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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

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ARCHIVED DISCUSSION FROM 5/25/1999
All times are U.S. Mountain Time

View Yesterday's Discussion.

Golden Vanity (05/25/99; 23:55:27MDT - Msg ID:6744)
(No Subject)
Peter Asher
Yes Sir Peter, exactly. It's the miss-perception that befuddles the owners of stock......
thinking they have a predetermined store of value and that someone is holding that value for them. I really think one has to be "skinned"a few times before taking it in.
Actually the one who "gets some of his money out" gets it from the next fool.

Absolutely no one should be "in the market" from May - November, as this fine article
points out...Why take additional risk with little or no reward?
http://decisionpoint.com/ChartSpotliteFiles/ChartSpot02.html
the odds are stacked against you.
While your there check out the "Net Equity Inflow Vs the SPX", it speaks volumes.
Gold!...up the rest of this week.. IMHO.
Got.."An evasive simplicity."..get rid of it.

Peter Asher (05/25/99; 23:27:26MDT - Msg ID:6743)
beesting
<If trillions of $'s are in the stock markets and most of that is
in brokers accounts(books) couldn't the securities firms use that collateral to play all kinds of
financial games, with everyone else's money?>

If you read what I just posted, you should be able to see that the Trillions of dollars went to the former share holders, only the stock is in the hands of the securities firms.

Even though most people don't get their shares in hand when they 'play' the market, I believe the only thing that the stock can collateralize, is the account holders margin. If that stock isn't "Escrowed" in each individual's account, then the bottom of the tank is a lot deeper than we thought.

beesting (05/25/99; 22:57:14MDT - Msg ID:6742)
Gold seen well supported near lows.
http://www.barney.co.za/reuters/may99/gold25.htm
Flemings global mining group said in a report:
The unique liquidity provided by Central Bank lending to the Gold market had prevented severe lease rate spikes, allowing the market to be played for the short side for extended periods.((3 long years)).
While it was hard to say when this dynamic would change, for now and while there was negative sentiment,"this structure creates an Achilles heel which invites attack,"Fleming said. Click above URL for more.

Attack from who?Have the shorts gained controling interest in the worlds supply of paper money by use-ing 100 to 1 leverage?If trillions of $'s are in the stock markets and most of that is in brokers accounts(books) couldn't the securities firms use that collateral to play all kinds of financial games,with everyone elses money? Including currency futures.Who else in the world understands investing as well as the securities firms themselves?
Nothing to lose everything to gain.If you guess wrong declare bankruptcy.As long as no securities violations can be proven your home free.More food for thought.......beesting

SteveH (05/25/99; 22:46:13MDT - Msg ID:6741)
June gold now...
$271.10.

From Bill Murphy:

1:45p Tuesday, May 25, 1999

Dear Friend of GATA and Gold:

Here's tonight's "Midas" commentary at
www.lemetropolecafe.com by GATA
Chairman Bill Murphy.

CHRIS POWELL
Secretary, Gold Anti-Trust Action Committee

* * *

May 25, 1999

Spot Gold $270.30 down $1.90
Spot Silver $5.055 unchanged

Technicals....

Gold continues to make 20-year lows led by the unending
barrage of selling in the physical market by Goldman
Sachs (joined today by Morgan Stanley). The funds
were also heavy sellers of gold during this session.

Goldman Sachs has been relentless with its selling
since right before the Bank of England's announcement
and has not let up since. The bullish consensus is down
to 21 percent and the last CFTC Commitment of Traders
Report shows that the large specs are short more than 8
million ounces of gold.

Enough!

Rip up "Commodity Techncial Analysis 101." Bring in a
new textbook. Professor Midas Murphy here. Your Cafe
commentators have been saying for weeks that there are
big problems out there behind the scenes that would
soon surface. When the first "systemic risk" problems
surfaced late last summer, the Fed had the luxury of
stepping on the gas and cutting interest rates. But now
the Fed has announced that the bias is to tighten, not
loosen, and is in somewhat of a box.

It is our guess that many of the problems that prompted
the rate cuts last year are still prevalent. As we have
been reporting to the Cafe, we believe that the
practically interest-free gold loans are being used to
try to reduce the pain of some of the problem
investments. As Charles Peabody and David Tice have
been telling you, some big banks and big investment
houses have some big problems. That is being reflected
in the swooning of the banking shares, which are now
going straight south. According to Charles, the
leverage in the financial system that caused the
problems late last summer was never removed from the
system. It was just shifted from the hedge fund Long-
Term Capital Management types to the money-center
banks, the broker/dealers, et al. These (the Credit
Suisse, Bank America types) are the new vulnerables.

We suspect problems; the Fed knows the problems. That
is why the Fed could not afford to let the price of
gold rise above $290 and called on the English poodle
politicos to drop their bombshell about selling Bank of
England gold when they did. That is why Goldman Sachs
continues to bomb the market and demoralize any bulls
left. It is a no-prisoners philosophy.

We told you two weeks ago that the word was out in
London that Goldman Sachs has a 1,000-tonne short
position on its books. Writers such as John Dizard of
the New York Post have decried such talk; they do not
think this possible.

So I think this is the time to divulge to you that we
have been told for many months now that the Fed has a
trading account at Goldman Sachs. That came to
Professor Midas Murphy from a reliable source. There
has been much speculation around town about "plunge
protection" teams and such out there, so this should be
no real shock. But would not surprise us that this
1,000-tonne gold short position has something to do
with our own Fed and can explain why Goldman Sachs can
continue to bomb the gold market. I do not want to hear
it that it is not possible:

>From federal statutes:

"Section 354. Transactions involving gold coin,
bullion, and certificates.

"Every Federal Reserve Bank shall have the power to
deal in gold coin and bullion at home or abroad, to
make loans thereon, exchange Federal Reserve notes for
gold, gold coin, or gold certificates, and to contract
for loans of gold coin or bullion, giving therfore,
when necessary, acceptable security, including the
hypothecation of United States bonds or other
securities which Federal Reserve banks are authorized
to hold."

All we can tell you at this point is that the Gold
Anti-Trust Action Committee is investigating this
matter, and it has, in part, to do with who is behind
the Federal Reserve banks, etc.

Do you know who stands behind the Federal Reserve?

The stock market is becoming unglued. The internet
stocks look like they finally have put in a "Hello,
Earth, we're coming back" call. This may be the long-
awaited correction our camp has been waiting for. The
Fed may know that a substantial correction is coming
too and, having no other bullets to shoot, is
orchestrating an assault on the gold market in a
desperate attempt to prevent some new Long-Term Capital
Management-type financial problems from surfacing.

That is Professor Midas Murphy's take on the gold
market now. The desperate bears are winning this
skirmish but we are going to win the war and win it
big. It is only a matter of time now before this gold
market manipulation outrage is exposed and the allowed
price of gold will go back to just the free-market
price of gold. My guess is that such a price is about
$500 per ounce.

Fundamentals....

By all accounts the demand for physical demand for gold
is robust and there are more reports of Australian
producer buybacks. The problem? You guessed it.

"LONDON (Reuters) -- May 25: Spot gold rose more a
dollar as European business began helped by a
combination of Middle East physical demand and what
looked like mine buyback activity, one London dealer
said.

"Increased gold lending volumes prompted talk of
firmness having come from miners closing out forward
hedge sales and their counterparties having lent the
metal back to the market."

For a bit of repeat commentary, the big sellers early
today in the cash market were Goldman Sachs (once
again) and Morgan Stanley. Our take on the gold market
is very clear. Unless something is done to break up the
cartel of bullion dealers that is terrorizing the gold
market in a collusive manner, or some outside market
factors come into play that force them to cover their
outrageously large short gold positions (which
fortunately could happen very easily), the price of
gold will go nowhere.

The gold producers, other gold companies, gold stock
shareholders, and believers in free markets must fight
back. If not, here is what we have to look forward to,
and speaking for GATA, we will not stand for this. A
note to me from Cafe member, Doc:

"I suppose you already got the message that Goldman
Sachs' commodity analyst was badmouthing gold this
morning on CNN. He said that with all the central bank
selling (didn't mention any of them buying) and the
trend toward electronic currencies, gold would remain
in a down to neutral price range for the next two years
and then maybe go to $350 in the third year."

It does not have to be this way. That is what GATA is
all about.

Gold industry: get off your butt and fight back. If you
do not and instead accept Goldman Sachs' version of the
next two years, there is no reason for investors to
back your companies by owning your shares. It is a
complete waste of time and opportunity cost of capital.

If it sounds like I am angry, I am. We will do our part
as best we can. It is about time you do the same. This
industry has become one big Titanic. Many of the gold
companies are responding to the bullion dealers'
assaults as if they have battered-wife syndrome. It is
a sad sight. Icebergs are upon us.

That bullion dealer ally, Bank of England Governor
Eddie George, today defended a decision by the
government to sell more than half of its gold reserves.

"LONDON (Reuters) -- 'It's a straightforward portfolio
decision and it's a perfectly reasonable portfolio
decision. Britain has 43 percent of its net gold and
foreign exchange reserves in gold and that is a very
big exposure to a single asset,' George told a
parliamentary committee. 'I think the market will
absorb the impact of what was a very sensible portfolio
decision,' he added.

"He said the decision to sell had been announced in a
very transparent manner designed to minimize the
uncertainty in the gold market and so that the gold
market could trade on the basis of knowledge of what
the government's intention was."

Hocus-pocus talk. But surely transparent. A political
decision was made by the British to make sure the price
of gold did not rise above the key $290 gold carry
trade borrowing point of the bullion dealers and to
make sure that the price would tank when the first pre-
gold sale announcement in more than 20 years was made.

George went on to say: "People get emotionally attached
to gold and we have seen quite a lot of emotional
reaction."

Mr. George, if I might say so myself, people are
emotional because your type of BS about all of this. It
is an outrage. Yes, we are emotional, but, I suspect,
not so much because we are attached to gold itself but
because of what the debasement of it represents and
because of the hypocrisy of statements such as yours
and the timing of the BOE announcement and what that
more than implies.

The Café's John Brimelow did some digging on your
statement, Mr. George, and listened to the audio of
your interview. When asked whether the BOE gold sale
was 1) your decision, 2) whether you were involved, and
3) whether you were consulted (which is a euphemism for
being told), your response was: "consulted." When asked
who made the asset allocation decisions on the "bank
reserves," your answer was the government (or the
politicians).

Even bullion dealer apologist Andy Smith poohpooed your
bank reserve comments, Mr. George. Thus you have given
new meaning to "balderdash."

George Milling-Stanley of the World Gold Council says
gold demand was up 28 percent year-on-year. U.S.
investment demand for gold is also continuing to break
records and rose 141 percent last quarter. The reasons
for the surge in gold buying are fears of a severe
stock market correction and Y2K problems.

A coin dealer in Dallas was on TV yesterday expounding
that his gold coin sales are going through the roof and
were up 100 percent just this past month over last.

Yet the price of gold drifts into oblivion.


Potpourri and the Gold Shares....

In 1929 the Dow was 17.4 percent above its 200-day
moving average in September before the crash. On May 6
this year it was 17 percent above its 200-day moving
average.

On Friday George Soros said that the International
Monetary Fund made several specific policy mistakes in
handling the recent global economic crisis, which, in
his opinion, is now over. "It insisted on cutting
public expenditures, when the cause of trouble was in
the private sector; it underestimated the severity of
the contagion; and in the case of Indonesia, it
precipitated a run on the banks by closing some banks
without first putting a deposit insurance scheme in
place."

This is the same IMF that wants to sell its gold to
raise money for debt relief for poor countries. It is
exactly all this gold sale talk, causing lower gold
prices, that is hurting many poor gold-producing
countries, not helping them. And the IMF gold sale talk
is certainly not helping the labor situation in South
Africa.

"Johannesburg, May 24 (Bloomberg) -- East Rand
Proprietary Mines Ltd., the highest-cost gold producer
in South Africa, said it could be forced to close
because of gold prices near 20-year lows and the
expiration of a government subsidy."

I just received a call from a highly respected
president of a well-known junior gold company who is
absolutely convinced that GATA is right about gold
market manipulation. He believes that if something is
not done very soon, many of the juniors are not going
to survive. The suppression of the gold price has gone
on just too long for many to hold out much longer.

I hate to talk like that, but this is "talk turkey"
time; the old birds-and-bees talk.

Robert Hoye of Vancouver, British Columbia, Canada, is
well known in academic circles for his quantum
research. I have had the pleasant opportunity to speak
with Bob from time to time and am always interested to
know what he has to say about the markets. In essence,
he is of the camp that we are still in a deflationary
spiral but that this is going to be very bullish for
gold. He looks for credit problems to develop and the
quality spreads to widen (he sent a chart showing that
the emerging debt to U.S. Treasury yield spreads are
already widening).

Bob likes to point to the widening of the gold-silver
ratio as a technical signal of further deflation
problems. It would appear he has his signal, as silver
has been trashed of late, following the retreat of the
base metals.

A report issued by Gold Fields Mineral Services, which
indicated that demand was down by 2 percent last year,
was a reason sighted for silver's selloff. Perhaps, but
the report also indicated that the silver supply/demand
deficit is now in its 11th year. At the bottom of the
copper market in early 1987 bearish fundamentals were
given by analysts such as GFMS for the copper price of
60 cents. Our camp paid no attention then to the so-
called experts. The trade associations and brokerage
house analysts were bearish to a man in February that
year. By December the copper price was $1.46.

The silver play will be just as grand.

Midas



Peter Asher (05/25/99; 22:37:29MDT - Msg ID:6740)
Steve, Gandalf
Thanks for the duet of validation. Would that I could observe the future as well as the immediate past. I've "kept my nose clean" for several weeks now, No call-option premium down the rat hole, but the ole 'call the broker', dialing finger is starting to itch again ---

Peter Asher (05/25/99; 22:29:35MDT - Msg ID:6739)
Golden Vanity
< A lot of money in the market will never make it out..it will simply disappear...poof..
never to be heard of again. There is really no money there at all. Its been spent---->
.
The second sentence is the reality! There is *never* any money "in the market". That's the point I've been hammering at in half a dozen posts since October.

Years ago, people used to say" I have some stock in AT&T" or whatever company. Not "My money is in AT&T." That's all people have, a share in a company. The only money that can be conceived of being IN the market, is whatever bid is on the floor of the exchange at that particular moment. If at noon tomorrow there are bids for 2000 shares of AMZN @ $50 per share, and nothing else, then in that moment in time, the total wealth factor of the company could be seen as $100,000. First guy to sell his 2000 shares is the one who "Gets (some of) his money out of the market."

Many people seem to have trouble duplicating this fact. I'm going to invent an expression for this phenomena and call it "An evasive simplicity."

SteveH (05/25/99; 22:03:23MDT - Msg ID:6738)
June gold now...
$271.10.

Peter, you are observant. Yes high volume. Gave up guessing what TA means in gold as it is simply futile. Hope it works that way on the way up too: no logic to the up swings I mean.

USAGOLD: Frankly...well written...well received. Thanks.

Steve

Bonus post:

Having been scourged well as some of you on the VSE, I have gotten used to patience, holding my course, and watching the stops knocked out before the final turnaround. Do you all remember the Cheech and Chong skit when they discussed snow: looks like ...., smells like ...., hmmm...tastes like .... Good thing we didn't step in it. Well I sense TSIATHTF, because even though we didn't step in it, we have lived through the worse negative feelings about gold that I thought were possible and eventhough there may be more, we all know the game now. We have our tickets for the big game now and no one shall talk us out of them.

Stage left: Scalper yelling...Tickets here, tickets, get your tickets, $271.10 dolla'.

Gandalf the White (05/25/99; 22:01:46MDT - Msg ID:6737)
Peter of the House of Asher
Very observant Peter ! I had read Kaplan's comments before I looked at the charts today when I returned from fighting off the determined Orcs.-- Here is what he said.
===Gold Mining Outlook by Steven Jon Kaplan
KAPLAN'S CORNER: Question: How would you interpret the trading activity in gold on Tuesday?
Answer: Locals on the COMEX waited until the European markets had closed so that a small amount of money was sufficient to probe the area just below $270, looking for sell stops. When few were found (hardly any speculators
are long gold), the market partially rebounded. With virtually no remaining sell stops and few technical targets on the downside, the rebound is likely to be swift and decisive, with powerful physical buying continuing to provide strong worldwide support for the yellow metal. Just as importantly, the recent weakness in the U.S. stock market is almost certain to lead to a sharp drop in the
dollar, which will also push gold higher. There is a classic delay pattern at work: first bonds fall, then the stock market drops, then the dollar plunges, then gold soars, then commodities surge. We are in the early stages of the second phase of this pattern.
*****In his opinion, start of #2 with #4 coming round the corner in the future. When #4, is what we all await.
<;-)


Peter Asher (05/25/99; 21:20:07MDT - Msg ID:6736)
Steve, Gandalf
Do you see the possibility of a selling climax in the GCM9, at the begining of the last hour today? Looks like a 20 minute reversal on very high volume.

USAGOLD (05/25/99; 20:37:01MDT - Msg ID:6735)
Stever.......and All.....
I have read a few of your most recent posts in connection with your confrontations with the paper money crowd, and I wanted to see if I could offer a thought or two to help you deal with this problem. As you may have guessed, I have spent a good many years dealing with the problems you describe in many different public and private venues.

For what its worth, I have to say that I have pretty much given up on converting people who have their heart, mind and soul in the paper money game. It is a hopeless cause and rewardless effort. Frankly, I see as a waste of time and my suggestion would be to leave it alone. At the same time, you will find many people in your life who agree with your position on gold (as well as many related matters), and these are the ones you will feel at home with. Not everybody is meant to own gold, and not everybody should. Somebody will have to take the losses when the paper money mythology goes up in flames, and I have come to the realization that it is not my function in life to make everyone a gold owner.

My more immediate concern is to help those who have decided on their own that they want to own gold. If you notice, in everything we do at USAGOLD and Centennial Precious Metals -- in all our advertising and pr efforts, even in the ABCs of Gold Investing -- we assume that the people who have contacted us already have an interest in gold. We are not missionaries out to convert the world. We are brokers out to serve our clientele and fellow gold advocates, or individuals who are at least predisposed to looking at its merits.

I can remember a recent meeting with a husband and wife. The wife had purchased gold a year previous to our meeting over her concern with the monetary system and Y2K (She was ahead of her time.) She was happy with owning gold and her husband was upset (He was a paper money advocate and stock market investor.) I didn't know his position going into the meeting but as soon as we started to talk, I knew that she had carted him into the office so that I could convince him that gold was a good item to own. He started out by trotting out a litany of arguments he had no doubt read in recent editions of the Wall Street Journal. He ended by asking me when gold was ever going to go up -- and he did so in a very challenging way. She said nothing. Just looked at me imploringly. What I said, no doubt surprised her. It surprised him even more.

I said, "I am not here to convince you that you should own gold. I don't particularly care if you own gold or not. This is your decision. The health of my business does not depend on whether or not you want to own it. There are many people who do. So if you don't want gold, its fine with me. If you would like to sell what you've got, I will buy it from you."

I stopped with that and looked at him waiting for a response. He fumbled and fidgeted a bit. Then he surprised me. He laughed. From the belly. And shook his head.

"Never thought you'd say something like that," he said.

That was that. We became fast friends. They kept their gold and bought more. So it goes.

On the price of gold and viewing gold as an investment (as opposed to a means to asset preservation), let me just say that if you ever look at gold graph drawn on a logarithmic scale (as opposed to linear graph), you will see something very interesting. Gold can be held in a narrow range for very long periods of time. This reflects the role of governments and central banks (particularly the U.S. gov and cb and it now appears the British gov and cb) in keeping the price in check. A titanic struggle takes place between the governments and free market gold until such time that it can no longer be restrained. There is just so much paper money floating about when weighed against the available ounces that it can no longer be held in check. It then explodes in value producing multiples in price from what becomes a very low starting point. I believe we are in one of those periods now.

The logarithmic type graph shows this velocity well. I am sure you have heard many times that in the early 1970s gold rose five times and in the late 1970s over eight times again from its chart low. This is when gold plays catch up. Had it been allowed to move in a free market atmosphere, these price rises would have been more subdued and stretched out. As it is, they occured rapidly in two to three year periods.

Since the mid 1980s gold has been held in check by the central banks and governments (through various machinations discussed thoroughly here and elsewhere) as well as the fortunate occurrence of a artificially restrained oil price which has allowed western governments to print money and then have the inflation rate absorbed by the oil producing states. Now, in my view, these restraints are becoming unravelled and this is having an effect on all markets including stocks. The latest maneuvers on the part of the Bank of England have the scent of desperation about them and could very well be the final volley. If you don't believe me, look at the pound is doing. How long before the dollar follows suit?

Remember the story of the old-time stock broker from Kansas I told last week. I asked him what happened when stocks started down in the last big bear market of the late sixties and early 1970s. He said nothing specific happened -- no precipitating event, no crash -- they just came to work one morning and the market started down and didn't come back. We may be seeing just that today. The circumstances are indeed very similar -- rising inflation, rising oil, the end of a long bull run in stocks (the Go-Go Sixties), corrupt government, U.S. involvement in someone else's civil war, a long and frustrating restraint of the gold price, etc. etc. These are not historical coincidences, they are the children of social, cultural and economic excess -- results of the pendulum having swung too far in one direction. As Clarence Darrow said: "History repeats itself. That's one of the problems with it."

Now back to our graphs and I will leave this drawn out discussion alone for the rest of the evening. I can remember gold's darkest hours back in the early 1970s when the Merrill Lynch crowd was telling us it would never go above $50. It prompty went to $200. Then I remember the IMF and U.S. Treasury gold sales when they drove it from $200 to $100 amidst press propaganda that gold would go to $5 (if you can believe that) -- according to one Wall Street pr artist. It overcame all that and went to $800 instead. When you understand those gold spikes on the logarithmic chart for what they are, you come to the fundamental realization is that the only way to own gold is to own the physical because only sheer luck would be responsible for getting the timing right. The same thing with gold stocks. Own the good ones that are not leveraged against gold and have a good history. Own them because they are quality, not because they represent leverage and be prepared to hold them through thick and thin. When the anti-gold cartel breaks down, and it will they will provide profits you had not though possible. But do not play this market for the short run, because if you do you could end up cannon fodder for the shorts.

Thought I'd pass along the benefit of long experience for what its worth. Don't forget, the turtle finally won the race because of his dogged determination. The speedy and arrogant hare was too wound up in himself to understand that he just might lose afterall. Something to remember when the stock and bond markets have cratered and gold has had its day -- the day you get to turn the tables.

For those who say this has been an exceedingly long and dark period for gold, I would counsel that these cycles play out over many years period of time. The stock bear market that started on a constant dollar scale in 1965 did not come back to the level from which it first descended until 1982-83. Similarly, the stock market high of 1929 was not reached again until 1942. Bear markets can be long and merciless but always darkest before the dawn. Gold's overdue, Steve, but I still wouldn't go out and load up future's contracts or call options.

Sorry about the long post. It didn't start out to be this long. Just happened. Hope you gained by it.

Jade (05/25/99; 19:54:44MDT - Msg ID:6734)
From AOL's point of view, Gold is on a Tear!!!
I bought most of my physical Gold at about 295. Now if I were to sell today I could get about 281. So I am presently down about 14 bucks. Now lets look at AOL. AOL reached about 170 two months ago or about two shares of AOL for one ounce of Gold. I was fortunate and sold my AOL at 160. Most of the people in the market are still holding onto their AOL and today it was 115. So two shares are now worth 230 bucks. So in reality my Gold is holding up very very well, while the two shares of AOL can now only buy two thirds of an of Gold ounce. Now I have used AOL as the example here as AOL typifies the stocks held by the six million day traders that work the market every week. So the thought that really strikes me, has the devaluation already started as most of the extra money today has been converted to stock, ala AOL, Etc. So maybe the Asset devaluation is underway. My holdings in Gold are keeping me even, or better, if you look at Gold through the eyes of AOL stock, Gold has moved up in value rather dramatically.

Go Gold.


Jade (05/25/99; 19:54:03MDT - Msg ID:6733)
From AOL's point of view, Gold is on a Tear!!!
I bought most of my physical Gold at about 295. Now if I were to sell today I could get about 281. So I am presently down about 14 bucks. Now lets look at AOL. AOL reached about 170 two months ago or about two shares of AOL for one ounce of Gold. I was fortunate and sold my AOL at 160. Most of the people in the market are still holding onto their AOL and today it was 115. So two shares are now worth 230 bucks. So in reality my Gold is holding up very very well, while the two shares of AOL can now only buy two thirds of an of Gold ounce. Now I have used AOL as the example here as AOL typifies the stocks held by the six million day traders that work the market every week. So the thought that really strikes me, has the devaluation already started as most of the extra money today has been converted to stock, ala AOL, Etc. So maybe the Asset devaluation is underway. My holdings in Gold are keeping me even, or better, if you look at Gold through the eyes of AOL stock, Gold has moved up in value rather dramatically.

Go Gold.


beesting (05/25/99; 19:35:01MDT - Msg ID:6732)
Peter Asher and all.
Just had time now to read your #6703 posting of last night. In my humble opinion your potential client is a very smart person. How many can take their winnings home and use it for something constructive?

DJIA again down today.(125 points)
Cannot for the life of me figure this Gold market,but buying with both hands and both feet.I know of places in this world where people have never heard of "the spot price of Gold",but would gladly exchange goods they produce for physical Gold.
I would say less than 5% of the world population has access to "The high tech world".But,they know what real money is,GOLD! 190 countries and very few people know in their heads exchange rates for countries other than their own.

For all on getting along with each other this is my mothers Golden advice,which has worked well for me:
"If you can't say something nice don't say anything at all."
..........beesting

TownCrier (05/25/99; 16:55:29MDT - Msg ID:6731)
Will the Real Larry Summers Please Stand Up?
http://www.users.dircon.co.uk/~netking/finan.htm#thotpot
Some background on the new Treasury Secretary from Colin Seymour's Financial Pages

Sample:

"I've always thought that underpopulated countries in Africa are vastly underpolluted" - Lawrence
Summers, chief economist of the World Bank

TownCrier (05/25/99; 16:43:35MDT - Msg ID:6730)
Brazil rumors, Argentina woes rattle LatAm markets
http://biz.yahoo.com/rf/990525/2r.html
``The newspaper report fell like a bomb on the market that was already nervous,'' a forex trader at Lloyds Bank in Sao
Paulo said.


TownCrier (05/25/99; 16:36:58MDT - Msg ID:6729)
Transcript from 60 Minutes Y2K Story
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000rqn
Timebomb 2000. For those who missed it last Sunday.

TownCrier (05/25/99; 16:31:06MDT - Msg ID:6728)
FWN Closing Market Report
[B] NY Precious Metals Review: Jun gold dn $2.1 after 20-yr low
By Darcy Keith and Melanie Lovatt, Bridge News
New York--May 25--COMEX Jun gold futures settled down $2.10 at $270.80
per ounce after dropping under $270 to a fresh contract low of $269.60,
which was yet another 20-year low on continuation charts. The fall was
blamed on fund selling, which appears to be getting heavier and heavier as
gold plunges to yet lower prices. Aside from the poor technical picture,
sentiment in the gold market is staying stubbornly bearish since the UK
Treasury announced May 7 it will sell over half of its gold reserves.
* * *
Gold fell on fund selling as players probed for sell stops, which were
believed to be triggered near the previous contract low of $271.70 seen
Monday.
The fact Jly managed to close above $270 could suggest that this support
level remains intact, said one dealer, although he noted that this is more
because of psychological factors than any key technical level.
One broker noted that the market is already very short gold, which has
made gold susceptible to a short-covering rally. That could happen, he
suggests, near Jly 6, when the UK Treasury plans to make its first gold
sale after announcing it will sell off 415 tonnes of its 715 tonnes in
gold reserves. The market has been selling off in anticipation of the UK
announcement, and once it finally takes place, some relief should come, he
said.
The weaker tone in the US dollar against the Japanese yen and Euro
today possibly helped to keep gold prices from selling off further, but
the dollar's strength in recent days is still encouraging some players to
go short.
However, Leonard Kaplan, chief bullion dealer at LFG Bullion Services
in Chicago, said that gold is currently a "very bear market" and
consequently is not really responding to any positive news.
Traders noted that statements today by Governor of the Bank of
England, Eddie George, suggesting that the gold sale has been overdone
were largely "ignored." (Story .14965). "It's a bit like bolting the barn
door after the horse has bolted," said one.
LFG's Kaplan noted that gold is probably going to make new lows
everyday, unless large speculators reverse their heavy short positions. He
noted that they will not exit shorts unless gold breaks above upside
resistance, seen at $275 and $278 in the cash market.
"We probably won't have support for the next $100--looking back 20
years on a chart is worthless," he said.
However, he noted that the current price could be much lower if there
had not been Australian producer hedge buy backs and increasing demand
from the Middle East.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN

Crossroads (05/25/99; 14:19:38MDT - Msg ID:6727)
Perception Is Everything"
I deal with numerous people throughout the course of each day, as I'm sure many of you do also. For the most part the situations that I get in on are either technical in nature regarding a product we've sold or a disgruntled customer or even a discouraged employee. I have become a student of "excellence" in customer service. When I am faced with situations that involve a persons feelings it is imperative that I take those feelings into consideration. It seems that it has become typical for the human race to react out of emotional responses and it makes me wonder. Have we gone to an extreme or am I overreacting?

I think about the pace that information travels and how available it has become, also, how many times I have found myself in the way of those who are now called "rage drivers" and I see how fast we track getting from place to place. I watch people drive by me on the way to work and it seems they have hollow empty stares in their eyes as they move on to tailgate the next available driver. I feel like a bug as I look in the rear view mirror about to be squashed by one who is obviously in a much greater hurry than I am. I notice that people are quick to rationalize or justify what is said, and we suddenly accuse others of that which we thought he or she did to wrong or shame each of us. We seldom give a thought to the fact that each one of us is a contributor to the outcome of everything that we're involved in. We have become obsessed with our immediate surroundings and the area that we are occupying at this very moment.

I wonder, does the more information we have at our disposal, cause us to begin a process of inward focus, concentrating more on ourselves hoping to bring some order to something that seems so vast and chaotic. The bigger "it" gets the more inward we think. Almost like self-preservation if you will. Could it be that the results of this sort of action causes us to react emotional, irrational and less mature, almost to the point of barbaric? Think about it. How confusing has it all become? How can we keep it all together? The here and now, the future, now get out there and get rich, only to be blinded by the lust patterns so that we can no longer see the effect we might have on other individuals.

It seems the more we try to bring around the perfect environment, the more chaotic things get. The thought process of those that seem to believe that we can obtain higher level thinking as they have on the make believe world of Star Trek, obviously lacks understanding of the individualism that still exists in this world, as evidenced here.

We have millions of external inputs stimulating our thought processes today. Is it any wonder that we have serious misfires and mental overloads that are taking place all around? These massive amounts of inputs may be the result of technology and progress or it may be that there is an attack on the system we've all become accustomed to and grown so comfortable with, but for whatever reason, it's a phenomenon that appears to have gripped the whole world.

I have come to the conclusion that, in general, we as a people of this world, not just the US, have become the products of shock treatment and it has caused us to be emotional reactionaries as opposed to logical thinkers. Obviously some are not affected at all and some are less affected than others, but there are many out there who are affected to the extreme. I call it hyper-sensitivity. The mettle that keeps our integrity intact has eroded and given way to hysteria, as Aragorn III cautioned earlier at this site, to not become too paranoid. These are not his exact words but that was my take on the subject. However, I can see, at least from my perspective, how easy it is to lose site of anything to hope in when so much confusion abounds. Consequently that seems to be the very reason we are all here, at least when we talk about the hope in the economic world, gold does offer a stand in one area of so many great odds.

Which brings me to the whole jest of this long-winded dissertation. I tell my employees that "Perception is everything!" As you have read this story, you have formed a perception of me. Likewise I have a perception of what I've written, as do you. Then there is my perception of how you will perceive what I've said…confused yet? Precisely the point! We not only need to have a grasp of the language being used along with all of its slang, but we have to have an even greater understanding of the logic that the writer is implying. Along with every written text goes some application of logic. If the writer incorporates it but the reader doesn't process it and he reacts because it felt like a personal attack, well, I think we can all assume what will happen next.

As I do with my own family, I do here, demonstrate objectivity by separating the comments made by the individual saying them, from what may or may not be their emotional reaction and then display integrity by not reacting with hyper-sensitivity. This forum has grown from diverse personalities and social environments. Some of us know a lot about gold and economies while others absorb their thinking, however, others know about other things and we process the two worlds of information and hopefully everyone can come away wiser for the sharing of this information. As it continues to grow ever wider, I encourage everyone, including myself, to spend more time processing than we do reacting. Have a perspective that offers objective thinking as opposed to subjectivity. It seems that there is a lot of quick jot type communication that goes on here and that often times leaves gaps in what is actually meant. So a greater amount of thought is required when interpreting or more description of what is meant must be written. Especially when communicating in the arena that involves the personal side of issues.

I will preface this…neither person nor article written at this post is under scrutiny or personal attack in this document. As so many of you bring expertise to this site with the knowledge you have of the world currencies and economies, I just wanted to emphasize what it is that keeps a good discussion going….Objectivity!

To coin a phrase "Please continue"


Golden Vanity (05/25/99; 14:01:23MDT - Msg ID:6726)
Peter Asher
Sir Peter,

A lot of money in the market will never make it out..it will simply disappear...poof..
never to be heard of again. There is really no money there at all. It's been spent on
66,000st ft houses and million dollar dinners.
I've watched 50% of AMZN's wealth disappear in (4) weeks.


Golden Vanity (05/25/99; 12:37:18MDT - Msg ID:6725)
TownCrier (5/25/99; 9:09:38MDT - Msg ID:6714) Argentine 'Domino Effect'
"The study at the following link presents empirical evidence that when central banks sell gold reserves, their country's currency will devalue a little more than 1/2% for every one percent of gold reserve reduction. As the Bank of England proposes to sell 415 tons of gold out of 717, i.e. 58%, the British pound stands to devalue by 29%".
If this is true......
Argentine government sold ALL OF ITS 124 METRIC TONNES OF GOLD RESERVES.


http://www.gold-eagle.com/analysis_98/vronsky020798.html

then the currency is going to (0)
GV

Peter Asher (05/25/99; 11:55:25MDT - Msg ID:6724)
Tomcat,
Preface my answer with "yes, and I would also say

Peter Asher (05/25/99; 11:51:33MDT - Msg ID:6723)
Tomcat, you asked last night,
<And Peter Sir, doth thou think that perhaps men bonded by the heart and mind help create a spirit
that lives unto itself? >

I would say that: We are spirits who, living true to ourselves, become men bonded by the heart and mind.

Peter Asher (05/25/99; 11:44:28MDT - Msg ID:6722)
Follow the momey
<TownCrier adds: "When the money comes out the stock market, it has to go into goods and services. Price inflation next??"

Not necessarily. Money can go into the bank to be loaned out for other people to spend on G&S, or, for other peoples margin accounts. It can go into Bonds and be spent on government welfare or corporate finance. It can go off-shore and inflate someone else's economy. It can go into hiding for Y2K and inflate nothing.---- It can also go into PMs and only inflate the owners sense of well being.

However, quantitatively, nothing really changes. The money that Joe takes 'out' of the market is the Money that Jim 'puts' in! No different then if Jim did something else with his money and Joe just kept his stock certificates.

What changes is, who has how much of the money to spend. The "Wealth Effect" is the psychological factor that makes Joe feel like spending all or part of his stock sale proceeds because a portion of them came from Jim's savings.

OverHerd (05/25/99; 11:28:53MDT - Msg ID:6721)
Correction to #6720
In the first paragraph it should read ...failed to mention that some of the systems are...
Sorry in a rush and not proof reading enough.

OverHerd (05/25/99; 11:21:49MDT - Msg ID:6720)
Questions and a possibility
Questions and a possibility
A few weeks ago I had seen a report on CNN Headline news, about 3 O'clock in the morning, that people were upset with the NERC claiming that the agency was essentially lying. The problem it seems is that the NERC has a term called, Exception reporting, where they claim that all systems are Y2K compliant but fail to mention that so of the systems that are expected to be compliant at a later date. Has anyone heard of this or seen it in practice? Is it used in other industries in their compliance reporting?
Yesterday I was talking to a coworker whose home is in Missouri told me of how he had called Kansas City P&L to get a 220 line put in and was told it would be two days. It seems they were running a Y2K test and was told that "it was not going well". Are problems like this occurring elsewhere in the US, the world?

On the subject of the UK's going towards the use of the EURO, one thing has crossed my mind. Now I may be totally off base here but is it possible that if a 30% gold backing is needed for entry and the UK had only 15% before the sale and 7% after the sale. They may be trying to drive their percentage so low that it would be next to impossible or economically impractical to regain that reserve to enter even if the citizenry wanted to?


Cavan Man (05/25/99; 10:39:10MDT - Msg ID:6719)
FOA & Another
I am new to the Forum and the subject near and dear. With the help of this Forum I am learning a great deal. Many times in reading your posts I am uncertain as to the meaning. Could you recommend a short reading list for my continued enlightenment and edification? Many thanks!

FOA (5/25/99; 10:05:24MDT - Msg ID:6718)
Reply
Dorchester (5/25/99; 9:11:21MDT - Msg ID:6715)

No! No, Dorchester,
I did not mean my post to you in such a light. You have read outside the spirit it was offered in. If others have done the same, it is withdrawn. All of the terms were in a general sense, as applied to everyone. Trust, me, Another and myself have received serious public criticism with little impact to us. Your words were constructive and analytic. Please continue. FOA

TownCrier (5/25/99; 9:30:58MDT - Msg ID:6717)
Eddie Georte: British Gold Sale "A Very Sensible Portfolio Decision"
http://finance.uk.yahoo.com/news/19990525/businessday/busstory142283.html
"He (Eddie George) dismissed accusations that the policy was a device to prop up the ailing euro as 'conspiracy theory gone to extreme'.
----------

TownCrier says: "Forget buying euros, dollars and yen. For the best portfolio returns try internet IPOs!"

And...

Towncrier asks: "What happened to the days when central bank reserves existed to defend one's currencies, not garner the best returns?"

Further...

TownCrier suggests: "When confusion is what you wish to encourage in the public mind, add a new conspiracy theory to the mix." (I'm trying to remember who said that the sale of gold was meant to prop up the euro?)

TownCrier (5/25/99; 9:18:01MDT - Msg ID:6716)
Thomas Friedman: From Cold War to Globalization
http://www.nytimes.com/library/opinion/friedman/052599frie.html
"The more Mr. Blair prepares to abandon the British
pound, the more he speaks like Winston Churchill."

Dorchester (5/25/99; 9:11:21MDT - Msg ID:6715)
FOA (5/25/99; 7:01:54MDT - Msg ID:6708)
It seems, from the following words, that you have taken offence at my first post regarding cultural values:

<I think it would be imprudent or harsh for me to just comment or reply to your post. Or to clarify what you suggest of our origin.>

Please understand that no slight or insult was intended, and that I have absolutely no interest in trying to expose or clarify what your origin may be.

After reading many of your posts over several months, and after reading as well the concerns of others who are invested in paper assets, it seemed to me that the latter group probably had something to learn from you that, to date, you had not chosen to share because to you it was less important.

Clearly, for you some boundary was crossed as I attempted to explore how this had come about. I offer my sincere apologies for offending you or any others who may likewise have been made uncomfortable, and hope that we can in future engage in a mutually respectful and enlightening exchange.

That aside, I do thank you for your thoughts on my situation, and for suggesting a practical course of action I had not considered.

Dorchester

TownCrier (5/25/99; 9:09:38MDT - Msg ID:6714)
Argentine 'Domino Effect'
http://www.nytimes.com/yr/mo/day/news/financial/brazil-marketplace.html
"When news of pressure on the Argentine peso started to scroll
down the computer screens on trading floors here last week, traders mainly
chuckled, stoking the historic rivalry between Brazil and its neighbor to the south.

They're not chuckling anymore.
------------

TownCrier asks: "If Argentina sneezes will the rest of Latin America catch a cold?"

TownCrier (5/25/99; 9:02:06MDT - Msg ID:6713)
Greenspan says wealth gains driving spending
http://biz.yahoo.com/rf/990524/bgo.html
WASHINGTON, May 24 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Monday that
U.S. consumers were using capital gains from both the stock market and equity built up in their homes
to fuel strong spending.
----------------

TownCrier adds: "When the money comes out the stock market, it has to go into goods and services. Price inflation next??"

TownCrier (5/25/99; 8:53:41MDT - Msg ID:6712)
BOE's George says U.S. economy needs to slow down
http://biz.yahoo.com/rf/990525/kg.html

Overheating a problem.

USAGOLD (5/25/99; 8:43:21MDT - Msg ID:6711)
Today's Gold Report: Y2K Hits Stocks, Physical Gold Buying from Middle East Continues
MARKET REPORT(5/25/99): Gold continued to drift lower in today's early going
despite dollar weakness and fears that the Fed might be forced to raise interest rates. This
morning for the first time, I saw a headline identifying Y2K as the culprit for declining
stock values. Banks, airlines and internet stocks -- all took a beating yesterday as concerns
surfaced that the bug might be more of a problem than formerly believed. The move to the
downside yesterday began in the financials when a top Wall Street analyst "made the
unusual move of recommending that investors sell multinational bank stocks because of
year 2000 computer concerns and other issues." The big Wall Street financial firms also
have extraordinary multi-billion dollar derivatives' exposure highly dependent on computer
trading programs that could be effected at some level by the Y2K bug.

Reuters reports that in last night's London market gold stayed in a range despite mining
companies closing out forward positions and continued strong Middle East demand. Eddie
George, Governor of the Bank of England, said that the gold markets had pushed the price
of gold too low in response to the UK government's decision to sell part of its gold
reserves, according to Bridge News this morning. Standard Charter Bank reports that the
latest COMEX commitment of traders (5/18/99) shows that the net short position for hedge
funds went from 20,000 contracts to 80,000 contracts in a two week period. "The market, "
says Standard, "initially shrugged this off as dealers pushed the price lower looking to
spark a move to $271 support. However one of the recent sellers turned buyer below $272
helping turn the tide."

That's it for today. Have a good day, fellow goldmeisters.

The featured article in this month's News & Views centers on government finance in an
article entitled "The Financial State of the Union." I'm sure it contains many
surprises for our readers. There is a great deal of difference between what our government
leaders are telling us and the reality with respect to the government's books. This issue is
one or our best and most informative. Please go to our ORDER FORM or call Marie at
1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly newsletter
-- and introductory packet on gold ownership.

fox (5/25/99; 7:19:14MDT - Msg ID:6710)
south african gold mine stock
fox
at this moment the price of the DRIEFONTEIN ( drfny) stock on the Brussels stock exchange is at a ridiculous 3.10 Euro.
The merger of Goldfields and Driefontein created the second greatest and richest goldmine in the world.

ET (5/25/99; 7:18:50MDT - Msg ID:6709)
Pioneers

Thanks Jeff for the link and Mike for your thoughts concerning these 'virtual' groups. Having participated in a few over the last few years I can say that this forum in particular has been the most informative and interesting of all of them. What I think is great about this bunch is everyone's diverse backgrounds. If we all thought the same and agreed on everything, little would be learned. Instead, we have people here of all ages and from many different parts of the world all contributing their own 'as I see it'.

To all those lurking, I would also like to encourage your participation. I am no gold expert as many here could attest. My interests over the last 30 years have been economics and the general study of money. I found my way here after reading Aragorn's and Another's stuff at Kitco and was fascinated by their thoughts. Over the years I have found there is a general lack of understanding amongst people concerning this issue of money and it was great to find some others taking the time to explain how things work. The last few years I have attempted to get a handle on this y2k thing after learning about it from a couple of Air Force guys in a bar in Colorado Springs. At first I thought they were nuts but I have come to find out they were simply the pioneers of this new knowledge. Amazing what you can learn in a bar. This forum is my 'virtual' bar.

To all those that have contributed I offer my thanks and I'll buy the next round. To those yet to contribute, I invite you to come in and pull up a chair. I think the next year or so is going to be the most interesting of my life as huge changes appear on the horizon. I'm fortunate to have access to so many great minds as I find here.

I'm off to Indiana tomorrow for a few days of golf and general carousing before the 500. I'll be taking no calls. You can find me in Bloomington at the Cascades golf course or Nick's downtown sampling their stromboli. If there is anything left of me Sunday I'll be in Indy for 'Gentleman, start your engines'. Happy Memorial Day to all!

ET



FOA (5/25/99; 7:01:54MDT - Msg ID:6708)
(No Subject)
Dorchester (05/24/99; 13:06:07MDT - Msg ID:6668)

Dorchester,
I think it would be imprudent or harsh for me to just comment or reply to your post. Or to clarify what you suggest of our origin. Therefore, I will offer what I feel and what I see. Much of it learned from Another.

What you have said, not only strikes at the heart of who we are, but where all of us are traveling. It could be said that it is a snapshot in time. For you, I know that picture represents the moment of the entire journey. Truly, it is not.

The worldly knowledge we have gained during our travels in life does represent part of our wealth. Sometimes a price is paid in real things so that people gain in experience equal to the history they never lived. The scale of such wealth is measured by the loss one takes to gain that
moment in time. For many, this moment pays a lifetime of return!
Some become lost in this moment and never find the path that leads from this forest of emotions. Trapped are they by knowledge because fear rules the heart. The mind is indeed willing but the feet will not move. So, as it is in the poem "Pioneers", so must it be for you, the first step taken will thus define the trail.

Dorchester, others would divide the assets, they wish to redirect into ten parts. Sell the first ten percent and convert it to the wealth of the ages. With this move, mentally, the path becomes clear. As gold rises each five percent, sell the next ten percent and so on.

"Good fortune follows a determined path". Therefore, make your trail clear, for yourself first, and you will not walk this journey alone. FOA





Tomcat (5/25/99; 6:35:54MDT - Msg ID:6707)
Cavan Man

Tis my error, kind Sir. I hope you accept my apology.

Cavan Man (5/25/99; 5:45:51MDT - Msg ID:6706)
Tomcat
Thank you for the compliment. I will investigate silver also. By the way, my sobriquet is "Cavan Man" not, caveman. Cavan is the county from which my family hails (Ireland).

Peter Asher (5/25/99; 0:03:39MDT - Msg ID:6705)
G'night
Two typos equal one bedtime.

Peter Asher (5/25/99; 0:01:29MDT - Msg ID:6704)
beesting
I just checked S&P and Dow overnight futures and thero is know sell-off, everything could have a dipster plateau tommorow.



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