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ARCHIVED DISCUSSION FROM 1/2/2002
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Black Blade
(1/2/02; 23:05:58MT - usagold.com msg#: 67595)
Newmont Ups Normandy Bid
Just announced on CNNfn that Newmont-Franco has officially raised the offer 10 cents for Normandy. I guess it is no longer just a rumor. "Interesting Times"
- Black Blade
uponroof
(1/2/02; 22:00:16MT - usagold.com msg#: 67594)
Black Blade .....thanks again
http://finance.news.com.au/common/story_page/0,4057,3521536%255E521,00.html
You are very informed on this and I do appreciate the view you're providing.
The 10 centavos kicker that NEM is apparently throwing out there is probably designed to offset Anglosoldout's advantage in deal timing.
AU has an unconditional bid which is scheduled to close Jan 11. NEM offer is being delayed due to various international regulatory meetings. The uncertainty of the NEM deadline is a disadvantage....and, the SEC is the judge and jury on how long the GAAP procedure will take! THAT'S one thing that bothers me. Harvey Pitt and the paid hacks at the SEC deciding between hedged and unhedged. It could get dirty at very high levels here.
So what does NEM do?
BUMPS THE BID UP 10 CENTS!
I LOVE IT!
Black Blade
(1/2/02; 21:38:48MT - usagold.com msg#: 67593)
uponroof - One More Thing
One more thing that the financial media and so-called "analysts" are missing here is the $38+ million breakup fee that goes to Newmont if Newmont loses out on the bid. That fee must also be considered in the overall costs associated with this bidding war should AngloGold-Barrick win. That is $38+ million on top of all current bids which actually drops the value of the AngloGold bid.
Actually one more thing. What if Newmont-France run the price up and then let AngloGold have the winning bid at a hefty price while walking away with an easy $38+ million payoff and leaving AngloGold with some large writeoffs and lowered expected profits from future forward sales? This soap opera could have some very interesting twists in a bizarre plot that makes the "who shot JR" episode of "Dallas" look rather amateurish in comparison. No matter how it plays out AngloGold does not look to have such a good deal. It comes down to AngloGold-Barrick wins = the forward sales game continues with more Gold sold forward, and if Newmont-Franco wins = large blocks of forward Gold sales are unwound and the POG rises. "Interesting Times" Cheers!
- Black Blade
uponroof
(1/2/02; 21:23:41MT - usagold.com msg#: 67592)
I am going to enjoy every minute of this
Thanks Black Blade
Sounds like NEM is about to put this to deal bed.
Anglosoldout and Barrick had better use that buyout capital, that was until recently burning a hole in their very nervous pockets, to purchase gold instead.
Better do it now boys....BEFORE NDY's hedges get covered. Tic...Tock...Tic...Tock..........BOOOOOOOOOOOOM
HEEE HEEE HEEE!
Black Blade
(1/2/02; 20:45:23MT - usagold.com msg#: 67591)
Normandy shares placed on trading halt
http://biz.yahoo.com/rf/020102/syb006287_1.html
Snippit:
SYDNEY, Jan 3 (Reuters) - A trading halt was imposed on shares in takeover target Normandy Mining Ltd on Thursday, pending an announcement from the company. Normandy, which is the subject of a heated battle between South Africa's AngloGold and U.S. rival Newmont Mining (NYSE:NEM), told shareholders on Monday to take no action before it provided updated advice by the end of the week. The Australian Financial Review daily newspaper said on Thursday in an unsourced report that Newmont appeared set to increase its bid by almost 10 cents a share to bring the battle for Normandy to an end.
Black Blade: A 10 cent increase in Newmont-franco bid? This is "interesting" as it really puts the screws to Booby Goodsell and his cohorts. It should be next to impossible for Booby to go it alone to match such an increased NEM bid. Now the question is whether another desperate Gold Hedge Fund by the name of Barrick under the leadership of Randolf Olipants will join this bidding war to save the Hedgers. Both AngloGold and Barrick are apparently very desperate to keep the Gold short sales program alive and the POG depressed. There is a continuing rumor from some that I know in the Gold mining industry that should Barrick join AngloGold in order to defeat the Newmont-Franco bid, we could possibly see Gold Fields cut a deal with Newmont-Franco for a piece of the action. As I have been saying this is an apparently desperate "do or die" action as far as AngloGold is concerned. Stay tuned - this soap opera is sure to have a few more twists and turns in a rather sordid plot.
Black Blade
(1/2/02; 20:31:37MT - usagold.com msg#: 67590)
PacifiCare to Cut 1,300 Jobs
http://biz.yahoo.com/rb/020102/business_health_pacificare_dc_1.html
Snippit:
CHICAGO (Reuters) - Health insurer PacifiCare Health Systems Inc. (Nasdaq:PHSY) said on Wednesday it will eliminate about 1,300 jobs, or 15 percent of its workforce, and take a $60 million pretax charge in the fourth quarter to cover severance and other related costs.
Black Blade: It didn't take long. "Bone Pile" growth begins next day after holidays. 1300 more "Bones" cast upon the "Bone Pile."
Canuck
(01/02/02; 19:49:46MT - usagold.com msg#: 67589)
@ Cavan Man
Ok buddy, spill your guts about Ari!
Cavan Man
(1/2/02; 18:01:23MT - usagold.com msg#: 67588)
Aristotle
Who loves 'ya baby?
Cavan Man
(1/2/02; 18:00:35MT - usagold.com msg#: 67587)
Privateer
You are one of the very best "big picture" and clear thinkers I have come across in two years plus on the web. Please visit more often.
Cavan Man
(1/2/02; 17:55:05MT - usagold.com msg#: 67586)
Buena Fe
Notice; Solbes said, "increasingly used". The mystery guest said that Euro was being used a ways back on the Trail--though not in a major way. With the Gulf States now adopting their own monetary unit (today's agreement) and the UAE (CB I think) stating their confidence in Euro as a significant reserve asset, the wheel turns slowly yet covers a lot of ground.
Canuck
(1/2/02; 17:49:04MT - usagold.com msg#: 67585)
Globe and Mail
Three excellent articles in the Globe today. The most neutral to gold (increase equities) mentioned of the 14 sectors in the TSE300, precious metals was #2 in 2001. The most bullish article mentioned a prominent investment firm that is 'heavily overweight non-hedged gold producers'. He expects 1Q02 to be great for gold.
Canuck
(1/2/02; 17:40:58MT - usagold.com msg#: 67584)
Gas
Gasoline took a major jump about 5 hours ago (20%), I don't see any news?
Black Blade
(1/2/02; 16:38:46MT - usagold.com msg#: 67583)
More Job Cuts Seen Despite Recovery Hopes
http://biz.yahoo.com/rb/020102/business_economy_jobs_dc_1.html
Snippit:
WASHINGTON (Reuters) - Job cuts still loom for American workers despite signs the U.S. economy may be headed for a recovery soon, analysts predicted. The December employment report, due out on Friday, is expected to paint a somber picture of the labor market at a time when some economic data lately have offered hopeful signs. The unemployment rate is seen rising to 5.8 percent from 5.7 percent in November. The jobs report will be released at 8:30 a.m. EST on Friday.
Black Blade: In a couple of weeks when we get past the data covering the holiday season, we should see the "Bone Pile" grow much higher. In a word - "GRIM"
Black Blade
(1/2/02; 16:30:10MT - usagold.com msg#: 67582)
Money funds lose $52.1 bln in cash, yields near low
http://biz.yahoo.com/rf/020102/n02592794_2.html
Snippit:
NEW YORK, Jan 2 (Reuters) - Investors yanked more than $52 billion of cash from money market mutual funds in the week ending on Tuesday, capping a rough year for savers, who saw yields plunge by nearly three-fourths to well below 2 percent, according to the Money Fund Report. Investors pulled $52.1 billion out of the funds, or 2.3 percent of overall assets, leaving assets just shy of $2.24 trillion, according to the report, published by fund tracker iMoneyNet of Westborough, Massachusetts. Institutions accounted for nearly all of the outflows. The average seven-day simple yield for taxable funds rose to 1.59 percent as of Jan. 1 from the prior record low of 1.58 percent a week ago, the report said. The average compound yield rose to 1.6 percent from 1.59 percent.
Black Blade: Add inflation into the equation and the result is a net loss. Add insult to injury when one realizes that short-term taxes must be paid on interest gains as well. Money Fund investors are getting a royal screwing. No wonder cash is flowing from Money and Bond Funds. Many poor investors are scared not knowing where to turn next - take a chance on the stock market? Pay off debt? Go to Real Estate? Maybe even - God forbid - that barbarous relic Gold? "Interesting Times"
Broken Tee
(1/2/02; 15:58:43MT - usagold.com msg#: 67581)
Bones for the pile
While watching the Business Week television show last Sunday 12/30. One of the talking heads (a putz) said,
"historically, in a recession, businesses usually lay off a total of 2 million people. They are now around the 1.8 million mark now".
Wow! only 200,000 more to the bone pile before the economy starts recovering. Any volunteers? Ah come on folks. The faster we reach 2 million the sooner the recovery starts.
(Sorry, I'm getting cynical in my old age)
TownCrier
(1/2/02; 15:31:07MT - usagold.com msg#: 67580)
HEADLINE: Argentina's 5th President in 2 Weeks Takes Office
http://biz.yahoo.com/rf/020102/n02347076_1.html
BUENOS AIRES, Argentina, Jan 2 (Reuters) - - Populist Eduardo Duhalde took office on Wednesday as Argentina's fifth president in two weeks and began plotting a possible devaluation to pull the economy out of a recession that sparked bloody riots.
+
After Congress chose Duhalde on Tuesday to lead Argentina until 2003, the Peronist Party powerbroker vowed to scrap "an economic model that has brought desperation to a vast majority" -- the currency system created by his own party a decade ago.
+
....Argentines can do little to preempt a devaluation since a 12-day-long ban on foreign exchange transactions remains in force as well as a $1,000 monthly limit on cash withdrawals.
-------------
The initial size of the peso devaluation being considered (nearly inevitable) has been mentioned at 30 - 40 percent. That takes real toll on the purchasing power of a person's digital- or paper-based bank account.
When currencies float (or rather sink) in accordance with their ease of issue, you need to embark on a regular program obtaining gold, in-hand, as a rock-solid means to preserve the liquid purchasing power of your life's accumulated wealth. Centennial can help you weigh your options, and they deliver the goods.
R.
Privateer
(1/2/02; 15:24:00MT - usagold.com msg#: 67579)
Treasury Debt
http://www.fms.treas.gov/dts/index.html
Hipplebeck: That "debt to the penny" figure from the Treasury rates an even bigger "ouch" considering two further points.
First - from Dec 28 to Dec 31, the debt jumped about $US 70 Billion
Second: The debt ceiling, as of December 31, was still $US 5.95 TRILLION. The Treasury formally requested that Congress raise the ceiling to $US 6.7 TRILLION about three weeks ago but as yet, they haven't.
The URL is to the Treasury's daily statement, which includes the current level of the debt ceiling. The latest figures are for December 31.
RobotGuy
(1/2/02; 14:58:52MT - usagold.com msg#: 67578)
Outlook for a great 2002?
It's January 2nd 2002 for God sakes! The second day of the new year, and already economists are sure that the stocks are rallying and everybody is going to get their job back, and we've seen clues that we're at the bottom of a slump etc.. etc... THIS IS DRIVING ME NUTZ!!! How on earth can a slight rally in the markets after the Federal Government force feeds fiat to the people determine the consequences of an entire year??? Listen carefully smart lemming... Wait, perhaps if you were a lemming, you would never visit this forum,.. nevermind. Honestly I am completely baffled. I know a great number of people who have just lost their jobs. They're not being called back tomorrow., or the next day. It's bizarre to try to stop history from occurring through media confidence instillation. We are in my opinion, and in the opinion of many others in this forum about to experience the usefulness of our rudimentary survival skills. I think by inspiring lemmings to continue market activity we are not only creating a bubble, but this bubble is cylindrical, and it pops funny. We must go through the historical slump and slow before we return to bust and boom. If we try to force bust and boom, we simply exagerate the inevitable waveform. The waveform is almost apparent in all forms of existence, why should it not be part of our social economy?
Hipplebeck
(1/2/02; 14:43:59MT - usagold.com msg#: 67577)
ouch!!!!
http://www.publicdebt.treas.gov/opd/opdpenny.htm
$5,943,438,563,436.13
TownCrier
(1/2/02; 14:04:47MT - usagold.com msg#: 67576)
Like Mr. Jensen, Rocket School Professor von Braun also takes a moment to reflect upon the new year
http://www.usagold.com/gildedopinion/RocketSchool/vonBraun.html
The latest from THE ROCKET SCHOOL OF ECONOMICS: 2002 -- A Perspective.
Introductory excerpt:
------It has been difficult over the last few months to find something of interest to write about. The world of economic activity continues to act in some rather peculiar way that seems to be a cross between total denial and ongoing bedazzlement. The insistence that the next great bull-market for stocks is just around the corner becomes tedious and the buffoons on CNBC are reaching their "use by" date. Meanwhile we have financial debacles that simply appear and disappear with no major repercussions being apparent. Enron is one example and Argentina is another. The CRB index is holding up rather well and we now have cheap gasoline again, which is nice.
+
As of today we have the official Euro, which conveniently reduces the paper currency game to three major players and a few bit players on the side. To some degree it could be said that the attempt by Central Bankers to fool the gullible public into believing that paper money is real is now in the last act. The Argentineans certainly have lost faith in paper it seems except for lighting fires perhaps.-------
Click the URL above to access the full commentary. You'll want to know why the professor offers these words among his concluding remarks:
------"Once again we point out that owning a basket of gold stocks for the long term is not a practice we would partake of. ... The physical is a lot safer, providing that you take delivery."------
R.
TownCrier
(01/02/02; 13:53:51MT - usagold.com msg#: 67575)
International editor Holger Jensen looks at the newborn year
http://www.usagold.com/gildedopinion/Jensen/index.html
HEADLINE: Euro launch, 59 conflicts, huge debt default greet '02
In this article he paints a picture where the full-fledged launch of the euro is intended to help foster economic stability within Europe -- even as elsewhere the world is racked with violent conflict and national bankruptcy is declared in Argentina.
excerpt:
-----The world enters the New Year with history's largest currency changeover, the biggest debt default, an open-ended war on terrorism and at least 58 other unresolved conflicts of varying intensity.
+
Today's euro launch brings 15 billion new bank notes and 52 billion coins into circulation in 12 European nations. Their total value: 646 billion euros, or $568 billion. ... Three members of the 15-nation European Union -- Britain, Sweden and Denmark -- opted out of the euro. But it will enter their borders through tourism and trade, increasing pressure on them to join...along with non-EU member Switzerland.
+
Argentina's $132 billion debt default was the largest the world had ever seen. It sparked bloody riots, toppled two governments in 10 days and sent shock waves throughout Latin America. ... Optimists say Argentina could rebound as quickly as Russia did after its 1998 default. Pessimists predict a messy devaluation, a return to hyperinflation and spiraling poverty, sparking further unrest and violence.----
Another update in the index includes this article on U.S. foreign policy.
HEADLINE: Has Bush really moderated his unilateral view of the world?
Excerpt:
------Sept. 11, it is said, dramatically altered President Bush's foreign policy. Or did it?
+
Prior to the terrorist attacks on the World Trade Center and the Pentagon, Bush had pursued a unilateral, even isolationist, course on the principle that the United States should act alone in what it saw as its own best interests. ... In hindsight, said Anatoli Lieven of the Carnegie Endowment for International Peace, "the supposed commitment to multilateralism was purely tactical."-------
Click the link above to enjoy them both right here at USAGOLD.
R.
Buena Fe
(01/02/02; 13:48:47MT - usagold.com msg#: 67574)
boom boom
http://dailynews.yahoo.com/h/nm/20020102/bs/euro_dc_15.html
'Europhoria' Sweeps Public, Currency Markets
.......Solbes said he expect the euro to be used increasingly for international oil transactions........
Well Well, an old discussion resurfaces for consideration. ? is how long till America gets it?
USAGOLD
(1/2/02; 09:11:00MT - usagold.com msg#: 67573)
Commentary & Review Now Updated. . . .
http://www.usagold.com/Order_Form.html
The Commentary & Review page has been updated with all new Short & Sweet.
A Snippet:
"One of the more popular gifts in Argentina this past #Christmas was a board game called "Eternal Debt" -- Deuda Eterna in the photograph right. The subtitle "Do You Dare to Defeat the IMF?" suggests an attitude of which few in the Northern hemisphere are aware. . . . . . . . . . . . . . . If you are looking for some insight as to why Rodriguez Saa disappeared from the Buenos Aires political scene nearly as fast he entered it -- four days was I believe the length of interment -- the following three snippets (as a group) may provide an answer. . . . . . . . . ."It [the new Argentine government now displaced] is the abandonment of the technocrat approach and the rejection of the Washington consensus," said BCP Securities' analyst, Peter Molano, at the time of the Saa proposal. "There are no PhDs from Harvard or Chicago in the Cabinet. All of the IMF/World Bank alumni are gone,'' said Molano. "They were replaced by Peronist Party loyalists." . . . . . . . .From a Reuters article (12/31/01): "The collapse of the latest government signaled the probable demise of plans by Rodriguez Saa for a parallel currency, the Argentino, which was intended to help put money in the hands of cash-hungry Argentines.
Black Blade
(1/2/02; 07:01:12MT - usagold.com msg#: 67572)
Silver Lease Rates Higher - Again
http://www.kitco.com/market/LFrate.html
Silver lease rates jump into extreme backwardation with silver one month at over 14%, two month at ovr 12%, etc. This suggests that supply is tightening once again (or just still tight). The rumor remain strong that Warren Buffett is not renewing leases, and that JPMC and Citibank are covering Enron silver short positions. If any of these rumors prove to be true, then look out - musch higher rates and prices could be in store.
- Black Blade
Black Blade
(1/2/02; 06:55:29MT - usagold.com msg#: 67571)
Increase in corporate debt could hurt U.S. recovery
http://www.msnbc.com/news/680026.asp
Analysts sound alarm as borrowing climbs
Snippit:
Dec. 31 - Heavy debts are hounding companies in almost every industry, from telecommunications to textiles. Could that be enough to keep the stock-market recovery at bay? BECAUSE U.S. CORPORATIONS are continuing to add to their debt, instead of cutting back, analysts have begun to sound the alarm. U.S. nonfinancial, nonfarm companies had racked up a record $4.9 trillion of debt as of the end of the third quarter, according to recently released figures from the Federal Reserve. That was up 6.6% from the third quarter of 2000, even as the economy entered a recession, the stock market swooned and many companies saw their credit ratings slashed.
The fear among analysts is that the debt deluge will put a cap on corporate spending, cutting off what many economists see as a spark for an earnings turnaround next year. That could quickly put a damper on stocks, if earnings improvements that have now been predicted for months begin to look much further off. What is happening on the corporate level mirrors Americans' household budgets, which also are stretched to the breaking point with a record $7.5 trillion in debt, up 8.5% from the end of the third quarter in 2000. If consumers begin to reduce all this debt, it could put a crimp in consumer spending in 2002.
Black Blade: I have hit on this subject several times before. Corporate and Consumer debt is at record high levels and as a result it is almost certain that there will be no real economic recovery. I will say it again - get out of debt, get Gold and Silver portfolio insurance, get a supply of nonperishable foods and basic necessities, and have a few months of cash for expenses. Prepare as you would for an extended period of unemployment or a natural disaster. It should be an "Interesting" year.
White Rose
(1/2/02; 05:51:21MT - usagold.com msg#: 67570)
Kitco silver prices: big spread between bid and ask
Usually there is a 3 cent spread between bid and ask for silver. This morning there is a 6 cent spread. Is this another sign of a shortage? The spread for gold is wider, but not by such a wide margin
The CoinGuy
(1/2/02; 03:53:46MT - usagold.com msg#: 67569)
TownCrier, ALL
Nice to see you posting. I know how you feel, we are going through the same problem...I've been sick since Thanksgiving, and it truly wears a person down.
I spent my free time from Christmas to New Years going through FOA's posts from the Bonsai series forward. An excellent read; I'm looking forward to the return of our friend on the Trail.
I ran across this little bit from the "Trail #91" the other night. I enjoy going back and reading these older posts, it gives me a better perspective on where we were, and where were headed.
Snippit:
I expect that "our" crisis will begin by year end as the Euro foundation becomes complete in the issuance of real currency. The new designation of our gold reserves is a classic signal that a major crisis is coming. A suspicion will eventually arise that native US money growth, now approaching 20%, will accelerate in hyper form to save it's banking function and political gold stores will not be
available to redenominate the currency. The very thought of a loss of reserve status for the dollar is on everyone's minds and will soon break out into open currency warfare. By then; the Washington Agreement's restrictions of bullion supplies will begin to bite as players demand gold and rush from the failure of contract credibility. By then: it will become known that the only way to stay whole, without bullion relief, will be in aligning one's self within the Euro Zone of financing. Those that started early in resolving some of their political gold debts will be the first to receive backing. England? Swiss? The rush will be on!
I think 2002 is going to be a real interesting year. I'm just glad to be around to enjoy it...
For the Silver Bugs: Noticed 1m rates were moving to the + side...
All take care, and have a great new year,
The CoinGuy
Belgian
(1/2/02; 03:51:18MT - usagold.com msg#: 67568)
From euroland
News in from the Netherlands (Holland) : An Iranian (not Irak) local newspaper, named "Iran News", had a very positive article on the euro. Including a straigthforward suggestion of oil for euros ! Haven't seen the article myself.
M.V.M. : You ...currency driven metal (Au/Ag) purchases...
May I suggest you pick up the Gresham's link on Father euro : R.Mundell < The euro and the stability of the international monetary system >
The competition between the € and $ is a dangerous venture for both currencies, at present ! The aging father ($) and the maturing son (€). The Mundell essay gives some good insights on this.
The Japan and Argentina crisis are of the nature that a AMU (american monetary union) is out of the question.
The above Iran-news (eurasia) suggests that the young euro has ambitions.
Gresham : Indeed Sir, R.Mundell is very quiet about the Gold factor. But there are some flaws in his projections.
For example the theoreticals about GDP growth of 6%/year for the next 10 years ? And POG -reserves from 300$ to 600$?? A bit simplistic. GDP = units of production (goods+services) x price per unit !!!! Both factors of this product don't evolve linear and non-cyclic !
Theoretical GDP can explode with a declining number of produced units and hyperinflated prices per unit. The dollar block (AMU-hehoi) nor EMU are able to maintain present illusionary stability for the next decade !!!
Some drastic corrections will claim their rights. And one of these corrections is certainly the exchange from obsolete dollar rerserves (globally) into euros and Gold.
Gresham take a look at Mundell's chapter 6, where the present Argentina's events are contradicting his suggestion of a AMU.
The "fall back"-factor for currencies on the dollar and for the euro on...GOLD (!!) haven't been elaborated in that essay.
Thanks for bringing the article up Sir.
Ski : ...deposit insurance in Japan...
Multiply your deposits (splits) and you are covered again !
Keep us updated on the POU (uranium). Thanks
Japan's Gold potential (trends) : There are hundreds (and more) of Gold potentials on this globe. Let there be no doubt about this. Do some simple math on your own with the known trillions of $ available and the obscene Gold valuation in combination with 2.500 tonnes of new gold + 3.000 tonnes hedged gold and a yearly demand above the offer. And put the total above of 140.000 tonnes = 1 trillion $ into that perspective. The Gold Rush has simply to be initiated by only one identity (out of the hundreds)at the right (!!) moment. Yes, I agree it is a boring statement. But at present the financial brotherhood is tackling much other more acute problems to avoid disaster and haven't yet embarked on the ultimate lifeboat (cfr. Titanic).
BB : M.M. Templeton in South Africa and his advise about their Gold and the rand. A higher rand is a guarantee for goldmine's collapse due to non profitability. A low/lower rand is ensuring that they can keep on competing with the export of their products in a global contracting and currency competing world economy. Sout Africa is to some extend another example as to how dollar supremacy is killing the kids one by one.
Make your currency close to worthless and you remain alive.
It is * The Dollar * guys ! Nothing but the dollar. And it is not a cyclic event but "systemic" and therefore irreversable without desastrous collapse.
Leigh
(1/2/02; 02:45:33MT - usagold.com msg#: 67567)
Town Crier
Welcome back, Town Crier!! Sorry to hear about your having pneumonia. Hope you had a very Merry Christmas anyway.
Elwood
(1/2/02; 01:05:20MT - usagold.com msg#: 67566)
Side note
Here's a side note that everyone can do. Go to your public library and find a newspaper dated the day or year of your own birth. Look at the prices in the ads, the real estate section and so forth.
Back then the price may have been $X for an item. Today the price may be (depending on your age) much more.
That difference, between what the price is today and what it was back then, represents the amount stolen from the common man through fiat inflation over that period of time. Now extend that amount to every item bought and sold over that period of time in this great nation of ours.
Getting the picture? Are you mad yet?
Elwood
TownCrier
(1/2/02; 00:57:40MT - usagold.com msg#: 67565)
A done deal... HEADLINE: Argentina signals end to peso-$US peg
http://news.ninemsn.com.au/business/story_24091.asp
An excerpt:
Wed 2 Jan 2002 -- Argentina's new president Eduardo Duhalde has confirmed the country would defer payments on its $US132 billion ($A260 billion) public debt, said the peso-dollar peg was as good as dead, and declared the country bankrupt.
-----------
Here it is -- a new year, and a good time to slip on a comfortable old pair of shoes. I always did like this view of the world -- as TownCrier -- much moreso than the one in the trenches, pits, and at the anvil. But I must say without further hesitation that I'm EXTREMELY happy with the new "workhorse" that Santa and his elves have brought out here to the Tower this holiday season. But enough about that for now, I'm nearly done in with pneumonia and need to retire to a warmer room.
I hope this attached article helps each and every one here to think about the vital need for gold as a portion of your wealth portfolio.
Randy
Elwood
(1/2/02; 00:52:32MT - usagold.com msg#: 67564)
darkhorse (1/1/02; 21:50:01MT - usagold.com msg#: 67559)
Hello, Darkhorse. Good question. However, I think you have things reversed. That is, an item that cost $1,000 normally will be $10,000 after a 10:1 devaluation. Note that it is the money that is devaluing. It's not that simple though. The prices of goods don't move exactly 10:1 in a "10:1" devaluation. Some move more, and some move less.
For instance, wages will move much more slowly than prices. If you're earning $30,000 per year and just getting by now with a mortgage payment, taxes, utilities and consumer debt, you can expect to be blasted with rising costs of groceries, gas and what-not before your wages can catch up. Since the same is happening to your employer your wages may never catch up. That is, you'll be unemployed. During this period the stock market blue chips might do pretty good until the taxes on your gains hit.
If you think about it, you've probably seen quite a bit of devaluation during your lifetime. This devaluation has been carried on slowly over time. That's the nature of modern fiat inflation. Please believe this, it's not a matter of "if" this lynch-pin event happens. It's a matter of "when".
What happens to your gold when the fiat dies? Since physical gold is money that can't be inflated, it represents wealth that will endure such a currency storm. In addition, unlike real property, it's easily transported and its ownership isn't taxed. Because of this, gold is a political metal, and its value is controlled through the paper markets that we've all read about here and elsewhere. It has quite a bit of catching up to do before its dollar price reflects past dollar inflation. If history is any guide, you can expect our beloved representatives in government to either a.) attempt to steal it, or b.) attempt to place hefty gains taxes on its exchange.
I urge you to follow the events in Argentina closely. You can easily learn the lessons now which the common man in that nation is learning the hard way. Do you think any of those folks care about what interest rate the banks are paying on their savings? Do you think any of them will ever see a penny of their "401(k)" again? Anyone with an American 401(k) should understand that these are assets registered with the Feds who will grab them in a heartbeat when it comes time to bailout our own banking system.
It appears the smart money in Japan is starting to load up on gold, and the government boys are making noises about using other people's money to save the banks. Do you think they could be next? When (not if) Japan goes, America will go soon afterwards. Believe it.
Elwood
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