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ARCHIVED DISCUSSION FROM 7/2/1999
All times are U.S. Mountain Time

View Yesterday's Discussion.

koan (7/2/99; 23:31:26MDT - Msg ID:8368)
inflation adjusted floors
I reAD another article by Armstrong and am not sure what to think. But one statement caught me when he said gold could test the 1974 low of $200. But $200 in 1974 would be much more today $500, $600, etc. But I also realized I am guilty of the same flaw when I use old floors like $4.84 for silver in the 1980's. But I guess really it is ultimately the technicians who use numbers which are not adjusted and thus not real? But they tend to use them.

koan (7/2/99; 22:19:12MDT - Msg ID:8367)
Steve H - nope
I only post my 2 cents here. No need to bother others. I'll go read it now out of curiosity.

SteveH (7/2/99; 20:23:17MDT - Msg ID:8366)
repost
www.kitco.com
Date: Fri Jul 02 1999 18:06
Fergus (Doing the Right Thing) ID#284226:
Copyright © 1999 Fergus/Kitco Inc. All rights reserved

The S&P500/Gold ratio closed today at 5.290, a new 200 year all-time high. The ratio is now 23.9% over 1998's year-end close of 4.268, and 55.5% over year-end 1997's close of 3.402. We are 88.8% above 1968's peak day of 2.802, and 241.9% above 1929's top day.

The average number of gold troy ounces needed to buy one unit of the S&P500 at the five peaks of stock market cycles of the past 200 years is 2.025; the average low ( for four bottoms ) is 0.149. The most recent low ( in 1980 ) was 0.132. The ratio is an astounding 3,907% above that low, which works out to about 20.8% per year for the last 19.5 years, that the S&P 500 has outperformed gold.

On the other hand, from 1968's peak day in stocks ( 2.802 ) , vis-à-vis gold, stocks declined 95.3% to the bottom in 1980 ( 0.132 ) -a wrenching 22.5% per year decline for roughly 12 years. And now we are 89% above that 1968 peak!

FWIW, each of the four major declines in S&P Composite stocks ( again, relative to gold ) since 1800 has been at a progressively greater annual rate of decline. Here is a list of them:

Decline from 1802 peak ( 0.167 ) to 1857 valley ( 0.057 ) = -65.9%, or -1.9% annually
Decline from 1881 peak ( 0.318 ) to 1896 valley ( 0.184 ) = -42.1%, or, -3.6% annually
Decline from 1929 peak ( 1.547 ) to 1942 valley ( 0.221 ) = -85.7%, or, -13.9% annually
Decline from 1968 peak ( 2.802 ) to 1980 valley ( 0.132 ) = -95.3%, or, -22.5% annually

If the past means anything, the ratio is telling us that stocks are absurdly priced right now, relative to gold. Put ANOTHER way, gold is dramatically cheaper than it has ever been, relative to stocks.

A couple of quotes come to mind:

"As far as I am concerned, the stock market doesn't exist. It is there only as reference to see of anybody is offering to do anything foolish." --Warren Buffett

"The trick is not to learn to trust your gut feelings, but rather to discipline yourself to ignore them… "The true contrarian waits for things to cool down and buys ( things ) nobody cares about, especially those that make Wall Street yawn." --Peter Lynch, in One Up on Wall Street

I believe that the trick now is to heed the words of Peter Lynch and Warren Buffett--to discipline ourselves to ignore the pain in our guts, and do what we know is right. Aside from us goldbugs, no one cares about gold right now ( especially the physical variety ) , and stocks are being offered at foolishly high prices.

Forget trying to time the bottom. Only those on the inside will know. And forget all this nonsense about gold becoming irrelevant.

Gold is extraordinarily cheap right now, period, and we know it. It's time to get past our guts and fears--past the pain we all feel--and do the right thing: buy an asset that no one cares about; an asset that has stood the test of time unlike any other for thousands of years, gold

SteveH (7/2/99; 20:20:12MDT - Msg ID:8365)
law
I can now see the clear need to pass a law making it illegal for any entity other than a gold producer or an entity with physical gold owned and present (not loaned or borrowed) to transact in the gold-carry trade. Had this law been in place and adhered to then we wouldn't have this mess, eh?

SteveH (7/2/99; 20:16:31MDT - Msg ID:8364)
more
What if all of the other gold sales in the last two years were also payoffs to gold loans gone south? This means that the end is near for easily available gold payments because it seems that the BOE is the backer of last resort. They are now reaching into the shoe box under the bed, the one with the 1936 $2.00 bills.

FOA, what say you?

SteveH (7/2/99; 20:13:57MDT - Msg ID:8363)
thought
Aristotle (and Aragorn) said, "...With the simple but vital central bank guarantee against the default of these Money (Gold) loans, the House of Saud, for example, would have not qualms about supplying the cash side, effectively buying not the Gold metal immediately, but rather the rights to receive the borrower's Gold repayments over a span of time. Just like a home loan on the secondary market. And the Money (Gold) of the central bank need not ever move or change ownership unless the borrower defaults on the loan and the CB is obligated to guarantee payment...."

It would seem then that the need for the BOE to make 25 tons physical available currently must mean they are acting as a loan guarantor and are having to fess up the gold to back a deal where payment in gold is due but insufficient gold is available to meet the payment. The other sales of gold being attempted worldwide (IMF, Suisse) seem to be representative of other loans coming due in gold where payment in not available.

But where does the Euro fit in to all this?

koan, is that your good post over at kitco under Pete?

SteveH (7/2/99; 19:46:22MDT - Msg ID:8362)
Mr. Yen the Mr. Murphy
http://www.afr.com.au/content/990703/world/world5.html
Mr Yen blows through
lest the bubble burst

Asia-Pacific,
By Peter Hartcher
It was confirmed during the week that one of the world's top finance officials, Japan's Eisuke Sakakibara - known as Mr Yen - is about to retire from his job as the country's main international negotiator. But why?

He told an acquaintance that he decided not to press for another year in the post because he expected that Wall Street would crash during that time, and he did not want to be around to try to deal with the consequences for Japan.

It was Sakakibara who first conceived the brilliant nickname for the US economy - bubble.com. The US is vulnerable, he says, to the possibility that the internet-led stockmarket bubble will burst with awful consequences.

It would not only drag down the US economy, he fears, but jeopardise the entire system of global capitalism. It is quite extraordinary, of course, that the vice-minister for international affairs at Japan's Ministry of Finance should utter such thoughts aloud.

Apocalyptic pronouncements from a responsible official are potentially destabilising. And the Americans, Sakakibara's closest and most important allies, hate it.

But his warning does serve as a sobering reminder of the awesome challenge that the US faces.

The Federal Reserve's Alan Greenspan is working to bring the eight-year US boom to a gentle moderation, a soft landing.

The problem is that history shows hard landings are infinitely more likely to occur, producing wrenching recession.

Greenspan's decision to raise interest rates by the barest possible increment during the week - and then saying that no more action is contemplated at the moment - shows him to be like the comical minesweeper of schoolyard humour.

He is advancing gingerly into the minefield with his hands over his ears, feeling his way forward with one foot outstretched, tentatively tapping the ground.

He has to expect that his leg might be blown off at any second and is moving with terrified caution, and without equipment of any sophistication.

Greenspan may be the world's most powerful central banker, but he is still armed with nothing more than two old-fashioned instruments of words and interest rates.

The US is nurturing a technological revolution at its economic breast at the moment. That is not in doubt.

The key question to ask of Wall Street, however, is this: Are investors pricing the effects of this revolution correctly?The stockmarket can only ever represent the value of the companies in the economy it represents. A simple and obvious point, yes.

So how do you explain this? The total value of the US stockmarket has been the equivalent of around 50 per cent of the total output of the US economy, on average, over the past 60 years. Today it is around 150 per cent.

In other words, the market has historically been prepared to value a dollar of economic output at 50¢. Today the market values that same dollar of output at $1.50.

Why should this historical relationship swerve so violently away from standard? Is it possible that stocks today could be worth three times the amount of real economic activity that they have traditionally represented?

The orthodox answer is that the technological revolution is transforming the productive power of that economy, and so the old rules no longer apply.

The Bank for International Settlements, the Swiss-based club of the rich-world's central bankers, is not so sure.

It is sometimes argued that the effects of recent high-tech investments may be especially large because they embody significant technological advances.

However, while computers have been a major component of recent investment spending, they still account for only 2 per cent of the net non-residential capital stock.

Thus, even if the returns on investment in computers are higher than for other types of equipment, their effect on aggregate productivity growth has been relatively modest until now.

No-one, naturally, can be sure of the future, and the BIS hedges by saying that computers may become an important source of productivity advances in future years. But until and unless that happens, any pricing of the technological revolution must be speculative.

Sakakibara has to have an even chance of being right that a surge of money is simply pushing stock prices to unreasonable levels, creating that oldest of investment phenomena, a speculative bubble waiting to burst.

In this view, the market is valuing a dollar of economic output at $1.50 not because investors seriously expect this to be the correct level, but just because a wave of hyper-liquidity is chasing a limited number of stocks and pushing prices to ridiculous heights. And Sakakibara has seen this phenomenon at close quarters in Japan's bubble economy of the late 1980s. But it is also possible that he has other motivations.

A top official in a rival Tokyo ministry says that Sakakibara was not offered the option of another year in the job, but that he has been forced out by the seniority system of the Japanese bureaucracy. And officials in the US Treasury suspect privately that Sakakibara's attacks on the US may be partly tactical - designed to deflect US criticism of Japan's spectacular economic mismanagement of the last decade.

One thing seems certain, however. They will not be rid of him.

Sakakibara, an extremely accomplished intellectual as well as one of the world's most high-profile finance officials, will be leaving the ministry in a month or so and will spend some of his time writing and lecturing, including during a visiting professorship at the Australian National University.

In this new incarnation, the US economist David Hale sees Sakakibara emerging as a leading spokesman for Asia, an advocate of Asian solutions for Asian problems and an challenger of US policy.

The best way for the US to disarm him, of course, would be by a soft landing. Good luck, Dr Greenspan.


-change-


Le Metropole members,

Professor von Braun has served a response to
Martin Armstrong ( Dos Passos Table ) at the Kiki
Table entitled, "Professor von Braun solves the
mystery".

It is well done and well thought out.

I spoke with Frank Veneroso about Martin Armstrong's
piece and have offered up a clarification for Mr.
Armstrong that follows the Prof's commentary at the
Kiki Table.

Today's activity was very quiet, but silver, oil and copper
all closed higher once again with gold finishing out right
above unchanged. Bullion dealer Chase offered HUGE size in the
gold pits for the second day in a row stopping any serious
rallies.

The open interest dropped over 5,000 contracts in yesterday's
action so the specs are covering while the bullion dealers
sell. A bit of the same old pattern we have seen for such
a long time.

It is especially disconcerting when one hears this today from
Kelvin Williams, Executive Director of South Africa's Anglo
Gold Ltd: " The auction is going to be oversubscribed by three
or four times the amount of gold on offer" ( confirming what
we already told you ). He went on to say, " one of our
counterparty banks has indicated a firm intention to make a
bid for the full 100%". Perhaps, this confirms the rumor
that Goldman Sachs was going to do just that. We will know
more by 11 AM, or so, London time on Tuesday.

Regardless, something does not sit right again here. Why are
the bullion banks offering size going into an auction that
is oversubsribed 3 or 4 times? What oversold market like gold
produces such feeble rallies with such strong demand? If
Goldman Sachs IS such a big buyer - who are they buying for?

I have a sickening feeling that the manipulation of the gold
market is intensifying and I will deal with that soon. I say this because it is clear that the natural supply/demand fundamentals
are improving daily. Our camp says there is a 150 tonne, or more,
natural supply/demand deficit that must be met EVERY MONTH.
Central Bank selling is minimal, so is producer forward selling,
and the Asians are rebuilding gold stocks after their crisis so
scrap supply is zilch. That can only leave leased gold
borrowed from central banks hitting the market. Could that
1,000 tonne short position at Goldman Sachs partly be gold
borrowed from the U.S. Fed? If Goldman is buying back gold at
the auction, is it doing so in behalf of the U.S. Fed? Is
that why they called the BOE into action to sell gold? Some
quid pro quo between the U.S. and British governments?

This is all very disturbing. You know that we will do what we
can to try and get a better handle on all this. The more
that GATA investigates the gold market, the worse the stench
becomes.

Whatever happens in the short term, it is clear that the shorts
will blow up at some point in time in the not too distant
future for the longer they keep the gold price down, the
greater will be the deficit and the gold loans will be just
that much bigger as they continue to grow and grow.

The shorts WILL have their butt handed to them and the
resulting short covering panic will cause the gold price to go
far, far higher than most can imagine.

<A HREF="http://www.lemetropolecafe.com/scripts/products.cfm">Le Metropole Cafe</A>

All the best,

Bill Murphy
Le Patron

koan (7/2/99; 17:39:20MDT - Msg ID:8361)
floors and ceilings
Silver over the past 20 years has had two more or less famous floors $4.84 which held nicely this year and $7.00. Here is my prediction of what we will see in the next 12 months. Silver will work its way above $6.00, at which point every computer in the world will trigger a buy signal ( many technicians will say $5.80), but I remember the emotion of the past of the $6.00 price. From there it should go directly to $7.00 which will then become a floor. It will range between $7.00 and $10.00 until the supply shortage really becomes acute or the dollar falls and then it is any ones guess. Having said this, over the past many years when I feel this bullish is when I should be buying puts. I read that the ratio of gold to silver is 10 or 12 to one. Can anyone confirm that? Last, I do not think the BOE sale will have any impact on the gold price as all those variables are usually worked in when there is this much transparency. But I do not feel strongly about this its just a guess (like everything else) and would love to see a move in gold to the $280 level or more.

koan (7/2/99; 17:05:24MDT - Msg ID:8360)
Technician - I appreciate your input
It is nice to read other posters trying to figure out these complicated mkts. I read all your stuff and you do a good job. I agree on the dollar. I am surprised the US doesn't lower it to provide relief to the farmers and other commodity producers. James Baker, I think that was who it was, lowered the dollar a great deal, in a straight down move, in the 80's. I seem to remember the yen being like 185 or more at the time. The dollar is way too strong and its strength undermines our industrial base as well as farmers and other commodity producers, not to mention our unbearable trade deficit.

Technician (7/2/99; 16:34:41MDT - Msg ID:8359)
Tuesday is our day:)
May I claim my victory? My call of bottom in gold 22 June, in this forum, has been and will remain accurate. Not only that but Tuesday will leave a gap not to be filled. I have been firm in my bullishness in crude, copper, gold and now silver. We are entering an era reminiscent of the late 70's. Be prepared for the ride for it will be wild and can be very profitable. I predicted $25 crude by years end on this forum and also maintain that opinion.

My website is crude and 100% non-commercial. I feel at this junction of time it serves a great need. I have had many grateful emails encouraging me to continue and I will as long as CFTC does not complain. I am not a CTA and am not defined as such according to the CFTC's very own definition. In fact, I have emailed them for clarification but as to date, no reply.

These types markets we are entering respond very well to technical analysis, they are trend followers. Even simple moving average works and more sophiscated methods work much better. If you trade commodities, keep your ego somewhere else or u will be chopped to ribbons.

I believe the $ is tremendeously over valued. If u don't believe that and welcome cheap European vacations then ask me what I hear from farmers in Kansas and elsewhere. They are dying out there friends while we enjoy cheap imports. This $ thing will become a political problem soon even if $ has not topped which it might have.

If You wish to visit my site email me at edwin_pu@yahoo.com. I consider providing web site URL here on forum in bad form. I wish to be an attraction for USAgold not a competitor.
ET, Bet a beer I will call buy on DM first;)
Hope I did not ramble, good trading


megatron (7/2/99; 15:40:22MDT - Msg ID:8358)
question
can the person in charge explain why my postings about inflation keep getting removed?

megatron (7/2/99; 14:12:04MDT - Msg ID:8357)
Ron Brown article POV
I'm a Canadian who travels to the US every 6 months or so for business and shopping. The level of price inflation I've seen in the last 3 years is incredible. It must be approaching 12% or higher. The official figures cannot be correct.Two of the main reasons I believe the average person hasn't realized this is
A; They don't travel at all, so they have no relative basis for judgement about prices and exchange rates,etc.
B; If they do they have no problems because US currency is accepted and is gaining against the local paper.Great, more trinkets can be brought home. The price of food, meals, and alchohol in the Pacific NW is going up very sharply. The price of fuel has remained stable though.Curious.

TownCrier (7/2/99; 13:11:16MDT - Msg ID:8356)
NY Precious Metals Review
By Tina Petersen, Bridge News
Washington--Jul 2--
Aug gold was very quiet ahead of the UK Treasury's gold
auction, settling up 20c at $264.6 per ounce.

Aug gold was surprisingly quiet ahead of the UK Treasury's gold
auction Tuesday, according to traders. However, one trader said that he
did not expect gold "to do much ahead of the long weekend anyway. No one
was expected to initiate new positions ahead of the auction anyway. Any
movement today was just position squaring."

While many expect to see a short-covering rally following the UK
Treasury's auction, one contrarian broker said it is possible that gold
could plunge as much as $10-11 Tuesday as further possible gold sales
await.
However, others maintain that 80,000 ounces is not a significant amount.
"Besides, the charts look good. It looks like gold has bottomed. We're
slowly making higher highs and higher lows."

One trader said he expected the auction to be well bid, which could
catch the market short. "There's good demand for the metal," he said.
"Everyone is interested in taking a piece. It should be disposed of in a
quick fashion."

--Aug gold (GCQ9) at $264.6, up 20c; RANGE: $264.7-263.9

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

koan (7/2/99; 13:05:54MDT - Msg ID:8355)
silver - very constructive move today
What I am expecting regarding silver is that the average Joe and Jane will start increasing their purchase of 100 oz silver bars and coins - this will further exacerbate the already short supplies which in turn will increase price, which will in turn increase purchases. Silver supplies, unlike gold are real finite. The user's will also start taking delivery and paying the storage costs, and the commercials should be increasing their long positions. I like to see small constructive moves like this because in a shortage situation there is time for people to purchase and the silver goes into strong hands which will not sell except at much higher prices - as apposed to the speculators just running up the futures mkt. The probable main reason that both gold and silver have trouble moving is, the tremendous technical damage both have suffered over the years. This is not true for the other white metals.

TownCrier (7/2/99; 12:33:50MDT - Msg ID:8354)
Pre-holiday tea leaves
http://biz.yahoo.com/rf/990702/yw.html
Most IMM currencies end abbreviated day higher

TownCrier (7/2/99; 12:30:48MDT - Msg ID:8353)
Gold attracts little trade in late Europe
http://biz.yahoo.com/rf/990702/ss.html
BoE auction is not just a sale...it's an EVENT.

TownCrier (7/2/99; 12:26:22MDT - Msg ID:8352)
A must read...GOLD HAS GONE TO THE MOON!!
http://dailynews.yahoo.com/headlines/ap/ap_us/story.html?s=v/ap/19990702/us/remembering_the_moon_1.html
See for yourself!

TownCrier (7/2/99; 12:15:04MDT - Msg ID:8351)
Oil News you can Use
http://biz.yahoo.com/rf/990702/tk.html
Oil market rally solid at 18-month highs

HopeingII (7/2/99; 12:01:00MDT - Msg ID:8350)
Martin Armstrong
I suppose what with Martin's reputation and position it's
somewhat understandable that he would comment on the
issue of Gold Manipulation, however, I can't help but feel
it rather odd that he does so with such intensity.

Let me put it this way. If an individual is truly knowledgeable about some subject, isn't the more likely
response upon hearing something that is totally absurd, to
simply say, nonesense, you don't know what your talking
about.

It seems to me that Martin puts considerable time and effort into writing hundred's (perhaps thousand's) of words about a subject that he claims is absolutely baloney. Methinks he
protests too much. I would question very much what he has to say given that he is in a position where "what he has to say" may in fact influence other people's views.

koan (7/2/99; 10:44:26MDT - Msg ID:8349)
focus -- silver breakout and divergence
Silver is looking to make a new breakout at $5.375. It traded Europe, night before last at $5.38. All other metals flat to down. Only PAAS is responding - they have great long term stock options, but a risky huge Russian play - sort of to the moon or what. But the big money seems to like it. I noticed the top quality silver juniors that are way oversold even by todays standards are being sucked up. HL had some short term options at 5 that doubled this morning. Always like to check Kitco to see what Gollum's take is. He has his eye on this, as do I.

turbohawg (7/2/99; 10:39:55MDT - Msg ID:8348)
... and one other thing ...
sooner or later, it's not going to matter what their intentions are ... the market will take control. Bonds are indicating that has begun ... the Fed appears to have painted itself into a corner.

turbohawg (7/2/99; 10:13:52MDT - Msg ID:8347)
SteveH
>My question is why? What is the benefit of doing this? If the hole is dug deeper and the fall to the bottom greater than why not let cycles cycle? <

That's a damn good question ... there's no doubt that Greenspan knows the mess the US has created. The post by TommyBear over on the Pru Bear Board (per AEL's link) and the article by Ron Brown that you posted diagnose the big picture well, in my opinion. Why didn't they let the US take a hit 4 or 5 years ago rather than blow the problem up to these extremes ?? (That's when they went from merely inflating to exploding the money supply).

The suggestion by Tomcat and others that they're pushing the implosion into Y2K makes a lot of sense, but still, why didn't they allow the market forces to prevail long before the consequences became this severe ??

I can only cynically assume that it was ultimately a political decision based on a psychotic president's narcissitic drive for power and a 'legacy'. He had to be a two-termer, you know. He had to beat impeachment. He had to have a 'good' economy to exist as anything but a piece of yesterday's trash. The hell with everyone else.

Now, are they deliberately pushing into Y2K so the blame can characteristically be placed somewhere else or will the Fed use Klinton's status as a lame duck to go ahead and change policy or will it be business as usual ??

I don't know, but impeachment is safely behind us now, and in the last month and a half, the money supply has begun contracting (although, it bumped up across the board last week). Note also that, curiously, in that last month and a half, insiders Rubin, Rivlin, and Yellen have announced that they're bailing. Mere coincidence ??

Cavan Man (7/2/99; 8:49:35MDT - Msg ID:8346)
To Aristotle
I have the good fortune of internet access this morning. I recommend the Sternberg Natural History Museum in Hays,KS to everyone.

Aristotle, I will take the time at some later date to verify the historical facts of record in your series although I have no doubt as to their veracity. My question is this; how did you and Aragorn come by these insights and conclusions? Can I assume correctly that your explanations and theories are the product of considerable research and thoughtful analysis; a bi-product of considerable intellect? In other words, and please don't misunderstand, how can I be sure that the tale you have told is accurate? Thanks.

USAGOLD (7/2/99; 8:36:06MDT - Msg ID:8345)
Today's Gold Market Report: Fireworks Today?
MARKET REPORT (7/2/99): Gold was sideways going into the long July 4th weekend.
Today will be the last trading session in the U.S. ahead of the Bank of England auction on
Tuesday. It will be shortened session. It could get interesting in New York today even
though most other markets will be winding down particularly if any news gets out about
who might be bidding on the BOE gold and whether or not it will actually reach the street or
end up in some other central bank's coffers the result of a satisfied lending arrangement
previously gone bad. Dispelling rumors floating the gold to the contrary, the BOE told
Bridge News yesterday that it wasn't recalling gold leases in advance of the auction -- the
reason, some analysts and trades believed, for the spike in lease rates in the past few days.
Lease rates are down fractionally this morning an indication that the market might not be
totally reassured by the BOE disclaimer.

In other news, key members of Congress have introduced legislation to stop International
Monetary Fund gold sales unless the gold is returned to the member countries who
originally contributed it. The bill stands a good chance of passage with House Majority
Leader Dick Armey one of its co-sponsors, though we suspect there will be strong
opposition from the Clinton administration. The bill calls for the president to veto the IMF
gold sale. One wonders if the President can veto a call for a veto -- a complexity to consider
on this 223rd birthday of a declaration of independence that makes such a constitutional
consideration a possibility.

I will leave the last few days reports up for weekend reading as you pull out that patio
recliner and bask in the warmth of summer. Have a good holiday, my fellow goldmeisters.

WAC (Wide Awake Club) (7/2/99; 8:26:48MDT - Msg ID:8344)
G-7 cuts poor countries debt by 70%
http://www.nigerianews.net/cgi-local/getNewsArticle.cgi?id=2370
"THE proposed industrial action by the Petroleum and Natural
Gas Senior LEADERS of the Group of seven Industrialised
actions (G-7) have endorsed a new initiative that will allow
for reduction of up to 70 per cent of the external debt currently owed by the poorest developing countries.."

Well worth a read. This is the kind of garbage that's put out in the third world press.

The Stranger (7/2/99; 7:54:12MDT - Msg ID:8343)
Jason Hommel
You realize, I am sure, that your prediction below is almost verbatim what was broadly forecast for y1k. Have we learned nothing in a thousand years?

"I believe the world is going to go through major upheavals with y2k, with a total collapse of our way of life as we know it, and
a world government is soon to follow on the heels of chaos. This will not be the reign of Christ nor any sort of Golden Age, but
rather, it will be the time of the AntiChrist."

SteveH (7/2/99; 7:46:44MDT - Msg ID:8342)
What would friends think about this?
Date: Thu Jul 01 1999 23:53
Shadowfax (Best I have read in a long time) ID#297378:
Copyright © 1999 Shadowfax/Kitco Inc. All rights reserved
// Seeking Truth In A World Of Lies and Deception //

by Ron Brown, North American Investment Services

We live in a world of confusion and contradiction. Though we seem to be
living in a period of unequaled and unending prosperity, it somehow seems
hollow and artificial, as if it could all end tomorrow. The booming stock

market has gone beyond insanity yet people still think it will never end.

Whenever I have trouble making sense of the distorted and obviously
conflicting information presented to us daily by government and the media,
I remember what President Roosevelt said...nothing in politics happens by
accident. I believe that is true today. In fact, I believe every report
or statement from the government is measured and designed to forward some
orchestrated agenda.

Recently, two topics in particular seem to be the source of more than
usual confusion, lies, and deceptions...

// Y2k and the Gold Market //

There has been an obviously orchestrated propaganda blitz since March 1999
regarding Y2k and the gold market. Below I offer nine observations and
some conclusions on this most intriguing situation.

OBSERVATION #1: Y2k has become a Propaganda War.

Jim Lord is one of the more respected Y2k experts in the world. In a
recent issue of his Y2K REALITY WATCH newsletter, Jim Lord identifies two
of the most important points I believe are missed in the Y2k debate.

First, the battleground of Y2k is not about solving the problem, but about
winning the propaganda war for public opinion. Second, Mr. Lord correctly
points out that the greatest threat of Y2k is the impact it will have on
the banking system.

Both points recognize it's not the "problem" but the "perception of the
problem" that creates the crisis and thus it's own reality. Y2k or not,
the financial system of the world is a gigantic bubble looking for a pin.
The only thing holding it together is consumer confidence. Regardless of
its magnitude, Y2k is a sharp pin that threatens to prick that veil of
confidence.

OBSERVATION #2: The gold market appears to be a rigged game.

In a news release dated 4/22/99, the GOLD ANTI-TRUST ACTION COMMITTEE
( GATA ) , announced that noted anti-trust and securities law firm
specialist, Berger & Montague of Philadelphia has been retained to
assist in its investigation into the alleged manipulation of the gold
market. GATA states "the price and supply of gold are being controlled by
a cartel of Wall Street investment houses and bullion banks with the
possible encouragement of the Federal Reserve and the US Treasury." This
confirms what many of us have suspected for years.

Anyone who has reviewed some of the EXECUTIVE ORDERS inacted by current
and past Presidents of the United States of America should be aware that
the events of today are really part of a much bigger plan. The crisis we
are headed for is not the result of bumbling idiots in high places. These
executive orders did not get on the law books by accident. They represent
a highly organized agenda to undermine our freedoms and national
sovereignty. Any plan of action must not ignore this frightening but
stark reality.

OBSERVATION #3: The world economy is collapsing.

Actually, the system began to unravel two years ago in the Pacific Rim
where the combination of stock market collapse and currency devaluation
destroyed as much as 80% of the wealth in Korea, Indonesia, Thailand, etc.
Despite IMF efforts to defuse the problem, the crisis quickly spread to
Russia--which is an economic basket case--slowing the economies of Europe.
The "Asian Flu" then proceeded on to South America where Brazil now
teeters on the brink of disaster. If Brazil goes, all of South America
goes.

I could elaborate, but I think you get the picture. The world financial
boom of the last 18 years is trying to collapse while the international
bankers who created this Ponzi scheme are trying desperately to hold it
together...at least until they can blame it on Y2k.

OBSERVATION #4: The United States is the "Buyer of Last Resort."

When you analyze it, the only thriving economy in the world is the United
States. Furthermore, I am convinced monetary authorities are using the US
to prop up the whole world. Think about it. The dollar is strong not
from it's own strength, but because the currencies of other nations are
weaker. Flight capital from failing economies throughout the world,
seeking refuge in the US, continues to fuel our financial markets. The
rich get richer.

In our prosperity, the United States has gone on a buying binge, importing
goods from all over the globe at distressed prices. Our trade deficit now
exceeds a record $20 billion per month and grows larger every month.

It's our imports that keep the world economy afloat, so the United States
economy must be kept strong, at least until the world recovers.
Unfortunately, distressed prices from abroad have deluded most Americans
into thinking there is no inflation. So, before we go further, let's
briefly discuss the subject of inflation, because it's our
misunderstanding of inflation that is at the root of our looming financial
crisis.

OBSERVATION #5: Most people don't really understand inflation.

We are programmed daily to believe inflation is "rising prices." It is
critical to understand that "rising prices" are *not* what inflation
*really* is. Inflation is the increase in the supply of money and
credit--period. Since everything we call money is really debt, inflation
is the increase in credit.

While it is true that the normal result of expanding credit is a rise in
prices, it is incorrect to equate the two. It's kind of like analyzing
rain. If you start with the assumption that wet streets cause rain, you'll
never come to a logical conclusion. In the same way, if you assume
inflation is higher prices, you'll never understand the true cause of it.

Politicians and bankers will continue to point their fingers and blame
everyone and everything for inflation except the true culprit--themselves.
It is the unconstitutional Federal Reserve System and fractional reserve
banking that magically creates credit, also known as debt, out of thin
air. The problem is that a system built on a foundation of debt can only
exist as long as the people maintain confidence. If confidence waivers the
debt bubble collapses causing the opposite condition--deflation.

By understanding what inflation *really* is we see that inflation has
never slowed down in spite of the spin promoted by the mainstream media.
The enormous growth in our debt structure and the value of equity markets
is proof that the supply of "money" has expanded dramatically. The only
thing that has been contained is the perception of inflation.

Secondly, because of the massive debt structure in the world, deflation
must be avoided at all cost. Remember that in a monetary system based on
debt, everyone's assets are really someone else's IOUs. In a depression no
one can pay off his IOUs. But, deflation is exactly what's happening as
world markets decline! To offset the deflation overseas the US markets
are being inflated massively to keep the world solvent.

OBSERVATION #6: The FED is continually avoiding near disaster.

In July-September of 1998, the US stock market almost fell off its
pedestal as stocks dropped 25 to 30 percent across the board. To prevent
a further panic the FED and its "plunge protection team" rushed in. They
opened the money spigot full blast to prop up failing markets. Of course
after the recovery the media establishment bragged about how resilient the
markets are, further entrenching the arrogance and complacency of a market
frothing with greed. It's as if nothing has changed. But something has
changed!

OBSERVATION #7: You eventually have to pay the piper!

Inflation fear is once again rearing its ugly head. The bankers cannot
run the printing presses nonstop without rekindling the perception of
inflation. As we discussed earlier, perception creates it's own reality.
Once the fear of inflation is ignited the whole credit bubble comes under
attack and confidence is undermined.

OBSERVATION #8: Inflation fear drives interest rates up, bond prices down.


The natural result of rising inflationary fear is higher interest rates
and thus lower bond values. Let me explain. Who's going to lend money at
5 percent if they perceive price inflation is 8 percent? Likewise, if
long-term rates rise to 8 percent, who's going to buy your bond paying 6
percent--unless you sell it at a discount. In other words, if long-term
interest rates rise from 5 to 6 percent, that's an increase of 20 percent
which would have a corresponding drop in the value of bonds. To
summarize, as interest rates rise the bond market comes under extreme
pressure.

OBSERVATION #9: Bonds are the foundation for our house of cards.

Finally, the point I want to make is our entire monetary and financial
system is built on a foundation of debt. The world debt structure has
grown well in excess of $100 trillion, and that doesn't even include
derivatives.

All debt instruments have a maturity date in which they must either be
repaid or renewed. Literally trillions of dollars of debt instruments
mature each year and must be rolled over. As interest rates rise and bond
values decline this becomes more and more difficult. The foundation for
our gigantic house of cards begins to crumble. If not stopped immediately
the process will quickly veer out of control; thus, shutting down economic
growth, collapsing the stock market bubble, and triggering a panic
stampede out of all paper assets. Obviously, an UNACCEPTABLE CONCLUSION.

CONCLUSIONS:

Make no mistake; the unraveling process has already begun in earnest.
Inflationary fears have driven long-term rates above 6 percent and the
bond price index has dropped to the lowest level since Oct 97. Monetary
authorities are now faced with the challenge of restoring confidence
before it wrecks the whole system. Inflationary fears must be calmed
immediately! Anything that undermines confidence must be attacked, and it
must be attacked immediately and with a vengeance. That is the answer to
our initial questions and explains the propaganda blitz to calm Y2k fears
and depress gold prices. They both represent an immediate threat to
confidence and therefore had to be dealt with severely.

// Y2K A Threat To Bank Solvency //

As Jim Lord explains, banks have only $3 for every $250 on deposit. Cash
withdrawals in preparation for a possible Y2k meltdown pose an immediate
threat to bank solvency. So in typical bureaucratic fashion, the truth has
to be compromised to protect people from themselves. So, the lies and
cover-ups spew forth as the establishment media acts to convince people
that Y2k is no longer a threat. My advice--don't buy into it.

If anything, the problem is greater than most people think simply because,
regardless of the magnitude of the problem technically, Y2k is a very
sharp pin that will prick the veil of confidence that holds a fragile
banking system together.

// Gold Is A Threat to the Financial System //

While a bank run on cash threatens solvency in the banking system, gold
threatens the system itself. Remember, gold is the only "real money" that
historically has provided the backing for all legitimate currencies. It
was only in the last 75 years or so that international bankers, led by the
Rothschilds, infiltrated western governments to remove the gold backing to
all currencies.

Despite all attempts to eradicate gold as the monetary standard, gold is
and always will be the money of last resort. Whenever confidence waivers
people will stampede out of paper assets and seek the refuge of gold,
silver and other tangible assets.

// The War On Gold Accelerates //

Because gold tends to rise as monetary fears increase, the perpetrators of
this fraudulent system are very sensitive to the price of gold. They will
do whatever is necessary to artificially hold the price down. The larger
the credit system gets the more critical the problem, since it takes a
smaller and smaller fraction of flight to cripple the system and trigger a
panic.

For example, in today's world if just 1 percent of the money in the system
tried to run for the exits, it would translate into well over a trillion
dollars. Do you think there is a trillion dollars worth of gold anywhere
in the world to meet such a potential demand? Well, there isn't!

In fact, one man by the name of Warren Buffett purchased 20 percent of the
world's annual silver production with less than $1 billion, and drove the
price of silver from $4.60/oz to over $7/oz in the process. What would
happen if a $1000 billion...a trillion...tried to enter the tangible asset
market? I think you see their predicament. They must do whatever is
necessary to make sure gold never gains any upward momentum.

// The Gold Lease Time Bomb //

International bankers have been struggling for years to hold gold & silver

prices down and have created their own monster in the process. Years ago,
in the early 80's, the central banks initiated a program where they leased
gold to large institutions who in turn sold it into the open market to
raise capital.

Mining companies used this technique to sell forward future productions,
but the greatest abuse of this practice was by giant mutual funds that
would use the proceeds to invest in financial markets. Do you see the
problem? The sale of borrowed gold has suppressed gold prices
temporarily, but it has created a short position that eventually must be
repaid.

It is now estimated the short position may exceed 14 thousand tons – over
5 years annual production! This amount of gold is not available. I hope
you can see that the bankers must manipulate the price of gold in every
conceivable way to put off the day of reckoning. Any rise in gold prices
will trigger a massive short squeeze!

// Gold Auctions--an Act of Desperation //

You've no doubt heard of the threatened gold sales by the IMF and the Bank
of Switzerland ( possibly 1300 tons ) plus auctions by the Bank of England
( 415 tons ) . The last time this happened was Nov 78 when Jimmy Carter
announced gold auctions just prior to gold prices exploding to over
$870/oz. The threat of auctions was mostly hype then, and it's mostly hype
now. It didn't stop the panic then and it certainly won't stop it now.

[Editor Note: One house of the Swiss government recently voted NOT to
sell their central bank gold which reduced this concern temporarily.]

My Advice: Don't let the hype intimidate you. That's exactly what they
are trying to do. Continue to accumulate the position you need during
this lull while prices are low and metals are readily available. When the
monetary meltdown accelerates, prices will expand and supply will dry up
overnight.

// THE BIGGER PICTURE //

The international bankers who created the Ponzi scheme we call a monetary
system know better than you and I that it's about to collapse. In fact,
it's part of their long-term plan to force the world to accept a "World
Central Bank." As David Rockefeller said, "given the right crisis the
world will accept our New World Order." But the timing must be right.

Rising interest rates or a panic flight out of paper cannot be allowed to
be the perceived cause of the crisis. That would expose their fraud. I
believe the "right crisis" they need is Y2k. What a perfect cover for
their coup! After all, they can exclaim, "Every thing was wonderful until
the awful Y2k crisis came along."

// A FINAL THOUGHT //

The deeper you explore the coming crisis the more overwhelming it seems.
The natural tendency is to stick your head in the sand and pretend the
problem will go away. That's why so many people believe the propaganda.
It's the old "tickle my ears" syndrome. As good stewards we are called to
seek the truth and do our best to prepare for ourselves and for our
families."


Tomcat (7/2/99; 7:05:27MDT - Msg ID:8341)
SteveH

Thank for all your posts and links.

You said, "But what long term benefit is there by delaying if the problem is only being made more severe."

I beleive AG et al are delaying the bubble problem until they can transfer the blame to the Y2k storm which will occur in Oct/Nov/Dec 99.

SteveH (7/2/99; 5:55:09MDT - Msg ID:8340)
more
http://www.gold-eagle.com/editorials_99/taylor070199.html
Taylor -- "...And with 1% of Americans owning more than 50% of the stock market, the longer this binge lasts, the greater will be their power to dominate our political process."

The glass is half-empty.

SteveH (7/2/99; 5:47:40MDT - Msg ID:8339)
more
http://www.gold-eagle.com/gold_digest_99/inger070199.html
Inger -- "This Fed is not primarily trying to "prick" a stock market bubble, but constrain demand at a time that foreign and domestic pricing power is being gradually reestablished, which is their mandate. That interestingly; means the Fed will look at today's market response, and ponder another hike."

So perhaps the delay is to allow foreign markets time to recover thus making any downturn here in the US less troublesome. (the glass is half full)


SteveH (7/2/99; 5:30:12MDT - Msg ID:8338)
Good morging everyone. August gold now...
$264.30.

Regarding AEL's link:

"...Given the absolute global disaster that awaits us upon the unraveling of the "carry trades", the defense of the U.S. dollar is of the highest priority. REPEAT: THE DEFENSE OF THE U.S. DOLLAR IS OF THE HIGHEST PRIORITY! ALL trading decisions you make need to keep this point foremost in mind...."

My question is why? What is the benefit of doing this? If the hole is dug deeper and the fall to the bottom greater than why not let cycles cycle?

As an aside, I watched morning financial news on CNN today. In the first half-hour I saw nothing but robust enthusiasm for low unemployment, the DOW, the NASDAQ. I believe a Mr. Jones, an Economist, did say he was flabbergasted(sp?) that the Fed didn't raise the rate higher. He said the neutral bias and the small increase merely fueled the markets more as everyone knew that he should have done more.

From the AEL link you can see that any attempt to widen the gap in the LT Bond Yield and the S&P Yield shows that the inevitable is being forestalled, a higher rate hike would have increased this gap further. So it would seem saving some ammunition for later might fit it the plans.

But what long term benefit is there by delaying if the problem is only being made more severe. I just hope it isn't thought to be the difference if it happens now vs latter the difference between a meteor five-miles in diameter vs 20 miles in diameter as either would be devastating to say the least. So for the PTB (powers that be) to say, "So what is the point, we might as well stave it off as long as possible" can be understood in that context of severities. Let us just hope it isn't that bad.

I must say I don't like being in the glass is half empty camp all the time, but sometime you have just got to wince and scratch your head, eh?



Peter Asher (7/2/99; 1:30:45MDT - Msg ID:8337)
That's Armageddon of course.
I guess one could cut and paste from spellcheck into the subject box.

Peter Asher (7/2/99; 1:22:38MDT - Msg ID:8336)
Armstrong, Bear and Arageddon
I think the flaw in Martin Armstrong's reasonable sounding treatise on gold lies in this small excerpt.

>>The word "manipulation" implies that there is some
goal to be achieved. No one seems to have defined
that goal, ---- <<

Suppose we rewrite that to say: "The proof of manipulation would be in finding the goal to be achieved by it"

Nowhere in his essay does Mr. Armstrong address the short position in gold. Now in an earlier article of his, he stated: "For every short, there is a long. Likewise, in his post today, Technician said: "For every long there is a short". However, that is not my understanding of a "short sale." For every buy there is a sell of course, but a short sale only means that the Item sold was borrowed rather than owned. It does not mean that there is a long position out there for it to be closed against. Sure, the item must be obtained and delivered by the short seller, but he may or may not have to buy it, in the case of gold, he can mine it for instance. But Armstrong tried to make a case for there being an equilibrium between Longs And Shorts at all times. No, a short sale can be actually, long gone (pardon the pun). That seems to be the case with the CB gold. It's been borrowed and sold and securely stored by whoever bought it and may or may not be sold at some point in the future. The short seller must obtain SOME gold from somewhere, but the actual borrowed gold he sold is not plugged in to the equation!

So, there is one possibility for a goal to be achieved, and, there is also another. Tonight's article referred by AEL from "The Prudent Bear" made a very concise and believable case for the Titanic Currency Liner to be on a collision course with the Debt Iceberg. Now when that ship captain of the Titanic pulled the wheel hard over and called for full reverse, he probably knew in his bones that his ship was going to hit.

It is totally believable that the people of wealth who run the global economy are aware that the momentum and course of the present fiscal voyage has been full speed ahead in the fog of fiat money delusion. They may know "in their bones"that the "ship" will sink. Well, just what is the life-boat, and who gets on it? We know that when the value stored in paper currency sinks beneath the waves, that gold is left floating high and dry, and you can bet that the first class passengers will do everything they can to make sure that they are all in the life boats. There is a lot of tonnage of gold out there to be taken possession of. You've got to get the tourist and steerage class over to the other side of the boat to do it.

So there, in analogy form, is the other goal for manipulation. Get the price of gold down, get large quantities available and buy it up. As Tommy Bear says: >> If any weakness in stocks or anticipation of a slowdown in the U.S. economy begins to spook the currency markets, the U.S. dollar WILL ultimately fall, the carry trade bubble WILL ultimately pop, the domestic debt bubble WILL ultimately pop, and the bears on this board will finally get their day of reckoning. My prediction is that once this happens, it will be so bad that we'll wish it never did, regardless of how much it benefits us. <<

Those who have all the gold, however, may not share that wish!


Jason Hommel (7/2/99; 1:15:41MDT - Msg ID:8335)
It's just a matter of time before they arrest us all!!! 8-)
http://news.excite.com/news/r/990701/16/odd-internet
How dare we advocate gold, which is nothing less than a veiled attempt at promoting a bank run. Unless, of course, they persist in declaring that gold is not money... heh, heh...

This story found at Excite! under "Oddly Enough" category.

Man Arrested For Note On Internet
Updated 4:15 PM ET July 1, 1999

BOGOTA (Reuters) - A Colombian man was arrested Thursday in connection with an anonymous note on the Internet that sparked a limited run on deposits at a leading bank.

The arrest was thought to be the first ever in Colombia for something posted on the Internet, and comes amid growing concerns about parts of the country's ailing banking sector.

A statement from the state security police, known as the DAS, identified the suspect as Jose Omar Olaya Rivera, 24, and said he had been charged with sowing "financial panic."

The run on the Davivienda SA, a top mortgage bank, occurred on May 26 after a message posted anonymously on the Internet said it was about to be taken over by government regulators.

It was not immediately clear if Rivera was accused of authoring the original note, which the DAS said had been traced to the United States.

But the police agency said he posted a second note on May 28, apparently from his home in the Pacific coast city of Buenaventura, claiming responsibility for the original message and threatening similar acts in the future.

"The people are sick and tired of high interest rates," the second note said in part.

About $3 million more than usual was withdrawn from Davivienda on May 27. Total withdrawals amounted to between $17.5 million and $20 million, about the level seen daily during the Christmas season.
-----------------

My comment:

Here they arrest a man because he caused $3 million in withdrawls? First of all, since when is it illegal to take money out of a bank???? Secondly, they don't even know how much was taken out that day, it varied by their own report by $2.5 million!!! So how can they charge a man of causing $3 million in withdrawls????

Jason Hommel (7/2/99; 0:35:14MDT - Msg ID:8334)
God and Money
http://www.jasonhommel.com
About two years ago, I began studying about God and Money. These two subjects are among the most difficult to understand on earth, except, perhaps, for human behavior.

People, although not very rational, can be predicted to certain degrees, and sometimes we can be influenced with frightening ease. No, I'm not saying I'm good at influencing people--not like the media anyway. Movies, TV, Newspapers all gear people's thinking in so many distracting ways. Even my University of Colorado at Boulder education was a complete pro-government socalistic propaganda-trip!

When I began, I did not at first realize how much my personal studies of God and Money would overlap and explain each other, and be so antagonistic towards the establishment's views. The subjects of truth, contracts, law, nations, and taxes all flow with ease from both topics. So too, do gold, history, power, welfare, statists, and more.

I mention this all here in the beginning because I do not think I can talk about money without mentioning God.

After much geological studies on the Flood and Creation, I came to believe the Bible as the word of God, and I take it for it's literal, common meaning. From reading the gold forums, reading the news reports, and doing the simple math, I also believe that there is a world conspiracy to depress the price of Gold through shorting/leasing/oil trading. I also believe from the stated plans of media figures and world leaders, that we are heading quickly to world government. "Thousand points of light" "Nationalism is dying" "Global Economy" "New World Order" "too many international organizations to count", etc. The Bible seems as if it predicts both world government, and a depressed gold price in the last days.

The point of this essay is not to prove these assertions, I believe they are self evident to all who have time to study the issues. I merely present them to let you know my bias and perspective.

Gold bugs should have a lot in common with Biblical literalists; both are seekers of truth and honesty, and thus, see and reject governments as a source of salvation because of the excesses of fraud, waste, sloth, and tyranny. Truth and honesty are moral values that are eternal and self evident, yet, unfortunately, so unpopular. I think this is one of the reasons why I am drawn to reading the gold forums; the people here love truth and honesty, and it does my soul good to see it.

Although there are many reasons why a return to a 100% gold-based money system would be better for everyone, there are other reasons to hold gold--more than I will list here; such as obeying Biblical commands to not lend for the sake of an increase, staying away from fraud, & having honest weights and measures.

I believe the world is going to go through major upheavals with y2k, with a total collapse of our way of life as we know it, and a world government is soon to follow on the heels of chaos. This will not be the reign of Christ nor any sort of Golden Age, but rather, it will be the time of the AntiChrist.

Christ gives the last church in the beginning of Revelation (3:18) one final piece of advice before all the bad things begin to happen in the Great Tribulation that follows: "Buy of me gold tried in the fire that thou may be rich..."

This advice and a warning.

Who writes the calls? Who makes it possible to buy an option? At the time you buy a call or option, the seller DOES NOT HAVE the actual physical commodity to deliver! Options don't cut it in a short squeeze. You need actual physical delivery. What is going to happen to the market when there are more people scrambling to get gold than there IS gold? Calls will go UNCOVERED. Orders UNFULFILLED. Bankruptcies. Broken Contracts. The decline and default of Big Banks, the United States government, and more.

That's what Alan Greenspan, is trying to prevent. And if the big banks default, and government collapses, what makes you think a tiny investor's contractural claim on an order of gold in the future will be honored?

Gold options are completely worthless in this market of manipulators. Do you think they will hand over their wealth to you as they bankrupt themselves?

No! In the coming wave of bankruptcies, those comitments will not be honored. The very definition of bankruptcy is the default of monetary contracts. Yes, the shorts will default to the banks, and the banks will default to you if you are holding calls and options.

And let's be optimistic, and assume you can receive a payment "settlement" in this weird thing called "cash." Do you know how many steps it takes before you can actually get a hold of your cash in case you want to use it in a time of financial crisis? First, you punch out your option, if you can. Then, you either go down to your brokerage house to get a check, which they may decide to delay for a day or two or even a week in a crisis. Then, you go down to a bank to cash the check in, and sometimes they put a "hold" on your money for up to three weeks... Wait, aren't these the very same institutions who will be bankrupt from a wild bull market in gold? And you should hope that if you are waiting three weeks to see your money that inflation is not running 1000% a day or worse as it has in the past when other fiat money systems were collapsing.

The failure of LTCM threatened the entire system!

Merryl Lynch recommends a "hold" on DROOY-- a tiny outfit holding gold options. It's one more way they can fleece you one last time before the big bang. Also, it's a way they can siphon off dollars from those who would otherwise truly be long in Gold. It's no big sudden news to get excited over, they've had the recommendation since January.

Let me quote from the Protocols of the Elders of Zion;

"At the same time we must intensively patronise trade and industry, but, first and foremost, speculation, the part played by which is to provide a counterpoise to industry: the absence of speculative industry will multiply capital in private hands and will serve to restore agriculture by freeing the land from indebtedness to the land banks. What we want is that industry should drain off from the land both labour and capital and by means of speculation transfer into our hands all the money of the world, and thereby throw all the goyim into the ranks of the proletariat. Then the goyim will bow down before us, if for no other reason but to get the right to exist."

The only way to be long in Gold is to actually take physical posession of the stuff, and not let go no matter how low the price falls. After all, why should you care if the price falls if you are only investing extra money, and you actually have the physical stuff? Calls and options unexercised because of market manipulation and a depressed gold price... you have just been robbed. Calls and options exercised after a bull market in gold that bankrupts the big boys? Good luck! You have absolutely nothing when they manipulate the market against you and you are in options; whether the market drops slightly or swings violently upwards. But when you have the real metal, they can manipulate the market all they like, and all your gold is still in your hands, unchanged.

IN FACT, THE ULTIMATE GOAL OF ALL FIAT MONEY SYSTEMS, AND ALL TAXATION SCHEMES, AND ALL INVESTMENT PLANS, IS NOTHING LESS THAN TO PHYSICALLY REMOVE THE ACTUAL PHYSICAL GOLD FROM THE HANDS OF THE PEOPLE. THE ONLY WAY TO FIGHT FIAT MONEY, IS TO TAKE POSESSION OF GOLD AND SILVER PERSONALLY.

And when the pay day comes in for the yellow metal, it'll go to those who heeded the words, "buy gold tried in the fire" that is, the stuff that lasts, not the paper, not the electronic promises to pay.

There is an incredibly large option position in Gold in December '99 at around $400, but I have not read much about it since I first heard about thist on Gary North's website. I think it's supposed to be over ten times as much as normal or something.

If gold moves up in a crazy way, there's no way option contracts will be honored. Just my opinion, backed by my study of world events, my understanding of bankruptcy law, the stated intent of the authors of the "protocols", and my interpretation of Scripture.

OK, I know many people on this forum have lost money in gold options before, it's hard not to have done so in the last 20 years. But that is no excuse to try to use options to regain what was lost in the past. Don't throw good money after bad. Stop playing the shell game that's rigged against you. You'd be better of going to Vegas!

Now, here's where I begin to speculate a bit more.

If the Rapture happens this fall and/or winter, and y2k chaos hits extremely hard as I think it will, national governments will either collapse or start martial law.

After a monetary collapse, and actual physical metal is determined to have all the value in the world, maybe being valued up to 100 times it's current value, posessors of silver and/or gold will have a sudden newfound wealth. Unfortunately, any government that still exists, or any government to come will have an incredible interest in those metals, and their goal will be, as always, to get the gold.

Either they rob, kill, or imprision you. After all, the last time gold was this cheap, it was illegal to own it, both domestically, and internationally from the U.S. point of view. That's right, using inflation adjusted dollars, it was 1972 that last time gold was valued this low, not 1979.

The world government that rises from the chaos is not going to have a friendly gold standard. Well, they might have a gold standard at first, but it won't be friendly to the seekers of truth. The AntiChrist to come will control the gold, and he will cause all, both rich and poor, to accept his new money system, a mark in the right hand or forehead, without which no one can buy or sell. (Rev. 13)

Perhaps at that time those who have hoarded up wealth for the last days will cast their gold and silver in the streets because it will be worthless.

[Ezek 7:19] "They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity."

Or perhaps, people will do this to save their lives because if they are caught with the precious metals it might spell a death sentence. Or perhaps this will be God's method to proclaim one last final worldwide declaration of the truth for the whole world to see what they are choosing, the rejection of all things honest and true, gold and silver, and the acceptance of the ultmate evil; voluntary enslavement to the master of fiat money instead of being a slave to God.

My conclusion? Friends, buy gold and silver--the actual physical metals with your excess investment dollars--those you have left over after you have fully prepared for both y2k and/or three and a half to seven years of tribulation. (Food preparations are not expensive--a year's supply of wheat or pasta costs a mere$250.) Perhaps holding the actual physical metals will bring great riches to those who hold them, and perhaps holding gold and silver coin will enable you to testify against the world when the time comes, but the riches will be temporary, like all earthly things. And so, do not put your ultimate faith in anything other than God if you value the truth that honest money of gold and silver represent. And when you invest what you don't need, think carefully about your investment choice. Sometimes there are people who have not yet met their basic food needs, and it's good to know that an alternative place to store your wealth, where neither moth nor rust consume, and where theives do not break in and steal, is in heaven.



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Wednesday February 8
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