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ARCHIVED DISCUSSION FROM 6/22/2001
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Journeyman (06/22/01; 22:36:44MT - usagold.com msg#: 56683)
P.S @Camel (6/21/01; 23:01:42MT - usagold.com msg#: 56616)

P.S

Camel, would you care to attempt a defense of real-world socialism as it played out in the Soviet Union, China, Cambodia, etc.?

Regards,
Journeyman


Journeyman (06/22/01; 22:33:34MT - usagold.com msg#: 56682)
Yur a bit misinformed about libertarians @Camel (6/21/01; 23:01:42MT - usagold.com msg#: 56616)

Hi Came!

Ah, yur a bit misinformed about a few things, libertarian philosophy among them.

Also so-called social-security.

And as far as "Oreo," you'd better plan on a few years of study before you can make any points that even interest him.

When I get a chance, if your interested, I can give you a few clues where you can find out about REAL libertarians, instead of the straw-man you've been attacking.

There are some libertarians that favor big business, just as there some democrats that do. But libertarians don't favor big business, and in fact only free markets, which you won't find anywhere in the world, because mainly big business, in cahoots with big labor and big government don't like competition.

I've made some extensive posts about this elsewhere, but since I'm on the road, I don't have the facilities to post them right now.

Most of the propaganda you've absorbed about free markets is just that, propaganda. For example, the first anti-child labor laws were passed against local governments who used children as chimney sweeps.

Many other things we all know about nasty business are either not true or actually true about big businesses supported by big government so they have monopolies.

Business are not necessarily good - - - but keep in mind, they supply most jobs.

If you believe in freedom, you're a libertarian. If you don't, you're something else.

Regards,
Journeyman


Black Blade (06/22/01; 21:45:05MT - usagold.com msg#: 56681)
More On Drill Rigs - Gold vs. Petroleum
I should have said that the number of US drill rigs in the US has more than doubled. I have seen some drill rigs and support vehicles for mining exploration companies that I have worked with who are based in Nevada and Montana drilling in Wyoming lately. The situation is going critical and now the NG people are looking to "beg, borrow, and steal" to keep up with NG demand and it appears to be a losing battle. The energy crisis is coming to a crossroads where production can not keep up with demand.

This also brings up another point. With metals mining exploration concerns bailing out of gold country and into energy, what does that mean for gold mining when the turnaround occurs and no more exploration drill rigs are to be found? It only means that US gold exploration and mining is in serious jeopardy. The major gold companies are their own worst enemies. Ultimately it also means that gold production will drop off even as high grading ramps up in the struggle to avoid failure and gold reserves are not replaced. In other words, US gold mining is toast.

Of course a recent NY Times poll has revealed that the vast majority say they will gladly pay higher energy costs to save the environment. We shall see soon enough. The reaction of the Grasshoppers on the left coast indicates otherwise. Protesters "pied" an energy company executive in California today. I guess that proves that when it comes down to high prices and the environment, the environment loses no matter what psuedo-environmentalists say now.

- Black Blade


R Powell (06/22/01; 21:38:54MT - usagold.com msg#: 56680)
auspec
I wonder who is buying (from the Midas report) and before I get my question posted you have a very plausible and probable answer for me. Very nicely done. The Cassandra part of your personna is working perfectly.
Thanks
Rich
P.S. We belive your multi personal identity is in a constant state of flux and that your composit makeup may sometimes also include other well known posters from many internet sites and some government agencies. Sleep well.

Black Blade (06/22/01; 21:27:18MT - usagold.com msg#: 56679)
Baker Hughes - U.S. rig count up 11, Canada down 15
http://biz.yahoo.com/rf/010622/n22487403.html

NEW YORK, June 22 (Reuters) - The number of rigs searching for oil and gas in the United States gained 11 to 1,277 during the week ending June 22, according to oil services firm Baker Hughes (NYSE:BHI). A year ago there were 893.

Black Blade: I was talking to a client this afternoon and he said that there were some drill rigs coming available. I asked where would they come from? He said Canada. I said that Canada was in a petroleum boom as well. He said that rates were better in the US and so they were bailing out of Canada for the US petroleum boom. From the latest BHI rig count it looks like it is quite possible that NG and oil rigs are migrating south. Even though the number of drill rigs working in NG, there has been no net gain in NG production. The production of NG can not keep up with demand. Yet there are about 275 new NG-fired power plants coming online by 2006 (now I hear that number is closer to 300). There will be a need to manufacture several hundred new rigs and train a few thousand rig workers just to keep pace. More likely is that a few thousand new rigs will need to be built over the next few years. The expanding economy and the "New Economy" demands "Cheap Energy" to survive. There is no more "Cheap Energy" and the end result is severe economic retraction or even economic collapse. Gold and silver as portfolio insurance is definitely a must.

Auspec - Oh my! I was impersonated once already, as was Leigh, journeyman, Zenidea, and possibly others. Cheers!


R Powell (06/22/01; 21:26:00MT - usagold.com msg#: 56678)
auspec
Thanks for the report from Midas stating that "over the past couple of months demand to secure physical gold over a period of a year has surged." We know Jipangu, a gold investment fund from Japan, is actively buying XAU stock and probably physical. Also in physical or stock equity form Gates, Buffet and Soros are all moving into precious metals positions. Reports from the neighbors indicate that large block buy orders are becoming more common in the mining stocks. I see this as the presence of large monied players or mutual fund money.
What immediately comes to mind is, How long can this off Comex demand go on before it is noticed and copied?
Buffet bought silver for many months (89 million ounces worth in 1997) before news leaked out early in 1998.
Second question is, Who is buying? Could be gold carry shorts from many years ago who no longer wish to re-lease.
Could it be big money anticipating higher POG? Could it be big time players sensing a squeeze or trying in initiate one? Could it be Uncle Sam trying to replace 1700 tons sold from the New York Fed. in a swop deal?
It would seem that any rumors of big buyers, if/once confirmed, would be our much talked about trigger for much higher POG. Will the market react to the rumor or insist on proof that demand is increasing? Just speculating at this but, if true, then the long side contracts on the future delivery months on Comex have probably been flowing into stronger ownership or are now owned by those less likely to sell on a small rise in POG. Short squeezes don't happen if the longs sell for small profits, short squeezes happen when the longs don't sell until prices rocket upward. Any thoughts??
Thanks also to Leigh for mentioning this.
Note for auspec, calm down, your identity is secure. You are a holographic confluence of Midas, uponroof, Tree, and the clarvoyant Cassandra. Occasionally you are only yourself.
The neighbors were asking today if Midas is Mr. Bill Murphy? I thought this was a given?
Kipling created a character named Kim who repeated his own name in times of stress to steel his courage and resolve and help him focus on the crisis at hand. In this way he reminded himself of who he was and thus what he had to do.
Go GATA and Buy more, Jipangu BC BN and Buy direct
Rich Rich Rich

auspec (06/22/01; 21:23:20MT - usagold.com msg#: 56677)
Leigh
"What might this mean to us as gold investors?" Speaking of an organized bailout of the shorts using official gold.
This is what some refer to as nirvana, checkmate, or the Big Kahauna {sp?}. The gold speaking world will have NO trouble in proper interpretation of this event, should it come about {I say should, but it IS happening now, clearly}.
The bailoutees get to join the ranks of LTCM {hopefully}, and the bailouters get to display their quickly emptying shelves. Oh my! They don't bail em out......gold flies, they do bail them out....... gold flies, which will they do?
This is a very quiet place tonite Leigh, truly 'dull' for sure {smile}. We could pretend to be Black Blade and put up multiple impressive posts, but, alas, there is only one BB and we would surely be found out and prosecuted for impersonating another poster. We only get so many chances around here, you know!
Best to you, thanks for keeping me from posting back and forth to myself.
a {BBwannaB}


auspec (6/22/01; 20:50:20MT - usagold.com msg#: 56676)
Chapman Revisited
From Robert Chapman:
May 14, 2001

"Our intelligence sources have informed us that Alan Greenspan has given the bullion banks until the end of May to clear up their hedging and outstanding gold derivative positions. Evidentially this process has been going on for some time. Furthermore, Tony Blair will try to make available, at the upcoming British gold auction, additional gold which will go to banks designated by Greenspan. We were also told that ****AngloGold will sell forward a designated amount of gold to banks also specified by Alan Greenspan****. Our source for this intelligence has been very accurate in the past. They also said they thought that gold would break out over $275.00 an ounce by Friday." END, {My ***s added}

From tonight's Midas:

"There were all kinds of queries about the AngloGold/Barrick hedging accord alert that Johm Brimlow and I put out this morning as the COMEX gold trading session commenced. The information came from two of Mitsui's {a highly regarded bullion dealer} websites. Hard to say what it means, but it is more curious smoke....."
"Now, we hear of something possibly brewing regarding AngloGold and Barrick, both of whom are very close to J.P. Morgan/Chase. Again, Morgan's Frank Arisman is on the board of AngloGold and Morgan's office in Toronto is on the floor below Barrick's." END

Comments: Seems remotely possible that both these gents {and Mitsui} mentioned AngloGold in relation to hedging of gold in "interesting" times. ****Gosh its going to be terribly difficult to figure out to whom BarAnglo may be sending some future production****. Any clues out there, anyone?? {snicker}. Is there anyone around that is hopelessly overleveraged in gold? Who would JPM/C possibly turn to in times of 'stress'?
Oh well, we'll probably never figure it out. I can't even spell the word BAILOUTT!! Wonder if JPM/C is about to have an identity crisis??
auspec{tacle}



auspec (6/22/01; 20:03:34MT - usagold.com msg#: 56675)
Leverage!
From Midas

"The derivatives on the books of J.P. Morgan Chase are something like 287 to 1 against their assets. Long Term Capital Management was 294 to 1 before they went tapioca."

Whoever said banking stocks were stodgy? I'm gonna load up on JPM/C next week and go for broke with them!
Got JPM/C?? Got an identity?

auspec (6/22/01; 19:57:46MT - usagold.com msg#: 56674)
TIF
Now I'm having an identity crisis! But at least I don't think I'm a plant {chortle}.

Tree in the Forest (6/22/01; 19:36:47MT - usagold.com msg#: 56673)
R Powell
But Rich, I thought you were auspec! ;-)

auspec (6/22/01; 19:20:17MT - usagold.com msg#: 56672)
A Touch Of Midas
Snipping now- Sipping Later
"I will explain in a bit, but first let me delve into what I meant when I declared that the physical gold market is on fire. Over the past couple of months demand to secure physical gold over a period of a year has surged. It is not easy to secure deals of sizeable tonnage and the NEW buyers are scurrying around the world to make these deals."

"As these deals are consummated, physical supply now flowing to help meet present demand will suddenly not be there. That will start to show up in rising gold premiums in the various world markets. By then gold will be flying and it will be apparent to all the gold is "on fire." The important time to receive information such as this is before it is generally known to the gold world. That is why it is coming your way at this point in time."

"By the way, the numbers I am talking about are staggering. They amount to as much as 10% of total gold supply coming out of the mines."

Note: Running around to various mines with Billions of $'s looking for the next years production, eh? Works for me.



R Powell (6/22/01; 17:46:50MT - usagold.com msg#: 56671)
Who am I
Identity
I wish to unequivocally state that I am not Randy. Nor am I Lafisrap. Also neither of these gentleman, whether individually or as a unit, is me.
Rich


Leigh (06/22/01; 17:09:37MT - usagold.com msg#: 56670)
Tonight's Midas Report
Here are two paragraphs from tonight's Midas report by Bill Murphy. What might this mean to us as gold owners?

"If my scenario is somewhat on the money, then the Bush Administration will announce that while they do not agree with the Clinton Administration policies because it hurt so many poor gold producing countries, etc., they had a right to do so. It will not surprise me if they, and maybe other countries, also announce that they are delivering gold to the bullion dealer shorts to avoid a debacle and then tell the public that they are doing so to avoid financial panic.

"What a scene that would be. While it will create a flap, Joe and Jane Investor, who care not of gold or principles, will be relieved that the Bush Administration has taken action to prevent their 401K's from being further decimated. Those that are outraged, such as the likes of GATA and various members of Congress, will be told to direct their venom at the Clinton Administration and the Democrats."

Belgian (06/22/01; 17:05:08MT - usagold.com msg#: 56669)
@ Auspec
Sir, forget about the details. They are not important.
I'll try to explain briefly, how I feel about what is happening from the gold producers site. FWIW of course !

The past 10/15 years, a lot has changed in the goldmining business. Mining has become a high tech enterprise.
The speed of plundering mother earth has multiplied tenfold. Check how most of the mines adapted to the idiotic gold valuation (including hedge appearence). Result : mining gold is not as exclusive as before.

The core goldminers lost their dominance and control of the complete gold cycle. De Beers history is an example as to understand what I mean with "under control". They survived synthetic diamonts (zirkon) and were able to encapsle all brave competitors. Diamont prices have been manipulated for already a very long time. The diamont cartel has never been challenged. The present ethic assault is simply countered with taking it private and go under cover. etc...etc...

In the fragmented (uncontrollable) mining industry, Au has reliable natural allies who can retain their full independance ( Harmony is a South African company). These allies have mutual interests. Eliminate small wild cat goldmining and let the masters rule the amount of gold on offer, in line with their mining plans and developments.

This reorganisation of mined gold on offer is what I conclude out of the scarce and superficial press releases.
I don't use a microscope to analyse every possible arrangement between producers. Relevant is the general teneur and intentions. Once you are in control with having spend the least on financial resources (ex Minorco speciality) you can organise the hedging mismatch at your conveniance ! Gather the survivers and suffocate the ballast. It is evident that this takes time to deploy, especially if you want to realize it with the absolute minimum on ammunition. A typical and very old "modus operandi". An authoritarian approach in contrast with open (more or less honest) competition.

The De Beers analogy is relevant as per example the different challenges that Russia/Zaire/Angola/Liberia, tried to organise to undermine the De Beers control. Kind of Diamont CBs floodding the market with plundered diamonts.
Each time the authoritarian position had to be reconquered.
No extra efforts were made to absorb the excessive offer with marketing tools. The gold consumption for jewelry runs at satisfactory volume. And it would take an enormous effort to stimulate investment demand for the time being.
Thus the only option left is gaining control on supply and in the mean time making sure that you will keep it for quite some time. A ruler's strategy ?

As you know, I'm strongly relying on my intuition and remain open minded and ready for swift adaption if the chosen theory doesn't make sense anymore.

The above is absolutely not related to the Gold fundamentals and possible future that are discussed here at lenght. It is only a reflexion on 1 of the 3 (underground) holders of gold. But IMO an important one now and later.

My repeating ad nauseum that there are 1 million reasons and arguments to accumulate physical gold, encounters a lot of compassionate smiling, whilst on the GOLD_activism path. I'm getting it slowly but surely "Why". Allow me some time for finetuning these toughts.

It is not because I'm heavily relying on my physical that the actions/intentions/strategies of the dominant goldproducers must be ignored. They are very close to the present and future reality. A microscopic vieuw might put us on the wrong footh. Mirages (fata morganas) in the desert or a Colombus sailor, gone mad, and crying "land in sight", and causing rebellion.
Might be that I'm overestimating the core goldproducers role and awareness of the future for Gold. Still I'll continue to place all the inspiration adsorbed on this forum against or in line with acts and deeds of the core producers.

For example : is it possible that Au got free hands in organising an orderly unwinding of the gold drama ?
Is a Barrick link a conditio sine qua non for getting the job ? Some fantasy doesn't harm, does it ?

Black Blade (6/22/01; 16:57:12MT - usagold.com msg#: 56668)
Is the Fed Flummoxed?
http://www.smartmoney.com/theeconomy/index.cfm?Story=200106211

Snippit:

THINGS AREN'T happening the way they're supposed to. We're six months into the Federal Reserve's aggressive campaign to stimulate economic growth with lower interest rates, and the economy is getting worse, not better. Has the central bank lost its magic? Are policy makers powerless? According to Thursday's Washington Post, some officials at the Fed are growing "increasingly concerned" that the economy isn't responding to lower interest rates the way it has historically.

Black Blade: The FED is in "sheer panic" mode. They're aggressively cutting rates because they and others know that the market is in the crapper. They also know that the contrived and massaged BLS data is not being accepted at face value. The more aggressive the FED rate cuts, the more obvious it is that something is seriously amiss. Many now are questioning what does the FED know that they must cut rates so sharply, so quickly and even between FOMC meetings? It is beginning to look more ugly all the time. More earnings warnings are due out next week.

Waiting for the other shoe to drop.


auspec (6/22/01; 16:39:02MT - usagold.com msg#: 56667)
Gentlemen
Nothing dull about that exchange.

Randy (@ The Tower) (6/22/01; 16:30:40MT - usagold.com msg#: 56666)
To Lafisrap (msg#: 56659), regarding HoF for ORO (01/13/01)
http://www.usagold.com/halloffame.html
Lafisrap: "If the candidate post is actually in the Hall of Fame, I apologize for my mistake"

R: I accept your apology.

Lafisrap: "I recall you posting a statement as to which qualifying candidate posts are selected for inclusion into the Hall of Fame. As I remember it, you stated that not all qualifying candidate posts are automatically included. Am I mistaken here also?"

R: I would surmise that is indeed how you remember it.

To be sure, I have (again) provided you with the URL so that you may (to your own satifaction) reaffirm all that which "is", and perhaps "is not" on each issue.

Lafisrap: "...the current front-running candidate for the identity of FOA/Another is Randy."

R: Whatever your intention, I can accept this notion of yours in no other regard than equivalent to the highest order of compliments. Thank you for your generous overestimation of my abilities.

Black Blade (06/22/01; 16:13:16MT - usagold.com msg#: 56665)
US Interior Department Looks to Western Energy Resources
http://www.slb.com/print_story.cfm?baid=1&storyid=255298&printable=1

Snippits:

WASHINGTON, June 21 (Reuters) - Amid broad opposition to drilling in the Arctic National Wildlife Refuge in Alaska, the Interior Department is taking a closer look at untapped oil and gas reserves in Western states, a department official said on Thursday. "Within the continental United States, the western part of the country seems the most prospective," Chip Groat, director of the U.S. Geological Survey (USGS), said at a briefing for lawmakers and congressional aides. Western states like Wyoming, Utah and Nevada have attractive reserves, he said. However, many doubt the Bush administration will have any luck winning rights - as it would like - to sanction energy exploration on national monument lands in the West.

Black Blade: Somehow between sexual encounters with "that woman," Bubba put several prime energy targets off-limits by executive order. One such target was a desolate stretch of desert in Southern Utah called Escalante Staircase that was declared a national park with dictatorial powers. This was done as a favor to environmentalist supporters such as Utah resident Robert Redford and to punish the voters of Utah who twice voted him into third place behind Ross Perot during the general presidential election. It probably does not matter though as the fundamental questions come into play such as - where will they find the drill rigs? Where will they find experienced crews and staff? How fast can they link together the infrastructure before the economy collapses under the high energy costs? Can they avoid prolonged environmental legal action? Etc. etc. etc.


R Powell (06/22/01; 16:10:22MT - usagold.com msg#: 56664)
one fer day
That one being the XAU which was up slightly.
The lease rates were down.
August POG contract was down $0.30 to 273.30 and July silver was down two cents to $4.303. Coincidentially, lumber was down with gold and soybeans was down with silver. The CRB (a commodities index) was down today and is now at 206.20. The dollar remains strong and commodities remain weak. All metals were down today as were all the grains. There was no rally this Spring for corn, wheat or beans. Cotton remains priced about 25% below the cost of production before the costs of fertilizer and fuel went up.
I once thought nothing can remain priced below the cost of production for very long. This is not so. Many commodities traders confess to buying sugar when sugar was shipped in burlap bags and the trading price of sugar was below the cost of that bag. That's a bag of sugar delivered for less than the cost of the empty container it was transported in. Many of those traders that bought at that low price lost money as, you guessed it, sugar prices went even lower!
Most analysts believe that the pre WA POG low will prove to be the lowest POG for years to come but the cost of production for gold, silver or anything else is not necessarily the lowest tradable price. Commodities are often bought or sold on a limit basis, that is only if the price is above a certain level or below one. I wonder if CPM would sell me silver eagles at a specified low price if Michael already had my money in his desk drawer?
What's that you say? Silver trading at $4.20/ounce? Didn't Rich have an order to but 100 coins at whatever price per coin they retail for when POS is $4.20? Yup, and another order for more at POS at $4.00/ounce. It would be complicated and bear watching but this might increase business. Any interest from the money in my account before purchases goes to the CPM Christmas Fund, of course. Enough money in many accounts would allow CPM to also buy stock (gold and silver) on the same "limit order" basis.
I really don't believe I'd like to put a business under this type of pressure but given enough ambition and enthusiasm and advertisement, it could generate a delivery only exchange( no offsetting of positions) in precious metals to rival the Comex. Two exchanges! One for paper trading and occasional delivery called the Comex, located in New York and one for delivery every time called the Kosares, located in Denver, Colorado!!
Michael, I hope you don't mind my playing with a precious metals exchange (exchange of fiat for physical), delivery only business. All in fun and to provoke thoughts about how things are exchanged among us.
Happy weekend to all!
Rich


Netking (06/22/01; 16:01:45MT - usagold.com msg#: 56663)
Lafisrap
Lafisrap(56659)
With the greatest respect to you Sir, does this matter? Is it worth having "bloodied noses" over regardless of who's right or wrong? Lets focus on the great PM analysis, financial and economic debate this site is respected for. I look forward to reading FOA's next post with anticipation, regardless of who his real identity is, or mine for that matter! kind regards to you, Netking.

Black Blade (06/22/01; 15:57:42MT - usagold.com msg#: 56662)
Officials From Western States Analyze Power Rate Caps, Worry They May Face Shortages
http://biz.yahoo.com/apf/010622/power_megawatt_scramble.html
West Analyzes Energy Price Caps

Snippit:

SAN FRANCISCO (AP) -- When power supplies stretch thin across the West this summer, who will decide whether Silicon Valley computers, Washington apple orchards or Las Vegas casinos get first dibs on what's left?

Black Blade: I vote casinos in Vegas.


Centennial Precious Metals, Inc. / USAGOLD (6/22/01; 15:38:24MT - usagold.com msg#: 56661)
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