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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 12/28/2000
All times are U.S. Mountain Time

(Yesterday's Discussion.)

I-am (12/28/00; 22:54:21MT - usagold.com msg#: 44646)
Just a note of thanks...
A frequent lurker - I thank all who have enlightened myself and others "sans agenda" and look forward to a meaningful defense through rational process and considered anticipation - my ideas about where we are going return to TPTB and their feet of clay ...

...each time FOA et al send a note - dare I say that violent repercussions may well greet the rational - shooting the messenger will do little to stop the unfolding of events at the precipice, but it may be well be the only response available to those for whom the process of self-destruction has become the only reality - perhaps a retreat into the Eurozone will save the dollar from a serious implosion but I see little that can liquify a currency so poorly valued that traders may be forced by officials to deal with it positively – recreating and moving capital along paths that are likely to remain illusory - Cheers to all from frigid Canada…

I-am


Hill Billy Mitchell (12/28/00; 22:00:56MT - usagold.com msg#: 44645)
Cavan Man @ # 44639


Cavan Man

It is best for me also. Sort of busy myself. Will catch you at a more convenient time. Just wanted to let you know that I hadn't forgotten.

HBM



Canuck (12/28/00; 21:30:36MT - usagold.com msg#: 44644)
Stranger
Hey buddy, hope you had a nice few days off.

Your posts of late have been right on.

We have everything going to hell in a handbasket, gold has been flat within a 50 cent range since Christmas and today we get confirmation of consumer worries, lowest level in 2 years.

Gold takes a nosedive, what the hell is that all about?

I can't believe the crap in the last year or so, is the current US administration outright crooks? How can irresponsibilty of this magnitude be tolerated?

I agree with your '5 year drunken binge', I've been following prudentbear.com, safehaven.ca, fallstreet.com etc.
lately, tuning into the new 'bought' economy. Sickening really, can't wait until the 'credit providers' get kicked in the jewels in the next few quarters.

See ya.



SHIFTY (12/28/00; 21:05:38MT - usagold.com msg#: 44643)
The Stranger
Gold and markets for year end
The Stranger : Lets hope we make it back and then some tonight and tomorrow. It looks like tomorrow is the last day to trade stocks in 2000. What's your thoughts about tomorrow? Big sell off ? or will they wait till 2001 for tax reasons? or do you think they are going to take the market up some?
I'm thinking we will see a sell off in Dow and Nasdaq tomorrow. I don't base this on anything but just a feeling.
Any thoughts on this?

Go GATA
Go Gold

$hifty

beesting (12/28/00; 20:35:11MT - usagold.com msg#: 44642)
The Truth About Stock Performance in Year 2000...From Bloomberg
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOkuqyxT5TmFzZGFx
A few lines:
The Nasdaq(Declined almost 40%) ranked as the 10th-worst performer in the world dropping more than Japan's Nikkei 225 index.
# 1 in the world-Shanghai B-share index.
Click above for full report....beesting.

RossL (12/28/00; 19:54:22MT - usagold.com msg#: 44641)
Cavan Man
Please read up on the 22nd amendment. You may be confused by the rules for governor in many states, but the 22nd amendment says that no person shall be elected to the office of the the president more than twice... Amendment ratified Feb. 1951.


Cavan Man (12/28/00; 19:47:04MT - usagold.com msg#: 44640)
RossL
Mr. Clinton can run again four years hence.

Cavan Man (12/28/00; 19:45:57MT - usagold.com msg#: 44639)
Hill Billy Mitchell
Would enjoy meeting you but tomorrow is packed. Please, let's take a raincheck. Kind regards...CM

lamprey_65 (12/28/00; 19:35:01MT - usagold.com msg#: 44638)
TheStranger
Can you identify the source of the Gabelli news concerning TVX?. I'm guessing it may have been the Gabelli Newsletter which I just signed up for tonight.

Yes, I'm a TVX shareholder (waiting for Greek mine approval ...waiting, waiting ;-)

RossL (12/28/00; 19:22:50MT - usagold.com msg#: 44637)
Eight more?
Sir HBM, the constitution says that Slick Willy cannot be president ever again. His term is done on Jan 20 and he is out.


auspec (12/28/00; 19:18:16MT - usagold.com msg#: 44636)
Trying again/hopelesslyworkingcomputeroperator
http://www.etext.org/Politics/Beter.Audio.Letter/dbal56
Persistence always pays off!

auspec (12/28/00; 19:13:59MT - usagold.com msg#: 44635)
http://www.etext.org/Politics/Beter.Audio.Letter/dbal56
Trying this link.

auspec (12/28/00; 19:08:45MT - usagold.com msg#: 44634)
Ft. Knox/Fiction/truth?
www.etext.org/Politics/Beter.Audio.Letter/dbal56
Ft. Knox Gold Scandal?? SHOW ME THE MONEY!!
It's a slow day, what can I say?

Sancho (12/28/00; 18:25:05MT - usagold.com msg#: 44633)
(No Subject)
The Stranger: Canamami: You had indicated the opaqueness that envelopes one as they try to grasp the various and sundry intricacies of the world financial markets. I have faithfully, almost daily, for over a year tried to absorb the accumulated logic, philosophy, and wisdom of many fine minds on this forum (indeed I don't understand when many of you find time to sleep and work) and I still have not arrived at a degree of knowledge that I would dare to verbally impart to someone/anyone. This undoubtedly is a cerebral shortfall on my part but there is a possibility that some things are not really "knowable" except perhaps in hindsight. Hunches and street smarts work pretty good though and I feel a major economic debacle coming on......

Hill Billy Mitchell (12/28/00; 18:19:43MT - usagold.com msg#: 44632)
@ Cavan Man
Sir Cavan Man

I am over on MO Bottom for a couple of days, tonite and tomarrow. Leaving Saturday. Just thought I'd see if you are in town. If so let me know by post of your convenience. I could give Michael a call tomarrow and get your phone #.

Respectfully,

HBM

Hill Billy Mitchell (12/28/00; 18:15:27MT - usagold.com msg#: 44631)
Eight more years?
I'm feeling a bit to lazy tonite to get out my copy of the US Constitution. Something has been eating on me for a while. Question - Does the constitution permit Klinton to sit our for four years and take the helm again for another eight. I am getting paranoid, I guess.

HBM

TheStranger (12/28/00; 17:30:55MT - usagold.com msg#: 44630)
The Great Felatiator
How apropos. One of the disgraced Clinton administration's final acts before leaving office is to declare a federal state of emergency in the President's own home state of Arkansas. Seems cold weather is the culprit. Meanwhile, the world's chief global-warming alarmist, Al Gore, slinks back home to a state that wouldn't even give him the votes he needed to save the White House.

Sorry, Al. If your idea of a great president is the great felatiater, you have no business near the reins of power.

On another item, isn't it interesting that we are about to complete the worst year in the history of the NASDAQ, inflation is at a ten-year high and the nation slides toward recession? Yet Clinton keeps bloviating about all the surpluses we are supposed to be about to experience.

Could it be he is trying to lay a foundation for future attacks against a Republican administration which has the job of cleaning up this mess?

Sorry, Bill. So far there have been NO surpluses on your watch, and you know it as well as anybody else who has bothered to check into it and is willing to tell the truth. Furthermore, the economic strength we have experienced the last 5 years was a drunken binge of money creation which only now may be cleaned up!

Why else does everybody in this room own gold?

TheStranger (12/28/00; 16:59:43MT - usagold.com msg#: 44629)
Cavan Man, $HIFTY, auspec and TVX
Cavan Man - Please keep those great anecdotes coming. It is great knowing someone who has as many contacts on main street as you do.

$HIFTY - I threw out a flip answer to your question today about the setback in gold. For that I apologize. Obviously the uptick in the dollar was far too slight to account for the dip in gold prices.

Word is, the decline happened when a couple of small commodity funds went into sell mode today because gold had failed to break to new highs earlier in the session. With the light semi-holiday volume condition which existed, the selling was sufficient to trigger some sell stops. However, silver did not follow gold down. Nor did the XAU. And by the end of the session the price was already well into recovery. So whether the recent rally is now over or not is debatable. But I don't think things look too serious.

auspec - I value posts like yours. Thanks for your contributions.

TVX - TVX holders may be in for a well-deserved bounce tomorrow. After the close today, the Gabelli Group (a money manager with a reputation for smelling out real value) said they have recently acquired over 2 million shares or 5.78% of the gold mining company.

Go Gold!



schippi (12/28/00; 16:10:15MT - usagold.com msg#: 44628)
Select Gold moving Up!
http://www.SelectSectors.com/agpm70.gif
FSAGX hourly chart:


PH in LA (12/28/00; 15:23:17MT - usagold.com msg#: 44627)
Which way interest rates?
http://nypost.com/postopinion/opedcolumnists/19767.htm

FOA:
What is your reaction to the following article? If I correctly understand your past comments, we should not be looking for a rate cut at all from the Fed, since this would precipitate a fall in the dollar leading to serious inflation. According to this, your line of thinking, the traditional boom/bust operation of the Fed is no longer a viable and controlable option due to the competition of the Euro as reserve currency waiting in the wings. In spite of what the mainstream media is promoting as a cure for the poor prospects of the present stock market environment, Greenspan should not really be thinking seriously of cutting interest rates. Yet the forex markets seem to believe it... we see the dollar falling steadily against the euro. Or is this actually the beginning of the end, with a collapse in stocks, the dollar and a runaway POG?

In any case, if Dick Morris is to be believed, it appears that president-(un)elect George II has promised way more than he was authorized to deliver; a modus operendi that his father, George I, was famous for. Thoughtful observers everywhere should have expected nothing else. When George II made his first priority getting elected, regardless of how it was to be done (without re-counting votes unless they were already for him, in spite of legislation he had long ago signed into Texas law) we knew that everything from his lips (without even bothering to read them) was designed for his own maximum advantage. Convinced that promises of tax cuts would give him the presidency, he apparently forgot to ask himself if they could actually be achieved. Now it looks like Greenspan is standing right in his way. Just as he stood right in the way of his father. Funny how history repeats itself.

Dear FOA: Your comments are greatly missed. I hope 2001 brings you opportunity to return here, where a chair by the fire is kept vacant for you in our thoughts.



GREENSPAN'S LESSON FOR BUSH by: Dick Morris/Tuesday, December 26,2000

EVEN as President Bush II grapples with training the puppy Governor Christine Todd Whitman gave him, Fed Chairman Alan Greenspan is paper training the new president. When Greenspan refused to cut rates at the Fed meeting last week, he was sending a signal to Bush II - if you want to cut taxes, don't expect me to cut interest rates. Greenspan will use the threat of no rate cut to keep Bush from spending the surplus on a tax cut.

Bush would do well to study the early Clinton years, when Greenspan reached a modus vivendi with the new president. Here's the deal: The Fed would cut rates if Clinton raised taxes. When I asked the new president in 1993 why he had to raise the gasoline tax (at that point the proposal was in its previous incarnation as a BTU tax), he gave me a one-word answer: "Greenspan." Elaborating, Clinton made it clear that the Fed not only wanted the deficit cut, it wanted it cut through a tax increase. Further, just any tax increase wouldn't do; it had to be a tax that would fall on the broad mass of Americans.

"Why?" I asked. "The raise you're planning in the top brackets of the income tax will generate the bulk of the revenue; why do you need an energy tax, too?" Clinton answered, "Because Greenspan won't believe that we're really serious about cutting the deficit unless we bleed some political blood in the tax increase. The upper brackets of the income tax are too easy. They want to see me suffer before they'll believe I mean it about cutting the deficit."

Clinton suffered, all right. He lost Congress in 1994 and laid the basis for six years of misery just to show Greenspan and the bond market that he meant it when he said he'd cut the deficit. But the long-term result was a Fed that kept rates compliantly low and maintained eight years of prosperity. For Clinton, it was worth the pain.

In this pre-inaugural period, Greenspan is putting Bush II through his paces. The more Bush II talks about a tax cut, the more Greenspan will refuse an interest-rate cut. The Fed won't let out the tight monetary policy if Bush II is planning to open the doors to the federal treasury with a stimulative fiscal policy. The Federal Reserve Board is too institutionally committed to fighting inflation and too scarred by the hyperinflation of the '70s to let out the brakes on monetary and fiscal policy at the same time.

Every president needs to go through a period of adjustment to the Fed. The Bush family has its particular remembered pain, blaming Greenspan for Bush I's defeat. Despite evidence of a coming recession through all of 1991 and 1992, Greenspan waited so long to cut rates that Bush I was defeated by an angry electorate. "Don't trust Greenspan" became the mantra among Bush loyalists.

Now, anxious to show Bush II who is boss, Greenspan skillfully notes that a recession may be coming but defiantly postpones any rate cut. With Bush II trumpeting a $1.3 trillion tax cut over ten years as the panacea to avert a temporary cyclical recession, Greenspan wants to kill, or at least temper, the tax cut before he comes through with a saving cut in interest rates.

The more Bush talks tax cuts, the more Greenspan will dig in his heels and hold steady on interest rates. Since it takes six months for any rate cut to begin to have an effect, and this divided Congress is not about to hand Bush the keys to the treasury with a huge tax decrease, Bush would be well advised to tone down the tax-cut rhetoric. He needs to signal Greenspan that he'll behave well enough to deserve a rate cut. If he keeps pushing for a big tax cut, he won't get a rate cut. That's how Alan Greenspan disciplines presidents.

Otherwise, Bush II should ask Bush I what happens to a president and his re-election prospects when the Fed won't cut rates during a recession.

auspec (12/28/00; 15:16:16MT - usagold.com msg#: 44626)
Need a Good Laugh?
WASHINGTON –– President Clinton on Thursday projected that the country will enjoy a $1.9 trillion budget surplus over the next decade. He said the increase in the expected surplus means the United States government will be debt-free by 2010.END


Note-That means if it actually doesn't happen it will have been someone else's fault. Just wanted to make sure all fully understand that everything is under control. I think there is some inhaling going on.



Cavan Man (12/28/00; 14:44:52MT - usagold.com msg#: 44625)
Stranger
I mentioned the other day of a chat I had recently in midtown Manhattan with a gentleman who is Director of packaging procurement for a major, international entertainment company. They are anticipating an inflationary environment moving forward. Also, and perhaps more significantly, he commented that they have absorbed a number of price increases already and that they are at the point of being unable to absorb any additional increases.

Randy (@ The Tower) (12/28/00; 14:39:48MT - usagold.com msg#: 44624)
Gold economics in simple equations
Bullion banking allows the same gold to appear to simultaneously satisfy multiple individuals that each think themselves to be the sole, undisputed owner. In this case, possession becomes ten-tenths of the the law, and the Eastern world is happy to stake its claim using good prices while the West slumbers in paper dreamland.

To demonstrate how the above physical distribution need have no impact on prices until the physical stops flowing, I shall point you toward this comment from today's metals market review by Bridge News....

Speaking of the COMEX futures trading at noon ET as February gold contracts had fallen intraday by $3.50 to $273.40, senior metals analyst at Alaron Tranding, David Meger, said "Its been within thin volumes, so it didn't take much selling pressure to get the market lower."

Acquire your physical while high confidence in paper and good bullion banking performance yet remains to dictate the cheap prices. Simple. Get real...get gold. Let Centennial be your partner as they are mine.

Randy (@ The Tower) (12/28/00; 14:21:09MT - usagold.com msg#: 44623)
Consolidated gold assets of the European System of Central Banks
Bridge News reported today that once again there was a decline in the foreign currency assets of the ESCB over the course of the previous week. Forex reserves dropped by 500 million euros to total 268.3 billion euro for the week ending December 22. Meanwhile, the European Central Bank said in its weekly financial statement that total gold assets remained unchanged at 124.947 billion euros.

As a reminder to those keeping score at home, tomorrow marks the occasion of the ECB's next quarterly gold revaluation whereby the per-ounce value of the gold reserves are marked to market values at which to be carried on the books throughout the next quarter.

Randy (@ The Tower) (12/28/00; 13:46:06MT - usagold.com msg#: 44622)
A lesson in familiar terms
We surely all know of somebody that has become over their head in credit-card debt. If not, then it is not too difficult to simply imagine a young person in their 20's who has found the lure of easy credit too tempting to resist. This person rationalizes how pleasant it would be to own and enjoy real things today (furniture, stereo, large TV, clothes in the latest fashion, vacations, etc.) regardless of the expense, because the terms of the credit repayment seem quite benign...extended over time.

Unfortunately, we all know how sadly this scene often plays out: the new spending on credit never quite fades to allow a timely and responsible workout of the accumulated debts, and any unexpected turn of fortune will often lead to extended economic hard times for that individual or a day of reckoning in bankruptcy court.

Its legacy role from the post WWII Bretton Woods agreement has put the United States into the same position as the short-minded kid who has been given a credit card with a multi-trillion dollar credit line. We, the People, have allowed our federal government to draw on a line of credit (through the issue of Treasury bonds, notes, and bills) that has been granted domestically and internationally (with impressive generosity and liberality). The vast size of our national debt shows the cumulative effect of our government's annual budget deficits.

Beyond that, as a nation of spenders, We the People have taken stock of our own mortality and have chosen to enjoy the physical fruits of life in the here and now. In the grand picture it does not matter whether we specifically (meaning, you and I) are spending the currency we have already earned as a representation of our own past productivity, or whether we are spending credit extended to us based upon another's faith in our future productivity. The bottom line of the big (global) picture is that when our local (dollar-denominated) currency --or credit-- is spent for things from abroad, it ALL becomes as credit in the eyes of the foreign producers. That is, rather than permanently holding these dollar-denominated accounts, they understandably maintain a reasonable expectation that these credits will SOME DAY be exchangeable in-kind, that is to say, for an equivalent value drawn from our own national wealth of real productivity.

The U.S. International Balance of Trade data gives us a view of the status of our international spending that is settled each month on in-kind exchanges and on international credit. The cumulative trade deficit for THIS YEAR ALONE is on pace to exceed 360 billion dollars. Is it unreasonable to imagine just the smallest change in fortune visiting upon us the same "economic hard times and day of reckoning in bankruptcy court" that we see so often for individuals similarly overextended? The trouble for me and you is that, on such a day that We the People hold our government to account for their liberal use of our credit, or on such a day that the United States as a whole is held to account for this long legacy of reliance upon foreign credit, the credibility of the currency (dollar) will suffer right along with the people who drew upon the credit and had many early years of enjoying real things without providing in-kind compensation at the time of purchase.

Internationally, the transfer of gold can settle these accounts as payment in full as a product of the valuation and volume transferred. Similarly, a domestic currency devaluation (a form of policy cheating) that increases the dollar-value (price) of each exported item could act to settle the accumulated trade debt, assuming the volume of exports would remain adequate at such prices. Which settlement option would you deem to be less destructive to our domestic and international economies?

Consider, finally, under a free market gold regime where the price-value of gold were seen and expected to ever be appropriately upward-trending amid muted temporal fluctuations: would it not still be attractive to exchange any quantity of held currency credits for its equivalent market value in gold? A billion in green paper versus a billion in yellow metal...a billion is a billion no matter how large (or small) the pile, yes? Except, the billion in yellow metal happily avoids the stress of dependence upon wayward foreign monetary policy.

And yet, how very much more savvy it would be for one to act timely and quickly to get the larger "pile of gold" as equivalent to his currency than to act later for an exchange which would provide the equivalent value but with receipt of a smaller "pile". The difference between the early action and the later one would be called capital gains...or windfall profits. You decide.

And in parallel to the individual mired in credit card debt, the United States is not in position to dictate the terms. One could say that there is not much beyond gentlemanly good will that stands between our current situation and that wherein our bonds are sent home seeking tangible, uncheatable assets. Mortality has its quirks, you know.

Let Centennial be your partner on this trip. Get real. Get gold.

Randy

Golden Truth (12/28/00; 13:29:45MT - usagold.com msg#: 44621)
To Randy
Thanks for the info on the russian banks buying 10% more Gold in 2001 from producers (A.K.A GOLD MINES)

My Question to you is when a mine sells their yearly output, be that 1tonne or 100tonne. What does the mine do with all that "PAPER MONEY"? I don't think they buy the Gold back to protect the PAPER MONEY against value loss do they, as this would be counter productive. Why sell it in the first place?

So what we have here is a conundrum,a GOLD mine end's up holding PAPER $$$ and investing in more paper stocks and bonds etc.

So i believe they now have a greater vested interest in their paper investments going up than in the P.O.G going up which would wipe out their so called fiat dollar accounts.

It appears to me the Fiat Dollar "SNAKE" is winning and will continue to win for it seems nobody is willing or has enough courage to stop selling their GOLD for an inflated dollar at even these low GOLD prices.

Also i,am sure that even if they would like to and are prepared to lose everthing they have, and which one of "US" would be? The Fiat Dollar "SNAKE" will now squeeze until the mines go broke so they can take ownership, or turn the mine owners into a form of slavery not seen for thousands of years while they labour to "produce" Gold for $50/oz!

The Fiat Dollar "SNAKE" is very crafty he's been at this fiat money game for along time now and seems to have hynotized many many people.

I see the future as dark and evil against GOLD because people have lost their will to fight and have been stripped naked of all thier Human Dignity. Let me define DIGNITY a.Impressively honorable or appropriate behavior,manner,or quality. b. Inherent nobility(Gold is a noble metal)and worth(Gold has Worth): the dignity of labor 2.A high rank.

So until this dollar Fiat "SNAKE" is destroyed or the people behind it, yes the people behind it, the people that continue to print money out of thin air, the "SNAKE" will continue to squeeze the last breath out of you!

Will you continue to let yourself be squeezed to death or will you fight back.

Got SNAKE repellant? (GOLD)P.S. I've heard pitch forks work good also but don't approach them in a group or in the afternoon when the Sun has warmed their blood.

Attack in the morning when they are slow and cold and by themselves, know thine enemy!!!

G.T
P.P.S Randy you don't have to answer the Question! I think we already know the answer now. Sorry if i disturbed you.

TheStranger (12/28/00; 13:16:42MT - usagold.com msg#: 44620)
canamami
Bonjour, mon ami!

Sure, a weakening dollar will impel foreign money to go home. So will foreign money going home impel a weakening dollar. (What comes first, the chicken or the egg?). But priming the pump would constitute a partial offset to those fleeing reserves. (Remember how the NASDAQ soared last winter because of all the Fed-induced Y2K liquidity?).

And don't let all this second guessing about interest rates fool you, either. The pump is being primed again and big time. Meanwhile tech stocks which deserve to die will do so no matter what the Fed does. And countries which aim to improve their economies (as in the U.S. right here and right now) will go on doing so by weakening their own currencies.

I wish we had both studied more econ at University. But damnit, we didn't. Now we are forced to grope in the dark like everybody else.

Cheers!


canamami (12/28/00; 12:48:21MT - usagold.com msg#: 44619)
Peter Cook article re Euro
I did not reproduce the entire article due to copyright concerns. Also, the link was too long given that the article is not from today's edition. Simply go to the Globe and Mail's website to find it (search in the last seven days feature).

Euro starting to hold its own
Rising against U.S., Japanese currencies
PETER COOK

Tuesday, December 26, 2000


BRUSSELS -- As the euro enters its third year, it is for the first time fulfilling hopes that it can hold its own in world currency markets and even rise against the U.S. dollar.

However, an uncomfortable reality for the euro's backers is that its rise reflects not a reassessment of Europe's economic strength, but a re-estimation of U.S. and Japanese weakness.

.............

Among those who predict the euro's improvement will continue are economists at London-based securities firm Goldman Sachs. They see the euro climbing to 93 cents in three months, $1.05 in six months and $1.22 by the end of 2001.

...............

There are several other ways in which the euro, weak or not, has been a success.

It has helped stitch together the financial systems of 11 countries, lowering the cost of capital and greatly increasing liquidity in debt and equity markets. One estimate is that borrowers now pay half a per cent less for money than before the euro's launch, a significant saving in the case of corporations that need billions to fund acquisitions and restructure


auspec (12/28/00; 12:19:40MT - usagold.com msg#: 44618)
The Stranger
In my opinion it will always be "It's the economy stupid". These are political animals we're talking about here, they will try to find a balance, but they will err on the side of sacrificing the dollar. We are just simply the last in line to devalue and the game goes on. The CFTC is supposed to get new people as I understand it. The Dems wouldn't mind sacrificing the next 2-4 years of repub govt, but there are larger themes/masters at work than just Dems/Repubs. They spin the blame game trying to get the wheel of the ship they have mutually agreed to sink next. Last one out please turn off the Constitution.

canamami (12/28/00; 12:17:02MT - usagold.com msg#: 44617)
Reply re Stranger's post 44613
But would not priming the pump (thereby causing dollar inflation and devaluation) cause the Europeans to liquidate their remaining US tech holdings, causing the US markets to fall further, thereby resulting in a "poverty effect" which could slow the economy further?

I wish I had studied more economics in university and taken some formal training concerning the stock market....one is never short an intellectual challenge when one tries to understand the economy and the markets.

TheStranger (12/28/00; 12:16:57MT - usagold.com msg#: 44616)
$HIFTY
Gold, per se, isn't down today. The dollar is up, and I don't yet now why. I'm sure the information is out there. It just hasn't reached me yet.

On balance, a shrinking dollar should help the economy. It will raise import prices, hurting our standard of living, but it will also make our exports more competitive and it will raise the value of repatriated earnings among America's multinational corporations.

TheStranger (12/28/00; 12:10:22MT - usagold.com msg#: 44615)
The Fed EX Rate Hike Announcement
I have said for months that a slowing economy would not solve the inflation problem. Yes, a lot of discounting took place among retailers this Christmas, but consider the news yesterday which came from Fed Ex. They have decided to raise the rates for air-delivery shipments in the U.S. by 4.9%. Why? Because growth in the delivery business is SLOWING(yes, you read that right), forcing the company to spread its costs over a smaller unit base. The Memphis, Tennessee shipper said they have little choice but to try to grow earnings through higher prices. UPS is also expected to raise rates this week. Rates for U.S. Postal Service deliveries are already scheduled to rise 4.6% on Jan.7.

The latest rate increase from Fed Ex comes on top of a 4% increase which was already imposed earlier this year, meaning that customers will now be paying 9% more than a year ago.

This news is very much in keeping with what Cavan Man and Boxman have said they see coming in the corrogated box business. It is also precisely what is meant by the word "stagflation".





SHIFTY (12/28/00; 11:55:13MT - usagold.com msg#: 44614)
The Stranger
The Stranger: If they save the economy and trash the dollar cant the sinking dollar sink the economy?
What the heck is going on in gold today? Is Larry Summers showing the new guy how to work the controls?
Also do we get new CFTC people when Dubya takes over?

$hifty

Go GATA
Go Gold

TheStranger (12/28/2000; 11:44:23MT - usagold.com msg#: 44613)
Re: #44602
"The Federal Reserve has two choices in this coming storm: protect the economy or protect the dollar. They cannot do both."

Stranger's Note:
Judging by the recent re-explosion in M-3 growth, the Fed has decided to save the economy.

YGM (12/28/2000; 10:52:53MT - usagold.com msg#: 44612)
Yesterdays Cafe Email....2nd one.
http://lemetropolecafe.com
Le Metropole Members,

GATA supporter David Poitras has served commentary
at The Hemmingway Table entitled, "WHY GOLD IS
NOT COMMON."

"The basis of any economy is its currency, be it
commodity or fiat. Recall Baron M. A. Rothschild's
famous statement "give me control over a nation's
currency and I care not who makes its laws". He means
that if you control a country's currency, you
indirectly control its media, educational system,
legislation, commerce, industry, work force and
essentially the entire nation. This is the power
that the Federal Reserve has over the United States
today."

GATA note:

It is with the support of the David Poitras' of the
world that GATA is gaining ground and putting untold
pressure behind the scenes on the Gold Cartel. You
can count on that based on the feedback we are
receiving from some very prestigious attorneys.

Reg Howe has come up with a marvel in his Complaint.

As Adam Hamilton relates in his stirring "Let Slip
the Dogs of War":

"Overall, the lawsuit is wholly fascinating and may
prove to be one of the most important financial
documents in modern United States history....

"I STRONGLY recommend every investor in gold and lover
of free markets take an hour or two and read this
historic document as soon as possible. It is
extraordinary!

"In this once in a lifetime chance to slay a conspiracy
dragon that has irreparably damaged so many innocent
mine workers, nations, and gold investors, a
tremendous amount of help is needed."

It is has been an inspiration to GATA Treasurer/
Secretary Chris Powell and I that GATA is receiving
so much financial support from believers all over
the world and to have such confidence of so many
special people that we may never meet.

Allow me to share two recent letters with you:

Dear Mr. Powell,

Once more I am sending you a small donation in support
of the Gold Anti-Trust Action Committee. I wish it
could be more, but I am 70 years old and can't retire
until gold rises substantially and I can sell it and
use the interest income.

By making this small contribution I at least feel
my voice is being heard.

Thank you and keep up the good work.

Beverly Allen
Burbank, California



Dear Mr. Powell,

I just wanted to say keep up the good work. I think
when everything is said and done GATA's efforts will
go down in history. This is the second check I've
sent and will send more as I can. Just to let you
know, I first heard of GATA thru the HSL close to
two years ago. I was already fairly convinced that
the gold market was being controlled, but had no
idea of the magnitude. GATA was an awesome eye-opener
and being a young person, I feel this is an
extraordinary lesson in the principles of free markets
that will be priceless throughout my life. Most
importantly it is great to see men who are still
willing to check the powers that are ever trying
to tighten their grip on freedom.

Take care and have a Merry Christmas,

William "Gabe" Dough
Manteo, North Carolina

And, I cannot resist sharing Gabe's attachment to
his letter with you:

Ra, ra, rhee
Kick 'em in the knee!

Ra, ra, rass
Kick 'em in the other knee!

(cheer from elementary school, except I think you
should kick 'em a little higher than the knee. Go GATA!)

Adam Hamilton is right, this is history in the making.
On the very day GATA came into being, Chris
Powell said to me, "let's change history." Me, the
ever present optimist, just chuckled at Chris.

Chris gets the last chuckle!

BILL MURPHY
CHAIRMAN
GOLD ANTI-TRUST ACTION COMMITTEE



<A HREF="http://www.LeMetropoleCafe.com/entrance.cfm">Le Metropole Cafe</A>

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com



Randy (@ The Tower) (12/28/2000; 10:38:35MT - usagold.com msg#: 44611)
Some of the content of this November address is not surprising
http://www.imf.org/external/np/speeches/2000/110700.htm
The topic of this speech by IMF Managing Director Horst Köhler was "Reform of the International Monetary System" delivered at a meeting with EU Parliamentary Committees in
Brussels on Nov. 7th. Germany's Mr. Köhler, you will recall, took over the lead role at the IMF in May, 2000. Among other activities prior to that he was at a time Germany's Deputy Minister of Finance and led Germany's negotiations in the framing of the Maastricht treaty for European Economic and Monetary Union.
-------------------
"There are clearly risks [to the global economic outlook], which are now coming mainly from the advanced industrial countries. They include the volatility of equity market prices, particularly in the United States, and the large U.S. current account deficit; the fragility of the economic recovery in Japan; and, of course, misalignments among the major currencies—especially the euro and the U.S. dollar. [. . .] This misalignment needs to be corrected. But dramatization is not productive. There will be a reversal."

"The recent financial crises taught us a number of important lessons. Not the least, it became clear that the IMF needed to do a better job of identifying sources of external and financial sector vulnerability at an early stage. We learned that countries must be well prepared for capital account liberalization, and that they need to consider the implications for the sustainability of their exchange rate regimes. [. . . .] In the three years since the beginning of the Asian crisis, there has been considerable progress in applying these lessons in a process to reform the international financial architecture."

"Most fundamentally, the IMF needs to refocus."

YGM (12/28/2000; 10:35:33MT - usagold.com msg#: 44610)
GATA Message.........GOTTA Message???
http://www.newsmaxstore.com/actiongram/sel_recipient.cfm?RefID=0
Send GW Bush or VP Cheney a mailed 'Priority Gram' or tell off your unfavourite CNBC Talking head....Tell Striesand or Baldwin it's time to board that plane and leave the Republic....Personally I like the venue for the GATA news, as it is an eyecatcher for anyone of means.....BTW...did anyone notice that of late "NewsMax.com" has a new very prominent fellow at the helm....None other than "Lord Rees Moog"...co-author of "Blood in The Streets and the Great Reckoning"....Might be good to check out newsmax financial section from time to time....Most here know where Mr. Moogs'
view of Financial Armegeddon lies....YGM

Randy (@ The Tower) (12/28/2000; 9:53:42MT - usagold.com msg#: 44609)
Lafisrap,
Thankyou for alerting me earlier to the post directed my way during the holiday weekend. I will respond in time as allowed by my current project.

Randy (@ The Tower) (12/28/2000; 9:49:26MT - usagold.com msg#: 44608)
Gold-related news out of Russia
In the first of these two articles from Bridge News, we see that the forex assets (including gold) held by the Central Bank of Russia have more than doubled over the course of the past year. With how much patience and tolerance should they be expected to hold onto the paper assets (the foreign-denominated bonds) should the denominating currencies weaken and provide exchange-rate losses? Physical gold is held as an asset because it cannot be similarly "cheated", printed, or suddenly devalued by the policies or economic performance of any single nation as can happen to the paper assets.
----------
HEADLINE: Russian CBR Dec. 22 FX/gold reserves $28.3 bln, +$900 mln on wk
Moscow--Dec. 28--The foreign exchange/gold reserves of the Central Bank of Russia totaled U.S. $28.3 billion as of Dec. 22, up $900 million from Dec. 15, the CBR announced Thursday. As of Dec. 8, the reserves were $27.6 billion, up $100 million on week. At the start of 2000, the CBR reserves stood at $12.3 billion.
---
HEADLINE: Russia's Sberbank says bought 23 tns gold from producers 2000
Moscow--Dec. 27--Russia's state-controlled savings bank Sberbank, the country's largest in terms of registered capital and controlled assets, purchased 23 tonnes of gold from domestic producers this year, up from 20 tonnes in 1999, an official at the bank said Wednesday. In 2001, Sberbank plans to buy about 10% more gold from producers than in 2000, he added.

Lafisrap (12/28/2000; 9:13:35MT - usagold.com msg#: 44607)
$ and euro still behaving as inverses

U.S. dollar index (NYBOT) up about % .5.
Euro down about % .4.
POG down about % 1.25 off yesterday's high.

Any news as to FOA returning?


Cavan Man (12/28/2000; 8:01:29MT - usagold.com msg#: 44606)
McIntosh Missive (USAGOLD 44602)
Rubbish.

Cavan Man (12/28/2000; 7:58:50MT - usagold.com msg#: 44605)
Euro Accounts
The bank of Ireland is very accomodative.

RossL (12/28/00; 05:39:34MT - usagold.com msg#: 44604)
Tlaga

Tlaga's gold standard index is tied to measurements of CPI over the years. Not many of us, including Alan Greenspan, have much faith in the CPI as measured by governments. Perhaps the Tlaga index is based on a "real CPI" or basket of goods?


SteveH (12/28/00; 05:28:24MT - usagold.com msg#: 44603)
Mr. G and Tlaga
Two observations:

The Lieberman connection comment raised an eyebrow and also the interesting aside on silver and gold tie-in as though it is written in stone waiting for the act.

Interesting article.

LeSin (12/28/00; 03:33:07MT - usagold.com msg#: 44602)
America's Economic Tribulation
Gold Eagle Site Editorials (forgot to copy the exact link)


America's Economic Tribulation


The economic horizon is dark with approaching storm clouds. This much is obvious to any reasonable person wondering what the new year will bring. The official Y2K begins on December 31st at midnight. We will yet see the level of economic devastation I worried about this time in 1999. The reason being the combination of the storm and our ship's condition as we head into it. If the United States Ship Economy was a real ship, the captain, if he survived, would stand trial for criminal negligence. Hear me well, Alan the Magician. Hear me well, leaders of the Federal Reserve and the global banking oligarchy. Your economic bubble has imploded; you will eventually be held accountable for your economic treason. Woe to the worthless economic shepherds. Woe to the lapdog press and the gutless politicians who have deceived and betrayed the ignorant and apathetic American people. The economic disaster which is now unfolding will sweep away all our dreams, hopes and illusions. If it is bad enough, it will sweep away our American Republic and possibly our lives. Time will tell.

In several of my earlier essays, "The Perfect Storm", "The NASDAQ'S Three Illusions" and "Swarms of Earthquakes", I went into great detail about the causes of our economic tribulations. I will not repeat myself describing the reasons for our economies looming recession/depression. You are entitled to your opinion. You are certainly entitled to think I'm a lunatic. I firmly believe every American citizen has a constitutionally protected right to be ignorant, foolish and wrong. Unfortunately, you also bear the responsibility for accepting the consequences of your beliefs. I do also, but my preparations for Y2K left me in a much better position to weather the coming economic storm than people who ignore my warnings are in.

Why do I use the biblical term "tribulation" to describe what will happen to the United States, and by extension the global economy, in the immediate future? Simple. I happen to think the Greek term translated "tribulation" is the most accurate on to describe what people are going to go through the next several years. While I don't consider myself a Bible scholar, I do focus in on specific terms that are translated into modern English. For example, I once read a footnote in Ezekiel 38, the chapter where Russia is predicted to invade the MidEast, that listed chariots as an alternative to horsemen. Obviously in English, horsemen implies Cossacks in fur hats making massed cavalry charges. And just as obviously, this is ridiculous in modern, mechanized warfare. Except here is an alternative translator rendering which says a horse powered, mobile platform for launching projectiles and with a crew will be used. Now, I was in a tank unit and I think that's a pretty good description for a modern armored tank. Specific words matter. I think tribulation fairly describes our immediate economic future.

This Greek term means grapes being crushed in a wine press. The English adjective Great added before it means the normal pressure will be greatly enhanced. I like to think of it as using one of those junkyard car crushers instead of a wine press. Putting a few pounds of grapes into a press designed to crush a car into the size of a bookcase- well, you get the idea. Harsh and savage economic times are about to come upon the earth. The likes we have not seen since the 1930's. Brutal times which will try men's souls and crush the spirit and hope out of them. America in particular, is about to thrown whining and wailing into the mouth of the Great Economic Tribulation. I happen to think our cell phones, reduced to the size of a pea, will be all that remains. Whether the self indulgent American populace has the moral fiber to withstand its date with economic tribulation remains to be seen. As Florida and the election showed, America is a bitterly divided mob, surrounded by an apathetic majority, existing in a corporate dictatorship. Not exactly the kind of political situation which makes one hopeful for a positive collective response to an economic downturn. Still, this is America and the blood of patriots is still in some of our veins. There is hope the scales will fall from the people's eyes and America will return to the wisdom and truth of our ancestors. Or then again, as Mr. Heston so aptly put it in "Planet of the Apes", when he viewed the Statue of Liberty sticking out of the beach, "You blew it up." The decision to destroy the American Republic lies in our hands and no others.

If this is our political condition as we head into the hurricane, what of our economic one? A few statistics will highlight both my point and our peril. The total United States Gross Domestic Product, our total economy, is around ten trillion dollars per year. Consumer debt is seven point five trillion. Corporate debt is ten point six trillion. Corporate debt alone exceeds the entire economic production for one whole year. The list goes on and on and on, just like the Energizer bunny. NASDAQ losses are estimated at nearly four trillion dollars. Despite the lap dog press spin on government surplus', our national debt is over five trillion dollars. The trillions just keep adding up on a global basis. I saw one estimate of over 96 Trillion dollars in derivatives and the like. I mean, who are these fiat lunatics kidding? Do they think it's even theoretically possible to pay off these trillions? Or are they just milking the interest until the planned collapse?

In a nutshell, America's attitude has changed. On a subjective basis the people realize things are looking bleak. Consumer confidence is down. The reverse stock wealth effect is in full swing. Heating oil, natural gas and energy prices are devastating home budgets. The people realize recession is coming. Why was Christmas such a retail bust? What do you think will happen to the stock market in January when the retail profit figures come in from Christmas? Wal Mart may sell a billion dollars of stuff on the day after Thanksgiving, but that doesn't mean they made any money on it. What will happen to the global economy when America stops playing the vacuum cleaner? Are you following my drift here? We're talking global economic tribulation here. The seven fat years have come and gone. The seven lean ones are here. Are we ready?

If one designed a situation to maximize the economic damage to America, entering a recession with insane levels of debt would be it. Guess what, gold-eagle.com readers, this is precisely the economic condition the United States finds itself in. In one of my earlier essays I wrote about the old sea movie. The one where the storm hits and the ship's steering wheel is seen spinning and spinning. We're not quite there yet. Here's where we are right now. We can see the storm getting closer. We're feeling the wind and waves, crashing surf and dark ominous clouds. We should be taking reasonable, prudent and sea tested actions to weather the storm. Are you listening to me Captain Alan GreenSpan? So what are we doing? We are doing the exact opposite of what we need to be doing. We are doing things that will eventually damage, and possibly sink, our ship. Every sailor knows that you furl, roll up and tie to the mast, all your sails when a storm threatens. You do this to minimize strain on the masts, control your speed and prevent masts breaking and crashing to the deck. But not our Mr. GreenSpan. No, our Fed version of Captain Ahab, is ordering the sails unfurled, the anchor chain cut and another round of party drinks.

In my brilliant little allegory here, levels of debt are the sails. The anchor is the value of the dollar. Captain GreenSpan/Ahab has blissfully allowed every stitch of canvas sail to be unfurled in the face of our looming recession. Alan the Magician is even going to cut the anchor chain and let our economy drift at full speed into the reefs. The Federal Reserve has two choices in this coming storm: protect the economy or protect the dollar. They cannot do both. Having created a bubble economy and stock market through massive debt creation, the Fed can neither furl or unfurl the sails. If they cut rates, the dollar is in peril. If they don't cut rates, the economy is in peril.

In a second nutshell, this is why things will be bad this time around. It's not even about the economy this time stupid. It's about the value of the dollar. Keep your eyes on the EURO and inventory your gold and silver life preserver. You will soon need it. Thanks Alan; thanks a lot.




People sleep peacefully in their beds at night because rough
men stand ready to do violence on their behalf. George Orwell



Doug McIntosh

30 December 2000

Also by Doug McIntosh






 





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