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ARCHIVED DISCUSSION FROM 7/16/2001
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Black Blade
(07/16/01; 23:47:47MT - usagold.com msg#: 58198)
Suffocation, War or Coal
http://www.dailyreckoning.com/home.cfm?loc=/body_headline.cfm&qs=id=1243
Snippit:
"The world consumes about one billion barrels of non-OPEC oil every 23 days. Just to replace production, we would have to add one billion barrels of recoverable new reserves every 23 days. That cannot be done."
Turning to natural gas, Groppe states, "To maintain total North American gas production, we'd have to bring on-stream every year, total production roughly equivalent to the [total] production that has been developed on the Gulf of Mexico shelf in the last 45 years. This can't be done!"
Black Blade: DITTO! We have doubled the number of drill rigs over the last 2 years and still can't increase production. Yet we continue to build NG-fired power plants. Anyone still wonder why George Dubya is concerned about energy? He doesn't want the economic crash to come on his watch - I think it's too late for that. Good commentary.
GOLD - Cheap Insurance - Proven Protection!
Black Blade
(07/16/01; 23:09:09MT - usagold.com msg#: 58197)
Asia Tanking!
http://quote.yahoo.com/m2?u
"Ladies and Gentlemen, in the event of an emergency landing, remove eye glasses, and tuck your head between your knees. The seat cushions may be used as floatation devices."
Asia coming in for a crash landing tonight. S. America should fair no better tomorrow. Also check out the stock market indices for today's trading action south of the US border. Very ugly.
The Invisible Hand
(07/16/01; 22:47:57MT - usagold.com msg#: 58196)
The significance of Genoa as meeting place for next week-end‘s G10 meeting
Gary North's REALITY CHECK
Issue 67 July 16, 2001
NOT AS BAD AS EXPECTED...
…
0last week's meeting of the G-7's senior economics
ministers. He said that the U.S. economy will grow by 3%,
up from this year's 1.2%, beginning early next year. Other nations' finance ministers were also upbeat. But not
Gordon Brown of the United Kingdom. (Their main meeting
will be on July 20-22. Genoa was the scene in 1922 of the
dismantling of the pre-War international gold standard,
which had kept prices stable for a century. After that, a
phony version, called the gold-exchange standard, was
adopted, where central banks kept interest-bearing debt of
England, and later the United States, instead of actual
gold.)
====
I know that the first and second sentences contain a syntactical error, but that's Gary's writing.
Have CoBra(Too) and Buena Fe perhaps some comments or rather additional information as to whether 1922 will be reversed?
@ Belgian
I should have known better than to disclose my identity in
The Invisible Hand (09/13/00; 21:14:46MT - usagold.com msg#: 36624)
Ja, ik zit inderdaad in d’oemstreken van HK.
Black Blade
(07/16/01; 22:28:13MT - usagold.com msg#: 58195)
Will Argentina spill over?
http://www.nationalpost.com/financialpost/story.html?f=/stories/20010716/619662.html
Confidence spreads in credit market key factor to watch
Snippit:
Reflecting the huge public debt is the annual budget deficit, which is currently running at about US$8.1-billion. The International Monetary Fund set a deficit target of US$6.5-billion for this year as a condition for Argentina's access to a US$40-billion financial aid package. The loan is in jeopardy and the country's financial solvency has now come under attack over fears that Argentina may be unable to meet its financial obligations. As the crisis escalated last week, Argentina's short-term interest rates skyrocketed, with yields on 90-day T-bills and one-year bonds at the latest government bond auction coming in at 14% to 16%, while day rates spiked to as high as 55% annualized levels in overnight trading. In reaction to the crisis, President Fernando de la Rua announced major government spending cuts, such as reducing government salaries and pensions, designed to trim a US$50-billion annual spending budget.
Economic crises occur with some regularity in Latin America and generally have spillover effects. The 1994-1995 Tequila Crisis in Mexico when the peso came under severe attack affected prices and returns in the entire region. Thus far, the Argentina effect has been relatively contained. Argentine stocks have lost more than 24% of their value in July while the Latin America region fell by just under 4%. Virtually every world region lost between 3% and 5%, so I would consider the losses in the Latin America market to be more reflective of world equity markets at this time than the pull of Argentina.
Black Blade: Spill over? I say yes. We "live in interesting times."
Black Blade
(07/16/01; 22:20:06MT - usagold.com msg#: 58194)
Argentina Crisis Puts Trade Bloc at Risk
http://www.latimes.com/business/la-000058178jul16.story?coll=la%2Dheadlines%2Dbusiness
Argentina Crisis Puts Trade Bloc at Risk
Snippit:
BUENOS AIRES -- As Argentina wrestles with its latest economic woes, one unintended victim of the crisis could be trade relations and a possible death blow to Mercosur, the trading partnership that comprises Argentina, Brazil, Paraguay and Uruguay. Born amid great hopes, Mercosur was supposed to provide a regional market for home-grown commodities and services. Instead, critics say, it has institutionalized the instability and inefficiency of its members.
Black Blade: OOPS! The end of the South American NAFTA? United we fall - divided we fall. There has been a lot of wealth transfer between Brazil and Argentina over the years as each economy has taken its lumps. Now both are crashing and there is no where to run. This could get ugly - perhaps as ugly as the Asian Contagion and Russian Bond Default combined. It could very well spill over to the rest of SA and Central America. And like a row of falling dominoes it could be a final nail in Wall Streets coffin. Very "Interesting."
goldquest
(07/16/01; 22:08:55MT - usagold.com msg#: 58193)
test
test
Black Blade
(07/16/01; 22:06:55MT - usagold.com msg#: 58192)
World running out of cheap oil that fuels economies
http://www.chron.com/cs/CDA/story.hts/business/967449
Snippit:
In fact, 1998 may have been the last hurrah of cheap oil. It may also have marked the end of a global boom and the beginning of a struggle with rising energy costs that will never end. Yes, you read that right. Never end. This may not be a momentary cycle or political phase. Rising energy costs may be a major secular trend. It will change how we live.
It should be noted that the authors are not members of the gloom-and-doom school. They were careful to acknowledge alternative sources of oil that are, as yet, undeveloped. "The world is not running out of oil -- at least not yet," they declared. "What our society does face, and soon, is the end of the abundant and cheap oil on which all industrial nations depend." One implication: The energy jolts of the last year could signal that we are about to experience the economic boom of the '80s and '90s in reverse.
Black Blade: A page out of "The Rise and Fall of Hydrocarbon Man." The book mentioned (Green Monday) sounds like it could be interesting. Wonder if the drop in oil to $10.00/bbl a couple of years ago was part of a "Whip-Saw" scenario by Arab OPEC members to make a quick stock profit? You just never know. It would have been quite a coup. And boom in reverse? - Gold as a wealth preservation vehicle? Of course, it is cheap at these prices.
Canuck
(07/16/01; 21:23:16MT - usagold.com msg#: 58191)
@ HBM, Belgian, nickle62, Megatron, Netking
Really enjoyed the 'banter' back and forth today......great stuff.
You read and read until your eyeballs glaze over trying to understand what the hell is going on and suddenly a 'roll' of posts come out making some sense. Good job men.
Over the week-end I spotted the Paul van Eeden story and BOOM! it suddenly makes sense again why I am 'accumulating'.
Half the lies you hear aren't true so it's good to be reminded of something that makes sense.
Waiting for 'Alan Greenspan: Final Act' or Bullion Bank: The Last Bet' or 'Hedged Miner: Over-The -Edge' coming to a currency devaluation near you.
The part that I am getting giddy over is I realize that I have the time (to wait) and they don't. (smile)
Have a golden week.
Canuck.
Tree in the Forest
(07/16/01; 21:09:36MT - usagold.com msg#: 58190)
How the Bilderbergers are pushing the Euro
http://www.tlio.demon.co.uk/reports.htm#most
This article is from 1998 but is still apropos today. It indicates why Thatcher got the boot; she was too independent and didn't commit to the Euro.
The world's most exclusive club wants supremacy in the
judicial and economic fields
20May98 - The Spotlight
By James P. Tucker Jr. - TURNBERRY, Scotland
Although moderately distracted by the new nuclear arms race between India and Pakistan, Bilderberg concentrated on its major goals on the road to world government:
Establishing a global court that would be superior to the U.S. Supreme Court and to those of all nations;
Pressing British Prime Minister Tony Blair to have the political courage to drag his country into the European common currency, the euro;
Pressuring the U.S. Congress into approving $18 billion to make interest payments to international banks which made bad loans to uncreditworthy countries on the assurance that taxpayers would make them good.
The British prime minister was summoned to shuttle back and forth from the summit of the eight industrialized countries held 450 miles away in Birmingham, England, at the same time by design.
Blair was hardly treated as a head of state. He was lectured severely for failing to bring Britain into the common currency, which is to be phased in beginning January 1. Blair assured Bilderberg that Britain would join, but he had to resolve "political problems" because "there is a surge of
nationalism at home."
"You're a Maggie Thatcher in long pants," a German told Blair. This was a crude reminder that Lady Thatcher had been dumped as head of state by her own Conservative Party on Bilderberg orders and replaced with trapeze artist
John Major, for the precise same reason (SPOTLIGHT, May 29, 1989).
After being deposed, Lady Thatcher told The SPOTLIGHT she considered being denounced by Bilderberg a "tribute" because neither Britain nor any country should surrender sovereignty.
"Helmut Kohl (German head of state) never flinched" in pressing his country to join the common currency, the German told Blair. "He may lose this election because of this. You know Germany has a problem with nationalism. But Helmut
stood firm."
Blair turned and walked away. There was much discussion and optimism among Bilderberg participants about a June meeting of the UN in Rome, to draft a treaty establishing a permanent International Criminal Court. Unlike the present World Court, the ICC is to have enforcement power and could impose its decisions universally.
"Will America's nationalists (an expletive in Bilderberg dialect) give us trouble about the court treaty?" asked one.
‘I think not," replied an American believed to be but not positively identified as Casimer Yost, director of the Institute for the Study of Diplomacy, School
of Foreign Service, at Georgetown University in Washington.
NOD FROM SENATE
The American pointed out that in 1994, the U.S. Senate voted 55-45 to encourage establishment of the ICC under the UN. The Senate did so, he said, with the full knowledge that the global court, with judges from (Red) China or other rogue nations, may pass judgment on the United States and individual citizens.
"There was some objections by the American public, but not much," the American said. "Most of them know nothing about it and probably won't." "Unless one of them is sent to jail by the ICC," interjected another. "Yeah, then they will notice," the American said.
The latter exchange was jocular and scornful.
On expanding NATO, Bilderberg participants were impatient.
"The shortest path to permanent peace is to bring everybody in including Russia as fast as practical," said one speaker whose comment met with general approval.
A question was raised about costs.
"Costs, you ask?" the speaker responded. "How much did two world wars, Korea, Vietnam and the Gulf War cost Americans? Peace is far less expensive."
To ensure "permanent peace throughout the world requires a strong enforcement mechanism, which means keeping the expanding NATO intact but under UN direction, for which there is a precedent to which none except rabid nationalists objected," the speaker said.
The "precedent" referred to was UN forces in Bosnia, where American soldiers were issued the UN uniform and served under a foreign commander who reported directly to the Security Council, with the U.S. president and Congress having no role at all.
CONGRESS BALKS
Bilderberg participants were clearly stating that the UN is to emerge into a world government with its own army patrolling the globe enforcing its will. Bilderberg luminaries expressed outrage that Congress did not approve
the $18 billion for the International Monetary Fund to bail out the big banks a year ago.
"How could you let your Congress get so out of control?" asked a Frenchman of an American during informal glass-tinkling. "It was never a problem before."
"Our Congress has a problem we call voters," came the answer. "That's because we have less direct communication," the Frenchman said.
"Leaders of your Congress no longer accept our invitations to attend Bilderberg." "Again, the problem is voters," the American explained. "For years and years, we enjoyed almost total privacy. Now, right-wing extremists stir the voters
up and congressmen have too many questions asked of them."
For decades, such congressional leaders as former House Speaker Tom Foley (D- Wash.), former Senate Banking Chairman Lloyd Bentsen (D-Texas) and others attended Bilderberg. Bentsen continued as President Clinton's Treasury secretary,
but was not listed among this year's participants.
For the past several years, the only legislators to attend were Sen. Sam Nunn (D-Ga.) and a House member but only after each had announced his retirement.
"We need them back, as the IMF problem shows," the Frenchman said. "But how?" asked the American. "Congressmen now consider attending Bilderberg; to be political suicide."
Bilderberg regulars were all accounted for, including David Rockefeller, Henry Kissinger and Evelyn de Rothschild, chairman of N.M. Rothschild & Sons of Britain and Europe.
President Clinton, himself a Bilderberg member, sent his usual assortment of administration officials: Marc Grossman, assistant secretary of state; Vernon Jordan Jr., a top unpaid advisor who will report Bilderberg demands directly to the president; Lawrence Summers, deputy secretary of Treasury; and Christine Todd Whitman (R), governor of New Jersey.
This is Mrs. Whitman's first Bilderberg meeting, which means they have plans for her. After Clinton's first Bilderberg meeting, in Baden-Baden, Germany in 1991, he became president.
Other old-time luminaries present included Chairman Peter Carrington, former secretary-general of NATO; Paul Allaire, chairman of Xerox Corp. and Conrad Black, chairman of the Telegraph of London and owner of a vast newspaper chain, among other global interests.
Black Blade
(07/16/01; 20:59:26MT - usagold.com msg#: 58189)
RE: Old Yeller - Very Good Article - Recommended Reading!
http://www2.marketwatch.com/news/story.asp?guid={6EF7EEB8-A3C4-4C03-A3D2-9B92222A0850}&symb=APC&sid=582
Snippit:
"I don't know if we have the national will to solve it," said Bob Gillon, vice president and analyst at John S. Herold, an energy research firm. "Every time that it appears the immediate crisis has been solved, there's a tendency for the issue to go very far back in the public's consciousness."
Black Blade: This snippit from your posted link really nails it. The problem is complacency when there is no visible problem. Today I heard on the local radio station one of the extremists environmentalists saying that now there's no energy crisis so the drilling on public lands must end (this is in the Coal Bed Methane in Wyoming). People tend to focus on oil and gasoline, however, electricity and natural gas are the real hidden land mines.
Snippit:
Consumers and politicians point to a multitude of new power generation facilities going into development in the next two or three years that appear sufficient to meet the growing energy needs of the world's largest economy. Yet with gas supply unlikely to expand quickly enough to fuel those plants, Americans may be facing years -- not just few quarters -- of occasional blackouts.
Black Blade: Exactly. "Red" Davis - governor of Kalifornia, has gleefully extolled the virtues of being "Green" and now the big bad energy companies are on the run as he single handedly put new power plants into service. Of course they require fuel - oops! And now several out-of-state natural gas and energy providers have sworn off doing business in the state. There will be real problems if a heat wave kicks up this summer. Look what happened when Las Vegas sold power to Kalifornia only to have their own blackouts because they over sold - again - oops! The economy is vulnerable. The danger is not addressing the problem by burying our heads in the sand.
Gold insurance is beginning to look more and more prudent all the time. Old Yeller - Thanks for the post and cheers!
Cavan Man
(07/16/01; 20:31:06MT - usagold.com msg#: 58188)
SteveH
If what you report as was stated at Kitco is true then, IMO, it would be consonant with the A/FOA "message". Gold mines nationalized either outright, vis a vis taxation or, in this reported instance, swapped for US Treasuries; all variations on the same theme. "Political will" is the tail that wags the dog. Let's see if the dog hunts. Until the Euro is able to settle oil, I'd rather be driving a Titleist.
GFD
(07/16/01; 20:14:24MT - usagold.com msg#: 58187)
A New Russian Gold Currency?
My brother and I have had a long, ongoing discussion about gold over the years. We recently discussed the news article (below) about Russia adopting gold coins as an alternative currency. I would like to share his comments on this development with you.
------
ST.PETERSBURG, RUSSIA, JUL 9, 2001 (A&G News via COMTEX) -- The gold coins minted in the 20s are now a legitimate means of payment along with the coins minted after January 1, 1998. As a result, Russia obtained a new financial tool, capable of becoming an alternative of a dollar. The gold pieces of the bank of Russia have a higher degree of liquidity than collectible coins also minted by the bank of Russia. Firstly, paragraph 149 of the second part of the Tax Code allows the VAT exemption to the operations involving the gold pieces. Secondly, the Central Bank (CB) intends to regularly quote the gold pieces. From the CB press-release it becomes clear that commercial banks will be the first ones to receive precious coins from its deposits, and will make regular deals with the clients based upon current quotations.
-----
The problem with the "Western" view of Russia is that we in the west think of it as some "poor cousin" in the east. In fact, Russia sees itself as neither "Western" nor "Asian". Throughout it's history it has been torn between allying its identity with the West and Asia. Peter the Great made the first major push to swing the balance to the West by building St. Petersburg - his "Window on the West". Stalin and some of his successors tried to swing the alliances to the East (China, Middle East etc.).
The fact of the matter is that Russia has looked to the west for technology, while it has relied on its eastern frontiers for the commodities that have paid for the technology and made it (or at least some of its citizens) rich. The markets for the eastern commodities have been the traditionaly been the west.
Commodities have been the thing that has made Russia great in the past. First it was furs traded to the European courts that funded Elizabeth and Catherine the Great's massive "modernization" of a still medieval Russia. Siberian gold funded Alexander the 1st and his push to defeat Napoleon and build an Empire. And Eurasian Oil - of late, has provided the means for many a Nuveau-Boyar.
Eastern Empires recognized that to become great you needed trade - and for trade you needed a mechanism for trade payments. The muslim empire was the first to come up with guarantees written on paper (that were enforceable by law) and this tool alone fuelled the most rapid expansion of an economic empire the world has ever seen. (The expansion of the Muslim Empire took under 100 yrs!!) This lesson from the east is not lost on the Russians. However, to their dismay, the US Dollar (and hence the US Economic Empire) is the defacto trade standard. Monetary policies created in the latter day Imperial Capital of Washington DC can be used to keep the "poor eastern cousins" in their place. No matter how hard and diligently the Russians work to become an economic power - a stroke of the pen in the USA can cause it all to come crashing down.
With the introduction of the "Chevronetz" it has created a mechanism independent of the west and the sometimes malicious treatment it has had to suffer under its hand. It now has a unit of trade under its own control. The east will be more than happy to trade in gold. After all, the Chinese love it and the Mullahs of the near east cannot but condone gold's use - as the Koran commands - as the only true unit of trade.
Call it the "St. Petersburg Tea Party" if you will. A small incident at first glance - but the first blow in a fight for independence. Perhaps the Russians masters have decided it is time to take what they have and - as Peter the Great once prophesied - "show our asses to the West".
This - in the long term - is really big stuff.
Hill Billy Mitchell
(07/16/01; 20:03:11MT - usagold.com msg#: 58186)
Belgian @ # 58178
Fine Sir,
I certainly do agree. It is of minor importance, these quests for a bottom. You are good to let me go on in such a way without saying enough of it.
About those gold funds which you occasionally follow: - I am of the opinion that those funds have little or nothing to do with physical holdings. There is no money in it for the fund managers. The fake moves here and there are to keep from losing the OPM in order to perpetuate the churning for the profit of the managers. They have no profit motive in physical metals. Just like all funds, the the eventual certainty of conflct of interest will arise. When that conflict occurs you can bet that the MGR'S best interest, commissions, will not defer to the OP's. This alone may account for their inconsistent decisions.
As to FOA and the political unfolding, I sense only ridicule from his corner on the subject "never say die" physical advocates. That trail seems to have evolved more into a diversion lately. Admittedly it is a winding path that must be trod but detours need not be a part of any quest for truth.
My opinion in this matter is of little consequence; however, and I do not want to put out the idea that I am not interested in what FOA has to say. Right or wrong his view should be given full consideration. It is sad that we Lilliputians have earned the disdane of Another, so much so, that we no longer really hear from him in his own words.
The WA announcement, I believe, scared a few intermediate sized players, those not inside the tent, and their reaction of fear of the unknown caused a knee jerk spike which has now only put these types into a coma. They will die the death when the big one hits. My take is that the road runners will never hit the ground. Enough about the lighter side. Next time maybe grim and dim will be in order for my post.
Also the last two spikes WA and the one lately did get FOA so excited that he seemed to think something was going down, even possibly the big one, causing me to suspect that he nor his mentors are in the tent. I was not fooled by the last one and will not be fooled by the next one, for if and when do not matter to me any more. All that matters is that I follow the the physical road. Being wrong is not the end of the world but steadfastness in conviction leaves one who is wrong in the end with a clear conscience.
HBM
PS: Never again will I call the broker for coin quotes in the heat of a spike when premiums and spreads are rediculous as I did when WA was announced. Fool me once shame on you. Fool me twice shame on me. I speak with forked tongue in cheek.
megatron
(7/16/01; 19:26:36MT - usagold.com msg#: 58185)
Emergency room in Latin America
"What happened to heem"?
"He was gored by a bank"
megatron
(07/16/01; 19:24:03MT - usagold.com msg#: 58184)
Pamplona, with a twist
There could be a new tourist attraction in Latin America;
The 'Running of the Banks'!
Old Yeller
(07/16/01; 19:14:28MT - usagold.com msg#: 58183)
Time for the ol'tradition;the bank run
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AO1OHmBUgQXJnZW50
Hopefully they'll be buying gold.
SteveH
(07/16/01; 18:05:38MT - usagold.com msg#: 58182)
Did you all see...
the post on Kitco today that spoke of the Fed and Treasury having been the major buyers of future-in-the-ground gold from major hedged US mines. In return for the future gold they provided US Treasury Bonds. They then use this gold to sell down the gold market and potentially bolster the equity markets and the mines use the money to develop more mines?
Buena Fe
(07/16/01; 17:29:01MT - usagold.com msg#: 58181)
Hubba Hubba.........here we go!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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=AO1NOLRSZV2Vla2x5
ALERT-Bond/currency destruction ahead.....take detour to gold!
07/16 16:27
Weekly Treasury Bill Sales Rise to Most in 5 Years (Update1)
By Liz Goldenberg
New York, July 16 (Bloomberg) -- The U.S. sold $13 billion of six-month Treasury bills today, $1 billion more than announced last week, and the biggest bill sale in five years.................
....... The Treasury will have to borrow $46 billion in the quarter ending on Sept. 30 instead of paying off $57 billion, as it originally anticipated, said Ward McCarthy, an economist with Stone & McCarthy Research Associates in Princeton, New Jersey.
``The sharp deceleration in tax receipt growth will result in the largest quarterly revision to Treasury financing on record,'' he said. McCarthy expects the government to raise as much as $90 billion by selling Treasury bills, using some of the money to pay down debt maturing in two to 30 years..............
Go GATA GO GOLD
Old Yeller
(07/16/01; 16:53:46MT - usagold.com msg#: 58180)
Looks like Black Blade...
http://www2.marketwatch.com/news/story.asp?guid={6EF7EEB8-A3C4-4C03-A3D2-9B92222A0850}&symb=APC&sid=582
Is writing for CBSMarketwatch now.Interesting how these crises seem to ebb out of public view so quickly.On the other hand,they don't go away,just surprise when they return in a scarier incarnation.
Thanks to BikerBear for the link.
slingshot
(07/16/01; 15:55:50MT - usagold.com msg#: 58179)
Belgian Msg# 58167
Speaking for this Lilliputan, if the price of Gold declined it would only accelerate the buying of physical. Your statement as to there is no profile for the average small goldholder is true if you look at it from a Giants point of perspective.
The small investor has only a snapshot of what is happening globally. Many rely on word of mouth,trends and maybe stroke of luck.
Fortunate ones find their way to USAGOLD and educate themslves to the gold market. Order replaces chaos and understanding replaces fear when investing in PM's.
Now for my profile. I see gold coins being brought.
My dealers case is aways different by amount and size of coins. He has been out of 1oz. coin at times.
May I add silver rounds are moving also.
I hope this is happening all over the place.
My guess is by the time the Paper Giants wake up, The Lilliputans,(small time investors) will have them tied up with their golden ropes of accumulation.
Slingshot
Belgian
(07/16/01; 15:29:07MT - usagold.com msg#: 58178)
@ HBM - 250$ POG bottom
Sir, I am in full uni sono with your fine philosophical approach of the matter in its various aspects, described by you. Exchanging toughts about this particular POG bottom is only a miner academic excercise and you surely do agree, that it is of minor importance for our shared LT vieuws.
Another aspect on this 250$ figure, is that we are missing too many reliable figures (statistics) on exact exchanges and consumption (industrial) or recycling of physical gold.
And as long as Physical Goldinvestors keep hiding their real intentions...the market can surprise us all with unexpected moves either way. But we both seem to have learned to live with that.
The WA announcement was (is) indeed a piece (big chunk) of the political part of the metal. But it is a two sided knife. Of course I've choosen the positive one but "theoretically" the negative one can be brought into existance as well. The collectivity can signal a total sale for instance. This to justify my statement of Gold, has no bottom or top. But as I mentionned, pure academics and far away from pragmatics.
And I do agree with a load of pragmatic reasons to accept this 250$ bottom.
It is the political aspect of Gold that FOA is unfolding and that is so confusing because the factor "time" is causing nervousness and demand for confirmation. I must admit that the "doubt" result, does work on me. I'm definitely not a Giant.
And what is bothering me in some way is the following : the few Gold Funds that I occasionally follow in their open communication, lack some consistancy in their acts towards the accumulation of physical gold, proportionate to their communicated convictions.(confirmational evidence)
I do realize that bringing this aspect into the open is somewhat delicate and I want to stick strictly to the rules of our host. Perhaps someone else has more diplomatic skills to bring this on the surface.
Have a nice day.
Gold Trail Update
(07/16/01; 12:42:08MDT - Msg ID:58177)
The Gold Trail Discussion has been Updated
The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
Hill Billy Mitchell
(07/16/01; 12:36:16MT - usagold.com msg#: 58176)
Belgian @ # 58156, # 58157, # 58160, and # 58164
Sir, on the matter of $252 POG bottom etc., I would like to use the Black Blade method if you don't mind. If this offends in any way please let me know and I will not use it with you in the future. By referencing your posts I feel that any lurker or poster with a real interest in this discussion would go directly to your posts and read them thoroughly and thoughtfully, an action which I highly recommend as your view is very well formed and offers much:
Snippit - Post # 58156: - "…Take a very deep breath and relax: - *** GOLD HAS NO BOTTOMS OR TOPS ***…Are you afraid or feeling uncomfortable with the impact of mining costs, against this perspective of enormous disproportionate 60.000 tonnes paper generator and 10 tonnes of newly mined gold? The impact is an absolute minimum and very limited in time. The hedging comedy is only adding to the pamperization….All this is supervised by Rand adjustments (costs) with the purpose of staying into the gold mining business for the next 100 years. With these arguments, I'm trying to relativate strongly, the impact of mining costs and amount of added new gold to POG for the future…"
HBM: - Gold has bottoms and gold has tops. We just cannot predict where they are. The cost of production and replacement are watched because they are factors no matter how rather insignificant they might seem at present. Based upon your attempt to anticipate the impact of these costs on future POG, we are in complete agreement here. More on my position of $250 bottom later.
Snippit - Post # 58157: - "…The whole mining strategy changes dramatically as soon as investors in physical gold decide that their wealth needs to be adjusted to reality…Sir HBM, it is all in the paper history, that our logic thinking efforts are hopelessly in vain…There is only one (ONE) alternative to optimize our risk reward position. Call CPM and discuss different strategies with the honorable gentlemen MK…
HBM: - Indeedd the paper history is a very short one vs. the physical history. The vanities of our logical thoughts in the area are, as you say, hopeless, but only in the sense that "all is vanity and vexation of spirit". Wisdom is the principle thing yet we are encouraged "Get wisdom and with the getting to also get understanding." We are, I think in agreement here also, for the prudent see danger and prepare but the fool passes on and suffers hurt. You have offered the solution well as you intimate that the only one (ONE) alternative (safe route) is to accumulate physical.
Snippit - Post # 58160: - "…Present misevaluations indicate a POG=300$ expectation. Don't interpret this as if gold production is leading POG. No the art of mining is following POG, profitably…HBM, I honestly don't know if your 250$ POG was a bottom…Underneath the comedy capers of the global pamperization, lies a power play. Giants have hundreds and hundreds years of age and therefore, time is not as precious as it is to us Lilliputians like moi and Auspec…
HBM: - Again we are in agreement as I do not know and admit to not knowing what the bottom or top of anything is. Yet I follow some strong teaching which yet to fail me. Physical history and paper history says that cost of production and availability matters because of the threat of demand for delivery. History says that production costs strongly affect the bottom for commodities or anything, which comes on line for availability as supply through the process of production. Above ground supply has been around for a long, long time and has been more significant as factor in the supply of gold more so than deep storage gold for a long time. I understand that the present paper manipulation is unprecedented but one must one must not ignore the fact that there is nothing new under the sun and that things are as they have been and all things which have failed in the past will fail in the future as per "Rich and wise old Solomon". Poor and wise old Solomon, please offer your thoughts. There is a bottom somewhere and I just happen to think that the bottom in this case is related to production costs and met its match at the $250 level. Supply and demand for gold are part of the mix from any and all sources. There is no question that paper is one of the determining factors, the most powerful at present, but no more so than is supply an demand of currency a great determining factor in the price of all goods and services. The supply, the demand and the medium of exchange all must be considered as they all have affect upon price equilibrium. Repatriation of the dollar will do to the U.S. citizen what the Reich Mark of Weimar Germany did to the patriots of Germany. God help us all.
As concerning my firm conviction as to $252 being the bottom for gold, I did make it clear in my post # 58126 that I hoped that I was wrong, when I said, "I have maintained that the $252 POG was the bottom and talks of $200 and $190 gold simply will not occur. I hope that I am wrong, for if short sellers force POG that low we will be afforded a short period of time to accumulate more per fiat unit and when the pressure created swells the short covering of the massive amounts of short which were required to force POG that low would finally bring an end to a short side of the market until we "patient ones" will have finally discovered what tremendous measure of the wealth accumulated by holding physical has really been all along."
Snippit - Post # 58164: - "…It is futile at present to make any price projection. There are no references or anchors. You, humbly me and the Giants are deciding on the valuation. The Pamperers only decide on the price. Permanent confettization has to fade away before we can begin our search for an appropriate valuation reference…"
HBM: - I believe that this agrees with my above statement also, "…finally bring an end to the short side of the market until we "patient ones" will have finally discovered what tremendous measure of the wealth accumulated by holding physical has really been all along…" does agree does it not, with your contention that we cannot know until "permanent confettization has faded away".
Snippit - Post # 58164: - "…Goldphile Leuschel was trapped (as myself) in LINEAR THINKING! Our time frame is too narrow because we are mortals and would like to enjoy the results of our efforts with earthly pleasures. Modern times...we want it all and we demand it now! Are we good enough to carry that millenniums old store of wealth?
HBM: - Sir I can assure you that I have been freed from that trap, "want it all and we demand it now! Are we good enough to carry that millenniums old store of wealth?" I quite agree that it is a trap. I am no longer operating under the assumption that the confettization will end in my lifetime. I expect that it will, (54 years old) but do not really care. My goal is to restore hope for my grandchildren should God not chose to bring this world to an end prior to the final move to reduce my grandchildren to the status of complete and unquestioned slavery. My accumulation is no longer for my benefit, save for conscience sake, but is for my future offspring. In the long run my grandchildren are not dead and the future is not now.
Sir Sierra has made the point clearly pointed out the de facto situation in the USA, in saying, "The U.S. Constitution is DEAD. Has been dead for quite a while. Forget invoking the Constitution." Yet I will never give up and will invoke the constitution from a prison cell if need be. I am among the sovereign in the United States of America and will be until my dying day. Usurpers, governments in the U.S. are not de jure sovereigns yet. I am not by myself in that we will not give up, though we are few in number. No other peoples have been where we are as no other peoples have experienced our sort of freedom and justice and liberty for all. The constitution is not dead because it is in our hearts. God forbid that we let it die with our bodies. We will pass it on along with our weapons of gold and silver and indomitable spirits. With this perspective I answer your question, "Are you afraid or feeling uncomfortable with the impact of mining costs, against this perspective of enormous disproportionate 60.000 tonnes paper generator and 10 tonnes of newly mined gold?" with strong, "No I am not". I am immensely grateful for the opportunity afforded me to put my lineal descendents in a position of hope at these ridiculous prices.
I understand that this is perspective unique to citizens of the USA and would not be of much interest to those around the world who have not ever known freedom as we have enjoyed de facto in the past or de jure as in the present.
Very respectfully,
HBM
miner49er
(07/16/01; 12:25:27MT - usagold.com msg#: 58175)
Invisible Hand: Re: #58163 - Ponzi Scheme
Sounds like the issuance of government debt. You loan them money, they pay you back with money they get from the next round of lenders (and what they can't seduce out of potential lenders, they extort in taxes). Only thing is instead of promising ridiculous returns, they pay the poorest returns, but promise security to make it worth your while.
Additionally, while Ponzi was out on bail, he just couldn't help himself, and set up a fraudulent Florida land scheme basically selling lots that were, let's say, endowed with significant water-frontage...
Gotta hand it to these guys...
miner49er
(07/16/01; 12:23:16MT - usagold.com msg#: 58174)
USAGOLD: Re: #58170 - Your commentary about this Administration being of a "different stripe."
Ok, Mike... I wasn't going to post anything for awhile because of time, but I'll throw out a quick one here. You mention that this Administration is of a different stripe and character. To this statement in principal, a hearty "Agreed!" However, I think this Administration realizes it is not by any means operating from the position of strength it would like.
We have already witnessed a number of turnarounds and backtracks from the early and rather candid comments they made about the economy, and the strong dollar. I don't believe this was duplicitous, as much as being brought into a fuller awareness of how precariously the house of cards really is balancing on a tight-rope over Niagara in a windstorm.
I think that this really is a matter of national security, and that things are being done out of consideration for protecting national interests. As much as this Administration probably philosophically does not like to intervene in the markets, it is also pragmatic enough to know what it can reasonably expect to accomplish, given the hand it was dealt. As such, certain sectors will be sacrificed simply because of a perceived "lose-lose worse" situation. I don't really believe O'Neill really wants to destroy the U.S. Manufacturing sector, but if it's a choice between losing and losing worse, they will have to go for now. This will be true of those holding contrarian investments that bet against a continuing U.S. Bull. Sort of like, "Sorry guys, nothing personal, but..."
The issue at hand IMHO is not that things may be different because of the lack of a Bush-blessed intervention initiative, but whether any such initiative at this point can work at all. This is why I think one point that needs to be addressed in all this is that of the currency war. Many have discussed this here in the past in many ways. My take on it that I have written about a few times is that the critical goal is to render the Euro stillborn, or at least have it die in infancy. Without a viable alternative to the USD as a world reserve currency, the US has then purchased breathing room in which a responsible government may work at fixing things (to the degree they can be corrected), or an irresponsible one, at further abusing them.
As this is considered warfare, anything is possible, and all things are disposable. I wrote this way back last September about the dollar, the price of oil and Europe:
"They will try to keep oil high (but not too high) and hope to eliminate the Euro competition by destabilizing their economies (but not too much) with expensive oil. The thinking here is that if the US can keep the US$ strong (but not too strong), and the Euro weak (but not too weak), we will be able to sustain higher oil prices (though with pain and suffering -- but not too much), while Europe will not, because the pain and suffering will be worse (but not much worse)."
If all else (where "all" = a mind-boggling array of considerations from JPM's swap book, to war in the Middle East) goes as planned, or at least a manageable status-quo, the U.S. belief is that it can achieve its goal of permanently relegating the Euro to a second-tier currency. Whatever this will mean as far as long term outcomes is up to pure conjecture, but as a desperate faction in a desperate situation, the visible goal will be achieved, and this will be construed as better for the U.S., than worse.
Thus, I don't think George Bush & Co. can help but interfere in the markets, and I think they will fully justify it from the perspective of protecting national interests.
Additionally, if what we have of the public accounts of the LTCM workout are anywhere near accurate, the Fed seemed to be more in the weak position of the parent of a long-spoilt child, now grown and incorrigible, and mollified only through appeasement. While the Fed clearly carries a lot of authority, have they the power anymore to stop the tide from washing ashore much longer?
With LTCM it seems that the banks that gathered to figure out how to raise funds to do this, were hardly in the spirit of fraternal concord and goodwill, and that only the suggestion that the Fed would help ensure adding liquidity, helped finally bring enough money to the table to bring it all off.
Who knows who or what is breaking as we speak. Who knows how powerful the Fed or U.S. Treasury is perceived by insiders in this go-round.
What do I think this means for gold? If anyone has read this far, and cares to know my opinion, I think there is still nothing like following the ancient paths, and that there is really nothing new under the sun. Holding physical gold discreetly, and accessibly always has been, and always will be the finest way of storing wealth.
Thanks Mike for the forum! Still the finest around...
Best regards,
miner
Centennial Precious Metals, Inc. / USAGOLD
(07/16/01; 12:18:08MT - usagold.com msg#: 58173)
Hard assets... Easy access!
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Belgian
(07/16/01; 09:19:16MT - usagold.com msg#: 58171)
Giants...
Gold Giants, desert kings and princes, Rothschilds and other dynasties, naughty boys ŕ la most recent Slobodan M. with his 700 Kilograms of physical. How much of total above
of the 25.000 tonnes are they gerating ? And how much of it is optimized with derivatives against the parts that lay idle ? Not that we really need correct answers to this questions but just to put everything grosso modo in some kind of perspective. And why not taking the most recent example of Slobo with 700 Kg. Was he percepted as a "powerfull" man ? Does he corresponds with the image of what we percieve as a "Giant" ? Don't think so.
Hey, wait a minute... 700 kg for a mini Giant (Slobo)...that must make 2.000 kg for an adolecent Giant (Moboetoe/Marcos and other naughty boys)... and let's make it 5.000 kg for the adult Giants (Princes)...and + 5.000 kg for the Kings...all making up for the 20.000 tonnes (out of 25.000). (for amusement only figures).
Point is that taking 1.000 tonnes in one go must be possible by at least one of these Giants. Especially with a 20$ profit on desert crude and 75 million barrils a day.
In contrast with the small and frightened ounce/kg holders, these Big boys have no fear and do optimize their holdings through the 900 tonnes/day, gold paper mill at LBMA and Comex.
They don't just sit down and await till heaven comes on POG and have all the time in the world. They just smell that exceptionnal opportunity of ridiculous low valuations and even enjoy the party. How many of them have dangerous (optimization) derivatives on their physical holding ?
Are they inter-related to avoid surprise attacks by undisciplined co-holders ? Are we entering inside the beast with these suggestive questions or is it to far from reality ?
Are there much alternatives left with reasonable risk/rewards for these Giants as to leave POG where it is and not be tempted for further accumulation ?
I'll use some fundamentals from Invisible Hand (bedankt):
Corporate profits in perspective : apples with apples...
'66 = 18% of GNP >>> ATH from the golden sixties (expansion)
'74 = 9% of GNP >>> Benji...
'82 = 7,5% >>> oeps, Benji's holding...
'91 = 8% >>> we made it...
'97 = 13% >>> hey, was that it...
'00 = 10% >>> don't worry...
projections for 7%...
Not precisely a shool example of a trend but the '66 versus '97 highs is what is confirming my intuition that the recent growth (natural growth) was much less "expansionist" than the one experienced in the golden sixties. Golden..humm, yadayada, standard brrrrgrrrw.
Is this a possible reason why some illuminati pretend that that Big expansion is still to come, through linear thingking from that 18% - '66 number ?
Garden pauze and fresh air.
USAGOLD
(07/16/01; 09:06:40MT - usagold.com msg#: 58170)
Today's Commentary & Review: Deep Doo-Doo, or Don't Cry for Me Chase Manhattan
http://www.usagold.com/Order_Form.html
Ed. Note: Below is a portion of today's Commentary & Review available normally by private password only. You can gain free access to this (almost) daily report on the gold market (and all that affects it) as well as our widely read hard copy newsletter, News & Views: Forecasts, Commentary & Analysis on the Economy and Precious Metals by going to the link above or calling USAGOLD's offices -- 800-869-5115. Available to current and prospective clientele in the United States, Europe, Canada and Australia. If longevity and growing readership are the test, these may be the best reporting services on gold available anywhere. Thank you for your interest.
------------------
7/16/01
In Brief:
Today's Action: Gold greeted the week with an early Monday gain as cautious investors moved to quell portfolio blues. As the summer doldrums continued to grip all markets including stocks, bonds and gold, the specter of debt problems in South America -- a perennial malady -- reappeared, this time with a vengeful ferocity. Argentina appears poised to default on it external debt to the tune of $155 to $189 billion depending on whose estimates you want to believe and in so doing take the rest of Latin America and a good chunk of Wall Street down with it.
In times past, South American default has appeared in the markets with the same consistency, commonality and inevitability of the tropical storms whipped up in the part of the world and sent careening toward Florida. But it's not the orange groves of Florida that need to duck at the moment. Instead Wall Street is the target heading for cover. In times past, all a discreet international banker had to do in such instances was retire to a quiet office and make a somewhat breathless phone call to D.C. and the fix-it -bail-out wheels would be set in motion.
But this administration is of a different stripe -- a different character. It does not like to intervene in the market's natural processes. It is infreered that if one must take some lumps, well, one must take some lumps. The recollection of the elder Bush's "deep doo-doo" comment latches onto the mind. Meanwhile, Alan Greenspan thumbs through his file drawer for the "Impending Moral Hazard" speech.
So we enter the week with a major international financial crisis brewing. Argentina has already sold its gold, its bonds and drained its currency reserves. The cupboard is bare; there's nothing left to loot from this particular treasury. Incipient default sings quietly in the background: "Don't cry for me, Chase Manhattan. The truth is I never left you."
I'm sure we will hear clear words of reassurance from both Argentina and Wall Street this week, but none of us know whether or not this is the one that will make the history books a la Credit Anstalt, or that some other event down the road will be the event that sends this monetary system careening into th ether. No matter. I strongly recommend a re-read of "Why Gold, Why Now" at our Daily Market Report page. Argentina is symptomatic of a deeper seated problem that tells us this is not the end of the road but somewhere in the middle -- and its getting rougher with each mile traveled. It tells why a portfolio diversification into gold makes sense in an environment like this one. MK
Cavan Man
(07/16/01; 09:03:11MT - usagold.com msg#: 58169)
Hello to Mssrs. Wanninski and Kemp et al
The gold carry trade, extreme forward sales in the context of mis-managed hedge books in concert with reckless speculation in physical gold proxies including derivatives have rendered any discussion of "setting" a higher gold price moot. In addition, if I may be so bold as to ask: why are we talking about "setting" a higher gold price?
A significantly higher gold price might well wreck the current global monetary system and significantly damage the financial system. Perhaps that is why there is talk of "setting"?
We are in the proverbial "trick bag". You are fighting today's battle with weapons, strategies and tactics from the past. In WWI, the English bled their country white making similar mistakes. Now is the time for leadership, NOT politics. Avoidance of pain does not hasten the cure. IMHO
The Stranger
(07/16/01; 08:29:28MT - usagold.com msg#: 58168)
The Spector of Deflation, By Robert Novak
http://www.townhall.com/columnists/robertnovak/rn20010716.shtml
From the article:
"It turns out that Jude Wanniski, the iconoclastic supply-side consultant, was right in his diagnosis. He has predicted for nine months that repeated interest rate cuts by the Federal Reserve Board and President Bush's tax cuts would not revive the economy. Nobody in authority wants to admit it, but Wanniski's warnings of dire economic consequences appear validated. "
Belgian
(7/16/01; 07:55:12MT - usagold.com msg#: 58167)
About Giants and Lilliputans
Starting with the easiest part, the lilliputans. What is the state of mind of modest Physical Goldholders with a few ounces to some Kilos ? How are they reacting on the "store of wealth" talk with their gold exchanged for much more paper than the present 268$/ounce ? And how much of the +/- 25.000 tonnes of gold is in hands of small holders-investors ? We leave jewelry lovers out of it because they purchased it for the pleasure of beauty in the first place.
The main problem is that there is not such a thing as a general profile for the average small goldholder, globally.
Asians and westerners do differ substantially (culture) and
makes it difficult to destill a universal gold marketing campaign. But what happens when highly motivated investors see a declining shareprice of the company they have been chosing on a fundamentel value basis ? Exactly, they have a very strong tendancy to accumulate more of their particular favorite whilst price declines. Does the same action takes place with physical goldholders ? Or do we all have different reasons for holding gold ? Hello WGC, isn't this something for you to comment on ?
Is POG's price behaviour paralysing these million potential ounce/Kilo accumulators to such an extend that they don't dare to accumulate any further ? Of course the majority of these global lilliputans don't have a clue on what is possibly going on in the goldmarket and will never decide to accumulate with the intention to corner the paper market
or make physical more scarce. Most probably they are intended to join in when all sails are set and the Giants blow the wind.
Coffeetime and Giants later.
US_Army(RET)
(07/16/01; 05:52:26MT - usagold.com msg#: 58166)
Internal dollar support mechanism (On conspiracy-)
Turnaround (07/01/01; 04:28:10MT - usagold.com msg#: 57276)
Turnaround…
Having just returned from "travels" and while browsing "archives" found your msg. re. Below…
You write: On conspiracy-
"Conspiracies come in different flavors and types. The simplest is the true conspiracy: a group of men and/or women gathered together in secret to plan a coordinated course of action…. But there are other kinds of conspiracy that may not usually be given that name. The Japanese planning of the attack on Pearl Harbor was a true conspiracy when viewed in isolation…and…
It would be very interesting to find out, if possible, what Yamamoto and his co-conspirators were thinking as they planned this attack. Did he really believe the five-digit code, now called JN25, was not breakable? Did he think the torpedo-bombing exercises went unnoticed, that an entire fleet could be assembled in Tokyo Bay and depart across the Pacific undetected? Was he watching the shifting of American personnel and materiel during 1941? Did they work through war game scenarios to see where the American provocations were leading? This should have tipped him off."
-------------------------------------
On my bookshelf is a copy of "The End of the Imperial Japanese Navy" by Masanor Ito (English trans.) which is a excellent account of what was in the minds of the hearts and minds of the Japanese Leaders and Naval commanders at the start of the war and years leading up to it. Great account of courage, rivalry and fatal overconfidence…from the perspective of the other side…
If interested, should be available (in paperback) at one of the big "used" book web vendors…Powell's/Alibris…etc.
Respectfully,
SLD
LeSin
(07/16/01; 05:46:58MT - usagold.com msg#: 58165)
Malaysia Launches Gold Coin & "The Beat Goes On & On"
http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=22244850&ID=cnniw&scategory=Metals+%26+Minerals%3APrecious
Gold coins to be launched Tuesday
Source: New Straits Times
Publication date: 2001-07-14
Arrival time: 2001-07-15
MALAYSIA's gold bullion coin, the Kijang Emas will be launched by Prime Minister Datuk Seri Dr Mahathir Mohamad on Tuesday.
The coins, minted by the Royal Mint of Malaysia, are available in denominations of one, 1/2 and 1/4 ounces.
As at July 12, they were trading at RM260 (1/4 ounce), RM520 (1/2 ounce) and RM1,040 (one ounce).
Gold's liquidity and acceptability are particularly important in times of crisis and may even be more important than its rate of exchange with paper money at such times, said a market player.
Gold bullion coins are popular with investors because they combine intrinsic value with artistic beauty.
Among the advantages of having it in any investment portfolio are the stable rate of exchange in prices, no credit risk and being internationally accepted, he said.
Although in recent years gold has been viewed as a poor investment tool, in ringgit terms however, the price of gold increased significantly during the economic crisis as a result of the ringgit's depreciation and its subsequent peg to the US dollar, he said
Belgian
(07/16/01; 05:29:23MT - usagold.com msg#: 58164)
HBM / Nickel 62 / Invisible Hand - part IV
To all : sorry for the repetition but GOLD has no bottom or top as long as there is ink and paper ! It is futile at present to make any price projection. There are no references or anchors. You, humbly me and the Giants are deciding on the valuation. The Pamperers only decide on the price. Permanent confettization has to fade away before we can begin our search for an appropiate valuation reference.
Goldphile Leuschel was trapped (as myself) in LINEAR THINKING ! Our time frame is too narrow because we are mortals and would like to enjoy the results of our efforts with earthly pleasures. Modern times...we want it all and we demand it now ! Are we good enough to carry that milleniums old store of wealth ?
Leuschel (BBL-bank, now ING) was also strongly biased towards gold, because his Bank has a big say in SA Harmony goldminer. As a conservative Value player he missed the mania run on the SMs from 1995 onwards. But this does not mean that his analyses are still correct. He only missed the gigantic paper fun. (invisable hand: your post about that eccentric stock rotation theorist was great stuff BTW- zitte gij in hongkong of daar ergens ?)
Auspec (#58144):most probably I'm going to disappoint you and I hate it. I've changed my vision on goldproducers on a substantial part of it. A result of intensive FOA-ization.
No Sir, no indoctrination but critical insight and convertion to, or almost total physicalization.
Is it difficult to find 250 tonnes when the WA-onners are offering 400 tonnes a year ? Who has been drying up those tonnes of Argentina's tears ? Faites vos jeuw messieurs...and just call if any of these 25.000 tonnes of private holders got shaking hands and is prepared to exchange some of his yellowing stash. Why the strong focus on UK sales when the Swiss have 3 times more for sale and changed from their BIS dealer ?
The CB sales in perspective : 5 years at 400 tonnes/year sales is 2.000 tonnes out of 32.000 tonnes. Isn't it a master move to sacrifice 6% (2.000 tonnes) of your wealth at give away prices to meet urgent obligations when you have a quasi certainty that the remaining 94% (30.000 tonnes) will be valued at a 4 figure price ? Are these 2.000 tonnes of WA gold providing the opportunity for the paper clowns to organise the perceptual panic ? What the hell is 2.000 tonnes over 5 years meaning in the pool of 60.000 tonnes non jewelry gold ? Sailboats need wind to sail and sheep shavers need sheep. It is the divine holders of physical gold who have the right to decide when/how and how much they want to value their (!) gold. Let us try you and me together to imagine we are Giants. Wouldn't it be much easier to understand why and how they are doing it ?
Dinner is waiting (no colloidal gold on the menu :-)))
Thank you nice people.
The Invisible Hand
(07/16/01; 05:15:20MT - usagold.com msg#: 58163)
What is a Ponzi scheme?
http://www.sunday-times.co.uk/
From the business section of yesterday's London Sunday Times:
What is a Ponzi scheme?
THE Ponzi scheme is better known in Britain as a pyramid scheme. This is an investment fraud that draws in people by promising ridiculous returns. Early investors are paid with money from later investors. The funds are never invested in any productive assets but are simply paid out to people already in the scheme.
The operator must continue to attract more and more investors to pay a return to those in the scheme. The system inevitably collapses and later investors get nothing.
The Ponzi scheme takes its name form Carlo Ponzi, an Italian immigrant who moved to Boston in 1919 and devised a scheme that promised to make money by trading vouchers in the European countries devastated in the first world war. As money came in from new investors, Ponzi used it to pay "dividends" to earlier investors.
When the scheme collapsed, Ponzi was arrested, convicted and deported back to Italy.
Hill Billy Mitchell
(07/16/01; 04:41:17MT - usagold.com msg#: 58162)
Belgian @ # 58156, # 58157 and #58160
Sir,
I will need to digest your responses as a unit.Sorry about your server trouble last night. Your efforts and thoughts are much appreciated.
Very respectfully,
HBM
Hill Billy Mitchell
(07/16/01; 04:36:00MT - usagold.com msg#: 58161)
MarkeTalk @ # 58152 Don't Cry for Argentina!
Sir, Please find the following snippits to your post:
"… on bailing out Argentina. According to Paul O'Neill, Treasury Secretary, it is not going to happen…But the strange thing is that no expert expects Argentina to be able to do anything BUT DEFAULT--long term, of course. I am reminded of what John Maynard Keynes said about the long term: we are all dead anyway…With U.S. interest rates already at levels equal to "official" inflation figures, Fed Chief Alan Greenspan does not have much room to maneuver. He used the interest rate lever last time. This time, I suspect, he will just print billions of dollars in bank guarantees and hope that no one will notice."
Sir,do I understand you to say that you do think that O’Neill is being less than straightforward and that he intimates that the U.S. will not be directly involved in a bailout? Are you saying that default will not occur in the short-term and that the experts, so-called, are implying by taking the position that Argentina will default in the long run that default is not going to happen this time around. In his context J. M. Keynes was defending his theories on fiscal policy and exposing the fact that his concern did not include grand children. I take it that when you alluded to Keynes’ statement in conjunction with the predicted long term default that you interpreted the so-called experts to be saying that in the short term Argentine default will not be an option. If I have understood you correctly and I think I do, then you, good sir, have in my opinion, Nailed down the situation.
We do not know what method will be used but Argentina will not default at this time. That the U.S. is involved directly in this next bailout may be disguised. What we do know is that, as you have clearly pointed out, certain very important banks are overexposed and that overexposure will be protected. I tend to think that you are right in predicting the printing press method this time (the smoke screen will probably be IMF rhetoric). That however would require concerted action, though not visible, involving both the Treasury Department and the Fed. This would expose the fact that O'Neill has become either a liar or a puppet or both. That he is now both I do not doubt but the exposure would confirm my current opinion of O’Neill, that he was compromised in short order and that he is now under total control. I think he came into his present position with his integrity in tact. I expect that he will eventually resign as he has no stomach for these things in the long run (smile). Of course he is no William E. Simon who, in my opinion was lily white but he is a man of natural integrity and deserves our compassion in contrast to a Rubin or a Greenspan, neither of which have an iota of concern for my grandchildren.
Very respectfully,
HBM
Ps: Your point about the parity of interest rates with the "official" inflation rates was in my opinion the clearest observation yet to show all of us what the rock and the hard place is in Greenspan's case. The rock would be the low interest rates and the hard place would be the real, as opposed to the nominal, rate of inflation. Long bond buyers are now in control of future Fed actions. As you say he will probably print this time around.
Belgian
(07/16/01; 04:26:19MT - usagold.com msg#: 58160)
@ HBM part III
Sorry for breaking up in parts, but I lost the complete text last night and want to avoid it. And please take my passionate post with some salt, due to the exiting content of your question.
TA, sorry TI (technical interpretation- smile FOA) of POG and goldproducers is telling us nothing about Gold's fundamentals. At best it provides some insight (with enough of luck) in the short term possible paperprice moves. Present minevaluations indicate a POG=300$ expectation.
Don't interprete this as if goldproduction is leading POG.
No the art of mining is following POG, profitably.
The minus 200$ and the 600$ target will start a (perceptual)live of their own if we are going to repeat it more often on a broad basis. If the new (hum) Barrick wants to launch a perception torpedo...all they have to do is simply suggest (whisper) some renewed hedging intentions and whoooooops here we go . My point : it has become an infant abrakadabra game to influence any market price on this entire globe. Your serious and genuine cost considerations are obsolete in this obscene casino. Canuck (and others) also points at the same obscenety in global dollar speculation (sorry FOA, indeed Gambling).
We are repeating this gambling mantra ad nauseum and run the risk of not having positioned ourselves in time with
enough transferred saved confetti. Watched a documentary (BBC) on the Rothshields dynasties, last night. They accumulated Real Tangible wealth, transferable to all generations to come and visible displayed in their 40 castles around the world. An instructive evidence that "wealth" needs to be stored in timeless tangibles.
HBM, I honestly don't know if your 250$ POG was a bottom.
There is 25.000 tonnes of physical gold in private investors hands. How much paper do you guess they can create around such a Giant stash ? And aren't they smarter in doing so as the 32.000 tonnes of collectivity gold ?
Or do these Giants have the intention of teaching the bureaucrats and would be gamblers a golden lesson ?
Gentlemen, please, never ever, mess around with our gold, if you please ? Goldproducers (some of them) are related to some of these Gold giants. Yes indeed it is a very small world out there. Fellow forumers, is it true that nothing seems what it is ?
Can we reasonably expect that one of these 25.000 tonnes goldholders are going to tell us what they planned ? Let's us all have LOL. Underneeth the comedy capers of the global pamperization, lies a power play. Giants have hundreds and hundreds years of age and therefore, time is not as precious as it is to us lilliputans like moi and Auspec.
Theoretically, miners can mine at extremely low POG, by consuming the bulk of their flexibility instruments (high grade ore reserves and dumps). No idea where the breaking point for mine closure is situated. But more and more mines are closed on care and maintainance and replacement costs (+ aids costs) don't appear in book-keeping anymore.
Of course this can change drastically overnight. But a higher POG does not mean higher gold output. Remember the relationship with jewelry industry.
part III
nickel62
(07/16/01; 04:22:25MT - usagold.com msg#: 58159)
Belgian I think your perspecitive is very valuable to understanding the real problem..
Whether or not we want to accept it, the world financial class has decided that physical gold is a disposable part of their financial machinations. They realized that it stood in the way of their own fiat/credit driven system and have decided to dump/sell-off/lease all of the Central Banks of the world gold before the price completely tanked. What else would you or I have done in the same situation. They are and have been these last ten years simply doing what all insiders with information do: they have been front running the realization that the total supply was not just mining output but also their own disgorging from the monetary hoards of the central banks. This should be almost accomplished now. But that is what has been keeping gold buried. The new equalization point of gold is somewhere around $260/ounce US. If you are a South African gold miner your currency must adjust or your mine and your country go puff. Forty percent of foriegn exchange in South Africa is gold exports I believe. Therefore the currency has no alternative but to lower the costs of the gold mining industry in SA or watch it become non-competitive. The same might be happening right now with the US mining industry as the energy prices in Nevada make the squeeze all the more intense on the locals.
The Invisible Hand
(07/16/01; 04:20:15MT - usagold.com msg#: 58158)
Roland Leuschel's missing link
http://www.tijd.be/articles/dossiers/20010702/tijdnet16440146.ihtm
Belgian,
Goei verlof g’ad?
As some posters may not know, one of what was then one of Belgium's top 3 banks (now the banks have merged and I don't know anymore which are the biggest) used to have a German investment guru named Leuschel. Now he's retired, but he's still writing a monthly(?} column in Belgium's De Financieel Economische Tijd newspaper.
I want to thank you for having provided the missing link between Leuschel's analysis and gold ownership
The last time Leuschel mentioned gold was in October 1999. In his June 30, 2001 column he's reiterating, like he did in his recent columns, his advice to own not gold, but real estate. He doesn't speak any longer about gold (Why? I don't know.)
As a lunatic who learnt gold's value through Harry Browne's (and Ayn Rand's) writings, I checked in Browne's books and he's saying that if you want to invest in real estate, the money should come from gold budget (Browne divides, and I simplify, the ideal portfolio into 25% stocks, 25 % T-bonds, 25% T-bills and 25% gold) because real estate would do well in similar circumstances as the circumstances in which gold would do well.
In yesterday's msg#: 58116, you have demonstrated why Gold should be chosen above any other tangible (real estate), thereby showing how Leuschel's analysis justifies gold ownership.
Thank You.
Belgian
(07/16/01; 03:35:50MT - usagold.com msg#: 58157)
@ HBM part II
The fragmented goldproducers have adapted to POG with all the flexibility tools available. The rise of the hedging sub culture is partly the result of following the speculative gambling fashion (trend) that will be named the Trojan horse in post factum history reflexions.
Conservative SA miners have strongly opposed the early signs of hedging but they lost their authority and production dominance. More on that later.
2.500 tonnes of newly mined gold yearly is servicing the gold-industry (jewelry) where POG doesn't matter at all !
They just alter the karats in the jewelry and satisfy the demand. Miners only worry about staying profitable and able to replace the mined ounces in order to stay in busness as long as possible, whatever the POG. Their fortunes are solely based on Physical Gold Investors who judge the value of gold. The whole mining business can only play with Gold's price perceptions. IMO a regrettable waste of time.
The whole mining strategy changes dramatically as soon as investors in physical gold decide that their wealth needs to be adjusted to reality. They think in terms of ounces and not in grams of confetti. At the gas station a fill is 2 or 3 ounces to be vaporized. And the miners can't explain the world's confetti generators how much effort it takes to get these 2 or 3 ounces out of the dark deeps.
Sir HBM, it is all in the paper hystery, that our logic thinking efforts are hopelessly in vain. Just do the same excercise for any listed company and the past price mania in proportion to the conservative valuations and risks of entrepeneurship. Extreme overvaluations against extreme undervaluations as the result of...yes, Sir...Global Vegas, where the organisers of the biggest global gamble contest
ever remain the permanent confetti collectors. Ponzi,ponzi,ponzi...maxima ponzi.
There is only one (ONE) alternative to optimize our risk reward position. Call CPM and discuss different strategies with the honorable gentlemen MK.
part II
Belgian
(07/16/01; 03:00:44MT - usagold.com msg#: 58156)
@ HBM # 58126
Sir, allow me to overlap this reflexion with posts from Auspec (58144) and Canuck (58147).
You : Mining costs and POG projections ?
Take a very deep breath and relax :
*** GOLD HAS NO BOTTOMS OR TOPS ***
It took me 20 years + this forum and FOA to become radical affermative on this conclusion.
Argumentation (condensed): one of the FOA pillars under his theory is that Values are Pamper-Priced. A sub-culture without limits. Worse than a Benji-elastic. 900 tonnes of daily confetti gold circling, as only vulptures do, around the daily carcasse of 10 tonnes Physical.
2.500 tonnes mineproduction + 25.000 tonnes private investment gold + 32.000 tonnes collectivity gold (total= 60.000 tonnes) do create (generate artificially) the paper circus around 10 tonnes of daily physical spectator.
(give and take a bit on these non dogmatic figures)
Are you afraid or feeling uncomfortable with the impact of
miningcosts, against this perspective of enormous disproportionate 60.000 tonnes paper generator and 10 tonnes of newly mined gold ? The impact is an absolute minimum and very limited in time. The hedging comedy is only adding to the pamperization.
The art (not science) of goldmining lies in the ability of staying flexible. Profitable mining and reserve optimization against God POG. Mixing the different ore grades and aboveground dump recycling (1 gr/tonne with heap leaching) whilst on the permanent look out to replace the mined ounces with new reserves. On this aspect, I only can modestly opinion on the South African (SA) situation in general. There are proven reserves for another 30 years and probable reserves for the following 50 years. Confirmation to be found in Johannesburg (Diagonal Street) of these very conservative estimates.
Ore grades of this replacement reserves are fluctuating in a wide range from less than 1 gr/tonne to + 10 gr/tonne.
Availabilty fluctuatates from surface to 5 Km of dept !
All this is supervised by Rand adjustments (costs) with the purpose of staying into the goldmining business for the next 100 years. With these arguments, I'm trying to relativate strongly, the impact of miningcosts and amount of added new gold to POG for the future.
part I
nickel62
(07/16/01; 01:57:26MT - usagold.com msg#: 58155)
Need for more letters to Congress!
GATA ACTION PLAN - TIME TO FOCUS ON TREASURY SECRETARY O'NEILL
Sunday July 15, 2001
It struck me last night to watch a CBS interview of a broker who was fired at Donaldson Lufkin & Jenrette - probably because he objected to the firm's hypocritical and anti-customer policies. The story was about the growing furor over the millions of people that lost a great deal of money due to Wall Street analysts and brokers touting internet and hi-tech companies in which their own firms made a killing by underwriting the IPO's of many of the companies. The conflict of interest could not be more obvious. The rest of the story was about these same brokerages plugging high tech firms all the way down until the investor had lost 80% or more of what the broker kept telling him was a great choice of investments. Then, near the bottom, the firm downgraded the companies!!!!
The CBS interview ended with the ex-broker, who has started his own firm, saying you can't trust most of the investment analysis coming out of Wall Street if there is a conflict of interest.
HELLO GOLD WORLD - WAKE UP
The mainstream gold press gets almost all of its information from the bullion dealers who have an enormous presence on Wall Street and in other important financial centers around the world. These well meaning reporters are being sucked in to a MUCH GREATER DEGREE than their associates who reported on the Internet boom two years ago. The importance of the conflict of interest is that much greater because we are talking about gold disinformation that may affect the entire financial system. The reporters are being fed pabulum by various bullion dealers and Wall Street investment houses to fend off serious analysis of what has transpired in the gold market these past many years. The irony is that most of bullion dealer employees talking to the gold market reporters probably have little clue as to degree of the manipulation of the gold price. Most mainstream gold analysts or traders are just talking the party line handed down to them from senior management, who are the REAL culprits in this gold scandal.
One of the most pitiful state of affairs I can think of is that is takes TRAGEDY or SCANDAL for the mainstream to correct obvious wrongs and for the truth to come out officially. One has to only reflect on:
*TOXIC WASTE
*TOBACCO
*FIRESTONE TIRES
*CLINTON'S INDESCRETIONS WITH SO MANY WOMEN and LYING TO AMERICANS ABOUT IT UNDER OATH
There are so many more examples, but the main thrust of going down this road is that the evidence that something was obviously very wrong in all these matters was there all along. Smoke was billowing for a long time. Only the BIG MONEY and POLITICAL POWERS kept the truth from surfacing. The sublimation of the truth cost many lives and caused considerable consternation - all because it was in the interests of big money to maintain the status quo.
The same kind of crowd is operative in the gold market for their same self-serving greedy reasons.
It is time for US to change the pattern for we can do so. The gold market collusion and fraud is doing more damage in the world than any of these other scandals, if one takes into consideration the unnecessary harm done to the economies and people of sub-Saharan Africa alone.
The latest GATA ACTION PLAN is a simple one. The past few days I have been speaking with Catherine Austin Fitts, who is the former President of Hamilton Securities Group, former Assistant Secretary of Housing during the first Bush Administration, and a former Managing Director and member of the Board of Directors of Dillon, Read & Co. Inc.
As the former number 2 at HUD, Catherine knows full well how Washington works. What I took from our conversations is that Washington is a process driven system. There is a process that government officials follow with appropriate parties. Red flags go up when normal "process" is not followed.
GATA is requesting that Americans from every state write their Senators and Congressman to ask them to obtain answers to some very straightforward questions from Treasury Secretary O'Neill about America's gold. For the Treasury Secretary not to answer these questions to Congress is a violation of the "process" and of his duty to openly disclose and communicate what his fellow Americans have a right to know.
Catherine went on to say that the only reason that the Treasury Secretary would not answer such basic questions that GATA has posed is that there is something to hide. As a result of recent discoveries and due to the fact that Mr. O'Neill has not responded to Senator Lieberman and others who have queried in GATA's behalf, it is clearly not unreasonable to assume that something is amiss with America's gold and something is being hidden.
Therefore, we must up the ante and press further on to put considerable pressure on Treasury Secretary O'Neill. There is a very important reason to do so. It has been virtually impossible for 31 months now to even get GATA mentioned in the mainstream U.S. press. Nobody will touch it because of WHO we are taking on. The other reason is that while the basic thrust of our message is easy to convey, the support for our allegations is extremely complicated and often very technical in nature.
Therefore, Catherine Austin Fitts suggested that to make it easier for the press to write about what GATA is alleging, we should make Treasury Secretary O'Neill's refusal to answer the questions THE story. That is something easier for the press to deal with, is not complicated and they do not have to antagonize the big money banking crowd in an article.
Included in GATA's plan is to request that all those receiving copies of letters sent by Congressmen or Senators fax them to me at 214 522 4432 or Chris Powell at 860 649 8878. We will add them to the ones we already have and as soon as GATA receives enough of them, I will go to one reporter after another at the Times, Washington Post, White House Press Corps, etc, until I find one that wants to delve into this issue. An issue that will be worth a Pulitzer Prize for someone if handled in the right way and BEFORE the gold price explodes.
There are other tactical maneuvers in the works after I have bundled all of the letters sent by Congress, but that must be kept on the QT for the moment.
If you want to help and live in a foreign country, GATA urges you to write Secretary O'Neill directly to turn up the heat. That would be much appreciated.
Our ACTION Plan is well underway. To give you some idea of what is being done and what kind of letters are going out, I have assembled some samples to make it as easy as possible for you to help us clean up the gold mess:
July 16, 2001
Senator Max Baucus
Chairman, Committee on Finance
511 HART SENATE OFFICE BUILDING
WASHINGTON DC 20510
Dear Senator,
I believe that your committee has the oversight for the deposit of public moneys and therefore would be in the best position to answer my questions and concerns.
It has been my understanding that the citizens of the United States have entrusted some 261.5 million ounces of their national gold to be held in trust by the Department of the Treasury that is controlled and administered by Congress. The status reporting of these assets is reflected monthly at the Financial Management Service / Department of the Treasury Website: http://www.fms.treas.gov/gold/index.html .
Reporting of the 261.5 million ounces of gold through August 2000 on the above Website was quite straightforward as can be seen by viewing the August report. A significant change was made on the September 2000 report that can also be viewed on the Treasury's Website. Over 54 million ounces were switched from the "Gold Bullion Reserve" category to "Custodial Gold Bullion", without footnote or explanation, reportedly held at the U.S. Mint at West Point, New York. This amounts to the apparent loss of gold ownership of over 20% of the total U.S. gold reserves previously thought to be part of our national asset base. "Reserves" obviously connote ownership while the connotation "Custodial" refers to taking care of another's property. The 48 million plus ounces at the U.S. Mint at Denver, Colorado continued to be reported as "Gold Bullion Reserve". This reporting was both before and after the September change of reclassification of gold at the U.S. Mint at West Point, New York and no other "Custodial" positions for any other location have ever been reported.
To further confuse the issue, the categories of "Reserve" and "Custodial" gold have both been eliminated as of the May 2001 report, also available for viewing on the Website. Both categories were consolidated and are now categorized and labeled "Deep Storage Gold" – whatever that means. Therefore, I would appreciate an explanation as to whom we are the custodians for this 54 million ounces of gold. Why do we no longer own this gold, and when and why did Congress authorize this apparent liquidation of national gold assets, as I'm sure you and your constituents would also like to know.
Additionally, independent audits are not only prudent but also mandated by "rule of law" for public entities such as General Electric. As much as Jack Welch is revered, he would not have survived if General Electric had not had outside annual, independent audits performed for the past 46 years. Yet, it is my understanding that this is exactly the case of our gold reserves that are held primarily in Ft. Knox as well as other locations. It would be prudent for Congress to "invest" in regularly scheduled independent audits of our gold reserves as one has not been performed since 1955 as it is always best not to "let the fox guard the hen house" and to "follow the rule of law".
I thank you for your time and would appreciate your answers to these time critical issues.
Sincerely yours,
Dennis B
San Diego, CA
Dennis went on to give GATA supporters further assistance on how to locate appropriate members of Congress and their address':
Libraryspot.com is the site I used to find all of the addresses of the Senators I wrote to. It also lists their phone numbers and e-mail addresses. Lists are by name and/or state. The site to the "government" level is
http://www.libraryspot.com/government/
The next level is to the legislative branch from which you can go to the House or Senate members as well as committees and who the members are and so on through the site.
http://www.libraryspot.com/government/legislativebranch.htm
-END-
GATA Treasurer/Secretary Chris Powell chipped in, as he always does:
I've updated below the letter I sent in April to Senator Lieberman and Representative Larson (Connecticut). The changed part is Section 6, about the reclassification of the West Point gold; it now reflects that gold's second reclassification.
cp
* * *
Dear Senator/Representative:
I am concerned about the U.S. government's policy toward gold and particularly about evidence that the government has been surreptitiously manipulating the price of gold.
For three months now, an organization I support, the Gold Anti-Trust Action Committee, has been trying to get the U.S. Treasury Department and the Federal Reserve Board to answer some questions about these issues. I would like answers to these questions too, so could you, on my behalf,pose them to the Treasury Department and the Federal Reserve and let me know if you get any response?
Here are the questions:
1) What are the "gold swaps" cited in the minutes of the January 31, 1995, meeting of the Federal Open Market Committee?
2) What "gold swaps" have been made by the ESF, the Treasury Department, or the Federal Reserve in the last 10 years? Whose gold was involved? What other parties were involved? What is the status of these "gold swaps"?
3) What was the purpose of these "gold swaps"? Do these "gold swaps" facilitate the lending, leasing, or sale of gold by other parties? How did these "gold swaps" come about? What does the United States gain from them? What becomes of gold that is "swapped"?
4) Were these "gold swaps" ever made public or reported to Congress? If so, how? If not, why not?
5) Have these "gold swaps" encumbered or otherwise put in jeopardy the gold reserves of the United States? If so, in what amount and to what extent?
6) Why has the gold at the U.S. Mint at West Point, N.Y., been reclassified this year from "gold bullion reserve" to "custodial gold" and then to "deep storage" gold? Is this gold still owned by the U.S. government? Did its ownership change at all by virtue of its reclassifications? If so, what is the authority for its having left the possession of the U.S. government? Who else has owned the gold by virtue of its reclassification? What has the United States received for any change in its ownership?
7) If, as Chairman Greenspan suggested in his letter of January 19, 2000, to Sen. Joseph I. Lieberman, the Federal Reserve System does not interfere in the free trade of gold, why were "gold swaps" discussed at the FOMC's meeting on January 31, 1995?
8) Exactly what is the policy of the Federal Reserve System, the Treasury Department, and the Exchange Stabilization Fund toward gold and the gold reserves of the United States?
Sincerely,
-END-
Staunch GATA supporter Jay Taylor mentioned the following in his latest newsletter this weekend:
MORE "FUNNY STUFF" FROM THE U.S. TRESURY
In a recent telephone conversation I had with Congressman Paul, he told me he had asked Treasury Secretary O'Neill a question about the possibility that the Exchange Stabilization Fund had encumbered as much as 20% of the U.S. gold supply in a swap with Germany.
The Congressman was responding to an article in James Turk's excellent newsletter, "Freemarket Gold & Money." James pointed out that an amount of gold that amounts to approximately 20% of the U.S. gold reserve, stored at West Point, had been suddenly reclassified from "US Gold Bullion" to "Custodial Reserves." This seemed to correspond to a similar decrease in German gold reserves leading to speculation that a swap between the ESF and Germany may have taken place and as a consequence, 20% of the U.S. gold supply may have been encumbered or committed to the Germans with Americans being totally unaware of this event. As I understand it, the Treasury Secretary had promised to get back to Congressman Paul on this issue.
We have not heard anything about the Treasury Secretary's response to Congressman Paul if indeed he has yet responded. In the mean time, Bill Murphy called my attention last week to the fact that the Treasury has apparently pulled yet another "fast one" on the American public. Now the Treasury has lumped all gold into once classification called "Deep Storage," apparently in an attempt to keep us totally in the dark. This of course is leading to even more speculation about what might be going on with the gold stored in the U.S. Treasury.
Hearing this, I sent an e-mail to Congressman Paul in which I asked the following:
"I am wondering in the Congressman is aware of this latest change in the classification of U.S. gold and whether the Treasury Secretary has yet answered the Congressman's initial question about the reclassification of 20% of the U.S. gold supply? Also, could we know why the Treasury saw fit to change the classification once again? Was it to avoid answering Congressman Paul's question? Was it to ensure further sales or gold swaps cannot be detected by the American public?
I believe this is a very serious issue, and I'm sure the Congressman does too. Since there are so few Congressmen in America who understand the importance of this issue for our freedom, I am taking the liberty to burden Congressman Paul once again on this freedom issue.
I want to thank Congressman Paul for his kind and gracious willingness to serve Americans - even those far outside of his district. He is greatly loved by those who cherish freedom and understand the connection between fiat currency and tyranny.
Gratefully,
Jay Taylor
Editor, J Taylor's Gold & Technology Stocks newsletter
From a www.LeMetropoleCafe.com member and GATA supporter:
Bill,
As a Cafe member and GATA supporter I appreciate your work and am honored to be associated with the effort. America has not seen anything like GATA since the Sons of Liberty.
I've already written my congressional delegation along the lines you suggested but am going to write new letters recommending they call for a Congressional Budget Office (CBO) investigation of the gold reserves, specifically: 1) Does the U.S. Govt. own all the gold in its vaults; 2) Is the 8,100 tons really on site.
My understanding is the CBO has the power to access anyone and anything in the Fed Gov't to answer a Member's inquiry. And CBO auditors don't lie to Senators.
Hank F CPA
Another sample for you:
Bill,
Just e-mailed Ohio Congressman Gillman (and I will call his office on Monday, he is a member on the Congressional Banking committee and Capital Markets Committee), Ohio Senators Voinovich and DeWine. Sent the following.
I hope this helps.
Dale
Senator Voinovich,
As an Ohio citizen, who helped vote you into office, I am asking for your help. I need you to contact a public official of our Executive Branch - Treasury Secretary Paul H. O'Neill. The Treasury Secretary has been asked for many months now to answer a simple question, yet he fails to respond to the Republic he serves. That question is quite simply, so simple that a child could answer it, yet the Treasury Secretary refuses. The question is:
"Why has 1700 tonnes of the Treasury's Gold Bullion Reserve been reclassified as Custodial Gold in August of last year".
Congressmen Paul (Texas) and Larson (Connecticut), as well as Senators Lieberman (Connecticut) and Allard (Colorado) have posed that same question to the Treasury Secretary and he has refused to answer them as well as to many others.
Who is Treasury Secretary O'Neill, that he acts as if he is above the law, and has to answer to no one? It appears more and more by the day, that Washington's political elite are totally out of control, as they appear accountable to no one, not even the Congress or the Senate. I didn't really expect Treasury Secretary O'Neill respond to my personal inquiries, after all, whom am I but a lowly American taxpayer. But when O'Neill refuses to answer the same questions posed by Senators and Congressmen, democracy has clearly taken a backseat and dark times seem around the corner.
In addition to the above question, please ask Treasury Secretary O'Neill for a response to the following three questions too:
1. "DOES THE TREASURY OF THE UNITED STATES OWN 54,067,331 OUNCES OF GOLD AT U.S. MINT IN WEST POINT, NEW YORK, WHICH ARE CLASSIFIED IN F.M.S. STATUS REPORT OF SEPTEMBER 30, 2000, AS "CUSTODIAL GOLD BULLION"? YES OR NO?
2. Why was Treasury owned gold in the Denver Mint, Fort Knox and at the West Point Mint reclassified at all three locations to read "Deep Storage Gold" as of May 31, 2001?
3. What does "Deep Storage Gold" mean?
In closing, I beg you Senator Voinovich to contact Treasury Secretary O'Neill, and demand that he answers the questions put forth to him by America's representatives. It is hard to fathom that a few individuals such as Secretary O'Neill can subordinate democracy to their own selfish ends. This is why you must help your fellow Congressmen, Senators, and constituents by contacting the Treasury Secretary and demanding that he answer our question above. You can contact him as follows:
The Honorable Paul H. O'Neill
Secretary of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
As I voted for you in last years election, I hope you will honor my loyalty to you. Thank you for your help Senator Voinovich.
Sincerely, a concerned voter and taxpayer,
Dale S
And, another one:
Dear Bill,
I wrote to Senator Lugar and Bayh of Indiana about this issue of the naming of the the gold more than a month ago. I also wrote to Buyer of Indiana's 5th. I've heard back from Buyer and Lugar (nothing from Bayh), and Lugar promised to forward answers when he heard back from the Secretary. Nothing yet.
Jerry C
Yet, another:
Bill:
Today, I sent letters to my two Oklahoma Senators and one Representative asking them to request some answers to questions about the "Deep Storage" gold reclassification from Secretary O'Neill. I will keep you informed on any response or feedback I get from the letters.
Jeff R
Broken Arrow, OK
And, one more:
July 16th, 2001
The Honorable Paul H. O'Neill
Secretary of the Treasury
1500 Pennsylvania Ave, NW
Washington, D.C. 20220
Dear Mr. O'Neill:
I am trying to make some sense out of the FMS report of US Treasury Owned Gold dated Aug 31st,2000 which identifies 56,945,284 fine troy ounces stored at US Mint in West Point, New York 54,067,331 ounces were classified as GOLD BULLION RESERVE.
Then Sept 30th, 2000 new status report refers to it as CUSTODIAL GOLD BULLION. Now I read it is referred to as "DEEP STORAGE GOLD" as of your May 31st, 2001 report.
Please advise me with a simple YES or NO does the Treasury of the United States own this gold that has been classified under three different titles in less then twelve months. Under the Freedom of Information Act I am requesting this information be made available.
I am thanking you in advance for your attention to this request .
Sincerely,
Richard D. H.
New Paltz, NY
One suggestion. Unless you are going to call your Representative or Senator's office, do not bother emailing, unless you know them personally. It just does not work. Faxes or letters are the way to go when it comes to the politicians.
It is time for the gold scandal to end before more lives, gold companies and gold investments go down the drain. GATA promised its supporters and victims of the gold market fraud that we would surge on until we won the day and the price of gold rises hundreds of dollars per ounce, which is what it should have done years ago.
We can WIN. We will WIN. That is what it is all about. The fact that the U.S. Treasury has found it necessary to change the classification of America's gold means that our probing has exposed a weakness that we can exploit. GATA needs your help on this one. We need letters to pour into the Treasury from Congressional members of every state and from enraged citizens of the world.
This has been "- CŔ –--€ ’§Ŕ
Netking
(07/16/01; 01:44:50MT - usagold.com msg#: 58154)
Cannuck
Canuck(58148)Thanks Sir & more power to the Maple!
Netking
(07/16/01; 01:40:16MT - usagold.com msg#: 58153)
The Mighty E.U. - Evolving into a Federalized Superpower
The European Union . . .
(Some thoughts from Chuck Missler of where EU's heading)
It's hard to keep doing something when you continually have to deny you're doing it. For years Britain's ruling labour party under Prime Minister Tony Blair has been refuting accusations that the emerging European Union would require Britons to cede large chunks of national sovereignty including control over their currency and economy to the socialist bureaucrats in Brussels.
But after the elections last month, when Mr Blairs Labour party was retained in office, it became blatantly obvious that the future EU will involve the loss of much sovereignty for member nations and the accompanying transfer of power to the politicians and bureaucrats in socialist Brussels. Mr Blair had hoped to avoid the federalisation issue during the elections, but was upcut by the French Prime Minister Lionel Jospin, who went public with his vision of a federalised Europe just a week before the British went to the polls.
The Nice Referendum
Last winter, EU members met in Nice to discuss how best to divide responsibilities between federal and nation-state levels of government. While no agreement was forthcoming at this meeting, representatives voted to finalize the framework by the end of 2004. The two sides in this debate
are: those who favor so-called "intergovernmentalism" or nation-state supremacy; and the federalists, who want Europe to operate as a super nation with a parliament, courts, taxation system, professional bureaucrats, and possibly a president. In essence the Europeans are facing
the same task the framers of the U.S. Constitution did when they decided to " form a more perfect union" : how much power will be given to member states and how much will reside in the federal government?
So far, German Chancellor Gerhard Schroder has proposed a new plan for radical changes in the European Union, which include the formation of European supergovernment. His proposal calls for the non-elected, bureaucratic European Commission in Brussels to form a new government, possessing wide ranging powers. Schroder suggested that the European
Parliament would consist of two houses, with the existing legislature becoming the lower house and the council of ministers, an already existing forum for national governments, being the upper house. The reorganized European Parliament would gain supervision of the European budget, including massive agricultural spending. Schroder also envisions a president, who would be chosen by one or both of the chambers of Parliament.
Rejecting Schroders blueprint, Lionel Jospin's vision of a unified Europe calls for a federation of national states, falling short of establishing a strong federal government. Jospins proposal did call for sweeping socialist reforms, including the harmonization of common law and criminal
law, and the establishment of an EU police force.
In addition, Jospin complained that the low rate of taxation in the "Anglo-Saxon" countries was unfair and needed to be "harmonized". This is "socialist-speak" for the fact that the continents tax rates are soaring and it's economy is moribund while lower tax rates, especially in Ireland, are embarrassing the other EU countries. Irelands booming economy is the result of slashing it's taxes. Jospin also believes it will be necessary to establish a collective budget, which translates to creation of central EUtreasury.
European Commission President Romano Prodi also produced a plan for Europe's future, largely geared towards increasing the non elected Commission's powers. Prodi proposed a direct EU-wide tax and that the economic government to de delegated to the Commission, along with the European Central Bank. His main concern is that with the expansion of the EU beyond the current 15 member states, the current process of decision making--which requires unanimous consent of all members--would become virtually unworkable in the future.
The European Army
Further complicating matters is a proposed European rapid Reaction Force(RRF), slated to go into operation in 2003. The Maastricht Treaty requires development of a common foreign and security policy. The Amsterdam Treaty (1999) created an embryonic EU foreign and defense ministry under
the direction of the high representative for foreign and security policy. The gentleman currently responsible for this position is Javier Solana, a former Secretary General fro NATO. The intent behind the RRF is to pool defense budgets and resources so that the force can respond to regional missions such as Bosnia, or on short notice without duplicating efforts.
There is still debate among EU members as to whether or not the RRF will become a European army. British Tory (conservative)leader William Hague said, "If it looks like an elephant and sounds like an elephant, it is an elephant. And this sounds and looks like a European army however much [the government] tries to deny it."
NATO allies, like the United States and Turkey, have questioned whether or not the RRF will cause the NATO alliance to become obsolete. German and British governments have maintained that U.S. presence in Europe is a stabalizing factor, while the French leadership has painted the U.S. as an adversary. According to an article in the 'International Herald Tribune', "Of all the constants of Jospin's vision of the European identity of the
future, the strongest appeared to be his conviction that Europe must define itself in opposition to America."(Intl Tribune May 29th 2001). . . if these trends continue, the European Union will evolve into a "United States of Europe" . . . and become a rival superpower in it's own
right.
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Privateer(58134)Re: The Economic Fundamentals post.
Relax Sir, I don't know who you are, or your interest as such. We have a table policy of "non promotion" of alternative sites or for selling of subscriptions etc. The posted matter was a free sample available for ALL & sundry in cyber land(I wouldn't subscribe, but that's me) and posting it was not selling or trading in intellectual property rights in my legal opinion but was relevant to an ongoing forum theme. Hope this helps you, regards - Netking.
MarkeTalk
(07/16/01; 00:31:26MT - usagold.com msg#: 58152)
Don't Cry for Argentina!
The weekend edition of The Financial Times (the other newspaper from London) had a story about the Bush Administration's stance on bailing out Argentina. According to Paul O'Neill, Treasury Secretary, it is not going to happen. Apparently, there was a $40 billion loan/workout arrangement consummated last December and the word is now "basta". Argentina responded by saying it would introduce austerity measures and pare down its enormous domestic debt. On that news, their stock market rallied and so did their bond market. Our banking stocks--JP Morgan Chase, Citigroup, Bank America, etc. who are all overexposed in South America-- had nice rallies last week. But the strange thing is that no expert expects Argentina to be able to do anything BUT DEFAULT--long term, of course. I am reminded of what John Maynard Keynes said about the long term: we are all dead anyway.
So how long before the gold market and its participants fully understand what is about to break forth from our Latin neighbors? If history is any guide, the last time we saw such rumblings was in August 1997 (with Southeast Asia) and again in August 1998 (with Russian threat of default and with South American debt problems). Gold rallied about $40-50 in roughly one month (September-October timeframe). I would suspect that the gold rally will be starting anytime and most probably no later than by the end of July or early August and should surprise most people who are looking for a September-October rally. With U.S. interest rates already at levels equal to "official" inflation figures, Fed Chief Alan Greenspan does not have much room to manoever. He used the interest rate lever last time. This time, I suspect, he will just print billions of dollars in bank guarantees and hope that no one will notice.
Gold's rally should stick this time and not retrace back below $300. I predict that gold's time has finally arrived. For those readers of this forum and clients of mine here at Centennial, I urge you to re-examine your portfolio and make any adjustments to your holdings before the rally begins. Gold could respond to financial instability the same way that soybeans and corn have responded to hot and dry weather in the Midwest over these past two weeks--they go straight up.
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