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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...

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ARCHIVED DISCUSSION FROM 10/23/2000
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Peter Asher (10/23/00; 23:52:11MT - usagold.com msg#: 39766)
Where the Iraqi Oil Money Goes.
http://www.thetimes.co.uk/article/0,,24039,00.html

This won't cut and paste.

DaveC (10/23/00; 23:03:11MT - usagold.com msg#: 39765)
Al Fulchino (10/23/00; 21:17:31MT - usagold.com msg#: 39757)
I sympathise with your comment but I don't agree. Insuring a Bush win would accomplish nothing for the idealistic Libertarian. In fact, it may have a reverse effect as the Libertarian voice would get drowned out by the self-serving and much stronger modern-day Republican voice. Consequently the Libertarian voice would be heard by no one.

How do you eat an elephant? One bite at a time. I guess we have to convert each individual one at a time. The writers of the Constitution took 10 months and 85 essays to persuade the American people that they needed a Constitution.

It is hard to believe that just 200 years later we are seeing political parties rise that literally want to turn America into a totalitarian state. That is my reading of the Green Party platform. Government controls everything and everything is subjective.

No, the Libertarians must stay independent. IMHO, it's the only chance we have.

I have started an education experiment with friends and family. When the subject of stocks or money come up, I ask them if they know where money comes from. Try it sometime. The look on people's faces when you explain the debt game to them is incredible. I believe we just have to keep educating them one at a time.

Good luck.

PS Gold getting ready to pop soon? I think so.

Netking (10/23/00; 22:39:58MT - usagold.com msg#: 39764)
Can You Name This Country?
Can You Name This Country?

* 709,000 regular (active duty) service personnel
* 293,000 reserve troops.
* Eight standing Army divisions
* 20 Air Force and Navy air wings
* 232 Strategic bombers
* 2,000 combat aircraft
* 13 strategic ballistic missile submarines
* 3,114 nuclear warheads on 232 missiles
* 500 ICBM's with 1,950 warheads
* Four aircraft carriers
* 121 surface combat ships and submarines, plus all the support bases, shipyards and logistical assets needed to sustain such a naval force.

Is it Russia? China? France? Great Britain? Wrong. USA? Wrong. This country no longer exists. It has vanished.

The above is the American military forces that have disappeared since the 1992 election of Bill Clinton & Al Gore.

Sleep well, America.

Goldsun (10/23/00; 22:18:20MT - usagold.com msg#: 39763)
CLHEHAW
Although I missed the battle I'd like to contribute a battlecry and if that's not nonlinear thinking I'd like to know what isn't.
Halfwits Unite - for two halves are better than one!
Goldsun

Mr Gresham (10/23/00; 22:08:02MT - usagold.com msg#: 39762)
FOA
You know that many of us hold the fond hope of meeting you in person some day. Meanwhile, we share a lot, and humor helps bridge the gap of our disappointment that our meeting cannot be sooner.

But maybe in all things you ARE the teacher, with emphasis even by accident: after all, I've "bought" several investments before, by sending my money off to somewhere in New York or such. But at your inspiration as a PGA, this is the first time I've actually "brought" anything home that I could keep.

Conclusion: If you can't bring it, don't buy it.

Goldsun (10/23/00; 22:02:58MT - usagold.com msg#: 39761)
Linguistics from the Land of Languages
Townie
Once attaining familiarity with Indian approach to English language one is finding great charm in same. You are agreeing with this excellent sentiment? Good good.
Goldsun

Sharefin (10/23/00; 21:57:52MT - usagold.com msg#: 39760)
Lamprey
I would hazard a guess that if the POG was steady at the price of $350 that much of the industry as we know it would be in a position of changing.
I also think that the price wouldn't be steady at this level as derivatives would be cutting in.

I agree that today we have a gloomy price & sentiment.
Perchance at the higher price you mention the sentiment could be far worse (for some)

I think it would be interesting to plot the liabilities & leveraging down at these levels and then to compare such changes that a rise to $350 would bring on.

Which companies would be in a better financial position
And which ones would be worse off.

The point I was attempting to get across was not so much the hedging/leasing.
But rather the tendency these last few years to taking on excessive debts.
Debts & interest rates eat profits alive and leave little of value for the investor.

The banks by virtue of lending to gold producers are aligning themselves for eventual ownership.
By default the investors in goldstocks are ending up with very little of value.

Paper gold is not an investment.

Elwood (10/23/00; 21:29:49MT - usagold.com msg#: 39759)
ORO (10/23/00; 08:46:08MT - usagold.com msg#: 39711)
"By 1967, all major oil producers but for Saudi and Gulf emirates had taken over the foreign oil companies."

Brown is incorrect here. Much of the nationalization took place after, and in response to, Nixon's default in Aug '71. Some examples:

1971

Jul 31 - Venezuela's Hydrocarbons Reversion Law mandates gradual transfer to government ownership of all "unexploited concession areas" by 1974 and "all their residual assets" by 1983. (This is the one I consider to be the "trigger" event for the run on American gold.)

Dec 5 - Libya nationalizes BP concession.

1972
Jun 1 - Iraq nationalizes Iraq Petroleum Company's (IPC) concession owned by British Petroleum, Royal Dutch-Shell, Compagnie Francaise des Petroles, Mobil and Standard Oil of New Jersey (now Exxon). The concessions were valued at over one billion dollars.

Sep 30 - Libya acquires a 50 percent interest in two ENI concessions.

Oct 27 - OPEC approves plan providing for 25 percent government ownership of all Western oil interests operating within Kuwait, Qatar, Abu Dhabi and Saudi Arabia beginning on January 1, 1973, and rising to 51 percent by January 1, 1983. (Iraq declines to agree.) Agreements signed on December 21.

1973
Mar 16 - Shah of Iran and Consortium members agree to nationalize all assets immediately in return for an assured 20-year supply of Iranian oil.

Jun 11 - Libya nationalizes Bunker Hunt concession; Nigeria acquires 35 percent participation in Shell-BP concession.

Aug ? -Libya nationalizes 51 percent of Occidental Petroleum concession and of the Oasis consortium.

Sep 1 - Libya nationalizes 51 percent of nine other companies' concessions: Esso, Libya/Sirte, Mobil, Shell, Gelensberg, Texaco, SoCal, Libyan-American (ARCO), and Grace.

Humble Pie (10/23/00; 21:21:42MT - usagold.com msg#: 39758)
reply to #39745
The no subject post was very good,I commend you for it. Here is a quotation I think of eevery now and then,"Every normal man must be tempted, at times,to spit on his hands,hoist the black flag,and begin slitting throats."[smile]H.L.Mencken

Al Fulchino (10/23/00; 21:17:31MT - usagold.com msg#: 39757)
Dave C
You ended with:

I don't think they are waiting for the country to come to them. Let's just hope the country doesn't get too lost first.

Me: You offered up some good numbers for the party's existing office holders. I will have to agree then that they are not "trying" to wait for history to beckon them. Yet even those numbers would be better utilized by insuring a Bush win over Gore. Even a few points could insure that your last sentence above doesn't come to fruition.

Chris Powell (10/23/00; 20:41:56MT - usagold.com msg#: 39756)
South African radio host writes about Murphy interview
http://www.egroups.com/message/gata/566
GATA is getting around South Africa.

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@eGroups.com

lamprey_65 (10/23/00; 20:35:48MT - usagold.com msg#: 39755)
Sharefin
Good points and I'm not disagreeing with any of them.

My one comment is - a $350 POG would be a better time to evaluate the leverage of mining shares than $270. At this quoted POG...of course everything looks ultra-gloomy.

Rockgrabber (10/23/00; 20:31:16MT - usagold.com msg#: 39754)
CAN ONE BUY OUT COMEX?
ACCORDING TO CBS.MARKETWATCH, TODAY COMEX WAREHOUSE STOCKS SIT AT 1,865,577 OZ. OF GOLD AND 95,991,943 OZ. OF SILVER. SO I WAS CURIOUS TO SEE EXACTLY HOW MUCH THIS WOULD COST AND I CAME TO A FIGURE OF $513,033,675 @ $275 PER OZ AND $470,360,520 @ $4.90 PER OZ. MY QUESTION NOW, CAN ONE ACTUAL BUY OUT THE COMEX WAREHOUSE SUPPLY OF BOTH GOLD AND SILVER FOR AS LITTLE AS 1 BILLION? AND IF SO DOES COMEX HAVE THE ABILITY TO REPLACE THESE STOCKS IN AN ADEQUATE AMOUNT OF TIME TO AVOID THE DISRUPTION OF PHYSICAL DEMAND, ASSUMING PHYSICAL DEMAND IS THERE?

Sharefin (10/23/00; 20:24:46MT - usagold.com msg#: 39753)
Who owns the gold
http://www.sharelynx.net/temp/ProductionRanks.htm
Thanks for your post @21:02

It got me to wondering about what's happening to all the monies gained by gold producers hedging.

What's the bet that all these extra monies garnered heads back to banks as interest on debts
Rather than being steered towards the investors who own the stocks.

A gold producer used to deliver profits to investors or increase their investors wealth.

Nowadays it seems more the trend that they sell forward their future earnings
Taking their profits and borrowing evermore to expand.
Growing an ever increasing amount of debts
And feeding the banks ever increasing debt repayments.

We all know how banks profit from lending the masses phenomenal sums - RE
The end sum is that the masses rarely get to own their own homes and have indentured their lives earnings to paying back the banks.

So here we now see the same with the gold producers.
Sure the banks will lend the producers gold to sell forward to garner monies.
But only if they'll engage in expanding through debts which are borrowed from the banks.

In the end the banks have grown an income stream
Backed by the asset value of the future production
Gaining ownership of the companies in case of default.

What have the investors gained out of all this?

Seems to me that the gold companies have sold their investors short.
Their loyalties no longer focused towards growing their company for their investors.
But rather indenturing themselves to the banks
Digging themselves deeper into debt - to ensure a steady income stream for the banks.

The greater the debt one takes on then the more assured that the banks will be on the receiving end.
Through dividends for the life of the project
And if/when the company goes belly up the banks end up with what's left.

The same logic pervades all businesses controlled by banks through debt.
And of late we've seen new laws introduced to protect the banks in case of default.

So as we plod along this weary road we see the largest producers taking out all the companies below them through debt.
As the companies filter forward through this pyramid the ones left at the top are the ones who own all the gold.
So we have ended up with a dozen top producer behemoths who own the greatest % of reserves and resources worldwide.
And they've achieved this through borrowing gold and selling forward and taking on ever increasing amounts of debt.

They are now indentured to the banks
Their gold is indentured to the banks
Their assets stream is indentured to the banks
Their dividends are indentured to the banks
And in the case of default the whole company is the property of the banks.

In the case of a derivative meltdown the end result will be that the banks end up with the assets
And the investors will end up with sad memories.

The bankers system is currently rewriting the rules to ensure themselves of this.

Now in light of this who in their right mind would care to consider a piece of paper as a promissory note That they own a share in a company as an asset to ensure them wealth
When the dividends are going to the banks
When the company though expansion of debt has indentured themselves to the banks
When the company folds through the derivatives it's taken on with the banks.

Essentially the gold companies have sold out their integrity to the banks
And the banks will end up owning the gold.

One has only to peruse this list
http://www.sharelynx.net/temp/ProductionRanks.htm
To see the pyramiding the producers have attained.
5% of the companies now produce 90% of the gold.
And through debt the banks have gained control of these companies.

All that is needed now is for the banks to pull the carpet out from underneath the companies
And they've ended up with all the gold.

Who would wish to invest in an industry such as this?

Paper gold assets are a joke
And all who invest in them are blindsided to what is really going on.

To my mind this industry's future has already been planned out and mapped forwards.

The investors will end up with naught
And the banks will have the gold.

Paper gold sucks
If you wish to hold gold as an asset -- buy physical... ... ... .

Cavan Man (10/23/00; 20:19:04MT - usagold.com msg#: 39752)
drudgereport
There's a photo up at the site that sends a chill down my spine.

PH in LA (10/23/00; 20:14:05MT - usagold.com msg#: 39751)
English prose at its best!
"I used to give talks at small meetings all the time..." Trail Guide.

FOA:
Please put my name on any invitation list you might complile for your next appearance. (Big smile!!)

All:
Since we have taken to commenting on English prose styles, may I offer the following passage from the users manual for an ether-net hub I recently bought (brought home) to connect two computers together in my house? When I read it by phone to tech support, the guy at the other end was speechless!

Under a heading of "Connectivity Rules", (I just wanted to know which hole to plug the wire into) the following was accented in bold-faced type:

"...And be attention, you have to using 10Mbps Ethernet repeaters to connect in your network segments to avoid the limitation of Fast Ethernet. Because if you haven't use pure 10Mbps Ethernet repeaters in this network segments then it would be under the rule of Fast Ethernet Standards in this 5-port 10/100Mbps dual speed Hub products that you used now."

(Please be aware that I introduced no typos into the above, either!)

Cavan Man (10/23/00; 20:13:35MT - usagold.com msg#: 39750)
Trail Guide
To spend two hours with you would be worth its weight in gold. Thank you for teaching me how to think. Never judge a book by its' cover eh? I was a masterful speller of english and french words; yet, "think clearly" I could not. Now, my wife accuses me of being an "anarchist" and, some of my friends accuse me of thinking like a "european". (smiling broadly and 'lovin every minute of it) We are on the same side of the valley you know:>).

Rockgrabber (10/23/00; 20:06:38MT - usagold.com msg#: 39749)
To whoever
I liked to preach at one time, and still have the inclination some what, but I am losing it for many reasons. First if ones heart is in the right place things will work out perfectly accordingly know matter in the end. Especially when one might judge my ability to understand due to my lack of "Formal Education", for that has little to due with my ultimate understanding. You can not judge a heart, so certainly dont judge one by there lack of ablility to communicate through writting.

I want to know about something. I want to know what the IMF is up to, and how they are going to use this time of history to benifit them introducing "their"(is that the right spelling) world currency so that they are able to enslave all folks of the world through debt. That is where we are heading. The IMF is going to enslave this whole world through debt, for their ability to capture peoples energy for themselves. Go for it good ol IMF, you are built to fail, so get the game on.

lamprey_65 (10/23/00; 20:00:50MT - usagold.com msg#: 39748)
P.S.
My cousin is a banker here in New England...he's seen his share of bubbles and how fast they can burst!

lamprey_65 (10/23/00; 19:57:02MT - usagold.com msg#: 39747)
Something Feels Wrong...Very, Very Wrong
I know, sounds real hokey - maybe if I make a list of things that look strange...

1. Al G. and Summers are almost begging Congress to move quickly on reform involving derivitives. It really smells like trouble brewing from the wording of their statement.
2. The corporate bond market is flopping around "like a fish on the ice" as the Russians say. Ominous.
3. Financials are starting to get hit...as brain dead as this market has been the past few years, you KNOW things must already be on the way to crunch time.
4. The selling pressure in even the largest cap stocks is serious. Big money wants OUT. Nifty little rally we've had the past few days doesn't look too good either.
5. Oil just doesn't want to stay below $30 a barrel. Imagine that!
6. The Middle East looks like its gonna blow. That means higher oil and possibly (just possibly) the shackles on gold are forced asunder. Can you say d-e-r-i-v-i-t-i-v-e-s, Mr. Summers?
7. Look around -- the big money knows it's over. Gates and Paul Allen began dumping MSFT back in February...still selling. GE is trying to use its overpriced stock now while it still can to buy Honeywell (anyone notice all the talk today on CNBC about how GE is really about $10 per share UNDERVALUED? Ethics, anyone?) High priced real estate is now up for sale -- Rockefeller Center, Chrysler Building, World Trade Center (all from this week's Barron's). Boston Red Sox for sale...get it while it's hot 'cause it may not be hot much longer.
8. Defense stocks still on a roll. Hmmm.
9. Easy Al can't lower rates...would hurt the dollar (and as we know, the dollar is the lynchpin). What a box, eh?
10. My cousin, who's been in banking for 37 years, says he's never seen debt and credit overextension like today...he expects it to all unravel (no timetables, sorry).
11. Nearly everyone is invested and fascinated with the markets. 'Nuff said!

Lamprey

SALMON (10/23/00; 19:56:50MT - usagold.com msg#: 39746)
Placer Dome
PLACER DOME POSTS $34 MILLION PROFIT IN THIRD QUARTER <br>(all dollar amounts in U.S. currency)

Vancouver, Canada - Placer Dome Inc. is pleased to report on its continuing strong financial and operating performance. Consolidated net earnings were $34 million or $0.10 per share in the third quarter of 2000,compared with $17 million or $0.06 per share in the same period last year.
Cash flow from operations amounted to $146 million in the third quarter,up from $99 million in the third quarter of 1999. Mine operating earnings increased to $101 million from $83 million in the corresponding period
last year.

Trail Guide (10/23/00; 19:26:57MT - usagold.com msg#: 39745)
(No Subject)

My spelling and punctuation is not right? I don't know what you mean? (smile)

This reminds me of an old reply someone put to me when I asked him to clarify himself on a strong position. "What do you want, he asked? Good flavor or good taste? Because you can't have both from me at these wages! (Ha! Ha! What a guy!) He later took time to explain everything.

You know, hearing every comment today and with posters comparing my speech here:

I used to give talks at small meetings all the time and they never complained about my spelling! (laughing again)

You see, one of you was right, in that I have never tried to publish or write anything. My notes from meetings are what I work from and they are an outrageous hodgepodge of foreign writing no CIA agent or secretary could ever crack! (still laughing).

I'm much more of an eye to eye, face to face, quietly making my position known, kind of fella. Take MK or Mr. Turk; these men can write. Im not kidding when I say that in their presents or in the company of other smart / important people I would typically blend into the shadows.

First and foremost, my reasons here are to simply keep the path warm until the real play comes into view. If my poor writing skills don't make things clear enough, it's ok because soon enough events take a hand and clear the path enough to follow. True, talking to me in person, you would say the same thing others do; "Trail Guide, you don't sound anything like you write"! (smile)

Well, that reminds me of the guy with an extremely large nose. He went into a plastic surgeons office to get his leg burns fixed and they asked if they could also fix his nose? He said absolutely NOT! If you did that, I wouldn't be me!

So,,,,, in that light,,, if I gave these posts to someone to edit, or had someone else translate most of Another's thoughts to english, it wouldn't be me. (smile)

===========

Holtzman wrote a good piece some time ago and I lost it's location. In it he made the distinction about how we were arguing about the difference between paper gold and physical gold, along with all our other debates. I think he said that it was all useless and some of us risked embarrassing
ourselves if paper / real gold spiked together. We should just diversify and watch the show, he said. ( I think that's what he said?)

To a degree I do exactly as he mentions, except that I don't trust paper gold at all when the going gets rough. Our differences is the same valley that separates PGAs (Physical Gold Advocates) from many modern hard money followers. It's a difference of "learning location".

You see, it all has to do with how one orients oneself in the world today. Indeed, understanding the word "orient" provides some of the answers. Interesting word, orient.

The old romans didn't have compasses and they depended on the position of the sun to gain location and direction each day. Every morning they would watch to see where it rose. They gave the name "oriens" to this location. In other words, the east. Later, "oriens" obviously a latin derivative, was slipped into english and it became orient. Not only was orient used to describe one's positioning in the world, it also referred to all the lands east of Europe. The Asians, etc..

In time, most of the world's thought could be broadly divided into Western and Eastern. How well one understood such thought and the people forces that created them, depended very much on how well we could orient our own thinking! Are you still with me? (smile)

For myself, I have placed my feet squarely on the ground that faces East to gain a better understanding. Because from here not only do the majority of the world's people live, there also resides most of the reserves of oil. Remember, "oriens" became "orient" and that traditionally was all the lands east of Europe. The Middle Eastern oil fields included!

Now, over time and across the space of human experience, Europe has become much better "orientated" to the "orient" way of trading and thinking than the West. To this end they will always meld better with them economically than the US can.

Indeed, this is something Mr. H had better "orientate" himself with because I suspect he is British. You see, I say this because only the Brits use "orientate" and that back - formation of a word has been in use there for about a century. Truly, plenty of time for him to understand why the Duke of Edinburgh once said,,,,,,, "the English are much more culturally and emotionally "orientated" towards Europe". Check it out for yourself? Perhaps that fine gentleman also knew the "oriens" from where oil did flow!

and that my friends is why their English paper gold is going to one day burn.

Now, did I get those letters and dots in the right places? (smile) I don't think so!

Trail Guide

Farfel (10/23/00; 18:39:46MT - usagold.com msg#: 39744)
@Goldfan, you know not what you speak...

Goldfan, in my younger years, I worked for Dome Petroleum, Calgary, and assisted in computerizing their accounting system (That was some seven years before I got involved in the film business). So my knowledge of Alberta and the history of Canadian oil development is fairly substantial.

Now if you wish to continue believing that Ontario helped Alberta develop its oil industry, you go ahead and continue subscribing to those Ontario fairy tales.

Here is the reality:

Ever since I can remember, a huge chunk of Calgary's population consisted of American oilmen. When I lived there, some 20% of the population consisted of oilmen from Texas, Oklahoma, etc. They purchased houses and lived there, always with the intent of returning someday to their American homes. Many did, many stayed.

In fact, it was the Americans who really developed the Alberta oil patch, and they would have developed it much faster and efficiently EXCEPT for the self-interested interference of Ontario elites who constantly devised regulations to benefit Ontario and Quebec at the expense of Western provincial interests.

I find it singularly amusing when you state that Ontario helped Alberta get its oil business going during the 50's and 60's from proceeds derived from Ontario citizens paycheques.

In reality, Ontario's measures to move Alberta oil to Ontario then were no less exploitative than those measures enacted by industrialized nations to grab cheap oil from the Middle East "camel jockeys" (as they used to call them).

In other words, the Ontario crowd saw a cheap, essential, domestic resource and preferred to exert its political control over that resource, NOT from any altruism, but rather from complete self interest. The Ontario crowd knew it had little to no influence over the Arab nations or the huge US multinationals who controlled the Mid East supply...so back in teh 50's and 60's, Ontario moved rapidly to exert strict control over Alberta and its vital commodity.

Frankly, any subsidization of the Canadian Confederation by Ontario pales in comparison to Alberta's subsidization of that very same union.

The most glaring example concerns the "french-ification" of Alberta. Here you have a province in which a total of some 500 French-Canadians lived, yet Ontario forced Alberta to adhere to the bilingual philosophies of the Trudeau government. That meant forcing French/English language on every aspect of Alberta culture, from its highway signs to its cereal boxes, even though hardly a French-speaking person lived there. Alberta spent many millions of dollars "going bilingual," even though finding a French-speaking person in Alberta was akin to looking for a needle in a haystack.

With respect to your analogy of a neighbor upstream who dams your stream in order to sell water... Alberta is NOT preventing Ontario from buying its oil, it is NOT damming Ontario's oil supply. Rather it is simply stating that Ontario should pay the world price for oil, no differently than Ontario compelling Albertans for many decades to pay world prices for autos manufactured in Windsor or chemicals, plastics created in Sarnia, etc.. What special subsidies did Alberta receive for decades of Ontario-manufactured products? Answer: none.

Furthermore, Alberta is NOT insisting that the irresponsible citizens of Ontario join their American imbecile brethren in placing an SUV in every garage, heating the Ontario swimming pools all year round, etc. and taking no notable measures to conserve oil and reduce demand. After all, face facts, DEMAND is a major source of the problem, NOT simply supply.

Finally when you state that Ontario has always transferred far more equalization payments to the rest of Canada than the other way around, well, la dee da dee dee.

First of all, Ontario always had a much larger population so naturally the equalization distributions were larger.

Most importantly, Ontario did NOT make those transfers for altruistic reasons, they did it to exert POLITICAL CONTROL, no different than the IMF making abundant US dollar loans to Third World nations in order to exercise control and influence over those nations internal affairs and force them to do things "the American way." (e.g., preserve US dollar global hegemony).

So spare me your absurd homilies concerning Ontario's altruism toward Alberta, it is simply sickening in its absence of Truth.

Thanks

F*

andrew the kiwi (10/23/00; 18:17:35MT - usagold.com msg#: 39743)
ASX free live trading information
for immediate information on any ASX listed company, visit this site:

www.tradingroom.com.au

current trading prices,high,low,volume,announcements,index movements etc all detailed in this excellent website. And its free!

with so many of the leading Australian miners at all time lows, the low gold and $A dollar is likely to encourage more takeover and intercompany activity.

TownCrier (10/23/00; 17:59:03MT - usagold.com msg#: 39742)
HEADLINE --- Banks: Why create foreign currency liabilities at all?
http://www.hindubusinessline.com/stories/062433t2.htm
This thought-provoking piece from the Hindu Business Line is in english, but just barely <impish grin>, so feel free to read it and provide your own insightful translation.

The text is in regard to the interplay between foreign and domestic assets and liabilities in India, and of special note is this passage:
"...bias and skewness which has been evident in the banking sector's handling of its foreign liability fund base. That bias, which has gathered strength in the past decade, has been towards safety and conservatism in handling a non-domestic currency fund base. This has meant a fairly high and increasing degree of reluctance to create domestic currency assets out of a foreign liability fund base and therefore a declining level of net foreign liabilities of the banking sector...."
+
"This is a very serious issue in the overall external sector management. For, if banks merely retain abroad whatever hard currency deposits they mobilise -- at a clear negative spread which could even be a full percentage point -- not only is there a net forex drainage at the micro level. It also points to the larger disadvantages which the domestic economy may suffer on account of the non-repatriation of foreign currency deposits. Indeed, if the underlying and larger rationale behind schemes such as the FCNR is to access the pool of international savings and supplement domestic savings, the extant practices roundly defeat that objective...."
+
"As can be noted, between March 1992 and March 1997, the total foreign assets of the banking sector increased by as much as 300 per cent -- from $1.9 billion to $7.27 billion. View that massive surge in the foreign assets in the backdrop of the comparatively minuscule increase of around 11 per cent in the total foreign liabilities of the banking sector in the same period -- from $15.05 billion to $16.81 billion. The net foreign liabilities, therefore, have seen a fairly sharp drop of 27 per cent -- falling from $13.12 billion as of March 1992 to $9.5 billion at the end of March 1997."

tic tic tic tic tic tic tic tic ........<like a stopwatch>

R Powell (10/23/00; 17:56:16MT - usagold.com msg#: 39741)
Prof. Von Braun
http://www.gold-eagle.com/gold_digest_00/vonbraun102400.html

The professeur might not be FOA or TG or even a rocket scientist but he has written a very pleasant, short, logical, and easily read article that will make you feel good.
Best part (IMHO)
"Gold does not declare a 10 for 1 reverse split as some Nasdaq listed dot. coms have done of recent times. Once you own physical metal, it does not have to be watched every day to see if its lost weight, gone out of business, lost its listing, failed to report on time, or subjected itself to the humility of name your own price."

However, don't forget where it's hidden!
Gold, physical and futures, for wealth and paper wealth! Rich

goldfan (10/23/00; 16:58:49MT - usagold.com msg#: 39739)
More on the wicked Ontario/Alberta Oil thing
Concerning Alberta Oil and the rest of Canada

@Galearis thanks for the insightful analysis.
@Journeyman, thanks for the discussion, and read on if you're so inclined.

@ET thanks for the links.

@ORO I guess I was a little clumsy, but don't think I deserved the boot-stomping re " it's plain thievery for a government to take away somebody's Oil".

I referred to the actions in the 50's trying to cap oil sales by the Federal government only because it seemed the issue might be coming our way again, due to the windfall profits on oil these days, and I am wondering what the denouement might be for Canada, given we can no longer do a Fed action to stop the sale of oil outside Canada, nor can we rely on the "family solidarity" feelings of Alberta to help the rest of Canada, after we helped them out of our personal pay cheques, to get their oil business going in the '50s and 60s. So what will happen?

Incidentally, if my neighbor is upstream of me, on a stream I need for irrigation, is he justified in suddenly damming the stream, selling the water to someone else entirely? Especially, when I helped him get his garden going, on the understanding we were in this thing together, and he wouldn't likely do something so drastic as selling away all the water in a short period of time.

What is the meaning of citizenship and community, if not these sorts of agreements? Maybe Alberta would be better not to join the bad old Ontario club, just changing its name to the bad old Alberta club. Maybe they would actually benefit, by seeing Canada as one whole, rather than a lot of little fiefdoms, each dominated by its own rapacious oligarchs. (I�m not holding my breath for this.)

Personally, I hope the Alberta and the Ontario governments continue their policies of supporting only a handful of business elites, ignoring all environmental and community health and education issues except those that relate to more cutting of governmental costs and less governmental regulation. This is the only way we will be impelled to get a proper understanding of how much work we have to do, how much compromise we have to make with each other, to have a civil and viable society. IMHO.

@justamereBear

In the early 50s Oil had just been discovered in Alberta. Pipelines were built from the west to Ontario. A pipeline already existed from Montreal to Sarnia, Ontario, and maybe further west, I don't remember. This brought imported oil from Portland Maine, all we had in those days. About 1956 or so, the Federal government mandated that the pipeline be reversed from the West, up to the Quebec border. This meant Ontario, but not Quebec citizens, would have to pay more for their gasoline and heating and aircraft fuel, and plastics feed stocks, etc. than would Quebec and the Eastern provinces, who could continue to use the much cheaper imported oil .This was done to help Alberta and Saskatchewan get their oil business going. Here in Ontario, we paid daily at the pumps, an extra amount, without too much fuss. Because we thought it would be good for Canada. Ontario has always transferred far more equalization payments to the rest of Canada, than ever we received. In fact, I don't believe( could be wrong) we've ever been on the receiving end. People here are more willing to talk about Canada than they are in other Provinces. Function of size I guess, we have 1/3 the country's population. I guess we're complacent. Attitudes are changing. Maybe the size difference between Ontario, Quebec and all the others is too much to overcome with civility.

@Farfel
@Shermag
I was attempting a discussion, not trying to shoot you. You both have attributed motives and beliefs to me I do not have, and picked selectively at what I said, ignoring other explanatory passages. I see you don't want a discussion .You want to be right.. OK. You're right.

Free gold. It will help.

Goldfan

TownCrier (10/23/00; 16:37:47MT - usagold.com msg#: 39738)
Time winding down for the dollar?
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3LJ30LOEC&live=true&tagid=IXLMS1QTICC&subheading=global%20economy
This short series of excerpted quotes sums up the gist of this Financial Times article.

Regarding the dollar's past ability to baffle economists who have predicted collapse at the hands of a swelling currenct account deficit, Paul Lambert, director of currencies and bonds at Deutsche Asset Management said, "Each time international appetite for one class of US asset has started to wane, another has taken its place."

Jim O'Neill, head of currency research at Goldman Sachs, admits, "It is increasingly difficult to see what will come to the rescue of the dollar this time."

And Mr. Lambert has the last word with the conclusion "It looks like the dollar bull run may have entered the final straight."

Boxman (10/23/00; 16:34:13MT - usagold.com msg#: 39737)
Gore in Viet Nam
http://pub5.ezboard.com/fyourdontimebomb2000.showMessage?topicID=13431.topic
A picture is worth a thousand words.

Mr Gresham (10/23/00; 15:15:23MT - usagold.com msg#: 39736)
Mr Moto's Money Report
http://www.piraz.com/wmre.htm
Today's latest.

"It's only a matter of time, I sense, until the same financial talent is turned to nifty ways at repackaging default receivables."

ORO: Thanks for response. A lot in your post. A 2nd or 3rd read is required, for an hour's rock-shoveling outside in the legendary Northwest October sunshine (not!) has addled the math side of my brain. Later.

PH in LA (10/23/00; 14:48:40MT - usagold.com msg#: 39735)
Correction
Looks like this site does not support the "does not equal" character that one gets (Mac OS) by typing "option =". The title of my previous post should read: "von Braun does not equal Trail Guide".

PH in LA (10/23/00; 14:45:38MT - usagold.com msg#: 39734)
Trail Guide*Prof. Von Braun

Just went over to Gold Eagle to review the Von Braun pages and came away with the indisputable impression that he is not FOA. A facile writer with an original and attention-grabbing turn of phrase, the professor does not begin to exhibit the depth and overall understanding of the issues that FOA does. This would be a very hard deception to pull off. Believe it or not, it is very difficult not to let slip what one knows while trying to elucidate a point to further the understanding of others. I doubt very much that FOA could do it. At the same time, he (FOA) would find it very difficult to supress the natural turns of phrase and liquid prose style that von Braun exhibits while writing as FOA.

Both writers are very consistent in their writing styles. Mispelling the same word in the same way does not overcome that fact. FWIW!

Galearis (10/23/00; 14:31:01MT - usagold.com msg#: 39733)
@ Canuck
YUP!
You said:"He's taking alot of heat for calling it early. The risk of an early call outweigh the risk of waiting to see in his eyes".

But why should he be the only one? The Can. Alliance wanted this timing too. The Tories, at least, have grounds for complaint with their internal problems not likely to get better under election pressure. The NDP, well who is going to listen to their line? However, so far the latter have asked the most serious questions to date about the Lib. gov. performance.

If Stockwell Day had a clue, he would have been chastizing the governement for the early call. His chances (like all far right parties) are always favoured as they are better at exploiting hard times better than good ones. So from our point of view he is out of the loop or just plain naive.

ORO (10/23/00; 14:24:28MT - usagold.com msg#: 39732)
A simple stock misery index
I was looking at a composite calculation for a "stock misery index" which is calculated from factors thought to have a negative effect on corporate income. These are the oil price, the dollar index, interest rates.

The index starts at 106 in mid 97 and falls to 93 in Dec 1998 and Jan 99. From that point, it rises steeply to 100 by May 99 and 105 in Jul 99, then to 112 by the end of 1999. By Mar 2000 it is at 117, and increases to 126 at the May 2000 stock rebound, under which value it stays till the middle of Aug 2000 Peaking at 134 at mid Sep. Then it drops with the stock market from that time till the last day of september, where is hits 126 at intervention's ebb and resumes its upward course to revisit the area above 132 at the Oct 12 bottom in stocks. From there it has dropped back to 128 and started back up last Friday. It hit 131 today, nearing its highs. The chart is remarkably similar to the chart of the inverse of the SP and Nasdaq PE, just that it seems to precede the moves in the stock indexes.

Interesting.

ORO (10/23/00; 13:55:06MT - usagold.com msg#: 39731)
Last post, fixing errors
Fixes marked by **
ORO (10/23/00; 13:13:30MT - usagold.com msg#: 39729)
Mr Gresham - dynamics
In your 39696 today
"oil is priced and [IS] paid for in dollars. That creates dollar demand. But if oil producers dump dollars on the back end in greater quantity, it attenuates the effect of initial demand, right?"

ORO: Dynamics dominate this. So long as dollar prices of oil are rising more quickly than the flow of dollars into oil exporter's hands, there is a rise in the dollar:

Say the dollar POO rises by 100% over 6 months from $15 to $30, and 40 mil bl/day are exported. If the importers have not changed their purchasing volumes (actually they have increased them, but lets not deal with that now) and they target having reserves sufficient for a 1 year supply:

Then at $15 POO they needed $220 bil. And now, at $30 they need $440 bil, then dollar balance demand has grown by $220 bil.

**If the increase was steady (linear) then the average price paid during this period was $22.5. Which comes to $165 bil flowing into the pockets of oil producers during that period. That would be up from $110 bil in 6 months at $15 oil. So oil revenue, and potential supply has grown by $165 - $110 = $55

**Thus $220 bil increased dollar demand less $55 increased supply = $165 bil net increase in demand.

**If the exporters use all of the increase in their cash flow to pay off debts accumulated when prices were lower then at $15 per bbl we had exporters with balanced cash flow at $110, so they use the balance of the revenue, $55 bil to pay off debt. This decreases the supply of dollars, as these go to "money heaven" as the loans are paid down. Thus the net new supply from petrodollars is 0.

**Thus the net increase in demand is $220 - $0 = $220

Only when the rate of increase in the POO slows to the point of the exporters receiving dollars more quickly than importers are increasing their balances and exporters are paying down debt, is the dollar supply going to exceed demand.

Say in the next half year, POO increases only $5/bbl.
Demand for dollar balances increased by $73 bil.
During this same period, oil exporters got another $183 bil.
They spend the usual $110 bil as before and use the rest to pay debt and accumulate reserves.
Thus, demand increased $73 bil and supply did not increase (oil exporters are still spending as much as before).
Net demand has increased $73 bil.

If the oil exporters no longer have debt they want to pay, and don't want further reserves, they will spend the new excess dollars, thus supplying to the markets the full $183 bil of their revenue. Thus the supply would increase by the change in their revenue: $73 bil

Since in this case new supply and new demand are equal, the effect of the dollar demand due to increased POO will be balanced completely by the increase in supply. If oil prices stop moving up then dollar supply due to higher oil prices will catch up to the demand it induces and the dollar will lose this contribution of a temporary net demand, just as the dollar supply has increased permanently.

**Over the 1 year period, we have oil revenue increasing from $220 bil to $348 bil, or by $128 bil.
**Dollar balance demand has grown from $220 to $513 bil or by $293 bil.
**If all is used to pay down debt/accumulate reserves, then we have only the increase in demand.
**If none is used for debt reduction/reserve accumulation, then the net increase in demand was 293 - 128 = $165 bil.

** If over the next year, prices are steady, then dollar balance demand stays as it was at the end of the prior year, increased by that same $293 bil over the 2 year period. But supply (if it is all spent) will have increased by (348 first year + 513 second year - prior rate for 2 years @ $15, which is 440 = $421 bil. Thus the net increase in SUPPLY would be 421 - 293 = $128 bil over 2 years.

Additional comment:
The point at which the supply demand picture flips is probably going to be that when oil exporters have paid down enough debt and accumulated sufficient reserves for their comfort, they will place any further excess dollars into the markets. This will be a rather sharp turn of events for this contributor to net dollar demand, but the fact that it would most probably coincide with non-oil exporters freeing themselves from debt burdens at the same time or very close to it. That would make the break in the dollar that much more pronounced.

nickel62 (10/23/00; 13:25:03MT - usagold.com msg#: 39730)
Von Braun and FOA
I have conversed with Mr. Von Braun twice before and while I was impressed when we exchanged emails I did not think he was on the same level as Trail Guide. However, that said these subjects are so difficult to convey , you can never really tell when someone is giving you the simple version of the problem because he (correctly) perceives that you can only absorb so much.
I would tend to doubt it though. Von Braun posts on the Gold-Eagle forum,and occassionally on Le Metropole Cafe.

ORO (10/23/00; 13:13:30MT - usagold.com msg#: 39729)
Mr Gresham - dynamics
In your 39696 today
"oil is priced and [IS] paid for in dollars. That creates dollar demand. But if oil producers dump dollars on the back end in greater quantity, it attenuates the effect of initial demand, right?"

ORO: Dynamics dominate this. So long as dollar prices of oil are rising more quickly than the flow of dollars into oil exporter's hands, there is a rise in the dollar:

Say the dollar POO rises by 100% over 6 months from $15 to $30, and 40 mil bl/day are exported. If the importers have not changed their purchasing volumes (actually they have increased them, but lets not deal with that now) and they target having reserves sufficient for a 1 year supply:

Then at $15 POO they needed $220 bil. And now, at $30 they need $440 bil, then dollar balance demand has grown by $220 bil.

If the increase was steady (linear) then the average price paid during this period was $22.5. Which comes to $165 bil flowing into the pockets of oil producers during that period.

Thus $220 bil increased dollar demand less $165 increased supply = $75 bil net increase in demand.

If the exporters use all of the increase in their cash flow to pay off debts accumulated when prices were lower then at $15 per bbl we had exporters with balanced cash flow at $110, so they use the balance of the revenue, $55 bil to pay off debt. This decreases the supply of dollars, as these go to "money heaven" as the loans are paid down.

Thus the net increase in demand is $220 - $110 = $110

Only when the rate of increase in the POO slows to the point of the exporters receiving dollars more quickly than importers are increasing their balances and exporters are paying down debt is the dollar supply going to exceed demand.

Say in the next half year, POO increases only $5/bbl.
Demand for dollar balances increased by $73 bil.
During this same period, oil exporters got another $183 bil.
They spend the usual $110 bil as before and use the rest to pay debt and accumulate reserves.
Thus, demand increased $73 bil and supply did not increase (oil exporters are still spending as much as before).
Net demand has increased $73 bil.

If the oil exporters no longer have debt they want to pay, and don't want further reserves, they will spend the new excess dollars, thus supplying to the markets the full $183 bil of their revenue. Thus the supply would increase by the change in their revenue: $73 bil

Since in this case new supply and new demand are equal, the effect of the dollar demand due to increased POO will be balanced completely by the increase in supply. If oil prices stop moving up then dollar supply due to higher oil prices will catch up to the demand it induces and the dollar will lose this contribution of a temporary net demand, just as the dollar supply has increased permanently.

"...what SA, ME, OPEC spend their money on (Lockheed, Bechtel, Mercedes, Rolex?), or what dollar quantities they save it in (in Chase, Citi, etc. -- didn't that lead to 3rd world debt crisis awhile back? and how did they wiggle out of that one?) I know Saudi Arabia has not had the surpluses (starting again?) in recent years, even falling into debt(?), but their role is pivotal once more, I would expect."

ORO: So far, the main spending item was debt repayment. Mexico has finished. Saudi should be done this year, and Venezuela is already spending. The Kuwaitis and other less indebted oil exporters from the gulf are just now beginning to buy up the luxury "stuff" and personal services as they used to. Saudi has already put in some military hardware orders. But the interesting twist is that Saudi, because of the shift away from Iraqi, Palestinian and Iranian workers due to the Philipinos, Pakistanis and Indians, have actually imported some industrial and entrepreneurial talent which started manufacturing there using imported labot, thus increasing their spending on capital equipment and on raw materials, instead of just increasing their spending on fine consumer goods. Funny thing is that some of the stuff is even exported into the US. Even local Saudis and residents of the UAE are starting to see results from the years of misguided industrial education and investment in that as their allowances from oil revenues have shrunk, they finally had to make use of these newfound skills and they are producing some of their own stuff.

"RESERVES: Dollar as reserve would be affected by changes in those levels. Have they just been piling up faster than anyone can spend 'em, or have European exporters been taking their profits off the table and spending them down? It's hard to imagine the Euro ECB nations upping their dollar reserves if they have any expectation of displacing the King as world's reserve."

ORO: First, the EU is dumping dollars out of reserves slowly. The Japanese are still sopping it up. Chinese and Koreans are not increasing their accumulation significantly. EU businesses are quickly buying up stakes in US industries in order to be able to retain markets when the dollar slides and their home markets can no longer compete with local US manufacture. Even Japanese are doing it for most of this decade - e.g. Accura (Honda) has moved the bulk of its supply to the US markets from Japan to the US as the Yen/$ rates are no longer favorable.

In the meantime, debtors are accumulating dollar reserves that assure sufficient supply to meet obligations (as Korea Mexico and China have done)

.

nickel62 (10/23/00; 13:12:04MT - usagold.com msg#: 39728)
Von Braun and FOA
I have conversed with Mr. Von Braun and while I have was impressed the two times we exchanged emails I do not think he is on the same level of FOA. These subjects are so difficult to convey however, you can never really tell when someone is giving you the simple version of the problem because the (correctly) perceive that you can only absorb so much. I would tend to doubt it though. He posts on the Gold-Eagle forum,and occassionally on Le Metropole Cafe.

Cavan Man (10/23/00; 13:08:27MT - usagold.com msg#: 39727)
States Rights Issue--Off Topic
We now have a "national" drunk driving law courtesy of the outgoing administration. Look, I am as much against drunk driving as anybody but why do we need the federal government to legislate this!!!! This is an issue for the 50 states to deal with.

This is another reason why I am becoming more a Libertarian day by day.

Mr Gresham (10/23/00; 13:06:22MT - usagold.com msg#: 39726)
Coin
I should find the production figure link, but it's more an impish observation.

Notice the absence of the new "collectible" state quarters from circulation? Collectible tokens is about all they are -- trying to get us to buy them like stamp collectors buying mint stamps from USPS, to paste in albums -- pure seignorage-times-10 profit for Treasury.

But if they create a shortage in use down the road, it may tug at the fiat money supply at the ground-level users' view. One loose thread...

Mr Gresham (10/23/00; 13:02:38MT - usagold.com msg#: 39725)
Paper
http://www.bep.treas.gov/figures.htm
I hadn't checked this yet this year. Look how they boomed on 100s and 20s last year, for y2k withdrawals. They're making up for the ratty-looking 1's this year, aren't they?

Worried? Sure they were. It would have gone down as one of the colossal blunders in financial history to have the world hooked on your paper money, and then not to print enough of it to meet an unusual demand. (b-e-e-e-e-g smile)

TownCrier (10/23/00; 12:53:51MT - usagold.com msg#: 39724)
James Turk explores the "Invisible Crash" at the Gilded Opinion
http://www.usagold.com/gildedopinion/TurkFedReserve.html
In his latest commentary, "The Federal Reserve's Worst Nightmare", our friend James Turk discusses the stock bubble and the dollar bubble, and gives weight to the conclusion that stock prices may continue upward while losing real value.

Click the link given above to see the commentary from which these following excerpts were drawn:
--------------------------

"...the Federal Reserve is contending with two different bubbles -- one that has inflated stock prices and one that has inflated the Dollar. In both cases, values are well beyond prudent levels, but the Dollar is the biggest bubble by far. . . . . .the market is bigger than the Federal Reserve and the US government.... The Fed cannot force people to hold Dollars if people want to dump those Dollars, which I believe they (mainly foreign holders) will do in mass as the Dollar bubble pops. Those Dollars will be spent everywhere imaginable because popping the Dollar bubble will cause a flight from currency, just like occurred in Weimar Germany.
+
Inevitably much of that money will end up in the stock market on the premise that good stocks will always represent a refuge from bad money. So the Dow Industrials will rise in nominal Dollar terms, but not in purchasing power terms, continuing the trend that began in July 1999..."

Parsifal (10/23/00; 12:43:12MT - usagold.com msg#: 39723)
Trail Guide=Prof. Von Braun?
Hipplebeck: bought=brought

Hard to ignore isn't it? Trail Guide so consistently uses "brought" in place of "bought," I expect he does it deliberately. Why? It is a curiosity.

Where does Prof. Von Braun post? The name is familiar to me, and I associate it with gold market commentary, but I've forgotten where I've read Von Braun. Also, could it be that "Von Braun" is another alias? Wasn't "Von Braun" a German rocket scientist the Americans co-opted after WWII?

Parsifal

Canuck (10/23/00; 12:11:30MT - usagold.com msg#: 39722)
Canada calls election
Headlines in Ottawa paper refer to '...earliest call for a federal election in 90 years...'.

The Prime Minister has called an election for late November (27th I believe). Varying editorials speculate on the timing of the call; current government in power less than 3 and a half years.

So now a guy has got to think; why is he calling an election so soon? Very obvious to me; first, logically he believes his chances of winning now are much greater than at the end of the 4th year, June of 2001. So now why does he think that? What does he fear on the horizon? It's very crystal clear to me.
1. The Canadian economy has peaked.
2. The U.S. elections are a week and a half away, is he going to wait until next summer? Not a chance, what will happen to the US economy, policy, dollar? Canada is joined at the hip to our American friends, which way is the PM leaning?
3. He fears the ME situation. Wait and see, not a chance.
4. He fears the oil situation. Call an election next spring after this winter? No way.

Our Canadian Prime Minister fears a collapse of the economy,
a falling USD, war in the Middle East and a oil problem/crises this winter. Are my speculations correct?
He's taking alot of heat for calling it early. The risk of an early call outweigh the risk of waiting to see in his eyes.

nickel62 (10/23/00; 12:05:59MT - usagold.com msg#: 39721)
Thanks ORO I just found your earlier post explaining the problem
For a minute I thought the milleneum had arrived.

nickel62 (10/23/00; 12:04:08MT - usagold.com msg#: 39720)
What is going on with the gold lease rates on KITCO?
Is that an error or has the lease rates really skyrocketed?

DaveC (10/23/00; 11:54:40MT - usagold.com msg#: 39719)
Al Fulchino (10/23/00; 11:13:05MT - usagold.com msg#: 39716)
Are the Libertarians waiting for history to come to them?

From the web site:

The number of Libertarians serving in public office around the USA has passed the 300 mark for the first time in party history, LP Political Director Ron Crickenberger has announced.

As of mid-September, the party had 313 members holding office at the state, county, or local level -- an increase of almost two dozen officeholders over the past few months.

The surge in officeholders came from several special elections, from a spate of local appointments, and from officeholders discovered by the California LP's "Operation Breakthrough," said Crickenberger.

Of the 313 officeholders, about 170 were elected and the remainder were appointed, said Crickenberger.

By comparison, the Reform Party has seven elected officeholders, the Green Party has 72, the Constitution Party has one, and the Natural Law Party has zero.

They are also running 1500-2000 candidates in November elections, including a majority of the house and senate races.

I don't think they are waiting for the country to come to them. Let's just hope the country doesn't get too lost first.

ORO (10/23/00; 11:31:19MT - usagold.com msg#: 39718)
714 - thanks for the ref to the source material
The liquidity issue is of course on the mark.

The point is that a figure was settled on well in excess of NY or London prices, thus creating a dual price mechanism.

ORO (10/23/00; 11:25:45MT - usagold.com msg#: 39717)
PH in LA - Lease rates incorrect
They had a miscalculation - probably crossed their datafields.

Subtract the absolute values from each other to get the lease rates:

e.g.
1 yr 6.6850% +5.2950 => 1.39%

Al Fulchino (10/23/00; 11:13:05MT - usagold.com msg#: 39716)
Hugh Akston,Nickel62 and Journeyman
In reverse order:
Joureyman msg # 39683,
Now I didn't know that it was being tried already in CA. I should have guessed that mine was not a new idea <smile> Thanks for clearing that up. You made some other points, I would like to address. One was that it doesn't work. Well here in New Hampshire it is having partial success. In fact, one of my two state reps finally realized she would never get elected unless she changed parties. She did and she was elected as a Republican. She is no more a Republican than I am a Democrat (or a fascist..eh Oro?) Anyway she and others have used this ploy to gain seats and we are getting dangerously close to losing our LIVE FREE or DIE attitude. It is getting more and more like Massachusetts every year. And get this, people who are losing their welfare status in MA are moving up here in droves to gain the same status up here.
Secondly, you point out that there are too few Libertarians to Republicans to make a difference. Well that situation exists NOW, even with a third party. The only consolation I see in the Libertarians remaining seperate is that for now, nothing can be blamed on them and as history approaches THEM, their usefuless can become clear. But there is a danger in waiting for history to come calling. The house could be burned to the ground and while some would dare say that that is exactly what may be needed, I would say I agree only if we did not run the risk of being carved up by outside nations before our Libertarian friends had a chance to do their surgery.

Nickel62 msg # 39684

Thanks we do agree.

Hugh Akston msg # 39679

I may missed you before this. Glad to talk with you. I still think the point I make above to Journeyman is valid. Do we run the risk of total deterioration? We are getting very close to that now and with 4-8 years of Gore under our belt, Libertarians may have nothing left to help save. I would treat the situation the same as having a young child. Work in a language he or she understands, hold their hand when crossing the street etc. There are too many dangers to not take the careful approach right now. That is just my opinion.

Al Fulchino (10/23/00; 11:09:53MT - usagold.com msg#: 39715)
Hugh Akston,Nickel62 and Journeyman
In reverse order:
Joureyman msg # 39683,
Now I didn't know that it was being tried already in CA. I should have guessed that mine was not a new idea <smile> Thanks for clearing that up. You made some other points, I would like to address. One was that it doesn't work. Well here in New Hampshire it is having partial success. In fact, one of my two state reps finally realized she would never get elected unless she changed parties. She did and she was elected as a Republican. She is no more a Republican than I am a Democrat (or a fascist..eh Oro?) Anyway she and others have used this ploy to gain seats and we are getting dangerously close to losing our LIVE FREE or DIE attitude. It is getting more and more like Massachusetts every year. And get this, people who are losing their welfare status in MA are moving up here in droves to gain the same status up here.
Secondly, you point out that there are too few Libertarians to Republicans to make a difference. Well that situation exists NOW, even with a third party. The only consolation I see in the Libertarians remaining seperate is that for now, nothing can be blamed on them and as history approaches THEM, their usefuless can become clear. But there is a danger in waiting for history to come calling. The house could be burned to the ground and while some would dare say that that is exactly what may be needed, I would say I agree only if we did not run the risk of being carved up by outside nations before our Libertarian friends had a chance to do their surgery.

Nickel62 msg # 39684

Thanks we do agree.

Hugh Akston msg # 39679

I may missed you before this. Glad to talk with you. I still think the point I make above to Journeyman is valid. Do we run the risk of total deterioration? We are getting very close to that now and with 4-8 years of Gore under our belt, Libertarians may have nothing left to help save. I would treat the situation the same as having a young child. Work in a language he or she understands, hold their hand when crossing the street etc. There are too many dangers to not take the careful approach right now. That is just my opinion.

PH in LA (10/23/00; 10:31:53MT - usagold.com msg#: 39714)
Gold Lease Rates
Anyone else notice that Kitco is reporting a 6% increase in gold lease rates this morning?

Is this correct?

If so, what does it mean?

Oro? FOA? Anyone?

wolavka (10/23/00; 10:03:24MT - usagold.com msg#: 39713)
Gold producers / gold for euro only
screw the u.s. dollar.It dumped you long ago, pay back.

714 (10/23/00; 09:09:21MT - usagold.com msg#: 39712)
Oro: Oil, God and Gold
http://go-here.to/secret_history
The "dual gold exchange rate", as you call it, began in 1939 when WWII opened and the London gold market closed. Aramco was no longer able to obtain gold for it royalty payments to King Saud. On top of that, gold prices began to diverge in various exchanges around the world on account of supply distortions, all the while the official US price continued to be $35. And while it is true gold was $70 in Jidda, there is some doubt that there was enough liquidity (that is dollars) in Jidda to facilitate many gold sales. See the above link for documents Brown used in his book.

ORO (10/23/00; 08:46:08MT - usagold.com msg#: 39711)
Gold Oil Aramco and the two tier gold price
Got me a copy of Oil God and Gold by Anthony Cave Brown

One of the many interesting points in this saga of Aramco and the house of Saud is that of dual gold prices.

1940-1946
Dispute over royalty in gold pounds (sovereigns, about 1/4 oz each) which was 1/20 oz per ton oil, as per the original concession, that being the payment to the crown. The Americans (Aramco) insisted on paying the official rate of $35 per ounce. The Saudis want the Jidda rate of $70/oz, which was the post war non-central bank free market rate of 1947.

The concession was to expire in 1993.

The compromise of $51 + a package of "goodies" was accepted by both the US side, Aramco (Exxon 30% Mobil 10% SOCal 30%and Texaco 10%) and the State Department (who had a legation to the negotiations to deal with payments and strategic issues) and Ibn Saud, who was the Saudi side, represented by Crown Prince Saud.

Goodies included a 357 mile rail line and port facillities, as well as an airport (from the previous round of "goodwill" being purchased).

This dual exchange rate lasted from 1947 till

The fear expressed by the Aramco consortium during WWII was of Saudi moves towards the Sterling for additional monetary support, which the government constantly sought because of its constantly expanding leakage of funds throughout the court and later through its bureaucracy. Britain had US assistance funds from lend lease that could have been used to buy the Saudi government, who would then either transfer the concessions to an English firm, or Aramco would be forced to move to British jurisdiction. Obviously not where they wanted to be. The US won Saudi to its side through nearly $100 mil in fundings throughout the war, and made it part of the Dollar block rather than the Sterling block. This was the matter of most importance after Bretton Woods, since oil would be the most heavilly traded item of international trade for decades to come, and whomever had oil pricing on their side would increase substantially the likelyhood of becoming the currency of global trade, and thus enjoy a subsidy that would enrich the people, businesses and the government of the reserve currency at no direct cost and negligible investment.

Another dispute came with the Saudi demand that the royalty be paid twice: on oil as it comes out of the ground and as it leaves the pipeline. That was eventually settled with a lump sum payment and a new royalty.

In 1956, following the Egyptian seisure of the Suez canal the first official threat was posed to nationalize Aramco. This following a prior threat by the initially successful attempt by Onassis to obtain all the transport rights to Aramco oil on exclusive contract in 1954 through a bribery scheme that got to the king's foremost advisors. Next in line was the 1960 erection of OPEC, followed closely by the breaching of the Aramco line by the demand for executive decision participation by Saudi's Yamani. By 1967, all major oil producers but for Saudi and Gulf emirates had taken over the foreign oil companies.

In the gold-oil deals, still ongoing through the 60s but being paid in dollars up front, gold being secured indirectly, the Qatari Emir was surprised to find his agent having squandered $90 mil on copper futures instead of obtaining the gold he was supposed to purchase.

It should be noted that the Saud familly had seen the oil as its own private property, as well they saw themselves as protectors of the tribesmen and the holy places. The royalties on oil are passed on through generations and are not necessarilly viewed as "state" property, owned by "the people" much less the "Arab Nation". Thus funds were stashed everywhere around the globe both in specie and as investments in financial media by private parties of the royal familly and by the various merchants and mercenary courtiers and bureaucrats.

Another point of interest is the Saudi view of the relationship with the US as being preferable to the relationships with much hated former colonial powers Britain and France. Aramco was the filter through which Saudi grew to view the US. As a business partner, and a damn good one, but for the problem of the perrenial US financial overextension.

Galearis (10/23/00; 08:42:13MT - usagold.com msg#: 39710)
@Farfel et al on the matter of Alberta and Ontario
To the greater extent these arguments seem to personalize political entities, territorial entities and one should always endeavour keep a more dispassionate position when discussing the subject in terms of value judgements suggesting a "good guy, bad guy" approach. Ontario's position in the great scheme of things economic has been a function of geography, demographics and history.

Geography: Even as an interior area of the country, the Great Lakes has been pivotal to establish numerous international ports from Lake Ontario to Thunder Bay. The raw materials are both received and shipped from such ports, and, of course, this activity evolved Ontario into THE industrial heartland of the country. That Ontario is also a centre of primary industries from the agricultural sector, mining and forestry are also an important factors.
The political centre of the country quite naturally followed from this...

History: immigration is the glue that cements the whole in Canada. Ontario has overwhelmingly benefited from the influx of peoples over the years - and now receives some 250,000 plus immigrants per year - far more settle in Ontario than emmigrate elsewhere in Canada. The reasons are quite simple: opportunity.

This process has been a passive one with only minor impetus from the political side to favour Ontario over the other provinces. The arrangement with the auto industry and the US is one example. The resource grab of oil by Ontario is a specious simplification that is overshadowed by the NAFTA Agreement. The percieved economic benefits and political control over the rest of Canada are natural outcome of this geography and history.

On the political side: we are just entering a national election campaign. The two main combatants are the Liberals, presently in power, and the Alliance Party of Canada. Although it is not said (too loudly as of yet) the latter is quite right wing and has an agenda of "Americanization" of the country. There are some who fear this (I am one); others think this inevitable, even to the point that it could lead to a political union. I am mystified by this attitude that so many would treat this so lightly. One wonders if an American would be as dispassionate if the situation was reversed.

Mr Gresham (10/23/00; 08:11:22MT - usagold.com msg#: 39709)
Hipple/Humble/FOA
More likely von Braun reading FOA. Our friend IS remarkably consistent with his typing bloops. (I suspect he had a secretary most of his business days.) He's probably not an editor at The New Yorker.

ET (10/23/00; 08:10:57MT - usagold.com msg#: 39708)
Gold
http://www.lewrockwell.com/blumert/blumert11.html

Gold and the New Yorker Magazine

by Burton S. Blumert

In a scurrilous article in New Yorker magazine (July 7, 2000: Gold People: Will They Ever Be Rich
Again?), author James Collins doesn't think so.

"Let's say that for some reason you decided back in 1980 that you wanted to lose money on your
investments over the next 20 years. Succeeding in this would have been very difficult to do as it
turns out.... There was, however, one investment that would have lost your money, causing not only
financial distress but also shame and humiliation. That investment was gold."

Terrific. Reminding the reader that gold lost its luster as an investment, never matching those highs
of 1980, is not the kind of investigative reporting that wins Pulitzer Prizes. The market realities are
dismal enough for the gold investor. We don't need Collins, a former senior business editor at
Time magazine, using distortions and/or deliberately slanted figures to make it appear worse.

Collins: "... On January 21, 1980, the price of gold on the New York Comex was $825.50. Today
its price is about $280 per ounce... . In other words the value of an ounce of gold has fallen about
seventy per cent."

Blumert: This is not unlike the fellow in a balloon who is lost. Spotting a farmer working below, our
wayward balloonist shouts down: "Sir, I'm lost. Where am I?" The farmer, with clear voice,
responds, "You're in a balloon."

The information may be correct but of no value. The likelihood of an investor buying gold, one
time only, on January 21, 1980, is sixty-eight million to one. (Ok, I made this number up, but it
seems about right).

Why not arrange for our mythical gold investor to buy on January 21, 1976, when the yellow metal
was $124 per ounce? In the year 2000 he would have been ahead 240 per cent. Or, pick any other
year that helps make your point.

When he describes the gold investor as suffering "shame and humiliation," it's evident Collins has
constructed a hit piece, not a serious article.

Rather than deriding the gold investor, Collins would do better to provide his reader with an
understanding of those critical events twenty years earlier, and their impact.

The winter of 1979-80 was not a good one for super-powers. While Soviet troops were being
drawn and quartered in the mountains of Afghanistan, the daily parade of blindfolded embassy
hostages by the Iranians provided the best evidence of a futile US foreign policy.

Back in the US of A, interest rates were approaching 20% and double-digit inflation was plaguing
consumers and terrorizing politicians. The Dow Jones Industrial Average had failed several times to
reach the magical level of 1000 and was languishing at about 800. Investor confidence was at low
ebb.

From November 1, 1979, through January 21, 1980, reflecting the prevailing malaise, the price of
gold soared from $372 per ounce to $825. In less than ninety days the "gold rush" made the front
pages of newspapers around the world.

For Americans, holding gold was illegal from 1933 to 1974. In 1974 all restrictions on gold
ownership were lifted, and it was amazing how quickly an efficient American gold market
developed. To a large extent, brand new companies provided the consumer with quality products at
low premium with instant liquidity. Gold sales reached fevered levels as the yellow metal filled its
historic role as a "fever thermometer" reflecting the society's political and economic ills.

From its high of January 21, 1980, the gold price headed lower, and for the next two decades
ranged between $250 and $350 an ounce on average. The rallies were infrequent. What happened?

One dark view believes there are conspiratorial forces working against gold. That the king doesn't
like gold, never has, never will. That gold reveals truth, and that kings, along with prime ministers
and presidents, can't handle too much of that. The evidence of a war on gold is very compelling,
but that is a subject for another time.

Some credit former Federal Reserve Chairman Paul Volker's monetary policy with de-emphasizing
gold's role. Baloney. That's as arrogant as the Democrats and Republicans taking credit for the
economic boom of the past decade. They are irrelevant.

The computer revolution is a pure American offspring. It has provided the boom along with the
unprecedented strength of the US dollar against all currencies AND gold. As long as the dollar
retains this dominant position, gold will remain lackluster.

Back to Collins, his relentless attack on the gold investor, and his distortions.

Collins: "In 1980, the Dow Jones Industrial Average was at 800. Today, it is around ten thousand
five hundred."

Blumert: It's one thing to look at averages, another to speak of individual investments. Many of the
companies that flourished in 1980 no longer exist.

I won't dwell upon some of the devastating losses we have seen recently on the NASDAQ. Stocks
that were one hundred seventy dollars per share in March 2000, are four dollars today. How many
stock certificates printed in the last twenty years are worth nothing, zilch, zero, bupkis? I imagine
they provide enough "shame and humiliation" to go around.

Collins: "Bonds bought in 1980 would have soared in value as interest rates came down."

Blumert: The economist, Dr. Franz Pick, once defined bonds as "certificates of guaranteed
confiscation." I recall a holder of certain junk bonds who ultimately used them as wallpaper in his
den.

Collins: "Paintings... UP... Comic books... .UP... Snuff boxes, stamps, coins, manuscripts,
majolica, it seems that no matter what you bought in 1980 your investment would have increased in
value by the year 2000... "

Blumert: Is that so? As a gold dealer who also has handled numismatics for forty years, I can attest,
with absolute certainty, that collector coin prices have never come close to matching 1980 levels.
My stamp dealer friends say it is pretty much the same in their world, and I would warrant comic
books, toys, and manuscripts are similarly checkered in their performance.

Collins: "In the 1980s the one hundred and eighty-five hundred thousand-dollar home is nine
hundred thousand in the year 2000."

Blumert: Real estate is the king of all investments, but bitterly disappointing to some. REITs (real
estate investment trusts) left some investors nothing but lawsuits, and even when market values
soar, many realize that finding a qualified buyer is not always an easy matter.

The Collins piece disintegrates into a narrative on the life and times of "goldbug" Michael Levinson.
It's the sorry saga of the New York City boy, educated at Harvard, who becomes interested in
gold, and makes a killing selling gold mining shares.

As the price of gold tumbles, then stagnates, Levinson loses his money, and is now the tragic
figure, broke, a pariah to his customers but clinging to a belief system that is obsolete and
irrelevant.

Actually, Levinson doesn't even qualify for the "goldbug" fraternity. Gold dealer/brokers, as
professionals, do not have parity with the true "goldbug". Which now brings us to the real
question. Why does Collins choose to do his article on gold at this time? The commodity is
certainly not in the news, and could never earn any space in a current issue of Time magazine. The
characters, would, at best, be "quaint" to the New Yorker readership.

I've got the answer. What's bugging Collins is that these people that he marginalizes are in fact a
"cut above" and principled.

I have dealt with gold investors for over forty years. Their checks are always good; they honor
every commitment, stay informed on current issues, and have a profound understanding of history.

They provide for their families, and they don't go broke. I can assure you that many, many of them
have done very well with their gold investments.

Our present culture of totalitarian liberalism is hostile to any criticism of the regime. Whenever a
group of people like the "goldbugs" rejects a key element of the modern state, such as managed
"funny" money, it's no surprise that the senior editors from Time magazine and the New Yorker
find the need to subject them to ridicule.

wolavka (10/23/00; 07:45:18MT - usagold.com msg#: 39707)
Golds tech signals
THESE ARE GOOD SIGNALS. If this market does not move higher, you know something is up.

SHIFTY (10/23/00; 07:43:36MT - usagold.com msg#: 39706)
More mergers
In the wake of the Exxon/Mobil deal and the AOL/Netscape deal, here
are the latest corporate mergers we can expect to see:

Hale Business Systems, Mary Kay Cosmetics, Fuller Brush, and W.R.
Grace Company merge to become Hale Mary Fuller Grace.

Polygram Records, Warner Brothers, and Keebler Crackers merge to
become Polly-Warner-Cracker.

3M and Goodyear merge to become MMMGood.

John Deere and Abitibi-Price merge to become Deere Abi.

Zippo Manufacturing, Audi Motors, Dofasco, and Dakota Mining merge to
become Zip Audi Do Da.

Honeywell, Imasco, and Home Oil merge to become Honey I'm Home.

Denison Mines, and Alliance and Metal Mining merge to become Mine All
Mine.

Federal Express and UPS merge to become FED UP.

Xerox and Wurlitzer will merge and begin manufacturing reproductive
organs.

Fairchild Electronics and Honeywell Computers will merge and become
Fairwell Honeychild.

3M, J.C. Penney and the Canadian Opera Company will merge and become
3 Penney Opera.

Grey Poupon and Dockers Pants will merge and become Poupon Pants.

Knott's Berry Farm & National Organization of Women will merge and
become Knott NOW!

wolavka (10/23/00; 07:34:30MT - usagold.com msg#: 39705)
Sir Gresham
Not sure????????

But history repeats itself . ME will not have peace according to some, until the last jew is in New York or the Mediterranean. Sad sick world where hitler repeats himself.

Hug a tree today, may not be here tomorrow.

714 (10/23/00; 07:33:57MT - usagold.com msg#: 39704)
A piece of history...
http://cgi.ebay.com/aw-cgi/eBayISAPI.dll?ViewItem&item=476873022
Aramco purchased gold from the US Mint in 1940's to meet royalty payments for Saudi oil. Here, apparently, is one of those bullion coins.

Humble Pie (10/23/00; 07:31:02MT - usagold.com msg#: 39703)
#39699
Hipplebeck : I'm glad someone else noticed the bought vs brought thing . I wonder!

Henri (10/23/00; 07:19:38MT - usagold.com msg#: 39702)
BIS buyout
It seems to me that the BIS stands in very good position to profit quite handsomely in fees from the management of the Swiss and Euro-zone bullion transfers. Could the move to buyout the private shareholders who have property but not voting rights be a move to cut-out investment partners who have no ability to defend themselves with vote (minority holders though they are) before the profits show on the books? Unbelievably, the BIS books show a lower amount of bullion on hand compared to the previous year as of the time the valuation studies were conducted. Will the private shareholders take their case to the Hague? Do they have any recourse at all? Perhaps not.

Henri (10/23/00; 07:11:25MT - usagold.com msg#: 39701)
Arafat's drive fueled by leverage of oil interests?
Hi All, I'm back from my stint and non-participatory pergatory wherein I assumed the persona of Bascom Toadvine due to inaccessibility of my USAgold password. Thank-you all for your indulgence. I am now compelled to utter this between the lines (between the buttons) query into recent events in the Mid-East.

I was struck by the sight of Arafat surrounded by a significant showing of ME oil ministers and his newfound belligerance. Perhaps he is playing the oil trump (or are they playing him?) Was this a dream? Where does a player like Arafat get the testicular fortitude to say "go to hell"
to Barak? Is it Barak's tentative leadership position that gives Arafat this audacity...or is it something more? Perhaps the oil ministers are applying pressure to the western financial wizardry (and I use the term loosely...sorry Gandalf) in more ways than just oil pricing. Perhaps they feel they can get anything they want at this point and are using the Palestinian state issue and Jerusalem as capital to see just how much power they can really wield without the focus on the oil markets. Is this a move called "check" on the international political chessboard? What options do the western powers have now to counter this bold move? If the West caves on this issue does it mean we have toppled our King in capitulation? What will be the next move of the Oil Ministry? Having won the day and lost the board, how will their power next be demonstrated? Will there be any stopping them? Do we indeed have sufficient capacity to recover in 2-3 years from this power play of higher oil prices by tapping the Athabasca reservoir and consolidating the NAFTA battle lines? Where the rubber meets the road is in the fiat exchange rates.

Silverbaron (10/23/00; 07:08:27MT - usagold.com msg#: 39700)
The Science of Getting Rich
http://websyte.com/unity/rich.htm
The Science of Getting Rich

A Classic from Wallace Wattles. The text is a bit outdated, but the audio tracks are up to the present time.

Hipplebeck (10/23/00; 06:13:10MT - usagold.com msg#: 39699)
Trail Guide=Prof. Von Braun?
bought=brought

Mr Gresham (10/23/00; 06:05:51MT - usagold.com msg#: 39698)
Wolavka
:)
:)
:)

Mr Gresham (10/23/00; 06:02:04MT - usagold.com msg#: 39697)
Canuck Question #3
No answer here, but it keeps coming back to "Do we know who these guys are?" The old de Gaulle true believers in gold, or a new generation who are totally embarrassed by the "barbarous relic"?

Or something in between, clever (cynical?) organization (chess?) players who see what the dollar has gotten away with for 50+ years and want a piece of the action, seeing dollar's past or eventual mis-steps as an opportunity to at least take back their own territory from foreign "occupation" if not "conquer" the world with their own fiat.

Fiat is potentially so much more "profitable" to an elite than hard money, they'd be totally out of their league not to try it, and all they have to do is "outrun you, not the bear" to have a shot at it. Using gold as a convincing "shadow on the wall" to claim legitimacy for their fiat, as well as a fallback Plan B in the direst circumstance. (Although seems to me their bullion is not much more percentage-wise than US's. FOA mentioned some legal encumbrance US needs to watch out for, that perhaps I need reviewed...)

Getting umpteen countries together to claim some of that advantage (as Mundell probably helped convince them to do) must be a monumental task. Especially without any "smoking white papers" being leaked that detail exactly that strategy. A lot of loud whispering had to go on (and still does)...?

Mr Gresham (10/23/00; 05:45:21MT - usagold.com msg#: 39696)
Dollar for Oil, Dollar as Reserve: Couple Clarifying Questions -- Oro? anyone?
Forgetful I am at 4 AM, or maybe a good refresher/intro for newbies...

OK, oil is priced and maybe paid for in dollars. That creates dollar demand. But if oil producers dump dollars on the back end in greater quantity, it attenuates the effect of initial demand, right?

Anyone know what SA, ME, OPEC spend their money on (Lockheed, Bechtel, Mercedes, Rolex?), or what dollar quantities they save it in (in Chase, Citi, etc. -- didn't that lead to 3rd world debt crisis awhile back? and how did they wiggle out of that one?) I know Saudi Arabia has not had the surpluses (starting again?) in recent years, even falling into debt(?), but their role is pivotal once more, I would expect.

RESERVES: Dollar as reserve would be affected by changes in those levels. Have they just been piling up faster than anyone can spend 'em, or have European exporters been taking their profits off the table and spending them down? It's hard to imagine the Euro ECB nations upping their dollar reserves if they have any expectation of displacing the King as world's reserve.

LeSin (10/23/00; 05:12:42MT - usagold.com msg#: 39695)
SingLion @ GE Forum - US$ v Euro "NO WAY OUT" @ "HI death"
I Like this Lion - Does he ever sound familiar, Yes
The USA cannot induce a recession because to-day we have the euro.�
(singlion) Oct 22, 17:58

This euro,we must find a way to discredit it.(USA)

This reserved currrency/trade settlement functions will force the $ to a "HI death". The higher it goes, the crazier it becomes as all scramble to come to terms with it.

There is no way out.

Canuck (10/23/00; 05:11:06MT - usagold.com msg#: 39694)
Miscellaneous questions
#1 From Strangers link,

``The central bank would be faced with a very difficult problem because it cannot lower interest rates when inflation, even oil-related inflation, is rising,'' Sinai said. ``The Fed would have to wait until there is a deflationary effect coming from a weaker economy before it takes a shot at lowering rates.''

Is this a characteristic of stagflation? Can't lower interest rates (dollar fall-out and anti-inflation fighting)
and can't raise them (murder economy)?

#2 We see reports from the EIA and API that oil inventories
are XX percent lower than last year. Also heating oil and other distillates are YY percent lower than last year. I posted a link some time ago from the EIA called The Chronology Of Oil 1970-1999 which, in their view suggested overstocking of oil and such in 1999 was due to Y2K fears.
Therefore my question is, are todays levels low (as indicated by the percentage lower than last year) in comparision to 1999 or are they actually low in comparision
to say 1998,1997,1996 etc.?

#3 We see and hear alot of 'offical' selling of gold. We don't hear anything on the buy side. We speculate who is on the buy side. The selling, selling, selling and the overhang of 'officaldom' is what has brought us to our current situation; a low gold price and negative sentiment.
We understand that the fiat kings want fiat to look strong and gold weak. We are pretty much certain that they is a co-operative amongst central bankers to maintain this initiative. So ...try this one on. What if Central Bank A sells (and actively 'announces' this), Central Bank B quietly buys. Central Bank C vocally sells to quiet CB D.
E to F. Then the merry-go-round, B to C, D to A, etc., etc.
The individual quantities of gold do not have to change much but the plot of SELL, SELL, SELL, buy, buy, buy serves its purpose. Too far a left field thought?

Thanks in advance,

Canuck.

wolavka (10/23/00; 05:11:04MT - usagold.com msg#: 39693)
Read the Book
Doing = Getting.

Put in mathematical terms, this boils down to: D=G2, where D is the amount of Doing (in energy units) and is equal to G, the amount of getting, squared. It shows that any amount of doing results in an exponential amount of getting. If you're doing all that, you might as well be doing what you want.

Absolutely doing what you want in all circumstances will also make others fear you, because they know that when it comes right down to it, you don't give a shit. And not giving a shit is a big mojo.

not giving a shit is made up of 3 parts.
1. not being afraid of what other people think;
2. not caring about their feelings;
3. keeping your eye on the prize.
Focus;
Saddam Hussein is an attorney. He has no intention of allowing failure to occur. Anyone have any doubts should know that when he showed up for his bar exam he kept a pistol within full view.

Buy Gold!!!!!!!!!!!!!!!!!

ThaiGold (10/23/00; 02:32:32MT - usagold.com msg#: 39692)
Latest Presidential Polls
http://www.rense.com/general4/polls.htm
Dubya Now With Commanding
Lead Over Gore In Polls
CNN/USA Today/Gallup Presidential Preference
10-22-00
�
�
Bush 50%
Gore 40%
Buchanan 0%
Nader 4%
�
ABC News Tracking
�
Bush 48%
Gore 43%
Buchanan 1%
Nader 3%
�
Voter.com Battleground 2000 Daily
�
Bush 44%
Gore 40%
Buchanan 1%
Nader 4%
�
Portrait of America Tracking
�
Bush 46%
Gore 41%
Buchanan 1%
Nader 4%
�
�
Reuters/MSNBC/Zogby Daily Tracking
�
Bush 45%
Gore 44%
Buchanan 0%
Nader 4%
�
NewsWeek's Weekly (Oct. 12-13)
�
Bush 44%
Gore 44%

http://www.rense.com/general4/polls.htm

Golden Truth (10/23/00; 01:50:05MT - usagold.com msg#: 39691)
Howdy Farfel
I like your last post on Alberta and oil and gas, i've worked for Canadian Occidental Petroleum for 20 years, here in Calgary,Alberta.

The East can kiss there Power Base GOODBYE!!!!! along with their arrogant P.M

Thanks Farfel love your stuff! :-)

G.T

justamereBear (10/23/00; 01:06:19MT - usagold.com msg#: 39690)
The way the world IS

If yesterday you went out and bought an ounce of gold, and today the price of gold went down, can you insist that the trade is reversible?

If the currency you gave for that ounce of gold, wildly inflates today, thus dramatically reducing its purchasing power, will you entertain a reversal of that trade?

Of course not, that is the way the world works. Parties, freely entering into an agreement, and a transaction, are bound to that agreement, and all the ramifications that flow from that.

However, when one party is much stronger than the other, AND has a mind to, (say by using a gun) they can compel a unilateral change in the rules, and force another result. That is how the world works. Agreements are binding, except in the face of power.

**FARFEL 39647
Two parties, Alberta, and Canada, freely entered an agreement as to what each would give and receive, in order that Alberta would join the larger union. The terms were clear.

In the early 70's, when Canada decided that Alberta had more assets than they needed, (read assets that Canada wanted) they came in and effectively stole the oil resources of Alberta. Similarly, the Crowsnest pass agreement was a condition of Albertas entry into the larger union. The Feds decided it was no longer convenient to honor that agreement either. Among others, Alberta now has 2 very legitimate grievances.

There is no such thing as a free market if any powerful players exist. Powerful players will always have a disportionate influence. Moral questions are not an issue. It is an issue of power.

In addition, certainly since WW2, Albertans (and to at least some extent, Ontrians) have had their substance sucked away through various ploys such as "equalization payments".

I have long thought it much more likely that Alberta would separate from Canada than Quebec. They have more legitimate grievances.

However, as DAVE C said in an earlier post; "They got away with it once, and they think they can get away with it again".

If you think that Alberta will get into the catbird seat simply by playing by the current rules of the game, as set up by Albertas opponents in this particular game, IMHO you are badly mistaken.

Alberta, in my mind, has only one possible course of successful action, and since they have little or no debt, they can probably play this particular game longer than the other players.

Alberta must quietly cease to issue any further licenses to explore, lift, and/or transport hydrocarbons. That is totally within their power to do, and while this action would probably be damaging in the short run, it is unlikely to be very damaging to either party in the long run, and might even be profitable.

Saddam baby has very astutely, and I think successfully, attacked the US dollar in the same basic way. He has indicated that he will not sell for US dollars. Period. He will shut down the pumps before selling for dollars. He will even sell for the floundering Euro, but not dollars. (and I have also long thought that the Euro was destined for failure) The feeling seems to be spreading in the middle east. What will happen to the US dollar if it loses its place as the de facto medium of exchange in the oilpatch? What percentage of world trade is represented by oil?

You can speak of this internationally. A specific line on a map is freely agreed to in return for peace, and other consideration. (One of which is absolute governance) While people just across the border undoubtedly have more in common with each other than they do with people at the other end of their own country, the agreement reached was that, on either side of this artificial line, each side will have absolute governance, and all the advantages and disadvantages that flowed therefrom. Break one clause, and the whole agreement is broken. Only raw power, or a new agreement which considers the value of what each side has to offer and needs, will alter the rules of this game. Value for value.

I have seen posts that bemoaned the fact that the US has gone from 600plus CAPITAL ships to 300 decks of all kinds. True or not, the balance of power is always shifting, and with its debt load, the US cannot stay at the level it has been accustomed to in the past.

In the communist world, where theoretically everything is owned by everybody, the theoretical sharing of resources might be possible. In our property owning western society, when the Alberta government conditionally sells the right to its interest in, for example, oil in the ground, Albertans no longer have the absolute right to that oil. It is in private hands. (still conditionally) One of the conditions is that the province can say, within limits, we do not wish this oil to be sold to the following list of parties, which theoretically may include up to 100% of the world populace.

**ORO 39641
Not that I basically disagree with it, but that is a pretty wide statement, and one that I would feel to be very debatable. I personally do not wish to enter a debate on it, because I feel the debate would quickly contain, or center on what I feel are moral arguments that are largely a whine that "this is not fair" and which tend to reflect an attitude that "what is yours is mine, and what is mine is my own".

It is my opinion that such whines are often used by the stronger party to justify the use of force to take what they want. On the other hand I am pragmatic enough to have long expected the US to use such arguments to justify the invasion of Canada, either economically, or militarily. Until recently I thought the issue would be fresh water. I note too, that the US is not offering to share its water resources with areas that have considerably less. This is not meant to be in any way insulting to any one individual. It is simply the way the world is.

At this point, such an invasion does not make sense when considering political, moral and economic factors, providing Canada freely exchanges its resources for pretty, colored T Tissue. It is a point that the US very shrewdly negotiated into NAFTA. I think most Canadians are aware of this. (or at least, should be)

If Canada should suddenly decide that these resources are needed for home consumption, and none were available for sale, what do you think would happen? I can predict the results fairly definitively. So can you.

**Goldfan 39640
No, according to the original agreement, the resources belong to the province, who can do pretty much what they want with them. If you insist on reopening the original agreement by saying this clause does not apply, then all parts of it, including the part about Alberta being part of Canada, are also open for discussion, where ever that may lead. That is not to say that there was not a largely implied assumption that we would look after "family" first, at the original signing.

** 39658
After composing this in my one fingered way, I notice your new post, before I posted this, and wish to insert;
I lived in the east during the 60's and 70's, and have heard all the propaganda about paying Alberta high prices for oil. I have studied the matter, and traveled a good deal to and from the west, but I was never able to find any evidence that supported this stance. That was a story that was making the rounds in the East, particularly the propaganda before Trudeau went in to steal Albertas oil. If you have any concrete evidence that does not concern the "pipeline/security of eastern supply" issue, I would like to know of it. I might join your side of that debate.

Regarding your last paragraph about your neighbours. In the final analysis; In the real down and dirty, this is what it is all about. Are we our brothers keeper, to what extent, and in what circumstances?

There are a lot of good people out there, and I suspect a far higher than normal percentage on this forum than in the general population. Such a thought does you credit.

I suspect that we may debate, or even argue, perhaps loudly, over whether we are going over, or around, or through this particular mountain, but I would think, particularly among the long time posters, that we post to share; to advance the common USAG community in its ability to cope with (potentially disastrous) coming events and change. Personally, it is a lot easier for me to lurk or discuss with people I know by phone. My only possible reasons for posting are to bring up a train of thought that I might want others to comment on, and to share/polish ideas. In the end, that is how I see our dialog, as being non confrontational.

**Peter Asher
36950 Loved it, will email on another subject.

39632-Regarding; This is not the gold standard of your fathers, savings bonds, and wheatfield, grinder, and oven;
I am in a constant state of wonder at humanity, and the blinders we all wear. Not that I don't do the same thing, but I can't see mine.
For instance it bends the mind that such intelligent people as one finds on this forum, continue to somehow believe that the world will go on much as it has if fiat hits the wall. They still mentally count it as profit in dollars if gold goes up in dollars. But I expect the reality to be profit in "golds" when the game is done. It is why I hope gold stays down in dollar terms for years to come. I want more golds.

I have stated that I own insurance in the form of options, but do not really expect to be able to convert it into physical when the time comes. To many are not thinking beyond; "fiat hits the wall and gold goes up and I am rich". If I cannot convert to physical, guess what, I intend to buy "wheatfields, mills, and bakeries". (possibly literally)

I have tried to get thinking started along these lines started by making some posts sort of "what if" arguments, but no go. I hope your way is successful.

In short I suppose I agree with WOLAVKA in 39662

And now I see I have ignored my bed again. NITE ALL

DaveC (10/23/00; 00:59:19MT - usagold.com msg#: 39689)
OT: Farfel, JohnDoe
http://www.cgg.ch/contents.htm
Farfel, thanks for the responses.

First, I believe the correct term for describing the political system in America today is "Fascist Democracy."

I define fascism as "government controls everything." And of course democracy is two wolves and a sheep deciding what to have for dinner.

"Hence I do NOT believe the main issue of the election is the one that you (and all other Libertarians) see, namely the individual vs. government. That is because, since the government today is no more than a subsidiary of the corporations, then the main issue in the coming election is this: the individual vs. the corporation."

I agree with this. The government today acts on two levels: 1) an interventionist level to get citizens and corporations do move in the direction the government wants and 2) an enforcement level, enforcing what the corporations want when it benefits the government.

"What we really need today is NOT less government, rather we need the RIGHT government, and that would be a government that is responsive to the public's interest, NOT the corporations' interests."

This is disagree with. We need both. But since we already have an interventionist government, why would I want to elect MORE interventionist. You obviously do not believe that the US should live by the principles outlined in the Constitution.

By electing Libertarians, you take away the BOTH of the levels of government I described: interventionist and enforcement. What remains is a government that will UPHOLD the Constitution AND the rights of the individual against both the government and the oligarchs.

What I do not understand is how someone can think Nader would be good for America and at the same time believe that most of his ideas would not be implemented anyway. What's the use?

For JohnDoe, if you go to the UN web site "Our GLobal Neighborhood," www.cgg.ch.contents.htm, you will find the same language about "UN/corporate partnerships."

I believe the current historical struggle, like the church/monarchy of old, is the government/corporation (oligarch). It will all end very badly unless the citizens of the US take back their government. Unfortunately, I also do not think they are ready to do that.

I could go on but I have work to do. Until later, go gold!

ThaiGold (10/23/00; 00:40:36MT - usagold.com msg#: 39688)
Inverted Gold Chits
Attn: wolavka (10/22/00; 17:48:13MT - usagold.com msg#: 39663)
wolavka:
You wrote:
Thought you'd like to know, dec gold is inverted. Expect fireworks.

I write:
Watchout, before you buy any of those Gold Chits today.
When inverted, one's coins drop from one's pockets.

See my:
ThaiGold (10/22/00; 22:42:51MT - usagold.com msg#: 39684)
Phantom Rice Merchant
Does This Sound Familiar.?.

Regards,

ThaiGold@OperaMail.Com

Farfel (10/23/00; 00:34:00MT - usagold.com msg#: 39687)
@GOLDFAN....re: Alberta's role in Canada

You said...

< I'm not defending Ontario. What I ask is, so what if Alberta gets the catbird seat, what will they do with it that's any
different from the might is right power stuff we've had for the last 10 000 years? I guess I'm really asking, can any nation
long endure that has a monopoly of something others need for their survival, if they insist on charging so much, everyone
has to be bankrupt to pay them?>

I say:

For decades, Ontario had a monopoly on the political power in Canada, and it used that power to allocate industry across the land.

Naturally, it favored allocations of industry to Ontario first, then second to Quebec (in order to appease the Separatist elements there).

All the while, the Western Provinces were treated like a "slave class" by the Ontario government. The Western provinces were deemed to be "resource provinces," their primary role to be the providers of cheap raw materials for Ontario or Quebec industries.

The main reason Alberta is still primarily an oil and gas province is NOT for lack of intellectual capital nor lack of raw materials needed for industry. Rather it is a result of the chronic Ontario monopolization of political power that starts with the electoral division of the entire country. Naturally, Ontario elects the most seats to government, even today when its population is now increasing at a much slower rate than the Western provinces. When will Ontario redesign the electoral division to reflect its diminishing representation/importance to Canada? Answer: Never, if Ottawa or Toronto have anything to do with it.

When auto firms from Detroit went looking to locate in Canada during the past century, they were encouraged to build only in Ontario. When European or Asian companies came looking to locate manufacturing facilites (TV's, stereos, chemicals, etc.) in Canada, Ontario politicians aimed them in the direction of Ontario first, Quebec second, British Columbia last. The Western provinces (excluding B.C.) had to fight Ontario for the few manufactured goods/hi tech industries located there. NEVER did Ottawa/Ontario strive to entice industry to locate in the Western Provinces; rather the Western Provinces struggled for what little industry they have.

Now finally, Alberta is in a position to reap a much deserved windfall for its depleting oil and gas resources, and the Ontario crowd is screaming, "Hey, let's share these resources equally, you should not reap most of the windfall, we should split it equally across the provinces."

And you say, "Hey, I don't want that type of inequality of wealth, I want an enlightened egalitarian distribution of revenues that benefits me as much as anybody in Alberta."
You offer all variety of intellectual rationalizations when the reality is that it boils down to your own self-interest, you do not want to pay for higher priced essentials such as gasoline, heating oil, etc. and I ask that you admit it. You do NOT live in Alberta, yet you wish to ensure that your comfy standard of living is not upset by the developing re-distribution of wealth taking place in Canada.

Well, guess what, after years of living off the cheap resources of the Western provinces and developing a much higher standard of living, Ontario now gets to experience how it feels to be a second banana in Canada...because that is where the province is headed, Alberta is becoming the new power center in Canada, the new source of surplus capital, vital ideas, and yes, finally, NON-oil and gas industries are beginning to locate there in abundance.

Alberta is taking over the leadership role in Canada, and Torontonians best get used to it.

IN conclusion, I will restate that it is amusing to see how entrenched elites (in Ontario) have been quite happy to exercise economic and political dominion over others for over a century, yet once they see their base of power and wealth eroding, all of a sudden they urge the creation of egalitarian measures (like the NEP) designed to preserve their long time hegemony.

You may suggest your ideas are based upon enlightened political philosophy, and I would suggest that they are based primarily upon self-interest. Nothing wrong with that fact, as long as you admit it, however, in this particular case, I am rooting for Alberta, NOT for Ontario.

Thanks

F*

WAC (Wide Awake Club) (10/23/00; 00:14:33MT - usagold.com msg#: 39686)
@Turkey Hunter - Owning All the Golds.
Somewhere in the good book, there is a verse that says "All your gold and silver are dross". Yes, they will own ALL the gold (and silver, since it's market behaviour as been similar to that of gold) because it is important to them. I will try and find that verse again and see the context. I have to go to work now, flight to catch. Perhaps lady Leigh or anybody else can help with this.

ViewYesterday's Discussion.

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