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ARCHIVED DISCUSSION FROM 2/19/2003
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Waverider (02/19/03; 23:59:23MT - usagold.com msg#: 98028)
North Korea Fighter Jet Enters Neutral Air Space
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Top%20World%20News&tp=ad_fin&T=au_storypage99.ht&s=APlR1fhQjTm9ydGgg
Snippit:
"A North Korean MiG-19 fighter jet entered the neutral air space that divides the Koreas for two minutes, the first infringement by a Northern plane since 1983. South Korea launched six F-5E jets after the North Korean plane flew into air space over the sea on the western edge of the peninsula, South Korea's Joint Chiefs of Staff said in a statement. The benchmark Kospi index fell as much as 0.5 percent within minutes of the announcement. It rebounded, and closed up 0.8 percent at 605.51 at 3 p.m. local time."

Black Blade (02/19/03; 23:39:43MT - usagold.com msg#: 98027)
Soaring petrol prices fuel growth fears
http://www.smh.com.au/articles/2003/02/19/1045638360887.html

Snippit:

There are growing fears that surging petrol prices will stifle the economy after war jitters yesterday pushed the international oil price to a 2-year high - around $US37 ($62.50) a barrel. The price of the global crude oil benchmark, West Texas Intermediate, reached $US36.96 in New York on Tuesday night, the highest mark since September 2000. It is possible international crude oil prices may jump to around $US45 a barrel or more, according to some analysts. This would push local petrol prices up another 10 to 15 cents a litre. While a short, successful campaign against Iraq by the United States and its allies would put downward pressure on the oil price, it might not fall far. US oil stocks are at a 28-year low and recent severe weather may see levels fall further. Supplies from the world's fifth biggest oil producer, Venezuela, remain well below normal because of a two-month-old strike, while a strike by oil workers in Nigeria has also put a question mark over its supplies. "The oil market has been hit by a perfect storm of influences," CommSec senior analyst Craig James said. "It's not just the war jitters." If prices remain high for some time, the fragile US economy may be tipped back into recession, with serious results for world growth and the Australian economy. Every recession in the US since the early 1970s has been preceded by a sharp rise in the oil price. "History shows that oil has a very significant impact on the US economy and [the latest rise] is hitting the US at a very vulnerable time," Mr James said.

Black Blade: And so it goes. Energy prices are certain to rise further. I find it amusing that the media pundits are saying that oil will fall when the weather warms up, however, the refineries need time to switch from heating oil to distillates before "driving season" begins. The high gasoline prices are more likely to rise from here. I have heard some in the industry mention that $3/gallon this summer is not at all far fetched.

Black Blade (02/19/03; 23:27:57MT - usagold.com msg#: 98026)
Iran may switch to euros for crude sale payments
http://www.gasandoil.com/goc/news/ntm23638.htm

20-08-02

US scrutiny of global banking since September 11 has spooked Iran into mulling a switch from dollars to euros for crude oil sales, its primary revenue earner, oil industry sources said. Iran could deal a psychological blow against the struggling dollar if it forces customers to pay billions of euro every year for their oil imports. "As a precaution, the Central Bank of Iran is looking into a switch away from dollar payments -- with the euro a favoured alternative," said an Iranian oil industry source. "The US is keen to know who is sending and receiving dollars and they may make it difficult to transfer our money, especially when they know it is for Iran," said an Iranian industry source. Iran's Central Bank has yet to issue a final decision on whether to drop the US greenback, the international currency of oil, for its exports. A committee of experts is mulling the move.

Revenue from Iran's daily crude sales of just under 2 mm barrels eventually returns to the Central Bank. But along the way, the money is transferred through a series of intermediary banks, mostly European. International bankers said all transactions involving large amounts of dollars are cleared through master accounts held in New York. And the New York Federal Reserve has access to information about such transfers, they said. "After September 11, US authorities were chasing terrorist funds and they were questioning a lot of things," said a senior banker. "There were many wild goose chases." Iranian sources said their banking colleagues have felt particularly hassled during the past several months, as Washington heats up its war of words on Tehran. This has encouraged Tehran to speed the pace of an ongoing debate to abandon the dollar as payment for oil sales.

Black Blade: Who can blame them as the US dollar weakens against the Euro. Besides, with Americans willing to sue at the drop of a hat it was to be expected. The rumor is that Saudi has also considered doing the same since the 9-11 victims families filed a lawsuit against the Saudi royals, businesses, and banks. This will pressure the US dollar as well.

Black Blade (02/19/03; 23:16:23MT - usagold.com msg#: 98025)
Goldman Sachs, CSFB Lose Bid to Dismiss Investors' IPO Suits
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APlO3CRRzR29sZG1h

Snippit:

New York, Feb. 19 (Bloomberg) -- Goldman Sachs Group Inc., Credit Suisse First Boston Inc., and 36 other investment banks must defend against legal claims that they and hundreds of Internet start-ups rigged initial public offerings. Investors say the banks and start-ups they took public manipulated the IPO market during the technology stock boom of the late 1990s. A federal judge rejected the banks' request to dismiss the suits. Lawyers for the investors say damages might top $1 billion, or about half of Goldman's profit in 2002. Two months after the ten largest securities firms agreed to pay about $1.4 billion to settle claims they misled customers with biased stock research, Wall Street now must face civil litigation that may highlight how some firms sacrificed integrity in the quest for fees.

Black Blade: Some time ago I mentioned that I smell lawsuit. Interesting how events are now coming together like a giant jigsaw puzzle.

Black Blade (02/19/03; 23:03:38MT - usagold.com msg#: 98024)
State's real unemployment may be higher than reported
http://sanjose.bizjournals.com/sanjose/stories/2003/02/17/daily28.html

Snippit:

Puzzled over how the acres of vacant offices, labs and manufacturing plants in Silicon Valley add up to an unemployment rate of just 7.5 percent? There may be a basis for that apparent disconnect. The state may have been hiding the real unemployment figures, according to reporting by the San Francisco Chronicle. The newspaper says in its Wednesday editions that California apparently lost twice as many jobs in the recession than the official unemployment numbers show -- especially in high tech. The Chronicle says it's obtained confidential data based on the unemployment insurance tax payments made by employers and filed quarterly with the state.

Black Blade: As I have repeatedly stated before. There are many ways to abuse and massage statistical data. I have seen it first hand many times and it is prevalent throughout our society, business, and government. Nationally the real unemployment is roughly between 11% and 12%. Meanwhile the BLS and other government agencies do not want to push the panic button so you will not hear the horrible truth. After all that's their job. Inflation data (CPI and PPI) is yet another statistically massaged lie. Then there are the phantom corporate earnings usually expressed as "pro forma" and "operating" earnings. The Enron mess with the complicity of criminal auditors like Arthur Andersen is only a small example of some of the abuses in accounting. But I covered all that in detail before. Nothing will change as Government will never tell the truth, corporations will disguise their earnings reports, and the financial media with their goofy guests will tout the ridiculous "all is well" and "economic recovery" foolishness.

mikal (02/19/03; 22:56:03MT - usagold.com msg#: 98023)
@GratefulforGold
I have posted on the gov't regulation issue over the years here and elsewhere. Always there is an unjustified fear of physical, as if jewelry, art objects or silverware would suddenly become prey to a Gestapo. If your area is beset by future chronic crime or rioting, that is another thing. But in the approx. 40 yrs when owning Au in the U.S. was outlawed, until 1972, trade in gold occurred nonetheless. Today rigid or irrational laws are taken less seriously, or at least interpreted with greater flexibility. Information conducts quicker and wider. And even more venues exist, for Au trading, than did in the "prohibition" period. Like moonshine, cigarettes or drugs, gold prices would benefit from "prohibition", IMHO. But gold is safer, more liquid and respectable as well as essential to most woman and many men, unlike the old, widely used "vices". Finally, the "venues" that I mentioned include: auctions, flea markets, jewelry shops, pawn shops, hobby shops, antique shops, coin shops, coin shows and now today online sales, newspaper ads, banks and more. I would expect that under a second "banning" or "prohibition", the best places would be the tried-and-true: Small shops(grocery, sundries, flowers, jewelry...crafts, hobby, coin, antiques, pawn, tobacco, liquer...beauty salon, tailor, etc.). However, greater caution would be needed at public coin shows and flea markets than in the past, unless gold collectible (numismatic) coins were exempt under similar rules as before. These traded side by side with gold bullion at many coin shows in the 40's, 50's and 60's, and may continue to do so in many markets.

Black Blade (02/19/03; 22:35:31MT - usagold.com msg#: 98022)
Gandy - Spot and Spike

You may have noticed that in the last couple of DMR's I mentioned that the weak specs have been largely shaken out and now gold can start to climb from a more stable base. I had mentioned that it was an opportunity to add to positions. Wall Street will have a very rough time in coming weeks and the USD will come under severe pressure as foreign funds are withdrawn from US dollar instruments. I won't go into details right now, but the short version is that the Fed is scared to death of raising rates and foreigner investors can get a better (and safer) rate of return elsewhere. The result is a steady weakening of the USD. Of course the growing deficit, war fears, "real rate" of inflation, rapidly growing money supply (as per Bernanke and Greenspan), etc. also combine to accelerate the dollar weakeness. Seriously though, gold and silver are grossly undervalued and the base of support is strengthening. The "Interesting Times" have only just begun.

- Black Blade

Waverider (02/19/03; 22:33:47MT - usagold.com msg#: 98021)
Sir Gandalf
Yes - Spot 'n Spike are both ready - this time I've given them HARD HATS so if they get TOO exhuberant when they see Streak flash by...well...we don't need any more concussions!

Black Blade (02/19/03; 22:21:30MT - usagold.com msg#: 98020)
Buena Fe

Sorry about that, sometimes my sarcasm, irony and very dry attempts at humor too often get taken seriously. Some of the small fry exploration and mining shares that trade on the Vancouver Exchange tend to be little more than some guy with a dream, a listing and too much of the time a lot of hype and even occasionally fraud. The old Chicago, Denver, and Salt Lake City OTC exchanges were much the same aa recently as the 1980's. A lot of hucksters were run out of town on a rail and several of them ended up in Vancouver. (Sorry but I won't name names for liability reasons)

If you intend to invest it always comes down to taking a very hard look at the company and its principals, a lot of research (balance sheet, funding, business plan, etc.), a thorough understanding of the geology of the proposed region of interest, the type of planned exploration/mining operations, and a study of the historical mining activity of the region where the company intends to operate. In the case of Silverado I was not inclined to even look at it very seriously as placer/paleo placer operations are extremely difficult to delineate and even the best sampling measures often prove to be inadequate, costly, and speculative at best. I do find the story of the whole affair rather amusing, however, I would prefer that the industry not get another black eye that can be used by the anti-gold investment community as yet another example of fraud in the gold mining sector.

Cheers!

- Black Blade

Gandalf the White (02/19/03; 22:15:48MT - usagold.com msg#: 98019)
Thanks Rich, for thinking of me ! <;-)
You said ----
R Powell (02/19/03; 19:29:02MT - usagold.com msg#: 98003)
Spot
now reported at $351.40
We're approaching that 350-354 level that was somewhat hard for spot to leap over on his/her first trip up here. I'll be impressed if the hounds can keep a steady pace higher without stumbling. I don't know if Gandalf is guiding them or if are on their own. Either way, good luck guys.
===
As both SPOT and SPIKE have climbed this Mountain before, I have entrusted their care to the Lady Waverider ! <;-)
I am quite busy helping Sir Slingshot plan the NEXT IMPORTANT action, and am able to only drop by the Castle and the TABLEROUND for a quick read.
This time both SPOT and SPIKE are ready for the $400 LEVEL !
<;-)

GratefulForGold (02/19/03; 22:04:46MT - usagold.com msg#: 98018)
MK -- Gold and "Anti-Money Laundering" regulations?
MK or others:

Excuse if this has already been posted, but I read it at our sister castle and immediately thought of Centennial. I don't know if Centennial falls under the "retail stores that also act as a dealer in such items" category and if this proposed rule under the Patriot Act affects you.

If you have any comments on this and its possible ramifications, I would be grateful for them!

(Also, if this subject has already been discussed and I missed it, please feel free to ignore this post).

#####

02/19/2003
Dow Jones News Services
(Copyright � 2003 Dow Jones & Company, Inc.)

WASHINGTON (Dow Jones)--Metals and jewelry dealers that do more than $50,000 worth of business per year would need to set up an anti-money laundering strategy, under a new proposed rule released Wednesday by the US Treasury.

The proposed rule covers precious metals dealers and refiners, jewelry manufacturers, loose gemstone merchants and retail stores that also act as a dealer in such items. Retail-only stores aren't covered by the rule, nor are dealers that buy or sell less than the $50,000 threshold.

The proposal is part of a series of regulations connected with the Patriot Act, counterterrorism legislation passed shortly after the Sept. 11, 2001, terrorist attacks. Businesses covered in the legislation are required to develop a strategy to prevent money laundering and curtail terrorist financing.

Comments are due 60 days after the rule is published in the Federal Register; Treasury said it expects the rule to be published next week.

R Powell (02/19/03; 21:15:55MT - usagold.com msg#: 98017)
Sector
Agree
And I do hope you are right. Time will tell.

darkhorse (02/19/03; 21:09:06MT - usagold.com msg#: 98016)
is the train wreck speeding up?
What would y'all be willing to bet that, before 7 Mar (just over two weeks time), we've let loose the dogs of war and gold is over $400? I can't put my finger on it, but there seems to be a real subtle kind of "hinky" feeling to everybody these days. All this talk of "limited options in a shrinking timeframe", the new moon phase coming up, and something a bit odd/different about the financial arena as a whole. Maybe I need to refill my meds, maybe I need to put my tinfoil helmet back on, or maybe I just need a cold shower...I just hope I don't need the plastic and duct tape!

ElGordo (02/19/03; 21:05:55MT - usagold.com msg#: 98015)
Drought map- food prices will rise
http://www.drought.unl.edu/dm/monitor.html
Looks like the 30's dust bowl.

Mark Twain said that history never really repeats itself.
But sometimes, it kinda rhymes.

Cavan Man (02/19/03; 21:03:30MT - usagold.com msg#: 98014)
PS sector
I did take note of your comment about the Lob wedge; it is my favorite club. I will forego the "2ball putter" because I am having enough trouble with the putter I currently use. I was going to make Another comment but this Cab Sav is putting me to sleep. (Cahli Neekta) That's g'night in Greek.

Cavan Man (02/19/03; 20:59:33MT - usagold.com msg#: 98013)
sector
(He claims he can hit a #5 pretty good....)
I second Mr. Gresham. We will play 18 this year yes?

Mr Gresham (02/19/03; 20:50:50MT - usagold.com msg#: 98012)
sector
Once more, I've gotta say how much I appreciate you, for the patience you bear, and the passion you put into your posts. I was going to say something about eloquence, too, but you're in good company today, and not much I can add that readers aren't likely to see for themselves.

ElGordo (02/19/03; 20:39:17MT - usagold.com msg#: 98011)
Huge class action suit filed against the securities industry!
http://www.guardian.co.uk/usa/story/0,12271,899111,00.html
A federal judge ruled yesterday that claims brought by more than a thousand investors, alleging that Wall Street banks rigged initial public offerings during the internet boom, could go ahead.

Many of the biggest investment banks are already facing a deluge of claims related to other issues, including the bankruptcies of Enron and WorldCom, and allegations that research analysts offered biased advice to secure corporate banking fees.

The ruling by district judge Shira Scheindlin followed an attempt by the banks, including Goldman Sachs and Credit Suisse First Boston to quash the claims.

In her 238-page judgment, she said there was evidence of "a coherent scheme by underwriters, issuers and their officers to defraud the investing public".

The claim is one of the largest class action suits ever filed against the securities industry. It names 55 underwriting banks and 308 companies that issued shares. Lawyers for the investors said the damages could top $1bn.
______
Couldn't have happened to a nicer bunch of guys....NOT!
This is going to really stink up troll street.

DummyANI (02/19/03; 20:35:05MT - usagold.com msg#: 98010)
GCC3 Access up110.2 $460
Why this value is truth ?

DummyANI (02/19/03; 20:31:40MT - usagold.com msg#: 98009)
Spike Jump $460
Spike Jump $460 Plus 110------> uppp

DAni

Dollar Bill (02/19/03; 20:26:29MT - usagold.com msg#: 98008)
Mogumbo Guru sez;
-We already see that the government issues debt, the banks buy the debt, and the Fed buys it from the banks with money it creates out of thin air, thus extinguishing the debt. How does this make interest rates soar? If anything, it should cause interest rates to fall, as there is so damned much contrived demand that the price of the debt soars, and thus makes the effective interest rate plummet. As they have been.

So interest rates should not be expected to soar until we start seeing the price inflation that always follows monetary inflation. And maybe not even then. Perhaps it is even possible for the Fed and the banks and the foreign central banks, working in some grand collusion, to keep this whole wheeze going, and at such levels that interest rates will forever remain low, even in the face of price hyperinflation! Who's gonna stop them? You? Hahahaha!-

sector (02/19/03; 19:58:39MT - usagold.com msg#: 98007)
@RichP A Forward sale...
...really does entail a title transfer
It and swaps are distinguished from options by the BIS and member banks are required to report their forward sales and swaps every three years to comply with the Triennial Report.

How does a producer cancel their hedges or forward sales? They deliver early, thus fulfilling the contract. Cash is provided to the forward seller at the time of the sale. The seller of forwards has a contractural liability to deliver metal that the buyer can demand be met by metal and only metal if that is what the contract stipulates. It is always true that contracts vary but the general use of the forward sale is to obtain cash for a future performance [Delivery of mined gold].

The point that I started with months ago was that the central bankers have far less gold in their vaults than experts surmise. The audits that I have offered confirm the view that half the central bank gold has been sold and no longer exists in the vaults. There has been a terrible cost to the West's central banks in this gold war -- and it's going to get worse for them.

There is a real supply/demand deficit on top of the loss of metal through central bank selling. Recall that the producer forward sale is a very effective way to hammer the spot price.

Let's wrap this up so we don't bore everybody here to tears and agree that the bullion bankers are in a bit of trouble.

Buena Fe (02/19/03; 19:50:22MT - usagold.com msg#: 98006)
Black Blade (02/19/03; 15:48:03MT - usagold.com msg#: 97983)
"The last thing the industry needs is another Bre-X situation."

C'MON BB so what, there are probably 5 bre-x's within our sector right now and 10 more in the imagination of some 2 bit promoter, i don't care, I EXPECT IT, cause that is the nature of VENTURE capital, like life, you have to take the good with the bad.

those who invest in exploration (to be honest, those who invest period), yet don't understand the enormous risk involved will most likely lose their poke. well to bad, grow the h..l up!

part of the problem with this manufactured low gold price, that we all harp about, is that the western investor has totally forgotten HOW difficult it is to FIND the PRECIOUS yellow stuff!!!!!!!!!!!!!!

who can name me the last +5 million oz gold discovery? the industry needs 15 of those new deposits a year ......... a YEAR!!!!!!!!!!!! i think foa is right, gold is going to 30m cause people are going (need) to learn all over again HOW HARD IT IS TO PUT OZ's ON THE TABLE FOR THE MRS.!

and while i'm a little wound up, there is probably 20 enron's (that's bre-x times 15 times 20 = 300), all ready mature, still to be exposed on wall street!

for the sake of the world, i suggest that we shut down the "scam capital of the world", the NYSE.

sorry bb, jus got to pass some gas i guess.

ElGordo (02/19/03; 19:43:12MT - usagold.com msg#: 98005)
@Slowman
Dealers in my area are out of silver bullion bars.
Check silver lease rates. They are jumping up.

Slowman (02/19/03; 19:39:47MT - usagold.com msg#: 98004)
Gold purchase confirmation
Just got back from spending two wks in Cancun, Mexico. It was great there without all the tourist. However, I , was able to talk to Japaneese house wives and found out THEY are definately purchasing GOLD and EUROS. Do not want US paper or even their own paper.
This confirms reports of their buying.

Today, I, tried to purchase a large quantity of silver. After calling 6 dealers, they all told me NO COIN available. The one dealer normally has 100 bags available most times. Even .999 stuff out of stock. All I could buy for immediate delivery was 725 oz. .999 and 200 face in 90 % coin.

Tried to purchase 100 Roosters at $66 ea Unc one had but he wanted $68. Really wanted SILVER. Nothing comming into the shops.

Just good information and hope YOU ALL enjoy.Guess i am going to have to purchase my 5000 oz goal slowly on DIPS.

R Powell (02/19/03; 19:29:02MT - usagold.com msg#: 98003)
Spot
now reported at $351.40
We're approaching that 350-354 level that was somewhat hard for spot to leap over on his/her first trip up here. I'll be impressed if the hounds can keep a steady pace higher without stumbling. I don't know if Gandalf is guiding them or if are on their own. Either way, good luck guys.

Buena Fe (02/19/03; 19:27:06MT - usagold.com msg#: 98002)
Aristotle (02/19/03; 17:18:32MT - usagold.com msg#: 97989)
sorry ari, call me dumb as a mud fence, but i entiendo sector fine, it is you who fogs my windshield.

Sundeck (02/19/03; 19:21:48MT - usagold.com msg#: 98001)
CB2 #97998 - Gold Fasans?
Gold Fasans? ... are they an Austrian bird? No, in Australia (my home) we have no fasans...although we do have bronzewing pidgeons and a Bronzewing Goldmine... :-)

R Powell (02/19/03; 19:14:32MT - usagold.com msg#: 98000)
Sector // gone or not gone?
I believe Aristotle has taken up were I left off with the same results. There is a difference between swaps, forwards and outright sales.

You said.....

"Any reasonably informed mining person knows that a forward sale is just that... funds are delivered and the metal is delivered at the future date at the agreed upon original strike price. The same applies for a swap. Title is transferred at the inception of the forward ands or swap."

This is not always true, in fact, in futures trading it is rarely so. Let me ask, if forwards were final sales or done deals, how then could hedged miners reduce their hedges? How could Barrick announce that they will deliver physical into some forward sales and unhedge the larger portion? This unhedging cancels by buying back WITH FIAT that which was sold for FIAT.

Without inspecting the forward contracts, we can not be sure how they are written but Aristotle is correct that many of these can be offset without the involvement of any physical. This is why I can accept gold as sold and gone if the central banks report less gold by weight or volume. Any other liens, swaps, or forwards may be (and 98% of the time are) simply a temporary transformation of the gold's monetary value into money (investment capital). Offsetting the paper debt offsets the lien on the gold.
If my home were debt free and I needed money, I could "sell" (mortgage) my home to a bank for cash. The title to the house is transfered to the bank or a lien is recorded against the property. If I offset this lien (pay back the mortgage) my home becomes lien free once more. At no time in this procedure is the house really gone, in fact, I can keep it in my possession all the time. The house, like the gold, is simply collateral used to raise needed cash.
I guess we've beaten this to death. Physical gone from the vaults implies sold and gone. The rest may be and probablt are offsetable paper liens.
Rich

Sovereign (02/19/03; 18:49:35MT - usagold.com msg#: 97999)
Mister Aristotle,
The full quote is "...with different expiration dates." Aristotle, you are attemting to kill the messenger when you can't refute his message. In philosophical lingo, (here's a free lesson for you), it's called ad hominem.

Yes, when there's backwardation, for instance--as in, the near-term futures contract being more expensive than one further out--, arbitrageurs sell the near-term contract and simultaneously buy the longer-term one, betting that the spike in price is due to a temporary disruption in the markets and will correct itself (soon, hopefully!). THE MOMENT THEY REALIZE THEIR BET BY BUYING AND SELLING THE FUTURES WITH DIFFERENT EXPIRATION DATES, THEY START INCURRING GAINS AND LOSSES THAT THEY THEREBY EXPOSE THEMSELVES TO.

In other words, this is not mere empty word games we're talking about.

Furthermore, may I respectfully suggest that it is not in good taste to cheapen gold and the truth that it stands for by associating it with a silly milk commercial?

A sense of aesthetics and virtue--go get yourself some.

Goodbye for now, Sir Aristotle. Dinner time!

CoBra(too) (02/19/03; 18:35:52MT - usagold.com msg#: 97998)
@ Sundeck ... Oiligarchy!
Thanks for being observant.

One shouldn't go venting and missing the clear and visible observations. As I have to admit, I rarely, if ever
use a dictionary ... except the Cassel's - verry British - and they may be new to the oily... are they not - except BP, or is it Royal Dutch?

Anyway, thanks for the great interpretation ... ;-) cb2 - an elderly austrian peasant - pleasantly, not a pheasant ... though, we've got Gold Fasans ... do you too?

Aristotle (02/19/03; 18:09:01MT - usagold.com msg#: 97997)
Sovereign:
"To the best of my knowledge, they usually involve the simultaneous buying and selling of futures contracts..."

Then as respectfully as anyone may possibly offer the observation, let me say there's room to expand your ceiling. I'll admit I've got miles to go myself, I can't see through walls, but I can assure you with confidence it doesn't end there. Sector's fault is oversimplification of the Metal/paper connections, and that's all BEFORE we throw in the inevitable political nuances. Sheeeeeesh! It's too much to convey. Why else do you think FOA's Gold Trail is as Loooooooooong as it is? Because it *HAS* to be!

Gold. Get you some. --- Aristotle

Sundeck (02/19/03; 18:05:38MT - usagold.com msg#: 97996)
CB2 #97993 - Spelling while venting
Apologies CB2, but I think you have need of an American dictionary..."oligarchy" is the English version, "oiligarchy" is the correct American spelling...

;-)

Has anyone noticed that Spot is off the chain?

ElGordo (02/19/03; 18:03:22MT - usagold.com msg#: 97995)
Third World politicians skimmed $100 billion from World Bank
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=31104
Cobra-some more globalization news for you-
-----
According to a recent study by Northwestern University political scientist Jeffrey Winters, in the last five decades corrupt officials from Third World countries have skimmed an estimated $100 billion from World Bank loans.

Not until 1996 did the World Bank institutionalize a strategy and mechanism for combating the corruption inside the institution, which next to the federal government is the largest employer in Washington.

The years passed. In 2000, the bank shifted the chairs on the deck of what seemed to some like the Titanic, merging its corruption-and-fraud-investigations unit and its office of business ethics into a department of institutional integrity. That same year the General Accounting Office, the U.S. congressional watchdog, issued a report calling on the World Bank to make greater efforts to control corruption.

But the U.S. Treasury Department is the executive-branch overseer of the development banks. And in November 2000 it successfully killed recommendations to Congress proposed by the U.S. Agency for International Development that greater public disclosure of the banks' operations be mandated and a better process of external and internal review be established to prevent potentially illegal loans from being approved.
___________
Banking in the world is some kind of criminal enterprise?
Yakuza in Japan, JPM, IMF, BCCI, Savings and Loans scandal etc There is no end to slimey banking.

CoBra(too) (02/19/03; 17:50:13MT - usagold.com msg#: 97993)
Indications of a Service Centered Economy?
@ El Gordo -your latest post on skyrocketing gas prices - as true as it is, and maybe just the beginning of a severe shortage - says it all. Particularily in the last paragraph.
"The director of policy analysis and statistics..." - won't ameliate the clear and present danger of gas shortages. Or will he? Did the director offer any solutions to the present danger of line ups at the gas station - costing zillions of man hours - or did he offer any other solutions to the fact that the USofA has to secure cheap oil under the pretext of ridding the globe from terrorist regimes in the oil rich ME?

How should I know, what's the real agenda as the deployment of troops is ongoing and Rummy says Germany -et al? - are akin to regimes of Lybia and Cuba. The man might be in dire need of a real good Cigar (oops, that was another era!)and some Cuba Libre.

Anyway - there you are; US troops spread around the world - no wonder the US needs homeland security as it seems no-one is left to defend the same. Kind'a comical and even suggesting to pull 70 plus thousand GI's outta Germany is stretching the imbecile.

After all Schr�der has proven his disloyality and should be kept under wraps, occupation, oops, not concentration camps, gramps.

Not even mentioning Chirac, who dares to stand up against the political correct interpretation. French - a tough language - oui non? ... as tough as Bien Pien Phuh- Hu!?

As I may be totally wrong ... and the empire will achieve everlasting pieces of elastic peace ... I'd rather hide under a shield of self-sufficiency and morsels of liberty by holding some reality - GOLD.

What a mess the established oligarchy preaching democracy has made under the pretext of globalization - of hedonistic lies - to appease the masses (J6P) and the more ufortunate not having Wal-Marts neither in their SUV's nor credit range.

... And these guys probably won't care too much if a swap, a forward or any other derivative on gold is an outright sale - spot deferred or else - as they depend on morsels of real food and not on dollarized future(s) promises, which may be or be not honored in kind.
- Oh, you can live on hope for a while - and without hope there's no future - though on hope alone there's guaranteed no future at all ... cb2 - venting ...

silvercollector (02/19/03; 17:38:16MT - usagold.com msg#: 97992)
I'm beginning to have a great deal of respect for this word "forthcoming"....
At the latest debate at the UN it was argued that Iraq was not genuinely "forthcoming".

Kinda like 'hiding things', being honest and telling the truth. Out in the open or hidden agenda, truth or lies, "fabrication & lies", the 2003 phrase of the year.

I wonder if the CEO's and CFO's in the last couple years have been "forthcoming"?

Are the American government/military/politicians forthcoming? Will the CB's be "forthcoming" about their physical gold holdings?

I get it.....'selective' forthcomingness.

Sovereign (02/19/03; 17:29:54MT - usagold.com msg#: 97991)
Aristotle: "a swap isn't a sale."
Dear Sir,

I have often observed you make convoluted arguments devoid of substance but heavy on self-aggrandizement.

But now you are starting to disseminate what is plainly false information. Sector is right on this count. There is a real transaction or exchange of assets taking place in the case of swaps. To the best of my knowledge, they usually involve the simultaneous buying and selling of futures contracts of the same underlying commodity/financial asset only with different expiration dates, to supposedly take advantage of potentially profitable arbitrage (speculative)opportunities.

By the way, philosophy really started going downhill after Plato, as a matter of fact. ;.)

silvercollector (02/19/03; 17:27:29MT - usagold.com msg#: 97990)
sector, R.Powell, Aristotle
While the rest of us wait in great awe for you guys to sort out this 16,000 tonnes in CB vault issue I must refer back to a story a year or so ago; it might have relevance.

The Phillipine (I seem to recall) CB admitted it had loaned out 'X' tonnes of gold but still had in on their books as 'gold on hand'. Apparently, if my memory serves correct, this is/was the practise it was to adhere to as outline by the IMF. Co-incidently, the receiver of the loaned gold ALSO had it on their books. This issue sprung about another round of the 'double-counting' debate. We later learned several other CB's were in the same league.

Further, BB gave us a link some months ago from the WGC that claimed all offical (CB) held gold was steady at 32/33,000 tonnes, a number tossed about for the last several years.

Now lets put some numbers together. Offically held gold is not 33,000 tonnes if Phillipine alone is double-counting. Throw is another handful of (admitting) CB's and the 33,000 begins to fall off noticably. Throw in another group of CB's that are not so forthcoming and the 33,000 number begins to fall off quickly.

So where are we, obviously below 33,000, but how far? You guys are debating this forward/swap/loan issue quite vigorously; does it all pertain to physical?

How does one measure paper? I believe physical would be easy to account for, wouldn't it? Let's go count it, shall we? Let's start in the good 'ol US of A !!

Aristotle (02/19/03; 17:18:32MT - usagold.com msg#: 97989)
sector, you have "tonnes" to learn about banking
Seeing no progress whatsoever, I'm gonna have to admit you've successfully resisted the full extent of my patience for a good will effort to give you a leg up. What can I do when you selectively ignore each important point that runs counter to your own thoughts? You make it further impossible by offering a moving target for corrective measures as you vacillate from misnderstanding to misunderstanding.

For the benefit of others, let me simply say again that your understanding of swaps and forwards is attrocious. Think for a minute. What is accomplished by listing forwards on on a sheet of stats? In your world, if the bank is being less than forthright about reserves versus actual sales, then why on earth would they announce these forwards, that is, these future commitments (in your world) to sell Gold openly and before the fact???

Since you're now (at least in your latest post) willing to admit that no funds change hands until the future date, why don't you give some thought to what is ACTUALLY represented by a forward while it's on the books. It seems that this represents the amount of Gold that you claim is being sold or already sold, but doesn't that then beg the question, what are we ACTUALLY left with when these forwards play out and are no longer on the books?

In other words, when a mature forward (say, after 90 days) is a done deal, what's the legacy on the bank's books? You see nothing! Go ahead... try to point to something. If this still doesn't sink in, have another look at my second-to-last paragraph, previous post to you. What's the sound of one hand clapping?

That's it. You've survived. I'm done beating my head on this wall.

Gold. Get you some. --- Aristotle

ElGordo (02/19/03; 17:10:48MT - usagold.com msg#: 97988)
California lost TWICE as many jobs as reported!
http://sanjose.bizjournals.com/sanjose/stories/2003/02/17/daily28.html
State's real unemployment may be higher than reported

Puzzled over how the acres of vacant offices, labs and manufacturing plants in Silicon Valley add up to an unemployment rate of just 7.5 percent? There may be a basis for that apparent disconnect.

The state may have been hiding the real unemployment figures, according to reporting by the San Francisco Chronicle.

The newspaper says in its Wednesday editions that California apparently lost twice as many jobs in the recession than the official unemployment numbers show -- especially in high tech.

The Chronicle says it's obtained confidential data based on the unemployment insurance tax payments made by employers and filed quarterly with the state. The newspaper says the data show that California lost 205,000 jobs at the end of June 2002 compared with the employment peak in 2001.

The widely-reported official Employment Development Department figures for the same period indicate a loss of 99,000 jobs -- half as many as may have been lost in reality, the newspaper says.

The Chronicle says experts say the EDD figures, when compared to the total number of jobs in the state, are within an acceptable margin of error.

The discrepancy in the figures may be due to how the two totals are reached. Employer tax filings are an actual count of employees, while the EDD number is based on a survey of a sample of employers who are asked how many people work for them, the newspaper notes.

The EDD has declined comment on the information the Chronicle found.
_______________
I always thought the jobs numbers were BOGUS.

Topaz (02/19/03; 17:01:32MT - usagold.com msg#: 97987)
@mikal#97950
All valid reasons for a weakening dollar Sir, the fly in the ointment is competitiveness of Foreign Trading vis said weak Dollar.
Theoretically - Dollar/Gold retraces to $322, (filling a percieved void as I see it)...and the Euro goes back to parity+/- ...a Dollar "dead-cat bounce" if you will - and the consequence imo of a US capitulation on Iraq...all achieved by Foreign interests...at some point in the interim Bond Holders will abandon enmasse....Lets watch!

cheers mikal.

ElGordo (02/19/03; 16:38:53MT - usagold.com msg#: 97986)
Gas prices starting to hurt economy
Reuters
Wednesday, February 19, 2003; 3:18 PM

NEW YORK - Retail gasoline prices in the United States have breached $2 a gallon in some major cities as domestic fuel supplies drop sharply and fears abound over potential war on oil supplier Iraq.

The average retail price for regular gasoline in San Francisco was $2.044 a gallon on Wednesday, while premium grades in cities like Los Angeles and Oakland were also above $2, according to the American Automobile Association.

The high fuel costs recall the sharp retail gasoline spike of the spring of 2001, when pump prices hit a nationwide record-high of $1.72 a gallon, and cities all over the West Coast and Midwest surged over $2 a gallon.

Prices for gasoline are expected to continue to rise as spring approaches, potentially breaking new records, as driving demand traditionally picks up steam with more pleasant weather and pressures inventories.

The fuel crunch, which is dealing a blow to consumers' pocketbooks and threatening the nation's economic recovery, highlights a need for the U.S. to become more independent from unreliable foreign oil supplies, the American Petroleum Institute (API) said on Wednesday.

"We're in the same fix we were in two years ago, and nothing's been done to fix the problems that existed then." said John Felmy, director of policy analysis and statistics at the API, which represents members of the oil industry.

Socrates964 (02/19/03; 16:38:29MT - usagold.com msg#: 97985)
msglory
"what of Canado and Mexico who have such a stellar customer as U.S.? Would they lose their business with us and have to ship oil to, say France and Germany? Wouldn't this cause such instability in our bordering neighbors that--------Oh my, of course--- we would have to go in and settle any problems they might have."

You may well be right on your final point, but not because of Canadian/Mexican oil. The point of my post was that even if the US gets full control of Iraqi oil fields, they are not going to unleash a flood of supply because output is already close to historic highs. I surmise from this that without major new investment to boost output, the US oil companies that take over Iraqi oil will not secure a lever for forcing prices down (or conversely, they would have to take over more than Iraq's oil to get one)

Unless you believe that the US would impose sanctions on NAFTA members that sold to France (most unlikely in my view) - it makes no difference where the Iraqi oil goes. Think of US oil companies as being like the owners of a supermarket selling beer at $5 a case. The beer comes from a brewery that is producing at full capacity. The supermarket owners kidnap the brewery owner and get him to sell the entire output of beer at cost (say $1 per case) instead of the wholesale price of $2. Now the supermarket owners could cut the retail price to $4 and keep their margins intact, but as this does not entail any pick-up in volume because there's no extra supply, they have no incentive to drop their price - result they keep on selling at $5 and pocketing the extra $1 of profit. They don't care who buys the beer at retail level. Now assume that the supermarket's demand for beer is much larger and requires 5 breweries to produce at full capacity. They may well decide to boost their margins by kidnapping the other brewery owners, but their actions with regard to one brewery only affect their relations with the other brewers in so far as the latter are intimidated into dropping their prices. Can the other brewers be prevented from selling to other supermarkets at better prices, in theory yes, but we are then talking about the US dominating the rest of the world - which I find improbable.

ElGordo (02/19/03; 16:27:23MT - usagold.com msg#: 97984)
Tomorrow we blow through $6.4 trillion debt limit
WASHINGTON, Feb 19 (Reuters) - The U.S. Treasury Department said on Wednesday it was taking steps to avoid bumping up against the government's self-imposed $6.400 trillion borrowing limit, giving the White House another political headache as it tries to sell its economic policies.

"Together we must continue working to enact an increase an increase in the statutory debt limit as quickly as possible to avoid any negative repercussions at home or abroad," Treasury Secretary John Snow said in a letter to Capitol Hill legislative leaders.

Treasury had first asked Congress in late December, and then again in early February, to up the limit. It did not specify the amount of new borrowing capacity sought and Congress left for its mid-winter vacation without acting.

In the letter, Snow said he will use a short-term federal workers retirement fund, the so-called G-Fund, to keep Treasury from hitting the limit. Separately, the Treasury's Bureau of the Public Debt also said it was suspending its State and Local Government Securities program, which counts against the debt cap, immediately. Treasury resorted to similar measures twice last year when it sought a hike in the debt limit.

Seeking a debt hike as it pushes its economic package could pose political problems for the Bush administration. The proposed Bush budget foresees record budget deficits, which would have to be financed by adding to the national debt, in 2003 and 2004.
_______________
As the national debt rises, it puts pressure on rates.
3/4 of 6.4 trillion is financed very short term.
The average debt maturity for the entire $6.4 trillion is
only 5.6 years.
_______________
New moon is on March 3 and April 1. So the first week in either
March or April will be the darkest. War could start in 2 weeks.

Black Blade (02/19/03; 15:48:03MT - usagold.com msg#: 97983)
Gold analyst 'disappears' following WND report
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=31106

Touter of Silverado stock rumored to have fled country after story ran

Snippit:

A controversial gold "analyst" who had touted the stock of a company that was the subject of a WorldNetDaily investigative report has subsequently disappeared, according to industry insiders. Bob Chapman was last seen at the 2003 Vancouver Investment Conference, held Jan. 26 and 27, where he was a featured speaker. Since then, several analysts report that Chapman's phone has been disconnected, that he has not replied to e-mail and that he is weeks behind in filing promised financial reports to editors. "Three weeks ago [Chapman] disappeared," said Bill Murphy, chairman of the Gold Anti-Trust Action Committee. "We can't find him. Word is he's gone to Mexico." Continued Murphy: "I'm not happy with this situation. I have few facts to deal with. He's written for my site for four years. He's missed three Saturdays now. I don't know what's happened. It's not showing courtesy for him to not tell others what he's doing. "All my people say his phone's been disconnected, and he doesn't respond to e-mail," Murphy added. "He won't contact me. I heard he's in Mexico. That's just a rumor. It's the craziest thing. "He's gone AWOL. Maybe he's lost at sea � who knows? It's disturbing because of the negative publicity. A standup person would at least answer, not disappear. I liked Bob very much, but I'm very disappointed. I've got to tell my own people something. I haven't written anything yet, because I can't find the friggin' words."

Black Blade: This story is getting legs and won't disappear. However, at least gold and silver in hand won't vaporize into the ether. The last thing the industry needs is another Bre-X situation. I hope Chapman did go anywhere in a helicopter. Hmmm�

Off to the gym!

sector (02/19/03; 15:42:08MT - usagold.com msg#: 97982)
@RichP The Paper Trades
..still involve a title transfer in many cases so...
..the owner of the vault may not be the owner of what's inside and until there is much more transparency we will be left sifting through the BIS reports.

The Insight article is very big in part becuase Washington is abuzz with all manner of dirt and recriminations these days...wouldn't you LOVE to be a fly on the DC cocktail party wall this weekend?

sector (02/19/03; 15:30:01MT - usagold.com msg#: 97981)
@Aristotle Barrick will find it interesting...
...that their forward sales aren't sales...and that they don't have to deliver into their hedgebook to satisfy those forwards
...and according to your "sources" [...ooops you didn't quote any] they didn't receive any funds for these forward sales. Better tell Mr. Munk about THAT. He will have to restate earnings!

Title changes hands in a forward sale and swap. A transaction involving assets takes place. Did you imagine that gold swapped because the central bankers thought other bars looked prettier than their own?

Loans too I suppose from your rant. I guess from the fog of your comments that when a central bank loans its gold, the borrower doesn't do anything with the gold...just strokes it I guess you are trying to say. The borrower Sells the borrowed gold for currency which is then invested in interest bearing instruments which used to be called the gold carry trade before rates fell through the floor. Rent a Lexus, then sell that Lexus�this is what some bullion banks have done with gold. Only the cost of the Lexus has gone up so the borrower is in a jam.

I have JPM ISDA [International Swaps and derivatives Association] contracts for gold/interest rate swaps if you would be so kind as to provide your e-mail.

Any reasonably informed mining person knows that a forward sale is just that... funds are delivered and the metal is delivered at the future date at the agreed upon original strike price. The same applies for a swap. Title is transferred at the inception of the forward ands or swap.

A swap is a swap of an asset [In this case gold] for another asset usually currency funds. A quick look at the Austrian central bank website annual report [google search]will show they received cash for their gold swap and now carry that cash as a liability until the gold is returned to the vault from where it was removed. Portugal also describes their gold swaps in exactly the same way. They received cash then sent the gold away to the new owner. Portugal also lost hundreds of tonnes of gold in the Drexel Burnham Lambert fiasco. Derxel failed to return Portugal's borrowed gold.

To imagine that the central banks have possession of gold that their own annual reports say they do not have is foolish. The issue is closed, Half the gold in central banks has been lost and isn't there.

The key to understanding a forward an swap contract is to appreciate that title to the asset has changed hands in exchange for another asset usually cash.

CoBra(too) (02/19/03; 15:16:12MT - usagold.com msg#: 97980)
@R. Powell -
Hello Rich,

Not tons, though as much as I can afford - comfortably... and still adding on dips. Remember! You've got to buy the dips!!!

Meantime, the worst -and that comes after BAD - seems to be that the administration is feeling that its preferred GSE's Fannie and Freddie are in dire need of a new over-seer, or is that over-looker? As your guess may be as good (or bad) as mine, the RE-Bubble may represent the last bulwark of the consumption economy!

Somebody seems to realize that you can't fight fire with fire, nor debt with more debt - except in an emergency for the short term. At that stage the term emergency becomes obscure as you're apt finding no escape from the engulfing fires. A real flagrant debt trap!

... and by artificially supressing the POG for so long to keep up the pretense of a working and valid currency system
the trap is already sprung - the trap of bankruptcy - and the only potential defense or cure - the gold patrimony of the people - has been squandered and is gone ... forever?

cb2

Black Blade (02/19/03; 15:09:17MT - usagold.com msg#: 97979)
Wall Street Confidence Games

Trading on the big board was quite dull today as there were few buyers and volume was low. In typical fashion the markets sprang to life in the last hour and interestingly the DOW finished slightly above 8,000. What is curious about this is that the block trades come in for select stocks that move the indices and suspiciously end at or just above a psychologically important level. The individual investor isn't buying it. With few small fry to attract into the market the media have blitzed the television tube with an assortment of carnival barker analysts and strategists screaming, begging, and even pleading for individuals to put their money into stocks. Good god they sound like late night infomercial charlatan Don Lepre selling some "get rich quick" scheme. The pleading became more intense over the weekend and much of the time with seemingly gleeful comments that "gold has fallen sharply from its peak". Remember that these clowns were the same ones telling us that the "New Economy" of dot.gones and techs would rise forever.

Trim Tabs reports that there are net outflows from mutual funds to the tune of $8 billion and inflows into bonds to the tune of $10 billion. Obviously individual investors are bailing out of Wall Street and focusing on Main Street while institutional investors continue to prop up the markets to some perceived psychologically important level in hopes of attracting the last few remaining suckers. Unfortunately for the institutionals the small fry do not see any compelling reason to get reamed over and over. It is a simple case of "once bitten twice shy" or "fool me once shame on you, fool me twice shame on me". Meanwhile the markets will continue to trend lower but with Wall Street interests playing confidence games in an attempt to suck those last few pennies out of the pockets of gullible suckers. We should see several bear market rallies over the course of the inevitable stock market freefall amid more earnings warnings, corporate failures and lay off announcements keep piling up.

Hey, if anything these charlatans will provide us with a lot of entertainment and the gullible suckers who fall for the siren songs of Wall Street will provide a real life study of Darwin's "Natural Selection" in action. Meanwhile the rest of us can quietly and surreptitiously accumulate hard assets, make very selective defensive investment choices, and get our house in order while the economy slowly implodes. "Interesting Times"

- Black Blade

mikal (02/19/03; 14:42:44MT - usagold.com msg#: 97978)
@R.Powell
IMHO, a large portion of the sold western CB Au went to the M. East, Russia and her neighbors and the Far East, including India and China.

Aristotle (02/19/03; 14:41:20MT - usagold.com msg#: 97977)
sector's irony
You said, "Milling-Stanley needs to get a clue here and do some real checking before he digs himself into a really deep hole."

Hey, that's great advice all around. Now if you'd be willing to give your own shovel a rest I might be able to find a rope that can still reach you. Hello? Sector? Hellooooooooooooooooooooooo...

= = = =
sector (02/19/03; 08:52:10MT - usagold.com msg#: 97949)
@Ari So...we agree that half the central bank gold...
...has been sold...
...and that the sold forward and swapped gold isn't in the vaults anymore.
= = = =

Yikes!!! That you've somehow surmised that I'm in agreement with you on this only serves to make me further question your interpretive efforts. If I gave you an inch of yarn, I do believe you could knit me a sweater! That's an incredible talent insofar as it isn't misapplied. Maybe if we put that talent to better use you could fashion a ladder out of my little bits of rope and maybe somehow we might manage to get you outta that hole.

Where do we start? I honestly get the impression that you don't quite know what a swap is. Should we start there? Do you know what a forward is? How about a loan? While demonstrating no observable appreciation (grasp) for the intricacies of banking you jumble them all up and call everything a sale.

Let's keep this simple. A swap isn't a sale. That's why it's called a swap, and not a sale. And a forward? No "real currency" is paid up front. At it's simplest, it's an agreement to a future exchange rate. Maybe, just maybe, some of these forwards (not a sale!) could be viewed as the back side of a spot swap (also not a sale!) And what might we see these swaps as? Well, for starters, how about as part of a mechanism to increase commercial banking reserves (how?) with a penstroke reallocating the account of in-house assets as commercial deposits (why?) to collateralize something sorta akin to a refinancing operation for that institution?

There's no need to let all this make your head swim because it's an intellectual pursuit that really doesn't have any material payoff in the end -- except giving you the satisfaction of calm understanding. It won't make any sort of "cabal" or "cartel" come crashing down, because you won't have revealed anything any more scandalous going on than *gasp!* the use of Gold in a monetary capacity withing the banking system. However, there IS an upside with this newfound calm understanding. You'll be informed to the wisdom of an ongoing program of Metal acquisition, and be more inclined to spending your time productively making money for that purpose rather than chasing paper rainbows or playing cloak and dagger with your buddies. But, hey, fun is fun and can be an end unto itself. To each his own.

Gold. Get you some. --- Aristotle

R Powell (02/19/03; 14:20:38MT - usagold.com msg#: 97976)
Sector
Congrats on the Kelly O'Meara article. Being in a major publication it will not go unnoticed. Have you sent a copy to the WSJ and the IBD?

I read your 97924 post from yesterday and I'm beginning to think you are right if the physical gold is actually not longer in the bank's vaults. I'm still suspicious of paper liens, still believe that which only exists on paper can be sold, and still believe most of the carry trade for gold was a paper game without physical delivery. However, if the banks report (by weight) that gold is no longer held, then even this sceptic will admit it's gone. Thanks to you and the GATA team for all the efforts over many years.

Now, you're not off the hook yet. If these banks have dishoarded this great amount, the obvious question is, who now holds it? The Russian and Chinese central banks (governments?) have acquired some, some may have filled the gap between production and use, as in industrial use and jewelry and some probably found its way into private hands. Yes? And what of the rest of it? Are there other banks with increases to account for some? Have Aristotle, CoBra(too), Gandalf and Randy formed a holding company with thousands of tonnes? Whose got the gold?
Thanks
Rich

Daniel Druff (02/19/03; 14:10:00MT - usagold.com msg#: 97975)
Apple For The Teacher
TownCrier (02/19/03; 12:02:13MT - usagold.com msg#: 97966)
Fed doing what it does best... making new money

I always appreciate these reports.

Sector:

Excuse me but do you know who Mr. James Burton is? Are you familiar with his past accomplishments(?)?

Mr. Burton was the head man for a rather large retirement fund until last October when he officially became a cog in the WGC group. This man is connected unlike anyone else I can think of to ALL pension funds in the USA. After his people fill their sack, I'm pretty sure the WGC will change their tune.

Relax, we're certainly on the right side of gold.

Thank you

Pizz (02/19/03; 13:56:13MT - usagold.com msg#: 97974)
Just sent the wife out for more canned goods, etc
About two hours ago we had a complete power outage in the small city where our offices are located.

Not that it doesn't happen two or three time a year, but it's not normally everything - street lights, signals, phones, - all power went.

When we walked outside people are coming out of buildings with a dazed look on their faces - cell phone circuits were maxed out.

I walked 4 blocks before I relaxed a bit when I saw signal lights working 10 blocks north of us.

The power company was inundated with phone calls wanting to know what happened. Turned out it was an equipment failure at a sub station.

If we get any major terror attack to the power grids - as we know - we're in BIG TROUBLE.

The fear is already out there, I just saw some of it on a false alarm. And you know, I'd bet not 1 out of a thousand will go home tonite and do some preparing.

Could get real ugly - even with a fertilizer truck backed up to the wrong place.

Been talking to a few of my peers within the industry and outside of it. Business is down dramatically all over the country. Right or wrong, Bush has got to make a decision quick - and he better put the 2004 elections out of his mind - cause it's appearing more like a lose - lose senario no matter what he does.

Buy, hold, and hang in -

Great gold article by O meara - thanks.

Pizz

msglory (02/19/03; 13:50:06MT - usagold.com msg#: 97973)
Socrates964 (2/18/03; 17:27:32MT - usagold.com msg#: 97904)
" I nevertheless think that the evidence of Afghanistan and the activities of Unocal/Enron in the region point to the fact that the leaders of the US are acting in their own narrow business interests. "

Socrates964 (2/18/03; 17:27:32MT - usagold.com msg#: 97904)

Mr. Socrates,
I have never expected otherwise of the leaders of the U.S. (or any other country), but in the unlikely event we could pull off a victory and gain access to the oil, what of Canado and Mexico who have such a stellar customer as U.S.? Would they lose their business with us and have to ship oil to, say France and Germany? Wouldn't this cause such instability in our bordering neighbors that--------Oh my, of course--- we would have to go in and settle any problems they might have.
Oh well, I guess I have answered my own question.

In any case we can yap about oil all we want to. IMHO is the threat of oil for Euros which Saddam highlighted for us in October of 2000 that is the fighting point here.

Back to lurking and listening to the big dogs.

msglory

Waverider (02/19/03; 13:33:41MT - usagold.com msg#: 97972)
VIP: DAILY GOLD MARKET REPORT
http://www.usagold.com/DailyQuotes.html
Hot off the press...

sector (02/19/03; 13:17:48MT - usagold.com msg#: 97971)
The World Gold Council's George Milling Stanley
Why he is DEAD WRONG about central bank reporting
"The central banks are under no obligation to report what they lend into the market, what they place on deposit and what they do with their swaps, so there's a conventional-wisdom view, and a couple of different bodies have done some fairly serious research in[to] this and have come up with a figure [of] around 4,500 to 5,000 tonnes."

+++++++++++++++++++++++++++++

In this single statement we find the core of the World Gold Council's incompetence and uselessness as a promotional body for gold producers.

Mr. Milling-Stanley fails to appreciate that the members of the Bank for International Settlements DO have an obligation to report their forwards, swaps and options to the BIS every three years in the BIS Triennial Survey.

It is in THAT central bank data that we have learned about the truth of 16,000 tonnes of central bank forwards and swaps. It is THAT data that makes a mockery of the WGC and its vaunted Gold Field Minerals Services statistics section and its rediculous 4,500 tonne reports.

These Hush-Puppied bozos at the WGC don't even bother to read the central bank BIS reports let alone the annual reports of each central bank which provide even clearer data about gold on deposit. The Portugese Central Bank is a model of reporting veracity. One knows where every bar is and was.

Milling-Stanley needs to get a clue here and do some real checking before he digs himself into a really deep hole.

In any event the gold producing world needs to exit theWGC as soon as possible.

Buena Fe (02/19/03; 12:58:53MT - usagold.com msg#: 97970)
grapefruits and gold
http://www.insightmag.com/news/370641.html
here is the correct link.

Buena Fe (02/19/03; 12:55:46MT - usagold.com msg#: 97969)
how to rise above the iq of a grapefruit!!!!!!!!
sector,
thanks for posting that smashing article, VITORY IS CLOSE.

go gata go

sector (02/19/03; 12:30:54MT - usagold.com msg#: 97968)
Panic Is Near if 'The Gold Is Gone'
Insight on the News - World [Washington Times Internet magazine]]

Issue: 03/04/03
------------------------------------------------------------------------

By Kelly Patricia O Meara
Gold. It's been called a barbarous relic, and those who focus on its historic role as a standard of value frequently are labeled "lunatic fringe." Given the recent highs in the gold market, it looks like the crazies have been having a hell of a year. With the stock market taking its third yearly loss, gold returned nearly 30 percent to investors, moving from $255 an ounce to six-year highs of $380.

Just about every analyst and "expert" on Wall Street willing to mention any of this has been quick to explain that the increase in the price of gold is due to impending war with Iraq. But hard-money analysts are arguing that should the United States go to war it will be of very little consequence to the price of gold -- a momentary blip -- because gold is a commodity and its price a matter of supply and demand.

The "lunatic fringe" long has argued that the price of gold was being manipulated by a "gold cartel" involving J.P. Morgan Chase, Citigroup, Deutsche Bank, Goldman Sachs, the Bank for International Settlements (BIS), the U.S. Treasury and the Federal Reserve, but that the manipulation had been sufficiently exposed to require that it be abandoned, producing the steady upward increase in the price of the shiny, yellow metal.

In fact the "gold bugs," as they're known, are so sure of their research that not only do they believe the price of gold will continue to climb, but many are expecting to see prices of $800 to $1,000 an ounce. Until recently, most in the gold and financial worlds scoffed at such a prediction, but last month the Bank of Portugal made an announcement that shocked those who credit official gold-reserve data and added fuel to the contention of the gold bugs that the "gold-cartel" manipulation is in meltdown.

What the Bank of Portugal revealed in its 2001 annual report is that 433 tonnes [metric tons] of gold -- some 70 percent of its gold reserve -- either have been lent or swapped into the market. According to Bill Murphy, chairman of the Gold Anti-Trust Action Committee (GATA), a nonprofit organization that researches and studies the gold market and reports its findings at www.LeMetropoleCafe.com: "This gold is gone -- and it lends support to our years of research that the central banks do not have the 32,000 tonnes of gold in reserve that they claim. The big question is: How many other central banks are in the same predicament as the Portuguese?"

Murphy explains: "The essence of the rigging of the gold market is that the bullion banks borrowed central-bank gold from various vaults and flooded the market with supply, keeping the price down. The GATA camp has uncovered information that shows that around 15,000 to 16,000 tonnes of gold have left the central banks, leaving the central-bank reserves with about half of what is officially reported."

This is why those who follow such arcana are predicting an explosion in the price of gold. According to Murphy, "The gold establishment says that the gold loans from the central banks are only 4,600 to 5,000 tonnes," but his information is that these loans are more than three times that number, which means "they're running out of physical gold to continue the scheme."

According to Murphy, "The cartel has been able to get away with lying about the amount of gold in reserve because the International Monetary Fund [IMF] is the Arthur Andersen of the gold world." He has provided to Insight documents from central banks confirming that the IMF instructed them to count both lent and swapped gold as a reserve. "In other words, the IMF told the central banks to deceive the investment and gold world[s]. Once this gold is lent [or] swapped, it's gone until such time as it can be repurchased. And with the skyrocketing price of gold we're now seeing, it would be incredibly expensive, let alone nearly physically impossible, to get it back."

What is important to understand, says Murphy, "is that there is a mine and scrap supply deficit of 1,500 tonnes, which is an enormous deficit when yearly mine supply is only 2,500 tonnes and going down. On top of that, there are these under-reported gold loans and other derivatives that are on the short side. There is no way to pay this gold back to the central banks without the price of gold going up hundreds of dollars per ounce. So the peasants and women of the world will have to sell their jewelry at say $800 an ounce to bail out these short positions or someone is going to have to tell the world that they don't have the gold that they have reported," shaking the world's financial system to its core.

The gold bugs appear to be basing their identification of a world gold shortage on industry data, much of which has been summarized in two papers prepared by four different gold analysts at different times using separate methods. The first paper was written by governmental investment adviser Frank Veneroso and his associate, mining analyst Declan Costelloe. Titled Gold Derivatives, Gold Lending: Official Management of the Gold Price and the Current State of the Gold Market, it was presented at the 2002 International Gold Symposium in Lima, Peru, and estimates the gold deficit of the central banks at between 10,000 and 15,000 tonnes. The second paper, Gold Derivatives: Moving Towards Checkmate, by Mike Bolser, a retired businessman, and Reginald H. Howe, a private investor and proprietor of the Website www.goldensextant.com, estimates the alleged shortage of central-bank gold at between 15,000 and 16,000 tonnes -- nearly a decade's worth of mine production.

George Milling-Stanley, manager of gold-market analysis for the World Gold Council (WGC), a private organization made up of leading gold-mining companies that promotes the acquisition and retention of gold, is aware of these papers and shortage numbers but tells Insight that "there are no official [gold-reserve] reports." That is, "The central banks are under no obligation to report what they lend into the market, what they place on deposit and what they do with their swaps, so there's a conventional-wisdom view, and a couple of different bodies have done some fairly serious research in[to] this and have come up with a figure [of] around 4,500 to 5,000 tonnes."

Stanley's estimate is based on data provided by so-called "serious" researchers, including London-based Gold Fields Mineral Services (GFMS), one of the world's foremost precious-metals consultants, and a report titled Gold Derivatives: The Market View, commissioned by the WGC to London-based Virtual Metals Consultancy. While these two groups appear to be the research choice of the official gold world, there are in fact no "official" figures, and both studies, like the Veneroso/Costelloe and Bolser/Howe reports, are based on interviews, data analysis and other research generally available to the industry.

Those who believe the central banks to have misrepresented their actual gold holdings place much of the blame for the lack of transparency on the shoulders of the IMF, which presents itself as being responsible for ensuring the stability of the international financial system. Although the IMF would not respond to questions about its gold-loan/swap requirements, what information has been made public appears to support GATA's understanding of how central-bank reserves are reported.

For example, in October 2001 the IMF responded to questions posed by GATA by saying it is not correct that the IMF insists members record swapped gold as an asset when a legal change in ownership has occurred. According to this response, "The IMF in fact recommends that swapped gold be excluded from reserve assets." Nonetheless, says GATA, there is abundant evidence that this is not the case, citing as an example the Central Bank of the Philippines (BSP).

A footnote on the Website of the Central Bank of the Philippines (www.bsp.gov.ph) in fact directly contradicts the IMF's claim: "Beginning January 2000, in compliance with the requirements of the IMF's reserves and foreign-currency-liquidity template under the Special Data Dissemination Standard (SDDS), gold swaps undertaken by the BSP with noncentral banks shall be treated as collateralized loans. Thus gold under the swap arrangement remains to be part of reserves, and a liability is deemed incurred corresponding to the proceeds of the swap."

The European Central Bank (ECB) also made it clear that the IMF policy is to include swaps and loans as reserves. The ECB responded to GATA: "Following the recommendations set out in the IMF operational guidelines of the 'Data Template on International Reserve and Foreign Currency Liquidity,' which were developed in 1999, all reversible gold transactions, including gold swaps, are recorded as collateralized loans in balance of payments and international investment-position statistics. This treatment implies that the gold account would remain unchanged on the balance sheet." The Bank of Finland and the Bank of Portugal also confirmed in writing that the swapped gold remains a reserve asset under IMF regulations.

Although the WGC's Stanley stands by the data provided by the industry's "serious" researchers, he insists he cannot say for certain that the numbers are accurate. "There is no requirement on any country to tell the IMF how much gold it owns," says Stanley. "The requirement is to tell the IMF how much gold it has decided to place in its official reserves. Nobody knows whether that is the total of what they own or not. Obviously they can't report more than what they own, but they can certainly report less if they chose to. That gold may have been lent out, but is nevertheless still owed to them. It's a bit like any company reporting a cash position. It will report cash on hand and cash due -- money owed by other people. I'm not saying this is ideal, but this is how it works."

John Embry, the manager of last year's best-performing North American gold fund and manager of the Royal Precious Metals Fund for the Royal Bank of Canada, says he is putting his and his clients' money on the "lunatic fringe" in this dispute: "I've examined all the evidence gathered by GATA and everyone else, and I think these guys are anything but lunatics. They've done their homework and have unearthed a lot of interesting stuff. The problem, though, is that the market is sufficiently opaque that there is really no way to know who is right and who is wrong."

"The fact is," continues Embry, "a lot of this stuff is based on estimations. I do however believe that, based on the evidence dug up by Veneroso and Howe, they are presenting equally if not more credible numbers than the other side. I find the campaign to undermine their credence simply bizarre. I think these guys [GATA] are right and that the number put out by Gold Fields Mineral Services as the amount of gold loaned out by the central banks is definitely wrong. Now, whether it's as much as 15,000 is up for interpretation. The recent release by the Bank of Portugal is important. When a central bank has 70 percent of its gold loaned or swapped, I don't think it is operating independently, and I suspect there are an awful lot of them that have loaned out much more than has been reported."

Embry says, "I've made a fortune for my clients investing in gold and gold stocks because I have operated on the premise that the Veneroso/Howe reports are right -- that gold was significantly undervalued in the daily quote and that it was going a lot higher. The circumstantial evidence, and I bet my clients' money on it, was very much in favor of the guys who said a great deal more central-bank gold had entered the market and driven the price down far too low. GATA has had this story from day one. I think that they're right and that officialdom doesn't want this exposed. GATA is willing to have a public debate but the gold world won't debate. I think there is a tacit admission of anyone who has an IQ above that of a grapefruit that Veneroso and Howe have a pretty good point. I'm an analyst who has looked at both sides of the issue and I bet my money on GATA. So far they've been right."

Whether the gold bugs are right about the reasons for the meteoric rise in the price of gold is uncertain, but, according to GATA's Murphy: "It's all the more reason to have the central banks come clean about the actual amount of gold that physically exists in their reserves. Either way, the price of gold will continue to rise because, as we already know and others are discovering, the gold is gone."

Kelly Patricia O'Meara is an investigative reporter for Insight magazine. email the author

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

CoBra(too) (02/19/03; 12:13:20MT - usagold.com msg#: 97967)
@ Chris Powell's Latest
Ties in nicely with my recent post - the good, bad and ugly - Tx CxP.

On another topic - the window of opportunity re Iraq a/o Saddam is closing rapidly. World opinion is starting to get negative and the weather window is open for 3-6 weeks max. The already deployed troops can't stay there indefinetely, so any more diplomatic intervention is doomed.

What to do? Strike immediately or lose face - once and for all. I reckon the Empire has no choice left as to go ahead and cross the Rubicon! Alea iacta est - the dice is tossed!

Weather the storm in the warm glow of your physical gold - and you know where to get it in fair trade ... cb2

TownCrier (02/19/03; 12:02:13MT - usagold.com msg#: 97966)
Fed doing what it does best... making new money
After resting up over the long President's Day holiday weekend, the Fed came back to work on Tuesday with the presses blazing.

The Fed's NY trading desk intevened on the open market yesterday to add $15 billion dollars to banking system reserves with overnight repurchase agreements.

Today was an echo of that monstrous intrusion, with $9 billion added, also through overnight RPs. It will interest you to know that the market in fed funds did not seem to warrant this today -- Funds were trading at the FOMC target, though yesterday's action was considerably tighter.

Stepping into the banking system's ever-present want for cash, the Fed also today initiated a coupon pass, buying U.S. securities outright to "permanently" add another $994 million of new money to the nation's banking system.

Physical gold cannot be "printed" so easily, thus offering protection to its owners against the risk of depreciation from wanton emission on the back of political maneuvers.

Bail dollars out of your boat on these swelling seas; call Centennial to claim your share of the limited gold today.

R.

Chris Powell (02/19/03; 11:44:43MT - usagold.com msg#: 97965)
'Panic Is Near If The Gold Is Gone'
http://groups.yahoo.com/group/gata/message/1438
Insight magazine publishes the definitive examination
of the central banks' surreptitious campaign to suppress
the gold price. The article is titled, "Panic Is Near If The
Gold Is Gone." It exposes the lies of the International
Monetary Fund and quotes gold fund manager John Embry as saying GATA has been exactly right from the start.

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

ElGordo (02/19/03; 11:41:51MT - usagold.com msg#: 97964)
Budget is "Breathtaking" "Mind-Boggling"
http://www.washingtonpost.com/wp-dyn/articles/A27389-2003Feb18.html
Administration officials say they could not put a price tag on such theoretical expenditures, but the budget does include a $400 billion placeholder for a Medicare overhaul and prescription drug proposal that has not been finished. The administration also has not funded military operations already underway in Afghanistan and the Persian Gulf that are far from theoretical.

"It's just breathtaking. It's just absolutely mind-boggling" that those costs have not been included, said Thomas Kahn, the Democratic staff director of the House Budget Committee.

What's more, Congress appears to be locking in future spending that may prove impossible to avoid. The 2003 budget authorizes discretionary expenditures totaling $763 billion, $14 billion more than Bush sought. Government agencies may take several years to write the checks to cover such authorized expenditures.

VanRip (02/19/03; 11:33:15MT - usagold.com msg#: 97963)
Gold On a Lighter Note?
Born Loser, one of the popular comic strips in the local paper, yesterday showed the husband looking up from his newspaper and remarking seriously to his wife, "With the market down, currency weak and interest rates falling, the only safe haven may be to invest in gold." She replies gleefully, " Oh, goody! Rings, bracelets or earrings?"

TownCrier (02/19/03; 11:29:26MT - usagold.com msg#: 97962)
Choices... mining business or metal
http://www.news24.com/News24/Finance/Economy/0,6119,2-8-25_1322513,00.html
19/02/2003��-�(SA)� Cape Town - During 2003 there is unlikely to be any further consolidation of the world gold mining industry...

Barros Conti, a gold equity trader with US Global Investors ... expects the global mine supply of gold to continue declining from 2003 onwards.

"Gold's fundamentals point to an extended bull run for the metal especially with the supply of gold falling," he added.

------(see url for article)-----

With global supply of newly mined gold expected to fall, investors face a choice. Would they rather seek ownership of a set of companies faced with slowly milking every last drop out of depleting reserves in order to sustain their corporate existance in this field, or would they prefer to acquire the product now while it's cheap, knowing that it's value will ultimately be inversely correlated to the miner's plight of exhaustion?

Think about your exit strategy. Who will want to be the last one owning the stock as the mines play out and the company's role shifts to that of mop-up and reclamation? If you buy or own the stock today, what is your exit strategy later? Who will you sell to, and why will they buy at a time that you think it is prudent to wash your hands of it? Savvy investors always think a step or two ahead. Can you ever be so sure that you would not now be among the last ones buying shares from the last of the proactive investors who are finally selling out before the last stage?

Gold, on the other hand, can be generally seen moving from owner to owner throughout the world as their individual needs shift independently from the building of savings to the reliance on savings. No exit strategy is needed because, unlike a company chipping away at the last dregs of a depleting orebody, gold itself will never go out of business. To see value for what it is, keep an eye on the longer term.

To add gold to your portfolio, give the friendly staff at USAGOLD-Centennial a call today. When you take ownership of your first shipment of gold, you'll gain a whole new perspective on the meaning of wealth management and savings. Portable property (gold) always offers you the independence for a commanding view of the financial landscape.

R.

Sundeck (02/19/03; 11:26:07MT - usagold.com msg#: 97961)
Reuters sees bear market into 2005
http://www.timesonline.co.uk/article/0,,5-582886,00.html
Snip:

"
Reuters sees bear market into 2005
By Raymond Snoddy, Media Editor

REUTERS, the financial news and media group, yesterday took drastic steps to safeguard the company in the event that the bear market persists into 2005.

The pessimistic outlook came as Tom Glocer, the chief executive, revealed the largest pre-tax loss in the company's 151 years, a further 3,000 job cuts and a five-point programme designed to increase market share and pull the group out of the red.

The figures sent the shares plunging 12 per cent to their lowest level for 14 years.

"I am not calling a turn. I want to protect this business through a very long bear market, should it go on into 2005," Mr Glocer said. "

Sundeck: Bear into 2005 eh? Looks like reality is settling in over at Reuters. Do we hear similar projections from Wall St. yet? How long will it be before "second-half recovery" refers to the second half of the decade?

:-)

ElGordo (02/19/03; 11:19:52MT - usagold.com msg#: 97960)
Home builders see traffic fall
http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=2254021
Among the index's three components, the component that gauges builders' view on buyer traffic fell the most in February, dropping to 43 points from January's 51. The buyer traffic figure was the lowest since 42 posted in August.

On Friday, the University of Michigan said its preliminary February reading on consumer sentiment fell to 79.2 points, its lowest level in nine years.

Shorter lines at home showings also crimped builders' view on future sales. The index's future sales component slipped to 66 points in February from last month's 68.

Daniel Druff (02/19/03; 11:18:34MT - usagold.com msg#: 97959)
The IRS and Property Management
Joe Mud - my plasterman buddy - was recently doing a patch- job for a prominent but humble Greek lady. One of her apartments needed some repair as did her sense of humor.

Get this...she was recently audited by our IRS. She received a clean bill of health as well as some interesting advice. "Raise your rents."

I'm sure that Joe did a great job on her walls but I'm not so sure if he improved the look of astonishment on her face. And that's exactly how I immediately looked when he told me the story...

Thank you

CoBra(too) (02/19/03; 10:40:27MT - usagold.com msg#: 97958)
The Good, The Bad and The Ugly ...
...Quite a move of some prominent Gold Members -

* The good John Embry, who's Royal Bank Gold Fund was probably the best performing fund in the last 2 years was apparently too good for his own good.
Anyway, John will join Sprott Securities so he's not lost to the gold community.

* Oliphant, the King of Hedges was apparently fired by the Super Hedger, infamous Barrick Gold. Good riddance!

* ... and Bob Chapman, the touter of Silverado fled the scene ... obscene? (re-Cytec)

Quite a few prominent gold people on the move; What to make of it? Signs of times are a'changin'! - while POG is advancing from the correction lows ...

cb2

Waverider (02/19/03; 10:20:37MT - usagold.com msg#: 97957)
Koizumi's Choice of Central Bank Chief May End Impasse in Japan
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APlOqABXXS29penVt
Snippit:
"Japanese Prime Minister Junichiro Koizumi has pleaded with central bank chief Masaru Hayami for two years to do more to stem a decade-long decline in the world's No. 2 economy.
Hayami's five-year term ends March 19, and Koizumi will handpick his successor. Hayami has rejected Koizumi's calls to pump more cash into the economy, saying the government must first tackle the bad loans that keep banks from providing the fresh credit the economy needs to grow.
Investors expect the new Bank of Japan chief to be more willing than Hayami to stimulate the economy by buying government bonds. That may lift confidence in a country wracked by falling prices, stalled growth and about $440 billion of bad loans. ``All hopes are being pinned on the new Bank of Japan governor,'' said Yuuki Sakurai, who helps manage 1.7 trillion yen ($14.3 billion) of fixed-income assets at Fukoku Mutual Life Insurance Co.``The new chief is being regarded as a Superman who can rescue the Japanese economy.''

Waverider: The Japanese are educated and aren't going to fall for inflation targeting - the upcoming BOJ Govenor change is very bullish for Gold. All the king's horses and all the king's men can't put the Japanese economy together again.

USAGOLD / Centennial Precious Metals, Inc. (02/19/03; 09:54:58MT - usagold.com msg#: 97956)
Why gold? Why now? (And how to get it...)
http://www.usagold.com/cpm/aboutmore.html

The Ups and Downs of Primary Trends

Just as the primary trend in gold is up as shown by our nearby
graph, the primary trend in stocks is down. If you diversify your
portfolio with gold, you not only gain by being in gold, you gain what
you would have lost in the stock market. Richard Russell, the
well-regarded long-time investment analyst who has correctly and
consistently forecasted the direction of both markets, says the stock
market and gold will cross in the 2000 to 3000 area. Think about that
for a moment. What will that mean to your portfolio if not properly
diversified with gold? What will it mean if it is?

Gold to diversify your portfolio is an easy phone call away.
1-800-869-5115

We've been serving investors for three decades.
The assistance you want, the professionalism you need.

Waverider (02/19/03; 09:36:01MT - usagold.com msg#: 97955)
Move Forward On Gold Reforms
http://www.financialexpress.com/fe_full_story.php?content_id=28371
Snippit:
"After 40 years of an unrealistic, negative policy on gold, for the first time the Indian authorities accepted the ground realities and gradually relaxed policy in 1990, 1992 and 1997. The reforms which now need to be undertaken are less glamorous, harder and more intricate and the authorities and the markets seem a little lost in their responses.

The LBMA, in end-January 2003, organised an Indian Bullion Market Development Forum. The forum recognised the need for a bullion trade association consisting of banks, traders, exporters and domestic jewellery fabricators. The Forum felt the need for setting and maintaining industry standards and for promoting trade reputation. Moreover, it recognised the need to motivate the authorities to undertake further reforms. To enable a transparent and efficient price formation mechanism to evolve, it was recommended that a Bullion Market Exchange be set up initially for spot, but subsequently, for forward, futures and options trade. It is important to have proper settlement and clearing mechanisms and it was felt that the Istanbul Gold Exchange could be a useful model to follow. Issues regarding refining, assaying and hallmarking need early attention. It was emphasised that legally, gold should be considered not as a commodity but as a currency. Export of gold scrap and bullion should be permitted and customs duty on imports should be abolished. In the financial markets, there should be clear regulatory responsibilities for spot and forward trading. Domestic borrowing and lending against gold should be facilitated and lending against gold deposits allowed. There is a need to expand the range of bullion products and gold accumulation plans and gold linked mutual funds should be encouraged."

Waverider: These are interesting proposals from the Indian Bullion Market Development Forum, with a recommendation that legally Gold be recognized as a currency, not as a commodity.

goldquest (02/19/03; 09:34:32MT - usagold.com msg#: 97954)
Chapman?
Sharing a Villa in the Bahamas with Bre-X survivors?

contrarian (02/19/03; 09:26:53MT - usagold.com msg#: 97953)
Efficacy of E-mail versus Letter
I don't want to be too much of a contrarian here, but felt strongly enough to weigh in on this. And my opinion may just pertain to the government/political sphere, perhaps, which tends to be more behind the times, but here I go.

I don't know about impacting the media, but I have found that regarding getting something DONE, letters are far and above the superior way to do business. This is assuming that your letter is address to a SPECIFIC PERSON (PREFERABLY SOMEONE HIGH UP) and it's WELL WRITTEN. For example, I live in New York City, and sent a letter to the mayor about noise level in my neighborhood. As a result, I received a personal apologetic call and a letter from a representative of the department responsible. On another note, I had problems with mail delivery and sent a complaint letter to the head New York City Postmaster. A week later I received a personal call from the manager of my local post office.

There's a tremendous volume of e-mails, they're easy to jot off, and they can easily get lost in the shuffle of thousands of other easily written e-mails.

Letters, on the other hand, are harder to do and take more time to write. I don't know about the media, but I do know that if you are seeking ACTION, a letter is the better way to go. Especially by taking advantage of the good old "cc". Use ccs. They will force recipients to take action because others' eyes are on them. For example, send to the mayor AND cc the Dept. of Public Works or vice versa.

I fear the same may be true with job hunting. I've heard many people saying that most of the online job posting sites are a waste of time in THIS ECONOMY. Better to target a specific manager in a written letter and explain how you can solve their problem.

Cytek (02/19/03; 09:00:39MT - usagold.com msg#: 97952)
Bob Chapman - MIA
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=31106
I subscribe to Bob's International Forcaster and haven't seen anything from him in 3 weeks, now this.

Gold analyst 'disappears' following WND report
Touter of Silverado stock rumored to have fled country after story ran

Posted: February 19, 2003
1:00 a.m. Eastern

By Sherrie Gossett
� 2003 WorldNetDaily.com

A controversial gold "analyst" who had touted the stock of a company that was the subject of a WorldNetDaily investigative report has subsequently disappeared, according to industry insiders.

Bob Chapman was last seen at the 2003 Vancouver Investment Conference, held Jan. 26 and 27, where he was a featured speaker.

Sources report that Chapman had a lawyer by his side throughout the event.

Since then, several analysts report that Chapman's phone has been disconnected, that he has not replied to e-mail and that he is weeks behind in filing promised financial reports to editors.

In the special investigative report on Vancouver's Silverado Gold Mines, WND reported that Chapman, who was an avid promoter of Silverado stock, had previously been paid 1.8 million shares of Silverado stock as part of a "consultant" agreement. Silverado Gold stock plummeted 56 percent immediately following the WND report, as trading swelled to a record 27 million shares.

MineWeb, a mining/engineering industry journal, reported that Silverado stock was "crushed" by the WND report, which "was well through the market and investors were clearly voting on it."

USAGOLD / Centennial Precious Metals, Inc. (02/19/03; 08:58:06MT - usagold.com msg#: 97951)
Would you invest in a stock that graphed like this?

purchasing power

Would you invest in a stock that graphed like this?

Probably not. But that is precisely what you have done if you own
stocks, bonds, cds, money markets or anything denominated in U.S.
dollars.

Sooner or later gold is going to react strongly to this simple dynamic:

The dollar has been continuously devalued without stop for the past 57 years. It has
not appreciated against goods and services once -- not even once -- in that entire time period.
There are periods when this policy has not been fully reflected in the price of gold.

Is "Now" one of them? "Is Now the Right Time for Gold?"

If you've received your initial information packet from us, you qualify to
receive this important report FREE OF CHARGE.

Please call 800-869-5115 if you would like us to send it to you --

Contact:

George Cooper Ext 102

Jonathan Kosares Ext 110

Marie Ballard Ext 106

We look forward to your inquiry.

mikal (02/19/03; 08:54:17MT - usagold.com msg#: 97950)
@Topaz
You: " A Dow-down day coupled with a strengthening dollar could wreak havoc in the bond arena imo."
As this Friday is a big stock-options expiration day, it serves the largest traders for the equities to close the week above certain support levels. Part of the recent dollar strength has served similar purposes, but it hasn't been strongly supported- Not by fundamentals including foreign investment inflows, balance of payments deficits, manufacturing output, etc. Not by forex traders who have kept it rangebound and well below topside resistance near 101.50. Not by technical chartists who foresee a breakdown. Not even by the "strong dollar" policy makers in government, who covertly and overtly increase money supply and monetary aggregates and credit availability to the dwindling pool of quaified borrowers. Favoring a gradual rise in gold and CPI to alleviate debt, reflate the mortgage, consumer credit, bond and equities markets and manage greenback devaluation. Postponing inevitable higher interest rates, defaults and bankruptcies.

sector (02/19/03; 08:52:10MT - usagold.com msg#: 97949)
@Ari So...we agree that half the central bank gold...
...has been sold...
...and that the sold forward and swapped gold isn't in the vaults anymore. It's not in the vaults of Norway, Denmark, Romania, Australia etc. The gold isn't there any more. The gold has been sold and then delivered. To get the gold back these central banks must BUY IT ON THE OPEN MARKET. Which will drive up the price. Which is what everybody at this board hopes will happen soon.

The data on central bank gold status came from the individual annual reports of each bank.

Since a large portion of the central bank gold has actually left the vaults as these examples suggest, no derivatives instrument can get it back.

The listing of central banks provided last evening doesn't reveal ALL the banks positions but a representative cross section of them conform to this condition. The banks that hide the gold status doubtless are doing it out of fear that their sales will trigger controversy as they have for the Bank of England, which BTW has lost half its gold too. Permanently lost the gold.

The total of 16,000 tonnes of forward and swaps is also not it question.

You ask what is the point?

The central banks have been selling their gold in order to suppress its price as a part of a large coordinated manipulation and they are VERY LOW on remaining gold to continue the scam. Sir Greenspan has admitted as much in his Feb 11, 2003 testimony to Ron Paul.

[�AG --

The reason I raised the issue of gold is the fact that the general wisdom during the period subsequent to the 1930s is that as we moved to essentially a fiat money standard, that there was no anchor to the general price level. And, indeed, what we subsequently observed is, as you point out, a very marked increase in general price levels, indeed, around the world as moved ourselves from commodity standards, and specifically gold. I had always thought that the fiat money system was chronically and inevitably an inflation vehicle, and indeed, said so repeatedly.

I have been quite surprised, and I must say, pleased by the fact that central bankers have been able to effectively simulate many of the characteristics of the gold standard by constraining the degree of finance in a manner which effectively has brought down the general price levels.
�]
"Simulating a gold standard" means that they sold their gold to drop its price gthereby allowing interest rates to be lowered to rock bottom levels. That permitted the numerous bubbles to be created and accelerated the credit growth to the point that the entire financial system is in danger.

Everything flowed from that original "Simulation of the gold standard".

The idea that magic pixie dust derivatives can get the central bank gold back is not credible in a tight physical world of diminishing supply and rising demand.

They must BUY THE GOLD to get it back. The gold has left their vaults. It has been consumed in the markets of the world. There is no "Cancellation" process that will miraculously return the gold that has been shipped out of their vaults.

This concept is really VERY easy to grasp. It is important appreciate this basic set of facts since there is a constant information war in the general gold war. Part of that propaganda is that central banks have 33,000 tonnes that they can drop on the markets any time they wish to hammer the price down. It isn't true. They have far less physical metal than they report.

The main point here is that the West has burned its furniture [Gold] to stay warm while the East has increased its holdings. The West's economic condition is horrid and the sale of its gold to prop up a walking dead man dollar is a prime example of this terrible status.

It also helps to explain why the US is ramming the Iraq war through. The US is economically dead without Iraq's energy.

We have gone from burning our own furniture to stealing and burning other's.

What a country.

USAGOLD / Centennial Precious Metals, Inc. (02/19/03; 08:50:33MT - usagold.com msg#: 97948)
What you need to know before you buy your first ounce of gold...
http://www.usagold.com/cpm/goldhelp.html

Q. What makes USAGOLD / Centennial Precious Metals different from its competitors in terms of its interaction with clients?

MK. Our business philosophy allows us to take a more laid-back approach. We don't employ a room full of brokers spinning the phones day and night. We don't have multi-million dollar advertising expenses dictating what kind of advice we give clients. This is all by choice. I decided long ago that I didn't want the headaches that go with managing a large number of brokers and the support staff and facilities required. At the same time, we get hundreds of requests each month for introductory information packets. We do not make cold calls. We do not work mailing lists. We do not call people at all hours of the day or night. We do not use marketing and sales gimmicks -- leaders, bait and switch, and the rest of it. We primarily work with clients who have discovered us, like what they see, and want to form a long term relationship with a reputable and reliable gold firm.

Q. Does the "laid-back approach" limit your business?

MK. Yes and no. In the short run, "yes." In the long run, "no." We probably lose a few prospects to the aggressive companies which use hard-sell tactics but we will not be changing our client-friendly approach. We know that not every prospective investor is going to become a client of USAGOLD / Centennial. However, we know that the client who chooses us is likely to be the type of client we are accustomed to doing business with. We work with a large number of professional people and business owners -- active, retired and semi-retired. In fact, we work with clientele that span the economic spectrum and all walks of life. Getting back to how our approach sets us apart from our competitors, we get quite a few disgruntled high net worth clients who come to us after being run through the mill by some of the boiler-room operations I've referred to earlier. They are usually grateful that they found us.

Q. And finally, is there anything else you would like to share with us?

MK. Fundamentally, we believe that we are here to serve the client. Anyone who has done business with us will vouch for the courteous and professional service he or she has received. Our staff is carefully chosen and it shows. We get referrals on nearly a daily basis and are kept busy with strong repeat business. I would also like to call attention to the solid informational services offered at this website. We believe that any of our clients or visitors will find USAGOLD head and shoulders above anything else out there. I would encourage anyone attending this site to have a look around. We also publish a very good hard copy newsletter called News & Views: A Bi-monthly Review of Forecasts, Commentary & Analysis on the Economy and Precious Metals. Above and beyond that, the most important thing is the way we treat our clientele. From first inquiry through order fulfillment, we want to make the gold investing experience as pleasant and rewarding as possible. We have a large and satisfied clientele and that's the way we want to keep it.

Waverider (02/19/03; 08:48:45MT - usagold.com msg#: 97947)
A Nation of One
You're right on! I've been responding to various articles about Gold for some time now, and as it assumes a higher profile in the media more reporters write about it - sometimes I just send positive comments, other times suggestions for issues that haven't been touched upon in the article. There's usually a link at the bottom of most web articles for feedback - I also include a link for them to the DMR and to this forum, so they can access the BEST information about Gold for their reporting. I almost always receive a return email of thanks. Cheers!

BTW - Spot's frisky this morning!

a nation of one (02/19/03; 08:27:23MT - usagold.com msg#: 97946)
Re: Black Blade (2/19/03; 05:06:33MT - usagold.com msg#: 97941)

From your post: "Liz Claman ... mentioned that she "had to ask if there was more to the gold picture than war because we have a lot of goldbugs who watch this program". Apparently they get a lot of email correspondence. Maybe a "good job" email to Liz at CNBC will keep em coming."

--Email can work miracles. There is a difference between sending a letter and sending an email. It's more immediate. And it feels personal. If you send a letter to a newspaper, or TV station, a worker usually sorts through all the letters, and if the person you're writing to gets it, it is days late, there is no impulse to reply, and to reply would be inconvenient. So the thrust of a letter is easily ignored or rationalized away. However, emails are received within minutes, often will be read by the person you are sending it to, and there IS sometimes a strong impulse to respond, and to do so is easy. Therefore, many publishers and TV people will reply to an email, though not to a letter. And since typing such a response eliminates the time needed to form a rationalization for ignoring the message contained in the received email, action -such as a change of mind- is often caused by an email, when it would not be caused by a letter. Email is a very powerful new tool the Internet has made possible. We should all use it. If every gold bug communicates with the webmaster, about something negative or positive they see on each website they visit, changes will be made. The snippet quoted above is characteristic of the kind of effect emails can bring about in terms of the public's awareness regarding the real value of gold, for example.

21mabry (2/19/03; 07:37:31MT - usagold.com msg#: 97945)
(No Subject)
Whats puzzling me is the nature of their game.But I have guessed their name.

Topaz (2/19/03; 05:44:41MT - usagold.com msg#: 97944)
Bonds and Gold.
http://www.futuresource.com/charts/multicharts.asp?symbols=tyxy%2Cfvxy%2Ctnxy%2Cgcg03&period=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=15&go.y=14
The longer T-Bonds outshon their shorter cousins Yesterday, on a Dow-up Day. These graphs give a good idea of Bond Market strength in the face of a weakening Dollar.
If Gold is a leading indicator of Dollar strength, the Party is upon us.
A Dow-down Day coupled with a strengthening Dollar could wreak havoc in the Bond arena imo.

barnacle bill (2/19/03; 05:16:10MT - usagold.com msg#: 97943)
3 Mystery Ships
Re: Msg#97937
This reminds me of the LePage Glue Gun in the book Catch-22. Talk about a weapon of mass destruction! This would glue entire formations of aircraft together in the air. I wonder if it would work on 3 ships at sea?

misetich (2/19/03; 05:14:07MT - usagold.com msg#: 97942)
Turkey Demands $32 Billion U.S. Aid Package if It Is to Take Part in a War on Iraq
http://www.nytimes.com/2003/02/19/international/europe/19TURK.html
Snip:

The Turkish request is about $6 billion higher than what American officials said over the weekend was their final offer. Of the $26 billion Washington has offered, $20 billion is in loan guarantees and $6 billion in direct grants. Although a Western diplomat said the Turks were seeking about $10 billion in direct aid, the White House is adamant that $6 billion is the limit for direct aid.
.........
That seemed increasingly unlikely here, as the day passed without a vote by Parliament on the deployment of American combat troops. Turkish officials had scheduled one, but canceled it on Monday, saying they would go forward only after they reached an agreement on an economic aid package.
There is a growing sense on both sides that time is running short. American military planners have drawn up two sets of war plans: one that includes Turkey as a staging area and one that does not.
Two senior American military officials said today that without Turkish consent by the end of the week, the Pentagon would be forced to shift to a less desirable backup plan.
"Two or three more days is about all that's left," said one of the senior officials.
********
Misetich

Iraq's planned invasion costs are rising by the second - The 1990 Gulf War is still fresh in many minds - The economical impact on Iraq's neighbours have been high - and will climb higher as the instability will grow due to the planned invasion

A dollar bill here (FRN)... a dollar bill there (FRN).. the world is awash with dollar bills (FRN's) - Sooner rather later the US $ is bound to devaluate at least ANOTHER 30% as the GDP shrinks and government deficit soar -

Got gold?

Black Blade (2/19/03; 05:06:33MT - usagold.com msg#: 97941)
CNBC Gold Analyst Interview

A rare gold analyst interview that wasn't true to form for the usual anti-gold CNBC programming. John Bridges, JP Morgan gold analyst was just interviewed about gold. He is positive on gold though expects a short temporary pullback on the outbreak of war, however, he says that the rise in gold is not war related but due to the weakening US dollar and gold will continue to make gains. The reason gold weakened after the outbreak of "Gulf War I" was due to a strengthening trend in the dollar. This time it is the inverse with the dollar weakening and gold strengthening. He notes that the dollar is still at least 20% overvalued. Not a bad interview.

The intro was interesting though as the male co-host (the new guy) mentioned that gold was falling, at that point Liz Claman interjected "but it's up over $3.00 this morning!". She also mentioned that she "had to ask if there was more to the gold picture than war because we have a lot of goldbugs who watch this program". Apparently they get a lot of email correspondence. Maybe a "good job" email to Liz at CNBC will keep em coming. Interesting

- Black Blade

Black Blade (2/19/03; 04:38:30MT - usagold.com msg#: 97940)
Tocqueville Gold Fund Manager Blasts Hedging
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1045510843653

Snippit:

Mr Hathaway looks for companies with low costs and limited hedging. He has never owned Barrick Gold, Canada's leading gold producer which last week ousted its chief executive Randal Oliphant over poor performance. Gold enthusiasts blame Barrick for driving down the gold price for years through its derivatives activities. "Barrick is a dog of a stock. It is an absolute shame," he says. Since the bull market in gold began in August 1999, Barrick shares are down 20 per cent, while the price of gold is up almost 40 per cent, and the Philadelphia Gold and Silver index, of which Barrick is the biggest component, is up only 3 per cent. "That is pathetic. If you buy a gold stock you think it will go up. The last thing you want is for management to second guess you."

Black Blade: Yet another negative take on the mega-hedger. The practice of selling forward production is a major reason why Gold has been under water for the last few years and the mega-hedgers are complicit in driving the price lower. As for the mega-hedgers, investors are voting with their feet and wallets. Down 3 percent � pathetic indeed!

Black Blade (2/19/03; 04:10:04MT - usagold.com msg#: 97939)
Market Indicators
http://www.mrci.com/qpnight.asp

US Market index futures are lower (at almost par with "fair value"). The futures have come off the lows with large block trades of S&P futures this morning. Perhaps the institutionals are desperate to keep this bear market rally alive as this is obviously not individual investor cash coming into the market. The USD is weaker, gold is higher, and petroleum is lower but coming off the lows. Still, it could be another "entertaining" day on Wall Street as the institutionals are the major players while the individuals are essentially sitting out this this bear market rally (once bitten twice shy).

- Black Blade

Belgian (2/19/03; 03:49:02MT - usagold.com msg#: 97938)
@ ElGordo
Germany's sale, in 1980, of mobile terrifying stuff to Iraq...
Russia using and killing hundreds of innocent, Moscow-theatre, hostages...
with 2003 mass destruction toxic gas...
So many articles who have the sole purpose of brain-washing the populace with one-sided "perceptions". Don't let us get fooled by these ancient techniques. Sorry for bringing it up and having nothing to do with Gold as such. Just to attrackt the attention, again, on the scale of blatant disinformation. We urgently need Free Press with the build-in, capacity of "Independance". As we will soon need * Free Gold * for a better World. Thanks Gordo.

The Independant UK (hum) : Tree ships are suspected of sailing around with Iraqi WMD. How handy.

Black Blade (2/19/03; 03:42:01MT - usagold.com msg#: 97937)
Ships with suspected Iraq arms cargo tracked
http://biz.yahoo.com/rf/030219/iraq_ships_1.html

Snippit:

U.S and British intelligence services are tracking three mystery ships suspected of carrying Iraqi weapons of mass destruction, the Independent newspaper said on Wednesday. Financial market dealers said the story increased tensions about the situation in Iraq again and some said it helped push safe-haven government bonds higher and the dollar lower in early trading on Wednesday. The paper, quoting what it called authoritative shipping industry sources, said the giant cargo ships had been sailing around the world for the past three months while maintaining radio silence in violation of international maritime law. A shipping industry source told The Independent: "If Iraq does have weapons of mass destruction, then a very large part of its capability could be afloat on the high seas right now. "These ships have maintained radio silence for long periods and for a considerable time they have been steaming around in ever decreasing circles."

Black Blade: Very "Interesting"! Euro markets took a dump on this news and Gold jumped a little. This is actually old news but it seems that the markets suddenly took interest this morning after it was re-reported in the "Independent". The older version was that the ships are owned by al Qaeda and are currently being tracked.

Belgian (2/19/03; 02:32:54MT - usagold.com msg#: 97936)
Nice to wake up with great postings.....
- London Stock Exchange and Deutsche Borse, resume their merger talks, wich were interrupted in 2000. Finance above politics ?

- South African "black empowerment" = A collective (!!!) investment sheme (!!!) for its mineworkers. No comment from me.

- Siochaina ..."We stand passively mute"...is giving me some comfort that common sense might prevail. And please don't apologize for simply having another opinion on �/$.
Thanks.

- Towncrier.."euro-pressure on UK"...Not only on UK, but some hard talk (choices) going on with the euro-infidel-Balkans...with the euro or against it ? Euroland was very aware of the encircling tactics of the dollar and therefore speeded up the Balkan-expansion offer (2004/2005). Same story still in play for Turkey and UK. It will happen on Old Europe's terms or NOT ! And it is against this background that I do watch the �/$ exchange rate's evolution. The euro-currency using its Gold-exchange-reserves as ultimate tool for setting its exchange rate, appropiately to the (politico-economical) circumstances !
(BTW: It was Tony who organized the "infamous" letter)

- Sector : Have you any idea where those 16,000 tonnes have landed ? TIA.

- Euro-infidel, Spain : 3 "million" people protested against Aznar's pro war position. Tree million Spanish citizens...but not one single picture of this on US media !

- CNN-finance : Extensive promotion on Plainum speculation. But not a word on the yellow precious. Most certainly because "yellow" is an out of fashion color and doesn't suits Asian skins so well ! Whoehaaa. What a trivial farce.

Black Blade (2/19/03; 01:41:17MT - usagold.com msg#: 97935)
Spot Saw A Cat!
http://focus.comdirect.co.uk/charts/cdcharttcl?symm=GLD.FX1&hist=1&dbrushwidth=1&charttype=1&gd1=na&gd2=na&benchmark=&infos=3&indtype1=0&indtype2=0&volumen=2

Spot is getting a bit frisky in London tonight. Gold jumped about three bucks (so far?). A good segment on Gold on Cnnfn Europe.

- Black Blade

Aristotle (2/19/03; 01:25:42MT - usagold.com msg#: 97934)
Help me out, sector.
As it stands, your comments are less than reassuring.

= = = =
"These contracts are as enforceable as any on earth. To suggest that the central bank who swapped all its gold can simply steal it back is ridiculous on its face. Real currency was accepted for the swapped gold. Real currency was taken for the forward sales of gold."
= = = =

First of all, if, indeed, contracts in general are as sacrocanct and inviolable as you imply, then why are you expending so much energy telling us about these rock solid "good as Gold" arrangements as though they were somehow scandalous? Guaranteed performance is a non-issue in my book, and barely worth attention. The size of short positions and the specifics of who holds them is of no consequence since they'll all be faithfully covered or closed as specified in the contract agreements, right? So what's your point?

IF, on the other hand, "default" can be more than just a *theoretical* idea, then I'd once again suggest my tired old theme -- that possession is what counts, contracts and consequences be damned, especially where the voting power of a sovereign nation is able to stand behind the action.

Bone up on 1933 history if you're in any doubt about this. You'll find a good example where many contracts went wanting as the people's Treasury essentially *stole* the physical Gold out from under the people AND from the very same banking system that many people still paint as the thief.

You said, "To suggest that the central bank who swapped all its gold can simply steal it back is ridiculous on its face. Real currency was accepted for the swapped Gold."

I think I've addressed that first point in substance, and on the second point I'm glad to see you put such high regard on "real currency" -- that lousy fiat stuff that's often held in contempt by your peers. But that's beside the point. Here's some banking food for thought. Think about the location of reserves of a member bank of the Federal Reserve. In open market operations the Fed can allocate reserves with a computer keystroke. Now take it up a level. Consider pure currency swaps among banks. It might be most instructive if you consider swaps among central banks in the form of reciprocal currency arrangements where a bilateral pledge of domestic liabilities gives simultaneous rise to offsetting foreign assets on the balance sheet of each CB. Using that as your model, where stems your expectation (and what *proof* can you offer) that Gold swaps are necessarily any less ethereal in nature than these other acts of accounting prowess?

Again, if contracts are as good as you say they are, then what's your point or scandal in this whole thing even if *even if* EVEN IF we're expected to buy into your notion that physical has actually moved while contract performance is sacrosanct?

I can understand your words, but I can't find the point that they serve.

Gold. Get you some because possession IS everything when it's needed. --- Aristotle

ElGordo (2/19/03; 00:11:27MT - usagold.com msg#: 97933)
Iraq has 8 German mobile chemical labs?
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=31103
Germany sold eight mobile laboratories to Iraq in the 1980s, reports the German-language New Zurich Newspaper.

According to a story in the Swiss paper yesterday, Iraq received the facilities for the purpose of producing biological and chemical weapons. Development expert Hans Branscheidt claims he personally saw the vehicles in action on several occasions in 1988, reports the paper.

"What is certain is that at least eight of these mobile laboratories were delivered from the Federal Republic of Germany to Iraq as late as the end of the eighties," Branscheidt is quoted as saying in the New Zurich Newspaper. According to the report, he also confirmed his comments to the Reuters news service.

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