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ARCHIVED DISCUSSION FROM 8/28/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) Black Blade (08/28/00; 23:07:00MT - usagold.com msg#: 35683) Petroleum Prices on the Rise Again! Market Watch, Aug. 28International energy futures prices inched up Friday as traders continued to worry about lower-than-normal fuel inventories. The October contract for benchmark US light, sweet crudes gained 40˘ to $32.03/bbl on the New York Mercantile Exchange, while the November contract was up 14˘ to $31.23/bbl.However, in after-hours electronic trading today, the October position retreated to $31.96/bbl.Friday, the September contract for home heating oil popped up 1.61˘ to 96.94˘/gal on the NYMEX. Unleaded gasoline for the same month gained 0.38˘ to 95.41˘/gal. The September natural gas contract rose by 8.8˘ to $4.63/Mcf.In London, the October contract for North Sea Brent oil closed at $30.39/bbl, up 4˘ for the day, while the November contract gained 15˘ to $30.08/bbl on the International Petroleum Exchange. The September contract for natural gas lost 2˘ to the equivalent of $2.43/Mcf on the IPE, however. Markets were unfazed Friday by reports that other major consumers—including Japan and Australia—had joined the US in asking for a production increase from the Organization of Petroleum Exporting Countries. So far, OPEC has resisted such pressure, claiming that current production levels may not be responsible for recent higher prices. However, Nigerian President Olusegun Obsanjo said over the weekend he would ensure that oil price stability is one of the main topics of discussion at the meeting of OPEC heads of state in late September in Caracas, Venezuela. That will be the second meeting of the heads of OPEC member countries since the organization was established in 1960. The first gathering was in 1975.The average price for OPEC's basket of seven crudes jumped by $1.30 to $30.44/bbl Friday. That basket price averaged $29.26/bbl last week, up from $28.63 the previous week. So far this year, OPEC has collected an average price of $26.61/bbl for its oil, including averages of $27.94/bbl in July and $29.12/bbl in June. That far exceeds its average prices of $17.47/bbl in 1999 and $12.28/bbl in 1998.Black Blade: Looks to be an interesting year shaping up in the petroleum biz. Petroleum stocks low, prices rising, Da prez in Nigeria with daughter begging for oil. Hmmmmm……… , In some of those cultures, potentates trade daughters for political concessions. You don't think that……., Nah, just a thought, besides looks like a bad trade. Who's bad trade? I leave that up to you ;-) MarkeTalk (08/28/00; 22:42:22MT - usagold.com msg#: 35682) Of Russian Submarines and the Price of Gold http://www.sightings.com/general3/even.htm Once again, many thanks go to Buena Fe who posts at this site for bringing this most thought-provoking article to my attention. If the author of the above-referenced article is half correct, then a whole lot of shaking on the world political/economic scene is about to happen! Over the past two months, I have discussed the present state of U.S. economic affairs with my clients. These affairs include but are not limited to the PPT either directly or indirectly in control of both gold and stock prices; White House and its cronies manipulating PPI and CPI numbers; Treasury Dept."retiring" U.S. bonds while Mr. Greenspan at the Fed has the money spigot wide open, etc. The question has been posed to me over and over again: When will the markets break free of their strangeholds?? I keep sensing in my spirit that it would take an exogenous shock to the system, probably political in nature either relating to a major war breaking out between nuclear powers (India v. Pakistan, U.S. v. Russia, China v. Taiwan) or else a disruption in the supply of oil to the West. If Jeffrey Steinberg is half correct, then we were/are on the verge of such a confrontation. Personally, I find it hard to believe that the U.S. and Russia would go to war over the sinking of the Kursk submarine. But if we examine Russia today, we find a humiliated and devastated superpower which has been reduced to a pauper. The regime of Boris "Give-Me-a-Drink" Yeltsin has yielded to a former KGB operative who has vowed to restore the greatness of Russia. Russia is symbolized by the bear and what we have now is a wounded and hungry bear. Not a good combination and certainly unpredictable. Our spook agencies must be working overtime to figure out what the next move will be.Now I admit that Mr. Steinberg's article cannot be verified and it would be officially denied anyway. But what if there is a glimmer of truth in it and what if an economic war, instead of a shooting war, breaks out? What if the Russians curry enough favor with the Arabs (Russia still helps Libya and Iraq and has close ties to Iran) to convince them to drop the U.S. Dollar as payment for oil and demand Euros and Yen (or a combination thereof) in return? And what if Russia's newly arranged friendship with China results in China dumping its $100 billion in U.S. debt obligations on the open market? Can you imagine the financial chaos that would ensue?BOTTOM LINE: Now more than ever is the time to own gold. Gold has always been a haven of safety in times of turmoil, and it will prove itself again sooner than you think. In recent years, regional disputes could do nothing to move gold. But a major confrontation would send it soaring. By the way, did anyone notice that the CBOT just approved expanding the price limits on various commodities, including gold and silver. Now gold is allowed to move $75/oz. per trading session; silver is allowed $1.50/oz. per trading session. Nothing ever happens by accident, as Franklin D. Roosevelt used to say. Folks, it is time to wake up and sound the alarm. Trouble is brewing out there somewhere. TEX (08/28/00; 22:31:41MT - usagold.com msg#: 35681) Read the link but don't send them the business Opps......looks like the supplied link is drumming up business for someone else. Read the link but make sure you send your gold business to MK. TEX (08/28/00; 22:23:48MT - usagold.com msg#: 35680) Interesting link about PM's http://www.mcalvany.com/specialreports/august/gspmarket.htm Interesting link from Don McAlvany's web site Scooter (08/28/00; 22:18:38MT - usagold.com msg#: 35679) Claiming Races Defined In my previous post I was referring to Thoroughbred horse racing on the major circuits. Southern California circuit in particular where the minimum amount of the claim price is $5,000, and usually most of those horses are the walking wounded. Not a good bet period!The races at Santa Anita Park, Hollywood Park, Del Mar, and the Fairplex all have claiming races and the price can go up to as high as $100,000 for a horse. The owner also has the choice of running his horse in a optional claiming race and not risk losing his horse at all.These races are seen, bet on and played all over the U.S. by virtue of the simocast closed circuit T.V. monitors at the major tracks. Millions of dollars are won and lost in one afternoon. This is a far cry from an unsanctioned, off track racing event done in the dark? In the water? In Kansas? Oh well. What next to besmirch the noble sport of kings? Hill Billy Mitchell (08/28/00; 21:58:38MT - usagold.com msg#: 35678) Scooter (08/28/00; 21:23:32MT - usagold.com msg#: 35676 Sir Scooter:That was cool. Now I think I understand why my friend had such mixed emotions. He must have made a pile of money but had to give up his horse albiet at a pretty good price.Also in the futures I think you are right. There is no luck in a situation like this and the insider tips are in some cases pure handouts.I am reminded of the $100,000 Hillary was given in a trade in the futures market, was it chickens. I forget.Anyway thanks for the insight. Better get out of here before I jam up the traffic any further. I think I may have ruffled FOA's feathers. It appears that maybe this is his forum.Respectfully,HBM nummus aureus (08/28/00; 21:26:57MT - usagold.com msg#: 35677) Claims races in Kansas... A claims race is meant to keep the competition equal. There would be little point in bringing a $1000 horse to a $500 claims race, to win a $100 purse. Any of the loosers in a claims race may buy the winner for the claim price. The trick is to win often with a $100 horse, in hopes he will be claimed. Locally, claims racing is also done with pickups and cars. Some of my mis-spent youth involved training and racing claims, which can be on track, cross country, or obstacles. Often, the riders or drivers in a claims race are required to switch mounts before the race. My first gold piece was the purse for winning a claims race across Tuttle Creek Reservoir in the dark on someone else's horse. I had to stay with him, because I couldn't swim. Scooter (08/28/00; 21:23:32MT - usagold.com msg#: 35676) @Hill Billy Mitchell-Claiming Races Have been a long time lurker and first time poster. I couldn't resist answering your question regarding the claiming races. The way it works is before the race other trainers will put a bid in for the amount of the claiming price. Say it is $35,000, and no matter how the horse finishes, first, second, third, or last. The one who put up the money and got the bid walks away with the horse. If the horse is injured during the race, he is still stuck with the horse. A horse is usually put up for claim to begin for reasons such as it does not school well and races greenly, or its lazy and doesn't like to run, or it becomes fractious around the crowd, or maybe it is injured and the owner wants to get rid of it.What most often happens is if a trainer of superior ability sees a horse with potential in the hands of an incompetent trainer (and there are many incompetent trainers) he or she will claim the horse and turn it around making it a winning horse. "Magic" Mike Mitchell is famous for that!What most likely happened with your friend is that as soon as he knew his horse had reached the top of its form cycle he placed it in a race where he pretty much knew it had a very good shot, barring any freak accidents, and the owner decided he would risk letting someone else claim it. In the mean time the owner, trainer, jockey, hot walker, and all of their friends made a bundle of money on that race. In addition he received the claiming price and was relieved of a liability. Even to bet the horse to come in second would have been a better than average pay off in that case. Right? Those are the tips that every gambler, recreational handicapper, and professional horseplayer is always looking for. Easy money, the edge that one must have to make many times your initial investment in about one minute and eleven seconds.I see a parallel in the gold market in that the manipulators know what is going to happen before the average trader. They control the market because they have the means to do so, yet they need all of the other investors to make a profit. The same with the paramutual at the track. 90% of the bettors lose because they simply do not understand what is actually happening leading up to the race, and still its not a sure thing because of racing luck (good and bad) can make a certainty become a loser right in front of your eyes. Not so with the gold market, there is no luck involved, just the power of money.Hope this helps to answer your question. 714 (08/28/00; 20:39:12MT - usagold.com msg#: 35675) The next gold bull... ...goes like this:1. The US$ suffers a dramatic fall in value against other currencies, triggered by some unforeseen event(s), as it is sold off around the world, losing, say, 40% of its value in a few weeks or months.2. Gold just as dramatically spikes up on the US$'s drop, triggering futile short-covering that ends in a frozen LBMA/COMEX gold trade (ala TOCOM/NYMEX palladium trade) with a price locked in around $1000 US, plus or minus $300.3. The price of gold, in US$, continues to rise in other foriegn markets, such as Jidda, Istanbul & Karachi well beyond $1000 US. Just this kind of market behavior occurred during WWII, with gold costing twice as much in Jidda as in NY.4. The oil-for-gold trade becomes strained, but oil continues to flow, with prices now open to tough negotiations and some creative financing (ala 1940's oil-for-train deal between Aramco & the Saudi king).5. Meanwhile in the US and Europe, where gold prices have been capped in the paper markets, gold flounders at the $1000 level on low volumes. Investors whose interest in gold, and purchases of, was piqued by the spike remain cautious on fears of availability and liquidity, and it sells for no more on the street than on the "frozen" exchanges. 6. The defense of Western currencies, especially the US$, does not hinge on or involve gold and restores some confidence in the domestic markets, while the trend towards e-currencies in the West finds new impetus. Consumers in Western countries continue to desire the convenience and percieved safety of "plastic money", while their leaders work out new trade arrangements with the oil producers and other exporting nations. 7. In a worst case scenario, the Franks, as Europeans (and their descendants) were named by the Arabs in days past, build up their armed forces in the Middle East for the attack on Mecca once prophesied by the Prophet Mohammed.*************************************************************Gold to $30,000? It'll never happen where I live (America). Trail Guide (08/28/00; 20:35:52MT - usagold.com msg#: 35674) The big trade! Hello Everyone!I would like to start this as an offshoot from my post earlier today to Peter Aster (msg#: 35638). It seems we have run into a roadblock of thought. Perhaps a traffic jam would be a better analogy. Let's talk:In it's most basic form, this presentation has been that; ----in the worldwide modern paper markets, contract trading has taken over the roll of setting gold prices at a tremendously understated level.---- Years ago hard physical trading once did that job and did it at a correct level relative the physical product that was changing hands. For us to follow and grasp this concept change correctly, we must start at the very beginning of simple economic principal. When someone buys a product and takes possession of that product he impacts the value of that item as it relates to the next person in line waiting to buy. Like this:----------When Joe buys one of five apple from the table of a vendor, he leaves only four apples left on the table to be bid on by the next buyer. This ages old act of "hard trading" demonstrates the whole human interaction with supply, demand, need and emotions. When the next buyer sees that only four apples are left, where there were once five, whether he likes it or not his mind will consider the above supply and demand possibilities. All the while personal need and emotions mix in his brain. The result may or may not be a different bid from the first buyer of an apple. But it will be a true value assessment based on actual, hard, real time circumstances known at that moment.When Joe brought that apple, he impacted real supply and forced the market,,,,,,, that's everyone trading behind him,,,,,, to form "hard opinions" about "real demand" and "real supply". In this dynamic, the next trade is not priced by "soft opinions" based on conjecture of "will Joe really take delivery". You see,,,,,, in real life,,,,,,, in real trading,,,,, Joe taking delivery now, hard down, undisputed,,,, and this forms a different "mind set to bid" by the next in line. This mind set is what creates a "real value bid" instead of a "possible value bid". These "hard bids" based on "hard opinions" overshadow and usually bid higher for product than "soft opinions". In times of "Hard Trading",,,,"Soft opinion" bids even fail to materialize mostly because "Joe has shown that he does take delivery"! ========Now, I had today, asked 10,000 Kansas investors to line up along their border with Colorado. This nice straight border is very long and allows room for everyone to have some space. I asked half of then (that's 5,000 (smile)) to stand on the Western side of the border (Colorado for you non Americans) and the other half of them to stand directly opposite on the Eastern side (Kansas). All of these people did this in a hurry and they remembered to bring the very last $50,000 in cash they had to their name along with a pen and paper.This was quite a mess to organize, so I hope everyone will appreciate this effort! (smile)So, Today, while the Comex was still open and trading,,,, and the US dealer markets were open,,,,, I instructed all 10,000 of these people to enter into a REAL LEGAL PRIVATE OFF MARKET CONTRACT with each other for "1,000 ounces of gold". In effect, I asked that 5,000 of these investors contract to buy from the other 5,000 the equivalent of "ten 100 ounce gold contracts" that would expire in one hour. That's one hour before the gold markets closed today.Yes, that's 50,000 contracts for five million ounces of gold that existed during trading today. Further, not only did the sellers not have any physical gold, their last $50,000 in margin cash could not possibly buy the 1,000 ounces to deliver. Nor could the 5,000 long traders hope to use the last $50,000 the had to their name to buy that same 1,000 ounces. But their margin deposits did seem to make the deal real.So, While this trade took place and the contracts were in force (they were legal and binding),,,, I called several bullion dealers to ask if the gold market was being impacted. I also watched the computer screen intently to see if anything would happen. Surely, with five million extra ounces of gold being traded, it would have changed the price of gold. "Just think, five thousand rich Americans contracting for five million ounces of gold should have done something!" Well, it didn't. So all 10,000 Kansas investors canceled their contracts by buying each others commitments and went home a little smarter.==========OK,The reason this little trade didn't impact the "real value" of physical gold was because they didn't trade any real gold. As big as the numbers seem, the real physical supply of gold was never touched. All they traded with each other was their "soft opinion" about the future price of gold. Again, I say soft because they only traded bluffs that were for far more metal than their real financial assets could cover. Their trading, like so much paper trading today creates and expands a soft paper market that not only overstates demand, but more importantly allows sellers to "vastly overstate supply without DRAWING FROM THE APPLE TRAY. Further, the worldwide paper markets our margin money has helped sustain, continues to trade an outstanding interest that is far in excess of real available bullion. ------"""" Yet this outstanding interest is the supply gauge that so understates what physical gold would trade at as it's used to price the much smaller dealer gold demand""" ----.===========Oh,,,, I'm sure 5% or 10% of my Kansas traders actually did make and receive delivery while I wasn't looking. They most likely had some gold and extra cash to make the deal. But with the size of the world gold market it didn't really notice.By far, the majority of these investors were playing out my observed typical "Western Style". They trade the price of gold while waiting for someone else to buy enough physical gold to impact supply. All the while helping support a system that dealers use to price bullion at an understated price. Again, a price that's not created by taking real bullion off the market in a volume equal to contracts traded. =======My reply to one investor heard saying, "why does anyone have to take delivery at all?". My good man, then you would end up just like my Kansas traders as they wade in our modern mess. Always settling up and trading nothing, and doing it at a lower price. Because the paper price of bullion will continue to fall from a continued increase in paper supply. No different than the way our governments lower the value of money by supplying more of it. The correlation between the two concepts is indeed staggering.This logic is almost like our early currency thinkers asking, "you know, we really don't need gold as a currency. Let's just trade dollars!"!===========ThanksTrail Guide 714 (08/28/00; 20:21:09MT - usagold.com msg#: 35673) goldfan... ...I'm with you. What's going on in the gold & currency markets is the carry trade. And, yes, playing the spread is gambling in my book, too. I, too, think that we'll see a default in the gold market. What I'm saying is that the effects of this default won't necessarily be what is being popularly portrayed at this site. Gold won't go to the moon. $1000, yes...$30000, forget it. Why?Gold is not money in America anymore, and it will NEVER circulate as such again, in spite of what's often said here. Yes, one can always cut a barter deal with gold, and yes, gold, by virtue of CB holdings, retains certain monetary qualities. Otherwise, there would be no carry trade in it. But when the you-know-what hits the fan, people won't be concerned with whether they have enough gold to pay their bills and feed their families. They'll be concerned with whether or not the have enough money, i.e. US$, to do so. And few will be concerned with POG. Some "hot money" that is left out there in the US, Europe and Japan will find its way to bullion, but a capped market, like we currently see in palladium, will DISCOURAGE investors in the industrialized West to flee to gold and will hold the price down. Gold will be more valuable and freer in the East. Such as in the oil-producing countries and other exporting nations of the world. During WWII, gold went for twice as much in Saudi Arabia than in the US. This is how it will happen again. And, yes, gold will commonly circulate in the "Indian Ocean" Rim, particularly Islamic countries. But not in the West. People in the West will opt for plastic currency over gold currency anyday. Because they're spoiled by convenience and percieved safety. And since it is easier for governments to stabilize domestic markets, within one's borders, than overseas, with trading partners, we will ALWAYS have the US$, however valueless it may be.And this is why the paper and physical markets are married in the West. Because it is the Comex and LBMA spot prices that Westerners believe determine gold's value. And THAT won't change, even if those markets lock up. The paper price of gold will go up...way up...but it will be frozen at some point in time, just as palladium has. None of this is to imply that bullion is a bad investment. If you live in the "West", by my reckoning, bullion should approximately triple in value. Not a bad return, not to mention its other virtues (anonymity, for one).BTW, the palladium prices over at our popular auction website are up in the range of $496-631 with about three days to go. It'll be interesting to see what premiums we get over and above the current spot price of $740. Still no bid on the $725 piece. lamprey_65 (08/28/00; 19:29:51MT - usagold.com msg#: 35672) CRB and Gold The last downdraft in POG coincided with the breakdown of the CRB below its up-trendline since last year. This move down began the week of July 10.Now the CRB has re-established above the trendline once again - can POG be far behind? Hill Billy Mitchell (08/28/00; 19:07:47MT - usagold.com msg#: 35671) @ RossL (Treasury rate spread files) SirThe files have been dispatched to the address which you provided. I am not sure I transmitted it properly.Let me know by email if you got it ok.HBM TownCrier (08/28/00; 18:54:15MT - usagold.com msg#: 35670) Sir FOA, the Gold Trail has now been cleared of bear traps You may once again feel at ease to walk there once again...at your convenience, of course.Jeff has set up a preliminary archiving system which I am now further modifying to fit our current format. The net effect, for now, is that your past text is safely tucked away in an archive, and you now have additional space to post to the Gold Trail as you see fit to do so. goldfan (08/28/00; 18:07:42MT - usagold.com msg#: 35669) for 714: possession is the law 714 thanks for your note. In my experience, 65+ years of this planet, this old saw is correct: In human affairs possession is 90% of the law, no matter what the law might think about that.The buyers and sellers of futures in the corn and pork belly market do so in order to get some control over their costs and revenues. For them, it reduces their business risks, passes them on to some more willing to take a risk in return for a profit just on the insurance angle, not the corn growing or hog marketing angle. These markets don't operate at volumes a hundred times larger than the daily production, the way the gold and currency derivatives markets do. Something else is going on in the gold and currency markets. It's called gambling. And to boot, since there is a lot more paper written, than there is goods to back it up, the risk of default is huge. I loudly object to it, since the banksters and our governments have fostered these gambling pits, putting our economy and our livelihoods and the very civility of our society at risk in so doing. They were not elected to introduce a deadly virus into our economic affairs, for their own personal gain.I wonder why you think the risk of default is not so great in the gold market, such that holders of gold certificates will find they can't exchange them for physical gold? In the ‘87 crash, many holders of puts couldn't cash them in. The counter parties refused to pay the enormous sums involved. When brokerage firms are in danger of bankruptcy, they use their customers' accounts and their customers' shareholdings, to bail themselves out. At the point of chaos, possession is 90% of the law.Maybe the paper and the physical will always stick together, but I don't see how. I think the huge turnovers we see in daily "gold" sales, are related somehow, by some kind of banking need, to the huge daily turnovers we see in currencies and currency derivatives, and that when the currency markets implode, so will the gold paper.All this high volatility we see these days, in so many different markets, is a sign of breakdown, of impending chaos. IMHO. If I were canoeing, and I saw this much rough water, I'd head for shore. FWIWGoldfan HI - HAT (08/28/00; 18:07:05MT - usagold.com msg#: 35668) R Powell.......20 Word Contest You WIN. R Powell (08/28/00; 17:40:00MT - usagold.com msg#: 35667) 20 Words or Less One word, Fear 714 (08/28/00; 16:27:09MT - usagold.com msg#: 35666) wolovka re: got a nice picture of a banana? Is it banana-flavored? :) Hill Billy Mitchell (08/28/00; 16:16:59MT - usagold.com msg#: 35665) @ ET (08/28/00; 15:27:05MT - usagold.com msg#: 35661) Sir ET:You said:"Actually, when you visit the race track you may ride away with the horse if the horse wins the 'claiming' race. Generally a price is set before the race to purchase the horse if it wins. I have no idea why this is done."My two cents worth:I have never been a horse track type gambler. The only time I ever placed a bet on a horse, the bet was an insider bet. The owner of the horse was a friend of mine and told me that he would let me know when it would be a sure thing that his horse, "Walking Joe" would win. I forgot all about it and then one day he came by the office and said, "Come with me tonight and bring some money. Walking Joe is going to win. This happened to be a claiming race for Walking Joe. Walking Joe won the race, my friend lost his horse and everybody except me had mixed emotions. I was delighted because I won the bet I placed on Walking Joe.Well not exactly delighted. For, you see, my friend assured me that his horse was going to win. I forget the odds but they were rather good. I went to the betting window prepared to place $1,000 on Walking Joe. My friend says oh no, just put $50 down to win and $50 to show. I said what? He said well "Joe" is going to win but I couldn't live with myself if I happened to be wrong and you lose $1,000. I was fairly amused by this and backed down even further betting $20 to win $20 to show. Well I won a little money, we had a great laugh and I walked away still confused by the whole ordeal.One thing I do remember. For some technical reason my friend was required to sell the horse by entering him in this particular race. Maybe that was true for all the horses in that particular race. Perhaps someone could enlighten us a little more on this business of "claiming races". I'd bet a picture of a banana against a picture of a fiat $ that there is some sort of position somewhere in the futures game which would be analogous to that of an owner entering his horse in a claiming race at the tracks.Help, HBM ET (08/28/00; 16:03:06MT - usagold.com msg#: 35664) Sennholz http://216.46.231.211/guest.htm From the article:"The economic maladjustments due to many years of monetary manipulations by the Federal Reserve System are the prime source and mover of the inevitable readjustment. Once the market structure no longer reflects the unhampered choices of all participants, the readjustment is unavoidable. In the end, the laws of the market always prevail over the edicts of political controllers and regulators. They even reign over the wishes of a few central bankers. Surely, government officials and central bankers have the power to lessen or aggravate the stresses of readjustment as they have the power to interfere with the economic lives of their nationals. They may reduce their burdens of government and allow the readjustment to proceed quickly and efficiently. Unfortunately, they tend to make matters worse and prolong the readjustment with ever more political intervention such as monetary expansion and deficit spending. "The Japanese government managed to turn a readjustment that began in 1990 into a decade of deep depression the end of which has not yet come in sight. This example and many others make us fearful that the U.S. Government will turn the coming readjustment into a long and painful recession. Political intervention is ill-designed for soft landings." ET (08/28/00; 15:43:23MT - usagold.com msg#: 35663) Peter Hey Peter - great post! You wrote in part;"The rational for the demise of the Paper gold market is that if a situation occurs whereby the writersdon't have the cash to pay of the price appreciation of their commitments, they certainly would haveno way to acquire the obligated Gold."Yes - this would seem to explain the reason palladium was trading at $75 and is now trading at at least 10 times that amount."The rest is a "No-brainer." If the huge quantity of "Perceived" gold that has been"overhanging"themarket goes "poof", then the remaining supply will be a small fraction of what was there before andby that very fact the demand will certainly be greater."It is the scenario of Gold being sought after as a possession in quantities far beyond the amount thatis above ground that would cut its price loose from the cost of production. Then a non- commodityparadigm would be in place and there would be no theoretical limit!"Yes - gold is interesting in that it is popularly traded for its industrial use but when the currency markets become volatile it trades as money. I believe some here have been trying to point out that oil occasionally trades in a similar fashion. Did you see the 'price' of oil and its derivatives today in the derivatives market. It's getting interesting! Hill Billy Mitchell (08/28/00; 15:40:28MT - usagold.com msg#: 35662) Official release http://www.bog.frb.fed.us/releases/H15/update/ Official: Federal Reserve Statistical ReleaseRelease Date: August 28, 2000Rates for Monday thru Friday, August 21, 22, 23, 24, 25,Federal funds 6.48, 6.42, 6.50, 6.56, 6.51Treasury constant maturities:3-month 6.30, 6.28, 6.29, 6.29, 6.3110-year 5.79, 5.78, 5.73, 5.73, 5.7320-year 6.02, 6.01, 5.97, 5.96, 5.9630-year 5.71, 5.71, 5.68, 5.67, 5.67Spread - FF vs long bond:(0.77%), (0.71%), (0.82%), (0.89%), (0.84%)Spread - 10 yr vs 30 yr:(0.08%), (0.07%), (0.05%), (0.06%), (0.06%) ET (08/28/00; 15:27:05MT - usagold.com msg#: 35661) Horses, grains, gold and Kansas Actually, when you visit the race track you may ride away with the horse if the horse wins the 'claiming' race. Generally a price is set before the race to purchase the horse if it wins. I have no idea why this is done.The grain markets are a good example of the futures markets getting way out of whack with reality. Recently the cash price for corn, wheat and beans were selling way below the current month's futures price. The cash price is known as the basis. The palladium situation is similar in that the basis is probably trading much higher than the futures price. We see similar circumstances regularly in the livestock markets here in the Midwest.There is no reason to believe that gold is any different than any other commodity in this regard. The primary reason for this kind of divergence is the fact that the market is so thinly traded. Several 'big traders' can come in and dominate the trading leaving the quoted daily price merely an approximation of what one might have to pay to purchase a large quantity. The thinner the trading the greater the room for error. Try trading orange juice if you want to see this in action.Let me be the first to volunteer for duty in FOA's experiment here in Kansas. I'm sure I can round up another 9999 participants. Do we have to put up our own money or will this be provided as a low interest loan similar to my broker? <g> Hill Billy Mitchell (08/28/00; 15:22:57MT - usagold.com msg#: 35660) Another note about gambling and PM's Borrowing money to buy PM's is a from of betting or at least presuming upon the future. The presumption is that the debt can be paid off no matter what happens in the future. There are those who have asked on occassion about the wisdom of borrowing in order to purchase the physical. I would say that it is a form of gambling. If you have no moral problem with defaulting should events render you unable to pay the debt, then maybe it would not be gambling in your case. Otherwise it is a gamble. Now don't try to argue with about this. I know more about debt than most of you. I have been in debt and broke three times. I have never defaulted except in that it took me longer than the agreed upon contracts to pay all. I paid huge interest payments voluntarily for the extra time. I liquidated all debt for the third time in 1995 and can assure you that the third time was the most painful experience of my life, for I liquidated the debt with after tax dollars. It took seven years. Yes I am a slow learner.Freeeeeeeedom!!!HBM Hill Billy Mitchell (08/28/00; 15:08:11MT - usagold.com msg#: 35659) @ Lady Leigh If you read my last post you must be shaking your head and asking, "A guy who qutoes A.W., what's the deal?"I confess. I am a reformed gambler. Thank God, I was delivered from gambling before I got interested in PM's. There is not a gambler alive who does not think that he can eventually beat the system. That goes for the gamblers on this forum.HBM Hill Billy Mitchell (08/28/00; 14:58:12MT - usagold.com msg#: 35658) Futures and price setting @ Canuck (8/28/2000; 9:43:45MT - usagold.com msg#: 35642):"Does the horse race gambler ride away with horses? "And @ Peter Asher (08/28/00; 14:19:11MT - usagold.com msg#: 35656)"...One does NOT need to take delivery! That's the point"...That is why the Paper Supply can be pumped up to control the market. The contracts can be nulled for cash."HBM observation:In sports gambling as I understand it the bookies at least at the top of up the food chain are in it only for the juice. They do not concern themselves with who is going to win or lose. Their job is to balance out the bets for a commission (the juice). If they fail to do that and are unable to pay the winner or collect from the loser the betting game moves to another arena and they are out of a job. People think the bookie is making the easy money. Try breaking a few legs on occassion just to keep your job. I would not want to be the bookie; I would not want to be the one placing the bets on either end of the game; I would, however be interested in owning a horse or two.I know that this very simplistic, yet I see a great resemblance in the broker and the bookie; the one placing the bet and the one holding the futures contract; the owner of the horses and the holder of the physical metal.No matter who wins the bet I still have my horses.Ari is always right when he says, "Get you some"HBMPS: - In a horse race when some big, big money goes down on a particular horse, the odds of any subsequent bets change drastically. If one has enough money he can squeeze his potential opponent or bluff him out of placing any further bets. Especially if his opponent is using OPM. Also I would think there are those who are playing the middles when the swings in the odds become violent.The analogies in this area are never ending. wolavka (08/28/00; 14:44:07MT - usagold.com msg#: 35657) The Thing vs. GOLD Futures/ physical." a THING FOR THE THING CANNOT BE "THE THING".Got a nice picture of a banana. If you think it's the thing, take a bite.Inside day, breakout @ 280 in dec Peter Asher (08/28/00; 14:19:11MT - usagold.com msg#: 35656) goldhunter (08/28/00; 12:10:28MT - usagold.com msg#: 35648) One does NOT need to take delivery! That's the point.That is why the Paper Supply can be pumped up to control the market. The contracts can be nulled for cash.It is when the contact writers don't have the cash that the contract holder is left with the only alterative being a delivery owed to him. If that default environment comes into play then the holders of Gold receipts will have no Gold owned by a contract writer to demand. TownCrier (08/28/00; 14:16:48MT - usagold.com msg#: 35655) Message for Sir Trail Guide / FOA Jeff and I have worn out a few carrier pigeons, but are well on the way to freeing up some additional capacity on the Gold Trail page. It shouldn't take but a short while from here...I'll post the "all clear" when it's ready. Hill Billy Mitchell (08/28/00; 14:13:09MT - usagold.com msg#: 35654) @ Canuck (8/28/2000; 9:43:45MT - usagold.com msg#: 35642) Sir:You say:"…Question: Is it not obvious to the contract players that the quantity of 'bets' far outnumber the quantity of gold?Are they betting on the price of gold and as compensation for winning the bet wanting gold or do they want money?Do the corn 'winners' walk away with corn? Does the horse race gambler ride away with horses? "Excerpt of the excerpt:..."Does the horse race gambler ride away with horses?"Sir, do you claim originality for the gambler, horse analogy.Those nine words do pry open the eyelids. In less than 10 words you have said more about the present futures market than has been said by all others combined.Yours,HBMAlso Peter:Re:your post # 35646Did not intend to minumize your contribution on this subject or anyone elses for that matter. Your post brought much light and sound reasoning to the issue.HBM 714 (08/28/00; 13:59:33MT - usagold.com msg#: 35653) ...a wee bit more Gold is one of the best hedges against a decline in the US$ and the primary reason I own it. POG will spike up on a dollar crisis. IMHO.bbl 714 (08/28/00; 13:52:37MT - usagold.com msg#: 35652) In all fairness, goldfan... ...I have to say that I peruse ebay from time to time and have NEVER seen gold sell at below spot in their auctions, unlike the current palladium offers. But then I've never shopped for palladium and have to admit that it is a very unusual investment (personnally, I wouldn't buy it). And palladium is much more volatile than gold, given the monopolistic supply situation.I am a bit skeptical of the popular notion in this forum that gold will sell at an official "paper" price and a much higher street price. I think the differences in prices we'll see will mimic history and more likely to vary across borders (particularly between East and West), and methinks it will be very difficult to divorce the "paper" price of gold from physical in the US, and probably Europe. Having said that, gold right now is VERY inexpensive (and someday headed higher) and bullion is the most secure form. Gold is a good deal, even here in the West....a friend of gold is a friend of mine. p.s.--Trail Guide never did answer my question as to when CB sales might draw to an end. goldfan (08/28/00; 13:06:44MT - usagold.com msg#: 35651) Concerning coins and bullion, and paper promises Hello all and 714, I noticed your post about the Pd coin for sale on ebay, saying it was offered below spot, no bids yet, got me thinking. To me, there's a difference between buying something that's a luxury, and something that's a necessity. Food is a necessity, and beside it, investment in anything is a luxury, nice to have, but food comes first. Only after I have life's basics, does investment become a necessity. Coin collecting for a hobby is a luxury. As an investment, I ask myself, am I willing to learn enough about this, to understand the market for collectible coins? The single Pd coin on auction at ebay, which it would be difficult to verify is even genuine Pd, falls in the luxury class as I see it. Hence its price is disconnected from that market where large volumes of genuine Pd are seen as a necessity by some auto manufacturers and others. I apply this reasoning to Au and Ag too, although, it would seem easier to aggregate a lot of verifiably pure Au and Ag bullion coins to sell to someone who needed the large volume. The paper derivatives game in Au and Ag I see as a gambling casino. Most of the players are doing this out of the luxury of playing with gambling money, not out of the necessity to eat or otherwise consume what they buy. Some of the players are manipulating the game for other ends, US $ currency stabilization, discouraging people from investing in Au and Ag, discouraging any idea of Au and Ag as "money".The POG is a fictitious number, an average of a lot of paper trades. I can't buy my collectible gold coin at the POG. Neither can I if I want 100 tonnes for my bank vault. Maybe I can still get delivery of 200 thousand ounces that I contracted for on COMEX. But that market is in peril, you can't get Pd this way any more, what's so different about gold?Any call I buy today, is a bet, a bet that the exchange will still be there, that my contract will be honored, that I will have the cash to pay. So I can never buy at the POG today. I can only bet on the future POG. And if before my strike date, the market price for gold bullion has exploded upward, the evidence of all such past events shows that my contract certainly will not be honored. Even if the counterparty has the goods, he won't deliver to me. He will sell to someone else at a much higher price and dare me to sue him. "Take a number", he'll say, from his home in the Cayman Islands. Oh, that's right, the COMEX is supposed to guarantee his performance. Funny, they're not answering the phones either. A few weeks later, they say, sorry, you'll have to settle in "cash". These are just my musings, thanks for the stimulation.Goldfan RS (08/28/00; 12:54:40MT - usagold.com msg#: 35650) nummus aureus (08/28/00; 12:24:05MT - msg#: 35649) ... what he said! Sir mr. aureus, you have stated the matter most eloquently. nummus aureus (08/28/00; 12:24:05MT - usagold.com msg#: 35649) More 20 words... Gold remains as always. It's exchange for fiat will increase as fear of the future increases. goldhunter (08/28/00; 12:10:28MT - usagold.com msg#: 35648) Question for Mr. Asher... Sir Peter, If you are trading futures contracts, and comfortable (using derivatives) why do you need to take delivery?If one believes in the integrity of the marketplace ( I realize some do and some do not)what reason is there to take delivery?This issue is one that causes some certain amounts of discomfort or grief...Why does one have to take delivery? SHIFTY (8/28/2000; 11:37:58MT - usagold.com msg#: 35647) test Is it a slow day or is the site down?Slow day is my guess!$hifty Peter Asher (8/28/2000; 11:34:22MT - usagold.com msg#: 35646) Fractionalization and a Matter of Degree. Whenever I deal in "Matter of Degree" analogies, I think of Robert Heinlien's statement "The only difference between stealing an hour of a man's time or killing him outright, is a matter of degree."Kind of focuses the mind on the concept. --- So, regarding the concept of Paper Gold:When you get a paper or electronic confirmation from CPM that you have purchased your gold, you now have "Paper Gold." You have a "promise to deliver" at a specified price. You know the company is trustworthy and "Good for it." barring a nuclear terrorist or asteroid strike on Denver, your gold will soon arrive in the mail. If you want to buy Physical Gold at the moment you part with your money you can always go to Denver with cash or certified check and take instant delivery.Now say you are expecting a Large bonus December 1st and plan to buy gold with it. You believe market forces will create a substantially higher price by that time and would like to "lock in" a price now. Gold for December delivery is quoted at $278 while Spot is at the same moment $273. You have the funds to put up 10% of your purchase price now and the $5.00 "Premium" is worth it to you because you anticipate gold to be selling above $300 by the time you have the rest of your money.Now suppose I post that I will match the terms of a December Gold contract but at a price of $277, better deal right? But not really because how do you know I can consummate that contract?So we have various degrees of arrangements to buy gold. Most people don't want to fly to Denver or elsewhere even though that is the safest and surest way to guarantee possession. And almost no-one is going to go to the other end of the spectrum and cut a paper "deal" with a private individual who is not set up in a financially reliable metals brokerage business.So, that is where the "Exchanges" come into play. They are considered a reliable source from which to purchase Metal either at the moment at Spot or for future delivery for a price lock at a premium. However once this "reliable contract' format was created there was in existence an Item for TRADE.What has evolved is that the ability to trade these contacts has resulted in them being created purely as a paper promise to be gotten out of at a profit or loss before expiration date. The simplicity of this is that when the writer of the contract buys it back, it no longer exists. An amount of paper gold in that moment just vanishes. If the Price of gold is lower, at the time of expiration, than the commitment price written, then the contact expires worthless and that Paper gold vanishes also.Nevertheless, while these contacts exist, they represent an alleged quantity of physical metal "promised" to the contract holder subject to him having the additional 90% of the cash to take delivery. As most Paper Gold contract are considered to be COLLECTABLE, this quantity of paper gold controls the Price. It is the Collectability that is a matter of degree.So what we therefore have is fractionalization of Gold very similar to the fractionalization of money by banks. The quantity in circulation is a "virtual" amount based on peoples future commitments and the good faith of the people committed to. What keeps the game afoot is that the contract writers have the cash to buy out the contracts and dissolve the Paper gold they have created. The rational for the demise of the Paper gold market is that if a situation occurs whereby the writers don't have the cash to pay of the price appreciation of their commitments, they certainly would have no way to acquire the obligated Gold.The rest is a "No-brainer." If the huge quantity of "Perceived" gold that has been"overhanging"the market goes "poof", then the remaining supply will be a small fraction of what was there before and by that very fact the demand will certainly be greater.It is the scenario of Gold being sought after as a possession in quantities far beyond the amount that is above ground that would cut its price loose from the cost of production. Then a non- commodity paradigm would be in place and there would be no theoretical limit! Buena Fe (8/28/2000; 9:59:22MT - usagold.com msg#: 35645) POG in 20 words (or a bit more) Gold's purchasing power will increase because: "The two most powerful/competing Central Banking groups (Euro vs. $) are at cross-purposes with one another (war), the group less greedy will win and gold will be free! (because they were willing to give up some money-creation power and tolerate free gold!) Knallgold (8/28/2000; 9:55:25MT - usagold.com msg#: 35644) Swiss Gold,@TG Thank you Sir for your answer.As a swiss, I was curious where my Gold is going... Canuck (8/28/2000; 9:49:48MT - usagold.com msg#: 35643) I screwed that up, damn it!! Gold will rise because, " Fiat currencies (presently strong)have an inverse relationship with gold. Numerous issues are engaged to reverse this cycle, particularly for the USD." Canuck (8/28/2000; 9:43:45MT - usagold.com msg#: 35642) The Price of Gold; 20 words. Before I recite my 20 words, may I ask a couple more questions?From Peter A. (& FOA)"The price of Gold is determined by the futures market because people believe the "Market Makers" are "Good for it." When that belief is shattered, Gold will rise dramatically."Question: Is it not obvious to the contract players that the quantity of 'bets' far outnumber the quantity of gold?Are they betting on the price of gold and as compensation for winning the bet wanting gold or do they want money?Do the corn 'winners' walk away with corn? Does the horse race gambler ride away with horses? What is the ratio ofgold bet versus physical; I am fairly sure that in the silver 'game' 98% is paper. Is this paper/physical (gold) thing not analogous to fiat currency?ALL fiat arguments revolve around the platform of backing; what (if anything) backs 'X' currency. So what is fiat gold backed with, nothing; silver, nothing. So why is there a 'rattling' in palladium; because there is an identifiablesupply/demand problem which has manifested the issues in the palladium futures markets. Why is there no futures issue in gold/silver; because there is no identifiable supply/demand (physical) issue.Please explain to me where there is too much demand and too little supply in gold, other than a zillion freaks betting on the price of gold? If there is truth to the old proverb that there must be offsetting shorts versus longs, then I don't understand the notion that gold will rise because too many contracts are betting gold to go down. I am sorry if I am too thick-skulled to get this; I apologize in advance.My 20 (or so)words;Gold will rise because, "Fiat currencies (presently strong) have a reserve relationship with gold. Numerous issues are engaged to reverse this cycle, particularly for the USD." 714 (8/28/2000; 9:39:53MT - usagold.com msg#: 35641) "Off-market" palladium prices... ...on a popular web auction site are far below the current capped price on NYMEX. In fact, one 1 ounce bullion coin which has a starting minimum bid of $725 US ($15 below spot) has yet to even be bid on. Three other 1 ounce coins/ingots range in price from $305-553 with three to four days to go yet on those auctions. Maybe I premature in posting this(we have a few days to go), but will keep an eye on it.Mr. Kosares, do you sell palladium coins? Thank you. White Hills (8/28/2000; 9:28:56MT - usagold.com msg#: 35640) Current Account Deficit CNBC this morning from Jackson Hole report of increase in Current Account Deficit suggests possible 40% drop in dollar. Speculation on gradual of abrupt. No details I hope I got it right, White Hills USAGOLD (8/28/2000; 9:20:25MT - usagold.com msg#: 35639) A Bottom?? http://www.usagold.com/Order_Form.html DAILY COMMENTARY (8/28/00) www.USAGOLD.com . . . Gold was sideways in the early going with Japanese buying interest the chief feature thus far. The latest Commitment of Traders report shows more bullish potential with short covering from large speculators going from 26,221 net short contracts versus 25,023 in the previous report. Adding to this morning's positive tone,Tim Evans at Pegasus Econometrics told Down Jones News Service that there is a bullish divergence on the Relative Strength Index at $275.30 a troy ounce, this week's low for the December contract, "warning that the market may have just bottomed." The Commerce Department reports consumer spending up a robust .6% in July casting some doubt on Wall Street hopes that the economy might be slowing down and with it inflation concerns. It appears that much of the spending is being fueled by consumer credit. Grant's Interest Rate Observer reports in its July letter a 21.6% gain in finance company credit over the last three months, and a 13% gain in commercial credit. This week we have leading indicators on Wednesday and the unemployment numbers on Friday. If you are looking for a source of news, commentary and analysis on gold and all that affects it, we invite you try a free trial subscription to our widely read monthly newsletter, News & Views: Forecasts, Commentary & Analysis on the Economy and Precious Metals. We offer solid commentary in a rapid fire, no-nonsense, bullet format designed for busy people who want gold related news and opinion without the unnecessary fluff. Please call Marie at 1-800-869-5115 or click here to request News & Views as well as our helpful introductory information packet for gold investors. We invite you to stay tuned to the gold market through our DISCUSSION FORUM featuring round the clock gold news & commentary from the public. PLEASE REMEMBER: It is your purchase of gold from Centennial Precious Metals that nourishes these pages. Call us at 1-800-869-5115 for prices and to have your questions answered.If you would like an information packet on gold ownership which includes our newsletter and Gold Almanac 2000, please go to the link above. Trail Guide (8/28/2000; 6:32:03MT - usagold.com msg#: 35638) Later Post Hello Peter,Thank you for using this portion of my logic to get your point across. In my travels I have found it surprising how many investors immediately grasp the enormity and impact of that statement. Yet, equally surprising it intrigues me just how many sophisticated, educated Americans see only a very small piece of the paper contradiction that same statement entails.Later today, I'm going to once again use Kansas as a testing ground like in an earlier post (smile). Asking 10,000 people to line up and do a futures trade for us. In this exercise we should be able to see how the futures understate price of gold by using our soft opinion instead of a hard trade. Somewhere in that group, even Goldhunter will participate!Also thanks to SteveH, HBM and others for "digging" deep in their mind. The truth is buried deep, here in America. With a good effort we will unearth it! thanks Trail Guide================Peter Asher (08/27/00; 23:31:54MT - usagold.com msg#: 35630) Canucks Challenge was already metToday's Forum opened up with my post of an EXACTLY twenty word excerpt fromFOA/TG's earlier msg. Again: Trail Guide (8/26/2000; 22:25:05MT - usagold.com msg#: 35589)>>> It represents a Western Style Opinion of where price should be IF they had the assets to complete the trade.<<< wolavka (8/28/2000; 6:31:47MT - usagold.com msg#: 35637) Time to move up Party time. Black Blade (8/28/2000; 6:20:02MT - usagold.com msg#: 35636) "Morning Wakeup Call!" The War Rages On! But the Fronts are Currently Static. Sources: BridgeNews, and Oil and Gas Journal. THE EASTERN FRONT:Japan TOCOM Aug gold expires lower on stronger yen, platinum up Tokyo--Aug. 28--Tokyo Commodity Exchange (TOCOM) Aug gold contract expired Monday at 940 yen per gram, down 7 yen from Friday, with the delivery against the contract totaling 1,103 lots, or 1,103 kilograms, according to the exchange. The TOCOM Aug platinum contract expired at 2,000 yen Monday, up 40 yen from Friday, it said. (Story .10803)Black Blade: Yawn!Asia Precious Metals Review: Japanese interest moves gold Tokyo--Aug. 28--Spot gold was steady in Asia Monday with Japanese interest having dominated trading, dealers said. It is expected to move within a narrow band of $272-275 later Monday. Spot palladium fell due to selling from the United States during the Asian trading, they said. (Story .2200)Black Blade: Kill that Palladium market! Palladium is in danger of being delisted anyway. Pd producers can hold the market hostage for physical as the exchanges have given the "green-light" as they tipped their hand. They don't have any, and the major producers in Russia don't either. Divergence of paper vs. physical?NG Crisis coming, no doubt about it!:Natural gas headed for crisis, analyst saysSpot natural gas prices remain above $4/MMbtu. Future contracts through March of 2001 for natural gas are also well above $4/MMBtu. And the 12-month strip is currently trading at $4.22 or $1.36 higher than last year at this time. Natural gas prices will continue to remain high driven by increased demand for storage, the need for summer cooling, fears of supply interruptions during the hurricane season, and the recent explosion on a pipeline owned by El Paso Natural Gas Co., a unit of El Paso Energy Corp., analysts say. "It is clear to us that the US is headed for a natural gas crisis this winter," says Marshall Adkins, analyst with Raymond James & Associates, Houston. "The winter is setting up for a more dramatic shortage scenario with severe upward price spikes." Even though the American Gas Association reported 55 bcf were injected into storage injection for the week ended Aug. 18, slightly above the comparable week in 1999, analysts were disappointed with the numbers.Most experts expected a higher number to be reported, according to a report issued by SalomonSmithBarney. But injections over the last 16 weeks have averaged about 1% lower than in 1999. Experts note the lower injection figures have come in spite of cooler temperatures in most of the country, except the Southwest, and a greater availability of nuclear generation. Under the circumstances, experts says, more gas should be going into storage. Storage levels to date are roughly 15% below last year and will require injections of about 90 bcf/ week for the next 10 weeks to get to the same level as last year at the end of the summer cooling season, according to SalomonSmithBarney. PaineWebber analysts have similar estimates. Refill slow "For the industry to reach the 3,000 bcf targeted storage level by Nov. 1, 2000, the weekly injection level would have to about 86 bcf. This compares with last year's refill rate of 51 bcf/week and the prior 5-year average of 59 bcf," states a Paine Webber report issued Thursday. Such projections combined with the frantic pace at which natural gas must now be injected into storage for winter to have on hand during cold snaps is pressuring the price upwards. The 5-year average for storage on Nov. 1 is about 2,911 bcf. The current storage figures are shaping up considerably below that. The hurricane season remains in full swing through November. One forecast calls for 11 tropical storms and three major hurricanes in the Atlantic. There is a 34% probability that some of these hurricanes will enter the Gulf of Mexico and disrupt supply, according to SalomonSmithBarney. Last weekend's natural gas pipeline rupture in New Mexico took gas out of the system and has only added to the pressure on prices. Adkins suggests that if the winter begins with only 2,650 bcf in storage, then it is highly likely supply dislocations could occur in some regions of the country. Moreover, at the end of a normal winter, gas inventories in storage will be so low that prices are likely to explode and marginal gas consumers willb be shut down, he says. Analysts worry that it will take the gas exploration and production industry some time to correct this tight supply situation. A record number of rigs drilling for gas notwithstanding, SalomonSmithBarney analysts say production will be up only about .2 bcf/day for the rest of the refill season.Black Blade: Making progress, but still too late to maximize NG storage before winter. Also, notice that the analysts are late to the party again. These budding rocket-scientists have been saying essentially all is well, and now are in a panic about the coming NG crisis. Hmmmmm……..Meanwhile, Oil opens at $32.03/bbl this morning. S&P Futures down -1.90, Fair Value down -1.27, a slight negative. Au is up +$.050 at $274.10, Ag is up 2 cents at $4,88, Pt is up 2 bucks at $580.00, and the Pd continues to die a slow death in a rigged market down -$9.00 at $710.00, still unable to attract new investors. Time to accumulate physical metals and profitable unhedged and debt-free mining shares. The Paper Chase looks to be as good as dead. SteveH (8/28/2000; 5:32:31MT - usagold.com msg#: 35635) Another From my perspective, Another (and FOA) have not been disproven. They have made some predictions that did not pan out: price of gold will not fall below $280 and the timing of the rise in the price of gold. I believe it is important to understand that these two persons have a point of view that is different than most of us -- they would (at least Another) appear to be insiders of the other camp. That is, Another speaks to what he knows the Euro/BIS camp intends to do in a Gold/Euro/Dollar/Oil world. As in any intention or plan, it can (and is) met with moves or plays by the opposition. It is this interplay of the Euro/BIS in juxtaposition to the Dollar/Fed/Treasury camp that we are witnessing now. This truly is like the four blind (sight-impaired) men (women) who touch the elephant all with different conclusions as to what they have in their hands.For example, we have Bill Murphy who believes the ESF and Treasury are involved in a manipulation of the dollar and gold markets through direct intervention via several well-known and not necessary to mention gold-bullion banks. We have Bill Buckler of www.the-privateer.com fame in Australia who see gold rising in all other (most anyway) currencies, except the dollar. He therefore sees the dollar as being held strong (meaning someone is doing the strengthening). We have various little events that when looked at with eyes wide slit -- such as the Gold Auctions, smaller country dishoarding of gold (Kuwait and others), negative press articles on gold, CPI figures that are untenably low when eating out costs just so much more -- we can see much froth on the surface, indicating a large school of fish just below the surface.So, Another and FOA have pointed our hands in the right direction. They, knowing what they do, have shown us where we need to feel. They have told us what their camp's intention is (to replace the dollar with the Euro). Does that mean what they say will come to pass in the manner and in the timeframe that they said it will? Of course not. But, what it does do is to focus our attention onto areas of the elephant that many of us would never have felt, let alone understood, without them or the Internet. Hey! What do you think this thing is that I am touching here? Are you sure that is not a tree trunk?(The story of blindmen touching an elephant is about four men who decipher it to be four different things based on their own world-views and only be able to feel (not see) what it is their are touching. Oddly, none of them conclude it is the same thing, yet they feel different parts of the same beast) Zenidea (8/28/2000; 5:28:09MT - usagold.com msg#: 35634) Thunder-Eggs are go ! I suppose it is about time I sat here humbly and exposed myself ( oh I hate the word I) I confess I am a braggerand I have had more failings than wins . I overwork myself and drink to excess at times. I am a scavenger always looking into nature for the simple answers. I Love the Periodic Table and Chemistry is my love and I have and am stuggling with it all the time. I fear death and I love Gold /platinum etc and the concept of Eternal life etc . I have made rudimentary sapphires and rubies and understand some things about crystalization. I am uneducated , but I am persistent. I earn 70,000.00 a year USA but I am unhappy because I am not doing that which I love. Yeah I confess I have only made micro gold crystals , I cheat, I mix it with silver ( an impurity ) whoms angstrongs equivalent is somewhat suitable to kick it off, and I admit I cannot make the fully fledged crystals nature makes and I am frustrated that no Chemical Engineer wont help with the answers and why ?. They answer my questions like I am some fool and I am always looking to find the right questions. I have Gold fever too but because of what I love . I only rave on to you all the way I do because I see you seem more interested in making money than that of understanding life and purpose.My God dont some of you realise that you only have one life to live!. and that more than money, the chemistry of understanding is more important than that . I was a Philosophy student via the london school of Philosophy (The 4th wave teaching ). Will you listen you people ?. I give you the permission to be who you are of course. ...In my opinion Black blade is worth a grain of salt or two.he folows the fundamentals and is exceedingly right minded .Think for yourselves people . Topaz (08/28/00; 02:22:39MT - usagold.com msg#: 35633) Canuck's "Why?" Why Gold will "rise"- (20 wd's or less)If every newly created Dollar dilutes the Dollar pool proportionally, reality demands ALL finite resources will, in time, be appreciated. Hill Billy Mitchell (08/28/00; 00:06:25MT - usagold.com msg#: 35632) @ Journeyman (8/23/2000; 8:28:02MT - usagold.com msg#: 35392) RepostYou said:"…Hill Billy, sorry I haven't had time to respond to you. I don't have the time and perhaps lack the expertise to help you with the number inversion project. I would have to educate myself on one more topic, and I'm having trouble keeping up on home things as it is. I was hoping that you would do all the work on that inversion and I could be a passive little information consumer! <blush>"My response:You are not getting off the hook quite that easily!You misunderstand what I desire from you. Let me explain:I have gone to a great expenditure in time and effort to get interest rate history on an enormous spreadsheet. My purpose is to get some honest data, which can be studied and manipulated so that we can draw our own conclusions without the biased opinions fired at random in the controlled media. The reason I am so interested in your participation is simply this. I find you to be the most open-minded, clear thinking and honest person on this forum. Now that doesn't mean that I do not find quite a few others who are open-minded, clear thinking and honest on our forum. I single you out because I choose to.Now here is what I am interested in from you: - I would like to send all of the raw data to you by mail. Just reviewing it will be a delight, I promise you. I am a theorist and not a scientist like an ORO, whom I consider a genius. As a theorist I have a powerful thirst for information. I am a very slow reader yet I read every thing I can get may hands on in the areas of economic theory. I have a B.S. degree in accounting; however, due to my great interest in economics I have more college hours in economics than I have in accounting. I feel that I have a good grasp of general economic theory but am not the technician that others are on this forum. It takes all kinds working together to get a deeper understanding of how and why things happen. If we know how and why things happen we have a better hope of preparing for the consequences of certain actions if we know what these actions are and we understand who is executing and what their agenda is.There is no doubt in my mind that, when I arm you with the same information that I have and I begin to post my thoughts as to what appears to be transpiring under our noses, you will be able to spot the validity and or fallacy of such offerings. I am not interested in your expertise for ORO and a few others will provide the expertise. I am interested in your uncanny ability to see the truth when it passes in front of your eyes. I ask that you pay especial attention to this subject of Treasury Yields, when it appears on the forum and ask the probing questions which must be asked and offer your thoughts which I am certain will form in your mind as time goes by.My plan is very simple. I will try to provide information and theoretical comments in this area on an ongoing basis in order to stimulate an in depth investigation into the matter. I am convinced that this, though a small part of the whole puzzle, is the sort of thing that TPTB do not want us to understand. The more ignorant we are in these mystical areas of money matters, the better they like it.I would like to have your permission to send the information at this time. I understand that you are busy. Just when you get a little time to review it you can contact me and we can pursue the thing only as far as you might desire or be able to find the time.Sir RossL has posted his email address on the forum therefore I will use it to establish contact with you outside of this forum. His email address is rossl@iwon.comWould please email him and he will give you my email address. Then you can email your address to me and I can get your mailing address and or fax # so that I can get this information to you. I will be transmitting the spreadsheet files to Ross. He is going to see if he can do some graphs and charts which will help from time to time. I am not a "journeyman" with computer spreadsheets and can only do a limited amount of data manipulation. I have seen his SDR site and if he desires to do something meaningful with the data I am sure that he is capable to do so. He has offered to take a look-see and I have decided to trust him. My gut is that he is full of integrity. I have learned to trust my gut and seldom get burned by doing so.Anyway this has been ridiculously long so I will bring it to a close.Very respectfully,HBMPS: We have plenty of time to get around to the subsidy issue. No hurry!PSS: Just to make sure that you read this I will repost this after midnight Mountain Time Hill Billy Mitchell (08/28/00; 00:02:36MT - usagold.com msg#: 35631) @ tedw (8/27/2000; 7:05:38MT - usagold.com msg#: 35600) Sir Tedw:Re: Gold as a competing investmentYou said:When one looks objectively at Gold as a competing investment in the market place, you have to conclude that it is not the most attractive investment at the present time. I believe that any prudent man should have a percentage of his investments in Gold, for his own protection and the protection of his family. However, if you bought Gold and put it in your vault last year at this time, you didn't earn any interest. It's true that the price is currently up about 9% over the year, but there are many investments which pay much more. For example, in my area if you had bought real estate you would have made 15%-25% on the real estate, and had income from it to boot. Or 2nd trust deeds on real estate could have netted you $12%-15% with little risk. And of course, many investors are content to keep their investments in the DOW, content with the belief that in the long term their investments will do much better than parked in Gold.Or even money in CD's which provide a certain rate of return which is guaranteed while Gold itself comes with no guarantee.In order for Gold to attract the investment dollar there has to be change___________________________________________________________________________________________Please find a repost from Kitco site from "Another":Date: Sun Nov 23 1997 09:18ANOTHER (THOUGHTS!) ID#60253:"Many wait for the next great bull market in gold to begin before they buy. Why buy now and lose interest or stock market gains? They will miss the greatest investment ever to come in ones lifetime! The powers of this world have already begun this motion. People of simple thought have but to buy physical gold and make low as the financial wars begin! You see, gold was cornered this year.(1997) It is done. No Central Bank will sell it's 50, 100, 200 million oz's gold when 600 million is needed! I ask you, how can currency price gold? Indeed, no price will work! You think any form of "paper gold" will stand this fire? Can we do battle with lions? When oil will not take currency without gold the have-nots will not sit still!""When a thousand hungry lions fight over one scrap of food, small dogs should hide with whats in their belly. A world waits for something to happen that is done."_________________________________________________________________________________________Sir Tedw:HBM comments:Either you are right or "Another" is right, or you are both wrong. You cannot both be right, as your conclusions are mutually exclusive. I do not claim that you are wrong; however for my part I tend to agree with "Another" on this one.HBMIt does seem that maybe Another was wrong in his statement,"No Central Bank will sell it's 50, 100, 200 million oz's gold when 600 million is needed!"HBM comment:I think maybe that the Central Bank of England subsequently did exactly this. ViewYesterday's Discussion.
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