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ARCHIVED DISCUSSION FROM 2/20/2001
All times are U.S. Mountain Time
(Yesterday's Discussion.)
FredBear
(02/20/01; 23:33:16MT - usagold.com msg#: 48643)
tedw (02/20/01; 21:57:15MT - usagold.com msg#: 48640)
Starfield Resources
SR has been a recommendation of Bob Chapman at International Forecaster for some months now. That's all I have.
Good luck.
Simply Me
(02/20/01; 23:16:58MT - usagold.com msg#: 48642)
@Black Blade
Hope it never happens to you. But, it's always good to remember what happened to the makers of buggy whips after the invention of the Model-T. Have you heard some talk of an invention called "Ginger" and a power source called I.T.?
Wasn't there a joke going around...
Q: How do you find a good geologist in Texas?
A: Just yell, "Waiter!"
simply
Simply Me
(02/20/01; 23:04:05MT - usagold.com msg#: 48641)
@Black Blade
Oh, I'm here most nights. I just try to keep posting to a minimum because I don't want to interfere with all the good research and interesting thoughts I see coming from folks much better informed on the gold markets. I like to see which way the wind is blowing.
A teaching certificate is as good as gold in a bad economy. Science/Math teachers and subsitute teachers are always in demand in small towns...now more than ever. And if you need extra cash, there's always tutering. Not a bad idea to dust that thing off and keep it renewed just in case you actually need it. Most Boards of Education are infernally slow with their paperwork. You would make an exellent teacher, judging from your forum posts. Elementary or Secondary Ed?
simply
tedw
(02/20/01; 21:57:15MT - usagold.com msg#: 48640)
Starfield resources
http://www.usagold.com
Anybody have any input on Starfield Resources, junior Canadian minimg company?
tedw
(02/20/01; 21:57:14MT - usagold.com msg#: 48639)
Starfield resources
http://www.usagold.com
Anybody have any input on Starfield Resources, junior Canadian minimg company?
Boxman
(02/20/01; 21:41:40MT - usagold.com msg#: 48638)
(No Subject)
OK, one last time. If my wife doesn't hear me, am I still wrong?
Sorry folks.
Mike
Boxman
(02/20/01; 21:39:33MT - usagold.com msg#: 48637)
Last post
That should read, If my doesn't hear me, am I still wrong.
Say good night, Gracie. Goodnight Gracie.
Mike
Canuck
(02/20/01; 21:36:45MT - usagold.com msg#: 48636)
Comex
The Comex in New York City can kiss my little white Canadian ass.
(This is in no way, implied or otherwise, assumes that Canadian derriere's are whiter or littler than standard ass)
Boxman
(02/20/01; 21:35:35MT - usagold.com msg#: 48635)
Shiftys post #48633
<<I just have to ask you an age old question. If you fall down and nobody hears you , do you make a noise>>
SHIFTY, How about this one. If I say something, and my wife doesn't me, am I still wrong?
Mike
SHIFTY
(02/20/01; 21:31:45MT - usagold.com msg#: 48634)
Philadelphia Experiment: Montauk Experiment
http://www.crystalinks.com/phila.html
I was reading this last night and when I got down to the bottom of the page I ran into an interesting story about a large amount of gold. I thought it may be of some interest.
---------------------------------------------------------
"The project was controlled by Dr. John Von Neumann and Jack Pruett. About 30 people worked there. It was a joint project...Air Force & Navy. Original funding came from the Nazi government funds. In 1944 there was an American troop train that went through a French railroad tunnel carrying $10 billion in Nazi gold which they had found.
It was $10 billion at the 1944 price of $20 per ounce. The train was blown up in the tunnel. It killed 51 American soldiers. The gold turned up ten years later at Montauk. This has been verified. That money was used to finance the project for many years as the value of gold went up.
They spent all of it and ran out of money. That's when they tapped on ITT, who funded it. ITT was owned by Krupp in Germany. In terms of personnel, many of the civilians and scientists there were all ex-Nazi's who came from Germany both before and after the war ended.
SHIFTY
(02/20/01; 21:27:11MT - usagold.com msg#: 48633)
Tree in the Forest
Thank you Sir Tree!
I will read it!
PS
I just have to ask you an age old question. If you fall down and nobody hears you , do you make a noise?
Hee Hee Hee
Big Smile
$hifty
Tree in the Forest
(02/20/01; 20:41:46MT - usagold.com msg#: 48632)
Correction
Correction on my first post. Feb OI is almost zero at this point. Comex needs to cover deliveries to stoppers to the tune of 5061 contracts.
Tree in the Forest
(02/20/01; 20:36:26MT - usagold.com msg#: 48631)
Shifty: How low does gold need to go?
http://csf.colorado.edu/forums/longwaves/2001/msg00282.html
Sir shifty, you asked how low does gold need to go. I am reposting the link above to a very interesting hypothesis which may answer your question. This guy sounds like he knows what he is doing. Time will tell.
Tree in the Forest
(02/20/01; 20:24:49MT - usagold.com msg#: 48630)
Comex numbers
Here are some Comex numbers for 2/20/01. I'm glad I checked the Nymex directly as the numbers here differ from Futuresource. As I expected, Comex managed to convince Scotia Mocatta to part with some additional AU and managed to get their eligible stocks up by 150,000 oz. to a whopping
245,000 oz. but it's still not enough to cover their Feb OI of 5061 contracts. Keep at it boys! Offer 'em enough paper and maybe you can avoid default...this month. But look at April. 104,000 contracts. That's 10,000,000 oz. guys. Watcha gonna do? Now where did I put that pick and shovel? PD and PT stocks are laughable as usual. Why bother to call yourself an exchange? Silver sits very quietly. Not enough silver to cover March but March OI is down. No problem here. Just like Turkey!
Comex Future
Contract spec.
Open interest near months
Comex stock
AU
100 oz.
Futures Feb OI 37 Apr OI 104,487
Eligible 245,477 oz.
Registered 1.8M oz.
AG
5000 oz.
Futures Mar OI 34,606
Eligible 27M oz.
Registered 99M oz.
PD
100 oz.
Futures Mar 754
82 oz.
PT
50 oz.
Futures Apr OI 6619
615 oz.
Black Blade
(2/20/2001; 19:52:00MT - usagold.com msg#: 48629)
RE: Simply Me
Good to see you here tonight. That is an interesting thought. I will finish a project for a miner client in about a month and unless some other project materialize, I will dust off the old "Teaching Certificate" for next year. I will more likely have something lined up with the oil and gas biz though. I think we could see a repeat of the depression era type of difficulties.
- Black Blade
Black Blade
(2/20/2001; 19:46:46MT - usagold.com msg#: 48628)
Seeing Red Tonight
http://quote.yahoo.com/m2?u
Asian markets look to be beaten down a bit tonight. We just might see the NASDAQ break below 2000 this week or next. Tomorrow the CPI numbers come out and should reflect the inflationary pressures as did the PPI last week. However, these numbers are generally bogus as statistical figures are used (Hedonic deflators, Seasonality, etc.). Could be interesting in the next two weeks. Also, OPEC meets on March 17th, and they are very likely to cut production a minimum of 1 million and possibly 2 million bbl per day.
- Black Blade
Simply Me
(2/20/2001; 19:36:32MT - usagold.com msg#: 48627)
@ Mr. Gresham - Everything old is new again in the New Economy.
Your recommendations for future employment/self-employment looks like advice from Depression Era survivors (such as my mother): "Have at least two skills to offer, one using your brain and one using your hands, then you'll never be out of work." and "If you don't have a job...make one."
The problem with today's hamburger flippers and department store sales clerks is that they couldn't use a hammer or a sewing machine with any degree of competence, so they can't supplement their current meager incomes or take care of themselves if their employer shuts down. They will be in the Food Stamp and Welfare lines along with all the other Demokrat/Socialist/Grasshoppers/Children of the New Economy.
Maybe at the heart of all this is a basic difference in physical gold advocates and "investment" paper pushers.
People who put away physical gold tend to display a fierce need for independence and an abhorance of trusting their future welfare to others (especially gov'mint others). I would be willing to venture that most are the eldest sibling in their families, expected to take care of the younger ones from an early age.
Show of hands?....(pause)....I thought so.
While the paper investors are playing the game that the gov'mint has set up for them, and fully expect the gov'mnt to catch them if they fall. The babies of the family? Always looked after and bailed out by big brother/sister.
Given that the above not-so-wild assumptions are generally true....it's no wonder that TPTB don't promote the value of saving gold. The gov'mint grows and thrives on dependents. Sheople are easier to farm than a lot of us ol' goats (and nannies).
Get physical gold.
Get a physical skill...carpentry, quilt-making, anything!
Eat well and enjoy playing with the children.
simply
SHIFTY
(2/20/2001; 19:25:26MT - usagold.com msg#: 48626)
Black Blade
I thought about that after I posted .
Paper for Paper
Makes you wonder if people will pay $50.00 for a news paper what will they pay for gold when the time comes?
$hifty
Black Blade
(2/20/2001; 19:07:33MT - usagold.com msg#: 48625)
RE: SHIFTY and news paper
SHIFTY you wrote:
People are nuts!
My brother-in law just told me that our Daytona Beach news papers from Monday are selling for $50.00
Black Blade: Kinda like "paper gold" eh?
Randy (@ The Tower)
(2/20/2001; 18:30:08MT - usagold.com msg#: 48624)
The obvious upside to today's dumping of COMEX April gold Contracts
http://www.usagold.com/onlinestore/special.html
For the acquisition minded, these pre-33 Confederatios can be had at their best price during this on-line offer.
Selling paper. Buying gold.
Randy (@ The Tower)
(2/20/2001; 18:17:34MT - usagold.com msg#: 48623)
The latest weekly market commentary courtesy of WGC
http://www.usagold.com/wgc.html
Notable excerpt:
"Belgium has announced plans to use the paper profit made on the transfer of 27.1 tonnes of gold to the European Central Bank to set up a state pension fund. The transfer, which took place in January 1999 as part of European economic and monetary union, yielded a "profit" based on the difference between gold's book value and the market value at which the transfer was completed of 7.1 billion Belgian francs."
-----------
Does this operation look familiar to you? Notice the date. In hindsight, we all can now clearly see the original inspiration and from which playbook the International Monetary Fund was reading from for its gold revaluation operations conducted from December 1999 through April 2000.
Gold. Someday all reserves will be held this way.
got any?
SHIFTY
(2/20/2001; 18:01:52MT - usagold.com msg#: 48622)
People are nuts!
My brother-in law just told me that our Daytona Beach news papers from Monday are selling for $50.00
$hifty
Mr Gresham
(2/20/2001; 16:34:21MT - usagold.com msg#: 48621)
Wild Hare
There's gotta be a few of us with some leftover actual "making things" skills, even if just to patch our old junk cars (like in Cuba) and keep 'em going awhile longer (import substitution). But the emphasis was on us and our neighbors working cheaper, not able to buy expensive imports, and having to rebuild exporting industry, probably from next to nothing. And yes, having to compete with Asian workers to do so. I remember hearing in 1995 when Mexico had its debt crisis, workers' income was rolled back to the level of 1956. Something like that. But "a job is a job" you'll be hearing people say.
In a land of unemployed hamburger flippers, the guy that can retrain and learn to make machine tools cheaper than those rich Germans can earn some of those high-value Euro investments for himself.
(My last remark going out before, should I need to explain, was "you losers" as in Dylan's "For the loser now will be later to win" (Times They are A-Changin'). "For the first one now will later be last...") Sounds like some Austrian economic cycle theory to me...
RossL
(2/20/2001; 16:23:30MT - usagold.com msg#: 48620)
Journeyman - 5 questions
I don't know the answers to your questions, but I like the idea that Belgian alluded to in #48617, that the derivatives can contribute to volatility.
The textbooks always reinforce the idea that futures and derivatives reduce volatility by adding liquidity to the markets and smoothing out seasonal problems.
That may be the case when we are discussing soybeans or corn, but does it hold true in the gold market as you describe? It's not helping Palladium right now.
Could it be that derivatives are adding an oscillator into the price function. I could describe this best by returning to an EE analogy, like Mr. Greshams' friends are using, and the derivative influence is in the imaginary plane. The oscillator could have a period of minutes, days, or years...
OK, I'm just rambling on now so I'll go back to lurking...
Journeyman
(2/20/2001; 15:48:44MT - usagold.com msg#: 48619)
I'll keep my emergency kit ready! @Belgian & Sancho
Thanks for your responses, guys!
Yea, too much of this stuff can definitely give you mycardial thingies. I'll keep my emergency asprin and ambulance-pass handy!
Regards,
Journeyman
Sancho
(2/20/2001; 15:22:46MT - usagold.com msg#: 48618)
(No Subject)
Journeyman: Re your post 48596, There are more than enough things in the stew working at cross purposes with each other that do not make sense to us mortals trying to use logic. One would think that what with all the printing presses rolling along 24 hours a day that the DOW would be around 50,000; if for no other reason than a lack of other things to buy due to a saturated economy. Too much attention to the unknowable can lead to a mycardial infarction.
Belgian
(2/20/2001; 15:14:41MT - usagold.com msg#: 48617)
Journeyman and derivatives
Sorry, but I'm a derivative-agnost and reflect only less than 2 cents of intuitive answer. If goldmovers decide to move to the buy-side of physical gold...no derivatives can cap the resulting POG-rise for long. If offer and demand are in tight balance, derivatives can force the price up or down in a broader price-range. In latest GATA message, R. Howe is talking about 4.500 tons of yearly gold-demand ????
With the offer 2.500 tons production + 400 tons scrap + 400 tons WA + x-tons non WA(make it 300 tons)...I have quite some difficulties to understand how a 1.000 tons of yearly deficit can be filled with derivatives ? I have always been counting with only 3.500 tons of yearly demand ! Probably, I'll had to many revieuws of statistic material, that I lost my way in it. How many years can gold live with a 1.000 tons shortage ? Sooooooo confusing.
And Tim Wood's 10 Questions plus answers by polyconomics is adding to that confusion. Help...again.
Belgian
(2/20/2001; 14:04:34MT - usagold.com msg#: 48616)
...5...4...3...2...1...0...debt countdown !
ORO : if your description is close to reality...we all await patiently the zero, goldignition, and lift off.Kaboom.
Wild Hare
(2/20/2001; 13:48:30MT - usagold.com msg#: 48615)
skilled american labor?
Unfortunately, most of the new technology manufacturing jobs, and hence skills, have been exported (software to india, hardware to singapore, thailand, malaysia, singapore, china). I'm in the disk drive business and there hasn't been a drive built in this country, aside from minimal pilot production, in probably ten years. Not that there's a future in drives or anything....
But hey, we still have plenty of lawyers.
>>>So, micro-mfg export-oriented businesses, harnessing the talents and labors of skilled USAmericans now forced to live on a tighter survival regime. Seems to be where our PM savings are likely to be best invested and our entrepreneurial skills best employed.
Journeyman
(2/20/2001; 13:21:51MT - usagold.com msg#: 48614)
How significant is the "derivatives effect?" @ORO, ANYONE
http://m1.mny.co.za/MGGold.nsf/Current/4225685F0043D1B24225698F004F7B9D?OpenDocument
Hi ORO!
Your posts are great today, but then why should today be an
exception?
A theme that's been traipsing in and out of here for a few months
has gotten me to thinking - - - Yea. Dangerous occupation, I
know.
As a result of this hazardous behavior, I have a question - - -
actually, about five of them. Very simple answers perhaps, but
if you don't have any, good for stimulating mental exercise. So,
here goes. According to Mr. Paul van Eeden [link in header]:
"In an abnormal derivative market [where the size of the
derivatives market is large in comparison to the size of the
underlying asset's market -j.], the amount of derivatives
being traded, based on a particular underlying asset, is so
large that changes in the supply and demand for the
derivatives causes changes in the underlying asset's price.
Exactly the opposite of a normal market.
And:
"The physical gold market is less than 2% of the size of the
derivatives market. The annual supply deficit is only about
0.1% of the total market and central bank sales, which
everyone is blaming for the demise of the gold price, are
only 0.12% of the gold market*." -Paul van Eeden, The
Meaning of Derivatives: Futures and Options
Mr. Van Eeden further suggests that "This convergence of the
derivatives market with the physical market of the underlying
asset on which it is based, as the derivatives approach
expiration, is a well known phenomenon.."
I realize the following questions probably don't have precise
answers - - - part of the demand for the derivative/physical
amalgam is created by the desire to gamble with the paper
contracts themselves. Further, not all "derivatives" act as
supply, etc. None the less, I think this could be a fruitful
line of research, and I'd be surprised if it turned out that no
one had looked into this yet.
1. Does "the derivatives effect" exist and if so, is it's
magnitude significant?
2. Is the "the derivatives effect" on the price of the underlying
apparent in all markets blessed with derivatives (and does it
have an over-all effect on the physical underlying's price or
only as the derivatives approach expiration?)
3. Does "the derivatives effect" add a long-term bias to the
price of the underlying? To the extent that the promises to
deliver are taken as if they were actual supply by physical
users, supply and demand suggests the composite price
(paper+underlying) would be biased downwards.
4.If as Mr. van Eeden suggests, physical gold is unusual in that
only 2% of what's traded in the gold markets is physical, what's
the ratio in other markets like pork bellies, oil, natural gas,
and even electricity? It seems logical that the effect would be
proportional to the ratio of underlying to paper that's traded.
Is there somewhere these ratios (or the raw materials to produce
them) are available?
5. Does anyone (ORO?) know where I can find any work that has
already been done on this?
Regards,
Journeyman
Journeyman
(2/20/2001; 12:56:06MT - usagold.com msg#: 48613)
Thanx Sir Peter! @Peter Asher msg#: 48603
Sure could go a long way toward explaining why the credit expansion didn't cause a stock market rise!
But I'm holding out for some other possibilities too.
Truth is, your answer's better than my current one I think.
High regards,
Journeyman
Buena Fe
(2/20/2001; 12:46:45MT - usagold.com msg#: 48612)
fire?
US banks under heavy pressure today (Bkx.x).......I smell smoke........what's on fire?
Mr Gresham
(2/20/2001; 12:18:09MT - usagold.com msg#: 48611)
Oro: Moonshine indeed!
"There will be a "new economy" and it will be a micro-manufacturing one"
I always like to get my brain a few notches ahead of our "gloom 'n' doom" Bad Boys' Club handbook, and imagine just what we'll all be doing for work in our closing decades. (Hopefully, not bagging groceries at Safeway.)
So, micro-mfg export-oriented businesses, harnessing the talents and labors of skilled USAmericans now forced to live on a tighter survival regime. Seems to be where our PM savings are likely to be best invested and our entrepreneurial skills best employed.
Thanks from my brain for pacing it a good morning lap around the 440 track.
(Hey! Call it moonshine, willya? I gotta be a bit tetched to hang around with you "losers" for so long, huh?)
Randy (@ The Tower)
(2/20/2001; 11:53:20MT - usagold.com msg#: 48610)
"We shall have the hyperinflation."
http://biz.yahoo.com/rf/010220/nat017582.html
First a recap of the swelling money supply figures we announced last Friday A.M., then we'll move on to the Fed open market operations today...adding reserves with a fury.
(02/16/01; 00:10:23MT - usagold.com msg#: 48351)
Something to chew on as you wait for breakfast...M2 & 3 up thrity billion dollars
http://biz.yahoo.com/rf/010215/nat017569.html
I think these numbers speak for themselves...from the Fed's latest report on money supply.
Figures are expressed as $-billions
M1 = 1,104.8 . . . down 1.5
M2 = 5,029.6 . . . up 29.3
M3 = 7,232.7 . . . up 35.3
----------------------------------------
With that backdrop, and also with the knowledge that the federal funds market was trading precisely at the FOMC's target rate, take a look at what the Fed's System Account Manager has been up to this morning....
First, there was an add of $2.0 billion to the banking system's reserves via 27-day repurchase agreements.
This was followed by a $6.505 billion polishing add via two-day RPs.
But no, it didn't stop there. The Fed decided a coupon pass was also in order, permanently adding another $1.446 billion to banking reserves through the outright purchase of U.S. Treasury securities (dated April 2001 to August 2001).
ORO
(2/20/2001; 11:32:54MT - usagold.com msg#: 48609)
Belgian - how to buy and why sell
The key to the purchase is the sale of a call spread. You buy the bullion and sell the gold calls. The net effect on the paper POG is near 0.
The second item is that the emerging nations producing gold are holders of very minor reserves, having committed them to the London gold pool and the IMF sales of 1976. The major gold producers are also highly indebted to foreign interests, the gold production needing only to cover real interest on the debt. Since there is much political benefit to politicians in having good consumer conditions now (when they are subject to election) vs. later (when they will be dead), the general tendency is to import as much as possible now, while increasing the gold production to a level at which it covers the interest charged. The loans, though denominated in dollars, are hedged into gold through off the books derivatives managed by the central banks, thus converting them into defacto gold loans. Gold producer countries must adjust the currency so that local gold production can at least survive, if not grow, and thus allow more borrowing.
Third, because the debts are defacto denomenated in gold (through the hedging contracts of the lenders), the actual POG does not matter to the indebted seller, since the selling is actually a debt repayment at a past market price.
Last, socialist politicians are very cheap, thus making their policy decisions subject to interests that may counter those of their people (about which they don't care much).
As to buying in secret, it is obvious that high reputation buyers would spark competition from other market players for the gold. Knowing the intention of a large buyer, the markets would mark up gold price ahead of the buyer and reduce the buyer's take.
Knallgold
(2/20/2001; 11:31:36MT - usagold.com msg#: 48608)
TG prediction from 3. January after the rate cut
"Trail Guide (01/03/01; 15:54:16MT - usagold.com msg#: 44966)
....Now our strong dollar support system is fracturing away...Nor will the gold derivatives markets be sustainable in dollar terms. Everyone in the world will be selling paper gold short in an effort to make some hay as it's structure crashes.
It's called piling on! "
Everyone will sell Gold short-since then we crashed in the 250's again.Anglogold hedged a whopping 5 years.And,who would have guessed it-Harmony did it also...
Peter Asher
(2/20/2001; 11:25:46MT - usagold.com msg#: 48607)
ORO
>>>>> the Fed will not be able to raise interest rates as prices begin rising,
because prices will continue rising to reflect the additional cost of borrowing needed to build
the capital, up to the point where the Fed raises rates so high as to kill investment completely, <<<<
Isn't that exactly what the Fed did twenty years ago thereby creating "The Perfect Stagflation"?
They won't this time IMO, because the unbelievable debt bubble would burst.
What say you?
Old Yeller
(2/20/2001; 11:12:53MT - usagold.com msg#: 48606)
It's the same old song,with a different meaning since Clinton's been gone
In regards to Paul O'Neill's recent backing and filling on the strong dollar policy.
I love simple analogies that can quickly illustrate how ludicrous official statements and policies can be.Here's my take on this situation.
Is this not unlike the penthouse tenant of considerable influence and reputation,(who happens to be years behind on his rent)convening his landlords together and informing them that his policy of loud,drunken parties will proceed on a continous basis.In addition,the tenant will be relying upon said landlords to provide refreshments and party favors.
Is this overly simplistic?I guess it must be,they seem to be able to perpetuate the percieved reality...so far.
Randy (@ The Tower)
(2/20/2001; 11:09:47MT - usagold.com msg#: 48605)
Mr. Gresham, howz 'bout some RocketSchool-style Swiss Cheese wit' dat knuckle sammidge?
http://www.usagold.com/gildedopinion/RocketSchool/vonBraun.html
The latest arrival from Professor von Braun at The Rocket School of Economics, titled:
"Who Put the Holes in the Swiss Cheese?"
Brought to you in conjunction with the good folks at Centennial who are scouring the earth to find metal for you wise(guy) customers at these incredible prices that don't exactly inspire dishoarding by anyone but the weakest of hands...kids who perhaps recently inherited their daddy's fortune somewhere in a quiet corner of the world. Give them a call and put them to work for you....finding the bullion and pre-33's to satisfy your portfolio's needs.
Stocks, Lies, and Ticker Tape
(2/20/2001; 11:07:38MT - usagold.com msg#: 48604)
ORO, Mr. Gresham, Randy
No need to twist my arm. I raise my home canning jar of shine high to toast all who post on this forum. (Although the "spaghetti english" really needs some work.)
Peter Asher
(2/20/2001; 11:07:35MT - usagold.com msg#: 48603)
Journeyman: #48596
You might find your answer in: --Peter Asher (01/28/01; 22:02:42MT - msg#: 46783)
Snippet >>>>Simultaneously, the credit expansion having gone where no loans had gone before, tapped out at 125% mortgages and lending criteria that expanded to where there probably wasn't a sane underwriter left on earth. That flow too is no longer in play. Therefore: My view is that these flows must be replaced and that the lowering of interest rates will perform that function rather then expand or inflate the economy.<<<
The "Millennium Bubble" was unique in that a much larger percentage of the population was "In" the market then ever before. The fuel for a market expansion is used up. We've "Been there, done that." There is no more collateral to be drawn on to borrow money to use for the cash 50% upon which to borrow the margined 50%. There is no more earning power to service more debt. The current rate reduction primarily serves to assist debt service in an environment that was already overextended and in threat of default.
Consider that all those folks who mortgaged way past "the hilt" probably expected to service their loans with profits!! Many are now in over their head. Worse, if they bought at the top and got stopped out on a margin call, they still have the debt to pay for the cash they lost and no stock to dream with.
>>>> That easy money fed a purchasing frenzy and the perceived wealth made it easy to let go of any other discretionary income. Naturally, as the seemingly endless cycle of Buy low/Sell high came to an end, that impetus ceased to exist.<<<<
History may be used as a tool to analyze the possibilities of the future, but, to use it as a crystal ball is to be doomed to be blind-sided.
Knallgold
(2/20/2001; 11:06:00MT - usagold.com msg#: 48602)
Mines clauses
Something posted by AlterEgo on GE,an interesting detail about the mines being run by bankers:
"...Frank McGhee, a dealer at Alliance Financial LLC in
Chicago.He suspected it was producers eying an imminent test of the $250 price and selling production forward as a
pre-emptive strike. That price was a key one for gold
production costs, he said."At that level, hedging operations start getting run by bankers as opposed to the (mining) companies," he explained. "They have clauses in their forwards (contracts), which are all financed. If it gets above a certain price, companies have freedom to do what
they want; if gets below certain price, they are
compelled to sell forward. ...."
ANOTHER nail in Goldminingcoffins ...
ORO
(2/20/2001; 10:55:41MT - usagold.com msg#: 48601)
Mr Gresham - shining
U sure its the sun?
Moonshine seems more likely to have the effects you exhibit...
Mr Gresham
(2/20/2001; 10:50:29MT - usagold.com msg#: 48600)
Grrrr....
Geez, I _would_ have to follow an Oro essay with that little piece o' crapola, wouldn't I? {many smiles} (My bumper sticker says: "I'd rather be reading ORO!")
Hey, this is the 20 minutes in the morning when the sun shines in on my monitor -- can't do any Serious reading for awhile, so the keyboard is my weapon of choice! Whaddyagonnado? Fuggeddaboudit?
Mr Gresham
(2/20/2001; 10:45:05MT - usagold.com msg#: 48599)
Hey Randy!
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOpKYGhY7RXVybyBG
"At the same time, Turkey had to pay yields as high as 144 percent to sell $2.7 billion of short-term debt securities. "
Yo, Randy! Dese guys know howta do bizness, huh? Yeah, right!
We had this little numbuhz operation goin' on, down in Broad & Wall, y'know? an' dis guy he chawgez sumthin' like dat 144 vigs, only he's onna weekly basis, y'know.
I wunna how much Turkish Taffy they hadda pull t' get dat kinda deal outa dem, huh? Haw, haw, haw! Madem an offa they couldn' refuse I betcha, haw haw haw!
Yeah, dem Dollarinis. They really know howta run a bizness operation. Ain't no Euronis gonna muscle in on deir turf, no way!
ORO
(2/20/2001; 10:38:46MT - usagold.com msg#: 48598)
Randy - The price of lessons not learned
Randy, you asked whether the "natural" collapse of the gold scheme provides a better lesson than a cessation of government/banking manipulations by court order or by additional ECB or BIS intervention.
I say this; the public will never see the lesson for it has never seen it in prior occurrences. The people at the top of the financial pyramid might learn a lesson, but are more likely to prefer keeping their bunk theory and laying blame on policy errors. Those inside the monetary gold manipulations know already where dangers are, and are aware of the ongoing loss of reserves of gold and other precious metals.
The monetary people may be arrogant and believe in what Bugos calls Keynesian psychology theory where prophecies are self fulfilling. This would manifest in anti-gold propaganda campaigns and publication of bogus POG data (as opposed to prices achieved through actual gold sales by the banking sector), as the monetary leadership attempts to cajole the markets into believing that the system is still working as before.
Overall, though people will vote with their feet into gold, they will still lend mind share to the Keynesian's cheerleading of "gold is dead" all the way to POG $30K or whatever. It is the few people like us at the forum and our tiny skeptical audiences which will be converted to having a "proven" theory for the first and to true converts for the latter. Generally, the blame will be broadcast loudly by politicians against their usual targets of "greedy speculators" and "price gouging" industry. Though politicians have scarcely any credibility to lose, popular faith in the possibility of positive government intervention in the markets, will only waver if people like ourselves forcefully attack the politicians and bureaucrats publicly, repeatedly, and smother them and the media with protestations and threats. On the grass roots level we can spend our time on one-on-one economic tutorials for the people at large.
The main point is still this: whether by natural collapse or by court or political action putting a stop to the manipulation, the chances of popular opinion being swayed away from the "bull market in government" are dim and slight. The chances of swaying politicians is nil, and the chances of moving the economic community are equally thin, as they have only recently started to move away from obtaining government and foundation money towards market driven research. The lesson that the collapse has to teach will only be learned as the aftermath develops into a whirlwind of government shots at its own feet, complete with discounted propaganda and draconian actions which affect people directly.
It should be remembered that Jude Wanninski still believes that a planned economy is superior to a free market even after the clear demonstration of the opposite. He brushes aside the absence of motivation and mechanism for success in planned economies, focusing instead on finding rationalizations as to how the the Soviet planners erred, implying that had HE been given the reigns of policy and power, there would have been a successful planned economy. If he "gets it", he sure does hide it well.
Finally, but most importantly, the structural distortions in the economy are approaching critical levels, levels from which recovery is more difficult. Though we speak of inventory volumes having accumulated, it should be noted that these inventories are not 5000 pieces of the same item as in the past, but 20-50 of each variant in a broad spectrum of variety, where 5000 pieces are indicative of 200-300 variants, i.e. qualitative inventory rather than quantitative inventory. Consumers react very differently to this kind of inventory liquidation. This poses a completely different problem since inventory sales result in shortages of the more desirable variants nearly immediately, while retaining the glut conditions for the less desirable ones over longer periods. As a result, prices rise disproportionately while sales volumes remain flat and inventory seems bloated.
The inventory problem does not really exist in the traditional sense, as in capital having produced and excess, thus making necessary the temporary closure of the plant, sale of inventory, and then reopening the plant once the inventories are cleared. The inventory of today is the actual capital - the production equipment, the brand marketing, the R&D, and the computer power that made handling the great range of varieties possible. That means some very different results should be expected - particularly as the process of inventory reduction is that of shutting down production, R&D etc. for the less successful items, while ramping up production for the more successful ones - meaning that shortage and excess are concurrent, with the excess falling somewhat in price and the short supply near doubling.
This condition is exacerbated by the effects of currency driven competition, as foreign products press local manufacture down on the downswings (where high dollar values cause local capacity closures), and upswings are related to a weaker dollar causing rising local demand from shuttered plants, that take much longer to reopen than to close, some may not ever reopen, the capital lost forever, and people paying high dollar prices for the foreign made goods till the new capacity is functional. This is a process that has become more intense over the years. That means that the Fed gets strong price inflation signals exactly when investment in local production starts gaining steam, and trade comes close to balance. As a result of this, the Fed has raised interest rates at exactly the point of new local manufacturing coming online, shifting the dollar up, profits down, and preventing the industrial economy from reviving fully. This time, with the capital equipment and services businesses on the brink of annihilation due to two decades of declining local business, and a series of shocks to their foreign business over the past decade (particularly since ’94 and intensifying since 97), there is the additional problem of foreign competition in this segment, as the emerging economies have reached a critical mass of technology and infrastructure. Therefore, the next move in emerging market development can be done with only minor reliance on US, Japanese, and EU capital businesses for supply.
Since the industrialized nation's capital businesses were the resource that Emerging Markets bought with borrowed dollars, the shift to self sufficiency will mean that no further debt traps are possible of the magnitude seen in the past. That, in turn, means that there would be no further growth (at least not significant growth) in dollar debt demand in the future, and thus we have reached close to the limits of "real" trade deficits. Furthermore, the local US capital businesses will not be able to retain what critical mass is left without the beginning of a US industrial revival, which can only materialize when the dollar weakens relative to foreign made goods, which means that that the Fed will not be able to raise interest rates as prices begin rising, because prices will continue rising to reflect the additional cost of borrowing needed to build the capital, up to the point where the Fed raises rates so high as to kill investment completely, and eliminate the US capital businesses altogether. Soon after, we would be importing capital business items as the Fed lowers rates and capital investment resumes, just with foreign capital businesses putting us into debt traps.
There will be a "new economy" and it will be a micro-manufacturing one, where vertical disintegration into broad and deep micro-producer networks undoes the diseconomies of scale. Scale in the past two decades was a byproduct of access to debt financing at preferential rates (and the cost of massive computing needed to run the complex supply and production chains). The new technologies are making the diseconomies of scale more readily apparent and more difficult to cover up with preferential interest rates for larger organizations. Defensive moves to consolidate businesses through mergers and acquisitions will backfire as the computing cost curve flattens (the cost of the highest end computing power relative to the cost of low end computing power), with the advent of broadband network computing, and further expansion of desktop computing power relative to floor standing computing power. This will eliminate whatever edge is left to large organizations in dealing with complexity, leaving the leaner small network model with even greater superiority.
Randy (@ The Tower)
(2/20/2001; 10:20:52MT - usagold.com msg#: 48597)
Aye, yo! I gottcher "Live News Wire" right 'ere!
http://www.usagold.com/DailyQuotes.html
Badda bing, badda boom.
Now youse got no excuses for losing yer dough when the 'conomy goes south 'n all, 'cause we've done our fair bit to keep youse all informed, ya see. So don't yas all come cryin' ta me, iff'n ya didn't get yers gold well before the deal went down 'n all... capisce?
<That's me without the translater and spell checker>
Journeyman
(2/20/2001; 10:16:54MT - usagold.com msg#: 48596)
QUESTION OF THE DAY (& I don't necessarily know the answer!) @ALL
"The notion that it is possible to pursue a CREDIT EXPANSION
without making stock prices rise and fixed investment expand is
absurd." -Ludwig von Mises, Human Action A Treatise on Economics,
Third Revised Edition (Chicago, Illinois: Contemporary Books,
Inc. 1966), pg. 795 & 796 also on-line from
http://www.mises.org/humanaction.asp]
- ~"Ah, [glancing at notes] ninty-five percent of the time when
interest rates go down [which EXPANDS CREDIT] the stock market
goes up." -Anchor Mark Haines to Alec Trebec, CNBC market
special, Feb. 19, 2001
QUESTION 1: Why, since the FED greatly EXPANDED CREDIT by
lowering interest rates a very rare and healthy 1% in less than a
month, haven't the markets gone up as they do 95% of the time?
QUESTION 2: What happens in that 5% of the time the markets DON'T
go up that prevents them from doing so?
Regards,
Journeyman
FredBear
(2/20/2001; 10:16:40MT - usagold.com msg#: 48595)
The Invisible Hand (02/20/01; 06:02:04MT - usagold.com msg#: 48582)
Personally I read these people, and others like them, not because they are cheerleaders but because I might learn something.
Corrigan is more than just someone who has read Rand, he happens to put out some of the most unique research on the internet. I read him every morning.
I have been reading him for over a year. It's nice to see Prof V at GE find him also.
Regards.
Randy (@ The Tower)
(02/20/01; 09:41:17MT - usagold.com msg#: 48594)
Here's the link to MK's Commentary & Review page, with online access to the News&Views pdf
http://member.usagold.com/commentaryreview.html
Remember, with some few exceptions, your Username is your Last name, and your Password is the first 20 characters of your e-mail address. (accessible to all Centennial clients and subscribers)
Have no fear, I'm working on getting the Live News wire at the Daily Market Report page back up...
USAGOLD
(2/20/2001; 9:17:40MT - usagold.com msg#: 48593)
Today's Commentary & Review
For some reason the Fetch system is not operating properly. I will post my Commentary here today.
Commentary:
2/20/01 www. usagold.com. . . . .Gold weakened at the New York open with traders citing fund activity as the main deterrent to higher prices. Both Europe and Asia drifted sideways waiting for direction from the U.S. gold market which reacted to a sharp increase in wholesale prices with a $3 rally on Friday. Over the weekend a G-7 meeting in Sicily produced an interesting shift in the alignment between the world's three leading economies -- Japan, the United States and Europe -- with a softer dollar its chief manifestation. The Reuters reports this morning that two top Japanese government officials are calling for aggressive bad loan write-offs is in line with the overall G7 policy change. Under a regime where the yen is allowed to strengthen against the dollar, Japan essentially gives up its long standing strategy to right the balance by exporting its way out of trouble -- at least for the moment. The announcements are a quiet acquiescence to the new Bush administration non-interventionist (read soft dollar) policy, and a major turn of events for the Japanese economy.
Physical demand remains strong with dollar concerns, inflation and the burgeoning energy crises the main driving forces. We suspect it will take awhile for the shift in financial markets' dynamics to become widely understood. Stay the course, fellow goldmeisters. If you haven't made your diversification, we suggest you act know. If you are midstream, keep to the plan. If you've achieved a comfortable level of diversification, sit back and watch the show. The situation is likely to get very interesting as we go into spring and more and more investors get the message. Stay tune. We will try to keep you informed both through my comments as well as those by others. MK
P.S. I've added a few quotes over the weekend to the right. Another interesting development is what's going on in the international oil patch. It is less than co-incidental that the OPEC producers hinted that they would cut production at about the same time the G7 ministers were saying that all would be OK if the oil producers would just cooperate and keep prices at current levels. The spike in wholesale prices on Friday is typical of the sort of chart action you see when inflation begins to get out of control -- a straight line then a major spike up. Investors around the world will begin to concern themselves with the real rate of return on the dollar in the weeks ahead. That return could go deeply negative overnight sparking a run from the dollar. I'll leave last Friday's report up for a few days in that it gives good background on the developing situation in financial markets.
-------------------------------
Review:
"It's like a forest during a time of drought. It's getting drier and drier every week, but until some camper comes along and drops a match, you don't have a forest fire. It doesn't mean that the forest becomes a safer place to camp just because there was no fire there in the past week." ---Comex analyst on the near-record gold short position as quoted by Dow Jones News Services, 2/17/01
"The bond guys thought interest rates would come down. The Fed could handle the slowdown. Inflation was not on the radar screen, but all of a sudden it is." Charles McMillion, MBG Information Services, as reported in Financial Times, 2/18/01
Ed. Note: Mr. McMillion's comments came after the announcement that producer prices had risen 1.1% (13.2% annualized). This increase will be taken more seriously than previous jumps in the inflation rate in that it spread beyond the energy sector into a wide variety of essentials.
"In an outstanding commentary on the subject by Douglas Pollitt, of his namesake Toronto broking firm, he says: 'An ever-larger supply of lent gold is needed to fill the widening supply-demand gap and to ensure that the market remains depressed and investors remain disinclined to call in existing gold loans.' He highlights three conditions that could turn a 'tinderbox' market into a raging gold inferno - a drought of official sector lending; faster reductions of new supply; and US dollar instability. One is sufficient for ignition, three would cause a wildfire that turns 1980 into an amateur stage production. There's no middle ground in the debate on gold, but Pollitt leaves the sage advice for last. 'Precious metal companies are...valued like options on the gold price, like portfolio insurance. Be positioned or be left out.' [George] Milling Stanley [of the World Gold Council] says it another, more eloquent way: "When it's midnight, do you know where your gold is?" -- Tim Wood, Australian Financial Review, 2/17/01
"The G-7 will say that the world economy will perform well if oil prices remain at current levels, said the official, who can't be further identified under briefing rules. The statement will contain three sentences on currencies, emphasizing the importance of allowing markets to determine the value of currencies, the official told reporters." -- Bloomberg, 2/17/01
Ed. Note: Is it now official that the strong dollar policy is dead? The forex markets will have the final say, but the Bush administration seems determined to pursue a new dollar policy apart from the Rubenesque policies of the past. Usually in these annual confessionals among finance ministers and central bankers little of substance reaches the public venue. The fact that the summarizing statement will "emphasize the importance of allowing markets to determine the value of currencies" illustrates -- it seems irrevocably -- the determination of the Bush administration to pursue its own dollar policy. That policy could very well be "no policy." One more point: If OPEC indeed began raising oil prices some time back to compensate for inflationary dollar creation, will it lower prices in the face of the well- documented and on-going acceleration of that trend? That remains to be seen, but one need consider the danger of leaving the economic future of the West in the hands of Gulf producers, or could it be that the G-7 finance ministers and central bankers had something else in mind? The statement conveniently and with small diplomacy shifts the blame for the dollar-inflation problem to the producers. We'll see how that plays in Riyhad and Caracas.
Journeyman
(2/20/2001; 9:01:02MT - usagold.com msg#: 48592)
Ever notice - - - @ALL
Ever notice how many of the talking heads and stock-touters on CNBC - - - or for that matter, politicians, etc. are, implicitly or explicitly, telling us what's going to happen in the future?
Ever think they, like most "investors," are predicting or forecasting the future - - - and doing so without being thoroughly aware they're doing so, let alone the difficulties?
And do you ever wonder if they're even aware of Yogi's Law: "Prediction is very difficult, especially of the future." Or Mises Maxim: "to acting man, the future is always hidden?"
Regards,
Journeyman
P.S. Remember, we're not immune to Yogi's Law or Mises Maxim either.
Chris Powell
(2/20/2001; 8:54:44MT - usagold.com msg#: 48591)
Reg Howe's latest explains how gold cabal works
http://groups.yahoo.com/group/gata/message/665
http://groups.yahoo.com/group/gata/message/665
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
Stocks, Lies, and Ticker Tape
(2/20/2001; 8:50:46MT - usagold.com msg#: 48590)
POG $252,....the firewall?
If the kitco chart is accurate, is "THE" or just "A" firewall for POG in place at $252? A plunge to $252, then just as rapidly a skyrocket back to $256.50? Do the mutual funds and institutions have buy and sell programs based upon the POG?
Knallgold
(2/20/2001; 8:50:35MT - usagold.com msg#: 48589)
Peter Asher
"If spot dives on comex today, there is a conspiricy. If it closes above $260, there is not"
Wow,how you knew it? :-)
Belgian
(2/20/2001; 8:33:22MT - usagold.com msg#: 48588)
@ ORO
Deep inside, I fully agree with you and many others on this outstanding forum. Politics is definitely the art of "Perception-Building". And has very little to do with "Rationale". Key-tought : is a relative small amount of official physical gold, sacrificed, (sold)(reshuffled) for the universal acceptance of a strong currency-standard : the almighty US$ ? I am profound non-political.
For this reason, it is difficult to depersonalise into a political skin. As a EMU-builder or Oilproducer or Japanese saver, I would use gold as a reliable counterforce for the debt-loaden and tired dollar-balloon. If a strong dollar-perception is artificially cultivated for the last 5 years...you don't need to be a economic wizard to feel, intuively, that you are fooled. I am asking for evidence of smart gold-accumulation. Because I strongly suspect there must be accumulation. Otherwise, we already would have left this forum long ago. After, Belgium announced its 20 tons of goldsale...another annoucement follows with "no more sales" ! Quite irrationnal, isn't it. The Nat.Bank governer, Guy Quaden, answers my questions with pure blablabla.
If Australia was selling to the Chinese...what interest do they have in keeping it secret, and selling at such a low price, when they are gold-producers themselves, and know that they are mortgaging, most of their underground gold ?
What purpose does this serve for the Australians ? Do they make a profit with lowering their currency with goldsales ?
The same reasoning for South Africa and Canada. Are they all sucked into the dollar hysteria ? Are gold-producing nations blindly convinced that a US$ is worth more than the natural gold-wealth lying under their bottoms ? Are they rebels without a cause ?
The entire world is profitting from an economy with weak-offer-currencies to a strong-demand-dollar currency.
2.500 tons of yearly produced gold, is insignificant in proportion to the total economic volume of gold-producing countries. So this gold-affair is not hurting them too much. But the amount of gold resting underground is valued at idiotic prizes. Why don't they agree on a gold- offer-decrease as to keep POG up and give the underground gold a much higher value whilst still maintaining a competitive currency-level versus the US$ ? Are you selling the house, whilst keeping the garage ?
There was never complete alignment, within OPEC. But with POO at 10$...they (?) went a bridge too far. I can summarize 1.000 reasons, why I should have been using gold as a politico-economic weapon. And up until now...nobody seems to use it. Admit, that as time goes by...it becomes more difficult to understand the "why's".
Turkey's interest rates rise to 1.000 % - overnight!!!!! due to "heavy dollar-buying" !!!!! 1001-th reason for having accumulated gold :-)
Why isn't the Turkisch government buying gold to restore a certain confidence level ? They have strong gold-affinity, haven't they ? It sells at a low price and their decission would result in an immediate effect in price-rise ! No, they decide to buy trade-deficit-inflated-debt-dollars. And prefer to loose twice ! And POG disappointed by the Turks, looses 3$ dollars of its golden tears.
This is an actuality fact, that is clearly illustrating what I am trying to say with my "evidence" question.
Stocks, Lies, and Ticker Tape
(2/20/2001; 8:32:25MT - usagold.com msg#: 48587)
WOW!!!!! Whats up with the KITCO CHART?????
POG dropped like a rock! Nearly instantaneously dropped $3, right off the chart. The chart depicts (by extrapolation) POG at $252. New York comes through again. Watch out world. That gold boomerang will come back with a vengeance!
Stocks, Lies, and Ticker Tape
(2/20/2001; 8:20:09MT - usagold.com msg#: 48586)
Gold is DIRT!
OK, not dirt, soil. While researching soil surveys my mind started to wander. Soil is the foundation upon which life sustaining food is grown. Gold is the foundation upon which true financial sustenance is built.
Soil and gold are also non perishable when used wisely.
Journeyman
(2/20/2001; 8:11:54MT - usagold.com msg#: 48585)
Do we have separation? @ALL
As you can imagine, Las Vegas is a volume market for gold.
A very good info source who works in the Las Vegas pawn business and had his own coin/gun store years ago told me Sunday that there are a lot more folks looking to buy gold - - - they can't believe it's so cheap.
Further, he said, when people come in to pawn or sell gold and they discover what they can get for it, many change their minds and keep it.
Usually he has some coins on-hand, and he has a lot of "frequent buyers" and "frequent sellers" who've built up over the years, but he says he now has to scrounge around and lately often can't come up with product.
Higher "premiums" on the way!
Regards,
Journeyman
SHIFTY
(02/20/01; 06:50:45MT - usagold.com msg#: 48584)
Reg Howe
http://www.lemetropolecafe.com/INDEX.HTML
Reg Howe has served commentary at The Dos Passos Table
entitled, "Hidden Faces of Modern Imperialism: AngloGold, Barrick and the BIS."
SHIFTY
(02/20/01; 06:45:20MT - usagold.com msg#: 48583)
How low will it go?
Is there a price that if gold is driven down to the shorts are set free?
If so just how low does it need to go?
$hifty
The Invisible Hand
(02/20/01; 06:02:04MT - usagold.com msg#: 48582)
Must reads
FredBear (02/20/01; 02:52:22MT - usagold.com msg#: 48581)
Old Yeller (02/20/01; 00:58:15MT - usagold.com msg#: 48576)
Ed Bugos is known to this Forum.
The other guy, Corrigan, is an objectivist or at least somebody who has read Ms Rand.
Do you really expect an article attacking this Forum's ideas from these people?
The day I'll see somebody from the other side of the ideas-spectrum change her/his ideas to this Forum's ideas, we'll have something to bring home.
In the meantime, the grasshoppers will not listen to the cheerleaders of the ants.
Which raises the question whether the POG needs the grasshoppers to listen to those cheerleaders, to which the answer is probably negative.
The only use of the cheerleaders is then to reassure the ants that they are right, i.e. that A is still A. AnywAy, thank you for the references.
FredBear
(02/20/01; 02:52:22MT - usagold.com msg#: 48581)
Old Yeller (02/20/01; 00:58:15MT - usagold.com msg#: 48576)
http://www.capitalinsight.co.uk/Home/Article.asp?ArticleFile=190201destroyers.pdf
I was just going to post a recomendation to read this article from Ed Bugos. It is a MUST READ.
Another must read is Sean Corrigan's Destroyer's Among Men at the link above.
FredBear
(02/20/01; 02:48:00MT - usagold.com msg#: 48580)
ORO
You have acknowledged my dark fears. When I write, as I did the last few days, with skepticism, it is because the optimistic part of me is in control. Other days I have been known to write with stronger conviction from the dark side.
Thanks. I think. :-)
SteveH
(02/20/01; 02:37:29MT - usagold.com msg#: 48579)
Mozel (repost)
www.kitco.com
repost:
Date: Tue Feb 20 2001 04:29
mozel (@The Global Game) ID#357270:
Copyright © 2000 mozel/Kitco Inc. All rights reserved
I miss SDRer's posts because he posted from lex. He posted from Treaties. Unlike pibee, who can't see beyond his nose, SDRr understood that gold is political and you have to study government and its lex to understand gold. The gold market is a government myth spawned by Keynesian communomics. Fiat traders believe in it.
For those who could not comprehend the posts of ANOTHER, allow me to translate one simple fact he alleged: that Saudi Arabia was being partly paid for oil with gold. Would this show up on charts ? No.
Why do we have this tremendous paper gold trading ? If banks will extend credit for gold production five or ten years into the future, why would they not do likewise for oil ? Especially so for a dominant oil producer who wanted settlement in gold ?
If "rational expectations theory" is a proven useful tool for hands on Keynsian economics and monetary policy management, then why would it not also be useful to suppress mass interest in gold ?
I hear about the tremendous impact on supply and on "investor" psychology of gold sales. I suppose that includes the sale of 167 tons by the Australian Reserve Bank to the Chinese Reserve Bank. What I want is for these people who say gold sales by banks are adding supply to show me that the amount of gold in bank vaults has actually reduced during these gold sales days. I think we have covered this ground before. I think the banks still have the gold in about the same amount as before. What all the publicity of bank gold sales does is affect expectations. It is implied that the banks are dumping gold because it is a barbrous relic. This plays well to people who are Keynsian in their minds already.
Those who say monetary union is impossible without political union are ignorant of history.
The prize is a Global Reserve Currency. World trade demands it. The United States wants to dominate it. The new administration has cut the Japanese loose to sauve qui peu. The European Union have a gold issue. Oil, the dollar's main client, perhaps have a gold issue, too.
ORO
(02/20/01; 02:10:25MT - usagold.com msg#: 48578)
FredBear, Belgian - open stupidity and hidden smarts
FredBear,
The lesson the bankers and governments learned from failed monetary experiments in the past is that you can get away with quite a bit of loot by the time the system collapses. As Lenin and his friend Keynes observed, monetary diseases are hard to diagnose and nearly hidden from public understanding. You may get a ton of loot and never be identified as the thief.
The lesson was learned well.
The experiments of the past have been repeated not because they do the economy or the people any good, but because of the potential benefit to the practitioners of the policy.
Unfortunately for them, knowing when to quit and skip town is difficult, and one is certainly going to find the temptation to stick with it for one more cycle too lucrative as to leave for the sake of safety. Thus John Law could not escape with his fortune intact.
A secondary lesson, one learned well by politicians is that appearance stands taller than actual results and mechanical understanding. Promises stand in substitution for substance till credibility is lost. Till then, appearing to act and even purposefully damaging the people's welfare and screaming about mysterious enemies that are to blame is much more beneficial to the power seeking politician than solving problems. More so, if the problem is solved, the politician may not be viewed by the public as being needed further, as they would call a plumber for their plumbing, they would call an electrician for their next item of repair.
We see today Gray Davis of California seeking to expand his powers through nationalization, or Californization, of the utilities, putting blame on "deregulation", though the system he attacks as failed is very much a regulated one. The structurally flawed system adopted in 1996 was, as far as government was concerned, better if it did not work. A working system would have no political value (increase in power). A failed one provides opportunity for another power grab. It should come as no surprise that the "deregulation" title for Cal's system was not loudly challenged as being non-descriptive because the government, the news generator that calls news conferences, called it by that name with an eye to gaining credit for it if it worked, and being able to denigrate the concept if it failed. The utilities were just trying to obtain better terms of business, and were not aware of the public relations agenda around discrediting "deregulation" (or themselves supported that agenda, having been among beneficiaries of regulation).
Belgian,
If gold were not political, why is it that governments around the world put so much effort into obtaining so much of it? To the extent of capturing 80% of official known monetary gold in their respective countries prior to WWII, then reneging on their obligations to return it to the public on demand.
If gold stands as wealth and potential competitor to government issued money, then it stands to reason that governments would work tirelessly to discredit gold, particularly if they have currently managed to obtain confidence in their paper money, and have much to lose if the paper suffers a loss of confidence. If partial loss of gold reserves is a cost of maintaining this confidence, then surely governments would choose to lose some gold over losing control of the monetary reigns. On the other hand, an accumulator of gold would not want to blow his opportunity to purchase gold at a substantial historical discount by advertizing his accumulation. Thus the seller governments would be loudly announcing the sales, while the accumulating governments and individuals would be doing so in secret.
Black Blade
(02/20/01; 01:09:41MT - usagold.com msg#: 48577)
RE: Working-kirk, tree in the forest, and tedw - PGMs
If your interested in Platinum I'm sure that MK and the castle guard could line that up for you. Palladium is more problematic, however, it should be possible as Englehard manufacture 10 oz bars and might be possible to obtain as well. The Russians claimed that they would deliver Pd into the markets time and again, but they haven't sold any significant amounts and what they do sell is likely out of current production from Norilsk Nickel. The PGM stockpiles have been depleted as there was an emergency need for hard currencies to pay foreign debt. The DLA has sold a paltry 5000 to 6000 oz. on occasion. The TOCOM flat out defaulted on Pd contracts in the past, and the NYMEX has raised margins to absurd levels twice - for all practical matters - a default on Pd contracts. There were other tactics used when the Hunt's bought silver in 1980 and the COMEX could not deliver. They simply changed the rules by closing down, and when they reopened, investors were only allowed to sell - not buy silver. They drove the Hunt's into bankruptcy and profited as it was determined that many managers of the COMEX had shorted silver. I foe one will not get involved in the paper contracts with these criminals. Physical metals and very selective mining issues are all that I will consider.
- Black Blade
Old Yeller
(02/20/01; 00:58:15MT - usagold.com msg#: 48576)
Gold and freedom;economic and individual
http://www.safehaven.ca/GB-GIC/GIC022001.htm
Interesting thoughts and perpectives from Mr.Bugos;in my opinion.A lot of common themes that are prevalent at USAGold.
It completely boggles my mind in just how disinterested most people are in this subject.I sense this underlying complacency in most people,that our leaders and advisors would never let us down.They talk about their savings and their mutual funds and extrapolate their gains off into some rosy tomorrow.Tomorrow is definitely coming,but what it will bring,may surprise them.
Why and how are these people(central bankers and politicians)allowed to get away with this obfuscation that just seems to get more grandiose by day.As the TV catch phrase says;the truth is out there.Somehow,however,I don't think it involves Mr.Greenspan and his magic wand.
Black Blade
(02/20/01; 00:51:35MT - usagold.com msg#: 48575)
Financial Magazine with a Good Article on Hard Assets (i.e. Gold)
In the March issue of Mutual Funds magazine, there is an interesting article entitled "Is Your Money Safe - What if the Unthinkable Happens? The article describes several scenarios of financial calamity where there could be banking and market troubles and how to invest defensively. Though most of these financial magazines declare that gold is dead and it is foolish to invest in gold, this is a somewhat muted piece on defensive investments including gold. The article begins with identifying national leaders such as Colin Powell and William Cohen who have stated that the American economy and financial system are at risk. The question asked is how will people fare if there are terrorist attacks, war, epidemics, depression, meltdown, hyperinflation, or a run on the banks. What if Pakistan were to sell or give nuclear weapons capacity to belligerent nations such as Iran, Libya, Iraq, etc. What if there were an attack on the telecommunications and internet by terrorists acts? Then all the hype about these kinds of problems that preceded Y2K could become reality as far as electronic commerce is concerned. The article describes several of these possible scenarios and a section quotes financial planner Harold Evensky in Coral Gables, Florida that a "a mintable gold piece is going to be negotiable anywhere." He suggests a roll of Krugerands or American Eagles. The piece describes the runaway inflation and oil shocks of the 1970's and the run up in the POG. Many financial planners suggest a 5% holding in real assets (like gold). The 1970's were tough but not cataclysmic. If there are potential severe problems that could easily make the 1970's economic woes pale in comparison. In the 1970's the DOW was in the 800's and the POG reached about $850 per ounce. Spring forward to 2001, and the DOW is roughly 10,500. Could gold be priced at $10,500 per ounce if the economy were to come apart as in the 1970's? could it be higher if the scenarios described in the article come to pass? This article is thought provoking and brings out issues that we frequently discuss here on the forum. What I find most interesting is that now there appears to be a major shift in sentiment as more of these articles begin to appear, more investment house recommend gold, and the perennial stock market bulls warn of recession or that we are already in a recession.
working-kirk
(02/20/01; 00:27:56MT - usagold.com msg#: 48574)
Instead buying platinum from Comdex May you can buy it in this form (See Link)1
http://imagehost.auctionwatch.com/bin/viewimage.x/00000000/jimstoys/gold3.jpg
Maybe comex should get a few toys like the link above shows
The wheels are platinum, bthe body is gold. If anyone had one of these I would be happy to buy it from them instead of comdex
Tree in the Forest (02/19/01; 17:50:49MT - usagold.com msg#: 48556)
tedw re: palladium
My last figures on palladium indicated Comex had only a few ounces. Platinum too. But at this point I think everyone is
in default on palladium because the Russians aren't delivering. I think Black Blade was saying this. Will post more Comex figures tomorrow.
Black Blade
(02/20/01; 00:13:53MT - usagold.com msg#: 48573)
Failed gold deposit scheme unlikely to succeed in India
http://www.financialexpress.com/fe/daily/20010219/fco19081.html
Snippit:
Have the bureaucrats and officials of the country's largest bank the State Bank of India been wrong in judging the Indian psyche while launching the much-hyped Gold Deposit Scheme? Going by the available figures of collection of gold under the scheme, it seems they have.
Black Blade: It was a no-brainer. It is hard to fool practical people. Those who live in the recent earthquake stricken areas who have fallen for this scheme and survived will have to dig through the rubble of the bank to get their gold for survival. Those survivors who did not fall for this idiocy (and that's most of them), have their gold in hand for survival. Proof that gold in hand is the best insurance for tough times,
Black Blade
(02/20/01; 00:06:11MT - usagold.com msg#: 48572)
BNB's Quaden says Belgium has no immediate plans to sell gold
Bridge news
Brussels--Feb. 19--The Belgian National Bank has "no concrete plans" in the immediate future to make any further sales of its gold reserves, Belgian National Bank Gov. Guy Quaden said Friday when presenting the Belgian 2000 economic report.
Black Blade: I don't think that they have much gold left to sell anyway. I wouldn't mind if they and the Brits unload all their gold as they simply don't deserve it and once liberated it could go to those of us who would not mind getting it all.
Peter Asher
(02/20/01; 00:00:29MT - usagold.com msg#: 48571)
Let's keep it simple,
If spot dives on comex today, there is a conspiricy. If it closes above $260, there is not
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