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ARCHIVED DISCUSSION FROM 11/26/2001
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Black Blade
(11/26/01; 23:53:26MT - usagold.com msg#: 65942)
Russia refuses to cut oil production at its own risk
http://atimes.com/c-asia/CK27Ag05.html
Snippit:
MOSCOW - Unstable oil price is threatening Russia's economic growth, warns a top government official. Russia's Minister of Finance Alexei Kudrin has urged the country's entrepreneurs to prepare themselves for "serious economic risks". Kudrin told the State Duma, the Lower House of parliament, last week that if the price of Russian Urals crude drops to US$15 per barrel, export duties will also fall. Economists fear that next year's gross domestic product growth (GDP) may fall below government projection of some 4 percent, and well below last year's unprecedented 8 percent growth. Russia, which is the second-largest exporter after Saudi Arabia, depends on oil for nearly two-fifths of its budget revenues.
NOW THE KICKER -
Sliding oil prices could weaken the ruble and force Russia to press for the restructuring of its $140-billion foreign debt. When oil prices slumped below $10 per barrel in the late 1998, OPEC took enough oil off the market to lift prices. In August 1998, low oil prices sparked Russia's financial crisis, making it impossible for the country to service its debts.
Black Blade: These passages about says it all. Third World backwater Russia cannot survive a severe oil price drop. OPEC can plunge Russia into the abyss if a price war erupts. Thought that the Russkie bond defaults created a few problems a couple of years ago for the likes of LTCM? Just wait until oil prices collapse.
mikal
(11/26/01; 22:09:23MT - usagold.com msg#: 65941)
@Galearis
Galearis, first let me say that your observations, analysis, and discussion are always most generous, insightful, and helpful! I have always valued the work of FOA here as well, agreeing with his reasoned conclusions, absorbing valuable insights, but disagreeing with his bearish silver stance. Would you kindly alleviate my confusion? I hold the metal as an honest asset and value holding. And I feel silver is an undervalued, underutilized, underappreciated metal deserving a much higher free market value. This $ value should represent its many wonderful medical, industrial, electronic, currency, and wealth-store uses, discovered and undiscovered. Thanks.
Waverider
(11/26/01; 22:05:51MT - usagold.com msg#: 65940)
And more...View of banking crisis creates credibility gap
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3F9Q9SIUC&live=true&tagid=FTDO9DHMZJC
Snippit:
"The decision by Japan's biggest banks to offer a more realistic assessment of their bad loan problem has been welcomed by Shoji Mori, the head of the Financial Services Agency, Japan's chief banking regulator.
But Mr Mori on Monday took some of the shine off the banks' action by adding soberly that "it does not mean that the problem has been resolved".
What Mr Mori knows is that the scale of the problem goes well beyond the biggest banks. While officials from the "big four" claim to have bitten the bullet on bad loans, there is apowerful lobby that believes the issue may still require a government bail-out to prevent a banking crisis..."
Waverider
(11/26/01; 22:02:11MT - usagold.com msg#: 65939)
Bad loans at world's biggest bank
http://cbs.marketwatch.com/news/story.asp?guid=%7BA9E4EF44%2DF296%2D49C6%2D83F2%2DC2665266ABCE%7D&siteid=mktw
Snippit:
TOKYO (CBS.MW) -- Mizuho Holdings, the world's biggest bank by assets, on Monday posted a net loss of 264.6 billion yen ($2.12 billion) for the six months through Sept. 30, taking a massive charge to deal with non-performing loans.
The fiscal first-half loss marks a sharp reversal from net profit of 154.83 billion yen in the same period a year ago. Mizuho sees an even rockier road ahead, warning of a loss of 720 billion yen for the full year ending March 2002."
Waverider: Me believes there may be bank bones heading for Black Blade's bone pile.
uponroof
(11/26/01; 21:57:15MT - usagold.com msg#: 65938)
Cavan Man....China
http://www1.chinadaily.com.cn/cndy/2001-11-21/44541.html
Love to hear your take on China converting to euros. Let me get the ball rolling.
China buying euros is a hedge of sorts. They are reacting to the Jan 1 kickoff only. Recall they own more US dollars through trade than any other nation. Their new trading status (WTO) will inhibit dollar conversion IMHO as the US will continue to buy from China at rates above those of competing currencies. Because of WTO China will be importing at rates to rival their exporting, and some of those imports will be from Euroland. It just makes sense to have some reserves for this surge.
Will the Euro replace the dollar? I don't think so. US deflationary pressures will have to cripple their imports before China goes over to euros in style. But before that can happen, following suit, the world will experience worse deflation allowing the dollar to again remain winner by default. .02 and I sure hope I'm wrong, but derivative explosions seem to be our only hope at cleaning the paper house. Please feel free to kick this around unmercifuly.
Galearis
(11/26/01; 21:05:15MT - usagold.com msg#: 65937)
@slingshot
The silver squeeze...
Yes, sir slingshot, that would seem to be what is going on..In order to reduce something with an industrial and investment/speculation application to one of ONLY an industrial application one only has to make it in the sizes that only fits the industrial one.
If all the major refineries that make "good" bar silver are doing this - and this is yet to be established - then we, indeed, have a world-wide problem over and above the absolute weight shortage. This, however, is only implied by our more distant posters, sir Netking, for example who is having difficulty getting small bar silver in New Zealand.
Also:
Foreign central bank silver reserves are also likely in the 100 oz size (unless they are quietly changing over to 1000 oz + - size quietly - which would be only speculation and improbable [?]).
And:
It is not ALL bad news. Remember that some 100 oz sizes and smaller have to be kept on hand for metal lease interest. I have no doubts that ScotiaMoccatta in Toronto (in my case) has bars of this size and smaller that are available. The other depositories - ScotiaMoccatta in the -US would also have a similar supply. You can bet that they absolutely hate over-the-counter buys here - and this is partly the reason for the add-on charges and especially the paper trail of who is buying what and how much. All for discouragement. I doubt if there is enough of this silver for everyone. (smile)
Smaller bullion/coin dealers are running out of silver quickly. These people have to rely in off-the-street supplies and capitulation of this supply has already occurred. The bullion dealer is not seeing this come in off the street much now. On the other hand the wise minority have bought at this bottom (?) and are looking for more - but the uninformed majority is not yet even thinking of silver. As the small dealer is the local source for most of the local speculators out there, the dead market will not be fed by these businesses. What a surprise when the new investor group tries to buy!
There is little silver around now.
And a dead market is probably a year and a half to three years away.
And silver could blow even sooner than this...
(smile)
G.
Canuck
(11/26/01; 20:35:43MT - usagold.com msg#: 65936)
Cavan Man, All
http://www.bank-banque-canada.ca/en/bonds.htm
Here is the Bank of Canada yield curve as of late (I would assume US yield rate is similiar). In the last week to 2 there has been a sharp reversal, something large is going on.
CM, just saw your 'morning mailbox' post, what's going on?
Gasoline went from 50.9 cents/litre this morning to 59.9, checked the news, nothing. Had expected that Russia folded or more bombs or something but nothing, what's going on? Bush's ultimatum to Iraq?
Man O' man, there is some queer sh*t going on.
I'm waiting impatiently for the appraisor to come so I can sew up this mortgage deal, where is this clown? The lawyer dude said buying/selling/refinancing is out-of-control; he has "never seen anything like it".
Euro around the corner, someone mentioned 36 days or so
;)
Canuck
(11/26/01; 20:02:58MT - usagold.com msg#: 65935)
Cavan Man
Go for it
auspec
(11/26/01; 19:51:18MT - usagold.com msg#: 65934)
Crashmaker Snippet
"....modern politics was a vast, shadowy, semi-criminal network linking elected officials and bureaucrats with the rich and powerful, on both sides of the law. Nothing was as it appeared. No one could be expected to tell the truth. Everyone's first loyalty was to someone other than the American people. From its inception the committee had run head on into the crooked politicians' code: STAY HIDDEN--REMAIN SILENT--PROTECT YOUR FRIENDS."
"THE EVILS OF GOVERNMENT EXIST ONLY IN ITS ABUSES."
auspec
(11/26/01; 19:44:24MT - usagold.com msg#: 65933)
Cavan Man
Most certainly!
slingshot
(11/26/01; 19:44:16MT - usagold.com msg#: 65932)
auspec
It sure does.
It appears weak hearts will not fare well in this arena.
Slingshot
Cavan Man
(11/26/01; 19:43:14MT - usagold.com msg#: 65931)
Austrian CB Gold Purchases
Is there anyone who reads here who has any interest in the published announcement of the subject BUYING $1 BILLION (100tons) of AU? Also, anyone interested in China selling UST and buying EURO for 10% of their FOREX reserves?
auspec
(11/26/01; 19:18:44MT - usagold.com msg#: 65930)
slingshot
Doesn't it make you proud to already have plenty of small unit silver? Just adds that much more premium to them!
Black Blade
(11/26/01; 18:50:55MT - usagold.com msg#: 65929)
Goldman May Cut 1,000 Jobs
http://biz.yahoo.com/rb/011126/business_financial_goldman_dc_1.html
Snippit:
NEW YORK (Reuters) - Wall Street firm Goldman Sachs Group Inc. (NYSE:GS) may soon be cutting as many as 1,000 jobs to pare costs as its investment banking revenue dries up, according to a Salomon Smith Barney research note on Monday.
Black Blade: Unproductive nonessential banker "Bones" shipped off to the "Bone Pile."
Black Blade
(11/26/01; 18:46:27MT - usagold.com msg#: 65928)
Brown Shoe Q3 earnings fall, 650 job cuts set
http://biz.yahoo.com/rf/011126/n26361275_1.html
Snippit:
ST. LOUIS, Nov 26 (Reuters) - Brown Shoe Co. (NYSE:BWS) on Monday reported lower third quarter earnings, citing weaker demand related to the Sept. 11 attacks, and said it would cut 650 jobs, taking charges in the fourth quarter.
Black Blade: These "Bones" have no sole. Off to the "Bone Pile."
The Invisible Hand
(11/26/01; 18:24:47MT - usagold.com msg#: 65927)
NewsMax, Koryagina, Bruguiere and Dornbusch - the lunatic fringe?
http://www.newsmax.com/archives/articles/2001/11/23/13946.shtml
Would those last standing goldbugs like gold to rise? It seems so. What about some new attacks on the US (financial system) coupled with a collapse of the Saudi-Arabian kingdom and a financial collapse in Japan?
My attention was aroused Sunday by a NewsMax article
Influential Russian Says 'Clock Ticking' for Next Attack
http://www.newsmax.com/archives/articles/2001/11/23/13946.shtml
This article refers to an October 03, 2001 NewsMax article under the headline Russian Expert Who ‘Predicted’ Attacks Warns of New Ones
http://www.newsmax.com/archives/articles/2001/10/3/212706.shtml
snip
The same Russian government expert who predicted last July that America was about to suffer a "financial attack" –- and encouraged Russian citizens to cash out dollars and buy rubles and gold –- has again surfaced to make more stunning forecasts. Dr. Tatyana Koryagina gained some credibility in the Russian media because of her prediction of an unusual catastrophe that was about to hit the U.S.
unsnip
Who's Dr. Koryagina, ask NerwsMax? Koryagina is a senior research fellow in the Institute of Macroeconomic Researches subordinated to Russian Ministry of Economic Development (Minekonom). She is reportedly close to President Putin's inner circle.says NewsMax.
My own internet search on Koryagina brought up
Russians Anticipate Dollar and Bush Crash
Posted on Saturday 28 July
http://www.goldbankone.com/article.php?sid=134
This concerns the gold chervonets which have been discussed here.
snippets
On July 4, Pavel Bykov wrote in the financial weekly Ekspert, The gold chervonets is back in Russia. …. The Central Bank's action, according to Ekspert, shows that the bank is seriously interested in creating a liquid market for the gold coins. After all, a dollar is just a piece of paper, while Russia has always preferred more valuable things....
Better than Bathroom Wallpaper
It was the outspoken economist Tatyana Koryagina, who suggested in her testimony to Sergei Glazyev's State Duma hearings on June 29 (EIR, July 6 and 20) that holders of dollars will soon be able to use them for nothing but wallpapering their toilet stalls. She was interviewed by the newspaper Pravda on July 12, about her forecasts of a mid-August blow-out of the entire world financial system, the U.S. economy and the dollar first and foremost. Koryagina's forecast of an August U.S.-centered financial breakdown is clearly being debated throughout Russia:
…
Moreover, Koryagina suggested that Russian citizens already now should change dollars for rubles, and gave a nod to the Bank of Russia's latest actions: I am closely watching the measures taken by the President and the Central Bank. From the standpoint of pre-crisis measures, they are acting properly. It is possible that after August 19, the ruble may become a rather good currency.
…
The last time there was public consideration of changing Russia's dollar orientation, was in the aftermath of the August 1998 collapse of the ruble and default on the ruble-denominated GKO government bonds. In January 1999, maverick economist Artur Sazonov floated a plan for a gold-backed ruble, linked to the European Monetary Union currency, the euro. Komsomolskaya Pravda wrote it up at that time, under the headline, Why Not a Gold Ruble, Gentlemen? Introduction of New European Currency Makes You Wonder Whether Russia Should Be Going Along With the Dollar.
unsnip
Remember the Russian FOA?
So the conclusion can be made, that "the dollar will disappear" (G.V.Kurdjumov). But it will not happen this year and the next year as well. It will happen in 10-15 years, as V.O.Chkuasely said (the Institute of Procrisis Investigations) disproving numerous accusations from the number of mass media, concerning the fact, that he had spread the panic among population, by appealing to get rid of American currency, which had become so dear to the heart of nearly every Russian citizen.
http://www.ffo.ru/stock/eindex.html
This Tuesday morning Hong-Kong time, I am reading on NewsMax:
French Terrorist Chief Warns of New Attacks, Possibly Cyanide
Phil Brennan, NewsMax.com
Tuesday, Nov. 27, 2001
The man who hunted down and jailed Carlos the Jackal, the world's most notorious terrorist, is now warning that the U.S. faces a deadly threat from terrorists now operating undetected in this country.
Jean-Louis Bruguiere, France's chief anti-terrorism judge, told journalist Christophe Calais that well-concealed terrorists cells in the U.S. could easily use cyanide to poison water supplies here.
http://www.newsmax.com/archives/articles/2001/11/26/175352.shtml
Also this morning, I found the summary of Rudi Dornbusch, former chief economic adviser of the IMF and the World Bank,‘s column in last week-end's Belgium's De Financieel Economische Tijd. This article is of course a translation of an article which should have been published earlier (and it mentions the price of $161 for oil, which I vaguely remember having seen discussed here). Dornbusch is arguing that the present recession will be milder than the recession of 1982, BUT, he says, the fall of the Saudi-Arabian royal family and the financial collapse of Japan could bring down the world economy.
He concludes:
But there comes perhaps a clear moment in Saudi-Arabia, whereby a stable government will be set up in no time. And perhaps, it is possible that an inflatory strategy puts Japan back on the road to growth, before the final hour comes (before the deathbell rings). But economic history teaches that when the economy is rotten so deep, attempts at reducing the damage can only open the door for a total collapse, like the reforms of Gorbachev in the former soviet-union.
http://www.tijd.be/articles/dossiers/20011126/tijdnet17518951.ihtm
Jubilate, goldbugs!
slingshot
(11/26/01; 18:03:09MT - usagold.com msg#: 65926)
The Silver Squeeze
After reading a few of the posts on silver'sure made my blood pressure go up a couple of points. Now they are melting all the small units of silver into 1000 oz industrial bars. Are these refiners waiting for the price of silver to go up greatly to sell to the users? At the same time cornering the market by blocking the small investor from accumulation. Who is going to buy a 1000 oz bar? How can you use it in a barter market? Lets don't forget that they plan to get as much as they can if and when silver drops to $3.50 per oz. OH, Those dirty buggers! to put it mildly. Couple this news with the arrival of the EURO and should it outperform the Dollar,Americans may have no POOR MANS GOLD to save them from finanical trouble. Even if the EURO wins it still will be, "Meet the New Boss, Same as the OLD BOSS", If I read it correctly.
Looks like we have a two front war. One being the refiners on Silver and the other the Bankers on Gold.
Time to Hunker Down.
Slingshot
Black Blade
(11/26/01; 17:44:31MT - usagold.com msg#: 65925)
Ashcroft says US got threat against natgas sector
http://biz.yahoo.com/rf/011126/n26364833_3.html
Snippit:
WASHINGTON, Nov 26 (Reuters) - U.S. Attorney General John Ashcroft said on Monday that the Bush administration received information on a possible terror attack on the American natural gas sector. ``There was, maybe 10 days or close to two weeks ago, an uncorroborated report of undetermined reliability about natural gas. Frankly, those are the kinds of reports which we take seriously,'' Ashcroft told reporters. Ashcroft did not say if the threat was made against a specific natural gas pipeline, storage site or liquefied natural gas (LNG) plant.
The administration is worried that attacks on the United States might resume if Saudi-born militant Osama bin Laden, who Washington believes was the mastermind behind the Sept. 11 attacks on New York and Washington, is captured or killed. ``We're especially always concerned as it relates to things that might have substantial hazard, and some of our energy (facilities) have substantial hazard,'' Ashcroft said. Energy industry trade groups were notified of the threat, he said.
Black Blade: Attacking the US Energy infrastructure would be the most effective and direct method of crippling the US economy. Another possibility would be an attack on Saudi, Omani, Kuwaiti, or Bahrain petroleum loading facilities that service western markets. After all, we live in "Interesting Times."
Black Blade
(11/26/01; 17:03:23MT - usagold.com msg#: 65924)
Normandy: Panel Revokes Interim Restraining Order
http://sg.biz.yahoo.com/011126/15/1xhgv.html
Snippit:
SYDNEY (Dow Jones)--Normandy Mining said late Monday that Australia's Takeovers Panel has revoked its interim order restraining the nation's largest gold miner's target statement from being sent to shareholders. Normandy Mining said the regulatory body concluded that contrary to South Africa's AngloGold Ltd. (AU) claims that the document is flawed, Normandy's target statement doesn't need to be amended and can be mailed to shareholders in its current form.
Black Blade: AngloGold's advances are rebuffed. Now it's AngloGold's move. The battle wages on. This is not good news for the desperate AngloGold. The hedgers are on the run and scrambling for cover!
site steward
(11/26/01; 16:22:24MT - usagold.com msg#: 65923)
New Stein
http://www.usagold.com/THEGILDEDOPINION.html
And after you smile, pick a story, any story, and read it while you're there.
Black Blade
(11/26/01; 16:13:25MT - usagold.com msg#: 65922)
Van Rip - Russia vs. OPEC
This is an old story that has floated about for over 20 years. First point is that most ME OPEC oil can be extracted and refined cheaper than Russia's heavy high-sulfur crudes. Secondly it will take years for this additional oil to be developed and shipped to market (such as building a pipeline being a major obstacle). Saudi and other Middle-East OPEC (and non-OPEC) members have the ability to flood the market with very low cost oil. This will hurt Russia more than the Middle-East producers. That is the threat now. Russia is an economic basket case and they simply cannot survive a price war.
Energy Secretary Spence Abraham is currently in Russia discussing the oil situation. A long-term price war could give a temporary boost to the Global Economy, however, this will also devastate western oil producers. When the oil supply is restricted in the future the western economies would be caught flat-footed without a significant means to supply domestic petroleum. Check mate! OPEC is in the Cat Bird seat on an oil price war. They could simply crush Russia as Russia needs the revenue more. Even if the Middle Eastern OPEC members get less profit, they will at least get a profit while Russia wallows in economic devastation. This could even lead Russia to become a member of OPEC. "If you can't beat em' - join em'."
Recently Chevron released results from their Caspian Sea exploration and these results were not encouraging as several promising areas resulted in several "Dry Holes." This has several exploration geologists rethinking the potential of the Region. Also the Soviets have destroyed much of the potential of the oil producing fields with mismanagement and inefficient methods that have caused irreparable harm to the oil fields. That should be no surprise. Another problem is that should any new reserves be found, it will take years to develop any new production. Then we are back to the old issue of a pipeline. This issue has been debated for years and we are no closer to building a pipeline than we were 20 years ago. Even if a pipeline is built, there are several security issues to be addressed. I don't see the US keeping a permanent presence with several US Army divisions in the region and paying bribes to every piss-ant warlord in the region.
It could be years before we see any significant increase in Russian petroleum production if at all. The costs are higher than in the Middle-East and there are just too many obstacles to efficient production and delivery. OPEC has a clear advantage. The issue has never been whether there is "enough" oil, it has always been about "cheap" oil. Cheers!
- Black Blade
Galearis
(11/26/01; 16:08:22MT - usagold.com msg#: 65921)
@ Netking
"Atocha" responded and it appears that a few of us are thinking the same thing
The gentleman was kind enough to respond considerably to my email which I paste below. What he says is very disturbing with an implied connection perhaps with the melting of 100 oz bars and COMEX. I will continue the conversation with him and ask for permission to post his email on USAGOLD.
In the meantime here is MY comment on the article; he completely agrees with my premise:
******************
Hello Mr. "Atocha",
First of all allow me to congratulate you on that fine editorial on Gold-Eagle, The Euro, Gold and the Dollar. All was succinctly put. However, and I do not mean this as a criticism - just a request for clarity - you said:
"We are now seeing the beginnings of a shortage of physical silver. One, ten, and hundred ounce silver bars have been bought and melted into good delivery one thousand ounce silver bars."
I have been aware of this shortage for some time now and have gone to the effort to chase down why this shortage is occurring. I have contacted both Engelhard and JM refiners and their response has been to tell me that they are not making small bar silver anymore. I do realize, however, that they ARE making 1000 oz bars. Both these refiners are very big sources of "good" bar silver and are also members of the LBMA. The latter point is also significant, I believe.
While we investors/speculators in the physical metal are well aware of the failed pricing mechanism in the commodities (markets) - especially obvious in the precious metals markets, where manipulation is an exacerbating factor - it would seem obvious that those on the other side would also be aware of the serious supply deficit crisis looming over the silver market. My worry, as an investor/speculator in the physical metal (I do not play the paper markets) is that the above quoted statement is a new wrinkle on the situation that is already very serious. The movement away from investment sized bars could be looked upon as an even more active means to remove the physical investor from the demand equation when all above ground stocks of silver are depleted. In other words, it is an attack on the monetary/hedge concept for silver.
And my question is (finally): how are you aware that these refineries are bringing in the small bars and remolding them to the large? And how would they accomplish this? What about central bank reserves in countries such as India? Regional impact only?
Do you see where this leads? If "western" bullion silver is converted to 1000 oz (+ - 12%) bar sizes, it may trigger disquisition of central bank reserves into the market in the eastern hemisphere where silver is looked upon in similar fashion to gold. Just one example of how this could play out.
Again, this is not a criticism, but a very important question for those of us who have followed the precious metals markets for years. I hope you can respond because I think we are on a threshold of change here that is yet another way for the fiscal "movers and shakers" to put us all in the fiat currency box with no way out.
Again, congratulations on a fine article. It is making the rounds and is now linked from other web sites.
Best regards,
**********
What he had to say was quite disturbing. The removal of 100 oz and all smaller bars is coordinated and on-going as we speak. The intent is both to affect the demand side AND to relegate silver as an industrial commodity only.
As I said, I will try to bring to you more details...
Regards,
G.
P.S. Who ya calling a radical?! (grin2)
Old Yeller
(11/26/01; 16:05:05MT - usagold.com msg#: 65920)
Bush and big government
http://www.portal.telegraph.co.uk/news/main.jhtml?xml=/news/2001/11/22/wbush122.xml
Quite a kerfuffle one short year ago in the aftermath of the election.I remember seeing the maps of Bush states and Gore states.Seems to me it was a mass of blue in the heartland of freedom and red in the liberal "big-government" states.
Looks like the surprise attacks on America have silenced the masses of right leaning critics of big government as Bush puts FDR's interventionism to shame.Personally,I'd be quite dispirited and somewhat jaded if the man I had voted for used the pretext of safety and security to impliment policy diametrically opposed to what he had campaigned for. Especially upping the flow of tax dollars to the two agencies who tragically let the people down in their most important duty.Why hasn't anyone of substance in the FBI or CIA been smoked out of their hole,instead of being rewarded with an expanded budget?
According to the polls,however,the man and his adminstration can do no wrong.History doesn't repeat,but it sure does rhyme good.
uponroof
(11/26/01; 15:58:38MT - usagold.com msg#: 65919)
Canada....heads up mates.
http://www.nationalpost.com/home/story.html?f=/stories/20011124/802952.html
Canadian friends~~~Anti-terror law gives military too much power: experts
I shudder to think what Canada would be like if it shared their southern border with a socialist country. The USA has helped slow down the slide but is fast becomming a land of limited freedom in itself.
FREEDOM is not leaving your cares in the hands of the gummint. That's called lazy. This pathetic mentality is pervasive today, growing in all areas, especially 'free' markets.
Market manipulation, to the delight of millions of new investors, believe it to be 'protection'. FED interest rate adjustments perceived as gummint 'help'. The bailouts after 911, a gummint blessing. When will California's plight surface again? Now Enron, will they intervene there?
DEPENDENTS that believe the gummint will in fact protect their money. HA! Just like the 90% loss of dollar purchasing power the FED engineered since 1940.
FREEDOM....you must watch closely. Losing ground daily.
Black Blade
(11/26/01; 15:41:03MT - usagold.com msg#: 65918)
Netking - AngloGold vs. Newmont
This battle was inevitable once NEM came into the picture. This is a "MUST WIN" effort for AngloGold. They have backed themselves into a corner. They sold off some assets for a quick infusion of cash and now they "MUST" deliver ounces into the hedge-book. If they don't win this bidding war, then they are in deep doodoo. I would venture that AngloGold and Barrick as the World's largest hedge fund miners "MUST" acquire "cheap" ounces or else. I think that we are about to see the endgame soon. As MK and I both have posted the Rueters article on the BoE auction tomorrow, the "huge reduction" in the Comex long position, and any surprise "over-subscription" on BoE Gold bids could spark a Gold rally. Unless certain powers intervene to quash such a rally, I suspect that AngloGold and Barrick could be in trouble. "Interesting Times" Cheers!
- Black Blade
Buena Fe
(11/26/01; 14:10:35MT - usagold.com msg#: 65917)
heard it here first
http://www.msnbc.com/news/663215.asp
Bush issues strong warning to Iraq
Baghdad must allow weapons inspectors back — or else
MSNBC NEWS SERVICES
WASHINGTON, Nov. 26 — President Bush hinted Monday that Iraq could be the next target of the U.S. war on terrorism. At a White House ceremony, the U.S. leader urged Iraqi President Saddam Hussein to allow U.N. inspectors back into Iraq to demonstrate that he's not developing weapons of mass destruction — or face the consequences..........
........ Among the notable advocates of expanding the U.S. campaign has been Deputy Secretary of Defense Paul D. Wolfowitz. "I think any government that supports or harbors terrorists should be very worried right now," he said in an interview last week...........
-----------------------------------------------------------
Didn't someone here (usagold) post this very scenario just a few weeks ago? Something about an extreme rightwing/Isreali top gov. group pushing Bush to war?
Could someone repost it if you saw it?
Old Yeller
(11/26/01; 13:50:17MT - usagold.com msg#: 65916)
America's deflation myth
http://www.newaus.com.au/econ299usdeflation.html
This forthright Aussie is not inclined to promote the latest bafflegab emitted from the corridors of power.
It seems to me the longer the Fed and the US administration
attempt to deflect the true causes of what truly ails the monetary system,the more severe the ultimate reckoning will be.
This appears to be a common theme in all government policies being managed for everyone's best interests at this time.The lack of objective mainstream media helps to perpetuate the cycle of "benevolent" deception.True and factual disclosure appear to be the rarest commodity these days.Thank goodness for the internet and fine sites like USAGOLD.
Old Yeller
(11/26/01; 13:31:38MT - usagold.com msg#: 65915)
Bond bounce; fails again
http://quotes.ino.com/chart/?s=CBOT_USZ1
The divergence continues,despite the latest plan to "help" Japan by persuading them to buy US treasuries.
Any guesses on the next plan(know in simpler times as manipulation)?
Buena Fe
(11/26/01; 13:04:55MT - usagold.com msg#: 65914)
backfire
Doesn't Russia want to sell all it's oil in Euros! Checkmate US$
The CoinGuy
(11/26/01; 13:01:45MT - usagold.com msg#: 65913)
Try and Try again...
http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0
TCG
The CoinGuy
(11/26/01; 13:00:35MT - usagold.com msg#: 65912)
Must be hard to type with Bear Claws this long...Roach's Latest Observations
http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0
I'll tell ya, I'm getting more and more confused on the inflation/deflation argument. Anyone else?
TCG
VanRip
(11/26/01; 12:43:33MT - usagold.com msg#: 65911)
Will a Tide of Russian Oil Sweep OPEC Aside?/BlackBlade
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Matthew%20Lynn&touch=1&s1=lynn&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=ad_bottom_bbco&s=AO.t9YROiV2lsbCBh
BlackBlade, Don't know if you've seen this. Sorry if it's old news.
Matthew Lynn of Bloomberg News has an interesting column regarding Russian and Opec Oil. According to him, Russia is in the cat bird's seat and too bad for Opec. Glad Bush and Putin are getting along. What do you think?
(snippit)
The stage is now set for a deepening, probably permanent, conflict between Russia and the Organization of Petroleum Exporting Countries. The rift will depress the price of oil, but it's more significant than that. This event may well finally break the power of OPEC, plunging Gulf states such as Saudi Arabia ever closer to an economic precipice. It might also serve to decisively bind Russia to the Western European economy.
(snippit)
After three decades the world might be about to see the re- emergence of a free market in oil, and the ending of a market rigged by Middle Eastern states -- an event to be welcomed by everyone apart from Arab princes and Park Lane hoteliers.
(snippit)
Could it be about to do so again? OPEC right now looks more threatened than at any time in its history. Russia is now back in the oil business as a big player, and a player with a very different outlook from OPEC.
(snippit)
Rising Russian oil production has a lot more pain to inflict on OPEC. Production is still only half Soviet levels, and private enterprise can surely pump oil out of the ground more efficiently than the old Soviet planners. There is certainly no shortage of the stuff. The U.S. Energy Department estimates Western Siberia alone has reserves of 216 billion barrels. It will be impossible for OPEC to survive that flood of oil onto the world market.
(snippit)
For the first time in a generation, the oil price could soon be set entirely by the free market, not by politicians. There will be losers from that, but their numbers will by far outweighed by the winners. No regrets are necessary for OPEC's demise.
George
(11/26/01; 11:59:00MT - usagold.com msg#: 65910)
Wilshire 5000
I understand that the Wilshire 5000 is a capitalization-weighted index. That being the case how do I calculate the total market capitalization in terms of dollars? I recently calculated the the market cap of the DOW 30 at 3 and 1/2 trillion dollars. Does anyone know if that figure is correct? Please help if you can.
Netking
(11/26/01; 11:06:01MT - usagold.com msg#: 65909)
Galearis - Ag supply
Galearis/Ag bugs etc - They'll be "hurting" for sure, I guess the sign of smaller bars being melted down(if confirmed) is a REAL indication of "measures being put in place" to "try"(grin) & contain the squeeze of "available" supply.(As an aside did you know that there are some <quite a few actually> "extreme PM radicals" that won't sell their physical holdings for less than $100/oz!!!<grin>)
"Their" goal here is not so much the prevention of the retail investor getting in on the metal but rather preparing for the protection (and survival!) of the important users (& there is lots of these yes). I have suspected something a little unusual has been going down for a while in terms of some refinery supplies (current & future)"being taken care of" with retail orders being shut out in the short(?)term.
My prediction(famous last words right!)is for the remaining "available physical metal" to go QUICKLY at these price levels . . .
We are right there at the doorway of the new bull in silver & gold . . . - Netking
Galearis
(11/26/01; 10:37:57MT - usagold.com msg#: 65908)
@Netking, Spartacus and others
http://www.gold-eagle.com/editorials_01/atocha112601.html
snippet:
"We are now seeing the beginnings of a shortage of physical silver. One, ten, and hundred ounce silver bars have been bought and melted into good delivery one thousand ounce silver bars."
*********
I have queried the author about this statement. If true, we may be seeing the first movement to the "political" solution to the silver shortage. Hope he responds.
G.
Netking
(11/26/01; 10:30:35MT - usagold.com msg#: 65907)
Gold wars cont. - "Anglo sools panel on to Newmont"
http://smh.com.au/news/0111/27/biztech/biztech6.html
The latest on this war from the Sydney Morning Herald . . .
AngloGold has declared war on Newmont Mining Corp, launching action to unwind key elements of Newmont's $3.8 billion counter-bid for Normandy Mining. Accusing Newmont of misleading Normandy shareholders, AngloGold alleged the company's bid contravened several "fundamental aspects" of Australian takeover law and policy.
"AngloGold considers that Newmont's offer is a high-risk proposition for Normandy shareholders," said AngloGold's chief financial officer, Jonathon Best. "We consider that the comparative analysis which Newmont has presented in selling its offer and its characterisation of AngloGold are misleading in a number of ways."
AngloGold had been expected to unveil a sweetener to its $1.42-a-share offer yesterday. Instead, the company said it intended to request the Australian Takeovers Panel to challenge several aspects of Newmont's counter-bid. This includes a request to set aside an agreement between Newmont and Normandy's largest shareholder Franco Nevada over the sale of 19.9 per cent of Normandy . . . . "
Cavan Man
(11/26/01; 09:19:29MT - usagold.com msg#: 65906)
(noble) site steward
Is there any mention in these pages of an announcement by the Austrian CB to buy US$1 billion of AU? Also, any reports out of China to sell reserves and buy Euro? Thanks.
PS: I am looking at financial markets closely and reading between the lines and it appear that all heck is getting ready to break out. Of course, that's if I am "reading" correctly.
USAGOLD
(11/26/01; 09:10:59MT - usagold.com msg#: 65905)
Daily Market Report: BOE Auction Tomorrow, Comprehensive Review of Gold Market at Commentary & Review page, Get Your Christmas Shopping Done Early On-Line -- Termine and Winer's Classic Collection
http://www.usagold.com/Order_Form.html
Ed. Note: Here we reproduce a portion of the Commentary & Review to
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access codes. You'll also gain access to our News & Views: A Quarterly
Review of Forecasts, Commentary and Analysis on the Economy and Precious Metals.
11/26/01
In Brief: Gold continued its slow southerly drift this morning after another
quiet night overseas with little in the way of news or trade activity to break it
out of the lethargy -- at least for the moment. The Bank of England gold auction
comes up tomorrow and the big buyers are likely to fill there currents needs
there rather than the open market. London traders think that the 20 tonne sale
will buttress prices this time around and could even ignite a rally, according to
Reuters this morning. Reuters also points to the "huge reduction" in the Comex
long position as additional incentive for a rally. Gold could also benefit from
dollar weakness.
We invite those looking for a in-depth report to read our review to the right. It
covers a longer term view. There's some good article summaries and links
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Morgan Stanley Goes Bullish on Gold . . . . . Over the weekend I
read an positive report on gold from Morgan Stanley . . . . . . . . . . .
* * *
Galearis
(11/26/01; 08:34:09MT - usagold.com msg#: 65904)
@Solomon Weaver
re American (real) silver dollars
Good morning,
You said: "Solomon says: Galearis, here are the numbers that I have always thought applied to pre-1965 "junk silver" legal tender coins:
Standard silver content is 90%. A dollar has 0. 8 ounce weight. Thus, a junk unit (dimes, quarters, or halves) with a face value of $1000 will have approximately 720 ounces of silver content.
**************
The apparent area of confusion here is geopolitical. My little post was about Canadian silver money, not American. The interesting (to me) business with "our" last commemorative issue, the "Expo 67" year issue was the varying purities - almost as if they were being indecisive to make a clean break with the precious metal content. Some of that year's mintage were 800 silver and some only 500 silver. All silver amalgam coins retail currently for $6 to $7CAN but the pre 1967 ones are all 800 silver.
A Canadian silver dollar has .6 oz silver in it at 800 grade. The American ones run better, as you say. The other interesting area to muse about is the retail price of new 99 coins. Note the much larger spread between metal content value to weight and the POS. This is the mint "hedging its bets! When they run out, as you imply in the rest of your post, silver MAY settle out in the end at $10 to $20 but I am not so sure it will be in US denominated spot and you may be a little low in your final projection. Note I said "settle out". The demand for the new coins will be good considering that this will likely be the last issue of them as history repeats itself with this coin run as it did back in '65 for the 900 coin.
Regards,
G.
George
(11/26/01; 08:22:05MT - usagold.com msg#: 65903)
Internet Tax
http://members.aol.com/gparrishjr/ggg1.html
Black Blade
Thanks for the update. I have had enough of politicians. I recently heard they passed the patriot bill (excursion into fascism) without even reading it. If such were the case it would not surprise me that they would slip in an Internet tax. They way things are now what with the undeclared "war" and all I don't even know why we need senators or congressmen. They are truly worse than the Taliban, but most people can't see it. How many people do you know who would let thieves steal gold right out of their own house for over 5 years and do nothing while it was exchanged in the streets for worthless pieces of paper?
Spartacus
(11/26/01; 08:14:40MT - usagold.com msg#: 65902)
The Euro, Gold and the Dollar
http://www.gold-eagle.com/editorials_01/atocha112601.html
...Forget all the polite, friendly and co-operative public rhetoric between the Fed and the ECB. The stakes of the war between the dollar and the euro are much more than substantial. At stake is the privilege to continue performing the greatest historical criminal plundering and looting of purchasing power in the history of the world...
Great article!
Cavan Man
(11/26/01; 07:43:55MT - usagold.com msg#: 65901)
Canuck, Leigh, BB ALL:
Have recently returned from a trip to find a letter in my mail box concerning the purchase of $1 billion by the Austrian CB of AU and the announcement of China converting 10% (at least intitially) of their reserves to EURO. Has this been discussed here over the weekend? In particular, the announcement by the Austrian CB would seem to flow done the same river and trail as long running commentary here. Will time prove all things (again)? As for China; this is to be expected. The real story will be the converting of like reserves by other sovereign nations. Comments?
Cavan Man
(11/26/01; 07:39:58MT - usagold.com msg#: 65900)
Leigh
While you are preaching to the choir in my case, I do believe it is an error to pull passages out of their context. This was seldom done pre-Luther and certainly not prior to the end of the 11th century. Blessed be the peacemakers.........CM
Black Blade
(11/26/01; 07:25:53MT - usagold.com msg#: 65899)
The Deflation Monster Still Lives
http://www.aei.org/eo/eo13507.htm
Snippit:
The Fed's comment reflected two underlying developments of concern to central banks. First, the slowdown in the global economy is accelerating, with Japan's virtual depression intensifying and Europe probably having slipped into recession during this quarter. No wonder then that both the hitherto recalcitrant European Central Bank and the more detached Bank of England followed the Fed's 50-basis-point rate cut of November 6 with identical cuts within forty-eight hours. Perhaps the other central banks were responding to the Fed's pointed reference to deterioration in business conditions "both here and abroad," and perhaps they were beginning to notice that both output and inflation were falling rapidly within their own countries.
The second and by far more compelling reality underlying the Fed's sense of urgency in cutting rates is the transition underway from disinflation to outright deflation both in the United States and worldwide. The report that the U.S. producer price index fell by 1.6 percent during October alone was an even more compelling spur to easing than the October Payroll Employment Report that saw elimination of 415,000 jobs, the largest one-month decline since May 1980.
Black Blade: Interesting article.
Black Blade
(11/26/01; 07:19:24MT - usagold.com msg#: 65898)
RE: George - Internet Tax
Sorry, but that is an old internet hoax. I am surprised that it is surfacing again (for at least the third time). It even caught some Congressional candidates by surprise during the 2000 elections. The incumbants obviously have no clue as to what legislation is floating around the halls of Congress - scary huh? Cheers!
- Black Blade
Black Blade
(11/26/01; 07:15:02MT - usagold.com msg#: 65897)
BANKRUPTCIES R US
http://www.nypost.com/business/35120.htm
Snippit:
Corporate bankruptcies and debt defaults are rising to record-high levels - and market watchers fear there are many more to come. In the last two weeks alone, as consumer confidence gained ground and stocks rallied, more than 200 companies filed for bankruptcy in the United States, according to BankruptcyData.com.
Black Blade: And it will get much worse as consumer and corporate debt are at extraordinary high levels. Even with "Cheap" credit, fewer banking institutions are taking on risk by making questionable loans. What a "Sea Change" from the last few years. But then even the banks are in deep trouble.
George
(11/26/01; 07:14:33MT - usagold.com msg#: 65896)
Tax on email
I read this on another forum and thought it might be of interest:
No more free e-mail! FEDERAL BILL 602-P I'm going to share this updated news. The last few months have revealed an alarming trend of the US GOV. attempting to quietly push through a legislation that will affect the use of the internet.
Under propose legislation, the US Postal Service will be attempting to bill E-mail users out of 'alternative postage fees,"
Bill 602P will permit Fed.Gov. to charge a 5-cent surcharge on every-email delivered by billing Internet Service providers at cource. The consumer would then be billed in turn by the ISP.
Washington DC lawyer Richard Stepp is working without pay to prevent this legislation from becoming law.
The postal service is claiming lost revenue, due to the proliferation of E-mail, is costing nearly $230.000.000 in revenue per year. You may have noticed their recent ad campaign: "There is nothing like a letter."
All you need to do is average out your daily e-mails and tabulate your yearly costs.
Congressional representative, Tony Schnell (R) has even suggested a "20-$40 per month surcharge on all internet service" above and beyond the governments proposed E-mail charges. Note that most of the major newspapers have ignored the story the only exception being the Washingtonian which called the idea of E-mail surcharge "a useful concept who's time has come" (March 6th 1999 Editorial).
Send this E-mail to EVERYONE on your list, and tell all your friends and relatives to write their congressional rep. and say 'NO' to bill 602P
Black Blade
(11/26/01; 07:08:15MT - usagold.com msg#: 65895)
Average investor has unrealistic view of future returns
http://cbs.marketwatch.com/news/story.asp?column=Weekend+Investor&siteid=mktw
Snippit:
SANTA MONICA, Calif. (CBS.MW) -- Freud's definition of a crazy person is someone who does the same thing over and over expecting different results. People are still expecting average annual returns in the stock market to be in the double digits. "They just have unrealistic expectations," says Jim Ward, managing director at the investment management firm SEI Investments. Ward, citing research SEI acquired from Scudder Investments, says even today investors 68 and older expect their average annual return in the stock market to be 16 percent or more. And that's the low expectation. Those with the highest expectations, between the ages of 18 and 23, expect annual returns of 26.5 percent, Ward says.
Black Blade: I think that these people will probably get a very rude "Wake Up Call." Then again, maybe we are seeing a New Stock Market Bubble forming. "Interesting Times."
Black Blade
(11/26/01; 07:00:06MT - usagold.com msg#: 65894)
The US economy sinks while stocks still float
http://www.newaus.com.au/econ300usrecession.html
Snippit:
What a surprise, the NAPM's (National Association of Purchasing Management) latest report revealed that economic activity in the manufacturing sector had fallen for the 15th consecutive month in October. Leaving no room for our Keynesian Pollyanna's to find a chink of light, it also revealed that the overall economy had ground to a halt.
Black Blade: Sinking economy and rising stock markets - it's called "Irrational Exuberance." The gamblers have returned to the Roulette Table.
Black Blade
(11/26/01; 06:10:53MT - usagold.com msg#: 65893)
UK auction seen buttressing gold price
http://biz.yahoo.com/rf/011126/l26383038_1.html
Snippit:
LONDON, Nov 26 (Reuters) - This week's sale of 20 tonnes of gold by the Bank of England may put a floor under a weakening bullion market and eventually push prices slightly higher, analysts and traders said on Monday. ``There is some confidence coming back into the market,'' Frederic Panizzutti, head of research at the Geneva-based Golden Avenue, told Reuters. ``Once we have cleared the auction out of the way we might see the market move again. I don't say that everybodyy is turning bullish, but at the moment people see more upside potential than downside potential,'' he said.
Black Blade: A "New Gold Rush" coming soon? At least there appears to be a more positive view of the "Barbarous Relic."
Black Blade
(11/26/01; 06:04:45MT - usagold.com msg#: 65892)
Boeing Sets 2,900 New Job Cuts, Total Now 14,900
http://biz.yahoo.com/rb/011126/business_boeing_layoffs_dc_1.html
Snippit:
SEATTLE (Reuters) - Boeing Co (NYSE:BA). On Monday announced 2,900 job cuts, boosting its total since the Sept. 11 hijack attacks to 14,900 or nearly half the 30,000 jobs it has said it could cut by the end of 2002.
Black Blade: The "Bone Pile" nudges higher.
Canuck
(11/26/01; 04:29:30MT - usagold.com msg#: 65891)
More on interest rates; bloodbath last week
http://www.the-privateer.com/gold6.html
Leigh
(11/26/01; 04:26:16MT - usagold.com msg#: 65890)
Cavan Man, Panda
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=25442
Remember our line of conversation months ago about what the Bible says about self-defense? This article makes my point MUCH better than I did at the time.
Belgian
(11/26/01; 04:19:55MT - usagold.com msg#: 65889)
@ Waverider
Modern times have modern confiscation means. Permanent ones : Taxes and Currency Depreciation ! No need to confiscate any tangible, on the contrary !
When the trio *prices-costs-profits*, are driven into a corner, the deflalala corner, fiscal (tax) and monetary (interest rates), policy-magics are finished. The economic engine, lost speed and renewed abundance must be created, to revive the trio + taxes + currencies. Gold confiscation is to be compared with the prohibition of alcohol. They never drunk that much. Ask how the Kennedy's made their fortune.
Goldmines will not be confiscated/nationalized for the following reasons : 2.500 tonnes of Gold is only 1,78% of the refined aboveground 140.000 tonnes. Estimates of the underground reserves (?) are a maiger 12.500 tonnes, less than 10% to be added to the above. Any state will leave those private mines alone and tax them for the remaining Gold that will reach the surface for refining. At a later stage or simultaniously, the trade in aboveground Physical Gold can be taxed, what is NOT the case at present ! Increasing Physical trade with ever higher prices is the Taxman's dream.
Oil-distribution, has never been nationalized or confiscated. As long as consumption increases and Taxes are coming in. The future : make oil abundantly available at high prices with high(er) taxes. Depreciate faster but with rich abundance and no practical restraints.
POG in the thousands will change the consumption of jewelry gold, dramatically. And that is something the mines dislike/fear ! It will be the Physical Gold Investor/Trader, who will dominate the price setting and Gold, Yes Refined Physical Gold Only, will be in demand. Not the rock - imbedded one .
It is when the general public, suddenly, awakes from this 70 year old currency debacle and finally finds refuge in Gold again, that the Gold-reflex of selfdefence will be re-established. This will not happen when POG is capped (again) at the oh so popular 600$/ounce.
He who believes that "the" drama, the currency-drama that is, will not take place and can be avoided at infinitum, is not to be advized to exchange the bulk of his fiat into the yellow physical.
Netking
(11/26/01; 03:01:17MT - usagold.com msg#: 65888)
tedw - silver
tedw(65859)Consider excerpt this from Mr Morgan PM analyst - May 2001):
Interview by Resource Consultants Inc
Pat: David you seem to prefer silver over gold can you explain why?
David: Yes, Pat. I prefer silver over gold for several reasons. First let me state that I do like gold and own some, but I feel silver will outperform gold during the next bull market.Silver is a monetary and an industrial metal. In fact silver has been used as money more often and in more places in the world than gold. Because silver is also an industrial metal it is used in applications that are vital to our way of life. We would not be able to own refrigerators, stereos, TV's, computers, or phones without silver. The silver used in most applications is very small but it is vital, it has to be there. One fact that many gold dealers make people aware of is; that gold was confiscated during Roosevelt's Administration. However, you seldom hear them say that silver has never been confiscated. This is just one more reason I favor silver over gold. Silver has been running a deficit for eleven straight years now. Every year now for over a decade the above ground supplies of silver have been eaten away until now the best estimates in the world of remaining silver stocks are between 300-500million ounces.
Pat: I've sold silver for years, it seems like the market is not paying attention to this constant decreasing supply, would you comment?
David: Certainly Pat, let's take the high number. 500 million or half a billion ounces, now let's subtract what Warren Buffet owns 130 million, that leaves 370 million ounces of silver. From my work I have shown that the average rate of silver consumption is about ten million ounces per month. So if we divide 370 million available by 10 million ounces per month usage, we find that there is only three years worth of silver left. This of course is purely a hypothetical example because the situation is far more critical than I am saying. First you have to use some common sense. All the 370 Million ounces I refer to is now owned by people. Some are industrial users that have to have the silver to continue in business, like Fuji film for example. Others are investors that have bought in over the years and most are holding around the five dollar level, these people are holding for price appreciation and safety. So, the question really becomes how much more silver is available at any price?. . . . "
Waverider
(11/26/01; 01:21:00MT - usagold.com msg#: 65887)
Belgian #65884
Always the BIG one Sir. Thank you for your views/theories and the time it takes to write them. You inspire me to review the archives of the discussions here and study TG's arguments. The question that immediately comes to mind is if Gold does reach a valuation in the thousands, what is to prevent the government from outlawing the private ownership of gold? Please excuse if this appears to be a naive question, or if this has been discussed previously on the forum, but to me that would appear a very real possibility and I believe has happened previously in history. Is that a risk to consider in catching the Gigantic Goldwave?
Waverider
Solomon Weaver
(11/26/01; 00:33:29MT - usagold.com msg#: 65886)
Nice to see silver topic yesterday .. a couple notes
Galearis (11/25/01; 15:58:54MT - usagold.com msg#: 65860)
If I remember correctly in 1967 we (Canada) "defaulted" on our metal currency so those last issues of commemorative dollars, halfs, quarters and dimes ran .8 OR .5 silver (impossible to tell which one held in hand), whereas in prior years it was all 800 silver. Around this time silver was at approx. $1.39/troy ounce (at .6 oz silver per each dollar) so this was the reason for the shift away from the precious metal. People began hoarding them!
. . . . . . . . . . . .
Solomon says: Galearis, here are the numbers that I have always thought applied to pre-1965 "junk silver" legal tender coins:
Standard silver content is 90%. A dollar has 0. 8 ounce weight. Thus, a junk unit (dimes, quarters, or halves) with a face value of $1000 will have approximately 720 ounces of silver content.
- - - - - - - - - - - - - - -
tedw (11/25/01; 15:56:25MT - usagold.com msg#: 65859)
silver
Since silver is an industrial metal, common sense would seem to indicate a weakening economy would mean weaking demand for silver, and an accordingly lower silver price.
So perhaps we will see $3.50 silver again,or even lower.
. . . . . . . . . . .
Solomon says: tedw, please consider the following: Since the 1800s when the US Government pushed so hard to mint new silver coins, and then wound up sitting on massive inventories, they have been a major source of reserve silver. The entire structure of the mining industry for the last decades (here I mean modern industry) has been established in a time when a silver deficit could always be covered by reserves. Now, we are entering a new period, where the mix of silver in an ore body will be an important consideration, as the worlds mining industry tries to reestablish an appropriate silver balance with the least amount of capital.
Also, the needs for metals such as copper and zinc tend to track the requirements for large scale industry and infrastructure, where silver is primarily required in photos and electronic applications. There is currently a glut of capacity in electronic fabrication, so one would expect attempts to drive unit prices down by volume production going up…i.e. the worldwide end consumer creates demand for silver in this setting. On the other hand, there has been a glut of investment dollars for large infrastructure, but this is slowing. With the global mining industry already in trouble, there is little interest in additional investments to mine more silver.
Silver is currently viewed as a cheap by product metal, and unless the price can rise to a stable level where it is attractive for mining capital to be spent on silver ore development, we will simply run out of available silver at some point in the next few years. The price of silver is extremely dominated by paper speculators and financiers…so, I have little surprise if the "price" would fall below $3.50. Oddly enough, the price collapse in zinc and copper, which are common side products of silver mining, has increased the cash costs of mining silver.
It is interesting to note that when Warren Buffet slowly purchased about 130 million ounces of silver in 1997, the price rose from the range of $4 to $7….this was against known inventories of about 1 billion ounces. This is because he was a large buyer who wanted real silver. I take this as a general indication that the equilibrium price of silver that would stimulate silver mining is about $10 per ounce. It am a little more aggressive and think that in today's dollars, we would need to see silver go to about $20 as a new price to drive the actual product mix of mining to fit the balance of silver.
"Unfortunately", Silver is likely to be very volatile, and that will tend to reduce investment until is seems clear that $10-$20 silver is here to stay.
And one more important thought....."Silver is the poor man's Gold".
Poor old Solomon
ViewYesterday's Discussion.
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