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ARCHIVED DISCUSSION FROM 7/2/2001 All times are U.S. Mountain Time (Yesterday's Discussion.) Black Blade (07/02/01; 23:36:16MT - usagold.com msg#: 57367) ‘Gas and Go’ Gets New Meaning http://abcnews.go.com/sections/business/DailyNews/gas_theft010702.html Higher Pump Prices Produce Increase in Gasoline TheftSnippit:As gasoline prices have risen there's been a corresponding increase in the number of "drive-offs," or gasoline thefts by motorists, according to the National Association of Convenience Stores.Black Blade: Higher energy costs lead to crime. Black Blade (07/02/01; 23:29:54MT - usagold.com msg#: 57366) Blackouts Roll Near Vegas http://abcnews.go.com/sections/us/DailyNews/vegas_blackouts010702.html Triple-Digit Temperatures and Energy Use Trigger Rolling Blackouts Snippit:The Las Vegas-based Nevada Power Company briefly declared a red alert as churning air conditioners outstripped the utility company's ability to provide electricity. The power emergency lasted about two hours. Scattered outages were reported around the Las Vegas area as power-thirsty customers tried to cope with triple-digit temperatures. Temperatures scorched the southern Nevada desert for the second straight day today. After reaching an official high of 112 degrees on Sunday, temperatures hit 120 on the Las Vegas Strip and 122 at elsewhere.Black Blade: Californian Blackouts rolling Eastward? Even with Hoover Dam in their backyard - Hmmm… Black Blade (07/02/01; 23:24:04MT - usagold.com msg#: 57365) RE: Carl H - Mexican Petroleum crisis http://biz.yahoo.com/rf/010628/n28282926.html Mexico is the 7th largest petroleum producer. Mexico's oil fields are in various stages of decline and the infrastructure is a shambles. It is extremely unlikely that Mexico will be an exporter of natural gas, in fact they could be an importer as I posted not long ago. The state oil company Pemex is grossly mismanaged and the proceeds are used for many of Mexico's social programs and very little has been used to upgrade and maintain the petroleum infrastructure. That is the unfortunate legacy of PRI (Institutional Revolutionary Party) that ruled Mexico for 71 years. The Utilities are just as bad off. As far as the amount of Mexican NG production, I am not sure, although there are concerns that domestic NG production will be insufficient for domestic needs. Check out the link to the article detailing the Mexican Petroleum crisis. Quite revealing. Cheers!- Black Blade Netking (07/02/01; 23:10:10MT - usagold.com msg#: 57364) POG - Direction http://community.metamarkets.com/boardCharts/200106/--29gold.gif P.O.G. - In the attatched graph:Gold recovered at support at the lower bound of the uptrend channel ( shown on the chart as a pair of thin pink lines ) . That's support today at 269.80. Resistance is at 276.70 from the short term downtrend line from the May peak (shown on the chart as a thin dark green line ). Long term : A new bull market Intermediate term : A beautiful double bottom reversal Short term: The strange uptrend continues -- but it's challenged severely now. Micro term :Bouncing off the bottom of the range (With thanks to Lurker777 & Don Luskin) Black Blade (07/02/01; 23:05:17MT - usagold.com msg#: 57363) US Power Outlook http://abcnews.go.com/sections/us/DailyNews/Power_Interactive_FeatureBlank_010418.html Check out the energy situation in your state. Carl H (07/02/01; 23:02:15MT - usagold.com msg#: 57362) Black Blade: Mexico & Natural Gas Can you tell me how much NG production does Mexico have?Is the infrastructure in place to export it to the US? Black Blade (07/02/01; 22:43:48MT - usagold.com msg#: 57361) Slick earnings reports blur accounting rules http://seattletimes.nwsource.com/html/businesstechnology/134312873_fuzzyearnings020.html Snippit:Increasingly, earnings reports, especially those from once-high-flying technology companies, are turning accounting rules on their heads. Today, the view through the news release often offers a blurry picture of how a business is doing. The SEC has taken note. Its chief accountant, Lynn Turner, recently tried to jawbone corporate America about the importance of clear disclosure. In a March speech, he attacked company disclosures that appeared to "turn straw into gold." His term for many of the earnings reports: "EBS, or Everything but the Bad Stuff." These earnings come under a variety of names - cash earnings, comprehensive income - but pro forma is the most commonly used. With the rise of tech companies, pro forma earnings have become more common. The dictionary says pro forma means "as if," or "hypothetical." Critics say "hocus-pocus" might be a better definition. Black Blade: Add this article to the previous post. These Dot-Bomb analysts and touts just don't give up. You just got to drive a stake through their hearts before these bloodsuckers do anymore damage by misleading and lying to investors. Pro Forma has been used for the last few years by even the "Blue Chip" Dot-Bombs (and Dot-Gones) and Tech stars. As I said, it's a virtual minefield! Not a concern with PMs. Black Blade (07/02/01; 22:33:13MT - usagold.com msg#: 57360) Stocks still costly, risky by historical standards http://inq.philly.com:80/content/inquirer/2001/07/01/business/PERS01.htm Dow stocks are trading for prices of about 22 times the companies' earnings for the last 12 months, while the price-to-earnings ratio for the S&P 500 is about 29. Even if you believe, as some experts do, that a "normal" P/E today is 20, rather than the long-term average of about 15, this doesn't bode well. To get a 20 P/E, prices for the S&P 500 stocks would have to fall by 30 percent, or earnings would have to soar by 45 percent. That's tough to do. With stocks this risky, it would be foolish to count on a return to the kind of double-digit annual gains we enjoyed in the late '90s.Sadly, though, long-term investors don't really have an alternative to stocks. You can protect your money in a bank account or money market fund, but this year's interest-rate cuts have dragged their yields down to the low single digits. With inflation, you'd be lucky to tread water.Black Blade: HUH!!! %&$#@^*(&$@!!!!!!!! Sorry, but drinking beer while reading that last statement is not advised, and a damn waste of good beer! It is true that stock prices are generally grossly overvalued. One must be very selective in a very few sectors while tip-toeing through this minefield. And PMs would also be a good contrarian bet now. Black Blade (07/02/01; 22:14:25MT - usagold.com msg#: 57359) Calif. narrowly averts blackouts as temps soar http://biz.yahoo.com/rf/010702/n02357941_3.html Snippit:LOS ANGELES, July 2 (Reuters) - California narrowly managed to avoid blackouts on Monday as scorching heat threw the state back into crisis mode after news of a major new power plant and increased conservation had raised spirits earlier in the day. The California Independent System Operator (ISO), which controls most of the state's power grid, warned early Monday afternoon that blackouts were ``a possibility'' but as loads began to drop the state appeared to have survived. ``We are going to be fine,'' said ISO spokeswoman Stephanie McCorkle. The ISO had declared a Stage Two alert earlier in the day triggering several emergency measures including the loss of service for some commercial customers. Black Blade: Looks like a close call, yet voluntary blackouts were still ordered. Still a couple of months left where it could get a bit warm. And even with a recession and conservation - hmmm… Black Blade (07/02/01; 22:01:46MT - usagold.com msg#: 57358) Usage down -- Davis' team gloats - Energy advisers call campaign big success http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/02/MN202073.DTL&type=news Snippits:Gov. Gray Davis' top energy advisers took credit yesterday for the apparent success so far of their new conservation campaign, calling it the most aggressive energy-savings effort in the nation's history. California's new conservation programs have sparked the public imagination to significantly reduce energy use -- 12.3 percent less electricity used last month alone -- save money and avoid blackouts, state energy officials told reporters during a conference call.Some have said California's energy savings are simply the result of businesses shutting down in the stalled-out economy. Others suggest the state has twiddled the latest conservation figures -- based on differences in this year's temperature and population growth -- in search of good ink for the governor.Black Blade: Here you are Canuck. It now is official as some reports are filtering out that the energy savings are a result of the California economic recession. Netking (07/02/01; 21:53:34MT - usagold.com msg#: 57357) BOE Auction With a holiday in the U.S. later in the week and another Bank of England 20-tonne auction over next week (to be announced July 4th UK) dealers expect business to be somewhat thin.However there appears to be very strong fundamental support for physical Au on any price weakness, eg India for one(posted earlier) are ready with the check book to take advantage of any opportunity in the weakness of spot.My reading is that downside is VERY limited. Any opinions on this next BOE sale? I may be wrong but I sense a certain apathy towards this "out there". Black Blade (07/02/01; 21:16:28MT - usagold.com msg#: 57356) RE: Canuck (07/02/01; 05:10:11MT - usagold.com msg#: 57331) Canuck: I wonder how much of the 12% is actually "the plan working" and how much is accredited to economic slowdown?You may be right that there is an element of a slowing economy at work here. When the economy heats up, energy costs go up, and when the economy slows there is less energy demand. This can be illustrated with natural gas. Prices have fallen quite a bit - partly as a result of moderate temperatures (so much for global warming), partly as a result of conservation, and partly as a result of less demand due to the economic slowdown (recession). Exploration and production has increased and yet there is very little net gain in natural gas. However, injection rates have increased and storage levels are higher. Decline rates for natural gas fields are much higher than the decline rates in oil fields. If natural gas exploration and production slowdown, we could see prices move higher. If we make it through July and August with moderate temperatures and a continuation of the economic slowdown (recession), we could probably make it through the winter months without any serious problems. One big question is whether utes will lock in long-term contracts while we have this reprieve or will they follow the folly of the Californian Grasshoppers and get whipsawed? Cheers!- Black Blade Netking (07/02/01; 20:06:47MT - usagold.com msg#: 57355) SILVER - India moves up to become third biggest silver user in world. http://www.economictimes.com/010601/01comm01.htm (India's consumption of Ag was up a staggering 21% in 2000! Reports I have seen from India in 2001 indicate this level of growth in consumption has not eased. - Netking)-----------------------------------------------------------Snippit:"INDIA has become the third-largest industrial user of silver in the world after the United States and Japan, with its consumption in 2000 having risen sharply by over 21 per cent to 1,430 tonnes. The growth in offtake over the past decade has been nothing short of spectacular, says world silver survey 2001 conducted by gold fields mineral services. The demand has risen by 177 per cent in the space of ten years from a relatively paltry 16.6 per cent or 417 tonne in 1991. In terms of developing world, the only country to come close to Indian level of offtake is China but, even here, demand is substantially lower on both per capita and absolute basis, the survey revealed.(yet it continues to grow also in an agressive manner in the PRC also - NK)" Netking (07/02/01; 19:56:46MT - usagold.com msg#: 57354) Oil futures down sharply for now . . . . The NYMEX crude oil futures ended sharply lower Monday after Iraq said it could speedily return to its two-million-barrel-a-day exports if the U.N. passes an unconditional renewal of existing sanctions.NYMEX August crude oil settled at $25.95 a barrel, losing 30 cents or 1.1 percent on the day. It plunged as low as $25.38, down 87 cents, and near last week's 14-month low of $25.10, amid expectations that Iraq would soon return to market after halting exports for about a month.In London, August Brent crude recouped part or its losses, last trading at $25.65 a barrel, down 43 cents or 1.6 percent, after sliding to a session low of $25.10. Confronted by a veto threat from Russia, U.N. Security Council members agreed on Monday to drop for now a U.S.-British plan to revamp sanctions against Iraq and instead extend the U.N. oil-for-food humanitarian program without changes.Britain, which drafted the resolution on the plan, told the council that in light of Russia's objections, the U.N. oil-for-food program should be extended or "rolled over" for about five months. The exact date will be determined on Tuesday when the current phase of the program expires.A U.S. State Department spokesman also said the U.S. had agreed to drop for a period yet to be settled a revamp of the sanctions and extend oil-for-food without changes. Netking (07/02/01; 19:46:38MT - usagold.com msg#: 57353) Gold imports up, may rise further - India http://www.economictimes.com/today/03comm03.htm Snippit:"Traders said gold imports were estimated to rise to 1,000 bars a day this week in the western Indian city of Ahmedabad, a leading gold importing centre, from about 300 bars per day last week. Traders said imports would pick up further if gold prices fell below $265 per ounce. "The demand would be moderate at a price range of $265-268 per ounce but be active at $260-265 range," a dealer said. Gold demand in the country would pick up in mid-August and be at its peak during the festival season, traders said." turbohawg (07/02/01; 17:19:35MT - usagold.com msg#: 57352) Turnaround >Sir Turbohawg,You may find "The Fourth Turning (An American Prophesy)" by William Strauss and Neil Howe (1997), Broadway Booksof considerable interest.<Yes ! Great book ! In fact, I put up a post about that book some time back (pre-Turnaround). Their description of how this Turning would evolve seems to be falling into place. An additional very interesting aspect of their book is their description of what they label the four generational archetypes – Prophet, Nomad, Hero, and Artist – and the roles the individuals who make up those archetypes play in society's various Turnings, especially the Fourth Turning that we're now entering into and which is the most relevant. Thanks for the response !hAug USAGOLD (07/02/01; 16:52:15MT - usagold.com msg#: 57351) working kirk. . . I think you are an outstanding poster and I'm sure many others agree. You keep posting and I'll keep reading. I watched "Finding Forrester" over the weekend. Made me think of you. Good luck with the horn. . . . . Hi-Hat (07/02/01; 15:49:56MT - usagold.com msg#: 57350) Leigh Yours is the voice of reason and common sense.A principled stand only proves it.Do consider posting ongoingly. This will get sorted out. Hi-Hat (07/02/01; 15:39:23MT - usagold.com msg#: 57349) working-kirk I believe that you have it precisely right.At this point what else is the power structure, otherthan a few competing GANGS. rc (07/02/01; 15:24:44MT - usagold.com msg#: 57348) @Perplexed - I'd like to precise a few points. I was not talking about the war debt. The subject is much to complex to be discussed in a few sentences. I mentioned the Marshall Plan which was something totally different. I don't remember the exact figures but there were in the order of 5+ billion for Brittain and France, 3+ billion for Germany and above two billion for Italy. I know other countries were involved like Belgium and the Netherlands but they were in much smaller amounts. To my knowledge all these loans have been paid back.As for the last war you seem to believe that the US enter the war to save the world. Sorry! To me this is propaganda. The US intervened in Europe twice in the last century to protect her own interests. The first time to save her loans to Brittain who was loosing the war and the second time because the stakes were much higher. In the long term : World domination. Which the US achieved. And yes! Without the US neither one could have been won.We are not on the same frequency on the matter because I don't believe in ideological war. You must create one if you want to be able to send 19 years old chaps to the slaughter. You cannot decently tell them that they should fight to preserve the interests of bankers or who knows what other kind of big financial outfits. It doesn't take anything away to those boys who died. IMHO, all your kids got killed for the wrong reasons. But it, widely, benefitted to a few.I was sarcastic because of the way you presented it. Even if I believe your dollars bills have no value by themselves, it doesn't mean I did not have to sweat to earn them. But I feel cheated because, as your country is such a big importer, there is no way I can get something for them that suits me, unless I reinvest all my dollars in the US. Which history shows it is the best recipe to loose all of them.My point with the Chineses was that they are in position to buy all your gold with their huge dollars reserve. Don't worry! Personally, I am hard put to buy just a few of your Gold Eagle coins. Moreover, I feel more confortable with the Canadian Maple Leaf. Sentimental and practical reasons.I understand you can't agree with me on many of the above. But in my long life, I will be 73 soon, I have got enough solid informations that contradict a lot of what is supposed to be common knowledge, that I am now highly sceptical and should I say very cynical.Have a good afternoon! Old Yeller (07/02/01; 13:27:52MT - usagold.com msg#: 57347) Barrick taking a pummelling Something appears to be amiss with the strategy.Faux pas for the Oliphant and Munkey?There was awful lot of HM purchased at the $8 level,arbs may be in trouble.Who's leading who in the race for the bottom? Usul (07/02/01; 13:16:58MT - usagold.com msg#: 57346) Gold watch: Dubai souq reports brisk business http://www.gulf-news.com/Articles/news.asp?ArticleID=21117 "Gold sales in the first two months this fiscal year were 10 per cent higher than the same period last year." Trail Guide (07/02/01; 12:24:51MT - usagold.com msg#: 57345) Bush to throw 'protectionist' bombshell' at Europe!! http://www.thetimes.co.uk/article/0,,5-2001223492,00.html Since CB2 put it up,,,,,,,,,,and USAGOLD drove it home,,,,,,I'll put a coat of paint on it to make it last,,,,,,,,I'm off for a while,TrailGuide===========================================MONDAY JULY 02 2001Bush to throw 'protectionist bombshell' at EuropeFROM CHRIS AYRES IN NEW YORKFEARS are growing that President Bush could throw a "protectionist bombshell" at Europe in retaliation for it blocking the $42 billion (£30 billion) acquisition of Honeywell International by General Electric. The EU's decision to block the merger of the US industrial groups — which it could announce as early as tomorrow — is the latest in a series of transatlantic trade disputes that have strained relations between Washington and Brussels. The disputes, which threaten to trigger a full-scale trade war between two of the world's biggest trading partners, come on top of transatlantic tensions over other issues such as the environment. The most likely target of US protectionism is the European steel industry. President Bush last week angered the EU by using section 201 of the 1974 Trade Act to launch a six-month investigation into the impact of European imports on the struggling US steel industry. If the investigation finds that imports are harming the US, President Bush can impose quotas on imports, punitive tariffs and other protectionist measures. This could have a devastating effect on European steelmakers, including Britain's Corus, which export about five million tonnes of finished steel products to the US a year. The steel dispute comes amid an equally damaging row over tax subsidies given to US companies operating in Europe. The World Trade Organisation (WTO) last month ruled that the Bush Administration was breaking international trade regulations by offering the subsidies, and opened the door for the EU to impose $4 billion in sanctions against the US. Robert Zoellick, the US trade representative, said that imposing the sanctions would be like dropping a "nuclear weapon" on trade relations between the two continents. The US has already failed to hide its anger over the EU's rejection of the Honeywell deal. The EU also last year blocked AOL Time Warner's acquisition of EMI Group, the British record company. There are concerns in Washington that the EU has a hidden anti-US agenda. President Bush recently said that he was concerned about theEU's stance on Honeywell, while Donald Evans, the CommerceSecretary, pleaded with the EU to clear the industrial merger. Attempts by Washington to influence the EU's investigation last month provoked a furious response from Mario Monti, the EU's Competition Commissioner. He said: "I deplore attempts to misinform the public and to trigger political intervention. This is entirely out of place in an antitrust case and has had no impact on the Commission whatsoever. This is a matter of law and economics, not politics." Imposing tough sanctions on European steel imports would be a popular move for President Bush in the US. The Speciality Steel Industry of North America, said last week: "We believe that substantial dumping continues in the US marketplace. We will closely monitor developments and, if and when appropriate, will ask the Administration to initiate additional section 201 cases on affected products." Washington and Brussels are already involved in a related row over steel duties. The EU has threatened to take the US to a WTO dispute panel over its "anti-subsidy duties" on steel imports from about 16 European companies. The EU won a similar WTO case last year against the US overduties on imports of leaded bars produced by Corus.---end- The Stranger (07/02/01; 12:15:22MT - usagold.com msg#: 57344) Erratum I ought to learn to proof my own posts. Rothbard's book is "The MYSTERY (not history) of Banking". Thanks. The Stranger (07/02/01; 12:07:28MT - usagold.com msg#: 57343) Epstein, Greenspan, Rothbard Stranger's Remarks:Below is a full copy of Gene Epstein's piece from this week's Barron's, which will be of interest to many members of the Forum. In it, Epstein responds to some of the issues raised by Martin Meyer, last week, concerning a weakening Federal Reserve. The piece is posted here with Mr. Epstein's kind consent.You will note mention of "Gold and Economic Freedom", an article written years ago by Alan Greespan, in the final paragraph. The full text of "Gold and Economic Freedom" can be found under my handle, posted last Saturday.For greater depth on this subject, Mr. Epstein's suggests you go to the source of Alan Greenspan's wisdom, Murray Rothbard, a name well-known to many who frequent USAGOLD. If you have not read Rothbard's landmark "History of Banking", the entire book can be downloaded free from the internet via pdf at: http://www.mises.org/mysteryofbanking/mysteryofbanking.pdfAs profound as Rothbard is, you will find he is VERY easily comprehended. But, warning: the work is over 170 pages, so it may take a minute or two to download. I think you'll be glad you took the time.*********************************************************** JULY 2, 2001Why Did Greenspan Go for a Two-Bit Cut?By Gene EpsteinWhy did the Federal Open Market Committee decide to disappoint market expectations by opting for the baby-step? Last week, it lowered the federal-funds rate target by only a quarter-percentage point, to 3¾% from 4%, thus retreating from the unbroken run of half-point giant-steps it has taken five times since January 3.One explanation for the less aggressive action holds that Greenspan & Co. hoped to buoy everyone else's confidence by signaling its own confidence in what had been done already. In that regard, note that for the very first time this year, the committee chose to keep score, stating in its formal release that "Today's action ... brings the decline in the target federal-funds rate since the beginning of the year to 275 basis points [2¾ percentage points]" -- perhaps by way of implying that the easy-money cake had pretty much been baked, while the last quarter-point was merely the cherry on top.That explanation also lends support to a second theory, which holds that the Fed is signaling that its work is done. But since the FOMC statement also expressed the usual concern about "declining profitability and business capital spending, weak expansion of consumption, and slowing growth abroad," a third view seems the most plausible: At this point (and to shift metaphors again), the Fed chairman wants to keep a few extra bullets in his gun.The reasoning? A funds rate of 3% appears to be a psychologically important barrier that Greenspan would breach with great reluctance. The only time fed funds even touched 3% on his watch was from September 1992 to February 1994, when he was hoping to lift us out of the sluggish recovery.To push that rate even lower, you might have to abandon the claim, which the FOMC statements have repeatedly made, that inflation has been "contained." For with the consumer price index already rising at a rate of more than 3% (really 4%), a short-term interest rate of less than 3% would begin to look inflationary indeed.Ergo, simple arithmetic would tell you that at 4% on fed funds, you have only two chances left to shoot with half-point bullets before you get to 3%. But quarter-point ammo allows you four such opportunities.Notice that I haven't been talking very much about economics; somehow a rate cut becomes more important as a gesture than as the concrete act of lowering the cost of lending to those who want to borrow.However, while granting that Fed policy can often be more symbol than substance, and even that the central bank wields less substantive power than it used to, we should reject an extreme view that has lately been making the rounds: the idea (shifting metaphors once more) that the Greenspan & Co. are merely the eunuchs guarding the economic harem, in charge of the palace lights and heating system, perhaps, but with no capacity at all to bring about procreative activities.At least, something close to the eunuch theory seems to be the main thesis of financial writer Martin Mayer, both in his recent book, The Fed, and in last week's article in The Wall Street Journal called "The Fed's Faded Glory."As Mayer would have it, the central bank pursues three goals -- fostering growth, fostering employment and curbing inflation -- with "exactly one tool," while in the pre-castration period of the 1950s, it "had much more to work with." Through the 'Fifties, according to his story, Fed chairman William McChesney Martin could place various institutional constraints on a banking system that accounted for about two-thirds of private-sector loans; in contrast, Mr. Greenspan is virtually neutered by the fact that the banks make only about one-fifth of all loans and have far more freedom to do what they want.But ironically, even with all the power at McChesney Martin's disposal during his nearly 19-year reign, the economy suffered no fewer than four recessions. In fact, that was not just because the Fed then had more leeway to do harm; it was also because, then as now, the central bank proved powerless to prevent the forces of boom and bust that it helped unleash (about which more in a minute). Consider one case of an ineffective tool: the Fed's right to raise and lower the margin requirements on stock purchases. Mayer cites it as an important weapon the central bank used to have in its arsenal, but seems to forget this rule is still on its books. McChesney Martin did change the margin requirement as many as 10 times (to as high as 90% on two occasions), but there's no evidence that his fiddling dampened market volatility. As noted, the Fed can change the margin requirement, although Greenspan has never done so. That's because -- as he's said several times -- studies show it doesn't work, because leverage can be had by other means.But the Fed does have the power to determine short-term interest rates, both within and beyond the banking system. The chart on this page chooses one example among many: the 30-day interest rate on commercial paper, which is direct borrowing by corporations from institutions.Notice that as the FOMC cut the fed-funds rate through the fall of '98, the commercial paper rate fell; and as it tightened through '99 and 2000, this commercial rate rose, only to plummet again through the easing of 2001. Note also that this rate began to fall in the last few months of 2000, even before the first rate cut of January 3. The reason apparently is that in this era of Greenspan glasnost, cuts and hikes are often anticipated before they actually happen.When you think about it, the Fed's still-undisputed power to anchor all short-term interest rates is obvious enough. If the fed-funds rate, which is the rate at which member banks can borrow from each other overnight, is set at 3¾%, then this means the banks will find it profitable to lend short-term money at around that rate. And if that's the case, then no creditworthy borrower outside the banking system would be willing to pay much higher than that rate. Why should he, when he can always take his business to one of the banks, despite their shrunken role, can still boast the kind of backing other financial institutions lack: the unique power of the Federal Reserve to print all the money that's required to maintain the fed-funds rate at the level it desires.Which brings us back to the other kind of power the Fed possesses: the power to do harm.Mayer writes that we lack a theory to fully explain the central bank's influence on the economy, and here he has a point. But it would help if he and others would begin to appreciate just how often the Fed creates its own messes.In today's regime, the central bank sets the price of short-term money, and at that price, it provides all the supply the market demands. That was how it underwrote the expansion of money and credit that fueled the Internet and high-tech bubbles. At the same time, Mr. Greenspan was careful to blame it all on those who were prone to irrational exuberance -- while providing all the drugs that kept them high. Then, feeling that the boom was getting out of hand, he cut off their supply by hiking interest rates.The eunuch guarding the harem? Say rather, the fox in charge of the chicken coop.Instead of reading Martin Mayer on this topic, try The Mystery of Banking, published in 1983 by the late, great Austrian economist Murray Rothbard.While his description of the Fed's operations is a bit outdated, Rothbard explains in typically lucid prose what money is, how it is created, how banking evolves and why gold and silver almost inevitably become the money of choice. He then shows the difference between a free market in money and the controlled market imposed by government.Much of the essence of Rothbard's case is admirably summarized in a 1966 essay called "Gold and Economic Freedom" (appearing in a 1967 collection entitled Capitalism: The Unknown Ideal). As the author writes, the Federal Reserve was created in 1913 for the express purpose of underwriting the expansion of money and credit, which in turn causes boom and bust. The article was written by Alan Greenspan. Old Yeller (07/02/01; 11:47:12MT - usagold.com msg#: 57342) Something more sinister is brewing? http://www.sandspring.com/charts2001/cdj070101.html Interesting commentary on one of the Japanese enigmas.The US is urging action on the banking crisis,elections for upper house coming July 29. Randy (@ The Tower) (07/02/01; 10:54:41MT - usagold.com msg#: 57341) Briefly... to Journeyman on Greenspan's "Not one word." Our Fed Chairman is quite definitely still pro gold. Considering how the markets tend to hang on his every word, he doesn't have the freedom to speak as candidly as most "non officials" can. But saying what he can, he sure knows how to send a powerful message, no? With these three words, he can effectively deliver the equivalent message of two words he dare not utter on the world stage at this particular time -- "Buy gold."I suggest we all follow his advice and do so. Give Centennial a call! megatron (07/02/01; 10:53:46MT - usagold.com msg#: 57340) workingkirk Real men respect power, but are not afraid of it. The courage of their conviction will over-ride fear. justamereBear (07/02/01; 10:47:17MT - usagold.com msg#: 57339) Working Kirk, Turbohawg Working KirkI doubt that anyone here wants you to stop posting as you do, certainly not me. Your life experiences give you a perspective that few can even imagine, and are very likely to need badly, in the event of the coming Armaggedon. Those who don't, can simply scroll. Nor can we suggest what we think you should comment on (except you have to stay within the guidelines.) because few of us have the knowledge to ask an intelligent question.TurbohawgIf one simply looks at such things as the female menstrual cycle, (about a lunar month) it is hard to deny that there is some cyclical effect in our lives. How much, and whether we understand it, may be open to question, but there are cyclical effects present in our lives.j'Bear Randy (@ The Tower) (07/02/01; 10:29:36MT - usagold.com msg#: 57338) Last chance to pick up the Wilhelm I and Chervonetz coins on-line http://www.usagold.com/onlinestore/special.html I have a couple pages to code before I can rejoin the discussion, but wanted to let everyone know that this page will be gone in a few hours, to be replaced with the new offer.As always, you can call the Centennial office directly to put in an order for these... while quantities yet remain. There will come a day you'll be glad you did -- or wish that you had! justamereBear (07/02/01; 10:17:46MT - usagold.com msg#: 57337) Thai Baht http://quotes.ino.com/exchanges/?e=FOREX Someone posted recently a snippit about an American guru who had accepted a contract with the Thai government to advise on their monetary problems. I believe the amount mentioned was 50 million baht.The question of the poster was how much this was in 'real' money.Disregarding the question of whether the USD is 'REAL' money, and the insult implied in the statement, the exchange rates can be found at the above link. In the case of the baht, it is about 45 plus to the dollar. So if you divide 50 million, by say 50, you get a payment for the contract of just over 1 million US.j'Bear USAGOLD (07/02/01; 09:03:24MT - usagold.com msg#: 57336) Today's Commentary & Review: Steel & Gold & Exchange Rates http://www.usagold.com/Order_Form.html These reports are published regularly at the Commentary & Review page, access by password only. A quick and easyone-time registration is required. Go to the link above. Your free subscription includes our popular monthly newsletter: NEWS & VIEWS: Forecasts, Commentary & Analysis on the Economy and Precious Metals.Since CB2 brought it up. . . . . . .- - - - - - - - - - 7/2/01 (www.usagold.com). . . .Gold continued the downtrend begun last week as the summer doldrums entered their second week. The week of July 4th is usually the most quiet of the year in the investment markets across the boards. Traders are reporting light physical buying on the dips. Says Future Source this morning (echoing our own view of the summer doldrums period), "Trading over the next few days will likely be thin due to the upcoming Independence Day holiday in the U.S., as many market participants will likely be absent Monday and/or Tuesday. That said, market participants have taken advantage of the absence of certain sections of the global gold investment community on public holidays earlier this year to move the market, in plays requiring very little effort. Some are pointing to the upcoming Bank of England auction as a deterrent to higher prices. We disagree. The BOE auctions have become irrelevant and if something were to happen in the economy or in the gold market itself to warrant a break to the upside, it is unlikely the 20-tonnes offered would be a deterrent. More interesting at the moment than the quiet investment markets is the developing situation in the steel industry. What is happening with steel on the international trade front offers a example of what is happening in a smorgasbord of U.S. industries. With losses and unemployment mounting and more factory closures facing a brace of domestic industries, the Bush administration is being called upon to do something about what may become its first major domestic economic crisis. Steel becomes a test case. Major steel producers like U.S. Steel are complaining that the strong dollar policy is opening the door to cheap, often government -subsidized steel imports making it impossible for domestic producers to compete in the marketplace. The Bush administration is coming under growing pressure to do something about it not just from steel but the National Association of Manufacturers and its membership as a whole. In its drive to find cheap imports to keep down inflation, American economic policy-makers are running American industry out of business. That wouldn't be so bad if the competition were occurring on a level playing field, but for a variety of reasons (i.e., cheap labor, subsidized foreign competition, beggar thy neighbor currency policies, etc.) it is not. One option, the restrictions/quota route, raises all kinds of questions about the 'free trade' stance of the Bush administration and the future of international trade agreements. That leaves adjusting the dollar exchange rate downward as the most viable policy option. The question is whether or not the Fed and U.S. government are capable of maneuvering the dollar lower under the circumstances. Both Europe and Asia have fed at the cheap currency trough for over a decade with the blessing of the U.S. That is not likely to change overnight, nor is it likely to occur without some vigorous arm-twisting, but more and more its beginning to look like something has to give. It looks like the steel question might become a testing ground for the Bush administration to determine which route -- quotas/restrictions or devaluation -- seems least offensive. At present, in the case of steel, the Bush administration is pushing for restrictions on exports to the United States. That may prove to be the wrong policy at a time when trading relationships, particularly with Europe (The Bush administration is reportedly angered over the EU's blocking of the Honeywell/General Electric merger.), are already strained, not to the mention the fact that it lacks the broad stroke required to assist a wide range of American manufacturers -- small and large, now under the gun. According to Meps Europe, a British analyst, the strong dollar has played the key role in channeling cheap steel imports into the US. "The main difficulties in recent years for the US steel segment have developed from the high value of the dollar." Meps recalled that since the mid1990s the US dollar had appreciated against all major currencies: 50% to the South Korean won and euro, 30% to the Taiwanese dollar, 15% to the yen and 6.5% to the pound. It follows that a weaker dollar, or a de facto devaluation would help not only steel, but the rest of American industry -- and helping domestic industry is supposedly one of the mandates the Bush administration took to the White House last January. It is unlikely that the strong dollar policy will end vis a vis a unilateral decision by the United States. This will make any upcoming international conclaves on the economy all the more interesting. If the G7 decides to restructure the international economy like it did in the early 1970s, it could lead to all sorts of dislocations and opportunities. The dollar would become the object of a de facto devaluation. The most direct beneficiary would likely be gold. Something to think about as pressure mounts for action by the Bush administration. That's it for today. We'll be back later in the week. MK Additional Note: If you think the summer doldrums affect just gold, think again. It affects all the markets. The stock market is worst than in the doldrums and could very well be in first stages of a long term bear market. Not many of today's investors have experienced the grinding away of one's assets by the bear. As we have said often on these pages, gold is a safe-haven for investors when the bear is on the loose. Since, the NASDAQ collapse and the onset of the bear market, gold has not only held its own, its made a couple forays to the $300 level. It is a good place to park funds and preserve the gains you've made in stocks. We would be happy to discuss the situation with you along with the fundamentals of gold ownership. Please contact us at 800-869-5115. CoBra(too) (07/02/01; 08:55:48MT - usagold.com msg#: 57335) - Confused? ... As I'm confused on the unrelenting US$-exchange value, mind you vs any other fiat currency - not gold, as it becomes more clear with the day that the POG is artificially suppressed - I'm just asking myself WHY ... can a fiat currency - even if it is regarded the only global reserve currency - gain value against all odds of : # 1 - deteriorating balance of payments - i.e. current account deficits are unsustainable. # 2 - Since 1985 the external debt explosion culminated last year from 1.52 trillion $ another 44% to 2.19 trillion. # 3 - this is about 7 times the cumulated growth average of external debt of the last 15 years (thanks to the "Privateer's no's). The 64K $-Qu. is how to repudiate this bubble, without destroying the rest of the global economies? ... By Greenmail, extortion and reflation by all others? Well, I don't think so! It won't work - though it may just prolong the bubble until the decay will wreak havoc - too big to contain - the unthinkable, unsinkable ship! ... Who'se running amuck? Pray, tell me, as I am at a loss to understand this monetary spree! ... Gee, don't ever free - gold - as we've got to get more at prices we'll never hoped to see for so long. So please, prolong this selling spree, snapped up by the free to see and grab the opportunity - I (me) too ... cheers cb2 Mexpat (07/02/01; 07:57:13MT - usagold.com msg#: 57334) What's powering the Mexican peso? Gringo expatriates living here in Mexico have been amazed by the recent strength of the peso vs. U.S. dollar. A couple of years ago we were frequently getting over 10 pesos to the dollar. Devaluation to 12 or 13 pesos was thought to be imminent. Not too long ago Bob Chapman, the International Forecaster guy, was recommending a short on the peso. But yesterday the local casa de cambio was advertising only 8.80. Instead of weakening the powerful peso has strengthened by something like 12% over the last two years. At the same time the cost of living in pesos (in spite of government claims of declining price inflation) is charging ahead at about a 15% annual rate. Examples: Rent increased 33% in the last two years, bottled gas up 20%, comida corrida in local restaurants up from 40 pesos to 50 this year, a cup of coffee in a Zocalo café up from 8 pesos to 10 (now over a dollar and no refills!) and it goes on and on. It is standard procedure for most local businesses to automatically up their prices across the board from 10 to 15 percent in January of each year. The net effect of all this is that it is costing expats with fixed incomes in dollars a hell of a lot more dollars than it did a few years ago to maintain the same standard of living here in Mexico due to price inflation and currency fluctuations. One could say we're getting "flucked" by the floating fiat currency system.One wonders why the previously pathetic peso has become so strong vs. the inflated dollar. Economic growth here is slowing as exports to the U.S. decrease and unemployment rises but the Mexican DOW is up like 25% this year. I read a lot of speculation as to why the peso is strong…dollar inflows from immigrants to the U.S., drug money being converted to pesos, foreign investment, money flows out of Argentina and other weaker Latin American economies into Mexico, but no one really seems to really have a good explanation for what's happening. Interest rates on peso deposits have actually dropped by about a third this year, from 15% to under 10%, which should, I would think, make peso investments less attractive. I'm wondering if it could largely be a result of the difference in monetary policy between the U.S. and Mexico. The U.S. has been expanding the dollar money supply wildly at the same time as the Mexican central bank, since 1998, has followed a rather restrictive policy. Could this be the primary cause of the relative strength changes we are seeing? I respect the fine economic analysis here on the Forum and would appreciate your thoughts and comments.Also, I'm wondering what might happen to the peso when the dollar crashes. If the U.S. moves into a hyper-inflationary blow-off and the dollar declines against European currencies will the peso necessarily go down with it since the two economies are so closely intertwined, and maintain more or less the current exchange ratio? Or could the peso actually strengthen further, putting those folks living in Mexico on fixed dollar incomes in a very precarious position? Any thoughts or comments on this?As a diversified gold bug, slowly being converted by the arguments of TG, Randy and others into a physical "gold advocate", I personally am pretty well covered. Unfortunately my suggestions to friends here that they consider putting some of their assets into physical PM's have been met until recently with tolerant derision and ridicule. Lately, however, some seem to be more receptive. Funny how a 25% decrease in purchasing power tends to open ones mind a bit. Next thing you know they'll be gettin’ some gold… or at least wishing they had. RossL (07/02/01; 07:37:33MT - usagold.com msg#: 57333) turbohawg http://home.columbus.rr.com/rossl/gold.htm I'm here! I spent the weekend out in the woods and I'm still trying to catch up on the discussion. Thanks for your concern.To all:I would also like to point out that my web page carries no advertising because it is paid in full (by me) as part of the contract with my ISP. If an ad should ever pop up on there, someone please email me so that I can complain about it.I have a limit of 5 megabytes on the page, and a few months ago I filled that up. Instead of making agonizing decisions about what to keep and what to delete, I deleted everything that was unchanged for more than 3 months, including the HBM chart page and the Another page. There was nothing personal about that decision, if anyone was wondering why those pages aren't there any more. working-kirk (07/02/01; 05:13:52MT - usagold.com msg#: 57332) My take on Greenspan MY THOUGHTS ON GREENSPANI have no doubt Greenspan sold out but I think it is more complicated than that. I think the man is clearly delusional and let me explain why.About the same time Greenspan join the Federal Government, William Simon also join the Federal as a businessman come to rescue it during the energy crisis. He couldn't. He became energy czar even through he protested he had no experence in the field. It was there he got a glimse of the inner workings of the government. The backroom dealings, the intrigue and dirty deeds done cheap. He wrote about it in his books "A time for truth" One thing he mentioned is a lot of other businessmen have come to Washington to save the country from potential problems only to leave in disqust. It takes a person of acertain deviousness and power hunger to climb the political ladder and stay there for a number of years. Greenspans obviously has this quality. But here is where I explain he is delusional.Why would an advocate of Ayn Rand go to Washington in the First place? If you remember her book Atlas Strugged, one of the main character was Franco D'Anconsta. This character thought by pretending to be a man of low even dispictable character, he could gain the trust of the collectists and with that trust destroy the system from within and after it is gone form one based on your true beliefs.What he forgot was Rand said : You don't win by pretending to join the enemy and then trying to outsmart them. You are only playing their game and it is a game you can't win.Also, I write and I have written about some pretty mean stuff about real life. Some who been following me must get a sense of some of evil I have encountered. There is a difference between fiction and real life. In fiction, it is a perfect valid plot device to have someone pretending to be evil but deep down is still mortally upright. In the violent world of drugs and gangs I grew up in and the real world you and I know: One of two things would happen neither of which ended up with the good guy hauling off the bad guys. If someone tried to pretend they were bad, in a fairly short time they would be faced with a situation where they would either be killed or be totally corrupted. Let me give a scenerio. You join the police force to save lives and be a hero. And you're good and given the chance to go undercover. You join a gang. The gang memebers don't trust you but they will give you a chance to prove yourself.In the neighborhood there's is a loudmouth noisy snitch who been dropping a dime and needs to be dealt with. You have to do the dealing! (As a little aside: The "drop-a-dime" program and "Just say no" I beleive are two of the most dangerous ways this government has found of killing innocents in a long soiled history of killing innocents. Just to be even thought of as a potential "snitch" is enough to have you and your children killed. You'll never read it in your newspaper only the government bragging how successful these programs are but I know that have been a lot of funerals because of these two harebrained schemes. My sister was telling me of a 15 year old who died last week who said no and thought to be a snitch. They had to have a close casket there was so much bullet damage.)So you have to kill an innocent person when you wanted to save lives. What would this do to your sense of morality?And if you didn't consent they have a bullet for you. If killing when you wanted to save lives doesn't corrupt you. nothing will. (Actually I wouldn't say nothing, because there are far worse ways of corrupting a soul.)(Another aside, because of this and other reasons, the police would rather arrest the people who buys marijuna for medical reasons then try tackling the crack house down the block. The dealer can either blackmail the cops and open a can of worm no one wants or if you get some new foolsih idealist cops, they not afriad to shoot it out) Alan was out playing hero but miscalucated by not knowing the difference between fantasy and real life and because he didn't know he ended up totally corrupted. Those who arranged for him to join the Federal Reserve would have known of his writings. And very early in his career at the Fed, he would have been given him a choice where he had to prove he wasn't pretending to good along with the system and something that would have totally blackened his soul. Could they asked him to murder someone? Possible but I don't think so. You and I know, at the level of power and money involved at the level of the Federal Reserve, murder has been used by the powers that be. But as someone who seen even worse evil, there's a lot worse you can do to corrupt a man than to have him commit murder. And once his soul is blackened and totally corrupted, there's is no hope for the man.So Greenie had been totally corrupted. What about his delusions of fanstasy of saving the world financal system? It too got changed. Changed into what appears to be a sell out for public adulation. He can't save the world like Franco did but maybe he can save the stock market. Don't think for a moment that Greenspan doesn't get off everytime the press yells he has saved the stock market with another rate cut. And he has saved the stock market so many time, The yelling gets louder and more is expected of him.Greenspan is faced with the: "What next Genius?" problem. Now I have not yet experienced it but maybe those who have known success can fill you in on more of the details. I only know it because friends tell me it has happened to them. I am trying to succeed as either a writer or musician. But my friends and mentors who have succeeded tell me: "What next Genuis?" How do you follow up the smash novel? or the runaway Los Vegas show revue? "What next genius?" And once you made it there will be vicious people, the same vicious people you saw knifing each other in gang wars, trying to take you down because they get an almost sexual pleasure in either killing you or taking you down? So "What next genius?"In the case of my friends they try to find someone as ambitious and talented and other factors and help make their climb a little easier. While it might not show here, I have some incredible teachers some of the best trumpet players, science fiction and screen writer trying to help me grow.(It helps I live in a city where the best musicians travel to buy the best made horns in the world Monettes" and screenwriters once they decide they made enoguh money in L.A. and want some green space come here to live)But where does Greenspan find someone he can teach who is willing to save the world financal system? He can't. And even if he could would Washington corrupt that person as it did him? The best he can do is give vague warnings about irrational exturbance. But it gets worse for Alan. Adulation of any kind is a drug. My friends have told me this. They whisper almost as if they were afraid someone would hear, they tell me of the fear that can come with Adulation. For musicians, actors and writers, that fears comes in the warning: "You'll never eat lunch in this town again!" They are talking about the Powers-that-be in Hollywood. The studios, the networks, the deal-makers and in particular the super agents that can get everybody together. And just like there are powers behind the visable and fameriar starsI am sure there are Powers-That-Be behind the Federal Reserve pulling Alan strings. Who are that? Your guess is as good as mine. Only the powers that be in Hollywood are exhibitionists compared to the power pulling the strings in Washington. We can only make wild eyed guesses about the power behind the throne on outcast internet sites like this. Alan has sort of hinted at them in saying: I tried montenary reform but no one would listen. Who is he refferring to? Whoever they are, I bet 1.) They have totally corrupted him and 2.) They have him in the worse fear possible. A fear far greater than fighting in a war or the loss of life. Megatron mentions in msg#: 57295> The argument that Greenspan 'knows' what happens to those > who fight the fed is even more sickening,if it is> plausible. Men ran through a hail of bullets on Omaha > beach, men laid on hand grenades to save others in Italy, > men laid in leech filled trenches in Gualalcanal, men > dropped nuclear weapons on other men's families, men burnt > alive on the decks of carriers!!! If that son%$@#@%@#ch > cannot simply stand up in front of people and say what he> means, without fear, in the knowledge that what he says is > true, then I can see why Doug Casey refused to> shake his hand. Then he is an embarassment to the human > race.Since this is a gold forum I cshould bring up the role of gold. Why in the name of sanity if you're out to destroy gold select a man who has spoken for gold? I believe it is it an all out war being fought on several fronts physically, spiritually and morally. We know how with the gold carry trade gold is being destroyed physically. How do you do it spiritually and morally. Why not go after a gold avocate and destory him. Maybe I can give another example. How many people were turned away from religion with the fall of Jim and Tammy Bakker? How many here are disgusted with Greenspan hypnocritcy seeing how he is the leading statist?Just like church attendance fell after the fall of Jim and Tammy, I bet a lot of people who would have been reception to the message of honest money and liberty gold can bring are turned away seeing Greenscan no longer believes. But just because Greenspan turned away from the Gold Standard doesn't mean is won't be a good things. I hope this forum will contiunue bacuse I am trying to write how it might be possible to reestablish a gold standard and the good it will do. Only it will take time. Anyway I appreciate this formum for letting me share my thought on gold and war and other things. If you think what I have to say is worthwhile please leave me feedback.> Black Blade (07/01/01; 16:29:11MT - usagold.com msg#: 57293)> RE: megatron> It is called selling out for a price. Sellin out for > public adulation and a few bucks. I have a hard time > believing that> this is the same Rand-Objectivist Greenspan that wrote > about freedom and "honest" money. Cheers!> - Black Blade>> megatron (07/01/01; 16:24:01MT - usagold.com msg#: 57292)>> Black Blade/Tree>> This is what angers/confuses me most about the man, is >> that he could write one of the most lucid documents>> about freedom and the 'American Way' ever written, and on >> the other hand do nothing in 13 years that remotely>> approaches the philosophical integrity of the document. >> Every time I read it I get inspired. Every school child>> should recite it. Yet, in my 10 years of following this >> subject ,I've seen nothing to indicate he is anything but >> one of the biggest 'statists' the world has ever seen. Canuck (07/02/01; 05:10:11MT - usagold.com msg#: 57331) @ BB From your previous message:"California businesses and residents cut electricity use by 12 percent in June compared with the same period last year, state officials said Sunday -- proof, they said, that the governor's plan for coping with a tight power supply is working"I wonder how much of the 12% is actually "the plan working" and how much is accredited to economic slowdown? Turnaround (07/02/01; 03:27:58MT - usagold.com msg#: 57330) four score and seven years turbohawg (07/01/01; 21:33:51MT - usagold.com msg#: 57310)"A second factor is the influence of cycles. The more I (casually and for fun) study them, the more I see them playing out in various aspects of life. Short, intermediate, and long term cycles are always in play, sometimes working in concert as they converge and other times working against each other as they diverge. The stock market provides a great lab for those who do serious cycle work as it quantifies cycles. George Lindsay was a master.....If the Great Society's triumph over freedom properly qualifies as an emotional agitation, then at around the 40 year interval we can expect the forces of statism to take a real hit. Other cyclic factors indicate that any such transistion will come with great difficulty. "Sir Turbohawg,You may find "The Fourth Turning (An American Prophesy)" by William Strauss and Neil Howe (1997), Broadway Booksof considerable interest. One central idea is the interval of the saeculum, or roughly one human lifetime. They speak at length about four seasons of specifically American history, the First Turning "High" (like post WWII), Second Turning "Awakening" (like 1960's spiritual upheaval), Third Turning "Unraveling" (needs no introduction), and Fourth Turning "Crisis", occuring in this order over the past several centuries.excerpt:Anglo-American Crises- (pp 43)"To see the pattern best start with the present and move backward. Eighty-five years passed between the attack on Pearl Harbor and the attack on Fort Sumpter. This is exactly the same span as between Fort Sumpter and the Declaration of Independence. Add two years (to Gettysburg), and you reach President Lincoln's famous "fourscore and seven years" calculation. Back up again, and note that eighty-seven years is also the period between the Declaration of Independence and the climax of the colonial Glorious Revolution....."Over time, American historians have built a nomenclature around these successive dates...Bruce Ackeman identifies "not one but three 'founding' moments in our history: the late 1780's, the late 1860's, and the mid 1930's""Although the Federal Reserve Act was passed Dec 23rd, 1913, the Federal Reserve Bank did not actually start operations until 1914, four score and seven years ago. turbohawg (07/02/01; 01:37:13MT - usagold.com msg#: 57329) ... and while on the subject of cycles ... … it's interesting (to me anyway) to consider the recent debate at the Forum in a cyclical context. Communism and fascism, the more radical extremes of collectivism, have been rejected the world over as proven failures. But collectivism itself has not yet, as reflected in the continued existence of socialistic govts and the fiat schemes necessary to prop them up. The idea of individualism, liberty, and honest money remains anathema to politicians and bureaucrats.It's no wonder that those who have studied the relationship between money and freedom shared similar views toward the pro-fiat, if-you-can't-beat’em-then-join’em euro stance endorsed here, which undoubtedly is seen as a contemporary, Third Way equivalent of ‘better red than dead’, and were quick to point out its flaws. The euro effort appears to be statism's last stand … or attempt at a last stand. Therefore, no opportunity to repudiate and cast out the oppressors of the world should be lost as failure could mean a resurgence of leftist control until the next cycle interval comes around years ahead.If the debate were allowed to continue straight up, many would likely find comforting the analysis and input of ET, ORO and other knowledgeable posters who have committed their time to illustrate how the euro scheme will ultimately fail sooner or later due to the mechanics of the overwhelming market forces which are already collapsing currencies and govts and which were created by the statists themselves in their bid to hold on to power til the end. Cycle analysis and observation of trends simply add another dimension, a dimension which seems to dovetail with market realities. But just in case the pro-freedom side is overly optimistic or outright wrong, arm thyself !Fortunately, access to thinkers such as Rand, Mises, Ron Paul, and many others is easier than ever, and newbies to such matters as those that were discussed here can readily find further insights if truly interested.hAug Peter Asher (07/02/01; 01:32:38MT - usagold.com msg#: 57328) That's 'world-wide' The tooth-picks propping up my eye-lids are buckling. (:-0 Peter Asher (07/02/01; 01:28:59MT - usagold.com msg#: 57327) ORO Many thanks for the reply. I'm trying to focus on that last paragraph regarding the atrophy of the currency in respect to gold. It seems that the quantity of 'buying rights, extant in the currency of the system, is so great in terms of the gold float that an equilibrium would occur at some point of gold/fiat ratio. Aragorn and I had a long back and forth on this back in the early days. I might resurrect those posts.What I'm looking for is the similarities or differences between your descriptions and my concept of Gold coins minted by any source qualified to certify weight and purity, exchanged for any currency in a wol-wide market entity, and having its buying power determined by free-market pricing of goods and services against that gold. I think we are on "the same page" on this but it's also way past my 'thinking time' tonight.Thanks again -- Peter ski (07/02/01; 01:16:31MT - usagold.com msg#: 57326) Getting in the last word on the Fed Once again, last weeks Fed meeting got the customary top billing & media fanfare as the most significant economic event of the week. For as long as I can remember, we have been led to beleve that this dedicated group of quasi government servants always has our interests and the best interests of our nation's economy at heart. But is this true?I penned the following lines a few years ago and think they apply to this situation."Ski's conclusion: Egypt, China, Greece, Rome, France, Spain, England ..... empires that have fallen ..... but why? I conclude that the vast majority of the 'seeds of destruction' of an advanced civilization are rooted in the DIVISION OF LABOR. As civilizations mature, only cobblers have the knowledge to make shoes, only farmers are experienced at making hay, only mechanics have the requirements to repair cars, only doctors are licensed to treat diseases, only the religious leaders possess the know-how to talk to God, only lawyers are certified to deal with the laws they have created, and only politicians have the expertise to govern. Because of the DIVISION OF LABOR, the greater tendency is to mostly do what you are specially qualified, educated, regulated or licensed to do. The result is that we then necessarily and voluntarly, disassociate ourselves from the activites & interests of others & transition onto a new course of preserving our own agenda. The resulting paradox is that in a specialized society, relatively few people know what you are actually up to, whether you are doing a good job, or if your actions are productive, counter-productive, or downright harmful to others in your very own society. The final outcome is that members of the advanced civilization then have the capacity to conceal their incompetence, hide their real agenda, line their own pockets, and generally preserve their own self interests to the detriment of others ..... right up until the final day of the inevitable social collapse. In the case of politicians, until the very last penny has been squandered, the vault is empty and the enemy is at the gate .... after it's too late to fix the problem."So ..... whether it's the Fed, the CEO of Firestone Tire, your favorite politician or the unionized assembly line worker next door ... I never put too much stock in what these entities are PRETENDING to do for me! Instead, a lot of silver and a little gold should do just nicely! Usul (07/02/01; 01:16:19MT - usagold.com msg#: 57325) "evidence that Barrick's stock is overpriced " http://biz.yahoo.com/rf/010701/n01247023.html Homestake deal shows Barrick's weakness - Barron's"Sanford Bernstein mining analyst John Tumazos...... rates the stock at underperform given the company's ``premium valuation to its peer group,'' according to the Barron's article." Black Blade (07/02/01; 00:26:22MT - usagold.com msg#: 57324) Philippine Volcano Likely to Explode http://dailynews.yahoo.com/h/ap/20010701/wl/philippines_volcano_25.html Snippit:LEGAZPI, Philippines (AP) - The Mayon volcano is rumbling and emitting dense gas clouds, signs it will likely explode again within a week, potentially with enough force to trigger an eruption that threatens villages at its base, scientists said Sunday. An explosion could come between Monday and next weekend, said Ed Laguerta, chief volcanologist at the Philippine Institute of Volcanology and Seismology.The Mayon volcano blew ash nine miles into the air and shot red hot boulders 2,000 feet high when it erupted June 24. On Friday, it erupted twice, but with considerably less force, blasting ash just over a mile into the air. ``Magma is rising easier and letting out gas,'' Laguerta said Sunday after reviewing the latest data on the rumbling mountain.Black Blade: Stop that gas! That CO2 will blow a hole in the ozone! And all this after Mt. Pinatubo last year. And that's just the Philippines. Good Night! ORO (07/02/01; 00:15:56MT - usagold.com msg#: 57323) Peter Asher - No system, and alternatives I summarized my approach a few weeks back, a couple of months ago, and a set of suggestions going back a couple of years.My first choice is "No System". The market participants chose whatever they want.The key choice is not to have a central bank, and not to have regulation of banking (at least not as it regards reserve ratios, leverage, interest rates, credit quality, etc..). Even Jack Kemp recognizes that the Fed should not be in the business of setting interest rates. Unfortunately, his suggested solution is not quite realistic since this Hayek-ian idea assumes that gold trading freely without participation of central banks in the gold market, but with all manipulation on the currency side alone will succeed in spite of the currency risk (for a downward gold price) being eliminated. At this juncture, we have to conceed that the downfal of a gold fixed par currency is that holding gold bears no risk, while holding currency does. Thus without a central bank to supply gold to the market and withdraw it according to market requirements to sustain the fixed par for any given short term interest rate, the currency is set on a terminal glide towards a pure market preference for conducting business entirely in gold. Thus par must break, no matter how well the central bank manages its business.Furthermore, if gold were simply made into a legal tender along with a currency, then the currency system would slowly attrophy as gold gains two fewer bid-ask transactions in conversion of currency to gold and vice versa for paying a debt, making for an advantage in contract denomination in gold (more stable real values, and even better stability with no central bank playing in the gold markets), and transactions in gold. Black Blade (07/02/01; 00:12:13MT - usagold.com msg#: 57322) Asia Taking a Hit Tonight! http://quote.yahoo.com/m2?u One more thing - Asian markets looks down right ugly tonight! Nikkei gets a drubbing - down by 223 points! Black Blade (07/02/01; 00:07:22MT - usagold.com msg#: 57321) Greenhouse gas emissions soar in defiant US http://www.guardian.co.uk/Archive/Article/0,4273,4213864,00.html Special report: George Bush's AmericaSnippit:America, the world's biggest producer of greenhouse gases, is polluting the planet on a greater scale than ever before. Official figures show its emissions of carbon dioxide - the main contributor to global warming - are accelerating rapidly, while other industrialised countries are cutting their output.Black Blade: Another critical article on the US Kyoto Accords from the land of Hoof and Mouth disease. If the Thames River was in the US, it would qualify as an EPA Super Fund Site. Interestingly, the US has a better record of cleaning up the environment than Europe and more land by percentage set aside for wilderness preservation. The science(?) of global warming is debatable as to whether man has any meaningful influence on greenhouse gas contributions. The recent eruption of the Mayon volcano in the Philippines has contributed more greenhouse gases than man will this year, and it still is ejecting gas. - Oh my! We must "put out" the World's volcanoes before we have more greenhouse gas put into the atmosphere! Can't put water on it as evaporation also is a contributor of greenhouse gas. We must stop evaporation too! We just got to change the laws of physics and the laws of nature - maybe we should sign a treaty ;-) Golden Dreams All!Perplexed - Interesting account of your proximity to the petroleum biz. Take care! ViewYesterday's Discussion.
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