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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

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ARCHIVED DISCUSSION FROM 9/2/2000
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Black Blade (09/02/00; 23:48:48MT - usagold.com msg#: 35906)
Journeyman's question
This question is not as easy as it appears on the surface. We are about to tread in untried waters. The old rules of inflation may have to be put aside, as this developing energy crunch is so fundamentally based on supply and demand without any hope of relief without the deployment of other alternative energy sources. So here is my attempt at a convoluted answer.

A true gold standard requires fiscal discipline. This is something that the Keynesians seem to have conveniently forgotten. One cannot print gold just as one cannot tax the populace into prosperity. As inflationary forces make an impact, gold rises in value as well, I think that Marius alludes to this with a reference to rising money supply. However, without the constraints of a gold standard, money (such as it is) can be printed at will. This is on the minds of all petroleum and energy producers. This is not to say that there would be no inflation under a gold standard, yet the intrinsic value of gold should at least theoretically rise in tandem with other commodities including petroleum. Gold should also hold value in a deflationary environment as well. During the inflation of the 1970’ and early 1980's gold had outperformed most other investment vehicles. During the depression of 1929 through the 1930's, gold held its value (under the gold standard), and even outperformed in that environment. Since gold was illegal for the peons to own, the next best proxy, Homestake Mining stock not only held up in the deflationary environment, but also rose over 519 percent from October 1929 to December 1935 (a compound rate of 35% per annum). The thing that is most important to remember here is that the problem with rising petroleum costs is that we truly are running out of oil. There are no more real super-giants (Very large oil fields) to be found. The easy pickings are found. There are a few smaller fields to be sure, but these will be more costly to find, explore, define and produce from. This situation is different from the typical inflation that we have come to expect. This is more a fundamental case of supply and demand. The only additional production capacity is in Saudi, and even then there is no more refining capacity. Add to this rising demand from emerging world economies, increased energy needs in the developed world (new economy), restriction of petroleum production, restrictions on politically incorrect energy sources (nuclear, coal, wind, and solar), and the energy needs from those countries who have depleted their own resources. It seems apparent that inflation is inevitable, though I would think that a gold standard could minimize or even mitigate the rising costs much better than current fiscal policy of "money supply". In other words, there just isn't a lot of intrinsic value in printed paper and national debt instruments. This is about as good as I can determine after several servings of my favorite adult beverages.



JMB (09/02/00; 23:26:46MT - usagold.com msg#: 35905)
Journeyman's Questions
Q 1: Why wouldn't increased energy prices show up as "inflation" if we were on a true (convertible) gold standard?....hmmm, the extra money spent on energy would take away from expenditures on hot dogs and what have you, no?
Q 2: What would happen?....ah, that's easy...we'd all live longer :)
My puzzler has me stumped....I'm thinking we just might see a gradual decline in our current account deficit in the not too distant future. Since we need a continous increase in credit to keep the bubble expanding, maybe this hypothetical current account decrease would set off a liquidity crisis which would undermine the foreign bullish sentiment toward our "mighty" dollar (gag me).
I feel very comfortable with my "hot dog" conclusion, but as to this "declining current account" fairytale, well....I don't know. Am I all wet? (Be gentle, it's late) Thanks.

Journeyman (09/02/00; 22:49:58MT - usagold.com msg#: 35904)
Another two "Questions of the Day" @Black Blade, ALL

Black Blade suggests:

"Black Blade: This treaty is as good as dead. When the energy crunch is in full force, shivering masses
in their unlit caves (homes) will demand suspension of regulations and treaties in favor of the daily
conveniences that they have become accustomed to. Of course, it will be costly, and **in spite of what
the drones say in the financial media, it will show up in inflation.**"

QUESTION 1: Why wouldn't increased energy prices show up as "inflation" if we were on a true (convertible) gold standard?

QUESTION 2: What WOULD happen?

Regards,
Journeyman

P.S. I think these are easier than the last one?


Black Blade (09/02/00; 22:34:47MT - usagold.com msg#: 35903)
OOPS. link to......
http://www.capitalism.org/home.htm
Interesting site.

Black Blade (09/02/00; 22:34:13MT - usagold.com msg#: 35902)
http://www.capitalism.org/home.htm
Interesting site.

Peter Asher (09/02/00; 22:24:42MT - usagold.com msg#: 35901)
Euro politicing in Denmark
http://www.sunday-times.co.uk/news/pages/sti/2000/09/03/stifgneur02002.html

Rasmussen must reassure Danes the euro will not mean surrender to the central bank.

Chocolate euros seduce
Denmark

-- The "yes" team is touring
Denmark with chocolate euro coins, covered in gold
foil, while the "no" team has retaliated with its own
bag of chocolate kroner in silver foil. Both taste the
same; the question is whether the Danes will find the
euro more difficult to swallow. -----


Marius (09/02/00; 21:47:34MT - usagold.com msg#: 35900)
To add to Shermag's answer to Journeyman's question
Good Evening, All!

Hope everyone is enjoying the long weekend. It has been (gulp!) over 2 decades since I took college level economics, but something stirred in my memory reading Shermag's explanation of why higher unemployment is viewed as positive by the market.

Rightly or wrongly, low unemployment leads to (in the minds of neo-Keynesians, anyhow) a tight labor market, higher wage demands, and thus: inflationary expectations. "Wage Inflation", like "demand pull" inflation or "cost push" inflation seems to be a fundamentally dishonest attempt to obscure what is being inflated. As the Austrian economists argue convincingly, rising prices are a symptom of inflation, not the malaise itself. Follow the money (supply)!!

I remember that the economists were in the process of inventing another fake form of inflation while I was in college: oil shock inflation! While there's no argument that higher oil prices can have negative consequences for dependent consumers, THERE IS NO INFLATION WITHOUT AN INCREASE IN THE MONEY SUPPLY!

Mr Gresham (09/02/00; 21:34:59MT - usagold.com msg#: 35899)
Alan Newman's Cross Currents
http://www.cross-currents.net/charts.htm
Sharing his latest, for those who've been appreciating his charts this year...

Shermag (09/02/00; 21:20:51MT - usagold.com msg#: 35898)
Journeyman
Thanks. High praise indeed from someone who has earned my respect.

Journeyman (09/02/00; 21:09:35MT - usagold.com msg#: 35897)
Good Answers @JMB msg#: 35867, Bonedaddy msg#: 35865 Thought Provoking Answer @Cavan Man msg#: 35880 &FIVE GOLD STARS @Shermag msg#: 35874

Good going guys! ALL good answers!

Thanks Shermag -- I won't have to answer now. From my viewpoint, you nailed it.

High Regards,
Journeyman


schippi (09/02/00; 20:26:04MT - usagold.com msg#: 35896)
Gold Indicator Chart
http://www.SelectSectors.com/gldind.gif
The Gold Indicator chart at:

Displays, The XAU, Gold(Cmx), CRB, FSAGX and
the US-Dollar Index, on a percentage basis, so that
different time periods may be compared. The data
currently shows, the CRB accelerating Up, the US$
Index, dropping and an inverted head and shoulders
formation in the XAU. This all points to a move Up
for Gold.

nummus aureus (09/02/00; 20:25:38MT - usagold.com msg#: 35895)
JMB's quiz...
"A gradual monthly decline of United State's current account deficit...." Is Impossible.

Leigh;
Until Trail Guide arrives, I've brought a radio to play 'Golden Oldies'.

Shermag (09/02/00; 19:54:04MT - usagold.com msg#: 35894)
(No Subject)
JMB's Saturday Night Puzzler
A gradual monthly decline of the United States' current account deficit..... although seemingly more benign than an abrupt drop, can hardly be considered a successful outcome. At the current rate of bleeding approaching $400B annually, a gradual decline could possibly result in a further accumulated deficit increase approaching one trillion dollars. This would be above an beyond the enormous accumulated deficit to date. This would be a further trillion dollars of foreign claims against the assets, present or future, of U.S. citizens. Hardly something to take comfort in.


Leigh (09/02/00; 19:36:07MT - usagold.com msg#: 35893)
Hike in the Dark
I was just reading over my latest post when a deeper truth jumped out at me. We HAVE been hiking in the dark all along! If it weren't for Trail Guide, Another, Aristotle and a few others "in the know" to shine their lights and guide us, we'd all be stumbling around and in danger of falling off a cliff! What a debt of gratitude we owe our wise friends!

Trail Guide, we're still waiting under the sign, but it's getting dark and cold. Won't you at least show up for the campfire and s'mores?


Shermag (09/02/00; 19:33:01MT - usagold.com msg#: 35892)
Black Blade Re: New economy conundrum (msg# 35867)
BB:
"Another interesting point is this: Why is slowing down the economy and therefore the rate of growth and compressing profit margins considered good for the economy? Certainly is difficult to understand this "New Economy"".

Shermag:
The thinking of the "new economy" adherents is simply amazing, isn't it. This should go down as one of the great false paradoxes of the mania. As to the logic that produces this belief, as best I can discern, it realy is as simple as: a slowing economy means no imminent interest rate hikes (or possibly eventual easing), and therefore a perpetuation of the expansion.

Throw in generous dollops of liquidity and like Pavlovian dogs, the greater fools rush in.


JMB (09/02/00; 19:25:36MT - usagold.com msg#: 35891)
The Puzzler....part 2.
Feel free to add as many sentences as necessary. Let it flow, IT'S SATURDAY NIGHT!

JMB (09/02/00; 19:06:08MT - usagold.com msg#: 35890)
A SATURDAY NIGHT PUZZLER...Complete the following sentence.

A gradual monthly decline of the United States' current account deficit.....


Note: Additional points will be awarded for striking fear into any unwary neophytes who may be lurking.

Leigh (09/02/00; 16:35:56MT - usagold.com msg#: 35889)
A Saturday Night Hike?
Who's game for a Saturday night hike? I'll bring the flashlights, Cavan Man, you bring the marshmallows, someone else, how about some chocolate bars and graham crackers? All we need is Trail Guide! TG, we'll all be waiting under the big USAGOLD sign - you can't miss us!


Mr Gresham (09/02/00; 14:26:59MT - usagold.com msg#: 35888)
Doug Noland -- Credit Bubble Bulletin
http://216.46.231.211/credit.htm
Every week, I think he can't possibly top what he's written before -- very often (this one especially) he does.

It's just an amazing keep-on-going bubble, and it's brought out writers to match it (including here at the Forum). I'm just lucky to have found a ringside seat to watch it from, next to some smart and vocal critics.

Now, protecting and maybe enhancing my savings and purchasing power ("making money") from all this knowledge -- that's another matter. Being too far ahead of the crowd doesn't seem to work. So far. Maybe something to be learned from the Wall Street crowd? N-a-a-a-a-h!

Maybe my choice has been just to sleep better at night. I'm turning out to be a lousy timer on so many things. But, everytime I see the initials "PMG" (Precious Metals Group?), I think "Peace of Mind Guaranteed".

Oh well, humanity may repeal 5000 years of historic valuation. Has it within its collective power of choice. But it's a bad, bad bet to make.





CoBra(too) (09/02/00; 11:56:02MT - usagold.com msg#: 35887)
"The Turning Dollar Tide" by Hans Shicht
Is another classic, I'm sure everyone has read over at G-E. It is a must read for all Goldhearts - best cb2

Canuck (09/02/00; 10:52:43MT - usagold.com msg#: 35886)
Fort Knox gold audit
http://csf.colorado.edu/forums/longwaves/apr00/msg00612.html
1997/1998 gold audits at Fort Knox are inconclusive!!

Is the gold there or not?

Also, manipulation theories during the April '00 crash.

Canuck (09/02/00; 10:14:34MT - usagold.com msg#: 35885)
From Sept. 1980
http://www.l0pht.com/pub/tezcat/Beter/Beter58
The Ro ckefeller interests, now under the control of John J. McCloy
and associates, arranged earlier this year for eight billion dollars
($8,000,000,000)--that's eight thousand million dollars--in gold to be
paid to the leader of Iraq, Saddam Hussein. A very special private
underground warehouse in Zurich was used in this transfer of gold.
This gold was an outright bribe. It was to persuade Iraq to attack
Iran. Eight billion dollars, my friends, is a lot of money, but it was
a cheap price for the Rockefeller oil cartel, and for two reasons:

First, the gold which was used to bribe Iraq to start the war was
part of the gold which was stolen from you and me! The bulk of the
gold taken from America's stockpiles was flown to Europe on
multinational corporate jets. So, my friends, that $8-billion in gold
did not cost the oil companies anything except some jet fuel, but it
cost you and me part of our monetary gold, and it has been used to
start a war for which you and I will pay even more.



Canuck (09/02/00; 10:08:38MT - usagold.com msg#: 35884)
Missing gold, IMF, ESF and oil.
http://www.l0pht.com/pub/tezcat/Beter/Beter04.txt
"On September 5, 1975, a reporter posed the following question to Dr.
Abdul-Rahman Al-Atteqi, Minister of Finance of Kuwait, at the National
Press Club, quote: "None of the oil-producing states spoke during the
World Bank and IMF meetings. Why not?"

Dr. Al-Atteqi answered, quote:

"Addressing people seems to be of no meaning. If the United Nations or
World Bank meetings had a time to listen exactly as good listeners
should, everyone would speak, but most of the speeches just go into
the air. Nobody hears it--whispering, most of the delegates out of the
room--and then it is a text in a book. If it happens, sometimes
somebody reads it. This is why. And secondly, it is known who runs the
policy of the Monetary System of the world, and we cannot for the time
being compete with them. We are in their hands. So this is a fact. We
have to live with it unless we break through--and we are looking for
that time."
--------------------------------------------------------
".....WE ARE LOOKING FOR THAT TIME......"

From 1975, is it the time??

Canuck (09/02/00; 09:56:00MT - usagold.com msg#: 35883)
More!!
http://peterbeter.miesto.sk/docs/all/dbal01.htm
"...gold illegally obtained by the Exchange Stabalization Fund..."
-------------

Oh my!! From 1975!!

Canuck (09/02/00; 09:41:04MT - usagold.com msg#: 35882)
1975 Fort Knox gold scandel; more!!
http://www.etext.org/Politics/Beter.Audio.Letter/dbal02
"The Government was taking gold out by twilight in trucks,
and I accused them of it and proved it on them because I had
people who were posted who are friends of mine. They were
telling me in the Treasury that they were not taking the gold
out, but I had friends who told me the hour and the minute when
they'll come out for another load. Oh yes, they've taken a lot
of gold out of there they won't admit. It's terrible."

(Signed) FRANK CHELF

Subscribed and sworn to before me this 7th day of April 1975."


Canuck (09/02/00; 09:32:52MT - usagold.com msg#: 35881)
Fort Knox gold
http://www.fortunecity.com/roswell/daniken/443/nelsonrockefellerandfortknoxscandel.htm
Here's an article from 1975!!! Fort Knox gold gone?

Has this BS been going on for 25 years?

Cavan Man (09/02/00; 09:27:19MT - usagold.com msg#: 35880)
Journeyman 35856
or, Strange Means of Measuring Value
Journeyman,

About eight years ago when I began studying financial markets and became a mainstream investor, I too could not understand why when a company announced a layoff of 15K, the stock took off like a rocket. To me, that just didn't make sense. But then, I was new to the game and not wise in the ways of Wall Street.

At first blush, it seems illogical; not rational for a stock to rise precipitously on the backs of labor in this example. Perhaps that is the point? The pure fiat system is not logical nor rational because it cannot sustain itself indefinitely hence, it is fundamentally an unstable means of maintaining monetary order within a society.

That's probably not the answer you are looking for but I am out of time (to really think) once again. Fine question!

PS: I do not think we will ever return to a pure gold standard. This concept of "freegold" is much more logical.

Canuck (09/02/00; 09:25:43MT - usagold.com msg#: 35879)
Nov. 1997 news
http://www.csmonitor.com/durable/1997/11/05/intl/intl.1.html
Here's an old article from 1997. Gold had dropped to a 12 year low; $307.

Interesting comments on Swiss sales (from 1997), CB sales and the supply shortfall being made up from same.

Do we have the stamina? Another 3 year wait?

Time will tell.

Black Blade (09/02/00; 09:05:10MT - usagold.com msg#: 35878)
US markets closed on Monday, but still could be interesting.
Currently NY Crude is at $33.40/bbl up +$0.26, and NG is at $4.835 Mbtu near all-time highs up +0.053. Could get very interesting this coming week. I'm outta here for a while. Going to go fish, swill beer, and plant cabbages ;-)

Black Blade (09/02/00; 08:20:09MT - usagold.com msg#: 35877)
Carbon-Chloride Method Holds Promise to Eliminate Cyanide in Gold Extraction
Source: Gold News p.5 (Gold Institute) July/August 2000

Researchers at Monash University in Australia say they have found a way to eliminate the use of cyanide in gold leaching processes by overcoming problems associated with using chloride solutions, an alternative method.

Cyanide leaching is the most popular method overall in the gold extraction process but it is controversial because of cyanide's perceived potential for harming the environment,

Until now, miners who wanted to use the activated carbon and chloride solution process to convert gold ions to gold metal had to destroy the carbon to recover the gold. This destruction of carbon is expensive. Monash scientists say they have found two forms of activated carbon that do not destroy the gold chloride ion and can be stripped without destroying the carbon.

John Cashion of the Department of Physics says that the work continues on the discovery and that a pilot plant in Kalgoorlie will open in several months. It will be managed by Perth-based Rand Mining NL.


Black Blade: What we in the industry have commonly called the "Bleach Leach" process. An interesting possibility, as there are many so-called "environmentalists" who oppose the use of cyanide. Cyanide gold extraction is now banned in Montana, yet this process could be used in its place. The wacko "environmentalists" would have to dream up another line of opposition to mining.


Black Blade (09/02/00; 08:04:45MT - usagold.com msg#: 35876)
RE: Shermag and MO VER MEG
Shermag: Another interesting point is this: Why is slowing down the economy and therefore the rate of growth and compressing profit margins considered good for the economy? Certainly is difficult to understand this "New Economy"

MO VER MEG: Thanks, I'll look into them.



Black Blade (09/02/00; 08:00:25MT - usagold.com msg#: 35875)
Something a Little Different Department
Source: Gold News, p. 6, (gold Institute) July/August 2000

Of Cabbages and King Midas
Plants Extract Gold from Soil

Extracting gold from vegetables, phytomining, has been known about for years, but a New Zealand scientists says he can get gold from cabbages in an economically viable manner.

Gold found in topsoil can often make its way into plants through roots. The plants are then processed and tiny amounts of gold can be obtained.

Now, Chris Anderson of Massey University, who has been working on the project for years, says that growing cabbages over rock debris, known as tailings, from old mines, can be done commercially. He estimates that extracting more than a kilogram (2.2 pounds) of plants by using a chemical that he stumbled upon in the laboratory during his experiments. The chemical is placed on the tailings and makes the gold soluble for around 10 days. The dried plants are burned and the gold remains.

Researchers from the Institute of Natural Resources previously tested Anderson's earlier plant mining techniques in which he used ammonium thicynanate to help make gold more soluble. At that time, the process was not economically viable because of the cost of the chemicals. The new process, Anderson says, uses smaller amounts of chemicals and fewer chemicals and could be worthwhile even at current gold prices.

During the past few years, scientists have used plants to absorb many substances from the earth including heavy metal pollutants such as mercury. University of Georgia scientists found that a genetically engineered Yellow Poplar not only absorbed mercury but seemed to thrive on it. The trees converted the mercury to a less toxic form sending it out through their leaves to the atmosphere.

Black Blade: Maybe the kids are right. Don't eat your vegetables – mine them. There used to be a company called Biomine that used vegetation clippings and for analysis and exploration for mining.



Shermag (09/02/00; 07:48:56MT - usagold.com msg#: 35874)
Journeyman's Question of the Day
Yesterday Journeyman posed the following to the forum:

"Does it ever seem perverse to you that when the unemployment rate goes up, i.e. people who want to work lose jobs, that that's considered "good for the economy" and the stock-market goes up?"

"QUESTION OF THE DAY: Why wouldn't this perverse aberration happen if we were on a TRUE (convertible) gold standard?"

To which I offer this response:

First, the standard storyline on why this aberration happens. The market participants (probably correctly) percieve that there will be no central bank response to increase interest rates, ensuring that the credit expansion and the consequent stock market bubble can continue unabated.

Now, in the environment of a TRUE gold standard, an increase in unemployment signifies a genuine slowing of the economy, with the attendant reduction in economic activity and business profitability. With the discipline imposed by a TRUE gold standard, the credit cycle must follow through to an adjustment downward to flush out the untennable economic activities undertaken in the preceeding expansion. Any portion of the banking industry that ignores this reality will likely see convertibility in action, in the withdrawal of deposits as it increasingly is percieved as a risk of failure.

MO VER MEG (09/02/00; 07:47:06MT - usagold.com msg#: 35873)
Black Blade
Two energy companies that may be worth a look: Dynatec (DY,T) and Keywest Energy (KWE,T).

MOVERMEG

Black Blade (09/02/00; 06:47:32MT - usagold.com msg#: 35872)
Analysts: Collapse in oil supply growth imminent
Source: Oil and Gas Journal

Soaring oil prices may have come too late to avert both a collapse in oil supply growth from countries outside
the Organization of Petroleum Exporting Countries and a new rig market famine next year, according to Petrodata
Research, the forecasting arm of industry data analysts OneOffshore Inc. Though oil companies have been flush with cash for the last year, this new money is being spent not on drilling wells but rather on "defending their balance
sheets, buying back shares, and competing with high growth technology stocks," said Petrodata analyst Maarten van Mourik. The current state of the market and "underlying pressures" are signaling a repeat of the 1995-98 cycle, in Van Mourik's opinion, which ended in the oil price crash and pan-industry recession. As well as its negative influence on oil supply, the spending drop over the last 2 years is also hitting the deepwater rig markets, states Van Mourik. He believes new oil company plans for fast-tracking new frontier field developments will likely be "too optimistic" in the light of an imminent rig market squeeze. "Poor day rates have made contractors wary of committing to further building of new rigs," he said. "As a result, we predict that the available fleet will be insufficient again shortly to cope with increasing demand and develop the potential of all those deepwater fields."

Black Blade: The low number of rigs is only a part of this equation. The lack refining capacity makes it a moot point! No new refineries have been built in the US since the 1970's mostly due to EPA and other various gubbermint regulations. A very severe energy crunch is just over the horizon.

KYOTO TREATY IS DEAD AS NATIONS BAIL OUT:

The Australian government has agreed to exclude LNG from the nation's overall greenhouse gas reduction measures. It also has postponed plans to create a domestic greenhouse gas emissions-trading regime until similar trading schemes are introduced elsewhere. The decision has been welcomed by the Australian petroleum industry.

Black Blade: This treaty is as good as dead. When the energy crunch is in full force, shivering masses in their unlit caves (homes) will demand suspension of regulations and treaties in favor of the daily conveniences that they have become accustomed to. Of course, it will be costly, and in spite of what the drones say in the financial media, it will show up in inflation.




Black Blade (09/02/00; 06:11:25MT - usagold.com msg#: 35871)
Norilsk Nickel Finds New Job for Old Subs or "We All Live in a Yellow Submarine"

By Christopher Pala
SPECIAL TO THE ST. PETERSBURG TIMES
Photo by Bellona Foundation

Some people say a project to convert nuclear-powered submarines into cargo carriers is crazy, others believe it is feasible. In any case, the navy is behind it. And the isolated mining and smelter conglomerate Norilsk Nickel in the north of Siberia hopes what must be the boldest swords-to-plough-shares project in history will allow it to ship thousands of tons of nickel under the ice off the Arctic coast in all weathers. The submarines in question are "boomers," stealthy behemoths carrying long-range ballistic missiles. The boomer is arguably the most lethal weapon ever built, and the biggest of them all - Norilsk Nickel's object of desire - is the one called Akula, or shark, and NATO calls Typhoon.

Designed with unique ice-breaking capabilities, it carries 20 SS-N-20 missiles, each with 10 warheads, for a total of 200 independently targeted nuclear bombs seven times more powerful than the one that hit Hiroshima. It's no wonder that it inspired the best-selling book "The Hunt for Red October." Three Akulas are more or less operational and the other three were headed for destruction under a U.S.-funded, $250-million program to help the impoverished navy pay for the costly dismantling. The Akula caught the eye of the management of Norilsk Nickel, the world's biggest producer of nickel, an essential ingredient of steel. Built in the 1930s with prison labor at the cost of thousands of lives, the sprawling Norilsk "kombinat" is one of the nation's most profitable enterprises, with 1999 sales of $2.944 billion and profits of $1.278 billion. Its 103,000 employees produce 22 percent of the world's nickel, along with 60 percent of its palladium and 40 percent of its platinum, plus copper and cobalt.

But getting these valuable metals - nickel topped $10,000 a ton last year - to their markets is no easy task. The ore is loaded onto ships in Dudinka, a bleak port on the vast Yenisei River, for the 560 kilometers north to the Kara Sea, where they turn west for the 1,760-kilometer voyage to Murmansk, the nation's main ice-free Arctic port. River and sea are covered with thick ice for nine months of the year, so the cargo ships must follow one of the nation's nuclear-powered icebreakers for most of the trip.

There are now six icebreakers in operation; all are owned by the state but operated by Murmansk Sea Line, a subsidiary of the nation's No.1 oil firm LUKoil. The fleet is overextended and under-maintained and one icebreaker is due to be retired in a few years, said Norilsk Nickel spokesman Anatoly Komrakov. Norilsk Nickel managers worry that at that time, LUKoil may give preference to oil over metal in its allocation of icebreaker time, especially since LUKoil is developing its Arctic fields and rapidly expanding its fleet of tankers. And building a new nuclear icebreaker would cost at least $150 million. So last year, Komrakov said, the company commissioned St. Petersburg's Rubin Design Bureau, designer of the Akula, to study the feasibility of turning Akulas, minus missile-and torpedo-launchers, into cargo ships.

In the meantime, Norilsk Nickel general director Alexander Khloponin headed for the Sevmash shipyard in Severodvinsk, near Arkhangelsk, where the Akulas were built in the 1980s and where the first one was being dismantled. He had no trouble convincing the navy brass to delay the cutting up of the next one scheduled for the blowtorch while the study was underway: They love his plan, just as they hate losing the gem of their strategic submarine fleet. Admiral Vladimir Kuroyedov, commander of the navy, recently told a television interviewer that the project "is the best way to use surplus submarines." The designers delivered their verdict in February: For $80 million, an Akula can be made to carry 12,000 tons of cargo safely and reliably. First, it would plow through the surface ice while descending the shallow Yenisei River. Then it would slide below the ice and, at a speed of 25 knots, three times faster than an icebreaker-led convoy, head for Murmansk, where its load would be transhipped to surface vessels. The entire operation would take place in or near Russian waters. With three all-weather Akulas plying the Dudinka-Murmansk route, Norilsk Nickel wouldn't need to depend on LUKoil's icebreakers any more. Norilsk Nickel chairman Yury Kotlyar has been downright enthusiastic.

"I think this project is absolutely realistic," he told a wire service last February. "I am certain we will have our first sea trials next year." Meanwhile, a second study is being done to evaluate more precisely the cost of modifying the company's docks and of operating the subs. Norilsk Nickel's Komrakov said results are due in January. He said his company favors creating a joint venture with the navy. The submarine crews will work as civilians - and presumably be paid more than the paltry $50 a month they now receive. But others are not so sure the project is viable. "It's a crazy idea - it's far too dangerous," said researcher Thomas Nilsen of Norway's Bellona Foundation, which monitors environmental threats posed by the Northern Fleet. "Navigating the Kara Sea is very tricky because it's so shallow." U.S. submarine expert and author Norman Polmar differs. "It's a great idea: these are marvelous ships that include tremendous feats of engineering," he said. "I know the designers at Rubin [Design Bureau] well, and if they say that it can be done, I believe them." "But I doubt it would be economical," he added, "because these things are horribly expensive to run."

"It's economically unrealistic," agreed analyst Mikhail Seleznyov of Moscow's United Financial Group. "They should use their healthy cash flow to build icebreakers." Still, suggests defense analyst Robert Norris of the Natural Resources Defense Council in Washington, D.C., "We should support commercial conversion." Ambassador Thomas Graham, former head of the Arms Control Agency who lives in Washington, said U.S.-Russian treaties involve only the destruction of launchers. "The owning nation can dispose of the ship as it wishes," so U.S. agreement would not be required.

Black Blade: Oh yeah, I like the "more or less operational" part in light of the stellar record of Soviet Sub safety and recent events. Doesn't sound feasible as all modern subs are prohibitively expensive. The cost is even greater as recovery costs from sunken subs just adds to the costs. Of course they have to have product to deliver which as far as PGMs is concerned is in doubt.


Black Blade (09/02/00; 05:29:20MT - usagold.com msg#: 35870)
Discovering the Origin of Gold Coins
Source: Gold News (Gold Institute) July/August 2000

Early Inscriptions Were Guarantees

Scientists at the British Museum in London have come up with a novel explanation for inscriptions on the world's earliest known coins, which were minted in Lydia, Turkey, more than 2,600 years ago. They argue that the stamp on the small coins was like a modern day refiner's ‘good delivery’ mark, a guarantee of their gold or silver content.

Until about 620 B.C.E., non-barter commercial transactions were made using weighed quantities of scrap gold or silver. However, in the rivers ofd Asia Minor (now Turkey) large amounts of electrum, a very pale yellow natural alloy of gold with 20-50 percent silver, were found, but the gold/silver content varied.

The British Museum researchers, led by metallurgist Paul Craddock, believe that the invention of ‘coins’ with clear stamps on them overcame this problem. Craftsmen simply added extra silver to achieve a consistent balance of 55 percent gold and 45 percent silver. Then they put the guaranteeing stamp, or ‘chop’, on each small ingot - creating the first coins of a clearly defined value.

A gold refinery was also set up in Sardis, the capital of Lydia, where goldsmiths worked at improving coin quality. They mixed natural electrum dust and salt in a clay pot, then heated the mixture to around 750 degrees Centigrade (1,590 Fahrenheit). Iron minerals from the clay pot reacted with the salt to produce ferric chloride and chlorine gases, which reacted with the silver in the electrum to form gaseous silver chloride. In five days, all the silver could be extracted from five kilos (161 oz.) leaving pure gold.

Craddock told "The Independent" newspaper in London, "It's taken ten years to disentangle the complex story of the origins of coinage. Using modern scanning electron microscopes and X-ray spectrometry equipment, we have been able for the first time to appreciate fully the genius of the metal workers of the ancient world."




Knallgold (9/2/2000; 4:03:29MT - usagold.com msg#: 35869)
ICE
http://www.intercontinentalexchange.com/
This new intercontinentalexchange,is it another shot against Gold and physical holders?Founders are the usual suspects in the Gold manipulation game.What do you think?

Zenidea (9/2/2000; 4:01:48MT - usagold.com msg#: 35868)
no subject
First in Aussie by law one needed a permit to protest , then it was you cannot own a gun ( Fear a Government that fears your gun) and now re: the Olympics , in the local newspaper a story reads " I find it difficult to believe that the Government is trying to introduce legislation that would enable the Australian Defence Force to not only arrest civilians without informing them of the reason but to shoot to kill civilians in public protests.
Self Explanatory huh . Off the subject abit, but whose going for Gold in this game ?. I bite my tongue !



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