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ARCHIVED DISCUSSION FROM 4/26/1999
All times are U.S. Mountain Time
View Yesterday's Discussion.
turbohawg
(4/26/99; 23:52:35MDT - Msg ID:5216)
Christine
The move from one reserve currency to another, one credit cartel to another, with basically the same cast of characters reminds one of a snake shedding its skin, doesn't it ??
If this is indeed taking place, the men behind it are no doubt solidifying their positions of wealth, and just as in the past, taxpayers will be used through the force of govt as a firewall against losses of their own. And also as in the past, economic problems will no doubt be blamed on the failure of capitalism rather than the lack of capitalism, particularly in regards to money and credit.
I'll be a believer that a new era of freedom and prosperity are on the horizon not when I see a new central bank using gold as a front for credibility, but when I see no central bank and money itself using gold for credibility.
That may just happen, and I think eventually it will ... but it's apt to be a rough road getting there.
Perhaps we should care less about a rise in the price of gold and more about what gold represents: freedom, integrity, individuality, reality.
Gandalf the White
(4/26/99; 23:40:22MDT - Msg ID:5215)
WOWERS --- Welcome Golden Truth
COME ON IN ! all the Knights have been awaiting you !
<;-)
Golden Truth
(4/26/99; 23:32:19MDT - Msg ID:5214)
Test
test
Christine
(4/26/99; 22:28:09MDT - Msg ID:5213)
@Another
If we are just changing reserve currencies, I don't think in the long end it will make any difference overall. ie The new currency will become as problematic as the old eventually. The same temptations of manipulation would lead to the same result. I honestly do not believe this is just about attempting to provide a new and better reserve currency. I think it is about those in very high power creating a world currency with which to increase their own financial and political power to their advantange.
Christine
(4/26/99; 21:56:33MDT - Msg ID:5212)
@Another-How is economic prosperity achieved
I will respond philosophically for now, and think more on specific economic issues you pose later. I do not believe freedom and economic prosperity are antithetical. Many would say the U.S. economic success has resulted from its degree of political freemdom. The U.S. was founded upon principles of freedom, not prinicples of prosperity. But the one flowed from the other. Almost for spiritual reasons, I cannot believe that a system that further erodes liberty and concentrates power can result in prosperity. Just the opposite. I understand your perspective, however. I just have to believe that solutions rest in greater individual responsibility and freedom.
The Stranger
(4/26/99; 21:21:19MDT - Msg ID:5211)
When it Comes to Gold Prices, Up Your's, Brother
Y'all give me an honest-to-God rally in commodities, and I'll show you some higher gold prices. All this talk of who is selling what makes for interesting speculation, but a li'l ole psychological shift back towards inflation could swamp this gold market with buy orders.
The Stranger
(4/26/99; 21:05:10MDT - Msg ID:5210)
A Short History of Post-War European Economic Union
The Euro is not the first attempt by members of the European Community to create currency stability. Its predecessors include the Bretton Woods Accord of 1944 (which pegged European currencies against the dollar), and when that ended in 1971, the Smithsonian Accord, which permitted greater fluctuation in exchange rates. The Smithsonian Accord functioned poorly and was augmented within a year by the European Joint Float Agreement of 1972. That system allowed individual member currencies to fluctuate against each other only within a range of 2.25 percent. As a whole, the currencies of the member groups were allowed to vary within a band of 4.5 percent. Keeping currencies within these narrow bands of fluctuation was only possible by constant control of money supply, interest rates, and inflation within the various member-states. But, as countries began pursuing different economic policies, market forces started to pull the agreement apart nation by nation, and by 1973, both the Smithsonian Accord and the Joint Float Agreement had collapsed.
Their replacement, the European Monetary System, was ratified in 1978 and implemented in 1979. The EMS created it's own currency, the European Currency Unit(ECU), which was equal to a weighted average of each member's currency and was designed eventually to replace individual currencies (sound familiar?).
Like its predecessor the EMS allowed a 2.25 percent fluctuation in member nations' currencies, but the EMS contained some safety features that the Joint Float did not, such as the "threshold of divergence." This threshold was set at 1.69 percent. Before then, a nation, with the support of other member nations, could attempt to pull its currency back into the allowed fluctuation band, but, when this threshold was reached, the emergency exit function was activated, ejecting that nation's currency from the Exchange Rate Mechanism.
The EMS did manage to survive the 1980s. But, in late 1992 and 1993, the economic impact of German reunification posed a problem. Pent-up East German consumer demand overwhelmed markets, complicating efforts by other nations to stay within the allowed margin of fluctuation. This challenge finally proved to be too much, and in September, 1992 traders began dumping EMS currencies. Despite a mighty intervention effort by the Bank of England, the British pound was driven out of the ERM. A similar fate soon befell the French and Swedish currencies.
Will this history of failure repeat with the Euro. One hopes not, but we shall see.
Peter Asher
(4/26/99; 20:54:21MDT - Msg ID:5209)
FOCUS-Bid to talk up euro shows European rift
http://nt.excite.com/news/r/990426/21/group-europe-currency
WASHINGTON (Reuters) - German and French
officials embarked on an offensive to talk up the
euro Monday in what analysts said highlighted a
rift within Europe about how to respond to the
currency's recent slide.
ANOTHER
(4/26/99; 20:37:39MDT - Msg ID:5208)
THOUGHTS!
Christine (4/26/99; 18:43:40MDT - Msg ID:5207)
Christine,
You see this world with eyes much stronger than mine. I think the years of time does wear the truth from ones vision. My thoughts once were strong for things that benefit all people. Now I view only with the logic of what is "feasible" under current conditions. It is the sad conclusion of a life brought to reality, yes?
The interaction of productive peoples, of many cultures, does require an economic function of
"broad scale". The choice for this day in time does not include the best solution for monetary ills, rather it be the selection that offers most economic production for all nations. The irony does prove that the currency platform I support be also the structure upon which we all will stand.
Most will seek out this position as the "free choice" not "forced choice".
You say, " I believe it will be detrimental to us all here". Perhaps, some will walk "the lower road", but many will rise from the shallows of economic despair. For most of this world, life itself is the "detrimental" journey that brings a yearning to walk "the higher road" that some consider low. Truly, our eyes will join to view this change that must come.
"in every life, time will prove all things"
Another
Christine
(4/26/99; 18:43:40MDT - Msg ID:5207)
What are the implications
If anything like what FOA & Another are suggesting starts to unfold, then I believe it will be detrimental to us all here. By all, I mean oil nations, euro nations, US dollar nations. I believe that any kind of international currency is by design only a greater transfer of power to those who will be responsible for the currency. Because the currency has some gold reserves does not mean it cannot be manipulated, as FOA readily admits. Already it is openly acknowledged that the plans for Euroland include political as well as currency union. Do I like fiat currency? No. But most of the credit bubble now maligned was CREATED by those same who now malign it, and say that the fiat dollar must be replaced. IMHO, all I see is arguments that support placing more and more financial power in fewer and fewer hands. I do not understand how this would benefit any of us. I can make many specific economic arguments, but I do believe what is often most missing is a discussion of the implications. Do I support private internet E-Gold as a new currency--yes. Do I support the euro, the US dollar, or any other international currency, gold-related or not, as gaining more and more power--No. That is the wrong direction unless we are members of the most elite few that will benefit.
Jade
(4/26/99; 18:17:18MDT - Msg ID:5206)
IMF Gold " will the real buyer please step up"
Maybe were looking at this all wrong. We keep hearing this drum beat regarding the sale of IMF Gold and the number being floated around lately seems to be this 10 Million Ozs. Maybe the real story, which would absolutely shock the Gold markets, is a hidden "Buyer" in this market. A real buyer. Like a Central Bank. A Central Bank that wants to accumulate a lot of Gold "right now". Now we know that it makes no sense for the IMF to sell their Gold on the open market. It's a flat out losing proposition. So lets look at this new direction here and for a moment think about a CB out there who is indeed a real and desperate buyer. A CB that holds a substantial amount of "Dollar Reserves" with little Gold reserves. A CB that would be hurt substantially if caught by a Dollar devaluation. A CB that has ties to Britain. And of course the big CB's of the world would shudder at some major CB entering the "open market" to purchase 10 million Ozs. The price of Gold would then really move and they're not ready yet. So maybe what were talking about here is a big buyer in the market, who has told the other CBs,"were ready to move now". So now lets find this buyer some Gold. Talk about panic here. The IMF hoard really seems to be the ideal candidate, as the CBs of the world with the big Gold hoards do not present themselves as potential sellers. So to keep this short, my nomination for this stealth buyer is none other than China herself, the great mystery of the Far East! Who better needs to build up their Gold Reserves and has been advised to do so.
SteveH
(4/26/99; 17:44:25MDT - Msg ID:5205)
Found this at another site...obtw, June gold now...$282.50
Hope Bill doesn't mind:
Honorable James Saxton Chairman Joint Economic Committee 339 Cannon House Office Building Washington, D.C. 20515-3003
April 26, 1999
Dear Congressman Saxton,
The purpose of my visit is to try and be of some assistance to you and your committee regarding the issue of the proposed IMF gold sale. It is the opinion of the Gold Anti Trust Action Committee that the real reason for the intense lobbying and orchestrated PR barrage about selling IMF gold by the White House and the Treasury is not being revealed to Congress. We believe that the real reason to promote the IMF sales has to do with a concerted manipulation of the gold market to keep the price down in order to bail out the gold shorts of Wall Street ( ie bullion banks, hedge funds, and other financial institutions).
That has been going on for some time but began in earnest when Alan Greenspan made this statement before a Senate Agriculture Committee on July 30, 1998, " central banks stand ready to lease gold in increasing quantities should the price rise". We would like someone in Congress to ask Mr.Greenspan exactly what he meant by that comment when he is testifying again before committee.
It is important to understand that there is a natural supply/demand deficit in the gold market, meaning that demand for gold far outstrips natural mine supply. Our associates figure that deficit is around 1200 to 1600 tonnes and that deficit has been met by gold producer forward selling, some central bank sales, scrap supply, and gold lending. We think that the gold lending is now so large that it has created a potential "systemic risk" problem. Bullion dealers have been lending out central bank gold to financial institutions at 1% interest rates. The gold is sold into the physical market ( depressing the price ) and the proceeds are then invested elsewhere. This is called the "gold carry trade" which operates under the same principle as the "yen carry trade" which blew up late last summer when the yen rallied strongly against the dollar. The short term demise of the yen carry trade caused great financial consternation.
The "carry trades" only represent cheap sources of capital if the price of the entity borrowed stays the same, or decreases. When the price of the yen suddenly rose sharply late last summer it caused great financial distress as very inexpensive loans became onerous. But, at least they could get out of the loan via liquidating the yen; in essence giving it back.
We believe that the speculative gold loans are now as high as 3,000 tonnes of gold and that the total gold loans ( producer forward sales, etc ) have reached 8,000 to 10,000 tonnes. If we are correct, and at some future date the price of gold rallies like the yen did, there will be financial turmoil. As yearly mine supply in 1998 was only 2529 tonnes, the borrowers will not be able to lay their hands on that much gold very quickly. Inevitably, there will be defaults and many financial institutions here and abroad will go bust. Many of the banks are getting in this too deeply and are at risk of becoming "Long Term Capital Managements". Panic is definitely not too strong a word to be used here.
This appears to us that the current administration and the NY investment houses are in cahoots and what we may have here is one of the great financial scandals in US history. Financial commentators often point to the muddling, low gold price as to how all is well in the economy and administration officials point to a low gold price with pride, almost using it as a report card on the great job they have done. The bullion banks and investment houses have picked up on this and are making sure that the price does not go up by supplying gold to the market place. They feel they can borrow gold with impunity, even at these low prices, as a result of Mr. Greenspan's comments. And of course there is the connection of Wall Street to Secretary of the Treasury, Robert Rubin. Everywhere we turn in our investigation, we find Goldman Sachs, his former firm, involved in gold bashing efforts.
Our committee ( GATA ) has retained one of the premier anti-trust firms in the United States, Berger & Montague of Philadelphia, to assist us in our investigation into this matter. If further evidence corroborates what we already have, we intend to sue some New York bullion dealer/investment houses for violation of the Sherman and Clayton acts. These firms are making fortunes ( while many associated with the gold industry are being destroyed ) through investments, after borrowing gold at 1% interest rates. However, we think that some of them are making these fortunes illegally as a result of collusive activities and in the process have created a "ticking time bomb" that could blow up to be a financial disaster in the future.
It is this cozy arrangement the administration has with these investment houses that we believe is the real reason behind the constant calls to sell the IMF gold. They both benefit from the sale of the IMF gold, but the poor countries in South Africa and West Africa lose as their mining industries deteriorate. I know you have had other experts testify on all of this to you so I will not get into that. But the American public, as well as this country's mining industry, could really lose too. Our last monthly trade deficit was $20 billion. At some point, there will be an attack on our dollar. Our gold resources are one of our greatest assets. Why sell any of them at these very, very low prices? We can point to our gold stocks in defending our dollar in the future. There are many financial analysts that think a financial bubble has been created. That may or may not be the case, but to advocate gold sales at this point in time will be looked on as great folly if there is a bubble, and it bursts.
Yes, the current administration and the greedy Wall Street houses are winning the day today with this gold market manipulation. But, if this charade about gold is not stopped now, someday the American public will be big losers if a financial panic sets in. If someone had stopped the Savings and Loans from their over-extensions a decade ago, we might not have had that big a crisis. The potential gold loan crisis could dwarf the Savings and Loan one if the orchestrated gold selling game is not curtailed now.
I have attached some material for your perusal, which elucidates much of what I have brought to your attention. That material is:
1. An April 16 Reuters PRNewswire in which Chris Thompson, the Chairman of one of the world's biggest gold producers, Gold Fields Limited, decries the tactics of the New York based bullion dealers.
2. An essay by John Hathaway, the highly regarded senior portfolio manager of The Tocqueville Fund in New York, entitled, " Bullion Dealer: Spin Meisters of the Gold Market"
3. Commentary from Veneroso Associates entitled, "Gold Zaitech - A Bear Bubble Driven By Cheap Credit". Frank Veneroso wrote the 1998 Gold Book and is one of the leading authorities in the world on the gold market. He has been economic policy advisor to the World Bank, the I.F.C. and the O.A.S. as well as many countries.
Frank Veneroso is also one of the leading authorities on the gold loan issue. I was with Frank when he determined out how large the gold loans are and I saw how he figured it out by learning what the gold loans were at individual bullion banks. In addition to that, I was there when he spoke to Terry Smeeton, who just retired as England's Chancellor of the Exchequer, about the gold loans last year. Five years ago Mr. Smeeton was very chatty with Frank about the loans. Last year, he would say nothing and could not get off the phone fast enough when Frank told him how large he now thought the gold loans had become.
4. Commentary from the highly regarded James Turk, who publishes the Freemarket Gold & Money Report. James is one of the other leading authorities in the world on the gold market and is known by all in the industry. His April 26 piece is very timely and covers the problem of the payback of the gold loans. His work shows that it could take a gold price of $608 to $923 to solve this very sizeable problem.
5. Brief commentary from the well established "International Harry Schultz Letter".
Harry Schultz also expounds on the nefarious tactics of the bullion dealers.
I look forward to meeting you on Tuesday at 1:15 and hope that we may of help to you regarding this IMF gold sale issue.
Best regards,
BILL MURPHY Chairman, Gold Anti Trust Action Committee, Inc.
The Stranger
(4/26/99; 17:02:57MDT - Msg ID:5204)
Anybody Else?
Mr. Aristotle....just reading your explanation of the slowing M3 growth made me wish I had paid closer attention in Econ 101 all those years ago. Unfortunately, it made me wish you had, too.
Could there be a connection with the decline in mortgage refinancings that has taken place? Or, is it possible that, with rates rising, money started migrating to shorter maturities? Perhaps I am worrying about absolutely nothing, but, if so, I'd like to know. Surely, some member of this august Round Table has a grasp of what exactly is going on. Also, if anybody knows where one might find regularly updated graphs of all the "M"s, including mzm, I'd be much obliged.
TownCrier
(4/26/99; 15:33:50MDT - Msg ID:5203)
U.S. Treasuries higher after late buying spurt
http://biz.yahoo.com/rf/990426/bil.html
Potpourri. War, peace, dollar, euro, hedge funds, markets.
TownCrier
(4/26/99; 15:28:57MDT - Msg ID:5202)
IMF asks for more data to curb crises
http://biz.yahoo.com/rf/990426/bc3.html
Evidence of the IMF working in similar direction as BIS.
TownCrier
(4/26/99; 15:21:40MDT - Msg ID:5201)
Gold mauled after U.S. funds turn bearish again
http://biz.yahoo.com/rf/990426/bjj.html
Despite all that, this is what it is all about--the physical market is very tight, with very little margin for error.
TownCrier
(4/26/99; 15:06:14MDT - Msg ID:5200)
Bridge NY Precious Metals Review: Jun gold dn $2.30 on trade sale
By Darcy Keith and Tina Petersen, Bridge News
Washington--Apr 26--COMEX Jun gold futures settled down $2.30 at $282.60 per
ounce after hitting a 2.5-week low of $281.7 on a large sell order from a US
trade house and continued jitters surrounding the possible IMF sale of 5-10
million ounces of gold to raise funds for poor nations. Dealers described the
move as mostly technical. The fall in gold prices pressured silver lower, with
May settling down 4.5 cents at $5.10 per ounce hitting a 1-week low of $5.055.
One trader observed that with recent events such as the war in Kosovo and
tensions between Russia and the US on how Kosovo is being handled, gold should
be benefiting, but the market is not being shaken from its bearish mood.
He said the slide in gold prices today was not based on any fundamental
reason, but rather some large players simply had orders to sell. "We're just at
the whim of the traders here," he said.
Good support for Jun gold is said to rest near $282, and $280 for spot gold,
which is currently trading at $280.80-283.20.
The market continues to note talk of possible International Monetary Fund
gold sales, particularly amid the Spring IMF meeting in Washington this week.
Traders said the sales are largely factored into prices already, although any
confirmation of the size or date could affect sentiment further.
There is also some concern the sale would send a signal to other holders of
gold, particularly central banks, that holding the metal is of little value any
more as part of monetary reserves.
One dealer said gold should be able to withstand heavy selling pressure if
the gold sale is confirmed at the IMF meetings, as the sale would still require
Congressional approval and government officials have already stated that any
sale would be conducted in such a manner that it would not disrupt the market.
He added that 5-10 million ounces is not a lot of gold. "An individual investor
can sell that amount in a day," he said.
The dealer added that gold could possibly even benefit from an IMF gold sale
announcement, as it could be interpreted as a "final" sale. "We could see a
similar reaction as bonds have sometimes to a last interest rate cut. While in
itself it's bad news, feelings that it will be the last such announcement in a
while can actually have a positive effect."
The dealer predicted gold would likely stay in a tight range this week,
especially if there is no concrete word out of the IMF. Traders originally
anticipated a rally this week.
One trader said that shorts have come out of the market over the last few
weeks but funds may be looking to work their way back into short positions on
more confident feelings.
"I think part of the reason we had shorts come out was because the market
had been squeezed by the banks," the trader said. "They forced it
up to the $285 area looking for fund stop losses and hadn't really triggered
them. I think some of the banks long gold have been trimming positions and some
of the funds, which are short gold, are feeling more confident and working their
way back into short positions."
Reprinted at USAGOLD with permission. For details please go to:
http://www.crbindex.com/
No further reproduction without written permission
Usul
(4/26/99; 15:06:12MDT - Msg ID:5199)
How Price Levels Are Maintained
"We have seen that the operations of Mr. Brown and the other skilled speculators will correct accidental movements in share prices. They will also correct movements brought about by ignorant speculators. Let us suppose that a boom is taking place in gold mine shares because it is expected that gold will be in great demand as backing for currencies. The boom has been so spectacular that ordinary members of the public, who know very little about the stock exchange, have been tempted to take a part.
Now, their buying will be unskilled in two ways. They will be ready to buy any gold share which looks cheap without knowing whether the company is in a good position for producing gold, and is genuinely conducted. And they will continue buying after the rise in share prices has gone as far as the increased demand for gold justifies. In both cases, the skilled speculators will help to keep share values at their proper level. They will leave unsound shares severely alone; and when the general rise in prices has gone far enough they will begin selling.
But for them the gambling public could force share prices up out of all relation to the profit-earning capacities of the companies concerned, even after the increased demand for gold had been allowed for. As it is, the rise in share prices should just represent the improvement in gold-mining prospects."
From a 1930's encyclopaedia. What example would they use today- internet stocks? How times change.
Now, who knows what used to be known as the "House of the Cherry Garden", in Switzerland? No prizes... answer later.
beesting
(4/26/99; 13:35:35MDT - Msg ID:5198)
To Jinx 44 msg 5191 and Town Crier msg 5192
Jinx you were right,it was a misconception on my part, I had to read up on Eurobonds;
Bonds denominated in U.S. dollars issued by Governments or Corperations but usually marketed from London-Hence Eurobonds.
What are they going to call bonds issued directly from Euro-land? This could get confusing,at least to me.........beesting
TownCrier
(4/26/99; 13:32:08MDT - Msg ID:5197)
FWN Closing N.Y. Metals: Lower: COT Pressures Gold in Short Term
New York-April 26-FWN--The precious metals complex here
ended the day lower, with gold futures apparently hurt at
least in the short term by Friday's Commitments of Traders
Report, even though the data may prove supportive in the
long run.
Silver also pulled back as it appeared to consolidate
some of the gains from late last week. Platinum and
palladium also continued their retreat, leaving the entire
complex softer.
June gold lost $2.30 to settle at $282.60.
While Friday's Commitment of Traders data is likely
bullish from a longer-term view, in the short term it may
have prompted some more selling, said Tim Evans, senior
commodity analyst with Pegasus Econometrics.
The report showed a reduction of net short positions by
the large non-commercial category--including the funds--
although it still a relatively large net short of
73,690.
This means there is still potential for considerable
short covering.
"Longer term, that still leaves the market in a bullish
situation," Evans said. "You still have heavy net short
exposures. But in the short term it means there is at least
a little money on the sidelines that can come in on the
short side.
"Traders are more likely to go with the trade in the
direction of their past success, which means selling rather
than buying."
Gold has pulled back lately when some potentially
bullish scenarios did not play out, Evans pointed out. For
instance, for a while last week it looked like the stock
market was headed lower, but instead the Dow Jones
Industrial Average is still around all-time highs.
The market also continues to trade against a backdrop
of potential sales of International Monetary Fund gold
reserves, as called for by a number of officials around the
globe the last couple of months in order to provide some
debt relief to poor countries, reminded Evans.
A minor shelf of support for June gold is seen around
$281.30, with more support anticipated at the April 5 low of
$279.10.
Initial resistance is anticipated at failed minor
support of $284.30. This is the start of "fairly thick"
resistance through $287.70, Evans said.
"I think if you can get above that band of resistance,
that's where we would see heavier fund short covering," he
added. Then further upside levels might be $293, the
psychological $300 level, then $301.50.
Evans did point out, however, that the market action
lately might be viewed as "somewhat constructive in that
prices have been moving sideways over the last month, which
eventually will try the patience of holders of shorts."
(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
Aristotle
(4/26/99; 13:20:49MDT - Msg ID:5196)
Howdy Stranger (Wow! Great posts these past days by everyone!)
Let me take a brutal stab at this M3 thing.
First, growth IS growth...slower growth is still MORE dollars, not fewer. (Pretty tricky, huh?!)
BUT, and this is a big butt, ( ! ) it does indicate a change in the wind, a possible shift in sentiment that the dollar is not so much in demand all of a sudden. And when they don't want the dollar any more, it follows that it won't be valued as highly. If they can't sell new dollars into existence (such as through 30-year bond issues) except at ever lower prices due to lack of demand, you've got yourself a rising interest rate and a dollar suitable for wiping lunch off your chin. (Thought I was gonna bring up that big butt again, didn't you!)
Of course, I may be out to lunch.
Lunch. Get you some. ---Aristotle
TownCrier
(4/26/99; 13:03:34MDT - Msg ID:5195)
ANALYSIS-Saudi must cut, but guards U.S. oil market share
http://biz.yahoo.com/rf/990426/9o.html
Oil production, cuts, and marketing news.
The Stranger
(4/26/99; 12:49:37MDT - Msg ID:5194)
Puzzled
I am struggling to understand how slower M3 growth helps gold. Would some patient person take a minute to help a lost soul? I would think fewer dollars in the world would raise THEIR value, not gold's.
TownCrier
(4/26/99; 12:48:16MDT - Msg ID:5193)
Kaufman says Fed may raise rates at end of summer
http://biz.yahoo.com/rf/990426/41.html
Words of warning from Henry Kaufman for the US economy.
TownCrier
(4/26/99; 12:38:49MDT - Msg ID:5192)
Malaysia's Eurobond plans greeted with enthusiasm
http://biz.yahoo.com/rf/990423/bbg.html
Eurobond information for Jinx44 and beesting...the dollar abroad.
jinx44
(4/26/99; 12:11:56MDT - Msg ID:5191)
Beesting and Eurobonds
As I read your post of Mr. Fisher's notion about eurobond refinancing, it struck me that there maybe a misperception here. I take Mr. Fisher to mean eurodollar bonds ($US bonds trading outside the US) rather than Euro-denominated bonds) What did you mean? THX
The Stranger
(4/26/99; 12:04:27MDT - Msg ID:5190)
Trust Me
Trust me, Mr. FOA. I would not hold you to the very minute. I simply found your lack of equivocation praiseworthy and wanted to say so. For all our sakes, I hope events land you in the pantheon of particularly prescient prognosticating personages, pronto!
beesting
(4/26/99; 11:32:02MDT - Msg ID:5189)
IMF sees some Eurobond refinancing.
http://biz.yahoo.com/rf/990426/zl.html
IMF First Deputy Managing Director Mr. Stanley Fisher said today: It is inevitable that countries facing shortages of private and public sector cash will have to reschedule Eurobonds.More at above URL.
Lets see if we understand this news release; The IMF which deals in U.S. Dollars,is saying that EUROBONDS may default because un-named countries cannot make payment??
To me this sounds like the same dis-information that has plagued the Gold industry for the last 3 years,driving the price of Gold down.
Could it be the IMF is using the same tactics to try to drive the EURO down in relation to the U.S. dollar??
Mr.Canamami msg.5165 stated he thought the U.S. may have up to half of the worlds Central Banks physical Gold stored withen the U.S. borders.He may be right! Official U.S. Gold holdings(as AragornIII correctly stated) are roughly 8000 tons. Great Britian,according to a news article from England posted on this forum months ago,moved their Central Bank Gold to U.S. shores during the Second World War,its still here.That would explain N.M.Rothschilds office in the State of Colorado.(N.M.Rothchilds Co.is responsible for Great Britians Mint and IMHO Great Britians GOLD holdings,which at one time encompassed half the planet as The British Empire.
Also,IMF Gold may be stored within U.S. borders since the U.S.does have controlling interest(18%) of the IMF.
Another storage facility may be still located under ground in New York City where at one time(pre-1971)international balance of payments were tallied in Gold.
So of the 33,000 ton World Central Bank Gold holdings indeed up to half of the physical Gold may be in the U.S. For What Its Worth.............beesting
turbohawg
(4/26/99; 10:40:50MDT - Msg ID:5188)
red meat
>It Doesn't Get Much More Specific Than This< You sure got that right, Stranger.
>I found your remarks yesterday to be edifying. Let's all hope you have
the timing right.< And that !!!
As one who was looking for a little more in the way of specifics, I feel obligated to proclaim my appreciation and respect to Another and FOA for their willingness to step out on that precarious timing limb, whether it proves to be exactly right or not. But as FOA said, >Another did not predicate this on a possible short covering rally caused by the loss of CB sales ( as stated a while back)<, they're talking trend and not small short term fluctuations.
Aragorn's post this morning was quite insightful as well. <Perhaps, do not try to think in terms of an act of war, but instead in terms of an act of liberation. < Very well said.
It's interesting that many of the same people belong to both "teams". That really should be no surprise, I guess. Does anyone doubt that they'll work to keep a hand in our pockets ?? (Pardon me for carrying away that slant, Aragorn, I know that wasn't your point).
If a move is truly afoot to move from the dollar reserve currency to another during this unprecedented credit bubble, and with the US stock market alone accounting for 50% of global stock market capitalization, the people behind it must feel as if they're walking a path littered with nuclear land mines.
Yields creeping up again this morning ... teasing us with that interest rate pin.
FOA
(4/26/99; 10:21:09MDT - Msg ID:5187)
The Stranger (4/26/99; 8:54:30MDT - Msg ID:5178)
Mr. Stranger,
Don't forget to include the rest of the elephant along with the tail! Yes, today and for the next several weeks I, myself, will be buying! thanks
FOA (4/25/99; 20:15:46MDT - Msg ID:5155)
Gandalf the White
Hello Gandalf the White,
Timing? Now! We should not see the gold price falling again (five or six dollars up or down is no
more than fluctuation). Pressure is coming to bear that should see it climbing through the rest of
the year and on. Another did not predicate this on a possible short covering rally caused by the
loss of CB sales ( as stated a while back). This time the major governments will be behind the
move. FOA
jinx44
(4/26/99; 10:20:58MDT - Msg ID:5186)
Euro/$US parity
It would seem that the talking heads in the US - WJC, AG, RR - were expecting their european counterparts to bemoan the "fall" of the euro and move to support it in the financial markets. Then why are the europeans so calm about the 10% drop in the nominal value of the euro? CHRISTINE take note! They would appear to be more than happy for the euro to be at par with the $US right now. This would not only lull the US talking heads to sleep regarding the euro, but would further facilitate the move from $US debt to the euro. I think that the wool has been pulled. The USGovt will continue to ignore the setup. They cannot believe "their" dollar is in that much trouble. They have been so successful at bullying their way around the world, they are victims of their own fatal hubris.
The same trap is being played out in Bosnia with blood, rather than electronic money. WJC pushed this issue to deflect attention from his domestic treason and for the big money men who must have their eyes on the prize--the Trpca mining complex in Kosovo. Now that the troops are there, Beijing Billy can't throw the switch for a ground war. He is waffling so as not to be responsible for the decision. He is waiting for NATO to relieve him of the awful burden. NATO isn't so sure of itself anymore either. Once again, the US is in a no-win situation led by moral misfits.
I still think this big deadly poker game has some players who are smarter than the others. Europe and the ME will win with the hands they have dealt. The US is seeing the end of the imperialist rope.
TownCrier
(4/26/99; 10:15:49MDT - Msg ID:5185)
Gold hit by New York fund short sales on IMF news
http://biz.yahoo.com/rf/990426/2y.html
This one explains things better than the previous article, or at least tries to.
TownCrier
(4/26/99; 10:13:04MDT - Msg ID:5184)
"This has all the hallmarks of the COMEX boys,"said one London dealer
http://biz.yahoo.com/rf/990426/2u.html
An interesting comment in an otherwise scant article.
FOA
(4/26/99; 10:10:31MDT - Msg ID:5183)
M3 money supply!
http://www.kitcomm.com/pub/discussion/M3.gif
All,
This is why they want to free up and leverage the IMF gold. The other world CBs are not selling so the only way to force it out, for paper liquidity creation is through an existing IMF structure! The game continues. FOA
TownCrier
(4/26/99; 10:00:53MDT - Msg ID:5182)
Rubin, Eichel meet at U.S. Treasury
http://biz.yahoo.com/rf/990426/xg.html
Finding a way to promote global growth.
TownCrier
(4/26/99; 9:58:11MDT - Msg ID:5181)
G7 meeting seen making no specific forex reference
http://biz.yahoo.com/rf/990426/18.html
Business behind closed doors will stay there for the time being.
Cage Rattler
(4/26/99; 9:39:14MDT - Msg ID:5180)
Euro
We have four statements in the past three hours indicating that the currency EUR/$ exchange rate is appropriate.
1. Bundesbank Hans Tietmeyer said current Euro interest rates were conducive to long term sustainable economic growth in the region and that the current exchange rate was not problematic.
2. German Finance Minister Hans Eichel added his own remarks by saying his country was not concerned with the decline of the euro since the beginning of the year because it reflects appropriate fundamentals.
3. Acting Monetary Affairs Commissioner Yves-Thibault De Silguy said that the current EUR/$ forward exchange rate reflected a future rise of the euro.
4. Mr. Jurgen Stark, Deputy Governor of the Bundesbank said there was no ground for dramatizing the current EUR/$ exchange rate.
The Invisible Hand
(4/26/99; 9:32:15MDT - Msg ID:5179)
Today's Market Update
Dear Mr Usagold:
I suppose you are writing from the American side of the big pond when you are writing in today's market update:
<The action in New York followed a quiet night overseas once again emphasizing that the gold price is being firmly kept in check by forces on this side of the big pond>
I don't understand why you are then switching to Britain:
<It is incredible how hard Britain is pushing for these sales. They started the ball rolling on this question some time back, enlisted the public support of both the Canadian and U.S. governments, and continue the public pressure as the IMF meets in Washington today. So what is going on in Britain to cause this ceaseless and breathless tantrum over gold sales?>.
Methinks no explorer has yet called a place "New Britain" in America.
What is the point I am missing?
The IVH
The Stranger
(4/26/99; 8:54:30MDT - Msg ID:5178)
It Doesn't Get Much More Specific Than This
ANOTHER (5139):
"The order of events will show
that the dollar will now fail, first,
then all will race for Euro. During this race, that now begins, gold will rise in dollars and Euros for a short time."
"Today, gold will actively rise as events expose it as the "new currency of reserve"."
FOA (5145):
"Gold will rise as the dollar gets imploded, setting the stage for a reserve currency transition. It is starting now, today, this hour, as we speak."
FOA (5155):
"Timing? Now!"
(Stranger's note- Thanks Mr. ANOTHER and MR. FOA. I found your remarks yesterday to be edifying. Let's all hope you have the timing right.)
USAGOLD
(4/26/99; 8:46:20MDT - Msg ID:5177)
Today's Gold Report: Breathless in Britain
MARKET UPDATE (4/26/99): The market sold-off this morning early as traders rushed
to short the metal following the British government's call to sell 10 million ounces of the
International Monetary's Fund gold. The action in New York followed a quiet night
overseas once again emphasizing that the gold price is being firmly kept in check by forces
on this side of the big pond. At the very least, it can be concluded that the COMEX is where
the short side of the market tends to flex its price-pounding muscle. The gold market for the
most part is in a hunkered down mode as it takes a public relations pounding at International
Monetary Fund meetings in Washington. There are mixed reports some saying that gold
sales are on the IMF agenda. Others say no. Bundesbank vice-president Stark announced
today that the German central bank and Schroder government had not officially discussed
IMF sales making it appear that the Germans will block serious discussion of sales. It is
incredible how hard Britain is pushing for these sales. They started the ball rolling on this
question some time back, enlisted the public support of both the Canadian and U.S.
governments, and continue the public pressure as the IMF meets in Washington today. So
what is going on in Britain to cause this ceaseless and breathless tantrum over gold sales?
One wonders.
That's it for today. We'll update if anything interesting surfaces.
ORDER FORM for a Free Copy of News & Views -- our widely read monthly newsletter
-- and introductory packet on gold ownership.
TownCrier
(4/26/99; 8:31:12MDT - Msg ID:5176)
Eichel says weakening euro no matter for concern
http://biz.yahoo.com/rf/990426/uc.html
euro: no worries, Russia: big worries!
TownCrier
(4/26/99; 8:26:45MDT - Msg ID:5175)
Tietmeyer says euro/dollar level appropriate
http://biz.yahoo.com/rf/990426/tt.html
euro, rate cuts, and IMF gold
TownCrier
(4/26/99; 8:06:08MDT - Msg ID:5174)
Gold to take IMF news in stride, Asian traders say
http://biz.yahoo.com/rf/990426/bo.html
But, one trader was found to say, "Gold has lost its treasury function altogether in this new era. I think more central banks are moving to sell gold, but I don't think any will be buying."
Methinks somebody is very, very wrong.
TownCrier
(4/26/99; 7:58:45MDT - Msg ID:5173)
HEADLINE: Ny Fed's Mcdonough Says Low Odds of Severe Us Stock Market Drop Hurting Economy
http://biz.yahoo.com/rf/990426/se.html
What's this? Mentally preparing the masses? Otherwise, why say such a thing??
Aragorn III
(4/26/99; 7:44:31MDT - Msg ID:5172)
FOA--It is you, Sir, that is exceptional.
How you managed to 1)discover the post, 2)read it, and 3)respond...all in a matter of 15 minutes...Simply remarkable. You may indeed use this information as you see fit. I am certain you would improve upon the delivery were you to convey these thoughts you know so well in your own words, but surely it is nice to have the typing done by other hands--convenience wins the day on occasion. As your past thoughts have been of great benefit to me, I am pleased to return the favor if you see it as such.
I enjoyed reading through yesterday's commentary. Perhaps I am safe speaking for all at this Round Table when I say that your time and effort is appreciated. Thank you!
FOA
(4/26/99; 7:04:58MDT - Msg ID:5171)
Aragorn
Aragorn III,
Exceptional post, sir! I will send it to several other people that will certainly enjoy it. If you will allow, I will use it as a reference for several further posts. Thank you for your thoughts, FOA
Aragorn III
(4/26/99; 6:49:34MDT - Msg ID:5170)
My thoughts for a new day, complete with plenty of typos and poor grammar!
Canamami asks the good question "The US possesses massive (I believe over 50% of the world's) gold reserves. What country or group in its right mind would start an economic war against the US, using gold as a significant weapon, in the face of such awesome US reserves? [...]to me it implies the equivalent of an economic war against the US[...]"
Perhaps, do not try to think in terms of an act of war, but instead in terms of an act of liberation. When the money has gone bad, the "committee to save the world" grew out of the efforts of self-preservation. Why does efforts toward the return to a clear monetary role for gold gain scorn and scepticism as an economic aggression leveled at the body of the U.S., when it is only the dead U.S. currency (along with all others) that is being replaced in favor of a live one. Should we not rather place our focus on the "act of war" the U.S. Govt declared, waged, and has won since it first ceased domestic convertibility in 1933, followed by the blitzkrieg in 1971 to end its obligations to international settlements of trade in real money?
True, the U.S. does report to hold over 8,000 tonnes of the world's 33,000 found in the official sector. But as all nations must look to their gold to "square the books" against outstanding issue of currency and debt, the U.S. is seen to hold much, much more than is easily covered even by so much gold. A single pat of butter for a large loaf indeed! Again, this need not be viewed as a personal attack against the U.S., as all nations will be under the same prospect whereby gold will "prove" their currency. But the focus naturally goes to the U.S., for it has been left in poorest position through the very same actions by which it reaped such great rewards for nearly three decades--buying the world's goods with numbers written on paper.
Please consider excerpts from this only days ago: Aragorn III (4/24/99; 17:14:16MDT - Msg ID:5123)
"As the framework for world economics was deteriorating by a failing [reserve] currency, it was in the interest of those having the most to lose to circumvent the problem--that the real supply of dollars was outpacing real supply of goods. This fed upon itself as ever more dollars were created, borrowed into existance for purchase of goods today by those who saw that their future production would easily repay these loans. (It was not to be, as we can see how many nations now struggle under a debt despite the hard work and good production of commodities valued by life the world-over.)
The solution was found for the dollar's problem through the alteration ... supply and demand pricing of key commodities was moved to the futures markets where the goods are but promises also.
This past vicious circle: borrowing many dollars with the prospect of easy repayment with future production, was now effectively replaced with an equally vicious circle: selling much future production (on paper) with the prospect of easy replacement (on paper) with future dollars in an "oversupplied" market!
In consequence, all those that borrowed easily have found that repayment has been hard, even as real demand for their products have grown! And further development takes a back seat to debt service."
Also, consider an excerpt from this post: Aragorn III (3/25/99; 3:23:55MDT - Msg ID:3827)
"What folly is it to suggest that a body [OPEC] is impoverished that commands a position atop a commodity [oil] needed the world over? Impoverished, no. In dire need of contract renegotiation to undo past [currency] mismanagement? Yes. Much like the United States renegotiated its debts in 1971 by saying "no more gold shall be paid to settle accumulated dollar-denominated debts". Dollars at that point became very cheap and easy to come by. OPEC is in the position to do likewise, though they will say "no more OIL will be paid to settle accumulated dollar-denominated debts". By pricing oil in euros, the U.S. will find that euros are not easy to obtain as the U.S. is a net importing nation. And what more need will any net exporting nation have for U.S. Dollars as balance of trade when oil requires euros? Suddenly, the outside world is not eager to accept any few dollars for its real products. Exchange rate of the dollar falls, and all countries use these newly cheap dollars to settle all accumulated dollar-denominated debts. That is the exit strategy of nations. The U.S. will be at a disadvantage until it achieves meaningful balance of trade. It cannot continue to print its primary export value. This will not kill the future demand for oil. The world is a much larger place than 50 united States, and any group of nations would be equally happy to rise to the occasion to be the fat consumer of of last resort.
These are the few remaining days of easy money. I suggest you use them wisely. Here's a hint...gold is the universal currency."
We can see that the struggle for a fair and viable currency walks hand in hand with the effort to revitalize global trade and economic development.
Further, I have read the various comments attempting to represent this as a battle of wits and wills of the "evil" IMF/dollar powers against the "evil" BIS/euro powers. This is not to be, as we see many players to be on both teams!
Think instead of the monetary structures being pitted against each other, as only one will win, while the men behind the scenes work both sides. Let us take a look...
The IMF sprang to life in 1947 out of the Bretton Woods conference in 1944. The purpose of the IMF was to RETURN the international settlements to a GOLD STANDARD! When this was ended by the U.S. in 1971, the IMF evolved to oversee and facilitate the wayward system of currency exchanges in a global fiat system of currencies. Of its 182 member nations today, the EMU 11 represent 22.4% of the voting shares, while notably the U.K. has 5%, the U.S. has 17.5%, Switzerland has 1.6% and Saudi Arabia has 3.3%. The IMF currently has eight of its 24 Executive Directors representing individual countries: China, France, Germany, Japan, Russia, Saudi Arabia, the United Kingdom, and the United States. The other 16 represent regions. Its Board consists of such notable Governors and Alternates as Hans Tietmeyer and Hans Eichel of Germany, Dominique Strauss-Kahn and Jean-Claude Trichet of France, Robert E. Rubin and Alan Greenspan, Gordon Brown and Edward A.J. George of United Kingdom, Hans Meyer of Switzerland, Paul Martin of Canada, etc... and its managing director is a Frenchman. The IMF Accounting Unit, the Special Drawing Right (SDR) as of April 23, 1999, SDR 1 equaled US$1.35327 and is calculated from this basket of currency: USDollar 39%, Deutsche Mark 21%, Japanese Yen 18%, Pound Sterling 11%, French Franc 11% (Since the launch of EMU, the euro has replaced the currency amounts of the deutsche mark and the French franc in the SDR valuation basket.) Clearly, the euro world is well represented in the IMF.
Let us take a briefer look at the BIS. As excerpted from their documents, "The Board of Directors comprises the Governors of the central banks of Belgium, France, Germany, Italy and the United Kingdom and the Chairman of the Board of Governors of the US Federal Reserve System, as ex officio members, each of whom appoints another member of the same nationality. The Statutes also provide for the election to the Board of not more than nine Governors of other member central banks. The Governors of the central banks of Canada, Japan, the Netherlands, Sweden and Switzerland are currently elected members of the Board."
I hope this proves helpful for further discussions, as much time can be spared from the speculation why IMF does not "fight the good fight" against the BIS. They once had much in common managing gold currency, but of necessity the IMF's role grew apart, even as the governors remained the same.
This "battle" may be oversimplified as a selection of monetary systems...of gold assets versus fiat currencies. Gold wins this one. No more. No less.
got victory?
Christine
(4/26/99; 6:32:02MDT - Msg ID:5169)
@Canamami--thank you
Thank you for your most eloquent comments. Much that is going on now does not make any logical sense. The giant financial(credit) bubble that has been created does not make any sense. Those running things cannot be that economically and financially naive. And as you most powerfully argue, it makes no sense for the euro to aggressively threaten the dollar. Thank you.
Silver Tongue
(4/26/99; 5:03:23MDT - Msg ID:5168)
Men or Mice
I am not going to be happy if gold continues to languish in mediocrity today. One would think that 17 or 18 years of it being in the doldrums would be sufficient. So to gold and silver I would say unabashedly, rise up and be men. Are you men or mice? Get that cheese out of here right now.
SteveH
(4/26/99; 1:29:31MDT - Msg ID:5167)
June gold now ...
$284.60.
Click Here to view yesterday's discussion.
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