an endeavor. Much like reaching the moon or climbing Everest. Someone/many will be ill-content to leave it sit neglected on the ocean floor. That is simply the way man has been wired. Now, would we spend a thousand dollars to pluck a wallet containing $200 from the bed of a lake? Nope.


NORTH OF 49 (2/16/99; 16:32:56MDT - Msg ID:2463)
Volcanic gold
In response to your request for thoughts on Japan's potential windfall subsea volcanic gold deposits, as
a professional rockhound, I've never seen it happen. Diamonds, possibly, due to high heat-pressure conditions.
Alchemy, however, just isn't part of the equation.
No49


Aragorn III (2/16/99; 16:20:44MDT - Msg ID:2462)
Goldfly, my strong-winged friend...
"Goldfly (2/15/99; 20:43:07MDT - Msg ID:2438)
Has anybody here seen my friend Aragorn......?
Hey!! What happened to A3? He predicted a rhino, then a contest,
then....... Nada!
Come on Aragorn, get your two grains worth in there! Tell us what the
April contract will be on Friday!"
-----------------------------------------
As enjoyable as visiting the FORUM would have been, this weekend, alas, I must be content with reveiwing the archives this afternoon. Commitment to a project left me precious little time for anything else...and as you know, a prediction may require much time and thought--else it remains a useless guess.

I predict that you will not be satisfied with my prediction. I further predict that at end-of-day Friday, the COMEX contract for delivery of gold in April will BE (as it ever has) the "betting slip" between counterparties that may or may not have any connection with the metal, but have nonetheless come together at COMEX to wager each on their side of the speculation. And as this speculation walks tall among those few hunching and scrambling quietly for the scraps upon the floor, there can be little doubt as to what activity influences the price. They might just as well be betting upon the weather. And if enough people told you it was dark and stormy, would you cancel the picnic when your own eyes reveal the sun to be shining brightly? Grab your basket and special person; all tables and swings in the park are yours as many people are indeed influenced by the "bad weather on paper".

I predict that on Friday gold will be as it ever has been. Gold. Shining brightly. Who will join with me in trusting their own eyes?

This opportunity is lost when the paper guidance becomes discredited from a growing general sense of departure from reality. The day will arrive when the sunny park is full of visitors, no matter what the "storm on paper" says about the weather. Aristotle had it right. Take this picnic and walk in the park on your own terms.


Aristotle (2/16/99; 14:48:11MDT - Msg ID:2461)
A key quote from International News
"A very strong U.S. dollar. A very, very strong U.S. dollar," said David Jarvis, liability trader at Levesque Beaubien Geoffrion.
*************
Brilliant! It would appear that the news puts focus not upon things that are profound, but rather upon the obvious. Keep it simple. That's good!
Here is an equally obvious notion--"If your dollar is strong, spend it!" Otherwise, you miss out upon the benefit of a strong dollar. No rocket science is needed here, folks. Gold is nearly as cheap as its ever been. Such a time to be a free thinker and to live a sovereign life...on your personal gold standard! Live YOUR life--not the one someone tries to arrange for you to live. Where's the enjoyment in that??


Aristotle (2/16/99; 14:11:42MDT - Msg ID:2460)
Always the easy answer.
The direct cause of this morning's decline in gold price was a sudden imbalance of supply and demand...the sell orders outweighing the buying.

OK. Now, "what was the direct cause of THAT?" we must ask. Could the recent announcement of potentially massive volcanic gold deposits a mile under the sea off of Japan have been a springboard for shortsellers to generate some momentum? That may be likely.

I'm not aware of the national or international jurisdiction of the location of these deposits. If Japan has the claim, you can be sure that they are wringing their hands at this MONETARY DEVELOPMENT.

Any other thoughts out there?

I tried to post this at noon but got called away. I see USAGOLD has posted some related news since. See? Lots of sellers...(lots of fools(?!))


USAGOLD (2/16/99; 13:27:48MDT - Msg ID:2459)
FWN at the Close: One Fund Sold 6000 Lots of Gold at Open
New York-Feb. 16-FWN--An overnight collapse in the
Japanese yen precipitated a steep fall-off in the
precious metals complex today, sources here said.

Stop-loss selling was reported in the gold and silver
futures. And fund selling was reported in these metals,
along with platinum.

"Silver and gold were down mostly on the strength of
the dollar against the yen," one trader said. "But obviously
a lot of sell stops were hit."

He added that one fund reportedly sold some 6,000 lots
of gold in the first half hour to hour of trade.

"The dollar strengthened to 118 yen, and that put some
pressure on the gold," another gold dealer said.

The U.S. dollar is up 3.17 yen for the day at Y118.77.
The greenback surged after overnight comments from Eisuke
Sakakibara, Japanese vice finance minister, who said the
government would accept a weakening yen as a natural
consequence of Friday's credit easing by the Bank of Japan
(BOJ).

The BOJ on Friday lowered its overnight call rate to
0.15% from 0.25%, although it left the official discount
rate at 0.5%.

Also early today, Bank of Japan Governor Masaru Hayami
commented that under current economic conditions, a softer
yen "is a good phenomenon that will revitalize the domestic
economy."

April gold settled $3.80 lower at $287.40. The market
fell as far as $285, with one floor contact reporting that
stops were triggered as prices fell through $288.

March silver lost 21.7 cents to $5.4450.

As was the case in gold, a silver floor trader linked
some of the early weakness to the decline in the yen.

"Then some good trade selling pushed it down," he said.
"There were some stops triggered, and basically a vacuum
occurred. There was very little buying underneath.

"The stops were up around $5.45 to $5.46 this morning.
They just pounded it right down to (a session low of)
$5.31."

Several traders also reported that fund selling
occurred, although one added that he anticipates the funds
to remain heavily long in silver.

Reprinted with permission. http://www.futuresource.com


Gandalf the White (2/16/99; 12:59:16MDT - Msg ID:2458)
Japan goes BONKERS
Wednesday, February 17, 1999
Regulators To Lower Bank-Brokerage Firewalls

TOKYO (Nikkei)--The Ministry of Finance and the Financial Supervisory Agency plan to lower the firewalls between banks and their securities subsidiaries from April 1, government sources said Tuesday. Under a draft plan to be disclosed next month, the MOF and the FSA will propose abolishing a rule that broadly bars banks' securities units from managing bond offerings from companies whose main bank is the parent. With banks still reluctant to expand lending, the government wants to give them more latitude to propose financing arrangements through their brokerage units, hoping to create a regulatory environment that encourages a shift away from bank borrowing and a move toward capital markets. As part of the deregulation, the MOF and the FSA also plan to drop restrictions that keep banks and their securities subsidiaries from making joint sales calls on client companies. Banks and their securities units would be allowed to set up joint branches offering both banking and brokerage services. The plan also aims to make it easier for a bank and its securities subsidiary to share client-firm information not disclosed to the public, requiring only that a client company consent to such exchanges of information. But the financial regulators will leave in place rules prohibiting tie-in sales, in which a bank might require a potential borrower to do business with its securities unit as a condition on a loan. A ban will also remain on the parent bank extending loans to finance the purchase of securities through its brokerage subsidiary.
(The Nihon Keizai Shimbun Wednesday morning edition)
*****
ALL this after the BoJ flip-flops on the purchase of residual long term gov bonds. This is like the old Coke -- new Coke switch -- everything stays the same but changes !
<;-)




Gandalf the White (2/16/99; 12:27:37MDT - Msg ID:2457)
Buena Fe
That was just the poet in you ! I personnally like the "loose" better. BUT either is the same end.
<;-)



Buena Fe (2/16/99; 10:53:13MDT - Msg ID:2456)
Spring Loose!
In kind've a sideways sort've-ah-way they booth make sense.
lose their powers...
loose their powers...
Or should I keep that appointment with the Forum's Doctor?


Buena Fe (2/16/99; 10:47:42MDT - Msg ID:2455)
?*%#@!!
Lose not Loose!


Buena Fe (2/16/99; 10:43:15MDT - Msg ID:2454)
Postulation!
There must be a mathematical equation somewhere that expresses what I am about to state.
When enough souls are able to predict/see a certain reactionary behavior by other souls, it seams that the predictable ones have, or are about, to loose their powers over the "souls who see".


T. Remital (2/16/99; 10:32:58MDT - Msg ID:2453)
Patience
This action today is typical of what markets do just prior to taking off in the other direction-
i would not be surprised to see a big move upwards starting tomorrow--Watch out for mkts.
to go in reverse on wed. Bonds filled part of a gap, gold hit support, dow has low volume on
this rise, japan is being manipulated again...all this is part of the game , GOLD will be the big
winner stay put.....


Buena Fe (2/16/99; 08:57:06MDT - Msg ID:2452)
Peter Asher #2434 (Last night) "Keeping a lid on it"
Peter, I should have gone back and read last nights postings before belching out "Giggles". Your analogy really nails it to the door. (aka Luther) The Golden Questions;
"When, How, What & Where ("If"? oooh.. shudder) will the anticipated capitulation take place?
The collective rambling of all here at USAGOLD will provide, over time, the necessary insights to the "Golden Answers". God Bless MK!


USAGOLD (2/16/99; 08:55:07MDT - Msg ID:2451)
MARKET UPDATE: Much Sound and Fury Signifying Nothing?
MARKET UPDATE (2/16/99): Confusion and conflicting opinion reigned in the gold and silver market as commentators, analysts and traders searched for solid reasons for the big
drop in prices this morning.

Silver, which had led the rally in precious metals last week, dropped by as much as 32˘ while inexplicably the silver lease which had been the engine for silver's rise stayed over the 10% mark. "I think it was the yen, " one trader told FWN. "Heavy fund selling," said another. "There's not anything to go after on the upside," offered another trader. "So we're seeing the market do some consolidation now."

In other words nobody has a viable explanation. The London market experienced something of a selloff with gold down $1.50 and silver down 5˘, but the real drama unfolded in New York at the opening gun.

The following appeared at Bridge News:

"London--Feb 16--The London Bullion Market revealed in a notice today that its Management Committee held a meeting at which conditions in the silver market were reviewed. "While conditions have recently been more active, it is clear that the market continues to trade in an orderly manner. The Management Committee will continue to monitor the situation," the notice said."

Is it a coincidence that the market cratered right after that meeting? What was its purpose other than reflecting a not so quiet desperation? There is little doubt that the silver shorts were feeling some pain up until this morning's dramatic drop. With the lease rates skyrocketing, it has become increasingly difficult for those with forward contracts to fulfill their silver obligations. The fact that the lease rates have stayed high today even though the price has dropped dramatically might indicate that there could have been more said at that meeting than the press has been able to learn. There has been some conjecture that because the latest silver spike occurred almost a year to the day after Warren Buffett completed the bulk of his silver purchase in 1998 and the subsequent rumors about his leasing it, that Buffett could have pulled his silver out of the lease market. Hence the spike in lease rates. Perhaps hopes are rising that Buffett can be persuaded to lease his silver again. Perhaps the spike in rates has to do with silver Buffett wants back that the lessees are having a hard time finding. If so, much rides on what Mr. Buffett wants out of the deal. There are many unanswered questions and much still in the air. It will be interesting to see what happens next.

This could be the silver market's version of the latest U.S. attack on Iraq -- a lot of sound and fury signifying nothing. I would view the drops in both metals as a buying opportunity. Because of the lack of fundamentals supporting the drop and the apparent lack of good reason for it, I am going to go out on the limb and say that it's not for real. Somebody has to buy silver and they are trying desperately to smoke out some metal. Any weak hands out there?

Gold played along with silver today. Both metals have rallied off their lows. March silver opened at $5.73, plummeted to $5.32 and is now trading at $5.43 -- up 11˘ from its low. February gold similarly opened at $291, dropped to $285 and is now trading at $287.20 -- up $2.20 from its lows. We'll update if anything interesting develops.


Gandalf the White (2/16/99; 08:45:59MDT - Msg ID:2450)
Thanks STRANGER for the good news
The Hobbits after searching have found one other bright and shining item, -- the APR Au contract held at the old support level -- 285 (off 6.2 points) and has now worked its way back to the 287 area (only off 4.2 points).
<;-)


The Stranger (2/16/99; 08:36:48MDT - Msg ID:2449)
Hang in there, Boys!
Another vital step in the worldwide reinflation process appears to be falling into place this morning as Japan finally accepts the inevitable. Swallowing their fear of the inflationary consequences, Japan has announced they will monetize debt by buying in more of their own bonds. This is an absolutely necessary act by a country which has tried and failed repeatedly, by relying on fiscal stimulus and mercantilist trade policy, to raise their economy. Boy, what a dead end that has been.
In the VERY short run, more bond buying means higher bond prices, not a welcome prospect for precious metals enthusiasts. But, beyond the kneejerk reaction of today, this is a welcome and totally necessary step in reinflating the world economy. Hang in there, boys. This is what we have been waiting for.


Gandalf the White (2/16/99; 08:30:57MDT - Msg ID:2448)
DUMP Time
WOWERS, looks like the "same ol'e - same ol'e" games ! Dump on SPOT the dog in NY is the only way that THEY can play the game. Note that the PPT started the PREM on the S&P out at above 15 this morning. YES, 15 !!! and after moving the DOW up over 100 points the PREM has settled into the normal range of around 5. Sure looks to the Hobbits as if THEY are really getting worried. My question is: which will be depleted first -- their determination or their money ? Looks as if it would be best to go back to the drawing board and await the rising of tomorrow's sun. The Nazguls are flying high today. Anyone got some GOOD news?
<;-)


Buena Fe (2/16/99; 08:08:57MDT - Msg ID:2447)
Giggles ;<)
www.cnnfn.com/markets/9902/16/bonds9a/ says it all.
Gold and commodities et al, are a small but important side-play to the all encompassing effort/need to keep currencies & bonds/rates within contained parimeters. In my judgement these latest actions continue the trend of escalating desparation by the PAWNS to keep the jenie in the bottle. "Be Strong and of good Courage" it will soon burst, and our world will change overnight.
(I hope its by Friday or I won't win the contest!)

The "jenie in the bottle" represents the Central Banks/Treasury Departments abilities to issue paper IOU's and call it money(a store of wealth).
Keep Well


ss of nep (2/16/99; 06:04:37MDT - Msg ID:2446)
I wonder if GATA can use this
Taken from the gold-eagle forum,

Conspiracy and the Choice of Ideologies - Feb 17 - Kutyn 
(vronsky)Feb 16, 07:26 http://www.gold-eagle.com/gold_digest_99/kutyn021699.html



SteveH (2/16/99; 05:17:32MDT - Msg ID:2445)
April gold started at $291.00...quickly fell to
$290.00 then fought to stay at $289.70 most of the night. Current ask is $289.70.

Shorts=1
Longs=0


el St.One (2/16/99; 02:25:12MDT - Msg ID:2444)
Federal Budget/GOLD
I hear the fine print in the pending budget has a clause that will authorise the IMF to sell 3 million oz of Gold, if enough other nations vote for a sale.
Looks like the impeached one is still a puppet to some very big strings. I will not even guess where the strings lead, probably better off not knowing.


Richard, Oregon (2/16/99; 00:04:35MDT - Msg ID:2443)
Missed it!
Must have been the gremlins stopping my internet provider from working for 3 hours or so and eating that last piece of wisdon I sent about the turning point. Too late! Thanks anyway!

Richard, Oregon (2/16/99; 00:00:27MDT - Msg ID:2442)
My Two Cents
****$293.00****
Welll ,posting problems a night. Quickly I believe it will take more the bonds to stop this Happy Days Train engineered by the powers to be to make this the turing point. Sorry this is short, my first got lost.



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