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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

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ARCHIVED DISCUSSION FROM 4/20/1999
All times are U.S. Mountain Time

View Yesterday's Discussion.

jinx44 (4/20/99; 22:35:46MDT - Msg ID:4962)
The Stranger and the gun: part II
Since it is late and quiet, I’ll be peevish and nitpicky. I’m glad we share common rights to defense and ownership. However, I would like to know the limits you would impose on my leaving my gun lying around and on how many I should be allowed to own. That is the exact “slippery slope” argument that put us in the current situation we are in. Do I encourage murder by the act of leaving a loaded gun in my house? Do I incite crime by owning 235 firearms but not by owning 117? Who is guilty? the tool or the fool that picks it up?
I am just goofing around tonight, so don’t take this post seriously. If you want to reposte, I would welcome it. All the best.


The Stranger (4/20/99; 22:01:33MDT - Msg ID:4961)
jinx44
You need not DEFEND your right to own a gun, jinx, only your right to leave it lying around.

Likewise, you need not EXPLAIN your right to own a gun, only your desire to own so many.



Al Fulchino (4/20/99; 21:59:01MDT - Msg ID:4960)
OilStocks PS
One post script/// How well will the majors do such as Mobil, if they can grow to $100 a share with 10-12 dollar oil, when oil gets to the current 16-18 doolars/barrel? Excluding, the very possible shortage that looms over our head, it is largely likely that after a respite at current prices where we test the publics response, I believe we will
see a run to 23 dollars minimum. The only thing to stop this would be a worldwide recession.



Al Fulchino (4/20/99; 21:50:59MDT - Msg ID:4959)
I appreciate the discussion here
To All: this is my first post. I got my password 5 weeks ago, but have little to add here.I consider myself mostly a learner. I follow several discussion groups. And I compliment the particpants here for staying on the subject and for their well thought out postings.

I bit of history for what it is worth. I am a Mobil Oil Franchisee. We operate three locations in Massachusetts.
I suppose as an investor I would classify myself as believing in myself more than the markets. But with what Ira's etc I do have, I pulled totally out of the market in Jan 99. The why is a character of my view of our country's present environment. I have felt a strange intuition for the last couple of years as I have watched fellow dealers spend more time in the stock market than their own businesses. I suppose it is because it is so easy of late to make money. Nevertheless, When I couple what I see in my day to day life with the current political situation in the world and our own county, I am concerned. I see clouds.

How many democracies have lasted much past 200 years I ask you? Was it Thomas Jefferson who asked if we will be able to keep the republic that our forefathers have spent their blood to purchase on our behalf? Look, who is in charge now.
Worst of all ask yourself who put him there. These people
drive by you each day. They are ahead of you and behind you at the supermarket checkout counter. Strange? Yes. Eerie? Very much so.

The check in the balance of the weak minds that always exist
in every generation needs to prevail in order for uncommon sense to hold together the fabric of what we so gingerly inherited. Do we have this check and balance today? My view is that we are now at the threshold of a dangerous equlibrium. For evidence, you need look no further than the impeachment. Not only the vote in the Senate but ever so much mor importantly in how the Senators acted during this time. Look at how few were unnaffected by smear. So many were
compromised by their own errors in judgement. Now in and of itself their own mistakes are not do or die. But the fact that they could be subject to pressure from outside sources
to suspend their own common sense clearly illustrates that these men that we ask to protect our Constitution do not have enough backbone. Please if you will explore the Delphi Principle....its message is thesis....antithesis...and sythesis. We have over the last few years especially witnessed ideas that are so outlandish it offends the uncommon sense that we are all born with. And our internal and our external enemies exploit those factionson the far far right who although may have their hearts in the right place ( and of course some do not) they may overreact. Our enemies take these overreactions and and harp on them and tar the rest of us who would consider ourselves mainstream and conservative of nature, but liberal toward our fellow citizen in terms of good will....soom those of us who are not strong of mind are brought closer to their position. Thus, our initial stance against wrong (evil) is slowly eroded. I hope I have explained this point well. I strongly encourage you to visit the Delphi Technique site in the web. It is simply brilliant.

Now,why I am sharing this all I am not sure...perhaps because I sense a kindred spirit amongst some here. But it is a welcome exercise for me, so please indulge me <smile>.

I am not sure that even in the state in which I live,
the Live Free or Die state of New Hampshire, is not prone to these weaknesses of human spirit as witnesses by the recent close vote on a state income tax.

My new friends Let me lastly share a few things I see in the gasoline business.With each dollar/barrel increase that u see on the news you should expect 2-2.5 cts per gallon at your pump. Secondly, I have been recieving some very good offers for my locations recently. Third, I have been advised
in a most uncharacteristic manner to not fear raising my prices.Fourth, I know of four recent Refinery fires in the US alone and more outside the country. Fifth, I see a weak preoccupied president. I also read Mr Simmons article and taken with my intution(some may say it isnt worth a hoot but I trust it)I have taken positions in physical gold and silver, gold stocks and also Oil stocks.

Thank you for your indulgments and I promise not to write for a long time

Best wishes to all

Christine (4/20/99; 21:42:36MDT - Msg ID:4958)
@Stranger--Market Forces vs Conspiracy Theories
I agree with you 100% that market forces will always prevail in the end. But there is a huge distance in getting from the beginning to the end in any economic activity. I until only recently believed totally in market forces--it had never crossed my mind that markets could be manipulated anywhere near the extent I now believe they are. Is believing in market manipulation believing in a conspiracy. In a narrow sense it is. How complex of a manipulation plan does it require to qualify as a conspiracy. Actually, I now wonder how I could have been so naive. My vocation is as a psychotherapist--I should have known more about human behaviour than that. Even in a small corporation, how many of the decisions are made based on power politics rather than good business sense. Those who are powerful, privileged, wealthy, and are determined to keep what they have (or acquire even more) cannot be underestimated in how they influence things. Is it a conspiracy or just typical of human nature. Actually, human nature is another market force that has to be accounted for, and I could go on for pages detailing how wrong I have been in estimately this "natural market force" in the past. I still agree with you about the euro in the long-term--natural economic market forces will win out over natural human market forces. :-)

USAGOLD (4/20/99; 20:41:03MDT - Msg ID:4957)
On the Littleton tragedy....
Thank you, Richard. We are a bit rattled here and I admit I needed a bracer after the day's events, as did my wife. Thank God, none near and dear were affected I am happy to say. But the city is stunned and deeply saddened. We, like so many who frequent this site, are involved in the raising of the next generation, and to see what the parents and children went through today was difficult. Denver to me has always been a very special place having attracted our fair share of America's best and brightest. And what happened is not what this city is about. It's funny what goes through your mind at a time like this. You not only count your blessings; you continue to hope that you and yours will always escape the evil that seems to erupt in our society from time to time. For whatever reason, today I began to think about my own long history in this city which began in 1971. I never really associated the West with horses and cowboy hats. To me it always meant the nicest people I'd ever been around, open vistas, and pride in what we are. The feeling is infectious and once Colorado gets in your blood you never get it out. I can remember sitting across from the Capitol building in a downtown park and having a wonderful conversation with one of Denver's senior citizens ( I was a twenty two year old). We were perfect strangers. I marvelled at how she was so willing to spend an hour of her time talking to me about her beloved Colorado. That sort of openess never happened where I came from, and it set the tone for me as I became a Coloradoan. I'll never forget her final comment to me: "Well, young man, I'll tell you one thing: If you don't like the weather around here, wait an hour." And as anybody who lives here will tell you, that is precisely the prescription. Now this city stretches from end to end, east and west, north to south and then some. It's not what it used to me, but much of what it used to be is still there -- underneath it all. It is a sad night for Colorado -- and the country as well. I feel for the kids and their parents, as do we all. As much as I have criticized Bill Clinton and oppose his actions in the Balkans, I have to thank him tonight for his kind and thoughtful words. Tragedies like this do not have a saving grace.

Thank your for your concern and prayers for the families involved.

SteveH (4/20/99; 20:40:58MDT - Msg ID:4956)
June gold now $285.70
Reuters:

By Alden Bentley 04:13 p.m Apr 20, 1999 Eastern
By Alden Bentley NEW YORK ( Reuters ) - Some gold market players may be colluding to keep gold prices near their lowest levels in 18 years, an industry group claimed Tuesday, though there are also several economic factors that may account for the slide in gold prices since 1996, traders said. The gold market in New York was abuzz on Tuesday about an investigation into an alleged conspiracy by a cartel of Wall Street firms and bullion banks to suppress the price of gold, with the possible encouragement of the Federal Reserve and the U.S. Treasury, traders said. A industry group named the Gold Anti-trust Action Committee ( GATA ) , said it had retained Philadelphia anti-trust and securities law firm Berger & Montague to look into gold market manipulation. Telephone calls to the law firm by Reuters had not been returned by Tuesday afternoon.
``It's the duck story -- it looks like a duck it's quacking like a duck, we say it's a duck and we're gathering evidence to support the evidence that we already have about that,'' Bill Murphy, chairman of GATA, told Reuters. ``If it's not orchestrated and if it's trade that is one thing. But we're saying it's all being done by certain parties at the same time, in a concerted action,'' Murhy said. Spot gold prices hit a six-year high near $420 per ounce in early 1996, but has since fallen to an 18 year low in late 1998 around $270 an ounce, and bullion has failed to get above $300 per ounce this year. Large speculative traders, such as hedge funds and Commodity Trading Advisors ( CTAs ) , are now holding the biggest net short position ever in COMEX gold futures contracts, according to a recent report from the Commodity Futures Trading Commission ( CFTC ) , a government body which regulates U.S. commodity trading. The CFTC Commitments of Traders report showed a sharp increase in net short speculative positions to 91,690 COMEX contracts as of April 6, up 32,797 contracts in two weeks. Gold dealers, with the help of central banks eager to reap a return on gold monetary reserves that would otherwise realize no interest, have been facilitating the shorting of gold by lending the metal at low interest rates to speculators and hedgers who in turn sell it, expecting that they will later buy it back at a lower price for a profit. ``The known shorts are in the CFTC numbers that you see every two weeks. It looks to me, based on open interest, that they will be just as big or larger this time,'' said John Hathaway, who manages a gold fund at Tocqueville Asset Management.
``But that is just the tip of the iceberg. There is a lot going on in derivatives, highly-structured products where the margins ( profits ) are for these bullion traders,'' he said. Some hedge funds have reportedly been using these cheap gold leases, available at interest rates as low as 1.0 percent, to fund investments in other higher-yielding assets, in a strategy known as a carry-trade. Murphy said GATA is also asking the U.S. Congress to look at, among other things, the implications for the gold market of last year's Federal Reserve-directed bank bailout of hedge fund Long-Term Capital Management. ``If they were let out of a 300-tonne ( gold ) position, we're saying the real short position is 10 times that, and it's a danger,'' Murphy said. With Asian markets on the mend and oil, and other commodity prices staging a comeback, many operators now fear that any big rise in the price of gold, which this month nearly retested last year's 18-year low at $270 per ounce, could spark a furious scramble to cover shorts. But ``philosophically, I have some problems about suing people just because the market has gone against you,'' said one gold dealer.
While demand for gold has outstripped mine supply in recent years, leasing of gold by central banks and sales of reserves by European central banks in particular, has forced prices lower, analysts said.
Low inflation and booming stock markets in developed countries have also provided little incentive for investors to hold gold.
``Then again, there are a lot of mysteries in the gold market and it might very well be that a court or discovery action might turn up some interesting things,'' the same dealer said. ( ( --Alden Bentley, New York Commodity Desk, 212-859-1641, nyc.commods.newsroom+reuters.com ) )


Christine (4/20/99; 20:35:36MDT - Msg ID:4955)
@Beesting--Alan Greenspan and trade comments
Beesting--thanks for the link. Maybe what Greenspan was talking about is the US Congress' failure to admit China to WTO. He and his international banking buddies may desperately (I conclude desperately from the tone of his comments) want/need access to China.

jinx44 (4/20/99; 20:23:03MDT - Msg ID:4954)
The Stranger and the gun
You are here in the West buying gold and living in relative freedom because of the gun. Perhaps you didn't care for the style of the 'guns and gold' comment. It wasn't my favorite either.

As lamentable as the recent shootings were, they will not be stopped at the expense of liberty and disarmament of the citizenry. We will pay a thousand times more dearly for the security that the state will impose on us in exchange for that hard won liberty.

People have and will continue to do foolish and dreadful things to others. Still, most of the people killed in the 20th century were murdered by their own governments. I have a very good chance of self-defense against a real criminal, but very little against the power of a criminal state. That is why they like gun control.

Said Patrick Henry, "Guard with jealous attention the public liberty. Suspect every one who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are ruined. . . . The great object is that every man be armed. . . . Everyone who is able may have a gun."

There is no compromise for freedom.



Richard, Oregon (4/20/99; 20:03:38MDT - Msg ID:4953)
Tragedy In Littleton
MK & CPM - My heart goes out to all of you close to the tragedy in Littleton today. Please know our thoughts and prayers are with you. We prayed Oregon would be the last but the evil one strikes again. So sad. I hope no one at CPM is directly involved. May God bless and comfort everyone in Denver and Littleton close to this terrible, terrible, event. Richard

The Stranger (4/20/99; 20:01:03MDT - Msg ID:4952)
CoBra, mein Freund
My remarks were purely analytical and, in no way, intended to disparage Europe or Europeans. I know you are long since gone to bed by now, but perhaps you will see this in the morning. I visit Europe every chance I get, and, like most Americans, I adore the culture as well as the people.

beesting (4/20/99; 19:54:39MDT - Msg ID:4951)
Gandalf, thank you for the sharp eyes!
http://biz.yahoo.com/rf/990420/bwt.html
Corrected URL for news about Mr. Greenspan.

Gandalf the White (4/20/99; 18:45:09MDT - Msg ID:4950)
Beesting
If you change the date in your link to 20 instead of 24 --- it will correctly work.
<;-)

beesting (4/20/99; 18:39:57MDT - Msg ID:4949)
More on Chairman Greenspan.
http://biz.yahoo.com/rf/990424/bwt.html
Headline: Greenspan presses U.S. politicians on free markets.........beesting

The Stranger (4/20/99; 17:44:23MDT - Msg ID:4948)
Guns and Gold
Recently, someone in here made a very macho statement about how if he had guns and gold, and you only had gold, he would wind up with the guns AND ALL THE GOLD.

I think now is an ideal time to put down my response. Whoever you are, sir, consider this: If power is what you seek, consider NOT owning guns. Perhaps then you will understand how small your attitude has made you.

For anyone else: If you must own the damn things, for God sakes, LOCK'EM UP!

CoBra(too) (4/20/99; 17:43:46MDT - Msg ID:4947)
Euro et al...
I have to admit that I am at a loss to explain the severe beating of the euro sibling in terms of US $. I don't want to speculate as to the immediate causes, considering the euroland purchasing power stability, trade surplus (while large percentage admittedly is internal trade) and last but not least comparatively low(external)debt level.
Notwithstanding structural economic problems, which haven't been sufficiently corrected (in response to Stranger& Aragorn)while there was a chance in mostly conservative led Europe for half a generation, I still feel we may start to observe the dawning of a cultural change in global $-denominated world trade.
Looking back at 27 years of floating currencies, with the US $ emerging as the ultimate world currency, after depreciating about 50% vs. all other leading currencies(units of account if you wish)right after the official demise of the gold standard, I would feel it may be premature to abort the sibling before he outgrows nursery. Particularily in view of the mounting debt, trade gap and resulting repatriation of foreign held $"s in the end. The last resort consumer, while presently a boon to the rest of the world, unfortunately, is the result of a financial and probably unsustainable market craze or bubble, creating a (virtual) wealth effect, which inherently will have to collapse, taking collateral as experienced in the S&L bubble to nirwana.
I'm sorry to be that negative, but I do feel the world, rapidly, has to return to some anchor in its ballooning monetary and financial craze before the systemic risks a la' LTCM take on proportions of no return.

BTW - thank you FOA, Sir, for mentioning m.h. post.
YGM-did you find a blowtorch to get rid of the white stuff- missing your input.
Regards CoBra(too)


The Stranger (4/20/99; 17:28:13MDT - Msg ID:4946)
More with Aragorn
First, Aragorn, you flatter me with your attention. I thank you for that, as I believe you are a very bright man. I noticed once before, for example, that you have a good grasp of the foundations of Euroland, something which I (perhaps obviously) lack. What a blessing it is to come here and find such intelligence just waiting, it would seem, for my engagement.

Having read and reread your post several times, I suspect that much of your opinion is in concurrence with my own. If so, I am pleased. You do raise a valid issue, however, with my remark about the impact upon the Euro of economic performance.

I suppose scarcity alone could maintain perception of value for the Euro. What rules apply to the ECB with respect to money creation parameters? Do you know? I do not. But, if ANY money creation is allowed, and I am sure it is, then it had better equate to the rate of economic growth plus productivity improvement, or the Euro will ultimately trend lower against currencies that do.

One of the limitations of this form of debate, of course, is the way it shields identities. For all I know, you may be Wm. Duisenberg, himself. But then, for all you know, I may chair the Economics Department at Wharton. Anyway, three cheers for the Round Table and for that which it makes possible.

SteveH (4/20/99; 17:18:21MDT - Msg ID:4945)
June gold now...
$286.00.

This just in from exbfield in response to "paper barrels."

SteveH,I've been following this thread for some time, having more than a passing interest in XXX [was a stock symbol] -- appreciate your comments. I noted the exerpt to which you referred, concerning oil prices. The numbers in that one-paragraph piece look strange to me. The world supply of oil amounted to 75 million barrels per day during the first quarter of this year, of which OPEC provided about 40%. World demand was also about 75 mmb/d. However, excess inventories currently amount to between 150 - 300 million barrels. Its tough to get good figures, but on any score, inventories are over-flowing. During the second quarter of any year, demand generally falls by about 2 mmb/d. So, if OPEC and other major exporters didn't agree to that 2.1 mmb/d production cut, inventories would have accumulated a further 2 mmb/d on top of their already excessive level -- disaster for prices and most OPEC national budgets. As it is,the 2.1 mmb/d production cut willl just keep inventories flat during the next quarter. The current run-up in oil prices is anticipation of the beginnings of a stock draw in the third quarter and then a very substantial stock draw in the fourth. Current prices appear to be discounting full compliance with the production cuts. Any disappointment -- we'll probably begin to get some inkling during the next three weeks -- will likely lead to a sharp pull-back. The import of this is that, while it is likely that the average price of crude will rise this year, there is very little likelihood of sharp upward pressure due to shortages over the summer and autumn. The point about falling non-OPEC production is well taken, but it's implications for price are longer term. North Sea production will likely peak by around the middle of the next decade,reinforcing already weakening production in North America. However, in the near term, as prices rise up to what an "equilibrium" level -- that I peg at about US$18/b -- there will likely be some slippage in the production curtailment. On another note,it is not likely that bond markets or, if necessary, monetary authorities would allow a sustained rise in oil prices to lead to a meaningful increase in general inflation. We might have to rely more on an (eventually) falling US dollar for a meaningful rise in gold prices...."

SteveH (4/20/99; 17:15:34MDT - Msg ID:4944)
June gold now...
$286.00.

This just in from exbfield in response to "paper barrels."

SteveH,I've been following this thread for some time, having more than a passing interest in XXX [was a stock symbol] -- appreciate your comments. I noted the exerpt to which you referred, concerning oil prices. The numbers in that one-paragraph piece look strange to me. The world supply of oil amounted to 75 million barrels per day during the first quarter of this year, of which OPEC provided about 40%. World demand was also about 75 mmb/d. However, excess inventories currently amount to between 150 - 300 million barrels. Its tough to get good figures, but on any score, inventories are over-flowing. During the second quarter of any year, demand generally falls by about 2 mmb/d. So, if OPEC and other major exporters didn't agree to that 2.1 mmb/d production cut, inventories would have accumulated a further 2 mmb/d on top of their already excessive level -- disaster for prices and most OPEC national budgets. As it is,the 2.1 mmb/d production cut willl just keep inventories flat during the next quarter. The current run-up in oil prices is anticipation of the beginnings of a stock draw in the third quarter and then a very substantial stock draw in the fourth. Current prices appear to be discounting full compliance with the production cuts. Any disappointment -- we'll probably begin to get some inkling during the next three weeks -- will likely lead to a sharp pull-back. The import of this is that, while it is likely that the average price of crude will rise this year, there is very little likelihood of sharp upward pressure due to shortages over the summer and autumn. The point about falling non-OPEC production is well taken, but it's implications for price are longer term. North Sea production will likely peak by around the middle of the next decade,reinforcing already weakening production in North America. However, in the near term, as prices rise up to what an "equilibrium" level -- that I peg at about US$18/b -- there will likely be some slippage in the production curtailment. On another note,it is not likely that bond markets or, if necessary, monetary authorities would allow a sustained rise in oil prices to lead to a meaningful increase in general inflation. We might have to rely more on an (eventually) falling US dollar for a meaningful rise in gold prices...."

TownCrier (4/20/99; 16:32:47MDT - Msg ID:4943)
Canada's Thiessen says supports IMF gold sales
http://biz.yahoo.com/rf/990420/5t.html
An old story, but short and sweet.

TownCrier (4/20/99; 16:30:45MDT - Msg ID:4942)
Investigation of Gold Price Manipulation Launched by GATA; Berger & Montague Retained as Counsel
http://biz.yahoo.com/prnews/990420/nh_gata_in_1.html
Battling giants: David picks up a stone...

TownCrier (4/20/99; 15:54:29MDT - Msg ID:4941)
Forecast of the IMF in its twice-yearly World Economic Outlook
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_324000/324268.stm
The world...in a teacup.

TownCrier (4/20/99; 15:46:45MDT - Msg ID:4940)
Bridge NY Precious Metals Review: June gold dn 40c on profit-taking
By Tina Petersen, Bridge News
Washington--Apr 20--COMEX Jun gold settled down 40c at $285.9 per ounce,
pressured by a stronger dollar and on profit-taking after run-ups late last
week and early this week totaling about $3.

Traders and analysts said profit-taking after recent run-ups and the
strength of the dollar weighed on both the gold and silver markets today but
most said they expect upside potential in the near-term. "Both markets are
relatively firm underneath," said a trader. Most said they see Jun gold reaching
$288 and May silver hitting $5.20.

"The markets have been up for 3-4 days now," said a trader. "I think they're
lightening up a bit now, but should come back up again."

Traders said the gold market has remained relatively unfazed by recent news
of IMF gold sales. "We continue to see stories about IMF sales, but the market
is putting them behind it," said a trader. "The amounts are so small and are
built into the market already." He said he does not see the potential IMF sales
as a negative for the market. "Once the sales do occur and we get them behind us
and don't have to worry about them, gold should find decent support," he said.

In the news today, Canadian Finance Minister Paul Martin said today that
most countries support the idea of IMF gold sales to finance debt-relief
operations. But Martin said that it remains to be seen whether there will be
movement on the issue at the looming IMF/World Bank meetings in Washington.

Reprinted at USAGOLD with permission. For details please go to:
http://www.crbindex.com/
No further reproduction without written permission

Aragorn III (4/20/99; 15:41:55MDT - Msg ID:4939)
More discussion with The Stranger
Stranger, you are always the good thinker. From your (4/20/99; 11:06:41MDT - Msg ID:4932):


"As for the Euro, its relative price performance is the only meaningful gauge we have of just how bad that perception is at the moment."

With this trained perspective we see only that the euro does not buy overseas dollars very well, or maybe we see closer to the mark that the dollars are selling euros with vigor. But there is yet more to be examined. Is the euro losing the land battle for eggs, for rent, for labor?

"partial gold backing alone will not save the Euro"

Truly, and to be quite frank, nothing "backs" a currency beyond itself or its contract. Foreign exchange reserves are not held for providing currency redemption. They are for purchasing a desired (temporary) exchange rate on the forex. Call it manipulation, call it bribery, call it savvy business, or what you like, but it is not "backing" any more than an advertisement "backs" its product. If the candy is bitter, the product fails and the ad campaign is suspended.

"I believe Economic policy does matter. I would be interested in hearing opinions to the contrary."

Economic policy...by this do we mean the bank's operational protocol--its lending policy? With the ECB we have a bookkeeper that tallies the ledgers independent of political orientation. Under the Maastricht Treaty, the individual national governments have moved towards balanced budgets and cannot create "debt upon debt, without limit" in an effort to beget new money. Government IOUs will not be purchased by the ECB, and all borrowers are expected to repay. Do you see this as a distinct departure from the U.S. cozy arrangement between Fed and Treasury? Too many years at unsustainable lending rates have destroyed the ability to service this U. S. debt, both foreign AND domestic. The thoughts you offer in your latest post (4/20/99; 13:36:04MDT - Msg ID:4937) complete the picture:

"For how many countries is the U.S.A export market number one? Furthermore, how much international debt originates from American Banks? In so many cases, we are not just your ultimate customer, but we are your ultimate creditor as well. Is it any wonder that, for virtually all countries, the relationship between the domestic currency and the dollar is a matter of economic life and death."

As ultimate customer and lender, do you see these countries� exposure to commodities markets that can take prices ever lower, holding them at the mercy of past creditors for continued production at any price? I offer this variation of your thought for consideration. "Is it any wonder that, for virtually all countries, the relationship between the exported commodities prices and the dollar's lending rate is a matter of economic life and death." As paper markets for commodities have shown the ability to act to negate price impact from inflation of the dollar supply, the U.S. is able to have its cake and eat it too. Meanwhile, these countries play a losing game of debt service, and no more.


TownCrier (4/20/99; 14:40:21MDT - Msg ID:4938)
FWN Closing NY Metals
New York-April 20-FWN--
Silver started out firmer but pulled back to finish
with a modest loss on profit taking. Platinum also closed
lower, remaining in a range since the lack of Russian
supplies does not affect it as greatly as palladium. Gold
finished with a tiny loss.
"It was a pretty quiet session overall," said Dave
Rinehimer, head of futures research with Salomon Smith
Barney.
June gold dipped 40 cents to $285.90.
"We weren't very active today," said Rinehimer. "This
market has pretty much factored in increased potential for
IMF (International Monetary Fund) gold sales and
expectations the Swiss will move forward to sell gold next
year. But there still appears to be a relatively large non-
commercial net short position in the market, and if we
continue to move sideways to higher, we will probably
activate some stops to the upside."
Support for June gold was pegged at $283.50, with
resistance seen at $287.50.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN

The Stranger (4/20/99; 13:36:04MDT - Msg ID:4937)
Welcome to the Big Casino
FOA, CoBra(too), and others:

For how many countries is the U.S.A export market number one? Furthermore, how much international debt originates from American Banks? In so many cases, we are not just your ultimate customer, but we are your ultimate creditor as well. Is it any wonder that, for virtually all countries, the relationship between the domestic currency and the dollar is a matter of economic life and death.

The real reason Southeast Asia, along with practically everybody else, for that matter, would like to find a better way, is precisely what CoBra says it is. It IS a casino out there. I don't doubt that the imposition of the dollar standard upon the world is the outcome of natural market forces, but the horribly destructive influence of highly leveraged currency speculation is not.

First we beguile you with our easy lending arrangements, so that you can buy our technology and equipment to overbuild your industry. Then our hedge funds destroy your dollar reserves by using leverage to force you into a hopeless defense of your currency. Then we bring the IMF in to dictate your economic policy.

I am afraid that I do not share FOA's well-considered vision of some financial cataclysm as a denouement. I do, however, believe that impoverishing our trading partners leads inevitably to the impoverishment of ourselves in one way or another. This time around we have chosen debasement of the dollar. A better tool in the future would be the adoption of at least some currency trading rules which would take the greater needs of humanity into account.

CoBra- If Al Gore is made president, and if he gets a democratic Congress, I will buy your comparison between socialism there and socialism here. As things stand now, however, I still see a difference.

Sorry for the length.


TownCrier (4/20/99; 12:45:11MDT - Msg ID:4936)
FX IN EUROPE-Conflicting pressures tie dollar down
http://biz.yahoo.com/rf/990420/bb8.html
Summary of the dollar's tea leaves.

Gandalf the White (4/20/99; 11:52:59MDT - Msg ID:4935)
The SHOW must go on !
the Show -- Continues
[read though the Crystal Ball of the Wiz -- <;-) ]
===
EURO then squats down, wraps an arm around the two barrels and heaves them to his shoulders. EURO then reaches with his foot under the barrel on its side and somehow incredibly manages to pick it up with his foot!! From this position standing on one leg, EURO brings his hands under the barrels on his shoulders and presses them up until his arms are fully extended. EURO nods his head to the polite and enthusiastic applause of the assembled
Knights and Ladies.

EURO kicks upward the barrel on his foot and it lands on end. EURO with one hand places a second barrel atop of that, and the third he tosses up with both hands and it lands straight-up atop them both. EURO then leans against the barrels with one hand while blowing on his fingernails of the other hand and polishing them on his GOLDEN tights. EURO looks over to the dollar and flashes a smile that is every bit of innocence and utter contempt at the same time.

The US Dollar is obviously flustered but undaunted. He whistles over to the entryway and a single barrel rolls out. The US Dollar stops it with a bit of effort. With the strength of both arms he stands it on end. The US Dollar then wraps both arms around it and proceeds to lift.
As he strains, his visage changes. He goes from the appearance of George Washington to Abe Lincoln, to Hamilton, then to Jackson. As he begins to appear as U.S. Grant the barrel starts to lift. Finally, in the form of
Ben Franklin, sweat streaming from his face, he is able to heave the barrel to his shoulder. He holds it there with one arm as he waves to the rather subdued group with the other. It is a pitiful sight. He asks, "Where is Wilson when one needs him ?"

The US Dollar glances over toward the EURO. EURO casually reaches into his pocket and takes out a small coin. He flicks it with his thumb toward the US Dollar who attempts to catch it with his free hand but is unable to handle it. He is knocked backward as though he were hit by a cannon ball. He winds up pressed against the wall under the barrel of oil. Orderlies scurry out with a stretcher and haul the groaning contestant away....... poor US Dollar.....

Lord MK walks over and picks up the dropped coin --- "Look at this !" Lord MK says to the assembled Knights and Ladies, as he holds forth a beautiful 0.9999 pure gold 100 EURO piece.

GF


CoBra(too) (4/20/99; 11:32:04MDT - Msg ID:4934)
Capitalist curencies/politics? Aragorn III and Stranger
What's the difference -capitalist or capitalist socialist - still democratic, still fiat -still politics -the same difference you experience between the symbol of the elephant and the donkey.
Europe has ousted their Thatchers, Kohls and (Chiracs - now doubtful) after the US elected WJC and ousting Reagan and Bush. I'm not convinced of any fundamental differences in the concept.
The main problem of the concept seemingly is the hegemony of the US $ in the context of being the ultimate and only world currency reserve. The Euro currency is not the ultimate answer (only a defense?), but I doubt that those countries relying at a dollar dominance will want to repeat the experience of getting sacked by it. SE Asia will emerge with its own currency block, aided by an Anzec $, defying derivative casino US$ demonination domination. It has happened before in this century.
Let's find back to reality (we watch gold together?) - in real values and valuations.




.
.

beesting (4/20/99; 11:29:48MDT - Msg ID:4933)
To The Invisible Hand
Thank you for your profound(at least to me)message #4913.
From someone who lives on the west coast of the North Atlantic,could you,or would you answer a few questions concerning the EURO?
Since the EURO is currently an electronic medium of exchange only,how does this effect the workers? Do they get a paycheck in local currency? Do they get paid in EURO's and convert to local currency when they buy local goods? Are credit card purchases in local currency converted to EURO's then back to local currencies? Is the public involved in EURO transactions at all?

I would like to expand on your excellent simple statement"Y2K endangers the essence of the EURO."

This statement explains why at present the world is hesitant to jump into the EURO with their own mediums of exchange. Think about this, if all your paper assets are stored in computer memory circuits and the circuits go haywire(crazy) for,1 day,1 week, 1 month or longer wouldn't you think twice about putting your assets into electronic currency,especially if it's a new and untested system?

In my humble opinion it may benifit the EURO in the long run to lose purchasing power now((To lower the cost of goods to be exported,remember,Japanese fiat money was 360 yen to the dollar when Japanese goods were flooding world markets,in 20 years Japan went from rags to riches.))

Someday,hopefully soon,the world will enjoy GOLD as an equable medium of exchange for the big players as well as the smaller players...........beesting

The Stranger (4/20/99; 11:06:41MDT - Msg ID:4932)
AragornIII
Aragorn- Thank you for noticing my remarks. In response to your query, I would say that currencies, like all things, are defined by the perception of those who regard them. As for the Euro, its relative price performance is the only meaningful gauge we have of just how bad that perception is at the moment. But, as implied in my previous post, partial gold backing alone will not save the Euro. I believe Economic policy does matter. I would be interested in hearing opinions to the contrary.

Gandalf the White (4/20/99; 11:00:06MDT - Msg ID:4931)
WOW
FOA and Goldfly --- Are you two related ?
<;-)

Gandalf the White (4/20/99; 10:49:14MDT - Msg ID:4930)
Thank you Goldfly
Precurser acts, prior to the start of "THE SHOW"
From the artist Goldfly --

Location --- THE USAGOLD FORUM "RoundTable"
Time --- early
Knights and Ladies present --- Few, but like I said -- tis early ! oh yes, Lord MK is there, and some old traveler garbed in white, is asleep in his chair at the far side of the table. Others seen are Aragorn III, Aristotle, and The Stranger, that are discussing the fine points of FOA's latest post.

----
All of a sudden -- the trumpets start blaring while the curtains at the end of the great hall open -- and --

The US Dollar comes out center stage, doing some lame tricks while Lord MK sits on his golden throne and yawns.

The US Dollar tells some dumb jokes that offends some of the Knights in attendance, who bristle and place their hands on their swords.

Sensing some action the King MK perks up and leans forward in his seat.

The US Dollar cowers stage right as several Knights begin to approach. Just as they are about to lay hands on him--

A fanfare!!!! All in the room turn toward stage left -- and there comes the EURO dressed in GOLDEN tights, flexing his muscles, dancing atop a barrel of oil, rolling it forward with his feet. The EURO stops and seems about to fall forward. The Knights gasp ! The EURO then rolls backwards and seems about to fall again. Another gasp comes from the assembled. The EURO continues this for a bit and it becomes apparent he is toying with the crowd and is well able to handle himself.

The EURO then hops off the barrel, whistles and twice claps his hands toward the stage entry whence he came and out roll two more barrels which he stops blythely with one foot.. Then to the cheers of the crowd of Goldhearts, Whith one hand on each barrel he stands them on end so that they stand at each end of the first. ---

Meanwhile at the other end of the stage, the US Dollar slips and slides on a few drops of the black gold while ---

More.......coming as soon as Goldfly finishes his other mandated challanges.

<;-)


TownCrier (4/20/99; 10:43:26MDT - Msg ID:4929)
Thai Banks Won't Show Problems
http://biz.yahoo.com/apf/990420/thailand_b_1.html
Pay now or pay later. Either way, they must pay the piper.

FOA (4/20/99; 10:40:49MDT - Msg ID:4928)
Modern Gold Standard!
Christine (4/20/99; 6:58:12MDT - Msg ID:4917)

Christine, hello again,
I don't think we will ever return to any form of the old gold standard, as it was constructed previously. Our financial world has grown far to complicated. Trade and commerce require a fast moving, self balancing system to retain the efficient use of labor and materials. Present digital currencies work very well in this new environment, except that they have evolved from and are based upon a dollar reserve standard. That reserve standard carries with it all of the past baggage of the old fixed rate exchange system (debts denominated in dollars world wide?). Only a general washout, with all that implies, will retrofit our present currency money system to match the class
act that free world trade is evolving into. Currently, the money war exists because the US/IMF wants everyone (trading partners) to lower trade margins (profits) to reflect the new economics of high speed free trade, while still maintaining payments on the old international dollar debts built up during protected trade. This has the effect of imploding native currencies and economic structures of countries trying to play the game in dollars but maintaining a local currency. We cannot have it both ways and something must give. Because all IMF/dollars are created with debt, all dollar denominated debt assets, worldwide, must be kept whole to maintain it's status as the world reserve currency. Therefore, retaining the dollar standard requires constant unbacked government to government dollar based loans so countries may make good on foreign debts. The IMF /
Federal reserve doesn't push of this just to maintain our trading partners, it's done to support the dollar reserve system.
Christine, any movement or perception that the world trading environment is moving away from dollar based trade settlement will begin a nuclear chain reaction of abandonment and repudiation of old dollar treasury debt that is held as a currency reserve! This is where this end
time political game becomes so intriguing. Many financial analysis have pegged the current international commodity deflation with the wrong identity. Falling prices in dollar terms are a direct result of a slow trend of abandonment of dollar reserve debt. Prices fall because the weight of
maintaining that reserve debt and it's part in the cost structure, is slipping away. If it was being serviced from profits, commodity production would be shutting down and product prices rising. The US/IMF rushes to lend money and the debt is being paid from the proceeds of these new
loans, not working capitol. Through this process the dollar is crashing, behind the seans, as we speak!
This is why the introduction (not it's current exchange rate) of the Euro was so important. It holds the position of a "backup" digital currency and will keep the world economic system on track when the dollar fails. Back to your original point; neither gold or the old gold standard could work as or with our present digital trading universe. What has and is evolving is a new gold currency that trades worldwide. It is manipulated just like all currencies. What we are
experiencing with gold is the building of "open gold currency trade" not "unmanipulated free gold trade" and it has taken twenty years to create. This open trade will be vital in supporting (read that backing) the massive capitol extensions the Euro will be required to service. When the dollar is replaced by the Euro, gold will be open traded (manipulated) into many thousands of Euros per ounce. That pricing will create the largest major currency reserve for the Euro System Central Banks. They will need it as their old dollar reserves will be destroyed. The present lawsuits against gold manipulation will truly fade away and be replaced with lawsuits against the huge taxes placed
on gold reserves worldwide. They will tax away 90% of these new profits just as they did the American oil companies.
Also:
At one point, a while back when the Euro looked like it would not be born, the possibility of gold being used as a partial payment (along with the dollar) in settlement of trade was very real. In this day and age, had the oil producers selected that option, world trade as we know it would have moved back 50 years as the currency system would never have kept up! World economic trade would have continued but the efficiencies of free trade using digital currencies would have been lost. Not to mention gold would have skyrocketed! Today, the low price of gold has enticed
many dollar holders to maintain their dollar reserve while buying gold to offset a potential dollars reserve status change. It is true that the cost of maintaining the dollar was very high as your paper barrel oil story has shown. However, gold was never purchased with current cash flow because (as so many people pointed out) they didn't have any. Oil reserves are easily used to purchase future delivery through the complicated world of "open manipulated gold trading". No doubt, much of that paper gold will be converted into a Euro package at the major expense and possible bankruptcy of modern gold traders.

Also:
CoBra(too)ID:4919).
Very good point!

Thanks for reading, FOA

Aragorn III (4/20/99; 10:34:04MDT - Msg ID:4927)
Stranger, let us think this through, together.
The U.S. dollar...it is a capitalist's currency to be sure, (or maybe not?...it is a fiat creation, after all) but is IT a "capitalist" currency? It would seem to me, as viewed by those who earn and spend, it is a unit of account.

The new euro...it is the socialist's currency to be sure, (and we see it has the same appearace as the fiat dollar), but is IT a "socialist" currency? It would seem to me, as viewed by those who earn and spend, it is a unit of account.

Is money defined by the skin of those who keep the books, or perhaps, is it defined by its function?

got markets?

The Invisible Hand (4/20/99; 10:14:42MDT - Msg ID:4926)
Cigarettes in Wonderland
http://www.usagold.com

Today's MARKET UPDATE reports partly as follows:
The Gold Anti-Trust Committee announced yesterday that it has retained the Philadelphia law firm of Berger & Montague to look into a possible anti-trust action against a cartel of Wall Street investment houses and bullion banks that the organization claims have colluded to control the price of gold. Berger and Montague are best known for its involvement in the recent tobacco case that ended with a massive settlement being awarded various state governments.

Here are some random thoughts.

Alan Greenspan has characterised the antitrust laws as follows:
The world of antitrust is reminiscent of Alice's Wonderland: everything seemingly is, yet apparently isn't, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet "too much" competition is condemned as "cutthroat". It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as "enlightened" when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge's verdict - after the fact.
(GREENSPAN, A., "Antitrust", in: RAND, A., (ed.), "Capitalism: the Unknown Ideal", New York, New American Library - Signet, 1967, p.63 - based on a paper given at the Antitrust Seminar of the National Association of Business Economists, Cleveland, September 25, 1961, published by the Nathaniel Branden Institute, New York, 1962.)

Who's going to be awarded the damages for the fixing of the gold price?

As far as I remember from law school, price-fixing agreements involve fixing the price at a higher level than the market level. How does this fit into that?

The Sherman Act (the US antitrust act) became law in 1890. Is it really a coincidence that the Fed was instituted only 20 years later?

The IVH


Gandalf the White (4/20/99; 10:08:18MDT - Msg ID:4925)
Steve's $CHART
Thanks Steve, You have shown the net worth of the average stockholder in the US equity market. As Kaplan has said, "The bear market started in Aug 1998 !" IF however you take and turn the chart upside down --- you see the income of the Floor Traders and Brokers that brought this "get very rich at the expense of the Sheeple" PR and media farse.
--- The Stranger is correct to as we were both taking pictures of the same thing and his yesterday's DOW headline is oh so true, -- it was the biggest 375 point ripoff seen in a long time. The only difference was that my camera was pointed at the evil ones, the Floor Traders and Brokers. Bet they will be selling their seats on the market soon too.
--- Thanks beesting for answering Aragorn's question -- and thanks Aragorn for explaining what AG is really trying to say ! Hey Farfel, why do you not get AG to try and speak so that ANYONE can figure out what HE is thinking ! He even is an English speaking American, but educated in communications on MARS, is my guess. --- Well all, I shall now sit back and await THE SHOW to begin. When is curtain-time, FOA ?
<;-)

The Stranger (4/20/99; 9:25:40MDT - Msg ID:4924)
The Invisible Hand
Dear IVH-
Trust me, not all of us are "enthusiastic about the Euro". A better question might be, "when will Europeans finally abandon their collectivist mentality?" (Just today, Euro Disneyland conceded a new work week reduction from 39 hours to 35 with no corresponding cut in pay.)

All European countries are now in the hands of popularly elected socialist governments. Instead of junking the absurd morass of anti-employment work rules, they seek mostly to grow their economies with monetary easing. Now, there is a recipe for inflation if there ever was one.

The Euro, a replacement for the dollar on world oil markets? Hardly. I wouldn't even take SURVIVAL of the Euro for granted.

One can at least attempt to understand these things, or one can simply create more conspiracy theories.

USAGOLD (4/20/99; 9:24:26MDT - Msg ID:4923)
Today's Gold Market Report: Bewildered Markets Looking for Direction
MARKET UPDATE (4/20/99): Gold retreated marginally this morning in markets that
seemed by and large bewildered and looking for direction. The dollar is mixed. Stocks are
struggling after NASDAQ's drubbing yesterday in which some high flying internet stocks
corrected by as much as 25% in one session. The bond market was mixed as well. The
European gold market traded up today and there was strong buying in Asia overnight
amidst concerns of potential widening of the conflict in the Balkans.

Swiss National Bank board member Bruno Gehrig told Reuters yesterday that "The earliest
possible moment at which the SNB can sell the first kilogram of gold will be in one year's
time." He also pointed out to the chagrin of Swiss leftists that the constitutional changes
brought about in last Sunday's vote make it possible for SNB to sell gold but did not allow
for the proceeds to be transferred outside the bank. Gehrig's remarks add weight to the
growing sentiment in the gold market that Swiss sales will be handled in such a way that the
effect on the price will be minimal.

The Gold Anti-Trust Committee announced yesterday that it has retained the Philadelphia
law firm of Berger & Montague to look into a possible anti-trust action against a cartel of
Wall Street investment houses and bullion banks that the organization claims have colluded
to control the price of gold. Berger and Montague are best known for its involvement in the
recent tobacco case that ended with a massive settlement being awarded various state
governments.

In Brief (4/20/99).........We have followed the fortunes of Long Term Capital
Management with great interest over the past several months. Now, this very telling
development reaches our desk: According to a Bridge News Report published today "Jon
Corzine, co-chairman of Goldman Sachs, is exploring ways of launching a buyout of
Long-Term Capital Management, the hedge fund which almost failed last year, the
Financial Times reported today. The report said Corzine, along with Jon Meriwether and
other original LTCM partners, has been approaching potential backers about raising funds
to buy out the consortium of banks around the world that stepped in last year to bail out the
highly-geared fund.".........If I recall correctly, this is not the first attempt to find capital
for the beleaguered fund. Other attempts have ended in failure. One wonders why Goldman
Sachs doesn't supply the capital itself.........................ECB president,Wim
Duisenberg's attitude toward the crumbling euro might be viewed by some as odd, but there
is method to this madness. As Mr. Duiseberg languidly strolls through the park, whistling
softly and taking in the spring-time air, the euro continues its trek toward parity with the
dollar.. The ECB's ho-hum attitude towards the euro can be explained by the age-old
strategy of weakening your currency to encourage exports........... And "Casual Wim"
seems blissfully content with that strategy for the moment....................... Speaking of
the ECB, it reports this morning no change in its gold holdings at 105.323
euros..............An announcement which could have serious repercussions as the day and
week progress, Russia said today it will be unable to pay off $1.2 billion in Ministry of
Finance loans. This is the latest in a series of defaults of all kinds over the past few
months................ Russian Deputy Finance Minister Mikhail Kasyanov told UPI
that,"Unfortunately, as hard as we tried to accumulate money and stabilize the situation, we
can't do this."................... Well, thanks for trying Mikhail. We know how hard it can
be whenever IMF money arrives and it just zips its way to Switzerland in the blink of an
eye..........When were we going to send the next injection of IMF loan money into the
Russian black hole (financed by the U.S. taxpayer). They don't call that country the Bear
for nothing..................Speaking of whistling through the park (make that graveyard),
the U.S. trade deficit rose 15.6% in February to a record $19.4 billion. Hey, don't worry.
Just buy more stock. Everything's going to be just fine. ...................Brazil's back in the
news. It's stock market was down 3% today as scandal its central bank/ foreign exchange
markets gripped markets......................That's it for today. MK

TownCrier (4/20/99; 9:13:38MDT - Msg ID:4922)
Russia Defaults on a $1.3B Debt
http://biz.yahoo.com/apf/990420/russia_def_1.html
$150 billion in foreign debts with $17.5 due this year. Russia says at most it can only pay half that.

TownCrier (4/20/99; 8:57:45MDT - Msg ID:4921)
Canada's Thiessen sees U.S. economy pushing limits
http://biz.yahoo.com/rf/990420/yr.html
Investors are wearing rose-colored glasses

TownCrier (4/20/99; 8:19:39MDT - Msg ID:4920)
Record U.S. Feb trade gap seen squeezing Q1 GDP
http://biz.yahoo.com/rf/990420/we.html
February's U.S. trade deficit widened to a record $19.44 billion as imports dwarfed exports

CoBra(too) (4/20/99; 7:45:41MDT - Msg ID:4919)
Paper barrels & Casino Capitalism
The referneces to paper barrels by esteemed ladies and knights of this round table are beginning to lift the fog of the main shortcomings in todays strive for globalisation, liberalisation and abandonment of regulations in world economies.
As FOA's analogy of supply-demand, where the balance or rather imbalance of the underlying product or commodity is is of little consequence, since the price has been fixed beforehand by paper (derivative)markets, states in (virtual)reality, that the foundations of economic globalisation are built on paper. In todays case the increasingly inflated paper of a free wheeling (floating) international monetary system, based on the hegemony of fiat $-system, which is benefitting only few (8% of global population) and lead to todays casino capitalism.
This type of globalised capitalism, where huge funds are sloshing around in search of the most profitable bet on world financilal markets, or better casinos, is now totally uncoupled from economic reality. Capital seems reduced to chits or jetons on the roulette table and increasingly seem to bypass its original function as the medium to finance long term productivity in order to benefit the economical, social and ecological enhancement of all.
The experiment of globalisation in itself is deemed positve, though built on paper foundations. The transition has started (FAO)and may be the return to stable and acceptable parameters for real value.

Regards to all CoBra(too)


SteveH (4/20/99; 7:27:09MDT - Msg ID:4918)
June gold hit 287 now ...
$286.6

Christine (4/20/99; 6:58:12MDT - Msg ID:4917)
Euro, international gold standard, electronic currency
IMHO, goldbugs are understandably enthusiastic about the gold standard. Perhaps this is some of the enthusiasm about the euro--it is more gold-linked than $US dollar. However, gold is ANATHEMA to central bankers and those in power. IMHO we are likely to get an electronic gold backed currency, but I ask you at what price. We the common people are not going to get anything for nothing. It is my strong suspicion that when we get this new currency it will be paid for by giving up a big chunck of our freedom. I am not speaking against a gold standard. Just that we be very wary about what is going on.

SteveH (4/20/99; 4:59:26MDT - Msg ID:4916)
June gold asking $286.70...
http://www.gmsresearch.com/$flo499.htm
I invite you to comment on this chart.

SteveH (4/20/99; 4:44:44MDT - Msg ID:4915)
June gold now...
$286.30.

How 'bout this:



For Immediate Attention April 19, 1999



REFORM OF EXCHANGE STABILIZATION FUND READIED
-- Openness and Accountability Would Be Mandated --
WASHINGTON, D.C. � Legislation reforming the Treasury's Exchange Stabilization Fund (ESF), the ESF Transparency and Accountability Act, is being readied for introduction, Vice Chairman Jim Saxton of the Joint Economic Committee (JEC) announced today. The ESF was established in 1934 at a time when the dollar was pegged to gold, but has survived into the current era of flexible exchange rates despite its lack of clear objectives and its secretive operations.

"This legislation will end the legacy of secrecy and obscurity at the ESF," Saxton said. "We need this kind of secrecy in our nuclear weapons programs, not in our international economic policy. The ESF is an important part of U.S. international economic policy, but most Americans have never heard of it. The American people have the right to know how billions of their tax dollars are being used.

"Excessive secrecy is part of an even larger problem: the lack of accountability to Congress or the American people. Although it is part of the U.S. government, the ESF and its operations are not subject to Congressional appropriations or approval. The executive branch has virtually exclusive control of the ESF, its policies and its operations. My legislation would change this unhealthy lack of balance in economic policy.

"The new ESF reform legislation will mandate transparency by requiring the public release of monthly statements from the ESF disclosing its finances, operations, policies, and any related monthly changes. Exceptions will be provided for information that is market-sensitive or related to national security.

"The ESF reform also would require Congressional approval for any use of the ESF in excess of $1 billion, except in certain cases when the President provides a public written certification that an imminent and serious danger to international financial markets exists. This would help restore needed balance in international economic policy and facilitate effective Congressional oversight. The legislation would also limit the authority to monetize the special drawing rights (SDRs) of the International Monetary Fund (IMF) held in the ESF.

"The ESF is a key element of the U.S. government's financial relationship with the IMF. A continued push for IMF transparency will not be as effective without much more openness at the ESF. For example, in recent weeks, part of the IMF-designed Brazil rescue package was triggered involving the ESF, but there has been virtually no public disclosure of this fact.

"The ESF is involved in the Brazilian bailout through a complicated and obscure arrangement with the Bank for International Settlements (BIS), an institution that is at least as secretive as the IMF. This type of arrangement creates the potential for important policy decisions involving the U.S. government to be hidden from the view of Congress and the public, and this is simply not acceptable," Saxton concluded.


Oregon Geezer (4/20/99; 3:58:31MDT - Msg ID:4914)
Blackmarket gasoline sales
From the AP wire this morning
In Florida gangs, using stolen credit cards and vans and trucks rigged with 600 to 1,000 gallon tanks, are buying gasoline and selling it at discounts in neighborhoods. Some of the vehicles are so poorly rigged that they pose an immediate danger. The crooks pay the fines --- from $1,000 to $3,000 and are back in business in no time. A sign of things to come?

The Invisible Hand (4/20/99; 2:33:55MDT - Msg ID:4913)
Euro - What's the fun?
http://www.usagold.com

I suppose this Forum agrees with me that Nixon was wrong in 1971 to "abolish" what remained of the link between the US dollar and gold. The reasoning is that paper has no value except governmental fiat. But at least, the US dollar still exists in paper.

Here comes the euro. People on the westcoast of the Northern Atlantic (that's the east- and westcoast of North-America) seem very enthusiastic about it being backed by gold. Over here, in euroland, this gold backing is something unknown, but that's not my point. My point is that it does not even exist in paper, but only electronically.

It's one thing not to exist in paper (I don't know what M1, M2 and M3 (and M4?) are, but it seems to me that the non-existence in paper allows unlimited money creation). It's quite another thing when electronic money is endangered by Y2k. Y2k endangers the essence of the euro.

Why are you so enthusiastic about the euro?

The IVH




Aragorn III (4/20/99; 0:58:11MDT - Msg ID:4912)
Correcting the flaw in Fed Chairman Greenspan's Trade and Technology speech
http://www.bog.frb.fed.us/boarddocs/speeches/current/19990416.htm
beesting, well done! By your words you have identified "the U.S.Dollar as the internationally accepted medium of exchange,instead of Gold" to be the flaw in the speech. Let us take another look at this good speech, and we shall supply the omitted element for the benefit of our friends. I have excerpted only the points necessary to convey the message, and use the popular convention that my own interjections are within [brackets].

"The evidence is overwhelmingly persuasive that the massive increase in world competition--a consequence of broadening trade flows--has fostered markedly higher standards of living for almost all countries who have participated in cross-border trade. I include most especially the United States."

[This comment, 'I include most especially the United States' sets the stage for this "flaw of omission", but assures us the Chairman does indeed understand this element omitted upon conclusion.]

"This is the process by which wealth is created incremental step by incremental step. It presupposes a continuous churning of an economy in which the new displaces the old."

"But the adjustment process is wrenching to an existing workforce made redundant largely through no fault of their own. It may be argued that all workers should have the foresight to recognize long-term job opportunity shifts and move in advance of obsolescence. This regrettably is a skill not in great abundance--among business managers or the economists who counsel them as well as among workers."

"Typically, antidumping duties are levied when foreign average prices are below [local] average cost of production."

"Thwarting competition, by placing barriers to imports, will prevent the needed transitions of the productive capital stock of the United States and other nations that enable it to continuously concentrate on producing those goods and services most desired by consumers."

"I regret that trade policy has been inextricably linked with job creation. We try to promote free trade on the mistaken ground that it will create jobs. The reason should be that it enhances standards of living through the effects of competition on productivity."

[Here the Chairman demonstrates his good understanding and proper focus on *real things*. Access to goods at the lowest possible price by an entire population should be recognized by policy makers as more beneficial to a nation than are artificial props to benefit a minority sector of industry which results in unnecessary higher prices for all. Strategic issues aside, should access to low cost materials be denied to a population solely to support those local few endeavoring at high-cost production? To be sure, petroleum falls in this category. In contrast, the U.S. could be the undisputed low-cost producer of the world's grain if farmers are assured access to petroleum from the low-cost producer. On a personal scale, imagine if you were not allowed to shop at the cheapest store in your city, or hire the low-cost contractor outside your neighborhood.]

"It is difficult to find credible evidence that trade has impacted the level of total employment in this country over the long run. Indeed, we are currently experiencing the widest trade deficit in history with a level of unemployment close to record lows."

"It is the relative balance of supply and demand in a competitive market economy that determines the mix of employment. When exports fall or imports rise, domestic demand and relative prices have invariably adjusted in the long run to leave total employment relatively unaffected. As economists like to say, all imports are eventually paid for with exports."

[Here we start to see the beginning of the "flaw of omission". Consider that the U.S. exports a great deal of dollars to pay for its imports, benefiting "most especially the United States" An exported good represents the offsetting (and mutually beneficial) payment-in-full for an import. Exporting dollars does not represent payment-in-full until such time as those same dollars are spent/redeemed for goods.]

"I also regret that...our trade laws and negotiating practices are essentially adversarial. They presume that a trade concession extracted from us by our trading partners is to their advantage at our expense, and must be countered.
Few economists see the world that way. And I am rash enough to suggest that we economists are correct, at least in this regard: trade is not a zero sum game."

[Here is where the Chairman commits a flaw of omission. If speaking to our Round Table, there is no doubt it would have been the focus, rather than the omission, of his speech. With the comment that trade is not a zero sum game, the Chairman implies that a gain to one party does not entail a loss to the counterparty. They both benefit, as they each trade for what they lack. However, as I touched on earlier, this does not hold as firmly when one party settles its balance of trade in fiat dollars. One country gets real goods today in exchange only for paper units that have an immediate and pervasive trend toward devaluation. When eventually redeemed, it is nearly certain that they buy fewer goods than they would have at the time of the original trade. Such is the benefit enjoyed by the U.S. and any other nation that finds itself in the enviable position that its notes are accepted by their net-exporting partners in settlement of trade, to the offsetting detriment of these net exporting trade partners. Hence, a zero sum game is only maintained if, for example, oil is traded for grain or for gold. If traded for paper, the time-value losses while holding the currency upsets the zero sum. To be sure, the Chairman did not lightly sweep this under the mat. He favors a gold standard for the same reasons he favors open trade.]

"If trade barriers are lowered by both parties, each clearly benefits. But if one lowers barriers and the other does not, the country that lowered barriers unilaterally would still be better off having done so."

"For these reasons, I am concerned about the recent evident weakening of support for free trade in this country. Should we endeavor to freeze competitive progress in place, we will almost certainly slow economic growth overall..."

[That which we have seen offered by ANOTHER and FOA...to see it come to pass will certainly involve dramatic changes in the seating arrangement at the world table. Old beggars may become choosers, while the life of ease may find it becomes necessary to work once again. Only if trade is kept open may we have hope for the least troublesome transition. While they do say, "All is fair in love and war", I say instead, "All is fair in open markets!"]

got freedom?
got gold?


Aristotle (4/20/99; 0:52:52MDT - Msg ID:4911)
Ahhhhhhhh...take a DEEP breath.
Overall, a great day. Gold was immune to the Swiss news, and the markets gave us all that cheap thrill that only a goldheart can know. Is that sad, or what??

Gandalf, I'd say our cameras recorded the action in a very similar manner. Isn't this is what my film showed when developed?
'The headlines should read:
"DOW Drops 325 in Biggest Washout Seen in 1999"

The Nasdaq had no trouble writing its own unambiguous headline today. "Nasdaq Falls over 5.5%"'

Christine, thanks for the compliment, and thank YOU for taking my advice and joining the Table.

FOA, my friend, you sure make me jumpy! The words are thrilling for what they entail, but I'm not sure if my years of cheap Gold acquisition is a habit I can easily part with. As you might well imagine, I have gotten quite fond of that regular influx of ounces into my personal treasury. At the end this inexpensive Gold heyday, I'm sure that my final assessment will be that my treasure is O' so small, yet represents my life's stored productivity, and handsomely rewarding my choice of Currency.

I am inclined to think that when Gold starts its move, it will be in such great demand that nearly overnight it will not be available. That is what makes me jumpy, and is why I try to warn my friends that the time to by Gold is well in advance of The Move. Due to the supply chain and delays built into the ordering process, I can easily imagine giving MK a call only to be told there is no hope of laying hands on the Gold, or else being told a week later that the suppliers have all reneged on their deliveries. I think that would be the most helpless feeling in the world, and the point at which a paper dollar would be the most reviled thing on Earth.

The calm with which the ECB watches and lightly remarks upon the falling euro speaks volumes in support of your comments. Much like a poker player that knows he has an unbeatable hand, there is careful work to be done in placing the bets before the final victory dance on the table. Might the euro's drop against the dollar actually be advantagous for the final position--to spend away the massive dollar holdings in the foriegn exchange reserves for any combination of euros, Gold, etc.? It would seem that just as oil and Gold have been driven to their low levels by short sellers, the euro has travelled that same path with the same guide. When the time comes to square the books, the world will seem awash in dollars chasing around preciously rare euros, Gold, and oil. World trade wins while the dollar answers for its past mistakes.

The individual survival plan for anyone having their wealth denominated in dollar terms can be summed up in two phrases.
Gold. Get you some. ---Aristotle



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Tuesday May 22
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