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

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ARCHIVED DISCUSSION FROM 4/27/2000
All times are U.S. Mountain Time

(Yesterday's Discussion.)

ORO (4/27/2000; 23:53:57MT - usagold.com msg#: 29498)
Euro Crush and the Dollar parabolic spike
The dollar is at the extreme of a short squeeze on the world markets as a result of the Euro transition. The Euro is undergoing an inflation of its float of the sort that had occurred in the dollar during the 70s, but way more quickly. The Euro is establishing a debt base. As a group of nations with an aggregate current accounts surplus, Euro land will soon find itself in the Japanese position of 1998.

Just as Japanese companies prepared for a strong Yen years before it came by building auto manufacturing facillities in the US, so are European corporations doing now. That is further assurance that the situation will reverse.

To Q3 99, the Euro debt base (their "Big Float") has grown 23% in one year despite Europe having a current account SURPLUS (We have a deficit). My tally out of the official US "Big Float" according to the BIS, is 5.8 $Trillion - growing at 6%, with bank debt FALLING 1.5%. While that of the Euro was 4.5 $trillion (including internal transnational debt within the EU), up from 3.6 $trillion.

This fast growing debt base will generate demand for Euro in the future as interest must be paid by the speculators and US based transnational corporations who borrowed it into existence. Since these corporations and speculators are dollar based (for the most part) they will be in the same position as gold is in. A current account surplus will prevent Euro from coming to market through trade, leaving these corporations and speculators with a dollar supply they will HAVE TO convert into Euro.

Combined with the US trade deficit, the Dollar's big float has had a 7% gross supply rate vs a 21% supply rate for the Euro (including current accounts surplus). Despite this rise in Euro supply, the EU has a MUCH lower price inflation (2.3%)than the US, and they do not massage the numbers. "Deprocessing" the US numbers, gives a 6.5% price inflation rate for 99, and it has been growing even with steady commodity prices over the last quarter, due to the strong dollar. The excessive Euro creation is predominantly a currency market phenomenon, and the parties taking on these Euro liabilities are not European, but Caymans, London, and New York based. Unlike US "Big Float" for which Americans are on the hook, since it was generated internally. This Euro "Big Float" is one for which foregners are on the hook - not Europeans. The EU is not supplying Euro to the markets, the financial markets are creating them.

In the meantime, the situation is such that US transnationals are losing market share and profits to EU competitors who have better financial terms and better export policies. This is forcing the US transnationals to seek further Euro financing instead of dollar financing. While this is pushing the Euro down NOW, it will be a death trap for the dollar LATER. Already, the US income payments balance is over 10 $ billion per quarter in the red. By the end of this year, that figure will hit $40 billion on top of the trade deficit. While high interest rates may cool down the economy somewhat on big ticket items, these same high rates will increase the outgoing payout of dollars. If the process ceases because of a local slowdown, then the Fed will lower rates in order to create monetary "stimulus", but both a lower rate and an economic slowdown will create a rush of funds dumping their dollars at the exchange window for whatever they can get and rushing back home. IT IS DAMNED IF YOU DO, DAMNED IF YOU DON'T.

The Euro's decline rate will ease up as the Euro float growth rate flattens this year, now that both EU and non-EU corporations are completing their transition to Euro finance rather than Dollar finance (at least for EU operations - though they seem increasingly inclined to raise Euro funds for global operations as well). Interest payments due on the Euro debt will reach significant propportions soon. The Euro float should reach Dollar float size by the end of this year, however, that increase will have been on top of a bigger debt base and without support from trade deficits. The ECB will then start an "aggressive" move in rates to "fight inflation" and will create the most massive short squeeze ever seen. Greater than that of the Dollar in the past 20 years, or the Pound in the 1920s and 1930s.

Since the Eurodollar rates spiked from 6.6% to 6.75% (new high) during this dollar spike, it is obvious that the displacement of dollar borrowing in global markets has been so severe that dollar supply from the current accounts is not enough to cover current dollar interest payment needs, now near $500 billion at the current, higher, interest rate. The Euro debt requires only $250 billion, and is getting all the necessary supply ($600-750 billion) from new borrowing by non-EU organizations. The Dollar supply is wholly from the current accounts deficit and stands only at a $400 billion level.

The US current accouts deficit has had the predominant effect of transferring dollar obligations from foreign non-Fed members to US based Fed members should now be over 40%, up from 33% in the first half of 99. By the end of the year we will be near 50%, and then the pressure on the Fed to add reserves will be tremendous as "Big Float" liabilities will be to foreigners and assets will be debt of Americans.

EU Political situation:

The EU socialist governments will be thrown out soon enough if they continue trying to out-Japan the Japanese in order to avoid succumbing to competitive pressures that are demanding they reduce regulation and welfare expenditures. The latter are a result of the Euro zone allowing much better mobility of capital - the capital base of the various nations is no longer captive to government pressure. Japan had to "Big Bang" its reforms over, what to them, is a short period. The EU leadership, unlike Japanese leaders, are aware of what they need to do (but for Lafontain, but he was "ejected"), and will do it though they loath to do so.

So long as the governments do not lose their nerve, they will be able to use the Euro crissis as an excuse to "take extraordinary measures" to tighten their belts and deregulate more quickly. For those who do not realize this, Carter was the president who started the bulk of the "small government" reform in the US - Ford and Nixon started the trend but did not initiate much. That is why Europe has chosen socialists to get the bulk of the deregulation programs started. The expectation has been that they will do a "kinder" restructuring than the center right and definitely more so than the liberals (no, in Europe liberal does not mean socialist, it sort of means "libertarian").

Finally, a summary:

1. The Euro is falling because there is a big supply coming into the markets from non-EU sources. Just like the Yen Carry Trade that went bust in 1998 and resulted in a 44% rise in the Yen/dollar in less than a year.

2. The dollar is rising because there is demand from old dollar debt, but dollars are being destroyed abroad instead of being created. It is a liquidity crissis. In an upcoming post I will use a recent example to demonstrate.

3. The Euro external float expansion is a creature of speculation and is not related to the EU internal monetary policies nor to the EU economy itself.

4. The very justified critique of EU government foot-dragging on reform will give way to cudos as they start to take action. Unions will take to the street and chaos will reign in cycles of strikes, but the governments - socialist or not - will take action. We need only one to demonstrate and force the others to compete. Ireland is one good example. It may be enough. The Euro drop will help them politically in selling reform to their public.

5. The dollar shortage in the currency markets is partially induced by Japanese accumulation of dollars, but it is high US rates that are preventing new borrowing (dollar creation) abroad, and intensifying a short squeeze on dollar debtors.

6. Damned if you do, damned if you don't. The Fed raising rates increases our trade deficit and raises the flow of dollar income out of the US. It is causing destruction of the dollar debts that kept the dollar alive.

7. When the ECB does make a move to raise rates, the unwinding of the dollar - Euro carry trade will be even wilder than the ride we got on the Yen. Unlike the Yen, at 0% interest and 2.5% long commercial rates, the Euro bears a 3.5% interest short term, and nearly 6% commercial long rates, and these are rising with the carry trade.



Black Blade (4/27/2000; 23:52:24MT - usagold.com msg#: 29497)
Re: Topaz
Hi, it's either been a while or I haven't seen your posts lately. The Euro is backed by roughly 15% gold, but there was a rumor(?) or possibly a report that th EU was being encouraged to double their gold reserves. One wonders if and Swiss gold could be added to the pile so to speak. Anyway, I am unaware of any recent additions to the EU reserves.

Topaz (4/27/2000; 23:33:59MT - usagold.com msg#: 29496)
Marius
http://www.cairns.net.au/~sharefin/Markets/Charts/GoldCurrency1.htm
Forgive me for asking good Sir, but- when did the ECB increase their (official) Bullion holdings above 15%? I have been away from town recently and may have missed that.

Link shows AU/ Currencies ratio- Now, if I were a Euro C/Banker with a (forward-looking) mindset to discount my US$ denominated Asset/Liabilities, I'd be pretty happy with the way my gold was going, Yes?

law (4/27/2000; 23:04:11MT - usagold.com msg#: 29495)
MK, All/Euro Speculation among others
http://www.skybluemonthly.freeservers.com
MK, I read your post "Speculation on the Euro Speculation" with great interest. Although this is a Gold Forum, I believe the complexity and volatility of what is occurring in the markets includes geopolitics, interest rates, currencies, precious metals, commodities, stocks, bonds, and their derivatives, and it is sometimes difficult to talk about gold when there is so much macroeconomic interaction "in play"

In this post I'd like to share some excerpts from recent readings and forum posts, interject some questions, and hopefully tie some of this together.

I've recently read FOAs latest "Euro" addition to the Trail page. If I may, I'd like to encapsulate a portion of it here briefly...hope you don't mind FOA; (what you see reflected in the exchange rate [Euro vs $] may not tell the full story of its underlying value [Euro]).

Now, a few excerpts. The first one from skybluemonthly:
"As we have studied in previous issues of Sky Blue Monthly, the current stock market bubble in the USA was created and has been sustained by both domestic liquidity and foreign capital inflow. There have been 2 sources of foreign capital inflow: Yen Carry Trade and Euro Carry Trade. (If you don't know what they are, make sure that you read previous issues of Sky Blue Monthly: Dec. 99, Jan. 00, Feb. 00 & March 00.) To understand this subject, we have to investigate the nature of a Carry Trade. The beginning and the end of a Carry Trade are not symmetrical because, at the formation of a Carry Trade, the volume is at a minimum; at the time when a Carry Trade is unwinded, the volume is at a maximum. We had better use an analogy here: Imagine that you are at a theatre. Before the show, few are in the theatre and some are just coming in. If fire breaks out, these guys, of course, head toward the exit doors and no one gets hurt. During the show, the theatre is packed. If fire breaks out, the crowd rush to the exits. Because there are so many people trying to escape through a few doors, some are trapped inside the theatre. Hence, tragedy occurs. Same thing happens when a Carry Trade bursts. We believe that every market crash in human history was caused, is caused, and will be caused by liquidation by the holders. The current stock market bubble in the USA (especially NASDAQ) has been fueled by domestic liquidity (money creation and credit expansion) and foreign capital inflow (Yen Carry Trade and Euro Carry Trade). Due to the huge volume, the unwinding of a Carry Trade will be compressed within a very short time frame. The consequence will be catastrophic. Historically, a Carry Trade always ended in disaster. According to FFEE, a Carry Trade won't last forever. (The theoretical analysis by FFEE on Carry Trade is beyond the scope of this paper.) A Carry Trade will end sooner or later. If and when Yen Carry Trade and/or Euro Carry Trade burst, the most likely economic consequence will be a global Great Depression. (The Great Depression in 1930's may be renamed as a Mediocre Depression.)

The same can be said for a stock market bubble, not just a Carry Trade. The beginning and the end of a stock market bubble are not symmetrical because, at the formation of a stock market bubble, the volume is at a minimum; at the time when a stock market bubble bursts, the volume is at a maximum. Due to the maximum volume, the collapse of a stock market bubble will be pressurized into a very short time frame, like the unwinding of a Carry Trade. The resulting collapse, of course, is spectacular. Many bulls believe that a stock market crash is always caused by the short sellers. Nothing can be further from the truth. Let us repeat: Every market crash in human history was caused, is caused, and will be caused by liquidation by the holders. Therefore, most investors are not able to get out before the crash. The reason is that if most stock investors try to get out, it will cause a stock market crash."

"You see: the whole thing is a bad joke. If US stock market falls, the Fed will let M3 Growth Rate rise and hence, US stock bubble skyrockets. If rising yen is threatening US stock market, BoJ will step in and sell yen for USD to suppress yen and hence, US stock bubble skyrockets. If T-Bond is sinking (and falling bond is hurting US stock market), US Treasury Department will use budget surplus to buyback T-Bond, and hence US stock bubble skyrockets. If T-Bond doesn't rise fast enough, BoJ will use the acquired USD from its interventions to buy US T-Bonds and hence, US stock bubble skyrockets. What are we doing here? Are we supposed to write Sky Blue Monthly to forecast stock, bond and currency markets? All the above factors cannot be predicted by using any qualitative or quantitative methods. Can you read the mind of Alan Greenspan (The Fed Chairman) to know M3 Growth Rate in the next few months? Can you read the minds of those central bankers at BoJ to know when they are going to intervene again? Can you read the mind of Treasury Secretary Lawrence Summers to know when he is going to use budget surplus to buyback T-Bonds again? If you can't, you should not trade stocks, bonds, or currencies because the risk is so high. Since we can't, we should not forecast stocks, bonds, or currencies in Sky Blue Monthly! In short, Sky Blue Monthly is dead. We still have to think how to get around with this in order to save our Monthly."
The Editor/Publisher is Mervin Yeung a former researcher for a hedge fund/http://www.skybluemonthly.freeserver.com

(I believe most here would agree there is also the gold carry and possibly a swiss carry still "in play".)

(Maybe he could pass on the word(s)...physical gold, get some!)

To All still in the "stock" market...can you spell the word T R A P P E D...For whom the bell tolls, it tolls for thee!
---Donne
To be continued...







Black Blade (4/27/2000; 23:04:08MT - usagold.com msg#: 29494)
Harley Davidson Re: Your Nepalese Friend!
Your Friend is quite correct about how much more brilliant yellow that jewelry is in that part of the world. Ever since I first traveled in SE Asia, I won't buy jewely from these charlatans that pass themselves off as jewelers in the US. When asked, they always come up with that same old tired Cr*p about how soft gold is, and it wouldn't make good jewelry if it were 24K, that your paying for the artistry, etc., etc. Those lame excuses only hide the fact that they charge very high premiums (sometimes in excess of 100%) for cheesy 10K and 14K jewelry items. Even in Europe the minimum is 18K. I usually get 24K jewelry (rings, chain necklaces, earrings, etc.) for family and friends when I travel to Hong Kong, Singapore, Thailand, or Indonesia. I also buy better gem stones in Myanmar and Thailand than here in the US. The jewelry trade in the US is a disgrace and tends to rip-off the people with low quality gold, and skim hefty margins buy charging as if it were high quality. It sure is fun after listening to their garbage, I get to watch their mouths drop as I pull out my 22", 24K, 98.5 gram chain from under my collar. Boy, what a bunch of weasels!

ET (4/27/2000; 22:39:04MT - usagold.com msg#: 29493)
Stranger
Hey Stranger - good to compare notes with you again.

You're right - the stagflation hasn't been acknowledged yet, just like the inflation of a year ago. <g>

We'll see. I think it's already baked in the cake, just like the inflation. We're starting to see quite a bit of retrenchment in our sector of the economy as firms are slowing investment quite quickly. We're sitting on a lot of cash at the moment waiting for good acquisition targets. In our arena, some recent combinations financed at the banks are going sour as rates have climbed a bit while your inflation has increased costs. These guys will fail and the banks will attempt to dump them at sale prices before the next one fails. It's a good time to be holding cash as the banks will sell these assets cheap for some liquidity.

Hey - it's that old 'right place at the right time' thing.

ET


Gandalf the White (4/27/2000; 22:25:20MT - usagold.com msg#: 29492)
pdeep's MINOR error
The future that you quote, pdeep, is the April future gc0j and not the June future gc0m!! This is the same as RossL posted in 29475 and LAW in the Backwardation Alert?!? posting of 29434 -- There are seven contracts still open !
<;-)


$5 Indian (4/27/2000; 22:20:31MT - usagold.com msg#: 29491)
Farfel
Yes, If gold be not risen from the dead, then our portfolio is held in vain. But Light is going to shine from this tomb, and that glitter will be spoken about in the streets. "It's Risen!" Gold did not stay dead. He's back to teach us about honest money. But three days is a long wait. If one doesn't believe that gold is coming back then that one cannot be a goldbug. Goldbugs also have great patience to strive for the truth about economics and life. They try to call a spade a spade but they often hurt another's feelings if too bold.

ET (4/27/2000; 22:18:30MT - usagold.com msg#: 29490)
Al
Hey Al - how you been? You're right about fixed rate debt being the way to go in an inflationary environment. The only way you'll get hurt is if prices rise so much that cashflow becomes a problem. It's that variable rate stuff that will kill you. I see many companies out there with large 'working capital' loans at short rates similar to credit card schemes. These guys will be in trouble in no time at all if rates climb.

ET


$5 Indian (4/27/2000; 22:03:10MT - usagold.com msg#: 29489)
Lamprey_65
Exactly.......I saw GLG and BMG both showing the small pistol flag. Definite accumulation and it's happening without any help from POG. Personally I'd stay away from the penny minors because if gold does drift down investor's fears induce selling. That radical gap down today in the Naz was just that, the fear of bad news. Well the dollar minors are ok because they have a little more meat on the burger. The "under a buck" stuff has secondary liftoff action after the minors begin transmitting to NASA. I want to know does the egg left behind prove the chicken came first? Do the goldstocks give a solid clue to the POG? There is such a thing as premature accumulation, but any accumulation is great. Into the smaller hands the better. When I see the ever flowing graceful pattern of DELL (no I don't believe in it) and realize that is produced by millions of small investors that lessen the effect of fund manager dumping, it shows the culprites of this volatility madness are the big boys who think like kids. SWC.........easy to figure out...a few funds divested in a sellers war. Like at a country auction where two farmers bid up the price of an old shovel to 11.50 when they sell them for $9.00 new at Lowes (only in reverse). What does a fund manager know about Russian mining capabilities. Wallstreet stopped snorting a higher grade of coke in mid-January, that's why we never had a 6th wave up that would have lasted till May. See the collapse occurred just after the stuff was cut with baking soda, sobriety and market mania just don't mix. Now it's going back up in spurts as the better stuff works through the system. Inflation report........no problem, we'll just let everything die and sink back that our buddies don't recommend. As each day passes a few tired souls fall away and get dragged under a tree where they pass away with near zero volume on the "Batan Stock March". Many stocks did the "W" but one by one they are falling out. It needs a 20 Billion dollar cash injection every Monday and Friday. It looks like most of it is headed for the flatlands then it draws out and down slow and over the falls.

Gold, the alternate reality for those not insane......has a wonderful Orange color of the 24 carat .999 finesse. The 10% copper in the Eagles and Kruggerands makes them yellow and it just isn't right. But, any American pre-33 gold coins may have some orange patina as that 10% copper turns a nice orange. Only if it is rare gold does it matter if it was dipped. Probably 85% of all collector silver coins have been dipped. But with the chemistry sets going and guys experimenting with smoke on the stove, ruining 300 silver coins to find the "right smoke" as Edison for recreating original toning, we now have purple, tan, yellow, green, blue, brown and even red silver dollars. And if it turned jet black, it got redipped to try one more time. 1978-1980 saw it all. No not me, it was "those guys". Nobody bothered with gold because it doesn't tone except what I described above.

TheStranger (4/27/2000; 22:01:35MT - usagold.com msg#: 29488)
ET
Man, I haven't seen your handle in awhile. The answer to your question is "sure". These circumstances can result in stagflation. You probably know more about that than I do. All inflations result in a diversion of capital away from productive uses in favor tangible assets (get it?). In that sense, I guess it is inevitable that, when left untreated, an inflation-ravaged economy will quickly go into decline. However, neither you nor I know yet how long the problem will be allowed to grow this time around. Or at least I don't. Furthermore, while debt levels in the U.S. are certainly high in corporate America, recent measures of federal government and consumer debt are not indicative of overextension by any historical standard. Besides, we are all going to be getting raises soon, right.

So I guess whether stagflation is on its way or not is still academic at this point, unless, that is, you are trying to sell packaging materials in Saint Louis or trucks in Oklahoma. In the real economy, stagflation matters! But, as gold investors, our real interest is in the inflation part of stagflation anyway.

Incidently, isn't it interesting that deflation only threatened the dollar once in your lifetime, putting gold at 18 year lows. Hopefully, each of us had the presence of mind to be in there buying. Providing we didn't defeat ourselves with options or the shares of marginal producers I believe we will be rewarded.

Great to see you again, ET!

Your friend,
TheStranger

Thanks to you too, Al Fulchino!

YGM (4/27/2000; 22:01:05MT - usagold.com msg#: 29487)
Sell in "May" ------- Go Short & Go Away....
IPO Locked Up Stock.........
FWIW Dept..........There is 3 X 'MORE' on Hold IPO Stock coming to the Markets in May than we saw in April............
......May 4th should be an exciting day for the Bubble....one of many between now and Clintons' PPT demise.................
GO GATA.......YGM.

BTW...for the Fringe Dwellers....Nostradamus called for May 5th 2000, as the beginning of economic collapse, as I believe I've read somewhere.......

Marius (4/27/2000; 21:29:53MT - usagold.com msg#: 29486)
USAGold (#29466) Regulation vs. "pull the gold"
Michael,

I like your reasoning in trying to explain what is happening re: the Euro. One would certainly hope Europe would see the folly of trying to regulate these hedge funds. All you have to do is look at what a bunch of useless gasbags the CFTC is! How could you regulate something that knows no borders or jurisdiction? It's like trying to capture the wind in a jar.

I'm not sure pulling their gold out of the market would directly defend the Euro--hasn't it entered this erratic period despite doubling the gold quasi-backing? What to do--go to 100% backing? I'd love for them to do it, just to shake up the gold shorts' cookie bag! (But then there's the little matter of the IMF...hmmm.) This is fascinating to watch, in a morbid sort of way. Keep the deep thoughts coming!

M

Farfel (4/27/2000; 21:20:47MT - usagold.com msg#: 29485)
OLD GOLD, I strongly disagree....
If gold reaches into the region of 240 or lower, then it is defeated as a precious metal and on its way to commodity status. Period. I categorically believe that. No V-Spike, no significant rebound to new highs, etc. Most gold companies I follow could not sustain another 6 months at a price level as low as 240. They will end up in bankruptcy with many gold investors holding backyard bonfires of gold share certificates and swearing never to touch the foul metal again.

There will be yet another trainload of "I told you so!" anti-gold market analysts (Mr. Andy Smith, Mr. Ted Arnold, Mr. Leonard Kaplan, Mr. APH, Mr. Goldman, Mr. O'Neil, Mr. Seidman, Mr. Kudlow, etc, etc, etc.) smirkily blaring their triumph to the world. These men will then predict the next pit-stop for gold at 200, then to 160, then to 100, on the way to 50.

There will be no sense in rebutting their arguments or buying against the grain of their mainstream "wisdom" simply because their inveterate predictions of gold's ultimate demise as a precious metal have been validated these past several years over and over again. By virtue of being right, they are perceived and validated as gurus and the gurus all think gold is either in some kind of Elliot Wave trajectory into oblivion or by virtue of fundamental analysis, declare that it is just another commodity, no different than nickel, tin, or copper.

Conversely, those who have said gold is more than just another commodity have been proven wrong over and over and over again as each passing day erodes the precious from the metal. The metal stinks to high heaven today, its last stand approaches, not in another year, but now, today.

It either rises now at a time when bonds, US stock markets, and the US Dollar are poised to fall, or it will never rise notably again. If it cannot rise when the financial markets experience their next period of hell, then it will be defeated permanently. I believe that with every scintilla of my intellect and heart.

At the same time, most of the same forementioned gurus continue to forecast equities moving to 15,000 then 20,000 then 30,000 and higher. If they are proven correct again, then they could predict that the sun will rise in the West tomorrow and everybody will believe them and dutifully follow whatever investment path they dictate.

Because I don't care whether you are a market fundamental analyst or a technician, ultimately the direction of the markets is determined by mass psychology/mass perception.

The markets appear to be in a hot war right now between dueling extremely antagonistic perceptions. The heat is turning up between those who believe in real assets, real earnings, and real value....and those who believe in momentum investing, the irrelevance of corporate profits, and of course bubble markets.

It is not simply a market war, it is also a cultural war. If the Clintonites and current Wall Street gurus walk away with victory this year, then it is game over for the bear crowd, the goldbugs, the contrarians. Thereafter, welcome to George Orwell's New Era, in which doublespeak and illogic (aka the New Paradigm) rule the day.

Thanks

F*

Al Fulchino (4/27/2000; 21:15:52MT - usagold.com msg#: 29484)
ET/Whats wrong with debt?
Question: What is wrong with debt during an inflationary period? Seemingly, you would retire debt with more and more worthless dollars.

Stranger, I follow your posts, thank you.

ET (4/27/2000; 21:12:26MT - usagold.com msg#: 29483)
Stranger

Hey Stranger - I follow your inflation analysis with great interest. Your thoughts have been spot on! Keep up the fine work!

Do you think there is some kind of limit to this money creation? I keep thinking we're getting closer to some kind of crisis of confidence but individuals and firms seem willing to acquire more and more debt. It seems to me that real interest rates are still negative virtually everywhere so surely more will follow.

I do however believe we're bumping up against it here in the US. Even the consumer confidence index has been declining. It's no wonder, a cup a joe at TGI Friday's is $1.79. I think the spike in oil prices has had more of an effect on people than has been credited. If oil starts another climb from here I think you can write off the stock market and its wealth effect. Stagflation here we come. Hope you are doing well.

ET


pdeep (4/27/2000; 21:09:25MT - usagold.com msg#: 29482)
June gold up 5.19% to 289.8
http://squote.marketwatch.com/data/squote2.htx?source=htx/http2_mw&ticker=GC=J0&slug=squote
Interesting....

Solomon Weaver (4/27/2000; 21:02:52MT - usagold.com msg#: 29481)
A DIFFERENT LETTER FOR CONGRESS
Hey ced_s.....your letter to Congress was a great summary of the issues surrounding gold.....I am just concerned that it is far to fact filled to attract interest, given the 5 minute attention span of politicians when it comes to real issue....

You need to stick with a simple message...

Here I offer my version...which is probably still too much....but closer to the ideal.

--------------------------

Dear Mr. Congressman (Senator)

As one of your constituents, I am writing you to warn you of a threat to the continued prosperity of the United States.

Mr. Congressman, in the recent months, the amount of GOLD WHICH IS BEING EXPORTED FROM THE UNITED STATES has been growing dramatically. GOLD is one of the few commodities which also have a solid monetary character, and contrary to what might be popular belief today, GOLD IS STILL A VERY IMPORTANT INTERNATIONAL MONETARY ASSET.

Whether this is foreign owned gold which is just being claimed by overseas owners...and shipped home, or whether Americans are selling their gold....those who understand gold (prudent hard money investors worldwide) ARE CASTING A VOTE OF NO CONFIDENCE in the current US economic system and Federal Government. Where is this gold coming from? And who is buying it? These questions are keys to a great political problem which has serious potential to erode the credibility of the United States Government.

Mr. Congressman, please stop to consider the following facts very carefully:

FOR THE UNITED STATES, WHICH ISSUES THE RESERVE CURRENCY OF THE WORLD (DOLLAR), GOLD IS THE ONLY MONETARY RESERVE ASSET WHICH WE HAVE TO DEFEND OUR DOLLAR.

GOLD HAS THE DISTINCTIVE ADVANTAGE THAT IT IS THE ONLY MONETARY ASSET WHICH DOES NOT RELY ON THE "FULL FAITH" IN A PAPER CURRENCY ISSUED BY A NATION.

IN A GLOBAL CURRENCY CRISIS, WHERE MANY CURRENCIES ARE VOLATILE, NATIONS WHO HAVE LARGE HOLDINGS OF GOLD WILL BE ABLE TO STABILIZE THEIR CURRENCIES BY HOLDING GOLD RESERVES. NATIONS WHICH DECLARE TO HAVE GOLD RESERVES BUT ARE LATER FOUND TO BE LYING ABOUT THEM FACE SERIOUS PROBLEMS IN SUCH A CRISIS. IF ANY OF THE GOLD LEAVING THE UNITED STATES TODAY IS COMING FROM FEDERAL MONETARY GOLD (DONE IN SECRET), THEN IT PUTS AMERICA IN A VERY DANGEROUS POSITION.

IN SUCH A CRISIS, GOLD MAY BE THE ONLY MONEY WHICH AMERICA CAN USE TO BUY OIL (THIS IS ASSUMING A SERIOUS PROBLEM WITH THE DOLLAR AND DOLLAR DENOMINATED CREDIT INSTRUMENTS LIKE TREASURY CERTIFICATES).

GOLD IS CURRENTLY LEAVING THE UNITED STATES AT RECORD RATES, FAR EXCEEDING THE AMOUNT WE PRODUCE.

Congressmen, now that times are good, it is easy to pass over this problem...however, if we move into a period of worldwide recession or depression, and worldwide currency crisis, the problem of gold is likely to become a hot political issue - worldwide.

Your political survival may depend on you and your staff understanding the hidden role gold is playing and the very dangerous position that manipulation of the US and British gold markets have created for the dollar, and eventually the economy of the United States.

I encourage you to get educated on this issue and to take a stand.

The Gold Anti-Trust Action Committee (GATA) is a privately supported organisation which has been researching the gold and silver markets. Whichever position you care to take on the issue, you will find their analysis very useful.

Solomon Weaver

Cavan Man (4/27/2000; 20:56:25MT - usagold.com msg#: 29480)
USAGOLD
Do you discount the possibility that because the Euro (as reported here) was not designed to be a conventional fiat currency (although fiat it certainly is) then therefore, it is not being defended in a conventional way?

Although perhaps a horse of a different color, I would agree with you that something must be done rather quickly. Surely there must be a contingency plan or do I give too much credit to the "planners" (and plotters)?

RossL (4/27/2000; 20:40:16MT - usagold.com msg#: 29479)
Canuck

The monthly trade deficit doesn't add to the national debt. The national debt is the amount of money borrowed by the government. T-Bills, Treasury bonds, etc.


USAGOLD (4/27/2000; 20:40:06MT - usagold.com msg#: 29478)
RPowell
I agree with Mr. Howe on much of his analysis. His read on official sales is similar to mine and several others. You cannot print gold like you can print paper money. Settlement in such circumstances requires real metal wherever you can find it, hence the constant pressure from the shorts to get someone to sell. I agree with Mr. Howe on that. I am not certain on whether or not the Europeans could defend the euro by selling U.S. Treasury paper. Perhaps others have an opinon on this. In my view, though, Euroland has not made the decision yet to defend the euro and as you suggest that's one of the problems. I think the hedge funds correctly anticipated that the leftist governments would not support the euro for the reasons you mention -- exports, also to attack the European unemployment problem. To them this has been an invitation to attack the currency. But this has gone further than even the leftist governments had anticipated. Now there are questions whether or not Europe and its currency are viable. There is little question that its reputation is severely damaged. If they cannot stop the speculation against its currency, the long term damage both in Europe itself with those who are being asked to hold the currency as savings, as well in terms of how Europe is viewed internationally , will be extensive. If I were a policy maker in Europe I would not be awaiting history's fate -- I would be developing a strategy as we speak.

But once again, I am guessing on the hedge fund theory. This could be natural market action, but I'm beginning to doubt it.

Don't you wonder what the ECB is thinking about all this?

Bonedaddy (4/27/2000; 20:34:33MT - usagold.com msg#: 29477)
Canuck
http://www.publicdebt.treas.gov/opd/opdpenny.htm
Here's a link to the daily public debt. Whew, where did all those zeros come from? Good thing Clinton eliminated the budget deficit. Now we can pay off the public debt in about 27,000,000,000 years!

Cavan Man (4/27/2000; 20:31:36MT - usagold.com msg#: 29476)
Sir Stranger's Inflation
I work in the packaging industry where we are raising prices with impunity (and it's about time I might add). The increases have been sailing thru (four in two years). Earnings of packaging companies are pretty good.

It's a much better idea to own stock in these types of companies than take possession. Who wants a ton of empty boxes anyway :)?

RossL (4/27/2000; 20:24:42MT - usagold.com msg#: 29475)
Mini-squeeze in April gold futures?

Thanks to law in msg#: 29434 for posting the stats of the gold futures contracts. According to livecharts.com, two GCJ00 contracts traded THIS MORNING at $14.30 above yesterday's close. Yesterday was supposed to be the last day! Maybe they were reported late. I assume the price went up as some hapless shorts had to bid up the price before someone with a warehouse receipt for registered gold decided to bail them out. If anyone has the story on this, please post it. Talk about musical chairs with no place to go!

Questions: Why did the cartel let that happen? Are they slipping? They are giving the impression of an illiquid market. The cartel should not want more publicity after Tuesday's fiasco.


oldgold (4/27/2000; 20:24:34MT - usagold.com msg#: 29474)
farfel
Your recent statement that most mining companies would go bust is POG fell to $240 is flat out wrong.

Only if gold fell to $240 and STAYED there for some months might your scenario come to pass. The kind of brief spike down that APH is talking about is something else entirely.

Canuck (4/27/2000; 20:22:14MT - usagold.com msg#: 29473)
Question
Is the 24 billion (Jan) and the 29 billion (Feb) and the sum of the monthly trade deficit(s) make up the total 5.7 trillion dollar debt?

I believe I saw a site (possibly US treasury) showing weekly total debt ie: the 5.7 trillion; anyone have a lead on that one?

TIA.

R Powell (4/27/2000; 20:12:38MT - usagold.com msg#: 29472)
USAGOLD Re. Swiss gold sales
http://www.gold-eagle.com/editorials 00/howe041700.html
Mr. Howe's speculation on the upcoming Swiss sale of gold agrees with your idea that Swiss gold might very well Not be available to any buyers outside of those backing the euro. I also believe that like the Dutch sales and unlike the BOE's sales, the world won't be notified of the actual sale(s) until after the fact. Don't the Euroland nations hold enough U.S. paper (Treasury notes) to defend the euro if needed? Also, isn't the weak euro just what the doctor ordered to stimulate European exports? That may be why they've made no attempt to defend.

Solomon Weaver (4/27/2000; 20:05:11MT - usagold.com msg#: 29471)
been busy lately
quietly sitting in the room on many occasions....

always reading the trail...

still believing silver is the poor man's gold....

glad to see so many new names lately...

Bonedaddy (4/27/2000; 20:03:02MT - usagold.com msg#: 29470)
The Contrarian's View
http://fennel.assumption.edu/pub/view/
I've been enjoying this fellow's eloquent commentary for about four years. You may like it too. I hope the link works.

SteveH (4/27/2000; 20:01:25MT - usagold.com msg#: 29469)
Site slow and Greenspan's speach...
No hidden code or agenda or mention of gold, rats!

***

Remarks by Chairman Alan Greenspan

The economy of rural America
At the Federal Reserve Bank of Kansas City Conference "Beyond Agriculture: New Policies for Rural America," Kansas City, Missouri (via videoconference)
April 27, 2000



I am pleased that my good friend, Tom Hoenig, the president of the Federal Reserve Bank of Kansas City, invited me to speak to this group on the challenges facing our rural economy in the twenty-first century. The Kansas City Reserve Bank has long maintained a special commitment to monitoring developments in this segment of our society and has most recently demonstrated that commitment through its creation of a new research unit, the Center for the Study of Rural America. The new unit is much appreciated by those of us in Washington who have always looked to the Reserve Banks to provide in-depth field coverage of our complex and ever-evolving economy.

Rural America and its relationship to the broader economy has changed enormously over time. A century ago, rural towns and villages were isolated by the high costs of conducting transactions across large distances. Goods were bulky, transportation poor, and lines of communication to points outside the local area primitive. About a third of the American people lived on farms, which at the time were relatively self-contained economic units that purchased little from outside and consumed on the farm a good bit of what was produced. Life in rural areas tended to be stable but not very prosperous. By today's standards, incomes were low, services minimal, and opportunities limited.

Technology changed all of that, as farming and the other resource-based industries in rural areas were altered by the past century's great waves of invention and innovation. The rise of the petroleum industry transformed the energy base of agriculture from that of animal and human labor to a system driven by gasoline and diesel fuel. Mechanization of agricultural processes, which had been pushed ahead earlier by the cotton gin, the steel plow, and the reaper, now was powered by the tractor, the combine, and a host of other types of farm machinery. Discoveries in the use of chemicals helped in plant nutrition and pest control, and the introduction of new crop varieties, such as hybrid corn, boosted yield potential enormously. Perhaps just as important, principles of organization and management that had proved successful in industry were increasingly applied to farming operations.

Agricultural productivity rose dramatically as a result of the combined and cumulative effects of these innovations. Crop yields, in particular, started to surge about six decades ago, when the effects of a number of innovations seemed to converge. Apart from fluctuations related to weather, national average corn yields had been remarkably stable at roughly 25 bushels per acre from the time of the Civil War to around 1940. But by the latter half of the 1970s, the average yield had quadrupled, to more than 100 bushels per acre, and it since has climbed further, to more than 130 bushels. Wheat yields, which had seldom exceeded 15 bushels per acre in the three-fourths of a century leading up to World War II, thereafter turned up sharply, and they have climbed to more than 40 bushels per acre in some recent years. Yields of other major crops also accelerated. Overall farm productivity sped up enormously, and its growth since the second World War has far outstripped the growth in output per hour in the rest of the economy.

The sharp rise in output per worker created large excess supplies of agricultural labor and led to a huge migration of farmers and farm workers from agriculture to other industries. Similar developments were at work in other resource-based industries, such as the mining of coal, copper, and iron. As workers in agriculture and the other primary commodity industries declined in number, many of the smaller rural villages and trade centers that had formed when earlier, more labor-intensive technologies prevailed were no longer viable as commercial centers. Spatial arrangements in rural areas shifted toward larger market centers that were farther apart, a move that was helped along by improvement in transportation technologies and the development of the modern highway system.

A hundred years ago, no one could possibly have anticipated the implications for rural America of the innovations that were emerging. Indeed, if rural citizens had known only of the dislocations that were in store--the migration of millions of workers and the eclipse of many small towns and villages--they would have been deeply incredulous. They surely could not have anticipated the diversity of modern rural America, tied to a broader economy through linkages provided by electricity, highways, and modern communications. Most of all, those rural citizens of a hundred years ago would likely have been astounded to realize that, despite all the dislocations, huge increases in the standard of living would take place not only in the cities but in rural areas as well. Yet that is what happened.

The fact is that in rural America as a whole, the nonfarm population and the level of employment have increased substantially over time, more than offsetting large declines in farming and the other resource-based industries. Growth in manufacturing created many new jobs in rural areas over the decades following World War II, and more recently, many rural places have become home to service-based industries. For all counties that are labeled nonmetropolitan by current definitions, population is about one-fourth larger than it was in 1960, and that does not take into account the very rapid growth in counties that were rural in 1960 but have since been absorbed into expanding metropolitan areas. Moreover, although growth of the present rural areas appeared relatively sluggish in the 1980s, there is little doubt that it has picked up this past decade. Rural communities close to the metropolitan areas continue to be among the faster growing places in our strong economy, but stronger-than-average growth also has been reported in many other rural places, especially those with attractive amenities that are much in demand among today's workers.

For an understanding of how so much dislocation could take place this past century and the result still be general improvement in the standard of living, we must look to the process of creative destruction that guides the evolution of a free and open market economy. Invention and innovation are constantly at work to replace the old with the new; to reduce the costs of materials, labor, time, space, and overhead; to alter the mix of goods and services or the mix of jobs; or to shift the locations of economic activity and populations. And out of this change has come economic advance.

Now we are in the midst of yet another great wave of invention and innovation, and rural America, like urban America, is certain to be swept along. Unfortunately, it is extremely difficult to predict how the comparative advantage of different industries and regions might ultimately change in response to broad shifts in technology. History provides ample reason for us to be cautious in this regard. For instance, electricity--like the new information technologies--was once viewed as a potentially decentralizing technology, and in many respects it was. But in conjunction with innovations that were taking place at the same time in other industries, such as steel, electricity also unleashed some forces that were strongly centralizing. For one thing, it brought increased efficiency to factories, which by their nature pull together in one location many economic functions, and the greater factory efficiency translated into lower costs and expanded markets for the centrally produced goods. Steel and electricity also combined to produce the modern urban skyscraper, steel providing the framing to go higher than in the past and electricity providing the means of elevating people from the ground to the fiftieth floor.

The central cities that factories and skyscrapers did so much to create continue to exert a powerful gravitational force on the economic landscape, even as manufacturing itself has spread out more broadly. Part of the gravitational pull of the cities comes from having concentrations of population that are sufficiently large to support highly diverse mixes of personal and business services. Moreover, the computer and the other new technologies are introducing economies of scale in the ability of firms to process large amounts of information about their internal operations or the characteristics of their markets. The lower cost of collecting and processing information will help businesses that are centrally located to reach further into rural markets.

But reduction of economic distance works two ways, and the information technologies that are bringing increased competition to rural markets are also working to create new opportunities for the businesses that are located in rural areas and incentives for those contemplating new rural business opportunities. One important change that has come with the new technologies, for example, is an increased capacity for separating the point at which a service is consumed from the point at which it is produced. Thus, business locations that might not have been feasible in the past because of their distance from central markets are becoming increasingly attractive in light of the new technologies. That, together with some basic cost advantages, no doubt helps to explain the recent rapid growth in a number of rural areas. The standard of living in rural places also is being enhanced by technological changes that are expanding the menu of consumption possibilities. Rural citizens are gaining access to a broader range of goods and services, and the already existing goods and services are available more expeditiously and at lower cost. Goods that have been around a long time are appearing with more options than before, and new goods and services are continually coming on line. Among the latter are many electronic products, such as satellite television, that have helped to counter the remoteness of many rural places. Remote locations also stand to benefit from innovations such as telemedicine, whereby expertise that is centrally located can be effectively transmitted to distant locations. Similar arrangements presumably are being developed, or considered, for many other types of services and should add to the quality of life in areas in which populations are too dispersed to support an indigenous supply of services.

Agricultural production, of course, for the foreseeable future will continue to be located in rural areas that are more distant from the central markets--it must be that way as long as the population is ultimately dependent on crops that require huge spaces. But as everyone in this audience knows, technological change and cost reduction are greatly altering the position of the farmer in the chain of production. Many livestock operations have become more like factories, with increased dependence on flows of information, tighter control over product quality at all stages of production, and greater standardization of output. Crop producers are turning to innovations such as electronic technologies, including those linked to satellites, to attain greater precision in planting, irrigation, fertilization, and weed-control. Genetic discoveries that should raise productive potential for both crops and livestock are being reported with great frequency.

All of these changes in farming technology and organization have implications for the size of the farm population and the structure of rural economies. Most indications point toward still further reductions in the number of commercial farms and increases in their size. However, new technologies also should continue to create profitable opportunities for smaller farms, as alternative uses for agricultural products are discovered and developed. Meanwhile, expansion of agricultural service industries should be a source of continued economic and employment growth in many rural areas.

The reductions of effective distance that are coming with the new technologies do not stop at our nation's borders. Farmers today are highly dependent on exports to absorb their remarkable productivity, and the ability to compete internationally depends on lowering unit costs faster than costs are being lowered by producers in other countries. Given the institutions that our nation has developed for pushing agricultural innovation ahead at a rapid pace and spreading information about new innovations quickly throughout the farm economy, U.S. producers are well positioned on this score. However, efforts to increase the openness of foreign markets for agricultural products will need to be maintained and intensified, so that the full benefits of farm productivity gain can show through into increased market opportunity and farm incomes.

Quite apart from the effects of a changing farm economy, rural towns and villages are likely to experience, within their local jurisdictions, a good bit of change in economic structure as a result of the new technologies. Many small and medium-size towns have seen their local business centers shift in recent decades from downtown locations to fringe areas that have an abundance of parking and can accommodate warehouse-sized outlets. Now, the distributors that have been successful on the outskirts are facing new challenges from information technologies that squeeze the costs of distribution down to bare minimums, effectively bringing the producer and consumer into closer economic proximity. In response to competition from new sources, some traditional distributors have moved quickly to implement electronic linkages that complement their bricks-and-mortar outlets. Other distributors are lagging and may ultimately have difficulty competing. With communications linkages tightening, businesses that are seeking a location in which a supply of dependable workers is readily available can more easily gather information about distant rural locations than in the past, and energetic rural communities with access to the Internet should find it easier to make themselves known to firms that are seeking a place.

Like all the previous episodes of technical advance, the revolution in information technology already has improved living conditions in numerous ways, and it will likely bring future benefits to rural communities that we now can only scarcely imagine. The benefits are perhaps most striking for those who are fully in tune with the new equipment for processing information. But the consumer who has never touched a computer or thought about information technology also is seeing beneficial effects, in the form of lower prices at the grocery store or other retail outlet than would otherwise prevail. Through channels such as these, efficiency gains get diffused widely throughout our economy, resulting in a broadly based increase in living standards. Although dislocations are bound to accompany economic growth, we should not shrink from accepting the changes that technology will bring but rather should rise to its challenges and look forward to the great benefits that it can provide over time to all our people, whether they live in congested urban areas or in the still-open spaces of rural America.


Bonedaddy (4/27/2000; 19:43:52MT - usagold.com msg#: 29468)
Stranger
a postcard
I follow your inflation information with great dedication.

I seek this education with great anticipation.

I look forward, with elation, to each communication.

I'm feel great consternation, when from posting, you vacation.

But seriously Stranger, some experts say that up to 80% of communication is non-verbal. Since, you can't see my little bald head nodding in agreement or my intense look of interest, we need to develop our skills of "reflective listening" here at the forum. Every on-line discussion group must face the same challenge. Were breaking new ground in interpersonal communication. Ain't it cool! ;) -Bd





TheStranger (4/27/2000; 19:32:29MT - usagold.com msg#: 29467)
Mr. Canuck and Mr. Powell
Thanks for the compliments. Honestly, I wasn't fishing. And I certainly wasn't going to go away. I just started to wonder if I was beating the subject over the head with a 2X4. Tonight, Bill Fleckenstein said one would have to be comatose not to recognize by this point that inflation has returned (would somebody please wake up Lawrence Kudlow?). But the story is still an evolving one and I am glad to hear that people still read my commentary.

By the way, I have now heard others in the media try to explain today's tech rally as a flight from inflation risk. I guess this re-education process is going to be harder than I thought. But sheeeesh! Give me a break. So far I have not seen anyone in the media remark on how this "unexpected" return of inflation might benefit PMs.

Imagine battling inflation with a portfolio of grossly overpriced tech stocks. This Nasdaq run today wasn't about finding sanctuary from inflation. It was about buying on bad news. Cute behavior, no doubt, but dangerous indeed in a bear market as we shall see.

I don't know where Poor Old Soloman is, Mr. Powell. Perhaps he will appear and speak for himself. I hope so.

USAGOLD (4/27/2000; 19:29:31MT - usagold.com msg#: 29466)
Speculation on the Euro Speculation
I have been encouraged by several clients of the firm (and posters here) with whom I have discussed the matters below, to post my thoughts to this juncture on the euro situation simply as a inducement to further discussion, even though they are in the developmental stage. I don't know if the euro is under speculative attack. I only know that its behaviour in recent days has been erratic and inexplicable. This is my attempt to find a root cause for its strange behaviour.

--------------------------

I am beginning to see merit with theory making the rounds that the euro may have been targeted as a short play by the hedge funds. If so there could be a battle royal pitting highly leveraged speculative pools against one of the world's largest and most significant nations states. If the euro has been targeted by the massive hedge funds, operating in many cases outside the regulatory jurisdiction of first world industrial states, then the European Central Bank and Europe itself must decide what they are going to do about it. It's one thing to have the hedge funds destroying the currencies and economies of poorly-organized third world nations located in the Pacific Rim. It's another when you're talking about throwing Europe to the wolves. This, my friends, could be serious business.

But that could very well be the case given the strange, inexplicable euro-plummet of recent weeks. Once again, I have to admit that these ruminations must be labelled speculative, as I only have the obvious circumstantial evidence to go by (and by that I don't simultaneously wish that thinking along these lines be diminished in importance). There is going to come a time when nation states will be forced to choose whether or not they can live with massive hedge funds determining monetary policy and by extension deciding the fate of the currency issued by that state, or whether that will be determined by the "target" state itself.

When the hedge funds and major financial institutions attack gold they are attacking a currency without a country -- easy pickings. When they attack the euro, what becomes evident is that the attack could also be viewed as an attack against the State, and all the legal, financial and political underpinnings that go with it -- not such easy pickings. Please keep in mind that I have said many times and still hold to the idea that gold will take care of itself -- that in the end the solution for gold is a market solution and no matter what we do, or say, gold will, in the end, "take no prisoners" as one Rothschilde analyst publicly proclaimed.

One wonders now in retrospect, whether or not the Washington Agreement could have been a retaliation to earlier attempts at undermining the euro. If so, then the recent shorting of the fledgling currency ( if that is what indeed is occurring) might be viewed as an escalation in the currency wars. If the hedge funds are going to be allowed to determine the fate of currencies, then the citizens of these countries (why save in them) need to ask to what purpose governments have been organized if not to protect the people living within its borders. If the castle, so to speak, is no longer functional then perhaps we need some other means of protection.

One possible retaliation by the ECB and its member central banks would to be to start pulling gold loans. Switzerland might consider holding off on its gold sales, offering it within the EU on first refusal basis or at least guaranteeing that a good portion of this metal be offered to its own citizens. Threatening to regulate these "organizations" through some international body, though potentially effective in the long run, is not going to do anything to thwart hedge fund ambitions today. I say "Pull in the Gold!" and let's see how these highly-leveraged enterprises suffer the heat. This isn't the first time Europe has been threatened by the barbarian hoard. Time to draw the battle line, or throw in the towel.

Short of that, every nation in the world need look over its shoulder to determine if it might be the next target of the hedge funds. Beyond that, I wonder if we are not witnessing the demise of the nation state, and the rise of corporate fiefdoms capable of over-riding the power of the states -- corporate feudalism if you will.


ced_s (4/27/2000; 19:09:59MT - usagold.com msg#: 29465)
Send a message to Congress, show support for GATA
http://legislators.com/congressorg2/congdir.html
Here is a not I sent to The Senate Banking Committee last evening, I sent it to my local newspaper with no response (as expected) earlier in the week. This URL to Congressmen is the best one I've found.

The Government had determined that Microsoft is a Trust, that is interesting as it seems the Government Of the U.S. and banking interests have colluded to controll the price of gold and silver, making it unattractive as an investment vehicle. I'm not sure how much of this the Senate Banking Committee has knowledge of.
They have removed international monetary systems from the Gold Standard, but for 75 % of the world, gold is still the ultimate store of wealth.
Bill Murphy and Chris Powell are founders of the Gold Anti-Trust Action, they maintain a website named Le Metropole Cafe. In the Cafe are many articles written
by experts in the economics and financial fields. I also must give credit to the Forum at Gold Eagle and USAGold for many hours of interesting reading.
When I discussed gold at work, the first statement I heard was gold has been demonetized. As I have since learned gold has been demonized, not demonetized. The Russians and Chinese are buying gold for their official gold holdings. Asia and the Orient import a large quantity also, mostly for private investment and demand is increasing. In India families will go hungry before they sell their gold. To these people gold is the ultimate storehouse of wealth.
Gold mine supply in 1999 was only 2559 tons. Frank Veneroso, an internationally recognized financial consultant has determined the supply/demand defecit is 1500 to 2000 tons annually. This defecit is being made up by gold leasing and
gold sales from Central Banks. The British and Swiss gold sales are designed to be a negative reinforcement to the price of gold as well as put supply into the market.Acording to Ted Butler, silver is in extremely short supply and could
explode upwards at any time, overwhelming those institutions that have capped the silver price. This could create a hazzard to the international banking system. No one wants that, as this could totally devestate the international economy.
When I read in The Republic that Kuwait was loaning it's gold, I knew there would be a further official announcement. Within two or three days, I read the U.S. was increasing it's military presence in Kuwait. A few weeks ago in the
Sunday edition of The Republic, China announced the cost of holding it's silver was expensive (in China ?) and was allowing it's silver producers to sell their silver outside of China. Again within a few days it was announced that
the U.S. supported the Chinese in it's One China policy, and more recently there was no opposition to China's acceptance into the WTO based on human rights violations. Coincidence, I think not.
GATA has found that the Exchange Stabilization Fund a Government Agency headed by The Secretary of The Treasury is responsible only to the President, and has no reporting requirements to Congress is the probable Agency involved.
The ESF in colusion with major banks are capping the price of gold, iregardless of the damage done to the mining industry and the loss of jobs in the third world
countries. From Greg Pickup of GATA, the top seven banks involved in this gold suppression have gold financial derivatives totaling 72.9 billion in place. I wondered why a BBC article I read recently commented about the suppression
of the gold price and relating it to the "mountain of derivatives", now I know. Greg Pickup states the total assets of these seven banks is 1.8 trillion dollars,
the total derivative position is 32.6 trillion. Is it any wonder Greenspan said that financial derivatives should not be regulated in a "free market", as did Secretary of
The Treasury Summers. The term should be manipulated market.
GATA has a stack of evidence it will be taking to Congress soon. This should
be an interesting summer.

Ed Stuart





totalamateur (4/27/2000; 19:04:07MT - usagold.com msg#: 29464)
To Gandalf the White
This is prime beef, the real thing,and can be inspected,assayed and taken home to your safe right now.
What more would you like to know? Please continue our talk
through email at forgold@hotmail.com

Gandalf the White (4/27/2000; 18:57:31MT - usagold.com msg#: 29463)
More data please ! -- totalamateur
(4/27/2000; 17:00:08MT - usagold.com msg#: 29449)
Bullion up for sale I have been notified that 100 tons of bullion is up for sale, by undisclosed seller.
++++
The Hobbits wish to know if this is good BEEF bullion ?, OR some other type stuff?
<;-)


Gandalf the White (4/27/2000; 18:42:43MT - usagold.com msg#: 29462)
YEP -- that does not work either !
<;-(

Gandalf the White (4/27/2000; 18:41:20MT - usagold.com msg#: 29461)
COMEX Open Interest (OI) listings
http://www.futuresource.com/cgi-bin/quickquote?+=gc%2C2
Cont.(After4/27)Open High Low Last SetChg. Vol. OI DTE
GCK00 May'00 2768y 0 4 29
GCM00 Jun'00 2782 2790 2782 2785 1 0 90584 62
GCQ00 Aug'00 2811 2815 2811 2815h 4 0 13631 124
GCV00 Oct'00 2838y 0 3921 183
GCZ00 Dec'00 2886a 2855b 2866y 0 19574 244
GCG01 Feb'01 2890y 0 6799 305
GCJ01 Apr'01 2916y 0 3344 364
GCM01 Jun'01 2850b 2942y 0 8712 426
GCQ01 Aug'01 2968y 0 691 489
GCV01 Oct'01 2994y 0 141 550
GCZ01 Dec'01 3020y 0 5387 613
GCG02 Feb'02 3046y 0 0 672
GCM02 Jun'02 3099y 0 2456 794
GCZ02 Dec'02 3178y 0 1916 978
GCM03 Jun'03 3257y 0 1132 1159
GCZ03 Dec'03 3336y 0 1805 1343
GCM04 Jun'04 3414y 0 1521 1525
GCZ04 Dec'04 3492y 0 372 1709
<;-)

Mr Gresham (4/27/2000; 18:33:33MT - usagold.com msg#: 29460)
Lire-ical interlude
I just traded in $500 for 1 million Italian lire (very pretty, new paper!), and for the next two weeks will be seeing what it's like to spend several million of something on the everyday necessities.

I expect great things to happen while I'm not monitoring our favorite topics ("A watched POG...") and I've printed the Gold Trail (40 pages) for light (smile?) reading on the plane.

Please continue to be your brilliant selves and treat each other well so there'll be lots of fine reading to look forward to on my return...


Farfel (4/27/2000; 18:08:16MT - usagold.com msg#: 29459)
R Powell re: Locked Up Stock. Watch Out!
First go to www.ipolockups.com and take a look at the impending horror show of Nasdaq stock about to be unloaded into the markets in May. Absolutely staggering, there seems to be no chance in hell that inflows into the market can overcome the expected $150 billion outflows of insider selling. Moreover the contagion effect from these insider sales should create all kinds of weakness in other non-lockup Nasdaq stocks, not to mention the bubble Dow market.

FYI A lockup restricts insider sales of stock and there are two kinds.

There is a SEC mandated lockup that lasts a year for holders of unregistered stock in an ipo.

Then there is an investment firm-mandated lockup that lasts only half a year for holders of stock in an ipo launched by any Wall Street investment firm.

The avalanche of expiring lockups in May is astounding and if we do get a Nasdaq crash this year, it will likely occur in the next thirty days.

Thanks

F*

Hill Billy Mitchell (4/27/2000; 18:04:02MT - usagold.com msg#: 29458)
Official release
http://www.bog.frb.us/releases/H15/update/
Official: Federal Reserve Statistical Release

Release Date: April 27, 2000

Rates for Wednesday, April 26, 2000

Federal funds 6.00

Treasury constant maturities:
3-month 5.75
10-year 6.14
20-year 6.28
30-year 5.95

upside down spread FF vs long bond = (.05%)


Harley Davidson (4/27/2000; 17:42:55MT - usagold.com msg#: 29457)
(No Subject)

A couple of weeks ago, I got a new office mate at work...a young lady from Nepal. Today, I took a conversation we were having toward the subject of gold and inquired how the people of Nepal feel about the yellow metal. Quite matter of fact-ly she mentioned that in Nepal, and the other countries in the area, if people have a little money, they buy gold. Its a way of life, a world view, its that simple. She went on to explain how easy it was to sell the gold if one needs the cash to purchase something but currency is not where one lets there money sit. "After all, over time the price of gold goes up, doesn't it" she said.

Another interesting item was that the level of apparent affluence is much lower in Nepal than in the US, not necessarily because people are poor but rather because people don't borrow money like they do in the US. In Nepal, if one doesn't have the money for something, they usually do without. There is much less indication of affluence simply because people tend to live within their means.

Also, the gold that they buy is often in the form of jewelry so its not uncommon to see people decked out with much gold jewelry. Some people who can't afford to buy gold will buy silver jewelry to wear but, and I thought this was interesting, if wealthy people wear silver, their perceived strangely as, apparently, it is socially expected that if one can afford to buy gold jewelry, then that is what they should wear. She went on to mentioned that gold jewelry is much yellower than the gold jewelry in the West. She suspects its much purer there.

It was clear that, on the subject of gold, she had much wisdom. I guess I was just taken to hear this young lady talking about gold in such a way that is so contrary to the view the typical westerner would have. There was no sense of speculation or uncertainty in what she had to say. She spoke with confidence and authority and was as sure of the enduring value of gold as she was that the sun would rise tomorrow. I think she is about twenty three years old. It was...refreshing!

Canuck (4/27/2000; 17:41:08MT - usagold.com msg#: 29456)
@ Stranger
Your inflation information was correct over a year ago and is still correct today. Notice how few disagree with you today as compared to late '98/early '99.

Your foresight is only overwhelmed by your wit. You are amongst the elite in this group.

I begin to understand a few concepts of international finance and I owe that to you, and to the knowledgeable
stewards of USAGOLD. Thanks to Mr. Kosares, T.C., & FOA.

Canuck

totalamateur (4/27/2000; 17:26:59MT - usagold.com msg#: 29455)
Bullion available
Undisclosed seller liquidating 100 tons of bullion. Please contact forgold@hotmail.com

R Powell (4/27/2000; 17:22:17MT - usagold.com msg#: 29454)
Farfel Re. "locked-up stock"
Can you explain, please, what "locked-up stock" is. Also, why do the insiders have to wait until May to dump this stock and is this a common occurance or something unusual. Is it simply that $150 billion (your figure) is much more than usual? TIA for any enlightenment.

SHIFTY (4/27/2000; 17:18:19MT - usagold.com msg#: 29453)
The PONZI
Nasdaq 3,774.03 + Dow 10,888.1 = 14,662.13 devide by 2 = PONZI 7,331.06 up 43.27 ponzi points!

Leigh (4/27/2000; 17:08:45MT - usagold.com msg#: 29452)
totalamateur
Hey -- whichever one of you buys the silver bullion -- be sure to register it on the Silver Pledge! You will make Sharefin's day!

Farfel (4/27/2000; 17:06:33MT - usagold.com msg#: 29451)
Got Gold?

  China intercepts US spyplane, Threatens war with Taiwan...again 

(Apr. 27, 2000) http://www.chinatimes.com.tw/english/english.htm


R Powell (4/27/2000; 17:04:47MT - usagold.com msg#: 29450)
Mr. Stranger Re 29429
Yes, please, keep posting on inflation and any other subject you please. Your work background alone carries more weight than most concerning financial matters of any sort. You used to talk at lenght with Soloman Weaver. Where is "poor old Soloman"?

totalamateur (4/27/2000; 17:00:08MT - usagold.com msg#: 29449)
Bullion up for sale
I have been notified that 100 tons of bullion is up for sale, by undisclosed seller. If interested, please leave details on forum on how to contact you. First come, first serve.

TownCrier (4/27/2000; 16:07:19MT - usagold.com msg#: 29448)
Total delivery notices for the COMEX April gold contract reach 9,945
See yesterday's post (TownCrier (4/26/2000; 12:13:43MT - usagold.com msg#: 29379)) for additional commentary on whether or not this represents "musical chairs" with a few ounces, or whether 994,500 ounces will truly be changing ownership by tomorrow's delivery deadline.

TownCrier (4/27/2000; 15:58:00MT - usagold.com msg#: 29447)
Sir Henri...your Henri (4/27/2000; 7:12:16MT - usagold.com msg#: 29418)
It is only fair to Sir RossL that I point out to you that the entirety of the text you attributed to him was in fact my own text, which was itself requoted yesterday from the body of TownCrier (4/21/2000; 20:10:27MT - usagold.com msg#: 29151). In my message yesterday that you've cited, there was a small excerpt of RossL's text inserted within the body of my larger text to stress the particular "drama" of the "passing of the buck" among the few players that kept open interest within the delivery month. To say again, the quote by Sir RossL was limited to ----------------RossL (04/26/00; 05:56:19MT - usagold.com msg#: 29361)Short Squeeze in Platinum Futures: "Yesterday was the last day for trading the April platinum contract. The WSJ reports that "60 to 70 contracts" were open at the start of trading, and 47 were left open for delivery at the end of the day. The shorts had to bid the April contract up $209.70 just to close out 23 or 33 contracts. WooHoo!"-----------------

I would be pleased to discuss these thoughts that you raised in further detail, but from your following message where you said, "RossL's point was missed by me and I am a dolt! He did say the active month futures are being sold into oblivion and not the far term contracts," it would appear that you re-read the text and saw the point I was making. I assure you, you are no dolt. This is not easy material to comprehend to begin with, and writing about it clearly proves to be my largest challenge. Obviously, I could not even manage the seemingly simple matter of clearly defining which text belonged to which poster.

The comments I offered were to provide further context into my thinking when I remarked on the peculiarity of this current level of delivery intentions in an earlier occasion of commenting on the delivery intentions news out of COMEX.

You said in your concluding remarks, "But who are these guys calling for delivery? I wonder if it is our friends Goldman Sachs and crew that is taking the last chips off the table and hoping someone will buy the naked paper from them and thus relieve them of all responsibility to deliver into the naked paper."

I recall that the significant positions for receipt of delivery upon first notice day a month ago were Deutsche Bank, Cargill, and Prudential. Goldman Sachs was a no-show throughout the month. That isn't to say they weren't actively selling down the price in the active and safe (non-delivery) month of June contracts. On your other point, I don't apparently see what you've described as a problem for G.S. or any other that might be actively and purposely shorting the futures as I've tried to characterize. To close out their open interest short position prior to the arrival of the delivery window for any specific contract month, it is themselves who need do nothing more than to buy an offsetting long position. And if this paper is properly discounted as you would agree that it should be, then this long position should be quite cheap to come by.

TheStranger (4/27/2000; 14:40:20MT - usagold.com msg#: 29446)
RS
Thanks.

It's hard to imagine communists laughing about anything, but I was around in those days too, and I remember what a waste of effort those price freezes were.

TheStranger (4/27/2000; 14:37:16MT - usagold.com msg#: 29445)
Re: SteveH and Whither Inflation
Thanks, Steve.

I am about to say something I know you already understand (better perhaps even than I do). I do so because you have raised a question about the relationship between money supply and inflation going forward.

In order to profit from what is about to take place, one must understand that when this inflation scenario began over a year ago, it was simply classical inflation (ie. money supply growth). Economists have argued for years that it is precisely when inflation is in this latent money growth only stage that it should be addressed. For, once inflation enters its PATENT form (rising wages and prices, which is what we have now), it begins to spiral. This means my costs go up so I demand a raise; my employer's payroll goes up so he raises prices; bonds go down so mortgage rates go up; house payments go up so I demand another raise, etc.,etc., etc.

Such spirals happen all the time in the third world. But, once they are in place, like the one now beginning in the U.S., only money supply SHRINKAGE can reverse the problem. Such shrinkage can be accomplished, of course, but not without triggering a recession (and this an election year). All of this may inevitably come about for America in due course. But I would remind everyone in the room that there is, as yet, NO SHRINKAGE in the supply of money in the American banking system. Nor, for that matter, has there been any TALK of shrinkage per the minutes of the FOMC.

Frankly, I do not agree with some of the dire predictions of HYPER-inflation which have been made here at the forum. Such visions require a Fed which not only hasn't addressed its problems but a Fed which apparently never will. That argument is a non-starter as far as I am concerned. But some inflation..YES. That I believe in. A year ago, I forecast 5 to 7% in these very pages. I stick by that forecast. And in a world where assets have, up til now, been priced for ZERO inflation, that implies enormous changes in the investment landscape going forward. That means bonds. That means stocks. And, yes, that means gold.

RS (4/27/2000; 14:13:13MT - usagold.com msg#: 29444)
Stranger .... usagold.com msg#: 29429
No one can ignore an elephant in the room forever...

Anyone who was alive in the late 1970's can remember the devastating (price) inflation of that time.
It certainly got Joe Sixpack's attention.

It amazes me how few today can remember wage and price CONTROLS imposed by Pres. Nixon, et. al.
In America!
Karl Marx was undoubtedly rolling in his grave, laughing.

What a relief it was to have Gerald Ford "carry on the good fight" with his WIN (Whip Inflation Now) lapel-buttons.
I know it measurably improved MY life.... (big sarcastic smirk)

---------------------------------------------
Journeyman.... re: your reponse to ThaiGold
(usagold.com msg#: 29427)
You certainly have THAT right. (All of it!)


Farfel (4/27/2000; 12:39:42MT - usagold.com msg#: 29443)
APH @ Kitco Seems Upset With Me?
From out of the blue, he's reposted an old message of mine in a mocking context so as to discredit me. I guess he must read these USA Gold boards.

Anyway, I did not mean to insult him when I suggested he comes off sounding like a computer program delivered from a backroom mainframe over at Goldman Sachs. It's just his manner of presentation is so dry, cool, and impersonal. In any case, he seems to be making up for that today by posting a record number of posts all over KITCO, infusing them with as much personality as he can put forth. Good for him!

I certainly acknowledge APH has done a better job of forecasting than most, since his long term charts keep telling him gold is going down and the stock market is going up, with little breaks to the contrary every now and then. His market timing within an established trend is pretty good but his ability to call significant market breaks up or down seems lacking.

Obviously all gold investors are hoping that a day will come where some significant fundamental event(s) arises to change the dominant market psychology, breaks this long term trend that APH forever forecasts, and transforms APH into the worst market forecaster on the web. :>)

APH, don't take it personal, man! I only posted your forecast of gold to 240 soon, not as an attack but as warning to goldbugs who follow you that if you are correct, then they best throw away most of their gold certificates today since gold producer bankruptcies at such a low gold price are inevitable and I cannot imagine more than 4 or 5 (very hedged) gold companies surviving.

Thanks

F*

SteveH (4/27/2000; 12:35:54MT - usagold.com msg#: 29442)
Stranger (corrected copy
Keep posting. ;-)

Journeyman: way to mention the 2nd.

If money supply is deaccelerating, is inflation doing the same?

Also, it would seem Gold may be making a move, but a bit early in a rise to tell. Up 1.2 for the future month of June.

lamprey_65 (4/27/2000; 12:30:49MT - usagold.com msg#: 29441)
Addendum to my last
This bottom basing accumulation pattern last appeared in major gold stocks in August '99.

SteveH (4/27/2000; 12:29:22MT - usagold.com msg#: 29440)
Stranger
Keep mosting. ;-)

Journeyman: way to mention the 2nd.

Farfel (4/27/2000; 12:16:53MT - usagold.com msg#: 29439)
@STRANGER, and the corollary is this:
With the rate of growth having peaked in December '99, then history suggests we could have enormous financial market problems from 4-6 months thereafter.

May looks to be a real disaster month for the stock market.

Thanks

F*

Farfel (4/27/2000; 12:14:13MT - usagold.com msg#: 29438)
@THE STRANGER, You are Correct re: Monetary Growth
My description was not quite precise enough.

The rate of monetary growth is DECELERATING.

Thanks

F*

lamprey_65 (4/27/2000; 12:13:24MT - usagold.com msg#: 29437)
Maybe another indicator?...
First, realize I am posting the following for general information purposes only -- this may be an indicator of a pending upward move in gold prices (within two months).

I do not hold positions in the stocks mentioned, nor am I recommending their purchase.

Over the past two weeks, I have noticed very impressive accumulation patterns developing in the following major gold stocks: Barrick Gold (ABX), Placer Dome (PDG), and Homestake Mining (HM). This accumulation is coming near the bottom of basing patterns and is strongest in ABX. Remember, this is taking place as the paper price of gold is FALLING.

I use this indicator (accumulation in mid to high cap companies during bottom basing patterns) as a tip-off that the "smart money" is accumulating. I've found this to be a very good indicator of a pending sharp, upward move within the following two months, maximum. It is very improbable that this is anything but big money coming in primarily because of the number of shares in the floats and the prices involved (above $5). Remember, the smart money does not buy at the top.

Although the gold sector is notorious for throwing off technical traders, I think we have to at least keep this accumulation pattern under scrutiny.

I see this as an excellent time to buy at least physical gold and silver.

Lamprey

TheStranger (4/27/2000; 12:09:34MT - usagold.com msg#: 29436)
Farfel
If I may... monetary supply has not really begun to downscale since y2k. What you probably mean to say is the rate of GROWTH in money has slowed, which is altogether different.

However, to the extent we can believe the numbers, the "M"s have continued to expand in the mid to high single digits. In fact, minutes from the most recent FOMC meetings show no evidence that money growth (or the reduction thereof) is even a topic of conversation. In what is clearly a throwback to the 1970s, Greenspan has decided to fight this dragon with rate policy alone. You remember that, as a member of President Ford's council of economic advisors, he authored the failed WIN (Whip Inflation Now) campaign back then. Funny. He deserves credit for being one of the few people to see the current inflation ahead of time. Yet recent wage and price reports clearly indicate he did not make the necessary policy adjustments.

Thanks to Cage Rattler, Henri and MK (private message) for their comments. I thought so. I just wanted to be sure.

law (4/27/2000; 11:58:26MT - usagold.com msg#: 29435)
Backwardation Alert?!?
http://www.futuresource.com
Sorry!!! Cut and paste didn't work to well.

April futures @ 2898 + 143
June @ 2770 - 1

law (4/27/2000; 11:47:49MT - usagold.com msg#: 29434)
Backwardation Alert?!?
Gold Futures (COMX) - Comp.

Contr. Date Last Trade* Open High/
Ask Low/
Bid Last/
Settle Chg. Vol. Open
Interest DTE
GCJ00 Apr'00 04/26 14:40 2898 2898 2898 2898 143 0 7 -1
GCK00 May'00 04/26 14:40 2755y 0 4 29
GCM00 Jun'00 04/27 13:01 2773 2791 2768 2770 -1 27418 90584 62
GCQ00 Aug'00 04/27 12:24 2812 2820 2792 2792L -6 2630 13631 124
GCV00 Oct'00 04/26 14:40 2780b 2825y 3 3921 183
GCZ00 Dec'00 04/27 12:10 2865 2870 2849 2849L -4 512 19574 244
GCG01 Feb'01 04/26 14:40 2876y 13 6799 305
GCJ01 Apr'01 04/27 11:16 2898 2898 2898 2898 -4 0 3344 364
GCM01 Jun'01 04/27 11:25 2945 2945 2943 2943L 15 3 8712 426
GCQ01 Aug'01 04/26 14:40 2954y 10 691 489
GCV01 Oct'01 04/26 14:40 2980y 0 141 550
GCZ01 Dec'01 04/26 14:40 3006y 1 5387 613
GCG02 Feb'02 04/26 14:40 3032y 0 0 672
GCM02 Jun'02 04/26 14:40 3084y 50 2456 794
GCZ02 Dec'02 04/26 14:40 3162y 0 1916 978
GCM03 Jun'03 04/26 14:40 3240y 0 1132 1159
GCZ03 Dec'03 04/26 14:40 3318y 0 1805 1343
GCM04 Jun'04 04/26 14:40 3395y 0 1521 1525
GCZ04 Dec'04 04/26 14:41 3472y 0 372 1709
GCJ00GCK00GCM00GCQ00GCV00GCZ00GCG01GCJ01GCM01GCQ01GCV01GCZ01GCG02GCM02GCZ02GCM03GCZ03GCM04GCZ04 GCH00GCJ00GCJ00GCK00GCK00GCM00GCN00GCQ00GCU00GCV00GCX00GCZ00GCF01GCG01GCH01GCJ01GCK01GCM01GCN01GCQ01GCU01GCV01GCX01GCZ01GCF02GCG02GCK02GCM02GCX02GCZ02GCK03GCM03GCX03GCZ03GCK04GCM04GCX04GCZ04

Click contracts for charts and time and sales
*Exchange time

Can this be the start???

The Stranger...Please, do continue

Cavan Man...You stated it well

To the Forum: Issues raised by Oldgold were addressed with exemplary replies!

rgds, law

Cage Rattler (4/27/2000; 11:06:11MT - usagold.com msg#: 29433)
TheStranger
Pls keep them coming. I note your posts in particular. Thanks.

Farfel (4/27/2000; 10:46:17MT - usagold.com msg#: 29432)
MAYDAY! Yet ANOTHER Interesting Fact re: Financial Markets
Based upon an examination of monetary figures, the money supply expansion peaked in December of 1999, then after y2k passed without event, monetary supply began to downscale quite notably.

Historically, significant market weakness occurs from 4-6 months after monetary expansion peaks as the diminution in credit works its way through the system.

Unless Greenspan drops interest rates soon, then one can expect a tremendous contraction in the financial markets.

Again, any simultaneous upheaval in stocks, bonds, and the US Dollar leaves precious metals as the only possible safety haven.

Nowhere else to go.

Thanks

F*






Henri (4/27/2000; 10:44:31MT - usagold.com msg#: 29431)
Stranger
My silence is in tacit agreement. One advantage of knowing the elephant is here is to move about so as not to get stepped on. The other is the ability to move about without stepping in something

Farfel (4/27/2000; 10:36:55MT - usagold.com msg#: 29430)
Worth a Repost: TWO trading days left until Nasdaq Crisis?
As per the Wall Street Journal, almost $150 billion in locked-up stock will be available for insiders to dump onto the public beginning in May.

That is a phenomenal amount of stock, OVER THREE TIMES as much stock as became available this past month, and we saw the negative effects of that insider unloading on the Nasdaq.

It seems that May is shaping up to be a true disaster for the Nasdaq. I suspect the recent strength in Nasdaq stocks reflects a final attempt by pros and insiders to push up the values before the great lock-up dump occurs.

Conversely, weakness in mainstream equities (if occurring simultaneously with bond and US dollar weakness) can only result in much renewed interest in precious metals.

Thanks

F*


TheStranger (4/27/2000; 10:31:19MT - usagold.com msg#: 29429)
Maria Bartaromo
This sad excuse for a financial journalist was on the telly this morning cheering on the brainless ones again. At one point she actually said that some analysts are suggesting the rising inflation may be good for technology stocks. Why? Because higher costs force companies to seek greater efficiency. What drivel!

It is frustrating having this elephant(inflation) in the room and so few people willing to notice. Still, truth has a way of coming out eventually, and I'd a lot rather be one of those who saw it early than one of those who saw it late.

By the way, I would appreciate hearing if anybody still follows my inflation commentary here at the forum. Without feedback one wonders whether the effort is still bearing fruit. Thanks.





Galearis (4/27/2000; 9:41:05MT - usagold.com msg#: 29428)
my last post...
should read "direct" proportion. Apologies. I must be beginning to suffer from Partymers disease.

Journeyman (4/27/2000; 9:39:57MT - usagold.com msg#: 29427)
PMs & IRS @Thai Gold 2941
http://www.thespiritof76.com/bigfloat.html

Hmm. Ok.

Don't believe FOA/TG? Check above reposted link for an explanation from, essentially, Alan Greenspan, which verifies the underlying contentions of FOA/TG of a potentially very troubled dollar.

If you're enamoured of dividends, paid in dollar denominated anything, go for it! But of all periods in (American) history, this is one most hazardous to dollar denominated wealth. Of all times, this is the one to hold physical gold. And by any measure, it's incredibly cheap anyway. Or do you want to buy high -- sell low?

Gold may have been de-monetized in the minds of Americans, etc. but not in the minds of Chinese, Koreans, Philippinos, Indians (as in India), etc. These people are the bulk of the world population.

ThaiGold, you learned a potentially very valuable lesson with your platinum: DON'T TRUST THE ESTABLISHMENT. Another clear lesson: Don't buy or sell amounts as large as $10,000. Cost averaging is better anyway.

What happened if you bought or sold for cash in those large amounts is you either generated a CTR (Cash Transaction Report) -- you filled it out supplying ID remember -- or, if you bought all at one store, and not in cash, the IRS REQUESTED your dealer to report anyone buying more than $10,000 in a year or any time period. Your coin dealer wasn't required to do this, but he's probably a sheeple who is scared s***less of IRS.

You can figure out how to avoid this problem next time if you try. I can think of at least three ways right off the top of my head.

As far as the IRS at all, well, stop volunteering to pay business excise taxes as if you were a corporation getting special priviliges like limited liability in return. As a flesh and blood human, trading your hours and your skills for money, you DO NOT have to volunteer in this manner!

There are more and more Americans successfully un-volunteering. I've seen unofficial estimats as high as 30 million. At least 5 to 10 million is a safe guess. There's a lot of good info out there to help you rediscover your true status and how to reclaim it. (Unfortunately there's a lot of bad info too. So be careful!)

One of the best sources I've found is "The Biggest 'Tax Loophole' of All" by Otto Skinner. You can check it out, along with other Skinner stuff by using altavista, google, alltheweb, etc. and searching for "Otto Skinner" (include the " marks in the search string.) Official Disclaimer: I have no financial interest what-so-ever in Mr. Skinner or his works.

If the dollar does dump, as even Greenspan admits it will sooner or later, remember, what's the lowest value $275 in paper money can reach? What's the lowest value for an ounce of physical gold?

Of course, timing's ALWAYS the question. NO ONE KNOWS. No one is in control of this process. Like death, "It will come when it will come." -Shakespear, I beleive

Finally, if you allow the establishment to intimidate you into not protecting your wealth --- or yourself (2nd Amendment), you deserve the results.

Regards,
Journeyman


Gandalf the White (4/27/2000; 9:12:57MT - usagold.com msg#: 29426)
The view of the Hobbits AND one request of SteveH
Keep DIPPING you NAZ "dipsters"!! While everything else is headed south, except for the XAU, you dipsters are managing to maintain the greater fool theory quite well!! Note that the long bond is again pushing the six percent level too.
The Hobbits wish for MORE poetry from memory, SteveH.
<;-)

USAGOLD (4/27/2000; 9:08:00MT - usagold.com msg#: 29425)
Today's Report
http://www.usagold.com/Order_Form.html
4/27/00 Indications
 Current
 Change
Gold June Comex
277.80
+0.70
Silver May Comex
4.95
+.01
30 Yr TBond June CBOT
97~05
+0~07
Dollar Index June NYBOT
108.85
+0.45

Market Report (4/27/00): Gold firmed a bit this morning as inflation fears once again rippled
through the markets and the euro took another calculated blow to the midsection. Meanwhile
stocks were under pressure even as the dollar continued to be the beneficiary of the currency
turmoil in Europe. Tokyo reported light short covering as the metal slipped to the $275 level there.
Standard of London reports fund short selling in Europe overnight. Good physical demand
continues at these levels. The major factor affecting the gold price continues to be the strong
dollar.

That's it for today, my friends. See you here tomorrow.

The May News & Views is at the printer and will be out shortly. We think you are going to like
this issue written during the weekend after the April 14 Wall Street Meltdown.

If you are looking for a pro-gold view of the various financial markets as well as a summary of the
events affecting the yellow metal, our monthly newsletter might be of interest. News & Views
-- Forecasts, Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not to mention it's Free of
Charge If you want to keep up with gold, this is the way a large segment of the gold owning
public does it, and has done it for over a decade.

Just click here ---> ORDER FORM <--- and make the appropriate entries.

SteveH (4/27/2000; 8:47:40MT - usagold.com msg#: 29424)
Insanity
Well, it would seem that the Duck is ignoring inflation and the Euro and is happy to trade in contradiction to all the warning signs. So be it. The DOW does seem to be tempered a bit by the economic figures today.

I am concerned about the Euro's apparent fall and continuing decline. BUT, not from the standpoint that I believe it is all over for the Euro. I am concerned, rather, for the EXTREMITY of the attack against it. It reminds me of a Robert Frost poem (from memory, so forgive any omissions or additions):

The rain to the wind said, you push and I'll pelt. They so smote the flower bed, that all the flowers knelt.

It would seem that rain (PPT) and the wind (ESF) are up to absolutely no good and have taken normally conservative (or what should be conservative) indicators and smoted the hell out of them. Or, at least, thumbed their noses at them. This, to me, is a strong signal that all is not well in Dollars and Gold. Something would sure seem to have to give here and soon.

Galearis (4/27/2000; 8:46:44MT - usagold.com msg#: 29423)
@Henri
Right you are, sir. That is a wonderful analogy!

@Canuck: The amount of disinformation is usually in inverse proportion to the stress on the participants. This is not much of a help to be sure, but in the new "Misinformation Age" the infrastructure is very efficient for achieving whatever ends the parties involved may wish. The downside to this (or upside, depending on which side of the issue one is on) is the other trait of this new age - information overload. People have to yell louder to be heard, and the people have become increasingly deaf.

It was encouraging to note that in spite of all the negative news against gold during the last couple of mini crashes of recent times there was still a pronounced flight to gold. This I take to be a measure of how poorly the anti-gold camp has done.

As for me, I applaud the G.Sachs efforts for I take the long view. Their behaviors simply hasten the demise of the paper industry and promote the violent advance of our goals in the end.

And one last point. Leasing activity is high this AM.

Henri (4/27/2000; 7:45:58MT - usagold.com msg#: 29422)
paper poker
Remember, in a game of chance for real stakes (gold in the kitty)the chips (contracts)are just a marker for what is in the kitty. When the players are allowed to cheat by throwing out chips for which there is no gold in the kitty (naked contracts) the pile of chips grows and the value of each chip goes down proportionately. When all the chips are counted and the gold is counted, the gold will be distributed in proportion to the relative holdings of the players (if it is to be settled without violence) under the assumption that every player was allowed to cheat in this way at some point during the game as long as they didn't get caught. The calls for delivery is an attempt by one player to cash in their chips for the original value and leave the game with a majority of the gold before the other players realize what has happened.

Cavan Man (4/27/2000; 7:35:20MT - usagold.com msg#: 29421)
To Thai Gold
You raise several good points.

Agree on SWC long term. "Big deal Cavan Man; who are you anyway?" Good question; "who" is anybody (anymore). Are you talking your book Thai Gold?

You appear to be incredibly bright. I doubt someone with your understanding of the PM complex as is evidenced by your comments here is not also a physical advocate.

We live in an age of cynicism. Cynicism breeds frustration in those of us who see so much of the world around us as being surreal and who are frequently inclined to exclaim, "say it ain't so Joe". Your frustration is evident to me. Count me in the frustrated camp also. However, I think you might be misdirecting your aggression.

We witness daily a general devolution in the general and natural moral condition of the species and, gone are the "Plain Speaking" days of Harry S. Truman. Why is the truth so very hard to find? Perhaps that question is truly an imponderable.

Confidentiality is a legitimate concern. I say, always do business with those you know and trust. Many here have absolute trust in our host. I am one of those.

Regarding our friend Trail Guide, his commentary is so controversial simply because the ramifications are a bit chilling to say the least. If you believe that absolute truth is seldom if ever found at either extreme, you would be well advised to read all of what FOA/Trail Guide has written. If you take the time to thoroughly read and then reflect upon the previous twelve months of posts by FOA/TG you might reach a different conclusion.

Could FOA be a currency "trader"? If so, what an inefficient means (this or any "forum") to attempt to move the market. Pardon me. I must laugh. Currency must be moved in very large amounts to move the market and to generate profits for the trader/investor. I suspect most of the visitors here are like me in that I certainly do not have the liquidity or courage to invest in the FOREX markets. If FOA is trading currency it is because it is a prudent investment to do so based upon knowledge of the subject.

I've been selling for over twenty years (you're right ORO!) and I have developed a very keen sense of discernment with regards to personalities, motivations, agendas, sincerity and falsehood. Indeed this "sense" of mine has served me quite well (TBTG). While FOA/TG might eventually be proven wrong, the person behind the posts (IMHO) writes without guile and with very good intentions. I for one am glad to share some elbow room at his/her table.

The Euro is just part of the story; it's not the main event. The main event is gold and the Euro plays a supporting role. The main event is gold because, gold always has been the main event.

I do watch this gold market together with FOA and those here.I do believe, "time will prove all things". Time has a way of doing that.

Kali Anastasi......CM





TheStranger (4/27/2000; 7:35:00MT - usagold.com msg#: 29420)
The Other Shoe Has Dropped
From Yahoo Business News:

At 8:30 a.m. EDT (1230 GMT), the Labour Department said the first-quarter Employment Cost Index (ECI) surged 1.4
percent, much higher than the 0.9 percent expected by economists polled by Reuters. It was the biggest increase in more than
10 years.

Simultaneously, the Commerce Department reported U.S. Gross Domestic Product (GDP) for the first quarter increased 5.4
percent, slightly less than the 5.9 percent anticipated. But the key GDP deflator, a wide gauge of price pressures in the
economy, grew by a stronger-than-expected 2.7 percent.

Economists had been forecasting a 2.2 percent boost.

Henri (4/27/2000; 7:29:55MT - usagold.com msg#: 29419)
Oops
RossL's point was missed by me and I am a dolt! He did say the active month futures are being sold into oblivion and not the far term contracts.

Perhaps the eventual effect is the same though if there is insufficient gold to cover any of them. The calls for delivery are similar to a "call" in poker. You don't think the guy the upped the ante last go round has the cards to back his bets and is "bluffing"...so you call him. giving up the call for delivery would be akin to "folding" and letting the brazen bettor take the pot.

Henri (4/27/2000; 7:12:16MT - usagold.com msg#: 29418)
RossL ...Post 29361and Town Crier... Post 29379
I apologize for snipping these clips out of context from the discussion, but I think there is a valid point to make here regarding the "WHEN" or the "break point" that will signal the soon to develop separation of the physical and paper markets. My comments are [in here]

RossL 29361
"...It should be clear by know that all that is necessary to cap the U.S. price of gold for those desiring to do so is to continue to sell the active month futures contracts more aggressively than anyone else can be found to buy them.

[Yes, this further depresses the paper price, but they do not have that much room to manuever. They can only drop the price to the level of the near term contract month. Any further drop would create "backwardation" where gold gets cheaper the further out in time you proceed]

"...Not only are they thereby immune from the possibility of being stuck with delivery obligations for gold that they couldn't provide, but their depression of this highly publicized futures price will generally diffuse any desire for the remaining April longs to seek delivery of a postion that is already apparently underwater as a cash loss. And for the same reason, the typical western investor mindset will not be putting much demand pressure on the spot market either.

[If the COMEX gold goes into "backwardation" those seeking gold accumulation will prefer to buy the far out contracts since the price is lower. Those holding the short near term contracts will be caught "holding the bag" so-to-speak Then we will see a repeat of the April platinum spike phenomenon]

"...You see, ultimately it is the ability to acquire the metal itself that is important, and falling prices are a means to this end. But lest you think there is no end in sight, I assure you this process has its limits. At the ABSOLUTE worst, the system breaks down when the active futures month reaches a price of zero. But it take little awareness of REALITY to convince yourself the breakdown shall happen LONG before.

[The point where paper gold enters into a backwardation situation? TOCOM revisited?]

"...For even as the typical western investor turns gold aside to seek the ownership of dot.coms on Wall Street, the rest of the world is buying whatever gold can be purchased with their own feable currencies. Sell currencies to buy dollars, use dollars to buy gold. You know see a reason why the dollar continues to look strong on the foreign exchange markets, and yet the price of real gold metal is disguised behind the mask of futures selling...the selling of just one form of paper gold derivative. At some point the last available golden chip is taken from the market table, and only the payment of higher premiums above the artificially determined spot price will get you the gold you seek.

[Yes, the curious calls for delivery of April gold contracts could have been just that. Creating more naked paper contracts in the farther out delivery dates depresses the price to get the guys calling for delivery to change their minds. Lets see if they are the actual fools. They must stand firm in the demand for delivery. I have a feeling that in calling for delivery, they are declaring themselves not to be the fools they are being taken for.]

"...This would be the separation of the paper and physical market prices that has been discussed here in the past.

[But who are these guys calling for delivery? I wonder if it is our friends Goldman Sachs and crew that is taking the last chips off the table and hoping someone will buy the naked paper from them and thus relieve them of all responsibility to deliver into the naked paper. Certainly the cheaper paper is an indication of the quality of the instrument not the value of the supposedly underlying commodity. Increased quantities of naked paper depresses the price even further. Perhaps they are hoping their old friends the miners will panic and take some of these naked contracts off their hands? Not likely if the miners have collectively recognized that to do so would be shooting themselves in the foot.]
_______________________________________

Black Blade (4/27/2000; 6:11:59MT - usagold.com msg#: 29417)
Morning Wakeup Call (a bit boring today)
Source: Bridge News
S&P Futures down -4.40 (-0.23 below fair value), a slight negative for the open on Wall Street. Au still comatose but up +$0.70 to $275.50, and Ag down -$0.03 to $4.94 (The bid dogs musta heard about that Silver pledge……Hmmmmm).

Asia Precious Metals Review: Gold recovers some overnight losses

Tokyo--April 27--Spot gold was supported by light short-covering—buying from players who had sold--in Asia Thursday, after the overnight slip to the key U.S. $275 per ounce, dealers said. Platinum rebounded from overnight late U.S. market levels on speculative buying on the Tokyo Commodity Exchange (TOCOM), they said. (Story .2200)

Black Blade: Ho Hum.

NY Precious Metals Review: Jun gold dn $2.7;May silver dn 6.8c

New York--Apr 26--COMEX Jun gold futures settled down $2.70 or 1% at $277.10 per ounce after falling throughout the day to hit a 7-month low of $276.40, which was a 1-month low on the active contract continuous chart. It was hurt by bearish sentiment over central bank sales and a strong dollar. May silver settled down 6.8c, 1.4%, at $4.947 after a 3 1/2 week low of $4.93. (Story .2333)

Black Blade: Yeah, right.


$5 Indian (04/27/00; 05:48:06MT - usagold.com msg#: 29416)
ThaiGold, Black Blade
http://www.usagold.com
Thankyou very much for the PGM's production information. It always good to perceive the rates of future productions so we can adjust our physical portfolios. I have nothing to complain about with the POG driftdown. The buyer/investor has other hot metals to gravitate to. Why do the ants insist on always bringing the same type of leaf back to the hive. If I've opened up a small can of worms, thems to go a fishing with.
============================================================

Backwardation:

When current priced futures contracts are higher priced than contracts written farther out, showing "they want the metal now!". Pt and Pd are in backwardation? I'm watching silver close.

============================================================

It sure feels good getting back to civilization.
Paragraphs and Sentance Structures found ONLY at Usagold.com

HI - HAT (04/27/00; 04:55:33MT - usagold.com msg#: 29415)
Paper Purge
Is anybody who they think they are?

Everything we see or seem;
Is but a dream within a dream.

Yes it does take a long time to understand gold. And in between are layers of paper denial.

Its either a feast or a famine.
Famine will sharpen the senses
A purgatory of fasting, to purge a paper dream.

Canuck (04/27/00; 04:44:17MT - usagold.com msg#: 29414)
Re: Last post
Believing 4/27/00 29413

Confused 4/24/00 29282

Canuck (04/27/00; 04:36:44MT - usagold.com msg#: 29413)
What to believe?
I posted a negative comment the other day regarding the accountability and the credibility of information spewing from many, if not most mediums. There was no response, perhaps my post was too crass for which I apologize, in advance, to anyone offended.

I ask another question related to the following:
------------------------------------------------

``As long as prices remain below $300, there will be firm demand for gold,'' GFMS Director Paul Walker told a news conference to present its annual report.

In its Gold Survey 2000, GFMS said physical buyers would continue to be attracted at prices under $300 an ounce.

Coupled with continued Asian economic recovery and world GDP growth of around 4.2 percent, the lower price should encourage an environment of robust physical gold demand this year.

Last year, world gold demand dipped to 4,092 tonnes, down from 4,106 tonnes in 1998.
--------------------------------------------------------

There have been numerous assertions to the fact that demand for gold, in fact record demand for gold was evident
in 1999. So what does the last sentence of the quote mean?
Is that statement from GFMS or from the author of the acticle because it is difficult to determine if the author (at that point in his article) is still quoting GFMS or wheither he/she has added the last line.

I'm having a difficult time these days believing anything.

Thoughts, comments.




ThaiGold (04/27/00; 02:27:22MT - usagold.com msg#: 29412)
Big Guns now Boosting the EURO.
Attn: FOA/Trail Guide
....
...
..
4-27-2000

To: FOA/Trail Guide

Thanks for your lengthy response to my (yesterday) post
questioning the viability of the EURO's future.

I've forwarded it to Alan Greenspan for a translation.
There seems to be nobody, short of him, and you, who can
explain things relating to currencies so clearly.

By your remarks, and frequent writings, I must assume you
are primarily a currency-trader, located in EUROland, with
roots in America. Who converts his profits into Physical
Gold in the FootSteps of Giants. Whatever. To each his own.

Today, the (London) Telegraph published another news item.
About the EURO's fate...
Here's the link:

http://www.telegraph.co.uk:80/et?ac=000124036011016&rtmo=kNYJCx7p&atmo=99999999&pg=/et/00/4/27/weur27.html

It appears, what you (apparently) said [paraphrased by me]
is that all these negative news reports are political
mischief, manipulation, PR, and various other contrivities.

Well, I must ask, "What isn't, these days.?."

The above link, more or less supports YOUR position, in
favor of the wunderbar EURO now, and ForeverAfter. They
have now called in their Big Guns, the German Chancellor,
and the French President, to refute earlier/voluminous
and ever more frequent anti-EURO reports.

And so, if we cannot believe our Chancellors, Presidents,
Adulterers, Treasury Chieftains, and ChairBanks, then who
can we believe.?. I guess we will have to settle for those
who claim to be "connected" insiders, such as yourself and
"Another" for our sole guidance along the Trail.

Gee, it would sure be nice if you could (someday) present
us with some credentials, and perhaps even some intelligible
and readable analysis and foresight with specifics and links
and dates for the things you espouse and forecast.

This probably sounds disrespectful, and MK will probably
pull my password for questioning your veracity. If so, that
will speak volumes about the whole issue. But I, and I'm
sure many in this forum look forward to your response and
continued clarifications. We deserve that don't we.?.

Cordially,

ThaiGold...
Comments Welcomed from anyone/anywhere/anytime.
ThaiRanch@OperaMail.Com
==========================================================





ThaiGold (04/27/00; 01:39:05MT - usagold.com msg#: 29411)
Physical PGMs: Caveat Emptor
Attn: Black Blade (04/27/00; 00:50:44MT - usagold.com msg#: 29409)
....
...
..
4-27-2000
To: Black Blade

With all due respect to MK's business, I'd like to relate
something to the Forum, for what it's worth, if anyone is
contemplating Physical purchases, from any dealer:

The only "Physical" I ever owned, was in the 1980's, a nice
$30,000 stack of 1oz Platinum coins. They languished in my
custody for years, then I finally sold them at BreakEven.

Shortly (3 years) afterwards, the IRS knocked on my mailbox
wishing/insisting on an audit of ALL my returns for the past
*five* years. Alledgedly to determine if I'd bought
them with "clean" funds. It was easy for me to show them
the origin, penny-for-penny, of the MerrilLynch muni-bonds
(sld) and the subsequent same-day platinum-coins (bot) via
MerrilLynch's PM Dept. The IRS auditor, had a lengthy
printout, and she explained, that she had to audit all (!)
those other hapless persons on her list, who'd bought PM's
of $10k or more in that year. Sheeesh. I'm sure it was just
government harrassment of (all) hapless Physical CoinBugs.
But, because of that gross inconvenience, I've never (bot)
any Physical metals since.

Exception: Minor amounts of Thai Gold, (24k) which are my
KeepSakes, not investments. Thank gosh. For investments, I
prefer d-i-v-i-d-e-n-d-s. And c-a-p-g-a-i-n-s. As it should
be.

So, Caveat Emptor. The IRS is Watching You. And Coin Shops.

ThaiGold...
Comments Welcomed from anyone/anywhere/anytime.
ThaiRanch@OperaMail.Com
==========================================================



Black Blade (04/27/00; 01:06:15MT - usagold.com msg#: 29410)
Appendum PGM
The previous post is not a solicitation or to be construed as advice to invest in the mentioned securities. They are mentioned for information purposes only and to illustrate how serious the shortage of PGMs really are and how much more severe it is likely to become. I do have a few hundred shares of Stillwater myself (bought a few years ago at a much lower price). If any should want to invest in equities, you definitely should do the dirty work yourself and research the company and look over the balance sheet, also look forward to the future possibilities. Obviously the surest and safest way to play this PM angle is to hold physical Pt, if there is any available. Our host MK is a likely place to start. Cheers, Black Blade

Black Blade (04/27/00; 00:50:44MT - usagold.com msg#: 29409)
PGMs There just aint enough to go around!
SWC isn't really in too bad a shape. They have increased costs due to an expansion of milling capacity and the East Boulder expansion. Once they have completed the development work they will effectively triple their production. As far as the PGMs are concerned, the demand is increasing and exploration for these metals hasn't really taken off yet. The platinum supplies will only become tighter as continued demand continues for industry, especially as Asia emerges from recession. Also demand for platinum jewelry is increasing. In Asia platinum jewelry has become quite fashionable, and the demand should only increase as Japan emerges from their long recession. Platinum jewelry in the United states has become more valued as jewelry as well. If fuel-cell technology becomes economically viable, then all bets are off as PGM prices will sky-rocket as platinum is a necessary element. There are only a few players in that arena such as Ballard Power of Canada.

There is a shortage of supply and very few new mining ventures on the horizon. The major producers of course are in S. Africa. As I alluded to in a previous post, Anglo-American Platinum or Amplats (NASDAQ: AAPTY) has problems with the government concerning some lands held in "trusts" for the homelands and they are also held by Amplats. There are 24 tracts and 2 are being actively mined. There is the possibility that the other 22 tracts could be taken away and given as "Black Empowerment" zones(?). The other S. African producer is Impala Platinum or Implats (NASDAQ: IMPAY). S. Africa has the worlds largest known deposits of Platinum and Palladium and both companies plan to exploit these deposits by doubling production over the next 10 years adding roughly 3.4 million oz. of platinum to the world supply. Still, this is not going to be enough. Then there is a small producer in Zimbabwe. Obviously this is a very high risk operation. Zimbabwe has deteriorated into a dictatorship (ala Idi Amin) under a nut-case named Mugabe. The Zimbabwe producer is Zimbabwe Platinum Mines Ltd. (Australia: ZIM). If this company somehow survives the political problems, fuel shortages, collapsed currency, electrical disruptions, anarchy, etc. then they may - possibly, probably - just might, meet their goals of boosting new mining operations. Maybe some posters from SA or Oz have more current information.

Russia produces PGM as a by-product, but the whole country is one giant basket-case (nuff said). Most PGM in Canada is produced as by-product of base metal production. Two players here are Inco Ltd. (N) and Falconbridge. There is another N. American producer in the great white north, that is North American Palladium (NASDAQ: PDLCF). They have a small open pit mine in Ontario, Canada. It is a small operation and reserves are about played out or may not be economically mined for much longer. Then there is a junior exploration company, Idaho Consolidated Metals (V.IDO) that is exploring near Stillwater Mining Co. (SWC) properties near Nye, Montana and they have some encouraging results, yet they are not a producer, and a long way from starting a mine.

The bottom line is this: There simply isn't enough platinum for the new clean air policies worldwide that requires catalytic converters, increased PGM needs from the electronics industries, increased jewelry demand, and if fuel-cell technology becomes viable and affordable, then all bets are off. Production will have to be increased several fold just to meet the most basic demand, and new aggressive exploration and production efforts will be required. In many parts of the world it takes years to explore and define a deposit, years to permit a mine (especially in the US), and years to get into production. So there it is. TOCOM-style default is going to be common place or that derivative market will simply cease to function.


ThaiGold (04/27/00; 00:40:32MT - usagold.com msg#: 29408)
Still Water Runs Deep
Attn: $5 Indian (4/26/2000; 23:20:42MT - usagold.com msg#: 29407)
.....
....
...
4-26-2000
To: $5 Indian

Methinks that StillWater Mining (SWC/amex), being the *only*
viable PGM (Platinum/Palladium) mine in the world, is often
heavily targeted by the PPT.
As you said, the other PGM mining companies are mirages.
So, if the PPT wishes to prevent Flites to PGM/SafeHaven
when the DOW and NASDAQ are tanking, StillWater gets their
axe. In spades.
Not to worry. It always springs back. And is a $100 stock
very soon.
Originally, I bot my SWC shares at their IPO. It was PGMS
on the OTC. Their IPO was done in near secrecy. Only big
time funds (mostly offshore) were allowed to participate.

Six months later, I took my profits and bot ThaiRanch with
them. Later, I bot back into SWC. I feel people interested
in the Platinum Group Metals (PGM's) should carefully
consider SWC for their portfolios.

And do not be discouraged by it's frequent (manipulated)
Ups-n-Downs. Be patient. patient. patient. patient.

Cordially,

ThaiGold...
Comments Welcomed from anyone/anywhere/anytime.
ThaiRanch@OperaMail.Com
==========================================================








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