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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 2/21/2004
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Waverider (2/21/04; 23:27:55MT - usagold.com msg#: 117509)
**** $413.50 *****
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID667551&cmd=show[s21672208]&disp=P
Gold's stellar performance? How many ways can one say "dollar devaluation" - a picture speaks a thousand words...

mikal (2/21/04; 23:05:24MT - usagold.com msg#: 117508)
Lopsided U.S. budget will come a-round by hook or by crook
http://www.etherzone.com/2004/henr022004.shtml
WARTIME DEBT
CAN WE AFFORD IT?
By: Ed Henry
What sort of planning is it where Congress and the administration sit down and decide on a budget of $2.2 trillion and a deficit of $307 billion, then tell us that the deficit is really going to be $521 billion instead? What sort of financial wizards plan this when receipts last year were only $1.782 trillion and that was $71 billion below the previous year's federal income?
Federal revenue has been in a downward spiral since Bush took office, but that doesn't stop them from planning bigger and bigger budgets.
Individual income tax receipts for this year are even worse than they were last year and can all be laid at the feet of job losses. The U.S. Treasury Monthly Report for January, four months into the current fiscal year, reports receipts of $298 billion so far when at the same time last year they were $306 billion.

But corporate taxes are up. Corporate taxes produced $47.6 billion by the end of January while they were only $34.2 billion at the same time last year. Too bad corporate taxes only account for a little more than seven percent of total federal income.
If your family were making less every year, would you be planning to spend more? Only if you could constantly borrow and go further and further in debt.
Last year, fiscal 2003, the national debt increased $555 billion which is the real deficit because it includes the $82 billion stolen from Social Security overtaxes and much more that came in from other entitlements plus increased indebtedness in interest paid by simply handing bogus trust funds more bogus bonds with no real money involved until it becomes time for you or your children to pay off this pile-on debt.
This year, fiscal 2004, the national debt is going to increase by about $700 billion. By the end of January, 2004, four months into the new fiscal year, the debt has already increased $226 billion. By the 17th of February it has gone up another $48 billion.
Both the Secretary of the Treasury and the President are calling for another trillion dollar increase to their self-imposed national debt limit. The same limit that they just increased by a trillion dollars last May, nine months ago.
What's the purpose of this national debt limit when it's going to be increased anyway? What was the purpose of the 1997 Balanced Budget Act that, after years of debate, finally picked 2003 as the date when the federal government would be able to balance its budget, spend no more than it takes in?
We all know the answer to that one, don't we? We hear it every time the President makes one of his scripted one-way speeches and every time any politician wants to justify wild spending.
Even before the horrific events of 9/11, you could have set any small group of American citizens around a table and asked them why we really need a federal government of any sort. After a lot of haggling back and forth over other issues, they would all agree that the primary purpose of such a government is to protect the people— to provide defense.
Defense has been the justification for all sorts of deeds, some good, others not so good, and some downright evil. Arguments for and against each of these acts from the invention of nuclear weapons of mass destruction, to their use, proliferation, a cold war, police actions, and so forth, can go on forever. They all have one thing in common, the protection and preservation of the American way of life and at least the majority of American people.
Currently, 9/11 is the justification for unlimited spending and the pre-emptive invasion of other nations. Most of our leaders don't miss a chance to drive home the idea that we are engaged in a war against terrorism and that we are all in danger of another terrorist attack. Some even claim it's inevitable and most are quick to point out that we should spare no expense to be protected.
They make it sound like this is only a temporary condition. Once terrorism is defeated, all will be well once again.
There are several questionable things about this way of thinking.
1. Terrorism is a strategy, a method of attacking a stronger enemy, an approach that has existed since David picked up his slingshot, a technique that our forefathers used against the British, a tactic, a skill that depends on surprise, a scheme that has gone by other names like "freedom fighting" or "underground." It is not a noun or an object. Declaring war against terrorism is like declaring war against thinking— which is not too far from the idea of taking pre-emptive action against anyone who might have evil intentions like the mad rabbit that attacked President Carter.
2. If we are going to declare war against someone that has hurt us, we better be damned sure we've identified the culprit. The invasion of Afghanistan may have been appropriate on the basis that the Taliban supported and protected terrorists training in their land. But there was no such justification for the invasion of Iraq.
3. Without a constitutional amendment, Congress cannot abdicate its duty as the only body with the power to declare war against another nation. No resolution or other act replaces the sworn duty to uphold the Constitution and the attempt to turn authority over to the President at best amounts to a violation of every Congress critter's sworn oath and at worst approaches treason.
4. Frightening the American people with color codes, the idea that terrorists might attack crowds at major sport events, blow up the Golden Gate Bridge, or other acts against the American populace assumes that the terrorists do not know who the enemy is. There is more evidence to suggest that the events of September 11, 2001, were a surgical strike against the government, the military, and the New World Order in which international banking plays a key role. In other words, the terrorists may know exactly who causes the trouble in their countries and it's our government.
This last point brings up the question of whether the enormous expense of defense, illegal invasions, increases in war machinery or our own weapons of mass destruction, plus the loss of many freedoms Americans have fought and died for, are really worth it.
Tantamount to all of this is the fact that many states and cities have voted against the Patriot Act and are not willing to support it. Most recently, the City Council of New York City, ground zero in the horrendous attacks of 9/11, formally voted to reject the Patriot Act. If New York City is against the loss of their personal freedoms, why should there be any holdouts in the rest of the country?
Even in my own home town, a factory town with unemployment of eleven percent, I recently listened to at least two of our fourteen member city council people argue for borrowing and a deficit of $3.2 million on the basis that we dare not let down our guard against another 9/11.
While the government and the propaganda media pump up the fear factor, their own behavior seems to belie the stories. Our President bounces all over the country giving speeches and raising money and he cuts budgets that were supposed to go to first responders like police and fire. Most cities can't afford to abide by the terms of the Patriot Act.
Most importantly, in the pit of our stomachs we all know what would put an end to terrorist attacks— get the hell out of every country where we haven't been called in. Bring our troops home and if we can't find them jobs put them on our borders. Even if we did this immediately, it would take time for those who have reason to hate us to calm down. We should have been asking what our "national interests" were a long time ago and before our tentacles spread into more than 130 nations of the world.
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."


Max Rabbitz (2/21/04; 19:38:36MT - usagold.com msg#: 117507)
21mabry & German Gold
Germany had been plundered after WWI and there was little gold left. Hitler's economic program was based on credit creation with paper money.

I don't believe gold has ever been illegal in any major European country except of course behind the Iron Curtain, where individual ownership of just about anything was illegal.

The Invisible Hand (2/21/04; 19:20:54MT - usagold.com msg#: 117506)
Dollar losing reserve currency status in Asia
http://observer.guardian.co.uk/business/story/0,6903,1153155,00.html
SNIPS
A new analysis by Lehman Brothers estimates that in the last half of last year as much as $133 billion of foreign exchange reserves in non-Japan Asia left the dollar for stronger, higher-yielding currencies such as the euro, pound and Australian dollar.
...
'The dollar's now sharing its reserve currency status a little - perhaps not a bad thing,' says John Llewellyn, chief economist at Lehmans.
==
Who told us so? blah, blah, blah!


Econoclast (2/21/04; 17:57:22MT - usagold.com msg#: 117505)
Old Yeller--Wow! A Blast from our past!
Still no answers, just more questions
I am merely curious about the reserves.
I think that it is good to know which way the financial winds are blowing in this economic world that we must live in. Although things may seem a bit shaky, the world is currently in (and under) control.
The euro versus the dollar is like a bunch of evil clowns playing polo.
Let them have and play in their fiat world.
I do (and did) not "buy into" the U.N. free-gold concept. Just the word free.
Let me be free to enter and exit their circus at will. Let me be free to do it using gold as both my ship and my anchor.
Did you see Econoclast (06/18/01; 08:53:15MT - usagold.com msg#: 56348)
or Econoclast #56368?


goldquest (2/21/04; 17:11:28MT - usagold.com msg#: 117504)
@Goldilox
Yep! Agreed. I am about ready to take down my, "Impeach Earl Warren," signs and replace them with, "Impeach Alan," signs! Yes, got gold, questing for more!

Brett Woods (2/21/04; 16:45:57MT - usagold.com msg#: 117503)
****386.00****
I think the big contribution to the gold bull market over the last year was the proximity of Mars in conjunction with Mercury and the absence of the influence of Venus, it being on the other side of the sun from us all summer. This made for an angry angst filled summer of unhappiness, despite the fact that sun spot activity was declining to below that trigger level which started to send people climbing the walls in 1998. I think that Mars & Mercury being near Earth and drawing Solar energy our way, while Venus which usually runs blocker for the electromagnetic wind was out of play, contributed significantly to a halt in the June decline. With Gold staying strong in the summer despite in the strong summer Dollar, it was just too much evidence of a bull, and that itchy electromagnetic uncertainty tipped the scales to the buy side and the bigger pull back which might have been, never happened. I am waiting for a decline and consolidation now through July, but the macro picture is still so favourable that I look to buy at $380. Actually, what I really want is to WIN a coin! ~my precious…

MK (2/21/04; 16:30:19MT - usagold.com msg#: 117502)
Nordattack: Disturbing Trends - Is Now the Right Time for Gold?
With respect to your timeline, twenty four years ago takes us to what I believe to be mid-cycle. 1980-1981 marked the height of the inflation which began in 1971 (the beginning of the cycle).

In that year, Paul Volcker/Ronald Reagan began the process of squeezing inflation out of the system, reorienting the dollar as a strong currency, and setting the stage for the long stock and bond market rallies which began essentially in 1985 and ended in 1999-2000. If you want to be fair to gold (a request you may or may not wish to address), you would take into consideration that at that point gold had traversed a ten year bull market which started at $35 in 1971 and culminated in the $850-875 peak zone in 1980.

At that time you could have gone back and said, "My gosh, look at the stock market: It's bounced between 600 and 1000 for over 20 years. When it going to get off the dime and start moving?" Well, it did - only after it became clearly established that the cycle had changed from weak dollar to strong dollar. Gold at the same time was just as muddled in the strong dollar era as the equities markets were in the weak dollar era.

The important point to understand is that these long cycles began in 1971 when the dollar was divorced from gold and era of fiat currencies began. The first part of the cycle featured a devalued dollar, high import costs, high inflation (which nearly went over the line to runaway inflation), weak equities markets and strong real estate, commodities and gold markets. The second part of the cycle featured the exact opposites: a strengthening dollar, low imports costs, low inflation, strong equities markets, weak commodity prices and a stable gold market.

Now, we have come full cycle. We are at the end of the strong dollar/strong equities cycle and beginning the weak dollar/strong gold part of the cycle - which if the analysis holds could last as long as 15 years.

Why do these cycles occur as outlined? To put it simply - because the economic paradigm associated with either aspect of the cycle causes dislocations and imbalances which the authorities (in the socialist fiat system) move to correct. The policy options palette is not all that varied, so the response is predictable.

Think for a moment where we are now and how we got here. The last devaluation of the dollar was under a Republican (Richard Nixon). This devaluation is under a Republican (George Bush). Is the situation now much different that the one in 1971? Is it not occurring for approximately the same reason it did in 1971. My contention would be that it is. In fact, we are looking at a rewind and play.

You are now at the beginning of the gold bull market associated with a weak dollar, weak equities, building inflation, rising import costs, commodities and real estate.

Gold is to 2001 what the stock market was 1985.

I decided to spend some time on this, Nordattack, because you ask a very good question AND a fair question. There is another aspect to your question which I would like to address and that has to do with the subject of gold itself and how we view the presence of gold in our portfolios.
Back in 1997, I published a book under the Addicus banner entitled "The ABCs of Gold Investing: Protecting Your Wealth Through Private Gold Ownership." In that book, I made the following point:

"This book is a distillation of nearly a quarter century of experience working with private investors interested in adding gold to their investment portfolios. It is not another "get rich quick" or "beat the market" treatise. Instead, it addresses a more practical concern -how to protect your wealth during what many believe are increasingly dangerous times for the average investor. Sensational returns or making the quick turn for big profits is not what gold investing is all about. Gold has to do with medium- to long-term asset preservation-weathering the storm and having something left after the dust clears. Since the investor is essentially trading an inherently unstable and depreciating form of money for one that has withstood the test of time, incorporating gold into your investment plan is among the more conservative strategies you can undertake. I often counsel investors that purchasing gold is not "investing" at all. In reality, you are simply replacing one form of money in your savings plan with another."

So you see, it all depends upon how you view gold. If you would like it to be an investment, it must be weighed against other investments, and above all, one must determine whether or not the timing is right. If you've done that and it comes up wanting in your estimation, than stick with whatever it is that you believe will be a better investment. Believe me, you are not going to hurt our feelings. Most of us know why we own gold.

At the time The ABCs was written I had come to the conclusion that gold's primary role in the portfolio was as a means to long term asset preservation. I see gold as a permanent fixture on the balance sheet for an assortment of reasons.

Having said that, lately, because the cycle has swung in gold's favor (as described above), I now believe that the ultimate store of value will begin to rise in dollar terms, and many will see this as proof that gold is also "a good investment." Gold has appreciated at least 20% per year over the last two years, but there are some even more interesting statistics, I would like to bring to your attention having to do with the longer term cycles mentioned at the beginning of this post.
______________

I just completed the fourth re-writing (over the last two years) of
"Disturbing Trends: Is Now the Right Time for Gold?"

It might be worth your time to take a look at it.

This eight page analysis is available free of charge by hard copy or e-mail, and it's available to all - not just Nordattack.

If you would like to receive a copy please contact Marie Ballard:

marie@usagold.com

Please head your e-mail "DISTURBING TRENDS" (She gets a lot of e-mail.) Also, be sure to include your home or office address if you want the hard copy.

Here are some interesting statistics for you:

Since 1971, stocks are up 1405% and that includes the big bull market which appears to have ended in 1999-2000. (I see the current run as a bear market rally about to run out of steam.)

Over that same period, gold is up 1155%.

So despite what the press has been telling us, gold hasn't performed that badly at all, but here's the more important point:

Many believe that the stock market is at the beginning stages of a bear market for reasons mentioned above and gold is in the beginning stages of a bull market for the same reasons.

It's now gold's turn.

But no matter what happens, keep this figure in mind also. The 1971 dollar is now worth 21¢. "Disturbing Trends" covers in eight pages gold's role in protecting you from further erosion in your savings. Gold's rise over the past two years did not happen in a vacuum. It is a beginning, not an end. And what I've offered here is a beginning as well.......I encourage your further review of gold and gold's role in the portfolio and hope this site can act as an educational resource for you and a catalyst to action.

MK

Goldilox (2/21/04; 16:08:14MT - usagold.com msg#: 117501)
Better Educated People?
@ Goldquest:

GS must have stock in some of the up and coming private business education conglomerates.

My question to him? Since the current mob of "underutilized" includes the highest proportion ever of folks with advanced degrees, how will that help?

If there are no jobs to be had, adding another degree to one's resume is just another frivolous way to spend that home equity loan.

Mayhaps we need a better enlightened electorate that will throw the crooked banksters and free-spending government dodos to the wolves!

Something smells funny these days.

Got gold?

goldquest (2/21/04; 15:39:57MT - usagold.com msg#: 117500)
Alans Solution
http://www.federalreserve.gov/boarddocs/speeches/2004/200402202/default.htm
We need better educated people, out of work and looking for jobs!

Goldilox (2/21/04; 15:22:11MT - usagold.com msg#: 117499)
More "new" economics - from the mogambo guru
http://www.dailyreckoning.com
snippet:

    John Crudele, writing in the NY Post, is one of those bright guys who know, by dint of unassailable proof, that the government is a lying bunch of weasels (LBOW), and has cast his jaundiced eye at the latest report of job creation. "By now my readers should have a PHD (pretty high disdain) for Capitol Hill math. This one, though, is a cake taker. I'll translate: Included in the 112,000 new jobs in January were 76,000 jobs that supposedly exist because people who weren't hired in December couldn't be fired in January. Got that? They didn't get hired in December, or fired in January, so they showed up as new employees in January as a statistical fluke. So, really there were only an abysmally small 36,000 new jobs in January. "

goldilox:

"GROAN"

Goldilox (2/21/04; 14:57:48MT - usagold.com msg#: 117498)
In the New Economics: Fast-Food Factories?
http://www.nytimes.com/2004/02/20/business/20jobs.html?ex=1077944400&en=41a6b41847c4733a&ei=5062&partner=GOOGLE
snippet:

"Is cooking a hamburger patty and inserting the meat, lettuce and ketchup inside a bun a manufacturing job, like assembling automobiles?

That question is posed in the new Economic Report of the President, a thick annual compendium of observations and statistics on the health of the United States economy.

Advertisement


The latest edition, sent to Congress last week, questions whether fast-food restaurants should continue to be counted as part of the service sector or should be reclassified as manufacturers. No answers were offered.

In a speech to Washington economists Tuesday, N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, said that properly classifying such workers was "an important consideration" in setting economic policy.

Counting jobs at McDonald's, Burger King and other fast-food enterprises alongside those at industrial companies like General Motors and Eastman Kodak might seem like a stretch, akin to classifying ketchup in school lunches as a vegetable, as was briefly the case in a 1981 federal regulatory proposal.

But the presidential report points out that the current system for classifying jobs "is not straightforward." The White House drew a box around the section so it would stand out among the 417 pages of statistics.

"When a fast-food restaurant sells a hamburger, for example, is it providing a 'service' or is it combining inputs to 'manufacture' a product?" the report asks.

"The question is: If you heat the hamburger up are you chemically transforming it?" Mr. Huether said."

Goldilox:

I remember when the coinage was debased by LBJ's admin, we were told that the PMs, especially silver, were necessary components to industrial growth, and thus were being replaced with the sandwich composites. Now we're being told that lack of industrial demand is keeping silver prices low (unsuccessfully), and gold is a barbarous relic.

With burger flipping reclassified as "manufacturing", the B(L)S is about to reclaim US strength as a manufacturing powerhouse.

My question is, "If you 'cook the books', are you manufacturing numbers?" If so, economists should also be included as manufacturing jobs.

21mabry (2/21/04; 14:21:32MT - usagold.com msg#: 117497)
Silver
Talking with the local bullion dealer last week,he mentioned the low premiums on junk bags.If I remember correctly premium was about .15 over spot.Was watching history channel it was a show on Hitler, were the enabling acts after Riechstag fire anything like our patriot acts.Were there laws against owning gold in nazi germany.21

USAGOLD / Centennial Precious Metals, Inc. (2/21/04; 14:11:23MT - usagold.com msg#: 117496)
Peace of mind, 24/seven
http://www.usagold.com/buy-gold-coins.html





Goldilox (2/21/04; 14:00:43MT - usagold.com msg#: 117495)
What is the Dow Doing Now?
http://www.financialsense.com/fsu/editorials/ti/2004/0221.html
snippet:

"Now lets get down to the nitty gritty. It seems throughout this so called new bull market, the Dow has been playing a new game, which has allowed it to carry on powering up with almost no respite. The game is called "lets some of us take a break while the rest of you carry the load".  The trick is rather simple. At any given time some of the Dow's components are either bottoming or starting to take of, while the others are topping or correcting. This way the Dow has mini corrections internally while it is powering up. This is one of the reason it has been able to carry on going up, because you almost never get a situation where all 30 components are overbought or oversold at the same time. Usually half are charging up while the other half are correcting."

Goldilox:

I found this while listening to FSO with my Saturday morning breakfast!

An acute dissection of how liquidity powers the DOW to ever greater buble proportions. . . another good teaching tool from Financial Sense University.

balzac (2/21/04; 13:44:12MT - usagold.com msg#: 117494)
re US HEGEMONY
Goldilox post 88
Great post -right on!!
Balzac

Druid (2/21/04; 12:40:50MT - usagold.com msg#: 117493)
Thanks!!!

Druid: Man! These last few days postings have been incredible. Like always, class is in session.

Gandalf the White (2/21/04; 12:22:40MT - usagold.com msg#: 117492)
TA TA TAAAAAAAAAAAAAAAAAAAAAAA -- POG Contest Entry LISTINGS !
Let us not forget that a POG CONTEST is still open for entry ! <;-)

Entries as of SATURDAY 2/21/04 at 12:00 Denver (MST) time !!!

Listed in order of decreasing values !
----

*** $44,444.4 *** mikal (02/19/04; 23:07:50MT - usagold.com msg#: 117414)

**** $444.4 **** Zhisheng (2/17/04; 23:13:41MT - usagold.com msg#: 117274)

**** $439.1 **** Gold Standard (2/19/04; 04:38:07MT - usagold.com msg#: 117359)

**** $433.6 **** steady (2/17/04; 22:22:53MT - usagold.com msg#: 117268)

**** $432.1 **** Gandalf the White (2/17/04; 22:16:57MT - usagold.com msg#: 117265)

**** $430.1 **** ha_tey_o (2/18/04; 00:53:54MT - usagold.com msg#: 117280)

**** $427.0 **** Sundeck (2/18/04; 09:31:49MT - usagold.com msg#: 117302)

**** $423.0 **** The Silver Surfer (2/20/04; 07:07:12MT - usagold.com msg#: 117428)

**** $422.2 **** monTROZ (02/19/04; 23:36:10MT - usagold.com msg#: 117418)

**** $420.0 **** Liberty Head (2/18/04; 10:53:18MT - usagold.com msg#: 117305)

**** $419.2 **** Smeagol (2/18/04; 23:16:34MT - usagold.com msg#: 117354)

**** $417.0 **** J-Bullion (2/20/04; 07:17:32MT - usagold.com msg#: 117429)

**** $415.1 **** Henri (2/19/04; 13:09:08MT - usagold.com msg#: 117374)
**** $415.0 **** Clink! (2/18/04; 08:57:34MT - usagold.com msg#: 117296)

**** $414.7 **** slingshot (02/20/04; 00:38:06MT - usagold.com msg#: 117420)
**** $414.6 **** Goldilox (2/20/04; 12:19:05MT - usagold.com msg#: 117443)

**** $409.9 **** pmurgsRSA (02/20/04; 04:22:00MT - usagold.com msg#: 117423)

**** $409.2 **** DryWasher (02/19/04; 18:23:40MT - usagold.com msg#: 117391)

**** $407.0 **** Dollar Bill (02/20/04; 19:34:21MT - usagold.com msg#: 117472)

**** $404.8 **** Survivor (2/18/04; 13:58:51MT - usagold.com msg#: 117317)

**** $396.5 **** balzac (2/20/04; 11:49:46MT - usagold.com msg#: 117441)

**** $387.5 **** gvc (2/20/04; 12:45:10MT - usagold.com msg#: 117446)

====
Perhaps these contests are tooooo long in druation ?
BECAUSE it looks as if everyone wants to wait until sometime Wednesday to enter their prognostication.
Wednesday midnight (Denver time is the DEADLINE time.)
BUT, the time length is to give YOU LURKERS time to get your PASSWORD and win the FREE GOLD and Silver.
<;-)



Clink! (2/21/04; 12:09:08MT - usagold.com msg#: 117491)
@ Melting Pot re Davy Crockett
That story was a keeper ! Lots of quotable lines, but the ones which really struck home were :-

The people have delegated to Congress, by the Constitution, the power to do certain things. To do these, it is authorized to collect and pay moneys, and for nothing else. Everything beyond this is usurpation, and a violation of the Constitution.'

"'So you see, Colonel, you have violated the Constitution in what I consider a vital point. It is a precedent fraught with danger to the country, for when Congress once begins to stretch its power beyond the limits of the Constitution, there is no limit to it, and no security for the people.

C!

Dollar Bill (2/21/04; 11:57:42MT - usagold.com msg#: 117490)
.,.
Sir Goldendome, I appreciate your compliment where you say I probably understand.....however, I am feeling like a beginner student. I have to reread posts all the time. Definately todays posts will take some time to digest! Yours included:) Oro will just be beyond me. But I will try. Aristotle, try not to swipe at the guys, I value them, and dont fergit, they get you posting, which is valuable:)

Goldilox (2/21/04; 11:55:22MT - usagold.com msg#: 117489)
Chevy Chevette
@ Goldendome

your statement "

" It would be taking a Chevy Chevette and calling it a Mercedes" might be better described as "taking a Dodge Neon and calling it a Mercedes".

LOL

Goldilox (2/21/04; 11:51:26MT - usagold.com msg#: 117488)
Saddam
@ $ Bill

Your statement . . .

"Belgian, as saddam said in your link, "the enemy". If oil was not needed, or they found some vast bank of reserves off the coast of alaska, a sober president would HAVE to go to active war against enemies actively planning and working towards destruction of the US. And the west frankly. Saddams sons were beastly, they were the future enemy and the next president could be some mushhead who is too courteous to fight for freedom."

. . . ignores the reality of who Saddam was and how he got in power. His goal of "destruction of the west" as you stated is just not supportable outside the neo-con sponsored media.

Saddam, like (Noriega, Pinochet, Castro, Ho, etc) was placed in power by a willing CIA to be the balancing act against Iran, who resents the US for their occupation under the puppet Shah. There are US press allegations that the 1991 invasion of Kuwait was quietly promoted to Iraq so that a public excuse for retribution could be created. Kuwait was part of Iraq until the west "created" it out of WWII booty, so it was easy to convince Saddam that "no one" would mind him retrieving what was theirs a generation ago.

Saddam was secretly armed and publicly praised by Rumsfeld and North 20 years ago, just as North Korea received its nuclear capability from Rumsfeld's Swiss corporation six years ago. They supported his "wars" against the Kurds and the Shiites right up to the moment of demonizing him. Bin Laden's roots are similar, as he was the "recruited" to oust the USSR before they could successfully complete a pipeline across Afghanistan.

To suggest that toppling him was an act of "fighting for freedom" circumvents the facts that led to his power. Of course he was a butcher. Compare his tactics to those of the generalissimos in South America over the last 40 years. The signature is compelling.

During the VietNam debacle, those who questioned policy were confronted by such slogans as "My country, right or wrong, my country." The neo-cons have totally embraced that tactic, and "hired" Rupert Murdock and Michael Eisner to control the news and talk show outlets for them. Notice Ted Turner was "removed" in the TWX/AOL merger, as his performance in Iraq vers 1.0 was regarded as too "independent".

Iraq's not about oil, per se, but about oil as industrial currency, and total dollar hegemony within that market. The linked article is quite on target, but neglects many of the dirtier details, making it a difficult mental transition from our media-programmed world view.

I'm not suggesting anyone support or not support specific current political realities, as that is an individual choice, but I prefer elucidation of the evidence to political slogan slinging.

The evidence points to increasing global destabilization, which is why precious metals are returning to favor.

got Gold?

Old Yeller (2/21/04; 11:15:29MT - usagold.com msg#: 117487)
ORO's the man with the answer
ORO (06/17/01; 20:06:29MT - usagold.com msg#: 56316)
Econoclast - stable money can't be managed
Econoclast, I am sad that you buy the UN free-gold concept which has much nice sounding fatherly advice around it but no mechanism to suggest that it would or could work.

In order to justify the concept FOA and Aristotle, and to some extent Randy and Aragorn III essentially had to come out and deny the unavoidable arguments against their position:

1. That wealth bears a discount rate, an interest rate embedded in the absolute and relative prices of all things.

Which preferences of the people can only be fully expressed in debt contracts contracted without interference from a cartel of monetary managers trying to fool them into putting resources into profitless ventures.

2. That people can, do, and must write contracts where real goods of today are lent, traded, split and collected back together in different forms with different paper and are contracted out for future delivery even decades into the future.

3. That there is no way to "manage" a monetary system effectively.

4. That for a pure debt currency it is impossible to retain value, as it loses value as it is inflated, and loses further value as it deflates.

5. That Gresham's Law reads "good money drives out the bad, unless they trade at par, in which case bad money drives out the good until par is broken, at which point the first condition resumes".

Further that the expected demise of the bullion banks that fix the par for the dollar into the future would be a break of par. Given that no par is planned for the Euro, it would automatically be the bad money without par.

6. That the financial markets trade mostly honest debt contracted by predominantly honest motives of actual investment of real goods in real productive capacities for the benefit of the investors, the intermediaries and all consumers of the future goods and services they will produce.

7. That these are thwarted by arbitrary decisions of financial markets regulators and the monetary managers, and thereby intensify and deepen errors of judgment of investors and the entrepreneurs putting their future and their reputations on the line.

That these same regulators and managers are just as likely to be motivated by an interest in destroying the marketplace as they are to prefer attempting to serve and preserve it.

8. That the the concept of broad "tradable wealth" where everything under the sun is used for savings is exactly the market distortion that inflation causes in the structure of the economy, where people suffer from the accumulation of unwanted goods while denying their use to those who do want them, all out of fear of their currency assets being inflated away.




The keys to understanding the success of free market money; gold, are the following:

1. At any and all points in time, the gold used as money is there at a limited quantity, thereby preventing or inhibiting outlandish booms (and the resulting busts) that arise from unlimited expansion of cash, a characteristic of fiat money.

2. Because of the limited gold liquidity, financial intermediaries are constantly competing with each other for liquidity, thus assuring that it flows to the most sound institutions rather than to the most politically well connected. Those institutions that expand credit without their borrowers generating a proportional return get their clock cleaned as their reserves are raided by other institutions and they are forced into liquidation with their depository and borrowing customers moving to better performing firms.

This natural competitive process nips credit expansions in the bud before over investment or under investment get a head of steam, since the gold liquidity is directly related to the real, non-financial economic resources through a well defined quantity of gold (go ask Greenspan what the money supply is) which circulates in the economy, and where prices are close to balance with the existing quantities of gold.

3. Where the production of gold (the supply) decreases when gold credit expands, and expands as gold credit contracts or as technology and productivity improve the profitability of gold mining, thus automatically measuring the actual impact of productivity enhancing technologies on the economy and inducing more gold to flow into the market as productivity increases, without resorting to odd theories, without waiting to convince anyone that it is or is not appropriate to increase money supply or restrict it. If productivity actually increased, the technology causing this improvement should be applied in gold mining as well and result in increased gold output, if productivity does not increase, then the amount of gold produced will fall as the easier ores are depleted, leaving only more expensive ores behind.

4. A natural stop for the deflation of debt is always present in the stock of gold which can pay off a large portion of the debt. This sets a natural limit on deflation.


5. No manager. The free market gold system does not have a manager and therefore allows people to contract forwards into the future at the rates they agree upon of their own free will in billions of individual transactions rather than at rates set by a blind and self interested manager.

6. When gold is used in this way it obtains its best value. It becomes the only thing for which there is a monetary premium. People do not need to keep unwanted products in their homes and in the many storage facillities for savings. Instead they save gold. Thus the demand for gold is at its maximum.





Goldendome (2/21/04; 10:46:27MT - usagold.com msg#: 117486)
@Dollar Bill -- The article by Chih Kwan Chen
HOW THE DOLLAR AND TRADE DEFICIT CRISIS WOULD HAVE EMERGED UNDER GOLD STANDARD
Sir Bill: Chih here, seems to be describing what Sir Aristotle might describe as nothing more than another fancy pants *paper gold* scheme. The true gold standard of the 19th century and the international gold exchange standard of the mid-twentieth century in no way operated in this manner [and I'm sure you realize that]. I intend to copy and re-read the article for better understanding, but what old Chih is describing is just another paper gold scam.

The plan described -Would Not- be THE Gold Standard. It would be taking a Chevy Chevette and calling it a Mercedes.

JavaMan (2/21/04; 09:47:16MT - usagold.com msg#: 117485)
In closing...
Aristotle, the original topic was, as I've said before, "fiat currencies, by any other name smell just as sour". That's my claim and I'm standing by it.

It's interesting that you protest the counterfeiting of your property but not of your currency. The Federal Reserve is, beyond all comparison, the greatest counterfeiter, bar none, in the history of the world. Eventually, the EU Central Bank will be a close second. Why is this so? Because they are no longer constrained by gold. Furthermore, if gold were to be established as property, perhaps causing it to go into the thousands of dollars per ounce, I would expect the incidence of counterfeiting (gold clad lead?) to rise in proportion to the increasing value of gold. Even at today's prices, are you absolutely certain there are no counterfeits among your gold coins?

If gold were to return as the foundation in some way for our money, I wouldn't be surprised to see the paper gold markets fade away due to lack of interest. Your paper gold players only get away with that game today, just like the bond vigilantes, because gold is no longer the unit of money.

Aristotle, I hold a great deal of respect for you and your insights. You happen to see the euro as an "honest fiat currency". Ok, you're entitled to your opinion, no matter how wrong I think it is. In the first paragraph of your last post, you expressed great concern regarding your property rights. Speaking of rights, as a guest of this round table, I have the right to expect that "Civil discourse shall be the rule". I can't help but resent and be insulted by your accusation that somehow I'm maintaining a dishonest upper hand and walking all over your property rights. To truly believe that is to demonstrate symptoms of personality disorder which really should be addressed. If you don't believe what you said, then I expect an apology. Which is it?

javaman


Dollar Bill (2/21/04; 09:46:05MT - usagold.com msg#: 117484)
.,.
"The unfolding discord between the ECB and the Greenspan Fed took an interesting and decidedly public turn this week, as the Wall Street Journal published a piece by ECB Chief Economist Otmar Issing. The following are excerpts:
"There seem to be strong arguments that central banks should not target asset prices, and only assess their development in the context of their potential influence on goods prices… Even in the case of extreme high valuations of assets, a situation in which most observers would agree that the prevailing level of asset prices is not sustainable… there are strong arguments that a central bank should not try to ‘prick the bubble.’ The interest rate increase required to prick the bubble in times of collective exuberance would inflict heavy losses on the real economy. The negative consequences for the reputation of the central bank following such policy would be more than obvious.
All this is the consensus view.
But can central banks just leave it at that and reject any responsibility? I grant that it is a tough challenge to identify an overshooting of asset prices at an early stage. And to repeat, no central bank should pretend knowledge it cannot dispose of. Nevertheless, we have repeatedly experienced situations in which market participants found it more rewarding to follow a trend than to bet against it despite their own view that the development was not sustainable. It is worth noting that with hindsight, i.e. after the collapse, almost everybody seems to agree that a ‘bubble’ has burst. Is it not difficult, then, to accept the argument that it should be totally impossible to make any judgement ex ante? Should it not be the role of central banks to communicate concerns in an appropriate form and thereby to try to contribute to a more sober assessment of asset price developments?
Huge swings in asset valuations can imply significant misallocations of resources in the economy and furthermore create problems for monetary policy. Not every strong decline in asset prices causes deflation, but all major deflations in the world were related to a sudden, continuing and substantial fall in values of assets. The consequences for banks, companies and households can be tremendous…

Prevention is the best way to minimize costs for society from a longer-term perspective. Central banks are confronted with this responsibility, but there is no easy answer to this challenge. So far, only some tentative conclusions can be drawn. First, in their communication, central banks should certainly avoid contributing to unsustainable collective euphoria and might even signal concerns about developments in the valuation of assets. Second, the argument that monetary policy should consider a rather long horizon is strengthened by the need to take into account movements of asset prices.
Finally, it should not be overlooked that most exceptional increases in prices for stocks and real estate in history were accompanied by strong expansions of money and/or credit. Just as consumer-price inflation is often described as a situation of ‘too much money chasing too few goods,’ asset-price inflation could similarly be characterized as ‘too much money chasing too few assets.’"


Dollar Bill (2/21/04; 09:32:16MT - usagold.com msg#: 117483)
.,.
http://www.forcastglobaleconomy.com/p4/article04.html
Hooray! Finally my favorite and frankly the only analyst I have found of the Yen/Dollar game has weighed in.
Chih Kwan Chen
HOW THE DOLLAR AND TRADE DEFICIT CRISIS WOULD HAVE EMERGED UNDER GOLD STANDARD.

Dollar Bill (2/21/04; 09:05:49MT - usagold.com msg#: 117482)
.,.
"A bizarre political statement by Saddam Hussein has earned Iraq a windfall of hundreds of millions of euros. In October 2000 Iraq insisted upon dumping the US Dollar -- `the currency of the enemy'"
Begian, as saddam said in your link, "the enemy". If oil was not needed, or they found some vast bank of reserves off the coast of alaska, a sober president would HAVE to go to active war against enemies actively planning and working towards destruction of the US. And the west frankly. Saddams sons were beastly, they were the future enemy and the next president could be some mushhead who is too courteous to fight for freedom.
But, your links reasons related to the euro certainly have merit.

Belgian (2/21/04; 08:03:48MT - usagold.com msg#: 117481)
@nordattack
http://www.ratical.org/ratville/CAH/RRiraqWar.html
Your question : What is really going on here...?

We all are prospering, thanks to "OIL". In order to have this oil "flowing" at convenient prices for our global economy,...a certain flow of Physical Gold needs to reach some very specific oil-reserve-holders.

Since the severe oil-crisis of the seventies, we found a very convenient way to ensure this Physical Gold Flow !
Simply by making Gold obscenely cheap through paper-price-containment. One does NOT acquire Gold that is NOT rising in price as to reflect its "Value" against depreciating confetti (currencies). Worse,...a declining goldprice results in the mobilization of hoarded Gold from the past, as to flow to the oil-reserves.

Today, the Asians are inspired by this wonderful Gold-Oil relationship and produce real goods/services,...also for a certain Gold-Flow !!!

Gold-production increased from 1,000 tonnes/year to 2,500 tonnes, now ! THERE IS NOT ENOUGH GOLD to serve a handful of knowledgeable Gold Giants and more than a billion, Indian, Asian, Russian, instinctive Gold poverellos.

The more the price of Gold steadily increases,...the less Physical Gold is (will) be changing hands and therefore the less *PHYSICAL* Gold will become available !!! A self-feeding, natural process. That's why there still isn't a US-Gold-ETF and the Gold-containers want to install a paper-gold-market in India, where more 10,000 tonnes are Physically in private individuals' hands. Paper-gold is ment to pressure Gold's price and to pull it from weak hands as to redirect/redistribute it to those who provide the fundamentals of our global economy (prosperity).

The LOW POG of the past 30 yrs, is the price that Gold (Goldholders) is (was) paying for our temporary prosperity.

The above link will help you in your PERSONAL judgement on how long this goldprice-falsification, will/can continue.

Aristotle (02/21/04; 03:08:53MT - usagold.com msg#: 117480)
Nordattack. The illusion you're suffering from is a common mirage
It's called "paper" Gold. It's a form of Gold money. It's devaluing on pace with the "paper" dollar. That's what it does. That's all it does.

Play a smarter game.

Gold. Get you some. --- Aristotle

nordattack (02/21/04; 01:29:55MT - usagold.com msg#: 117479)
Gold losing value?
I have a question that I think we all should look at. Since the gold price peak in 1980 the gold price has basically been stable. By that I mean it has bounced back and forth between 300 and 500 dollars per ounce for about 24 years. It is said that gold is a store of value and a hedge against inflation. Yet how can this be with an essentially stable price? By comparison houses, cars, milk, gasoline and just about everything under the sun that matters has continued to rise in price as the dollar continues to be devalued by the printing presses of the Federal Reserve.

If our money is constantly being devalued causing prices on everything that matters to continue to rise how is it possible that the price of gold has not risen in 24 years? How is it that our money that is getting more and more worthless can continue each year to buy the same amount of gold? Only if gold itself was losing value at a rate equal to the devaluation of our currency could such a ratio continue to exist. What would be the purpose in owning gold if it is losing value each year? If inflation has increased at the rate of 3.5 percent per year every year for the last 24 years then gold should have gone up 84% since 1983 when the price settled in to around $300 per ounce.

Of course it is nice to think that money that grows more and more worthless can still buy the same amount of gold year in and year out. What is really going on here?




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