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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...

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ARCHIVED DISCUSSION FROM 10/19/1999
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Gandalf the White (10/19/99; 22:22:16MDT - Msg ID:16948)
Hey Goldspoony -- Did youse see this ?
Gold Mining OutlookGold Mining Outlook
by Steven Jon KaplanBack Issue List
Updated @ 6:55 p.m. EDT, Tuesday, October 19, 1999.

KAPLAN'S CORNER: QUESTION: Platinum and palladium seem to be holding up well even as gold has been dropping. Do you think they represent a good buying opportunity?
ANSWER: Definitely not. Recent share price weakness in platinum mining shares around the world after a significant rally, including Stillwater in the U.S. and Anglo and Impala in South Africa, are probably pointing the way
toward lower prices for platinum and palladium in the coming months. In any downtrend for gold, the PGMs (shorthand for platinum and palladium) are likely
to underperform, and may even suffer a collapse as their traders' commitments show that their current lofty price levels, especially for platinum, have been
primarily achieved through speculator accumulation. Any downturn will trigger a cascade of speculator sell stops. Once platinum mining shares begin to outperform the metals themselves, it will probably be time to accumulate these
again; their traders' commitments have been strongly bullish at least a few times per year and will almost certainly confirm any good buying opportunity.
*****Better get more saddle glue !
<;-)

Black Blade (10/19/99; 22:19:27MDT - Msg ID:16947)
Bonedaddy
You are so close. I saw an episode on A&E once called "American castles" (I think that was the name). Someone actually did have sheets of US currency as wallpaper. And in the most appopriate place perhaps.....the bathroom! Sorry, but I could resist.

The Stranger (10/19/99; 22:08:29MDT - Msg ID:16946)
Bonedaddy
What a nice thing to say. Thank you for your kindness. Wall Street professionals learned long ago that the market goes up more than 60% of the time. Therefore, you can usually be right by just being an eternal optimist. This will also free you from long hours of study and provide ample time to work on your golf game. Of course, once you have invested your clients' money accordingly, you have little choice but to talk your book. Sure enough, it makes sense, but that is no game for heroes, if you ask me.

Black Blade (10/19/99; 22:06:18MDT - Msg ID:16945)
ORO....kudos!
One more thing. When the Gov. calculates food in the base CPI for example....Meats can substitute for one another, such as steak vs. hamburger vs. chicken, etc. Who knows, maybe even vs. baloney. The point is the CPI is actually meaningless. I heard one of the talking heads on the tube today trying to explain the core rate. How pathetic!

Chris Powell (10/19/99; 22:06:02MDT - Msg ID:16944)
Get the industry to stand up for itself
One more day for the Denver gold show.
Let them hear from you and we can beat
gold's enemies.

http://www.egroups.com/group/gata/258.html?

http://www.egroups.com/group/gata/260.html?

ORO (10/19/99; 22:00:10MDT - Msg ID:16943)
The Stranger - Inflation indexes
Aside from the PPI and the CPI, there is the GDP deflator which does include health care. Unfortunately, it also includes the government's $ estimate of the "horse power" of computers rather than their actual selling price in the calculation. This is a (stupid) attempt at making sense of the economic value of technology. The idea is that the marginal value of each additional megaflop or megabite is the same as the previous. The measurement is better on a logarithmic scale, but not even close to precise.
Bottom line, there is no official aggregate figure, published by the government, that can even come close to estimating the actual inflation rate.
There is another issue - one of interpretation. Some industries are running out of workers and some key materials, in particular construction, where in some areas construction is halted because contractors can't find people to fulfil contract, in others, wallboard was not ordered early enough and the crews sit idle for a short while and go home. In some areas, the economy is stretched to the limit, and if prices were facing resistance before, this resistance is slowly falling away.

By my index of lowest available prices for foods and gasoline, we are at 25% inflation. In some food areas it is closer to 50% Y/Y. (sampled in two week period in Sep.)

Scrappy (10/19/99; 21:56:18MDT - Msg ID:16942)
ORO
Oh.

Thanks. Re: the mystique of gold. Oh. Thanks. :}

Black Blade (10/19/99; 21:51:40MDT - Msg ID:16941)
can you believe the spinmeisters?
Howdy stranger! It sure is a good thing that I don't need energy, drink or eat...otherwise I'd be in real trouble! Thank God for the core rate! I feel much better now. I guess that explains the current drop in Au (-0.50) and the rise in s&p futures (currently +4.70). Oh well, I guess all is well, never mind that new highs at 19 and new lows at 396 don't mean anything. Well stranger you really did take the words right out of my mouth. Good to see you back!

Bonedaddy (10/19/99; 21:42:27MDT - Msg ID:16940)
Howdy Stranger!
Man, I've missed your posts! Do you suppose that real inflation is just hard for people to see in a "virtual world"? But, I'm predicting one thing will become more affordable, greenbacks as wallpaper.

SteveH (10/19/99; 21:29:57MDT - Msg ID:16939)
What call?
FOA, what call in London? Tell us more, please.

The Stranger (10/19/99; 21:15:53MDT - Msg ID:16938)
Inflation Update
Today's CPI report only showed the largest U.S. consumer price increase in 5 months. And, of course, hearing news like that, the crowd couldn't snap up those Wall Street bargains fast enough this morning. Why hell, I guess 5% annual is no inflation at all, is it?

Well, it may be no inflation to some, but it is precisely what this writer predicted here at USAGOLD almost 9 months ago. It is also what the bond market, various commodity markets, and the Fed have warned us about all year long. Yet, how ridiculous are the contortions through which the disinflation crowd puts itself in trying to explain away the obvious. Friday, on CNBC, one commentator was heard to say that, if you didn't smoke or eat or drive a new car, you hardly experienced any inflation at all. Of course he left out most healthcare costs and most housing costs, which don't count in the government's numbers and have been running well ahead of both the PPI and the CPI of late.

Today "Institutional Investor" magazine's Economist of the Year (sorry sir, I did not catch your name) declared that the bond market will make certain there is no inflation. Well, excuuuuuse me, but that never seemed to work in the 70s. Inflation is by definition an increase in the money supply. Sooner or later more money shows up in higher prices, and that is precisely what is going on NOW. You can raise rates as high as you want, you can send your bond market to absolute zero. None of this will make a whit of difference unless you control the growth of money. The problem is how to do that when so nascent a worldwide recovery hangs in the balance, y2k approaches, and U.S. stocks are in dive mode? Mundell might suggest coordinating such an act with a tax cut, but Clinton has already disarmed himself of that weapon by vowing to veto virtually anything that comes along.

I know the gold rally appears to have petered out these days, but I wouldn't be duped by what, in my judgement, is just a feint. The way I see it, neither bonds, nor the dollar, nor the stock market have bottomed yet. And gold? Why, I think it's just warmin' up.

canamami (10/19/99; 21:11:10MDT - Msg ID:16937)
Questions for FOA
I will really start to post again Halloween weekend (month end will be over then).

However, some questions for FOA:

1. Will the "oil" countries move to "currency basket" settlement or Euro settlement solely? If only Euro settlement, why not also Japan which also has a trade surplus? Does "oil" include non-Mid-East countries like Venezuela? Will there be direct gold settlement in any form (not merely the Euro getting credibility from the ECB's gold reserves)?

2. Why do you believe the switch by "oil" to Euro settlement will "harm" the dollar so severely? Why would Euro settlement necessarily enhance gold's status, if gold itself is not used directly for settlement? Are you positing that the US will be obliged to settle with its gold reserves to buy oil and other necessaries, a la Germany circa 1944, and this is the reason the gold mines will be nationalized?

FOA, I know there are too many questions here, but your replies to those you have time to answer would be appreciated. I also know you have dealt with these issues in certain respects on previous occasions.

Thank You.

SteveH (10/19/99; 21:02:36MDT - Msg ID:16936)
Letter
I believe the author to be Farfel.

SteveH (10/19/99; 20:59:17MDT - Msg ID:16935)
GS/Ashanti
http://www.gold-eagle.com/editorials_99/dvcohen102199.html
"...In Goldman Sach's case, one of their major debtor clients happens to be Ashanti Gold. Via excessive hedging activity in the gold market, Ashanti apparently owes Goldman Sachs a hefty amount of physical gold (since ALL gold loans are only repayable in gold, NOT currency!). Apparently, with the spot price of gold now higher than Ashanti's hedge price, Ashanti has received a margin call from its bullion bank, Goldman Sachs...."

andrew the kiwi (10/19/99; 20:59:15MDT - Msg ID:16934)
the hare and the tortoise!
platinum up $5.00 or 1.23%, b$413 a$418, wake up gold!!!!

Cavan Man (10/19/99; 20:58:24MDT - Msg ID:16933)
FOA $360
Hello. That's your second reference today to 360. Why?

FOA (10/19/99; 19:57:36MDT - Msg ID:16932)
SteveH
You arrived there first! Good.

FOA (10/19/99; 19:54:16MDT - Msg ID:16931)
The Euro Area: A New Monetary Colossus
http://www.goldensextant.com/commentary.html#anchor6027
PH, I trust you have been reading this gentleman lately. As one reads this entire article we can understand what "Yellin" cannot.
Paper gold may be sold down at anytime but in this new atmosphere of an Official physical gold bull, there paper bluff is being called. Did anyone witness the huge call on london today? Buy physical while you can get it under $360 as we will be there soon enough. Gold will outperform!

----------------------------

October 21, 1999. The Euro Area: A New Monetary Colossus

The 11 nations of the Euro Area have a total population of 290 million and a combined annual GDP of almost $7 trillion, comparing quite favorably in size to the United States with a population of 270 million and a GDP of $8.5 trillion. Impressive as these numbers are, they pale beside the monetary numbers. Source: IMF, International Financial Statistics, October 1999 (most figures for end of June 1999).

With over 400 million ounces (12,560 metric tons) of gold reserves, the EA has almost 1.4 ounces per person compared to 262 million ounces(8150 tons) equating to just under 1 ounce per person for the U. S. More importantly, with the equivalent of around $1350 of cash currency per person in circulation compared to more than $2000 for each American, the EA could provide a 40% gold cover for its currency outstanding (i.e., the combined total of all 11 national currencies outstanding) at less than $400/oz. The U. S., as I have noted before, would need a gold price in excess of $800/oz. to do the same thing. Total U. S. foreign exchange reserves are some $30 billion; those of the EA over $220 billion. And with a 1998 balance of payments surplus in excess of $120 billion, the EA is running trade surpluses almost as large as U. S. trade deficits.

The implications of these numbers are huge, particularly for anyone contemplating any sort of currency competition, let alone a possible currency war, between the Euro Area and the United States. What makes them even more frightening from the American perspective is the fact that Euro currency itself does not yet exist but must be introduced by January 1, 2002. Why?

One of the most intriguing questions about the U.S. dollar, or more precisely the 550 billion of them circulating in the world, is: where are they? No one really knows, but it seems almost certain that a great many of them circulate outside the country in parts of the world where the local currency is unreliable. Something of the same phenomonon is seen with the German mark, of which there are the equivalent of almost 1675 Euros (approx. US$ 1800) for every German, and even more spectacularly with the Swiss franc (over 4500 (approx. US$ 3000) per citizen, for each whom Switzerland also has gold reserves equal to almost 11.75 ounces before the currently proposed gold sales). On the other hand, Belgium, France, Italy and the Netherlands, taken together, have currency outstanding equal to about 1000 Euros (approx. US$1100) per citizen.

The problem with a currency held in large quantities outside its country of issuance, where it is legal tender, is its potential for causing destabilizing inflation in its home country should a large amount of it be repatriated suddenly, as might be caused for example by a sudden loss of confidence. Indeed, just this problem led to some discussion in Congress a few years ago about creating two dollars, one to circulate internally and one externally. The problem with such an idea, of course, is that even serious discussion of it can trigger the very consequences it seeks to forestall.

In this context, the planned issuance of Euro notes and associated elimination of national currencies, particularly the German mark, should hold some potential concern for the EMU. What is more, and even more importantly, the new Euro currency will have to earn and secure acceptance by citizens of the Euro Area. But look at the numbers. It is well within the realm of possibility: (1) to back the new Euro currency with a 40% gold cover, whether it is actually redeemable or not; and (2) to mop up all excess German marks and other EA national currencies circulating externally with EA dollar forex reserves. Indeed, what other use will there be for the bulk of these reserves? If the United States can get along with its gold and $30 billion of forex reserves, surely the EA -- with more gold as well as balance of payments surpluses -- can do the same. And however attached EA citizens may be to their old national currencies, a new Euro currency -- backed by gold -- might command not only monetary allegiance ("a Euro as good as gold") but also greater allegiance to the whole concept of a United States of Europe.

FOA NOTE: Much more to this at this site.

SteveH (10/19/99; 19:49:22MDT - Msg ID:16930)
Interesting
http://www.goldensextant.com/commentary.html#anchor6027
snippet--

"With over 400 million ounces (12,560 metric tons) of gold reserves, the EA has almost 1.4 ounces per person compared to 262 million ounces (8150 tons) equating to just under 1 ounce per person for the U. S. More importantly, with the equivalent of around $1350 of cash currency per person in circulation compared to more than $2000 for each American, the EA could provide a 40% gold cover for its currency outstanding (i.e., the combined total of all 11 national currencies outstanding) at less than $400/oz. The U. S., as I have noted before, would need a gold price in excess of $800/oz. to do the same thing. Total U. S. foreign exchange reserves are some $30 billion; those of the EA over $220 billion. And with a 1998 balance of payments surplus in excess of $120 billion, the EA is running trade surpluses almost as large as U. S. trade deficits.

The implications of these numbers are huge, particularly for anyone contemplating any sort of currency competition, let alone a possible currency war, between the Euro Area and the United States. What makes them even more frightening from the American perspective is the fact that Euro currency itself does not yet exist but must be introduced by January 1, 2002. Why?"

megatron (10/19/99; 19:35:23MDT - Msg ID:16929)
future of gold
If you want to know what Rubin and Clinton are thinking about your gold stock investments and how to deal with your gold, I strongly urge you to read 'The Prince' by Machiavelli. Too REAL, Too scary.

ORO (10/19/99; 19:35:07MDT - Msg ID:16928)
Scrappy
http://www.mises.com
Indeed, your story is inspiring. Hat's off to you.

The Mystique of gold is somewhat a reverse observation. Mundell pointed out that the references to gods, emperors and national emblems grow in relation to the debasement of the coin of the realm. Thus he points to the appearance of "In God We Trust" on the Civil War greenback. Simple. Before, we could rely on there being something behind the bill. During the war we had to hope God would provide it.

SteveH - thanks again for pointing him out to me. I do like his historical depth and analysis. I think he is still not seeing things in full. The Block article in RossL's URL is great, and touches on Mundell's early attempts to put together Keynesian and Monetarist thinking without pushing gold. Then Block admonishes Hayek for giving up on a free market commodity money as politically infeasible.
http://www.mises.com/journals/scholar/Blockgold%2EPDF
Wonderful read.
Quite alot of good stuff in the Mises site. Highly recommended.

SteveH (10/19/99; 19:22:14MDT - Msg ID:16927)
Kinross's hedge and financial picture 3rd qtr
Related Quotes

K.TO
3.86
-0.05

delayed 20 mins - disclaimer

Tuesday October 19, 12:52 pm Eastern Time
Kinross Gold Q3 results
(Full text of press release from Canadian Corporate News)

OCTOBER 19, 1999

Kinross Gold Corporation Third Quarter Results

TORONTO, ONTARIO--KINROSS GOLD CORPORATION (TSE-K; NYSE-KGC) announced today that results for the three months and nine months ended September 30, 1999 are as follows:

All results are expressed in United States Dollars unless otherwise stated.

Kinross provides the following detail regarding the Company's performance during the third quarter of 1999. Although the average spot price of gold was $259 per ounce compared to $289 in 1998, cash flow provided from operations for the third quarter was $17.0 million, compared to $17.8 million in 1998. Gold equivalent production for the third quarter was 257,331 ounces at total cash costs of $193 per ounce.

Net loss for the three months ended September 30, 1999 was $11.4 million, five cents per share, on revenues of $79.7 million, compared with a net loss for the third quarter of 1998 of $10.2 million, six cents per share, on revenues of $87.0 million. Total cash costs were $193 per ounce of gold equivalent in the quarter, down from the 1998 third quarter costs of $210 per ounce. Cash flow provided from operations was $17.0 million, six cents per share, compared to $17.8 million, nine cents per share in the same period of 1998.

Net loss for the nine months ended September 30, 1999 was $36.1 million, fourteen cents per share, on revenues of $236.2 million, compared with a net loss for the first nine months of 1998 of $9.9 million, eight cents per share on revenues of $193.6 million. Total cash costs were $194 per ounce of gold equivalent in the first nine months, down from $218 per ounce of gold equivalent in the same period of 1998. Cash flow provided from operations for the first nine months of 1999 was $47.6 million, sixteen cents per share, compared to $37.8 million, nineteen cents per share in the same period of 1998.

Included in the results of operations for the nine months ended September 30, 1999 are $5.0 million, or two cents per share of unusual charges. These charges resulted from severance obligation associated with the decision to place the Macassa mine on care and maintenance and a contract termination fee associated with the termination of the surface mining contract at the Refugio mine.

Gold equivalent production for the third quarter was 257,331 ounces, for a nine-month total of 759,642 ounces. The Company is on track to produce in excess of one million ounces of gold equivalent in 1999.

The Company's gold hedging program enabled the Company to realize an average price of $300 and $299 per ounce for the third quarter and nine months respectively, compared with average spot prices of $259 and $273 for the third quarter and nine months respectively.

Operating Performance

Although production was nominally lower than planned, total cash costs were slightly better than anticipated for the first nine months of 1999. The current plan calls for higher production from the Hoyle Pond and Refugio mines for the fourth quarter of the year, for a full year total of more than one million ounces for the Company at sustainable low total cash costs of approximately $190 per ounce of gold equivalent. For details of tonnes processed, grade and recovery refer to the tables presented later in this press release.

Fort Knox Mine - Alaska

The Fort Knox mine continued to increase production during the third quarter. Third quarter production increased by six percent over the second quarter at total cash costs of $182 per ounce, better than planned. With the closing of the True North acquisition, the Company is now focusing the exploration and permitting activities in Alaska on the nearby True North and Ryan Lode properties which will provide higher grade ore and allow the Company to increase production at the Fort Knox mine by 2001.

Hoyle Pond Mine - Ontario

As previously reported substantial changes at the Hoyle Pond operations lead to improved productivity by the end of the second quarter. The Company is pleased to report a continual improvement in production during the third quarter. Production increased by 36% and total cash costs improved to $187 per ounce for the third quarter. While this is still not at an acceptable level, continued improvement is forecast for the balance of the year such that production expectations for the full year are approximately 135,000 ounces at a total cash cost of about $190 per ounce.

Kubaka Mine - Russia

The Kubaka mine continues to exceed planned production with lower than forecasted total cash costs. Production at the Kubaka mine is significantly better than planned due to higher than expected mill feed grade, greater mill throughput and lower operating costs. Total cash costs at the Kubaka mine remained the lowest in the Company at $139 per ounce of gold equivalent for the third quarter of 1999.

Refugio Mine - Chile

Production at the Refugio mine declined 27% during the third quarter when compared to the second quarter, but increased by 37% when compared to the third quarter of 1998. Total cash costs were $314 per equivalent ounce, compared to $437 for the third quarter of 1998. While the nine month performance at Refugio is disappointing, management remains confident that beginning with the fourth quarter and going forward, sustainable, much lower production costs will be reported.

Denton-Rawhide - Nevada

Production at the Denton-Rawhide mine increased by 20% during the third quarter and total cash costs remained better than planned at $253 per ounce of gold equivalent. For the nine months, production at the Denton-Rawhide Mine continues to exceed plan due to higher than planned tonnes placed on the leachpad. Blanket - Zimbabwe

Production at the Blanket mine increased by 18% during the third quarter and total cash costs remained on plan at $170 per ounce of gold. For the year, production is slightly lower than planned but total cash costs remain below planned at $161 per ounce of gold.

Hedge Position

As at September 30, 1999, the Company had sold forward 1,100,000 ounces of gold at prices ranging from $298 to $325 per ounce. The Company uses spot deferred contracts and forward sales with floating gold interest rates. The majority of gold borrowing costs have been fixed out to March or April of 2000, minimizing the impact of current high gold lease rates. In addition the Company has 500,000 ounces of European style call options (exercisable only at expiry) at prices detailed in the table below.

All of the hedging facilities that the Company has established are margin free, therefore the Company does not face any exposure to margin calls in any gold price environment.

Gold Hedge Position
As at September 30, 1999

Gold

Sold Gold Call Average

Forward Average Options Strike Year '000 oz. price Sold '000 oz. Price

1999 200 $298 200 $283
2000 350 $305 0 $0
2001 150 $325 0 $0
2002 150 $325 100 $340
2003 150 $325 100 $340
2004 100 $316 100 $340
----- -----
Total 1,100 500
----- -----

Year 2000 Update

The remediation of the Company's operating facilities with regard to Y2K compliance has been completed. The Fort Knox, Hoyle Pond, Kubaka, Refugio, Macassa and Blanket properties have all completed remediation of their process control systems and these plant systems are considered Y2K compliant.

Remediation of business information systems, and ancillary application packages has successfully been completed at the Fort Knox, Hoyle Pond, Kubaka, Macassa and Blanket properties. Remediation at the Refugio property is 90% complete with a planned completion date of December 1, 1999.

No issues have been identified with our critical vendors.

Y2K contingency planning is currently taking place at each site, and the plans will be updated as circumstances change throughout the remainder of the year. The supply of electrical power to various sites still remains a concern despite confirmations by the electrical utilities that they are ready.

Contingency plans will take this into consideration and will determine the best method to maintain operations utilizing our standby power generators.

Total project spending estimates for the year remain in line with previous estimates.

No serious issues have been identified by the assessments, and it is the Company's belief that there will not be any serious operational problems caused by the Y2K ``bug'' and that the Company has taken the necessary steps to resolve any Year 2000 issues. However, there can be no assurance that any one or more such failures would not have a material adverse effect on the Company. Actual outcomes and results could be affected by future factors including, but not limited to, availability of skilled personnel, ability to locate software problems, critical suppliers and subcontractors meeting commitments, and timely actions by customers and suppliers.

Outlook

As at September 30, 1999, the Company has $122.2 million of cash and operating working capital of $27.4 million for total working capital of $149.6 million. This combined with sustainable low cost production, and a manageable debt repayment schedule, provides the Company with a solid platform for future growth when opportunities present themselves.

This press release includes certain ``Forward-Looking Statements'' within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Kinross Gold Corporation (``Kinross''), are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Kinross' expectations are disclosed under the heading ``Risk Factors'' and elsewhere in Kinross' documents filed from time to time with the Toronto Stock Exchange, the United States Securities and Exchange Commission and other regulatory authorities.

Kinross Gold Corporation
Consolidated Balance Sheets

(expressed in millions of U.S. dollars) (unaudited)

As at September 30 As at December 31
1999 1998
------------ ------------
Assets

Current assets
Cash and cash equivalents $122.2 $153.4
Bullion settlements and other
accounts receivable 50.6 55.4
Inventories 50.5 54.6
Marketable securities 1.9 1.2
------------ ------------
225.2 264.6
Mineral properties, plant and
equipment 817.0 809.8
Long - term investments 24.6 25.0
Deferred charges and other assets 14.3 15.4
------------ ------------
$ 1,081.1 $ 1,114.8
------------ ------------
------------ ------------

Liabilities
Current liabilities
Accounts payable and accrued

liabilities $ 43.9 $ 49.4
Current portion of long - term debt 25.3 25.1
Current portion of site restoration
cost accruals 6.4 5.9
------------ ------------
75.6 80.4

Long-term debt 120.3 125.8
Site restoration cost accruals 48.0 52.0
Deferred income and mining taxes 7.2 6.9
Deferred revenue and other 22.6 29.0
Debt component of convertible
debentures 39.4 42.7
Redeemable retractable preferred
shares 3.1 3.1
------------ ------------
316.2 339.9

------------ ------------ Convertible preferred shares of

subsidiary company 88.3 88.3

------------ ------------ Common shareholders' equity

Common share capital 919.9 904.2
Contributed surplus 7.9 3.6
Equity component of convertible
debentures 108.0 103.1
Deficit (337.4) (296.4)
Foreign currency translation
adjustments (21.8) (27.9)
------------ ------------
676.6 686.6
------------ ------------

$ 1,081.1 $ 1,114.8
------------ ------------
------------ ------------

Kinross Gold Corporation
Consolidated Statements of Operations
For the nine months ended September 30

(expressed in millions of U.S. dollars except per share amounts)
(unaudited)
Three months ended Nine months ended
September 30 September 30
1999 1998 1999 1998
------- ------- ------- -------
Revenue
Mining revenue $ 77.1 $ 83.5 $ 227.0 $ 181.6
Interest and other income 2.6 3.5 9.2 12.0
------- ------- ------- -------

79.7 87.0 236.2 193.6

------- ------- ------- -------

Expenses

Operating 51.3 61.2 156.5 132.4

General and administrative 2.6 1.8 7.5 5.0

Exploration and business

development 3.1 2.8 7.4 5.9

Depreciation, depletion
and amortization 28.0 27.2 82.9 50.9
------- ------- ------- -------
85.0 93.0 254.3 194.2
------- ------- ------- -------

Loss before the undernoted (5.3) (6.0) (18.1) (0.6)

Gain on sale of marketable

securities - 1.9 0.1 2.7 Foreign exchange gain (loss)

and other 0.1 (0.4) - (0.1)
Share in loss of associated
companies (0.1) (0.1) (0.3) (0.3)
Interest expense on long-term
liabilities (3.4) (3.8) (10.0) (7.2)
------- ------- ------- -------

Loss before taxes and
dividends on convertible
preferred shares of

subsidiary company (8.7) (8.4) (28.3) (5.5)

Provision for income and

mining taxes (1.0) (0.1) (2.7) (2.1)

------- ------- ------- -------

Loss for the period before
dividends on convertible
preferred shares of

subsidiary company (9.7) (8.5) (31.0) (7.6)

Dividends on convertible

preferred shares of subsidiary
company (1.7) (1.7) (5.1) (2.3)
------- ------- ------- -------

Net loss for the period (11.4) (10.2) (36.1) (9.9)

Increase in equity component

of convertible debentures (1.7) (1.5) (4.9) (4.4)

------- ------- ------- -------

Net loss attributable to

common shares $(13.1) $(11.7) $(41.0) $(14.3)
------- ------- ------- -------
------- ------- ------- -------

Net loss per share

Net basic and fully

diluted $(0.05) $(0.06) $(0.14) $(0.08)

Weighted average number common

shares outstanding 299.9 191.5 298.9 191.5 Total outstanding and issued

common shares at

September 30 300.1 292.4

Kinross Gold Corporation
Consolidated Statements of Cash Flows
For the nine months ended September 30

(expressed in millions of U.S. dollars) (unaudited)

Three months ended Nine months ended
September 30 September 30
1999 1998 1999 1998

------- ------- ------- ------- Net inflow (outflow) of cash

related to the following activities:
Operating:
Loss for the period before
dividends on convertible
preferred shares

of subsidiary company $(9.7) $(8.5) $(31.0) $(7.6) Items not affecting cash:

Depreciation, depletion
and amortization 28.0 27.2 82.9 50.9
Gain on sale of marketable
securities - (1.9) (0.1) (2.7)
Deferred income and
mining taxes - (0.4) - (1.5)
Deferred revenue realized (2.2) (2.2) (7.0) (6.7)
Site restoration cost
accruals 0.8 3.1 2.3 5.1

Other 0.1 0.5 0.5 0.3

------- ------- ------- ------- Cash flow provided from

operations 17.0 17.8 47.6 37.8
Deferred revenue - hedging
gains - - - 13.9
Site restoration
expenditures (2.7) (0.4) (6.3) (0.8)
Changes in non-cash working
capital items
Bullion settlements and other
accounts receivable 0.4 (0.5) 4.5 5.4

Inventories 0.7 (1.8) 4.1 -

Marketable securities - 2.2 (0.4) 5.4
Commodity derivative
contracts - 46.0 - 46.0
Accounts payable and accrued
liabilities 1.4 (16.8) (5.1) (19.3)
Effect of exchange rate
changes (3.9) 2.0 0.4 (3.3)

------- ------- ------- ------- Cash flow provided from

operating activities 12.9 48.5 44.8 85.1

------- ------- ------- ------- Financing:

Issuance (repurchase) of
common shares, net 0.5 (1.6) (6.0) 171.1
Convertible debentures (1.1) (0.9) (3.3) (2.7)
Repayment of debt 2.0 (0.6) (5.4) (256.2)
Dividends on convertible
preferred shares of
subsidiary company (1.7) (1.7) (5.2) (2.3)

------- ------- ------- ------- Cash flow (used in) financing

activities (0.3) (4.8) (19.9) (90.1)

------- ------- ------- ------- Investing:

Additions to properties,
plant and equipment (10.5) (12.6) (28.7) (24.8)
Business acquisitions, net
of cash acquired (0.1) - (30.4) 3.5
Long-term investments and
other assets 0.5 (0.8) 0.7 (0.8)
Proceeds from the sale of
fixed assets - - 2.3 2.0

------- ------- ------- ------- Cash flow (used in) provided

by investing activities (10.1) (13.4) (56.1) (20.1)

------- ------- ------- -------

Increase (decrease) in cash

and cash equivalents 2.5 30.3 (31.2) (25.1)

Cash and cash equivalents,

beginning of period 119.7 134.9 153.4 190.3

------- ------- ------- -------

Cash and cash equivalents,

end of period $122.2 $165.2 $122.2 $165.2
------- ------- ------- -------
------- ------- ------- -------

Kinross Gold Corporation Consolidated Statements of Common Shareholders' Equity For the nine months ended September 30 (expressed in millions of U.S. dollars) (unaudited)

Foreign
Currency
Common Contributed Convertible Translation
Shares Surplus Debentures Deficit Adjustment Total

------- ----------- ---------- ------- ---------- ----- Balance, December 31, 1998 $904.2 $3.6 $103.1 $(296.4) $(27.9) $686.6

Shares issued
pursuant to the
La Teko

acquisition 25.9 - - - - 25.9 Repurchased pursuant

to issuer

bid (11.8) 4.3 - - - (7.5) Other 1.6 - - - - 1.6 Convertible

debenture equity

component

increase - - 4.9 (4.9) - - Net loss for

the period - - - (36.1) - (36.1) Foreign currency

translation

adjustment - - - - 6.1 6.1

------- ----------- ---------- ------- ---------- ----- Balance, September

30, 1999 $919.9 $7.9 $108.0 $(337.4) $(21�*kp$8�fcfc PROPHECy`*kpfcfc��@)�`ifcfc Msg ID:�k � 0`0_

SteveH (10/19/99; 19:13:55MDT - Msg ID:16926)
repost
www.kitco.com
Date: Tue Oct 19 1999 19:30
Rob (SEQUIN (@ LGBull .sh*t) ID#25171:) ID#409221:
Sequin

Forbes magazine had a gold price chart ( constant dollars ) whose origin started in the year 1000 AD. The chart showed a centuries long decline in the price of gold. The rate of change was incosequential for a mans life span but, never the less.....

Its seems the more specialized economies become, the less valuable gold becomes v. other commodities.

Am I missing something?

robert

TownCrier (10/19/99; 19:12:16MDT - Msg ID:16925)
After the Close: the GOLDEN VIEW from The Tower
The Dow Jones Industrial Average of 30 stocks (a.k.a. the DOW) lost 130 points today. But, "Hold the phone!" you say..your conventional sources of information are telling you that the DOW gained 88.65 points today, closing at 10204.93. That may seem true enough, but your taking a rather narrow view of things if you look no further. Let's look further...
+
First of all, the DOW does not define the whole market. For instance, advancers were almost evenly matched by declining stocks, and new 52-week lows outnumbered new highs by 264 to 18. The Nasdaq Composite actually closed lower on the day and has now lost 7.8%--just a few days after setting its all-time high on Oct. 11.
+
And second, there's no reason to fixate on the closing cost as a sign of overall market health. Sure, there's a tendency to do so, because it provides a convenient snapshot in time for comparing day to day trends, but you risk missing the big picture. Here's the rest of that big picture (in addition to the rest of the NYSE and Nasdaq as briefly mentioned above.)
+
The Labor Department released the Consumer Price Index an hour before the opening bell on Wall Street reporting a CPI increase of 0.4% with increase in the "core" CPI (excludes food and energy prices) of 0.3%. Because both figures matched the expectations of economists, the DOW launched nearly 220 points from its previous closing level (10116.28) in a spurt of irrational exuberance to reach 10335.37 at 11:00 EDT. But from there, things steadily deteriorated throughout the remainder of the day, and the DOW had lost 130 points by the time they rang the closing bell. If trading were done around the clock, who knows where we'd be by now, but surely you can see the fallacy of simply comparing one day's closing numbers to the next. Anyone who bought into the DOW at its peak today certainly has no trouble making this same distinction. Because this market operates as it does, we must now wait a day before it is allowed to continue trading from where it left off, and we can follow the development of this trend.

You might also have a tendency to fixate on the closing gold price, comparing one day to the next for signs for your trading strategy. Because gold is not a unique American asset, it trades around the clock and around the world, so its "closing price" in NY is even less significant than the closing price as described above for the DOW. The continuing trend is what is important, and gold's history is so long that even the "trend" of one day to the next is inadequate to tell the story. Certainly, the span of a human life is much shorter than the span of gold's history. But because we all have earthly needs, we are less inclined to take the historical view, preferring instead a shorter view that more closely matches a span of time best characterized as "paycheck-to-paycheck." Hence the fixation on what gold did since yesterday in New York, or for the more astute, what gold did since last week. This GOLDEN VIEW is written daily with the realization that a great many people will always want to see these daily snapshots of numbers.

The reality is that we are not mayflies with the lifespan of a few hours, so it is often to our advantage to detect and focus on the trends that are meaningful in a span of time that more closely matches our own. In a general investment sense, the DOW and Nasdaq remain near lifetime highs, while gold is currently priced at levels seen twenty years ago--and just think of the vast currency-creation that has occurred globally since then.

But here in The Tower, our view doesn't even focus on gold as an investment in contrast with the DOW or Nasdaq. We see it terms of the more important trends as a monetary asset. Let's review the most recent news in this regard. The World Gold Council reported that the demand for gold in the second quarter of this year broke all-time records. This was not done on the back of expanded industrial use of gold for electroplating electronic connectors. This was done by people worldwide acquiring gold as a financial asset...an alternative to national currency savings that have either failed them in the past or threaten to betray them in the future. Once bitten, twice shy...and wiser for it.

Additionally, it is quite clear that gold has been extensively lent (with interest) as a financial asset...lent to the point of unsustainability. Fearing the devastating economic impact from an impending collapse of this important worldwide system of bullion banking (not to mention the loss of gold to various private lenders), the European central banks have recently emerged from actions previously held "behind closed doors" to announce to the world that gold was an important financial asset and further sales or lending would be curtailed. The hope would seem to be that the market participants might somehow close or liquidate their outstanding positions in an orderly fashion in the process of transitioning "from here to there."

Further, the International Monetary Fund has been an 800-pound gorilla sitting on the fair use and fair valuation of gold for three decades. The IMF passed "ironclad" articles of agreement that member nations would no longer peg their national currencies to gold, and they made no bones about it. In their own words:

"Before the Second Amendment of the Articles of Agreement of the IMF in April 1978, the role of gold in the international monetary system was central and pervasive. The Second Amendment contained a number of provisions that, in combination, were intended to achieve a gradual reduction of the role of gold in the international monetary system and in the IMF.
------The Second Amendment to the Articles of Agreement of the IMF eliminated the use of gold as the common denominator of the par value system and as the basis of the value of the SDR. The Amendment also abolished the official price of gold and abrogated the obligatory uses of gold in transactions between the IMF and its members. The Second Amendment required the Fund, in its dealings in gold, to avoid managing its price or establishing a fixed price of gold. Under the Amendment, members undertook to collaborate with the IMF and other members with respect to reserve assets to promote better international surveillance of international liquidity.-------
However, gold is still an important asset in the reserve holdings of a number of countries, and the IMF remains one of the largest official holders of gold in the world."

So now, after carrying 3,200 tonnes of gold at a bogus book value of SDR 35 (one Special Drawing Right currently equates with $1.40, giving IMF gold a current book value of $49.00 per ounce in U.S. currency terms...in euro terms, that same ounce would be �45.15 per ounce.) the IMF gorilla has taken its fat butt off of gold, consenting that the easiest solution to their problems is to allow themselves to recognize the actual market value of gold, whatever that may prove to be. So as to not blatently run rough shod all over their own articles, the IMF is proposing to bring about this new operating scheme in fits and starts. They'll catch on soon enough. The European Central Bank already utilizes the best international banking practice of marking gold reserves regularly to market values. They do this at the end of each quarter. (Currently, the ECB values its total gold assets at �114.988 billion.)

So having said all that, when we tell you that the spot price for gold was last quoted in NY at $307.60, down $2.10 from the previous day, we hope you keep these thoughts in mind and take Bart Simpsons' advice..."don't have a cow, man." Further, keep this larger perspective in mind when you read the latest thoughts and antics of the traders of gold derivatives as reported by Bridge News...

NY Precious Metals Review: Dec gold down $2.2 after 18-day low
By Melanie Lovatt, Bridge News
New York--Oct 19--COMEX Dec gold settled down $2.20 at $309.50 per ounce
after dropping to an 18-day low of $306.20. A climb in US equities prices and a
recovery in the dollar against the euro and yen pushed gold lower, said traders.
Gold was also pressured as 1-month lease rates slipped to 2.25% from Monday's
2.30%, which in turn was down on Friday's 3%.

[Our latest source shows the 1-month gold lease rate at 2.4570% (annualized). As we've speculated before, we wonder if rates are dropping for the same reason that margin calls are being postponed on certain producers (Ashanti), that being that so much postion squaring through on-market operations has been rendered impossible due to the latest developments in gold that those involved have had to put on a brave face and try to resolve things off-market. In the meanwhile, to the casual outside observer, everything appears to be business as usual. We would not be surprised to see certain degrees of latitude allowed in this LTCM-esque replay, perhaps officially and temporarily justified as a special Y2K allowance. You need look no further than the Fed's own new policy to participate in extended and "tri-party" repo agreements in order to add reserves to the banking system due to Y2K. Anyway, back to the Bridge report...]

The stock market rose in relief that today's US Consumer Price Index only
met expectations as opposed to Friday's Producer Price Index, which came in much
higher than expectations. The CPI was in-line with analysts' forecasts, climbing
by 0.4%, which was 0.3% without food and energy components."The CPI number
was friendly to equities and eases inflationary pressure in the market," said
David Meger, senior metals analyst at Alaron Trading.
"Gold was therefore pressured by the stock market recovery, dollar strength
and hit by fund selling," he added. He noted that the recent lack of buying
interest over the last couple of days shows something of a reversal of the
previously positive sentiment in gold, although bargain hunting overnight in
Asia has continued.

He suggests that gold sees solid support at $298.50, which is a 50%
retracement from the recent highs. "Gold came in weaker, we had a sharper
selloff, bounced back and then looked dead," he noted.
Meanwhile, Dec silver fell to $5.17, which is a fresh 1-month low. It slipped
on lack of buying interest, accompanied by some low volume fund selling. Chart
support is at $5.13, noted Meger, suggesting that if silver prices moved to
these levels they would start to see not only technically driven buying, but
physical demand.
There was talk that one large NY dealer was attempting to keep silver down in
order to keep pressure on the gold market. However, some traders dismissed this
as fantasy. Nevertheless, some were discouraged. Leonard Kaplan, chief bullion
dealer at LFG Bullion Services complained that silver is "back into the low
$5.20s--the same price as when gold was $50 lower." He said: "I would have
thought that silver would be well supported at $5.40 with gold up." [Seems to confirm that gold and silver are fundamentally different creatures, doen't it? In a separate report, Bridge also had this to offer...]
London--Oct 19--Saudi investor Prince Alwaleed Bin Talal today confirmed
reports he has been studying the "investment opportunity" in the Ghanaian
Ashanti Goldfields Co. Ltd, a statement issued by Alwaleed's office said today.
***
Reprinted at USAGOLD with permission. For details please go to:
http://www.crbindex.com/reviews/index.htm
No further reproduction without written permission

Here are the numbers for COMEX open interest on gold futures for the end of derivative trading yesterday: October contracts increased by 2 to 116 (with 2,510 previous positions closed upon the announcement of delivery intentions), November was unchanged at 14, open interest in December futures increased by 693 contracts to 116,661, and the total open interest on COMEX through June 2004 rose by 5186 to 220,871 contracts.

Unfortunately, our scout didn't return with a report from the COMEX gold depositories today (must have gotten sidetracked at an inn with good beer), so hopefully somebody at the Round Table here can provide a link to an alternate source of info that works for that info.

In addition to stocks' failing performance as the day wore on, US Treasuries also gave up their early gains today. After turning south, the 30-year bond headed further into loss-territory to the tune of 12/32 in price, pushing the yield to 6.342%. Rumors circulated among traders that the ECB would likely act to raise rates at their November 4th meeting, which in turn would pressure US bonds.

In currencies, the dollar lost only tiny ground against the yen, losing .03 yen to close at 105.33 yen per dollar. The euro gained .001 cents against the dollar, closing up at 1.0831 dollars per euro.

November crude settled down 31c at $22.22 with the expiration of November crude futures contracts tomorrow (Wednesday) said to be the reason for the selloff as traders wanted to liquidate out of their November positions, according to several brokers and traders. FWN reports a broker as saying "With expiration tomorrow nobody knows what's going to happen so
people are getting out so they don't want to take a position in the Dec contract."

Some volatility crept into the day and prices were pushed higher from a weak start on news of "an impromptu meeting between Saudi's oil minister Ali Naimi and his counterparts, who may have included Mexico's Luis Tellez and Venezuela's Ali Rodriguez sources," according to FWN. It was confirmed there was in fact a meeting of officials, reported to have focused on current conditions in the oil market. However, one wire report said only Saudi Arabia and Mexico held talks.

And that's the view from here...after the close.

Chris Powell (10/19/99; 17:31:33MDT - Msg ID:16924)
Renowed author Arthur Hailey joins GATA
http://www.egroups.com/group/gata/261.html?
Three new posts at the GATA site at eGroups
tonight.

The first has "Airport" and "Hotel" author Arthur
Hailey's letters in support of GATA and a pro-gold
excerpt from his other novel, "The Moneychangers."

The second is a story from yesterday's Financial
Post in Canada about manipulation of the gold
market. The story mentions GATA.

The third describes the speech of the World Gold
Council's president to open the Denver Gold Group
convention.

Scrappy (10/19/99; 17:08:26MDT - Msg ID:16923)
The Scot; DD
Thanks, folks.

Ah, a little respect! Your compliments are accepted with, (I hope), a flair of grace!

The Scot, I will e-mail you re; medicinal herbalism. Bear in mind, I am an amateur, but I do seem to have more knowledge in this area than the average joe. And if I don't know the answer, I can look it up-have a ton of books. Expect to get an e-letter tonight or tomorrow.

Yellin and Steve H.- Gold has been the one constant throughout history and across boundaries. When I considered it, I kept coming back to that conclusion. Even if it was down, it would, sooner or later, go back up. And it's ALWAYS worth SOMETHING, even if less than what you originally paid for it. In an emergency, you can count on it being saleable. Considering y2k or any other event or series of events that might bring society to its' knees, gold is the only thing, besides barter of goods and services, that would possibly be used as a 'money' again. Then I found this site, and started learning a WHOLE lot about what the 'economic structure could possibly be in for, with or without y2k. THEN, and ONLY then, did I go buy one. Gee, it felt cool. My kids wanted some too, they thought it was cool, too. Oh yeah, it's purty.
I think you give too little credit to the 'little guy'
I know of many, many people in my part of the world, who are prepared for ANYTHING. They don't talk about it all too much, ya never know who's gonna hear, but I can tell you this. When gold started going up, and the DOW started going down, my customers came in happy as all get. For no apparent reason. I just wonder how many have a nice 'stash' buried somewhere....
The only one I have had to convince is my city buddy in Chi-town who's been playing the market the last year or two.
And he wasn't hard to convince. Common sense prevailed easily.
I geuss my point is, that, for the 'littlest of the little guys', anyway, a little knowledge goes a long way. We wanna, and will, survive.
Perhaps the ones for whom this whole ordeal will be the most difficult, the ones who will be hardest to convince, are the ones who have been counting on this dollar joy-ride to go on forever. It won't, it isn't, and I hope GATA et al will continue to fight for right and work to get the general populace educated on all of this. As for the 'mystique' of gold, well, I don't think there is a 'mystique'. It is what it is, and if one is willing to 'get educated' about it, one will see that it is a constant throughout history and across borders. Sooner or later, it always comes back, and it always comes through.

USAGOLD (10/19/99; 17:03:45MDT - Msg ID:16922)
Cobra(too)
http://www.amazon.com/exec/obidos/ASIN/0804005915/qid%3D940372714/002-9607081-2297022
The above link will introduce to a book that I think will serve your purposes. You are in luck because I read the book many years ago and remembered the title -- Midas of the Rockies. (Tough to forget.) W.S. Stratton, Midas of the Rockies, pulled a fortune out of the Cripple Creek district. I think, but I am not sure, that he was the first to own the fabled Sunnyside mine the primary vein of which was first seen from miles away by the prospectors who discovered it. I guess up until that time others who saw it didn't know what they were looking at. I owned a small sample ore from that extraordinary mine where you could see the gold in the rock -- little specks of native gold. Quite a sight....

Glad I could help. A standard reference of sorts is Men to Match My Mountains by Irving Stone -- the same with several fine historical novels to his credit including a good one on John and Abigail Adams. But you probably already have that in your library. One I liked was Silver Dollar (can't remember the author) -- the story of Horace and Baby Doe Tabor -- rags to riches then back to rags, the quintessential Colorado gold story -- though he made his fortune in silver and then lost it when the nations of the world went exclusively to a gold standard.

A nice side benefit to Midas of the Rockies is that it was written by a very good writer named Frank Waters who has something of a cult following out here. Around here the Stratton book is must reading for anyone interested in Colorado gold history.

So has winter yet touched those Vienna Woods? My best to you and yours, C2. Thanks for being here and your interest in the Centennial state.

ORO (10/19/99; 16:31:46MDT - Msg ID:16921)
Yellin' of troy - comments on your reply to Aragorn III
You raised the issue of Joe politico vs. economic Joe. Joe is happy to see inflation ease his debt, and can find protection for assets in stocks of companies benefiting from price rises and in the PMs. Joe will not fear inflation, he will vote for it while Jane is exchanging the savings account into gold coin. Your point is well taken, as in the case of Volcker's good money policy, which was never voted on, he just did it without saying what it was till after the fact.
As things stand, dollars and all other currency can and do fill the exchange money role. As long as avenues to move from exchange money to wealth money are open without too heavy a loss, it will stay so. Even if not, most of the exchange medium role will continue as it does in Brazil and in Russia (though Russians are pretty used to barter anyway, and do so routinely and Brazilians use Marks and Dollars for trade as well).
Where the changes are greatest is in gold for wealth money, as opposed to $ wealth (Money market "cash", CDs, bonds, growth stocks...). Most of us don't have much $ wealth, but have quite a bit of debt, so most of us will vote for crummy funny money but avoid its use. We will continue doing so till our debts are safely behind us. A cry for hard money will come only much later, when price inflation robs us of our pay too quickly for us to take action against it.

Another issue, not raised, but very relevant is the fact of global trade and the perception of $ and its associated assets as counterbalance to trade deficits. Here Joe's vote matters little and appreciation of political intervention in his favor will give way when he discovers that the world, still awash in dollars, does not want any more and that his politicians can't improve his lot in life because the dollars have no place to go but into higher prices. Over most of the past decade, $ were needed by the world to finance debt repayment in $ so that the world did not compete with Joe for products, the $ price floor for global goods and services were dictated by Joe. Today, and in the near future, Dominiques, Gustavs, Kims, Lees, Seijis and Keshavs will be competing with Joe for products using the same $ that Joe has. During this time the US may try to control inflation by raising interest rates. As a result, the world will have more $ because of the US's previous profilgacy led to such external debt that higher interest rates flood the world's $ money supply to a far greater extent than they can limit local economic activity without massive disruption to our thinly capitalized financial system.
The world at large, much more aware of gold as both wealth and exchange money, will impose their perceptions on Joe. Joe will come along for the ride as gold rises and catches his attention as one of the few things moving up (aside from oil prices and processed foods).
In a nutshell, the US policies acceptible to Joe are not going to make him feel any better. The "bull market in politics" is nearing its end as people are being more strongly divided between pro and anti government. The last two generations of adults in this country are predisposed to breaking up large organizations. They will eventually deconstruct government.

You said in a number os posts that a fiat currency can be managed by a responsible monetary authority. I believe it can not. The two main reasons are that (1) the funny money obfuscates market signals and gives false readings on anything measured, thereby blinding policymakers and assuring that most policies will be erroneous, I would say that the current structure can't even allow us to figure out our trade balances or make the GNP measurements meaningful. (2) There is an inflationary bias for seignorage and a tendency to recoil from painful (short term) monetary measures (remember Joe?)

In a previous post I answered that question by recounting my version of the floating gold reserve system FOA and Another refer to. It is simply a motivational matter for the gold holding central banks to mark to market the gold reserves, and keep a quickly rising bid under it to raise the value of the gold backing. Deficit spending can be hidden behind this activity without increasing taxes until it causes a general price inflation (which I believe it will).

Hill Billy Mitchell (10/19/99; 16:25:49MDT - Msg ID:16920)
Still working
WEALTH MILEAGE CHART @ 10-14-98

$ U.S. EURO YEN GOLD SILVER

$ U.S. 1.OO .9301 106.81 .0032 .1862

EURO 1.0752 1.00 114.85 .0034 .2002

YEN .0094 .0087 1.00 .000030 .0017

GOLD 314.00 292.04 33,540 1.00 58.47

SILVER 5.37 4.99 573.60 .0171 1.00

Journeyman (10/19/99; 16:18:27MDT - Msg ID:16919)
Gold's mystique @yellin' et. al.
It isn't mystique that gives gold value to those who are familiar with the relevant history of the apparently inevitable consequences of paper money: "Thus was the history of France [during the 1793 paper currency debacle] logically developed in obedience to natural laws; such has, to a greater or less degree, always been the result of irredeemable paper, created according to the whim or interest of legislative assemblies rather than based upon standards of value permanent in their nature and agreed upon throughout the entire world. Such, we may fairly expect, will always be the result of them until the fiat of the Almighty shall evolve laws in the universe radically different from those which at present obtain. {*86} -Fiat Money Inflation in France by Andrew Dickson White, p. 109 To the uninformed, the second best is the remaining mystique, based on the unknown (to them) history of gold vs. paper. That is, gold, for various physical-psychological reasons, maintains it's value, where paper never has. Hopefully, the legends, mystique, etc. will serve those entranced by it well if and when "modern" paper currency goes the way of all other "modern" paper currencies of the past. Regards, Journeyman

backlash (10/19/99; 16:06:58MDT - Msg ID:16918)
AREM & Scrappy

Sorry for the lapse in using 'short-speak' without first defining it. However, 'SWAG' is not a computer term and goes back far before computers. We engineers many years ago, when we really did not know the answer, would simply make a 'Scientific Wild Ass Guess'. (which was considered far superior to a simple WAG.)

Scrappy - -
Hats off to you and yours. You are what America is really made of! I, too, started off with little, worked to support a wife and child while attending college. (And finally finished.) To give you a boost in confidence, you will certainly succeed. It is in your makeup (no, not cosmetics) to succeed. Your best realization is that you will not get rich quick. Absolutely EVERY time I thought I had it figured out and was about to cut that fat hog, I was blindsided but good. Lost a year's salary (of borrowed money) on the stock market, bought a business by hocking everything I had just before the botttom fell out of the local economy, and the story goes on and on. However, each and every time, I felt obliged to press on, pay my debts, and do my best. No, I never did make ANY big killing on anything, but by persevering, life has been good to me, blessed me with three fine children and seven beautiful grandchildren. Oh, yes, by being diligent in monetary discipline, now am financially comfortable.

My thanks to all on this forum and especially MK for having shown me the next level of responsibility and knowledge at USAGold.

Scrappy, hang in there, you will surely prosper.

Best Wishes, bl

Journeyman (10/19/99; 15:49:24MDT - Msg ID:16917)
Why Gold should & could become money AGAIN: @yellin', Aragorn III, ALL
I happened to be in Germany during the almost hyper inflation in the U.S. Der Welt (The World), Germany's "Time" magazine, had a cover picture of a thousand mark note, all green and nasty, obviously rotting away. The headline on the cover read, "What are they doing to our money?" Official figures put US inflation over 10% at the time . The German inflation that got them so excited? ~4%! Why? Becasue living Germans remembered the "wheelbarrow full of money/ money dumped wheelbarrow stolen" realities they had lived through. A whole generation of Asians has just been likewise innoculated against trust in paper money. Americans may be just about to get an even more powerful innoculation. These kinds of disasters don't happen when there is gold circulating. Remember, "the people" didn't vote against gold; PAPER money was foisted on them by the banking/government elites for their own fun and profit. Regards, Journeyman

Journeyman (10/19/99; 15:40:25MDT - Msg ID:16916)
Why Gold should & could become money AGAIN. @Yellin', Aragorn III, etc.
I happened to be in Germany during the almost hyper inflation in the U.S. Der Welt (The World), Germany's "Time" magazine, had a cover picture of a thousand mark note, all green and nasty, obviously rotting away. The headline on the cover read, "What are they doing to our money?" Official figures put US inflation over 10% at the time . The German inflation that got them so excited? ~4%! Why? Becasue living Germans remembered the "wheelbarrow full of money/ money dumped wheelbarrow stolen" realities they had lived through. A whole generation of Asians has just been likewise innoculated against trust in paper money. Americans may be just about to get an even more powerful innoculation. These kinds of disasters don't happen when there is gold circulating. Remember, "the people" didn't vote against gold; it was foisted on them by the banking/government elites for their own fun and profit. Regards, Journeyman

CoBra(too) (10/19/99; 15:36:33MDT - Msg ID:16915)
@ Leigh :"Queen" by Alex Haley - the author of "Roots"
-The Epic Saga of ROOTS is now complete(d) by David Stevens - may be the American bestseller of all times, observes The Observer. Hey, Leigh I'm just reading it and made the same mistake. I would have asked Bill about the statement of today - but then I figured a guy writing Roots and Queen can't be the same author as "Moneychangers"!
BTW - J. Mitcheners - "CENTENNIAL" is as precious to me, though its not our host's Cent. PM's, but was known as a town at the fork of two tributaries to the river 'Platte' next to Denver. A fascinating story - similar to the true sagas on PM's MK writes about.
Rambling on, @ MK - I do remember a book on Cripple Creek's either Bullion or Money Mountain and as I recall one of the best bookstores west of Chicago, no NY is in your area - I would appreciate your assistance in getting a copy - if at all available.
Sorry, folks for off subject post-it's just I love Colorado.
CB2

Gold Dancer (10/19/99; 15:13:19MDT - Msg ID:16914)
JCS
I am real leary about all those Dec contracts. Sometimes the obvious never works. Who is to know who owns them and for what purpose. I know only one thing: Greenspan and Rubin
are not people to stand up and take any blame for what they have done and will do ANYTHING to make sure the thing
holds together till next April. And I don't think the mining companies are going to start a hugh rally and hurt themselves again either.

We need a whole new generation of gold stock buyers to move prices higher and this is going to take time. A lot longer than I want given how much time has passed already.

Drooy says it all. If it had rallied to $5 I would have agreed with you and. But it didn't and that told me more than I wanted to hear!

We will know in the fullness of time what happens. I have
no choice but to hold on the what I have. It hasn't done
very much in this rally and it is discouraging to say the least. Doesn't mean it can't turn on a dime but.....

Gold Dancer

JCS (10/19/99; 14:51:44MDT - Msg ID:16913)
Gold Dancer (10/19/99; 12:56:27MDT - Msg ID:16894)
Just depends on how hard they squeeze them. With no physical metal in sight, and the Dec. contract loaded up, a moster squeeze appears in the making. I still think $400+ is a possibility by year's end. GATA is swearing by $600 spot overnight when the next move starts. Guess we'll know in the fullness of time.
Re: DROOY--I know. Price is astounding. If the article at www.gold-eagle is even half accurate, $500 gold = $38/share and its at 1.875. Also, a new article at gold-eagle today has a listing of the hedged positions of most of the companies and DROOY is in pretty good shape, based on what we know.
Anyone have a line on why the weakness in GSR. Earlier this afternoon the size was 2,300x76,000. I bought a little at 1.125 but wonder now-- if I was so smart--why does someone want out of 76,000. Help me if you can.
Gold conference ends tomorrow--maybe wave 3 begins?

SteveH (10/19/99; 14:50:13MDT - Msg ID:16912)
Yellin
Hello and a comment,

Gold's mystique, imo, is the 32,000 metric tons in the Central Bank vaults, of which little or no silver or platinum exists (except in a strategic stockpile) in CB warehouses. Further, platinum's use is mostly industrial and it is many times rarer than gold. Silver is more abundent but not a CB stored item. Gold packs more value for the weight than silver but not platinum but platinum might be less desired and sold at a discount whereas gold coins are gold coins of known value and more marketable. Because gold has more concentrated value and is more recognized it is a better value brought out of strifed areas into non-strifed areas of the world by refugees fleeing for their lives.

Gold's value as money is seen by its ability to settle debt of itself (see the old and some new contracts with a gold option of payment) or it can be converted at the 'going-rate' into any local currency by the local 'gold' changer (coin shop/bank/?). That's my take on it.

None of us adore or idol it. We just don't want it messed with. We don't bother other people (with money); why are they bothering us. That is the basis of the GATA thing. What right has the government to secretly play in the gold market at our detriment and without our permission. It affects us and we don't like it. What is more, there is an apparent and obvious conflict of interest when the Treasury, the Fed, and GS all share employees. What else is being shared? Info, gold, ....? This is the source of our fervor (at least some of us).

Personally, I own some gold stocks and it really irks me to see my stocks beatup for 2 years and see the shenanigans in the gold market. It ain't right and GATA is right on.

Yellin' of troy (10/19/99; 14:36:16MDT - Msg ID:16911)
Goldspoon -- more horse sense
It is becoming clear to me from this Forum that one of the main things gold has going for it is the sheer mystique, the aura of magic. To a lesser degree, silver shares that. Platinum does not. I'm not sure why, maybe it's too dull-colored, or too industrial, or too new. And it used to be far worse; people had plenty at hand, but refused to stake their claims, threw it away as waste and nuisance. But what a horse it's turned out to be! So I think you should call it Uncharismatic.

SteveH (10/19/99; 14:36:03MDT - Msg ID:16910)
repost
www.kitco.com
Date: Tue Oct 19 1999 16:27
LGBee (Allen / Kiwi, Who made the following statements last week?) ID#269409:
Copyright � 1999 LGBee/Kitco Inc. All rights reserved
Take a guess....

The analysts who call the current retraction "healthy" are correct. In a low inflation era, you can not have an equity market rising
exponentially 20% annually with no one paying the piper. It becomes an unsustainable bubble, where valuations no longer have
meaning, and folks are borrowing to buy stocks.

When the peak of such a buying bubble frenzy is reached, and the Ponzi scheme becomes unsustainable by new buyers, and
monetary expansion, the bubble bursts with a horrific collapse that drags the entire economy downwith it, into massive recession.

Think about this. The growth of households "playing the market" has tripled in the past decade in the U.S. In other developed
countries it has doubled. At the same time, U.S. personal savings rates are at all time lows, debt ratios are at all time highs.

There is a consumer buying frenzy going on based on the new "paper" wealth everyone feels they have, due to their market gains,
and a strong economy. This puts the economy, and it's healthy expansion, in precarious posiiton, subject to massive collapse, in the
event of a burst bubble market.

A correction now, and a pull back to more rational valuations, is much preferable to a final blowoff push to the top, followed by an
all out collapse, such as we saw in 1929. Yes, much has changed since 1929, and we are nowhere near such a fisaco at this point,
due to smarter monetary policy, a FED willing to loosen as well as tighten, a new high tech. economy, etc etc. This is why a bear
market is not coming to the U.S. economy, a this point IMHO.

However, ironicaly, the greatest threat to the market's long term health, is for the market to move up too much too fast, based on
"borrowed" money, expanded M3 money supply ( currently expanding at 10% plus ) and derivitaves play, at all time highs. WHen
these margin and derivitaves buyers are forced to sell to cover loss positions, the collapse can be horrific.

A pull back now prevents this scenario, from being an uncontrolled collapse, and instead we have a correction followed by
resumption of the bull market, we have all come to take for granted.

Keep in mind, from 1959 to 1980, the stock market essentially made ZERO gains! Investors today have forgotten that the market
isn't ALWAYS a great place make gains, EVEN IN THE LONG RUN, if the economy doesn't support those gains. ( Think how
much whining Lafayette would have been doing during that 20 year period of no gains!!! )

The market does not ALWAYS move up, and if it does so too sharply in a period of no inflation, using borrowed funds, there will be
a piper to pay, I can assure you. And it won't just be investors paying that piper.

Netking (10/19/99; 14:34:18MDT - Msg ID:16909)
Crash alert update
http://www.wwfn.com/crashupdate.html
Updated link herewith.
NZ's market has just opened for Wednesday & up about 1.25%.

Yellin' of troy (10/19/99; 14:24:07MDT - Msg ID:16908)
Aragorn III -- gold as concept money -- part 2/2
Then is gold simply so wonderful as money that everyone will have to realize it? But actually, it's not; in most ways paper is at least as good, even better. In comparison to today's paper, gold has only one great virtue: It's hard to fake, to manipulate, to politicize, to cheat on, to dilute. It's almost pure free-market money, untamed by government leash, heedless of our masters' voices. A "vote with your fingers" for gold is a vote against Big Government, a vote for the invisible hand. But Americans (and not alone) consistently vote *for* Big Government, rhetoric to the contrary. And this is even more true in crisis eras, when sound money especially comes under attack. The Great Depression gave us gold confiscation and the New Deal. WWI brought forth censorship, Prohibition, and the Red Scare (and lynchings). The Civil War gave us Greenbacks and the Legal Tender Cases, plus a draft and military rule and purely political suspension of habeas corpus. The Revolutionary War gave us "not worth a continental" and confiscations and "debt relief" and repudiations. When people hurt, they do not look for an invisible hand to kiss, they run to Big Brother and shriek for relief. And they look for villains, scapegoats. And in the popular mind, gold has not escaped associations with the traditional villains: the Money Power, New York, greedy speculators, fat cats, bankers. "You shall not crucify mankind upon a cross of gold" didn't actually win the election, but it sure got a lot of votes, and that was in the days when gold was familiar and had plenty of political support. We can all hope that this time will be different, but I'm not holding my breath. The bull market in politics has not yet been broken. And if it *is* broken, or if people simply want sounder money, there will still be no urgent need for gold (though it would help in the longer run, by guarding against backsliding). The dollar doesn't *have* to be run irresponsibly; as I said in some previous post, the problem with government money is politics, not economically inevitable. And we do live in a demeocracy. If most Americans really wanted sound money, the dollar would be sound, Congress would see to it. You (or someone else?) dismissed the possibility of a money issuer -- though actually I wasn't speaking particularly about dollars or debt money or government money -- shrinking supply to match demand, on the ground that the pain would be too great. Depending on how it's done I'm not so sure about that, but in any case, the pain from a shrinking money supply is nothing compared to the pain of a complete change in the monetary system, especially to one that will take away our codeine for good. What you are predicting is that people will choose in the shops the very things they refuse at the polls, and in a way much more irrevocable than they could manage at the polls. If we put Ron Paul in the White House we could change our minds in a few years, but if we depose the dollar and put gold on the monetary throne, there's no easy going back.

People do pay more attention and make better decisions and sometimes face very different incentives in their private affairs than in the voting booth, but I don't offhand see this as one of those cases where individual and collective choices will differ. A monetary system is a public good, and when you decide what money to accept or demand you aren't just considering your own preferences, you're betting on what others will do. Adoption of a new money is always, to a large degree, a collective phenomenon, even if not exactly "political": it is a "social" choice, and much affected by whatever organization is available. And the usual organization that people rely on for these things is *government*. Politics might actually be fed by the facing of such an important social choice. It's true that people's influence in the money decision may differ from their political influence; businessmen will probably be very important, since that's where the transacting is. But I know of no broad class in society that is gold-oriented; the people for whom gold coins have chocolate inside come from all walks of life. And yes, the people who had gold ahead of the crisis will have gained wealth and maybe influence compared to their neighbors, but that's a one-shot event, and several times a very small fraction is still a very small fraction. There may be other ways -- Is there an organization of gold activists who could pop up on street corners everywhere at the right time? Or perhaps there is some mechanism for a golden contagion of pandemic proportions, some way a small nucleus of gold bugs could expand gradually but swiftly by rational individual decisions. But nothing comes to mind. What I want to see from this Forum is some detailed explanation of exactly *how* gold might become money. My lack of imagination isn't conclusive, but it's all I've got at the moment.

Once again we must face the possibility of doing it through CBs. They do know history. But they have also spent decades bashing gold. And they are basically just trying to bolster their currencies and maintain political support at home, and both of these depend on public perceptions. If gold isn't money to the hobbit in the street, why should CBs value it? Why install a money whose claim to fame is that it will fetter them and their cronies?

Journeyman (10/19/99; 14:18:00MDT - Msg ID:16907)
BARBAROUS RELIC?? Re: Message ID# 16513
"If you have a fiat currency, which is what everyone has in the world --- . . . Central banks of necessity determine what the money supply is. If you're on a gold standard or other mechanism in which the central banks do not have discretion then the system works automatically. The reason why there is very little support for gold standard, you know as well as I in the current context, is the consequences of those types of market adjustments are not considered to be appropriate in the 20th and 21st century. I'm one of the rare people who share a nostalgic view about the old gold standard as you know, but I must tell you I am in a very small minority amongst my colleagues on that issue." -Alan Greenspan, to US House Banking Committee, July 22, 1998. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . By the late 1970s [after Nixon "closed the gold window"] the world had seen an overall price increase of roughly 400 percent. -Joel Kurtzman, THE DEATH OF MONEY, (New York, NY: SIMON & SCHUSTER 1993), p. 70. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . "It takes $4.92 today to buy the same amount of goods that could be bought for $1.00 in 1960." -CNN Factoid, 12 Aug. 1993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The ruble is sharply down {vs. the dollar, }from 17 to the dollar to about 20 to the dollar. This is due to confusion over the central bank's plans to print rubles in order to redeem government debts and bonds and fears of the resultant hyper-inflation. Russian prices are up 43% since September 1. -CNBC, 18 Sep 1998, ~8:33:04 AM EDT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Seagate Technologies, a large disk-drive manufacturer, takes $63 million charge, essentially for speculating on foreign currencies, particularly hedging on the Thai bhat and the Malaysian ringgit. -CNBC, 10-16-97, 5:57pm EST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Seagate will cut 10% of its work force worldwide. This includes 7200 jobs in Asia, 1300 jobs in the US, and 1400 jobs in Ireland. -CNBC, 15 Jan 1998, ~6:35:24 PM EST. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Philippine Airlines, Asia's oldest, will cease operations and go out of business next week after 57 years in the air. A pilot strike and a $2 billion dollar debt brought on by the Asian economic slow-down are cited as the reasons. -NWI, 19 Sep 1998, ~2:10:56 PM EDT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - The British Colombian economy, predicted to grow 2.8% in 1998, because of the Asian crisis, is now expected to grow only 1.8%, or ~36% less. -NWI, 16 Feb 1998, ~ 3:37:03 PM EST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - The World Bank reports that [as a result of the Asian currency crisis] the number of poor in Asia (Malaysia, Thailand, Indonesia, and the Philippines) may double to 90 million over the next three years, and there is a desperate need to reduce the prices of basic supplies [food, etc.]. -NWI, 30 Sep 1998, ~5:51:13 PM EDT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . "Whenever you have a currency fall as sharply as the [Indonesian] rupiah has fallen, which is approximately 80%, and you import any significant amount of materials or foodstuffs, which they do, then clearly the domestic price of many of the things which they import obviously skyrockets ...there are increasing concerns of food shortages and food prices which are too high for those average Indonesian citizens to afford." -Alan Greenspan, Semi-annual Humphrey-Hawkins Testimony to US House, July 22, 1998, 11:45am . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The [Indonesian] people are angry about an inflation rate that's hit 40% a month. Some basics are rising even faster: Gasoline has soared 70% the past two weeks; rice has doubled in the same period. "Who can afford to live, let alone eat, here anymore?" said Mozes, a 43-year [old?] accountant. -"Economic despair turns peaceful protests violent" by James Cox, USA TODAY, FRI./SAT./SUN., MAY 15-17, 1998, COVER STORY, pg. 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - There's now a shortage of imported drugs in Indonesia because foreign drug companies won't extend credit to Indonesian hospitals and doctors. As a result of this and other side-effects of the Asian economic crisis, the cost of many medical procedures has risen by 500%. Many Indonesians can't afford this, and some are paying with their lives. -NWI, 20 Feb 1998, ~1:55:50 PM EST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Eight-thousand (8,000) Idonesians, half of them children, now sift through the garbage dump outside Jakarta from dusk to dawn, searching for food and goods. This is a direct result of the Asian economic crisis, and if it continues, the dump may become Jakarta's fastest growing suburb. -NWI Up Close, 16 Aug 1998, ~1:56:35 PM EDT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Most of the Asian tigers are now creating money at the rate of ~20% since the beginning of the crisis. This results in inflation and will further devalue these currencies. This is a result of prompting by the IMF. The result is that the workers' salaries and the people's savings are decimated [by inflation]. This results in various forms of civil and political unrest, and if this continues, we'll see more. -Lawrence Kudlow, -CNBC, 8 Jan 1998, ~9:11:50 AM EST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - The Indonesian currency lost 25% of its value overnight. Indonesian stocks were off 12%. Indonesians stripped the supermarket shelves, buying everything in sight, because of expectation of price increases. -CNBC, 8 Jan 1998, ~9:02:12 AM EST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . JAKARTA, Indonesia -- "As the roof of a blazing central Jakarta police station caved in a few yards away, rioters roared their approval and a shop owner named Joko broke into a grin. This makes me happy. I support it," he said, while nervously declining to reveal his full name. ...Demonstrations that began two weeks ago with university students shouting for democracy have turned into riots driven by a frustrated and rapidly expanding population of poor people who can't afford many of life's basic necessities. ...it's estimated that between 8 million and 20 million people out of a population of 200 million have lost their jobs since last fall. -"Economic despair turns peaceful protests violent" by James Cox, USA TODAY, FRI./SAT./SUN., MAY 15-17, 1998, COVER STORY, pg. 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -Russian inflation is 67% this month, which makes it almost impossible for average Russians to survive. 100,000 Russians in Moscow will lose their jobs in the next two months, and that's just in the financial sector alone. -NBC Evening News, 3 Oct 1998, ~6:36:11 PM EDT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government price hikes sparked a week of riots and demonstrations throughout Yemen that left more than 50 people dead in June, reports Faysal Makram in the Saudi-owned Al-Hayat of London. -WORLD PRESS REVIEW, SEPTEMBER 1998, p. 24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Ecuador devalued it's currency today. -CNBC, 14 Sep 1998, ~4:54:32 PM EDT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Riots break out against the results of Ecuadorian Government financial reforms. -CNNI, 3 Oct 1998, ~1:51:01 PM EDT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . So, Mr. Greenspan, if "the consequences of those types of market adjustments [caused by a gold based, thus "automatically controlled" trade unit] are not considered to be appropriate in the 20th and 21st century," how do your colleagues feel about the above consequences of the market adjustments caused by paper/megabyte trade units? Are THESE market adjustments considered to be appropriate in the 20th and 21st century? Which is the "BARBAROUS RELIC," gold or paper/megabyte money?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regards, Journeyman

TownCrier (10/19/99; 13:58:47MDT - Msg ID:16906)
Hear ye! Hear ye! An update at USAGOLD!
http://www.usagold.com/wgc.html
Grab your torch and wander down the hallway to the doorway listed above wherein you will find THIS WEEK IN GOLD, the latest weekly gold market commentary provided courtesy of the World Gold Council. Among other news, you'll learn that British assay offices hallmarked 6,495,547 gold items during Q3-1999, an increase of 5.7% over the third quarter last year.

phaedrus (10/19/99; 13:48:28MDT - Msg ID:16905)
Central Banks reason to sell gold
Just wanted to give a quick response to this point, which came up in an earlier post:

"There is no reason for a CB to sell its gold, even at a high price, because it has no use for the paper it would get, which it can simply emit on its own and use to buy foreign currencies or whatever it needs."

Not sure who's supporting this argument, but I'd like to point out that it is very simplistic. CB's can print all the money they want, yes, but they cannot do it free of charge. By rolling out the printing presses, the CB weakens the currency. If I print dollars to buy Yen, I am weakening the dollar by injecting more dollars into the system. This is inflationary.

Having said that, there is clearly a valid reason for CB's to sell gold: in an effort to directly strengthen their currency. For example, let us say that Switzerland sold off a portion of its gold reserves to the Japanese, then used the Yen they received to buy back a large portion of the Swiss Francs in the global market. This would have the net effect of directly strengthening the Swiss Franc. In otherwords, a central bank with strong gold reserves has the luxury of being able to strengthen its currency in a pinch without having to slow down its economy by raising interest rates or taxes or whathaveyou. The ability to print paper money is NOT a free and clear option because it erodes the currency.

The best time to do sell gold in an effort to strengthen the currency, obviously, is when the gold price seems to have peaked (or, alternatively, when your financial system is in a serious bind). And the price of gold WILL peak again, eventually, though as for where it will do that no one knows. But the whole reason gold reserves are seen as desirable is because of their ability to return value to a depreciating currency.

The logic behind CB's keeping gold is so that they can USE it in times of financial crisis. If there were never any need to use it it would be dumb to have it in the first place.

Yellin' of troy (10/19/99; 13:44:16MDT - Msg ID:16904)
Aragorn III -- gold as concept money -- part 1/2
I'm glad to see you and I agree that "all true money is concept money." And believing that, I will certainly not deny that gold could in principle serve as money even at some arbitrarily high price, *given the right historical path*. If gold were money, still more if it were the only money in town, if it had been so for a long time and seemed natural and unquestionable, if the rise in its price had happened slowly enough not to make it unsuitable as money, then by now the price might be sky-high without inducing anyone to abandon the golden money, any more than they in fact abandon King Dollar. Gold would be stable concept money, and would be on the whole (despite some flaws) excellent money. But we aren't in that situation, and won't be any time soon. In fact, I think it would be difficult (for reasons I'll explain in a later post) even to give gold a running start by introducing it as money alongside the paper stuff. If gold is to monetize, it will be in a crisis atmosphere, with the dollar failing or failed. And the question is what exactly the public will desert, under what description will they lose faith in the dollar. Will it be only the dollar itself (but the New Dollar, the "Bill," is a great idea), or paper money (but beads are worth a fortune as we seek our roots), or concept money in general? My assumption was that having been once burned, people will want to see "real value" and will adopt gold as money only if it offers security in the form of the low price ratio I discussed. This, it is now clear, is where we disagree. I'll take your word for it that no one on this Forum has offered that as the reason why gold will be money, but it hardly matters what people here think -- we're a small, self-selected, unrepresentative bunch. What matters is how everone else thinks and will react. Forecasting waves of mass opinion ain't easy, and I for one certainly can't claim to be infallible, having guessed wrong which microcomputer platform and operating system would catch on. But we must do our best, so let's continue. As I now understand you, you and the other proponents of the gold moon shot believe gold will be welcomed and accepted as money (at any price) simply because it is (1) traditional money, and (2) good money, in the sense that its inherent permanent features, as distinguished from its current financial ones, its use-value and price, make it excellent for use as money.

You argue first that gold has been money longer than the dollar, so it will be easy for us to "get back on the bicycle." But those centuries of gold money are the wrong time scale. All my family back to Zeus have been great bicyclists, but as a child I was contrary and refused to learn to ride, preferring the little red rocket-powered wagon I tantrumed Uncle into buying me. I'm almost sure the family bike is sitting in my attic somewhere, and with today's prices for rocket fuel I sometimes think about taking it down. But I can't ride it. I inherited only the bike, not the neuromuscular habits. What counts is not whether our ancestors thought gold was money but whether we do. Most Americans today have no experience whtaever of gold as money. To have the faintest recollection of gold money you have to be about 70, and more like 80 to recall it really clearly. And most people don't know much history, let alone monetary history. As several posts here have described, Joe Average does *not* think of gold coins as money. (And my personal experience is that the people well up in their 70s, who might know better, are the first to dismiss talk of gold. They still worship FDR.) And we have now had years of anti-gold propaganda. Yes, there is a mystique, as evidenced by the "gold standard" metaphor (and I'd be the last to deny that metaphors are often very revealing), but is that enough? Look at the countries that have already come down with the Asian Contagion. By now, quite a number of stock markets and economies and currencies have tanked, many in societies with much stronger gold traditions than ours, and thus with gold much more ubiquitous and immediately available to get the ball rolling. And in these crashes, gold has done very well, as an investment or insurance policy. Millionaires without gold have turned into paupers while people with gold escaped. If ever there was a moment for gold to shine, wasn't this it? And these events happened long enough ago to allow not only an initial panic but also some reflection and experimentation, time for economic and social and political dynamics to play out. Yet, as far as I know -- I'm no expert, correct me if I'm wrong --, not one of these peoples has abandoned paper money for golden. What makes you think we will?

Gandalf the White (10/19/99; 13:42:48MDT - Msg ID:16903)
Ok the "TEST" was fine, USAGOLD
NOW Speak!
<;-)

Leigh (10/19/99; 13:40:24MDT - Msg ID:16902)
Alex Haley / Arthur Hailey
You guys, I apologize for giving out dumb information. Last night when I wrote the post about Novelist Hailey ("Airport"), I got his first name wrong. But it turned out to be the correct first name of Novelist Haley ("Roots").

This is the right information:
- Arthur Hailey wrote "Airport," "The Moneychangers" etc. -- he's a loyal GATA supporter.
- Alex Haley wrote "Roots" -- he died a number of years ago.

Sorry for the mixup.

USAGOLD (10/19/99; 13:32:36MDT - Msg ID:16901)
test
test

CoBra(too) (10/19/99; 13:30:17MDT - Msg ID:16900)
Give or take 10 years Phos...
Dear Leigh - TC's summary of today's greenspeak gives a better answer to your Q. @ Europe.
Ineresting day - take care CB2

TownCrier (10/19/99; 13:22:27MDT - Msg ID:16899)
Selected Excerpts of Today's Remarks by Fed Chairman Alan Greenspan
http://www.bog.frb.fed.us/BoardDocs/speeches/1999/19991019.HTM
Do efficient financial markets mitigate financial crises?
Before the 1999 Financial Markets Conference of the Federal Reserve Bank of Atlanta, Sea Island, Georgia
October 19, 1999

Before the crisis broke, there was little reason to question the three decades of phenomenally solid East Asian economic growth, largely financed through the banking system. The rapidly expanding economies and bank credit growth kept the ratio of nonperforming loans to total bank assets low. The failure to have backup forms of intermediation was of little consequence. The lack of a spare tire is of no concern if you do not get a flat. East Asia had no spare tires.

Banks, being highly leveraged institutions, have, throughout their history, periodically fallen into crisis. The classic problem of bank risk management is to achieve an always-elusive degree of leverage that creates an adequate return on equity without threatening default.
The success rate has never approached 100 percent, except where banks are credibly guaranteed, usually by their governments, in the currency of their liabilities. But even that exception is by no means ironclad, especially when that currency is foreign.
...
In dire circumstances, modern central banks have provided liquidity, but fear is not always assuaged by cash. Even with increased liquidity, banks do not lend in unstable periods. The Japanese banking system today is an example: The Bank of Japan has created massive liquidity, yet bank lending has responded little.

We must continually remind ourselves that a financial infrastructure is composed of a broad set of institutions whose functioning, like all else in a society, must be consistent with the underlying value system. On the surface, financial infrastructure appears to be a strictly technical concern. It includes accounting standards that accurately portray the condition of the firm, legal systems that reliably provide for the protection of property and the enforcement of contracts, and bankruptcy provisions that lend assurance in advance as to how claims will be resolved in the inevitable result that some business decisions prove to be mistakes. ... But the development of such institutions almost invariably is molded by the culture of a society. Arguably the notion of property rights in today's Russia is subliminally biased by a Soviet education that inculcated a highly negative view of individual property ownership. The antipathy to the "loss of face" in Asia makes it difficult to institute, for example, the bankruptcy procedures of Western nations, and in the West we each differ owing to deep-seated views of creditor-debtor relationships.
...
Nonetheless, the competitive pressures toward convergence will be a formidable force in the future if, as I suspect, additional forms of financial intermediation are seen as benefiting an economy. Moreover, a broader financial infrastructure will likely also strengthen the environment for the banking system and enhance its performance.
...
It is noteworthy that the financial systems of most continental European countries escaped much of the turmoil of the past two years. And looking back over recent decades, we find fewer examples in continental Europe of banking crises sparked by real estate booms and busts or episodes of credit crunch of the sort I have mentioned in the United States and Japan. ... Such institutions rarely exhibit the dynamism and innovation that many private banks have employed for their, and their economies', prosperity. Government participation often distorts the allocation of capital to its most productive uses and undermines the reliability of price signals. But at times when market adjustment processes might have proved inadequate to prevent a banking crisis, such a government presence in the banking system can provide implicit guarantees of resources to keep credit flowing, even if its direction is suboptimal. ... In short, there is some evidence to suggest that insurance against destabilizing credit crises has been purchased with a less efficient utilization of capital.
...
The rapidly developing international financial system has clearly intensified competitive forces that have enhanced standards of living throughout most of the world. It is important that we develop domestic financial structures that facilitate and protect our international financial and trading systems, a process that will require much energy and commitment in the years ahead.

Phos (10/19/99; 13:14:57MDT - Msg ID:16898)
A minute of silence on the 60th anniversary
Sorry for the length of this post. Any of this sound familiar? Blame the Mobs (see December 19th headline).
FISHER=ABBY C, etc.

Headlines from 1929 "The New York Times"
==========================================
Wednesday, July 3, 1929, Page 31, Col. 5
SEES STOCK RISE JUSTIFIED
Moody's Says Returns Are In Line With Industrial Activity
==========================================
Friday, September 6, 1929, Page 1, Col. 7

STOCK PRICES BREAK ON DARK PROPHECY
Drop In Hectic Last Hour As Babson's Prediction Of A Big Slump Is Printed
Page 12, Col. 2
BABSON PREDICTS 'CRASH' IN STOCKS
Says Wise Investors Will Pay Up Loans And Avoid Marging [sic] Trading
----------
FISHER VIEW IS OPPOSITE
Declares No Big Recession In Market Is Due, Because Inventions Are Adding To Health
==========================================
Wednesday, October 2, 1929, Page 5, Col. 1

HAZLEWOOD WARNS BANKERS ON CREDITS
He Tells Convention Tendency is to "Pass the Buck" On Market Loans to Reserve Board
----------
CALLS THEM RESPONSIBLE
Not Reserve System's Duty to Assume Burden, Says President at San Francisco Meeting
----------
CONFIDENCE IS UNSHAKEN
But He Declares That Some Institutions Are Overloaded At The Present Time
==========================================
Sunday, October 13, 1929, II, Page 7, Col. 2

STOCK PRICES WILL STAY AT HIGH LEVEL FOR YEARS TO COME, SAYS OHIO ECONOMIST
==========================================
Wednesday, October 16, 1929, Page 8, Col. 4

FISHER SEES STOCKS PERMANENTLY HIGH
Yale Economist Tells Purchasing Agents Increased Earnings Justify Rise
----------
SAYS TRUSTS AID SALES
------------
AYRES SEES MARKET AS 'CREEPING BEAR'
Fall of Prices Began Months Ago, He Says, but Was Hidden by Rising Averages
----------
DECLINE IN AUTUMN USUAL
Recession This Season About 14 Per Cent, Against Normal Drop of 9, He Reports
----------
MITCHELL ASSERTS STOCKS ARE SOUND
Banker, Sailing From Europe, Says He Sees No Signs of Wall Street Slump
==========================================
Tuesday, October 22, 1929, Page 24, Col. 1

FISHER SAYS PRICES OF STOCKS ARE LOW
Quotations Have Not Caught Up With Real Values As Yet, He Declares
----------
SEES NO CAUSE FOR SLUMP
Economist Tells Credit Men that Market Has Not Been Inflated, But Merely Readjusted
==========================================
Wednesday, October 23, 1929, Page 1, Col. 4

STOCKS GAIN SHARPLY BUT SLIP NEAR CLOSE
Vigorous Recovery Marks Most of Day and Many Issues Show Net Advances
----------
MARKET GLOOM LESSENED
Banking Support, Ease of Money and Mitchell's Optimistic Statement Help Rally
==========================================
Thursday, October 24, 1929, Page 1, Col. 1

PRICES OF STOCKS CRASH IN HEAVY LIQUIDATION, TOTAL DROP OF BILLIONS
PAPER LOSS $4,000,000,000
2,600,000 Shares Sold In The Final Hour In Record Decline
----------
MANY ACCOUNTS WIPED OUT
But No Brokerage House Is In Difficulties, As Margins Have Been Kept High
----------
ORGANIZED BANKING ABSENT
Bankers Confer On Steps To Support Market - Highest Break Is 96 Points
----------
SAYS STOCK SLUMP IS ONLY TEMPORARY
Professor Fisher Tells Capital Bankers Market Rise Since War Has Been Justified.
----------
ECONOMIC REASONS CITED
----------
"Public Speculative Mania," He Declares, is Least Important Cause of Price Inflation.
==========================================
Friday, October 24, 1929, Page 1, Columns 5-8

WORST STOCK CRASH STEMMED BY BANKS;
12,894,650-SHARE DAY SWAMPS MARKET;
LEADERS CONFER, FIND CONDITIONS SOUND
----------
FINANCIERS EASE TENSION
LOSSES RECOVERED IN PART
Five Wall Street Bankers Hold Two Meetings at Morgan Office
Upward Trend Start with 200,000-Share Order for Steel
----------
TICKERS LAG FOUR HOURS
Thousands of Accounts Wiped Out, With Traders in Dark as to Events on Exchange
==========================================
Saturday, October 26, 1929, Page 2, Col. 5

CAUTION ADVISED BY STOCK BROKERS
Letters to Clients Warn Against Hysterical Selling and Favor Some Buying
----------
TONE IS OPTIMISTIC
Narrow Trading is Predicted for a Time Till the Market Recuperates
==========================================
Tuesday, October 29, 1929, Page 1, Col. 6

STOCK PRICES SLUMP $14,000,000,000
NATION-WIDE STAMPEDE TO UNLOAD;
BANKERS TO SUPPORT MARKET TODAY

Sixteen Leading Issues Down $2,893,520,108;
Tel. & Tel. and Steel Among Heaviest Losses
----------
PREMIER ISSUES HARD HIT
Unexpected Torrent of Liquidation Again Rocks Markets
==========================================
Wednesday, October 30, 1929, Page 1, Columns 6-8

STOCKS COLLAPSE IN 16,410,030-SHARE DAY,
BUT RALLY AT CLOSE CHEERS BROKERS;
BANKERS OPTIMISTIC, TO CONTINUE AID

240 Issues Lose $15,894,818,894 in Month; Slump in Full Exchange List Vastly Larger
==========================================
Friday, November 1, 1929, Page 3, Col. 3

SISSON DECRIES INFLATION
Lays Crash to Small Investors' Lack of Experience
==========================================
Thursday, December 19, 1929, Page 36, Col. 1

LAYS STOCK BREAKS TO MOB PSYCHOLOGY
W.W. Price Says Crashes Will Come So Long as Facilities for Speculation Exist.
----------
ARMSTRONG IS OPTIMISTIC
Consul General Tells British Chamber England Has Weathered the Worst of Industrial Crisis

Yellin' of troy (10/19/99; 13:12:55MDT - Msg ID:16897)
Aragorn III -- CBs and their paper
I have so far only been able to read your response to me once through quickly, but for now, two points are what stick in my mind as most needing a reply. For greater computer safety I'm going to do them separately. This is the first.

You say there is no reason for a CB to sell its gold, even at a high price, because it has no use for the paper it would get, which it can simply emit on its own and use to buy foreign currencies or whatever it needs. Would you say the same if the great price to be had were for something other than gold, something blatantly non-monetary? Imagine you are the chairman of the CB. One of its assets is the Chairman's Car, which was bought for $50,000 and is now old enough that you have been thinking of trading it in, you expect for about $15,000. (If you don't like the $ units, substitute your favorite or make one up.) You get a letter from Honest Abby's Used Cars, offering $100,000 for the Chairman's Car. It appears that Abby has a clientele who thrill at driving cars formerly owned by celebrities, and you, Mr. Chairman, are a popular celebrity. Knowing what policies you are planning and what tragedies to fear, you suspect you will soon be hated, so it's now or never. Well, there are no doubt arguments against such a sale, based on, say, questions of dignity or SOP. But wouldn't it sound very strange to tell Abby, or hear from your colleagues, "The Bank never sells anything, in fact we've decided just to junk the Car rather than do the usual trade-in -- all that paperwork is no fun, and we don't need the money, you know, we can just print it"? Is gold so different? I assert that it is perfectly plausible to sell the Car, or the gold, because it isn't true that the Bank can issue its paper money in any amounts with impunity. Issuing more money will cause more inflation. The Bank may not mind some inflation -- its policy may be anything from No More Money through Stable Prices to the Keynesian Limit --, but it *has* a policy, which it regards as optimal (for whatever political or professional or patriotic reasons), and whatever that policy is, issuing more of our $s every time we need some of their Afros or Fiats is going to upset it. Even though the Bank does not exist simply to maximize profits, snatching a profit when the golden opportunity presents is a useful tactic toward its mission. For the more wealth the Bank has, the more flexibility and ammunition it has for whatever interventions and bailouts it chooses to engage in. As an analogy, consider the Widget Monopoly. The monopolist produces fewer widgets and sells them at a higher price than a competitive market would and thereby makes a monopoly profit. But hardly an infinite profit. And when it comes to ordinary business decisions -- Should we offer a red model? a longer warranty? pay our vice presidents more? --, the considerations and strategies that will maximize profits are the same as for a non-monopolist. An issuer of paper money is a monopolist in the money, "producing" much less of it, at a much higher price, than marginal-cost tactics would dictate. But the resulting "profits" don't equate to a perfectly free hand, and when it comes to sideshows like the overpriced gold or the Chairman's Car, there is no reason to depart from Generally Accepted Greedy Principles. And once this is realized, the fact that, as you noticed, CBs aren't far from the perfect logicians is not a stabilizing influence.

AREM (10/19/99; 13:12:26MDT - Msg ID:16896)
golden (10/19/99; 09:22:23MDT - Msg ID:16864) Trying to Learn
I share your confusion about what's happening on the gold market,and I bet that a lot of others are equally confused. There are so many words and so many predictions about what is going to happen "any day now". Too much hype. The abreviations like WTO and SWAG are confusing too. Please people, spell them out. Brevity is a virtue, but not with abreviations.

The Scot (10/19/99; 12:59:05MDT - Msg ID:16895)
Scrappy
Your posts today have lifted my spirit. It is wonderful to know that there are still those out there with your determination. I cannot advise you on golden matters for I am a novice myself. I am curious about Medicinal Herbalisim, could you tell me more about it. So we don't take up space here, e-mail me at: scot@wans.net
Sincerely, The Scot

Gold Dancer (10/19/99; 12:56:27MDT - Msg ID:16894)
JCS--Gold Predictions
Your projections for gold are fine with me but I think a little optimistic over the shorter term. I really think it will take a while for the public to catch on and I think there are too many shorts and mining companies who would like to see a slower rise.

In the end, the slower the rise the higher the gold stocks will go. They will need several quarters of rising earnings to get Wall Street and the public interested.

That's not only my feeling, that's what the market is telling me. Drooy still under $2!!! Can you believe that?
It is going to take another 12 to 18 months to get that where it belongs: in the 20's.

Gold Dancer

phaedrus (10/19/99; 12:51:05MDT - Msg ID:16893)
stock rally betrayed by bonds
After rallying earlier this morning on the benign CPI, bonds
are now down more than half a point, ten minutes or so
before they close. This is bad for Wall Street and a clear
indication that this stock rally is bogus.

As the WSJ points out, bond traders are kind of like the
canary in the coal mine- they are among the first indicators
that things are going sour- and they are clearly not
rejoicing over this CPI number.

The big stock rally has been chopped in half so far- but as
for whether we will finish up or down on the day, I don't
really care. Bonds are telling the story that Wall Street
is trying to mute.

If we do finish negative, though, after such a big rally,
it's not going to do much for the stature of Abby Joseph and
company.

RossL (10/19/99; 12:26:43MDT - Msg ID:16892)
Gold standard
http://www.mises.com/journals/scholar/Blockgold%2EPDF
Here is an essay on the gold standard and commodity money that recently showed up on the Mises page (http://www.mises.com/) The link above is requires PDF reader.

Radical Privatization of Gold: A Critique of Friedman, Mundell, Hayek, and Greenspan
by Walter Block ( University of Central Arkansas )

Netking (10/19/99; 12:25:43MDT - Msg ID:16891)
Stock Market
This comment by Vronsky copied here for your info from our
"brothers in Gold" at Gold-Eagle;

The continuation of the ingredients that we have
identified as those that have preceded the crashes of
the past continued with Friday's 267 point decline.
Under current circumstances, those market indicators
that have become oversold are of little consequence as
panic takes hold of emotions and reality. We truly wish
this weren't so, but it is the way markets have always
worked. In the truest spirit of the market's propensity
to act in recurring patterns, it is indeed tracing out
almost the exact replay of past market meltdowns.

In a recent commentary written this past weekend by Dan
Ascani, President of the "Global Market Perspectives",
Dan points out some eerie similarities:

"Countdown to a crash: days #37 to #40 are likely to
bring a collapse;The market tends to remember
anniversaries. Thus, note the S&P 500 peak on July 20,
1999, exactly one year from the July 20, 1998 peak.
Note: The market also peaked at the time in July
1990 before it plunged into the October low that year;
Note also the Dow's August 25, 1999 peak, exactly 12
years from the August 25, 1987 peak. Taking this one
step further, both the 1929 and 1987 market crashes
occurred between the 37th and 40th market days from the
record high. Black Tuesday in 1929 occurred on the 40th
day, and Black Monday in 1987 occurred on the 37th
market Day;The 37th market day is October 18, 1999, and
the 40th market day is October 21, 1999." I would like
to point out that today is only the 39th "market day"
from the peak – but, I think you get the picture.

After probing below the 10,000 level on the Dow several
times Friday and yesterday, the Dow managed to bounce by
about 100 points by the closing bell. It just makes
sense for "some" buyers to emerge thinking this is the
appropriate level to attempt buying the dip,
especially as they have failed to learn NOT to front run
important economic reports like this morning's CPI
release. We think they are too early and still think
10,000 will give way, perhaps after the report. In any
event we are content for the moment NOT joining them
in trying are skills as Olympic Javelin catchers. As
seen on so many recent "seemingly" strong days, there
were only 11 stocks that went up for every 19 that went
down yesterday as the A/D Line remains in a virtual free
fall. Also, the OTC Composite played "catch-down"
to the Dow, dropping by another 43 points after last
week's early all time high, reversal, and major Buying
Climax (BC) by closing lower for the week. This is a
strong sign that prices may have seen their high for
quite some time to come.

The probing of the psychological 10,000 level has
already satisfied our "minimum" expectation for the
entire 5 wave decline that we had forecast. This does
not mean that within the minor 5th wave that it can't
decline further, to within our target zone of Fibonnacci
support between 9691 and 9840. Should support at 10,000
give way, without fulfilling the prophecy of an all out
crash, I would expect the target to be realized. To
confirm that the 5th wave ended by falling short of this
target, it would have to close above resistance at
10,350. Higher resistance is above 10,700. A decline
below 9970 would usher in further
selling toward our lower price objective.

(market comment courtesy of Mitch Harris)

Mitch Harris
MARKET TREND REALITIES, Reality Check Update

DD (10/19/99; 12:25:33MDT - Msg ID:16890)
survival
Hi All - Just a quick note & some observations. Scrappy - Wow! You sure have the right handle. I believe that life is not meant to "work out". It's more likely to be a series of tests in which we are given opportunities to handle adversity. Obviously, you've passed your tests with flying colors. You are undoubtedly a teacher for others. Maybe you should be the one handing out diplomas. Nice job Scrappy. One another note, I believe it is difficult to predict what is going to happen short term under the current conditions. However, there is one truth that will probably hold through out the coming crisis. People will do ANYTHING when their survival is threatened. Like a cornered rat, people become more irrational and dangerous when left with no escape. So, what will the shorts, BBs, leveraged speculators and US/dollar advocates do when everything starts to fall apart in earnest??? ANYTHING!! Oh, and don't forget the final fly in the ointment, Y2k. We're about 70 days away and anyone who thinks Y2k isn't going to have an adverse effect on global economies is either ignorant on in denial. The global computer system of systems, with its vitually infinate interconnects and effects, is what allows the current high viloscity of the global commerce. Can any say, "Sorry, we can't ship. Our computers are down."....or, "Our supplier's computers are down."....or, "Our customer's computers are down."...or, "Our factory is down." Looks like interesting times, No? Best, DD

TownCrier (10/19/99; 12:09:21MDT - Msg ID:16889)
U.S. Consumer Prices Core Rate Rose 0.3% in September; Housing Starts Fell
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=d8f5378551b8c5ff1497507f10893dd8
Excluding food and energy (the most important staples of life!) the Labor Department's consumer price index's "core" rate rose 0.3 percent in September, totaling 2 percent higher on the year since September 1998--the lowest yearly increase in 33 years. HURRAH! Inflation is a thing of the past! It is so comforting to know that as we go to the fuel station for gas so that we can drive to the grocery store the prices encountered won't be a burden. No wait...we forgot they were referring to the "core" rate, which applies to things like yo-yo's, rubber bands, chia pets, and postage stamps.

Not surprisingly, stocks and bonds rose on this good news.

ORO (10/19/99; 12:06:05MDT - Msg ID:16888)
Broken Oak
The "pure" gold standard was run during the end of the period of the western world's greatest rise in production and living standards. This period also saw a powerful Britain being met by France Russia America italy Austria and Germany, as well as an emerging Japan. There was no way for any of these to predominate on their own, alliances were needed.
Note that Silver was still being used in one way or another during most of the growth phase. The ejection of silver from the monetary system was an intrusion by governments into the markets, an arbitrary decision. When the process was over, the world was ready for a depression because post WWI currencies were pegged to gold at unrealistic prewar levels: while before the war silver was still part of the official money supply, post war regimes did not have it as a part of their monetary system on a level with gold. In this way an artificial gold shortage was formed. Later, Germany's post Weimar return to the gold standard tightened the gold deficit further.
Free exchange rates of silver and gold monetary systems are conductive to rapid growth and stable prices. Interruption of these exchanges by governments seeking one advantage or another over others, or just being the plain stupid organizations that they are, was the source of the trouble in the post WWI gold standard.

See Mundell's links for a good analysis of some of these issues.
http://www.columbia.edu/~ram15/LBE.htm
http://www.columbia.edu/~ram15/grash.html
http://www.columbia.edu/~ram15/ABrettwds.htm

I will add that silver was hurt as a monetary metal not only because the metal was being pushed out by gold through government "fiat" but also because of the discovery of the enormous Mexican silver deposits that caused a doubling of production relative to gold production.

patrias (10/19/99; 11:57:00MDT - Msg ID:16887)
strad master - margin calls
excellent question! from my experience trading, once i come under margin call they might give me until the next day or my trade is closed out at the market. it seems awfully strange that the powers that be have allowed this much time for ashanti to cover their margin call. the pog would probably be over $500 if comex had required ashanti to cover their position. any others out there know more on this subject.

first time post for me, but i've been reading the forum for several weeks now. i'm getting quite an education about monetary systems. thanks all!

JCS (10/19/99; 11:55:53MDT - Msg ID:16886)
Gold Dancer (10/19/99; 11:18:21MDT - Msg ID:16882)
Re: 3rd wave up, given the dynamics,IMHO, I think we'll see at a minimum 1.618x wave 1 or about $445, alternatively, 2.618x wave 1 or about $531. I am not expecting this overnight, and I think wave 3 will subdivide, so my guess is that it will complete over a 4-6 month period. This would give time for some washout among the margined positions that are in trouble. It could be that the entire cycle wave completes in that time frame; ie, 5 waves of a larger wave 1 up to $600+ over 4-6 months.

TownCrier (10/19/99; 11:44:11MDT - Msg ID:16885)
Germany's Eichel Says Euro-11 Inflation 'Must Not Be Feared'
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=04904681f2e7da2406ebc8f309bee20f
In what has been the latest in a series of remarks from European Central Bank officials hinting at the possibility of a rate rise, Bundesbank President Ernst Welteke said today that the ECB is "ready to do its duty" to preserve low inflation in the euro economy.
German Finance Minister Hans Eichel said that countries which have adopted the euro must "maintain iron discipline" in fiscal policy, but that "what has happened with oil should not cause a change in the ECB's monetary policy."

Hmmmmmmm...makes you think he might have a little insight into the future, doesn't it?

Journeyman (10/19/99; 11:39:21MDT - Msg ID:16884)
Broken Oak @ Invisible Hand: Re: WHY GOLD HAD TO GO
Dear Broken, .................................................................. ............................................................................... Good points in your Message ID# 16876! But your suggestion that the gold standard was abandoned because there wasn't enough gold for large-scale industialization is the result of deliberate anti-gold disinformation. The gold standard wasn't really "abandoned," it was killed, & for good reasons -- but not good reasons for us "jus plain folks." For an explanation of the reasons I make this claim, see Message ID# 16513 "WHY GOLD HAD TO GO" on 10/15/99. (Check the Archives section of this site.) ................................................ ................................................................................ Some relevant excerpts: ........................................................ ................................................................................ The united States grew and prospered on a gold standard for over a century with only one hiatus during the Civil War. This would indicate, theoretical objections aside, that a gold standard is eminently practical and highly conducive to economic growth, prosperity, and, propaganda to the contrary not withstanding, stability. ....................................................... ................................................................................ The gold standard was killed, not because it didn't work, but because the bankers and their cronies in the political cliques couldn't profit from gold as money as they could from paper money. The excuses normally cited to indict the gold standard, such as massive bank failures, etc. were greatly exaggerated, and in the context of the depredations caused by paper money, pale to insignificance. The quality of such whinings can be deduced from the ultimate indictment against gold, which is no more than calling it names such as "barbarous relic." [SEE subsequent post, "BARBAROUS RELIC".] It wasn't that the gold standard didn't work; it worked too well, automatically protecting people's savings and making large banking institutions peripheral rather than central. Hmm! "Peripheral Banks." Has kind of a nice ring to it don't you think? ......................................................................... ................................................................................ In short there was not, as people commonly assume, a failure of the gold standard, in fact the reason it was done away with is that it was too successful at protecting people from currency depreciation ("inflation") caused by the banker-government axis. ........................................................ ................................................................................ Regards, Journeyman

CoBra(too) (10/19/99; 11:33:17MDT - Msg ID:16883)
Ashanti are "nuts"!
Or more to the point "Ashanti Nuts" is an old Austrian expression for peanuts.
Where are the good old days of down to earth peanut farmers becoming presidents of the US of A - don't we all feel a bit nostalgic for those days, when the average guy felt sympathy in fair view of the gigantic chores any US president is facing. We were able to "read his lips", a major feat, while not discounting Ron and Georgie's acomplishments at their respective shift in contributing to the the world's abandonment of communism, I feel the legacy of these leaders
are being betrayed today. It is "decroyable" that the high principles of former administrations have been squashed only to keep up the pretense of new and virtual paper wealth. It is also deplorable that the rest of the world was playing at "EMU" (couldn't resist, but mean ostrich), until, well until
they couldn't cope with it any longer. ORO, A, FOA and all at the forum have spelled out the eventual outcome, which I subscribe -mostly- to as well.

@Leigh - Thank you for your kind words (which I know I don't really deserve)- but we're a "global village" and as the saying goes, when AG utters his inimitable greenspeak every financial and political analyst picks at any crumbs left between the lines and will - ultimately - be proven wrong. To answer your question, yes any meltdown in the US $ and financial markets will have a definite impact on Europe and any other markets globally. This is another factor I would hope against hope for a gradual decline (maybe the PPT can prove its value in achievig this end, which I doubt). Anyway, the EU may survive this predicament in better shape, but by no means unscathd.

MK @ usagold mentioned the possibility of "Flight Lieutenant" Jerry Rawlins (Pres. of Ghana - ormer Gold Coast and the source of the British Gold Guinea) to nationalize Ashanti and/or all other gold mining activities in the country. IMO, there is no way to do that again, not only that it was done before and the results have led to the
ousting of the Communists at the Rawling led coup, which again led to the floating of minority equity in ASL -now almost 70% of the capitalization of Accra's Stock Exchange-. Gold production accounts for 40% of Ghana's exports - right after cocoa and don't forget Goldfileds Tarkwa Mine, now 30 moz Reserve/resource and counting, not including several smaller reserves and resources delineated by a host of international exploration and development co's. (wi'll send an -mail on this topic directly). - BTW-Ghana's commissioner of Mines was fired last friday on sketching rescue plans for ASL by himself - whithout consulting the gubbmint.

@ Coin Guy - it's so visible - isn't it?
Best CB2

Gold Dancer (10/19/99; 11:18:21MDT - Msg ID:16882)
Golden
The spot price of gold will be up tomorrow. Leg 3 will begin and be the same size as leg 1 or about $86. The Dec contract should reach $391. If not the gold market will reach $296 and the Dec $382.

I am holding long term so these gyrations don't conern me.
We are in a bull market. I am enjoying myself.

If one want's to buy, today is a good time. Maybe it will pay to wait. Maybe not.

Gold Dancer

Scrappy (10/19/99; 11:17:01MDT - Msg ID:16881)
Broken Oak
none
Thank you for the accolades. FYI, I have overcome lots in my life-financial considerations always were low on my list of priorities. I always felt as long as we ate, etc., we could focus on other things, like God, morals, etc. Let me tell you, raising two kids to be drug free, gang free, teenage parent trap free, etc., has been no easy feat. I look around, and I am glad I didn't concentrate on getting them 'things'. They are both two exceptional indiveiduals.
Also, just for your interest, I am finally investing a little in myself. Over the years, I have acquired a basic working knowledge of medicinal herbalism. I am signing up for an 'official' diploma program. With such a skill, and with the growing interest in this area, I should be a.o.k. no matter if society as we know it crumbles or continues. My main concern, if society as we know it continues, is paying for college for the offspring. They are definitely worthy of any help I can give them, and they deserve a real shot at it.
Again, thanks so much for the accolades. They mean a lot to me on my little island.

TownCrier (10/19/99; 11:06:23MDT - Msg ID:16880)
Investors should be cautious on US stocks-Miyazawa
http://biz.yahoo.com/rf/991018/9b.html
Japan's Finance Minister Kiichi Miyazawa warned investors to be careful about developments in the U.S. stock market, "It is best not to say anything unnecessarily...but investors should pay sufficient attention to what the Fed chairman said." And in case your memory is suffering today, we reported last Friday that Chairman Greenspan warned about possibilities of sudden, sharp reversals in confidence by investors taking their toll on equity and financial markets.

In comparing the two, Miyazawa said it was "almost certain" that the Japanese economy will tend to improve while gains in the U.S. economy and stock market will slow down.

Leigh (10/19/99; 10:57:28MDT - Msg ID:16879)
Latest from SEQUIN
Date: Tue Oct 19 1999 11:25
SEQUIN (GOLD) ID#25171
306.50 Indeed. (to paraphrase the now silent RJ)
We got good help from Goldman who bought 650,000 oz (in my opinion maybe up to 150,000 were for own account and the remaining for Ashanti).
We will see if the level holds in coming days or we will be punished down to 296.5.
THKS

Broken Oak (10/19/99; 10:50:49MDT - Msg ID:16878)
Scrappy
My admiration for your work ethic and grit. Hang tight. Think about the opportunity to obtain productive capability even on a small scale. ie - knitting machine, bread baking, etc. To rise above your current situation will require many hours of fresh thinking.

I remember my mom who had 'yard sales'. She would have small scraps of fabric in small bundles which she sold fo 25 to 50� each. Her neighbor always over priced things. At the end of the day my mom was always WAY ahead of the game. There are ways to grow small businesses or enterprises which will net you significant rewards, but alot of today's business strategies depend upon debt, which is a real tragic step.

Keep up the good work. You ARE a winner.

golden (10/19/99; 10:49:44MDT - Msg ID:16877)
Gold Dancer's post
Dear GOld Dancer,,
I need to clarify your post for my understanding. You are saying that the gold spot price should be up as of tomorrow? What about silver?

Broken Oak (10/19/99; 10:41:40MDT - Msg ID:16876)
The Invisible Hand
I believe the last line is basicly saying that 'fiat' money is not a thing in its own right, but a medium which must be used to get some thing later. If a bushel of wheat is both a commodity as well as a unit of account. If we all delt with only units of account and the relationship of goods one to another was stable in relationship to the unit of account then all would be well and one would not have to think about it. But this is not the case when the unit of account has no sustantive, corporial identity as a tangible material thing in its own right (wheat, oil, gold).

This is another way of talking about the quantity of 'fiat' money vs the need for 'fiat' money in transactions. Or another way of talking about the effects of 'printing to much or too little paper money'. You can't fake a bushel of wheat, a barrel of oil or an ounce of gold. You can manufacture fiat money till the couws come home. The holder of fiat money risks inflation (which destroys the value of his held money). Since gold can not be extracted very easily it can not really be 'printed' and therefore becomes stable in its relationship to other things.

Further, one of the reasons that the gold standard was abandonded was because a pure gold standard does not really enable massive industrialization, but rather hinders it due to a restriction in the amount of available capital. This, IMHO, relates to the capacity of a nation to make war or keep sovereignty.

Gold Dancer (10/19/99; 10:28:59MDT - Msg ID:16875)
JCS/Elliot count
I agree with your latest Elliot Wave Count on gold and the stock market. Looks to me like the correction is over. Tomorrow should be up.

Ashanti was in a margin call for $250 million but at what gold price? If it was $335 they are certainly able to cover at a lot lower prices now. With a lot of these derivitives not tested in court and the risks never stated clearly I bet it might be cheaped in the end for Goldman and the other Bullion Banks to eat some their handywork. Time will tell but if they force the issue that could complicate matters more than they want.

But I am convinced that until Greenspan leaves next April the markets will be manipulated so he can make him self look
good. For those who don't think he can do this, or that the markets are bigger than he is, I just remind you that he has done this for a long time already and no one is complaining that matters. We don't matter on this forum. It was not until Rubin left that the Yen was allowed to rise. And gold is not going to really get going to the upside till after
Greenspan leaves. It does not mean that gold can't go to
$390 but that is about it as far as I can see. Then we will spend another 3 months going sideways. And then Alan leaves and the wheels come off, the turbo is turned on and off we go to $600+ by the end of 2000. Just my thoughts for now.

Gold Dancer

Scrappy (10/19/99; 10:24:39MDT - Msg ID:16874)
golden
none
Hi. I kind of know how you feel. I'm a coffee shop waitress, in a tiny town, always have been poor. Suddenly, I have this chunk of money thrown in my lap. I am determined to make something of it-not to just see it gone on nothing. I have two kids, now college age, both enrolled at community colleges, for now.
The amount of money in my lap is, I am sure, pocket change to these guys here. But, to me, it represents a real chance, with time and patience, to perhaps elevate my financial positon above the poverty level. I have lived at or below the poverty level all of my life. I have never taken welfare, and have never received one red cent in child support. This 'chunk of money' means a LOT to me, and I am totally ignorant on what to do with it. Or i was. Thanks to these people here, I feel I have a beginners' knowledge, at least, of the money world, how it works, and what is going on with it at this point in time.
I strongly encourage you to read the Forum archives, especially the "Important posts, 6/99 to present" Get educated. Calm down, trust yourself and your brain, and mostly, MAKE YOUR OWN DECISIONS! Don't let anyone tell you what to do-if you are using a broker, YOU tell HIM/HER what you want done! Sounds like that is what you are trying to do, and there is so much conflicting info, it IS confusing.
But, I got quite an education reading the above mentioned posts. I know I am not going to get rich overnight, and I know that if I get all excited about the day to day events, I will freak out, cash out, and blow it.
I really believe what FOA and ANOTHER, among others have been saying. It seems many of the people who speak here play with money on a daily basis, so their opinions are for short term, day to day considerations. Even if I had the money to get into the day to day game, right now, I know I would not have enough knowledge to do so. Not if I wanted to rely solely on my own opinions and interpretations.
I think, therefore, the best thing for me to do, is to play for the long haul. And of all the gnarled thoughts I have read here, the one that keeps jumping out at me is, "Get physical, shut my mouth, and WAIT!"
I don't know if this has helped you at all. I hope we all 'make it'. I for one, have some hope and feel pretty secure that I am doing the best I possibly can with what I have.

All, sorry this is so long. Thank you for the free flow of thoughts and ideas. You people have taught me a lot at a time when I was WAY too excited, and needed to learn a LOT. Thanks tonnes, from the bottom of me heart.

ORO (10/19/99; 10:22:37MDT - Msg ID:16873)
SteveH-R. A. Mundell
Thanks for the URL.

Reading his stuff. Very rich. Has his whole '68 book online. Seems to continue some of the Austrian thinking with "updates" from monetarist works and others. Very big on noting the profitable seignorage both as a tool of the "superpower" in maintaining Hegemony, and the "prize" of international power.

Great read so far.

If anybody is interested in a little more on monetary thinking, Outside of Mises Theory of Money, there is Mundell's thinking and Hayek's Good Money, newly reprinted in a new (expensive) edition.

Strad Master (10/19/99; 10:03:21MDT - Msg ID:16872)
For USA Gold or anyone - regarding Margin calls
The imminent failure of Ashanti Gold you mention in today's update brings up a question. Is Ashanti responsible for a margin call delivered at the time the price fix was much higher than it is now or does the drifting down in the price of gold relieve them of their debt. If the latter, I imagine that everyone who is involved in geting the price progressively lower is breathing a big sigh of relief as the danger becomes increasingly more remote. I know from my own experience with a big gold brokerage that when I got a margin call on a leveraged position, it didn't matter about the subsequent price; I was liable for meeting the call even if the very next day it reversed and I went into profit territory. Which leads me to a second question: How is the price established for the margin call Ashantineeds to meet? At the close of trading in London, or New York, the high for the day, the low for the day - what? Thanks for responses.

elevator guy (10/19/99; 09:59:55MDT - Msg ID:16871)
Leigh, and Chicken Man
Thank you Leigh! Can you imagine the impact it had when we told people gold was poised to go up, and then after the ECB agreement, it went up? That must have gotten some attention from those outside our little camp!

Your right, Chicken Man! If the general public sees no value in gold, they may never buy it. Until the DOW crashes, and they see their life savings go up in smoke. With the advent of the Euro, and the cap on sales by the ECB, it seems probable that the dollar will decline in status as a world wide reserve currency. Or at least it will be in for a rough ride. If I knew nothing about gold, (just like now!), were to be told this in advance, I would be thankful someone tipped me off to the changes coming, and buy at least some gold.

Does anyone think the public at large will ever realise just how it is that their hard earned value is stolen from them, by devaluation of the dollar? Perhaps it will go unoticed, or be blamed on some scapegoat factors.

Maybe we are all just part of an inside group, that will profit from the coming changes in our economy, and the public at large will be stupified, and in the dark as always.

At any rate, I'm very pleased to be here, and receiving information of the long view.

Leigh (10/19/99; 09:45:18MDT - Msg ID:16870)
CoBra(too) and elevator guy
Dear CoBra: I'm always amazed at how tuned-in you are to financial matters here in the States. Are there a lot of people in Europe who pay attention to our stock market? If our markets were to crash, would it affect Europeans a great deal?

elevator guy: I'm so much in agreement on you about our responsibility to warn the sheeple. I know the terrible feeling of having people ignore you or even hang up on you (the worst offenders are family members, too, and that really hurts!), but they'll remember and think about what you say. Sometimes they'll do their thinking at the lowest ebb, when they're the most frightened, and your words will seem as a guiding light!

golden (10/19/99; 09:33:52MDT - Msg ID:16869)
oops/spelling
I had to chuckle when I read my post. I did not realize my spelling (in my just posted post) was so bad. Please forgive.
'Appreviation' should be abbreviations.
And 'invesstes' should be invested.
Thanks for your patience and your responses.
Nancy
GAa5274575@aol.com

USAGOLD (10/19/99; 09:32:12MDT - Msg ID:16868)
Today's Gold Market Report: Intrigue in Ghana, Londontown
MARKET REPORT(10/19/99): Gold continued its southerly trek this
morning with many of the bigger players still on the sidelines awaiting
the outcome of the Ashanti and Cambior margin call negotiations. These
talks are critical to the gold market because, if the calls are forced
by the two companies' counterparties,it could touch off a wave of short
covering both in the physical and derivative market..........As it is
reports are circulating that gold is being returned by various
counterparties to the central banks as the process of unwinding the gold
carry trade continues.......Gold lease rates continue to
fall.............Reuters reports in one article that "Saudi Prince
al-Waleed bin Talal had offered financial help to Ghana's Ashanti
Goldfields" and the move "helped keep the lid on prices, removing the
bullish prospect of a forced closure of the miner's hedge book." (I
think Reuters may have gotten the prince's name wrong. If I recall
correctly, it is "Alaweed.") In another Reuters report, Al Waleed, a
self-made multi-billionaire, reportedly offered his support to the Ghana
government not Ashanti per se -- the significance of that distinction
remains to be determined, but it does start some red lights flashing.
Ashanti has been given "no more than a week" to straighten the mess out,
according to reports......... It is difficult to understand why anyone
would be interested in absorbing Ashanti's $270 million margin call
under the circumstances, especially when you consider that any further
rise could touch still more margin calls and unwinding the position
would most likely bankrupt the company. From where I sit -- and mind
you, this is only speculation from someone sitting in old Denver-town
thousands of miles from New York and London let alone Ghana -- the
positioning going on behind the scenes gives off the scent of default.
The intrigue here is palpable....The fact that the mining company was
given only a week by its 17 counterparties tells you something. Add
Prince Alaweed in the mix and you have the type of intrigue and
characters you would expect to find in a good financial
thriller.......Fear and loathing grip old Londontown and whose to say
that Ghana might not play the nationalization card? As it is, Reuters
reports that "the possibility that it (Ashanti) will fall into foreign
hands is a sensitive political issue for (Ghana)President Jerry
Rawlings.".... The European and Asian markets were quiet overnight.
"Typically, the retreats are coming in New York trading hours while Asia
picks up physical metal," said Rhona O'Connell of T. Hoare & Co as
reported at FWN. "The market overall is expecting strong buying, both
professional and retail, on any dip towards $300," she
added................ That's it for today, fellow goldmeisters. Keep
your ear to the rail. If the Ashanti situation blows up, things could
get interesting in a hurry. 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 gold.

CoBra(too) (10/19/99; 09:31:32MDT - Msg ID:16867)
Buy on dips!
The "buy on dips" syndrome for the general market was heavily sponsored by your friendly PPT again. We all believe it too be the (politically) correct action. Thank you!

We're rapidly catching up on this free education and buy gold on any dip.

You too? - CB2

Chicken man (10/19/99; 09:28:32MDT - Msg ID:16866)
elavator guy @ "the public"
What if the public really don't care about GATA's message.....if your audience is deaf you can shout all you want and nothing will happen....eh?

JCS (10/19/99; 09:25:21MDT - Msg ID:16865)
Gold--Elliott Wave
December Gold appears to have completed the "C" wave of a 3-3-5 "running flat" wave 2 correction on the daily chart. If this is the correct count, the pattern is extremely bullish and it should be on the verge of the next up leg, a 3rd wave lift off.
Coincidentally, this is the exact same labeling that I am applying to the SPX on the daily chart from the Aug. 10 low. From that point to the October 11th high was a corrective pattern, Elliott 3-3-5 running flat, and it should now be in a 3rd wave decline.
Back to gold: on the chart the big spike up to 339 was a "B" wave and from there to this morning's low the "C", completing the pattern.
Hopefully, this is correct count and its "up up and away".
Good luck,

golden (10/19/99; 09:22:23MDT - Msg ID:16864)
Trying to Learn
I have been going from area to area to try to figure out how to make money with gold and silver.
Tomcat, I just read your post. You say that if they cannot cover, that the system will collapse, which system - gold, gold leasing, banks, please clarify for me.
I have heard people say that if you do not have physical possession of the gold, watch out as the big boys with more power will grab it. Who are the big boys, governments, Goldman Saks?
Currently I am in leveraged positions with gold and silver with Monex. I suppossedly have bars in a bank with my name on them, and certificates to show it. Is this safe, Monex says it is. What do you say?
Every day there seems to be a new 'excuse' why the metals market is down. It does not seem consistant with my perception of reality that the metals market is down. I hear talk of manipulations of the market, people trying to cover shorts, then I hear that they have not covered. I am very confused. I invesstes in the market just 2 months ago, with a strong belief that gold and silver would go up due to the concerns about Y2K. Now I am just plain confused. Knowing that gold and silver will someday go up cannot help me make day to day decisions. I hear all this talk about graph and charts. 10 days ago, my broker told me for sure silver is about to pop up. Since then there has been one reason after another (- someone is selling to cover stock losses, - etc.) as reasons why it did not go up. I am searching for information - that is how I found this forum. But it is so time consuming. Where do you folks get your best reliable iformation. What is silver doing? What is gold doing? I have heard that gold is more manipulated than silver. I have been spending about 10 hours a day for three months now trying to get educated, and I feel more ignorant now than I did then. Thanks for any input. If you use appreviations, could you tell me what they stand for the first time that you use them. Thanks. Nancy

watcher (10/19/99; 09:22:16MDT - Msg ID:16863)
armstrong
armstrong pointing finger at republic bank of NY. Could get interesting. picked up on GOLD EAGLE this am

elevator guy (10/19/99; 09:20:25MDT - Msg ID:16862)
Bill Murphy thanks FOA for his supportive comments.
FOA's recent supportive comments were most appreciated by Bill Murphy and GATA.

That the dollar is on a slide, is a fact. That Gold is on the rise, is a fact.

However, our paper gold market is just fiction, and being manipulated at every chance by those who have a vested interest in maintaining the staus quo of the DOW, and other derivitives.

We must continue to educate the general public. If we were to assume that public knowledge is not consequential, we err in judgement.

Only when the public knows nothing, and does nothing, are the perpetrators of dishonesty and deceit allowed to function with impunity.

We can see the importance for influencing public opinion, by observing how the powers that be, through a well oiled media machine, hide inflation behind tweaked numbers, and disparage gold ownership. Their polls tell us what to think, so that we all begin to think alike, and accept the party line with out so much as a cough.

So then every time you re-post an expose of the colluding cabal to your Senator, Congressman, within financial circles, and all over, you are striking a blow for freedom, and helping to turn the tide of the all-important public opinion.

Support GATA any way you can, and make a difference!

CoinGuy (10/19/99; 08:59:17MDT - Msg ID:16861)
Greenspan
I believe I heard a blurb on CNBC that Greenspam will be commenting on the markets this afternoon. It will be carried live...

I agree with Cobra(too) markets assesment this morning. In lite of the shake the PPI, rising oil prices, and Greenspan gave the markets last week, I don't think a nuclear bomb would deter these "greedy" wall streeters. The only thing I know is "fear" is three times the motivator. I think this market needs some motivation.

Can you say "manipulation", I would sell into the rallys if you have anything else at risk.

I could go on but there's a neighbor's cow loose in my back yard.

Get physical,
Coinguy

Tomcat (10/19/99; 08:51:54MDT - Msg ID:16860)
Settling short positions when no physical gold is available.

I think it is pretty clear to most of us that much more paper gold exists than is available in physical form.

Those lenders of physical gold want their gold back but many lenders are going to realize that they are not going to get their gold. If I were one of them, and I was sure that I would not get my gold, I would: 1) realize that the potential for more losses are possible if the market for paper folds, 2) I would begin search out means to minimize future losses by settling for something other than gold: euros, US dollars, silver, platinum, palladium, stocks, bonds, etc.

There are many ways to negotiate a settlement. Here is one example. Let's say GS owes me 50 million dollars worth of gold and GS tells me they want to settle in dollars. I say ok but I want the 50 million dollars now plus an agreement that if the POG rises, and is physically available within the next year, then I have the option to return/exchange my 50 million for physical gold which GS must deliver. At least, with this sort of agreement, I get my initial investment back and am covered if physical gold becomes available.

Is this a great settlement? No. But what choice do I have. My major concern would be that GS is going to go into recievership and then I would not even be able to make a cash settlement. Furthermore, if I don't do this quickly, GS might do it with others and then run out of cash.

So, my question to the forum is simply this. If you can settle for cash or cash substitutes (like silver or something phyical that is available) then this will happen. Yes? No?

And, this being the case, the shorts will be able to cover.

Perhaps someone can take an opposing position and tear this argument apart. Perhaps I missing the boat (I have missed a few in my time). But until someone can counter this approach, I foresee the shorts getting covered (even if the Fed has to loan money to the BBs to do it). Fed loans would be inflationary but hell, the fed is throwing billions into repos every week. What's a 10 or 20 or 50 billion more? And if this isn't done the system goes down.

SHIFTY (10/19/99; 08:23:46MDT - Msg ID:16859)
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 we were about to see the most currupt administration in the history of the United States. I'm sad to say he hit that nail right on the head.

CoBra(too) (10/19/99; 08:15:51MDT - Msg ID:16858)
CPI - tame as expected!
There is no inflation (CPI)
There is no deflation (PPI)
There is only one thing left to say
There IS Manipulation!!!

@ ORO - hope you're right with the FED running out of ammunition. Even if they can't print gold,and perhaps they have already (pre)sold all bullion, since they've defaulted anyway on their gold/$ contracts twice in this century - they still can print more greenbacks. Why should the FED care as long as they can postpone the inevitable and in the meantime their cronies have privately stashed away the bullion and most probable some of the major deposits of the overhedged producers for the showdown of the $-credit & equities bubble.
This paper game is not only rigged - it is a scandalous and unethical criminal transgression of the general public administered outside of the realm of any legal accountability. The SEC, CFTC and all other financial watchdogs of the current administration seem to be trained exclusively to hound the small fry.
Sorry -CoBra's (too) get venomous once in a while.

Tanglewild (10/19/99; 07:10:43MDT - Msg ID:16857)
quabbin
Most likely the open at 407.00 would have been a gap open. that is to say the last market(say london for examble) closed at 406.00 and then to open-the quoting market went higher to 407.00....hope this helps.
tw

Tanglewild (10/19/99; 06:56:09MDT - Msg ID:16856)
cpi
cpi numbers came in as expected...+0.04 and +0.03 for the core number. markets headed up

Peter Asher (10/19/99; 06:41:35MDT - Msg ID:16855)
CPI ?
Dont' have the number but the S&P is up 12 pts. in the first ten minutes.

Quabbin (10/19/99; 06:30:15MDT - Msg ID:16854)
@Goldspoon re: Platinums shadow
http://www.mrci.com/qpnight.htm
I must explain that when I posted about checking the Kitco plat chart yesterday it was down about $240 to $170. Clicking on Kitco for a quick look can be like going to a horror movie, it takes a pretty good trick to scare you when you already expect it. After about 3 seconds of panic I slapped Kitco and the back and said, "haha, good one Kitco, you got me with that one" and simply came back here lure other victims to fiery pits of Hell for a little stress relief.

That being said, although the term "believer" doesn't fit (I am most suspicious of the things I find I think I've come to know), your perception of POP as a leading indication of POG is not lost on me.
Most often when someone feels they have snapped a piece of the puzzle into place I tend to feel that they have only recovered said piece from the carpet and identified it as an actual piece of the puzzle we are currently working on.
This view in no way reduces my gratitude for a job well done. Thank you Mr. Spoon.
Incidently, given the implications, I'm quite glad that plat wasn't really trading at $170 :).

Also, thank you for the above link regarding quotes. Perhaps you could further help me understand them. I am used to dealing with stock quotes where "change"="open"-"last" or "last"-"open". I can't seem to find any mathematical reasoning for the field "change" on the page you directed me to. For example, your post included:

Market Mth Open High Low Last Change Date Time Ask Bid
Platinum(NYM)(Access) Jan 407.0 407.0 407.0 407.0 +1.0 10/17/99 18:39 407.9 404.1

...if Open, High, Low, and Last are all 407.0, from where is the +1.0 Change derived?

Thanks in advance for clarifying this. I have seen these types of quotes many times before but have never given them much credence. It wasn't until your post yesterday that I really realized why.
(If anyone else is reading this, I would of course be glad to see your explanations of this as well.)

Thankee Sai,
Q:)

FOA (10/19/99; 06:24:25MDT - Msg ID:16853)
Paris and Berlin Look to Offset U.S. at IMF
http://www.iht.com/IHT/TODAY/TUE/FIN/imf.2.html
There is a Dollar/IMF faction!

---In a book published last week on the period leading up to his resignation in March, Mr. Lafontaine quotes from articles describing Treasury Secretary Lawrence Summers of the United States and his predecessor, Robert Rubin, as regarding the IMF and the World Bank as organs of American policy and the IMF as coming under the dominating influence of the Treasury Department and Wall Street. -------------

The Invisible Hand (10/19/99; 06:20:09MDT - Msg ID:16852)
Von Mises and the dollar as debt
I am still struggling with the idea that the dollar is a debt of the US government (and by extension, through tax extortion, of every actor in the US economy). I think I almost found the answer on p.76 of Mises's "The theory of Money and Credit" (1981, Liberty classics ed.). First the quotation, then my question:
"The decisive characteristic of commodity money is the employment for monetary purposes of a commodity in the technological sense. For the present investigation, it is a matter of complete indifference what particular commodity this is; the important thing is that it is the commodity in question that constitutes the money and that the money is merely this commodity. The case of fiat money is quite different. Here the deciding factor is the stamp, and it is not the material bearing the stamp that constitutes the money, but the stamp itself. The nature of the material that bears the stamp is a matter of quite minor importance. Credit money, finally, is a claim falling due in the future that is used as a general medium of exchange."
I understand everything in this quotation except the last sentence. Fiat money relies on trust in the stamp, OK, but how does one infer from this that fiat money is "a claim falling due in the future"?

Hill Billy Mitchell (10/19/99; 06:04:35MDT - Msg ID:16851)
WORKING
WEALTH MILEAGE CHART @ 10-14-00

$ U.S. EURO YEN GOLD SILVER

$ U.S. 1.00 0.93 1.07 0.00 0.19

EURO 1.08 1.00 1.15 0.00 0.20

100 YEN 0.936 0.871 1.00 0.003 0.175

GOLD 317.25 295.06 339 1.00 59.41

SILVER 5.34 4.97 5.70 0.02 1.00

WEALTH MILEAGE CHART @ 10-18-99

$ U.S. EURO YEN GOLD SILVER

$ U.S. 1.00 0.92 1.05 0.00 0.19

EURO 1.09 1.00 1.15 0.00 0.20

100 YEN 0.949 0.872 1.00 0.003 0.178

GOLD 317.25 291.38 334 1.00 59.41

SILVER 5.34 4.90 5.63 0.02 1.00

SteveH (10/19/99; 05:35:06MDT - Msg ID:16850)
Dec. gold trending lower
$310.10.

Oro,

Please give us one paragraph on the military seignorage and what it is and how it works?

Thanks

RossL (10/19/99; 04:40:07MDT - Msg ID:16849)
PPT
el St.One (10/19/99; 2:44:31MDT - Msg ID:16847) said:
"Do I read you right, the PPT operates in the futures mkt? I know the leverage is there, but where will they get their backing the day things goes against them."

SP futures are settled in cash, so the FED could monetize and pour cash into the stock markets. The question is, how will they settle losses on the gold derivatives? As someone pointed out in the past, they can't just print up gold.

SteveH (10/19/99; 3:27:54MDT - Msg ID:16848)
friend (not Leroy)
ORO and Gandalf and JCS,

My friend is intelligent and articulate. I have sent him select articles that support and well-articulate the gold arguments you mention. He just chooses not to listen. Remember the story of the black crabs in the box who keep pulling the one black crab back in once he or she discovered how standing on the shoulders of a friend could lead to escape. His wisdom stops at the dollar's door: he earns in dollars, he spends in dollars and to hell with the Euro, the Yuan, the Yen, and the Yang (gold). Interest earned is king in his book but he fails to leap to the loss of earnings against other currencies as that is tantamount to gambling. If the dollar goes down, everyone's dollar (in the US) goes down and he is still ahead (of everyone else in the US). Nothing else matters. Gold is idol or icon and is tantamount to idol worship. That simple.

el St.One (10/19/99; 2:44:31MDT - Msg ID:16847)
ORO PPT
Thanks for the education on PPT. Sorry I did not see your reply until just now. I had to be out the door as the market closed. Do I read you right, the PPT operates in the futures mkt? I know the leverage is there, but where will they get their backing the day things goes against them. I guess I shouldn't have to ask, their share holders or DC bailout.

Thanks again el

Tanglewild (10/19/99; 2:13:34MDT - Msg ID:16846)
Financial Times report--Ashanti
A sneak attack..heheh. A little piece of the report:

The Saudi Arabian investor, Prince Al-Waleed Bin Talal Bin Abdulaziz
Al Saud, yesterday pledged financial
support for the Ghanaian
government, which owns 20 per cent
of the troubled gold miner Ashanti, in
a move that could block Lonmin's bid
for the company.
http://ft.com/hippocampus/q25b146.htm

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