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ARCHIVED DISCUSSION FROM 4/19/2001
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Netking
(04/19/01; 23:22:16MT - usagold.com msg#: 52233)
@JustamereBear etc all - Silver
A good ongoing discussion. The bottom line & facts in summary then is herewith; In this year 2001, the bullish case for silver grows by the day. There are several reasons why buying and holding silver NOW will prove to be one of the best investment decisions someone could make, quite possibly in their entire LIFETIME.
- Silver faces a massive supply deficit each year
- Silver inventories are at their lowest levels in more than 100 years
- Silver demand factors (still increasing)
- Silver is severely more undervalued than gold (and sold short)
- Silver is affordable to everyone.
- Silver is currently 98% below (in inflation adjusted terms)the 1980 high price of $52.25
Chris Powell
(04/19/01; 23:08:41MT - usagold.com msg#: 52232)
Fed minutes reveal ESF surreptitiously lends U.S. gold
http://groups.yahoo.com/group/gata/message/733
This is the big one, folks.
What are we going to do about it, now that
it's on the record?
http://groups.yahoo.com/group/gata/message/733
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@yahoogroups.com
justamereBear
(04/19/01; 22:40:37MT - usagold.com msg#: 52231)
And the banks make or lose
huge sums on movements of 1/1000 of a cent.
j'bear
justamereBear
(04/19/01; 22:37:26MT - usagold.com msg#: 52230)
Lookit that US dollar index go
http://www.quotewatch.com/charts/futures/NYCE/DXY0-intraday.html
Down about 2.2 cents since 11 on Wed.
justamereBear
(04/19/01; 22:16:00MT - usagold.com msg#: 52228)
Randy
Randy
I find most of your comment pretty pithy, but today you seemed more than usual to get to heartwood. Bravo
j'Bear
justamereBear
(04/19/01; 22:13:48MT - usagold.com msg#: 52227)
B Blade Netking WorkingKirk @ ALL re silver
Re my post on silver and the resultant debate/arguements.
Netking, I have read your suggested Dave@silver-investor, and see nothing that I can disagree with. I have already stated that such might be possible, but that I lacked the knowledge to make an intelligent comment on the supply, which seems to be the main argument of Dave. (That the supply/demand situation is out of whack, and an increase in price, to recognize that fact, is imminent.) If the supply demand equation is in fact out of balance, I do feel that the price will eventually adjust to reflect the fundamentals.
I certainly agree with your reply to Working Kirk re Handy & Harmon and the banks.
Working Kirk. I suspect that the timing, etc of your post, and the fact it was not addressed to anyone in particular, was meant to generally enter the debate. Obviously, there is some sort of China conspiracy thread that I have not really been following, and about which I have no intelligent comment. I might say that $500 or even $1,000, transportation on a ton of goods valued at something south of a quarter of a million dollars, does not strike me as being of great significance. I also read the Indian demand to be more driven by government regulation, ie you can't have as much as is available to other people, thus giving it a mystique, or pent up demand that is striking. On balance, just reading the general population, I would think that the Chinese are as prone to squirreling away any precious metals as the Indian population, just not as visible, since the Indians seem to be more prone to wearing their wealth on the form of jewelry. So I am not sure exactly where you are going with this, or if it is meant to comment on my post.
Just read your 52171 (I started this reply this morning) and you make a lot of sense with it. I have just moved to a somewhat rural area, and guess what, there are bargains to be had in silver at some of the many farm auctions that go on hereabouts.
My concerns are more easily described if one assumes a doubling or tripling of the price of silver, as opposed to a doubling or tripling of the price of gold.
If the price of silver were to triple, I would expect that the mining of silver would not change appreciably. It would still be mined largely as a byproduct. A tripling of the price of gold would definitely change the number of working mines.
Still on the supply side, concerning recovery, or recycling, tripling the price of gold would not increase the recovery rates appreciably, since it is now common to recover a large percentage of industrial gold. However, tripling the price of silver could lead to economic recovery of silver. (Not that I am sure of the particular price that it would be interesting to recover at.) This would have the effect of DRAMATICALLY increasing the supply.
On the demand side, a tripling of the price of silver would likely have a very adverse effect on what is more of an industrial metal. (than gold) I mentioned possible alternatives to silver solder.
As well there seems to be a natural evolution happening, or at least starting, in the photographic field. In my opinion, the world is a whole is wealthier than it was 25, or 50, or 100 years ago. Peoples expectations are higher. We are using more per capita of things that are not absolutely essential to survival, such as photography. One would expect that, in addition to the population growth, the expectations of the people increasing as well, would have the growth rates of photographic silver usage jumping "to the moon".
I would wager that regardless of who has whatever market share, the global usage of silver based film, particularly in North America has leveled off, and may even be in decline during the last, say 3 years, since the advent of the affordable digital image. I maintain that this trend will likely only accelerate regardless of whatever economic conditions we encounter. I think a tripling of the price of silver would only accelerate this trend toward digital images. Since photography is one of the bigger users of silver, I find this to be significant. To be sure, some limited additional use of precious metals would now exist, that did not exist before, in the fabrication of electronic cameras. As well, the use of silver based film is not going to disappear completely anytime soon. There are to many places where digital images are not suitable.
As long as the trend toward the industrialization of gold and silver continues, away from their monetary values, the overhang in the form of government holdings of these metals is likely to effect gold more than silver, simply because as a percentage, governments hold far more of their values in gold than silver, which might be subject to dumping on the market.
It seems to me that an underlying theme of this forum is that the trend to industrial use only for gold and silver is going to be reversed, as the world throws out its debased fiat currencies, and turns to some other medium of exchange, such as precious metals, which will regain their monetary component. If such a thing were to happen, the government holdings would likely be removed from the equation, since they would likely try to hang onto those holdings.
If such is the case, I submit that a clearer case can be made for gold, as opposed to silver. (not that the price, in US dollars of both would not jump)(and not that I do not own silver) However, that is what makes a horserace, different opinions.
j'Bear
abudahhab
(04/19/01; 21:32:01MT - usagold.com msg#: 52226)
This time is different
Watching the melt down in the 30-year T-Bond futures, I cannot help think that this time is different. Perhaps its the dawning of the new Golden Age?
From today's Midas report quoting Bill King ,
"Something occurred 3 weeks ago that unnerved Al & the Fed. For the previous two reporting periods M3 has surged $110B, or a 33% annualized rate the past month!!! MZM is up > 45% annualized the past two weeks and 40% the past month!. It's a 30% annualized since Jan. 1."
It's all very simple as it impossible to have true deflation with fiat. The debts (gov't, corp and consumer) are now too large and completely unservicable. The system is awash in silent defaults.
The Fed is likely accepting any old shoe as collateral at the Discount Window. All the bad debts will be monetized. These monetary growth rates are just beginning to accelerate; the real inflation is just around the corner and will hit the unsuspecting masses very hard.
This was my pivot week. So far, so good.
Remember, you "gotta be in it, to win it!"
Elwood
(04/19/01; 21:29:00MT - usagold.com msg#: 52225)
Trail Guide
------
"Many hard money philosophers have pointed their finger at others for the fiat situation we use today. It was the bankers and governments, the kings and cohorts, big business and robber barons or some communist manifesto that forced us to use this type of money. Well, you may not like the process and consider yourself above or apart from it all. You may even declare all of them evil. But, in the end, one fact remain; society may govern itself in many ways over thousands of years, but it has never stopped the evolution that corrupts the use of real money as official money."
-------
Thank you, sir, for sharing your deep thoughts. True, your words are, but why is this a reason to abandon the fight for sound money?
Surely you must be aware of the massive inefficiencies that will accompany a system with two moneys. There will be two prices for every good, one stable, the other not. Would not the timeline of such a system be extremely short compared to that of a system of sound money even though the sound money eventually becomes corrupted?
How is this system better (or even different) than what we have today?
Further, you state:
-----
"For the better part of human existence, gold alone has served all of the best functions of tradable wealth. But as soon as we call it our money, human nature takes over. Yes, we can call it a stock or a bond, a piece of land or a painting, a car, boat or antique, but just don't label it as money."
------
But, sir, none of these things are gold. Is it not the *label* of money, but its *use* as money that makes a thing money? How can we officially deny the use of pencils for writing, yet still maintain the "free market value" of pencils?
Regards,
Elwood
Max Rabbitz
(04/19/01; 21:11:34MT - usagold.com msg#: 52224)
Discrediting the Bears....and gold
Does anyone find it strange that in the days just prior to the stock market melt up and "surprise" Fed rate cut that a number of prominent bears were given air time? In particular I recall David Tice and William Fleckenstein. It's almost as if TPTB wanted to burn them and their followers, and teach a lesson. What I learned is that the markets are as rigged as they can make them. But I guess that's their advantage when you live in a paper world. By the way, I'm not short on anything but confidence in the dollar. I thank the Forum for this education. I watch in amazement as things unfold and am thankful for the low price of gold. The golden escape hatch.
R Powell
(04/19/01; 20:54:34MT - usagold.com msg#: 52223)
Black Blade
Your thoughts on this recent SM surge as a sucker's rally are identical to mine. Interesting thought from the G-E forum today, now that most of the short sellers have probably covered, who will buy in the next downturn?
Without the shorts covering (buying) to take profit, there may be no one. I've read that it's a total lack of buying rather than a great amount of selling that produces "crashes". Seems to make sense. If it got to that point, even the bottom pickers might wait for the dust to clear. Danger, Will Robinson!
Rich
lamprey_65
(04/19/01; 20:17:59MT - usagold.com msg#: 52222)
Gold (Intra)Weekly
http://www.bookmarkusa.com/goldweekly.jpg
schippi - You beat me to it!
Posting a little early this week just to say...
WATCH IT! This is a potentially explosive pattern developing.
Wanted to post now in case it ran away on us in a blink of an eye. Looking good but still want to see how it closes this week and acts early next.
auspec
(04/19/01; 20:16:21MT - usagold.com msg#: 52221)
Trail Guide
Thank you, Sir, for your time, talent, and perspective! Your insights and clarifications are greatly appreciated. A hearty meal to fully digest, only sorry I didn't ask sooner {smile}.
auspecfully,
a
Black Blade
(04/19/01; 19:56:00MT - usagold.com msg#: 52219)
After Hours Trades
http://toplist.island.com/toplist/top20.jsp?AH=on
After hours trading is still in positive territory. All this in spite of greatly lowered earnings estimates. A suckers rally? The second intra-meeting Fed rate cut of 50 bp during what many percieved as a market rally must come for some other reason than to stroke the stock market investor. The Fed gets economic data before anyone else (supposedly), so this begs the question: What do Head Fed AG and the other Fed governors see that is so horrific and damaging to the economy that another intra-meeting rate cut is warranted? It sounds as if there is some very bad news on the horizon. Just waiting for the other shoe to drop -
- Black Blade
R Powell
(04/19/01; 19:49:15MT - usagold.com msg#: 52218)
Lafisrap
Comex is a commodity exchange just as is the Chicago Board of Trade for corn, wheat, soybeans etc. All exchanges provide the means for the transfer of product (commodity)from seller to buyer. The exchange tries to insure quality and quantity and assurance that promises are keep at the future date and the designated place. None of the exchanges owns or buys any of the commodities traded.
It is also common for almost any commodity to have contracts (open interest) at any time for a quantity of the given commodity far in excess of the total amount of that particular commodity. Almost all contracts are settled in cash. The farmer does want to sell corn and Kelloggs does want to make corn flakes but most everyone else buying or selling corn wants only monetary profit. Gold is treated as a commodity and traded as such. They don't know any better!
Hope this helps/adds to Randy's remarks
Rich
SteveH
(04/19/01; 19:48:37MT - usagold.com msg#: 52217)
ESF
http://www.goldensextant.com/ConsolidatedOpposition.html#anchor257110
Econoclast saw this first. Sorry. This is horrendous if proven true. Pass the word. ESF tied (allegedly) up 20% of US gold reserve. Outlandish!!
SteveH
(04/19/01; 19:44:39MT - usagold.com msg#: 52215)
ESF
http://www.goldensextant.com/ConsolidatedOpposition.html#anchor257110
snippet:
This reference to gold swaps was made only
a few months after the Federal Reserve's decision to assume the
two American seats on the BIS board. This decision, which was
effectively hidden from the American people and all but a few
members of Congress, coincided with the first incident of preemptive
gold selling on the COMEX in excess of three standard deviations
as set forth in the Mr. Bolser's statistical study (C. 48-50;
P.A. Ex. Q). Mr. Speck's study dates the beginning of detectable
anomalous selling pressures in COMEX gold just a few months earlier
(P.A. Ex. T).
Far from limiting its role to providing financial
guarantees or backing for gold derivatives as the plaintiff has
alleged, Mr. Mattingly's statement suggests that the ESF has
engaged -- almost certainly through the N.Y. Fed (P.A. Ex. V)
-- in swapping out U.S. gold reserves to one or more bullion
banks to facilitate the price manipulation scheme. Indeed, if
the recent reclassification of the "Gold Bullion Reserve"
held in the U.S. Mint at West Point to "Custodial Gold Bullion" reflects the combined total outstanding volume of these swaps
(P.A. 29, Exs. U1 & U2), the ESF has covertly encumbered
more than 20% of the total claimed official gold reserves of
the United States.
R Powell
(4/19/01; 19:31:12MT - usagold.com msg#: 52214)
Randy
Thanks for the report (52197).
You mentioned euro banknotes at 361 billion euros and gold marked to market at 118.464 billion euros. This is about as close to one third as possible given that the POG does fluctuate somewhat every day. Coincidence or by design?
You also mentioned fewer reserves held in U.S. paper form. Again, by design? and if so, in response to a percieved weakening in the dollar by the rate cuts? Is this the beginning of the return of big float? Is it occuring from other countries? So many questions, so little knowledge! TIA for any answers from any one at any time.
I'm especially interested as I'm of the opinion that the return of big float will put POG in four figures.
Ready for it?
Rich
Leigh
(4/19/01; 19:14:08MT - usagold.com msg#: 52213)
Replies
I'm still here, auspec! Thanks for asking! I'm just quietly lurking because I don't have much to say. But I'm intensely interested in what all of you are saying, so I log on as often as possible.
Cavan Man, please forgive me for not writing after you courageously posted your e-mail address! You'll get a reply soon.
Gandalf, thanks for posting that old Birthday Bash story! Those were fun days! Last night I re-read the posts from the night I wrote it and was glad to see that most of us are still around. But where are: The Scot, North of 49, and YGM? Step forward, gentlemen - we miss you!
Lafisrap
(4/19/01; 19:06:19MT - usagold.com msg#: 52212)
(No Subject)
Randy: However, under your same microscope, you could easily join COMEX to this list as a mere "point of contact" that doesn't "got gold" because the bulk of this gold does not belong to the Exchange, but rather belongs to the individual entities holding the title to gold being recognized as "good delivery" and stored at the approved COMEX "warehouses". Agreed?
Me: OK. That makes sense. I did not know that. Seems the real, true "got gold" qualifiers are even less than I thought. Who are these entities and how is it that they can be enticed to release their physical gold to COMEX, gold which might be claimed by someone else by calling for delivery?
Randy: To be sure, my point remains that COMEX is primarily a point of contact NOT for the exchange of gold, but rather a point of contact similar to a Las Vegas bookie who merely takes speculative/hedge bets from both sides (on price movements), and then settles the wagers with cash 999 times out of 1,000 contacts.
Me: Yes, I knew that. But when there is no more gold to deliver to those who call for delivery, COMEX can hardly maintain credibility.
Randy: Buy contrast, when calls are placed with the Centennial "Point of Contact", 100% of the transactions result in physical settlement between the buy side and the sell side.
Me: Yes, that is good, and we like that. Thanks. However, the qualifications for "got gold" cannot be bent. It is the very theme of this forum. You must own the gold and either posess it physically or have it safely stored. If I bend the rule even a bit, the situation will degenerate and fiat is the result. I learned that here.
Randy: The fact that Centennial maintains a holding account in the vaults at ScotiaMocatta, a bank that happens to be an approved depository for the COMEX, does not mean that Centennial's own account of transitionary gold at Scotia is enlisted as registered inventory on the Commodities Exchange. I assure you, it isn't!
Me: Yes, CPM is better than COMEX. The gold is probably held in a separate vault, or if held in the same vault some records are kept of who owns what. If you own gold and it is safely stored, the you "got gold."
Randy: As you and I have now discussed, these "stocks" of gold do not exist.
Me: Randy, you are the greatest for these explanations. If I can understand these things, anyone can. There is not much gold around, no stocks sitting available, except perhaps what the CBs have.
Randy: The problem is quite the opposite. It isn't that we are waiting for such "available stocks" to be absorbed into ownership, but rather, we are waiting for the reality to set in that the same limited quantity of gold is being "owned" many times over by a multiple of people... a phenomenon unique to the banking industry, and the cause of "bank runs" as seen throughout the rich history of gold banking.
Me: Yes, I know. It all seems very dishonest. Furthermore, I expect that the gold put at risk with multiple owners rarely belongs (originally) to the bankers who put that gold at risk. They only do that with "OPG" (other people's gold).
Randy: I say again, the COMEX gold is already owned. Don't be confused by its presence or absence when you should instead try to train your eye on the BIG picture.
Me: OK, I thought COMEX owned it themselves. They are just the facilitator of a gam. They don't own the gold or the claims on it. How weird. Just using other people's gold and other people's money to run a game. Nice work if you can get it.
Lafisrap
Randy:
R Powell
(4/19/01; 18:57:51MT - usagold.com msg#: 52211)
Randy
That all known above ground gold is owned seems logical. What then is the difference between eligible and registered Comex gold? Is eligible gold that which has been sold but also that on which no one has yet taken delivery?
And registered? That which is in storage and maybe available for sale at some futher date (higher price)?
Somewhat of an academic question as I believe you are entirely correct about 98+% of contracts are settled in cash. But, the perception of a shortage of available gold for delivery will still unnerve the market, no?
Rich
Cavan Man
(4/19/01; 18:56:57MT - usagold.com msg#: 52210)
Trail Guide
Brilliant commentary--many thanks.
Saw my first "Aureus", "Stater" and "Daric" (is it?) in the library at james Madison last week and thought of you.
Many happy returns....CM
R Powell
(4/19/01; 18:48:08MT - usagold.com msg#: 52209)
One fer day
One for three. POG up, XAU down and lease rates (reflecting the rate cut) also down.
tg- 52204- sounds like a good description of the return of "big float".
Usagold- your daily report (52177) was noted and admired by Pragmatic at the neighboring castle.
Lafisrap- thanks for the COMEX stocks report.
Rich
auspec
(4/19/01; 18:47:33MT - usagold.com msg#: 52208)
Belgian #52184
The Gold Trail has been updated and I can see 5 pages of intense learning dead ahead. Thank you in advance ANOTHER'S FRIEND. I am going to delve into Belgian's post # 52184, as planned, and then head towards absorption of "FOA Reply msg#65". Best if mind focuses on one thing at a time {I wish}.
Thank you, Sir Belgian, for leading me around like a pup on a leash. School it is. I tell my friends this Forum and the entire internet of like minded sites is like an interactive advanced degree, only it is real, applicable, and the TRUTH. Freedom promoted here!
From Belgian's post # 52184: "Today we need 4 1/2$ credit for 1$ growth." Now that is a big picture item that is hard for many, including me, to comprehend. But it tells a tenuous story of USD. Can you relate it to the Euro and how much credit is required for 1$ growth, as that ALSO tells quite a story. The fiats ARE relative as you say. No perfect one exists now, or ever will exist, so we compare them against each other and whatever we can find of meritous value {your and my gold and oil}. If the compared items are bogusly manipulated we must factor this in and look deeper. Or just buy and say thank you! Thank you MK for today's bargain and the service that went with it. Pleasure doing business with CPM. Back to relative currencies: "They" devalue..."We"devalue, name of the game, but we must be careful not to devalue unkontrollably. THAT is the issue, must be kept in kontrol. Will we lose kontrol?
Per Belgian: "Global debt is estimated at 90 Trillion$, double the GNP." That, again, is perspective. Moi would not sleep well if my debt was 2X my annual production! FACT! Can it be sustained? Yes, unless an escape hatch is provided for the "smart money" to find {a superior currency including the yellow}. We all go down together if we all stay together, but we won't. Tonto says.... "What do you mean 'we' white man?? The massive debt will do one of 2 things, get even larger or default. Paying off is not a viable option.
Per Belgian: "My intuition tells me that ALL paper is depreciating. Or is it that services are more and more overvalued?" BINGO! The services are properly valued, thank God {I'm in the service industry}, because a lot of it can't be farmed out to Taiwan or India or China.
Belgian: "Aren't we doing something similar as during the British Empire? Surfing the world in quest for the lowest price for manufactured goods and undervaluing Chinese/Indian etc.?" We ARE acting exactly like the British Empire and her colonies in locating the cheapest goods available because of our USD hegemony and superiority. Some of that is simply free market forces at work and some of it is emperialistic tactics. Our colonies are whatever 3rd world we can enslave via IMF or other USD link. No, it cannot last forever, but it can last as long as "US wannabees" have their RELATIVE standards of living raised by catering to US consumerism. To some degree it is Win-Win, each contributing to the other's standard of living. Unfortunately for the Banana, imbalances are created during the process that give the deal a finite life, and others would like to participate in same process.
Must go, as have a bit of homework to do. Grateful.
Lafisrap
(4/19/01; 18:40:11MT - usagold.com msg#: 52207)
Trail Guide's New Direct Style
Econoclast: Trail Guide, I like your new, direct style of writing. Keep it coming!
Me: Yes, yes, new direct style much better.
Econoclast
(4/19/01; 18:32:33MT - usagold.com msg#: 52206)
A Bombshell for Americans Worth Repeating...
"...if the recent reclassification of the "Gold Bullion Reserve" held in the U.S. Mint at West Point to "Custodial Gold Bullion" reflects the combined total outstanding volume of these swaps (P.A. 29, Exs. U1 & U2), the ESF has covertly encumbered more than 20% of the total claimed official gold reserves of the United States."
If this is shown to be true, maybe this is the thing that can wake people up. I asked my wife, who appreciates my politics and economic views but sometimes thinks I am a little out there (a typical American), "if that quote were true, would it make you mad? To my encouragement, she said "yes".
Trail Guide, I like your new, direct style of writing. Keep it coming!
tg
(4/19/01; 18:20:58MT - usagold.com msg#: 52204)
(No Subject)
http://itulip.com/#Today
The Deflation/Inflation Scenario for 2002 - 2006
Q: What happens when the U.S. economy contracts in 2001 spite of rate cuts?
A: The U.S. experiences a gradual deflationary recession and its trading partners experience severe recessions, especially Asia.
Q: What happens when U.S. trading partners experience severe recessions?
A: They begin to sell foreign assets, including dollar denominated assets (equities and bonds), to raise cash.
Q: What happens when they sell dollar denominated assets?
A: The world supply of dollars rises and the exchange rate value of the dollar falls.
Q: What happens when the dollar falls?
A: Import prices rise in the U.S., especially energy, causing inflation to rise sharply.
Q: What do our trading partners do if the U.S. experiences a surge in inflation?
A: Gradual repatriation may turn into capital flight.
Q: What can the U.S. do then?
A: 1) Raise interest rates to slow redemption, but this may slow the economy more and make the problem worse, causing more capital flight or 2) Allow the dollar to devalue so that the remaining foreign debt is repaid quickly with cheaper dollars
Randy (@ The Tower)
(4/19/01; 18:13:41MT - usagold.com msg#: 52203)
OK, Lafisrap, let's put on our thinking caps for a minute and revisit your comments
It is quite true, I said:
"The COMEX gold trading pit is the meeting place for speculators and price hedgers. Barring extraordinary circumstances, those actually looking to buy gold do it elsewhere... either through Centennial Precious Metals, bullion banks, refiners, or mines (according to the buyers' specific needs)."
To a degree you have dismissed these "Point of Contact" for buyers by saying that they don't "got gold", perhaps only playing the middleman. (more on that in a bit)
However, under your same microscope, you could easily join COMEX to this list as a mere "point of contact" that doesn't "got gold" because the bulk of this gold does not belong to the Exchange, but rather belongs to the individual entities holding the title to gold being recognized as "good delivery" and stored at the approved COMEX "warehouses".
Agreed?
To be sure, my point remains that COMEX is primarily a point of contact NOT for the exchange of gold, but rather a point of contact similar to a Las Vegas bookie who merely takes speculative/hedge bets from both sides (on price movements), and then settles the wagers with cash 999 times out of 1,000 contacts.
Buy contrast, when calls are placed with the Centennial "Point of Contact", 100% of the transactions result in physical settlement between the buy side and the sell side.
The fact that Centennial maintains a holding account in the vaults at ScotiaMocatta, a bank that happens to be an approved depository for the COMEX, does not mean that Centennial's own account of transitionary gold at Scotia is enlisted as registered inventory on the Commodities Exchange. I assure you, it isn't!
There seems to be a prevailing fantasy that there are stocks of gold here or there, and as soon as it is spoken for, BAM! we're off to the races. As you and I have now discussed, these "stocks" of gold do not exist. All significant gold (meaning, all above ground) currently has an owner, even if some small bit of it is owned outright by the "Points of Contact" I've mentioned, or is owned outright by the parties that conduct their business through these POC's.
The problem is quite the opposite. It isn't that we are waiting for such "available stocks" to be absorbed into ownership, but rather, we are waiting for the reality to set in that the same limited quantity of gold is being "owned" many times over by a multiple of people... a phenomenon unique to the banking industry, and the cause of "bank runs" as seen throughout the rich history of gold banking.
And for as long as these owners are content to put their gold up for lease, or naive enough to think that gold on contract is truly and simply theirs for the asking, then other individuals shall also have a chance to claim a share of common "ownership" at these diluted prices. The smart ones are taking delivery, recognizing that "possession is nine-tenths of the law" in the inevitable dispute.
I say again, the COMEX gold is already owned. Don't be confused by its presence or absence when you should instead try to train your eye on the BIG picture.
Good luck!
Econoclast
(4/19/01; 18:06:03MT - usagold.com msg#: 52202)
A Bombshell....But Will Average Americans Care?
In a post the other day, I wrote that gold manipulation downward was not a problem for me personally unless it has led to the loss of MY gold as an American, or other potential losses to my liberties under the Constitution.
I might have spoken (written) too soon as evidenced by the following quote from Reg Howe's response to the dismissal motions.
"Far from limiting its role to providing financial guarantees or backing for gold derivatives as the plaintiff has alleged, Mr. Mattingly's statement suggests that the ESF has engaged -- almost certainly through the N.Y. Fed (P.A. Ex. V) -- in swapping out U.S. gold reserves to one or more bullion banks to facilitate the price manipulation scheme. Indeed, if the recent reclassification of the "Gold Bullion Reserve" held in the U.S. Mint at West Point to "Custodial Gold Bullion" reflects the combined total outstanding volume of these swaps (P.A. 29, Exs. U1 & U2), the ESF has covertly encumbered more than 20% of the total claimed official gold reserves of the United States."
Now I'm mad! When will America wake up and get mad with me (us)?
Lafisrap
(4/19/01; 18:03:33MT - usagold.com msg#: 52201)
COMEX gold and silver warehouse stocks-April 19
http://www.futuresource.com/search.asp?source=story¶m='id=i4143181274926546945'&filename=story
COMEX eligble gold stocks were reduced today by approximately 3 per-cent. Registered stock remained unchanged. So, the the gold that was eligible did not simply get transferred to registered. What happened? We don't know.
auspec
(4/19/01; 17:57:33MT - usagold.com msg#: 52200)
Lady Leigh
Are you still with us , Lady Leigh? We seem to stumble on w/o Aristotle and Oro, but your presence is surely missed! Would that ALL return!
Gold Trail Update
(4/19/01; 17:50:30MDT - Msg ID:52199)
The Gold Trail Discussion has been Updated
The Gold Trail Discussion has been updated. Click on the link to read the latest updates.
tg
(4/19/01; 17:37:50MT - usagold.com msg#: 52198)
(No Subject)
http://www.aei.org/eo/eo12776.htm
A depression follows a period of euphoria about the outlook for the economy and the future earnings of "new" companies. The euphoria becomes unsustainable, and the stock prices of the new companies collapse. Large wealth losses replace large expected wealth gains. Consumption growth slows, then turns negative, and stock prices of more companies fall because weaker demand erases pricing power and, with it, prospective profits. Demand falls further, and deflation sets in.
In a depression, the central bank discovers (to its horror) that stock prices, not interest rates, become the major transmission mechanism running from financial markets to the real economy. That is because after a bubble earnings fall faster than any central bank can, or will, cut interest rates, and when earnings, or more ominously, expected earnings, fall faster than interest rates, then stock prices fall.
Randy (@ The Tower)
(4/19/01; 17:17:18MT - usagold.com msg#: 52197)
Speaking of reserves... the assets of the ECB
As promised to Canuck, and as regularly featured here at USAGOLD, here is a glimpse of the consolidated financial statement of the Eurosystem, particulary as it relates to the management of the foreign exchange reserve assets.
This report will be more comprehensive than usual, and hopefully the larger glimpse will reveal more to you about the trend than the weekly snapshots have done, my own commentary notwithstanding.
For the week ended March 23, 2001:
256.2 billion euros was the net domestic value held in Foreign Currency, DOWN 0.5 billion euros from the previous week on portfolio transactions.
Gold assets were steady at 118.612 billion euros in this final week prior to the quarterly mark-to-market revaluations.
For the week ended March 30, 2001:
the net domestic value held in Foreign Currency was DOWN 1.6 billion euros from the previous week on portfolio transactions prior to a net increase of 11.8 billion euros in domestic value owing to the quarterly mark-to-market revaluation of these assets, leaving the net postion in Foreign Currency at 268.0 billion euros.
Gold assets received a quarterly revaluation upward by 125 million euros based on the change in market prices since December 29, 2000. However, effective delivery of 30 tonnes by Austria under terms of the Washington Agreement reduced the mass value of these gold assets by 273 million, leaving gold reserves valued at 118.464 billion euros.
For the week ended April 6, 2001:
the net domestic value held in Foreign Currency was DOWN 0.5 billion euros from the previous week on portfolio transactions, leaving the net postion in Foreign Currency at 267.5 billion euros in domestic value.
Gold assets were steady at 118.464 billion euros
For the week ended April 13, 2001:
the net domestic value held in Foreign Currency was DOWN 0.7 billion euros from the previous week on portfolio transactions, leaving the net postion in Foreign Currency at 266.8 billion euros in domestic value.
Gold assets were steady at 118.464 billion euros
-------------
The story is most telling if we look at the effects of the Central Banks' portfolio transactions (which are by deliberate CHOICE) rather than the effects of the revaluations (which are by "chance" of market values).
In the four-week time period seen here, customer and portfolio transactions have reduced the consolidated eurosystem holdings of Foreign Currency by 3.3 Billion euros in value.
By contrast, there has been a less than 0.3 billion euro reduction in gold holdings as a result of member transactions.
I'll leave it to your own capable minds to envision what lay ahead down the road, particularly as the U.S. dollar shows weakness from the Fed's easing on monetary policy in the face of a weakening U.S. economy.
[And from the Trivia Department, the equivalent euro value of eurosystem's legacy national banknotes currently in circulation (until the year-end changeover) totals 361 billion euros....for what it's worth.]
Lafisrap
(4/19/01; 17:14:40MT - usagold.com msg#: 52196)
Randy: The skew of COMEX "gold" for Lafisrap
Thanks for the response. The jist of your response is that COMEX numbers available on the Internet do not give enough info to be really valuable. Ok, I am not surprised.
Now about gold, physical, gold who has it.
Randy said: "The COMEX gold trading pit is the meeting place for speculators and price hedgers. Barring extraordinary circumstances, those actually looking to buy gold do it elsewhere... either through Centennial Precious Metals, bullion banks, refiners, or mines (according to the buyers' specific needs).
Me: Well, CPM is a broker, right? No significant amounts of gold on the premises, just a go-between, no? When I purchased gold from CPM, it was shipped to me from Bank Scotiamocatta in New York (Worl Trade Center, same place COMEX keeps its gold, right?), didn't even stop for a visit at CPM in Denver. I will go out on a limb here and say that other gold brokers operate similarly, no real physical gold, just a go-between. Thus, gold brokers do not qualify in the "got gold" game. Sorry, the line must be drawn somewhere. The fact that gold brokers can get gold does not qualify them as having gold. It is not the same.
I expect that refiners have gold, but that they are essentially just another go-between. Are refiners the actual owners of the gold they refine? Or are they performing a service for others? I don't know, but if they do not own the gold they are refining, refiners don't qualify completely as having gold either, because the gold they have is not theirs.
Bullion banks, how much gold do they have if they are constantly borrowing gold from the CBs? Perhaps they do not have very much? I keep hearing about how bullion banks are in so much trouble because they cannot pay back the gold they have borrowed from the CBs. It does not sound like bullion banks "got gold," not much that they can claim as their own.
Mines, if they are engaged in hedges wherein their gold is sold forward to others who then have valid legal claims on it (gold in the ground), how much gold can we say they have? Perhaps not much.
I do not know the answers to these questions, nor do I expect that they are easily answered. However, I do believe that the "got gold" question can only be answered in the affirmative if that entity actually has unencombered gold safely stored. All others do not "got gold."
So, if bullion banks, refiners, brokers, and mines all either do not "got gold" or have serious complications with the gold the do got, then if real physical gold exists in COMEX storage that can be got, it probably will be, right?
Maybe we are further along wiping out the COMEX stocks than we think. I'm sure you all are much more informed about these matters than I am.
Lafisrap
Randy (@ The Tower)
(4/19/01; 15:49:19MT - usagold.com msg#: 52194)
Zimbabwe's Reserve Bank paying $343 (U.S.) per ounce for local gold
http://www.fingaz.co.zw/fingaz/2001/April/April20/1421.shtml
Under the guise of a subsidy to local miners, will the bank sit on the purchased gold as a reserve asset in place of foreign currencies (as they should), or will they sell it immediately at a loss? Perhaps they will sit. Mines Secretary Nicholas Kitikiti said, "The introduction of the floor price is just one of the many measures which government is planning to take, over and above the existing 20 percent FCA (foreign currency account) retention scheme."
He also explained, "This price is intended to align the industry cost structures with its revenues. Government is confident that this measure will provide some relief to the gold sector, currently reeling under unfavourable international trading conditions. ... The support price will only be applied when the local currency equivalent of the international price falls below the floor price. Once the local currency equivalent of the international price exceeds the floor price, Fidelity Refiners will automatically transact at the ruling international price."
"It is, however, important to note that the said level of subsidy will depend on the international gold price, depreciation of the local currency and the level of profits generated by the central bank on its gold and foreign transactions."
I personally feel that the free market should be the "entity" to set the price. But admittedly, knowing what we all know about these matters, the government of Zimbabwe will definately be receiving good gold value in exchange for its offered $343 currency price. So the question remains, how much of Zimbabwe's annual production of 22 tonnes will no longer reach the physical market, how much will be thrown into the bullion banking arena to earn interest, and how much of this will only be an exercise in writing subsidy checks as the gold to be mined is allowed to flow to normal destinations?
Randy (@ The Tower)
(4/19/01; 15:16:21MT - usagold.com msg#: 52193)
"Pumping currency" and "propping" U.S. bond markets
The Fed today added $9.205 billion in reserves to the banking system -- $4.505 billion via seven-day repos and $4.7 billion via overnights.
Meanwhile, the Treasury itself bought back $2.0 billion in Treasury bonds maturity-dated 2015 through 2019 having coupon rates of 7% to 11%.
Randy (@ The Tower)
(4/19/01; 15:06:57MT - usagold.com msg#: 52192)
Truly, these are the very pebbles that can begin an avalanche of currency devaluation
http://biz.yahoo.com/rf/010419/wbt023627.html
Reuters reports that Federal Reserve Vice Chairman Roger Ferguson said today there remains "plenty of room" for monetary policy actions.
VC Ferguson said, "We will continue to be vigilant to ensure that the economy does not tip into recession."
He also sent a subtle message that these things can quickly get out of hand when he said, "There is some reason to think that in fact the length of time for transmission of monetary policy to the economy has shortened somewhat."
The path to be walked by the FOMC is truly one that is upon a razor's edge.
Randy (@ The Tower)
(4/19/01; 14:51:02MT - usagold.com msg#: 52191)
Fed's Gramlich says savings key to Social Security
http://biz.yahoo.com/rf/010419/wat023769.html
EXCERPTS
WASHINGTON, April 19 (Reuters) - Federal Reserve Governor Edward Gramlich said on Thursday that raising the level of national savings is crucial....Gramlich examined various proposals for propping up the nation's public retirement program.....said some approaches, including setting up voluntary individual savings accounts for the poor or setting aside a portion of payroll taxes for individuals to invest themselves, may not go far enough in creating new savings. "Here is a potential pitfall - the approaches with the most political popularity may also be those with the least effect on national saving." -----
What are YOU saving for that "rainy" or restful day? Is it sufficiently immune from the inevitably political devaluation of the printing presses?
Randy (@ The Tower)
(4/19/01; 14:36:02MT - usagold.com msg#: 52190)
Federal Reserve's Vice Chairman is uncertain how low rates must go
http://biz.yahoo.com/rf/010419/wbt023626.html
Fed VC Roger Ferguson said today, "what interest rates will be associated with a return to healthy growth in spending remains an open question," adding the caution to would-be investors, "I think it is too early to have a strong conviction that the economy is reaching the end of this period of quite slow growth."
Randy (@ The Tower)
(4/19/01; 14:28:38MT - usagold.com msg#: 52189)
The skew of COMEX "gold" for Lafisrap
Two items:
You must first consider that some/many of these delivery obligations may fall upon those already holding the necessary gold among the ranks of the registered inventory. Such "delivery" would thereby bring about only a nonclimactic transfer of paper title that you will never see from the public statistics shown via our internet windows on the world.
Next, ponder how many of these cummulative delivery notices might simply represent a game of "hot potato" among contract obligations that have "gone physical" to the chagrin of the various participants.
The COMEX gold trading pit is the meeting place for speculators and price hedgers. Barring extraordinary circumstances, those actually looking to buy gold do it elsewhere... either through Centennial Precious Metals, bullion banks, refiners, or mines (according to the buyers' specific needs).
Personally, I wouldn't get my undies in a bunch over these bi-monthly calls for COMEX delivery unless I thought that the time had come and this was THE EVENT in which the big players thought in advance that gold would likely no longer be forthcoming in size from the standard sources at low-premium prices derived from the futures contract prices. This COMEX action would then be interpreted as the last desperate grap for cheap gold. Are we at that point? I dunno. It'll happen someday as it always has in the past when paper contracts attempt to represent the wealth of physical gold. And as always happens, those left holding paper at the end are never made completely whole by the adjudicated terms of settlement.
Tree in the Forest
(4/19/01; 14:23:12MT - usagold.com msg#: 52188)
Auspec
Thank you for your very fine posts today. We need "inquiring minds" on this forum. I certainly seem to have stirred up some controversy on silver. When I'm finished with silver, I will try to get some arguments going on gold <grin>. If silver is so unimportant, why do they manipulate it as with the gold market? Why not just let it go and let it drop into oblivion as a simple industrial commodity like lead and zinc with which it appears in nature? No. I continue to believe that gold and silver both are prisoners of the COMEX and focus my attention right there. Only when both are free will we see honest pricing.
Tree in the Forest
(4/19/01; 14:08:48MT - usagold.com msg#: 52187)
Lafisrap - COMEX gold
The stoppers in gold for the April contract are almost double February's contract (500,000). The question for Comex are twofold: 1) When will these people demand the actual physical? 2) How much metal can they "pull" from registered holders?
All of these stoppers have been matched to issuers so they presumably have a source for the gold in place. The stoppers for February took at least another whole month to pickup their metal. My guess is that COMEX will not default in gold (or silver) this cycle. But by June, Comex gold inventory will be squat. Don Lindley has stated that the June gold contract month is shaping up as a waste paper recycling month i.e. the you know what hits the fan. We will have to wait another cycle. I will post more on this issue next week.
Trail Guide
(4/19/01; 14:04:33MT - usagold.com msg#: 52186)
auspec (4/19/01; 08:48:52MT - usagold.com msg#: 52175)
--------
Auspec,
I'm going to outline some replies to you on the trails page. Am working on it right this moment. Along with some comments.
thanks for taking the time to read and consider.
TrailGuide
Randy (@ The Tower)
(4/19/01; 13:55:21MT - usagold.com msg#: 52185)
April News & Views
http://www.usagold.com/newsviews.html
Sir Stranger, I'm sure MK appreciates your kind words of support regarding the newsletter.... I know he works diligently on it every month, as he also does daily for his Market Reports. As with your experience, a paper copy of the newletter also arrived in the mail today here at The Tower, and was received by a rapt audience.
For those who would like to see what they are missing, I encourage them to visit the link above. The mouse-click is FREE! (as is the newsletter to clients and prospective clients)
Belgian
(4/19/01; 13:33:56MT - usagold.com msg#: 52184)
Sir Auspec and The Banana....
Yes Sir, those currencies and their pseudo-value... !
Some more 2 cents talk : it was when the Britisch Empire started to loose its colonial wealth generating tools, that the Pound Sterling lost its dominance and standard value.
It is the only story that I intuitively compare with the actual status of the dollar. Sterling didn't went bananas but lost that intrinsic value, provided by the enormous amounts of goods and services that it represented. The colonies produced these valuable products for practically nothing. So, behind each printed note, there was an enormous
amount of tradeble tangibles.
As soon as we start to increase the amount of paper to compensate for a contraction in goods and services...we are depreciating that piece of paper. In the case of pound sterling it was easier to understand how the crumbling colonial wealth, eroded the corresponding value of the same existing amount of paper. The same excercise is more difficult to proof for the dollar. But we have some criteria :
- What will happen with global dollar-debt against the increasing amount of dollar-paper ?
- Up until now, declining interest rates, put some lit on expanding debt. When do we reach the confidence-culmination-point ? How will we react, once we realise thoroughly that
nothing seems what it is ? My guess is pure HYPERINFLALALA.
Today we need 4 1/2$ credit for 1$ growth ! Do you think that this equation will decrease or increase ?
Global debt is estimated at 90 Trillion $, double the global GNP. Do you think that this equation is going to decrease or increase ?
This extremely strong tendency of more paper for less goods and services is similar to what happened with sterling and its colonies.
Gold and oil, are IMO, two beakons to signal the above luring dangers. Presently, they don't seem to do their job.
The valuations of currencies, relative to each other, is very confusing. Gold and oil are the most universal standards one can come up with.
You and we, are probably making a mistake by considering the dollar-paper against other paper. We are comparing how good we are as americans or europeans against the turkish or south africans. We lost an important universal standard...30 years ago (smile).
My intuition tells me that ALL paper is depreciating.
Or is it that services are more and more over-valued ?
Isn't it strange that most produced goods, decline rapidly in price and that services are rising constantly in price ?
Aren't we doing something similar as during the British empire ? Surfing the world in quest for the lowest price for manufactured goods and undervaluating Chinese/Indian etc...services and overvaluating the services we do provide ourselves. This global imbalance cannot exist for ever.
The outcome is most probably an inflalala solution ?
Let us hope that FAO/Another, has some more precise vieuw on the matter.
TheStranger
(4/19/01; 12:57:31MT - usagold.com msg#: 52183)
Bravo, Michael Kosares
I just finished reading my April "News and Views". This is as fine a gold digest as you are going to find anywhere. Bravo, Michael. USAGOLD is a class act all the way!
Horatio
(4/19/01; 12:34:09MT - usagold.com msg#: 52182)
Energy crisis
You want to see how fast the energy crisis gets solved ,just black out NYC.They deserve a few blackouts since Gov.Cuomo closed a 5 billion nuclear plant that was already built.
Then they wanted another 5 billion to dismantle it because long Island didn't have a evacuation plan.This Moron ,Gov Cuomo is part of that liberal socialist group that thinks everything is political, impressions are reality and the masses need to told whats good for them.Its a good thing he's EX-Gov.Its no co-incidence Kalifornia and NY will experience black-outs.
Lafisrap
(4/19/01; 12:29:06MT - usagold.com msg#: 52181)
COMEX delivery intentions for Au, April 19
http://www.futuresource.com/search.asp?source=story¶m='id=i4143124710184648705'&filename=story
Says 8,939 gold delivery notices so far as of April 19. Would that be 8,939 contracts at 100 ounces per contract, therefore 893,900 oz real, physical Au called for to be handed over from COMEX eligble stock? Is that the way it is?
And is it significant that COMEX has only 109,628 physical oz Au in eliglble stock as of April 18?
Is this just another noisy wolf alarm from the little boy who cried wolf? If so, why?
Lafisrap
Tannehill
(4/19/01; 12:26:11MT - usagold.com msg#: 52180)
silver "chopsticks"
Another reason I don't see the Chinese sending much silver to the west is "chopsticks" Seriously, I have had more than one Chinese friend tell me that one thing many Chinese people want is silver chopsticks. Not the bambo kind -eat once and throw away. These are handed down from generation to generation. When I mention the antispectic quality of silver, it is like a light dawns on to my friends and they go, oh that's why they want them. Can anyone else, confirm this desire for silver chopsticks? Much like silverware in the west. Has always made sense to me.
I suspect silver in photography has been declining for quite sometime, Kodak has introduce several new films over the past 10 years, bet because they use less and less silver, not more. They reaped a huge peace dividend with the give away prices of the American silver stockpile, unfortunately Uncle Sugar is now almost out of silver. Did you get any of the peace dividend?
Thats all from Tannehill
Old Yeller
(4/19/01; 11:00:42MT - usagold.com msg#: 52179)
More on the Fed's tactics....
http://community.metamarkets.com/thread.jhtml?b=46&id=26371
From someone who is certainly a lot more knowledgeable than I am.
Whatever the reason for Greenspan's strategy,I still feel he's playing the market gyrations like the penny stock promoters with a hot discovery used to play the old VSE.By selectively releasing both good and not so good drill results,he seems to have an end game in mind but is obliviuos to the ramifications of his actions on individuals who are not in the know.Hardly seems like responsible behavior for the most powerful person on earth.
Stability,who's got it?
Randy (@ The Tower)
(4/19/01; 10:23:33MT - usagold.com msg#: 52178)
GOLD and the U.S. International Trade in Goods and Services
http://www.census.gov/indicator/www/ustrade.html
Data released yesterday by the Department of Commerce revealed that the U.S. trade deficit decreased to $27 billion in February from the January deficit of $33.3 billion. This narrowing of the trade gap was primarily a result of a 4.4 percent decline to $117.4 billion in total imports -- reflecting the largest monthly decrease seen since the government has been tracking this trade data from 1992. Yes, it would indeed appear that the consumer-driven U.S. economy is slowing.
In contrast however, the exports of U.S. goods and services climbed 1 percent over the month to $90.5 billion on the back of record high sales of consumer goods.
Having read FOA's latest Renoir analogy on the Gold Trail, here's an interesting aside: Government analysts noted that among significant declines in overall imports was a $422 million February drop in shipments of artwork versus January values which were said to be inflated by large shipments of paintings from Europe.
So now we ask, as we do monthly, "what do the trade figures reveal about the American interest in gold as compared to the rest of the world?"
In February, Americans imported only $163 million in gold bullion, whereas we exported $565 million in gold bullion to the rest of the world. This reflects a NET outflow of approximately 47 tonnes of gold bullion from domestic ownership.
To put this alarming imbalance in better perspective, our domestic production of gold from mining provides us with only 30 tonnes of new gold per month, and here we see eager foreign claims on all of that, plus an additional claim for 17 tonnes from prior "savings".
We are arguably the world's richest nation and largest consumer of everything...yet we collectively let the timeless wealth of gold slip through our fingers at these 22-year low prices while the rest of the world does not stand idly by. The wealth of kings...get you some.
Seeing the inexplicable resurgence of silver interest among some of our forum participants, I'll offer the following because these persons may be interested to know that the U.S. remains a net silver importer. In February we exported only $16 million of silver while we imported $42 million....small potatoes compared to the value being traded in gold. Noentheless, Centennial will be happy to help you obtain all the silver you want or need. Cheers!
USAGOLD
(4/19/01; 09:44:27MT - usagold.com msg#: 52177)
Today's Commentary: Bigger Fish to Fry
http://www.usagold.com/Order_Form.html
Bigger Fish to Fry
4/19/01 (www.usagold.com ). . . .Gold surged in
international markets overnight and New York this
morning as the cold, hard reality of the U.S. central
bank's rate cut settled in. Yesterday we saw one side of
the coin frame-frozen as the stock market rallied
whole-heartedly. Today we see the other side of the coin
frame-frozen as international investors take heed of the
dwindling real rate of return on the dollar and a stock
market that simply cannot easily dismiss poor earnings
reports, the threat of a U.S. based recession and an
historically high price/earnings over-valuation. That's the
cold hard reality I'm referring to. Will yesterday's big
rally turn out to be another One-Day Wonder? We'll see
as the day unfolds. Today could hold the psychological
key to the stock market's long term future.
One must keep in mind through all this, even if the stock
market rallies today (right now its down about 40 points)
that we are in a Primary Bear Market, as Richard Russel
calls it. (Russel is the long-time analyst who had the
nerve to buck Wall Street Goldilocks market euphoria
calling this downtrend before it started back in 1999.
Now he has begun to talk optimistically about gold.) And
Primary Bear Markets don't act like bulls. They are a
different creature. Speaking of bulls, the gold bull goaded
by continued strong demand worldwide and the ominous
market action in both stocks and the dollar has stirred a
bit from its long slumber and opened one eye to view the
proceedings. Those big banks and brokerage houses
babysitting one of the largest gold short positions in
history can only hope this bull doesn't see Red. But those
forces which force dollar-based equities are the very same
forces that wake this bull from its Rip Van Winkle state.
The dollar, puffing heavily as the real rate of return
squeezes to near zero, is down sharply against the
currency spectrum this morning including the euro, the
yen and Swissie. The European Central Bank, not moved
in the slightest by all the Fed maneuvering, continues to
signal that it will not lower rates. The currency
engineering continues. All of this appears intended to
engineer the flow of capital out of dollar -- a de facto
devaluation.
As it is, I should add, that in this commentator's opinion,
the rate cut had nothing to do with "rescuing the stock
market" and "striking boldly in favor of stock investors"
as this morning's newspaper headlines proclaim. I've
always wondered why Wall Street believed that Alan
Greenspan's primary motive would be to favor overtly
one class of investors -- stock investors -- over all others.
In keeping with the real role of the central bank -- to alter
circumstances detrimental to the banking system as a
whole -- Mr. Greenspan, it would seem, has bigger fish
to fry. The rate cut has to do with (just to name a few
glaring examples) utility failures in California, the
massive loan defaults building among once highly
regarded telecom companies (which some say could be
greater than the S&L mess of the early 1990s), Japan's
interminable balance sheet problems and massive
derivative bets by the banks that could go sour and
overwhelm bank balance sheets. I could go on but you
get the picture. Let's just call it systemic risk. I would not
be surprised to hear about one or more banks (or some
other major corporate institution) having been pushed to
the ropes in recent days. In the end, the rate cut might be
signalling a litany of woes for the stock market of the
future, not the opposite.
I think many of us might be sensing that presence of
danger. Gold buyers continue to steadily place their
orders at USAGOLD/Centennial Precious Metals
undeterred by the day to day machinations of the stock
market. They too have bigger fish to fry. The questions
will start today about why this rate cut came out of the
blue, and I think the reality behind that speculation could
be quite threatening indeed. That's it for today, fellow
goldmeisters. I'll write more tomorrow if anything
dramatic occurs. Beyond that, this should be it for the
week. Have a nice weekend. MK
P.S. I might update the Review section over the next few
days as I run into articles that I think might interest you.
I decided to run today's Commentary at the
Daily Market Report page today as an example
of the kind of analysis available regularly at the
Commentary & Review page.
To join us at COMMENTARY & REVIEW a
one-time, quick Registration is required. Please go to the link above. International inquiries welcome. It includes free
trial access to Commentary & Review, a free information
packet on gold ownership, News & Views -- our popular
newsletter, and our Client Intro to Centennial Precious
Metals/USAGOLD (by mail).
rc
(4/19/01; 09:27:34MT - usagold.com msg#: 52176)
China's outflow of silver?
Are you sure of this information?. Personally I have as much informations to the contrary. Besides, I am hard put to believe the Chinese are so stupid as to sell their silver at bargain prices.
auspec
(4/19/01; 08:48:52MT - usagold.com msg#: 52175)
ANOTHER And FOA
Thank you, wise men, for your trail illuminations, much appreciated! Please forgive my persistent questions in posts #s 51479, 51935, and 51992 and this summary of these questions, once again. Little in my life has been accomplished without an uncommon level of persistence so I must "return to my roots" and give the maximum effort, as it is all I know. Still hoping and trusting that these perspectives will be addressed by you. Thanks in advance!
From USAGOLD post #51479 {with a few additions} "In Defense of the DOLLAR"
This is your humble correspondent, trying to make sense of our rapidly changing currency world. Please bear with me as explanations for the "end game" scenario are sought. Am I really going to defend the US Dollar? Only relatively speaking, because I can't see the hyperinflation script coming to pass that we so readily toss about on this Forum. No problem whatsoever in visioning the rise of the EURO, just in what degree of demise of the dollar. The USD will get its "just desserts", the EURO is clearly a "comer".
FOA, your 3-10-01 piece, "On the Road", is classic excellence so I would like to take excerpts from it as this "Defense of the Dollar" takes format. My questions/comments are surrounded by *s. Trail Guide: <Well,,,,,,, things are not as before,,,, are they? (smile)
In my last post USAGOLD Forum post (#48858) we noted that the paper gold game was reaching it's limits. The BOE was almost asking "what do you want us to do"? The answer came as plain as day as the paper price was driven a little lower in return for a gold sale reduction. Yes, clear as a mountain stream,,,, the unwinding has begun! It will continue until the big event when the gold rules are officially changed. Not much different than when the dollar hit it's credibility limit in 1971. As Randy has often pointed out; the US printed gold contracts back then until they (dollars on the gold exchange standard) lost their mathematical ability to be converted into gold.>
*If the dollar's status is now so similar to what it was in 1971, why would we see the Brazil type hyperinflation now as opposed to the simple ongoing degredation of fiat that we have all come to know and hate? Why the extreme portrayal of the dollar? It's clear the dollar is an old toad and there are young stallions waiting in the wings, but it's hard to see this as an all-or-none issue where the dollar {banana} goes from being the world's reserve currency to being "nada". Where's the middle ground with dual and competing reserve currencies in common use?*
Trail Guide:
<What's in process now??:
The Washington Agreement placed in context where the Euro system is going with gold. That pronouncement drove home the fact that our Dollar gold pricing system was going to die with the dollar reserve function. The WA placed us "on the road" to high priced physical gold and low priced contract gold. It could have been the end of the LBMA pricing structure, right then and there, except that it would have clocked the global financial structure too fast.
Indeed, our Euro friends helped the system out by giving it some more of the same poison, more paper gold inflation. Yes, all the while since the WA, people have been falling all over each other trying to explain why so much new European gold has entered the market through lending. Yet, all that was mostly lent was more paper credits built upon a failing dollar gold pricing system. You see, they left the maintaining of system credibility to the dollar faction. Kind of strange how gold keeps showing up as part of the US trade deficit? Even is it's only a trickle.
Gold bugs cry that the paper market is not free because government endorsed inflation in this arena is killing it's price structure. Almost as if they want fiat gold that less inflated? Well, that's great if your "gold" money is in our modern gold producing industry and that's hip deep in committing it's product to satisfy these same paper contracts. Yes, this mistake of "hard money" allocation by
western savers, is the result of ignoring history and how currency systems evolve. Gold industry investments work if the current fiat system is remaining "in use", but showing price inflation. However, when currency systems fall "out of use" while moving into super price inflation,,,,, the
next competing system will side with physical gold! It doesn't happen often, but when it does real wealth in one's hand becomes worth many times investments in "almost gold". Truly, the dollar price of physical gold is going higher than anyone expects.> END
*Comments: Again it is easy to see the dollar as losing a large piece of the action, but hard to see its total demise or its falling out of use. The US as the largest military force in the world certainly has its overriding benefits. The US has enormous resources; physical, financial, and spiritual. American creativity and "know how" has changed the world. This country will not turn over and simply give in! Let's look forward to the next 5 years and place probabilities on what is likely to happen as far as the dollar/euro is concerned. I will rank these various scenarios in what I see as their most likely odds of happening:
1}Ongoing MODERATE debasement of US Dollar. {Brisker} Business as {than} usual.
2}Gold and/or Oil breaks away from the dollar.
3}Dual and competing reserve currencies. "Co-Currencies" in Reserves. The currency war that is in clear sight {thanks to ANOTHER and FOA}.
4}Status quo.
5}All out war that distracts/rescues the dollar and extends its life. Wag the dollar.
6}Dollar merged with euro/backed by euro.
7}Brazillian or Weimar style hyperinflation of the USD, the Big Banana, or the 'little banana'.
What ranking would you give these possible scenarios? And yes, we all know the DEBT is a monster lurking closer and closer! Debt is designed for default as fiats are for debasement. Looking for a catalyst to get the EURO kick started a bit? All that is necessary is for ECB to get rid of a % of dollar reserves about the time the common coinage comes into play. Ouch! But still, "death" of the USD?? At $30,000 POG the US as we know it will be no more, agreed?
Another question comes to mind: What advantage would it be to the Power Elite to destroy the dollar. Yes, a one world government and currency would suffice as a legitimate reason, but the old guy likely has many deeds yet to perform. Do you respond to questions in regards to mentioning the "Power Elite"? Some won't "go there" and that is their free choice, no problema.
The dollar has defaulted twice to date, yet chugs along. What "history lessons" best show us the endline that awaits the dollar? The end of a currency's lifetime always ends in gold debasement? By "super price inflation" are you referring to something much worse than the US in the 1970's? You must be, as that fiasco was "successfully" negotiated. The 13% mortgage wasn't a world stopper. Are we looking for a low probability event that has only happened a few times in history, or a high probability event that has happened EVERY time in history as a currency reserve ages? Odds or the END?
As per gold "industry" investments, they will do just fine at your $360 POG from todays level. The Romanian deposit that contains 8-10 million ounces should fare well regardless of what currency is "reserve". You stated: "Gold industry investments work if the current fiat system is remaining "in use", but showing price inflation." Are you talking all or none with the dollar as reserve currency of the entire world or reserve currency of none? The dollar will remain in use, imho, until there is a one world currency, even Brazil "uses" their currency of old. So we have the dollar and we have the inflation, and we get gold stock appreciation. Yes, a gold stock is a problem if it must sell gold in dollars and the dollars are TOTALLY worthless, but I'll take those odds, thank you. Please don't misunderstand me, as I have a greater current appreciation for physical {thanks to the braintrust of this fine establishment} than stocks, but just can't see this as 'all or none'.
Maybe a lesson is needed in "how currency systems evolve". The waiter replies: "Sorry sir, we're out of the hyperinflation, but there is ALWAYS plenty of inflation available in the kitchen."
There are many on the Forum that struggle to see a USD "cataclysm" as a high probability event and it does seem to be a KEY question to address if you would. These questions are, or possibly ought to be, in the minds of all of us as we make our financial decisions.
Thanks, ANOTHER & Trail Guide, for your many and fine efforts. I remain, on the trail.*
au{in}spec{tor} Clouseau
Belgian
(04/19/01; 06:08:49MT - usagold.com msg#: 52170)
Interest Rates (IR)
Do have IR, as a gvnmt Intervention-Tool, any indicative value or significance ? Don't think so ! IR-TRENDS are always lagging the economic events (reality). SM was already irrationally exuberant when IR followed its way up. Economic expansion and contraction don't change direction with IR-Intervention !
The reason why someone decides to take credit (expand) is only determined through his "confidence" in the economic future, or at least his perception of it. Jobsecurity and probability of profit are deciding on credit decissions.
The present declining short term IR-trend is only confirming the economic reality of contraction. Guru, Greenspan is not performing heroic acts, by simply following (confirming) what all economic participants are already experiencing. IR has IMO nothing to do anymore with economic activity and attached intrinsic value of the currency. IR has become a pure Interventionist operating tool for mass perception. Talk it up or down. You can not manage economic fundamentals in the long run. Some very minor adjustment is the maximum that a regulator can achieve or hope for. IR mythology !
It is against this perspective that I keep an eagle's eye on the USTB-30 yrs. This is of some indicator-value for reason of its Long Term expression of optimism or pessimism. I have the illusion that this IR has something to say about the intrinsic value of the currency. The higher it goes, the less the currency is appreciated. Did the Clintonistas managed to manipulate the USTB-30 ? Not convinced they could do it perfectly.
The USTB-30, declining momentum diverged sharply with the parabolic ascend of the Stock Market. Don't know if this is enough evidence to proof a degree of falsification.
Yeller, I do agree with your manipulation-theory of recent IR-decline ! Too many indications for the pre-meditation of the panic-act.Euro-rate pressures-telegrammed Nikkei-rise-Futures rise at opening-Friday options/futures...etc...
Au+Ag(in)spec(tor) Clouseau...Poirot, overhere :
This brave man Bernard Swanepoel, still needs to tell his fellow goldproducers, that they should adjust the value of their underground Gold. I even want to suggest to interpellate the respective governments about the actual loss of tangible wealth for the enterprises and the gold-nations as well. Anyway...they will be forced to understand it sooner or later.
BB : the hidden Bush/Saddam trick is a very significant test ! If they agree on lowering the POO...Alice might turn on the lights again ? What is going to be the exchange for both services (mutual interests) ?
Yesterday's rate decline was a government act. We all experienced this act as semi-normal. At least the vast majority of individual SM participants. We all saw the enormous result on stocks. Why do other people demonstrate, firmly, so much reluctance in accepting that exactly the same is already happening with POG ?
They want to save the SM, not the economy...because the SM has become the economy. They want to depress Gold to save the dollar...because the dollar isn't Gold anymore.
Netking
(04/19/01; 04:39:02MT - usagold.com msg#: 52169)
Working Kirk
Good comment W/Kirk(52168), as Ted Butler said a while back; "Let me ask you a question - if one of the most respected names in the precious metals world, Handy & Harman, can announce out of the blue, that it is bankrupt and cannot honor its obligations - who can be trusted? If the largest silver refiner can't meet its silver obligations, do you think a bank or insurance company can?"
working-kirk
(04/19/01; 03:44:03MT - usagold.com msg#: 52168)
Why the silver shortfall can't be coming from China
Everyone agrees there is a shortfall for silver. A lot of people seem to think it is being made up by sales from China. I don't.
Never mind that tensions between the United States and China are getting worse and if a war comes China will fight using ecomonical means, electronic warfare and other means since it is not certain they can go toe to toe militarily.
Never mind that China was the last nation to go off the silver standard, or that in the chinese black market for drugs, opium, heroin and others, silver is still the prefer form of payment and there are many who prefer buying to selling. So it makes no sense that they would just dump silver.
Never mind that China was being hurt economically when the United States was overpaying for silver and while they could n't do anything about that, it now makes perfect sense they
would give away free money when there no reason they would want to and be perfectly happy to support the central banker by selling as much silver needed to keep the price below a nickel an ounce.
To me, it doesn't make sense that not only would China be willing to give away free money but would be willing to pay frieght on it as well
It seems the shortfall is going up. from 120 million ounces to just under 200 million a year That means every day 2,000,000 ounces or 125,000 pounds or 62.5 tons has to come from somewhere. My experience has been it costs about
$500 to ship a ton of goods 5,000 miles. You may find better rates or whatever but let's say for the sake of argument $500 a ton is a good rate. It works out to about .25 cents a pound. That means $31,000 and change each day. I don't know about you but is somebody asked me to help them out by just giving away money I would kind of balk paying $31,000 a day. If I was China and for some strange reason decided to give away my silver I would be more likely to ship it off to India. The Indians can't get enough gold and silver and are willing to pay two to three times the going rate to get their hands on anything that gold or silver and not nailed down. I don't think I would have a problem getting Indians to pay my shipping. It should cost the same to ship to India as to the United States. Turkey would pay well too especially since the Turkish Lira has tumbled and might even get cheaper shiping since the drug trafficing people have set up the transport necessary to move goods in volume cheaply between the two countries.
But there other thing about shipping to consider. Most of the Chinese imports come in on container ships and arrives in either Los Angeles, San Francisco, Portland or Seattle. Container ships are too slow. IT takes three months or longer. TOO SLOW! We all know how voliatle the precious metals can be. So that means air frieght. That means even more in shipping cost.
Even if you are stupid enough to give away your money, your silver and gold, there has to come a point where it will kill you to do so. Can you see the Chinese or anybody else doing this willingly?
So where is the silver coming from to make up the shortfall?
Well Warren Buffet brought 130,000,000 ounces. I think that is gone. That was about a year supply. He probably leased it and got a real good price and went the shorts defaults as they will, he will get a lot of money for his pain.
Previously I believe the silver shortfall was being made up by the treasury. But that is gone. They government announced they was going to be soon tapped out.
I think the last placed the silver is coming from are those who don't know they are giving it away. Remember, I asked who would willing give away money and pay shipping? Are but unwilling and unknowing, now that is different! A lot of people say: There is no silver shortage. You can't believe the number of people who socked it away. After all, when the price of silver last exploded when the Hunt brothers, silver came out of the woodwork. If silver explodes again,
these same silver squirrels have plenty socked away.
Growing up on the poor side of town, you learn something about shady characters. If you have money, you can bet some thief will sniff it out and either try to rob you or con you. Well, thiefs will be thiefs, conman will be conman and bankers will be bankers. I believe a lot of the silver squirrels decided to put some of their silver in IRA's or silver savings or Comdex or something where they got a piece of paper for their real money.
Well, thiefs will be thiefs, conman will be conman and bankers will be bankers. They are always trying to work you. I know every time I shake hands with my banker I have to count my fingers to make sure I not missing any. I am always getting hit with service fees, or some "low cost" introdutory credit card offer. (Tried a credit card once and couldn't believe how much it cost me. Not only that but
I couldn't even haggle down the price and so ended up paying far more than I usually pay) I believe the bankers and other who offered paper for silver worked those who managed to saved silver. And I think because the squirrel were savers they managed to sock away quite a bit. Enough to cover the cover the shortfall for a year and a half when it became obvious to me there were serious problems with the supply of silver. Anyway, it will be very interesting to watch what happens to silver at the end of April, beginning of May.
Unless you got your silver and gold where you can visit it occansionally. (Someone mentioned burying in a tin can where only you know--sound good to me!) I think a lot of people who think they own silver will be in for a unpleasant surprise. Got gold? Got Silver? Got your hands on it now?
Black Blade
(04/19/01; 03:17:42MT - usagold.com msg#: 52167)
Palladium Falling Off the Charts
If Kitco charts are to be believed, then Pd is down -$62.00. Platinum is holding on +2.00.
Black Blade
(04/19/01; 03:13:20MT - usagold.com msg#: 52166)
Futures Sinking Fast
http://www.mrci.com/qpnight.htm
US Market futures are falling fast now. Maybe reality is setting in.
Golden Dreams All!
Belgian
(04/19/01; 03:12:32MT - usagold.com msg#: 52165)
Ten Years USTB-30 ( 5,72%)
1990 - 2001 : Interest Rate decline with High = 9,12% ('90) and Low = 4,70% ('98).
Interpretation : the past 10 year decline has stopped and reversed. The Low of 4,70% is in. Long term momentum-indicators show a positive divergence since 1995 !
There is a very visible Pivot-Line at 5,90%. Pivot line, indicates a high probability of Make or Brake decisision point for the trend. With 5,72% today, we are approaching this MOB of 5,90% ! Breaking this pivot target (5,90%), brings the 10 year old resistance line in target at 6,5% (6,40%).
Breaking the 6,5%, is confirmation that US$ has lost the battle.
Note that in 1993, the USTB Low of 5,90% is corresponding with the 8 year cycle-low of POG = 340$.
The 1990-1993 USTB decline (9,12%-5,90%) was the base-building of the SM-mania.
POG and USTB period '98 - '01 are corresponding. With the WA-POG-spike to be compaired with USTB-spike 4,7% to 6,75%. Today, POG is lagging USTB.
Can we conclude that : Pivot for USTB 5,90% + Break 6,50% is corresponding with POG - pivot 300$ and break 340$-350$ ????
The 1990 decline in USTB, corresponds with the base building + rise in US-Index with lead and lag periods. The pivot or MOB target in the 100/90-zone for the dollar-index.
Very curious how these 3 brothers will work out their supposed inter-relationship ?
Black Blade
(04/19/01; 02:40:57MT - usagold.com msg#: 52164)
RE: Netking and JBear
Fuji film has been taking market share from Kodak for years. There have been some trade issues about unfair competition between Fuji and Kodak, There have also been some lawsuits in the past. It should be no surprise that Kodak has seen lower film sales. Fuji also has a growing market, especially in Asia. Go to most any store where film is sold, and usually Fuji and off-brand films are cheaper than Kodak film. Kodak's competitors have been gaining market share for years. I would suspect that Kodak will experience declining sales going forward. I also recall that Kodak had purchased contracts on silver not long ago.
- Black Blade
Netking
(04/19/01; 02:26:02MT - usagold.com msg#: 52163)
justamereBear (52161)
justamereBear, what you say re:US film is correct,Eastman Kodak the biggest user of the metal in the US, have said photographic film sales are falling faster than expected. Sales from the product line that includes Kodak's main film business fell 7 per cent in the first quarter, and the company said it saw no end to the decline. But as previously commented "to confuse the issue" however The Peoples Rublic of China's(The worlds largest Silver user)use of Silver in film has increased & would replace that of EK.
Have a perusal of Dave's comments(per below)for some more thought.
http://www.silver-investor.com/confess.htm
Old Yeller
(04/19/01; 01:41:29MT - usagold.com msg#: 52162)
Rah-rahs from the cheerleading squad
http://www.bloomberg.com/feature/feature987620034.html
Notice how our little insightful elves omit just who created the damn bubble in the first place?
Oh,in case the assumption is made,I did not have any short positions that have created bitterness.I am only appalled at the immorality of this.
justamereBear
(04/19/01; 01:23:42MT - usagold.com msg#: 52161)
Netking 52153 & all the siver barons
A few years ago I was quite up on silver, before I studied it carefully, and some new tech developments, such as digital photography became parctical. I still have a fair amount of physical kicking around somewhere, because it does have potential. If it gets going, it will probably go pretty good.
I am now concentrating my energies elsewhere for a couple of reasons. A huge percentage of the use of silver was in the photographic industry. With the advent of the relatively inexpensive digital camera, and the ability to trade "pix" on the net, many westerners are increasingly skipping the silver based negative, and going direct to digital. As long as the world exists on its current path, I would not expect that trend to change.
Secondly, most silver is produced as a byproduct of other metals mining. There are almost no pure silver plays around the world. That particular reason is a very two edged sword, and could be very potent if the theory that demand has been outstripping supply is correct. I have not enough knowledge to comment one way or another on that facit. I do know that there is relatively little recovery going on because of the low price. An increase in price would bring a good deal of recovery activity, which would increase the supply dramaically.
Another big user of silver is in silver solder, which could change if the price went up dramatically. Watch an automobile radiator being made, and you get an idea of the huge industrial use of silver solder, Largely because it is less expensive than the alternatives.
I have not abandoned silver complete, largely because it has always been the poor mans gold. However, I cannot see that the case for silver is nearly as clear as the case for gold.
j'Bear
Old Yeller
(04/19/01; 01:20:30MT - usagold.com msg#: 52160)
All animals are equal,but some are more equal than others...
Or in the Fed's little book of ethics;it's all right to massacre bears en masse,but if you are a bull,well that's a different story.
Funny how this comes two days before option expiry.Funny how some major players seemed to have a hunch it was coming.Think back to the Asian crisis and the lectures from the US financial elite about crony capitalism.Could the TBTF crowd use this opportunity to rebalance some "offside" trades.
Excuse my cynicism,but this really stinks badly.The happiest day in the history of the earth is the day the Fed is revealed for what they truly are.Unconstitutional robber barons who belong in prison.Fleck is right,Greenspan is a menace to society.
Black Blade
(04/19/01; 00:59:04MT - usagold.com msg#: 52159)
Politicians to Blame for Energy Crisis
http://biz.yahoo.com/bw/010418/0439.html
Snippit:
Writing in the new issue of World EnergyÆ magazine, Higgins predicts that the current difficulties will take years to unravel, and blasts California Governor Gray Davis for refusing to take action many months before brownouts started occurring. ``It would not have taken much at that point to solve the crisis,'' Higgins notes.
Also in this issue, Energy Secretary Spencer Abraham outlines his view of an energy crisis all across America, writing that ``Californians lost an estimated $2.3 billion in wages, sales and productivity'' due to recent brownouts, and more sectors of America may suffer the same consequences this summer, including New York City, the Midwest, the Southeast and the Northern Plain states.
Black Blade: Though I agree that Kommissar Davis has been about as effective as a eunuch in a porno film, this energy crisis would have hit Kalifornia anyway. No power plants built over the last 12 years, and a policy that prevented exploration and production of hydrocarbons to feed any power plants. The article does explain the consequences of the crisis in Fairy Land and around the world - short and sweet.
The article can be accessed at the web site listed in the article.
Black Blade
(04/19/01; 00:44:38MT - usagold.com msg#: 52158)
RE: JBear
Thanks, that article has a bit more info to digest. Raises a few more possibilities as well.
- Black Blade
Black Blade
(04/19/01; 00:40:41MT - usagold.com msg#: 52157)
Energy Task Force Seeks Sanctions Review
http://dailynews.yahoo.com/h/nm/20010418/pl/energy_sanctions_dc_2.html
Snippit:
The Bush administration's Energy Task Force, chaired by Vice President Dick Cheney, will urge the review of sanctions policy as part of a report that is not expected to be released before mid-May, industry sources said. The report had been expected this month. In the past year, the United States has faced continued energy problems, from rolling blackouts in California, skyrocketing gasoline prices and concerns over heating oil shortages in the Northeast.
Black Blade: I posted in the past that George W would end up kissing Saddam's butt for oil. How ironic. That's what happens when daddy leaves the job only half done.
justamereBear
(04/19/01; 00:40:31MT - usagold.com msg#: 52156)
Black Blade @All
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3FU96FPLC&live=true
Another take on the Fed by the Financial Times. About the same conclusion. Typical British restraint IMHO
j'Bear
Black Blade
(04/19/01; 00:33:07MT - usagold.com msg#: 52155)
Fed Cuts Rates in Rare Move
http://biz.yahoo.com/rb/010418/business_economy_fed_dc_80.html
Snippit:
In a statement explaining its relatively rare step, the Fed said economic conditions still were tilted toward weakness -- a clear signal that it will cut rates again if necessary. The Fed's next scheduled FOMC meeting is on May 15 and another rate reduction is widely anticipated then.
Black Blade: The Fed has access to data before everyone else. Obviously they see some severe threats to the economy on the horizon. It must be extremely severe to make 2 rate cuts between Fed meetings so far this year. There is decreased producer spending and the massive wave of layoffs are so far the only obvious indicators, so it must be something else that the Fed knows. Economic collapse? Energy crisis to be more severe? Fifth horseman arriving? Maybe time to purchase some portfolio insurance.
Black Blade
(04/19/01; 00:20:44MT - usagold.com msg#: 52154)
Asian Markets Higher
http://quote.yahoo.com/m2?u
Hang Seng is flying high followed closely by the Nikkei. Even though exports are lower due to lower demand from the west, these indices are climbing. "Irrational Exhuberance" is not just a western disease ;-)
Netking
(04/19/01; 00:16:27MT - usagold.com msg#: 52153)
Silver Words . . . Randy & Tree
Randy(@The Tower 52111) & Tree In The Forrest(52142)
Randy,
Good question Sir. My position does not change any. There is a continual year in & year out demand for Silver that is far in excess of the supply that is being taken from the ground & sourced from scrap etc. The current price adjusted for inflation is about 98% below the $52+ top in 1980 & Silver inventory supplies are the lowest in over 100 years.
I believe Tree's comment is valid & logical given the known facts.
If China are supporting the US/Comex then both are playing "High Risk Chicken". For how long would this alleged support last given the ongoing EP-3 storm & calls from some Republicans & Democrats for economic sanctions against The PRC? "IF" the biggest user of Silver on the planet is net outflowing at "these prices"(given the declining world inventory position & their own source of Silver)then this will definitely further precipitate the case for the bulls & the eventual VERY VIOLENT explosion of the physical price of Silver in the not too distant future.
Black Blade
(04/19/01; 00:15:18MT - usagold.com msg#: 52152)
Market Futures Higher
http://www.mrci.com/qpnight.htm
Market futures are higher tonight. In spite of considerably lower earnings.
megatron
(04/19/01; 00:01:51MT - usagold.com msg#: 52151)
Trailgiude
Nice comment. I guess when your in the league of Hunts, Soros, Gates, and Buffet, some small time internet posters I read about, who obviously know nothing about investing like you do, I'll go 'long' your opinions.
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