 Centennial Precious Metals Gold coins & bullion since 1973 Denver, Colorado 80246-0009 We educate first-time investors! |
for quotes and purchase information.
|
ARCHIVED DISCUSSION FROM 10/18/1999
All times are U.S. Mountain Time
View Yesterday's Discussion.
Tomcat
(10/19/99; 0:00:53MDT - Msg ID:16845)
iceberg, your post #16827
Hey iceberg, that was a great post on Greenspan's Oct 14 speech. You said in point 5:
5) The Fed Chairman tells bankers they need to prepare for a systematic failure, across all markets, affecting "even a seemingly well-diversified portfolio."
OK, the banks need to prepare. But what he doesn't say is how. How can they prepare? Sell their furniture? Call in some loans?
The problem is that their assets are in loans, which, in a "systemic collapse" aren't going to be worth a whole lot. And if there is a run on the banks the banks won't have the money to give to their depositors. The only thing holding up confidence is the workability of our economic system and the that falters the confidences will vanish faster than they can print money.
I understand what he was saying to the banks. I just don't see what the banks can practically do. Do you?
ORO
(10/18/99; 22:30:16MDT - Msg ID:16844)
Gandalf the White
This is where credibility comes in, building over years. Excitement stands in the way of presenting a solid argument. Aside from that, yes, some people will never get it because they don't want to bother with thinking. This friend is very well written and lives his mind. He can be convinced if he gets the arguments presented to him. Unfortunately, he does not seem to want to listen. A convincing prediction coming true is all you need to get his attention again. Gandalf, you are by no means feeble or lacking in any faculty.
SteveH - you need not "recruit" converts to a cause. I don't think you owe it to anybody. If this friend is highly valued, make an effort to give him a concise rendition of your view. He seems to have no more patience for snippets.
I am putting all this together and posting in order to collect criticisms and find holes in the arguments, and prod people to reveal more information or analysis. I believe the only way to get the professionals I try to cater to to listen is to provide a well tested line of thinking.
Just Weight & Measures
(10/18/99; 22:00:56MDT - Msg ID:16843)
Where to from here?
Been enjoying all the posts on this forum. An intelligent discussion page about one of my favorite topics - GOLD. Thought I'd finally join in
I'm just a little bitter about the government messing with my savings - after I'd sweated for them - every time they started up that big photo copier. Inflation at 1 or 2% YA RIGHT!!!! Price increases are NOT inflation. They are just a sign of inflation. So the CPI numbers will only indicate what has already happened. The money supply has been going up at about 9% per year for quite some time. The truth is finally comming out in PPI and CPI numbers - which are always fiddled with anyways.
I determined - after reading Anthony Sutton's "War on Gold" - to put a little of the yellow stuff away for retirement/inheritance. Uncle Sam doesn't know I've got it so he can't tax it when I either sell or give it to my kids. I've been wondering if I missed the boat these past few year Gold went down, down, down and the DOW went up, up , up.
These last few weeks have been enjoyable, not so much because I can laugh at all my DOW buddies, but because the cycle of fiat money is once again going down in flames (as it always will) just like it predecessor the Continental Dollar, the French Assignat and numerous other currencies that no one even remembers. I like it when I see dishonest weights and measures destroyed, though it takes a toll on society. I pity the fokes who believed the lie and thought the money party would never end. They thought there was such a thing as a free lunch and that they could only benefit from inflation. They have their life saving tied up in equities and real estate that has only ever gone up in terms of dollars. Soon, perhaps the dollar will come crashing down. I say, get some physical GOLD while you still can and get ready for a rocky few years.
I'm looking forward to my DOW puts moving into the money, perhaps tomorrow. My Gold call options finally paying off, though perhaps Gold won't move up enough before DEC. Most of all I'm looking forward to a change in our fiat money system - no more funny money I hope. But I wonder how it will change or perhaps what will replace it. If Mr. Clinton has his way, I somehow think it won't be step in the right direction. Perhaps facisim?
Long enough for an intrductory post I think.
Gandalf the White
(10/18/99; 21:57:32MDT - Msg ID:16842)
ORO's post to SteveH
BUT ORO, what if Sir Steve has friends that are not open to true proven facts, and only believe those statements of the "talking heads" intent on selling "their book" for the betterment of there clients and selves. There are far too many of those types of sheeple, or the talking heads would not have a job. -- Tis only through diverse viewpoints and ability to ask cutting questions of theose viewpoints that one can determine for himself the ringing of trueism in a thought. -- Most of your thoughts are far above my febble mind comprehension, but after a while even I can piece together the road that you are walking. I may have to run to catchup with you as you are far ahead of me, BUT I am miles in front of Steve's "friends" and they may never even get on the correct road. -- Remember that we can not save those that do not wish to listen to a different viewpoint and even the best argument in this world often falls on "deaf" ears. -- To those that care to listen, OK. -- To those that care not, their loss ! Please ORO, speak slowly .....
<;-)
ORO
(10/18/99; 21:36:40MDT - Msg ID:16841)
SteveH-Your friend
You must have started into this without working out a good argument - the kind of logical, fully reasoned and well backed information one must put together to move a knowledgeable individual away from his familliar grounds.
Not having a good argument for anything beyond a good intermediate term/long term trade in gold, I could take my Mises and Hayek, and read them at leasure over the next few years, and totally miss the point FOA and ANOTHER put up. Knowing how leveraged the US was and how heavy its current account deficit was, I found something ringing true but far from proven. I collected enough information to make an argument for (1) the oil for gold deals (beyond their old historical background), (2) the gold short situation, (3)the seignorage for military protection deal, (4) debt trap economics, (5) workability of gold backed currencies, (6) debt and monetization dynamics, (7) the workings of a trade economy (the New Rome), (8) interplay into politics.
I think one needs to go over at least some of this to understand the issues and be able to provide a consistent and coherent view of the gold market and its environment.
Leigh
(10/18/99; 21:09:21MDT - Msg ID:16840)
Author Alex Hailey Lends GATA a Hand
Over at lemetropolecafe.com, there are copies of letters written to Barrick and Gold Fields by author Alex Hailey, author of Airport and many other best-sellers. Mr. Hailey, it turns out, is a goldbug and supporter of GATA. He recently sold his Barrick stock, and his blistering letter to Barrick makes for delightful reading.
A couple of weeks ago I mentioned Mr. Hailey as the possible author of "Roots." Well, I was wrong (though it seems as though the real author, who is now deceased, had a similar name).
SteveH
(10/18/99; 20:37:43MDT - Msg ID:16839)
repost
www.kitco.com
I missed this in the WGC keynote speach:
Date: Mon Oct 18 1999 22:12
HighRise (flierdude) ID#401460:
( Keynote Speech given by Miss Haruko Fukuda CEO World Gold Council )
"But it is now certain, whether by default or intent,
that the Euro has equal if not greater gold "backing" than the US dollar."
HighRise
CoinGuy
(10/18/99; 20:18:40MDT - Msg ID:16838)
no typing skills
That was supposed to be .5
cOiNgUy
CoinGuy
(10/18/99; 20:14:35MDT - Msg ID:16837)
JCS
As far as your "humble opinion" stated below, "I concur".
Had a great time reading all of todays posts.
Any guesses on CPI, I'll say %5...who knows
Coiguy
ORO
(10/18/99; 20:08:17MDT - Msg ID:16836)
Tanglewild Journeyman - CB2
http://home.earthlink.net/~amn/charts.html
More Newman charts.
I just love his work. Particularly his M2 to Stock market capitalization ratio. He essentially has shown that to save the markets the Fed would need to print up so much money that it would bring too high an inflation in the money supply. Doubtless it would cause the real asset markets to go bonkers if he did try. This graph he got from Bianco.
CB2 - The Fed speach is essentially saying that the PPT does not have enough fire power to keep things going. The Newman article shows they can do it but not without drowning the economy in newly printed cash.
Speach:
http://www.federalreserve.gov/boarddocs/speeches/1999/19991014.htm
Background can be found in:
http://www.clev.frb.org/
"Beyond Price Stability: A Reconsideration of Monetary Policy in Periods of Low Inflation" - couldn't find exact URL
http://www.federalreserve.gov/pubs/bulletin/1999/0199lead.pdf
FOA
(10/18/99; 19:58:38MDT - Msg ID:16835)
Haruko Fukuda is telling thr real story now!!!!! OH YES!
ALL: I can make but one post now, so I will reply to Michael's observations. Will try to broden some thoughts as I comment.
--------------USAGOLD (10/17/99; 9:54:50MDT - Msg ID:16650)
I can say with pleasure that the markets have become infinitely more interesting, and with no pleasure that they have perhaps become infinitely more dangerous. "Indeed, is the fall in lending rates a sign that fresh gold is being supplied to cover the shorts? I tell you the lending arena of the gold market is frozen in loses." --FOA 10/16/99
I agree with this, FOA. I think the lending rate is falling not because of a new supply of gold but because there are no takers. This gold carry trade is indeed locked up. I think many are losing their career positions over this debacle and many more are on the verge of losing their positions. The
proponents of gold sales, leasing et al are in the process of being severely discredited both in public and in the professional investment community due to its burdensome excesses -- excesses which could have severe repercussions with financial firms up and down Wall Street. ( I saw one report where it was rumoured that Goldman Sachs losses at the moment could be as high as $2 billion.) It appears to me that the gold carry trade battle is now over and all that remains is burying the corpses and removing the debris from the battlefield. There will be further attempts to drag these firms out of the fire, but when the day is done, I think the gold carry trade will be taken out of the
financial firm training manual and rendered a much deserved place in financial history books.--------
-----------------------------------
Hello MK,
Yes, I think we are in the middle of an extended workout. None of the BBs are in a rush to cover these (carry trade and other) bad loans because in doing so they must borrow gold to do it. There is no way they could bid the physical market. If they did it would completely dry up what
gold is supplying the retail markets. If they must return gold they must borrow to do it and create same problem in the lending arena. Their image is seen on the borrow side and the rates spike. We saw this recently. So they fall back into the financial workout mode and the rates relax.
The ECB/BIS really nailed this entire play to the wall. An entire industry was built on expanding the liquidity for international traders as our Washington officials looked on with approval. The top people knew why gold was originally (starting years ago) being taken down, yet they smiled as
these funds (and others) "coat tailed" the fall. And why not smile, these trades were using huge leverage to build (and support) the American market mania. The ECB said "enough is enough" earlier this year, but no one listened. I guess they thought these people (ECB) were nobodies? Then the BIS said they were going to cut it off short and the US asked for some time to work it out. Ha! They worked it out all right! Our treasury head watched them flood the gold paper onto
the markets like madmen.
What amazes me is that most of these "big inside" operators create the market and really didn't know why the original gold (and loan guarantees) was being supplied by the Euro arena. I always thought they did and their stories to clients about "CBs no longer using gold" was just a "good retail story". When the ECB and the BIS told Greenspan "it done", it hit these BBs like a nuclear blast! I don't think anyone yet understands that these people are now the sole backup for an entire asset class that cannot be made whole. On the surface, they may have to make good on 5 or 10 billion. But underneath, the ECB could crush them by running gold into the thousands. That's why I say "it's all over people", because this bull is going to run the equity of the dollar creating banks into the ground. And the US FED has no power to stop it. There is no way the US will use one ounce of it's gold to support a "banking crisis" if a "currency war" becomes the result! Some think that if we have one it's as bad as the other. They should study "currency war" history, preDollar!
The BBs can go for the ride slowly (and be controlled) or they can kill themselves by attempting to cover. What a master play this has been.
-------------------------------------------
--So FOA....This new gold market; it is a free market, yes?
--In the Robert Mundell speech for which Steve H provided a link, the laureate said as early as 1997 there would be a new gold market and that central banks would look to settling with gold at free market prices. He suggested that this would occur in the 21st century. Was it last year, the gave Prize was awarded to Black and Scholes -- and then LTCM -- where Scholes was employed --promptly went under water? Now Mundell wins the Nobel Prize while the gold carry trade
implodes. The former honed tools for statist economics; the latter honed tools for free currency and gold markets and a much-needed competitor for the dollar. One became the tools of the status quo; the other the tools for a new economy.----------- ----------------------
Boy,,,, Michael, I have to tell you, Mundell knew the story and no one listened! Now the whole Dollar/IMF system is in change and most of the nonEURO US trade partners have bet their entire economic society on a prosperous, buying American public. The next few years will be history to
remember. By the way, any thoughts on a "Britian in the EU"? (smile)
--------------------------------------
-----In talking with colleagues in the gold industry, the feeling is that it will be a long time before the Wall Street trading firms and mining companies sanction again something like the gold carry trade -- at least to the degree that it was utilized in the late 1990s. Perhaps this was a usable idea that had got out of control? There is little doubt that the European action with respect to gold,
sanctioned by Alan Greenspan who attended the Washington meeting, was aimed at the hedge funds and foreign exchange traders at the big banks. Leveraged trading was beginning to frustrate some nations' foreign policies and the mechanisms previously established to keep crisis situations from getting out of control. What good is it to try to save a country like Indonesia with fresh loans, stiff political and economic sanctions when hedge funds can easily destroy the Indonesian currency through derivative plays and leverage and undermine the intent of the international agencies. (Please don't construe from this that I back IMF actions during this Asian contagion lending crisis. I do not. I simply offer the foregoing as an explanation for the cb's actions.) So they acted to cut off the life-blood from the speculators -- the gold and yen carry trades.
The two pronged attack on the bullion banks, foreign exchange desks, hedge funds, et al co-incided with the latest jawboning by Alan Greenspan with respect to the stock market. He has to be getting a little fed up with being laughed at and ignored by the speculators whenever he warns
of the excesses in the equities markets. Perhaps now they will find out the central banks still have teeth?
This all goes hand in hand and marks a turning point. The financial world has changed in the last few weeks and I think the man on the street is just now finding out that something has happened. At the moment I can say with pleasure that the markets have become infinitely more interesting, and with no pleasure that they have perhaps become infinitely more dangerous.---------------
-----------------------
Dangerous is the right word, MK! Indeed, I did little more than "extend" my context into your "just written" perception. As events have unfolded we can clearly see what this gold market means to Euroland. Traders are busy trying to build a strategy to gain from a move in gold while the very trading arena they use may go up in smoke! I know that the BIS wants gold over $400. Yet, for the same reasons they didn't buy at $280 they don't have to buy physical now. The BIS is responsible for all gold movements between CBs, it's in their charter. Few know what they are doing untill after the fact. Today, they can let the BB "paper crunch" do their work for them. Soon. How fast it gets there will be determined by how the BBs can workout their problems. I suspect we will see rental rates rise each time one of them has to slice off some capital. When this process is wide open Another said he will be writing again (above $360 should do it). The changeover of oil to Euro settlement is the next area to discuss and I am intrested to follow how this ties with gold.
On another note:: With the EU recently (last week?) accepting South Africa into a "favoured nation" trade status, I suspect that any of the SA gold shares that survive this may be left alone (just a guess). The EU needs the SA minerals as much as oil and that country may become very important to them. We will watch as this all plays out.
Also to ALL::: Everyone is down on Bill Murphy for the wrong reasons. They don't have to do anything but continue to discuss this in public to be a huge success! What ever else can be done will indeed help more! Investors can and do think, read and hear much better than most advisors give
them credit for. With the "right insights", they will know to move their assets as events unfold. Walking assets have more impact than standing armies. So don't discount what GATA is doing.
From my perspective, most all mines will have a rough time (not only from hedges) in this new bull. If people keep reading GATA they will at least know to run from BB controlled shares as they will be the first hit. I always say, bullion first and foremost. But, human nature as it is, the biggest and most free mines are the next place to be. They won't run as bullion will later, but everyone can't
be totally in gold. It's a physics problem at these low values! So "GOOD WORK" Bill, I know the sweat is running on the other team!
Thanks to everyone for reading and discussing FOA
JCS
(10/18/99; 19:53:36MDT - Msg ID:16834)
SteveH RE: Another Friend
What Mr. Greenspan didn't come right out and say, and what, IMHO, he or anyone in his position, would never say, is that he and Mr. Rubin have, virtually, destroyed the U.S. Dollar.
First, THEY hyperinflated the credit markets last fall allowing an additional $3+ trillion in public and private debt to be created over a 12 month period.
Second, through this massive credit expansion, THEY allowed a stock market mania to get out of reason, with a speculative bubble that they are scared to death of.
Third, in the process, THEY tried to destroy gold as a monetary asset by allowing CB "gold carry trade" to expand to levels equal to the financial market bubble.
Now, THEY and WE are all going to pay dearly for THEIR gross negligence through the following:
If HE doesn't increase interest rates immediately and significantly, the dollar stands to collapse, which will burst the bubble in a 1929 type collapse, bringing a deflation of all investment assets except the REAL MONEY: gold, silver, platinum, which will inflate significantly.
If HE does increase interest rates immediately and significantly, HE will possibly save the dollar, burst the bubble in the process and bring a 1929 type collapse, which will deflate all investment assets except the REAL MONEY (REPEAT ABOVE).
If THEY CONTINUE TO TRY AN MANIPULATE GOLD, it will burst the bubble (etc, etc, you get the picture).
Its the proverbial "painting yourself into a corner" and he and Rubin have done just that.
The FED and the US TReasury dept. will not be able to meet all of the margin calls and bail out all of the hedge funds that are destined to go down over the next few weeks.
For your friend: Gold is, most likely, the only safe haven that will survive the coming upheaval.
All given IMHO.
USAGOLD
(10/18/99; 19:16:49MDT - Msg ID:16833)
Ladies and Gentleman...A Toast
Please Rise....and lift your glasses.
For the Executive Director of the World Gold Council.... Haruko Fukuda
Raise your voices:
Hip Hip Hoorah!
Hip Hip Hoorah!
Hip Hip Hoorah!
For the Director of the Denver Gold Group......
Michelle Ashby
Raise your voices:
Hip Hip Hoorah!
Hip Hip Hoorah!
Hip Hip Hoorah!
For our colleagues and friends...
Raise your voices:
Hip Hip Hoorah!
Hip Hip Horrah!
Hip Hip Hoorah!
Haruko Fukuda and Michelle Ashby:
Please know that Chairs of Distinction have been honorably reserved for you at this eminent Table of yore. When not with us in substance, you are with us in spirit.
SteveH
(10/18/99; 19:16:18MDT - Msg ID:16832)
another friend
This is from a friend (not Leroy) who, when given Greenspan's speach told me this in email:
My contention is that our currency is the strongest, and it will probably prevail, but even if it doesn't, I don't care. I'm not out to make money on commodity speculation. I have no stomach for that - especially where gold in concerned. If you're right, in time, your investments will pay off. But in the mean time, realize that by being so enamored, you risk missing out on even better opportunities....
You take the simplest things all out of "epic proportion" if they even remotely associate with your obsession. All he is saying is that risk managers have put aside traditional norms when it comes to determining acceptible risk/reward levels when evaluating investment opportunities. As a result, there is more downside exposure than there would be otherwise. This is not news. The article clearly states that he emphasized that he was not predicting a crash, so how do you get "a down market of epic proportions" out of this? He is merely spreading the word to be cautious in an attempt to limit expansion to a healthy, sustainable rate. He is telling everyone what they should already know. To read anything else into this is to imagine conclusions that just aren't there. But that's what your little circle does - like an obsequious gaggle, you parrot illogical pronouncements back and forth and laud the wisdom of the author - as if he is a prophet and the messages are articles of faith - without ever stopping to consider the source or scritinize the conclusions for logic, objective factual basis, or refutability. Actually, faith in gold is behind it all - blind faith. I find this akin to idolatry, and wish you would leave me out of it.
SHIFTY
(10/18/99; 19:16:07MDT - Msg ID:16831)
To Journeyman re: Eustace Mullins
I had the pleasure of meeting Eustace Mullins back in 1992.I will never forget what he said about Mr.Bill Clinton. He said that we were about to see the most corrupt administration in the history of the United States. I'm sad to say he hit that one right on the nose.
SHIFTY
(10/18/99; 19:14:55MDT - Msg ID:16830)
To Journeyman re: Eustace Mullins
I had the pleasure of meeting Eustace Mullins back in 1992.I will never forget what he said about Mr.Bill Clinton. He said that we were about to see the most corrupt administration in the history of the United States. I'm sad to say he hit that one right on the nose.
SHIFTY
(10/18/99; 19:10:02MDT - Msg ID:16829)
To Journeyman re: Eustace Mullins
I had the pleasure of meeting Eustace Mullins back in 1992.I will never forget what he said about Mr.Bill Clinton. He said that we were about to see the most corrupt administration in the history of the United States. I'm sad to say he hit that one right on the nose.
TownCrier
(10/18/99; 18:55:12MDT - Msg ID:16828)
After the Close: the GOLDEN VIEW from The Tower
Gold is back at the centre of international financial thinking. Yes...yes, indeed. You can actually hear the ring of truth to it if you'd take a moment to turn down the volume on CNBC.
"Gold is back with its customary charisma. What greater affirmation can there be for gold as a monetary asset than the declaration by 15 of the world's largest gold holders that 'gold will remain an important element of global monetary reserves'?" That was the rhetorical question Miss Haruko Fakuda, chief executive of the World Gold Council, put before the Denver Gold Group in a keynote speech today. The World Gold Council issued a company press release, and we'll pick it up where Miss Fakuda's comments left off...
The Washington Agreement was agreed on Sept. 26 by the Group of Ten central bank governors, with the U.S. Secretary of the Treasury, Lawrence Summers, and the Chairman of the Federal Reserve, Alan Greenspan, also present.
"It is a remarkable achievement. It is extremely rare for independently-minded central banks to agree to co-ordination of this magnitude on reserve management,'' she said. ``This is not just a one-off joint intervention in foreign exchange markets of the kind we see from time to time, but an agreement to last at least five years."
Fakuda said the Washington Agreement marked the first time in 28 years that the governments with the largest gold holdings had made a positive joint statement on gold.
"Those three decades have been a period in which gold was persistently sidelined by the official sector attempting to demonetise gold. Yet the amount of gold held in reserve by the official sector has barely declined during that period, a decline of a mere six percent in three decades. The attempt to replace gold with SDRs as a reserve asset was an abject failure," said Fakuda.
"Far from gold being marginalised and finished as a monetary asset, the latest IMF proposal uses gold as money to pay back debt! What happened to SDRs, once thought to be the answer to external payment problems?"
Fakuda added that the Washington Agreement was significant in several respects and it raised some questions for the future. Although it did not have the force of an international treaty, it was signed by each central bank governor and had a broader dimension as the U.S. and Japan, although not signatories, were in accord with the spirit of the Agreement and both countries had stated they were not sellers of gold. The Agreement will also be monitored by the Bank for International Settlements.
The Agreement covered nearly 50 percent of the world's official gold holdings and with the addition of the U.S., Japan, the IMF and BIS, and Australia who were also non-sellers and South Africa which was not expected to sell given its opposition to U.K. sales, over 85 percent of the official sector gold holdings "are not out of the market."
Fakuda also pointed out that by 2005 when the agreement is to be "reviewed," both the U.K. and Sweden might be either in or preparing to be in the Euro, thus bringing their reserves under ECB control.
"How strongly politically motivated this agreement has been amongst the European nations is one of the questions that will be answered in time. But it is now certain, whether by default or intent, that the Euro has equal if not greater gold 'backing' than the U.S. dollar," she said.
"Perhaps the most interesting and far-reaching question for the future that comes to my mind is whether this agreement will end up as a forerunner in some form to a return to an official price for gold. Though that is unlikely and was certainly in no way intended to lead to this, at least one of the triggers for the agreement was the price falling to a level not seen since 1978.
"What level of price would be appropriate and acceptable by the major official holders for valuing their gold reserves? Will any of this imply central bank intervention in the conventional sense in the gold market and will BIS continue its co-ordinating function in future to encompass all the G10 countries?" she asked.
"It opens up ultimately a whole host of philosophical as well as practical questions about the role, nature, and the 'value' of gold as a monetary asset. In any event, the world's largest holders of gold have not said that they will be keeping their chestnuts in their bag; what will other central banks do?" said Fakuda.
In another company press release, it would appear that Homestake Mining has fortune telling skills that rival that of Nostradamus...that, or they're simply the luckiest dogs on the planet when it comes to market timing. According to their press release, the company has "no margin call requirements in any of its existing hedge contracts despite recent changes in the price of gold. Over 95% of its reserve base can benefit from the rising gold market. Homestake further confirmed that it is not exposed to mark to market earnings adjustments with respect to its precious metals contracts.
Although Homestake's policy provides for the use of forward sales contracts to hedge up to 30 per cent of each of the following ten year's expected annual gold and silver production, it is currently largely unhedged due in part to the previously announced closure of a major portion of its hedge portfolio. In that transaction, which took place on July 29, 1999 when the price of gold was $254/oz, Homestake closed out 245,000 ounces of US dollar denominated forward sales and realized $35 million."
Why bother mining gold at all when you can call em' that good? They might as well keep pulling paper profits out of a hat...its much easier, and much cleaner work, apparently.
European Central Bank (ECB) board member Tommaso Padoa-Schioppa said that he shares Federal Reserve Chairman Alan Greenspan's fears about the existence of a financial market bubble, but that didn't stop punch-drunk investors from bidding up the DJIA, the whole DJIA, and nothing but the DJIA. While the DOW gained 96 points, the Nasdaq pared earlier losses near 100 to close 43 points lower. Again, only the DOW itself looked good, as market breadth was as anemic as it ever has been these many past weeks. NYSE decliners outpaced advancers by 2 to 1, and new 52-week lows numbered 398 compared to only 8 new highs. On the Nasdaq, the decliner:advancer ratio was also 2:1, and new lows beat new highs by 220 to 33.
The 30-Yr Bond gave back Friday's rally, losing 23/32 in price (yield 6.297%) as traders claim it is bracing for tomorrow's CPI data. Why bother? If Friday was any guidepost, a strong CPI will tank the DOW (especially following today's bogus deadcat bounce gains) and the long bond will once again benefit from foolish flights to safety. Not that the flight itself is foolish, mind you, but the destination (bonds) sure is. When the fate of the dollar seems to be so firmly intertwined with the destiny of the stock market, holding these interest bearing promises of "future dollar delivery" seems a sure way to take a bath on capital losses through adverse exchange rate movements. Oh well, everybody's got to live and learn.
Just so you know what key figure to look for, in this latest measure of consumer inflation, analysts expect the September's Consumer Price Index to come in at +0.4%.
Turning back to gold for the market results, spot gold was last quoted in NY at $309.70.
Sometimes a closer look into other though basically similar markets will help you to see things somewhat differently, and gain some new perspective in what had become old or routine. As you read this Bridge NYMEX Oil Review, think about the connection of this contract trading in relation to the underlying physical crude market. Then, see if you can imagine their gold trading counterparts...throwing paper around as needed to help prop up the vulnerable areas of their overall book.
New York--Oct 18--Front-month WTI crude futures weakened in dull trade
as participants continued to roll their November positions into December
ahead of Wednesday's expiration of Nov crude futures contracts. The
Nov-Dec spread went into deep contango, widening to 18 cents. Nov crude
settled down 29c at $22.53.
With little fresh news, brokers and traders twiddled their thumbs for
most of the session as Nov crude drifted lower after coming off an
intraday high of $22.90.
When local participants failed to push the contract above this
resistance level, the contract tumbled through support at $22.60 and later
at $22.40 to hit an intraday low of $22.30.
Meanwhile, today's background news made little impact on the market,
brokers said. The market shrugged off comments made by Luis Tellez, the
Mexican secretary of state for energy, that the price of Brent crude oil
should be around 25 to 27 dollars per barrel in the next 4 months. The
benchmark North Sea Brent crude currently costs between 20 and 22 dollars
per barrel, having reached a low-point of around 10 dollars per barrel
earlier this year.
---
OK, so having prepped your mind to freshly absorb routine info, here's the Bridge NY Precious Metals Review....
NY Precious Metals Review: Dec gold down $4.7, silver slides
By Melanie Lovatt, Bridge News
New York--Oct 18--COMEX Dec gold futures settled down $4.70 at $311.70
per ounce after slipping to a 2-week low of $311.10. Dec silver settled
down 9.8c at $5.24 per ounce after a 1-month low of $5.205. They were both
hurt by fund sales and started to slip early in the session as equities
steadied after last week's fall and the dollar recouped some losses
against the euro.
"The dollar/stock market comeback was weighing on gold and these
things are strongly inversely correlated now," said James Steel, analyst
at Refco. "The key behind the gold rally was the dollar decline and the
revival of the dollar will cut into the rally," he added.
However, after the COMEX gold close at 1430 ET the Dow Jones
industrial average was coming under renewed pressure and was down 26.6 at
9993.41 at 1514 ET. Furthermore, while the dollar had started to recover
against the euro, it resumed its slump against the yen. If this trend
continues, it could help gold and silver recover today's losses, commented
one trader, although he cautioned reading much into today's moves. "Prices
were falling, but no-one really appeared to know why and it wasn't huge
volume," he said.
Steel noted that the fallback was also in part helped by the fact most
of the frenzied short-covering seen over the recent weeks after gold
rallied is now largely completed. "Everyone says all the short-covering is
over with--players have had ample time to cover," he commented.
He said that funds continue to "sell silver heavily in the absence of
any heavy trade support" and that they are "testing the entire metals
complex by selling silver first."
In silver, locals became short and pushed Dec below sell-stops at the
$5.30 area, which brought in some fund selling, said one broker. Gold and
silver were both playing off each other's weaknesses today, he said.
Another broker noted that some players may attempt to push gold lower
in order to test and then confirm the $300 support area. "We need to pull
back and then hold that major support area after the recent climb," he
said.
"People are looking for the bottom part of the range--they've
established the upside for a while," he added. Traders suggested that a
slip in gold lease rates had also contributed to today's easier tone.
Platinum and palladium followed gold and silver to lower prices, but
there was very little activity and they were largely ignored, said
traders.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN
Today was the first brisk day at the COMEX gold depositories in the past couple of weeks. Today we watched as 97 ounces were withdrawn from Registered gold stock at Republic National, and 21,231 ounces (two-thirds tonne) were withdrawn from Registered gold at ScotiaMocatta. Total invetory stands at 897,401 ounces, of which 810,997 ounces are Registered.
In last Friday's trading, open interest in October futures rose by 2 contracts to 114, November was unchanged at 14, December rose 790 contracts to 115,968, and total open interest in COMEX gold futures thru June 2004 rose by 158 to 215,685 contracts. Total postitions so far for October that have received delivery intentions are 2,510 contracts (251,000 ounces).
In the "real" world, Ashanti Goldfields Ltd, the third largest gold producer in South Africa, continues to be the industry's most highly visible example of "how NOT to..." The recent sharp rise in gold price has put Ashanti into a liquidity crisis thanks to their gold hedges--meant to protect them against lower prices, but at a gold price of $325, entitles its counterparties to margin calls of $270 million. Ashanti has managed to keep the wolves from the door by first negotiating a temporary standstill on action by its 17 derivatives counterparties, but as that expired at 1630 GMT today, Ashanti's counterparties agreed to grant a waiver of their millions in claims for up to another week. With the derivative markets drifting lower over the past few days, you would think these same counterparties would be hot to cash out now and run. The cooperation would seem to give clear evidence that receiving the cash gains are not so much the objective, but rather the effort is to keep everyone in business and to keep the gold coming. On that note, here is a somewhat related commentary we offered on Saturday in regard to some questions raised as to whether or not Anglogold was closing out its own hedge positions, beginning with a brief report from Bridge...
---
New York--Oct 14--Anglogold of South Africa is concerned the enormous rally seen in gold over the past month won't be sustainable as it has introduced instability into the market, said Kelvin Williams, executive director for the company. ---Bridge News (Reprinted at USAGOLD by permission, no further reproduction without permission from Bridge)
The key element of that piece is clearly the concern over the instability aspect. And specifically, that instability is manifested in the books of both financial institutions and producers who have contracted lots of business with other parties under the medium-term prospects of prices much lower than they are today, including the additional threats of higher prices to come. His warning seems to be clearly a plea to their counterparties to please find ways to cooperate with all those having upside-down forward books...otherwise the industry-wide instability would threaten the viability and sustainability of a "new gold market" going forward. And clearly, this is what the "long" gold counterparties would want, so his comment should be seen as a bargaining device. If Anglogold is taking action (or inaction) on their forward books that might otherwise seem counter to the common-sense direction, it may just be that there's a bigger purpose to be served--and expectation of lower gold prices is NOT among them.
---
Gold lease rates continue to ease back toward levels that begin to approach something that almost resembles the high side of "normal." Sorta. Some gold market watchers are saying this reflects more a cooling of action in the lending market, rather than the arrival of new sources of gold to assuage the same borrowing needs present just a few short weeks ago. The Tower is inclined to favor this view, too, and perhaps moreso, that the lending market has seized up, and the counterparies are busy striking deals...not unlike the situation demonstrated amply in the hedging realm by Ashanti and its counterparties. It should come as no surprise that participants suddenly become very cooperative when faced with the prospect of seeing their hopes of gold turn permanently into little more than paper settlements...better to buy time and get what you can get, right?
Today's gold lease rates (annualized)
1-month 2.6580%
2-month 2.7600%
3-month 3.7980%
6-month 3.6040%
12-mnth 3.4500%
Bottom line: If the gold is not in your hand, at least you'll have the consolation that your leveraged paper will always buy you a ride on the Reading R.R. and a couple of houses for Park Place and Boardwalk. That is, if your counterparty doesn't come to you first for an I.O.U.
And that's the view from here...after the close.
iceberg
(10/18/99; 18:53:09MDT - Msg ID:16827)
Greenspan and Gold
On October 14, 1999 Fed Chairman Greenspan delivered an extraordinary warning to bankers about the
need to prepare for a finanicial crisis, market crashes and panic. The Fed Chairman's speech, "Measuring
Financial Risk in the Twenty-first Century", was extraordinary in several ways :
1) The Fed Chairman sounded the alarm about a real possibility for a collapse of the financial markets.
Unlike other Fed-speak, Greenspan's speech was unambiguous...his message clear.
2) The Fed Chairman pointed out that such a collapse can occur anytime...without advance notice (hint,
hint...nudge,nudge). Clearly, Greenspan is warning these bankers that the potential for collapse
"anytime", includes the coming weeks or months .
3) The Fed Chairman is talking openly about potential "panic" in the markets.
4) The Fed Chairman warns about "a bursting bubble" in the tradition of "Dutch tulip bulbs or Russian
equities."
5) The Fed Chairman tells bankers they need to prepare for a systematic failure, across all markets,
affecting "even a seemingly well-diversified portfolio."
It is extraordinary for the Fed Chairman to clearly and unambiguosly warn about market crashes, financial
collapse and panic. It is extraordinary for the Fed Chairman so publicly to warn banks about the need to
prepare for a finanicial crisis, market crash and panic.
What has prompted the Fed Chairman's blunt warning and urgent call for action?
First, the bankers and other financial institutions have not taken sufficient action based on Greenspan's
previous warnings. As Greenspan states , "I have called attention to this risk-management challenge in a
different context when discussing the roots of the international financial crises of the past two and a half
years. My focus has been on the perils of risk management when periodic crises--read sharply rising risk
premiums--undermine risk-management structures that fail to address them." At the time of the LTCM
debacle, Greenspan issued some warning about risky financial shenanigans, including derivative trading.
Greenspan warned that failure of the relatively small LTCM could lead to failure of much larger financial
systems. However, after the LTCM crisis, many banks and "risk-management structures" have failed to
address Greenspan's warnings.
Secondly, a new crisis, much larger than LTCM, looms before the Fed Chairman. A clue as to nature of
this crisis can be found in what Greenspan, on October 14, 1999, tells the bankers to do:
"At a minimum, risk managers need to stress test the assumptions underlying their models and set aside
somewhat higher contingency resources--reserves or capital--to cover the losses that will inevitably emerge
from time to time when investors suffer a loss of confidence. These reserves will appear almost all the time
to be a suboptimal use of capital. So do fire insurance premiums. "
The Fed Chairman wants the bankers and other "risk managers" to "stress test" their assumptions and
models. Where have the words "stress test" been used in the past couple of weeks, just before Greenspan
uses the same words. Ashanti Goldfields recently suffered a large drop in its stock price despite the sharp
rise in gold prices. The drop in Ashanti's stock is due to Ashanti's hedging program. Recent reports indicate
someone from Ashanti said that Ashanti had "stess tested" it's hedging program for a $50 rise in gold but
not for a $70 rise in gold. Recent reports indicate others invloved in shorting gold or hedging had not
"stress tested" their strategy. The bullion bankers are vulnerable to billion dollar losses due to rising gold
prices.
The recent run-up in gold prices has caught bullion bakers, derivatives speculators, and other gold shorts in
an historic squeeze of monumental proportions. The Fed Chairman, privy to specific information he can
not divulge, probably sees a clear risk for financial collapse larger than the LTCM debacle...a collapse
which even the Fed with all its tools can not prevent.
While he does not want to divulge company-specific horror stories, the Fed Chairman probably feels
compelled to at least warn the general public in some way. And that is a reasonable explanation for his
October 14 speech, publicly admonishing the bankers to reduce risk and increase reserves. Greenspan may
also be thinking about his "legacy". If the financial markets collapse and some banks fail, the Fed
Chairman would be able to say that he warned the banks and the public.
The media justs reports on the effects, but not the content (stark warning) of the October 14 speech. Read
Greenspan's blockbuster for yourself. The text of the Oct 14 speech is at:
http://www.bog.frb.fed.us/boarddocs/speeches/1999/19991014.htm
Iceberg
October 18, 1999
SteveH
(10/18/99; 18:50:14MDT - Msg ID:16826)
Protecting gold (final final)
In trying to figure out if a CCW case that ruled against a law-abiding citizen (the case was Clair County CCW Licesing Board v. Pencak) because he was deprived of a CCW permit (concealed weapons permit) (no I don't know if it was to protect his gold) by a CCW licensing board, the judge ruled that the 2nd Amendment was a state right and denied Pencak his permit. In organizing my thoughts, I wrote this to myself in an attempt to figure out if I were an attorney how I would personally argue the same case Pro Per (my own counsel). I believe that before the Emerson case, which I mentioned earlier, there would be no hope but I believe as you may that hope definitely exists now (MSA 28.426 is the law that require a board to deny a license unless certain criteria are met and which are subjective):
This is not legal advice, just my opinion.
These thoughts are based on the recent Federal case United States of America v Timothy Joe Emerson, which states "the Second Amendment within the Bill of Rights proves that the right to bear arms is an individual right, rather than a collective one" Further, Emerson calls into question United States v. Miller, 307 U.S. 174 (1939). "Miller did not answer the crucial question of whether the Second Amendment embodies an individual right to bear arms. Although its holdings have been to justify many previous many previous lower federal court rulings circumscribing Second Amendment rights" including the right to bear 'concealed weapons. See, e.g., Hickman v. Block; 81 F.3d 98, 100-01 (9th Cir. 1996) where the court ruled the plaintiff lacked standing to sue for denial of concealed weapon permit, because, in that court's opinion, the Second Amendment did not protect possession of weapon by private citizen; right to bear arms is held by the state. In other words, Emerson radically reverses Federal court standing on the Second Amendment, as it now considers it an individual right and makes Miller pass and irrelevant as well as the cases built around it.
Further, "what it means to take rights seriously is that one will honor them even when there is a significant social cost in doing so. Protecting freedom of speech, the rights of criminal defendants, or any other part of the Bill of Rights has significant costs criminals going free, oppressed groups having to hear viciously racist speech and so on consequences which we take for granted in defending the Bill of Rights" and Plaintiff argues carrying of a concealed weapon is one of these rights that overrides the states right to prevent lawful, non-violent, citizens and legal aliens from carrying concealed weapons as reasonable exercise of police power or because a concealed pistol can conveniently be classified as a weapon suitable to criminals and therefore be prohibited from concealed carrying.
The plaintiff holds that preventing citizens who otherwise meet the stipulations of MSA 28.246 can not be prevented from concealed bearing of arms as a reasonable exercise of police power nor can the state classify a concealed weapon that is otherwise legal to own as being a compelling reason of the state when the Right to Keep and Bear Arms is an individual right and therefore invokes Strict Scrutiny in consideration of Section 6.1 of MSA 28.246, which in part states:
"A license shall not be issued unless it appears that the applicant has good reason to fear injury to his or her person or property, or has other proper reasons."
Further, since the defendant is known to preclude only those proven to be in imminent danger or those persons who are law enforcement personnel (or former law enforcement personnel) to the exclusion of those with 'other proper reasons or those whose occupations and life styles may have other proper reason to fear but are not under immediate threat or danger such as the Plaintiff presented in application for the CCW permit, the Plaintiff argues that not only does the Defendant fail in protecting the Defendant's constitutional rights as in 2 above but fails to consider 'other proper reasons as a valid exercise of their mandated responsibility and exceeds reasonable police power by denying people who have compelling reasons of simple self protection (even without an immediate threat). Further, the Defendant is well documented to overuse its police powers it acts to limit unrestricted CCW permits to the least amount of people as possible. This is an absurd abuse of reasonable police power. It is unreasonable use of police power.
The Plaintiff holds that the Defendants practice of its charter and MSA 28.246 Section 6.1 is unconstitutional because it allows a Concealed Weapons Board to discriminate against a citizen's rights by automatically depriving an otherwise eligible citizen or legal alien of their Second Amendment rights. MSA 28.246 Section 6.1 is putting the burden on the citizen to prove their right to bear arms. The Plaintiff is stripped of his right to bear arms as much as a convicted felon. The Emerson courts said, "Second Amendment rights should not be so easily abridged. There must be a limit to government regulation on lawful bearing of firearms" This section of the statute exceeds that limit, and therefore it is unconstitutional.
Plaintiff argues that Defendants denial of an unrestricted or restricted concealed weapon license violated the Fourteenth Amendment's guarantee of equal protection: He argues that the Defendant deprived him of the right to carry a concealed weapon while traveling thus triggering Strict Scrutiny. Unlike the Concealed Weapons Licensing Board of St. Clair County v. Pencak, where the court ruled the Second Amendment right to bear arms was a state right and denied Pencak the license, Emerson rules that it is an individual right. That makes the Pencak denial a counterclaim because it is an individual right and carrying a concealed weapon should have been allowed under Pencak and thus for the Plaintiff in this complaint and therefore does trigger Strict Scrutiny: carrying a concealed weapon is an individual right and should be given equal protection to bearing an arm at home or hunting or at work.
Further, firearm possession is a valuable liberty interest imbedded in the Second Amendment to the United States Constitution. There is a long tradition of widespread lawful gun ownership and carrying of concealed weapons by private individuals in this country. The Plaintiff's request for a Concealed Weapons permit is a simple manifestation of the Plaintiff's liberty right, for case Law derived from Miller had the affect of making it only legal to bear arms while at home or at work. So even though the Second Amendment states the 'right to keep and bear arms the end-result of restrictive Case law based on Miller was to essentially limit people to the possession of arms at home or work or hunting but not while traveling or walking or mobile in public. One could argue that it is perfectly legal to openly carry a side arm in a holster (just like a cowboy or cowgirl) while in a downtown metropolitan area but no citizen or legal alien would do such a legal but socially unacceptable act for it would have the likely affect of bringing the law to bear and impede the mobility of the citizen. In other words, concealed carry becomes the only way a modern citizen can manifest their Second Amendment right away from hunting, home, or work. In Emerson the court said "the right of the citizens to keep and bear arms has justly been considered as the palladium of the liberties of a republic; since it offers a strong moral check against the usurpation and arbitrary power of rulers; and will generally, even if these are successful in the first instance, enable the people to resist and triumph over them." Without a right of carrying a concealed weapon one could argue that one could only protect the republic or themselves while at home or hunting or at work but not while in public or traveling. So making concealed carry a special restriction under the states reasonable use of police power and not a valid liberty right safeguarded by the Second Amendment has the affect of diminishing the Second Amendment by restricting it to only applying to a citizen or legal alien while home, hunting, or at work but puts them at risk to their self protection and protection of the state while in public or traveling. Unrestricted concealed carry therefore is an essential meaning within the broad phrase 'the right to bear arms, for without it the right to bear arms is diminished. Again, in Emerson, the court stated, "Thus, concerns about the social costs of enforcing the Second Amendment must be outweighed by considering the lengths to which the federal courts have gone to uphold other rights in the Constitution. The rights of the Second Amendment should be as zealously guarded as the other individual liberties enshrined in the Bill of Rights." Also, "But there is no need to deceive ourselves as to what the original Second Amendment said and meant. Of course, properly understood, it is no limitation upon arms control by the states." Therefore MSA 28.426 Section 6.1 is unconstitutional in that it automatically denies a permit without a threat to the requester or other proper reason. A proper reason of self-protection is enough and should be a given and not have to be proven to the Defendant and Strict Scrutiny applies.
4. Further, the process of 'shall not be issued unless as written in MSA 28.426 Section 6.1 denies due process as it requires a citizen or legal alien to prove a liberty right instead of the state proving the right doesn't exist for a compelling reason of the state. Since there is a liberty interest, which is much more than an abstract need or desire for or an unilateral expectation of a benefit, in obtaining a license to carry a concealed weapon, the Plaintiff argues that MSA 28.426 section 6.1 violates his Fifth Amendment right of due process. Even though the Defendant is given broad discretion in their role as provided for in MSA 28.426, since, per Emerson, the Second Amendment is an individual right, that makes it a Liberty right as well and as such subject to strict scrutiny and thus unconstitutional for the Defendant to automatically deny a license unrestricted or otherwise for the purpose of self-defense or defense of the state even if danger is not imminent. Therefore MSA 28.426 Sec. 6.1 is unconstitutional.
5. Equal protection. Plaintiff argues that Defendants denial of an unrestricted concealed weapon license violated the Fourteenth Amendment's guarantee of equal protection in that MSA 28.432a exempts CCW license holders from other states from the requirements of MSA 28.246.
28.432a Persons to whom {Sect} 28.426 inapplicable; exception as to township constable. [M.S.A. 28.98(1)]
(f) A person licensed to carry a pistol concealed upon his or her person issued by another state.
Plaintiff argues that he qualifies for several other state unrestricted CCW licenses, Florida being one.
Since Michigan allows other citizens and legal aliens within its borders under the exemption of MSA 28.432a and he qualifies for at least one State's unrestricted CCW license, if not several others, and could legally carry a concealed weapon in at least Florida
The Department of State [Florida] shall issue a license if the applicant (a) is at least 21 and a resident of the United States
The licensing law "shall be liberally construed to carry out the Constitutional right to bear arms for self-defense."
and several other states and would be in compliance with even the Michigan exemption within Michigan as well as Florida with a Florida permit, the Plaintiff is not being given equal protection of the law as a Michigan Law's protects the rights of a Michigan citizen with another state's CCW license and the rights of another State's citizen while in Michigan. Since the Plaintiff qualifies for a Florida and several other State unrestricted CCW permits and is exempted by MSA 28.432a from MSA 28.426 but is denied an unrestricted CCW license by the State of Michigan when applying under MSA 28.426 this is not equal protection of the law and thus MSA 28.426 Section 6.1 is unconstitutional.
Finally, Miller had the effect to diminish the personal right to bear arms and merely supports where in the court says in the Emerson case that " when the Second Amendment is held to guarantee nothing more than the state National Guard, this would simply show that the Founders were right when they feared that some future generation might wish to abandon liberties that they considered essential, and so sought to protect those liberties in a Bill of rightsbut we should not pretend that these are not reductions of rights." The MSA 28.426 Sec.6.1 is such a reduction of rights.
CoBra(too)
(10/18/99; 18:21:03MDT - Msg ID:16825)
Re:PPT
ORO - thanks for providing the link to Wash. Post's PPT (hillary-ous) article, which I was trying to find again - you've saved me lots of time. And thanks to you SteveH, JCS and Journeyman I have to reconsider a recent short post "seems as the PPT has lost control of what to control" -at least not yet, but "buying time"-for a "controlled" bubble deflator vs. implosive meltdown- may become increasingly difficult with the emergence of adversaries of some stature.
To be fair, a piece or two of the cake might not be asking for too much, would it? -indeed! Other President's financial markets working group(ie)s would surely like to lend a hand in rigging the friggin' $-frigate as some of the old hands either abandonded ship altogether - seasick RR defected Slick WJC for greener pastures - or else wear out at the continuous watches.
In the era of globalization the international division of laborious rigging of markets, cooking of books and protecting the politically correct partys should be more evenly distributed - globally.
IMHO - CB2
SteveH
(10/18/99; 18:14:05MDT - Msg ID:16824)
Speach
Gold Markets and Demand
Navigation
Core/Home
Domain Page
Help/About
Feedback
Search
Clear Frames
Speeches & Articles Archive
THE DENVER GOLD GROUP
Mining Investment Forum '99
The Westin Hotel Tabor Center, Denver Colorado
18 October 1999
Keynote Speech
given by Miss Haruko Fukuda
Chief Executive Officer
World Gold Council
Chairman, ladies and gentlemen,
Thank you for your warm welcome. It gives me much pleasure to be here at this distinguished gathering of the Denver Gold Group Investment Forum. When Michele Ashby asked me some months ago if I would make the Keynote speech over lunch I accepted without hesitation because, even though I was new to the world of gold, I was already well aware of the splendid reputation of the annual Denver Gold Group meeting as the pivotal event of the gold industry each year. What I did not know was that we would be meeting in a dramatically changed environment of renewed confidence and optimism.
Before I speak on the latest development, I should like to pay a personal tribute to Michele for her courage and professionalism in arranging this annual event. I know how hard it is to establish and maintain the integrity of a global meeting of this scale year in and year out. She told me to keep going as the gold price declined daily to new lows in July. Today we are meeting at what will always be remembered as a landmark in the history of the gold market. As mining share analysts assess the impact of the new dynamics in the gold market on the future earnings of gold mining companies and their financial gearing strategies, I wonder how many mining companies have had to re-write their presentations during the last two weeks. I am privileged to attend this historic Denver Gold Forum and would like to ask you all to join me in expressing our gratitude to Michele for this important occasion.
On Sunday 26th September - just three weeks ago - a new era dawned for gold. For the first time in almost exactly 28 years, since convertibility of gold into US dollars for official holders was suspended on 15th August 1971, the governments with the largest gold holdings made a positive joint statement on gold. Those three decades have been a period in which gold was persistently sidelined by the official sector attempting to demonetise gold. In recent years the market has been plagued by persistent rumours of ever increasing official sector sales and each and every announcement of sale by central banks has acted as a trigger for a new downturn in the price of gold. Yet the amount of gold held in reserve by the official sector has barely declined during that period - a decline of a mere 6% in three decades. The attempt to replace gold with SDRs as a reserve asset was an abject failure.
The rationale behind the decision of the British government to more than halve its gold reserves earlier this year announced on 7th May has never properly been explained but it sparked off a fierce international debate on the role of gold as a reserve asset. In planning to bring the level of British gold reserves down to a mere 300 tons the Prime Minister told the House of Commons that gold has been 'a bad investment' and that 'other countries were selling too. The IMF is also selling.' Today that answer sounds singularly out of tune.
Acting as spokesman on behalf of 15 central banks - the ECB, the 11 national central banks in the European System of Central Banks (the Eurosystem), plus the central banks of Sweden, Switzerland and the UK - Mr Wim Duisenberg, the President of the European Central Bank, read out their historic five-point agreement on the sidelines of the IMF/World Bank Annual Meeting in Washington. The five points in the order in which they were put in the Communiqu were as follows. I read them verbatim:
Gold will remain an important element of global monetary reserves.
The above institutions will not enter the market as sellers, with the exception of already decided sales.
The gold sales already decided will be achieved through a concerted programme of sales over the next five years. Annual sales will not exceed approximately 400 tons and total sales over this period will not exceed 2,000 tons.
The signatories to this agreement have agreed not to expand their gold leasings and their use of gold futures and options over this period.
This agreement will be reviewed after five years.
We at the World Gold Council have christened it The Washington Agreement on Gold. I hope you will all also use this name.
The Washington Agreement was finalised and agreed over lunch on that Sunday in Washington of the Group of Ten central bank governors, and the US Secretary of the Treasury, Lawrence Summers, and the Chairman of the Federal Reserve, Alan Greenspan, were also present. It is a remarkable achievement. It is extremely rare for independently-minded central banks to agree to co-ordination of this magnitude on reserve management. This is not just one-off joint intervention in foreign exchange markets of the kind we see from time to time, but an agreement to last at least five years. The agreement is significant in several respects. It also raises some far-reaching questions for the future.
First, although it does not have the legal force of an international treaty, it is nonetheless an international agreement signed by each central bank governor, each having legal responsibility for his country's official gold reserves. For the UK, the Governor of the Bank of England signed on behalf of HM Treasury, where that legal responsibility rests. The agreement will be monitored by the Bank for International Settlements, with a dedicated unit to be set up there for this purpose.
While the agreement is between European central banks, including the ECB, it was put together through the Group of Ten central bank governors who meet regularly in Basle on a monthly basis. It therefore has a broader dimension in that the United States and Japan have been at least present at the G10 discussions and in agreement with the spirit of the agreement. Indeed, the Japanese government issued a statement in support the following day on 27th September stating that it also will not be selling or lending gold. The United States had of course stated its intention not to sell earlier on 20th May this year and neither the US nor the IMF lend gold.
Secondly, the agreement covers nearly 50% of the world's official gold holdings as the 15 signatories of the Washington Agreement collectively hold approximately 16,000 tonnes (including the 2,000 to be sold by 2005) out of the world total official holdings of 33,500 tonnes. Adding to this the US, Japan, the IMF and BIS (both of which have stated that they will abide by the spirit of the Washington Agreement), Australia, which already said earlier in July it will not sell any more gold, and South Africa, which has been actively opposing the UK sale, we calculate that over 85% of the world official sector holdings are now out of the market.
Thirdly, the agreement to limit lending to present levels is certain to reduce substantially any new supply of gold for borrowing, given that the US, Japan and the IMF are also out of this market. We estimate that about half of the currently outstanding gold leases of at least some 5-6,000 tonnes has come under the restriction of the Washington Agreement, and many of the countries not party to the agreement are thought to be already "fully lent" or are barred from lending by domestic legislation.
Fourthly, as I have been told by signatory governors of central banks to the agreement, there is good reason to expect that the agreement is watertight. Not only do the signatory central banks have legal control over their gold reserves, their governors meet every month in Basle. Eleven out of 15 participate in Economic and Monetary Union (EMU) and their gold reserves are already controlled in part by the ECB. The UK and Sweden, though not part of EMU, are also legally members of the European System of Central Banks. It is also possible that Switzerland will have associate status with the EU in future.
By 2005 when the agreement is to be "reviewed" both the UK and Sweden might be either in or preparing to be in the Euro, thus bringing their reserves under ECB control. How strongly politically motivated this agreement has been amongst the European nations is one of the questions that will be answered in time. But it is now certain, whether by default or intent, that the Euro has equal if not greater gold "backing" than the US dollar.
My perception is that there was a congruence of various factors that gave rise to this agreement. There were certain to have been Euro-political, world-economic, and market-related reasons. Perhaps the most interesting and far-reaching question for the future that comes to my mind is whether this agreement will end up as a forerunner in some form to a return to an official price for gold. Though that is unlikely and was certainly in no way intended to lead to this, at least one of the triggers for the agreement was the price falling to a level not seen since 1978. What level of price would be appropriate and acceptable by the major official holders for valuing their gold reserves? Will any of this imply central bank intervention in the conventional sense in the gold market and will BIS continue its co-ordinating function in future to encompass all the G10 countries? It opens up ultimately a whole host of philosophical as well as practical questions about the role, nature, and the "value" of gold as a monetary asset. In any event, the world's largest holders of gold have now said that they will be keeping their chestnuts in their bag; what will other central banks do?
As if not to be outdone by European central bankers, the IMF held its Press Conference on the HIPC debt relief the very next day on Monday 27th September. The confirmation that the IMF would not be auctioning its gold to finance debt relief but will use what it has called "off-market" transactions represented a double coup for all of us who have been campaigning for many months over this issue. Though we found it gratifying to hear the IMF spokesman say (I quote from the transcript of the Press Conference) ' I think there was quite an effective campaign by the World Gold Council, and I think the World Gold Council has said on the record that actually it welcomed this proposed change because it recognised exactly that an off-market transaction does not have and cannot have any impact on the gold price' (End of quote), it was a triumph for the concerted campaign by different parts of the industry pulling together. In essence the proposal now is for the Fund to sell up to 14 million ounces of gold to member countries with payments due to the Fund for past loans. The country would buy with SDRs or usable currency just the amount of gold worth, at market value, its debt to the Fund. It would immediately settle with the Fund by returning the gold, which would then be entered in the Fund's books at market price. The Fund's gold is valued at US$48 an ounce (SDRs 35) compared with the market value of over US$300 now. A straightforward revaluation for the required quantity of gold would result only in an accounting gain; moreover, such a revaluation is inconsistent with the Fund's Articles of Association. So the Fund has shown its customary flair for ingenuity in overcoming the technical difficulty.
As recently as this July, Michel Camdessus, with the backing of the Group of Seven heads of government, said that some open market sales of IMF gold would certainly be entailed in funding HIPC debt relief. It was only after the gold price hit a succession of new 20-year lows in July following the first British auction on 6th July that the Fund grudgingly admitted it was considering "several options" to make use of its gold. By then it seemed virtually certain that the US Congress would not approve the essential US vote on open market sales on the IMF Board. Opposition from US lawmakers came broadly from three camps:
those who ardently oppose virtually anything the IMF does;
those representing gold-mining districts; and
those, such as Jim Leach, the influential chairman of the House Banking Committee, who were concerned about the effect on the mining industry in the developing world.
This third group, which included the Congressional Black Caucus, promised to be a growing one as the facts became more widely known - in part as a result of the circulation of the World Gold Council's study "A Glittering Future?" which no one has disputed in either substance or detail. It is worth noting that the economic research into the role of gold production in poor developing countries was started two years previously by the Public Policy Centre of the World Gold Council and that widespread dissemination of the findings of this research led to impartial observers who were concerned neither with politics nor gold interests also becoming convinced of the dangers of IMF gold sales and publicly expressing their concerns. The World Gold Council was then concerned with engaging the IMF officials in discussion on what alternative ways existed for the Fund to finance its portion of the HIPC debt relief throughout August and September. Some of you will have seen the exchange of correspondence between Mr Stanley Fischer, the First Deputy Managing Director of the IMF, and myself on the IMF and WGC web sites.
Far from gold being marginalised and finished as a monetary asset, the latest IMF proposal uses gold as money to pay back debt! What happened to SDRs, once thought to be the answer to external payment problems?
Gold is back with its customary charisma. I will tell you an amusing aside. The British Chancellor of the Exchequer may have thought he was getting rid of it. But as we speak today gold is being flown back to London in crates: Brinks Mat vans are busy delivering consignment stocks flown back from lying idle in all parts of the world to London, to the Bank of England and to other gold depositaries. Bullion banks need them for their liquidity.
What greater affirmation can there be for gold as a monetary asset than the declaration by 15 of the world's largest gold holders that 'gold will remain an important element of global monetary reserves'? Wim Duisenberg, the President of the ECB, in announcing the Washington Agreement, acknowledged generously that he and his fellow central bankers were influenced by the arguments of the World Gold Council and gold-producing countries: he had to blame it on someone! In private conversation, I have been told on good authority, Michel Camdessus too, who incidentally refers to the World Gold Council as the "Conseil de l'Or" as if this was a Byzantine institution, - it sounds grander in French - also acknowledges the role of the Council. But France and Germany who are known to have led the initiative have the tradition and natural understanding of the intrinsic value of gold. They understand that gold is no one's liability, that it is universal and eternal. They hold a large proportion of their external reserves in gold because they believe that gold is the only thing that will ultimately secure a country's monetary independence and sovereignty.
The Chairman of the Federal Reserve, Alan Greenspan, said on 20th May to the House Banking Committee soon after Britain announced its decision to sell gold that (I quote) 'gold still represents the ultimate form of payment in the world. Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody. Gold is always accepted.' (End of quote) But even amongst friends, between Britain and America, gold played a crucial role in Britain's war efforts. Sir Martin Gilbert writes in his classic biography of Churchill that at the end of December 1940 (I quote): 'Relations with Roosevelt had reached a difficult point, almost a breaking point. Many of Churchill's most urgent requests for war supplies had failed to win the President's approval. Britain's inability to pay was proving a serious stumbling-block. Arms purchases for December, January and February amounted to US$1,000 million, but her gold reserves and dollar balances had been so depleted by a year of war expenditure as to total only $574 million. The Americans offered to provide the equipment for ten British divisions but, Churchill told his War Cabinet colleagues, wanted $257 million paid in advance out of these rapidly dwindling gold reserves. Roosevelt had gone so far as to send an American warship to the Simonstown naval base near Cape Town to collect the $50 million of Britain's gold reserves held in South Africa.' (End of quote) Roosevelt was clearly being advised by the US Treasury and the Fed that if Britain sued for peace the pound sterling would become valueless. Sir Martin Gilbert continues, referring to January 1941 (I quote): 'Even as Churchill and Hopkins talked, Roosevelt was announcing the financial solution; the United States would build what Britain needed and then lease it to her, on a rental basis, with payment to be delayed until after the war. But before this Lend-Lease arrangement came into force, Britain must pay all the debts she could in gold, and by the sale of British commercial assets in the United States. It was a hard bargain, depriving Britain of what was left of her economic strength. ' (End of quote)
Gold is, then, held in official reserve not just as an investment as the British Prime Minister asserted, but partly at least for the rainy day. Our Asian friends understand this well. During the recent financial crisis the South Korean government asked its people to hand in their gold to help the national economy. In 1991 the Indian government used its gold reserves to raise US$1 billion to avoid default. The Chinese, the Indian and Middle Eastern ladies hold on to their high caratage gold jewellery lest their husbands desert them. The World Gold Council has recently collaborated with the government of Indonesia, where the domestic currency has depreciated by over 80% against the dollar to introduce last month gold coins for saving to pay for the pilgrimage to Mecca. Gold comes into use at unexpected moments but when it does it outshines all else for its universal acceptability.
Now the pendulum has swung away from the extreme situation into which the gold debate had plunged. So what about the market? All of you are of course greatly better qualified to speak on this than I am. In any case the gold market is thick with its own private agenda and I am not really party to these. But I would like to comment on the more general aspect of the market - the part you would say ordinary lay people like myself can understand. Well-known, respected analysts have been saying "gold is finished", frequently misquoting John Maynard Keynes. Keynes, for instance, never wrote that gold is a "barbarous relic". What he wrote was (I quote): 'In truth, the gold standard is already a barbarous relic' (My italics; End of quote) - a very different concept. Keynes well understood the complexity and the multiplicity of the role of gold in economics. He understood too that gold meant different things to different people at different times and that its "value" is relative to other things - as the value of anything always is. Writing in 1923, rejecting the arguments to return to a gold standard, in his Tract on Monetary Reform he said (I quote): 'The value of gold has not depended on the policy or the decision of a single body of men; and a sufficient proportion of the supply has been able to find its way, without any flooding of the market, into the Arts or into the hoards of Asia for its marginal value to be governed by a steady psychological estimation of the metal in relation to other things. This is what is meant by saying that gold has "intrinsic value" and is free from the dangers of a "managed" currency.' (End of quote)
Today the dominant theme in the gold market is the impact of the Washington Agreement on the demand and supply balance; analysts and commentators talk as though the price movement of the last three weeks is entirely the responsibility of the European central bankers. But we all know that markets are made up of many independent forces and the determinants of price are not always immediately visible. On high levels of physical gold demand, the World Gold Council is confident of its analysis as it tracks in detail demand patterns in the major consuming countries. But as Keynes well understood gold has something to do with the stability of internal domestic prices and the stability of external exchange rates (and the two are of course linked). The Washington Agreement came at a time when commodity prices led by oil are rising faster than at any time for more than a decade. This could feed through to higher wage demands in time. Global economic prospects have picked up substantially with world GDP growth likely to exceed 3% for 1999; the US dollar has recently weakened with a growing trade deficit, and long bond yields have been rising. We are not here today to debate the prospects for inflation. But I would not totally discount the possibility that inflationary expectations may be a factor in the market. The Washington Agreement was certainly a trigger, a big trigger, for market participants to reassess their understanding of the marginal value of gold in relation to other things. We cannot yet judge whether the recent price movement in gold is indicating a wholesale change in the structure of relative prices. Many analysts still believe, though, that when the current panic short covering comes to an end the gold price will resume its downward spiral.
But when and how will the short covering "come to an end"? Nobody really knows the extent of the supposed gigantic short positions that have built up over the recent years, possibly even posing a new threat of instability related to those gold derivatives. What does seem certain to me is that the dynamics of the gold derivative markets have changed dramatically as a result of the Washington Agreement limiting central bank lending. The World Gold Council some months ago commissioned a major study on the international market in gold derivatives which we believe will continue to play a significant role in bullion in the future. We expect to complete this study early next summer. With this and in other ways we strive for greater transparency and to encourage all those concerned to make a balanced assessment of the role of gold in our economies.
If the Council has had an influence on this historic agreement, it is a result of work we have carried out over a number of years. I would like to mention in particular our work with central banks, where we have endeavoured to position gold as a reserve asset in the context of the changing environment facing central banks and the pressures on them,
SteveH
(10/18/99; 18:03:32MDT - Msg ID:16823)
Thanks ORO
Oro,
You amaze me again. You didn't answer the question is it legal, although JCS did, I believe. I would guess that the plunge protection team breaks the 5th and 14th amendments though as it doesn't allow due process or equal protection under the law. In fact the entire concept of trading through GS provides an unfair advantage and smells of insider knowledge. Anyway, due process as it takes away a liberty interest for shareholders in gold stocks by causing a market action against them and unequal protection under the law because it stems from a law that works to protect some (longs) and hurt others (shorts and gold stocks). But as in any law, one most go to the courts to prove up its ultimate constitutionality.
ORO
(10/18/99; 17:36:45MDT - Msg ID:16822)
This one does work
http://www.decisionpoint.com/ChartSpotliteFiles/ChartSpot02.html
http://www.decisionpoint.com/
See newer Newman stuff in the Chart Spotlight section
Tanglewild
(10/18/99; 17:30:02MDT - Msg ID:16821)
Journeyman msg #1687
http://www.decisionpoint.com/chartspotlitefiles/chartspot02.html
Hi, it seems that chart is no longer there. Gremlins???
regards, tw
JCS
(10/18/99; 17:12:36MDT - Msg ID:16820)
Journeyman; who owns FED
The plot thickens and gets even better:
The FED was created because of a "need" to have a central bank due to the Banking/Financial Panic of 1908. But historians all agree that the crisis was created by J.P.Morgan who was, effectively, the central banker in the U.S. at the time. He controlled most of the gold bullion and when the banks got in trouble he loaned them gold to bail them out and, ultimately ,bought their allegiance for a CB. When the Federal Reserve Act was passed, the NY FED was and still is a private corporation and had 300 stockholders, the majority of voting shares held among the list that you provided. But, there's even more: most of those names were involved in the financing of the Revolutionary Army in 1776 when the New Colony declared its independence from the King. So the "big money" financed the formation of our nation and in return, got whatever it wanted in "franchises" in the new land. You can see this on the back of every $1 bill. Its the pyramid and the eye. At the base of the pyramid is a date: May 1, 1776, the day the allegiance was formed among the big money to finance the war effort.
Its a truly amazing story that goes back much, much further in time, but space here just doesn't permit going into all the details. However, as a teaser, it all began in Babylon about 4,000 years ago!!
Good luck
ORO
(10/18/99; 16:42:47MDT - Msg ID:16819)
SteveH- JCS PPT Who's who
http://washingtonpost.com/wp-srv/business/daily/feb/26/plunge.htm
Take note that this is an interpretation of a compendium of news, editorials, and rumors. Take what you will as fact. I can't confirm much of anything.
1. JCS is spot on.
2. Oversight is by the Federal Reserve, SEC, CFTC, Treasury and NYSE heads.
3. It was set up according to the recommendations of the post 1987 Report of the Working Group on Financial Markets - or Brady Report. Its' recommendation was (of course) to keep themselves active, and to have a "physical" presence in the markets, particularly the NYSE.
Article in link above is a "nice" description
"the members of his Working Group on Financial Markets -- the secretary of the treasury and the chairmen of the Federal Reserve Board, the Securities and Exchange Commission and the Commodity Futures Trading Commission."
4. The trading is done through NY Fed stock holder Goldman Sachs. Part of the methodology is flooding the markets with liquidity (i.e. loans) and then pumping the futures by command from the booth. Goldman buys on its own account trading with money borrowed from the Fed with assurances of a buy back if it fails.
5. Stock index futures are normally purchased. Particularly S&P.
6. In parallel to this function, Treasury runs the exchange stabilization fund to support selected markets through loans for particular transactions. I think they are not active anymore.
I do not know that any of the agencies do their buying outright.
The Fed has routine open market operations in the bond markets and gold derivatives. This is what it is allowed to "play with" according to its charter.
I do not know of any action by the PPT or Treasury today, but suspect that the action at the end of last week was orchestrated.
To give some idea of the thinking behind this, here is another quote from the link above.
"""It was extraordinarily difficult around 11 o'clock," Corrigan recalled. "The market was at one point down another 250 points, and that's when the debate with Phelan took place."
Simultaneously, Corrigan and other central bank officials spoke privately with the big banks and urged them not to call loans they had made to Wall Street houses, which were collateralized by securities that could no longer be traded and whose value was in question.
A final critical moment came that day when the Fed decided not to shut down a subsidiary of the Continental Illinois Bank that was the largest lender to the commodity futures and options trading houses in Chicago. The subsidiary had run out of capital to provide financing to that market.
"Closing it would have drained all the liquidity out of the futures and options markets," said one former top Fed official involved in the decision. Investors use stock futures and options to hedge positions in the underlying stock market. ""
The idea is buy time by lending money and pressing on firms not to execute margin calls on clients.
Al Fulchino
(10/18/99; 16:10:45MDT - Msg ID:16818)
sorry
Last sentence should read "That isthe myopic view."
Al Fulchino
(10/18/99; 16:09:55MDT - Msg ID:16817)
Journeymen
It is no coincidence that the income tax and the federal reserve system have come into being. Note the similar time frame. Some will see this view as seeing a conspiracy under every rock. That is the myopic.
arlen
(10/18/99; 15:51:02MDT - Msg ID:16816)
"THE CRASH OF 1999...1929 Revisited & Magnified"
http://wwww.viettexas.com/myhome/OZ.html
This a forcast...a prediction...a augery and intro into
a UNIQUE body of research on the Markets. Available ONLY
from the author, UNCENSORED and entitled:
"MILLENNIUM FINANCIAL FORCASTING"
-------------------------------
arlen
(10/18/99; 15:49:23MDT - Msg ID:16815)
"THE CRASH OF 1999...1929 Revisited & Magnified"
http://www.angelfire.com/ok3/oz/index.com
This a forcast...a prediction...a augery and intro into
a UNIQUE body of research on the Markets. Available ONLY
from the author, UNCENSORED and entitled:
"MILLENNIUM FINANCIAL FORCASTING"
-------------------------------
You are also invited to visit website:
http://www.viettexas.com/myhome/OZ.html
Al Fulchino
(10/18/99; 15:47:29MDT - Msg ID:16814)
Must Read
www.geocities.com/Heartland/7006/psychopolitics.html
Everyone, I have meant to share this for a long time. It is a MUST read. If you value your wealth, your freedom your free spirit and not necessarily in that order, you will sit and be shocked if you have never read the text that you will find in the link above. I have copied and pasted a small excerpt that I think will give you a small taste. The entire text came to light in the thirties. Perhaps, with so much time having gone bye, some will see why sheeple are just that. The link is not an overly long read, but I find that you will be missing too much if you skip any of the chapters. Hope it is useful to you all. It likeley is the second strongest thing I will ever contribute to this forum.
What follows is a pretty mild example of what you will find .
From the Russian Textbook on Psychopolitics:
The handling of economic propaganda is not properly the sphere of psychopolitics but the psychopolitician must understand the economic measures and Communist goals connected with them.
The masses must at last come to believe that only excessive taxation of the rich can deliver them of the "burdensome leisure class" and can thus be brought to accept such a thing as income tax, a Marxist principle smoothly slid into Capitalistic framework in 1909-1913 in the United States. This, even though the basic law of the United States forbade it and even though Communism at that time had been active only a few years in America. Such success as the Income Tax law, had it been followed thoroughly could have brought the United States and not Russia into the world scene as the first Communist nation.
Journeyman
(10/18/99; 15:46:02MDT - Msg ID:16813)
WHO OWNS THE FEDERAL RESERVE; JCS @ Message ID #16809
You've probably been assuming your whole life, when you thought of it, that
the "Federal Reserve" was a government agency of some sort. As hard as
this may be for you to believe, despite the misdirective use of the word
"Federal" in it's name, it is not. It is, in fact, an agglomeration of
privately owned banks which work hand in glove with the Federal Government.
-L.Reichard White, "MONEY," (Brownsville, Penna: WhiteINK 1997)............
...........................................................................
.....The bankers have also been able to deceive the American people into
believing that a Federal Reserve Bank is a government institution, when in
fact, each one is privately owned. If you want to see for yourself, look in
the government pages of a phone book in a large city such as Los Angeles or
San Francisco. [A city where there is a Federal Reserve branch bank. -LRW]
You will not find any Federal Reserve Bank listed in the government pages.
But you will find a Federal Reserve Bank listed in the white pages, just
like any other privately owned corporate entity. The Ninth Circuit Court of
Appeals also confirms the fact of private ownership. .....................
.....Each Federal Reserve Bank is a separate corporation owned by
commercial banks in its region. -Lewis v. United States, 680 F.2d 1239,
1241 (1982). -Otto Skinner, The Biggest 'Tax Loophole' of All, (San Pedro,
CA: Otto U. Skinner 1997) p. 163 .........................................
..........................................................................
Here is an idea of who owns the Federal Reserve from The Economic Rape of
America by Fredrick Mann, p21: ............................................
...........................................................................
.....WHO OWNS THE FEDERAL RESERVE?.........................................
...........................................................................
.....There has been much speculation about who owns the Federal Reserve
Corporation. It has been one of the best kept secrets of the century,
because the Federal Reserve Act of 1913 provided that the names of the
owner banks be kept secret. However, R. E. McMaster publisher of the
newsletter The Reaper, asked his Swiss banking contacts which banks hold
the controlling stock in the Federal Reserve Corporation. The answer:
...........................................................................
1. Rothschild Banks of London and Berlin ..................................
2. Lazard Brothers Bank of Paris ..........................................
3. Israel Moses Sieff Banks of Italy ......................................
4. Warburg Bank of Hamburg and Amsterdam ..................................
5. Lehman Brothers Bank of New York .......................................
6. Kuhn Loeb Bank of New York .............................................
7. Chase Manhattan Bank of New York .......................................
8. Goldman Sachs Bank of New York .........................................
...........................................................................
.....In The Secrets Of The Federal Reserve, Eustace Mullins indicates that,
because the Federal Reserve Bank of New York sets interest rates and
controls the daily supply and price of currency throughout the U.S., the
owners of that bank are the real directors of the entire system. Mullins
states: ...................................................................
...........................................................................
"The shareholders of these banks which own the stock of the Federal Reserve
Bank of New York are the people who have controlled our political and
economic destinies since 1914. They are the Rothschilds, Lazard Freres
(Eugene Mayer), Israel Sieff, Kuhn Loeb Company, Warburg Company, Lehman
Brothers, Goldman Sachs. the Rockefeller family, and the J.P. Morgan
interests." ...............................................................
...........................................................................
Regards, Journeyman
canamami
(10/18/99; 15:37:18MDT - Msg ID:16812)
Reply to Viper
Viper,
Sadly, there is some genuine truth to what you posted. I have noted that gold advocates sometimes do have an unfortunate tendency to create what Karl Popper called ad hoc premises - i.e., explanations for the failure of a predicted event to occur, designed to uphold the validity of the original theory or postulate.
Viper
(10/18/99; 15:19:52MDT - Msg ID:16811)
Post from another forum
Good afternoon all,...I found this on another forum, thought you might find it of interest. I for one haven't decided yet wheather I find it funny or not.
It was titled, REASONS TO BE BULLISH IN GOLD....I think this gentleman has viewed this forum. I have seen him on several, although I don't believe I've ever seen him post here.
Here Goes!......
The recent short covering rally has created an incredible wave of enthusiasm, especially amongst newer traders. The recent rally certainly has put a spark into a once dead market.
Most commodity forums (not so this one) are full of stories
of manipulations, and predictions of gold prices going to the moon.
For the new trader, figuring out the fundamental background of gold may be an overwhelming task. To make this task easier for you, I have collected some posts of various gold afficionados, citing what makes this market move. I hope the presented comments may give you an idea on how to really analyze this market.
Lease rates are high - this is bullish for gold, because the people doing lease programs will be in trouble when it comes to covering their short positions.
Lease rates coming down - this is bullish for gold, because the people doing lease programs are in trouble.
Large open long position in options (a large Dec option position was quoted, a few days ago) - this is bullish for gold, because smart money entered this position, and these guys know what they are doing.
(this option contract, of course, has an equally large short position) Large open short position in options - this is bullish for gold, because the not-so-smart money entered into these positions, and they will soon be sorry.
Large commercial long position in gold futures, before the move starts - this is bullish, because the big guys know where it's going
Large commercial short position in gold futures - this is bullish, because the big guys will have to cover their shorts.
Silver going down - this is bullish for gold, because the silver/gold spreaders are liquidating their spreads (long silver, short gold)
Silver going up - this is bullish, because it shows that all metals will now run
Dollar becoming stronger - this is bullish for gold, because the other countries will be forced to liquidate their gold reserves to raise money, so that they can offset the falling value of their currencies.
Dollar becoming weaker - this is bullish for gold, because we will have to pay more US Dollars for gold that's traded on overseas markets.
Crude oil going up - this is bullish for gold, because it is inflationary, and gold will go up with inflation.
Crude oil going down - this is bullish for gold, because. wellllll, heck, its bullish too
the stock market going down - this is bullish for gold, because investors will leave the stock market and buy gold
the stock market going up - this is bullish for gold, because the stock market will create a lot of new wealth, which eventually will be diverted into gold.
Interest rates going down - this is bullish for gold, because investors will flock to the more tangible value of gold
Interest rates going up - this is bullish for gold, because it is inflationary.
The XAU (gold stock index) going up - this is bullish for gold, because traditionally the XAU leads gold
The XAU going down - this bullish for gold, because it reflects the troubles many gold mining companies are in, due to problems with short option positions.
As you can see, all you have to do is study the news and do some thinking, and before you know it, you will know whether to buy or sell gold.
While doing your studying, you also have to be aware of the big players: there are some powerful interest groups who have tried to force prices down, and there are some powerful interest groups who try to force prices up.
Proper etiquette requires you to use the terms "manipulation" or "conspiracy" whenever you mention the group that pushed prices down. On the other hand, when you mention the group that is trying to push prices up (such as GATA), it is a good idea to use terms such as "reliable source of information", or any other respectful terminology.
Also, you have to become a better judge of character than you might have been up to now. For example, you have to know that people who are short gold, be it banks or large specs, are despicable characters who deserve to be punished by rising gold prices, whereas people who buy metals, such as Buffett, Soros, and recently Gates, are benign and warm people, who have your well-being in mind..
There it is! Not so difficult, is it?
(I thought, a little humor might lighten up our sometimes tense days. But then, to some, this isn't humor!)
GK
canamami
(10/18/99; 15:04:15MDT - Msg ID:16810)
Question for Oro
Did the PPT cause the decline in the POG and the price of silver today?
JCS
(10/18/99; 14:38:31MDT - Msg ID:16809)
PPT-Steve H
Not to steal any of ORO's thunder, 'cause, just as they say in that commercial "you da man!",
PPT = Plunge Protection Team, aka, CPT = Crash Protection Team, consists of Mr. Peter Fisher, Trading Strategist of the NY FED. He has a team who occupy an office in the NYSE building with a glass window overlooking the trading floor. They have constant contact with their floor sources and execute most of the "stabilizing" trades through Goldman Sachs. As I understand it, it's is legal under an Executive Order established after the 1987 crash. However, KIM, no one knows what they do, what positions they take or the strategy, whether VST, ST, or, I doubt, IT, trades, because the FED has never been audited and there's no law that requires them to report their market activities. As we have , no doubt seen posted here and other places, the FED isn't owned or controlled by the US Gov't so they do what they please, to suit the needs of the FED's owners.
TownCrier
(10/18/99; 14:32:35MDT - Msg ID:16808)
Ashanti wins extension on standstill deal
http://biz.yahoo.com/rf/991018/vh.html
Ashanti Goldfields was granted an extension to their standstill agreement with its gold hedging counterparties for up to one week. Does anyone else believe that Ashanti is simply the industry's high-profile "poster child," and that this sort of thing is working itself through a great many set of counterparties out there in one degree or another? The best guess it that when the dust settles, very little newly produced gold will be reaching the open market for quite some time...it will already have commitments to a destination. Old sovereigns from other people's pockets (so to speak) may be the only supply available that the rest of us will be vying for.
ORO
(10/18/99; 13:48:08MDT - Msg ID:16807)
Yellin' of troy - Computer trouble
http://www.quote.com/livechartscom/
I am sorry you had lost your posts. I am looking forward to reading your work.
I can only suggest you use a word processor or notepad and copy and paste from there. When I go beyond a couple of paragraphs I keep the post on a text or word processor and save at every turn. On the word processor I put on a 10 minute autosave.
el St.One - look at the intraday charts right now. You will see what a PPT intervention looks like. Note the strong correlation of the SP premium being pushed up on a sudden motion "out of thin air", and the sharp rebound on the Nasdaq. (klick the $COMPX)
Tomcat
(10/18/99; 13:47:34MDT - Msg ID:16806)
Al Fulchino, ORO, TC, Chris Powell
Al: I am fine. Thanks for asking. Al, that question at the bottom of the post was actually part of the repost so I can't really contribute much. However, if the premium (the spread between spot and the street price for physical) is starting to rise, then that is very significant. I am hoping more knights/ladies will post any information on premiums that they hear about.
ORO: Your latest reply to Yellin and AragornIII is unbelievably great. If just a fraction of what you write could be put into a book or paper it would spread faster than fiat in inflationary times.
TC: Amazing how those repos are getting pumped into the system.
Chris Powell: Those urls are just what the doctor ordered. Thanks.
SteveH
(10/18/99; 13:45:31MDT - Msg ID:16805)
ORO
You amaze me.
Who is the PPT made of and is what you are talking about legal?
ORO
(10/18/99; 13:39:15MDT - Msg ID:16804)
el St.One - PPT
PPT is not at all assisting. They are pulling out most of the time, assisting only in short intervals near the close. The rallies they produce are being sold into. Most of the Dow strength is a result of previous losses bringing the dipsters in to pick up bits of crushed blue chips. The Dow has also a skew to oil and banking and these are doing rather well. Banking because of the coming earnings reports, oil because of the inflationary rise in oil prices.
The selling is coming from the futures, not only the individual stocks. That is where the very high market cap to float value ratio of the megatech stocks is causing their shares to be disproportionately shorted as part of the arbitrage from the futures.
When the futures are being pumped up by the PPT, this show up as extra strength in megatechs. These have been showing weakness in all but the short futures driven upswings. The PPT isn't even trying to reverse the markets, only to keep them stable.
JCS
(10/18/99; 13:37:14MDT - Msg ID:16803)
Re: Yellin of troy--needs help
I don't know what the problem is that you're having, but if you'll use a word processor like Netscape composer, type your message and then copy & paste into the message area you'll save yourself the loss of 2+ hours of typing an composing. This way you can save your typed material in a text file even if the message board screws up.
Yellin' of troy
(10/18/99; 13:33:13MDT - Msg ID:16802)
webmaster, sysop, anyone
On Saturday I tried to post a fairly long message (though not as long as I've done in the past), and when I was almost through, my Message box suddenly went blank, as if I had just started, and I couldn't get it back. (In fact, I couldn't then even manage to post an "arrow" when I tried.) I lost over an hour's work. Today, just now, I tried again, and the same thing happened. No warning, no graceful degradation, just another hour and a half down the drain. What's going on? Is this a Windows problem? a problem with your system? Can anyone help? I can't afford to keep trying until I get some advice or assurances.
el St.One
(10/18/99; 13:25:35MDT - Msg ID:16801)
C P T
Looks like the Crash Protection Team are giving it their best effort. If they can hold the DOW together for another hour, they will be toasting each other with double Martinis with triple olives.
I had my doubts, but when they can hold the Dow steady while the NASDAQ losses a 100 points they must have some very deep pockets. I'll bet some of it is coming out of my pocket. Time to put a better lock on this shallow pocket. Buy more real stuff. GOLD GOLD GOLD and more GOLD
el
Al Fulchino
(10/18/99; 13:00:00MDT - Msg ID:16800)
Your question
Tomcat, how are you? You asked about SM not wanting to part with their product. If they truly did not wish to part with it, IMO, they would not have it up for sale. I have gasoline in the ground.....I am willing to sell it today for what I can charge. Now, if i was unsure of future deliveries, then I would hold back. I am no expert here but, I believe the principle holds just the same. They are selling for a reason.And if they are part of a cabal that wishes not to put it on the market then there can be only ONE reason. And that would be to NOT scare the market. Best wishes.
Tomcat
(10/18/99; 12:51:36MDT - Msg ID:16799)
Repost: More on the possibility of rising premiums
Date: Mon Oct 18 1999 11:50 rhody (Scotia Mocatta spreads are crazy! I just phoned them to get) ID#408236 Copyright 1999 rhody/Kitco Inc. All rights reserved
Scotia Mocatta spreads are crazy! I just phoned them to get a quote for gold maple leafs in Canadian funds and was quoted $516 per one oz coin. It was 498 yesterday per coin. Kitco, on the other hand is quoting 492 right now for the same coin, and was quoting 496 yesterday. Gold is down over
$US4, but Scotia Mocatta RAISED prices today. This is not a function of an exchange fluctuation, or Barts's prices should also be going up. What gives with Scotia Mocatta?
Any comments? SM as a bullion bank will be part of the CABAL. Could it be that they really don't want to part with gold, even at retail rates at these levels?
Tomcat
(10/18/99; 12:32:03MDT - Msg ID:16798)
Repost: Are premiums beginning to grow?
Galearis (@farmer: I was jawing with rhody the just the other day and chewing over the) ID#430259: Copyright 1999 Galearis/Kitco Inc. All rights reserved
I was jawing with rhody the just the other day and chewing over the chaos of this market and the fundamentals of the pms. Ted Butler ( of course! ) would also have good insights into this market. The ( little known!? ) consensus is that there is about a year and a half of above ground silver available to the market in physical metal. The short overhang is a frozen tidal wave of heavy hurt just poised to crush the shorts should they lose control of this thing. They are terrified!!!! You must understand that the price is ( obviously ) being controlled by deriviative trades ( hell, if anyone attempted to take physical delivery of one sizeable "buy", that would be it. ) A default and the resulting run would be an ugly thing of gigantic proportions and it is doubtful that COMEX would survive. Since many of the shorts are also hurting from their exposure to the gold rally ( bull? ) , the beginning of the silver ( bull? ) rally would truly be the end.
To give you an anecdotal example of the tightness in this market: a certain silver bug went down to the BNS in Toronto last week and bought a paultry number of 100 oz Ag bullion bars. Not only did this person have to wait 45 minutes for them to bring it up one floor from the vault, but it was noted that the payment represented a much higher spread from that which he paid on earlier occasions. Spot does not represent as great a factor by which these people sell you PHYSICAL metal as it once did . There really are two markets, one of paper and the other of physical. The same goes for gold. Should one buy a thousand ounces of physical and take possession, the buyer is likely to be paying closer to $400 per oz - IF it is available. I think the beginning of the Buffet spike will mark the beginnings of TRULY interesting times for this market! THEN you will see the beginnings of the BIG defaults!!!! The cabel is going to have a time juggling both of these things at the same time.... Buy physical if and when you can then sit back and wait for the lights to dim and .....
TownCrier
(10/18/99; 12:28:25MDT - Msg ID:16797)
Fed's 3-day fixed system RPs added $2.495 billion
http://biz.yahoo.com/rf/991018/l4.html
Makin' money outta "junk"...these new reserves were achieved through tri-party repos.
At what point will the Fed participate in repos with office furniture? "Ah, yes, we'd like an overnight system repo on our branch manager's antique oak desk...how's 5-5/16% sound? Great."
TownCrier
(10/18/99; 12:22:31MDT - Msg ID:16796)
FOCUS-Ashanti weighs options as Lonmin cuts offer
http://biz.yahoo.com/rf/991018/rq.html
One analyst said, "Anyone taking on that company would want to neutralise or sterilise that hedge and there's going to be a cost associated to that. I suspect they have to satisfy themselves they've got $150-200 million and that's basically the difference between the first and second offers."
The counterparties' voluntary standstill agreement expires at 1630 GMT.
Chris Powell
(10/18/99; 11:02:31MDT - Msg ID:16795)
If you'd like to DO something to HELP....
.... Instead of just complaining to no one
in particular, you can check out the
following.
This message suggests some questions about
the Fed and Treasury Department that could
be directed to your congressman and senators:
http://www.egroups.com/group/gata/251.html?
To identify and get the addresses of your
congressman and senators, go to this site
and type in your ZIP code:
http://www.vote-smart.org
To see what we'd like to tell gold mining
company executives at the Denver gold show,
and for the fax number of the hotel where
the show is being held, please read:
http://www.egroups.com/group/gata/258.html?
For a list of the companies expected to be
represented at the show, and their home
office addresses, please read:
http://www.egroups.com/group/gata/260.html?
TownCrier
(10/18/99; 10:57:11MDT - Msg ID:16794)
DJIA just went south of the border, Nasdaq -75
Not that anyone cares...
CoinGuy
(10/18/99; 10:53:23MDT - Msg ID:16793)
Stocks, Gold
Like I said last night, the market looks weak, but a few Dow stocks would keep this market around the crucial 10,000 level(via the PPT). I'm wondering what the CPI will look like tomorrow?
I expect gold to retrace some of it's gains, but personally I'm using the time to get into more physical numismatic coins. I thought of picking up some Plat, but like to stick with the PM'S I'm familiar with.
Gary North has an interesting article this morning...
Get Physical,
CoInGuY
TownCrier
(10/18/99; 10:50:16MDT - Msg ID:16792)
Glad you took our jesting in stride, Goldy.
Goldy Locks Guy
(10/18/99; 10:46:42MDT - Msg ID:16791)
Good Grief
Ok...I just had to scroll back and look at my mess. I'm totally humiliated...Who says making a grand entrance is so grand....
Sorry again guys...
By the way........Looks like most peoples fears and anxieties over gold AND the DJ is going to have to extend another day or two.? Gee....maybe the lid will stay on until I can take a 3rd quater draw from my company...then I can stuff my mattress alittle fuller with those golden feathers!
Later Gold Roly Poly's! (That's one of those bugs with lots of legs that curl up in a little ball when you pick them up..)
Goldylocks
mike55
(10/18/99; 10:42:29MDT - Msg ID:16790)
ORO - US Oil
Thanks for your response to my question on the long-term outlook for US oil. I have also been of the belief and understanding of the points you made -- use up the other guy's first, $ price rise for domestic production, etc., and construe from your response that based on our continued thirst for oil, the long-term outlook for US production is not a matter of if, but of when, and at what cost. US subsidization of domestic fields may be required from a strategic reserve standpoint depending on what the future brings.
TownCrier
(10/18/99; 10:31:56MDT - Msg ID:16789)
Sir Goldfly, thanks, and...
you'll be pleased to know that your early "Masterpiece" is in the works, too, for inclusion in the "fun room" because we are a bit more free to take some liberties there. Why? Because at these prices we can have both gold AND fun, and no matter what may befall the gold supply, we'll never run out of "fun."
Goldspoon
(10/18/99; 10:29:03MDT - Msg ID:16788)
***GREAT READ*****
http://www.contraryinvestor.com/mo.htm
***It is begining to hit the streets.. Wall Street first then Main Street... Many stock Gurus are just beginning to smell the coffee...Gary North appears to be brewing a huge pot and waking up a soon to be (rushing mob) of Main Streeters...****enjoy, Goldspoon (see the link for more)****
Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)
We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.
Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.
Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves.
Journeyman
(10/18/99; 10:21:18MDT - Msg ID:16787)
In Search of the PPT 1
http://www.decisionpoint.com/chartspotlitefiles/chartspot02.html
I'm on I-NET safari in an attempt to bag the fabled PPT (plunge
protection team). Have found some interesting tracks. Stumbled
upon the clearing in the link above. Whoa! You now have a map, and
if ye be a brave knight or lady, go boldly forth -- then slip
silently into the night! Regards, Journeyman
TownCrier
(10/18/99; 10:21:08MDT - Msg ID:16786)
Minimum Wage Bill in U.S. Includes Favors for Florists, Brewers, Others
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20World%20News&s1=blk&tp=ad_topright_topworld&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=fb7757135e3c3ff83412fb0db6111a6a
With all of this legislative meddling, do Americans even know what capitalism and a free-market is these days?
Goldfly
(10/18/99; 10:17:18MDT - Msg ID:16785)
Townie - HOF noms
You know, 16 Tons only got two seconds, but lots of accolades too....
Goldy Locks Guy
(10/18/99; 10:16:15MDT - Msg ID:16784)
Oooops....SORRY
Sorry guys....When I went to post my thingy the FIRST time, I got this error. I assumed that it did not post. So, I thought I was doing something wrong and thus, kept trying to post it....In fact, I may get an error code when I send this message....Anyway, I know you guys are probably nauseated by seeing my post 7 times, please barf quitely...it might make someone else miss their mark. Towncrier, your response was most amusing :) but Robin Hood I'm not...at least I don't think so. (Where's maid marion?)
fox
(10/18/99; 10:15:47MDT - Msg ID:16783)
fox
http://news.24.com/English/Business/companies/ENG_162003_732627_SEO.asp
how bad is the situation realy ad ashanti gold ?
Bill
(10/18/99; 09:58:38MDT - Msg ID:16782)
FOA
When do you see this huge move starting? I realize no one knows the answer to that for sure. I think a lot of us would really appreciate your best, educated guess.
Thanks
TownCrier
(10/18/99; 09:57:14MDT - Msg ID:16781)
EU's Solbes on Volatility, Inflation Threat: Comment
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=594c7c9bde02ca581ea749cf7d603094
European Union Monetary Commissioner Pedro Solbes said their were concerns express in their last meeting about "short-term volatility and the risk of turbulence" in the euro coming from the "situation in the U.S. and the
debate about whether America will have a hard or soft landing."
OK, now if America's situation is so bubbly and precarious that Europeans are worried about the fallout, don't you think it would be prudent for more Americans to wake up and smell the coffee? But, most people seem content to just keep on buying the dips in the stock market. Its amazing how many blank stares you get when you talk to people about gold. Although, in all fairness, more and more are "coming around to our way of thinking."
RossL
(10/18/99; 09:54:48MDT - Msg ID:16780)
More Gary North
http://www.garynorth.com/y2k/detail_.cfm/6550
Subject: Gold: A Political Metal
Goldspoon
(10/18/99; 09:44:57MDT - Msg ID:16779)
Gold -Platinum spread...Want a preview of where gold is headed (short term basis)??
OF course you do!!! Here's how to know!!! The average spread between Platinum and gold has been about $100 dollars with gold correcting to this figure on the up swing or on the down swing.(in Quabbin's case) As i write this Platinum is $409 and Gold is $310.....Watch when platinum moves..... and simply correct gold for a $100 average spread...The delay in golds move is usually 1-2 hours sometimes as much as 24.... but gold has always corrected to platinum this way for the whole run...i see no reason to change this rule per "Rules Game" i'll let you know if this should change...
My Best as Always..
Goldspoon
Goldspoon
(10/18/99; 09:23:24MDT - Msg ID:16778)
After Quabbin posted ,laughing at Platinum...Gold then fell ....Beleiver now??
http://www.kitco.com/gold.graph.html
Quabbin (10/18/99; 02:37:23MDT - Msg ID:16752)
Who was it that said gold will follow platinum?
http://www.kitco.com/platinum.graph.html
hehe....just for kicks (if you don't hold plat) check out the Kitco above. (if you do hold plat, don't even look...it MUST be a VERY sick mistake)
**********************************
Dear Quabbin....
Don't feel bad, lots of people make the mistake of not listening to Goldspoon... your not the first and won't be the last..... i'm sure....
Watch.... Platinum when it turns a rally in gold will follow..Key WORD here....WHEN.....
USAGOLD
(10/18/99; 09:20:20MDT - Msg ID:16777)
Today's Gold Market Report: Gold Tumbles; Ashanti Sweats Bullets; Cambior Begs for Time as Gold Luminaries Begin Meeting in Denver
MARKET REPORT(10/18/99):Gold tumbled this morning despite another
postponement/extension of the Ashanti margin calls. Bridge News calls
the market "nervous"......The postponement delayed further the merger
talks with Lonmin and kept the market up in the air as to how these huge
margin calls are going to be handled. Also, Lonmin lowered its offer for
Ashanti reflecting the hedging woes on Africa's third largest gold
producer ....Meanwhile gold luminaries from across the world are
gathering in Denver this week for the Denver Gold Group conference
amidst chaos among some producers and much uncertainty over hedging
programs throughout the gold mining industry. The potential for default
on gold loan obligations plagues several mining
companies...........Besides Ashanti, Canadian mining company, Cambior is
also experiencing hedge book difficulties resulting from forwarding
nearly double its production for 1999. Cambior's counterparties are
being asked to "defer Cambior gold delivery obligations under all or
substantially all hedging contracts." In other words,Cambior requesting
permission to default and the counterparties do not have much choice but
to go along. But this problem is not likely to go away and could very
well stretch beyond Cambior and Ashanti to other high-profile mining
companies........ Should gold prices go higher Cambior and Ashanti both
would be subject to additional margin calls. As it is the Ashanti is
equal to nearly half the value of the entire company.......... London
Reuters reports one dealer as saying: "Financial markets are expected to
remain hypersensitive to economic data this week, any further sell-off
in equity markets should at least see gold remain well supported at
current levels."...... Gold lease rates continue to slip reflecting a
cooling of action in the gold lending market -- most likely a reflection
of the major bullion banks and mining companies cooling their heals in
wake of the Ashanti and Cambior defaults.......... That's it for today,
fellow goldmeisters. We'll see you back here tomorrow.
Please call 800-869-5115 (Ask for Mary Conway) if you have an
interest in receiving a trial subscription to our widely read
newsletter, News & Views: Forecasts, Commentary and Analysis on
the Economy and Precious Metals. Or you can go to our ORDER FORM
and submit your request by E-Mail. You will also receive our
introductory packet on investing in gol
TownCrier
(10/18/99; 09:17:37MDT - Msg ID:16776)
Atlanta Fed's Guynn -- Fed can't get complacent...Though signs are that the "strong dollar" is a goner.
http://biz.yahoo.com/rf/991018/k0.html
Regarding the atypically strong dollar and the growing current account deficit, Robert Eisenbeis, senior vice president at the Atlanta Fed, said "Everybody fully expected that at some point you would start seeing a pullback in exchange rates and that's been happening in an orderly fashion. It would be a mistake to try and lean against that."
Viper
(10/18/99; 09:16:54MDT - Msg ID:16775)
SRXtreme/Gold
I understand your nervousness. I get a little anxious myself even though I truely believe that this is just a retracement that every market makes. You may want to check out a couple other forums, (I will incl. the site addresses)
as with this forum, there are a few people that can ease your anxioty.
I know no one can say for 100% certainty that Gold will go up, but reading the opinions of the people on this & other forums can help put your mind at ease.
Happy Trading To You! Viper
GO GOLD!!!!! :)
tfc-charts.w2d.com/forum/
marketforum.com
Viper
(10/18/99; 09:15:47MDT - Msg ID:16774)
SRXtreme/Gold
I understand your nervousness. I get a little anxious myself even though I truely believe that this is just a retracement that every market makes. You may want to check out a couple other forums, (I will incl. the site addresses)
as with this forum, there are a few people that can ease your anxioty.
I know no one can say for 100% certainty that Gold will go up, but reading the opinions of the people on this & other forums can help put your mind at ease.
Happy Trading To You! Viper
GO GOLD!!!!! :)
SRXtreme
(10/18/99; 09:07:53MDT - Msg ID:16773)
Thanks for your input Golden Calf
Golden Calf (advising is always difficult)
Thanks for your input, I am in short, april 2000
Since gold was VERY Low around 260 when I bought in August,
I Figured the dow was preparing to fall which it is and hoped to capitalize on the Y2K maddness.
I thought that it could only go up considering the "what goes up must come down" (and vise versa) therory. I know it's much more complex than that but so far its bee simple but effective.
BTW; I do have the stops in place
Thanks
Golden Calf
(10/18/99; 08:51:20MDT - Msg ID:16772)
advising is always difficult
SRXtreme (10/18/99; 08:20:03MDT - Msg ID:16769)
Going Down Short and Up long ??
If you're a short term trader, who knows what he's
doing, you should have stops placed when you make a
trade. If you're buying for the long term, more than
a year....then sit tight, unless gold breaks below 280
where, I for one, would advise taking a loss and selling.
Good luck, and don't watch the daily fluctuations if
you're in it for the long pull, unless you have a strong
stomach, and don't let emotions get the better of you.
Good investing!
watcher
(10/18/99; 08:33:26MDT - Msg ID:16771)
denver/gold show
I would expect the price in gold to be neutral or down during the gold show which ends wedn.
The bullion bankers and shorts don't want to lose face publicly and will try to flex whatever strenght they still have.
These shows sometimes take on a carnaval like setting and can generate a lot of excitement if allowed to.After the show we'll see what happens.
Must be interesting , one side pro gold and the other against it. Only in this world those involved in the most stable entity can create such instability.
TownCrier
(10/18/99; 08:21:04MDT - Msg ID:16770)
UK dismisses talk Brown to succeed IMF's Camdessus
http://biz.yahoo.com/rf/991017/2.html
Bigger changes coming to the IMF?
SRXtreme
(10/18/99; 08:20:03MDT - Msg ID:16769)
Going Down Short and Up long ??
Hey all you experts out there, I'm just a small time (nervous) gold investor, holding some 300's and find all this info on gold a little confusing.
With Gold dropping below $310 this morning I find myself somewhat nervous and am looking for some reassurance from the knowedgeable traders out there.
Please correct me if I mis-understood what most are saying.
Overall Gold is on its way Up, probablty up to the $350-400 range by Dec 99. The current Fall in price is due to the Floodong of traders selling there holding believing those who attempt to manipulate the price, that gold is going back down to tht $260 range.
This is what those who attempt to manipulate the market want expect everone to do is sell now and gather thier small profit and force the price down so they can buy low before golds starts its real trek towards the actual 350-400 range by the end of the year.
Do you guys (gals) think that gold will be climbing soon?
Prjected price by years end.
My guess is around $400. This guestimate is NOT calculating Y2K panic factor into the equation.
I se some HUGE Numbers (over $1000) Is that really possible without a major depression?
Welcome all comments in layman terms please
Leigh
(10/18/99; 08:19:40MDT - Msg ID:16768)
Thinking About Burying Your Gold?
In today's paper a convicted marijuana smuggler/murderer speaks of authorities who searched for his supposed wealth. "[They] never found a red cent," Garza said. "They even went into my back yard with backhoes. They were under the impression I had money."
TownCrier
(10/18/99; 08:15:54MDT - Msg ID:16767)
Hall of Fame nominations, past and present
http://www.usagold.com/halloffame.html
I noticed that we had a few nominations for the HoF over the past week. The "entrance requirements" are further explained at the top of the Hall, but essentially, to be considered for addition there must be at least three well-considered "Seconds" to the original nomination. Everyone is encouraged to point out to me if I've missed something, but of the past-week's nominations, our count so far reveals that none have received the requisite support. (We're still blushing here in the Tower because one of you rascals nominated Thursday's GOLDEN VIEW. Thanks for the praise, but the G-V's are ALL probably best left to reside in the cozy dim glow of the archives...put to use as bookends!)
TownCrier
(10/18/99; 07:55:19MDT - Msg ID:16766)
My mistake, Twice Discipled (Perfect looking arrow, by the way!)
Twice Discipled (10/16/99; 19:59:02MDT - Msg ID:16607)
*>>>>------$328.40--------+>
I must have missed it because it was only a dime away from that "porcupine" that Sir Goldy Locks Guy made at $328.50.
There were so many splinters in that area that it was quite easy to miss.
Thanks for the notice!
Al Fulchino
(10/18/99; 07:33:05MDT - Msg ID:16765)
Leigh..great question for FOA
I have had similar questions. Dear FOA??? Sooner or later, surely, the Hillary Clinton's of the world would be getting
more advice on how to make another commodities killing? What say you on this subject?
Leigh
(10/18/99; 06:46:35MDT - Msg ID:16764)
A Question for FOA
Dear FOA: I've been wondering for some time about people who are political and financial "insiders." Do they know that gold is going to go up, and are they putting large percentage of their money into gold? Some of these people have a LOT of money, and if they were to shift it over into gold, you'd think supply would vanish overnight. I'm thinking of people like politically correct entertainers, politicians, business people (especially financial insiders), and so on. Do some of these people already have their money in paper gold, thinking they're safe, and not realizing that there is no physical gold to back it up?
Thank you.
Twice Discipled
(10/18/99; 06:34:14MDT - Msg ID:16763)
Town Crier - check out Msg ID:16607
My feable explanation may not have been enough.
FOA
(10/18/99; 05:42:35MDT - Msg ID:16762)
Note
Number Six (10/18/99; 03:08:25MDT - Msg ID:16757)
Would anyone care to comment on this POG exhange I had tonight... This is No. 6 aka Andy in Denver.
Hello Number Six,
I want to thank and reply to all the fantastic thoughts given here the last day or two. But have no time right now. So, I'll work it in as I can. It's going to be interesting this next few days.
Six, Yes, a good portion of the short may have been covered or maybe not! Yet, the tonnage has not moved! It's going to and when it does this last move will look like a "wiggle". For now we must wait and watch the paper game. Thanks all FOA
SteveH
(10/18/99; 05:24:16MDT - Msg ID:16761)
Hall of fame and december gold
First, I nominate Oro's dissertation into the hall of fame.
Next, dec. gold now...$317.30.
The Invisible Hand
(10/18/99; 05:15:37MDT - Msg ID:16760)
the Value of this Forum
http://www.ft.com/hippocampus/q259a92.htm
Sorry my browser can't get farther then this in today's FT, but if you there take comments, you should find James Grant's (www.grantspub.com) article "A bad case of excessive optimism".
It contains the following paragraph:
"Someday a professor of English will win a Nobel prize in economics for proving that the financial markets actually operate on a principle of irony. Our Nobel laureate of the future will persuasively demonstrate that the discussion preceding the movement of prices at dramatic turning points is always the wrong discussion. Thus, for example, what foreshadowed the recent explosive rally in gold bullion was not a public forum on the opportunities available in the gold market. it was rather the auction of a portion of Britain's national treasure at what may prove to be generation low prices."
Is this Forum not public?
TownCrier
(10/18/99; 04:45:45MDT - Msg ID:16759)
Hear ye! Hear ye! The call to contest! >>>>------PRELIMINARY RESULTS--------+>
When the final archer was seen to depart by moonlight, we took an oil lamp from off the wall and descended the Tower steps to duly note the various placement of the many arrows. In truth, some arrows were so misshapen that we marvelled at their arrival to the target!
This parchment of results shall remain attached to this sturdy oak for all to study until the day of truth arrives. If any contestant discovers that their arrow was overlooked or misidentified, please attribute the mistake to the dim light, and call the correction to the attention of your devoted TownCrier.
__________________________________________________________
Simply Me (10/17/99; 23:08:20MDT - Msg ID:16742)
*>>>>------$0--------+>
Chicken man (10/17/99; 15:44:09MDT - Msg ID:16685)
>>>>>>----$225---->
pa kua (10/16/99; 20:55:03MDT - Msg ID:16614)
>===>=====>=====> $293 <=====<======<=======<
el St.One (10/17/99; 15:09:29MDT - Msg ID:16681)
>>>>>-----303.30------>>>>
diston5 (10/17/99; 19:40:51MDT - Msg ID:16720)
>>--------$304.00----------+>>>
Goldiehawk (10/17/99; 18:45:26MDT - Msg ID:16713)
===============305.60========>>>>>>
canamami (10/17/99; 22:15:49MDT - Msg ID:16735)
*>>>>>>>- - - - - - -$306.67- - - - - - - ->>>>>>+>
Phos (10/16/99; 08:16:36MDT - Msg ID:16544)
>>>>=====$308=====>
Ray Patten (10/17/99; 18:54:01MDT - Msg ID:16715)
>>>====308.10----->
Fasolt (10/17/99; 20:13:31MDT - Msg ID:16725)
>>>>------310.25------
Gold Dancer (10/15/99; 17:17:16MDT - Msg ID:16496)
>>>>>>312.00....>
summicron (10/16/99; 18:43:11MDT - Msg ID:16594)
>>>>>> ----- $312.50 ------ <<<<<<<
backlash (10/17/99; 23:32:11MDT - Msg ID:16746)
>>>>>>------- $ 314.80 -------+>
Tomcat (10/16/99; 23:13:44MDT - Msg ID:16622)
>>>>>>>------$316-------+>>>>>>
Goldfly (10/17/99; 11:08:23MDT - Msg ID:16660)
>>>>>>--------317.20------------(>X
sstins (10/17/99; 20:04:20MDT - Msg ID:16724)
>>----------$318--------->>
flierdude (10/17/99; 10:59:21MDT - Msg ID:16658)
>>>>>---------$318.70----------+>>>>
andrew the kiwi (10/17/99; 16:32:16MDT - Msg ID:16694)
>>>>>--------$319--------->
Tanglewild (10/15/99; 22:09:30MDT - Msg ID:16529)
>>>>-----$319.25-----$>
Carl (10/17/99; 9:06:24MDT - Msg ID:16643)
>>>>$320.00.
Hipplebeck (10/15/99; 18:49:49MDT - Msg ID:16507)
>>>----------------------$320.20++++++++++>>>
Gandalf the White (10/14/99; 15:09:35MDT - Msg ID:16356)
>>>>>----------$321.0----------->
SCRCS (10/15/99; 15:28:37MDT - Msg ID:16481)
>>>----321.25----+>
baba2 (10/17/99; 15:10:27MDT - Msg ID:16682)
\\\\\\\\\\\\\\\\\________$321.70__________\\
Strad Master (10/17/99; 21:48:51MDT - Msg ID:16730)
>>>>>>>-----------$322--------+>
mike55 (10/16/99; 19:37:56MDT - Msg ID:16603)
>>>>>>------ $322.40 ---------->
Black Blade (10/14/99; 22:06:42MDT - Msg ID:16399)
>>>>>----$323.00----+>
AllanC (10/17/99; 22:34:19MDT - Msg ID:16737)
>>>>-----323.15----->
CoinGuy (10/14/99; 22:04:47MDT - Msg ID:16397)
>>>>>----------323.50-------------->
CoBra(too) (10/15/99; 18:10:28MDT - Msg ID:16498)
*>>>>> 324.75<<<<<
HopeingII (10/16/99; 23:55:31MDT - Msg ID:16627)
*>>>>------ $ 324.75 --------+>
NORTH OF 49 (10/15/99; 11:24:33MDT - Msg ID:16456)
>>>>>=====327.50=====>
Goldy Locks Guy (10/15/99; 21:35:58MDT - Msg ID:16518)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:36:34MDT - Msg ID:16519)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:37:09MDT - Msg ID:16520)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:40:05MDT - Msg ID:16521)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:44:32MDT - Msg ID:16524)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
RossL (10/15/99; 21:54:55MDT - Msg ID:16527)
Goldy Locks Guy
It's an awesome poem but you don't need to post it 5 times! [Hey Rosco, you spoke too soon...would you believe the final count was SEVEN times?? Goldy Locks Guy...we're all impressed that you were able to empty your quiver, sending each arrow to split the shaft of the preceeding one. You're quite the marksman!--TownCrier]
Goldy Locks Guy (10/16/99; 16:31:48MDT - Msg ID:16576)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:56:30MDT - Msg ID:16528)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
onlychild (10/17/99; 22:39:13MDT - Msg ID:16738)
>>>>>>>>---------328.55---------->>>>>>>>>
MidEastGold (10/15/99; 11:37:45MDT - Msg ID:16458)
>>>>>=====329.25=====>
Richard, Oregon (10/15/99; 10:53:35MDT - Msg ID:16452)
>>>-----$330.00----->>
Jon (10/17/99; 5:40:22MDT - Msg ID:16635)
331.25
nugget101 (10/15/99; 13:17:04MDT - Msg ID:16470)
>>>---------- 332.10 ------ >>
Quabbin (10/18/99; 02:37:23MDT - Msg ID:16752)
>>>======333.33========> [Happy 33rd Birthday, Sir!]
Peter Asher (10/17/99; 23:15:12MDT - Msg ID:16744)
>>>>>>> $333.50 >>>>>>>>
Roark (10/15/99; 21:34:07MDT - Msg ID:16517)
>-----$336.00----->
law (10/16/99; 19:35:24MDT - Msg ID:16602)
----> $338.20
Hill Billy Mitchell (10/14/99; 21:38:11MDT - Msg ID:16386)
$338.50
T. Remital (10/15/99; 15:54:43MDT - Msg ID:16485)
>>>>>>339.50-------->
goldnbones (10/17/99; 13:09:04MDT - Msg ID:16674)
####-----$339.75----->
MRM (10/16/99; 17:34:53MDT - Msg ID:16586)
<<<------342.79------>>>
DD (10/16/99; 23:34:10MDT - Msg ID:16623)
------------>>>>>>>>>>$345.01------------>>>>>>>>>>>>>
Angel (10/17/99; 18:30:32MDT - Msg ID:16712)
>>>>>>--------------------347.70--------------------->>>>>>>>>
Trader_vic (10/14/99; 21:01:28MDT - Msg ID:16383)
>>>>>-----349.50-------->
RossL (10/15/99; 14:13:04MDT - Msg ID:16474)
>>>----------$349.60 ------>>>
elevator guy (10/16/99; 19:11:17MDT - Msg ID:16596)
*>>>------$350.00----------+>
TEX (10/16/99; 23:51:25MDT - Msg ID:16626)
>>>>>>>>>>>.........356.00.........>>>>>>>>>>!
Goldspoon (10/15/99; 15:49:14MDT - Msg ID:16484)
>>>----357.25----+>
St. George (10/17/99; 12:04:30MDT - Msg ID:16667)
*>>>-----$360.50----+>
phaedrus (10/15/99; 10:23:14MDT - Msg ID:16450)
>>>>--------$362.50------+>
Netking (10/17/99; 19:52:38MDT - Msg ID:16721)
>>>>>-----$365.47------>>>>
wiley (10/17/99; 18:08:14MDT - Msg ID:16709)
>>>--------------$369----------------+>>>
Village Idiot (10/15/99; 16:16:02MDT - Msg ID:16489)
>>>---374.20--->
The Believer (10/16/99; 21:51:51MDT - Msg ID:16618)
>>>>----$387.50----+>
Al Fulchino (10/15/99; 21:50:55MDT - Msg ID:16525)
$$$388.50$$$
apdchief (10/15/99; 15:00:47MDT - Msg ID:16480)
>>>>-----$389.90----->X
Canuck (10/16/99; 19:51:11MDT - Msg ID:16605)
-----------------__________________ $$$ )))) $399 U.S.
THX-1138 (10/15/99; 23:25:54MDT - Msg ID:16535)
>>>>=====$400=====>
Clint H (10/17/99; 10:49:06MDT - Msg ID:16656)
>>>>>...$417 Oct 22..>>>
Journeyman (10/17/99; 17:37:45MDT - Msg ID:16705)
>>>>-----$475.00------->
Number Six (10/17/99; 17:07:05MDT - Msg ID:16702)
>>>>>>>======= LOCK LIMIT ===($477)====>>>>>>>
The Invisible Hand (10/17/99; 4:59:43MDT - Msg ID:16633)
*>>>>------ $ 523.25 --------+>
Bill (10/15/99; 18:52:35MDT - Msg ID:16509)
>>>--- ?? --->
A French 20 franc (Rooster) gold coin goes to the marksman placing his arrow closest to the December COMEX gold futures contract closing price on Friday, October 22, a silver Eagle goes to each of the next two closest.
REMINDER: All first-time posters through the span of this contest (Oct 14 - 17) will be given a silver Eagle each as a warm welcome to this Round Table, but they must e-mail the Castle (Centennial Precious Metals / USAGOLD) to alert the staff so that your effort does not go overlooked.
cpm@usagold.com (Please put "first time poster" in the subject box of the e-mail)
Good luck to our many archers!
Number Six
(10/18/99; 04:36:25MDT - Msg ID:16758)
It's Official - Barron's sees possibility of $1,000 an ounce!
Whatever is really driving the price of bullion, one columnist in New York has offered his own point of view. Alan Abelson of Barron's, a weekly financial magazine, argues that the price of gold has sky-rocketed because of "the fear factor". But not just any old fear. It seems that investors didn't give a toss about the precious metal during the Asian contagion, the financial debacles in Russia and Brazil, or even during the possible impeachment trial in the United States.
So what are they so afraid of? According to Abelson, Beatty and Trump. As in Warren Beatty, handsome actor, and Donald Trump, property developer and casino operator. It seems that these two stalwart Americans are threatening to run for US president. Neither claims to have any experience in the political arena, but as Abelson points out they "both boast considerable success in other pursuits [mostly the opposite sex].
"In other words, investors, to their credit, perceived this dire threat to the future of the republic and hurried to protect themselves by laying in a store of gold. Should Trump or Beatty actually throw his hat in the ring, the next price point for bullion is $500 an ounce. If either were to get elected, $1,000 is in the bag."
Number Six
(10/18/99; 03:08:25MDT - Msg ID:16757)
Would anyone care to comment on this POG exhange I had tonight...
This is No. 6 aka Andy in Denver.
Tonight I saw a post by Dick Moody referencing what may happen todat to the POG and I rebutted a few of his statements...
It's fairly lonf but I would appreciate any comments, am I out of line here, is Dick...
I trust FOA and so Dick's reasoning doesn't add up for me... this is the exchange...
===========================================================
Heyyyyy AAAAAAANNNNNNDDDDDDYYYYYYYYY & Anyone else
Careful that you don't stroke out guys & gals.
Most of the 14 Market oscillators that I follow are still primarily bearish on the DJIA technically...but only for probably another day or so. DMI remains bearish/ADX trendline remains bearish. Commodity Channel Index remains just went bearish, indicating that this move may have a few days to go or perhaps 500 points downward to spare. The Bollinger Bands however are showing a switch is developing and anticipating another bounce... though I suspect in light of all the other oscillator's that the BBs are a bit premature in here. The Momentum Indicator is showing oversold status again, but it could fall still further,anyway. I suspect so. Rate of Change shows being oversold, but it also shows further lows are ahead for Monday anyway. The Relative Strength Index is also showing oversold status but still weakly oversold and that means there is still strength for a downmove over the next day or so. MACD is VERY bearish for the next day or so, and the Volume Index suggests more new lows are ahead (probably over the next week or so) The current new low is accompanied by increasing volume, suggesting further new lows are ahead.
Fast Stochastics (not reliable for timing, IMHO)indicates an upward move is building.
Slow Stochastics (more reliable) indicates an oversold market but is not reliable here as a bottom signal setter because stochastics is only reliable in marking bull market bottom retracements. We're now into a "bear market" -- basis LONG TERM...
Guys, we're not likely to see a steep drop here on Monday beyond 300 to 500 points down. I won't say we couldn't see even greater drops than 300-500 points on the DJIA but say 1,000 points or more is highly unlikely without more bad fundamental news hitting the market unexpectedly. It is also possible that this market move may stop out at -300 or more and then turn and retrace back to perhaps even positive territory during Monday's trading. It IS possible (though not likely)) to see a + day on the DJIA, if so it wouldn't be + by much. Frankly I'd expect to see on the close a range somewhere between -150 and -250. This is probably the most plausible range.
IF so, I would be more inclined to see a short term rally as the short-traders unwind their positions to take profits, IF there is no further signs fresh selling or margin call selling on Tuesday. That said, I'd figure that under such a scenario you might see a 100 point or more gain on Tuesday, depending on how low she closes Monday. Right now, its a bit early to figure out Tuesday.
Re: GOLD... GOLD had better NOT break below $310 IF the DOW is tanking because IF Gold does NOT SKYROCKET... then Gold has its own EMERGENCY PROBLEM in that the big boys are back to keeping GOLD down probably due to bank selling of long positions to cover stock losses. Banks and others might just unwind out of all other markets to cover stock losses, per the demand by Greenspan last Thur nite. In doing so, it automatically covers up the Gold market with more selling. This I suspect explains why Gold/Silver sat stupefied on Friday during the Stock turmoil. SOMEHOW, I expect more of that today in the metals. I hope not. I'd like to see her run. For me, Gold... NOW REMEMBER I BASE ALL GOLD ANALYSIS ON THE NEAREST ACTIVE TRADING MONTH, WHICH IS DECEMBER GOLD... and it NEEDS TO CRACK BACK OVER $320 quickly on the open... IF gold fools around below $320.00 til the NYSE opens... this is a bad sign for gold...it shows extreme weakness and probably confirms my suspicions about bank and funds-house liquidations to cover Friday losses. IF so, it will be a long, long day for metals.
IF gold can quickly break over $320 and hold around $325 by NYSE opening, then I think Gold would have a decent chance of locklimiting up for the day, at least for awhile... and should certainly crack back over $330.00 and race to $340.00 and over and should close above $340.
Yes, closing above $340 is extremely important here.
On the flip side... If gold loses on Monday...IF Gold closes below $310... then the Gold Bull Market will have ENDED. That's right, technically a move and close below 310 (basis December 99) would have fatal technical ramifications that will signal something seriously wrong internally within the Gold Comex pits as well as world markets.
Silver will follow gold whereever Gold leads it.
Crude appears to be in the middle of a developing trading range for awhile bouncing back and forth between $20-$25. Too many mixed signals now in the oscillators after Friday's trading.
Well, there's a FWIW from the guy who knows Murphy and his laws quite well. Somehow, I managed to keep from sawing myself off of that limb on Thursday, but it was kinda scary...with that big black bear down below me just a waitin' for supper.
Have fun watching the market and just remember the only floor traders who may survive on Monday would be those wearing their "crash helmets." Yes, even in the exchanges we must have "safety first." I'm just waiting for them to mandate seatbelt laws on their chairs! Especially over at NASDAQ. HA!
-- Dick Moody (dickmoody@yahoo.com), October 18, 1999.
--------------------------------------------------------------------------------
Thanks for the analysis Dick... did you ever read my recent post explaining what is going on in the gold markets as perceived by FOA (friend of ANOTHER) over at USAGOLD?
Per his analysis he says the shorts are playing a waiting game, desperately buying time, time which is about to run out as there is no physical available... He says gold will run to $500 in no time once it unravels...
Thoughts?
-- Andy (2000EOD@prodigy.net), October 18, 1999.
--------------------------------------------------------------------------------
This is the link
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001azV
-- Andy (2000EOD@prodigy.net), October 18, 1999.
--------------------------------------------------------------------------------
Yeah, Andy, I read it and a lot of other goodies too.
I don't buy the scenarios though. Perhaps its because I've heard that same sort of song and dance for 20 years now, just a different verse. But same bottom line. The thing is, I just read a Reuters story a few hours ago that most of the Gold boys were covered on their shorts for now. A lot of the problems had been in options also that they've been able to either roll back or are sitting way, way out there.
Thus with a combination of that and the fact that Gold failed to move on Friday ... well that Friday action just about nailed down a coffin on the current technicals for this Gold bull-rally... This would also indicate that the shorts have not lost control of the gold market. As I also said earlier, stock drops may have an adverse effect on gold...IN FACT... Greenspan may have realized this and the whole reason for a stock drop was to force actions by the banks to sell off their metals both long and short positions to raise capital to cover stock losses...thereby killing 2 birds with one stone. NOW, I might be wrong on that, but its a strong suspicion of mine.
Andy, never underestimate the boys that Greenspan is running with... and btw, they're not Europeans... their globalists...and their purpose is to set up a New World Order for a strong dictator to arise greater than anything Hitler could dream of. As I see it, Y2K might be the least of our worries... All I can see is that they're still in control and will remain so barring unforeseen natural calamities like a "deep impact" or solar flare that fries the planet.
Oh, one other thing, ... I AM PERSONAL FRIENDS WITH MURPHY and I find myself out on the darndest limbs, so consider that when you read my rambling comments. Ha!
Have fun watching the action.
-- Dick Moody (dickmoody@yahoo.com), October 18, 1999.
--------------------------------------------------------------------------------
Thanks for replying Dick... a couple of points...
Yeah, Andy, I read it and a lot of other goodies too. I don't buy the scenarios though. Perhaps its because I've heard that same sort of song and dance for 20 years now, just a different verse. But same bottom line. The thing is, I just read a Reuters story a few
###### ding ding ding ding
REUTERS - the mouthpiece of the cabal Dick :) the controlled establishment press i.e. the big banks that are connected are gonna spread these rumours that the shorts are ok...
Did you read the other Reuters story today basically covering the Denver Gold Miners conference and basically talking up Barrick's hedge position - which as you know is absolutely disastrous - as being not a problem. Consider Murphy's letter to that Bas***D Oliphant!!!
#######
hours ago that most of the Gold boys were covered on their shorts for now. A lot of the problems had been in options also that they've been able to either roll back or are sitting way, way out there.
####### Sorry. Don't believe it Dick. #######
Thus with a combination of that and the fact that Gold failed to move on Friday ... well that Friday action just about nailed down a coffin on the current technicals for this Gold bull-rally...
####### With all due respect to all your expertise over all the years you have been in this game this is pure BS Dick.
You CAN NOT look at technicals in the rigged gold market. It just cannot be done.
Yes you can look at resistance levels and so on - but we are in a different game here now Dick, involving many many factors other than pure profit or loss...
Think about it - gold at $252 fer chrissakes.... that is NOT market supply and demand Dick :) #######
This would also indicate that the shorts have not lost control of the gold market. As I also said earlier, stock drops may have an adverse effect on gold...IN FACT... Greenspan may have realized this and the whole reason for a stock drop was to force actions by the banks to sell off their metals both long and short positions to raise capital to cover stock losses...thereby killing 2 birds with one stone. NOW, I might be wrong on that, but its a strong suspicion of mine.
####### you could be right - we'll see soon enough... #######
Andy, never underestimate the boys that Greenspan is running with... and btw, they're not Europeans... their globalists...and their purpose is to set up a New World Order for a strong dictator to arise greater than anything Hitler could dream of. As I see it, Y2K might be the least of our worries... All I can see is that they're still in control and will remain so barring unforeseen natural calamities like a "deep impact" or solar flare that fries the planet.
####### I agree they are globalists, and I agree with much of what you say. we'll soon see. None of this is new to me... :) #######
Oh, one other thing, ... I AM PERSONAL FRIENDS WITH MURPHY and I find myself out on the darndest limbs, so consider that when you read my rambling comments. Ha!
Have fun watching the action.
####### Thanks very much Dick. Let us agree to differ a little. Fact is the recent breakout of Gold was the largest since 1980. if I had told you a few weeks ago that gold would hit $339 you would have laughed and told me your technicals wouldn't support the run-up!
Yet it happened.
For a reason.
Which is about to made plain for all to see. Won't be long Dick, no way has this bull run ended :)
Cheers - tell Murphy he's doing a SUPERB job! #######
===========================================================
We'll see soon enough :)
Thanks in advance, Andy
ORO
(10/18/99; 02:53:02MDT - Msg ID:16756)
Quabin - Plat
http://www.mrci.com/qpnight.htm
For a quote and some cool stock index analysis.
Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Dec 317.2 318.1 315.7 318.1 +1.7 10/18/99 1:26 318.0 317.7
Silver(CMX) Dec 536.0 537.5 535.0 537.5 +3.7 10/18/99 1:20 537.5 536.0
Copper(CMX) Dec 79.10 79.10 78.50 78.50 -0.45 10/18/99 1:34 78.80 78.35
Platinum(NYM)(Access) Jan 407.0 407.0 407.0 407.0 +1.0 10/17/99 18:39 407.9 404.1
ORO
(10/18/99; 02:46:40MDT - Msg ID:16755)
Continued 2
In the US markets, this means that debt in proportion to M3 must end back at the 220-240% area, and debt as a portion of GDP should go back below the 150% range. If the derivatives positions of US banks are treated as debt, the repudiation process would end up with their fall to a similar or smaller proportion of aggregate debt relative to the current debt position. Such that $33 trillion of notional value of outstanding derivatives over $24.5 trillion of US internal debt, each falling by roughly half relative to GDP, ends with a GDP revalued to $15-20 trillion (doubling), the $ index at 50, the CRB at 400, and nominal debt levels the same, though lower relative to GDP and M3.
Whatever further monetization is necessary until the US can rebuild its export capability, will cause a further decline in the $.
Finally, some thanks are due
FOA, thank you for your writings, always informative, weighty with wisdom. I rarely find cause to comment unless translating your thoughts into my own dry language.
I thank you for the timely information and your enlightening explanation, most of all, thank you for the depth of wisdom.
Aragorn III. Some say the value of something is its price. Some will see the errors at the core of today's monetary instability (e.g. James Dines and Rick Ackerman in their versions of "The Bonfire of the Currencies") yet unwilling to deal seriously with the underlying philosophical issues, even as they manifest in real life. Perhaps disdain for the discussions of angels dancing on pinheads?
I thank you, "who was not born yesterday" for the depth of experience you communicate.
Yellin of Troy. Thank you for thinking and taking the time to write your thoughts. From your writing I see an astute economist wrapping a bright mind around issues no longer discussed in economics textbooks. Much of the theory I discuss runs counter to the interests of economists in advancing their careers through the revolving doors of government, academia and finance. I suggest that the smart start collecting material for a history of stupid economic experiments and the idiotic mental constructs built to hide the truth behind concept money and its innate instability.
Thank you for stimulating me to gather more thoughts from dispersed notes and fragments.
Writing this was great fun.
We still have tons and tonnes to go over.
ORO
(10/18/99; 02:45:12MDT - Msg ID:16754)
Continued
5. The extent of monetary use of gold makes its cost of production rise to the same level rather quickly. Thus, the supply side of commodity money prevents the ratio of monetary to commodity value from going much beyond 2.
Reiterating and commenting on AragornIII. Msg ID:16418
1. The paper chicken was hatched from the golden egg. I.e. concept money derives its acceptance, at least in part, from its history as a gold receipt.
2. The driving force for concept money is the seignorage it allows the monetary authority. Reduction of its supply is anathema to its purpose.
3. The debt traps that are the blood vessels of modern concept money get clogged with bad debt when money supply is reduced and a fatal stroke in the economy results. Therefore, the monetary authority stands at the ready with enormous syringes of dollar thinner and clot busting default rescue packages. In the meantime much monetary blood is spilled into the markets.
4. The monetary use becomes the commodity money's major use in an advanced economy so the ratio of monetary demand to nonmonetary demand is indeed high. However, there is no reason to expect that there would be a preference to anything else as money, since there is ample evidence that recognizing and harnessing gold's monetary role is simply going along with the markets rather than with an artificial construct. The actual element of importance in Yellin's argument is the ratio of monetary value to production cost, not commodity demand. (My own point in AragornIII's context)
5. Confidence in a money is predominantly a function of the lack of a need for trust in official intervention, on the one hand, and on the other if there is an authority, the confidence in the authority itself,. If the large central bank hoards were dumped, gold would be quickly set free of the only significant threat it has ever faced.
6. Contrary to AragornIII (with all deference) there is more than an arbitrary agreement and tradition behind gold. Furthermore, there is more than an evolution behind the market's choice of gold as money. The evolution was a process of discovery of the nature of gold, its deposits, its economics. The process brought about a confidence in gold. AragornIII, I think, is mixing the concepts of money and concept money. The point is that gold money can't escape being an instance of the concept of money, but "concept money" is a claim of label on an empty box. It is the attempt to use the label of the concept as the thing it represents. It is a cognitive miscreant. What one discovers in studying the nature and mechanisms of concept money, does not promote confidence in it. One of the first things learned is that it either represents nothing and is devoid of inherent value, or is a deed of ownership over the products of the citizens' time, that citizens have not issued, but their government issued in their name without their consent. Thus, it can be interpreted as part of a time share arrangement for owning people, i.e. slavery, sold by a promoter known also as government. Since the attempts of collection are very low yielding in extremis, I would claim that it is more plain sham than straight slavery. Further study reveals the problems inherent in concept money are generated by the cognitive error, I will not elaborate further on this point in this posting.
7. Overshoot and plateau. Somewhat outside AragornIII's comments. Since the official monetization as discussed in this case is an open bid for the metal by a fiat currency aiming to back itself with gold, there is likely no interest on their part to push gold into dangerous "bubble" territory. They may actually be able to tell within a factor of 2 where the market stands and will stop raising the bid at some point in very loose proximity to the point of mania taking over. Quite frankly, I believe this is a core problem with the mechanics of the future system.
8. Keeling over and bouncing back. Gold bounces back mostly because of the supply characteristics, but also because of its retained role as wealth money even when outlawed. Concept money falls and has to be tied back to PMs and re-evolve.
9. Again, contrary to AragornIII, there is very much a distinction between commodity money (PMs in particular) and concept money, whether of government fiat or otherwise. The commodity money is a product with natural corrective processes built into the nature of its economics because of its physical reality. Concept money is divorced from reality by intentionally making a cognitive error equivalent to putting a label reading "food" on an empty box of Mac 'n Cheese. The key element in the nature of successful commodity money is the structure of its supply, its physical properties, and the presence of commodity demand. Commodity money is within the concept of money, but is not the label itself. Thus, "true money" is not concept money, though it derives most of its demand from its use as money, it derives its value (over extended periods) from its physical nature. Commodity money is part of the barter system that is the nature of trade, concept money is not natural, does not rely on trade or barter but is anathema to both. It is based on coercion and fraud, not agreement and cooperation.
Commentary:
FOA (10/15/99; 14:50:00MDT -:16479)
Yellin' of troy (10/15/99; 13:03:53MDT - Msg ID:16465)
FOA -- the demand for gold is not insatiable See Msg ID 16465
1. FOA, I could not agree more. As stated above, "true money" is part of the world of barter and trade, where items of value are traded, services and products of use to the receivers. Money is the label used to describe usage, whether that of a common barter item (commodity money) or concept money. Yes, banking has a little to do with it, because it was very inefficient without a natural or coerced money, and once developed around particular items for debt settlement, they do become the defacto monies. And right again, the concept money of today is an implied contract intended for default.
2. FOA, again, I need only translate to my (inferior) terms, for consistency: Because of their nature, PMs are natural moneys of the commodity type. Thus, official pronouncements may make them official or black market money, but not change their nature as money. PMs are as much wealth as a Cellini piece, a seaside villa, or a fleet of luxury cars.
3. Most important for the wealth accumulation issue, PMs need not go through a trade into fiat to be used as exchange money, because they may be traded directly. In extremis, contracts and deeds of ownership are in danger of being ignored, thus the portability and "big money" liquidity of gold play a part in its preference as part of wealth. When the threats to solvency, order and civility mount, all tend to move to the safety of gold. It is more liquid and more easily divided than any other form of wealth. In expectation of war at home, some will convert as much as they can into PMs and gems. PMs are preferred because of ease of verification of pure materials.
4. I will drop the question of infinite demand for PMs, though it is obviously significantly greater than the market prices might suggest. It should be noted that in the days when fiduciary duty was important, financial advisors advised gold and other PMs to constitute at least 5% of one's net worth in times of quiet, 15% in preparation for financial disruption. In liquid assets, they would suggest 10% to 15% in the PMs in quiet times, and as much as possible in preparation for financial instability and war.
5. Gold is both underpriced and underused. Much of the gold bought by individuals as part of their diversification was never delivered, but replaced by gold related obligations that were never intended to be delivered against by their issuer. A fraud. Most of the buyers are still not aware that their "gold" does not glitter. Since 1995, I estimate a supply deficit of 4000 to 5000 tons per year was papered over with fraudulent contracts. The "price" to clear this demand from the market after such a long period of accumulating demand is anyone's guess.
6. Measures of wealth. In extremis, currencies and all that is denominated in them are worthless. Debts and derivatives are all dependent on the ability of institutions to remain solvent. Deeds to property depend on the willingness of government (much distracted during financial, political and marital upheaval) to secure them. Thus the error of Yellin of Troy is in reasoning in her posting using the wrong unit of account. One that tends to disintegrate quickly when pressed. " How can the price be correct when no paper money can define wealth? No person knows the true wealth of gold."
7. The value of gold in times of upheaval is amplified, as both FOA and ANOTHER indicate. Why? Because these are the times in which most other types of wealth are threatened, when obligations are not honored. Gold and the PMs are not promises, carry no commitments, and grow more desirable with the growth of noise about us. In a way, it is a measure of insecurity, thus Yellin of Troy's observation of temporary instability in gold's purchasing power, do not indicate a weakness in gold so much as a temporary strength of the monetary authority as consecutive errors collect to form the necessary conditions for disaster.
A bit of thinking on the current system:
The current monetary systems all use debt money. i.e. money that is generated almost exclusively by the production of new debt in the banking system and the debt markets. Positive account balances are possible only as the obverse of someone taking on a debt obligation. Thus, instead of currency being supplied first, debt is created simultaneously with money (by the bank or credit market, not government). Future demand for money is created such that it is greater than the money created. The credit expansion phase of a credit cycle is the cause of expansion of economic activity to meet real demand. The expansion phase is often accompanied by price inflation. But this also creates a future demand that may not be met by income produced in the economy (profit and wage), and therefore the willingness to borrow, and historically has done so cyclically. Interest rates tend to fall under these circumstances since demand for fresh loans sours. However, as the loss of fresh money flows through the economy, price deflation sets in and default risk increases, thus increasing borrowing costs later in the cycle. When new borrowing creates too little fresh money, the banking system falls apart, with a significant portion of the banks going under.
The banking system can be said to have two phases and to be inherently unstable, subject to necessary fits and starts.
In a commodity money system, the commodity money becomes more valuable, as it is necessary for debt settlement, and wages fall because of the reduced profitability of many businesses. Under these circumstances, the production of the monetary commodities becomes more profitable, and their production increases during the debt contraction phase. During the debt expansion phase, the markets are flooded with paper equivalents and the profitability of the commodity money production, and hence the supply of new commodity money is eventually reduced, thus making debt repayments more difficult and limiting excessive debt expansion.
In a fiat money system there is a central bank to attempt to artificially fill in the natural role of money creation in the commodity money system when the bank system is in danger of deflating. The Central bank stands behind the banks with the promise of replacing dead assets (non performing obligations) with subsidized loans and fresh cash money. Currency may be supplied by the Central Bank as necessary to prevent default in the banking system when "natural" debt growth is insufficient to create enough money to service the debt burden. To some extent, the Central Bank may change interest rates to raise or limit the debt burden while increasing or decreasing the monetization of debt (it is assymetrical, as easing brings on refinancings of long term debt, and tightening has a much slower effect as few will refinance into higher interest rates). (I) In an economy closed to foreign trade and investment, this eventually leads to disaster as the Central Bank must choose alternately between debt bubbles and price inflation on the one hand, and explosive collapse of banking, on the other. Why? Because of the growth of the accumulated debt will continue to such heights that the economy will not be able to serve it. When this point is reached, only the massive printing of money will solve the problem of servicing the debt. Lowering of interest rates (to encourage borrowing) reduces bank liquidity as money moves into mattresses while banks face both withdrawals and surges in bad debt. Monetization follows as there is no other choice if the banks are to be saved. When the economy has healed and normal banking resumes, the economy expands in strong price inflation as people return money to the banks and the banks lend to all who have deferred demand through the debt repudiation cycle.
(II) In an open economy that does not have the stature of issuer of the reserve currency, there are two types of scenarios, one for a debtor nation, one for a creditor nation. In the debtor nation, the free and easy buildup of debt within the country is supplemented by foreign borrowing to finance trade deficits. The debt bubble of this kind of economy ends when the first trouble in debt payments causes an abrupt panic departure of reserve currency and results in chaos in the credit system as it implodes in unpayable foreign debt (denominated in reserve currency). These foreign debts can not be serviced with any amount of monetization, and the economy turns to exports. The economy ends up in severe debt deflation, extreme price inflation originating in import price inflation being matched by inflation of the prices of local goods being exported, and a severe drop in living standards.
(III) In a creditor nation (an exporter), the debt bubble grows in a similar way as in a closed economy, and ends up as does the closed economy, but with more severe price and credit deflation. Once the Central Bank has lowered interest rates sufficiently, an interesting phenomenon occurs, (1) the lower interest rates encourage other countries to borrow in the creditor's currency, and thus reduce (initially) the exchange rate. (2) The low interest rates cause bank withdrawals, (3) the low prices caused by the price and credit deflation are supplemented by the low currency exchange rates to push export volume heavily. (4) This exacerbates the importer's and the reserve currency issuer's debt, thus contributing to their credit bubbles.
(IV) The issuer of the reserve currency has the most flexibility, but also has the most vulnerable position in the long run. The issuer of reserve currency must have a trade deficit and a current accounts deficit. (A) If interest rates are directed towards a reduction of the trade and current accounts deficits by encouraging foreign borrowing that would cause a decline in the currency, there would be price inflation accompanied by rapid debt growth. However, the country would not become a heavy debtor (as % GDP) to foreigners because it only has to supply enough currency each year to (1) settle the increase in trade volume (not the whole trade volume), (2) settle the differential between new foreign borrowing and foreign debt load denominated in its currency. Under these circumstances, the reserve currency issuer will cause a steady accumulation of debt of foreign debtor nations and an accumulation of reserve currency in the hands of the creditor nations. (B) If interest rates are raised to combat inflation, there is a quick switch in trade flows due to the reversal of the interest rate differential joining with the "natural" reserve currency demand (1 and 2 above - this also causes an increase in the demand for money to settle debt because of the higher debt load arising from hikes in interest rates) to quickly raise the exchange rate to the detriment of the exporting industries and to the merriment of consumers and retailers. (B1) This produces a strong surge of imports and a fundamental change in the structure of the economy. The "mature" economy rapidly looses industries, one after the other, and turns more towards the marketing and transport of foreign made goods. (B2) As is soon discovered, the added imports serve to grow the nominal economy more quickly than the production of the same products, since the assembly, transport, retailing and marketing operations generate a greater GDP per worker than does the manufacturing itself. (B3) During this phase there is a rapid accumulation of foreign debt and bouts of currency weakness. (B4) When interest rates are raised it is foreign debtor nations that keel over (see II) while the reserve issuer finds very low inflation caused by the fire sale prices of the debtor nation's exports. (B5) Once the debtor nations are restored to normalcy, inflation resumes quickly and interest rates must be raised again. (C) During these processes, creditor nations find that there is no way for them to make use of the accumulated reserve currency, and that when they lower interest rates, there is no response in their own economy, but the reserve issuer's economy runs through the roof. Jealousy is, justifiably, directed towards the profligate reserve issuer. (D) Eventually, (D1) repeated collapses of the debtor nations teach them not to accumulate foreign debt, and thus the demand for the reserve currency abroad is damaged, just as its supply reaches new heights due to higher import costs as the value of the reserve currency falls. (D2) When support from the creditor nations ends, the issuer of the reserve currency will have accumulated a huge debt that (D3) will loose value quickly as (D4) alternatives (like commodity money or currencies of creditor nations) are used to balance trade. (E) The (former) reserve currency will be decimated, and no matter how severe the interest rate hikes, there would not be any way to remove the flow of reserve currency seeking to procure real products rather than recycle the reserves into new debt and equities in the reserve issuer's markets. The lower currency exchange rate and the price hikes this causes in imports shakes the confidence of the local and foreign investors who seek safety in commodity money and real assets. Since in this inflationary environment, deposits and debt securities are being sold by substantial foreign holders, raising interest rates or refraining from monetization may cause the beginning of a credit crunch and a rolling default that would cause the credit markets to seize up and the economy to crash.
A quick glance at aggregate debt in the US reveals that debt has grown in all years since 1960 (the beginning of my series). It has grown faster than GDP. From a steady 150% (+/- 5%) of GDP through 1980, it has grown since to 277% of GDP today. Viewing the debt balloon as a portion of M3, the debt in the US shows a similar pattern where the significant break occurs from a steady 235% (+/-10%) of M3 in the 1961 to 1984 period. Since then, it broke sharply upwards to reach 400% of M3 in 1995. This is where it has stayed. What is most interesting here, is that in the post 1980 world of higher interest rates, indebtedness
Debt service less debt growth and nominal GDP growth gives a measure of the ease of filling the debt service needs of the US economy, particularly as a portion of GDP. Prior to 1980 there were no periods where debt service was greater than new debt creation and GDP growth. Since then, in the periods 1980 to 1983, and in 1990 through 1994 there were serious, if not severe deficiencies in the ability of the economy to service its debt load. These were periods of slow or negative growth (less than 3% real GDP growth). These periods were punctuated by six year periods of quick debt growth and heavy trade deficits centered around 1987 and 1998 (we are still in the latter period, in the debt slowdown phase).
After the 1987 crisis, all nations came together to help the US economy recover. The Japanese interest rate reductions and the US interest reductions of the early 90s were sufficient to heat up the Asian "Tigers" and some of the Latin American countries in an orgy of trade deficits and debt accumulation that threw some economies into hyperdrive growth over 10%. The 1994-5 interest rate hikes in the US marked the end of the debtor nation's ride as their reserves dwindled and businesses were quick to invest in export producing capital using foreign and local debt. Though this excess production lowered prices, the heavy consumption this caused brought the great deficits discussed before and caused profitability to disappear.
As is obvious from this, debt is key to modern monetary issues, it is not possible for the banking system to survive on a pure debt structure without continuous growth of debt outstanding. The willingness of people, corporations and the government to go into debt is the limiting factor of debt growth. The prevention of a deflation of the banking system, a liquidity or credit crunch requires debt monetization. Thus, recessions cause a drop in business activity and income generation by the economy. The drop in this activity needs to be matched by fiscal expansion of the government's indebtedness to generate sufficient debt expansion to avoid the destructive deflation of the banking system and exasperation of the recession. Alternatively, interest rates may be lowered to the point of resumption of borrowing. If borrowing does not resume, government deficit spending must be monetized by the purchase of government (or other) securities by the Central Bank. Otherwise, debt expansion would have to be replaced out of income, causing a liquidity shortage and price declines and then the banking system would be in danger of collapse due to defaults by unprofitable businesses.
The bottom line is that creating money from nothing, as banking debt does, creates no goods or services, just concept money. Thus, the banking system increases money supply and debt and causes the presence of concept money known (initially) through price inflation. The price inflation later leads to more indebtedness, and finally to a credit squeeze when the economy is unwinding produces a "death" of the money through default and liquidation. Over this debt repudiation process, the leverage of the bankers will cause their destruction through the elimination of the money they "created". The elimination of the debt obligations lays the groundwork for price inflation to follow as the Central Bank eventually gives in to monetization and the buying power of the currency falls to the point where bank leverage is returned to "normal".
In the US markets, this means that debt in proportion to M3 must end back at the 220-240%
ORO
(10/18/99; 02:40:59MDT - Msg ID:16753)
Yellin' of troy AragornIII FOA
Good morning all.
I am hoping this posts in one piece.
So here it goes.------The problem with "concept money" is that it is vulnerable to "reverberant doubt." I accept it only because I believe others will, which requires believing they believe still others will, and so on.
1. This is a problem with all money and all goods and assets.
2. As you point out, concept money is more susceptible to doubt because one does not see any value to it from its inherent properties. (I folded 3 bills into a small wedge and it straightened out my wobbly end table I erased the depositor database of the bank computer to play Doom 3D, nobody seemed to mind).
3. Wealth money and exchange money. You seem to make a distinction at some point though you don't say so outright. I would like to make the distinction and make it clear. I would only add that some wealth money can often take the place of an exchange money, but no concept money could be wealth money. Gold and the PMs are best suited for both roles.
1. Money. What is it?
1.1. Usage - medium of exchange, wealth
1.2. Properties as medium of exchange
1.2.1. Liquidity in physical and electronic form.
1.2.2. Generally accepted in trade - don't want that smelly herring
1.2.3. Does not loose significant purchasing power over the course of a day or two from the time of pay till it is safely used or transformed into wealth money - see Weimar.
1.2.4. In physical form it is not too bulky to take to market. (I'll give you this truck load o shells here for the cucumber...)
1.2.5. Finely divisible. It'll cost you 0.01 Ming Dynasty vases.
1.2.6. Easily verifiable
1.3. Properties as wealth
1.3.1. Rare and grows rarer over time. (each new unit costs the same or more to produce than the previous one)
1.3.2. Longevity. Does not corrode, bleach out, break, decay etc..
1.3.3. High density of purchasing power per carriage on one's person and in storage. Transportable, low cost of ownership. (We couldn't take the Michelangelo statue when the Nazis came to Milan, damn new roof on the villa cost a fortune)
1.3.4. Not dependent on arbitrary decisions of political and economic powers as to the bulk of supply and demand over prolonged periods of time. Say a generation or two. (Grandpa left us a safe deposit box in Rio, full of money he worked for all his life, we bought a popsicle for each of us with what we got from a collector)
1.3.5. Has significant demand of its own to consume whatever quantity could hit the market. (as opposed to a mile wide meteor that would wipe out life on earth)
1.3.6. Has a market and accepted in trade in many places, does not have to be particularly liquid.
1.3.7. Easily verifiable
1.3.8. Has value in wartime or peace. Preferably more during war than in peace
1.4. Can concept money be money in all senses?
1.4.1. Not even a slight chance, because the loss of value in war time, and its susceptibility to the inevitable government goof(s).
1.4.2. Can it be used as short term preserver of wealth (i.e. a bond?), yes in time of peace and economic stability, no when these are threatened. (Like now)
1.4.3. As a medium of exchange it is good so long as its decline allows sufficient time for wealth preservation through conversion to commodity money and precious goods.
------ if this money, though risky enough to be lousy money, is still the *best* kind of money available, then just because there is a chance it might find no takers when I want to spend it does *not* mean I should spend it all now and refuse to take any more.
As you say later on, it is a matter of allocation and purpose.
Whether you are looking to store wealth for the unborn grandkids, or supply tonight's dinner. Investing in GE is one thing, locking up your money in a CD is another, but none of these are for the next generation. They are for money you will use yourself and this need not be very liquid, and they are susceptible to the same vagaries as your money, namely dilution.
------ if the money has an issuer or other central authority who can reduce the supply as appropriate -- more likely for concept money than a physical commodity --, the price of a unit of money need not even change, and this price stability can itself bolster confidence. As long as we are in this regime, the doubt inherent in concept money does not reverberate: #n *isn't* going to reject the money as not-money, so there's no reason for #n-1 to do so either.
As AragornIII said, the fact of the presence and need of a regulatory authority indicates the fear in officialdom that there would not be confidence in the money. Confidence in this Issuing Authority assumes that there is a possibility if not a probability of them "getting it right". I will say this again: It is not a possibility. The best you can hope for is that you won't see a major break within the next couple of years. C'est la.
Remember this, in order for the burden of issuing and controlling money to have value for the authority, it must include a "fraud", something for nothing must play into it. The whole concept of fiat/concept money is just that, seignorage. If concept money is used, it will cause a cumulative economic distortion over time. Attempts to correct it will only cause further distortion because of the interjection of another arbitrary decision making process.
Why would anyone think that central planning, so bad for anything else in the economy, should be a valuable component in money issuance and control?
------It becomes right to hold less money/liquidity, but not to hold none; *some* amount of liquidity really is *very* valuable.
As long as you can make it to the coin store or supermarket without loosing a chunk of your purchasing power, you are fine. When the speed of purchasing power loss heats up, you see in your own anxiety and your rush to spend before the price goes up the same evidence that others do and can be sure that liquidity is going to disappear, as you are surely not #n, otherwise prices would have been stable. When new price booklets are distributed at the store entrance daily because the cost of updating the price on the shelves is be too high you know you are there.
------ There are a couple of classic ways to keep the system in the stable region. Laws requiring payment of taxes in a particular kind of money or making it legal tender for debt and other contracts assure everyone that there will always be at least a limited, specialized demand for the money, which reduces the risk of loss from getting stuck with it when the music stops.
Not really.
The excess demand for money for settlement of these tricks for slowing its devaluation are also among the main causes for it to occur. One of my first observations upon reviewing debt and monetary aggregates has been that there is a cycle and there are two phases. Debt growth starts it, then monetization and credit crunches follow it. Credit crunches are what a monetary authority is most concerned with, because of its destructive domino effects on banking. The alternative is monetization. Ultimately, the method for clearing excess money creation dooms the system to violent unwinding through debt collapse or monetization. Given the slightest choice, the central bank will monazite.
Taking Parkinson's second law into account within the monetary realm, we have the introduction of the recently ballyhooed moral hazard. Essentially, if the monetary authority offers "insurance", the system will inevitably reach the capacity of this insurance's reserves and surpass it significantly. In the concept money world there is no end to reserves, but each additional draw dilutes the whole in circulation and in accounts.
------ non/monetary values. Of course, at any one time, the price and marginal value for commodity use and for use as money must be about the same, otherwise stocks would shift from one use to the other...... The point is that when a commodity becomes money its demand curve shifts, since it is now the sum of the regular, physical demand curve and an additional curve of demand for use as money. The latter is downward-sloping, since the higher the price -- the more you can get for a unit of money -- the fewer units you need to serve your liquidity needs (assuming the money is reasonably divisible). So there will be a new equilibrium, at a higher price [purchasing power]. And at this higher price, actual physical demand will be less, as users shift to substitutes or do without or reduce their own outputs.
Wonderfully thought out demand picture. What is missing is the presence of supply. The big difference between the various candidate monetary commodities, and the reason PMs got top billing is here. All PMs are depleting "natural" resources. The "easy" ores are produced first then, when depleted, the next level ore is used; with lower concentration, more difficult chemistry, deeper excavation, greater political instability, or lack of infrastructure. Because of this steep staircase ascension in real cost of production with each rise in demand, the global economy's technological advancement is challenged to just keep gold production going, not to speak of attempting to lower the cost.
The PMs are assured in this way of maintaining purchasing power over long stretches of time. New high quality deposits are rapidly depleted to the same cost level as the rest. Similarly, the bringing to market of large hoards may lower the purchasing power over a short time, however, there is bound to be a recovery in its relative value. The prospect of recovery is what causes the savvy to buy during these "supply crises" and puts a natural floor under the purchasing power.
The bottom line is that over a generation or more, there is no meaning to the monetary demand, since it is not what dictates the purchasing power. It is the fact of the ever increasing real inputs of production (however slowly).
.
------ Conversely, if money is demonetized, if the monetary demand vanishes, the price will drop, and this reduced price is what I have been referring to as the nonmonetary value. Pure concept money, having no nonmonetary use/demand to speak of (apart from a few collectors, historians, etc.), becomes (nearly) worthless if demonetized.
The analysis of supply should suspend your interpretation of demonetization when referring to a depleting resource commodity money. Though the supply shock from official demonetization may cause loss of confidence for a period, particularly before it actually happens, the fact is that the monetary authorities of all countries can not actually make the decision to demonetize PMs, only the decision to not call them money. Just as printing "I am money" on a paper does not make it so, so does the new official nomenclature not make the PMs any less money than they were before the decision.
------ But when the money first becomes money, the whole circulating balance has to be obtained, creating a much higher demand, temporarily; and the effect on price will be all the greater since suppliers know the demand is temporary and won't turn their businesses upside down to meet it. Conversely, on demonetization the whole monetary balance, no longer wanted, gets dumped into the supply side of the equilibrium, but only as a one-time thing, until it is absorbed. (Essentially, this is what was happening to gold in recent years.)
Your discussion of overshoot is quite to the point, I believe we have just started out of the gate on recovery from overshooting in the gold markets. The paradigm has shifted as the high demand for gold at "demonetized" prices has been satisfied by the implied encumbrance of much "monetary authority" gold, fraudulently backing impossible promises by bullion bankers. As ANOTHER is wont to say, the price was dropping because of the high demand.
------These transitional effects are much less a problem for pure concept money, which can be created and destroyed by magic wand as needed, but for commodity money they are serious, making the stuff less attractive and more risky as money, and thus perhaps preventing it from becoming or remaining money.
Quite the contrary here. The requirement of a monetary authority controlling the spigot is exactly the kind of thing that a wealth accumulator like AragornIII wants to avoid. The current popular trust and confidence in the motives and abilities of the monetary authorities is an anomaly, as is the benevolence of a dictator or regent. There has yet to be a case in which the monetary authority was due its accolades. The best one should expect is their mass resignation, perhaps accompanied by some tar and feathers, followed by the elimination of their powers.
Magically appearing and disappearing is not a property of stable money, or wealth money. Concept money rabbits appearing and disappearing repeatedly from the hat do not indicate magic, they indicate trickery and illusion. Our wizards of money know this, and have made a fine art of "hand quicker than the eye" illusions of concept money rabbits where they keep the rabbits and sell the "magical" hats to the simple circus audience.
Finally, the issue is: does one trust the magician, or the natural properties of commodity money, particularly of the depleting resource variety?
------ Let's consider the claim that has been made around here that gold is going to $30,000/oz. When I first saw that, I wondered, like others, what those $s will buy. It appears the claim is that the change will be about equally divided between gold and dollars: The price of gold will rise by an order of magnitude and the price of dollars fall by an order of magnitude, both relative to things-in-general.
Yes, that is the general estimate some of us are using.
The dollar's purchasing power is an artificially maintained state. In some of my previous posts I discussed the mechanism of its maintenance, the reasons for it on a number of planes, and the current state of affairs. FOA, ANOTHER, AragornIII, MK and others have pointed to this as well. All of the major reasons for the maintenance program have already disappeared. The mechanism itself is breaking apart. And a 10 fold devaluation is not only thinkable, but inevitable. Furthermore, it has happened before, in the rather quick drop of the late sixties to early eighties when there was strong international support for it. This support is now gone, so the elements to delay the drop are gone as well.
------Is it at all plausible that the price could go up by a factor of ten? As I understand the claim, the proponents are not talking about a mere brief spike in the price (caused by a short squeeze or some other aberration), but about a fairly stable price level, a new equilibrium.
Yes, and again, the current gold purchasing power is an artificially maintained state. The mechanism that maintains the low price as well as the interests backing it are all changing. The interest of the new monetary authorities does not lie with low gold prices at this point, but with high prices. The mechanism itself, the details of which I and others have discussed and estimated, was about done for even if the official support was still standing (which it isn't). The war against gold was lost and the opposing forces are trying to decide the right retreat tactics (scorched earth, panic and run...), and whether to make a last stand or surrender.
And to repeat the dollar story, it has happened before (20 fold in 11 years, 10 fold was permanent) despite many measures taken by the most powerful players in the monetary system to stop it. The "united front" is no longer there, and the interests of its former members now stand on the other side, or at odds with each other.
------ Now, no one is predicting some huge technological or aesthetic change in physical demand (or supply), so the idea must be a flood of new *monetary* demand, a remonetization of gold. But what all that theory tells us is that at ten times the present price, gold will not be such good money. ..... what price would clear a purely physical market, so offhand I have no quarrel with the $600/oz figure that has been going around here. (I would like to point out, though, that for gold the "physical" and monetary demands aren't totally separable, since a lot of gold jewelry around the world is held as a store of wealth, with monetary overtones and assumptions vulnerable to a demonetization and disillusionment.) But that isn't the number in the public mind; what will come to mind when people envision a loss of gold's monetary status is the $300 it was at for so long before the New Monetary Order. To make things still worse, there's the overhang of all those official gold holdings.
The one thing to remember is that the revaluation is rarely that of gold itself, the revaluation is usually that of gold obligations - back to near 0. It is a deflationary phenomenon, when viewed through the eyes of gold.
The historical record shows that revaluations of gold have met with heavy dishoarding when an 10 ounces can buy the prevailing mode of transport.
In banking terms, when banks are restored to 60% reserves stability is restored. (it is not threatened significantly until it drops below 40%.) In our case of the late 90's, the leverage of M3 is 4 within the US. In order for the whole debt to be 60% coverable in cash, monetization needs to be 60% of a quadruple the money supply. In order to obtain 60% coverage of the resulting inflated M3 with 262 million ounces, we have roughly
$6 trillion X 4 X 0.6 X 0.6 / 262 million = $33 000
The 1976 "redistribution of wealth calculation" brings just under 200 barrels of oil per ounce. Currently at $22, implying a $4400 price. If the price of oil continues to rise, one should expect gold to rise at least in proportion. A 10 fold drop in the dollar would bring $200 oil, and $40 000 gold.
In terms of unskilled labor, one ounce per month (shaky figure, since I can't find the source at the moment). Since the US, Mexican and Southeast Asian unskilled workers sit at about the same international value of employment and skills, the $ should fall to near parity in pay of unskilled labor, which would bring it down by a factor of 10.
Back to the vulnerability of the New Monetary Order. I do agree that there is a danger of artificial inflation of gold with the proposed regime, and monetary authorities will doubtless try to do just this, as it stands in their interest to do so. One thing to add here is that the appropriate level would still be at the $30 000 range. In any case, one should consider the rule of rising incremental supply cost coming into play. Once price rises in the inputs to gold production are considered (10 fold?) and the depletion effects are taken into consideration, given sufficient time, the supply cost will be just that - $30 000. No one will be thinking of $300 as a downside potential. Perhaps 10 - 20 000 more tons would be produced in the next decade than otherwise, but that is not to mean the price would fall much below the new, much higher production cost .
As AragornIII said, there is nothing else to go to but real goods and gold. The new money would just be spent if it perceived to be too richly valued. But there is no incentive to "cheat" because of the lack of alternatives for parking the receipts of sale. Levels of debt and leverage through derivatives are so absurdly high that raising interest rates to lure the central bankers into any currency will backfire in producing enormous flows of newly "printed" currency into the markets that would swamp the initial financial flows. This strategy has been the lynchpin of the post Volcker era. The accumulation of obligations this has caused is so enormous that there is no way to let it continue, not to speak of it being substantially extended without large scale runs of the printing press. I would expect one form of "cheating" to be reincorporation of the PGMs and silver into the central bank accounts.
Bottom line on the issue is that the leverage against gold that develops with the bull market will be a major determinant of the stability of the system. The degree of diversification by central banks into the other PMs that have natural properties similar to gold will also be a measure of stability.
The main conclusions you drew from your work were:
--- For someone holding newly-monetized gold, the potential loss if the monetization fails or is reversed will be.... 80%...95%.
--- At such prices, gold will be the softest "hard money" you can imagine.
--- For practical economic purposes, it will be almost like concept money.
--- this will represent a *change* in [gold's] economics.
--- But if you thought of gold as good money precisely because its ratio [of monetary to commodity value] was low, because its commodity value provided security, then an effective loss of that state of affairs is an *event*, a news peg, an occasion to reconsider one's policy.
--- I cannot believe that gold at those prices will be stable money.
--- The system will be on the wrong side of the tipping point, and gold will cease to be money. [which is why it will never become such]
Frankly, your conclusions err in not considering the natural supply dynamics. The simple fact is that gold as wealth money has never left us. The monetary authorities have never had the power to decide this issue, and still do not. This is no different from government engineers not being able to decide that cling wrap has the strength of steel. Furthermore, I suspect that gold was never let go as the unit of account for international trade and debt settlement at a dollar price much higher than "allowed" in the markets.
So the counter-conclusions are:
1. Gold does not need to be remonetized, because it has never ceased to be money.
2. Publication and recognition of gold's price is the issue at hand.
3. The second issue is recognition that the 16000 to 20000 tons of paper gold sold to cover demand for the metal over the last decade will not satisfy it because it is not deliverable. The demand for that metal will be satisfied by the physical market along with the new demand now mounting at a true price much higher than now. In times of peace, bad ammunition is counted along with the good, in times of war only the ammunition that works is counted.
4. Primary to all of this, is the recognition by the markets that the dollar has lost its political support and has little economic backing to provide it with value. It is the concept that you are rich on paper until you try and spend your paper money. As you spend your money you both increase the price of what you buy and decrease the value of your unspent money.
5. The extent of monetary use of gold makes its cost of prod \B<SK N` >--$q y: U5P jኤ>g <V;{KZd'ȤF]ʧ2> *--K--˧˞M... '--'76z]-M}eb8ݿ"6*"t'?9u
;V//i"K
Quabbin
(10/18/99; 02:37:23MDT - Msg ID:16752)
Who was it that said gold will follow platinum?
http://www.kitco.com/platinum.graph.html
hehe....just for kicks (if you don't hold plat) check out the Kitco above. (if you do hold plat, don't even look...it MUST be a VERY sick mistake)
BTW, I didn't even shoot an arrow but I'll go on record with >>>======333.33========> because they tell me I just turned 33. Seriously though, I don't believe there is a closing price between 226.00 and 249.00.
Good luck to all nonetheless.
Q:)
Number Six
(10/18/99; 01:10:24MDT - Msg ID:16751)
The DOW[N]
Hi Netking,
per my golden arrow wild-assed guess, I'm gunna go for another LOCK LIMIT day on Wall Street...
I believe it kicks in at a 10% drop, but I am probably wrong...
I have some BEARX (the Prudent Bear Fund) which made about +2% last Friday :)
Asia is not looking at all good...
Tuesday is the anniversary of the 1987 crash...
And the Oct '29 day is coming up soon, is it friday of this week?
Cheers
Number Six
(10/18/99; 01:04:53MDT - Msg ID:16750)
Pharaoh's Gold - I see this as a good omen :)
http://www.the-times.co.uk/news/pages/Times/frontpage.html?999
Ancient map points to pharaohs' gold
FROM MICHAEL THEODOLOU IN NICOSIA
AN Australian-Egyptian company is planning an ambitious
37 million project to mine gold in Egypt which once
supplied the precious metal for ancient pharaonic
treasures, including those of Tutankhamun. It will make
the country one of the ten top gold producers in the
world, company directors said.
Behind the project is an Egyptian geologist, Sami Raghy,
who was inspired by a 3,200-year-old papyrus map
showing gold mine tunnels. It is believed to have been
sketched by King Seti I. He was the father of Rameses II,
a prolific builder and the most celebrated of all the
Pharaohs.
"Every king was buried with a cache of gold and it was
written where that gold came from," Mr Raghy said. "It's
the oldest known geological plan in the world."
Using the map as his guide, Mr Raghy, who has been
dubbed Egypt's Indiana Jones, is leading a 40-strong team
of Egyptian and Australian prospectors in the mountainous
eastern desert at Sukari, 500 miles south of Cairo. Even in
October temperatures rise above 30 degrees. "It's very
tough work, but I love exploring," Mr Raghy said.
Full-scale mining is due to begin early next year.
Development work has begun at one hill which alone
promises deposits of two million ounces of gold. Ten
other potential deposits of "world standard" have been
found.
The remarkable quest for riches in the desert began seven
years ago when Mr Raghy, who spent 32 years in
Australian mines, spotted a copy of the ancient map in a
government office in Cairo while on holiday with his
Welsh-born wife, Mair.
For him the map was proof that the ancient Egyptians
mined gold while our ancestors were still in the Stone
Age. The Pharaohs sent out exploration teams on camel
trains to open mines as far south as Kush, the pharaonic
name for Ethiopia.
Seti I ruled Egypt from 1290BC to 1279BC, about 40
years after the death of Tutankhamun, the boy Pharaoh,
whose gold funerary mask has become an icon of
Egyptology. But Mr Raghy is in no doubt that the mines in
the area he is now working supplied the gold for
Tutankhamun's treasures.
Mr Raghy's company, Centamin Egypt, hopes to use
opencast mining instead of the more costly tunnelling.
Netking
(10/18/99; 00:45:03MDT - Msg ID:16749)
@Number Six/All
What's our best guess for the Dow?
Number Six
(10/18/99; 00:42:41MDT - Msg ID:16748)
Asia Tanking
http://quote.yahoo.com/m2?u
Weeell, i'm working the night shift here in Denver and Asia is tanking, and it's still early...
Korea down 4.2%
Australia 2.3%
Japan 1.85%
China 2.6%
============================
France also first to open at 1% down...
Click Here to view yesterday's discussion.
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.
|
Centennial Precious Metals Gold coins & bullion since 1973 Denver, Colorado 80246-0009 We educate first-time investors! |
for quotes and purchase information.
|
