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...
The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.
ARCHIVED DISCUSSION FROM 6/19/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) SHIFTY (06/19/00; 22:45:05MT - usagold.com msg#: 32636) Markie Talk msg.#32619 SLEIGHT OF HAND WITH INFLATION STATSI wonder if we can figure out our Tax returns with this new method? Probably get a few years free room and board at the nearest federal pen! That would lower our monthly bills and ease inflation too. I just wonder how long this kind of stuff can go on ? MarkeTalk (06/19/00; 22:32:32MT - usagold.com msg#: 32635) R Powell In response to your question why the equity markets ignore the obvious inflation rate, I can only offer some possible answers. First of all, the so-called "wealth effect" of inflated stock prices does play a major role. Friends, family, stockbrokers, etc. tell me that if their stocks keep outpacing inflation and then some, there is no need to buy gold. So as long as people believe that stocks are in a bull market, then the delusion will continue until the bear comes out of the closet in full force. When will that be? Watch a break below DOW 10,000 and then below 9700. If the NASDAQ breaks below 3000, trouble is ahead. If it closes convincingly below 2800, then panic will strike. Expect PPT to try and hold things together past the election but PPT may not be successful this time around.Secondly, as long as there are stockbrokers (such as one of my contacts) and market "talking heads" a la CNBC who repeat the mindless drivel that inflation is just 2.4% per year, then the delusion will continue--but just for a season. And time may be up sooner than you think. You see, I have found that people will believe a lie if it fits in with their world view of things. The truth can be brutal.Thirdly, most people don't think for themselves. It takes time and involves effort. People are sheep, hence the name "sheeple" . Deep down they want someone else to take care of them, to make their decisions for them. So if some "expert" from Harvard Business School or from Chase Manhattan Bank or whomever gets up on television and says there is really no inflation, then who are they to disagree? Take CNBC for example. Jimmy Rogers, whom I have not seen in a long, long time would always take issue with the U.S. government's or Wall Street's position. Now he is gone. In his place we get Lawrence Kudlow, who used to be a respectable economist years ago but somehow has become a government cheerleader, a lap dog of sorts. Why the big change? I don't know but truth can be stranger than fiction.Finally, never underestimate the herd mentality of the investing public. They call themselves "momentum investors" or something similar. Take gold, for example. Last summer here at Centennial we could not give the stuff away at $253 per ounce. But once gold rocketed $80 in one week to around $330, the phone rang constantly. No lunch breaks, no breaks to answer nature's call, etc. You get the picture. Once again, it is safety in numbers--everyone is buying gold and so should I. Markets cycle and so we can expect a repeat performance as soon as stocks crumble--be it before the election or after. Gold senses trouble NOW which is why it is moving higher on supposedly benign inflation data. And I believe you will see gold moving higher despite the Dow Jones. Once gold holds above $300 on a weekly basis, we are off to the races. Black Blade (06/19/00; 22:28:39MT - usagold.com msg#: 32634) Looming oil crisis, great article! http://www.gold-eagle.com/editorials_00/aoe062000.html I normally don't post a link to the other forum, however, this excellent article nails it! The editorial is originally from GATA's site. Inflation is only going yo explode from here. It is definitely worth a look. Turnaround (06/19/00; 22:01:13MT - usagold.com msg#: 32633) Why Kosovo? Journeyman (06/19/00; 20:07:38MT - usagold.com msg#: 32627)Re: Why Kosovo? @Turnaround msg#: 32614Journeyman : I followed that turkey VERY closely. Why Kosovo? In my opinion, it was the dregs of a previous NWO experiment (Bosnia) that just wouldn't go away and finallygot completely out of NWO control. They grossly miscalculated Melosovic's determination and had to do something before resistance over this small province, about the size of the state of Maryland, could prove to the world that the most powerful military alliance ever to exist on the face of the earth (NATO) couldn't even subdue a determined "third rate country" like Serbia. They didn't need, couldn't tolerate another Viet Nam or Afghanistan, proving nearly anyone could successfully resist their military might.Maybe so, I can't discount this group of theories, thought about it myself, though probably not as much as you appear to have.Journeyman : NATO leaders broke international law AND the NATO charter, killed at least four times as many innocent people in 73 days as both sides in the conflict had killed in the previous year, and destroyed more than half the houses in the province they claimed they were protecting. Most of these still remain rubble or uncompleted today. If there were any war criminals in this debacle, they definitely include Bill Clinton and Tony Blaire.Roger all the above. And furthermore, they would have known this going in if they weren't toocoked up.Journeyman :To repeat, Kosovo was another NWO miscalculation for which the innocent inhabitants of Kosovo and Serbia are still paying. All the leaders who are responsiblefor what happened are still healthy and in office.My simple little Occam's Razor hypothesis is not incompatible with the above viewpoint. It would also have made a great sales pitch for the NATO types.Anyway, we may be orbiting too far away from the financial central force. Turnaround (06/19/00; 21:44:06MT - usagold.com msg#: 32632) BigFloat edifice ORO (06/19/00; 19:36:37MT - usagold.com msg#: 32625)Journeyman - Big FlotSam and the IRSORO: These are some $3 trillion in dollar denominated assets, at least half of which are in the US.…ORO: In the meantime, bank balances owned by foreigners in the US will start moving offshore to one of many third nations that have no tax treaties with the US or the depositors' government. This would tend to increase BigFloat as dollar liabilities move offshore. Eh? Don't foreign owned US bank deposits count toward BigFloat? In the sense that they cango shopping in the US just as easily as the offshore dollars can?ORO: The plus is that the growth rate of BigFloat would diminish. The minus is that its repatriation would be rapid and the previously moved funds would add to it and cause the dollar to crater and interest rates to rise. ORO: As for proportions of BigFloat, the external dollar debt in the international markets is $6 trillion. Foreign owned US financial assets amount to about the same, plus a certain growth due to [accrued] interest, probably standing at about 7 trillion in the US, and $13 trillion altogether. This is opposed to a local market of domestic debt and domestic accounts [totaling] $20 trillion and a financial debt structure of unknown ownership at about $8 trillion or a little above. Assuming [similar] ownership structures, the totals come to $16 trillion foreign and $25 trillion domestic. This does not include stock or direct investment which have an ownership of real goods, intellectual property, actual "good will", and running at about $16 trillion in "market value" and roughly $5 trillion of "book" value which is subject to price inflationary growth.Oof. That is just a trifle more than I was led to believe. Can you please provide some level of detail, say breaking out foreign held US Treasuries corporate bonds, etc. Anything at all would be greatly appreciated, as are the other "edifices" you draw our attention to. SHIFTY (06/19/00; 21:22:46MT - usagold.com msg#: 32631) Beesting Beesting: I have heard that George Bush Sr. and James Baker own the largest fleet of oil tankers in the world and never make the rich list . The Rockefeller clan and the other families that own the federal reserve never get mention either. I guess when you have that much you can be left off the list, or Trillionaires don't count. Leland (06/19/00; 20:59:59MT - usagold.com msg#: 32630) And We're Supposed to Swallow the CPI?? 06/19/2000: What Is Pumping Up Gas Prices? SUSIE GHARIB: Sticker shock at the gas pump could also sting the economy. A new study by Crain's Chicago Business estimates those sky-high gas prices in the Midwest could cost the Chicago area 36,000 jobs and $1 billion in economic activity. And with gas prices heading even higher, lawmakers in Chicago wanted to know today what's behind the price spike. Diane Eastabrook reports. DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: In Chicago, gas prices are still soaring well above $2 a gallon, while the national average is around $1.60. At this hearing, Chicago's Congressional Delegation tried to find out why gas prices here are so high, but at least one representative came armed with her own conclusion. REP. JANICE SCHAKOWSKY, (D) ILLINOIS: I think it's the oil companies that are gouging Chicago consumers. EASTABROOK: But the oil industry argues there are many legitimate reasons for the high pump prices in the Midwest. Demand here is higher than any other part of the country. Recent pipeline and distribution problems have made it difficult to get fuel to the area. In Chicago, state and local taxes add several cents to a gallon of gas. And as of June 1st, new environmental regulations for the city require drivers to buy a more expensive reformulated gas. DAVE SYKUTA, EXEC. DIR., ILLINOIS PETROLEUM COUNCIL: If I could wave a magic wand right now and cut crude oil prices in half-and, boy, I wish I could-the sad fact is Chicago would still probably have just about the highest price in the nation. EASTABROOK: But officials from both the Department of Energy and the Environmental Protection Agency countered gas supplies, while lower than a year ago, are still plentiful. And new reformulated gasoline should only cost between $0.04 and $ 0.08 cents extra a gallon. ROBERT PERCIASEPE, ASST. ADMINISTRATOR, EPA: To hear these accusations that clean gasoline, which is an idea that was developed in cooperation between government and industry, is somehow responsible for the prices the American public are facing is just wrong. EASTABROOK: The Federal Trade Commission is currently investigating the higher gas prices in the Midwest, and later this week another congressional delegation will meet in Washington and ask some of the same questions that were asked today. Diane Eastabrook, "NIGHTLY BUSINESS REPORT," Chicago. (Fair Use For (Of Course) Educational/Research Puproses Only.) SHIFTY (06/19/00; 20:47:19MT - usagold.com msg#: 32629) R Powell I thought that but the price listed was lower than it had been and was showing a gain. The only thing I can think of is either the CRB started a new day or it's rigged very poorly. Let's hope it's a new day! $hifty Journeyman (06/19/00; 20:34:58MT - usagold.com msg#: 32628) Re: Big FlotSam and the IRS @ORO #32625 Big FlotSam!! Ha! Cool!! I hadn't even thought of the potential ramifications of the new IRS initiative. Great info. Thanx. And the figures are sure useful! It'll take me awhile to digest it all. High regards,JourneymanP.S. Congratulations on the HOF -- it's been a tough room lately! Journeyman (06/19/00; 20:07:38MT - usagold.com msg#: 32627) Re: Why Kosovo? @Turnaround msg#: 32614 I followed that turkey VERY closely. Why Kosovo? In my opinion, it was the dregs of a previous NWO experiment (Bosnia) that just wouldn't go away and finally got completely out of NWO control. They grossly miscalculated Melosovic's determination and had to do something before resistance over this small province, about the size of the state of Maryland, could prove to the world that the most powerful military alliance ever to exist on the face of the earth (NATO) couldn't even subdue a determined "third rate country" like Serbia. They didn't need, couldn't tolerate another Viet Nam or Afghanistan, proving nearly anyone could successfuly resist their military might.NATO leaders broke international law AND the NATO charter, killed at least four times as many innocent people in 73 days as both sides in the conflict had killed in the previous year, and destroyed more than half the houses in the province they claimed they were protecting. Most of these still remain rubble or uncompleted today. If there were any war criminals in this debacle, they definitely include Bill Clinton and Tony Blaire.To repeat, Kosovo was another NWO miscalculation for which the innocent inhabitants of Kosovo and Serbia are still paying. All the leaders who are responsible for what happened are still healthy and in office.Regards,Journeyman beesting (06/19/00; 19:36:53MT - usagold.com msg#: 32626) Hi PH in LA. I think your right, lets hope this is only a TOPIC for discussion!!...beesting. ORO (06/19/00; 19:36:37MT - usagold.com msg#: 32625) Journeyman - Big FlotSam and the IRS The IRS is attacking the income flows generated by foreign held US deposits by dictating a very high standard witholding for the non-identified accounts stashed in the offshore tax shelters from Lichtenstein, Austria and Switzerland down to the Bahamas, Caymans, etc.. EU governments have been talking with the US government about methodology to obtain names and ammounts held by their citizens in these offshore accounts. This assumes that these states have some claim over the incomes of persons no matter where these incomes derive. The US has definitely said so outright. This is a claim of ownership of citizens. Needless to say, the governments making such claims will soon find that the numbers of citizens on their books will drop considerably.Furthermore, the official 30% witholding on these funds will lower the return on US holdings to offshore holders who wish to remain anonymous from 6% to 4% on bank accounts and treasuries. This means that the "real" return on these will fall to -2% if the dollar remains flat in international purchasing power. Applying this to bond accounts and funds at brokerages would mean that the return on corporate bonds and mortgages would fall to 6% - or 0% return. This could prompt a sale by offshore account holders of all US assets. These are some $3 trillion in dollar denominated assets, at least half of which are in the US.This is very dangerous for our financial markets.The drug/terrorist justifications are just weak excuses for both government and popular desire to soak the rich. Needless to say, the resources of these "rich" do not normally make themselves available where they are likely to be absorbed. Though crackpot social democrat (a.k.a. populist facism) and enviro-nihilist coalitions are in power on both sides of the Atlantic, I believe that their last ditch attempt at sopping up transnational money will end up in removal of investment within their borders, along with the expatriation of their more capable human resources. The cessation of investment in local physical capital will be the harshest blow. Which means that there will be just that much less to "soak".In the meantime, bank balances owned by foreigners in the US will start moving offshore to one of many third nations that have no tax treaties with the US or the depositors' government. This would tend to increase BigFloat as dollar liabilities move offshore. The plus is that the growth rate of BigFloat would diminish. The minus is that its repatriation would be rapid and the previously moved funds would add to it and cause the dollar to crater and interest rates to rise. As for proportions of BigFloat, the external dollar debt in the international markets is $6 trillion. Foreign owned US financial assets amount to about the same, plus a certain growth due to acrued interest, probably standing at about 7 trillion in the US, and $13 trillion altogether. This is opposed to a local market of domestic debt and domestic accounts totalling $20 trillion and a financial debt structure of unknown ownership at about $8 trillion or a little above. Assuming simillar ownership structures, the totals come to $16 trillion foreign and $25 trillion domestic. This does not include stock or direct investment which have an ownership of real goods, intellectual property, actual "good will", and running at about $16 trillion in "market value" and roughly $5 trillion of "book" value which is subject to price inflationary growth. R Powell (06/19/00; 19:34:51MT - usagold.com msg#: 32624) "cooking the books" Mr. MarkeTalk, I think everyone who pays for food, tranportation, clothing, housing, or education knows that the cost of surviving is and has been going up. Why, I keep wondering, do the equity markets react favorably to CPI and PPI numbers month after month when these numbers are so obviously not even close to reality. Has the spending of the "wealth effect" created by inflated stock prices offset the damage done/ being done by the increase in living costs? How do the NASDAQ and DOW keep churning along, other than by recieving more and more investment money. George Soros gave, as one reason for downshifting his investment company, the fact that the markets no longer made sense to him. They certainly have me confused. A poster at gold-eagle mentioned several times today that TPTB poured huge amounts through the S+P index for support. If true, this will only delay a greater decline. No? Also, if true, how strong are the PPT and ESF? beesting (06/19/00; 19:32:42MT - usagold.com msg#: 32623) What Lady Leigh may have been refering to:Forbes Magazine Publishes Annual List of Billionaires. http://dailynews.yahoo.com/h/ap/20000615/bs/forbes_billionaires.html The first 3 in the rankings are:1. Bill Gates..USA...60 Billion down from 100 Billion.2. Larry Elison..USA...47 Billion.3. King Fahd Bin Abdulaziz Alsaud..Saudi Arabia..30 Billion.The article goes on to say Bill Gates lost about 1/3 of his wealth when his company Microsofts shareprice fell.Obviously Forbes Magazine ranks by amount of known paper wealth, but lets go back in time to your childhood, age 5-7 and daydream about being the worlds richest person.You have your choice:Would you rather be Bill Gates currently worth 60 Billion in paper assets?Would you rather be Larry Elison currently worth 47 Billion in paper assets?or, Would you rather be King Fahd Bin Abdulaziz Alsaud who owns a COUNTRY AND ALL THE ASSETS IN IT including Gold and Oil?Now again, Who is The Worlds Richest Man?....beesting. PH in LA (06/19/00; 19:29:16MT - usagold.com msg#: 32622) Federal Reserve Gold Greetings Beesting!If the Fed is thinking seriously about selling gold reserves many will immediately suspect that such gold has already been sold and the public action of "selling" it would be more like acknowledgement on their part for past sales that have already taken place. As in the case of the British and Swiss "sales", it would be very surprising indeed to see any actual gold find its way into the hands of actual citizens. Gold is way to valuable for that to happen! R Powell (06/19/00; 18:56:20MT - usagold.com msg#: 32621) Oil and Gold prices at crbindex Shifty, Oil and gold continue to trade after our (U.S.A.) markets close and it may be that the crbindex is reflecting this activity. beesting (06/19/00; 18:39:06MT - usagold.com msg#: 32620) Further Discussion on U.S. Gold Sales. Sir Aristotle,I did notice your post to Sir Old Gold on Saturday, it was good sound thinking.It just seems so frustrating to me to constantly read about anti-Gold propaganda. The picture I get in my mind of the true Goldhearts is a very small band of warriors with their backs together in a tight circle, getting constantly attacked by the frenzied mobs of speculators and so-called main stream economists.If the U.S. Gvt. or Fed ever gets serious about selling the Nations Gold supply, may I suggest, they start a huge sales promotional campaign thru The U.S. Mint, similar to what is going on right now for the State quarters and Sacagawa dollars,and sell the Gold thru faithful authorized dealers such as USAGOLD,right to the American people, over a period of time. I know I'd buy as much as I could afford.Those in the Know.....Buy Gold.....beesting. MarkeTalk (06/19/00; 18:22:19MT - usagold.com msg#: 32619) Phoney CPI Report http://www.nypost.com/business/31310.htm Last week in my post on June 14th (message #32355) I lambasted the CPI report as a total joke, saying that it was ludicrous to believe there is only 0.2% inflation in the economy. I did not have the tools to take apart the government's report and expose the fraud. But thanks to Jeff Dahl at Samex for bringing this article to my attention today. John Crudele, notable business news columnist at the New York Post, has done the work for us. I have been reading his column in the business section of our local newspapers for years. I always had a lot of respect for him because he was willing to challenge the establishment. He deserves all the kudos he can get. When you read his article, you will be shocked by the brazen attitude of how the Commerce Department is "cooking the books." Even the ancient Greeks would be shocked by their hubris. My prediction is: when shock turns to outrage, outrage could find its fulfillment in action, i.e. the general public will be buying precious metals. My advice: buy now to beat the crowd.Here is another hot item just off the press. Thanks to Jeremy at Atlantic Capital for alerting me to this story. It seems that late today (after the markets closed, of course!) that Norway's oil company association is threatening to shut down oil production by locking out union members due to an ongoing labor dispute. Norway produces about 3.2 million barrels per day and is the world's second largest oil exporter after Saudia Arabia!! The lockout will occur at midnight this coming Friday unless a settlement is reached. To read the full story, click on www.msnbc.com/news/422795.asp. Query: Can you imagine the disruptive effect on world oil markets a lockout would have? Are we talking about $35 per barrel or maybe $40? Anybody care to pay $2.50 or $3.00 per gallon for gas? And speaking of phoney CPI numbers, can anyone doubt for one minute what sky high oil and gas prices would do to inflation? Folks, we are at an historic turning point here in the commodities markets, especially precious metals. Don't hesitate any longer if you have not taken a position or if you want to add to your positions. HI - HAT (06/19/00; 17:51:38MT - usagold.com msg#: 32618) Golden Hook msg...32601 Bondage Is The Plague The Trail must be found first, before anyone can even be on it. What you have touched on in your post is a glimse of the surreal that only thinking in the secret alphabet can hold dear.Holding the gold close is indeed a salvation for a War and Peace that are always existant, at all times, in all things,in this World.The elemental gold is strangely of equal worth to either of the opposing elemental forces of darkness or light, but alas, is to be cherished more when helping give light when the cycle favors the DARK. TownCrier (06/19/00; 17:46:40MT - usagold.com msg#: 32617) Hall of Fame http://www.usagold.com/halloffame.html In addition to those seconds that have been received at the Forum, Sir Holtzman has also chimed in via e-mail, thus securing the inclusion of ORO's post. I've added it to my "to do" list...grant me a day.Thanks go out to ORO for his effort and to those that brought their nominations/seconds to my attention. Aristotle (06/19/00; 17:37:14MT - usagold.com msg#: 32616) Several replies Sir Journeyman--I'm glad to see that you found my comments to be on target regarding the subtle subsidy of using dollars for balance of trade settlements. To put it in better perspective, on top of our free gift of $1,000 per year as U.S. citizens, also consider how many people in the so-called "emerging markets" survive on less income than that same $1,000 per year.Sir Black Blade--thanks for posting the article yesterday morning entitled "Gold and The Economy: An Interview with Objectivist Richard Salsman--Interview by Mark Da Cunha for Capitalism Magazine." I found Salsman's thoughts to be all over the map and barely intelligible as a result. Sure, he got some items right--in exactly the same way that an errant wartime bombing run might still take out some enemy targets, but still cause massive and regrettable civilian casualties as a result. His thoughts were so poorly constructed that he is a menace if given airplay as an "expert" in a magazine such as we see here. It would be nice if he showed up at the forum so that we could steer him away from bringing any further embarrassment upon himself. Unfortunately, there are a lot of simple folks out there that will probably take him at his word. Sheeeeeeeesh.Leigh-- you had several questions."(1) Trail Guide said that a lot of politicians and billionaires are secretly accumulating gold. Have you noticed this to be true? Do they talk about it among themselves, or is this a private thing that they don't ever mention?"The last time I shared a room with Warren Buffet I can't say that his pants were riding low from heavy pockets, but then, there was no need for him to have any Gold on his person. Nor was there a reason to talk about it. Such is the nature of very successful people not to look amateurish by talking about the obvious. (How often you discuss your need/use of oxygen with your peers?) It goes without saying that those who worked tirelessly to "build an empire" strive to position themselves (i.e. their "portfolio") in a manner that emphasizes both the acquisition of physical capital/wealth and also the maintenance of sufficient liquidity to meet anticipated needs.However, I cannot say what may be the mindset of the "instant billionaaires"--those founders of internet enterprises who found themselves one easy IPO away from riches beyond their comprehension in the midst of an investment bubble. I'm sure you will agree that they likely have a somewhat skewed perception of real wealth and how the real world works. Recent sags in tech stocks may serve as a quick wake up call that paper values are disturbingly easy come, easy go."(2) Would this accumulation be a recent thing, or do you think they've been accumulating all along? In other words, are people "in the know" getting scared about the fate of the economy?"I believe I answered that with my comments above. And as for being "scared," as a general rule, the "Haves" are generally more concerned about the fate of the economy and for keeping what they've acquired than are the "Have Nots.""(3) Do you think these people believe that gold has a future in the economy to come? Are they buying because they think gold will go up in relation to the dollar, or just as a way to stash away some wealth?"It's oxygen, my dear Lady. It is oxygen!"(4) Do you think at least some of these people are mistakenly using "paper gold" instead of buying bullion?"It's true enough that a fool and his money are soon parted, so with very few exceptions you can be sure that people who have acquired these levels of wealth are somewhat more mindful of their decisions than the average Joe Speculator. IF (a big "if") some of them held positions in Gold derivatives, you can be sure that it was done to serve some express purpose. But because Gold derivatives serve neither the end objective of tangible wealth acquisition, or of securing liquidity, you can be sure that the general sentiment toward "paper Gold" among the very wealthy is that it is for chumps--the bumbling middle-class.Gold. Your affordable ticket out of Chumpville. ---Aristotle SHIFTY (06/19/00; 16:37:55MT - usagold.com msg#: 32615) NY Ponzi Nasdaq 3,989.85 + Dow 10,557.85 = 14,547.69 divide by 2 = 7,273.84 PonziUP 118.91 Turnaround (06/19/00; 15:09:37MT - usagold.com msg#: 32614) Why Kosovo? I hope I'm not wandering too far off topic...Why Kosovo?What might have been the purpose of the Kosovo operation- NATO's first and only military action,just over line of the old Soviet Empire.Notice that the subsequent Russian disenchantment with the US made it easier for Putin to get elected. Remember the stories of Mafia dons controlling nuclear installations in the FSU, the drunk guards at stockpile sites, etc?Remember the old Cold War analogy for MAD-Two men are locked together in a room. Each one is holding a grenade with the pin pulled out.They glare at each other and maneuver around, sometimes kicking the other in the shins, sometimes waving the grenade in front of the other's face. Neither one can kill the other or disarm him.Update this for the 1990's:One of the men is going to pieces, getting drunk and losing control of himself.So what do you about it?You slap him in the face.Hey, hey, hey! Wake up!Pull yourself together, man.Get a grip. SHIFTY (06/19/00; 14:47:27MT - usagold.com msg#: 32613) http://www.crbindex.com/ I had a few errands to run today and did not leave till after the close of gold. When I left Gold and Oil were down. I just got back and checked CRB and see that Gold and Oil are up.....but the prices listed are lower than when I went out. How does that figure?? Is there a reason for this ? Is it the Moon? I would think a lower price would mean that the price went down ( LOWER) . When I left I think Oil was about 31.25 now its 29.65 up .03% ???????????????????? Aristotle (06/19/00; 14:36:05MT - usagold.com msg#: 32612) Beesting and the Fed's Henderson Hi beesting. I noticed that GATA offered some commentary Sunday night on the nature of the background to last Monday's Bloomberg article bearing the farcical headline "Central Banks Have Little Need for Gold, Fed Economist Says." You may be comforted to know that GATA's findings supported the commentary I offered on this matter on Saturday in response to OldGold's concerns over the uncertain nature of the Fed study being cited by Bloomberg. As you will probably ascertain from reading my comments and seeing that my thoughts were confirmed, I am not at all concerned about this report, and the fact that it is getting "airplay" again only supports that the spinmeisters are running low on semi-credible propaganda to keep Gold out of favor with inflation-wary investors. Here's what I said to oldgold in case you missed it--it's so short, I'll just repost it here to save you the trouble of scrolling back to Saturday.Aristotle (06/17/00; 17:50:21MT - usagold.com msg#: 32530)Oldgold and the Fed Studyhttp://www.federalreserve.gov/pubs/ifdp/1997/582/default.htmI wouldn't be too hasty to get my skivvies in a bunch over this Fed staff report. If it is not in fact a commentary on the 1997 International Finance Discussion Paper, then it is likely nothing more than a rehash of the same tired brainstorming by Henderson and Salant.As to the veracity of these staff papers and their impact on actual policy, here is what the Fed has to say about them--"Staff working papers in the International Finance Discussion Paper (IFDP) series are preliminary materials circulated to stimulate discussion and critical comment. The analyses and conclusions set forth are those of the authors and do not indicate concurrence by other members of the research staff or the Board of Governors. References in publications to the International Finance Discussion Paper series (other than acknowledgment) should be cleared with the author(s) to protect the tentative character of these papers."Though this paper has an ominous sounding title, "Can Government Gold Be Put to Better Use? Qualitative and Quantitative Effects of Alternative Policies," I wouldn't worry about the topic overmuch. Given enough time, these staffers will study everything under the Sun. Here's an example of some other earth-shattering research--"The Current International Financial Crisis: How Much Is New?""The Effects of Weather on Retail Sales""Monetary Policy Independence in the ERM: Was There Any?""Should America Save for its Old Age? Population Aging, National Saving, and Fiscal Policy""Long Memory in Emerging Market Stock Returns""Are Oil Shocks Inflationary? Asymmetric and Nonlinear Specifications versus Changes in Regime""Do Pension Plans with Participant Investment Choice Teach Households to Hold More Equity?""The Banking Industry and the Safety Net Subsidy""Minimum Wage Careers?""When Would Educational Standards Help Improve Scholastic Achievement?"Peace of mind. Get you some...Gold! ---Aristotle Hill Billy Mitchell (06/19/00; 14:30:49MT - usagold.com msg#: 32611) ORO's golden post, Subsidies, and Citizenship Journeyman, ORO, Leland, WAC, JavaMan, Turnaround,HI-HAT, Aristotle, etal.I will respond next weekend. It would be the best time, I feel. Also I need the time to get fair responses put together for very fair and penetrating questions and comments.HBM Leland (06/19/00; 14:27:39MT - usagold.com msg#: 32610) @Sir HBM Thank you, sir, and my compliments to you for "stepping-over-the-line", just like so many of us when wewere too young to understand. Hill Billy Mitchell (06/19/00; 14:17:33MT - usagold.com msg#: 32609) Misunderstood @Leland # 32523Sir Leland, You responded to my Post as follows:...don't give up! I've got four different USA uniforms in my closet...When I made this statement, "I would not be able to once again go to war for my new country to preserve my newfound freedom."__________I did not make myself clear about going to war. At the age of 53 I am certainly not too old to fight and I am in better shape than most of the young men of draft age. It would not take much physical training for me to be able to carry my load were I called upon. I was referring to the fact that governments do not want men (non-career) of my age in the armed forces because my mind is not like it was when I was drafted at the age of 19. Very young men make better soldiers because they have not yet become congnizant of the world around them and are more easily trained to take orders no matter what personal principles might be compromised. It is a fact of military life, I understand it, and do not object to it. In combat situations orders must not be questioned. That is much more difficult for a 53 year old man than a 19 year old boy. I just would not be wanted for that reason. If I were called to fight for true freedom at my age, or the age of 70 for that matter, I would not hesitate. You see I have already disqualified myself because I have an opinion as to what true freedom is. When I was 19 I did not have a clue. I went and I fought for I knew not what. I have no regrets. I am just glad I did not know what I know today, else I fear I might have gone to Canada like some of the cowards did, for the wrong reason. I do not mean to imply that all who went to Canada went because they were cowards; however that was the case for most, I believe.Next time I fight I will not be drafted but I will fight. My fight will be for freedom. I do not expect to survive the battle but hope and trust that, should I die, my death will not be in vain. As William Wallace cried, "Freeeedom", I shall hope to leave that cry wringing in my grand children's ears.Kindest regards,HBM Leland (06/19/00; 13:35:26MT - usagold.com msg#: 32608) For the Second Time, I'm Posting a Link to the Best News Every Day...(Michael's Updates are Included) http://www.thebulliondesk.com/News.asp . JavaMan (06/19/00; 13:06:04MT - usagold.com msg#: 32607) TC, Seconds... I also seconded ORO's post several days ago... beesting (06/19/00; 12:51:31MT - usagold.com msg#: 32606) @ Sir TownCrier # 32604 Thanks for the support. I think you can see from my last post how I honestly feel about ownership of physical Gold in a patriotic way.I'll try my best to follow the USAGOLD guidelines in the future.Deepest Thank You's for all at USAGOLD that make this site possible....beesting. beesting (06/19/00; 12:40:04MT - usagold.com msg#: 32605) Is The Federal Reserve System about to Give Away the peoples Gold??? http://www.egroups.com/message/gata/491? This post is dedicated to you, tedw.A Mr. Dale Henderson an employee of The Federal Reserve System recently suggested,"All CB's Sell All Their Gold Reserves!" Click above URL to GATA link for more complete coverage.Lets take a short glimpse at history and examine if those in charge of the wealth accumulated by The United States of America is being handled in an appropriate manner.Gleaning what has been learned here at USAGOLD and the other Gold forums, we have learned that GOLD has been the WORLDS money of choice up until 1971.(In many parts of the world, it still is.)But lets concentrate on U.S. history:Formed in 1776 after declaring Independence from England, the Rag Tag group of mostly Deportees from The British Isles with the help of the French and Native Americans started a new life with a new dream:We The People Will Govern ourselves using only Gold and Silver as The Peoples Money!!!Well, history tells us that in less than 200 years this Motly group, with the help of immigrants from all over the world, built the wealthiest and most prosperous Nation the World has ever known, USING GOLD and SILVER as MONEY!!!And now we get a Mr. Dale Henderson of The Federal Reserve System trying his best to convince the people that the National Treasure of The United States of America(8000 + tonnes of Gold) is no longer Treasure, because he says so!!!Does this man speaking on behalf of The Federal Reserve System even have a right to suggest what he's suggesting?(Sell the U.S.'s National Treasure, GOLD) The American People worked hard to accumulate what is unquestionably,"We The Peoples, Gold"!My parents, your parents, great grandparents etc. etc.They worked to build a better life for their offspring, in many cases worked themselves into the grave, to give you and me a better life than they had.Is this how the new generation repays them?Yes, we Americans live in a Country that is supposed to guarantee freedom of speech, but I'm afraid Mr Henderson's remarks would have earned himself a fresh coat of tar and feathers a few short years ago!!!The U.S. Congress stopped the selling of IMF Gold just a short time ago, so many of the pro-Gold arguements may be still fresh in the minds of The U.S. Congress, so now may be the time to express your thoughts to your Congress person on this sacred subject. Thanks for Reading....beesting. TownCrier (06/19/00; 11:33:19MT - usagold.com msg#: 32604) A clarification for Sir beesting I saw your weekend post and the associated e-groups comment, and a little clarification may be in order regarding a post of yours getting the broom. Certainly, there was nothing "wrong" with the topic of your post and no reason whatsoever for anyone here or at Centennial to want to ban such thoughts as the monetary use of gold or its fabrication to better suit that end. As I recollect the reason it got pulled, it was part of a group of three posts in a row by different posters that each ignored the posting guidelines not to provide "free promotions" by providing links to companies that compete with Centennnial for business. You may recall that the company getting the promo at the time was JP Morgan, anglogold, and PAMP's GoldAvenue project. So as not to step on Centennial's toes, it is certainly fair to speculate upon and discuss JP Morgan's motives for this joint venture while not providing active URLs along with discussion of their gold inventory, etc. Sorry for any aggravaton this may have caused that your good thoughts got swept away along with the promos for GoldAve. that had to go. I hope this clears things up a bit for you Sir beesting. I've always enjoyed your comments and enthusiasm, and look forward to more of the same. TownCrier (06/19/00; 11:01:22MT - usagold.com msg#: 32603) Sir Topaz At a minimum, three distinct "seconds" to a nomination are needed for consideration for the Hall of Fame. I'll look into it. beesting (06/19/00; 10:33:20MT - usagold.com msg#: 32602) Gold Fields Ltd. Top 10 Shareholders. http://www.bfanet.com/cgi-bin/bfaweb.exe/bfamemo?file=reps&page=DRE 4 Gold in SA msg. # 32596It seems the shareholders of Gold Fields Ltd S.A. may have grounds for legal action according to your post, but look who the top 10 shareholders are by clicking above URL.Thanks for posting....beesting. Golden Hook (06/19/00; 09:54:34MT - usagold.com msg#: 32601) LOOTED GOLD- FOREVER BURIED FROM THE HANDS OF THE MASSES. GOLD- It is a word that men have forsaken their familaies for.Distant lands, men have traveled to and died for the yellow metal. It has led men into the path of glory and the crooked path of debauchery. From ancient times it has been stored in kings palaces and adorned the necks and body of queens.Most of all religous churches of all types have associated it as an equal with Almighty God. It has been in the hands of the very elite and has always excaped the hands and the pockets of the poor.This day and age which is at the end time will see the metal forever buried away from the hands of the people. It will ounce again be the precious riches to the wise to build palaces amoung themselves, traded by recipts in goverments, hidden from all eyes that may see it and lust after it and seek ways to obtain it. The ground will no longer bring forth the precious gold as a monetary or adornments. This will be the sign of the gods.For as knowledge has increased so have the bonds of all peoples. Wireless eyes will watch every move and the bondage will increase as people think they are free.Then one great day when a plague comes the riches will be cast aside by its owners as an appeasement that to the false gods. To show that they are rightious. Gold will flow in the streets and none will seek it.Until such time comes I say get all the gold you can lay your hands on.Buy it,borrow it, mine it and hoard it. For it will be your salvation to excape the bankers greed and bondage. USAGOLD (06/19/00; 09:08:18MT - usagold.com msg#: 32600) Title to Today's Report should read: Today's Report: COT Numbers Related to SFAS 133?With a "question mark" included. USAGOLD (06/19/00; 09:03:05MT - usagold.com msg#: 32599) Today's Report: COT Numbers Related to SFAS 133 http://www.usagold.com/Order_Form.html FOR A COMPLEMENTARY ISSUE OF NEWS & VIEWS 6/19/00 Indications Current Change Gold August Comex 288.00 -3.20 Silver July Comex 5.03 -0.05 30 Yr TBond Sept CBOT 97~13 -0~10 Dollar Index June NYBOT 105.85 +0.33 Market Report 6/19/00): Gold slipped overnight on Australian producer selling, a slow, featureless day in Europe,and news that the speculative short position had peeled back dramatically. Asia also reported physical buying that was sidelined when the sellers came in. The closely watched CFTC commitment of traders report for gold futures fell over 70% -- one of the largest reductions in short positions over a two week period that I can recall. For the short term, the huge reduction implied that the offsetting purchases anticipated by the market had already occurred and this has cast a bearish pall on the gold market this morning. However, the huge reduction in speculator short positions combined with the 58% increase in gold long positions could be indicating that we are in for some changing dynamics in the gold market in the near future which could lead to a more positive mind set. Whether or not this indicates a shift in Wall Street's long-standing anti-gold trading practices and an unwinding of the multi-billion gold derivative positions remains to be seen. The unwinding could be part and parcel of the change in hedging practices we anticipated in response to the June 15th implementation in accounting standards (SFAS 133) that will force corporations to mark their derivative positions to market and carry those profits or losses to the bottom line. Gold market analysts have hypothesized that the implementation of SFAS 133 could dramatically affect the way gold is traded and force mining companies to clean up their hedge books. These COT numbers could be the first indication that these analysts' reading of the situation may have been on the money. This week we have Trade Balance for April on Tuesday which be interesting. Next Monday the Federal Reserve Open Market Committee meets on interest rates. That's it for today. We'll see you back here tomorrow. Have a good day, fellow goldmeisters. Leigh (06/19/00; 08:19:28MT - usagold.com msg#: 32598) Aristotle Aristotle, I hope I didn't scare you away with the questions I asked yesterday. Please forgive me if I inadvertently backed you into a corner. Don't answer them if you don't want to. elevator guy (06/19/00; 07:36:09MT - usagold.com msg#: 32597) They are not out of bullets yet? Ok, first, I am a firm beleiver in what GATA is doing, and pray for their continued success. But it occured to me that TPTB may have a lot of options left, before they lose control of TPPOG, or the supremacy of the FRN, for that matter.They could raise taxes, (further enslaving the people, who now have both man and wife working to stay alive), yes, they could raise taxes even further, and use the stolen value of the people's labor to buy gold, and dump it into the market place, to depress the price, and show the dollar strong. Or they could use the stolen value of the people's labor to sell paper contracts into the Comex or LBMA, to sell down any rallies.They could dump the gold in Fort Knox into the market place, assuming there really is still any gold in the vaults.They could call in favors, from Kuwait, et al, to sell more of the people's gold into the market places.They could start some hokey war, (human rights, etc), and by bashing some far away land, and thereby create or maintain the politiacal alignments that maintain the extant balance of power. OR they could steal the gold of a conquered people, and dump that. They are not above sacrificing American or foreign lives to keep their stranglehold. They are above national pride and identity, they are only sworn to money and power.They could do all the above, and the people won't object, because the people are told what to think by the polls, and the media selectively reports all the truth that is allowed for the people to hear, so they come to the conclusions they are supposed to come to. Its for sure that the people of the USA won't do anything to stop TPTB, unless they are cold and shivering at night, or desparately hungry. Until then, deception is the rule of the media/government, and they can operate with impunity.Given the above, it could be quite some time before the FOA/Another scenario comes to pass. Maybe not even in our lifetime.Dont wish for a higher paper price of gold, until you yourself are set up in a long physical position. I think this gives many of us a little more time to aquire physical before TSHTF.But when might that be? It seems that there are lot of things TPTB can do still, to keep gold down. 4 Gold in SA (06/19/00; 07:27:32MT - usagold.com msg#: 32596) HAS DEUTSCHE BANK STARTED MANIPULATING GOLDFIELDS SHARE IN ADDITION TO GOLD? Hi AllThis is my first posting at USAGOLD and I would like to take this opportunity to thank MK for a great forum for reading constructive views on Gold in its various guises.I have not currently converted to holding only physical gold, but that view is slowly starting to make more sense as time passes and the manipulation of Gold becomes clearer.In this posting I would like to highlight the practices of Deutsche Bank securities in South Africa, specifically their dealings in Goldfields.I refer you to a posting:Solomon Weaver (05/29/00; 22:47:20MT - usagold.com msg#: 31529)Why does the Director of Securities at Deutsche Bank plead to have options sold back before expiration???http://mny.co.za/BusToday.nsf/Current/422567D900452FF8422568EB0056FEEEgidsek posted this link which was an interview between MONEYWEB and Niall Smith: Director, Deutsche Bank SecuritiesHere is a company which has a gold derivatives position over $50 billion dollars and this guy is out trying to convince the world that DB is trying to minimize their "exposure" in 50 million warrants on Gold Fields calls which at the time of the interview were still 4 Rand out of the money...he was almost pleading that holders of these "worthless calls" should be happy to sell them back at an interesting premium of a few pennies per call.I would like you all to note that this offer was made at a point that DBS, thought the deal could go through at R35-R36, which would have cost Deutsche bank securities dearly in South AfricaGoldfields share subsequently starts rally on JSE and Nasdaq, with a 25% surge on 12.06.00 when the price hit an intra day high of R30.50, up 25% on the day. DB securities are obviously starting to build up a sweat at this point as another +-R2.50 move would have brought the 1gflc1 warrant into the money.On 12.06.00, a few holders of the 1GFLC1 warrants had a broker contact Ralph Cope of Deutsche Bank securities (DBS) to take them up on their publicly air offered to buy back the warrants at 0.05c – DBS advise that they are no longer honoring that commitment? Did they know something that the market did not?DBS issues a new Goldfields warrant with a strike price of R30.00, which would ensure that the market sells Goldfields shares and buys the warrant, should the share price have moved to R36.00, which would have covered DBS from needing to directly sell Goldfields themselves in the open market. On the morning of 15.06.00, the strike date for the 1gflc1 warrant, the Goldfields share starts rally once again, with a move approaching 10% in three hours of trading, 45 minutes before a press release from Goldfields.30 Minutes BEFORE the press release, Deutsche Bank securities start dumping Goldfields shares, causing the price to drop close to 10% in a space of 20 minutes!The press release comes out at 14h52 and it becomes clear to holders of 1gflc1 that the deal works out to +-R28.50, making the warrant worthless. But even clearer is the reason that the DBS reneged on their 0.05c buy back of 1GFLC1's - Deutsche Bank are one of the parties doing the deal for Goldfields/Franco and DBS securities had the offer price LONG before the market!On 16.06.00, a SA Broker approaches DBS to find out how to exercise the rights on 1gflc1, as his clients anticipated the potential of a imminent better deal from Barracks or another hedged producer, as the deal with Franco was well below the markets fair price of R36 for Goldfields.This was the response from Ralph Cope of DBS, published on the Internet at sawarrants.co.za: Searching for Intelligent Life It is widely believed that the ability to double click, understand articles in The Economist and operate a mobile telephone is what sets man apart from the animal kingdom. On Wednesday, the defining lines of this great divide were smudged like mosquito colliding into a 180 km/h windshield. Deutsche Bank received a phone call from a broker (who will remain nameless for legal reasons) who was the proud owner of a client looking to exercise his Gold Fields warrants. These warrants, which mature on 15 June, confer upon warrantholders the right to buy Gold Fields shares at R32.25. There is no need to be the sharpest pick in the tool shed to realise that it is only economically viable to exercise a warrant when the underlying share price is trading above the strike price. In the case of Gold Fields warrants (1GFL) the strike price is R32.25 which means that it only makes sense to exercise these warrants when Gold Fields shares are trading above R32.25. At the time of this fateful phone call, Gold Fields shares were trading at R26.20. The dear soul exercising his Gold Fields warrants is therefore buying a share that is trading at R26.20 at a 23% premium – its almost like buying one for the price of two! A misconception in the warrant market is that by exercising ones warrants, one will magically be transported into a financial position filled with fluffy clouds and harp plucking cherubs. The average thinking on the Gold Fields warrant is thus: "I've bought these flea invested rat bags at 20c. The warrant is now trading at 1c and the last time there was a bid on the screen, Nixon was leopard crawling down a government passage with a flash light between his teeth. Maybe, if I exercise these swamp donkeys, I can limit my losses". Warrants are derivative instruments which derive their value from the underlying share. The price of the warrant will therefore reflect any profit that can be made through exercising into the share. If the warrant is valued at zero, it means that there is no additional cash to be made by exercising the warrant immediately and there may even be a large realisable loss. In the case of Gold Fields, exercising the warrant now makes as sense as tanning during a Norwegian winter. DBS actions clearly highlights its total disregard for its clients, who it de-frauded by reneging on a publicly aired offer to re-purchase the 1gflc1 warrants and now again with accusations of insider trading brought against DBS.These defamatory remarks by their Ralph Cope highlight the fact that DBS and its employees are mere parasites thinking that winning a battle constitutes winning the war on Gold.I would state that Deutsche bank Securities have no intelligence whatsoever.19.06.00, a leading SA newspaper, Business Day publishes article:A hole in Deutsche's Chinese wall?The article questions weather Deutsche bank securities was acting on insider information supplied by parent Deutsche Bank, when dealing in 1glfc1 Goldfields warrants!The JSE's surveillance director, Bill Urmson, was quoted as saying they may look into the matter.Mr. Willie Jackobsz, the investor relations and media manager of Goldfields, has requested the JSE to lodge an inquiry into the allegations of insider trading by Deutsche Bank Securities.One may ponder whether Ralph Cope of DBS, an issue of warrants, has not now ‘issued’ his own death ‘warrant’? (A director of Bre-X gold mine scandal was thrown to his death from helicopter for de-frauding investors a few years back – Why not directors of DB/DBS next?) Can Ralph Cope ‘Cope’ with the ‘calls’ placed for his head! Hill Billy Mitchell (06/19/00; 06:42:10MT - usagold.com msg#: 32595) Official release http://www.bog.frb.fed.us/releases/H15/update/ Official: Federal Reserve Statistical Release Release Date: June 16, 2000 Rates for Thursday, June 15, 2000Federal funds 6.70Treasury constant maturities: 3-month 5.8410-year 6.0520-year 6.2630-year 5.93upside-down spread FF vs long bond = (77.%) Black Blade (06/19/00; 06:39:20MT - usagold.com msg#: 32594) Correction Price of Pt. Pt is up +$7.00 at $541.00. Also Rhodium is up another $50.00 at $2300.00. Black Blade (06/19/00; 06:30:44MT - usagold.com msg#: 32593) Morning Wakeup Call! Slow start this week. Sources: Rueters and Bridge News FROM THE ASIAN WAR FRONT:Forward hedge sales erase gold gainsREUTERS Comex gold gave up early gains to squaring on Friday, while tightening lease rates offered more proof producers were using the best spot bullion levels in three months to book some forward hedge sales, dealers said. "Every time it gets to US$292 you see a little selling," one dealer said. "You've got to assume with lease rates coming in a little bit there has been some forward selling." August gold shed 90 cents to end at $291.20 an ounce, after trading between $290.60 and $294.40. Spot metal went out at $289-$289.50, against Thursday's close at $289.60-$290.10. The dealer said recent hedging activity - coming equally from North America, Latin America and Australia - while not significant in absolute terms, compensated for the slow business last month when prices spent much of the time between $272 and $274. In London, gold remained volatile with trading ranges widening and seen around $286 to $296 with some potential to break the higher end. Again the focus was the dollar's renewed weakness against the Australian dollar, which reached a new two-month high. Spot gold ended at $289.75-$290.45 after an afternoon fix at $290.10 and a morning setting at $290.30. In Hong Kong, gold closed on Saturday at HK$2,670 a tael, down $8 on the day but up $44 on the week.Black Blade: Not the way to start off the week. Shameful that the mining companies despise and have no confidence in their own product. Certainly not the way to attract investors.Asia Precious Metals Review: Spot gold falls on Australian sales Hong Kong--June 19--Selling from Australia drove spot gold lower in thin trade in Asia on Monday, as many players were sidelined on uncertainty over gold's future direction, dealers said. The metal will likely trade in a narrow range in the near term unless fresh leads emerge, they said. Spot platinum and palladium were quoted higher in Asia compared with their levels in U.S. trade late Friday, following a rise in the price of the platinum and palladium contracts of the Tokyo Commodity Exchange (TOCOM), traders said. (Story .2200)Black Blade: Looks like the TOCOM are ready to whipsaw some unsuspecting losers of their cash with another fake PGM paper market. Ya know, run up the price, default, and take their cash. Banzai! Oh well, Fool me once, shame on you!, fool me twice, shame on me! Some people never learn, the TOCOM is rigged! Better odds in Vegas! Meanwhile, Ahead of NY open, Au is down -$1.00 at $287.90, Ag up +$0.01 at $5.03, Pt up +$1.00 at 547.00, and Pd is flying high up $17.00 at $687.00. S&P Futures are up +0.30, fair value up 2.88 indicating a likely flat open on Wall Street. Oil is down -$0.42 at $29.60/bbl ahead of Wednesdays OPEC meeting. The big number this week is the trade deficit, expected to set yet another record due to higher petroleum prices. Silverbaron (06/19/00; 05:29:32MT - usagold.com msg#: 32592) POG correlation from currency exchange rates http://expage.com/goldexcurrenciesdaily Updated through this morning's data (7:00 EST US time) Leland (06/19/00; 05:10:54MT - usagold.com msg#: 32591) A Whole Lot of Truth...From a Respected Financial Institution...For Educational Purposes Only Who Wants to Stay a Millionaire? By Robert Kleinschmidt "How do you make a small fortune in the stock market?" "Start with a large one." So goes the old saw, and like most old saws, there are still some teeth in it. The wisdom behind this old joke has been lost in recent times, however, as more and more investors have looked upon the stock market as a place to get rich. Soaring stock prices, the new conventional wisdom of buying every dip, unshakable conviction in the invincibility of the Fed, the perceived exception to market cycles for new economy stocks have all conspired to create the illusion that the road to riches is through your friendly online broker. One might have thought that the enormous volatility of the past few months would have changed this perception, and for some no doubt it has. Still, particularly as the market rallied in recent days, notions of making a killing on Wall Street seem to be reviving. This is unfortunate. The truth is that the stock market has never been a good place to get rich. Entrepreneurs get rich. Venture capitalists get rich. Insiders get rich. CEO's with scandalously high compensation packages get rich. Hedge fund managers, who recklessly leverage their clients’ money and take 20% off the top in addition to their one- percent fee, get rich -- before they go broke. Of course, movie stars and sports figures get rich. Foreign dictators get rich. Even game show contestants can get rich. But the average investor? The average investor doesn't get rich. Far more often he gets taken. The average investor doesn't get rich mainly because he is focusing on the wrong objectives. The biggest mistake is trying to get rich. This requires taking on more risk than most folks can afford. Of course, it doesn't look like risk when everything is going according to plan. But that's the nature of risk. It is a measure of how much you can lose when things aren't going so swimmingly. A lesser mistake, but more perplexing, is the obsession many investors have over commission costs. Online and discount brokers battle over customers by offering ever lower and lower commission rates, while at the same time providing abysmal execution. In some cases absence of commission altogether merely disguises the fact that spreads are far wider than normal. Another old saw is "you get what you pay for." And what is so great about implementing a bad decision more quickly, or after regular trading hours, courtesy of electronic trading systems? Failure to keep focused on the long term has cost the average investor dearly. I have read statistics that show the shrinking average holding period for the typical private investor, and they are appalling. The extremely short holding period means the average investor is absorbing enormous transaction costs, even at the super discounted commissions, and is sailing directly into the wind of an unfavorable tax system that taxes short term gains at ordinary income rates, while severely limiting the deductibility of losses. This short-term orientation virtually assures the accuracy of the old saw with which we started this note. Historically, the stock market has returned nine to eleven per cent per year, depending on the index used to measure the returns. While these are more than acceptable absolute returns, we doubt they would excite the average investor trying to strike it rich. At Tocqueville, we have always viewed the equity market as the ideal place to invest funds for the long term in order to preserve capital against the insidious long-term effects of taxes and inflation. (Even the relatively modest inflation of the past decade has eroded the purchasing power of capital by over thirty per cent.) In short, it is a good place to stay rich. With that as an objective an investor can afford the luxury of taking a truly long-term view when appraising his holdings, or when researching an investment idea. What is the point of actively trading a stock that one intends to hold for the next five to ten years, barring a dramatic change in circumstances or valuation? What difference does it make if the commission rate is 6, 8, 10 or even 25 cents per share when the cost will be amortized over a long period rather than a week or two? And how much has been saved if the order, which represents no real client relationship and only a few dollars to the online broker, gets executed at prices well above (or below) where a careful broker with a meaningful client relationship, would get it done? Equity investing can keep capital intact if an investor is willing to stick with a disciplined approach and not chase the latest investment fads in an attempt to generate returns in excess of historical averages. By definition, the latest fad is something that has already gained attention for the eye-popping performance it has recently generated. Investors who chase performance, rather than attempting to anticipate it, may participate in some fancy results in the short run, but are likely to be left holding the bag when the situation reverses. The recent collapse of the NASDAQ is a case in point. The most successful investors among our clients are the ones who have been with us for the longest period of time. On balance, they don't know the value of their portfolio on a day to day basis; don't concern themselves with the latest discount offering; are, if anything, amused by most recent Wall Street hype; and want to discuss the composition and performance of their portfolio -- at most -- once a year. If they are trying to get rich, they are doing so on their own through their own business activities and not in the stock market. When we ask them their investment objectives they say that what they expect from us is not to make their fortune but to keep it safe. And that's their final answer. Robert Kleinschmidt June 2000 Canuck (06/19/00; 05:00:32MT - usagold.com msg#: 32590) Apr. trade deficit out tomorrow at 08:30 eastern; calender http://www.etrade.com/cgi-bin/gx.cgi/Applogic+EconomicCal Financial calendar.Any early news of 'D-day'? (June 15) Topaz (06/19/00; 04:22:03MT - usagold.com msg#: 32589) Townie,Aristotle, All. http://www.usagold.com/halloffame.html TC:Just did some DD re: Oro's recently nominated post(s).Seconds from SHIFTY and SteveH qualifies said post's I believe?Ari: I'm afraid I suffer from that most debilitating of afflictions, the name of which escapes me, that manifests itself in many unusual ways.One is using miniscule amounts of toothpaste, another pertains to toilet paper (but we won't go there) and yet another, relevant here, is when I try to cram too many thoughts into too few keystrokes. Your efforts in answering my pared down question does you credit Sir and I will further seek your assistance when I'm in "remission"<smile>.All:I strongly suggest a perusal of the Hall of Fame (linked above). A remarkable archive indeed! tedw (06/19/00; 02:05:30MT - usagold.com msg#: 32588) Lies and more lies http://www.usagold.com No one has refuted my points in message #32539 and one person has agreed that what I said was true. I may be preaching to the choir but I proceed nonetheless.Take a quarter out of your pocket or off the desk and take a good look at it. I have some questions. Why is the quarter silver colored?Look around the edges and you will also notice that it is serrated. Why?If you are old enough to remember US money was one time actually made of silver (trust me Im not making this up).And it was serrated to keep people from "clipping" it:taking a portion of the silver away.But our current quarters are not silver, so why do they go to all the trouble to make it look like silver? and why are the edges serrated?If at the time the silver was taken out of circulation,they had issued quarters, dimes, and half dollars made of copperthe American people would not have accepted it. They would have realized what was really happening. The resistance probably would have been enough to cause unrest, and there may have even been popular support for those who would have rightly pointed out that "money" must be gold and silver in order to be legal. However, it was made acceptable to a sleeping gullible nation by using lies and deception. Have you heard the story about the dress shop which changed the sizes of the dresses down one size,and became popular because the women liked to be lied to and believe they were thinner and smaller than they really were? In the same way, the US currency was debased and the Amamerican people, not wanting to face the facts of a corrupt government accepted a nice lie. If you really want to have some fun, the next time you go to the bank pick a young teller, and when she gives you your money ask her what the federal reserve note is a note for? I guarantee a blank stare. Or find a silver certificate and walk into a bank and ask for your dollar in silver coin.In the coming currency collapse you will do well to remember the American people are getting exactly what they deserve. Chris Powell (06/19/00; 00:21:27MT - usagold.com msg#: 32587) Sell all central bank gold? http://www.egroups.com/message/gata/491? The Fed's trial balloon suggesting that allcentral banks should sell all their goldmay be a sign that they already HAVEsold most of it and can't get it back.To subscribe to GATA's dispatches by email and get them immediately so you don't have to go look for them, send an email to:gata-subscribe@eGroups.com ViewYesterday's Discussion.
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.