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ARCHIVED DISCUSSION FROM 8/21/2005 All times are U.S. Mountain Time (Yesterday's Discussion.) Goldilox (08/21/05; 22:16:52MT - usagold.com msg#: 135185) Anonymous @ mikal,The interesting thing about Anonymous' tale is how cleverly he evades the well-known facts that Osama and Al Qeada were set up and funded under the watchful deep pockets of the CIA in order to do battle with the Soviets in Afghanistan 25 years ago. Remember, Reagan specifically dedicated the 1981 launch of the Space Shuttle to their "heroism". Their funnel for funding was the Pakistani Secret Service, whose director was having breakfast with admin officials in Washington on the morning of 9/11/01, but supposedly the whole arms funneling operation was unknown to him.Either "the left hand doesn't know what the right hand is doing", or they just don't have the cajones to admit when they lose track of their own operatives.It smells too much like a disinformation campaign when they purposely omit so many verified facts. mikal (08/21/05; 21:31:41MT - usagold.com msg#: 135184) Bin Laden and WMD focus of news reports http://www.cbsnews.com/stories/2005/08/17/60minutes/main782930.shtml CBS News | Bin Laden Expert Steps Forward | August 21, 2005Former CIA expert tells why he considers a Bin Laden WMD attack on US soil most likely."Gold, get you some." - Aristotle Goldilox (08/21/05; 21:11:54MT - usagold.com msg#: 135183) the Great Influenza @ Clink!.I wonder if that's why the author was being interviewed on CSPAN "Book Report" today? Clink! (08/21/05; 21:11:01MT - usagold.com msg#: 135182) Sheesh Goldi ! Not only do you post at virtually all hours of the day and night, but you're hovering here in between times !There is a riposte to that which was favorite T-shirt material, but I don't have time to find it tonight - got to be up in (wince) less than seven hours. 'Night.C! Clink! (08/21/05; 21:04:39MT - usagold.com msg#: 135181) And on other matters ... http://www.latimes.com/news/nationworld/nation/la-na-bushread16aug16,0,3467977.story?coll=la-home-nation While watching TV last night, I was informed that the President took three books with him on vacation. While musing on the real power of someone who is professed to be the most powerful person in the world, but can't keep his reading material a secret, I considered his list :-1/ Salt: A world history. Considering that it was used, among other things, to pay Roman legions, it was an early version of real, tangible wealth. We can but applaud. On a personal note, I haven't read the book, but was blown away by the revelations in one of the author's other books "Cod". It might be difficult to believe, but it was fascinating reading.2/ The Great Influenza: The Epic Story of the Deadliest Plague in History. If anyone has been following Sinclair recently, this should be sending cold shivers up and down your spine. What has he been told to expect ? 3/ Alexander II: The Last Great Tsar. Is George the Second trying to find any lessons from history ? Like how to avoid a revolution ?All in all, I must congratulate him on an interesting choice, but, in the back of my mind, I have my doubt about the veracity of the list. As the "commentator" said (OK, it was Bill Maher), this is a guy who is probably really excited because it's not every day that you get to go cycling with a guy who has walked on the Moon .....C!The attached link gives a little more info. mikal (08/21/05; 21:00:40MT - usagold.com msg#: 135180) Bundles of debt and fraying nerves Major media probably shouldn't be ignored when they run stories like this one recently from Financial Times: "Derivatives Cannot Take the Strain", regarding the short squeeze delivery problem in the 10 year US Treasury, listed future (first derivative). Excerpt: "The real problem is that the US economy is just too leveraged. Starting with the housing industry, the country is too dependent on derivative markets to create the illusion that interest rate risk can be conjured away. The technical problems of the 10-year are just another early warning sign of this fundamental weakness." Goldilox (08/21/05; 20:57:08MT - usagold.com msg#: 135179) Language @ Clink,That's NOT Cricket! Clink! (08/21/05; 20:42:08MT - usagold.com msg#: 135178) If ever proof were needed ..... Someone once said that the US and the UK were separated by a common language. Goldilox, your last posting demonstrated that in spades !!!!!!!! Goldilox (08/21/05; 20:12:28MT - usagold.com msg#: 135177) Little League Update Kalen Pemintel, who tied a LL record yesterday by striking out all 18 outs (he also gave up two runs) in the Vista, CA Little League playoff game, hit an RBI double and a grand slam today to beat Maine 7-3 and advance his team to the final 8.Not bad for a 12 year-old!Now all he needs is a "gold glove" for a complete "hat trick."This is more fun than MLB. Smeagol (08/21/05; 19:02:14MT - usagold.com msg#: 135176) We owe? we owe? Regarding the comment in the article linked by Ssir Mikal:"You owe $145,000. And the bill is rising every day. That's how much it would cost every American man, woman and child to pay the tab for the long-term promises the U.S. government has made to creditors, retirees, veterans and the poor."Sss... it irritates uss... we never understood where people seem to get this notion that ssomebody owes ssomeone else anything they never agreed to, or that has been sspent without their permission! >8-(Forty five thousand,plus another hundred grand,they say we owes? HA!S. mikal (08/21/05; 18:28:02MT - usagold.com msg#: 135175) Swim with a golden current or drown http://www.rense.com/general67/democracyisanillusion.htm Democracy Is An Illusion - Foreign Bankers Hold Our Purse Strings - Henry Makow PhD - August 21, 2005Excellent short treatise and entreaty concerning money awareness. mikal (08/21/05; 17:59:33MT - usagold.com msg#: 135174) To America: "Get your house in order" http://www.napanews.com/templates/index.cfm?template=story_full&id=BED1C633-55AB-4F1A-BEF7-0D72908B67B7 Experts Warn That Heavy Debt Threatens American Economy - Robert Tanner - AP - August 21, 2005 mikal (08/21/05; 16:11:29MT - usagold.com msg#: 135173) Indians "price takers not price setters", for now http://www.thehindubusinessline.com/2005/08/22/stories/2005082200011300.htm The Hindu Business Line : The changing scenario - G. Chandrashekar - August 22, 2005 Goldilox (08/21/05; 15:57:26MT - usagold.com msg#: 135172) The Great Influenza: The Epic story of the 1918 Pandemic John Barry, author of the above title, is currently on CSPAN describing the issues that exacebated the killer flu epidemic of 1918 as outlined in his history of the 1918 flu crises.The greatest problem, in his estimation, was the rash of public misinformation that actually impeded battling the epidemic. In comparison, he suggested that Asia's response to SARS was so politically motivated to protect poultry farmers, that had it been as lethal as the 1918 virus, we would probably have seen huge death tolls.His current concern is that microbiologists have their hands full staying on top of the rapid flu virus mutations and keeping vaccines vital.Off topic, for sure, but very interesting discussions, given the outbreaks of bird flus and the migration to human carriers recently.With all the economic "factors" teetering on edge, one wonders how a global or major regional health crisis might tip the scales. USAGOLD / Centennial Precious Metals, Inc. (8/21/05; 12:26:29MT - usagold.com msg#: 135171) A world of gold at your fingertips... http://www.usagold.com/buy-gold-coins.html Goldilox (8/21/05; 09:45:41MT - usagold.com msg#: 135170) Missed Link msg#: 135167 http://www.financialsense.com/fsu/editorials/2005/0819.html Sorry 'bout that Goldilox (8/21/05; 09:39:31MT - usagold.com msg#: 135169) GOLD - Is it Really all in the Name? - Doug Gnazzo http://www.financialsense.com/fsu/editorials/gnazzo/2005/0819.html snip:Why Gold ShinesWhen money is exchanged for other goods, we do not literally exchange the money for the other goods, but the value that the money represents in other goods. We exchange values for values.In trade we give goods for goods, evaluating them in comparison to the monetary unit. The money is but the medium of exchange that represents the purchasing power by which other goods can be exchanged for. Money is the standard – for comparison – the measure of value.Thus money is a receipt for value. The monetary system is an agreement between traders to regulate the issuance of money, to exchange values in terms of the monetary unit, and to keep an account of all such exchanges.Gold as money is a measure of value. Gold as money is a standard of value. Gold as money is a store of value. The quality or purchasing power of money is more important than the quantity or supply of units of money.Gold retains its purchasing power through time and over time. Gold cannot just be printed up or made to appear on the ledger by the mere flick of a computer key, it must be mined from the bowls of the earth, by the sweat, blood, and tears of man. This gives gold an inherent discipline from being overproduced at will – by fiat.Another quality that makes gold so valuable is the fact that it is not consumed. This is best shown by gold's "stocks to flow ratio" – the above ground stock of gold divided by the annual production rate of gold.This ratio is approximately fifty to one. In other words, it would take fifty years at the present rate of world gold production to produce the present stock or supply of gold.Gold's stocks to flow ratio is an important reason why it is deemed to be so valuable, it is not just because of subjective valuation. There is also a cumulative process of subjective valuation that has taken place over centuries of market behavior that has by freedom of choice determined that gold is the most marketable commodity. This means that gold has the least declining marginal utility as perceived by the market.Thus gold is seen to be the best transmitter of value in time, through time, and over time. This cumulative process has caused gold to be saved and hoarded throughout the ages.Because gold retains its purchasing power, it is the best store of value – the best store of wealth.Gold has obtained an objective form of valuation based on its stocks to flows ratio in combination with its many other monetary qualities. This objective valuation has given gold an objective exchange value as well. Collectively, these numerous monetary qualities and functions make gold the most accepted common medium of exchange throughout history.Although gold has no intrinsic value in and of itself, man has chosen to value gold most dearly throughout the ages. He has chosen gold as the supreme receipt and store of wealth - The Sovereign of Sovereigns.To believe that gold or any form of money has intrinsic value is to misunderstand the concept and theory of money. This is just what the would be rulers of the universe want – illusion and delusion, as the people can't question that which they know not.Be not deceived. Gold is most valuable and will become of even greater value, but the value comes from what We The People place on it – nothing more, nothing less. Gold represents a receipt for wealth, as long as man so chooses to accept it as such.Gold and silver are the best choices of money, history has clearly born this out. Nothing else is needed but the return to Honest Money – Gold and Silver. Goldilox (8/21/05; 09:33:32MT - usagold.com msg#: 135168) What is "inflation", anyway? If FIAT money is no more than a fiction of "credit and debt", inflation seems nothing more than a premeditated opportunity to plunder the accounting for the benefit of colluding banks, corporations, and governments.Do we "make money" by riding the coat tails of the inflationists, or if we're lucky, perhaps, maintain an even keel?So much has been written about the separation of Church and State, but not since Madison and Jefferson have many explored the equally incestuous and pugnatious relationship of Bank and State.Personal freedom can do nothing but erode while the banksters and high priced corporate lobbyists apply choke collars to Congress and the administration for their own enrichment.The last highway bill contained 3600 pork riders - that's about 11 for each Congressman. Goldilox (8/21/05; 09:20:46MT - usagold.com msg#: 135167) A Flawed Mandate - Tim Iocono snip:So, here we are in the summer of 2005, nearing the end of the 18 year term of Alan Greenspan. We cannot help but marvel at two things - how lucky Mr. Greenspan was to have started his term when he did, and what a poor job he has done in the last ten years.The reason we say this is that his term has benefited from one notable condition, low inflation (as measured by consumer prices), and Mr. Greenspan has responded to this condition in an inappropriate manner that has resulted in a series of asset bubbles and global imbalances that his successor will inherit.Some say that the Greenspan Fed has been "fighting" inflation, and that is why it has remained low. This is far from the truth. Paul Volcker "fought" inflation by raising interest rates to near 20% and inducing a recession. The Greenspan tenure at the Fed has been marked by moderate energy prices and inexpensive imported goods from Asia, which have offset other rising prices to keep overall consumer prices relatively low. Some statistical slight-of-hand with inflation calculations and deliberately misleading reporting of inflation (i.e., emphasizing "core" inflation) has helped keep a lid on "reported" consumer prices as well.Both of the first two factors, inexpensive energy and imports, are beyond the control of the Fed and are not likely to continue.The Fundamental ErrorThe Federal Reserve has a three-part mandate for monetary policy - maximum employment, stable prices, and moderate long-term interest rates (it seems "maximum sustainable growth" used to be included here, but no longer). The fundamental error by the Greenspan Fed has been to make monetary conditions overly stimulative in order to facilitate job creation, while believing that it was achieving price stability.While statistically, these mandates have largely been achieved in recent years, the failure to address asset prices and to consider the effects of trade and currency policies on import prices has enabled the creation of huge asset bubbles and trade deficits, while resulting in job creation of increasingly poor quality. The apparently mistaken belief that energy prices would stay low indefinitely will likely turn out to be simply a case of good timing for Mr. Greenspan and bad timing for his successor.Collectively, these factors - asset prices, trade and currency policies, and energy costs - have painted a misleading picture of price stability, particularly over the last ten years, which the Fed has failed to recognize. Or, perhaps it has recognized these factors but has chosen to ignore them - for political or other reasons.The failure to address asset prices and asset bubbles is well known - first stocks, now housing. These prices are not included in the consumer price indices, and this is, in part, justification for ignoring them as monetary policy considerations. The Fed says it is not their job to stop asset bubbles from forming, but rather to mitigate the effects of the bubble's aftermath. This is just nonsense, as will likely be demonstrated as the housing bubble aftermath develops.The trade and currency policies of recent years have allowed huge trade deficits to develop with our Asian trading partners using what is essentially a fixed exchange rate system. While it is not the responsibility of the Fed to police other central banks and monitor the exchange rate policies of other countries, the Fed should be well aware that the absence of freely floating exchange rates has kept the prices of imported goods artificially low for many years. Instead of higher import prices due to a devalued U.S. dollar, this imbalance shows up in the huge trade deficit.Finally, the relentless rise of energy costs in recent years brings with it the very real possibility that energy costs over the last twenty years were the exception and not the rule. While energy plays a smaller role in the overall price structure than it did two decades ago, it is still very significant, and if the price of oil continues to rise - to $80, $100, and beyond, as predicted by many - this will dramatically affect consumer prices.-GoldiloxThe FED's "inflation fighting" efforts have more closely resembled a fixed boxing match than a true contest, so the judges continue to call the dollar "ahead on points". Monetary inflation has essentially gone hyperbolic since that fateful closed door meeting on Jeckyl Island, rendering the consumer the final loser! Goldilox (8/21/05; 09:12:19MT - usagold.com msg#: 135166) What About Silver Demand? - David Morgan http://www.financialsense.com/editorials/morgan/2005/0819.html snip:Long-term studies of commodity prices have shown that over time, commodities return to their mean. This "average" price, however, can remain outside of this range for a very long time. Silver has certainly remained outside of its purchasing power range for the past 25 years, and remains so today. Therefore we fully admit that having this knowledge for the past quarter-century was of little practical value. However, things are changing rapidly in the world's financial landscape, and the new silver age is rapidly approaching, first from a technological standpoint and later from a monetary and wealth building/preservation perspective.After Warren Buffett announced his silver purchase in 1998, Forbes magazine ran a brief article on silver and included a very interesting graph. (visit web site) This graph provided 600 years of silver prices in 1998 dollars. So, all the inflation is taken out of the equation, and the prices reflect silver's true value. In constant dollars, silver's purchasing power averaged $150 per ounce in 1998 dollars for 600 years. This is the average purchasing power for 600 years; obviously, silver has nothing close to that "value" today, which provides one unbelievable investment opportunity.The question becomes whether silver will ever reach either the $150 nominal value or, better yet, the purchasing equivalent of the 600-year average? According to long-term historical standards it must, but will we all live long enough to benefit from this? The Silver Investor is on record as stating that silver could trade as high as US$100 per ounce in nominal terms and perhaps higher. It is our belief that this will most likely occur on a price spike and the price will quickly adjust downward but establish a new range, perhaps in the US$20.00 area. We are looking at 2007-2008 as the area for a large price spike, but not the final spike. We will need to study the market activity to make our best call at the time.-GoldiloxInteresting analysis weaving the SSI dilemma into the silver supply-demand equation. Goldilox (8/21/05; 09:00:21MT - usagold.com msg#: 135165) A Modern Dilemma - Addison Wiggins http://www.financialsense.com/editorials/daily/2005/0819.html snip: The problem becomes severe when, unavoidably, the system finally collapses. At some point, the Federal Reserve - with blessings of the Congress and the administration - prints and places so much money into circulation that its perceived value just evaporates. Can this happen? It has always happened in the past when fiat money systems were put into use. We have to wonder whether FDR was sincere when, in 1933, he declared that the currency had adequate backing. It wasn't until the following year that the president raised the ounce value of gold from $20.67 to $35. He explained his own monetary policy in 1933 after declaring the government's sole right to possess gold:"More liberal provision has been made for banks to borrow on these assets at the Reserve Banks and more liberal provision has also been made for issuing currency on the security of those good assets. This currency is not fiat currency. It is issued on adequate security, and every good bank has an abundance of such security."It was the plan of the day. First, the law required that all citizens turn over their gold to the government. Second, the value of that gold was raised nearly 70 percent to $35 per ounce (after collecting it from the people, of course). Third, the president declared that currency printing was being liberalized - but it is backed by gold, so it's not a fiat system. This may have been true in 1933, but since then - having removed ourselves from the gold standard - the presses are printing money late into the night. The gold standard has been long forgotten in Congress, the Federal Reserve, and the executive branch.It may be the view of some people that a perfect monetary system may include changes in value based on purchasing power and on the demand for money itself. Thus, rich nations would become richer and control the cost of goods, while poor nations would remain poor. In spite of the best efforts under the Bretton Woods Agreement, it has proven impossible to simply let money find its own level of value. Unlike stocks and real estate, the free market does not work well with monetary value because each country has its own selfinterests. Furthermore, today's post-Bretton Woods monetary system has no method available to prevent or mitigate trade imbalances. Thus, trade surplus versus deficit continues to expand out of control. The United States ended up accumulating current account deficits totaling more than $3 trillion between 1980 and 2000.This perverse twist on world money has had a strange effect:"These deficits have acted as an economic subsidy to the rest of the world, but they have also flooded the world with dollars, which have replaced gold as the new international reserve asset. These deficits have, in effect, become the font of a new global money supply."-GoldiloxFIAT money systems have diluted the benefits of capitalism, by rendering that very capital unstable. More effort is spent defending the capital than building wealth and trade. This can be witnessed by the sheer volume of currency and derivative markets versus the "real" markets for commodities and finished goods. When "free markets" are constantly foot-noted, confidence becomes fleeting, at best. When manufacturers make more profits through currency arbitrage than actual sales, the system is being gutted before our very eyes.Who is behind the curtain, Toto?I explained the Hollywood transition of Dorothy's silver to ruby red slippers to some friends at dinner Friday night, and they were fascinated. Are we witnessing some personal fiscal rennaissance from this economic turmoil? Belgian (8/21/05; 03:47:25MT - usagold.com msg#: 135164) @ gv msg#135161 You are not at all missing the point...on the contrary, IMO.Gold is indeed about wealth and even more important about wealth "preservation" !Maybe it is because I've started maturing that I come to grips with the notion of what (objective-universal) wealth exactly is...how to preserve it for transfer.Very important is your absolutely correct observation that for the past 7 decades, the aboveground goldmetal has NOT ...absolutely not...reflected the total (global) accumulated wealth. Gold did NOT ***-function-*** as it should ! Very, very significant.Gold should have functioned as the consolidator of what you (me and all the others) percept as generation of wealth (productive, profitable enterprise). Businesses come and go and the fiat they generate (profit) is permanently depreciating.The whole complex system of economic/financial/monetary affairs starts to show serious deep cracks. We are observing these growing defaults daily. The system starts to roll on square wheels (disfunctioning with insufficiant harmony - unbalanced). The need for a fundamental change grows by the day. And it is exactly at this point that your observation about gold having dysfunctioned for the past x-decades, is gaining in importance ! We were ooooh sooooooh convinced that we could manage the whole affair...without gold properly functioning : A. Greenspan >>> CBs are acting as IF we were on a gold-standard !The objective (gold) store of accumulated wealth was deliberately disabeled...made unfunctionable. Our purchasing power had to be permanently falsified as to operate on the $-IMS...SYSTEM.Any expansion (businesses) must happen on solid foundations. Drifting debtbergs are far from solid foundations. Debt (not credit) is not a consolidation of one's wealth. An objective store of value must be debt-free as a starter.GV, we are NOT living under market-driven forces...we are all living under a debt-driven political economy. A real market is about credit/credibility/creditworthness and not about an endlessly accumulation of debt ...and the political organization/management of such a system !Savings are a postponement of consumption. But natural savers also want to consolidate a part of those savings into an appropiate (perfect) tangible. A solid foundation as an intact wealth for eventual later expansion of business that generates fiat.Any bussines is a venture and can turn into a total loss. Wealth consolidated in gold can never turn into a total loss. But look what they have done to gold in the past 7 decades...from confiscation to price containment...taking gold's wealth function away or disabeled. The confetti brewers "had" to take the golden foundation away in order to have "their" system up and running !But that's history...because the system reaches the end of its lifetime. And then one goes "automatically" back to the roots...the foundations...modernized freegold !But after 7 decades (3 generations) of confetti brewery (notes to digits)...the notions of real wealth and freegold have almost been extinguished...almost, dearest gv...almost !Today's markets are NOT...markets but virtual markets, based on nothing but debt and the illusions that debt brings with it. Time is running out for empty promesses that aren't functioning (manageable) anymore. I want value for the offered value...from now on ! And I strongly suspect that I'm not alone with this idea.But this gigantic transition from illusionary debt richness to genuine wealth consolidation is going to be a rocky ride. Big changes always carry a lot of injustices (suffering) in them. Realizing that one's wealth is NOT exactly what its virtual credits say it is. But today's savers (postponed consumption) are losing purchasing power at a faster speed and scale than they actually realize...due to the massive (systemic) falsification of stats and false perception building forces that can easily deceive.This time, the organized robbery of what is supposed to be wealth will not be a temporary event. The planet's rapport de forces have been changing already. Many (objective) observers certainly already agree with this ongoing fact. It is NOT the end of the world...but it is the end of the foundationless confetti brewery era...the empty and unproductive speculative/gambling finale. Consolidate your smartness properly as to preserve what you accumulated to be classified as transferable wealth.It is against the above background that all chart-patterns (with their ever rising extremes) should be interpreted.And in all honesty we do realize all together how extremely difficult these decisions realy are. But that's exactly the main thing on what the gold = wealth disablers have been counting to marginalize gold's function for such a long period. But we all let it happen for temporary great fun !Have a nice WE, Sir. ge (8/21/05; 00:44:13MT - usagold.com msg#: 135163) Ned msg#: 135152 Frankly, I do not have a firm understanding of what is going on. There are several possibilities and it is very difficult to tell fact from fiction. Just watching and taking notes.One possibility is the following:http://wagnews.blogspot.com/2005/08/irans-president-nobody-man-who-burned.htmlhttp://wagnews.blogspot.com/2005/08/disinfo-iran-invasion-drivel.html"…you may still be under the impression that Iran is some kind of enemy of the United States. Let the relative peace in the Tehran-dominated south of Iraq dissuade you of that notion." is main message of this site.Consider the memories of Sheikh Yamani:http://observer.guardian.co.uk/business/story/0,6903,421888,00.html***start of quote***"His voice quickens further when he reminisces about the era of great oil diplomacy in the Seventies and his contemporary, former US Secretary of State Henry Kissinger."At this point he makes an extraordinary claim: 'I am 100 per cent sure that the Americans were behind the increase in the price of oil. The oil companies were in in real trouble at that time, they had borrowed a lot of money and they needed a high oil price to save them.'"He says he was convinced of this by the attitude of the Shah of Iran, who in one crucial day in 1974 moved from the Saudi view, that a hike would be dangerous to Opec because it would alienate the US, to advocating higher prices."'King Faisal sent me to the Shah of Iran, who said: "Why are you against the increase in the price of oil? That is what they want? Ask Henry Kissinger - he is the one who wants a higher price".' ***end of quote***A higher oil price would increase the demand for Dollar while the oil is being priced in USD. ViewYesterday's Discussion.
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