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ARCHIVED DISCUSSION FROM 7/2/2000
All times are U.S. Mountain Time
(Yesterday's Discussion.)
SHIFTY
(07/02/00; 22:55:33MT - usagold.com msg#: 33112)
test
:)
Canuck
(07/02/00; 19:45:58MT - usagold.com msg#: 33111)
From Gata (see msg 33102); who is the young "dynamo"?
Our "dynamo" host believes that certain currencies
are being manipulated to facilitate gold producer
hedging and that certain officials are encouraging
the manipulation of the gold market so the dollar
does not have competition from other reserve
currencies. That may not sound all that dramatic to
you, but this will be: Our host already owns tonnes
of gold (that is tonnes, not ounces) and is thinking
of taking delivery on $100 million to $120 million
of gold in the near future.
----------------------------------------------------
Light the match, dude, light the match.
Monsieur FOA may have clues on his return, yes?
ET
(07/02/00; 19:10:04MT - usagold.com msg#: 33110)
Lew Rockwell
http://www.lewrockwell.com/rockwell/lonestar.html
Lone Star of Liberty
by Llewellyn H. Rockwell, Jr.
Party platforms are usually better and more politically principled
than the candidates who run on them. Written as they are by
rank-and-file activists, they put the heart and soul of the party on
display, even when neither the officeholder nor the governing
coalition lives up to the promise. Rarely has a platform in our
times been as good as the Republican one from George W.?s own
home state of Texas; indeed it?s so good, it?s got all the right
people mighty upset.
What?s especially interesting about this document is that it
indicates what? s on the mind of GOP activists in the state from
which the GOP presidential nominee hails. But unlike the
candidate, these folks are not interested in putting a conservative spin on the
Clinton-Gore ideological muddle. They are demanding a complete break with the
politics of the last decade.
The smarmy "third way" politics of our time is supplanted by full-throated,
Texas-style independence and radicalism that rejects statism and collectivism across
the board. Sure enough, Bob Herbert, writing in the New York Times, considers it to
be evidence of the "zany extremism of the Republican Party in Mr. Bush?s home
state." Well, most Texans would consider some of the goings on in New York a little
zany too.
As for Herbert, he would say the same (and probably has!) about Jefferson, Paine,
Henry, Adams, and the whole of the Southern political tradition in America. He
probably doesn?t care much for the Texas penchant for resenting attempts at outside
control. The platform only appears non-mainstream by today?s standards; by the
standards of American history and current anti-government opinion in major parts
of the country and the world, this document is right on the money.
The preamble begins with a sweeping defense of freedom and counterposes it with
government?s continuing attack on liberty. This is the single greatest insight one can
have about the current political situation. Freedom doesn?t mean having the
Herbertian right to other people?s money and property; it means the right to be left
alone to manage your affairs the way you see fit. Yet this one point eludes 9 out of 10
commentators on politics who either don?t understand it, or favor the wrong side in
the battle.
Lefties are quick to jump on Republicans who praise freedom and then demand that
government step in to shape society in ways to their liking. But the Lone Star GOP is
more sophisticated: "No government on earth can replace the nurturing love found
in families, churches, and communities. The more that government intervenes in
personal relationships, the more those relationships will be diminished, not
strengthened. This is why the more government spends ?trying to solve? poverty,
education, and the decline of the family, the more the problems grow."
The preamble admits that some people find freedom to be a burden. To them it
warns that government is never a solution. "They will sacrifice their future on the
altar of the government?s false promises-guaranteed education, guaranteed jobs,
guaranteed security. No government in history has kept those guarantees. Where has
communism or socialism worked?" This is the rhetoric of truth-telling, and not the
kind of thing you see in the mainstream press, or even the conservative press.
The platform proceeds with a distinction that eludes even many libertarians:
the importance of localized political decision-making as compared with
centralization. "Not only does the Republican Party of Texas proclaim the freedom
of the individual citizen from the general power of government, it also proclaims the
state?s proper freedom from federal control." At last, some clarity about states?
rights, which, in the American political context, always refers to the right to be free.
Even better are the named implications of this right: no census powers for the feds
other than those in the Constitution (counting heads); the elimination of executive
orders; an end to the "gathering, accumulation, and dissemination of finger prints,
Social Security numbers, financial and personal information" by government; no
more federal emergency powers; no more federal land use controls; no more taking
of private property by the feds.
Imagine the degree to which this agenda would gut the central government as we
know it. It would matter less who held the office of the presidency. Even if we
someday ended up with another Clinton, he would be denied the power to wreck the
country with the stroke of the pen - a power which Clinton has, and Congress has
failed to take away from him. Isn?t rule by good law rather than rule by men
(whether good or bad) what we should be seeking?
As we might expect from Texas, where guns are commonplace, the platform is
squarely against all gun control: "The Party calls upon the US Congress to repeal any
and all laws that infringe on the right of citizens to keep and bear arms; to reject the
establishment of any mechanism or process to record, register, or monitor the
ownership of firearms; to reject the imposition of excessive taxation or regulation on
the manufacture or sale of firearms and ammunition."
As for social issues, remember how the left is always trying to paint the right as
secretly theocratic? In truth, the threat runs the other way: the government has
come to believe that it is a god, and it has been trying to crush the freedom of religion
by erecting a secular theocracy. The platform seems to understand this, asserting
that "all Americans have the right to practice their religious faith free of
persecution, intimidation, and violence."
On environmentalism, the platform is rock solid. "We reaffirm the belief in the
fundamental constitutional concept of an individual?s right to own and use property
without governmental interference." Consistently applied, this provision would gut
the invasive and expensive eco-regulations which have locked up land and crushed
new technologies that would enhance our standard of living.
The Texas GOP comes out against the Department of Education, all interference in
the right to educate at home, the phony-baloney classification of traditional
discipline as child abuse, the federal imposition of sensitivity training in colleges and
universities, all affirmative action and quotas, the minimum wage, all privileges for
labor unions, and even government-owned infrastructure.
The platform is further against the Kyoto Treaty, "sustainable development," the
Endangered Species Act as a land-use control regulation, the Biodiversity Treaty, all
inheritance taxes, and the Clinton administration?s "move toward the socialistic
redistribution of our national wealth."
Left-liberal commentators have been whipping themselves up into a frenzy about
isolationism on the right, by which they mean opposition to American imperialism.
Well, the Texas GOP is exhibit A in how dramatic the turnaround from Cold War
internationalism to the new right-wing "mind-your-own-business" foreign policy
truly is. Hence, the platform demands a pullout from the United Nations, an end to
funding the IMF, the repeal of Nafta, and withdrawal from the World Trade
Organization. These are interesting positions. They suggest that the Lone Star GOP
should reevaluate its own leadership, which supported all these programs.
Bob Herbert was particularly upset that the platform calls for the abolition of the
Federal Reserve System and the restoration of the gold standard. Zany extremism?
Not at all. Paper money is big government?s credit card. The gold standard has the
advantage of ending inflation, ending business cycles, and restraining the growth of
the public debt and debt-financed government in general. It would also make sure
that an unelected banker like Alan Greenspan would no longer have the main power
over the economy; as even he once wrote, the gold standard and freedom go together.
A platform that says something like this isn?t extremist or wacky, as Herbert claims,
though it surely shocks the sensibilities of New York Times editorial writers. Its
sentiments represent a radical departure from the present command-and-control
system of Clintonized government. That is an agenda widely desired within the GOP,
and also among independents who don?t trust the GOP to carry out the program.
Devolution from central government and a restoration of liberty and property is
exactly what is called for in a post-socialist age. The desire for such radical change
isn?t limited to a fringe; it is the dominant opinion in one of the largest state party
organizations in the country. Why must the nation ?s press continue to report on
rank-and-file GOP opinions as if they are reporting on life on Mars?
In fact, if the platform has a problem, it is not its extremism but its periodic and
wholly unnecessary nod to conventional opinion. It permits funding for Nasa
(located in Texas), some protectionism (when domestic industries are outcompeted),
and the Americans With Disabilities Act (no coincidence, passed by the Bush
administration), and whips up hysteria against China.
Also, the platform endorses the Pledge of Allegiance in public schools, as if any child
should be made to swear allegiance to the central state in these times. This platform
certainly doesn?t, and that?s what?s good about it. Its significance is that it serves to
remind us that the opinions and taboos erected by our political leaders and the
mainstream press have little to do with the opinions of millions and millions of real
people, who, after all, have a history and a future, and are voters too.
June 30, 2000
Llewellyn H. Rockwell, Jr., is president of the Ludwig von Mises Institute in Auburn, Alabama. He also edits
a daily news site, LewRockwell.com.
Leland
(07/02/00; 17:27:04MT - usagold.com msg#: 33109)
The High Price at the Pumps is Hitting Overseas, Too
July 1, 2000, 12:42AM
Gas prices have Europeans fuming
By BRUCE STANLEY
LONDON -- Although gasoline prices traditionally are higher on this side of the Atlantic, typically
submissive European consumers are clamoring for relief from worsening pain at the pump.
From Britain to Hungary to Finland, the outrage at rising gas prices sounds almost, well, American in its
intensity.
"Prices are outrageous," seethed Budapest book publisher Tamas Bekes.
"It's madness," said Valerie Khoury, a housewife in suburban Paris.
European motorists are long accustomed to paying as much as four times what Americans shell out for
a tankful of gas, because of fuel taxes that can add a staggering 80 percent to the retail gas price in the
region. Nonetheless, they have become more dependent on their cars, for pleasure as much as for
work.
"The car for Italians is a habit, a tradition, like spaghetti," said Italian taxi driver Michele Di Russo at a
filling station in central Rome. "Gas prices will not affect its usage. The car is entertainment."
As in the United States, where prices have soared in some areas to more than $2 a gallon, recent
increases in the price of crude oil used to make gasoline are sending prices up. The cost of unleaded
gas has risen by 16 percent in France, 14 percent in Italy and 11 percent in Belgium over the past year.
There are few signs that resentment at the increases is ferocious enough to boil over into a consumer
rebellion.
"People have been bludgeoned by one successive rise after another. We're so used to them, we've
become desensitized," said Michael Johnson, spokesman for the Automobile Association of Britain.
According to Johnson's organization, the average price in June for a gallon of unleaded gasoline in
Britain was $4.94, more than twice what Britons paid a decade ago.
Norway is the only European nation with costlier gas, at $5 a gallon, the AA said. France is the next
most expensive, at $4.23, followed by Italy, Germany, Portugal, Austria and Spain.
The difference from one country to the next is mostly because of government taxes, which in Britain
and France account for more than 80 percent of the price of gas. Finland had the next highest fuel tax,
at 78 percent, followed by Belgium and Poland at 75 percent each, the AA said.
This tax bite has left some motorists feeling passive and powerless.
"We can't really do anything about it. It's in the hands of the government," said office worker Norah
Lydon, who spoke as she filled her tank in the London suburb of Edgware.
An average 27 cents of every dollar that Americans spend at the pump goes toward taxes. Thus the
tripling in world oil prices since December 1998 has caused gasoline prices to spike more dramatically
in the United States than in Europe.
"It's just not the big deal here that it is in the U.S. because the price is masked by tax," said Jeremy
Elden, an oil and gas industry analyst at Lehman Bros. in London.
Klaus Rehaag of the Paris-based International Energy Association argued that the U.S.-style car
culture is not as strong in Europe, where large cities have good public transportation and are linked by
dense rail networks.
But discontent over gas prices appears widespread and rising.
"Prices are just ridiculous," said Risto Hyvonen of Helsinki, Finland. "I don't drive any less now. But
whereas before I used to tank up at any old gas station, now I look for special offers."
The Finance Ministry in neighboring Sweden has received 80,000 letters in the past few months alone
protesting its 70-plus percent tax on gasoline, ministry spokesman Haakan Boberg said.
Public pressure already has proven effective in Austria. Last month, the Austrian state-owned oil
company agreed to trim 2.5 cents off each gallon of unleaded gas after automobile clubs and labor
groups complained that the country's prices were among the highest in Europe.
In Germany, costlier gas is forcing up prices for taxi rides, pizza deliveries and even emergency visits
from locksmiths.
Some Europeans are economizing by planning errand trips more carefully and taking buses or subways
where convenient.
But Czech businessman Martin Kukas spoke for many in the region when he acknowledged his
automobile dependency.
"Even if the price goes up further, there's nothing I can do," he said at a busy intersection in downtown
Prague. "I just need to use the car."
(Thanks To The ASSOCIATED PRESS, And Fair Use For Educational/Research Purposes Only.)
Leigh
(07/02/00; 15:21:52MT - usagold.com msg#: 33108)
JavaMan, Strad Master, HI-HAT
Thank you for your answers! I was wondering if GS is about to begin a campaign to make paper gold the coolest new investment in town. Can't you just see them next week on CNBC, talking about how the public is beginning to fear inflation (unnecessarily, of course!) and how holding paper gold will diversify an investor's portfolio and protect against volatility.
The investing public will line up to buy paper gold, and Goldman Sachs conveniently will be right there with an unlimited supply.
You see, I've been racking my brain trying to figure out who is buying these things nowadays. I know some very wealthy people who look askance at the mention of gold (no, they're not bluffing). The middle-class investors that I know are still hanging in with the stock market. It would take a major, brilliantly designed PR campaign to bring investors back to gold - but to paper gold and not bullion.
HI - HAT
(07/02/00; 14:58:19MT - usagold.com msg#: 33107)
Leigh..........msg..33098__________Goldman Gold
Is It A Real Snake ? OR Just A Piece Of Rope ?
Hello to you. I find it extremely unlikely that a Goldman partner would make a statement like that, at this stage of the game, unless there is a BIG motive for doing so.
If anything I think the real truth when the paper gold game goes TOCOM, is Goldman will be in the "Position",to "GUT" the other players.
One must always remember that they are one of the Mother snakes of the Federal Reserve System.
Treacherous Vipers of whom if you ever hear public statements of them "talking their BOOK", expect the complete opposite of what they say they are going to do.
Leland
(07/02/00; 14:54:15MT - usagold.com msg#: 33106)
@Strad Master
You may be entirely correct about the commodity brokers,
and I've often wondered if the lack of transparency in
the gold market is "churning", where one arm of the same
company is selling to another "arm" in order to control
prices. I keep hoping Billy Murphy will help us all
unravel the confusion.
Strad Master
(07/02/00; 14:13:59MT - usagold.com msg#: 33105)
Leigh
Speculative answer to your question.
I really don't know too much about all the inner workings of big commodity houses like Goldman Sachs, but it seems to me that since the entire Gold market is relatively thin and since most long-side speculators (especially in the paper markets) are extremely skittish, GS wouldn't have to put out too much paper to tank the price - at least that is the hope they are betting with. I may be all wrong so don't take this as anything other than a guess.
JavaMan
(07/02/00; 13:42:33MT - usagold.com msg#: 33104)
(No Subject)
http://www.nationalreview.com/dissent/dissent061300.html
While browsing mises.org for answers to "the six questions", I stumbled upon this article:
We've Got Inflation Now. The Fed's real problem.
By Gene Callahan, contributor to the Ludwig von Mises Institute
"But a rise in the price of one commodity cannot "generate" inflation. If the price of oil rises without an increase in the money supply, the only possible results are a shift of spending from other goods to oil, or a decrease in the amount of oil used. After all, without more money available, how could consumers spend more than they previously did on oil and at least as much as they previously did on everything else?"
Click on the link above for the rest of the article.
John Doe
(07/02/00; 13:36:07MT - usagold.com msg#: 33103)
Who's buying the paper gold
Leigh
"Goldman Sachs seems confident that it can sell unlimited amounts of their worthless paper, but to whom?"
Although some of the "gold paper" leaks out to a few unsuspecting parties (and fewer all the time), I believe Goldman Sachs and its accomplices have the size and are perfectly able to create and maintain this sort of market all by themselves.
Their real challenge is to off-load the exposure of their past "interventions" onto another entity, preferably to some government taxpayers, the general investing public, their stockholders, or to a competitor.
Chris Powell
(07/02/00; 12:48:24MT - usagold.com msg#: 33102)
Report on the FT conference: The emperor has no gold
http://www.egroups.com/message/gata/501?
By GATA Chairman Bill Murphy.
To subscribe to GATA's dispatches by email
and get them immediately so you don't have
to go look for them, send an email to:
gata-subscribe@eGroups.com
ET
(07/02/00; 12:23:57MT - usagold.com msg#: 33101)
Sean Corrigan
http://www.lewrockwell.com/orig/corrigan7.html
From Lew Rockwell's site:
"The Bubble to date has run on the usual weary themes of our forefathers
- an overabundance of cheap credit, usually combined with innovations
in monetizing it, mass participation, often aided by advances in
communications, and the promise of boundless wealth based on the
fruits of Man's own natural genius.
"To see the Bubble end, we need to see at least two - and possibly all three
- of these factors fade out or reverse."
Journeyman
(07/02/00; 11:34:48MT - usagold.com msg#: 33100)
What did Charles DeGaulle mean by "extravagant privilege?
http://www.usagold.com/gildedopinion/bigfloat.html
Questiion 2: What did Charles DeGaulle mean by "extravagant
privilege? What's another little-used word for it? What would
happen if "the privilege" were exercized world-wide?
Sierra Madre, your answer looks good to me! And here's what von Mises had to say, theoretically, and long before DeGualle spoke of "it" as an "extravagant privilige":
Let us assume that the international authority
[or, say, the Federal Reserve -j. ] increases the
amount of its issuance by a definite sum [of credit
money or paper/megabyte money -j. ], all of which goes
to one country, Ruritania [no, America -j. ]. The final
result of this inflationary action will be a rise in
prices of commodities and services all over the world.
but while this process is going on, the conditions of
the citizens of various countries are affected in a
different way. The Ruritanians [no, Americans] are the
first group blessed by the additional manna. They have
more money in their pockets while the rest of the
world's inhabitants have not yet got a share of the new
money. They can bid higher prices, while the others
cannot. Therefore the Ruritanians [no, Americans]
withdraw more goods from the world market than they did
before. The non-Ruritanians are forced to restrict
their consumption because they cannot compete with the
higher prices paid by the Ruritanians. While the
process of adjusting prices to the altered money
relation is still in progress, the Ruritanians are in
an advantageous position against the non-Ruritanians.
When the process finally comes to an end, the
Ruritanians have been enriched at the expense of the
non-Ruritanians.
-Ludwig von Mises, Human Action A Treatise on Economics, Third
Revised Edition (Chicago, Illinois: Contemporary Books, Inc.
1966), pg. 477 [XVII. INDIRECT EXCHANGE 19. The Gold Standard
-available also from http://www.mises.org/humanaction.asp]
What Charles DeGualle meant by "extravagant privilege" was the
"privilege" of printing paper currency that is used in countries
other than the one in which it is printed. As a matter of fact,
it is also an extravagant privilige within the country where it
is printed.
This Mises quote should sound familiar to regular readers of this
forum. Because the Federal Reserve has been "expanding credit,"
sending "dollars" overseas in various forms, Americans are
somewhat in the position of the Ruritanians; we've been enriched
at the expense of the non-Americans.
The other darker side of the coin, however, is the evolution of
"Big Float." (If you don't already understand "Big Float" see
the link in the header.)
The other name for the extravagant privilege? Seigniorage.
Regards,
Journeyman
In case you tuned in late, this post is Mises "answer" to
question 2. of the following six posed in an earlier post:
1. Why has the word "inflation" become confusing? What are the
results of this confusion?
2. What did Charles DeGaulle mean by "extravagant privilege?
What's another little-used word for it? What would happen if
"the privilege" were exercized world-wide?
3. Did markets and the people choose paper money over gold? If
not, who did?
4. Does government/Federal Reserve monetary control serve the
common good?
5. Is there enough gold for the world to go back on the gold
standard?
6. Is gold too expensive to be efficient for use as money?
Leland
(07/02/00; 11:01:33MT - usagold.com msg#: 33099)
Goes Public in 1998...Smashing Success...Then Smashes on June 2l
http://www.sunspot.net/content/archive/story?section=archive&pagename=story&storyid=1150350216136
I'm reading more and more about "hot" stocks going down the
tube, like the one above.
The market bubble is getting popped by too many of these
hot companies now going into bankruptcy.
More conservative investments, like gold, should soon become
beneficiaries.
Michael, I'm thinking about ordering some more gold coins.
(And, my wishes to you for a very pleasant Independence Day
weekend!)
Leigh
(07/02/00; 10:28:34MT - usagold.com msg#: 33098)
Who's Buying All That Paper Gold
http://www.lemetropolecafe.com
This is a quote from today's long and VERY interesting Midas: "Jim Reilly, a Partner at Goldman Sachs and top commodity dog, told a delegate at the FT World Gold Conference that if buyers come in to push up the price of gold to $310 or $320, Goldman Sachs would offer unlimited amounts of gold paper to keep the price from going beyond that point."
OK. Now -- Aristotle, I WILL NOT continue to pester you, so I am throwing this question out to whoever wishes to answer. Who is buying all that paper gold? The middle class scorns gold in any form. Politicians and billionaires are buying physical gold. Goldman Sachs seems confident that it can sell unlimited amounts of their worthless paper, but to whom?
Thank you to anyone who is willing to answer!
Mr Gresham
(7/2/2000; 8:38:16MT - usagold.com msg#: 33097)
Aristotle #33086 -- Oro's numbers
You critique Oro's use of some fairly specific numbers:
(---You continued your point with the comments--"The profits of trade are placed in rarities and gold. Like all profit motive operations (the only motive) the 100% of the enterprise exists because of the expected 15%-20% gross margin, the gross margin is only important because it provides the profit which can be invested or stored. Investments earn a return, gold is what is returned and not reinvested. Traditionally, a 3% net profit is all that is necessary, thus 97% of trade can be done without gold, but the only justification for the 97% is the 3% that will be put into gold.")
I want to speak up for Oro's doing this on several occasions (international debt trap, USD seignorage, etc.) because he helps me put some concrete dimensions to some concepts which until then were largely anecdotal. I think that way, too, and will extrapolate personal numbers from macro situations to frame my thinking, but not to run my business by.
("Hmmm, 40% tax rate plus 8% inflation plus 20% for missing time with my kid and 20% for tiring me out, and finally 20% for my wife's spending the additional: Think I'll go fishing Saturday instead of to the office.") (This facetious example is NOT comparable in seriousness to Oro's efforts. Since I'm in the tax business, I see all the ways that money taxes us, and ask "Where's my take-home?")
What I'm trying to say is I don't take Oro's analysis completely literally ("numerically"?) when he does this. It's beyond "back of the envelope" but it's meant to illustrate and further a discussion, not to present predictive statistics.
In the case of the 3% figure for gold, he gets me thinking about the wealth that passes through generations, mediated by the rise and fall of families, of corporate empires, and has to be re-earned in new lives and new ventures. It is both the insurance against old age and family upheaval, and one fruit of enterprise (which may have ripened alongside many other fruits if we look astutely).
3% also sets a realistic long-term expectation of accumulation in an era when polls reveal that our neighbors and co-workers expect upwards of 25% annual gains on their "savings". Sheeesh!
Two fine minds meeting -- just trying to grease the interface!
Mr Gresham
(7/2/2000; 8:12:28MT - usagold.com msg#: 33096)
Aristotle #33086 -- A thought
The difference between gold and fiat's seems to be the eternal tension between Man's successes and Nature's endurance.
My wife and I just had a semi-argument about our recent spending of "too much time" (read: two extra days of my relaxing from driving in Italian traffic) in the lush green Tuscany countryside ("nothing for me to do there") vs. in the cities. "Exactly my preference," say I, remembering the pheasant calls I had learned to recognize.
I had that time to imagine the Roman legions passing through those valleys on their way to maintain the Empire. The city that passed into history is obliterated by another on its site. The countryside remains a much closer replica of itself of 2000 years ago.
The 14 towers of San Gigminiano (survivors of 90 towers at one time) -- built and manned by (90?) warring families just down the street from one another.
Man can cook up some amazing constructs. The power of illusion. The power of agreement. Fiat currency, like gold, is NOT really anyone's liability. But it exists and carries value by mutual agreement and expectation. This could change at ANY moment -- but probably will not vanish overnight. So the only question is when and how. Once we have prepared our golden refuge, we may join others as curious observers to our own species' glorious folly.
Do gold advocates want to strip away all their illusions? All their flawed and self-deceiving agreements? We couldn't if we wanted to. They will do it to themselves, in time. Just not when we think they ought.
Nature created gold, just as it created Man's genetic code, and occasionally Man has to acknowledge Nature's work as more enduring than his own. But "not just yet, please... let us roll the dice/pull the handle/deal the cards just one more time..."
Canuck
(7/2/2000; 7:18:04MT - usagold.com msg#: 33095)
@ Stranger
Thanks for the link re: Inflation (Prudentbear).
I have been very conscious of the price of 'eggs' while shopping of late and its difficult to find anything that has not increased in cost.
I still get a little lost following the 'paper' aspects of gold (shorts,futures,derivatives, etc) but there is a couple
things I do know for sure.
a) The POO chart from your link (msg 33071) is interesting.
A rough average from 1987-1999, excluding the Gulf War spike
has oil in the $17-$19 range. Oil for 2000 must be averaging
close to $30; global demand dictates this price. The global
economies are firing on all cylinders. As you might say, too
much global money chasing too little oil. So, when does oil
come back down. When economies collapse and not before; barring a left field event, ie. OPEC decides to lower the POO because they feel sorry for us? Right.
b) The company I work for sells hardware. Every office I walk into has a new P3 on each desk, connected to a zillion
gig server. The office has a new phone system, voicemail system, fax, photocopier, cells. etc,etc. All these machines are running on the latest and greatest software. Why? All these systems and sub-systems were upgraded last year (Y2K) and with the money sloshing around last year, it was easy. Second quarter earnings and growth numbers from the hardware/software giants might be interesting.
c) Gold is not far above production cost. Lower POG will bankrupt marginal producers reducing supply rallying gold.
Lower POG stops exploration reducing future supply rallying gold. IMHO, gold less than $225-250 is impossible. Can one buy anything lower than the price to produce it?
The 'crazy canucks' celebrated Canada Day yesterday (133 years young); suffering from some sort of cerebral disorder
today manifested by lingering too long in a tent where the serve a frothy liquid causing one to sing the National Anthem severely off key.
Hope our American friends have a safe and mildly rowdy July 4th.
Canuck.
tedw
(7/2/2000; 5:34:39MT - usagold.com msg#: 33094)
US vs. Emerson
http://www.usagold.com
To Steve H and all patriots everywhere:
The officical position of the US Justice Department is that
the individual US Citizen has absolutely no second amendment rights under the Constitution. It is a right only of the national guard. They are arguing this in court.
Check it out at www.frontpagemag.com
In keeping with the spirit of this position, I hereby dub
the Department of Justice, the Department of Injustice.
Jason Happy
(7/2/2000; 5:13:28MT - usagold.com msg#: 33093)
Links to Silver resources
Solomon Weaver,
Once again, I spent some time online, trying to find out the elusive answer: how much silver is left out there?...
Here are a few of the best online links that I have found that have information about silver. If anyone here finds that these present a compelling case for investing in Silver, I would recommend buying 90% silver coins dated 1964 from our usagold forum host. Ordering is as simple as dialing the phone: (800) 869-5115
http://www.gold-eagle.com/research/butlerndx.html
http://www.gold-eagle.com/silver_section/reports.html
http://www.kitco.com/pda3992.html
http://www.sentex.net/~resource/slvr98-1.htm
http://www.silverinstitute.org/news/pr24may00.html
http://www.gfms.co.uk/html/f_silver.htm
http://www.cpmgroup.com/
http://www.cpmgroup.com/silver.htm
http://www.cpmgroup.com/free.htm
http://www.cpmgroup.com/msimon_auvsag.html
http://www.ajpm.com/pages/why.html
http://goldsheet.simplenet.com/silver.htm
http://www.silverassets.com/assets.htm
http://www.metro.net/cam/#anchor705277
http://www.metro.net/cam/camnewsletter.html
http://www.metro.net/cam/#anchor329194
--silver mining companies listed at the silver page
http://www.hecla-mining.com/
http://www.hecla-mining.com/reserves.html
http://www.apexsilver.com/
http://www.panamericansilver.com/
http://www.panamericansilver.com/market.html
http://www.panamericansilver.com/market/fundamentals.html
The following are interesting quotes from articles written from 1995 to 1998, that specifically mention the dwindling above ground supply of silver:
Keep in mind that Warren Buffet bought his 130 million oz. silver to be shipped to London in 1997, announced in late '97? early 1998?
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From:
http://www.cpmgroup.com/msimon_auvsag.html
Total world stocks of silver in bullion and coin form are estimated to have stood around 850 million ounces at the beginning of 1995. By the end of the year they are estimated to have dropped to 700.0 million ounces. This reduction of total silver bullion holdings, to a level equivalent to approximately one years worth of silver use, is one of the subtle changes that occurred in 1995.
The silver market was filled with rumors about one or two large institutional investors 'buying up all of the silver,' but the reality of the matter is that the investment buying in the silver market, throughout 1993 - 1995, has been broad based.
As silver stocks became more scarce over the course of the year, this tightening had an effect on prices. Prices shot higher in April, when the dealers who had been selling New York Comex futures and options had their bluff called. A large volume of Comex call options for May delivery were exercised. With insufficient physical metal available to cover these short positions, dealers had to scramble to cover their positions, pushing prices sharply higher. By early May prices had shot up to an intraday high of $6.22. Later in the year, other incidents reinforced the realization that silver supplies indeed were tight. As discussed earlier, bankers and metal traders were surprised to find that, despite the appearance of large amounts of silver in London vaults in the middle of 1995, the metal was held by investors and did not represent metal available to the market without a significant increase in prices. Silver lease rates also rose sharply in the second half of 1995, for the first time in more than a decade, presenting market participants with yet further evidence that something real had changed in the silver market.
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From:
http://www.cpmgroup.com/survey96launch.html
Probably the most important, and most interesting, issue facing the silver market in 1996 and beyond is how much silver remains in inventories, either in bullion or bullion coin form.
I mentioned the 640.5 million ounce decline in inventories over the past six years. It is CPM Group's estimate that by the beginning of 1996 reported and unreported silver inventories worldwide totaled less than 700.0 million ounces. In other words, roughly half of the silver stocks that had been accumulated up to 1990 appears to have been used over the subsequent six years.
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From:
http://www.metro.net/cam/#anchor329194
A classic approach is to look at the supply demand fundamentals. According to the CPM 1998 silver survey on page ten, the December 1997 reported and estimated Silver inventory was between 767 and 972 million troy ounces. Government stocks are 167.5 million ounces. The annual shortfall is approximately 200 million ounces. If we use the high figure, then in about five years there is no more silver and again the price reaches toward infinity. Again this is ridiculous, but does indicate the trend. It is most interesting to note that the CPM data indicates that the amount of silver is four times more scarce than gold. Again using the world gold councils figures of four billion ounces of gold above ground. This is interesting that four billion ounces of gold are available at some price and only one billion ounces of silver are available to the market at some price. The most refreshing fact is that the silver inventories are primarily out of government and banking control.
By definition if the electronic money has a good possibility of going to zero, that infers that precious metals have no limit.
------------------------------
From:
http://www.sentex.net/~resource/slvr98-1.htm
...COMEX inventories ... have been dropping to 12 year lows near the end of 1997. These inventories were down 31% on the year as of Oct/1997. The CPM group, as of Dec. 31 1996 has estimated unreported inventories are somewhere between a low of 102M ozs. and a high case scenario of 327M ozs. No matter how you look at things, inventories are getting dangerously low.
------------------------------
My note to myself in July '99, was that there was about 400 million ounces of silver in above ground inventories in the world.
Today, July 2000, the COMEX is down to 100 million ounces;
Warren Buffet has 130 million ounces; And there are about 1450 coin dealers online? My personal experience with coin dealers is that they are comfortable holding $100,000 in silver; at $5.00/oz, that's 20,000 oz. each shop x 1000 = 20 million ounces; relatively insignificant amount, yet might be considered to be held in "strong" hands, ie, not let go if there are limit up days back in New York.
Once again, I suggest to all forum lurkers who still have money to invest to get some actual physical silver before supply runs out completely...
(800) 869-5115 toll free phone
ORO
(7/2/2000; 3:19:38MT - usagold.com msg#: 33092)
Aristotle - comments, installment 1
Aristotle
First, the workability issue and the apparent performance of the current currency system.
The boom and bust cycles of monetary inflation, at first at the credit level and then at the monetary base level are well known and innate features of debt money. They parallel the gold debt boom and bust cycles that central banks introduced. The latest such cycles were 1913-1929 expansion, 1929-1933 contraction. In the Bretton Woods system it was 1946-1966 expansion, 1967-1971 draw down of reserves, 1971 break. The current cycle in the gold markets is exactly as its predecessors in principle, though many features are not the same. The contraction phase - the deflationary phase of the central bank gold systems is equivalent to the stagflation/hyperinflation phase of the pure debt money systems.
The indirect gold backing of the dollar that FOA and ANOTHER imply and I think exists, is going to collapse in a deflationary manner in the paper gold market, and in a stagflation/hyperinflationary manner in the dollar that has been hitched to gold in paper form. As you noted later in your post, the short covering of dollar derivatives seems absurd. When dollar derivatives collapse, the source of value of the currency - the source of demand "to repay debt", disappears. The derivatives of gold do not CREATE the current demand for gold but serve to displace it and dilute its value as they are CREATED to fill the demand. The two phenomena are exactly opposites of each other.
The funny money systems can survive through periods of 100% annual price inflations - these survival mechanisms are built around indexing to prices - banks offer and demand indexation to the CPI or an equivalent, governments index their bonds, people index their wages, and the construction and composition of the CPI is heavilly scrutinized whenever there is doubt as to its reflection of price levels. The growth of such systems in inflation prone countries removed the benefit to government and banking of inflating the money supply as people form a habit of carrying nominally calculated debt and indexed assets. The people competed with government as to how quickly they spend the funds they don't have yet. The people won the race. Sounds wierd, but that has been my personal experience in such periods.
I will add that when this happens, the government and the banks (usually having been nationalized due to bankruptcy) will attempt to provide a stable substitute system that will retain people's confidence till the next credit expansion causes prices to take off.
While wide popular understanding of what is happening in the currency valuation dynamics of nations with a heavy inflationary tendency does improve substantially, it does not mean that alternatives are understood, nor is it understood that the lack of wild devaluation of paper money purchasing power at one point in time serves as a predictor of it happening later.
The stability of the dollar and the currencies of industrialized nations are primarilly outcomes of the support of the dollar through a few mechanisms that sop up the international dollar supply. The bulk of them are:
1. Dollar debt traps
2. Central bank reserve holdings of dollar assets
Both are deliberate mechanisms. Both have been constructed for the political purposes of sustaining the dollar and the US economy at the expense of Europe and later at the expense of both Europe and dollar debtors. The Bretton Woods concept of backing the dollar with gold so long as no substantial conversion occurs is reproduced faithfully in the current floating rate system with a gold "kicker". Goods from our creditors and from the other debtors back the value of our currency. Just as no gold came out of America when the redemption of dollars into gold occurred, so will the dollars on central bank books and investror's accounts will not buy substantial quantities of goods from the US when "more dollars" will no longer denominate their desired return on investment.
ViewYesterday's Discussion.
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.
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