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ARCHIVED DISCUSSION FROM 8/23/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) Black Blade (8/23/2000; 23:19:35MT - usagold.com msg#: 35443) Da Prez. goes to Afwica for da oil Billy Clinton is going to Nigeria next week. Unfortunately he is likely to return to the US. In a role reversal that usually involves young female whitehouse interns, He is reportedly on his way to get down on his knees before Nigerian Pres. Obasanjo to beg for oil. Last week, Billy sent a letter to the Saudi's begging for oil. They have pretty much blown him off (no pun intended). The Saudis just simply don't have much extra capacity left. The oil squeeze is beginning to concern US politicians, especially ahead of US elections. There is a precarious balance of supply and demand. Any number of factors could come into play. A refinery shutdown for maintenance or an explosion as is a common occurrence could disrupt supply. The NG situation has gone from being a nuisance to being critical. Electrical power generation plants need NG, and almost all future electrical power will require clean burning NG. An interesting note, on CNBC a commentary noted that the analysts were completely wrong on oil and NG over the last couple of years. Hmmmmmmmmm……………. Go Figure! Rx Gold (8/23/2000; 23:15:21MT - usagold.com msg#: 35442) Gold value added-Zenidea I find it interesting to find different ways to value-add to a gold piece. Many years ago I bought quite a few pieces of silver bullion. The price has since dropped quite a bit and if I had to sell these pieces at today's prices I would be a BIG looser. Over the past few years I have tought myself to work this silver into jewelry pieces. There is quite a difference in the quality of jewelry out there and it is mostly sterling silver. What I have to work with is pure silver or 99.99 fine. This is very easy to work and has a really nice color and feel. It has more of a yellow mellow color and is noticeable when displayed next to sterling. I have found that a one ounce bar or round can be pounded or rolled into a sheet that will make from 1 to 6 hair barrettes or up to 10 earrings. A nice hair barrette will sell for $10 to $20 and simple earrings will fetch $10 with ease. This of coarse involves working the piece for 10 to 15 minutes and soldering a finding (clip or ear wire) on. This is the only way I have been able to drag my butt out of the mud and make a profit on this. I hope to some day make a little profit on some gold too if the price doesn't go back up. I would like to learn a little more about making fake nuggets. Not to pawn off as real nuggets but as accents for jewelry. There was an old gent named ‘Silk Hat Harry’ who tended the gas pumps at the Dahlstrom Garage in Goldfield, Nevada. Old Silk Hat used to have a small blob of brass on his watch chain that was made in the garage by melting a little brazing rod into a bucket of water. There were quite a few blobs that were ‘talked off’ of that watch chain over the years.RxGold Black Blade (8/23/2000; 22:13:48MT - usagold.com msg#: 35441) The big story here is NYMEX still is out to manipulate the Pd market. CFTC asleep at the wheel - Again. NYMEX Goes Further Into Default on Palladium!NYMEX to increase palladium futures margins Thursday, Monday New York--Aug. 23--The New York Mercantile Exchange said it will increase the margins on its palladium futures contract on Thursday, with another incremental increase again on Monday. NYMEX hiked palladium margins last week in a move that has been highly criticized by the trade who contend the higher margins are stifling liquidity in the contracts. (Story .15629)Black Blade: Yet another move to save the shorts! The longs are getting told to drop trow and grab their ankles as the NYMEX continues manipulation schemes in the Pd market. The reason? To make an orderly market. BS - It is to extinguish the free market. Better to just bail out of the paper trades and take physical off of the table. By taking physical, investors can throw the sludge back in NYMEX's face!China to sell Pd forward.Price volatility boosts China's international palladium trades Hong Kong--Aug. 23--The volatility of palladium prices in the international market has increased China's imports and exports of the metal over the past few months, producer sources in China said Wednesday. They said Chinese palladium producers have increased selling of forward shipments to overseas buyers to take advantage of strong prices. (Story .13373) Black Blade: wow, and what a big market it is too. The Chinese PGM market is a joke.Silver Company Going Belly-Up!Sunshine Mining reorganizing under Chapter 11 bankruptcy New York--Aug. 23--Sunshine Mining and Refining Co. said Wednesday it has filed reorganization cases in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of the U.S. bankruptcy code. The company and its affiliates have proposed a reorganization plan that is co-sponsored by four of its major bondholders holding more than 70% of Sunshine's outstanding debt. (Story .19602)Black Blade: Unfortunately Sunshine is toast! Old company, inept management. Marius (8/23/2000; 21:54:05MT - usagold.com msg#: 35440) Beesting, Goldhunter Beesting,Thanks much for posting the lengthy COMEX report. I admit to being a little anal in how I process such info.: I copy and paste into Word, edit, print, & absorb. Looks like interesting reading, and I can't wait to have at it! Guess you know what I'll be up to 1st thing tomorrow....Goldhunter,Everything you've said, sir, regarding my last post, sounds good as far as it goes. It doesn't address the underlying question. Like a fractional reserve banking system, everything looks fine as long as peoples' faith remains intact. Rattle that a couple of times in a serious way, and who can say what will happen? Unlike a bank, there isn't a Federal Reserve to inject liquidity into an exchange that has overextended itself, is there? Some of you may rightly ask what the heck I trade in gold derivatives for, knowing what I know. The fact is, I'm not interested in settling a contract for 100 oz. of physical when I trade COMEX. Settle me in dollars at a profit, and I'll be happy as a clam. One more strike like I made in Oct '99, and I'll happily trade some of those dollars to MK for some pre-'33 coins or whatever. (MK: you DO still accept dollars??) Seriously, I know it's a long shot. That's why I trade options with a lot of time on them. Even though I pay more for time premium, I have the knowledge that it only takes one or two unforseen events to affect the price dramatically--and those seemingly risky options can be worth many mutiples of what I paid for them.The standard caveats apply; particularly, don't trade what you can't afford to lose. I see people who spend more on lottery tickets in a year than I've spent on gold option premium. I've taken 1 long position in gold since Oct '99. Even if those options expire worthless, I've made more than enough on unleaded gas & crude options to cover the action.Call it my guilty pleasure, not unlike you watching that Godawful Survivor!MM Cavan Man (8/23/2000; 21:46:15MT - usagold.com msg#: 35439) Trail Guide Please have no doubt that I see the logic of your representations although I am wondering if your "friends" have a plan to deal with the fallout of $30K POG. Perhaps that is a place we do not want to go??? I am not a "trader". I do not debate the merits of the current method of price discovery. You endeavor to encourage the typical "western" mind to think anew. However, your well intentioned strategy is no substitute for at least partial answers to some relatively good questions. What say ye good Sir Knight?Shun the conventional wisdom of the age and, why; specifically relative to both events past and perhaps around the bend? Kind regards....CM LeSin (8/23/2000; 21:37:11MT - usagold.com msg#: 35438) GAME RULES CHANGE - PGMs from Platinum Guild International Platinum Investing in the New Millennium: The Rules of the Game Have ChangedHere is a quick summary of the year 2000's price trends for precious metals: Gold is trading near historic lows, and platinum is trading near historic highs. In the eyes of some investors, this simple observation makes gold look relatively cheap, while making platinum look relatively overvalued. This would be true if both metals traded in a vacuum, with the only points of reference being past prices. However both metals trade in, and respond to, a broader world. There is much more to platinum and gold prices than yesterday's trend.Both platinum and gold are hedge metals, because both offer investors diversification benefits in a portfolio and can guard against the vagaries of inflation. The two markets diverge significantly beyond that. Gold's price is a function of investor sentiment. This is because above ground supply dwarfs newly mined supply, and most jewelry consumption is, like in India, a quasi-investment for many in developing economies. Platinum prices on the other hand are a function of newly mined supply balanced against world consumption, with over 50% of the world's platinum going to meet industrial needs. There are no readily available above ground stocks of platinum to be drawn upon.What, then, is the meaning between the currently wide spread between platinum and gold? Not much, as the importance of the platinum-gold spread has dwindled to near zero. Investors seeking a technical price signal for when to buy platinum used to follow the platinum-gold spread, buying as much platinum as they could afford on the rare occasions when platinum traded below gold. The last time such an opportunity occurred was in early 1997. Investors who moved in then had the potential for making a very decent return. Like generals fighting the last war, however, some investors are waiting for another opportunity like that. Even without the aid of a crystal ball, it is fairly safe to say the opportunity will not come anytime in the near future.So what "rules" or buy points should investors follow when buying platinum? Consider the following:Platinum is at a discount to palladium. This condition makes platinum a longer term buy, not too different from the old rule of buying platinum when it was at a discount to gold. Why?There is less platinum mined than palladium. Irregularities in palladium supplies are pushing industrial users back to platinum, as in the autocatalyst industry. Platinum has a broader, more diversified demand base than palladium. Palladium consumption consists almost entirely of electronics, autocatalyst, and dentistry demand. Compare this to platinum, where it is estimated that 1 out of every 5 consumer goods is made with or in a process that uses platinum. Many platinum analysts forecast spikes to over $600 as probable this year. This makes platinum at anything less than $600, minus transaction costs, a potential play for the active investor. Why?Adjusted for inflation, platinum prices in the nominal $500s are at a reasonable price range. Platinum spent the latter part of the 1980s trading in a similar range, with frequent forays well past the $600s. It is not uncommon for platinum to see price swings of over $20, or to climb over $50 in a matter of days. Demand is enormous, fed by the booming global economy. Russian supply remains sketchy, and may be cause for a deficit again this year. This is on account of sharply reduced exports from Russia, which normally would provide 20% of the market on the margin. South Africa and, to a much smaller degree North America, provide most of the balance. Inflationary concerns are best countered with platinum. Why?The last US inflationary crisis (in the 1970s) saw platinum's price outperform gold. The volatility of platinum prices (standard deviation from the mean, combined with a negative correlation) allows investors to get more diversification benefit per dollar invested than with the other diversifying investments. Technological advances in fuel cells, information technology, and space vehicle construction utilizing platinum ensure extended long-term demand, particularly for those considering retirement savings type investments. The new rules for when to buy platinum are the reflection of a different market environment than that of a few years ago. The advent of the Platinum American Eagle and rules changes regarding the inclusion of platinum coins in Individual Retirement Accounts make the market even more accessible to individual investors now, than it ever has been. Armed with these new vehicles and a better understanding of current market dynamics, investors have ample opportunity to trade to their best advantage.- by Aran Murphy, Senior Economist for Platinum Guild International. Aran works in PGI's New York office, and can best be reached via email at economist@platinumguild.org JMB (8/23/2000; 21:15:39MT - usagold.com msg#: 35437) GOLDHUNTER I really want to be on your team but ARISTOTLE absoutely forbids it. Look up in the grandstands, third row behind the visitor's dugout, the guy waving the futures contract. "Yo, GOLDHUNTER...YOU'RE THE MAN." Ahh good, now I have your attention. Here's the deal...Let's take delivery of one Gold Futures Contract...how about December 2000? Do you think ARISTOTLE will let us play on his team if we show him 100 ounces of Gold? I bet he will.Do you think ARISTOTLE would consider changing the name of his team? I have a modest and sensitive nature which doesn't handle criticism very well. If my family and friends were to find out that I was playing on the "GOLD WILL SELL FOR $30,000 PER OUNCE" team, I can only imagine the humilitating ignominious pain I would feel upon their discovery. However, if it is found that the consumption of Gold will cure the common cold, or avert teenage acne or contribute to any other fantastic medical discovery then the name should remain the same. $30,000 an oz! Who would want that much worthless paper lying around? Couldn't put it in the bank because they'll all be closed. Let's hope for a Golden Medical Miracle...OK, practice on Saturday, be there or be square. Al Fulchino (8/23/2000; 21:13:24MT - usagold.com msg#: 35436) What the heck do I know? From yesterday:"And that leads me to the final possibilities of Rich versus either of the ladies. The odds. 100% ladies. Simply they are NOT Rich. If I have to tell you why, you do not understand life.<smile>. Oh, the things I could write. Ok. I will write some. Manipulator, conniver, teaser, tempter, provider of food only as bait for the human fish. What else? Oh, arrogant, selfish, double talker. Enough? Thought so."I hope I am better at precious metal predictions <smile> Canuck (8/23/2000; 20:57:35MT - usagold.com msg#: 35435) Strange day? Well, well, well; testy enviroment today.Gold breaks support of $272 (Aug 9 and May 25/26) to set a multi-month low and we have a defensive slant today, yes?The paper market is front page news, FOA is, for the first time that that I have witnessed is agressively pressing the point of a 'failed' futures market. Welcome back FOA, it's been nearly 2 months; you promised us "lots to talk about' when you return. You live up to your word!N.Y. closed today at $270.50, dangerously close to falling out of the tight $270-$290 trading range. I am hoping the stock markets have it right, the XAU has hung in well and the unhedged miner that I have a stake in has actually risen from the $285 fall over the last few weeks. I hope we don't see a sub-270 close in New York over the next few days but I feel it may be in the cards. News from Europe and in particular Germany were not encouraging today.Bulls expect the dollar to rise.I feel our next big date is OPEC's quarterly meeting Sept. 10th. I feel gold is sideways until then. I feel Comex is anon-issue short and medium term. The cantongo indicates normal trade, lease rates are nothing to write home to mother about and interest rates are on hold. I am watching the following dates:Sept. 10 OPEC Q4 meeting; no new supply??Sept. 26 One-year W.A. anniversary; left field event?? lamprey_65 (8/23/2000; 20:36:27MT - usagold.com msg#: 35434) Ounces Per Citizen So, over 250,000,000 U.S. residents -- if we each personally attempted to hold just one ounce, that's over 7,700 tons of gold by my quick accounting.Like they say, "There's no rush like a gold rush!"Lamprey SMU (8/23/2000; 19:00:39MT - usagold.com msg#: 35433) Magic ...and now I see that my posting is back. Man, I been smoking way too many of dem cigaars. (I even imagined that I saw Bobbo here without his bible!) SMU (8/23/2000; 18:57:30MT - usagold.com msg#: 35432) This site is magic! http://members.home.net/kitkat0123/flash.html You post something on it...Yup, there it is on the reload and then.....POOF- it is gone. MAGIC! SMU (8/23/2000; 18:34:07MT - usagold.com msg#: 35431) Goldbug Meeting http://members.home.net/kitkat0123/flash.html There is entirely too much levity on this forum. To bring us back on an even keel, please consider attending this upcoming meeting of fellow Precious Metals enthusiasts.(firearms optional)(dress optional)(sense of humour mandatory)http://members.home.net/kitkat0123/flash.htmlClick on the Montana link - Flash required da2g (8/23/2000; 18:21:18MT - usagold.com msg#: 35430) Smithsonian Magazine For what it is worth, I found it interesting that the September, 2000 issue of Smithsonian Magazine had an article dealing with the evolution of banking and gold. The thrust of the article is how gold has been essentially demonitized, however it is worthy to note that the article ended by referring to gold as a wealth asset. 714 (8/23/2000; 17:55:59MT - usagold.com msg#: 35429) Ahh...Trail Guide, you're here I had a question last night after you left regarding the cessation of CB sales and when that might occur. I got the impression from perusing Another's old Kitco posts that that would have occurred by now, but yet a number of CBs, including the Swiss, continue to sell. Why? Any comments are appreciated. 714 (8/23/2000; 17:49:41MT - usagold.com msg#: 35428) Thanks WAC & Trail Guide... ...I have a hard time believing the euro's going to fly, given the traditional divisions among Europeans. I've read that the Germans are not too pleased with it and I can't help but wonder if they're undermining it. The ECB seemed to do little to support it during its drop from $1.17 to .91US. On the other hand, why race someone's who's headed straight off a cliff (US$)? Perhaps ECB's strategy is too get the euro's low in BEFORE the US$ does its inevitable dive. Managing a currency, especially a new one, is undoubtably complicated. Trail Guide (8/23/2000; 17:42:28MT - usagold.com msg#: 35427) Comment Hello Everyone,OK, now that I have the mike and a clear mind, I'll say a few things. I see a full house and even spotted Goldhunter over there on the side. Yes, a little wave and smile back at you, sir.People, I have to say that myself and most of you have probably heard official line spoken before. In all walks of life and professions, once heard the expression is easy to remember. I have forgotten the number of times guys have explained the workings of exchanges and markets to me. They spent hours lining me up so as to get a crack at my little account. (grin) It all comes out so neat and clean that the verbiage almost sounds like a preacher quoting line and verse right from the book. Well, Mr. Goldhunter is absolutely right in presenting all the line items in sequence. (another little wave and grin to you 'sir) But, something happens between the time we read it all and hear it all while sitting at the kitchen table,,,,,,,,, and when our money is on the line "real time". I think the terms to describe it are "reality" and "real life"!We can take in everything a "futures industry advocate" tells us as fact,,,,,, kind of like going to drivers school. You know, go the posted speed limit, signal before turns, maintain a safe distance, put your lights on at night,,,,,,, and don't worry there are plenty of officers out there to enforce the law if you get in trouble. All these things are line & verse,,,,,, the rules,,,,,,the law,,,, the trading book. But boy once we get out on the Freeway (Highway for you east coasters),,,,, all bets are off! It's everyone for themselves! If the speed limit is 70 watch for that truck going 95! Good lord, I almost hit that woman because she didn't signal! That big commercial trader just ran me down with a 6,000 lot sell order!My friends, the difference between Goldhunter (another big smile) and myself, is that I speak in terms of what happens in "real life". Not what the book or officials say will happen. My discussion, projections and analogies are based on how real people deal with each other world wide in hard terms. Now for a little rebuttal:You post:goldhunter (08/23/00; 07:56:59MT - usagold.com msg#: 35388)------The Comex price IS THE PRICE for gold to buy or sell at that instant in time...PERIOD. ---Sir, there are many good schools in this world that could teach you the difference between a "contract agreement" and a "hard closing trade". Before making a statement like above you should consider enrolling. All COMEX dealings on their exchange are the trading of contract agreements. No matter if they extend out six months or last just 60 seconds, there is no "closing trade" for "PHYSICAL METAL" until that metal or it's warehouse receipt is in your account or your hot little hand.------ PERIOD!Further: Even when you have settled for physical delivery,,,, and paid out your cash,,,,,,,, you still only have a contract agreement OUTSTANDING,,,,,,, nothing is settled yet,,,, you have no "hard closing trade". That closing, sir, is when the days,,,, weeks,,,,,, or months pass and your physical is delivered in your requested form. Let's add one more PERIOD to that!Further:Now, the above was the process of buying and closing a contract, not setting the price of physical yellow gold. In the above one has "bid for delivery" by entering into a contract. You have not traded any gold nor have you conducted a "closing trade" that IMPACTS THE SUPPLY OF GOLD at the time said contract is traded.As an example: I have one good friend that is short some 50 contracts and does not have any gold of his own,,,,,,, does not have enough assets to buy that much gold if called to deliver. He would have to declare bankruptcy if the markets opened the first trading day tomorrow and the first contract traded moved at +200 over the following day. Now,,,,, the long holder opposite this poor fellow has a contract for 50 times that 100 ounces. But, he did not set the price of gold when he brought those contracts. He only set the price of those contract agreements. He did not close a trade for gold and did not impact the price of gold by taking supply off the market as a "closing trade" would have done. In fact,,,,, all he did was express his opinion,,,,, through open outcry,,,, of the value and integrity of those contracts should he decide to take delivery and "close the trade" from my friend Of course,,,, in driving school we learn that everyone stops for red lights. It's the law,,,, right? It's also the official rules that comex will deliver is needed. But,,,,, in the real world we may experience later,,,,,, no one is going to cover the millions and millions of gold bets made world wide by people like my little 50 contract friend. Especially if the markets open +200 ten days in a row! Your post:-----Your OPINION that it is an opinion of price or other is wrong...You want gold, you get it...you want to sell gold you can sell it...100 oz lots, big or small...the exchange will accommodate your wish.---------People,,,,,,, We can't even get new firestone tires for our bad ones,,,,,, let alone find an extra 100 million ounces of gold laying around when the market goes up in smoke. The next time someone passes you going 80 in a 50 zone,,,, just remember,,,, in the real world accommodation is indeed just a passing wish.Smile!!!Thanks allTrail Guide wolavka (8/23/2000; 17:21:26MT - usagold.com msg#: 35426) swiss franc globex hit 5842, 5850 is possible breakout, could explode up, we shall see if she drags gold with her. SHIFTY (8/23/2000; 16:52:20MT - usagold.com msg#: 35425) Al Fulchino Man Made nuggets I guess the way I see it is: If you were to sell a fake nugget to somebody, and tell them it was a "fake" and be up-front about the whole thing you still have no way of knowing that the buyer would also be honest if he or she was to re-sell the piece. I think it would be hard to fool a placer miner or dealer, but the average Joe would have little chance.Just my thoughts on the subject.$hifty beesting (8/23/2000; 16:06:48MT - usagold.com msg#: 35424) Government Report on COMEX concerning Sept 28, 1999. http://www.cftc.gov/tm/gold_options_report031000.htm To all the Goldheart "Team-mates" lets keep the playing field level.Originally posted by Richard Harman at GoldWorldNet June 4,2000. I haven't seen it posted at USAGOLD yet.REPORT ON GOLD OPTIONS TRADING ON SEPTEMBER 28, 1999I. INTRODUCTIONOn Tuesday, September 28, 1999, an extraordinary spike in volume, volatility and price occurred inthe gold options market at the Commodity Exchange, Inc. ("COMEX" or "Exchange"), a Divisionof the New York Mercantile Exchange ("NYMEX"). Responding to a Sunday, September 26,1999 announcement by 15 European central banks of a surprise five-year moratorium on all newsales of gold from their reserves, the gold options market traded a record volume of 81,317contracts in a record number of trades, 15,044. This was more than double the previous volumerecord of 39,944 contracts set on March 7, 1995, and a more than a twelve-fold increase over thenormal number of trades. Gold options volatility also was unusually high. For example, the price ofthe December 1999 $300 gold call, the most active contract, had an extremely wide trading range.The premium fluctuated between a low of $5 and a high of $29 before settling at $18, up $15.30 forthe day.1The gold options market was severely strained on September 28 with respect to execution andclearance of orders. This was due primarily to the tremendous influx of small-lot paper orders to thefloor throughout the day, and the myriad of option series and strike prices traded. As a result, theDivision of Trading and Markets ("Division") received a large number of complaints, 69 in all,predominantly from retail customers who had entered or attempted to enter small-lot gold optionorders on September 28. The complaints, in large part, involved the status of possible unfilledorders, including market orders; long delays in reporting or confirming fills, or no reports at all; andan inability to place limit or other contingent orders. In addition, press reports alleged that onSeptember 28 gold options floor brokers may have given preference to the execution of largeorders, that thousands of small orders may have gone unexecuted, and that many retail customerswere left uninformed for days of their market positions.In light of the many complaints from the public and the allegations in the press, the Divisionsubsequently undertook a study of gold options trading at COMEX on September 28. The Divisionreviewed various market participants’ activities of that date to determine whether orders werereceived and executed in accordance with relevant Exchange trading rules, whether clearing rulesand procedures were observed, whether the events of September 28 revealed systemic problems,and what corrective steps, if any, should be recommended to ameliorate the impact of such marketconditions should they recur.In conducting its review, Division staff interviewed six floor brokers, officials at six futurescommission merchants ("FCMs"), and COMEX compliance, legal, administrative, and operationspersonnel (collectively, "Exchange staff").2 In addition, Division staff observed a demonstration ofthe Exchange's On Line Trade Entry ("OLTE") system, and obtained written information fromExchange staff on aspects of OLTE's functioning significant to this review. Division staff alsoconducted a trade practice investigation of September 28 gold options trading to determine whetherthere were any indications of possible trading violations.3The report that follows includes: (1) a discussion of the events of the week of September 28; (2) ananalysis of the issues raised by those events; and (3) the Division's conclusions andrecommendations. It does not, however, contain analysis or findings regarding individual brokertrading activity.II. FACTS A. September 26: European Central Banks Announcement of Moratorium on New Gold SalesAs noted above, on Sunday, September 26, 1999, 15 European central banks announced a surprisefive-year moratorium on all new sales of gold held in official reserves. Prior to this announcement,gold prices had been pressured by worries about central bank gold selling, caused by a May 1999British Treasury announcement of plans to unload more than half of its $6.5 billion in gold reserves inexchange for world currencies. The May announcement had triggered concern that governments andcentral banks would soon be dumping bullion reserves, flooding the market and driving prices lower.Gold prices had reacted by falling swiftly and sharply. By July 6, 1999, the August 1999 futurescontract had settled at a 20-year low of $257.80 per ounce.The September 26 weekend announcement by the central banks removed a major uncertaintysurrounding gold sales. In a statement, the banks pledged that gold "will remain an important elementin global monetary reserves" and vowed not to enter the market as sellers, except in cases for whicha sale had already been agreed. They also announced that they would limit the amount of their goldlending. News sources reported that in light of the statement, the market knew exactly what wouldbe available for sales and for lending for the next five years.4 B. September 27: Early Market ReactionOn Monday, September 27, 1999, in response to the announcement by the central banks, goldoptions volume, which had averaged approximately 6,434 contracts during the first seven businessdays of September 1999, quintupled to 34,893 contracts,5 and gold options price volatility began toincrease.6Floor brokers, FCMs, and Exchange staff interviewed by the Division generally did not see in theevents of September 27 any indication of what was to occur on September 28 in the gold optionsmarket.7 The floor brokers and FCMs viewed September 27 as a "busy day" which involved avolume increase, but was still somewhat within normal expectations. However, some floor brokersand FCMs experienced order routing and clearing difficulties which, as discussed below, may havebeen precursors of, or contributors to, the severe problems that arose the following day.Specifically, several FCMs and floor brokers reported that the Trade Order Processing System("TOPS") electronic order routing system8 at COMEX malfunctioned at various times during theday on September 27. This resulted from problems with the TOPS link to the NYMEX building,where COMEX is located. Floor brokers stated that due to TOPS outages, order receipt wasdelayed for an hour or more during most of the day. Consequently, the normal timely execution ofsome orders was delayed. Some FCMs also reported receiving delayed fill reports from the floor onSeptember 27.Clearing difficulties also arose on September 27. Some floor brokers stated that, as the result of highvolume and TOPS outages they found it more difficult than usual to reconcile trading card entrieswith order tickets and enter trades into OLTE. These brokers reported an inability to enter asignificant number of their trades into OLTE before it was closed on the evening of September 27,despite the Exchange's extension of OLTE input time to approximately 8:45 p.m. from its normal5:00 p.m. close. One FCM with a significant share of gold options business reported that it did notreceive data concerning outtrades from September 27 until approximately 10:00 p.m., several hourslater than usual, and consequently had staff working all night to balance its books. As a result ofthese problems, before the opening on September 28, some floor brokers and FCMs had anunusually high number of unmatched trades from September 27.9Exchange staff did not consider September 27 a problem day, although they did note the increase involume. COMEX staff conducted routine market surveillance activities, including the review of largetraders in gold options, and ascertained that variation margin payments were timely collected.Exchange staff did not view the number of outtrades on September 27 as a significant departurefrom the norm. C. September 28: Major Market EventOn Tuesday, September 28, 1999, the COMEX gold options market experienced a major marketevent, involving record volume, extraordinary price volatility, and significant problems with orderexecution, fill reporting, clearing, and implementation of order restrictions. 1. Record Number of TradesThe floor brokers and FCMs interviewed stated that the number of orders sent to the floor onSeptember 28 exceeded anything in their memory. As noted earlier, the number of gold optionstrades increased more than twelve-fold over normal levels, and trading volume increased more thaneight-fold over normal levels. Floor brokers received an unusually large number of orders before theopen, and encountered waves of new orders coming in by electronic transmission and telephonethroughout the day. Most of this order surge consisted of small-lot orders in various option seriesand strike prices.10 Because the majority of these small-lot orders were received through the TOPSsystem, the amount of paper received by brokers was described as overwhelming. Telephoneorders also poured in: brokers reported that all their phone lines were lit up constantly all day, andthat customers who had not traded in years called them with orders.Floor brokers could not physically handle the enormous volume of orders coming into the ring, eventhough they were present in greater numbers than on a typical day. On a normal trading day, asmeasured by the period from September 1 through September 10, 1999, an average of 28 floorbrokers transact customer orders in the gold options ring. On September 28, 54 floor brokers,some from other futures and options trading rings, traded gold options contracts for customers.11Even this doubling of floor broker participation, however, could not cope with the huge increase inthe number of orders needing execution. 2. Extraordinary VolatilityFloor brokers’ difficulties in filling the flood of orders on September 28 were further compoundedby extreme price volatility. A review of the most active gold option contract, the December 1999$300 call, illustrates how volatile market conditions may have contributed to unfilled orders andnumerous outtrades.12 According to the Price Change Register for September 28, at the opening at8:20 a.m. this strike traded between premiums of $5 and $7, up from the previous day's settlementof $2.70. At 8:20:01 a.m., a "fast market" was declared.13 The fast market continued for virtuallythe entire trading session. The price of the $300 call quickly spiraled higher, reaching the $15 level at9:30:10 a.m. The market then traded between $10 and $15 until reaching $16 at 12:37:38 p.m. By1:11:30 p.m., the market had rallied to $21, and at 1:31:26 p.m. it hit $29, the high of the day.Prices dropped to $22 level by 1:33:09 p.m., fell to $12 at 1:59:08 p.m., and fluctuated between$11 and $18 during the last half-hour of trading. The contract settled at $18, $15.30 higher than theprevious day's settlement. 3. Execution ProblemsThe extraordinary number of orders and extreme price volatility contributed significantly to problemswith order execution. Some FCMs and floor brokers stated that thousands of gold options orderssent to the pit were not executed, although one FCM stated that most of its orders were filled. Mostof the unexecuted orders were limit or "cancel and replace" orders, although some market ordersalso were not executed. One FCM stated that nearly 2,500 of its orders were not executed, mostlylimit orders attempting to liquidate calls. One FCM said that in a few instances orders reported asexecuted in fact were not. For orders that were executed, FCMs and floor brokers interviewed byDivision staff said they had received very few complaints regarding fill quality.A fundamental cause of execution problems was the sheer number of orders coming to the ring.Brokers and FCMs reported that their clerks had to deliver multiple, foot-high stacks of orders tothe ring almost constantly throughout the day. Brokers stated that they frequently had stacks oforders in each hand and each pocket, and could not physically handle additional orders brought tothem. Moreover, these order stacks were not prioritized,14 because orders came so rapidly thatclerks had no time to sort them by type of order or time of receipt.15Brokers and FCMs also stated that the TOPS printers for the gold options ring were incapable ofprinting orders as fast as they were entered into the system. As a result, TOPS orders were behindbetween 40 minutes to an hour or more all day.16 This contributed to order execution delays. Onefloor broker group reported that, as a result of these problems, some orders were diverted to TOPSprinters at the New York Board of Trade, and that some may have been either delayed ormisplaced in the process of transporting them to the COMEX floor.Brokers’ problems were compounded by the unusually high number of options contracts tradingactively that day. According to the COMEX Daily Market Report for September 28, nine optionscontract months, comprising approximately 364 different strike prices, were available for trading.Floor brokers interviewed by Division staff reported that almost all of these strikes were tradingactively on September 28. This combined with the absence of order prioritization and extreme pricevolatility to create extraordinarily difficult conditions for order execution. As one floor brokerinterviewed by Division staff observed, "September 28 is the one day in this business no one in thepit will ever forget." 4. Fill Reporting ProblemsThe FCMs interviewed by Division staff noted that on September 28, large numbers of fills were notreported by floor brokers to their customers in the normal course, leaving customers uncertain as totheir positions in the market. This occurred because brokers and their clerks were occupied by theneed to execute as many orders as possible in the face of overwhelming order flow. The steadystream of incoming orders made it difficult for floor brokers to take time to report fills eithertelephonically or by keying the requisite information into TOPS, and also forced them to delay orderticket endorsement.One FCM with a large share of COMEX gold options business reported that many of its filledtrades were not reported until Friday, October 1, 1999, and some were not reported until Monday,October 4, 1999 or Tuesday, October 5, 1999. Another large FCM reported that it did not obtaininformation on some fills until as late as Wednesday, October 6, 1999. 5. Clearing ProblemsMarket conditions also caused significant clearing problems, which persisted for a substantial periodof time after September 28 and were a principal cause of the trade confirmation delays complainedof by many customers. These clearing problems resulted from entry into OLTE of incorrect tradeinformation. OLTE requires that both members involved in each trade enter complete informationabout the trade before the system will accept the trade as a matched trade. Erroneous or incompleteinput by one or both members will cause either an unmatched or a miscleared trade.COMEX had an exceptional number of unmatched trades in gold options on September 28.Unmatched trades occur either when one broker has not entered any information regarding his orher side of a transaction into OLTE, or when one broker enters information that is inconsistent withthe opposite broker's entry with respect to the opposite broker's identity, the date, commodity,contract, quantity, or price of the trade, or (for options) the strike price and whether the trade is aput or call. During the more typical trading days of September 1 through September 24, 1999,COMEX averaged less than three unmatched gold options trades out of approximately 1,300 tradesper day, for an average unmatched trade percentage of approximately 0.18 percent. In contrast, onSeptember 28, 2,636 gold options trades out of a total of 15,044, or approximately 18 percent,were unmatched.17COMEX also had an exceptional number of miscleared trades on September 28. Miscleared tradesare those that match on all clearing criteria but are incorrectly cleared on one or both sides to thewrong clearing member. This occurs when a broker enters erroneous or incomplete information inthe clearing member or customer account fields in OLTE. Miscleared trades caused the greatestdifficulties for floor brokers and FCMs, and were the principal reason why an unusually long timewas required to rectify clearing problems from September 28. Most FCMs interviewed by Divisionstaff said their experience was that there were significantly more miscleared trades than unmatchedtrades from September 28, and that miscleared trades constituted the larger part of their clearingproblems from that day. One FCM estimated that approximately 80 percent of its trades misclearedat other FCMs. Another FCM, whose principal COMEX business is as a primary clearing member("PCM")18 for floor brokers and local traders, said that on September 29 it not only received noticeof more unmatched trades involving its guaranteed brokers than ever, but also had more misclearedtrades than ever defaulted to it as a PCM.19The Exchange attempted to help facilitate OLTE trade entry on the evening of September 28 bysending Exchange staff to assist floor brokers with the input process. However, floor brokersunanimously told Division staff that this well-intended effort unfortunately exacerbated the problem.According to the floor brokers, even though the Exchange staffers did their best, virtually all the dataentries they made contained keypunch errors, due in part to Exchange staffers’ unfamiliarity withbrokers’ handwriting. As a result, many of the affected trades did not match broker to broker, andeven more were miscleared.As part of their effort to enter as many trades as possible into OLTE on September 28, a number offloor brokers asked the Exchange to leave OLTE open for input and corrections past the normal5:00 p.m. cutoff time. Exchange staff informed the Division that COMEX did keep the system openon September 28 until approximately 10:15 to 10:30 p.m., and similarly extended OLTE's normalinput hours for more than a week thereafter. Many brokers and FCMs said it would have beenmore helpful if the Exchange had left OLTE open longer, even for an hour or two.20 However,COMEX staff told the Division it is necessary to close OLTE no later than 11:00 p.m. to allowenough time for OLTE's overnight processing cycle. OLTE must be reopened no later than 4:00a.m., since the Eurotop 100 and Eurotop 300 contracts begin trading at 5:00 a.m. the next tradingday. COMEX staff also noted that delay in closing OLTE for the evening would have causedproblems for many FCMs, who rely on final clearing data from COMEX in their own overnight dataprocessing cycles, and face similar world-wide start-up deadlines for the next day's trading.Exchange officers and staff also discussed internally, in part at the suggestion of a few COMEXmembers, the possibility of delaying the opening of gold options trading on Wednesday, September29, in order to allow time to reduce the number of unmatched trades. However, the Exchangedecided that a delay would not be in the best interest of either the trading public or the Exchange,particularly in the world gold market situation then existing. The majority of FCMs and floor brokersinterviewed by the Division concurred in this decision.For "Long Version" of report click above URL.....beesting. Trail Guide (8/23/2000; 15:44:43MT - usagold.com msg#: 35423) boy this hall is crowded My Goodness!After pushing and grabbing just to get up here on stage with the "mike",,,,,, I'm all worn out and forgot what I wanted to say! (smile) Michael,,,, where did all these people come from? (big grin) Can't believe how many new faces are here today and in the archives.Anyway, just had to note something and I'll be back to add my say about these paper "futures" in a bit.Trail Guide TownCrier (8/23/2000; 15:32:12MT - usagold.com msg#: 35422) China's economy and precious metals...from the active News Feed on the Daily Market Report page http://www.hk-imail.com/inews/public/article_v.cfm?articleid=6438&intcatid=10 This article reports on the likelihood of a selloff in silver driven by liquidation from China. One Shanghai-based trader said, "We understand there is a possibility of light selling from the central bank on world markets due to China's strong inventories. But domestic silver demand is expected to pick up this year to about the same level of output. It is unlikely for China to rush to sell heavily on world markets."Silver demand is expected to double this year to nearly 1,600 tonnes (matching domestic production of 1,600 tonnes), up from past average annual demand of only 800 tonnes.China's economy is improving, paving the way for increased demand, along with the efforts toward liberalisation of the precious metals markets. Check out these figures. The Chinese economy has already grown by an astounding 8.2 percent in the first half of this year, compared with *only* 7.1 percent for the entire year of 1999.The People's Bank of China declined to comment yesterday on questions of official sales as a matter of policy. They treat precious metal inforation as a state secret. However, industrial sources have estimated that the Central Bank provided about 7 percent of the world silver supply last year through official sales after having swollen the central bank inventory by buying the 2,900 tonnes domestic surplus production between the years 1994 and 1998.Reiterating the thoughts of the trader quoted above, a source at China's newest (and only) currently authorised silver trading market said, "We have no figures of central bank's silver trading as they are extremely confidential. But we cannot imagine any big amounts to be sold on world markets while domestic demand remains healthy." wolavka (8/23/2000; 15:17:10MT - usagold.com msg#: 35421) Chart point From a day traders chart point the technical indicators are within the days prior range which means easy penetration. We are reaching a climax which should be violent. A globex trade tonite in dec back up to 278 and a low of 275.60 Check out the upper range over each days close and you will see that these bastards are selling everything they can at or above the prior days close. Sea change begins when you see globex working the nite session over the close. Education will destroy a corrupt enviornment.Braveheart tonite to reenforce what I believe. Aristotle (8/23/2000; 14:34:15MT - usagold.com msg#: 35420) wolavka, you are right! "Futures where created by clever lawyers for fleeceing the lambs. The leverage now can be used to accumulate fiat which in turn can buy physicals."True, very true. My friend, "Hedgefund Hannefin", has utilized this leverage of futures to make a bundle of fiat by shorting Gold over many recent months. He's no dummy, and has used these specific gains to buy physical Gold. In the period of just a short while, he has accumulated almost as much Gold as I have worked much of my life to acquire. The bastard.Oh, well. I guess it really doesn't matter how he got the Gold. At least he'll still be able to afford joining me for nights on the town after the financial downturn.Gold. Get you some any way you can--except by stealing. ---Aristotle Bobbo (8/23/2000; 14:23:35MT - usagold.com msg#: 35419) Results of today's battle.....Cabal 1....Gbugs 2 As the combatants withdraw to their respective corners, preparing to engage in fierce battle again tomorrow, the gbugs grabbed the advantage today. In spite of the 2.5 POG drop, the XAU held up in a stellar fashion, closing down only .38 or .74%. The bullish XAU/POG Divergence continues and that augers good for the gbugs. Taking a quick scan of the XAU techs we are in blast-off mode. 30 min, 60 min, and daily stochs or ready to fly (weekly is in bearish mode, but in oversold territory and can change with a big up tomorrow and Friday). Also: RSI, MACD, etc., are all very constructive for an upmove. Many bullish tech divergences have developed. POG (Dec) is in similar oversold condition and ready to turn up and rally as shorts will have to cover bigtime. The famous historically profitable Aug sell period for gold is coming to a close and the "market makers and movers" will not let the spec shorts off easily (both Gold and XAU spec shorts). So I expect a turn before the 31st...Greed will burn 'em...NOT getting shaken out today (au stox) was the right thing. Only minor fractional losses. Now on strenght you will have a confirmed uptrend developing and a good buy signal.Well, due to the fact that I dwell in South Florida, I need to go make some preparations for a little Miss Debby. She is coming to visit on Friday or Saturday and it's not wise to be unprepared. Profitable trading for all gbugs...:) wolavka (8/23/2000; 14:13:50MT - usagold.com msg#: 35418) chicken or egg Physical before future, this was the beginning .Futures where created by clever lawyers for fleeceing the lambs.The leverage now can be used to accumulate fiat which in turn can buy physicals. Those that do not like or hate futures must understand that a futures contract whether it is gold or oil or corn or whatever, turns prior to the physical item. Honor among men when it comes to a contract, RIGHT. Trust no one and to thyown self be true. wolavka (8/23/2000; 13:51:26MT - usagold.com msg#: 35417) who hates gold?????????????? Keep selling, I can't wait. alot of day traders giving up toward close, now that you broke 277.40, tomorrow will have to be spike up. Swiss franc closed strong, gold will follow . Aristotle (8/23/2000; 13:46:33MT - usagold.com msg#: 35416) Goldhunter--I suggest that you reread my post; all answers are there. And more importantly, the isolated points you call attention to in your latest text are already fully addressed in terms of a MEANINGFUL CONTEXT within my post.Reread, and think.In your comments to White Hills, -------"Imagine a well publicised, well attended, government regulated marketplace with LONGEVITY and a "good-standing" reputation that trades tangibles and intangibles for all to buy and sell...commercials as well as non-commercials (speculators)...at an agreed-upon-price for a gal, an oz, or a bushel...that price stands until liquidation/offset or delivery...the price is real for that instant in time..."-------please consider the longevity and "good standing" and government regulation of the Gold-backed U.S. dollar. And yet...IT FAILED. Also consider that for an item and concept of wealth to be meaningful and valid, it must survive and be useful throughout conditions of financial turmoil. The fact that a price for something is real for an "instant in time" has no connection to how excellent or how pathetic it will serve as wealth when that "instant in time" has passed, nor does it reveal the valuation and future price during something we would call "crunch time." Expectations of or protection against "crunch time" is the reason many people value and use Gold.To your credit, you said to me, "If you feel you are getting more VALUE at a given price you are probably buying, if not, you may be selling..."Yes! That is EXACTLY why Gold futures contracts are being sold. They have very little value.Value. Get you some. ---Aristotle Al Fulchino (8/23/2000; 13:42:52MT - usagold.com msg#: 35415) Shifty Hey Shifty, you wrote in,SHIFTY (8/23/2000; 11:06:45MT - usagold.com msg#: 35405)Al Fulchino /Zenidea Man Made nuggetsI don't like to hear of people trying to fake nuggets. Nuggets bring a premium price because they are rare. Also I have yet to see a nugget that was fake / man made that could fool a person that knew what a real nugget looked like. A real gold nugget has a blend of impurities that make it unique to the place of origin. The impurities are stuff like silver, platinum, copper. The way I understand it nobody can truly duplicate a real nugget. I look at it like counterfeiting gods handy work.Me> I don't suggest we fool anyone. Yet if it is possible to duplicate, what would the results be? Both good and bad I assure you. Bad first comes to mind in that it ruins any present price value. But the good would be that it would be affordable to all. I do not know if it is possible to duplicate, but if it was it would be based in God created physics. So if it is posible, then why not, I say.My wife sells some jewelry in her store and sometimes has these fake stones that are just marvelously done. A woman on a limited budget can dress like a queen for a night all the while knowing she didn't bust the budget, <smile>.Repeating, if it is possible, so be it, it would be no different than me posting a note to you here versus years ago writing the idea down on paper and mailing it. It is a duplication of intentions, nothing more. But this is faster, saves money, time and still looks the same when you and I get it.Great to talk with you! Bobbo (8/23/2000; 13:18:08MT - usagold.com msg#: 35414) Holding for now... I'm sitting here watching the various windows on the screens and I feel like I'm watchinga 21st century High Noon shoot out at OK Corral between the good guys and the badguys. A veritable intergalactic struggle between good and evil. In reality it may be moretruth than fiction. The bulls and the bears are tugging at the XAU as it floats just abovebreakdown levels. Which will prevail? If levels hold in light of the 2.5 POG dump today,then the gbugs win the day and things will look real bright, and very soon. If the darksideprevails we will see sub 50 levels (in all likelihood). As I watch some 15 stocks tradelive-time, I notice that volume is light and big dumps at the bid (or mid-spread) are beingabsorbed as prices hold. At my last post today, the XAU was only .14 higher than now,the XAU low of the day has held thus far, but the POG has closed about 1.6 lower than itwas then. My hands are experiencing the proverbial sweaty palm syndrome as I watchtick by tick. My gut says big au stox dump at the close. My analysis says not many sellerleft and therefore no real reason to take them much lower. Which will prevail? Cabal orgbugs?Go Gold...Go XAU...(at least hold them important support levels - now at 50.25 area). Ifwe do hold it will be possible that lift-off can begin tomorrow. Everything is wayoversold and while that can continue it looks as if the selling is coming to an end. goldhunter (8/23/2000; 13:05:24MT - usagold.com msg#: 35413) Aristotle reply... You are something...price, value, SURVIVOR TV...Here is what WE talk about...Gold, silver, or peanuts if you will...it does NOT matter if you talk tangibles or intangibles...You go out and buy anything (or sell) by PRICE...what did you pay (dollars, cents, hours of work [barter]) it's how much? If you feel you are getting more VALUE at a given price you are probably buying,if not, you may be selling...Value is a judgement for all to make, mine may be similar, maybe not, but if I called the coindealer at the same time as you and I get charged 280 per and he charges you 281 for the same You are angry because of PRICE NOT VALUE...And when you sell your coin...it would be fun to hear you try to convince the buyer how much VALUE you want for your coin...Tell me, Aristotle, what is the VALUE of a 1 oz gold eagle coin RIGHT NOW?I can make a call and find out the PRICE...WHAT is YOUR VALUE?Deals get done on price. Value is subjective. Both change... Aristotle (8/23/2000; 12:40:51MT - usagold.com msg#: 35412) Gold Hunter, you must think carefully about what White Hills said at 35402 You are unfortunately blinded beyond the confines of your current understanding. Your handicap is that you fail to comprehend that there can be a distinction between "value" and "price." The content of your earlier post to FOA shows that flaw in your thought quite clearly.Gold distinctly has a VALUE that is revealed in its actual USE based on its physical attributes and its reputation in the mind of mankind.COMEX contracts distinctly have a PRICE which is derived by the dollar level above or below which individual people are willing to pay an initial margin fee to take responsibility for one side of an officially arranged COMEX-sanctioned wager that has a payoff hinged upon whether other traders/gamblers will be driving the price of these same wager contracts up or down as time moves along.When a person spends $28,000 for 100 oz. of Gold, that person is buying Gold's VALUE. Many people may not have that much, but the principle holds true even when they spend, say, $1,350 for a few ounces of Gold. They get Gold's VALUE at a very attractive PRICE.When a person spends $1,350 for the initial margin on a COMEX Gold contract, that person is buying a PRICE. To be sure, this is NOT the value-based price of Gold, but rather the value-based price of future wager contracts like itself.It takes only a small degree of thought to see that the VALUE of a COMEX contract is small and will fall further in a financial environment of escalating and impending defaults--in a similar manner that the VALUE of any historical Gold-back currency fell surrounding the inevitability of delivery failure against these obligations. The mighty U.S. dollar was a good example in 1971. If the U.S. could default on delivery, it is EASY to imagine individual and commercial organizations through COMEX defaulting too.In the final analysis, it would be better for that person to spend his $1,350 initial margin cash on the small amount of physical Gold instead. In that way, he would be taking ownership of something of VALUE.OK, so why can we miraculously buy Gold at the COMEX-derived prices? Because we are currently living among "good times" in which confidence remains high and threats of financial defaults aren't even being whispered about. (Or is that changing?) During such a "good" time, it comes as no surprise that enough people will confuse and equate the value-based price of paper contracts (such as COMEX Gold futures) with the value-based price of Gold itself. Truly, the values of each against financial default is vastly different, and tumultuous financial times will reveal the contracts to be currently valued much too highly, and Gold to be currently valued much too low in popular perceptions.The day will surely arrive when each item will be given a different PRICE that will properly reflect the relative VALUE. Only physical Gold will thrive under such a re-pricing, and will safely deliver the concept of your wealth into your future. Defaulted Gold contracts will suffer a worse fate than defaulted Gold-standard currencies, because the world still made a USE for the currencies as units of account. There will be no USE for defaulted Gold contracts.You must realize this: People can and do live on the use of things that have value, even when there is no price involved. (You can watch the show "Survivor" to learn a thing or two where "prices" are absent.) On the other hand, a mouthful of "price" is not much to chew on. Smart thinkers use their currency in exchange for items of VALUE. It's particularly nice when an over-complacent marketplace gives them a good "price" in which to do it.You, Goldhunter, say we are all team-mates. I say that you guys in the futures outfield are only capable of taking your turn at bat using toothpicks, and are of no use to the ultimate drive for a properly priced Gold to reflect its true value. Those of us playing the physical market infield come to bat swinging some might big lumber. When Gold soars out of the park, it sure will be odd to see you and the rest of our beloved outfield team-mates crying, and picking their empty teeth.Gold. Get you some. ---Aristotle goldhunter (8/23/2000; 12:12:29MT - usagold.com msg#: 35411) Marius reply We are having strange times Marius...The crude/gas/nat.gas markets double in price and gol/silver trade off...hopefully for only a short time longer as fundamentals are changing for the better...As to what happens at an exchange when a commodity contract doubles in price, some times NOTHING happens, sometimes margins increase, and maybe sometimes SOMETHING happens...The NYMEX has handled energy increases, the CSCE has handled sugar increases, and some day Mr. Wolavka WILL be RIGHT and soybeans will increase too...The exchanges are typically liquid marketplaces, and professional women and men are "seat-holders" and they might even welcome an increase in volume and volatility. We will see.An interesting analogy might be asked of our host:Mr. Kosares,Has your firm ever had the occasion to be completely SOLD OUT of product? Do you stop taking orders? Do you stop answering phones? Do you send people home? Can you ALWAYS get more inventory?Because his business is in good standing, with longevity, and GREAT reputation, and He has EXPERIENCE, he probably knows what to do to accomodate business under MOST circumstances. ALL circumstances? Probably, but maybe we don't know ALL circumstances...Also, I would offer that if Comex volume picks up because we are trading over 350 or 400 that Centennial Precious Metals volume picks up too...I see gold markets moving together... wolavka (8/23/2000; 11:53:51MT - usagold.com msg#: 35410) aug.24th Is this the date when otc mkt in atlanta opens for exchange of oil and gold trading??????????????????????????????If so , interesting how they've held gold back until tomorrow. goldhunter (8/23/2000; 11:40:06MT - usagold.com msg#: 35409) White Hills reply... I have an awful lot of respect for people at this forum...I have MAJOR respect for FOA/TrailGuide...My disagreement earlier was with "True" or "Real" pricing...Imagine a well publicised, well attended, government regulated marketplace with LONGEVITY and a "good-standing" reputation that trades tangibles and intangibles for all to buy and sell...commercials as well as non-commercials (speculators)...at an agreed-upon-price for a gal, an oz, or a bushel...that price stands until liquidation/offset or delivery...the price is real for that instant in time... Bobbo (8/23/2000; 11:37:26MT - usagold.com msg#: 35408) Katty Bar the Door Fuses lit. Katty bar the door and let's get this next rally going bigtime...Virtually all pieces in place and now for the lift-off...:)Tested yesterday's low at 50.62 and came within .03, XAU now at 50.85 with virtually all indicators turning up and saying this is the time NOT to get shaken out. Rally dead ahead....imho....hopefully, maybe, could be...yep...:) CoBra(too) (8/23/2000; 11:14:42MT - usagold.com msg#: 35407) Stunned! @ WAC F R I E N D - not fiend - Does the cabal now have the power to erase letters and meanings - So sorry -cb2 CoBra(too) (8/23/2000; 11:11:39MT - usagold.com msg#: 35406) @ WAC - hey fiend your msg. 35393 echoes my own thoughts. Great post and find thank you-cb2 SHIFTY (8/23/2000; 11:06:45MT - usagold.com msg#: 35405) Al Fulchino /Zenidea Man Made nuggets I don't like to hear of people trying to fake nuggets. Nuggets bring a premium price because they are rare. Also I have yet to see a nugget that was fake / man made that could fool a person that knew what a real nugget looked like. A real gold nugget has a blend of impurities that make it unique to the place of origin. The impurities are stuff like silver, platinum, copper. The way I understand it nobody can truly duplicate a real nugget. I look at it like counterfeiting gods handy work.$hifty Marius (8/23/2000; 10:48:30MT - usagold.com msg#: 35404) Legal/illegal speed; paper v. physical Thanks for the posts re: Ritalin. I not only fall down on my knees & thank God I don't have children, but I seriously consider getting Mr. Happy sliced (so I can't have any accidentally) every time I read stuff like this. Let me see if I have this straight: I take speed myself, I get thrown in jail. I fail to administer it to my kid, I get thrown in jail. What a country!Goldhunter:A respectful question, with a preamble. I've traded in paper gold off and on for 2 years. I've made and lost money doing so. I still hold some options, but I wouldn't advise anyone to trade this way. What you say about COMEX seems to be true--you want physical, you get it. Any examination of how much paper is outstanding in relation to physical suggests that we are looking at a rigged, fraudulent fractional reserve banking system posing as a gold market. I don't necessarily buy Another's/FOA's scenario, but I can't conclusively predict it won't happen, either. I have a feeling we'll find out, perhaps when oil tops $50, and people start to wake up to how many different ways they're getting screwed. I remember having to wait weeks to get my profits on gold calls last fall, when gold moved $80 or so. Some trades were adjusted or nullified by the exchange then. What happens if we go to $400, $500, or even $600? Recent history has proven you don't need $30,000 gold to bring the exchange to a grinding halt.M White Hills (8/23/2000; 10:45:56MT - usagold.com msg#: 35403) Goldhunter/Msg#35388 To complete my previous post, "TG, FOA, ANOTHER and other in this forum have brought forth new ideas and realities that should be examined by all not just dismissed because your reality cannot see forward to the turning of the next card. White Hills White Hills (8/23/2000; 10:39:19MT - usagold.com msg#: 35402) Goldhunter/msg#35388 When I was in college many years ago one of the instructors that I had demonstrated what a Paradigm was by reading the report of a test conducted by a large university with a group os students. The used some playing cards and flashed them in front of the students asking them to remember as many as they could. Although some remembered more than others not one student recalled two of cards that were includedin the ones flashed before the students, the black Queen of Diamonds and the red Jack of Spades. You see, the minds of the students dismissed those two cards as if they were never used becaus they did't fit into the minds paradigm of what a deck of cards included. A paradigm is a powerful force that sometimes prevents logic and common sense from being used in understanding new ideas and new realities. All of us at one time or another have attempted to inform others of certain information only to observe their eyes glaxe over with a blank stare and the changing of the subject as if it were never mentioned.We should realize that the willingness to investigate new ideas is the way we progress as individuals and as a Nation. Those that bring new ideas to the fore often meet fiery resistance as those ideas threaten the paradigm of others unable to see the cards. Examples of this in history are too many to list.TG, FOA, Al Fulchino (8/23/2000; 10:29:53MT - usagold.com msg#: 35401) Zenidea (08/23/00; 04:41:14MT - usagold.com msg#: 35372) good day to you. I do not think your ideas have no interest here...in fact most here *may* not have the background to discuss your subject, as interesting as it is. Perhaps you could enlighten us some more? wolavka (8/23/2000; 10:21:03MT - usagold.com msg#: 35400) Gold Dec comex magic # 277.40 watch for close @ or above it. watch outside day today in swiss franc. Maybe the world has had enough of the Dollar. With api stats inflation will roar. Gold will have its' revenge. Hang in there bugs. Al Fulchino (8/23/2000; 10:12:38MT - usagold.com msg#: 35399) wolavka your messages are getting longer wolavka (8/23/2000; 9:54:49MT - usagold.com msg#: 35398) ultimate insult U.S. Dollar is now doomed. Americans demand swiss to plug holes in swiss cheese. How dare they complain when their stinkin dollars smell up the whole world. Do the swiss a favor and rub your dollars with alittle limburger and see how long somebody wants them. wolavka (8/23/2000; 9:16:31MT - usagold.com msg#: 35397) soybeans watch for breakout here. wolavka (8/23/2000; 9:12:17MT - usagold.com msg#: 35396) Something has to give High energy prices, natural gas and propane, grains gotta be dried. something has got to give. Al Fulchino (8/23/2000; 8:59:16MT - usagold.com msg#: 35395) Black Blade Black Blade (08/23/00; 08:10:36MT - usagold.com msg#: 35390)re: Al FulchinoDo you think that the latest API inventory numbers will have any substantial impact on your wholesale prices going forward?Me> I have been wrong before, but how can they not? In fact, these numbers do not show a slow down in the economy. I think the recent Fed Meeting reflects that an election is coming up, more than any other reason that they did not move.< I see that gasoline inventories are down as well. The thing that grabs me the most is the utilization rate of 96.9%! That looks like a tight squeeze in the making, and to juggle between gasoline, heating, refined oil, etc. I would have to think that you would be a bit nervous. What is your take on the current petroleum, situation from your perspective at the retail level? TIA-Black BladeMe> Let's put it this way. I purchased my heating oil for the upcoming season two months ago. And I strongly recomment everyone else does to. Should you or others follow me? Nope, not unless you do you research (smile). Current price here is $1.095 cash. I locked mine in at $1.145 earlier this summer. Last year i was in at 72.9 cents. Also, one thing I have noted is that with higher prices here to stay for the foreseeable future, there is a noticeable shift from the upper grades by the consumer to the lower grades. That changes pricing strategy for me. And on a funny note, since noone besides Topaz wants to lighten up the mood <smile..just kidding everyone> and talk Survivor, would you believe that I can price my 93 octane the same as my 89, or price it one penny higher OR LOWER and I will still get 89 octane purchases? Hmmm...just let a Cadillac be priced the same as a yugo and see what happens. On second thought, don't answer that, I have a bad feeling about some people <smile>. Ciao Mr Gresham (8/23/2000; 8:50:04MT - usagold.com msg#: 35394) (No Subject) Ari(stotle) - You are amazing! I love your stories. Thank you. WAC (Wide Awake Club) (8/23/2000; 8:31:08MT - usagold.com msg#: 35393) Mr Greenspan puts the world in danger Article by Anthony Hilton of the London Evening Standard. The job of America's most important banker, the chairman of the Federal Reserve, was once famously described as taking away the punch bowl just as the party was getting into full swing. Partygoers might hate him at the time, but they would feel differently next morning when they were spared a monumental hangover. Alan Greenspan has that job now, but not for him the image of a dull sober-suited banker, the type you really would not want at your cocktail party. Instead, thanks to the effortless way he has moved interest rates up and down for the past 10 years and managed to keep America growing for faster and longer than anyone had a right to expect, he is now treated with the reverence of a saint. Investors across America pour their money into the stock market, because they believe that whatever might happen to the American economy which might pose a threat to their savings, Greenspan will sort it out and keep them safe. Thus far he has delivered. By rights the Asian crisis of three years ago and the huge losses it threatened for American banks and business should at the very least have applied an ice pack to the American boom. By rights the threatened collapse of Long Term Capital Management, a hedge fund which had borrowed billions from the world's banks and lost most of it on duff investments in Russia, should have brought the party to a halt. But Greenspan took the disasters in his stride. His speeches soothed the jittery markets, his interest rate cuts restored their confidence, and his cajoling ensured that Long Term Capital was not only rescued, but those who did his bidding and put up the money have subsequently emerged with a profit. But the trouble is that the more he delivers, the more investors throw caution to the winds, and the more frothy the American boom becomes. But the more euphoric the party gets, the greater the risk, not just for America, but for the rest of the world, that it will all go horribly wrong. A slump in America - the so-called "hard landing" feared by economists - would send shockwaves throughout the world. Other countries would be unable to resist the downward pull of such a powerful economy and when the United States sneezes, the rest of the world catches a very nasty cold indeed. Crisis in America would have huge knock-on effects on trade with the rest of the world and global stock markets would track Wall Street lower. That is why when he failed to put up interest rates yesterday, American partygoers cheered but others were deeply worried. They fear that Greenspan has lost the plot, that he has become so hooked on his success, and on the way that technology appears to have brought a steep change in American productivity, that he has become blind to the huge imbalances in the American economy. They say his job is to look at money and credit, not computers, and that if he was really paying attention to these, then he would be urgently putting up rates to take the steam out of the economy. In failing, he is allowing confidence to breed over confidence, and over confidence to lead to excess. And that excess ultimately will be his and America's undoing. He has some powerful critics. Henry Kaufman, who in the Reagan and Bush years was the most influential analyst on Wall Street, has repeatedly warned that duff loans are a threat to America's prosperity, but is largely ignored as yesterday's man. The evidence, though, is compelling. During the past two years American business and households have absorbed $1.4 trillion in new lending, and in the first quarter alone consumer credit expanded eight per cent. Today, the average American household is shelling out more income to service debt than at any time in the past 21 years. Americans as a whole no longer save, but happily borrow on the back of their usually unrealised stock market profits. First-time home owners don't struggle to finance a new kitchen, they simply get a mortgage of 125 per cent of the building's worth - and if the kitchen is OK, they blow the money on a new car or a holiday, and sometimes both. Corporate America's balance sheet is even worse. Most of the blockbuster takeovers where companies are bought and sold by the billion are financed not from the bidder's own resources but with the help of truly massive bank loans. Mainstream business's demand for credit is also galloping ahead and increased at a rapid 10 per cent in the first quarter. Meanwhile, the percentage of commercial and industrial loans in arrears is rising, and credit quality deteriorating. Moody's, a research house whose business is assessing the likelihood of companies being able to repay their loans, recently reported that downgrades of firms' credit ratings swamped upgrades two-to-one in the first half of 2000, the highest ratio since the 1991 recession. Surprisingly, America's banks appear ill-prepared to cope with any further deterioration in the credit-worthi-ness of their main borrowers. The ratio of bank reserves to total loans is at a 13-year low. Adding to the picture of instability is Wall Street, where the very risky business of borrowing for stock trading is on the rise again, after a brief hiatus in the spring. Margin debt in June was up three per cent to $247 billion, double the level of two years ago. Overall, there is no doubt that the credit quality of America is eroding and if it erodes too far it will bring the whole economy down, and much else besides. No one can tell what Greenspan privately thinks of all this, but ironically (given his new-found love of technology) his critics have been doing computer runs of his public speeches to see how often he mentions credit as opposed to technology. A letter in the Financial Times a few weeks ago gave the result. In his last 10 speeches, to a variety of audiences, the Fed chairman used the words "credit", "debt" and "leverage" 30 times, and, within that total, "money" was mentioned just once. In contrast the words "technology", "productivity" and "innovation" were used 281 times. While that does not prove anything, it is indicative. His problem, though, is similar to someone who once told a small lie for the best of intentions but then finds they have to tell bigger and bigger lies to stop the first one being found out. His was to buy into the idea that technology made the old rules irrelevant, which while it may have seemed harmless at the time now means he has to go along with the ever bigger and ever more grandiose claims made for the new economy. What he ought to do is puncture the Wall Street bubble but that is the one thing he cannot afford to do. The man whose reputation rests on being the guardian of the US economy - and thus of the world's economic health - has in fact become its prisoner. But that means there is no one left on guard. Journeyman (8/23/2000; 8:28:02MT - usagold.com msg#: 35392) Incoherent? @Hill Billy Mitchell (08/23/00; 05:59:04MT - usagold.com msg#: 35377) I don't think you were incoherent -- that insight as to how inflation spreads _these days_ was, in my opinion, QUITE enlightening. Business folks these days apparently realize it's all the BOTTOM LINE. That means it doesn't matter which product they make their money on, just so they make it.They used to do this in Vegas, especially before Howard Hughs. They give away food and shows as "comps" at a loss but make it up because they knew from experience people would lose the cost of that "free food and show" at the gaming tables --- and then some.If you're a business person, you know what people will pay for. You run "loss leaders" to get people in, then hike the prices of the stuff they'll buy (are in the habit of buying) pretty much no matter what. Like drinks in convenience stores.So this means tracking inflation now isn't as straight forward as it used to be (not that it was ever very straight forward): Wholesale cost of your gasoline goes up -- raise the price of your drinks! Cool! That'll work for awhile, but then what?Will people get pissed at the oil companies, OPEC, USA Corp./FED RESERVE, because the price of drinks tops Mount Everest? Or will they demonstrate against Seven-Eleven, Coke and Pepsi?Will the REAL inflation indexes, you know not the PPI/CPI BS for the rubes, but the ones the FED trusts, show the real picture?Whoopie folks! Here we go!Regards,JourneymanP.S. Hill Billy, sorry I haven't had time to respond to you. I don't have the time, and perhaps lack the expertise to help you with the number inversion project. I would have to educate myself on one more topic, and I'm having trouble keeping up on home things as it is. I was hoping that you would do all the work on that inversion and I could be a passive little information consumer! <blush>As for the subsidy issue, I've been thinking about it. I think I see where you're coming from, but I don't completely agree. I think I see the "middle ground" which would no doubt be illuminating, but, well, not right now. (Am working on a "free-trade" response to the discussion a few days ago because it hits me "where I've been living.") Black Blade (08/23/00; 08:17:41MT - usagold.com msg#: 35391) Oil flying High, PMs Comatose or Worse. http://www.mrci.com/qpday.asp Petroleum up across the board, and PMs are languishing. Well, at least there's no inflation. - In a Pigs Eye! Oh, well, I still scooping up PMs while they're cheap! Black Blade (08/23/00; 08:10:36MT - usagold.com msg#: 35390) re: Al Fulchino Do you think that the latest API inventory numbers will have any substantial impact on your wholesale prices going forward? I see that gasoline inventories are down as well. The thing that grabs me the most is the utilization rate of 96.9%! That looks like a tight squeeze in the making, and to juggle between gasoline, heating, refined oil, etc. I would have to think that you would be a bit nervous. What is your take on the current petroleum, situation from your perspective at the retail level? TIA-Black Blade Al Fulchino (08/23/00; 07:58:57MT - usagold.com msg#: 35389) Black Blade I have gone one month without an up or down wholsesale price move. I see the same thing you do, as far as stocks go, but no sign of pressure at the Retail Front. Yet. goldhunter (08/23/00; 07:56:59MT - usagold.com msg#: 35388) FOA/Trail Guide chats Good day sir. Remember me? Glad to have you back. Sorry, I disagree!Your OPINION on Comex paper gold is more than a little mis-leading (your latest Trail Guide chat)The Comex price IS THE PRICE for gold to buy or sell at that instant in time...PERIOD. You want to buy 100 oz physical, you buy a contract, take delivery, you got it...You want to sell...sell a contract and deliver...same thing.Your OPINION that it is an opinion of price or other is wrong...You want gold, you get it...you want to sell gold you can sell it...100 oz lots, big or small...the exchange will accomodate your wish.Some seem so caught up in a notion that it's us vs them...paper vs physical...you want paper? there is Comex, You want physical? There is Centennial Precious Metals Inc.Those that want leverage probably trade paper...those that don't want leverage probably trade bullion...An insistance that you can't receive YOUR GOLD from a Comex contract is nonsense...you know better, and to offer that a price you may buy a contract of gold for isn't real, is also.We are team-mates in the persuit of higher prices in gold, and both physical and futures move together. One uses leverage.Period. Why doesn't EVERYONE deliver/take delivery? Because they don't need too, don't have too, or don't CARE too...the leveraged futures contract does not require it!The price is established each and every second/minute/hour on a futures exchange somewhere in the world AND twice a day by a small group in London...BELIEVE THIS!Futures are NOT the enemy or BAD. In fact, futures will help us all some day when the trend reverses to up, and folks buy more physical and futures...BOTH! Al Fulchino (08/23/00; 07:56:47MT - usagold.com msg#: 35387) Topaz Where are you that you see the show on Friday? And <smile> I assume you will not be searching the internet for who won, ......between Wednesday PM and then. <grin>. Black Blade (08/23/00; 07:56:03MT - usagold.com msg#: 35386) re: MO VER MEG Actually I have Franco-Nevada as well. I left them out of the correspondence since I also have Goldfields and they are merging. I am not aware of too many combined PM and Petroleum plays though. I always thought that Syncrude was and interesting play (Canadian Stock). Mining oil from tar sands in the Athabasca region. they have over 600 billion bbl equivalent there. Black Blade (08/23/00; 07:50:44MT - usagold.com msg#: 35385) Another Take on The developing Oil Crisis Oil Speeds Higher; U.S. Inventories Wane By Richard Mably LONDON (Reuters) - Oil prices vaulted higher again Wednesday as dealers reacted sharply to news of an unexpected decline in U.S. petroleum inventories. London Brent blend futures gained 88 cents in early business to $30.81 a barrel while U.S. light crude in electronic trade sped 89 cents higher to $32.11. While extra oil from the OPEC cartel had been expected to start replenishing lowly stockpiles in the West, latest data released late Tuesday showed inventories still are in decline. Statistics from the American Petroleum Institute marked U.S. crude stocks in the week to August 18 down 7.7 million barrels at 279.7 million -- 11 percent lower than at the same time last year. The API said stocks of distillates, which include heating oil, fell 2.9 million barrels to 111.2 million, a deficit of 28 percent versus last year. ``The warning signs have been in the market for some time but this latest data provides a strong reinforcement of the message that stocks are very low,'' said Peter Gignoux, head of the London energy desk at Schroder Salomon Smith Barney. ``This is clearly a shockingly large draw,'' said Lawrence Eagles of brokers GNI. Opec Under Spotlight Traders cite fears that a big round of refinery maintenance in the United States could lead to a shortage of heating oil this winter. Analysts say refiners are not keen to refill inventories when the market prices prompt oil at a big premium. Prices back near recent 10-year peak will put renewed pressure on the Organization of the Petroleum Exporting Countries to lift exports for a third time this year. Oil has risen sharply from a 22-year low of less than $10 a barrel in 1998 after a series of OPEC supply curbs which the cartel has partially lifted this year. OPEC ministers meet in little more than two weeks time and are expected to raise production by at least 500,000 barrels daily. The cartel has adopted an automatic mechanism that stipulates the release of that volume if a basket of its crude stay above $28 a barrel for 20 working days. Consumer countries that are trying to stem inflationary pressures from rising oil import costs are likely to want OPEC to sanction a larger increase in supplies. The United States and the European Union both in recent weeks have made contact with OPEC to voice their concerns over high prices. Constrained by limited capacity, only Saudi Arabia is believed capable of any significant production increase. Riyadh has gone quiet after promising in early July to lift add enough extra oil to bring prices down to $25 a barrel. Saudi, OPEC's biggest supplier, has come under heavy pressure not to act unilaterally and upset OPEC unity ahead of September's summit of cartel heads of state in Caracas. MO VER MEG (08/23/00; 07:43:14MT - usagold.com msg#: 35384) Black Blade Thank you for responding. I agree with your philosophy and lately have been turning depreciating assets (things with wheels and props) into MS63 Liberties. The reason I wrote to you is that after looking at my Franco-Nevada stock and observing their energy holdings, perhaps there may be other mining companies setting on large potential energy holdings and may not have been bid up yet.A suggestion: An excellent news letter that got me into oil at $14.00 is the "Early Warning Report". I am out now, but still looking. Thanks again,MO VER MEG Black Blade (08/23/00; 07:15:55MT - usagold.com msg#: 35383) OIL - New 24 Year Low API REPORT FOR WEEK CHANGE FROM WEEK CHANGE FROM WEEK ENDED 8/18/00 ENDED 8/11/00 ENDED 8/20/99 CRUDE.........279.706 MLN DN 7.774 MLN DOWN 35.38 MLN DISTILLATE....111.182 MLN DN 2.890 MLN DOWN 30.69 MLN GASOLINE......202.201 MLN DN 1.142 MLN DOWN 4.62 MLN UTILIZATION...96.9 PCT UP 1.2 PCT UP 1.6 PCT NEW YORK (Reuters) - U.S. oil inventories fell sharply to a new 24-year low last week, according to the American Petroleum Institute (API), dashing trader expectations and sending another wave of supply fears through an already fragile market, analysts said. ``There's no doubt about it: this is a very bullish report,'' said Tim Evans of Thomson Global. The API's report, released Tuesday afternoon after a delay, showed U.S. crude oil stocks down 7.774 million barrels to 279.71 million barrels for the week ended August 18, the lowest level reached since March of 1976, when stocks fell to 265.8 million. The crude oil draw was matched by an equally surprising slip in distillates inventories, which normally build ahead of cooler weather -- adding to growing concerns of heating oil shortages this winter, and potentially adding pressure on OPEC to up its output at its September meeting in Vienna. Distillates stocks fell 2.89 million barrels to 111.18 million barrels, more than 30 million barrels below last year's level, according to the report. ``There's a strong inducement right now to buy out of primary storage, so a lot of that product is probably moving into secondary and tertiary,'' said one analyst. ``We're not actually consuming it all right now.'' The draws came amid healthy foreign imports, reported at roughly 9.1 million barrels per day -- a figure which surprised some analysts since transatlantic crude oil prices have unusually risen higher than those in the U.S., and should in theory, have redirected cargoes. The U.S is dependent on overseas barrels for more than half of its crude oil needs. But analysts pointed to continued strong refiner demand as a possible culprit to the depleting supplies: refinery utilization reportedly jumped 1.2 percent last week to 96.9 percent. ``This is going to become a restriction on crude runs,'' said one analyst. ``Refiners are running at full blast and crude inventories are at record lows. That just won't work.'' Gasoline inventories, meanwhile, dropped 1.14 million barrels to 202.2 million barrels, within analyst forecasts and holding to seasonal trends. The largest draw in crude oil stocks was in the West Coast at 3.4 million barrels, with the second largest in the Northeast at 2.2 million barrels. In the U.S. Gulf Coast, the home to more than half of the nation's refining, crude draws amounted to only 1.6 million barrels -- a slowdown aided by a number of refinery glitches last week. API REPORT FOR WEEK CHANGE FROM WEEK CHANGE FROM WEEKENDED 8/18/00 ENDED 8/11/00 ENDED 8/20/99CRUDE.........279.706 MLN DN 7.774 MLN DOWN 35.38 MLNDISTILLATE....111.182 MLN DN 2.890 MLN DOWN 30.69 MLNGASOLINE......202.201 MLN DN 1.142 MLN DOWN 4.62 MLNUTILIZATION...96.9 PCT UP 1.2 PCT UP 1.6 PCT wolavka (08/23/00; 06:53:38MT - usagold.com msg#: 35382) dec gold trend line 278 resistance, break it and then 280 282 284 Topaz (08/23/00; 06:51:40MT - usagold.com msg#: 35381) Black blade 'mornin BB,The "peso" got another kick in the guts o/nite- glad I got the "more-slowly burning" Au.Did you know a Billionaire in Aust= a Trillionaire in US?source- last Friday Trivia Night ie: impeccable!! Topaz (08/23/00; 06:41:14MT - usagold.com msg#: 35380) All: and AL F (again) http://www.mindspring.com/~samson/another/ All,The Link (as offered by SteveH yesterday) Required reading- The Man has a unique insight into a World running parallel to ours that alas we get only occasional glimpses.A's reference to the US$/Au both exploding to the upside as a prelude to $ hyperinflation can easily be seen to be occurring NOW- albeit Oil in the Gold seat----- Spend a couple of hours parusing this excellent compilation along with the "Thoughts" archived here at USAGOLD.Al,That (of course!!) was a PAPER "nugget". you don't think I'd risk a PHYSICAL one, do you?? <smile> Black Blade (08/23/00; 06:25:17MT - usagold.com msg#: 35379) "Morning Wakeup Call" THE EASTERN FRONT:Asia Precious Metals Review: Gold falls on speculative sellingBy Mari Iwata and Polly Yam, BridgeNewsTokyo--Aug. 23--Spot gold extended overnight losses to Asia on Wednesday due to speculative selling from the United States during the Asian trading, dealers said. Fears of selling from Australian gold producers amid the weakness of Australian dollar against the U.S. dollar also triggered selling on spot gold, they said. Spot gold's nearby support is set at U.S. $270 per ounce. Spot gold opened in Asia at the day's high of $273.50 (bid), but fell for much of Asian trading hitting its day's low of $271.95 (bid), dealers said. Speculative selling heavily impacted on the gold price Wednesday, with scattered selling from Asia-based players who were afraid that the current weakness of the Australian dollar against the U.S. dollar could encourage Australian gold producers to sell gold, dealers said. "Selling from Australian producers was not significant today," one of the dealers said. The rumored selling of gold reserves from a South American central bank was also taken by some bears as an excuse to sell more gold, they added. Dealers noted that physical demand from Asia-based sources was active below $273, but the buying was not strong enough to offset the selling. In Asia, physical demand for silver remained strong at low levels but the price continued to be capped below $4.85 on persistent selling, dealers noted. Silver traded at $4.825-$4.835 per ounce for much of the Asian trading. Spot platinum and palladium markets remained inactive on lack of trading interest and fresh market-driving news, dealers said. Tokyo Commodity Exchange (TOCOM) platinum and palladium futures fell Wednesday due to profit-taking, TOCOM dealers said, adding overnight NYMEX price falls also impacted the futures. Speculators were reluctant to take new longs on expectations that the Russian export agency Almaz would in September begin 2000 palladium shipments under long-term contract to Japan, according to dealers. Japanese buyers, however, are not very confident about the startup timetable of the 2000 palladium shipment though they have signed contracts with Almaz. Japanese buyers have informed Almaz their buying amounts of platinum, palladium and rhodium, according to a buyer source. But Almaz is not expected to deliver platinum and rhodium to Japanese buyers in September even if it starts the palladium shipment next month, the source said. The strength of the yen against the U.S. dollar prompted selling on TOCOM gold futures, dealers said. The U.S. dlr/yen fell to the 107 level after breaking the recent trading level of 108 in the morning.Black Blade: Will continue buying cheap. Let's see, TOCOM screws investors once and expects them to return for seconds. Doesn't sound like much of a business plan to me. No wonder they have an "inactive" PGM market. The rumors that Uruguay is selling its gold was the butt of jokes on CNBC yesterday. Even they see how pathetic their plan is. 23 tons is less than one BOE gold give-away. Aussies selling gold? Why not, ya can get a lot of Aussie pesos for gold. But then Aussies pesos are next to worthless anyway.THE RUSSIAN FRONT:Russia to Sell Precious Metals, Gems to Pay DebtsMOSCOW, Aug 23, 2000 -- (Reuters) Russia is going to sell precious metals and gems worth three billion rubles (around USD 110 million) from the state reserve next year to repay a state debt, the government said in a statement on Tuesday. The statement was distributed at a government meeting which approved the draft 2001 federal budget. But Deputy Prime Minister Alexei Kudrin, speaking at a news briefing after the meeting, refused to give any further details, citing the state secrecy laws which cover all aspects of trade in precious metals and gems.Black Blade: You can see why Russia can't deliver anything but current production of PGMs. They sold their stockpiles long ago (at least that which wasn't stolen). And ya just gotta love those "secrecy laws". Yeah, right.Meanwhile, oil is up +$0.84 at $32.06/bbl and looking strong, NG is up $0.032 at $4.56 Mfc, and heating oil is up strongly as well. S&P Futures are down -5.00, Fair Value down -0.64, a slight negative. Au is down -$1.25 at $271.75, Ag unchanged at $4.80, Pt down -$3.00 at $567.00, and Pd down -$8.00 at $726.00. FOA/TG could be right about Pd as an example of what to expect for other PM markets. The TOCOM and NYMEX defaults on Pd could extend to other metals when the markets become volatile to the upside. The price in US dollar terms may be only digit placements on contracts while the real deal occurs with the actual metal. Meanwhile Au and Ag look like especially good values now. Topaz (08/23/00; 06:19:10MT - usagold.com msg#: 35378) SteveH: Al F. Steve,Mucho cudos for providing the link to ANOTHER's early Kitco efforts- I've been wracking my brains for nigh on 2 yr's trying to remember the wording to what I consider his most notable "expression" vis:- "when a thousand hungry lions fight for one scrap of food, small dogs should hide with what's in their belly".No matter how I tried to (re)phrase it, it never looked right-Now this pup's belly is full to the point of hurting and as Golden Truth might say "Bring on the Lions---NOW!!"Al,The final eposode (2hr) of Survivor screens here (forum time) 5am Friday. The whole casa-del-Topaz Family are enthralled with the Show-we watched the Sean episode this Evening- Pagong group hate Rich, he's done with at the Jury Council - Kelly or Rudy for mine- a 1/20 oz "nugget" on Kelly-- no Rudy-- no Sue...Duh! Hill Billy Mitchell (08/23/00; 05:59:04MT - usagold.com msg#: 35377) @ THX-1138 (08/22/00; 23:03:16MT - usagold.com msg#: 35355) Quick market changes You posted:You want to talk about changes in markets, I just saw one this morning.I left for work at 7:15AM and the store down the street from me was selling gas at $1.29. I get home today at 6:00PM and the price had jumped to $1.40. Now that is a quick moving market. Up 8% in one day.I have several clients who own mom and pop gasoline and convience stores. One of them told me when the oil shocks first hit that it was so hard to make anything off the fuel that he was going to have to raise the price on his fountain sodas just to stay above water. This man is a very astute business man and highly educated in business and economics.It follows that other small ticket items are the first to move up in price. The price of eating "out" has moved up steadily in the past year, technological productivity gains to the contrary.I went into a convenience store yesterday, (not one of my clients)a place where I stop often to buy a 44 oz. fountain soda for myself and a 32 oz. fountain soda for my wife. I got quite a shock. Prior to yesterday the sodas were priced at: 44 oz. - $0.99, 32 oz. - $0.89, 16 oz. $0.79.The new prices posted were: 44 oz. - $1.49, 32 oz. - $1.29, 16 oz. - $1.09. I went in with $2.00 (paper) to make my purchase as always and discovered when I got to the cash register that I did not have enough paper to make the purchase. I was not embarrassed but I was mad. Not mad at the store operators but at the "CORE OF ENGINEERS".The fuel is up and the food is up; not to worry the "CORE RATE" is holding just fine and the economy is not over-heating. Don't worry, be happy. No need to raise the target rate for Fed Funds nor the Discount Rate.Around here the "Corp of Engineers", are anathema. They represent a nasty bunch only to be excelled by the local "Corp Case workers". I have a feeling that these bureaucratic authoritarians are going be mad at the convience store operators rather than the "Core of Engineers". The store operators will be placed on ritalin (price controls) before this is over because a goat has to be found when this economy really finds out that: - by the time the "non-core" items have been purchased and consumer debt has reached the breaking point, the price of core items will begin not only to hold but to drop as there will be no money left with which to buy them. That is unless "Sir Alahad" and the "Core of Engineers", decide to print money hand-over-fist and get rid of this foggy notion that the money supply must be held in check to cool things down.If this sounds a bit incoherent it is the problem lies with Greenspeak, Governmentspeak, etc. If the truth is not floating around out there then "the lie" will not be detected.The lie, "Ye shall not surely die, but be as gods knowing good and evil. There is no God!"Sorry for the ranting and apologies to those who say their is no God. Of course being a libertarian, I acknowledge right to express your opinion that there is no God else I would not have the right to express my opinion that there is one.HBM Pete (08/23/00; 05:37:41MT - usagold.com msg#: 35376) A macro view What is the primary danger to any fiat system? Honest money(gold)! Then consider how and what the fiat club can and will do to protect their fiat money system, control and accumulate gold:1) By the use of their vast reserves hiding in government vaults to lend and sell at ridiculously low rates.2) Manipulating miners to sell forward many years to insure their reserves will be replenished over and above their current holdings. In essence this policy supports the mines that hedge to eventually gobble up miners that do not as the unhedged mines go bankrupt due to a controlled low POG.3) Using the derivative market and the above factors to suppress the POG in order to accumulate gold cheaply and at the same time discourage the goldbugs(Kitcoites and USAGOLDBUGS as an example) from accumulating and in all probability force them to sell into a falling and disparaged market.4) Keep the above game going long enough to accumulate and control the present above ground supply and future production until they own and control the majority of gold reserves and future production.Once the above is accomplished, any threats to their fiat paper system will disappear. The brave NWO will be a simple task to enforce once and for all. Who will be able to stop them? NO ONE! ANOTHER and FOA will be vindicated in their thoughts that physical accumulation by those brave and smart enough to see through the machinations of the world would be masters will have a chance to survive what the NWO has in store for mankind."He who owns the gold rules!" Does anyone doubt that the NWO club has let this statement elude them? Think long and hard about the above! wolavka (08/23/00; 05:17:55MT - usagold.com msg#: 35375) dollar and greasy bankers against gold and oil. Never did like those little pencil necks.need some help down here @ 276, start buyin. wolavka (08/23/00; 04:59:36MT - usagold.com msg#: 35374) Taking out stops Watch it close here at 276 as low, stops gone, need to run up off low here. Black Blade (08/23/00; 04:49:36MT - usagold.com msg#: 35373) 2 new Rather Small to Moderate Size Petroleum Finds Announced Iran discovers large new oil, gas fields TEHRAN, Iran, Aug 20, 2000 (The Canadian Press via COMTEX) -- Iran has discovered an oil field with crude reserves of more than one billion barrels, state-run Tehran radio reported Sunday. It quoted Mahmoud Mohaddes, director of discoveries at the National Iranian Oil Co., as saying the field was located in southern Bushehr province. In addition, a field containing about 800 billion cubic feet of natural gas, also had been found recently, the radio quoted Mohaddes as saying. He said that field, whose location he did not give, could produce 80 million cubic feet of gas per day. Iran sits atop 90 billion barrels of proven oil reserves, roughly nine per cent of the world's total, and more than half of its 40 producing fields contain more than a billion barrels of oil. Black Blade: Not a very big field really. But the real problem is not only drilling and building the infrastructure which could take years, but the lack of refining capacity.Moroccan king announces oil and gas find RABAT, Morocco, Aug 20, 2000 (AP WorldStream via COMTEX) -- Moroccan King Mohammed VI said late Sunday that a large field of oil and gas had been discovered near the kingdom's eastern border, the official news agency said. The king said the find "was good-quality and abundant," but he did not put a figure on the amount of resources that had been discovered near Talsint, about 100 kilometers (60 miles) from the border with gas-rich Algeria, the MAP agency reported. This spring, some independent media, including the magazine Demain, speculated that the underground store may contain the equivalent of up to 20 billion barrels of oil. In July, Moroccan Energy Minister Youssef Tahiri called the reports "fantastic and premature" but said there were encouraging signs of oil finds. Speaking at a festival for young people, the king said the natural resources should be "used rationally, to ensure the relaunching of the national economy and social development." Since taking the throne after the death of his father, Hassan II, last summer, the 37-year-old ruler has made efforts to modernize the North African kingdom with measures to promote literacy and fight poverty, among other problems. Unlike its neighbor Algeria, Morocco has had no important stores of oil or natural gas, and has been forced to import virtually all such energy. U.S. company Lone Star has showed new faith in Morocco's potential, an