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

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WELCOME TO THE ARCHIVES!

ARCHIVED DISCUSSION FROM 9/27/1999
All times are U.S. Mountain Time

View Yesterday's Discussion.

Beowulf (9/27/99; 23:47:53MDT - Msg ID:14662)
Question for the Forum
Hooyah! Happy, Happy, Joy, Joy for the for the Goldbugs.

Now to the question part. The Gov'ment is moving me to a position over seas in Europe. I have a few shares of Newmont that I bought at 16 7/8 back in April and have not regreted the decision since. Now that I'm due to leave for Europe in two weeks I would like some direction from the Forum on what to do. Should I sell my stock, or take delivery of the Certificates and take them with me? If I sold it that would mean I'd have to pay state tax on the profit (6%).

Another question: Last week my gold coin purchases were valued under $10k but after today I have significantly exceeded that. From what I understand I can't take more than $10k out of the country for some reason. I don't plan on returning to the Southwest so putting it in a bank deposit box here will do me no good if I can never get it. All my relatives that I've explained what was going on with gold for the last year have told me gold is the worst investment and wouldn't listen to me. Now they all want me to leave my gold with them for safe keeping. What should I do? take some with me and leave some with relative to hold? Take it all? Mail a portion to my new Post Office Box? Sell? (I sure don't feel doing the last one is the right decision, but if I have to, then I have to). Could someone help give me some direction to think about?

onlychild (9/27/99; 23:16:23MDT - Msg ID:14661)
Surplus
Somebody help me out here, didn't I see over the weekend that the gov't was out of money? So if Uncle is broke and he's gonna bum some money off of the taxpayers (SS trust fund) then what's this surplus crap? I'm just a simple kid from Kansas City and I don't get all this big finance stuff.

By the way MK, in "Short and Sweet" you mentioned enjoying some football this fall: You must be planning to watch the Chiefs!

Goldfly (9/27/99; 23:08:08MDT - Msg ID:14660)
Zippy-da-do-Downer

$284.50!!! What happened here?



Goldfly (9/27/99; 22:54:30MDT - Msg ID:14659)
Ok, this is late for me....

And I'm trying to study too.

Bought....




GFD (9/27/99; 22:53:31MDT - Msg ID:14658)
Recent Events
I am very busy so I will be in and out sporadically during the week.

There are a couple of things to keep in mind. Please forgive if this is redundant as I have not had enough time to read everyones posts in detail.

Firstly, the very public announcement by the central bankers. They did not necessarily need to make this decision public. The announcement was a *very* deliberate act. It is not clear in my mind what they had in mind but there are a couple of things people should keep in mind.

Firstly, they may be announcing a plan to unwind the large physical short position. Those loans that will never be repaid will be instead settled as "sales" for cash. The announcement could be seen as saying they will unwind 400 tons a year of defunct loans. The interesting question in this scenario is what price do they settle? Current rates? (which could be very high..).

Secondly, this is a financial tremor. Something has shifted beneath the surface to manifest this. Most likely something political. However, remember that the previous regime had enough clout to keep the thumb on gold for several years in the face of heavy physical buying. Do not assume they have capitulated.

Goldfly (9/27/99; 22:52:04MDT - Msg ID:14657)
Get along little dogie!

Spot $287.50!!! Spiking!

Michael, Wife of Goldfly says those fellas at the ECB bout some futures......



Goldfly (9/27/99; 22:46:32MDT - Msg ID:14656)
Yippee Ki Yi Yo!!

Spot $287.20!!! and movin' up!


Black Blade (9/27/99; 22:34:25MDT - Msg ID:14655)
JCTex, here's a little more
Indeed, did you see where the government claimed a $115 billion dollar surplus projection today! These people must think that all Americans are complete morons! Wait a minute...I think that most are morons if they believe what Clinton and friends have spewed out about the economy over the last few years. Check the treasury web-site and you will see that the national debt has increased over the last year. Does this sound like a budget surplus? Of course not, they simply steal from the SSI trust fund and Abbra Cadrabra... Poof... there it is, a surplus! I talk to some of my friends and they are not what I consider to be complete morons, but they believe this crap (sorry). I really do think that most Americans are complete morons. When they do awake I'm afraid that when I say "I told you so" it will be too late.

GFD (9/27/99; 22:31:47MDT - Msg ID:14654)
PH in LA
I am back from 3 weeks and a minor explosion on gold. PH in LA I will be willing to try and answer any BT/The Writer questions that you may have.



Black Blade (9/27/99; 22:07:58MDT - Msg ID:14653)
Leigh and jewelry for the other fair maidens
Leigh, you may be interested that 24K jewelry sold into the US usually has a significant premium attached. I've been lucky to know those in the back alley "black market" for gold and gems because of my position and corrupt government in the 3rd world. My only advice is be careful and purchase accordingly. Good luck!

elevator guy (9/27/99; 22:06:49MDT - Msg ID:14652)
Harry Schultz credits Bill Murphy, and Chris Powel of GATA
Harry Schultz, world's highest paid investment consultant, (Guinness Book) and for 36 years publisher of the International Harry Schultz letter, gave GATA "a large measure of credit for the announcement by Euro Central Bank President Wim Duisenburg that bank sales would be limited and modest."
Schultz said "GATA organized pressure, and made revelations that played a role in this sigfnifigant EU action. A gold bull market is probably underway. Its arrival was delayed by certain bullion dealers and bullion banks who have contrived illegally to hold down the price for many years"

I'd like to thank Bill Murphy, and Chris Powel, and all who support(ed) GATA, for all they have taught me, and they have been campaigning under threat of death, for no pay, to help bring about this sea change of events, which benefit all of those who hold precious their liberty, and their gold. They did not just talk in safe chat rooms. They took the message to the streets, although some gold bugs did not help them. Their efforts have benefited all who sell, or own gold.

Black Blade (9/27/99; 21:59:53MDT - Msg ID:14651)
More fun tonight
It's been a great day for all of us in gold. I don't necessarily agree with FOA and Another on all these issues, but our goals are the same. If Another is a Midddle-east Arab(?) as some suspect, then I'm sure that he will agree with the old saying "the enemy of my enemy is my friend". personally I think of us as all brothers and sisters in this quest after all and would lioke to remain friends for all time. I buy all PM's for a reason, not because one is better than another, but because each perform a function as insurance, commodity, etc. Gold has that special shine lately, but don't discount silver and the PGM's. I bought all but for different reasons. I won't put all my eggs in one basket. I'm pleased with the PM market, and it's not over yet...look at Kitco graph tonight...Au is up another 3.10. Silver is doing OK as well. Goldspoon...what horse is Platinum? Perhaps his name is "Star-shine? Did he at least place or show?

Black Blade (9/27/99; 21:59:43MDT - Msg ID:14650)
More fun tonight
It's been a great day for all of us in gold. I don't necessarily agree with FOA and Another on all these issues, but our goals are the same. If Another is a Midddle-east Arab(?) as some suspect, then I'm sure that he will agree with the old saying "the enemy of my enemy is my friend". personally I think of us as all brothers and sisters in this quest after all and would lioke to remain friends for all time. I buy all PM's for a reason, not because one is better than another, but because each perform a function as insurance, commodity, etc. Gold has that special shine lately, but don't discount silver and the PGM's. I bought all but for different reasons. I won't put all my eggs in one basket. I'm pleased with the PM market, and it's not over yet...look at Kitco graph tonight...Au is up another 3.10. Silver is doing OK as well. Goldspoon...what horse is Platinum? Perhaps his name is "Star-shine? Did he at least place or show?

gidsek (9/27/99; 21:56:11MDT - Msg ID:14649)
Question to all..
Was the amount of IMF gold subject to "revaluation" 10 moz followed by another commitment of 14 moz (total 24 so far..)or was the 10moz tranche adjusted upward to 14?

We'd do well to keep track, they've got 100 altogether yes?

gidsek

gidsek (9/27/99; 21:45:18MDT - Msg ID:14648)
FOA .. Hello
YEESS! (you said..)

"The US stood quiet to this dollar killing move because they now need gold to rise also. This concept was quietly circulated around Washington this past spring. Now with this new ECB move, you can bet that the IMF is going to lose it's funding (from everyone) on a systematic schedule. IMF gold will be the only equity the US will have to continue supporting the international dollar debt (and therefore the integrity of the dollar) for the time being. Note: Did they lob off of the term "FUND" from the IMF name because funding is being phased out? (don't laugh, Washington is nuts)
------------------------------------------------------------

Foreign dollar/debt defaults are extremely bearish for the USD. Many billions were needed in Asia by those scrambling to close out dollar obligations to convert them to their own
depreciating currencies, some called this "The Flight to Quality".

Outright default however will have the opposite effect. So it's IMF gold to the rescue.

gidsek



Golden Truth (9/27/99; 21:36:27MDT - Msg ID:14647)
TO THE "MOST EXCELLENT" F.O.A
Hello again F.O.A i can't believe how much i have learned from you, and continue to do so.
I agree 100% with your message ID:14618
You are so right, Bullion Rules!
From one Bullion Boy to another? Hurry back soon and may Gods Angels watch over you.
G.T

Chris Powell (9/27/99; 21:34:17MDT - Msg ID:14646)
Midas on the tide in gold's favor
http://www.egroups.com/group/gata/209.html?
Excerpts here. Other good recent posts.

gidsek (9/27/99; 21:24:12MDT - Msg ID:14645)
Question of the day
I'll take a swing..

The IMF is dealing with the ongoing debt crisis in a new way. No doubt they are still rolling over debt, however this time they are doing so using the spread between the book and market values of it's gold holdings. The US Congress has made it clear that outright sales will not be permitted. Recall that Sundays' ECB news was accompanied by the announcement of the Ecuadoran Brady default. A higher gold price is advantageous if this tactic is to be employed.

Though this has been bullish for the price, gold is still being used as a device to support the fiat paradigm, rather than being acknowledged for what it is.. true money.

Gold hasn't done well during during debt/currency collapses, is another one of the way? Watch the dollar.

ta dahhhh..!

gidsek :)


Farfel (9/27/99; 21:19:06MDT - Msg ID:14644)
Dear Old Gold aka George Cole:
I simply do not understand your bitterness toward me. Are you unhappy because you feel I acted as some kind of a brake to your gold investments?

George, as best as I know, I am not in a competition with you. If you are making money and a helluva lot more than myself, then great! (if that's so important to you?).

Frankly, you have no idea what my position in the gold market is. I have repeatedly stated over the past that I am "staying away from gold." However, staying away from gold and liquidating my longstanding position are two entirely different things. So I leave it to your imagination as to what is going on in my personal portfolio.

I can only say that I think today was a great day for the pragmatists and rational people of the world. It seems the police have finally arrived at the "bubble-mania" stocks party, ready to sober up the crowd, now that it is well past midnight, speaking metaphorically.

I am elated for those who held true to their convictions and finally saw a good taste of prosperity visit them.

Congrats to all goldbugs who never gave up hope that they would see a golden day like today.

What a rush! What a thrill!

Thanks

F*









JCTex (9/27/99; 20:07:34MDT - Msg ID:14643)
Michael: our pop quiz for the day
Michael, I have been scratching what little white hair I have left since 6:00 this morning on the U.S. side of your question. COULD IT BE AS SIMPLE AS: horrendous inflation is the ONLY way that the US can even hope to service its debt [$20 trillion, plus]. That "off budget" stuff is nonsense and we all know it. I tried that on my banker and it didn't work out too well. The real kicker is that they will have Y2K to blame for it [not THEIR fault].

On the European side of the question, it looks to me like Another and FOA have been shooting straight with us all along. The U.S. dollar has to be discredited before the Euro can "save the day." That would also give the Saudis a good, reasonable reason to make the switch. Right or wrong, FOA??

FOA (9/27/99; 20:03:37MDT - Msg ID:14642)
No time, one post only!
USAGOLD (9/27/99; 15:07:02MDT - Msg ID:14618)

Why did they do it? Why do the Europeans want the price of gold to rise? Why didn't the U.S. and Britain stand in their way?

Michael,
That's a good one. I think they are following the rough outline we have talked about. If you have absorbed most of TownC's (Europe) news today, several things come to mind.
1. England is doing what Another thought, moving from the dollar system into the Euro world. Let's face it, they are "lost" in their current position if the US economy contracts and Euroland grows internally. Europe has made it clear on several occasions (including today) that they are a closed
system. Yes, the world can trade with them, but the conditions are better on the inside. England no longer has the same ties to America that their political dogma suggests. Every day Europe more becomes their family through proximity, if nothing else. Hey, the Euro tunnel may have been a bad investment, but it has finally tied the isles physically to the mainland!

Their push for EMU is right in line with their completion of bullion sales. Don't read their sales as
a reserve balancing act, like Belgium. The BOE is indeed trying to clear out some bad paper before their move. Like it or not, when England, Swiss and the middle east all tie to Euroland (through EMU or by trade), the LBMA will become redundant. I bet in five years or less (mostly much less)
the ECB will sanction a major bullion association of it's own. The time frame here is much too short for the LBMA to clear out the paper it took them a decade to build up supporting the dollar.

2. How can the US stand in the way of rising gold? It's only been the (needed) continued use of dollar that constructed the "Low Gold" paper markets for oil. The US mostly used it's currency powers to augment the plan as others carried it out. Now with the successful birth of the Euro, many other nations are scrambling to at least build a backup bridge into that arena. The US is not blind to this and will certainly not commit it's gold reserves to buy in it's own currency debt from it's competitors. If someone is about to kill you, you don't offer to pay back your debt to them before they act!

Neither do I think the Fed (or treasury) has been trading paper gold. If the right entities wanted to expose this (the US is very open in these regards) they would get their hands on those items and exercise them in a very visible way. One that followed the paper trail with the media in tow. Weather the FED brought gold to fill the order or used Fort Knox, it could be seen. Besides, with Congress so obsesses with not letting our gold flow into other hands (or however the IMF deal works out), one whiff of Fed gold commitments would blow the whole story.

3. The ECB announcement was used to close the final door, in public view. They now have the Swiss and English on their side and it's time for gold to become Euro Money. Let's see if the ECB / BIS don't eventually arrange for the purchase of most of that gold. Goldfield and Anglo may eventually have some big bidding competitors the next time around. No hedge funds allowed next time. This last auction was done with the full knowledge of this ECB announcement in the
background. No wonder the bidding was over subscribed just in the last minute.

The US stood quiet to this dollar killing move because they now need gold to rise also. This concept was quietly circulated around Washington this past spring. Now with this new ECB move, you can bet that the IMF is going to lose it's funding (from everyone) on a systematic schedule. IMF gold will be the only equity the US will have to continue supporting the international dollar debt (and therefore the integrity of the dollar) for the time being. Note: Did they lob off of the term "FUND" from the IMF name because funding is being phased out? (don't laugh, Washington is
nuts)

I look for the US economy to drag down Japan, Canada, Mexico and all of our major trade partners as foreign dollar debt slowly fails. India, the Middle East and China will all create a new "Orient Express" trade route with their old European partners.

My take on it Michael..........We are on the road FOA

Also:
Goldspoon Msg ID:14620,
Golden Sun is some stud, right? I know you are having fun, good stuff my friend. I bet KOAN could kill me for my luck. Here I grind on silver all day long and Gold supports my words almost as if I knew what was going to happen. (smile) Bet silver goes up a dollar tomorrow in good faith for the Silver Kings!

Looks like everyone made a tonne of money on gold stocks! Good for all!! Even my Goldfield went up! (I hate it when it does that!)(smile). Me and the "Bullion Boys" at USAGOLD FORUM will just have to settle for our little 5%.

Make what you can because the game is all over, people! If you are happy holding after tax profits from the mine shares, that's good. But, physical is going "shortage" big time now. Bet there is major 5 and 10 tonne order flow through the BIS right now and it's looking for 30 day full
allocation. If it doesn't hit the CBs desk for filling, the scramble is on. So, during the next many weeks or few months, your profits won't find much "physical street gold" around at a price you're willing pay. Indeed, the paper gold price we all follow may crunch down hard as this unfolds. Buy it if you think it's the same equivalent, I know it isn't. Lot to think about, no?

PH, yes, we are on the road!
I can't wait to see how those 400,000+/- gold options work the Comex price with no gold in the warehouse! I heard they will be serving "Bear Steaks" for lunch on the trading floor!. Later, everyone's beef is going to burn!

Don't know when I'll be back? FOA


Canuck (9/27/99; 19:45:05MDT - Msg ID:14641)
Leigh
My hat is always off for you my dear.

elevator guy (9/27/99; 19:39:27MDT - Msg ID:14640)
Thank you ORO, and Netking!
Your inputs are greatly appreciated.

Canuck (9/27/99; 19:38:31MDT - Msg ID:14639)
USAGOLD
M.K.,

...or maybe they are positioning for Y2K ...

When currency bites the dust, what's left?

TownCrier (9/27/99; 19:36:08MDT - Msg ID:14638)
After the Close: the GOLDEN VIEW from The Tower
http://www.bog.frb.fed.us/Boarddocs/speeches/1999/199909272.htm
A brief sound bite that may be of no interest to you whatsoever, but The Tower saw some points in today's speech on "Lessons from the Global Crises" by the Fed Chairman that we thought were of passing interest. In these excerpts he walks us through the near meltdown in 1998 with an explanation of who bailed out whom, how this differed from the usual turn of events, who has set a good banking example, and a look at the evolution of new financial instruments.

"Following the Russian default of August 1998, public capital markets in the United States virtually seized up. For a time not even investment-grade bond issuers could find reasonable takers. While Federal Reserve easing shortly thereafter doubtless was a factor, it is not credible that this move was the whole explanation of the dramatic restoration of most, though not all, markets in a matter of weeks. The seizure appeared too deep seated to be readily unwound solely by a cumulative 75 basis point ease in overnight rates. Arguably, at least as relevant was the existence of backup financial institutions, especially commercial banks, that replaced the intermediation function of the public capital markets."

"What we perceived in the United States in 1998 may be an important general principle: Multiple alternatives to transform an economy's savings into capital investment offer a set of backup facilities should the primary form of intermediation fail. In 1998 in the United States, banking replaced the capital markets. Far more often it has been the other way around, as it was most recently in the United States a decade ago.

"Highly leveraged institutions, such as banks, are, by their nature, periodically subject to seizing up as difficulties in funding leverage inevitably arise. The classic problem of bank risk management is to achieve an always elusive degree of leverage that creates an adequate return on equity without threatening default."
[...]
"It is noteworthy that the financial systems of most continental European countries escaped much of the turmoil of the past two years. And looking back over recent decades, we find fewer examples in continental Europe of banking crises sparked by real estate booms and busts or episodes of credit crunch of the sort I have mentioned in the United States and Japan.
[...]
"Diverse capital markets, aside from acting as backup to the credit process in times of stress, compete with a banking system to lower financing costs for all borrowers in more normal circumstances. Over the decades, capital markets and banking systems have interacted to create, develop, and promote new instruments that improved the efficiency of capital creation and risk bearing in our economies. Products for the most part have arisen within the banking system, where they evolved from being specialized instruments for one borrower to having more standardized characteristics.

"At the point that standardization became sufficient, the product migrated to open capital markets, where trading expanded to a wider class of borrowers, tapping the savings of larger groups. Money market mutual funds, futures contracts, junk bonds, and asset-backed securities are all examples of this process at work." --Alan Greenspan
---

Stocks finished moderately up today, but well off their intraday gains in what could turn out to be a dead-cat bounce. (Look out for the dead horse later in this report.) The gains weren't very convincing, considering the NYSE registered 248 new 52-week lows while only 22 companies reached new highs.

Markets were helped higher by a slight improvement of the dollar strength on the back of a favorable comment by the G7 where no comment had been expected at all. "We shared Japan's concern about the potential impact of the yen's appreciation for the Japanese economy, and the world economy. We welcomed indications by the Japanese authorities that policies would be conducted appropriately in view of this potential impact. We will continue to monitor developments in exchange markets and cooperate as appropriate."

The dollar closed 1.73 yen higher, while the euro made additional gains over the dollar, finishing 2.05 yen higher (as measured with a common yardstick). The Bellweather bond, however, shed 21/32, driving the yield over 6% at 6.16%.

Let's move along into the good stuff...the reason you're here.

Over the last five trading days, spot gold has gained $27.4 dollars, representing an increase of 11% over the $254.5 pre-auction price. While trimming off a bit of the intraday highs, spot gold in NY finished on a strong note, up $13.50 at $281.90. All the more impressive considering the dollar firming today. As we take a look at the latest development in the Australian market, spot gold is continuing upward, now up to $284.

Kicking off this latest upsurge was a clear indication coming from 15 European Central Banks that gold will remain an important global financial asset. The agreement was most notable because it included the Brits and the Swiss...the current seller that precipitated much of this crisis of confidence, and the potentially large seller who's prospects for sales have hung ominously over any legitimate past glimmer that might have taken the price higher. The signatories account for roughly 70% of official sector gold reserves. The joint statement released on Sunday is as follows:

The European Central Bank and the central banks of Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, Switzerland, and England.

Statement on Gold

In the interest of clarifying their intentions with respect to their gold holdings, the above institutions make the following statement:

1. Gold will remain an important element of global monetary reserves.

2. The above institutions will not enter the market as sellers, with the exception of already decided sales.

3. The gold sales already decided will be achieved through a concerted programme of sales over the next five years. Annual sales will not exceed approximately 400 tons and total sales over this period will not exceed 2,000 tons.

4. The signatories to this agreement have agreed not to expand their gold leasings and their use of gold futures and options over this period.

5. This agreement will be reviewed after five years.
--
Noticably absent from among the signatories is Denmark. Danish Finance Minister Marianne Jelved told Bridge News that she had not heard anything about the gold announcement, however, after checking with National Bank of Denmark Governor Bodil Nyboe Andersen, she confirmed that Denmark's policy had not changed and there were "no plans to sell any" of its 67 tonne gold reserve.

The U.S. and Japan have affirmed on many occasions that they have no plans to sell gold, and although Canada has been steadily reducing its gold reserves in recent months (selling 170,000 ounces in August) a top Canadian official said "We think they've made a sensible decision. It should provide greater certainty and stability to the gold market." Bridge news reports that Canada now has less than 2 million ounces left, (representing 2% of its total international reserves) and the official said, "We don't plan to sell off any (remaining) gold in any significant way." ......Whew! We dodged a bullet there! That Canadian overhang always did cast a pall on gold's future.

---
The Bridge New market review today provides an adequate summary of the high points, many of which have been addressed here throughout the day, and is provided below:

NY Precious Metals Review: Dec gold up $14, or 5.3%, on EU news
By Melanie Lovatt, Bridge News
New York--Sep 27--COMEX Dec gold futures settled up a spectacular $14,
or 5.3%, at $283.80 per ounce after jumping to a 5-month high of $287.80
overnight.
Gold climbed on news the European and Swiss Central Banks will cap gold
sales, although their announcement that they would not expand gold leasing
was an even greater factor in the price jump, said traders and analysts.

Central bank gold leasing has been regarded by many gold players as
the single biggest factor in keeping prices low and the banks' self
imposed restriction on such activities is the best news gold has had in a
long time, said gold market observers.
Gold had surged overnight in Asia on the statement from major European
central banks that they would cap their gold sales.
Traders said that along with the EU news, gold was being helped by an
announcement that the IMF has officially endorsed a plan to revalue 14
million ounces of its gold reserves through off market sales. This contrasts
with an earlier plan for outright sales.

Also, Friday's commitment of traders report was positive, showing a
big decrease in the net short speculative positions in COMEX and a sharp
increase in speculative long positions. "This is extremely
bullish," said one trader, noting that he expected to see heavy
short-covering in the next reporting session.

Nevertheless, the overriding pull on gold prices was the EU
announcement.
"It's one of the most significant announcements in gold in years. Central
banks have been the number one enemy of gold bulls, facilitating
aggressive producer hedge selling with all their lending," said Bill
O'Neill, analyst at Merrill Lynch.

Jim Steel, analyst at Refco, said that today's EU news, "considerably
changes the dynamic of the gold market and removes a major plank of
supply." He said that it is therefore "likely to tighten supply-demand
balance" especially given the recent rise in demand.
O'Neill added that the EU announcement "puts a limit on things" and
noted that the fact the European central banks will also limit lending
over a 5-year period will result in less aggressive selling by producers.
As a result of the EU announcement, it would be possible for gold to
climb to $300, O'Neill predicted.
While gold could have a short term pullback--and indeed it has already
dipped from its overnight highs--an announcement of this nature is "worth
this much," he said.

Analysts said that gold had already shown signs of improving psychology
and that prices had bottomed out, illustrated by its positive response to
last Tuesday's Bank of England gold sale, which nudged prices higher. The
EU announcement helped this process further, they said.
The positive response to the UK gold auction freed gold and allowed it
to respond positively to the yen's rally against the dollar, an increase
in oil prices, a pullback in US equities markets and a pop higher in the
Bridge/Commodity Research Bureau index.

Jeffrey Christian, analyst at CPM Group, said that announcements from
both the EU and IMF suggest "that we have seen the lows." He said that
many players who had been trading on the short side for the last four
years had recently changed their views and decided it would be more
profitable to go long. They were waiting for a trigger and this was
provided by the EU and IMF news, he said. Christian added that a reduction
in lending could be "very important" because it could cause lease rates to
shoot higher.

[We'll take advantage of that good segue to present the latest table of annualized gold lease rates followed by their appreciable change:
1-month 3.7800% +0.5000
2-month 3.7400% +0.4500
3-month 3.9050% +0.5450
6-month 4.5790% +0.8030
12-mnth 4.7000% +1.2920
_________________________]
Meanwhile, Leonard Kaplan, chief bullion dealer at LFG Bullion
Services, said that while a $15 move in gold is "terrific" it is also
"silly." He noted that some players had already started taking profits at
the 0820 ET market open and he said that there are concerns that producers
could sell into the rally. Nevertheless, the move "energizes precious metals
could bring in a lot of players," he said, noting it is the most significant
move in around 10 years.
The price jump "demonstrates how much psychology has changed," he
said, noting that with the market still very short it "could possibly go
higher."

He added that uncertainties over central bank sales have been
lifted.
"What the market hates most of all is uncertainty," he said.
Kaplan noted that these recent developments could lead to sharp
criticism of the UK's auction plan, pointing out that last Tuesday it sold
25 tonnes at about $25 under today's market price, which gives a loss of
around $20 million.
"They'll get criticized worse now because they're wrong," he said,
pointing out that after the first auction on Jul 6, prices had fallen
back.
***
(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
---
The three of us on The Tower rooftop belive that Mr. Kaplan might want to consider if this price run-up is any more silly than the prospects of non-producers closing gold loans now without the mechanism of using an increasing supply of another's borrowed gold to repay your own. That's the biggest danger, and worthy of additional discussion. We believe he is focusing upon the price movement in terms of the hedging and speculative arenas of futures contracts, where the only element acting as a reality check is the potential for a widespread outbreak of exchange of futures positions for physical among the contract longs.

If you've been following along with us over the past few days, you would realize that as of last Friday (barring new positions entered that day) the open interest on the unsung September gold contract stood at 2. Today Merrill Lynch announced intentions for delivery on those 2 contracts, bringing the delivery intentions for September to a total of 29 contracts, dropping September OI to zero. This is remarkable in that a very high percentage (if not ALL) of the futures contract positions for September were exchanged for physical. The highest OI we recall at any point throughout the month was a dozen, give-or-take.
+
The COMEX futures desk is typically for hedging price exposure, not for holiday shopping. Given the large percentage of August contracts (approx 5,000...volume larger than Sept because it's one of the standard contract months) that were also exchanged for physical, we've got ample reason to step back and pause for thought. Something is not as it once was, seemingly. Brilliant analysis, eh, Sherlock?
+
As of Friday's figures, October open interest stands at 3,781 contracts, total COMEX gold OI rising 5,211 to 216,186 contracts. Accounting for the 6,012 ounce of Eligible gold stock that was wheeled out of COMEX's Scotia Mocatta depository, total Eligible gold stocks number 129,154 ounces, total Registered stock weighs in at 813,077 ounces. One final swing of the whip before moving on...should the high-percentage EFP trend continue, either most of the current COMEX inventory will change hands, or else 15 tonnes (500,000 ounces) will have to be found out on "the street" for settlement. OK, enough of that...that horse ain't goin' nowhere.

Here's a tip to producers seeking higher exchange rates for their golden product. Kevin Norrish of Barclays Capital indicated that the nerves of the large speculative gold shorts are likely to be severely tested over the next five days. According to FWN, he said "If tighter forward spreads discourage a knee-jerk sell response from producers, prices could
continue to move higher on short-covering." ....So there you have it. Keep those knees down.

In our favorite commentary of the day, we said in regard to a Reuters report that was a soapbox for an IMF official to confirm their intricate plans to revalue gold as their portion of HIPC financing: "The IMF tries to maintain the fiction that their credit based system remains vigorous despite this obvious deus ex machina." We were on a roll, and continued, observing with disdain "this attempted platitude by a senior official at the IMF Treasurer's Department: 'This is a one-time operation of a highly exceptional nature as part of a broader financing package...' They're hooked, so they might as well go with the flow and cease with the fiction." The prevailing international practice has become to mark to market your gold reserves at regular intervals.
+
Reuters described the IMF plan as a complicated transaction (approved by the IMF's policy making Interim Committee on Sunday) that allows the IMF to revalue 14 million ounces of gold from its 103 million ounce stockpile while avoiding the need for open-market sales of gold. "Under the new deal the IMF will use difference between the present book value of the gold and the market price to pay for debt relief and for a program of concessionary lending for poor countries." The IMF would use two thirds of the money raised to pay for debt relief and one third to close a gap in financing concessionary lending programs. The plan still requires IMF parlimentary approval of 85%, which in turn remains contingent upon U.S. Congressional approval. The U.S. vote is worth nearly 18% in the IMF and is adequate to veto any unfavorable measure to U.S. interests.

There was little for the Fifth Horseman to do today but stand back in awe of the Golden Knight, and crude futures settled down 15c in paper making (profit taking) at $24.61.

And that's the view from here...after the close.

Leigh (9/27/99; 19:18:43MDT - Msg ID:14637)
Canuck
What a Knight does on his own time and in his own castle is no business of ours. Thank you, good sir, for being so considerate of our feelings.

SteveH (9/27/99; 19:17:47MDT - Msg ID:14636)
Dec gold now...
$285.90 or up $2.1!

NewGold,

What FOA predicts wouldn't yet come to pass. Gold hasn't really rallied $30 plus dollars, it hasn't crossed $300, other chess moves are being made by significant players that will affect any outcome. What is certain is this rally is different than those other failed rally's. 1) It mostly gains overseas, 2) Gold stocks seem to confirm it. 3) The press seem to be getting on board with it. 4) IMF and ECU agendas' seem to support a higher gold price now. Any failures due to inability to cover with gold would come later as gold crosses $300 barrier and stays. Euro plays a key role in all of this, as does oil, as does long-term bond yield and short and long-term gold lease rates. These are the key indicators to watch for signs of the future direction in this market (and of course the POG). We wait and ride along for now....

Canuck (9/27/99; 19:10:54MDT - Msg ID:14635)
Lapiscap
Your post this am.
Yes, I need to see gold at 30,000k/oz.

I need the 7 assorted (days of the week) Lamborgini's.(sp)

I need the estate, the house, the 22 parlor cottage with an adjacent lake infested with small-mouth bass and lake trout.
(Is there such a thing?)

I need the 7 (assorted) 23 yr. old females decorated in microscopic apparel boasting dimensions larger than average.

I need , I need , I need.

However, ....I will be content with a couple bucks, a comfortable position going into 2000, a feeling of goodwill
with the elite at USAGOLD, and ..... 5 (assorted) 23 year old females decorated in microscopic apparel boasting dimensions larger than average.

Canuck.

P.S.: To Leigh, Buttercup and other Ladies of the Table
Round. My sexist comments above are in mere jubilation
of gold's performance this past week. It is probably
not necessary to mention that a Ladies stature super-
excedes a 23 yr.old blah, blah, blah by 100 fold.

oldgold (9/27/99; 19:00:17MDT - Msg ID:14634)
Farfel
farfel;

At least I am making big bucks in gold now and did not lose too much in the bear. My track record -- admittedly far from the best in gold -- is a hundred times better than yours. And unlike you I made a significant fortune in gold back in the 1993 gold bull.

The difference between us I think is that I learned from mistakes. Perhaps you will too.


Leigh (9/27/99; 18:53:59MDT - Msg ID:14633)
Golden Truth
Dear Golden Truth: megatron's post of yesterday bears no relation to his true feelings about the Tony Brown Show. megatron is a sensitive guy who wants everyone to get along. He didn't mean to discourage us from talking about the show if we wanted to. No -- megatron was simply preoccupied with monetary stuff yesterday, and he was hoping to hear more about silver vs. gold. Plus, Mrs. m's birthday is coming up, and he wanted to get some tips on jewelry buying. He was afraid that if the conversation took a different turn, he would miss out on something. He accidently lost his temper. But then after I pointed out the necessity for goldbugs to stay informed on such issues, he realized how much he needed to hear what Tony Brown was saying. He is lurking now, and he wants very much for you to clue us all in. Here is what we need to know: (1) Is our government making plans to evacuate people in cities if Y2K gets bad? (2) Where would the people be put? (3) How long would they have to stay? (4) What happens to them if they resist evacuation? (5) Does this plan have racial overtones?

Hi, megatron. Congratulations on your gold fund gains today!

PH in LA (9/27/99; 18:50:38MDT - Msg ID:14632)
Test
Test

PH in LA (9/27/99; 18:26:26MDT - Msg ID:14631)
GFD: Are you out there?
To the former Kitco poster "GFD" if you are lurking out there:

Would you please respond for questions/comments about posts by BT and "the writer"?

NewGold (9/27/99; 17:54:09MDT - Msg ID:14630)
@ ORO, Anyone
Could you please explain in layman's terms how/why FOA/Another predictions of worthless mining stocks
how gone up substancially today?
I did not purchase Gold mining shares and wonder if
it will be OK to purchase now, has anything changed?
I say this because some Gold mining are up 40% plus.
Any advice would be appreciated.

Golden Truth (9/27/99; 17:32:39MDT - Msg ID:14629)
SOLD MY SILVER FOR GOLD!!!!!!!!!!!!!No IRON INVESTMENTS for ME.
Sold all my Silver Maple Leafs today and bought two 1oz GOLD Maple Leafs. I LOST 28% between what i paid for them and what i sold them at. I will never!! buy silver again as an investment, i've checked around on the WEB and the lowest amount of money i could of lost was 10%.

To get only a 10% loss i would have to of, sold them to a U.S dealer and i didn't want to spend my whole day running to the post office.

My point is this when it comes time to sell a GOLD coin you only lose 1.7% the best i've found, right up to 4.2% the worst i've found.

So now you have $1000.00 in Silver Coin and $1000.00 in GOLD coin and its now time to sell, let take the best case scenario and you sell your $1000.00 Silver coins and only lose 10% you go home with $900.00 in your pocket.
Now you sell $1000.00 in GOLD coin and you lose 1.7% and you go home with $983.00 in your pocket.

I'd say the only person making money here would be the coin shop, Silver truly is a good buy for the coin dealer? I,am sure any of them would be happy to sell you Silver but even happier to buy it back from you.
If you don't believe me just try and sell your Silver for the low spread(Diff between Buy and Sell) you get when you sell GOLD,and if you find them, i would like there name also!

Then see M.K at Centenial Precious Metals and he can sell you some of the real stuff GOLD A.K.A real MONEY!

HI LEIGH, i decided not to talk about "Tony Browns Show" it seems some posters are upset by this. So i figure it might be to inflammatory,but that doesn't mean it can't happen and that it's not true!

Also thanks F.O.A for answering my last question about massive reserve losses and then tossing the Dollar into the Garbage. I loved it, and it helps me also, to see the bigger picture,the EURO!
G.T P.S Don't buy any Iron Nickels :-)))

Netking (9/27/99; 16:43:42MDT - Msg ID:14628)
USA Gold - question
USAGOLD (9/27/99; 15:07:02MDT - Msg ID:14618)
MK - The plunge protection team appears to be "running with the foxes & hunting with the hounds". I would say that if they can't control it through 'Plan A' then 'Plan B' will involve a different strategy for them which will become clearer in the days immediately ahead no doubt! I guess there is too much potential/kinetic demand on the market so they are going to direct this thing if they can rather than shoot it in the head.


PH in LA (9/27/99; 16:41:53MDT - Msg ID:14627)
How about this one?


With everyone singing the praises of one stock or another, today, has anyone else been watching Cusac Gold (cusif.ob)? Unfortunately, I haven't owned it in several years, but if only I did! Been watching it for a couple years now and today it is up 75% ...all the way up to $.07 (lots of room left on the upside for this one). Looks like the juniors are gonna participate now. Just another point of confirmation for this move.

Sure looks like FOA is right. We're on the road now!

CoBra(too) (9/27/99; 16:37:49MDT - Msg ID:14626)
Please read big but hollow hedge Buoys in third para.
-got carried away on such a great day!

CoBra(too) (9/27/99; 16:24:39MDT - Msg ID:14625)
MK's question of the day - why did the ECB's do it ....
in this loud and clear manner? A great question to contemplate, but firstly the Brit's wellcomed the action, officially, anyway, with Eddie, Gordon and Tony having enough to do wiping all that (yellow) breakfast egg yolk of their faces - after playing it's your egg together for so long. The US cowboys at the TSY and the Fed have stated all along that they won't go along with the outright sellers, but how about the leasing, forwarding and futures options - is there an option left, if yes, how much gold is in the vaults of Fort (Ob-)Knox(iuos- sorry again A.III) in physical form vs undeliverable paper contracts?, or did it ever leave, even then I'd call it a liability- just as in 1934 and 1972. Can a great country or rather their government, such as the US, which I respect for its people, their imagination and integrity, default once more?

FOA's currency battle between $/IMF faction, getting more discredited by the day - vs BIS/Euro/(oil)becomes more and more plausible. What bothers me in this equation is the massive $ reserves the ECB's, apparently, are still holding, which according to FOA's recent post may constitute a neglible obstacle in the long run.

Anyway, I feel the ECB's may have had enough and wanted to put a shell in front of the BB's bows in order to curb in the hedge boys, which are perpetrating international currency waters in a magnitude never experienced before in this gigantic, or better monstrous way, depleting all oceans to the benefit of very few. At his "Whim", Deuisenberg may have found it's high noon to cut the cutter free and snap all lines in the face of the rapidly approachung tsunami of stranding the last of minoes.
And besides, the ECB's have a vested interest in goldfish, which has, is and will be the most important gene-reserve in their hatchery.

In conclusion, I've never seen a grander day in the gold markets in more than 30 years. Among the major players - the winner is Placer Dome colsing at Cdn.$ 22,60 or up C$ 5.05, a whopping 28,8%. What an entree to the new president and designated CEO, Jay Taylor - may he lead the pack in this fashion for a long time.

Regards CB2


Goldspoon (9/27/99; 16:01:08MDT - Msg ID:14624)
USAGOLD's question
"Small sneaky steps back to a Gold standard is less disruptive than one Giant leap".

PH in LA (9/27/99; 15:55:48MDT - Msg ID:14623)
Question of the Day

Michael:

I like the thought process your questions conjure up: Trying to understand the market and its movers and shakers through reverse engineering, if you will. (Sometimes seems a little more like 20/20 hindsight.)

In any case, most of us like to imagine that "they" (or someone, at least) are in some semblance of control...that events are not just landing on them like "lightening in the night", as they so often seem to us outsiders as we peer inside through the layers of deception those insiders use to hide behind.

Yes, it does almost seem like their announcement was made on purpose. The IMF's "new idea" of marking gold reserves to market (like the Europeans) gives them a whole new dimension of reserves to use for more lending (without have to come "hat in hand" to the US for funding.) A subject they are up against the wall on since there seems little chance that the US taxpayers will start feeling inclined to accomodate them any time soon. For this purpose, a higher POG is much to their advantage.

Also, if indeed the Fed, as part of their market-propping operations, has been writing call options to help out hedge funds and bullion banks, we can conclude that those options have been allowed to expire worthless, which opens the door to higher prices. Maybe some of the big boys have seen the writing on the wall and moved to clean up their balance books. Those who haven't by now can consider themselves out manouvered and start looking for other lines of work. They must know by now that they are history.



Aristotle (9/27/99; 15:51:21MDT - Msg ID:14622)
A great day, but let's not forget last week which brought us up about $14 also
http://biz.yahoo.com/rf/990927/43.html
For me it's a bit bittersweet, coming a week too soon, before my regular monthly currency exchange--dollars for Gold. I guess I might as well start getting used to it, lighter monthly earnings with increased value of past savings. Not a bad tradeoff though, all things considered.

Here's a simplistic and whimsical thought for what it's worth, and the link I've provided is the source of my numbers.

Newmont Mining says they see no reason to hedge its production in light of this lastest announcement by the consortia of european central banks, nor do they plan to sell additional shares which would dilute their stock. Fine. Here comes the whimsical numbers game.

Newmont shares are currently at 26-5/8, but I'll round that to 27 just to keep this easy.

The price of Gold is approximately $280 (again, rounded to keep this easy.)

A Newmont spokesman said that a $25 increase in the price of Gold translates to a rise of $0.42 a share in annual earnings.

So simplistically, whimsically, here's where we stand.

If you spent $280 for an ounce of Gold today, (let's ignore the premium for now to keep this simple) you would have "made" $25 with a simple $25 rise in the price of Gold to $305 per ounce. Nearly a 10% return--not bad!

Let's assume the best--that Newmont is willing to pay its shareholders 100% of all new earnings above this $280 price of Gold. For you to gain that same $25 increase, at the additional dividend of $0.42 per share, you would need to be holding 60 shares of Newmont. That would cost you $1,620 to participate in this "direct" gain from the rising price of gold by holding shares of Newmont. And in the end, you're still holding only paper. With me so far?

If you had resisted the stock buying mania urges, and taken that same $1,620 to put it all into Gold at $280, you would be holding 5.75 ounces, and that same $25 rise in Gold prices would translate into a direct value gain of $144.

It gets better! You have completely eliminated all counterparty risk and hold Gold at the end of the day. I assumed the best-case scenario that Newmont would dispurse the entire earnings to shareholders. If they split the profits in half with you, you'd need to by twice as many shares to earn that $25 bucks that a $280 coin could have gotten for you with no counterparty risk. I'm using the term counterparty risk rather loosely here, I'll be the first to admit. Esentially I mean that you have no control over the executive decisions made by Newmont regarding mining operations and dividend, new issues of shares, etc, you have no control over a possible devaluation of your denominating currency (since you are holding only paper), and you have no control over what another would-be share holder might pay you to acquire your stock.

Clearly, it is this last element that a stock buyer is banking on to make them rich--that someone else will be paying them more money than they themselves paid for those shares for a chance to participate in the meager per share dividends coupled with the prospects of yet another, greater fool coming along in the future.

Meanwhile, the guy with the Gold...cha-ching, cha-ching, cha-ching...real money, no risk.

And I can say no risk with certainty because the whole premise of this fanciful, simplistic examination was the stated condition "assume that" the price of Gold increased by $25.

I sure hope everyone recognizes that this was far short of a careful, clinical analysis of a full investment strategy, but hopefully it gave you a chance to think about things in a way you might not normally have done, and thereby better consider what's in your best interests.

Gold. Get you some. ---Aristotle

Goldspoon (9/27/99; 15:39:25MDT - Msg ID:14621)
USAGOLD, Townie...
Would it be possible to include Platinum/Silver/MS 65 coins? in your remarks of the markets? As many of us have interests in these products also?

Goldspoon (9/27/99; 15:29:30MDT - Msg ID:14620)
FOA , Aragorn III..Headline from todays news that i was reading to you yesterday
http://biz.yahoo.com/rf/990927/3l.html
Quote From today's link....
"Fellow precious metals silver and platinum rode higher on gold's coat-tails, with silver breaking up above $5.30 an ounce and platinum hitting a fresh high since February."

From Goldspoons crystal ball... yesterday's posts..
"Place your bets......
Step right up! the race is about to begin!
Riding Gold Sun is FOA a proven track record indeed..and
Riding Silver Moon is Koan, a darker horse says many....

They don't look the same.. they don't weigh the same... but both thought of as money by all..... :-)
Prediction from the peanut gallery: Silver Moon will get out of the gate slow but will catch and maybe pass Gold Sun on the home stretch as Silver Moon conserves energy by riding on Gold Sun's coat tails.... :-)"

Pizza man, eh? ET? Tomcat?

Awwwww Come On..... don't get mad at me.... i'm just hav'in a little fun....besides....

FOA, Aragorn III, ...CONGRADULATIONS you are both learned men and know the in's and out's of Gold far better and were here long before i...My hat is off to you both sirs....
as i am still a sapling in this mighty forest of tall Red Woods.
Again Congradulations!!!

Netking (9/27/99; 15:21:05MDT - Msg ID:14619)
ELEVATOR GUY (re:14610)
Elevator Guy (9/27/99; 13:54:20MDT - Msg ID:14610)
Good proactive questions buddy - keep digging.

Your Gold call options will usually add around $100-00 in value (USD) for every $1-00
the POG/underlying futures contract moves above your strike price.

eg If I purchased December 2000 Call options with a strike of $360 for a cost of $90 plus
say brokerage of $20 this would make a total cost to me of $110 for the transaction. Now
when the POG rises to $362 in this scenario I would be "in the black", that is I would have
recovered (on paper) the cost of my initial call. For every dollar above the strike that the
futures contract on which this call option is based moves you are in the money by a greater
amount. You can sell the option before expirey if it is "in the money" although don't leave
this until the last few day's of the expirey month normally. You can also convert this
option to the underlying futures contract on which the option is based normally for the
cost of a futures contract brokerage.

Don't worry because you would not need to come with the $27,000 as a deposit on a full
Gold futures contract! My brokers current deposit is $800(USD) per Gold futures
contract, although be aware this would be subject to "margin calls" should the price move
against you to ensure that this $800 is maintained.

Many people might elect to maintain the option without conversion to the full futures
contract and then sell the option at the desired time & take the profit without ever owning
the futures contract. Options obviously give you the right but not the obligation to buy the
underlying futures contract at a pre-determined price. The only risk with buying your call
option is loosing the cost of the actual option itself should the underlying futures
contract/POG not reach above the strike before expirey.

Hope this may help a little


USAGOLD (9/27/99; 15:07:02MDT - Msg ID:14618)
Question of the Day
Now with all the euphoria and excitement settling a little, the question comes to mind:

Why did they do it? Why do the Europeans want the price of gold to rise? Why didn't the U.S. and Britain stand in their way?

They could have thrown in the towel without the fanfare. They could have just quiety withdrawn without the announcement. Why didn't they?

ORO (9/27/99; 15:03:21MDT - Msg ID:14617)
Elevator guy, All
Elevator Guy,
Yes the calcs were right as far as the proportions, I didn't check the arithmatic.
The best move to my eyes, now that you have something to loose, is to make yourself a rule. Only so much of the account is invested at any one point in options, say 30 to 40% of your dedicated options account, though I normally recommend leaving this figure in the 5-15% range. You should limit your exposure by cashing in the portion in the money, remaining in near/out of the money calls.


Two good observations from S.Jon Kaplan
http://www.goldminingoutlook.com/

"One-month London gold lease rates averaged 3.22% on Friday, compared with 3.12% on Thursday. Since lease rates almost always decline in a rally as shorts cover their positions, the aberrant behavior means that gold is likely to continue to rise in the near future.

"Canada sold 4.28 tonnes of gold during the past week, as part of its continuing policy to unload all of its gold reserves [just before the big rally in gold begins; presumably to keep its currency depressed]. "

Lets' see Montreal talk this down.

Lease rates moving up so sharply indicate further attempts at not covering and/or further shorting by hedging producers etc. This means that the excess future demand for short covering will coincide with the dip in production due to lack of exploration and investment. This will coincide with "low grading", as the miners move from production at 120-140% of long term capacity, to 70-80%, essentially reducing production by half as the price goes up and concerns move to supplying future demand rather than survival through the current dip. This assumes that the markets remain open throughout this period, which is very much in question.

Some may find this useful:
http://quote.yahoo.com/q?s=^JGOL%2B^xau%2Babx%2BAEM%2BASL%2BBGO%2BBMG%2BCAU%2BCBJ%2BCDE%2BCRRS%2BCYM%2BDAY%2BECO%2BEUNVF%2BFCX%2BGGO%2BGLG%2BGRERF%2BHL%2BHM%2BKGC%2BMAENF%2BMDG%2BNEM%2BPDG%2BRIC%2BRYO%2BTVX%2BAAGIY%2BAAPTY%2BABERF%2BALTA%2BANGLY%2BAR%2BASA%2BAU%2BAVGLY%2BBHP%2BBWLRF%2BCCH%2BCEF%2BCFCM%2BCLT%2BDBRSY%2BDMMB%2BDRFNY%2BDROOY%2BEBC%2BEC%2BGGA%2BGLDFY%2BGLDR%2BGSR%2BGTCMY%2BHGMCY%2BIMPAY%2BKRY%2BLIHRY%2BMKAU%2BMNRCY%2BN%2BNGC%2BPAASF%2BPCU%2BPD%2BPIOG%2BQIXXF%2BRANGY%2BRDMMF%2BRGLD%2BROM%2BRTP%2BSGOLY%2BSIL%2BSSC%2BSWC%2BVENGF%2BWMC%2BMETLF%2BCCJ%2BSSRIF%2BMPVIF%2BARZ.TO%2BRAY.TO%2BGEO.TO%2BTEKB.TO%2BDBC.A.TO%2BELD.TO%2BNOV.TO%2BRPD.TO%2BAUR.TO%2BFL.TO%2BNOR.TO%2BVOY.TO%2BORV.TO%2BGRL.B.TO%2BPGD.TO%2BRNG.TO%2BIMN.TO%2BMAN.TO%2BIMG.TO%2BAPQ.TO%2BEET.TO%2BING.TO%2BS.TO%2BSUF.TO%2BSWG.TO%2BBPT.A.TO%2BFN.TO&d=1ym




Goldspoon (9/27/99; 14:55:51MDT - Msg ID:14616)
Farfel
True class sir....
The party is young...most of guests have yet to arrive..
Get your self some of our golden punch and join us.....

elevator guy (9/27/99; 14:31:57MDT - Msg ID:14615)
Thank you, ORO.
Thanks for your response. Am I to assume that my questions were correct, since you did'nt offer any corrections? (They were not rhetorical, but I truly am not sure about what I said)
So it seems by your answer, assuming one is using options, and not buying physical, that it is better to buy many samller out of the money options, which have more multiplicative effect, than to leave a larger sum riding on one in the money position.

ORO (9/27/99; 14:13:57MDT - Msg ID:14614)
Elevator guy
Roll them over

Cash out the entire position, keep in $ the original investment and enough to cover 4 rounds of commissions. With the leftover money, buy calls $5 out of the money, or better yet, buy gold coins with one half of the remainder, and buy $5 out of the money calls ($290) with the other half.
The cash value heavy calls are not where you want to keep your investment. If you must use options, you can get the same upside exposure from a much smaller ammount put at risk.


PH in LA (9/27/99; 14:07:04MDT - Msg ID:14613)
Farfel's track record.
Dear Oldgold:

Most of us knew when Farfel was trying to lift up our spirits by talking his book; even then. If we didn't, we soon learned. At the same time, much of his real analysis was very well worth reading. If he stumbled, it was in trying to pin down the timeframe to get some performance out of his investments. Not even ANOTHER and/or FOA have been able to get very specific on the time element, in spite of their fabulous in-depth analysis.

It is a humbling experience to try to anticipate exactly what the morrow will bring. Any thought expended on that will convince the thinker of that. And it is always all-too-easy to confuse hindsight with forsight. Even if Farfel was not always aware of some of his human limitations in this regard, his comments were (and still are) interesting and well-worth reading.

Let's not try to rub salt in his wounds! Especially on such an auspicious occasion as this!

Gotta go now...want to pick up some of that scrap iron before Farfel starts buying more and makes the price go down. (smile)

TownCrier (9/27/99; 13:59:38MDT - Msg ID:14612)
Gold price jump to help fund IMF debt relief plan
http://biz.yahoo.com/rf/990927/38.html
The IMF tries to maintain the fiction that their credit based system remains vigorous despite this obvious deus ex machina, with this attempted platitude by a senior official at the IMF Treasurer's Department: "This is a one-time operation of a highly exceptional nature as part of a broader financing package..."

They're hooked, so they might as well go with the flow and cease with the fiction.

megatron (9/27/99; 13:56:14MDT - Msg ID:14611)
Leigh
Actually Mrs. megatron is jumping up and down with joy over her gold fund which is now in the black. Hopefully lots of daytraders will start to take notice of todays moves and inject some life (liquidity) into juniors. It's a shame to see a great little company like Geomaque GEO. fall behind.

elevator guy (9/27/99; 13:54:20MDT - Msg ID:14610)
Can someone help me, please?
Can someone help me figure out what my gold options are worth right now? When spot price was about $260, I bought about 15 Dec calls, and 17 Feb 00 calls. Lets take one example: One Dec 270 call cost me $420. Looking at the New York Mercantile Exchange website, I can see that gcz9 270 call option is trading around $1450. (Of course this will vary) So if I spent $420, plus commission of $25, makes $445, but if I could sell that option for say, around $1450, then I would have profited about $1000? In addition I get the $420 back, for a total of about $1450 back, less commisions? Do I have that right?
But I have no intention of selling now, as gold is positioned for signifigant further increases.
And if I wanted to convert the 270 Dec call option to a futures contract, then I would have to come up with 100oz times $270/oz, or $27,000? Do I need to deposit this "margin" into my trading account, or is it just a smaller percentage, and if I want to take delivery of the physical, then I need to come up with the balance?
I'd appreciate it if some one could set me straight on this stuff.
I've been working on the elevator biz, you know, and it has been a long time since I've traded anything, and that was only one item, being corn in 96.

TownCrier (9/27/99; 13:44:29MDT - Msg ID:14609)
Commodities-Gold soars in Europe, base metals dull
http://biz.yahoo.com/rf/990927/3l.html
Do you hear that, Sirs FOA and Aragorn III? Base metals are dull. You might, therefore, choose to rethink your iron investments...or else double down and pile in 'cause them dogs is sure to run, too! :)

megatron (9/27/99; 13:44:26MDT - Msg ID:14608)
Towmcrier
certainly changes the story. Although the son did learn an intelligent lesson somewhere. Hopefully from good ol' dad.
In any case, an exciting day to be alive.

Leigh (9/27/99; 13:42:00MDT - Msg ID:14607)
megatron
I certainly hope Mian Mian's father isn't putting his faith in the Chinese yuan, which is teetering on devaluation.

Did you see North of 49's write-up about Asian jewelry? Since you're a jewelry buff, I thought you might enjoy that. Perhaps Mrs. megatron would like to have some of it.

TownCrier (9/27/99; 13:39:04MDT - Msg ID:14606)
megatron, you might say so...
but in typical media fashion, they made no mention of Mian Mian's brother, who believes in free markets, and therefore believes in gold. Sorta makes the old man look foolish by comparison, wouldn't you say?

TownCrier (9/27/99; 13:30:53MDT - Msg ID:14605)
US dollar no longer anchor for low inflation-Parry
http://biz.yahoo.com/rf/990927/2g.html
Federal Reserve SanFran Branch President Robert Parry indicated the days of the strong dollar may be numbered.

Farfel (9/27/99; 13:30:46MDT - Msg ID:14604)
Dear Old Gold:
Frustrated, are you? Didn't get a good enough gold position PRIOR to blast-off, huh?

George, I would think that someone like yourself who has a notorious track record of horrendous gold market calls over the past several years would be the LAST person to ridicule others in terms of their analyses. I am disappointed in you.

"People who live in glass houses should not throw stones."

In any case, it's a great day for the men of gold and they certainly deserve their time in the sun.

Bravo! :-))

Thanks

F*

megatron (9/27/99; 13:27:14MDT - Msg ID:14603)
towncrier
sounds like Mian Mian's old man is the smartest one of the lot

oldgold (9/27/99; 12:58:59MDT - Msg ID:14602)
Farfel
You have been and remain the perfect contrary indicator. When gold was crashing below $300 on its way to $250 you were shouting, I DON'T CARE, I'M BUYING MORE.

THE WHEN GOLD APPROACHED $250 YOU TURNED INTO A GOLD SUPER BEAR.

Your assumptions about what moves the gold markert would appear to need some basic reformulation


TownCrier (9/27/99; 12:47:58MDT - Msg ID:14601)
Year after LTCM debacle, hedge funds open up
http://biz.yahoo.com/rf/990927/v8.html
After humbling losses, hedge funds turn relatively conservative.

TownCrier (9/27/99; 12:40:11MDT - Msg ID:14600)
ECB's Noyer says euro has basis to rise
http://biz.yahoo.com/rf/990927/uq.html
ECB Vice-President Christian Noyer see the basis for "strong appreciation" of the euro which would not lead to "negative economic effects"...such as Japan is struggling with as a trade crusher.

Mr Gresham (9/27/99; 12:34:41MDT - Msg ID:14599)
ORO #14587
http://www.prorege.com/north/2461.html
ORO –

Oro #14587:"The current situation is such that the Fed is coming to terms with the concept of monetizing more than a whole year's worth of debt within the next few months. Many have not understood this. Nor have many understood the fact of the initiation of a deflationary cycle can cause great inflation when default is not permitted in a debtor nation. Perversely, the promise by the Fed to print money like mad, has reassured many players of the stability of $. How? by preventing a perception of the debt being "hung out to dry". If it is categorically all to be redeemed, and the Fed is a willing buyer of last resort, then there is no immediate reason to dump private US $ debt securities and return to your home currency. So we end up with protecting of the $ by the promise of unhindered future printing."

Thank you for making your mental pictures of the flows of funds, and their balances (or lack thereof) so visible to the reader via your clear writing.

Isn't there a confusion here between currency printing and money creation? The Fed's promise of late has been to provide ample paper currency to meet withdrawal requests by depositors. And, as ever, it stands ready to provide digital dollars into the accounts of TBTF institutions to stave off systemic collapse.

But, where there are ample debt instruments (Tbonds, Ginnies, Freddies, etc.) for it to buy or repo from those institutions in order to liquefy their accounts, the paper printing is limited by the contracted supply of printable currency paper from Crane Co. of Dalton, Mass. [see link], and also by the internal temperature (smile?) of printing presses run 24 hours daily.

Newly-provided paper currency is a subset of money creation, and an exchange of one form of dollars for the other, obviously. It is just that the y2k crisis brewing is a uniquely-framed challenge to the Fed, and perhaps we and it are still thinking largely in terms of the other type of liquidity challenge which it has occasionally met, and so far mastered.

The inflationary effect of additional paper may be more than compensated for by the contraction of the "digital" money supply as the multiplier effect works in reverse. The Fed may "push on its string" extending money out to banks, but they may (as in prior credit crunches) abruptly find most new borrowing applicants to be default risks unlike those they enthusiastically lent to the month before. :-)

Liquidity preference at the extreme has the public holding more paper "safely" in hand, but the digital and overall money velocity slowing precipitously. Default risk still exists, even grows, but it has been concentrated into the digital realm. I'm still trying to get a sense of the proportions in each of these...

Your view?



TownCrier (9/27/99; 12:22:20MDT - Msg ID:14598)
Chinese Search For New Values--Freedom Brings Uncertainty as Ideology Wanes
http://search.washingtonpost.com/wp-srv/WPlate/1999-09/26/194l-092699-idx.html
China tries to rediscover itself. An interesting article, and worth a look to gain a glimpse into this most populous of nations. How well does the East meet the West?

---In Mian Mian's family, faith is an important issue as well. "I wish I had beliefs and ideals," she said at one point. Her mother is a Christian, and her sister, who lives in Australia, is a Buddhist. Asked what her father believes, Mian Mian's mother blurted out: "Him, he believes in cash."

714 (9/27/99; 12:13:16MDT - Msg ID:14597)
What are the chances...
...of the US stepping up gold sales or leasing so shorts can cover and these hedge funds can safely bail out?

Goldspoon, thanks for the input on silver/gold markets. Yes, it does look like silver's a bigger market all around. I did pick up some physical today...

fox (9/27/99; 12:07:59MDT - Msg ID:14596)
fox
Goldfields management
Gold Fields sees bullion piercing $300/oz




Johannesburg – Gold Fields Ltd, the world's second largest gold producer, said on Monday that it saw bullion vaulting the crucial $300 per ounce threshold in coming weeks after the Europan Central Bank put a cap on sales.

"If we can get gold over $300 we're going to look a lot better. I think it probably will within the next two to three weeks," chief executive Chris Thompson told Reuters.

"I don't think the hedge funds have started to buy back yet. It's now so expensive to hedge, because of the high gold lease-rate, and this should mean reduced producer hedging (selling) in the future," he said.

Gold spiked $16 in opening European trade to its firmest levels since May after the ECB said it would limit member sales to 400 tonnes annually and a total of 2 000 tonnes over the next five years.

Thompson last week disclosed that Gold Fields had bought 12.5% of the Bank of England's auction of 25 tonnes of gold when the price was around $255.75/ounce, and said then that it thought bullion was cheap.








Goldspoon (9/27/99; 11:49:28MDT - Msg ID:14595)
Special People
Lots of "Special People" buying Silver Moon today even though it is clearly in no way connected to Gold Sun... :-) (grin)

Gold Dancer (9/27/99; 11:42:45MDT - Msg ID:14594)
Phos
I would not be too concerned about them shutting down the gold market. True, there are a lot of shorts out there but that was the origional intent by European Central Bankers. They lent out their gold "knowing" it would not return. Why would they do such a thing? Easy. They wanted to create a
built in demand for their new currency the EURO.

So these paper gold contracts will not have to be settled in gold they will be settled in Euros as well. Presto: instand demand for the EURO sending it into reserve currency status.

The gold market will be allowed to go as high as it wants over the years ahead because it is now a reserve which is carried on the books at market value in Europe, soon to be carried at market value in the IMF and by default soon to
be revalued by the Federal Reserve.

All planned out inadvance and here now for all of us to
enjoy. We now have a free market in gold. In time, we will
regret everyword we wrote about the internet stocks as we
join the party.

Gold Dancer

Goldspoon (9/27/99; 11:42:26MDT - Msg ID:14593)
Leigh , S&P 100
http://www.decisionpoint.com/DailyCharts/OEX.html
Because the Tech heavy S&P 100 did not break it's 200 day moving average on Friday thus the stock rally today. Bears may make a run at the 200 day mark tommorrow or Wensday..

Leigh, this is the rope that must be broken to add more fuel to golds rise... It will be the signal to dump stocks in a big way and roll this money into gold....

ORO (9/27/99; 11:36:57MDT - Msg ID:14592)
Phos - Different
Platinum, though a natural money, is rarely traded that way. The futures are really showing the distress of shorts, but the short position is unlikely to have been anywhere near the short in gold nor the supply deficit. Most significant, forward selling was not a very strong element in the market, so far as I can see.

Goldspoon (9/27/99; 11:28:04MDT - Msg ID:14591)
Peter
Thanks for helping me field 714's question...

Phos (9/27/99; 11:18:07MDT - Msg ID:14590)
ORO (9/27/99; 11:02:58MDT - Msg ID:14587)
ORO - Your comment on forward rates:

-----My signal is the forward rate, when it is below 0, I would expect the paper gold meltdown scenario of FOA to occur. Though headed that way, it is not there yet. -----

I notice that platinum forward rates are negative. Doesn't gold usually follow or is it the other way around? What are the ramifications for platinum at this point? Really appreciate your analysis. I don't want to get caught in PM stocks if they are going to shut down the gold market!

Gold Dancer (9/27/99; 11:05:50MDT - Msg ID:14589)
Nice little gold rally
Wonderful day in gold. But I do believe better days are coming. I still smell disbelief out there. Fear is a long
ways off. So is the high price for gold. Me? I just plan to sit back, watch the show, and enjoy watching others eventually s*** in their shorts as they learn the eternal lesson that euphoria and hubris always ends in tears.

Gold Dancer

Luv_G7 (9/27/99; 11:04:24MDT - Msg ID:14588)
Huge short positions in physical market!
http://www.usagold.com
The rally has begun! Buyers: study the market and you will learn of the HUGE short positions being held by shorters and hedge funds worldwide. No quick covering and decline is possible. Experts estimate that short positions for physical metal are between 2,000 and 16,000 tons. It's mind boggling! These shorts must cover, starting now, and it will only add fuel to the fire! There is no limit to the upward price movement. Gold mining stocks will be an unbelievable profit center.

Another fact: The total market capitalization for all gold equity funds is around $4 billion. The total market capitalization for all other equity funds is around 2,900 billion. There's going to be a lot of capital flowing through a very small door, very soon. I love it!



ORO (9/27/99; 11:02:58MDT - Msg ID:14587)
FOA, MK Aristottle Holtzman all
I came back to find gold making the kind of noticeable move that it has not made in quite a while.

There was a lot of good reading from these weekend posts.

Mr Holzman's explanations are in their usual lucid tongue backed by great reasoning.

FOA, I understand that now that the rug has been pulled from under the gold banking system, there is an initial pop. Yet there is no reaction yet in the currency markets. I am still hoping that the CBs of the G7 + Oil+China, manage to find a way to prevent a debilitating shock from ocurring. The losses to all would be too high, and I expect they would do what is within their power to ameliorate the situation and avoid the economnic losses. My signal is the forward rate, when it is below 0, I would expect the paper gold meltdown scenario of FOA to occur. Though headed that way, it is not there yet.
Today's lease rates seem to indicate heavy long term selling of the kind producer hedging and in extremis BB rollovers would imply.
The gold let is hitting the markets and has managed to lower prices from their peak by $10, before the $3 rebound. The length of the contracts implied by the lease rates indicates a longer term strength at the expense of dampening of the short term move.
The likelyhood of the paper gold markets closing is much higher on the way up than it is on the way down. Though, again, it depends on the progression of events. Coming from a break in $ and in liquidity for the arbitrage players, the low price scenario could have come about. Breaking out from the gold side, the low POG scenario may never materialize as the markets will close on the way up and forced to settle commitments in currency.
The current situation is such that the Fed is coming to terms with the concept of monetizing more than a whole year's worth of debt within the next few months. Many have not understood this. Nor have many understood the fact of the initiation of a deflationary cycle can cause great inflation when default is not permitted in a debtor nation. Perversely, the promise by the Fed to print money like mad, has reassured many players of the stability of $. How? by preventing a perception of the debt being "hung out to dry". If it is categorically all to be redeemed, and the Fed is a willing buyer of last resort, then there is no immediate reason to dump private US $ debt securities and return to your home currency. So we end up with protecting of the $ by the promise of unhindered future printing.
As long as the Fed is not falling too far behind, the slide in $ will be controlled.
Note that the important thing on the minds of the coferees in Washington was not the Yen. Their decisive action was done in regards gold - not Yen ("of concern").
The second issue, of GDP: Yes, GDP is in large part a distorted view of the aggregate of an economy's activity. And yes, the distortion is to a great extent a result of the currency not being tied to anything outside perception and debt balance. The manipulation of the figure of GNP and GDP serve to provide support for inflation of the currency, as in the statement "money supply must grow with the economy". It is, in a way, making the sum of dollars printed appear small relative to the economy itself, while the economy itself is counted as the very same sum. It still provides information of substance, however distorted it may be.

Aristotle, MK, The trade of conceessions for gold is too old to impress the skeptic. There is only the current evidence that the historical deal is the same as it has always been.


TownCrier (9/27/99; 10:51:36MDT - Msg ID:14586)
All Okay On Y2K? Not Yet: White House Urges Small Businesses to Make Needed Repairs -- and Soon
http://www.washingtonpost.com/wp-srv/WPlate/1999-09/27/023l-092799-idx.html
With 95 days left, the chairman of the President's Council on Year 2000 Conversion warned small bussiness that there is great risk in waiting, and if they sit back and let Jan 1, 2000 prove where the problems are for them, they may find themselves "at the end of a very long line" to get the necessary fixes. He said this could lead them to cash-flow problems which could force them to close.

TownCrier (9/27/99; 10:39:45MDT - Msg ID:14585)
Further on this item mentioned earlier...Ecuador defaults on debt
http://news.bbc.co.uk/hi/english/world/americas/newsid_458000/458562.stm
As Ecuador faces its worst economic crisis in over 50 years, it last month decided to postpone its Brady bond debt interest payment of $96 million for 30 days. The president announce, now that we're down to the wire...it ain't gonna happen, pardner. Nearly half of Ecuador's $13.3 billion foreign debt is structured as Brady bond debt.

TownCrier (9/27/99; 10:25:49MDT - Msg ID:14584)
Red Oskar blasts Schröder
http://news.bbc.co.uk/hi/english/world/europe/newsid_458000/458232.stm
After resigning six months ago as finance minister, Oskar Lafontaine criticizes German Chancellor Gerhard Schröder for spending cuts and welfare reforms which have been very unpopular among those with Socialist leanings such as Mr. Lafontaine.

Hey, Oskar, take a cue from UK's Chancellor Brown...you can't spend your way to prosperity with money you don't have. First you work, THEN you eat. Otherwise, you are only getting a free ride from somebody else, and could stop at any time. Another country comes to mind where this has the potential to become troublesome...spending money they don't have.

Gandalf the White (9/27/99; 10:09:43MDT - Msg ID:14583)
The PPT is showing FEAR in its eyes !
Hello ALL -- What a WONDERFUL day in Hobbitville today. -- All the Goldhearts are smiling and watching the Orcs running in circles and and shouting "Thunder in the Night!". -- Did everyone notice where the PPT started the $PREM.X this morning ? --- 21.5 opening and then holding the 11. base for as long as they can ! --- LOOK at the volume size on the mining stocks -- OUT OF THIS World ! Over 4 million shares on NEM and 3 Mil on ABX -- Can you see the change in attitude ? -- Let me end with a heart felt "Thank you!" to Peter and Robin Asher for hosting the "FIRST Annual" PNW Goldheart meeting, PLUS, Richard (of OR) and Carol, for joining me and my better half, at the Asher abode. -- This was one of the most memorable weekends of my goldfever "plagued" life. --- "Goldfever", CATCH IT !!!
<;-)


TownCrier (9/27/99; 9:49:04MDT - Msg ID:14582)
Brown: We've only just begun [reform]
http://news.bbc.co.uk/hi/english/uk_politics/newsid_458000/458561.stm
British Chancellor Gordon Brown gave a stirring keynote speech which earned him standing cheers from Labour Party delegates but jeers from some union leaders. "I will never let the deficit get out of control. We will not spend money we have not earned. Our years of responsibility in government have just begun. We will never again let Tory economics ruin people's lives."

The Tower says, "No comment."

Leigh (9/27/99; 9:37:43MDT - Msg ID:14581)
CNBC
Has anyone been watching CNBC just now? They were saying that gold stocks are up because the mining companies are HEDGING! They say it's a real money-maker for the mines, and that's why their value is going up. Barrick was held up as a good example.

JA (9/27/99; 9:27:22MDT - Msg ID:14580)
Canuck
In response to your question below:

Canuck (9/25/99; 19:59:37MDT - Msg ID:14383)
JA
May I ask which stock you hold? My post an hour or so ago may divulge the fact that I have interest in certain companies.

Sorry I am slow in responding, but I typically don't visit this site on Sundays. I do not feel that I am any kind of expert when it comes to selecting Stocks and If I were to do it over again I would probably do it differently. Having said all that most all precious metals stocks are doing well today. I have shares in the following companys

TVX Gold
ECO Bay Mines
Sunshine Mines
Hecla
Alta Gold
Pegasus- went under but still showing some value on my statement

I bought these companies some because they are local others because they were cheap and I could buy them in 1000 lots not because I did any through analysis. Several are up significantly today.


USAGOLD (9/27/99; 9:16:36MDT - Msg ID:14579)
All...Links - Today's Daily Report
If you wish to access the links in Today's report, please go to the Daily Market Report link at the top of the page. All the links are posted there for easy reference.

USAGOLD (9/27/99; 9:13:14MDT - Msg ID:14578)
Today's Gold Report: LIFTOFF!
MARKET ANALYSIS (9/27/99): Gold lifted off last night in what some described as
frantic trading after European banks signed a declaration saying they would cap future gold
sales and leasing operations for a five year period. For years the threat of sales and a higher
lease pool volume has been the sword of Damocles hanging over the gold market trotted out
by those short the market and the mainstream financial press whenever gold seemed to want
to move out of the doldrums. Now, for all intents and purposes, this threat and attendant
restraints have been taken off the table in this move toward transparency signed by all of
Europe's largest and most prestigious central banks. The yellow metal responded almost
immediately in Tokyo and later London, as well as the American overnight market, with a
rapid escalation in the price that at one point had it up $18 -- the largest one day spike in 14
years. Also, affecting the gold market as well as the equities markets is a report that
Ecuador will default on its Brady bond debt tomorrow -- an event sure to be a source of
concern in the banking sector and on Wall Street as a whole.

Rather than try to re-write the elaborate and dramatic script that unfolded last night, we will
use the internet to our advantage this morning by posting all the relevant links, starting with
the bombshell announcement of last night and move it forward to the last link provided to
the most recent.

Have a good day, my fellow goldmeisters.

The first Reuters brief -- and inkling of things to come

The Actual Text of the Joint Statement on Gold by the European Central Banks

UK welcomes European statement on gold sales

Swiss, U.K. plans part of Europe gold sales-ECB

FOCUS-Gold soars as ECB statement revives sentiment

Gold fix highest since May after ECB sales pledge

Gold Posts Biggest Gain in 14 Years - Bloomberg

Due to the high volume for these news stories, the links are not always responsive and
Yahoo appears to having problems today. Please be patient. Stay tuned to USAGOLD
Forum for up to the minute postings on the situation. We will update if necessary later on.

The September edition of News & Views is a major you-don't-want-to-miss-it, highly
informative, and slightly irreverent blockbuster. We revisit our Five Horsemen of the
New Apocalypse -- the euro challenge, Y2K, the Asian contagion, the bubble stock
market and rising oil -- none of which have taken the summer off. We also preview the
Ten Reasons Why Main Street Worldwide Is Returning to Gold and Short &
Sweet (as is our custom) rambles with a hint of cynicism through a litany of world
political and economic events. You won't want to miss our look at the world of gold to kick
off the Fall investment season. The Season of the Yellow Metal? Just might be so...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.

Peter Asher (9/27/99; 8:50:55MDT - Msg ID:14577)
Goldspoon
The Gold contract at 100 oz. X $280 = $28,000 The Silver contract at $5000 oz. X $5.40 = $27,000

TownCrier (9/27/99; 8:49:13MDT - Msg ID:14576)
ECB's Noyer sees possible risk to price stability
http://biz.yahoo.com/rf/990927/sd.html
Read the last three paragraphs. The ECB is pushing the euro zone members to build and maintain a fiscally sound house, avoiding the pitfalls that trapped the dollar.

TownCrier (9/27/99; 8:41:08MDT - Msg ID:14575)
CS sees Swiss growth and inflation accelerating [the "Rest of the Story" about the Swiss"
http://biz.yahoo.com/rf/990927/n9.html
Credit Suisse chief economist Alois Bischofberger expects Swiss growth with higher inflation and interest rates over the next two years.

He sees the Swiss franc as remaining stable against the euro, yet posting gains against the dollar.

OK, so if the franc is to inflate, and yet still post gains against the dollar, the dollar must really be expected to take a bath.

(He also says he sees a chance for a "hard landing" for the U.S.)

Leigh (9/27/99; 8:32:44MDT - Msg ID:14574)
WAC
That was cute! How appropriate that they set gold free on a Sunday!

beesting (9/27/99; 8:32:38MDT - Msg ID:14573)
Try this URL for XAU
http://quote.yahoo.com/q?s=^XAU&d=1d
XAU now up to 81.78--------14.44%.
My eyes are getting blurry, and my hands are shaking!
Date for future historians to remember,when lightning in the night struck the Gold market: September 27,1999.
...beesting

TownCrier (9/27/99; 8:31:03MDT - Msg ID:14572)
You see, the Swiss referendum was always more about the revaluation than cutting the gold backing (which was effectively meaningless and dead in the water for years)
http://biz.yahoo.com/rf/990927/fo.html
"Switzerland, which was the last major industrial country to link its currency to gold, is dropping that link and wants to revalue 2,590 tonnes of gold reserves on its books."

Gold has not even begun to flex its muscles.

WAC (Wide Awake Club) (9/27/99; 8:24:46MDT - Msg ID:14571)
Let My Gold Go
Silver and Gold are mine, says the Lord of Host.
And The Lord my God said to the Europeans, let my Gold go.
Otherwise, I shall visit upon you, the plague of Inflation, Deflation, Depression, Unemployment, Social Unrest and more.
And The Europeans heeded upon the Word of The Lord and let Gold go.

TownCrier (9/27/99; 8:23:50MDT - Msg ID:14570)
Official sector gold holdings
http://biz.yahoo.com/rf/990927/e9.html
A reminder of the world's largest gold holders. The central banks signing on to this agreement limiting sales and lending (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, Switzerland and Britain) dominate the percentage of gold held in the offical sector, and make up 11 of the top 21 countries.

beesting (9/27/99; 8:17:33MDT - Msg ID:14569)
For the Ladies & Knights holding Gold mining stocks.
http://quote.yahoo.com/q?s='XAU&d=1d
XAU up 9.75% at 10:02 E.S.T.
There were so many orders for the big North American Gold mines trading on NYSE was halted or delayed until computers could catch up.

A VW bug painted Gold just passed me on the freeway doing about 120 with a sign on the back saying: HANG ON BOYZ-WE GOT A LICENSE TO FLY!!
....GOLD I got some!!.......beesting

TownCrier (9/27/99; 8:12:34MDT - Msg ID:14568)
Gold jumps as Europe caps sales, eyes $300
http://biz.yahoo.com/rf/990927/gr.html
Analyst expects to see $300 this year, "It may come slowly, it may come quickly. I think we are in a new environment for gold now." Another analyst expects gold to move into backwardation, about which Reuters says "...the price of spot metal is more expensive than that of a futures price, indicating tightness in the market..."

TownCrier (9/27/99; 8:04:00MDT - Msg ID:14567)
U.S. Fed sees troubling rise in poor bank loans
http://biz.yahoo.com/rf/990927/i4.html
Federal Reserve Governor Laurence Meyer said in remarks prepared for delivery to the Institute of International Bankers, "Lenders are relying too much on the continuation of good times. They're assuming a very optimistic view of their borrowers' operating prospects and that their borrowers always will have ready access to financial markets."

It all adds flavor to this soup we're in. Goldhearts are riding high and dry on a floating saltine cracker, however.

TownCrier (9/27/99; 7:56:45MDT - Msg ID:14566)
Well, what did you expect them to do? They'll always steer you to stocks...their bread & butter.
Alert: Goldman Ups Newmont , Barrick Gold to Trading Buy From Mkt Perform
Alert: Goldman Raises Battle Mountain Gold to Trading Buy From Market Perform
Alert: Goldman Ups Placer Dome Homestake to Mkt Outperform From Mkt Perform
Alert: Goldman Ups Lihir , Kinross to Mkt Perform From Mkt Underperform



TownCrier (9/27/99; 7:45:29MDT - Msg ID:14565)
Most of this you already know...so skip to the conclusion
http://biz.yahoo.com/apf/990927/world_econ_2.html
"...a botched devaluation of the Russian ruble and the near collapse of a large American hedge fund threatened to push the United States and the rest of the world into recession..."

As IMF and World Bank meetings continue this week, even U.S. officials are growing worried over the huge U.S. trade imbalance that has helped serve to stabilized and provide a market for the fallen asian economies.

Goldspoon (9/27/99; 6:57:47MDT - Msg ID:14564)
714
714 Hopes this gives you a feel for the size of the markets, i beleive eatch contract is for (1000 oz) some one may correct me on this ....if this is correct take our old friend spot and multiply....

Friday's COMEX gold estimated volume was a very heavy 90,000 lots. Total COMEX gold open interest on Thursday gained 3,415 to 210,975 contracts.

COMEX silver open interest added 654 to 79,346 lots. COMEX gold warehouse stocks rose 40,078 to 948,243 ounces, while COMEX silver warehouse stocks were unchanged at 78,790,939 ounces.


FOA (9/27/99; 6:54:58MDT - Msg ID:14563)
No time for discussion!
http://biz.yahoo.com/rf/990927/f0.html
SYDNEY, Sept 27 (Reuters)

``The Europeans have set gold free,'' the dealer added.

The Invisible Hand (9/27/99; 6:46:20MDT - Msg ID:14562)
The Scot, CNBC and the devil
The Scot,
You find it strange that after having watching CNBC for about 45 min. you have not heard one word about Gold.
You are forgetting that the barbarous relic had already enough support of 15 European central banks by their statement this week-end. The relic needed that support to rise like a phoenix.
Who are you to call for even more support?
Sorry, I couldn't resist the temptation of being the devil's advocate and paraphrasing one interviewee on the BBC-World Service Radio in that way..


Goldspoon (9/27/99; 6:42:45MDT - Msg ID:14561)
The Race....
AND THERE OFF!!! Gold Sun is first out of the with a 5.4% start, the wind off of Gold Sun has drafted Silver Moon to a 2.1% start.
This is not surprizing as we have said Silver Moon is a slow starter... as he is the dark horse, stays up at night and likes to party....but watch out for the home stretch my what a finisher......

The Scot (9/27/99; 6:18:08MDT - Msg ID:14560)
CNBC
I have been watching CNBC for about the last 45 min. I have not heard one word about Gold. Very Strange!
The Scot

714 (9/27/99; 5:12:20MDT - Msg ID:14559)
Goldspoon re: silver
I saw yesterday's reply about the silver & gold markets. Another question comes to mind. Is the dollar volume of the silver market as high as the gold market? Please advise. Thanks.

Netking (9/27/99; 5:02:24MDT - Msg ID:14558)
Gold on the Go
Good evening all - Some December 2000 call options @ $90 each and at a strike of $360 are looking a good thing to me.
An excellent article by Marion Butler (USA Gold) 27th Sep on this site well worth serious contemplation.
Above all your getting, get wisdom for she has more value than Gold.

Canuck (9/27/99; 4:52:53MDT - Msg ID:14557)
The announcement. See FOA #14480
Bank Of England

I'd like to know how Bloody Oliver Eatmore (BOE) managed to weasel into the european group. (England is included within
the 15 member limited selling group).

The BOE boils my blood. Hypocrites. They started this mess and now are claiming some sort of innocence.

714 (9/27/99; 4:39:05MDT - Msg ID:14556)
POG Looks great...
Thoughts of Another and FOA came to mind this morning. After seeing this dramatic (and continuing) run-up this last week in POG, we're seeing what seems to be a natural, and even unmanipulated, market at work. What happened to the theory that POG would stay low and physical wouldn't be available? The paper and the physical markets are still married to each other, yes?

Off to buy silver today. It's looking like the most bang for the buck right now...

CoBra(too) (9/27/99; 4:21:01MDT - Msg ID:14555)
London morning gold fixing at 281.70-
Cheers to all - CB2

CoBra(too) (9/27/99; 4:02:40MDT - Msg ID:14554)
Blue Skies - ahead
Woke up to an early fall day, clear and crisp air, are promising a day when you can see forever. Leaves, golden in the early sunlight are sailing from the oak and maple trees, alike golden coins piling up on the meadows below.
A morning to rejoice as we've been longing for the turn of the tides and as we can feel a new "aurea prima" arise, as the moisture of the long dark night of the goldilocks slowly evaporizes from the undergrowth, the grass and hege(r)s.

Kudos to ECB and ECB's for clear words and long live aurea prima.

Cheers to all and have an equally great morning CB2.

@MK-Is it not a coincidence finding your (no, mine) first News & Views in my morning mail? Thank you!


gidsek (9/27/99; 3:49:50MDT - Msg ID:14553)
Bill (9/26/99; 22:53:12MDT - Msg ID:14519)
For some time the December contract has been a Y2K play. The market is unclear about the outcome of the date roll-over so the December contract is the one recieving the attention, from those hoping to cash in on the fear and suspense before the roll-over.

..might work..

gisek

Aragorn III (9/27/99; 3:16:29MDT - Msg ID:14552)
Sir Peter, your Msg ID:14543 puts a smile on my face to see me within such good company!
It is an honor to see a post with my name surrounded by two such diligent professors at this school...the names of Peter Asher and FOA.

I also smile to see such a small ID number and to think how much water has passed under this bridge since that time, with Msg ID's now approaching 15,000! That is a lot of talk on the doorstep to receive this first "goodnight kiss". We discover it took the lightning in the night as just the thing to set the proper mood! Will the father turn on the porchlight? The hedge funds have lots of paper contracts to sell in an attempt to defend their book for yet another day...or has this genie at last gotten out of the bottle? I must go.

got three wishes?

Goldsun (9/27/99; 2:57:27MDT - Msg ID:14551)
Gold
Nice.
Goldsun

Mr Gresham (9/27/99; 2:54:48MDT - Msg ID:14550)
Usul -- Thank you!
Thanks, Usul, for the quick response and link to Another's Thoughts.

What a night to be in such good company! As I reluctantly crawl off to bed, I'm thinking of the joy of those of our Table who shall read this news during the day.


Aragorn III (9/27/99; 2:42:16MDT - Msg ID:14549)
Reply to our dedicated sir koan, and to all (link provided by FOA)
http://www.marketwatch.newsalert.com/bin/story?StoryId=Cn:2Aqb8ZtJi2mZG4ndi0&FQ
Koan, you posted: <<<koan (9/26/99; 23:19:32MDT - Msg ID:14528) "...This caught me by surprise. The central bank statement, where did that come from?">>>

This is what I would call "a small finger" as mentioned in this post when Sunday was yet young. The signs were there for the world to see, but perhaps you were blinded by the white light of your silver?

<<Aragorn III (9/26/99; 2:53:37MDT - Msg ID:14408) "Consider that the IMF and BIS, the ECB, and yes...the BOE (even as a seller-in-distress), and frequently our good Federal Reserve Chairman; they all speak only of gold, but never silver. Please be aware they can move the gold price further with a small finger than you or I could ever move silver with a crane. The path has become increasingly clear with the IMF moving to mark to market a portion of gold holdings...an easy addiction with more to follow??? I would say we might hold our breath on this one and yet not risk turning too blue.">>

Indeed, we may breathe again with cheeks still pink, for that passage of time was little more than a pause between inhale and exhale. (I will claim no credit for "calling this move" for it is no more remarkable than seeing wet ground and then "calling" the rain.) Those with gold may find that they breathe at ease, while those with only silver may find themselves to be breathing hard to chase this ride that would not wait.

In that same post I questioned your "mathematics" for silver to double before gold, asking.......<<"Good Sir, my scale is broken this day, and therefore my currency knows nothing of weights and measures. I am told that the (amount of) silver held in my left hand was purchased for 10 dollars, while the (amount of) gold in my right hand was purchased for 10 dollars. To "double" (to equate with your example) they must each "go" to $20. How is it that this silver knows the shorter path and may travel the faster, easier road?">>

You were kind to show me the light with your post:
<<<koan (9/26/99; 12:32:58MDT - Msg ID:14433) Silver and gold - relative appreciation - a theory "Aragorn III re doubling: You buy $5,000 worth of silver and you get 1,000 oz ($5.00 per oz). You buy $5,000 worth of gold and you get 20 oz ($250 per oz). If silver goes to $10 per oz you just doubled your money i.e. now you have $10,000 (1,000 oz times $10). That other $5,000 you put into gold for 20 oz will need to go $500 per oz i.e. 20 times $500 = $10,000.) Elementary my dear Watson.">>>

Although FOA was kind enough to support my brand of logic, your clear presentation begs me to give your version a try to see how well it fits...I merely alter your example for "half" because logic must work both directions:

"koan re halving: You buy $5,000 worth of silver and get 1,000 oz (at $5 per oz). You also buy $5,000 worth of gold and get 20 oz (at $250 per oz...though we shall ignore how that has now changed!). If silver loses $2.50 per oz you just lost half your money i.e. now you have $2,500 (1,000oz times $2.50). That other $5,000 you put into gold for 20.oz will need to lose $125 per oz (i.e. 20 times $125 = $2,500.) Elementary my dear Watson."

Do you now see that in that sense, Sherlock Holmes would not be worth writing about, as he would surely solve no cases? Your math is true, but the conclusion does not follow. Using this same logic taken to extreme for clarity, it would apparently be very easy to lose all of your money with silver, as silver need fall only $5, whereas gold's path is so long it cannot get there from here.

The use defines the value, and we now see monetary officials talk of "reverse alchemy", turning gold into money within the IMF...significant because the IMF stands as the single largest representation of "institutional commitment" to do battle against such "reverse alchemy". As they are seen to raise the white flag, the wider world rejoices, and "Gold will take no prisoners" we are warned by a BIS official as quoted in Michael Kosares' very good newsletter. Siver was never in this battle, and we can say "to the victor go the spoils". It is here that I find disagreement with the BIS. I say that one ounce of gold will capture a great many dollars indeed! But silver?? As the TownCrier reminds us recently, we have received a good education in our discussion and sharing of news with each other. We know what is happening now and why as no single news reporter or man on the street can know. You may stand with answers while your neighbors stand bewildered. How you choose to apply the education will both serve as the final exam and provide the grade for the class.

I must borrow from CoBra(too)...
got straight-A(u)'s ?

AllanC (9/27/99; 2:22:59MDT - Msg ID:14548)
DEAR CNBC
Dear CNBC:

Just thought I would share with you a little conversation I overheard tonite.

RING! RING! RING!!!!!!!

RON INSANA: Dammit! Who's calling at this time of night!....... Hello?

MR PRODUCER: Larry! Sorry to wake you up.....But it seems we've got some action going
on overseas. Apparently the gold market is going through the roof! Up more than $15 in Hong Kong.

RON INSANA: Are you kidding?!!

MR PRODUCER: No bull Larry! It seems we've got some news on the Euro CB's not selling any more gold. It looks like some of our friends the gold shorters are going to be in quite a pickle. You've got to pass it on to the news staff tomorrow, I want you to downplay this story.

RON INSANA: Well how can I? I mean....everybody's going to be talking about it.

MR PRODUCER: Well, you know what I mean. Just give it a negative spin, like maybe the CB's still plan to sell some, just not as much. Maybe you can add that some Asian suckers are buying it for jewellry season. Don't make it sound like a big deal. Especially don't mention the huge short position in gold, that could bring out the sharks. Get some commentators on that you know will say something negative about it. But don't give it too much time. You know you gave gold too much time last week with the move up and the bank of England auction. Most of your stories should continue to focus on the technology and internet sectors, and keep bringing back commentators who tell us about what a wonderful new age we live in...that the Dow is going straight to 100,000...that we live in a "new paradigm"...yeah get that idiot Larry Kudlow...he'll say anything as long as he gets paid for it.

RON INSANA: OK Boss. But do you think this is really it. Are people finally starting to realize that gold is not the "barbarous relic" that we said it was. Maybe that it's worth something after all.

MR PRODUCER: I don't know Ron and frankly I don't care. But I don't want the stock markets to get shaky because of this gold move so we've got to cheer this market on! I don't want our ratings to drop. You remember what happened with our predecessor FNN back it 87!! Why, when the markets dropped and were stagnant for a few years, we lost ratings and were forced to sell out. Why most of our revenues come from advertisers who have a vested interest in this stock bull market continuing. So let's not let them down. Keep up the good reporting...Goodnight.

Click.....

(Good reporting? He he he he he!)

A little fly on the wall






The Invisible Hand (9/27/99; 1:51:34MDT - Msg ID:14547)
America, wake up!
Our day has come.
Spot is at 284.30 up 13.90

Simply Me (9/27/99; 1:51:23MDT - Msg ID:14546)
Lightening in the Night
I'm sorry for those who sleep right now.
Godspeed, FOA. I'm sure you will be Very busy.

...Got party hats?

Usul (9/27/99; 1:42:30MDT - Msg ID:14545)
Gold will be repriced once in your lifetime!
http://www.cairns.net.au/~gunbury/ANOTHER21.html
Mr. Gresham,

As well as Another's THOUGHTS archived here at
USAGOLD's home page, you can find earlier THOUGHTs
archived at Sharefin's Internet Links. See for example (excerpted):

Sat Feb 14 1998 20:50
Sir, the world is going to change, and the rules of engagement will also change. Gold will be repriced, once! It will be enough for your time of life.

Sun Nov 30 1997 20:03
For ones of simple thought, such as I " gold will be repriced once in life, and that will be much more than enough".

Wed Nov 05 1997 20:33
There is no end to the amount of paper contracts that can be written and sold to drop the price of gold. The large players that I know have no problem with this. They are not traders.

"Gold will only have to be repriced once, that will be more than enough"!

Sat Nov 01 1997 21:35
Do you think that value has been lost by holding physical gold all these years?

If the answer is yes, you are wrong! I tell you now, it's all in your perception of what is value and what is real. Gold has been increasing in value since the early 90s and doing it at a rate much higher than any other investment. Cannot see this? Hear me now, what the wealthy and powerful know: "real value does not have to always be stated or converted thruout time. It need only be priced once during the experience of life, that will be much more than enough!"


Lafisrap (9/27/99; 1:04:13MDT - Msg ID:14544)
Still a good time to buy
I sure do need gold to go to $30,000 per ounce. (I should buy a house.) But I am thinking/feeling that this recent G7 announcement is somehow intended to keep the US dollar, the LBMA, and the IMF from bankruptcy. It could be that the world's financial powers are just buying some more time for the present arrangements. It would seem that the highest dollar price of gold will be at the time of dollar meltdown.

It is still a good time to buy gold. Don't you agree? My life savings is small, but I am invested approximately 90 percent in precious metals. I even took out a small loan to buy more physical. Perhaps I will do the same again, but this time with a larger loan.

Lafisrap



Peter Asher (9/27/99; 0:46:12MDT - Msg ID:14543)
Truth
Aragorn III (12/4/98; 17:28:31MDT - Msg ID:1155)

Modern monetary events do not grow from a seed to a mighty oak in the
Town Square for all to see. They are instead as lightning in the night.

FOA (9/26/99; 18:58:01MDT - Msg ID:14480)

It's all over people!

Keats — "Truth is beauty,
Beauty is truth.
This is all there is to know,
And all you need to know."

Peter Asher (9/27/99; 0:22:54MDT - Msg ID:14542)
The Scot (9/26/99; 23:41:30MDT - Msg ID:14535)
Well, Scottie, the Forum Wizard was here, and we did have our attention on the magic metals some of the time, but we also talked "Of shoes — and ships — and sealing wax -- Of cabbages and kings."

Sometimes, wanting something too much keeps it from happening. It could be that when we forgot about Gold and concentrated on finding ripe blackberries to pick, that the true magic spell was woven.

If you had to choose between never again holding a Gold coin or never again picking and eating a ripe berry, what would it be?

Golden coins or golden moments? One of the big riddles of life!


koan (9/27/99; 0:19:53MDT - Msg ID:14541)
London opening?
Does London open in an hour?

Black Blade (9/27/99; 0:10:28MDT - Msg ID:14540)
Wishful Thinking?
Can you just see it now? Shredder machines being fired up, emergency FED meeting in the morning, bank holiday, trading curbs put in place, markets stop trading, Bill Clinton's legacy - gone! Tony Blair having to come to account before parlament. Very interesting and amusing times. The Wunder Kinder are now Shmucks.

Mr Gresham (9/27/99; 0:03:53MDT - Msg ID:14539)
Once in a lifetime
"Gold will be revalued once in a lifetime."

(Will someone please supply the posting number or archive location for Another's statement above, and correct me if I've gotten it wrong?)


elevator guy (9/27/99; 0:03:23MDT - Msg ID:14538)
I'm trying to spread the word, to help Gold along, but I'm having trouble posting at...
MarketForum.com Its where all sorts of traders post about wheat, oil, Yen, etc. When I try to post about what is happening with Gold right now, my posts don't make it through. I wonder if the posts are being screened? Well, no matter, gold will have its day. When the door shuts, all those who scoffed will drown. Serves 'em right!



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