 Centennial Precious Metals Gold coins & bullion since 1973 Denver, Colorado 80246-0009 We educate first-time investors! |
for quotes and purchase information.
|
ARCHIVED DISCUSSION FROM 12/26/1999
All times are U.S. Mountain Time
View Yesterday's Discussion.
Number Six
(12/26/99; 23:53:23MDT - Msg ID:21681)
Oil part three
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002755
nt
Number Six
(12/26/99; 23:51:28MDT - Msg ID:21680)
Oil part two
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002752
nt
Number Six
(12/26/99; 23:49:47MDT - Msg ID:21679)
Oil part 1
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=00274x
nt
R Powell
(12/26/99; 23:42:40MDT - Msg ID:21678)
***MY TOP FIVE EVENTS for GOLD MARKET 1999***
Europe unites under one currency.
A single currency has gained acceptance during 1999 to serve the monetary
needs of eleven European countries. It should be noted that this new "Euro"
is partially backed by gold unlike other fiat currencies. Speculators
espounding that gold is merely a commodity appeared dumbfounded.
The Bank of England sells gold.
The world financial community has been stunned by the Bank of England's
announcement of planned gold sales before the actual sales. Fiat gold prices
dropped in anticipation almost guarantying the English people a lower selling
price for their gold. Pro-gold investors including GATA point to the
announcement as another example of market manipulation to keep the dollar
value of the yellow metal depressed.
Washington Agreement announced on Sept. 26.
European central banks led by the German and French backers of the gold
based Euro have agreed to limit gold sales and gold leases over the next five
years. The agreement limits sales to 2000 tons (400 tons per year) and
restricts lending and derivative activity to current levels. Fundamental
speculators who base price predictions on supply and demand estimates now
forecast a bullish move for the price of gold as the unlimited supply from
central bank sales has been curbed. Political observers called the
announcement a defence of the gold based Euro
while those with short speculative positions in the gold market hurried to
contain their losses while the dollar price of gold soared.
\ Bank of England Sale oversubscribed.
The BOE's September gold sale was more than eight times oversold
revealing a
desperate need for physical gold. Speculation abounds that mining concerns
and unknown players of the 'gold carry trade’ are attempting to offset hugh
losses incured by shorting gold in the past and, by means of the futures
market, into the future. The names Ashanti, Cambior and Barricks have been
mentioned as holding short futures positions entered with the assumption that
gold prices would not rise. What remains unclear is the amount of these short
positions, to what extent they can be covered or rolled over (refinanced)
into the future and to what levels the price of gold will rise to
accommodate these needs.
Commodity Funds hold long gold positions.
Figures released by the Commodity Futures Trading Commision on November
19, 1999 revealed non-commercial or commodity fund long contracts held at
28090 and short contracts held at 25319. This net long speculative position
for the funds- a most unusual opinion not seen for some time- reinforces the
conception of fund managers as trend following players often ignorant of
market fundamentals. These are big money investors with the capacity to move
markets over the short term, with decisions based solely on technical
analysis- charts. These managers have little or no desire to study or
understand market forces. The chart shows the trend- the fund manager
follows.These are not market manipulators ( although gold market manipulators
most assuredly exist). These are simple chartists who happen to be playing
with hugh amounts of money but care not whether they are positioned on the
long or the short side of any market.
General Review
This past year has shown that gold is money! Backing the Euro with gold
and defending the same with the Washington Agreement emphasizes this fact.
More importantly this agreement implies limits on the supply of gold which,
with central bank sales and leasing, had been unlimited for years. This
should refocus the psychology of all gold investors back to the basic
fundamentals of supply and demand. No market can be manipulated forever.
Simply stated, gold is money and supply is not unlimited.
Number Six
(12/26/99; 23:41:58MDT - Msg ID:21677)
Very Important Oil Post - if oil skyrockets, what happens to gold/silver?
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002755
I've been posting recently on Oil (I have about $10k invested in long oil call options in addition to gold and silver) and have been corresponding with RC and others on the embedded chip problem in the oil/power/nuke industries...
This is his final analysis, just before the y2k CDC.
It bears very careful reading...
Cheers, Andy aka No. 6
P.S.
This is the third part. I will post all three links.
============================================================
Y2K & Oil A Final Evaluation
Part 3 -- PROJECTIONS (for rollover and beyond)
CRUDE OIL: The following is based upon statistics and previously reported problems and failure ratios applied to general statistics. We'll look at each of the 4 areas that we previously examined only now we'll look at projections for each. From there we will draw overall conclusions that become our expectations for how the rollover might proceed for oil.
We are assuming that every other aspect of the national infrastructure experiences no problems. By this we mean that we are assuming that there is no problem with the national electricity grid and no regional or local power outages where refineries or ports are located. We assume the phones will be okay. We assume the water supplies to refineries are okay. We assume there are no problems with the banking or financial market sectors. We assume that all the vendors that supply support products to oil refineries, ports, tankers, and pipelines and oil wells are all okay. [that is a tall assumption, isn't it?] In other words, we are really removing from our equations any other potentials for trouble that are beyond an oil company's control. We want to try to measure just the main impact for the oil industry itself.
OIL WELLS and Crude Oil Production levels.
Given that 80% of USA crude production is subject to the Y2K embeddeds problem we realize the mathematical factors.
Small oil wells…no problem 20% of USA crude oil production or about 9% of total US needs will not be affected unless pipelines fail.
Large oil wells… With 50 to 100 LSES for each well, and a 30% to 50% LSES fail rate per well… we can expect 15 to 30 LSES to experience failures. This however does not necessarily mean that all the failures will shut the well down. In fact, we suspect that at least 1 system failure and probably upwards of 5 failures per well that can/will (?) cause shutdowns. This will not be for every large well as some wells newly developed had compliant equipment already. Still, in theory this should affect nearly 80% (give or take some) of domestic oil wells. Some wells may have manual overrides that can still work but others will not. The greatest problems will be with the large offshore wells. The Large Oil Well problem could affect as much as 36% of all oil supply needed daily by the U.S. (However, if Y2K affects other industries severely, there may be less need demanded).
For purposes of projections, Let us assume a mild scenario of only 1 in 10 oil wells suffers catastrophic shutdowns that can't be fixed in a few days. We know that 46% of our needs are met by US producers. Of that 46% … 36% is from large oil wells. If 10% of supply is lost from those wells for indefinite or prolonged Periods we would then have a 3.6% supply drop to demand ratio. So we have a strong threat to the 36% of US oil supply going to refineries from US producers. A 10% reduction would mean a 3.6% drop in supply. This is roughly the equivalent of the 1973/74 Arab oil embargo but this is not the only threat. A 10% loss estimate is especially optimistic considering the mathematical odds but we can hope that parts are available in some cases, and workarounds available for other and the remainder of the 90% simply luck out. That would leave us with a 10% reduction. This, I say again, would be extremely optimistic given the mathematical odds based on the prior testing that gave us the failure ratios we are working with.
Foreign oil well production:
What goes for America, also works for oversees oil-producing nations. In foreign oil producing/exporting nations we find similar problems. This is apparently true for those cities that were highlighted in the latest US DoE "watch list" dated at the first of December. This list includes Venezuela, our number one source for imported oil. It also includes Columbia, Nigeria, Iran, Iraq, Russia and others. For the links and snippets see the old thread: http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001zSh
See this link to the separate thread on Venezuela and the link to DoE on this nation. http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001zHG
In addition, you will recall the other day's Bloomberg Financial News story citing UN officials reporting that Gulf Oil producing nations were not compliant. Later the story was downplayed and the spinmeisters came out of the woodwork to claim all is A-OK with oil. I've now had 3 seen three separate sources from oil insiders saying Saudi Arabia is in deep trouble and is not expected to make it even with their oil sector.
Folks, if the Persian gulf nations don't make their oil sector compliant and it goes Down, there is no need to continue this analysis. There's no need to even have this forum anymore, because if they go down, and hard as reports suggest, combined with all else… you can kiss this nation goodbye. A 70% to 90% loss of oil would be the death knell of civilized society. So, we're going to take a more contrarian view and assume that it won't be that bad.
Let us optimistically assume, that only 10% of the oil production is affected in the Gulf. Let's project the potential problems on this basis. Please see the US DoE summary of Oil-importing nations and their percentage of supply to US needs. See the link: Latest monthly tallies:
http://www.api.org/faqs/
The link found below shows the US Senate figures on annual reports based upon 1998 final totals. (Remember that these are monthlies and fluctuate drastically from month to month.) Risks assessed by Gartner Group analysis supplied to the US Senate by request. http://www.iea.org/ieay2k/newlinks/imports.htm
We will also project that nations on the High level of probable disruptions will lose a third of their export quantities to the U.S based in part upon the mathematical factors plus the indications that those nations are less likely to provide sufficient infrastructure support. It may well be 100% and not 33%. We also then assumed that everyone else except the UK would lose 10%. (UK is not much of a factor anyway for US needs). What we then see here is a total impact of 22.8% of foreign crude oil supply lost to US. This translates out into an 11% of US needs not being met due to foreign interruptions. Combine this with a 3.6% domestic production loss and you have a 14.6% loss of crude oil. This would be far more severe than either of the previous oil-shock situations. Remember also, that I'm arbitrarily being optimistic in spite of the mathematical equations suggesting that all large wells will experience a shutdown failure. The prior testing models are suggesting that 1 to 5 of those systems that fail will be critical shutdown failures.
If only 10% stay down, that would be very optimistic. We note that parts problems are just one of many factors that could delay crude production stoppages. If you noted in the TAVA study, a real problem was lack of replacement parts because vendors were either no longer in business or no longer willing to make that part but rather required buying a whole new customized system. Well re-drilling is another aspect to consider when it has to replace the old well that lost all pressure and cannot be re-utililized. My point is that the odds are very much against just a 10% loss. But that is what we will work with except for high-risk nations known to have tremendous other infrastructure problems and severely behind on remediation.
What is the median expectation for well failures? I'd be more inclined to say a third to one half as being more realistic. If this were so then we'd be looking at a 30% to 46% loss of domestic US sources for US supply needs. Remember though that this reflects the deductions for the 9% factor supplied by non-embedded oil wells that must be subtracted.
So what do we have for an average projection range?
Most optimistic -- 14.6% loss of supply needs. Modest projection -- 30.0% loss of supply needs Median projection -- 46.0% loss of supply needs Maximum… -- 91.0% loss of supply needs
When I review the statistics for the limited testing that was done and then apply that to the overall quantity statistics that we do have, I just don't see anything more optimistic than a 14% loss of supply, although I'd apply a plus or minus range of 5 percentage points…for a minimum range of 9% to 19%.
I also don't think it will reach maximum either. So, I'm still inclined to range it as between a 20% to 30% loss of supply based upon the statistics and insider reports of prior results.
B. Oil transportation -- pipelines, ocean tankers, port facilities
I simply don't have enough data to factor into projections for any problems that might be involved. I have noted the US Coast Guard commander's comments. We've noted that some port authorities are imposing restrictions. We've noted the problems with embedded systems within tankers and of course the loading and unloading systems in ports. Our projections then will assume these problems will only be short-lived. These assumptions may be too optimistic. I just have no statistics with which to crunch numbers for projections.
C. Oil Refining
This is the next big factor in projecting oil issues in Y2K. In doing so we should remember the earlier quotes from the Tava report on its experiences with its own major oil company.
Note the following sequence of failure???
"One of the more troublesome findings was that the analyzers would continue to work but would send erroneous data." (SO, IT WOULD CONTINUE TO WORK…for awhile, BUT…)
"The proprietary networks from the control systems to the analyzers would fail. The inventory and analysis would take 7 weeks and cost $122,000. The conversion for two units would take an estimated 15 weeks and cost $760,000."
(NOTE: TAKE 15 WEEKS!!! That is almost 4 months!!!)
" One piece of equipment successfully made the January 1, 2000 transition and was allowed to continue. Just over a month later, when checked again, the date on the equipment was January 34! "
It took a month to show up!
" The projected risk levels for failure of all the units of these companies was between 60% and 90% if the non-IT parts of the business were not found and fixed."
Well those are pretty high numbers. We know that the US Department of Energy indicated in a 1998 year-end report that the US had 95 refineries operating last year. The report cited above refers to a major oil company that employed consultants from Tava to assist in remediation efforts. Prior remediation found a 60% to 90% risk of failure in embedded systems in these refineries if not fixed. We know, and the oil companies in their 10-Qs, as well as the NIST report tell us that they know they didn't/couldn't get them all. The US Dep't of Commerce's NIST report at the end of November tells us that testing was completely insufficient. So what kind of failure rates should we expect that would close down a refinery?
Now, I've come across information from an embedded systems oil engineer who served as the chief designer of embedded systems for a major oil company. He has over 20 years in the industry and until this past summer was involved in remediating those systems that he designed. He also assisted in helping other oil companies with their refinery embedded problems.
He has indicated that after reviewing the famous DD1 Light oil chat dialogue, he indicated that the projections made by DD are very "possible." He also said:
"No one (in this industry) is putting out accurate information any more, its impossible."
He goes on to say:
"When I was at ______ [Ed. Note: Oil co. name is deleted by this editor] site in ______, [Ed. Note: city location deleted for confidentiality] they said they were shutting down at the end of the year. There are a lot of other refineries doing same. "_______ [Ed note: Oil co. name again deleted] is having problems world wide. ARCO and EXXON are shutting down the two major international pipelines." "The least of my concerns are oil and chemical, … main concern is nuclear reactors. The same embedded systems used in the refineries are used at the nuke plants. The whole northern hemisphere is going to be exposed to radiation."
"Gulf is announcing they are shutting down overseas as non-compliant."
This fellow's experience with embeddeds in oil has led him to conclude that similar embedded problems in the nuclear power industry will lead to nuclear accidents and thus overshadowing problems within the oil industry. Indeed, if nuclear clouds were hanging over the whole Northern Hemisphere it would overshadow any percentage drop in oil supply or refined products. This is someone that I was hoping to make contact with and hopefully persuade him to come to this forum and share with us his knowledge. Unfortunately, I did not know how to contact him until a few days ago and the holiday time has made contact difficult although I have tried. I will keep trying to reach him and perhaps he will wish to post here.
The US Dep't of Energy in their 1998 summary says there are 95 active crude oil refineries operating as of the end of 1998 here in the U.S. What if 10% of those 95 US refineries go down and 10% of the foreign refineries go down? What is the impact? Substantial, to say the least. I will leave you to fill in the numbers, but what I've just related is a very, very optimistic projection. A single refinery shutdown in the past has sent tremors through the markets and triggered rising prices. Now, combine that with oil well production problems and you can see at least a pricing impact. This is based upon ignoring all other US refineries.
What if 20 refineries have problems? Especially if they are some of the largest capacity refineries. Keep in mind that a lot of the larger production plants have greater amounts of embedded systems and require only a handful of men to operate them. BUT, when a problem develops and a refinery full of embeddeds shuts down, there is a problem. It takes manpower to bring it back up. There are teams of specialists who go around doing nothing but starting back up refineries from maintenance turnarounds. Please note what another oil engineer had to say in commenting about the quotes from this engineer whom you just read about. This second engineer made the following comments about re-starting an embedded systems controlled refinery:
" Some crews specialize on such re-start-ups, so that shut downs are normally staggered to better utilize such specialists. An industry wide shutdown and fresh start-up is of itself an unprecedented hazard, because tiny misjudgments in start-up can be very costly, and destroy a plant. The hazards of having plants started-up without control by sufficiently experienced "start-uppers" might be almost as hazardous, and a global scale, as any embedded chip problems."
Now, perhaps you can see some other factors that are indirectly involved in this problem for the oil industry. Other problems can cascade indirectly from software code and embedded systems problems.
Do you think that perhaps my projection of only 4 or 5 plants shutting down is a bit too pessimistic? Or is it too optimistic? You decide. Frankly, I think I've been overly optimistic.
In summary, we don't know how many catastrophic events will occur on rollover that we will be able to see or hear about immediately. I suspect it could be several days. There will be delayed events that were fatally wounded but unknown to the company until perhaps a month later when it finally keels over dead surprising operators who had no clue. Expect many of these problems to take a long time to fix before production can resume. Yes, there may be some workarounds available but primarily in smaller less developed refineries.
Effects should begin to be felt later in the month at the pump. If it jumps in the first few days due to known problems, just figure it's only just begun to jump and that more problems are yet to come. Supplies would begin to shrink within days but the full magnitude may slowly develop at the pumps over a course of weeks. Probably mid-February if these systems follow the same fail ratios as during testing. How long will it last? I would suspect that it will be 6 months at the earliest to recover from the lengthy problems of system replacements and it is possible that it could be closer to 9 months or a year.
I suspect that we'll see at least 4 or 5 refineries out of production for at least a significant period of time (say 4 to 6 months). This would be the very minimum. That would be exceedingly optimistic. It is also premised on the notion that there are NO power outages or dirty power problems for any refineries. Dirty power could really screw up a refinery and quickly cause a shutdown. It also assumes that there will be NO phone outages, and NO water disruptions. Any shutdowns for any reason at a refinery loaded with embeddeds could mean a long wait for a special re-start team to come…IF there are several other refineries in the same boat. Remember a refinery that has gone cold can take a long time to get re-started.
Therefore, 4 to 5 refineries lost and out of production for an extended period of time is exceedingly optimistic. There is a good chance that 10 to 20 refineries could go down for various reasons, and not all might even be related to the embeddeds issues or power failures. It could be dirty power that knocks them out or perhaps phones or even complete loss of water for an extended period. My projection though is going to focus only on the embeddeds issue, not software code problems, not power loss, not dirty power issues, etc. We're just looking at it from the embeddeds standpoint. I think there's a good chance that we'll see 20 to 40 refineries go down with problems. Some will go down briefly, others for several days. These would not be the embedded refineries with only a handful of workers. These minimal staffed refineries will stay down much longer even if the embeddeds are fixed pronto…IF many of them go down at once. Why? Not enough specialists around to restart.
I'm also not going to factor in possible explosions and fires that might take a refinery down for months or years. Still I think we stand a better than 50/50 chance for at least 9 or 10 refineries to go down for most of the winter and spring. Worst case would be all refineries going down for various reasons. I think that is highly unlikely without the grid going down. IF the grid goes down, the oil industry is TOAST for 6 months. PERIOD! Median case would be 30 to 40 going down and 20 to 25 staying down for 6 months or more.
It also assumes that pipelines will function normally and that there will be no problems with oil tankers or oil docking facilities.
Based upon a premise of no other infrastructure problems"
I think there is a 5% to 10% chance that no refineries will go down. I think there is a 5% to 10% chance that half the refineries will go down I think there is a 50% chance that 9 or 10 refineries will go down for 6 mo. I think there is a 20% chance that 20 to 30 refineries will go down for 6 mo.
I see a 95% chance for at least a 7% drop in oil supply for the USA I see a 70% chance for at least a 14% drop in oil supply for the USA I see a 50% chance for at least a 30% drop in oil supply for the USA I see a 60% chance for at least a 40% drop in oil supply for the USA
I see zero chances for NO oil. There will still be oil from stripper wells if the pipelines stay up.
I see problems developing fairly quickly but not publicly known for perhaps 2 weeks even if there are explosions and fires. I suspect the spin meisters will work overtime to blame any problems on any thing but Y2K due to liability factors. We will not likely know about oil and Y2K directly until later in the month, even if prices keep going up. There will be other excuses in order to keep the markets calm as long as possible.
I see 100% likelihood of LIES being spun by the government and big business starting on January 1, 2000 … within 2 minutes after rollover. YOU CAN TAKE THIS ONE TO THE BANK.
-- R.C. (racambab@mailcity.com), December 27, 1999
Zenidea
(12/26/99; 22:53:56MDT - Msg ID:21676)
if I had a heartbeat for every atom of gold
Thirty spokes make up a wheels hub , but if that wheel did not have a dead centre that wheel wouldnt function properly ; Cut windows and doors in a box
but without those empty spaces , that box would never be a room . Take a cup ! if it were not for the empty space in that cup , the cup would not yeild a cup !. Only profit comes from that what is there , usefullness from that which is not there ; therfore , profit comes from nothing !. remember the Matrix !. where the telescope end the microscope begins . you are on the right path Aristotle ,! borrow some from socrates ! :).Merry Christmas !
Peter Asher
(12/26/99; 22:48:44MDT - Msg ID:21675)
TEST
Did everyone go to bed early or are we about to get hit with 20 last minute contest entries.
Number Six
(12/26/99; 19:32:00MDT - Msg ID:21674)
@Farfel
Weeell, I was going to enter, but your one can't be beat. You've NAILED it! Kudos!
Peter Asher
(12/26/99; 19:03:50MDT - Msg ID:21673)
Interesting link-up of my #21666 and Farfel's #21669
I said:
If the marketplace can be controlled sufficiently for all borrowed gold to be returned to the CB vaults, then the lower price of gold will have created a net buying opportunity. Low prices will only have created losses on the quantities sold into the open market. It does not hurt a Central Bank to loose value on its hoard for a few years, if it still has it when the price recovers. Look not at what they sell, but at what they keep!
Farfel takes a look:
The IMF statistics reveal that at the end of 1997, countries held a total of 886.69 million ounces in their reserves, whereas at the end of the third-quarter of 1999, this number has actually risen significantly, to 947.25 million ounces of gold held in reserves. This net gain suggests that these sales might more appropriately be perceived as interbank transfers, coupled with the acquisition of additional gold from nonbank sources. So the next time a major media organization headlines another Central Bank gold sale, gold investors should realize that the vast majority of the gold sale will likely NEVER reach the public trading markets and the announcement is designed solely to create negative psychology in the public markets in order to scare down the price of gold.
Farfel
(12/26/99; 18:40:30MDT - Msg ID:21672)
***MY TOP FIVE EVENTS for GOLD MARKET 1999*** (W/HEADLINES)
1) BARRICK TELLS ITS OWN SHAREHOLDERS, "YOU'RE ALL A BUNCH OF LOONIES!" -- following renowned novelist/former
shareholder Arthur Hailey's denunciation of Barrick Gold's anti-gold hedging policies,
a senior Barrick official declares that many of its own shareholders
are conspiracy theorists. The Barrick executive's hostile comments signal a
wake-up call to all gold mining shareholders to put an end to the
masochistic acceptance of the insufferable status quo within the
industry. It is time for gold mining shareholders to tell ALL
managements that "THEY ARE MAD AS HELL AND NOT GOING TO TAKE IT
ANYMORE!" If it means disrupting shareholder meetings, then disrupt
them. If it means voting out existing managements and tossing them onto
the streets, then toss them out in a manner no different than the tens
of thousands of employees who have lost their livelihoods owing to bad
decisions by these incompetent (corrupt?) managements.
2) MARTY "COOK THE BOOKS" ARMSTRONG RIPS OFF JAPANESE MILLIONS, THEN SECRETLY BUYS GOLD AND SILVER -- here you have the most vocal, strident, unyielding, articulate precious metals Bear,
disseminating negative
propaganda amost daily against gold and silver in zillions of mainstream
publications, yet secretly acquiring the physical. His actions may well
prove to be the micro- metaphor for what is really transpiring amongst the
central banks as they trumpet their gold sales to the world whilst
actually acquiring cheaper gold in a most quiet, shrewd manner.
3) IMF SENDS MESSAGE FROM CENTRAL BANKS TO THE WORLD, "WE FOOLED YOU, SUCKERS!" --
contrary to popular belief and the numerous articles released by the
mainstream media, Central banks have become net accumulators of gold
reserves. As per the latest IMF quarterly report, global central bank gold reserves INCREASED. IMF statistics reveal that at the end of 1997, countries held a total of 886.69 million ounces in their reserves, whereas at the end
of the third-quarter of 1999, this number has actually risen
significantly, to 947.25 million ounces of
gold held in reserves. This net gain suggests that these sales might more appropriately be perceived as
interbank transfers, coupled with the acquisition of additional gold from nonbank sources. So the next time a major
media organization headlines another Central Bank gold sale, gold investors should realize that the vast majority of the
gold sale will likely NEVER reach the public trading markets and the announcement is designed solely to create
negative psychology in the public markets in order to scare down the price of gold.
4) BRITAIN COMES TO THE RESCUE OF GOLDMAN SACHS AND GANG -- as gold is about to break above 300, the British government announces its intentions to sell half its entire gold reserves. The timing of the announcement by the Bank of England leaves absolutely no doubt that Western
nations are actively manipulating the gold price to protect the hegemony of the US Dollar as we approach Y2k, and
more importantly, safeguard the enormous gold short positions of Wall Street's bullion banks. Since a gold price in
excess of $300 an ounce is a potential spark to enormous short covering, then the US government/Wall Street have
drawn a "line in the sand" around the 300 price in order to preclude a gold short squeeze of astronomical proportion.
The fact that the British gold sale was announced in advance and designed as a Dutch auction whereby gold is awarded
at the LOWEST BID price further proves that the British government's primary goal is simply the diminution of the
gold price, NOT central bank reserves' diversification.
5) US TO KUWAIT, "BEND OVER CAMEL JOCKEYS, WE NEED YOUR GOLD RIGHT NOW!" -- Kuwait leases its entire gold reserves (approx. 79 tons) in order to halt the frenzied gold short squeeze resulting from
the unexpected Washington Agreement announcement by the major European Nations. In order to sustain US Dollar
hegemony and protect the heavy gold short positions of Wall Street's major investment houses, America appears to
have persuaded Kuwait to lease its entire gold reserves immediately following Europe's surprise announcement to cap
gold sales and terminate gold leasing. Kuwait's decision was particularly stunning given that most Arab nations have a
long history of venerating gold. For those who might have held a single scintilla of doubt about the current degree of
gold market manipulation, then they need only note that immediately following Kuwait's gold lease announcement, the
US government declared it would provide almost two hundred million dollars of military aid to Kuwait. In doing so,
the US government proved that it is much easier today to print millions of dollars than it is to obtain a mere 79 tons of
gold.
714
(12/26/99; 18:13:37MDT - Msg ID:21671)
***MY TOP FIVE EVENTS for GOLD MARKET 1999***
1. The Washington Agreement.
The ECB steps up following BoE's September gold auction, curbing gold sales and leasing. The price of gold subsequently rises to $330 in the next two weeks, triggering a quiet crisis in the industry as bullion banks and hedged miners take a big hit. The manipulation goes on, but the writing is on the wall. Gold arbitrage is dead. Time for the exit strategies.
2. The Bank of England Gold Auction-May 1999.
Gold prices fall in anticipation of this announced auction, part of a series of auctions to liquidate half of England's holdings. After the auction, the price of gold continues to drop into the summer to 20-year lows. Gold dips into the US$250's, affording goldbugs another buying opportunity of a lifetime (another one?!). It makes for one long summer.
3. The Bank of England Gold Auction-September 1999.
An unexpected barrage of bids triggers a US$20 rise in gold. Winning bidders include a South African mining company. The industry begins to stand up to government manipulation of gold prices and the detrimental effect it has on some small countries. The first leg up in September's very dramatic price rise.
4. The Introduction of the Euro.
Europe's grand, new currency…a world-class contender for "reserve currency", the plan involves partial gold-backing of the new note. Opens at $1.18 US and promptly drops. Loses 13% of value in the course of its first year. Another disappointment for goldbugs.
5. GATA.
Perhaps gold's best advertisement. GATA is keeping gold in the spotlight as no one else is doing. Public sentiment drives the stock market. At some point, public sentiment will drive gold. Might be just what the doctor ordered…a show.
It's the same old story for gold.
It remains an asset deeply tied to government. Large portions of the world's gold stocks remain in various central banks and, as a result, the price of gold remains subjected to price manipulations like the BoE auctions and Kuwait's recent offering. Sentiment in banking circles seems to favor a continuing liquidation of central bank stocks, even in Switzerland. And gold leasing continues to move prices. That's the bad news.
The good news is that physical gold is much in demand, far outstripping the fresh supply from mines. And with September's dramatic price rise, the gold market's landscape changed forever. The gold shorts are vulnerable. And bullishness is running much higher now than in the dog days of August. The Year 2000 promises to be exciting and no doubt we'll see quite a bit of volatility in all the financial markets this year.
All in all, it was not the year goldbugs hoped for, but 1999's news promises changes.
schippi
(12/26/99; 18:10:07MDT - Msg ID:21670)
Gold Sectors Chart ( 7 Yrs)
http://www.SelectSectors.com/agpmlt.gif
Looks like Gold sectors are poised to move Up.
Farfel
(12/26/99; 18:08:26MDT - Msg ID:21669)
********** My Top Five Events for Gold Market 1999 *********
1) Barrick Denounces its own shareholders as being "conspiracy theorists" -- following renowned novelist/former shareholder Arthur Hailey's denunciation of Barrick Gold's anti-gold hedging policies,
a senior Barrick official declares that many of its own shareholders
are complete wackos. The Barrick executive's hostile comments signal a
wake-up call to all gold mining shareholders to put an end to the
masochistic acceptance of the insufferable status quo within the
industry. It is time for gold mining shareholders to tell ALL
managements that "THEY ARE MAD AS HELL AND NOT GOING TO TAKE IT
ANYMORE!" If it means disrupting shareholder meetings, then disrupt
them. If it means voting out existing managements and tossing them onto
the streets, then toss them out in a manner no different than the tens
of thousands of employees who have lost their livelihoods owing to bad
decisions by these incompetent (corrupt?) managements.
2) Marty "Cook the Books" Armstrong alleged to have stolen millions of
dollars from Japanese investors, then converting much of the proceeds
into gold and silver bullion -- here you have the most vocal, strident, unyielding, articulate precious metals Bear, disseminating negative
propaganda amost daily against gold and silver in zillions of mainstream
publications, yet secretly acquiring the physical. His actions may well
prove to be the micro- metaphor for what is really transpiring amongst the
central banks as they trumpet their gold sales to the world whilst
actually acquiring cheaper gold in a most quiet, shrewd manner.
3) IMF releases it latest quarterly report on Central Bank gold sales and reveals a significant INCREASE in global Central Bank gold reserves --
contrary to popular belief and the numerous articles released by the
mainstream media, Central banks have become net accumulators of gold
reserves. The IMF statistics reveal that
at the end of 1997, countries held a total of 886.69 million ounces in their reserves, whereas at the end
of the third-quarter of 1999, this number has actually risen
significantly, to 947.25 million ounces of
gold held in reserves. This net gain suggests that these sales might more appropriately be perceived as
interbank transfers, coupled with the acquisition of additional gold from nonbank sources. So the next time a major media organization headlines another Central Bank gold sale, gold investors should realize that the vast majority of the gold sale will likely NEVER reach the public trading markets and the announcement is designed solely to create
negative psychology in the public markets in order to scare down the price of gold.
4) Britain announces a lowest bid Dutch Auction for half of its gold reserves as the gold price is about to break above $300 an ounce -- the timing of the announcement by the Bank of England leaves absolutely no doubt that Western nations are actively manipulating the gold price to protect the hegemony of the US Dollar as we approach Y2k, and more importantly, safeguard the enormous gold short positions of Wall Street's bullion banks. Since a gold price in excess of $300 an ounce is a potential spark to enormous short covering, then the US government/Wall Street have drawn a "line in the sand" around the 300 price in order to preclude a gold short squeeze of astronomical proportion. The fact that the British gold sale was announced in advance and designed as a Dutch auction whereby gold is awarded at the LOWEST BID price further proves that the British government's primary goal is simply the diminution of the gold price, NOT central bank reserves' diversification.
5) Kuwait leases its entire gold reserves (approx. 79 tons) in order to halt the frenzied gold short squeeze resulting from the unexpected Washington Agreement announcement by the major European Nations -- in order to sustain US Dollar hegemony and protect the heavy gold short positions of Wall Street's major investment houses, America appears to have persuaded Kuwait to lease its entire gold reserves immediately following Europe's surprise announcement to cap gold sales and terminate gold leasing. Kuwait's decision was particularly stunning given that most Arab nations have a long history of venerating gold. For those who might have held a single scintilla of doubt about the current degree of gold market manipulation, then they need only note that immediately following Kuwait's gold lease announcement, the US government declared it would provide almost two hundred million dollars of military aid to Kuwait. In doing so, the US government proved that it is much easier today to print millions of dollars than it is to obtain a mere 79 tons of gold.
Peter Asher
(12/26/99; 17:22:02MDT - Msg ID:21668)
YGM
That is a great sentence
"When One Eye Looks at the past...and one to the future, it seems to make the present much clearer as to perpective."
Peter Asher
(12/26/99; 16:50:12MDT - Msg ID:21667)
Please forgive the double post
I found some sloppy grammer and typos that made for difficult reading.
Peter Asher
(12/26/99; 16:48:47MDT - Msg ID:21666)
***MY TOP FIVE EVENTS for GOLD MARKET 1999***
***MY TOP FIVE EVENTS for GOLD MARKET 1999***
1) Gold New Year Begins With Advent of New EMU Euro!
It was forecast that the combining of several nations currency into one monetary unit would increase the economic buying power of the participating nations. However, the laws of geometry prevailed and the whole was only equal to the sum of it's parts. Despite the fact of its being redeemable by the combined economy of all its members, the Euro failed to attract a following as a Global Reserve Currency and the Dollar maintained it's supremacy. It was thought by many that the 15% gold backing would create an upward movement on the price of gold but this did not occur. The event was also significant in the end, by the fact of it's failed expectation.
2) Bank Of England Announces Gold Auction In Advance!
In a virtually unprecedented prior announcement the BOE gave advance notice of a series of Gold Auctions to take place over the Next two years. The financial world was taken aback by the incongruity of an action that would cause a lower price to be received than if the gold had been sold in the regular marketplace. The price of gold responded by dropping far more than was warranted by the tonnage and timing announced.
3) 15 European CBs Announce a Surprise Agreement to Curtail Leasing of Their Gold Inventories.
This binding policy of limiting leasing of gold to 2000 tons over a five year period, came without even a hint that it was being contemplated. Definitely the best kept (Of the eventually publicized) financial secrets of the year. The explosive gold and silver rally that followed amazed even true believers. In only two trading days Gold reached $330 and Silver $5.95 before showing any sign of reversal.
4) Ashanti and Cambior Mines on Wrong Side of Paper Forward Sales
The sudden spike in gold prices revealed that many of the Mines had locked in future sales prices through speculative forms of trading practices that resulted in financial liabilities in a rising price environment. The mines did not confront the implications of this occurrence to their cash flows, nor did their counter-parties properly evaluate the ability of their debtors to make good on the liabilities. The concepts of "To big to fail" and "I'd rather owe it to you, then do you out of it" came into play, as it was realized that the possibility of getting paid later was preferable to the certainty of not getting paid at all! Investors soon discovered that mining stocks were not a sure thing as a way to invest in or speculate on precious metals.
5) >>>>KUWAIT TO DEPOSIT 79 TONNES OF GOLD WITH INTERNATIONAL FIRMS
Kuwait--Oct 21--Kuwait's Central Bank announced today that it had decided to deposit 79
tonnes of its gold reserves with "reputable" international finance institutions. Central bank
governor Sheikh Salem Abdul-Aziz al-Sabah said the bank would invest its gold through
limited-term deposits, without giving up the ownership of the reserves.<<<<<
This announcement, posted that morning by FOA, was followed by the appearance of the word Kuwait another 41 times during that day's discussion. Then on Oct 23rd there was this. >>>> KUWAIT (AP) - "The United States will upgrade two air bases and an army camp it has been using in this oil-rich state at a cost of around $173 million," Defense Secretary William Cohen said Sunday. <<< That came out to a finder's fee of $72 per oz.
The reality that the 15 European banks were not the only source of gold hoards available for leasing became clear to the investment world and the prices of gold and silver retreated to the levels they were at the time of the Washington Agreement before resuming an orderly move upward during the last two weeks.
Three other significant events served to make more people aware of the true situation in the gold and silver markets but have not really altered the price of gold or the ongoing fundamentals as yet.
The Gold Anti Trust Action Committee, while exposing much of the behind the scenes mechanization and manipulation, did not of it self have an effect on the actual market place. It has even been suggested on this site that the awareness of ongoing manipulation could be keeping some investors OUT of gold for now.
Also the scandal of Princeton Economic Institute's fraud and losses and the arrest of it's PM bashing spokesman Martin Armstrong had little impact on the physical market place. Even the disclosure that he had 5000 oz. of gold stashed in the upstairs hall closet mainly created a lot of "It figures!"
Finally, the news of China allowing it's people to buy gold for the first time in 50 years, at best helped the price of gold in firming up last week, but the net result of this action remains to be seen.
It would not be outside the operational parameters of the PRC government to permit the population to convert their savings to gold and then later confiscate it back to the State. That would be a way to finance a gold reserve build up at the expense of the population. On one end of the spectrum, China could be planning a gold backed currency. On the other hand, it could be simply an incentive to create increased productivity by permitting real savings. Nothing negative in that, but not necessarily part of the "Grand Plan." I think the "Jury's still out" on this one.
So, to summerize the import of what I see as the 5 main events:
Events #2,#4 & #5, have their own particular link in a chain of "behind the scenes" indicators. The unfolding of the BOE auctions opened up many eyes and focused much attention on the fact that the gold market was not operating on free-market principles or government non-intervention. The other important result of this was the proof that market sentiment was a stronger influence on the price of gold than the quantitative fundamentals of supply and demand. But these events should be seen as the secondary effects that they were. Though major activities, all three were part of the maneuvers in the larger scheme of things. The BOE, the Bullion banks, the Mines and the gold carry traders may be loose cannons, dupes or pawns in these events. Short covering is not a permanent change in the underlying fundamentals of supply and demand. In the long run it is the quantities of forward sales that result in delivery to replace gold hoards, rather than into industry consumption or new ownership, that will create a reduction in the supply factor. But does that quantity play a major role?
I believe it is events #1 #3 that are the known part of the bigger story.
The hoarding and dis-hoarding of national gold reserves is the largest quantitative factor in the distribution of above ground inventories. Therefor the advent of the Gold backed Euro and the Washington agreement are changes in the most basic fundamentals of the gold marketplace. For whatever reasons exist to be contemplated and discovered, these two events are surly part of a piece.
The US trade deficit is only maintainable by the fact of the dollar being the reserve currency of the world. The entity whose economy is backed by the reserve currency of the world, can consume more than it produces. The deficit is offset by the float! Euroland has been on the short end of this stick to date. It would behoove them to attempt to replace the dollar with the Euro. As even their composite economy does not have the magnitude of ours, how better to sway the World's traders than to back the currency, increasingly, with gold? If the marketplace can be controlled sufficiently for all borrowed gold to be returned to the CB vaults, then the lower price of gold will have created a net buying opportunity. Low prices will only have created losses on the quantities sold into the open market. It does not hurt a Central Bank to loose value on its hoard for a few years, if it still has it when the price recovers. Look not at what they sell, but at what they keep!
We may have only seen the first part of an ongoing strategy of the Central Banks increasing their gold reserves. This is not the only possible theory of the hidden reasons behind the manipulation the POG, but the events of this year do fit it well. It is still early in the Game!
Peter Asher
(12/26/99; 16:26:59MDT - Msg ID:21665)
***MY TOP FIVE EVENTS for GOLD MARKET 1999***
1) Gold New Year Begins With Advent of New EMU Euro!
It was forecast that the combining of several nations currency into one monetary unit would increase the economic buying power of the participating nations. However, the laws of geometry prevailed and the whole was only equal to the sum of it's parts. Despite the fact of its being redeemable by the combined economy of all its members, the Euro failed to attract a following as a Global Reserve Currency and the Dollar maintained it's supremacy. It was thought by many that the 15% gold backing would create an upward movement on the price of gold but this did not occur. The event was significant in the end by the fact of it's failed expectation.
2) Bank Of England Announces Gold Auction In Advance!
In a virtually unprecedented prior announcement the BOE gave advance notice of a series of Gold Auctions to take place over the Next two years. The financial world was taken aback by the incongruity of an action that would cause a lower price to be received than if the gold had been sold in the regular marketplace. The price of gold responded by dropping far more than was warranted by the tonnage and timing announced.
3) 15 European CBs Announce a Surprise Agreement to Curtail Leasing of Their Gold Inventories.
This binding policy of limiting leasing of gold to 2000 tons over a five year period, came without even a hint that it was being contemplated. Definitely the best kept (Of the eventually publicized) financial secrets of the year. The explosive gold and silver rally that followed amazed even true believers. In only two trading days Gold reached $330 and Silver $5.95 before showing any sign of reversal.
4) Ashanti and Cambior Mines on Wrong Side of Paper Forward Sales
The sudden spike in gold prices revealed that many of the Mines had locked in future sales prices through speculative forms of trading practices that resulted in financial liabilities in a rising price environment. The mines did not confront the implications of this occurrence to their cash flows, nor did their counter-parties properly evaluate the ability of their debtors to make good on the liabilities. The concepts of "To big to fail" and I'd rather owe it to you, then do you out of it" came into play, as it was realized that the possibility of getting paid later was preferable to the certainty of not getting paid at all! Investors soon discovered that mining stocks were not a sure thing as a way to invest in or speculate on precious metals.
5) >>>>KUWAIT TO DEPOSIT 79 TONNES OF GOLD WITH INTERNATIONAL FIRMS
Kuwait--Oct 21--Kuwait's Central Bank announced today that it had decided to deposit 79
tonnes of its gold reserves with "reputable" international finance institutions. Central bank
governor Sheikh Salem Abdul-Aziz al-Sabah said the bank would invest its gold through
limited-term deposits, without giving up the ownership of the reserves.<<<<<
This announcement, posted that morning by FOA, was followed by the appearance of the word Kuwait another 41 times during that day's discussion. Then on Oct 23rd there was this. >>>> KUWAIT (AP) - "The United States will upgrade two air bases and an army camp it has been using in this oil-rich state at a cost of around $173 million," Defense Secretary William Cohen said Sunday. <<< That came out to a finder's fee of $72 per oz.
The reality that the 15 European banks were not the only source of gold hoards available for leasing became clear to the investment world and the prices of gold and silver retreated to the levels they were at the time of the Washington Agreement, before resuming an orderly move upward during the last two weeks.
Three other significant events served to make more people aware of the true situation in the gold and silver markets but have not really altered the price of gold or the ongoing fundamentals as yet.
The Gold Anti Trust Action Committee, while exposing much of the behind the scenes mechanization and manipulation, did not of it self have an effect on the actual market place. It has even been suggested on this site that the awareness of ongoing manipulation could be keeping some investors OUT of gold for now.
Also the scandal of Princeton Economic Institute's fraud and losses and the arrest of it's PM bashing spokesman Martin Armstrong also had little impact on the physical market place. Even the disclosure that he had 5000 oz. of gold stashed in the upstairs hall closet mainly created a lot of "It figures!"
Finally, the news of China allowing it's people to buy gold for the first time in 50 years, at best helped the price of gold in firming up last week, but the net result of this action remains to be seen.
It would not be outside the operational parameters of the PRC government to permit the
population to convert their savings to gold and then later confiscate it back to the State. That would be a way to finance a gold reserve build up at the expense of the population. On one end of the spectrum, China could be planning a gold backed currency. On the other hand, it could be simply an incentive to create increased productivity by permitting real savings. Nothing negative in that, but not necessarily part of the "Grand Plan." I think the "Jury's still out" on this one.
So, to summerize the import of what I see as the 5 main events:
Events #2,#4 & #5, have their own particular link in a chain of "behind the scenes" indicators. The unfolding of the BOE auctions opened up many eyes and focused much attention on the fact that the gold market was not operating on free-market principles or government non-intervention. The other important result of this was the proof that market sentiment was a stronger influence on the price of gold than the quantitative fundamentals of supply and demand. But these events should be seen as the secondary effects that they were. Though major activities, all three were part of the maneuvers in the larger scheme of things. The BOE, the Bullion banks, the Mines and the gold carry traders may be loose cannons, dupes or pawns in these events. Short covering is not a permanent change in the underlying fundamentals of supply and demand. In the long run it is the quantities of forward sales that result in delivery to replace gold hoards, rather than into industry consumption or new ownership, that will create a reduction in the supply factor. But does that quantity play a major role?
I believe it is events #1 #3 that are the known part of the bigger story.
The hoarding and dis-hoarding of national gold reserves is the largest quantitative factor in the distribution of above ground inventories. Therefor the advent of the Gold backed Euro and the Washington agreement are changes in the most basic fundamentals of the gold marketplace. For whatever reasons exist to be contemplated and discovered, these two events are surly part of a piece.
The US trade deficit is only maintainable by the fact of the dollar being the reserve currency of the world. The entity whose economy is backed by the reserve currency of the world, can consume more than it produces. The deficit is offset by the float! Euroland has been on the short end of this stick to date. It would behoove them to attempt to replace the dollar with the Euro. As even their composite economy does not have the magnitude of ours, how better to sway the World's traders than to back the currency, increasingly, with gold? If the marketplace can be controlled sufficiently for all borrowed gold to be returned to the CB vaults, then the lower price of gold will have created a net buying opportunity. Low prices will only have created losses on the quantities sold into the open market. It does not hurt a Central Bank to loose value on its hoard for a few years, if it still has it when the price recovers. Look not at what they sell, but at what they keep!
We may have only seen the first part of an ongoing strategy of the Central Banks increasing their gold reserves. This is not the only possible theory of the hidden reasons behind the manipulation the POG, but the events of this year do fit it well. It is still early in the Game!
Journeyman
(12/26/99; 16:06:36MDT - Msg ID:21664)
Karma
"Deputy assistant commissioner Alan Fry, head of Scotland Yard's anti-terrorist branch, has asked members of the public to be on their guard and to contact police if they notice anything suspicious. "
That's nice. But what if the phones are down or the squad is busy? Since the British elites, not trusting their traditionally violent citizens with fire arms, after trying to call for help, all they can do is die as the helpless disarmed victims they allowed their government to make of them.
Regards,
Journeyman
P.S. This is fair, since it's British Government action that's responsible for people being ticked off enough to engage in "terrorist" acts. Once again "citizens" will pay for the actions of their "governments."
TownCrier
(12/26/99; 15:47:22MDT - Msg ID:21663)
Hear ye! Hear ye! ***CONTEST DEADLINE APPROACHES***
From MK's Monday announcement of an opportunity for you to earn precious metal:
"I think a lot of the meisters are going to be hanging out at the FORUM during this Christmas week despite wild dashes to the Mall, food and beverage outlets, and other holiday activity, so I thought it would be a good time to have an important year-end type of contest. I hope posters find the time.......
For a French 20 francs gold coin (the famous gold Rooster coin--containing .1867 pure gold ounces), please carefully read and follow these simple instructions:
List the TOP FIVE EVENTS for the GOLD market in 1999 in a newspaper-type headline format (example: "Gandalf the White Purchases Entirety of BOE Fifth Gold Auction") with a short explanation as to why each was significant--whether positive or negative. This must be followed by a review of the events and their impact AS A GROUP on the psychology of gold investors. That review should be at least 30 words.
Length of review is not as important as content!! Your contest entry must be headed with ***MY TOP FIVE EVENTS for GOLD MARKET 1999*** (surrounded by stars as shown here)
The contest will run between now and the end of the day (Midnight Forum Time) Sunday 12-26-99. Time of submission will not play a role in the selection of winners. Content and quality of the post are the keys.....
There will be two runner-up silver Eagles prizes.
One entry per poster, please.
To encourage additional participation from our silent forum vistors, first-time posters will receive a Silver Eagle for posting during the contest period, but you must do two things:
1. Participate in the contest or else post at least 30 words on any gold investment related subject, and
2. You must e-mail us that this is your first post so that we'll know to verify if you qualify for the Silver (cpm@usagold.com)
I [Michael Kosares] will post my TOP FIVE on Monday after the CONTEST is officially closed. (The winning entry will not be contingent on agreement with me but the strength of the commentary. The winners' announcement might extend into the New Year depending upon year-end schedules of our panel of judges.)
I just thought it might be fun to recapitulate the past year.......
Onward, my fellow meisters.......into the fray. Let knowledge and courtesy be your hallmarks; wisdom your guide.
I want to take this opportunity to wish all our posters and lurkers Happy Holidays! I would like to especially thank our regular posters for making this one of the most interesting and informative stops on the internet. We've come a long ways from where we began, and built something here of which we can all be proud. May God bless and keep each of you and your families during these happy year end celebrations and into the New Year...... MK"
The Tower sends its warmest regards, too!
YGM
(12/26/99; 15:37:45MDT - Msg ID:21662)
Peter.....
When One Eye Looks....
At the past...and one to the future, it seems to make the present much clearer as to perpective. I await your entry with interest....YGM.
Peter Asher
(12/26/99; 13:15:12MDT - Msg ID:21661)
YGM, China Gold
A little excerpt from the contest post I'm working on
It would not be outside the operational parameters of the PRC government to permit the population to convert their savings to gold and then later confiscate it back to the State.
Netking
(12/26/99; 13:10:38MDT - Msg ID:21660)
Y2K Cont. - Millennial Insanity
http://www.gold-eagle.com/gold_digest_99/ackerman122899.html
Some interesting thoughts from Dr Vronsky heading into Y2K.
Peter Asher
(12/26/99; 13:09:43MDT - Msg ID:21659)
Feds Say U.S. Systems Ready for Y2K
http://news.excite.com/news/ap/991226/14/news-y2k-ready
>>>> "There is no reason to believe there will be any problem," city police commissioner Howard Safir said. "We've been preparing for this for three years. We've been preparing for every contingency."
As for Safir himself, "I'm going to be standing right under the ball when it drops." <<<<
I'm glad to see that one member of what I call the "National Three Monkey Committee" is keeping their eye on the ball.
YGM
(12/26/99; 12:53:24MDT - Msg ID:21658)
From Reginald Howe
http://www.goldensextant.com/
CURRENT MPEG COMMENTARY
December 20, 1999. Chinese Gold: Earning a Good Spread
According to a story from China Daily (www.kitco.com/_a/news/3960.htm), the People's Bank of China is selling gold bars weighing 50, 100, 200 and 500 grams to the public, and "they are receiving a warm welcome." The sales were initiated on December 10, priced at 104 yuan per gram. Based on an exchange rate of .1137 yuan per dollar (today's rate from the currency converter at South China Morning Post, www.scmp.com), the price is about US$368/oz. (31.103 grams = 1 troy ounce). Not a bad spread for the People's Bank if it covers on the world market.
The story adds that individuals in China are now permitted for the first time since 1949 to buy gold bars "...for savings and investment, as long as they can afford them." It adds: "And the metal is still the top choice for most individuals to maintain and enhance their wealth." Among nations, China is the fifth largest gold producer with annual gold production reported to be about 150 metric tons. A short but interesting discussion of Chinese gold can be found at The Gold Companion (www.pamp.ch/lexique) under China.
Netking
(12/26/99; 12:46:19MDT - Msg ID:21657)
Y2K Thoughts ...
Some more Y2K thoughts...
One of the most unpredictable facets of the Year 2000 problem is the behavior of the so-called "embedded systems", the chips built into anything from toasters to nuclear reactors.
Computer industry analysts now believe that there are 50 billion of these such embedded devices in daily use - in other words about 10 for every person on the planet.
The risk of failure of many of the simpler of these devices is considered low (very low). The consequences of failure ranges from "trivial"(no breakfast in bed for the wife) to "cataclysmic".
Embedded systems cannot pose a risk unless they have access to date information, which rules out the vast majority of the simpler devices known as micro-controllers. Micro-controllers as used on door chimes, microwaves & refrigerators will experience a failure rate of less than 1 in 100,000.
More likely to fail (and more serious) are the more complex microprocessor devices, especially those attached to an onboard clock. At least 7%(we predict) of these more complex microprocessors will cause temporary problems at the century rollover and 2% (predicted) will show "persistent Year 2000 anomalous processing" from there on.
The hard part will be when the complex microprocessors fail & then rectifying system functionality with minimal impact.
beesting
(12/26/99; 11:57:40MDT - Msg ID:21656)
Lightning in the night--or the day the U.S. Dollar was devalued.A true story.
In August 1971,after saving and planning for 2 years,my wife and I made a trip to Japan. When we got off the plane we changed our American Dollars for Japanese Yen,enough for a one month stay.The rate was Y360 to the dollar,went to our hotel and got a good nights sleep.When we awoke in the morning we learned that the U.S. dollar exchange rate had radically changed from Y360 to the dollar to about Y240 or Y230 to the dollar(my memory is fuzzy on the exact amount)
It so happened we found out later, this was the exact date the U.S. defaulted on their Gold for dollar commitments.
No warning,nothing,it was like lightning in the night.
Since that day I've thought about that experience a lot,if we had scheduled that vacation a day after we had or later,we would have run short on cash.No ATM's in those days.
Which brings my thinking to the present and Gold.
Which world currency has gained in buying power over the last 50 years? Answer-none!
Which world currency will GAIN in buying power over the next 10 years? Answer-none!
If I had kept $100 under my bed from July 1971 to today, what would that $100 buy compared to 1971 prices? Answer $13 dollars worth of stuff, or less.
If I had kept an ounce of Gold under my bed, bought at $35 dollars per ounce in 1971,would it have kept most of its purchasing power today? The answer is YES compared to all other currencies.
Gold has been a proven long term reliable storage of wealth through out history, and currently as most agree, it may appreciate in purchasing power in the not to distant future.That my friends, is why I'm a Goldheart!!!
Belated MERRY CHRISTMAS to all....beesting.
YGM
(12/26/99; 11:39:01MDT - Msg ID:21655)
Merry Christmas to All GATA Supporters....
....and those that should be.....
Thanks for 11 months of giving us a united voice to fight back.....we're not just a voice in the wilderness any longer.
We're a force to be reckoned with,,,and the reckoning seems nearer each passing month.....GO GATA, GO PHYSICAL........YGM.
YGM
(12/26/99; 11:30:43MDT - Msg ID:21654)
Y2K and London City Blockade....
True y2k fears exposed.......
December 26 1999BRITAIN<Picture: Line>
Anarchist attack fears turn City into no-go area
Nick Fielding and James Clark
THE City of London is bracing itself for violent attacks over the millennium holiday after threats by anarchists to start a new Great Fire of London.
Police are to isolate the City after receiving a warning of the plan, as well as intelligence about Islamic fundamentalists and Irish republican splinter groups. Access will be possible only through seven tightly controlled entrances and exits. "It will effectively be a no-go area," said a Corporation of London spokesman.
Armed troops will also be on stand-by at three bases around the capital in case of public disorder if the millennium bug causes chaos. The government's emergency planning committee, chaired by Jack Straw, the home secretary, will sit for 24 hours over millennium night and New Year's Day to monitor essential services and public safety. One barracks will be used as a helicopter port. A military communications network, including police and key Whitehall departments, will also stand ready.
Security at the Millennium Dome in Greenwich, which will be attended by the Queen, the prime minister and other dignitaries, will be unprecedented. Bridges across the Thames will be closed, tunnels emptied and aircraft forbidden to fly over the site. Up to 32 police vessels will patrol the Thames, including two fire tenders. Members of the navy's elite Special Boat Squadron will be on duty.
Scotland Yard's response is being co-ordinated by a millennium unit involving the anti-
terrorist squad, special branch and liaison between MI5 and MI6, the Home Office and other government departments.
The unit's concerns include Islamic terror groups based in Europe and linked to Osama Bin Laden, the terrorist described by the CIA as the world's most wanted man.
The FBI said this week that one such group, based in Frankfurt, Germany, was planning to send a string of parcel bombs to British and American targets over the holiday period. The warning came as anti-terrorist police in Britain arrested an Algerian asylum-seeker linked to an Islamic terror group. Ramdane Zouabri, 26, has been charged with threatening to kill an Algerian community leader after he was allegedly filmed making calls from a north London telephone box. Zouabri's brother is leader of the Algerian Groupe Islamique Armé (GIA), which killed 30 people on Christmas Eve at a roadblock near Khemis Miliana, west of the Algerian capital, Algiers.
Deputy assistant commissioner Alan Fry, head of Scotland Yard's anti-terrorist branch, has asked members of the public to be on their guard and to contact police if they notice anything suspicious.
Additional reporting: Adam Nathan; Matthew Campbell, Washington, and Uzi Mahnaimi, Jerusalem
Copyright 1999 Times Newspapers Ltd. This service is provided on Times Newspapers' standard terms and conditions. To inquire about a licence to reproduce material from The Sunday Times, visit the Syndication website.
Peter Asher
(12/26/99; 11:27:54MDT - Msg ID:21653)
Dangerous Case. canamami! comments??
http://www.worldnetdaily.com/bluesky_dougherty/19991224_xnjdo_lawsuit_ov.shtml
This legal action is very alarming. It would allow the preempting of existing brand name and titles from Internet search engines by whomever trademarked the word first. It would be the equivalent of prohibiting brands and titles from the Yellow Pages if they contained a word that someone else had in a trademark.
>>>> A French financial consulting firm has filed suit in Paris against a non-profit scholarly arts association, claiming over a million dollars in damages because the latter's use of the keyword "Leonardo" is causing Internet search engines to display the arts association's web pages as well as the firm's pages.
In filing its Nov. 18 suit, the advisory and funding firm of Transasia - along with undisclosed "co-complainants" -- claimed to have recently trademarked in France the names 'Leonardo," "Leonardo Finance," "Leonardo Partners," 'Leonardo Invest" and "Leonardo Experts."
"Transasia is claiming over a million dollars in damages based on their claim that a search engine request using the word "Leonardo" brings up not only their web-sites but also those of the Leonardo
arts organization."
Such search engine results, the company said, results in lost business and, hence, lost revenues.
The suit asks that Association Leonardo be forbidden from using the word "Leonardo"
in its web-site projects or any other products or services and seeks damages.
Worse, after the financial firm secured the issuance of the suit, it asked French authorities to secure a search warrant for the premises of Association Leonardo to see if police could find any "incriminating" use of the word Leonardo. According to MIT, "the search warrant was served with no prior warning by a squad of eight policemen. <<<<
Number Six
(12/26/99; 6:51:58MDT - Msg ID:21652)
Ashanti
Ashanti crisis deepens as it struggles to raise rescue loans
John Jay - Sunday Times
ASHANTI GOLDFIELDS, once the most powerful company in sub-Saharan Africa outside South Africa, is this weekend in crisis as its banks and investors battle over attempts to organise a rescue refinancing.
Britain's Lonmin mining group, which owns 32% of Ashanti's shares, is a key player, as is the Ghanaian government, which owns 19% and can block any takeover.
Lonmin's chairman Sir John Craven has made one bid for Ashanti but this was rejected by Ghana. Craven is now trying to forge a role in the refinancing but he is thought to have rejected requests from Ashanti's banks that Lonmin, the mining rump of Tiny Rowland's Lonrho combine, inject fresh loans without taking security on the African company's assets.
Ashanti's dollar-denominated shares stand at the equivalent of 185p, down from a £17 peak in 1996, to value it at £205.5m. Lonrho offered a share swap valuing it at about 433p a share but also including a fresh £62m loan.
The Ashanti crisis blew up in October when the company came close to insolvency as a result of derivatives losses. The company had been speculating that the gold price would remain low, using the derivatives market to boost its weakened profits. But a sudden surge left its derivatives contracts deep in loss.
In November, Ashanti's derivatives counter-parties, which included Goldman Sachs, its investment bank, agreed a standstill on margin payments but demanded warrants over 15% of its shares. But the deal was conditional on Ashanti producing a rescue plan, in particular a $125m ( £77.4m ) loan to finance the development of its Geita goldmining prospect in Tanzania.
Two weeks ago the deadline on the rescue talks passed without a deal but the 15-bank consortium agreed last Thursday to grant Ashanti further time to refinance itself. Ashanti has asked Lonrho to put up $25m in loans or loan guarantees as part of the $125m rescue package. But Craven is believed to have told Richard Peprah, Ashanti's chairman and also a Ghanaian government minister, that the British company will not participate unless it gains pre-emption rights over the Geita project, enabling it to match any outside offer.
Craven is also thought to have made a new attempt to negotiate a full merger at 433p a share but he is thought to be willing to consider other proposals that Ghana might find more attractive.
One option, which would still leave the Ghanaian government with a big interest in gold mining in its country, would be to split the Ghanaian assets from those outside the country. Under such a deal Lonmin would take ownership of Geita but would continue to manage the Ghanaian gold interests in return for management fees.
A failure to rescue Ashanti could have a profound affect on western investment in sub- Saharan Africa. Since Ghana blocked the Lonmin merger, despite the agreement of its own representatives on the Ashanti board, inward investment in the region has frozen.
Number Six
(12/26/99; 1:35:27MDT - Msg ID:21651)
Commodities, y2k and a hyperinflation scenario...
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0026Qj
Interesting post here... from TB2K
Gonna ramble a bit here, but there is much to discuss.
What is sticking in my mind are some of the comments made to R. Reagan's GRACE COMMISION in the 1980's. The Commission members interviewed the leading financial experts and government finance personalities in many of the South American countries. When the Commision asked, "How long did it take your economy to go from a state of normalcy to hyperinflation?" the answer was, "One week".
"One week", think about it! We have just gone through an 18 year bull market for bonds and stocks. Commodity inflation has not been much of a problem during this period. In fact commodity prices have been remarkably stable in spite of record money creation by the Fed and the banking system. They have been stable dispite the fact there exists a massive and rapidly increasing amount of $US currency in circulation throughout the world. It even more remarkable that commodity prices have remained under control given the enormous float of counterfiet currency in circulation (estimated at between 10-20% of the total currency float).
The commodity complex has been a relatively unattractive investment compared to bonds and equities over the past 2 decades. The lack of investment/speculative interest can partially explain this lackluster performance as can the disinflationary policies of the last real central banker, Paul Volker. Manipulation is one other means of suppressing prices. The commodity complex has recently been showing signs of life while also giving us glimpses of a massive secret campaign to keep commodity prices in check. The best illustration is the blatant manipulation of the gold market. (please refer to www.lemetropolecafe.com for detail). Last week it was disclosed that in an attempt to keep the price of palladium in check (a price increase of any precious metal will spill over into the others) the US Government has liquidated virtually its entire stockpile of this very strategic metal. Now Russia remains virtually the lone supplier of palladium to the world market. Incredible!
No doubt the same powers are working overtime to keep the oil complex in check. It is a losing battle IMHO and this is being reflected in the bizzare behavior and statements being made by Richardson, Clinton and the rest. In fact, they have already lost the war (how do you fight a insoluble computer design error?) we just don't know it yet.
Indeed, I believe the Y2K problem will be the tripwire that releases the shackles from commodity prices and ushers us down the nasty and demoralizing road to hyperinflation. It will most likely start in the oil complex and rapidly spread to all other real commodites. This process should start within the next three weeks and keep going for years. Remember, it took the SA countries only 1 week to go from normalcy to hyperinflation.
Why? It is so simple. The lack of energy and a breakdown in the JIT process will severely impare our ability to create and process/refine new supplies of commodities. The exisiting stockpiles instantly become very very valuable as future deliveries are suspect. If your orginazation intends to remain in existance, it must stockpile all necessary supplies IMMEDIATELY. No choice in this matter! Add to this the incredible amounts of bank created funds and currency in circulation , what will stop this great price expolsion?
So as a civilization here we sit, going into the last year of the millenium largely ignorant and complacent about the economic ramifications of Y2K. We are in love with our grossly inflated paper assets and all the toys (SUV's etc.) they bring us. Things are so good, we cannot imagine bad times and we will not listen to any objective voices of caution. Technology has served us incredibly well and of course we humans have complete control over our high tech! - or do we? Boy are things going to change - and fast!
Likes: 1. gold coins 2. junk silver coins 3. 2-4 week deposits 4. Unhedge gold producers and junior golds 5. Commodity based companies
Dislikes: 1. bubble stocks (the whole high tech complex) 2. deposits and bonds with a maturity of greater than 1 month
More than anything else, I believe that liquidity is your friend.
"A commodity in hand is infinitely more valuable than a promise to deliver." Y2K mantra
Netking
(12/26/99; 0:04:50MDT - Msg ID:21650)
GATA;"Cambior's digging itself out of its hedging hole"
12:30a EST Saturday, December 25, 1999
Dear Friend of GATA and Gold:
Here's a Canadian Press story about Cambior's digging
itself out of its hedging hole.
Merry Christmas from GATA, where we never sleep!
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Cambior restructures debt
while it scrambles to sell assets
MONTREAL, Dec. 23 (Canadian Press) -- Cambior Inc., a
gold producer that was burned badly by the gold price
recovery in October, has reached a restructuring
agreement with creditors that are owed $212 million US.
Loans will be extended to Dec. 31, 2000, while Cambior
raises money by selling gold or base metal assets, the
company said Thursday.
Cambior has agreed to make an interim payment of $75
million US to financial creditors by June 30.
When the gold price soared to $322 US an ounce in early
October, Cambior's price hedging program faced a
potential loss of $32.4 million US. That's because
Cambior had a commitment to sell about 900,000 ounces
at $287 US an ounce, among other contracts.
Cambior said the hedging portfolio has been reduced and
restructured. As of Wednesday, its gold hedging had
been reduced to 1.8 million ounces at an average price
of $333 US an ounce, including a deferred gain of $11
US an ounce, and the naked call position had been
reduced to 784,000 ounces at an average price of $349
US an ounce.
On Thursday, gold was quoted on the spot market at
$286.70 US an ounce.
The company is a diversified gold producer with
operations throughout North and South America. Its
holdings include the Doyon division in Quebec.
On the Toronto stock market Thursday, Cambior shares
closed at $1.55 apiece, up five cents. In late
September, the stock traded above $6.
-END-
Click Here to view yesterday's discussion.
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.
|
Centennial Precious Metals Gold coins & bullion since 1973 Denver, Colorado 80246-0009 We educate first-time investors! |
for quotes and purchase information.
|
