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ARCHIVED DISCUSSION FROM 11/29/1999
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turbohawg (11/29/99; 22:58:04MDT - Msg ID:19932)
Well, since the can was reopened ...
Hopefully, the definition problem has been successfully sidestepped here ... an honest effort was made.

Some think that the US has set itself up for it's own version of the Asian Contagion. What if that is true and it actually comes to pass ? What does that really mean ? Would it be like any previous time of economic hardship in this country or would it set a precedent ?

How does preparing one's wealth for a sudden monetary contraction compare to preparing it for accelerating expansion ? If one prepared for a monetary contraction accompanied by rising prices, as describes the Asian Contagion, how would those preparations fare if the outcome was substantially different ? Likewise, if one was not prepared for a monetary contraction accompanied by rising prices and it did happen, what would be the consequences, especially if one's preparations had been configured for a repeat performance of a previous crisis ?

Below are many more questions, all asked only in an attempt to stimulate further thought on this subject.

What would it be like if capital suddenly started fleeing this country, if foreigners dumped their Treasury holdings virtually en masse, sparking a sudden exit by the herd from the stock market, and the dollar nosedived, and many banks were at once faced with insolvency, and the financial grid seized up ?

What would it be like if the spending medium of individuals in the form of cash and credit became heavily restricted, as in the '30's �flation, but prices skyrocketed, as in the '70's �flation, all compressed into a matter of weeks and months rather than over a decade ? How important would prices be if what one has to purchase with is unavailable, either because it's gone or because it's inaccessible for a period of time ?

What would be the ripple effect of a large scale selloff in the stock market, aside from the obvious real effect of the perceived savings of many individuals being dramatically reduced ?

What about the bond market ? In addition to the damage to a person's bond holdings, how would soaring interest rates effect, say, the housing market ?

In such an environment, could heavily mortgaged homeowners expect easy credit to continue the bid up in home prices, or even roughly maintain them, similar to the '70's �flation, thereby protecting a home's long term asset value as an investment vehicle, or might credit become so restricted that the bid up would be choked off, with relative values then dropping due both to a lack of increasing demand and a growing oversupply due to defaults being dumped on the market ? Would it really matter to the person whose home was bought primarily to have a roof over his head, provided he was confident in his ability to always meet the payments, even in a slow economy where jobs might be at risk ?

And how might adjustable rate mortgages be affected vs fixed rate mortgages ?

Similar questions could be asked of those with huge credit card debt. Would it be possible to continue meeting those credit card payments even if one's job and paycheck were intact, but increasing prices were taking a larger and larger part of one's income ? And how much more would that dynamic be affected if one's credit card debt was variable rate rather than fixed rate ?

What about the solvency of corporations, many of which have borrowed heavily to finance such surefire productivity enhancers as stock buybacks ? How does one pick, now, corporations to invest in (or to work for) that could ride out an economic storm, before market dislocations reveal themselves ?

How would importers fare vs exporters ? We do still have exporters, right ?

Gold is recognized as a good longterm vehicle for the storage of wealth, but would it be the best trading medium in an environment with little money available short to intermediate term, or would any recognized physical medium of exchange carry a premium ? More bluntly, could the value of physical cash and gold rise at the same time ?

Money market funds have proven during their existence to be a safe means of storing cash, but in a systemic crunch would corporate bond defaults result in a loss to these funds, or a lock up ? Money market funds invested only in short term Treasuries would seem to be free of any default risk, but again, could, for example, withdrawal demands freeze them up for awhile ?

As far as trying to make a buck on a sudden bear market, could one be confident that the liquidity would always be there to allow the taking of profits on shorts/puts ? Might not those on the other side be faced with default ? If exchanges were closed for some time so that an attempt could be made to bailout the big players, ensuring that one's bear profits were eventually realized, might not those profits be worth much less if the dollar collapsed while one was waiting ? In other words, could you win and lose at the same time ?

Is the Federal Reserve really in control, or is it bluffing to maintain the perception ? If one thinks it has control, or even if one thinks it has enough control to engineer the proverbial soft landing, then no need to be concerned. If one has doubts, isn't a little thought toward preparations for the likely consequences in order ?

Probably no one would argue that the Fed can always be expected to respond to any evidence of monetary contraction with attempts to re-expand, no matter how irresponsible that course of action. And sooner or later they would succeed. But could an uncontrollable contraction take place, even for a few days, that would alter the balance of wealth of individuals for many many years ?

Why have even renowned economics 'experts� gotten caught off guard by sudden changes ? What was it about their analysis that was wrong ? Remember Irving "Stocks are now at what looks like a permanently high plateau" Fisher ? How about John Maynard Keynes who, according to John Rothschild in The Bear Book, lost "millions of dollars in the bear rout of 1929-1932?"

I'm not going to pretend to know the answers to all of these questions � I certainly don't. Some don't even have specific answers, as they present tradeoffs that must be tailored to individual circumstance. But they seem worth asking in current times and a reasonable guess could probably be made at more than one of them. A person could no doubt come up with many more like them.

Almost certainly, they will be construed as carrying an apocalyptic tone. Maybe their thrust will turn out to be wide of the mark. But history teaches that change does occur from time to time in some form or fashion, regardless of what we hope for. Therefore, why not choose to see questions such as these as carrying within them the seeds of opportunity ?

So, to repeat 2 questions from the beginning: If one prepared for a monetary contraction accompanied by rising prices, as describes the Asian Contagion, how would those preparations fare if the outcome was substantially different ? Likewise, if one was not prepared for a monetary contraction accompanied by rising prices and it did happen, what would be the consequences, especially if one's preparations had been configured for a repeat performance of a previous crisis ?

Preparing for monetary contraction or preparing for monetary expansion, does it matter ?
-----------------------------------------------

Gonna be very busy in the days and weeks ahead ... that's it for me for the time being (I hear the cheers).

Black Blade (11/29/99; 22:17:55MDT - Msg ID:19931)
POG up suddenly $1.90 to $292.50
Is this just another hallucination courtesy of Kitco?

Black Blade (11/29/99; 22:11:04MDT - Msg ID:19930)
Y2K's close; we're still not ready
http://www.computerworld.com/home/print.nsf/all/991129CE6A
By WIlliam Ulrich
11/29/99 Industry association and government spokesmen have proclaimed the Y2K problem dead.

People believe this because they ignore published status reports to the contrary, see no personal connection to the problem and listen to pundits while doing little research for themselves.

But when problems emerge, companies and governments will take the brunt of the criticism. Assessing the reality of the situation will allow organizations to respond to the public relations challenges ahead. Reality is different from what the media tell us.

In September, Cap Gemini America, an information technology consulting firm in New York, found that 44% of major companies wouldn't have their mission-critical systems compliant by January. A CIO magazine poll found that 81% of large companies weren't yet finished and that half the companies surveyed had no contingency plans. A National Federation of Independent Business study found that 40% of small businesses had done nothing about Y2K.

Where progress has been made, work completed to date remains in question. According to independent validation and verification (IV&V) studies by SEEC Inc. in Pittsburgh, the average mainframe or midrange system contains 510 date-related errors after remediation. A second study in February by Reasoning Inc. in Mountain View, Calif., found between 100 and 1,000 bugs in similar samplings. An unrelated study by SriSoft Corp. in Diamond Bar, Calif., in October discovered that testing catches 30% of Y2K bugs, while IV&V uncovers another 40% to 45%. This leaves 25% of the remaining bugs in a best-case scenario.

Statistics drawn from government hearings and Web sites paint a more detailed picture. Only 13.5% of small and midsize chemical and petroleum firms have completed Y2K preparations. The Food and Drug Administration said 4,053 high-risk biomedical devices remain noncompliant. More than half of all health care providers won't be ready. And 70% of schools are unprepared.

According to calculations found in a report by researcher Warren Bone at New York-based Westergaard.com Inc.'s Web site (www.wbn.com/y2ktimebomb/), only 75% of federal mission-critical systems will be finished by January, and the status of nonmission-critical systems remains unclear. Other reports found 13 states at risk for failures in federal benefit programs, 25% of U.S. counties with no Y2K plan, 63% of 911 call centers unprepared and Medicare provider payments facing delays.

Even best-case scenarios are imperfect. The Social Security Administration (SSA) began year 2000 efforts in 1989. In July, according to the Information Systems Accounting & Information Management Division, SSA found 1,565 year 2000 errors in mission-critical systems. Only 44% of these had been fixed as of October. SSA is still checking data and finalizing contingency plans.

What does this mean to consumers? In statements made in early November to CBS News, the State Department inspector general said, "80 countries are at moderate to high risk, and there will be failures at every economic level, in every region of the world." Nick Gogerty, an analyst at London-based International Monitoring, predicted in October that Y2K would lead to $1.1 trillion in damages worldwide, not including those from litigation and insurance costs. These costs, along with many inconveniences, will affect us next year.

Why is the government telling us that most industries are 100% Y2K-compliant when bug-free systems are a myth? The answer is that the government and selected industries don't want people to panic. But when things go wrong, people will demand answers.

What can organizations do when problems strike? First, consider that 80% of your customers expect no year 2000 problems at all. Second, don't believe your own industry hype about 100% compliance. Third, be polite and let them know we are all in this together -- for the long haul.

Most important, when future large-scale challenges arise, consider your industry's posture. The unrealistic Y2K performance expectations set by industry associations are unachievable. Finally, see if any of those high-priced public relations directors want to work your customer hot line in January. They may learn something about manipulating perceptions about matters they barely understand.

Black Blade: I step away from the round table for a few bites of turkey and the Au market turns ugly. (Toshin Kuro Kosai).

Peter Asher (11/29/99; 22:00:58MDT - Msg ID:19929)
STRANGER !!
>>>> For some reason, the government figures subtract capital gains from savings, yet they do not include stock market holdings in their calculations. Doesn't this also explain a paradox. We keep
decrying the billions that are being invested in stocks yet worrying that nobody is putting
anything aside. Hello! <<<<<

And HELLO back, One never knows on this thinking, feeling, screaming, arguing debating and proselytizing Forum, if silence in response to posts is agreement, confusion or scorn.

I have said this many times in many ways and Aristotle once generously honored me by saying he was printing up my statement on cards. There is no money in the market!!!! The income stream must be in peoples hands and loaned into margin accounts in order for someone to have "Put aside" money in the market by being able to redeem their shares for money when they sell.

That is why stock certificates ARE NOT SAVINGS, quantitatively. They represent an unknown quantity of money to be earned or created in the future. (Sorry about the shouting'sometimes, I too get worked up.)

Black Blade (11/29/99; 21:55:28MDT - Msg ID:19928)
Horseless carriages in Mass. and now jury duty in 1900, hmmm....
Y2K Bug Shows Up in Philadelphia
Source: Associated Press

PHILADELPHIA (AP) -- As many as 500 people got notices telling them to show up for jury duty in 1900 -- an error caused by the so-called Y2K bug in city court computers.
"Yes, after all the work that was done to avoid this, it happened," city Jury Commissioner Michael J. McAllister told the Philadelphia Daily News. "Well, it was only one run of mailings, and we've taken care of it. It shouldn't happen again." About 400 to 500 people got the erroneous mailings, he said. McAllister said the problem only involved those who had been granted postponements of their jury duty; the notices were for a second call.
But Charles McLaughlin of the city's Port Richmond section, who got his summons Friday, said he had never asked for a postponement. "I told my wife, 'I've got jury duty, but I can't go. I've already missed it.' Then I told her it was for the year 1900," he said.
Brian Anderson, who is in charge of the city's computer systems, could not be reached for comment by the Daily News. Computer experts around the world have been warning for months about the Y2K bug, a technological glitch that can cause computer systems to mistake the year 2000 for 1900.

ORO (11/29/99; 21:50:42MDT - Msg ID:19927)
THC - Dollar index - how and why
There are a few dollar indices in use. The one usually quoted is the narrow dollar index measuring the dollar exchange rate against currencies of major economies, the G7 currencies.
There is a "broad" trade weighted dollar index that measures the relative exchange rates weighted by dollar volume of trade with ALL trade partners rather than "important" ones (like the rest of the G7 that are stuck with our debt). Since we tend to import progressively more from countries with weak currencies and less from those with strong currencies, the narrow index shows a decline of the dollar, while the Broad index shows a rise.

My version of the index takes the FRB's index and multiplies it by the CPI to find the difference between current and historical buying power of the dollar locally vs abroad.
Thus the buying power of the dollar in the US is proportional to 1/CPI. Thus the dollar depreciated in proportion to the CPI.
The buying power of the dollar from its trade partners is proportional to the exchange rate and the foreign inflation, or to the broad dollar index, lets call it BDX, and FCPI for foreign inflation.
The local buying power of the foreign currency being 1/FCPI, leaves only the effect of the relative currency values on the relative price in the US and in the country from which it is imported.
Thus if the price of a "general" product in the US is P$(1999) in 1999, and P$(1974) in 1974, then if the CPI index were 1.00 in 1974, then
P$(1999)=P$(1974) X CPI. [1]
Doing the same thing with the foreign currency (also indexed to 1974) as
FP(1999)=FP(1974) X FCPI. [2]
Since the US has had few tarrifs change significantly since the 70s, if the exchange rate then, F/$(1974) indexed to be 1, was such that
P$(1974) X F/$(1974)= FP(1974). [3]
Then in 1999
P$(1999) X F/$(1999)= FP(1999). [4]
Using the setting of 1974 as 1 and dividing the two equations:
CPI X BDX = FCPI [5]
What this means is that for internationally traded goods, the price in Foreign currency is rising in proportion to the US inflation rate and the currency exchange rate. When I actually went to look at price changes since 1980 in the trading partners of the US, they were no where near the figures implied by the values given in the charts.
For example:
(average % per year)

...............1965-80 1980-93

Indonesia.......35.5.....8.5

Rep. of Korea...18.4.....6.3

Hong Kong........8.1.....7.9

Japan............7.7.....1.5

Thailand.........6.2.....4.3

Singapore........5.1.....2.5

Malaysia.........4.9.....2.2

http://www.worldbank.org/wbi/edimp/eastasia/inflated.html
From that point till just before the crissis (1997), the inflation rates were even nearer 0. Wold bank resources indicate lowish inflation in Latin American countries Before and After their 1994 currency crissis. Contrary to much that was discussed, the governments in Asia were not trying to inflate the money supply, but trying to prevent that from hapenning using the usual fiscal drags and raising short term rates above long term rates.
This goes to show that something else has absorbed most of the dollar inflation and caused the currencies to depreciate. Furthermore, a steadilly growing stream of goods exiting these countries and entering the US indicated that prices in these countries were actualy LOWER than they were in the US and becoming lower still. (If it were the other way around, the goods would travel the other way, which did occur for a very short while just before the Flu hit Mexico, South and North Asia...).
Considering other issues - particularly the external debt balance of these countries, I realised there should be a debt repatriation figure in the equation that measures $ needed to repay external debt. As an index, this would be a cumulative figure that pushes products out and consumes dollars. Lets call it DDD, for dollar debt demand.

So the equation is actually:

CPI X BDX = FCPI + DDD

The growth of imports into the US from these countries indicates that the equations we strted from, [3, 4] were not quite appropriate, because the importation rate in both dollars and goods volumes was rising - showing that there was no equilibrium (which is what these equations imply).
Checking the figures for import volumes, the rise in the FCPI figure (inflation in the exporting nations) was more than compensated for by the rise in import volumes, so for our purposes, in rough approximation,

CPI X BDX = DDD

That is why the figure was important. Rather than reflecting inflation in the exporting nations, it reflected a rise in their debt service load.

The currency exchange rate is "controllable" by the setting of relative interest rates and debt traps. If the foreign country borrowed in dollars at 12% when interest rates were 7% in the US, then the lowering of liquidity by the FED to prevent growth in the US from "overheating", will have a more negative effect on the emerging market nation, who would still have to pay the interest, if not interest and principal. Indeed, all of the crises in the Emerging Nations started right after the Fed began raising rates.

The EMs receive more dollars by sending out more goods, which it does by sending them out at a lower dollar price.

The Stranger (11/29/99; 21:35:08MDT - Msg ID:19926)
Golden Truth
Okay, G.T., I read it.

Obviously, there is no way I can give a thorough response to this article without writing long into the night. Due to my own time constraints, I sometimes avoid reading the longest posts here at the Forum, so I feel a bit guilty about length, but here goes:

This is the first I have heard of Richbacher, so I cannot speak to his record. I will say I don't agree with some of his characterizations or his basic conclusion (no surprise).

"He says the four classic elements of a bubble
are all present and most obvious: 1) money and credit have been expanding vastly in excess of both savings and GDP growth; 2) inflationary pressures are being channeled toward, and concentrated in, asset prices; 3) low inflation has kept monetary policy too loose; 4) soaring asset prices have overstimulated domestic borrowing and spending."

Well, money and credit have been expanding too fast not to create inflation, that's for sure. Here, I am in agreement, although I question the use of the word "vastly". After all, M3 growth this year has averaged maybe 9%. If you buy the GDP numbers (and I do) that show maybe 4.5-5% growth, and you buy the productivity numbers (which I do with reservation) that show maybe 4% growth, it is hard to make a case for "vastly".

And, yes, excess money creation is being channeled into assets. That is normal enough. When money grows more rapidly than the real economy, it has to go somewhere. This, too, by virtue of the so-called wealth effect, tends to create price inflation. Today, for example, we actually see people leaving their jobs to sit at home and day-trade. In this way, they manage to consume more in goods and services than they produce... too much money chasing too few goods and services.

In economics, the one sure way to get heard is to speak in extremes. If you know who Dennis Rodman is, then you know that a similar principle works in the NBA. Richbacher, says, for example, that money is too loose. Well is it? Last year, it was loose because the U.S. was the only engine left pulling the train. Commodity prices were sinking fast, the dollar was strong and productivity was rising. Wouldn't you have stoked the oven? And, this year, money is loose for an entirely different reason. As the rest of the world recovers, foreign money is repatriating, and the Fed is put in the position of having to support the bond market. While they have attempted to stop what otherwise might have been a rout, at least they have allowed prices to TREND down overall. Given what is at stake in the main street economy, can you say you would have done differently?

I also have trouble with the constant wailing about the overextended stock market. Think for a minute about what is going on. Baby boomers are in their prime savings years. Despite what Richbacher says, savings are substantial in this country. For some reason, the government figures subtract capital gains from savings, yet they do not include stock market holdings in their calculations. No wonder they come up negative. Doesn't this also explain a paradox. We keep decrying the billions that are being invested in stocks yet worrying that nobody is putting anything aside. Hello!

Most retirement money is long-term in nature. These people know there are occasional big losses coming, but they have been conditioned to dollar-cost-average over many years. They buy tech stocks because in a disinflation environment, the only companies scoring any earnings gains are the ones that improve other people's earnings through productivity. Is this theme overdone? Yes. Is it all the rage? Yes. Is it indicative of the whole market? No. Most stocks have been sliding for 18 months. Many now have compelling prices (if you own gold mining stocks, you know what I am talking about).

All of this supports my continued predictions of reflation. I don't see how it can be avoided. But it takes a hell of a leap, in my judgement, to see a deflationary collapse coming out of all this. Anyway, you asked, and I hope I helped.

gidsek (11/29/99; 21:32:40MDT - Msg ID:19925)
TC
"...playing a factor too would be the heavy currency intervention from Japan which strengthened the dollar while weakening the yen"

James Dines, The Original Goldbug has aptly described todays' currencies as staggering drunks holding each other up.

gidsek

TownCrier (11/29/99; 21:16:46MDT - Msg ID:19924)
The GOLDEN VIEW from The Tower
Ignoring the temporary, reactionary spike up and inevitable retracement of the price spike following the European central banks' announcement of the Washington Agreement to curb future lending and sales, gold seems clearly to have established itself on a firm footing destined for a brighter future...particularly as compared with the dollar, as we'll explain.
+
To recap this morning's gold market action, dealers said producer selling out of Australia led to the drop in the gold price in overseas trading ahead of the UK auction. Surely playing a factor too would be the heavy currency intervention from Japan which strengthened the dollar while weakening the yen. All other factors being equal, this alone would drop the gold price. The sum of these effects brought the morning gold fixing in London to $293.10. When the auction deadline later arrived , it was revealed that in the closed bidding process, parties were willing to take the full 25 tonnes offered at prices at or above $293.50. Though some market participants had higher expectations and were depressed with the results, a fairer assessment is in order. The truth of the matter is that these 25 tonnes were not rejected, but were in fact TAKEN by professionals at a price $40 higher (up 15%) than a short two months ago at the September auction. That, my friends, is what we call a Reality Check. The reality is that these prices are SOLID.
+
Unfortunately, many market participants were expecting fireworks, so in a fit of disappointment they threw reason out the window, and gold traded down throughout the day. Spot was sold down $7.20 to $290.60, returning to a point in time only ten days ago when the price was last seen at this level. Where's the pain there? Ten days. That's nothing if you hold physical, unleveraged gold, but on the other hand, leveraged derivative positions subject to margin calls and expiration dates might certainly leave you with sleepless nights. Even the Philadelphia Stock Exchange Gold and Silver Index plunged by 6.7%. But while gold was revisiting its prices of only 10 days ago, the Bellwether Bond was sold down to levels last seen over a month ago. The 30-Yr Bond lost 31/32 in price, reaching its lowest since October 27th, driving the yield to 6.300%.
Go for the gold...metal, that is.

RELATED MONETARY AFFAIRS

Japan's Finance Minister Kiichi Miyazawa said on Tuesday there would be no joint intervention at this time with other nations in the currency market. "That will depend on how things develop," but he said Japan was ready to act alone to curb the surging yen. "If necessary, we can intervene anytime." ......When you consider that the strong yen has been countered with forex interventions that involve the selling of yen primarily for the purchase of dollars, we can't help but think that dollar weakness is an equal concern...after all, to weaken the yen through the supply/demand forces on the foreign exchange markets, they could as easily flood the world with yen in exchange for a little bit of EVERYthing...euros, gold, Swiss Francs, Australian dollars, etc. Seen in this light, the dollar was effectively on the receiving end of a joint international intervention: the yen that Japan sold absorbed dollars from the worldwide money market, and the gold that the UK sold absorbed dollars also.

STOCK MARKET WEAKNESS

On heavy volume, the DOW lost 41 points (Nasdaq lost 26), but the telling story was the market internals. On NYSE trading, declining stocks outnumbered advancers by a wide margin of 2,126 to 989, and those reaching new 52-week lows absolutely crushed those reaching new highs 373 to 54.

BACK TO SOLID GOLD

FWN reported that David Meger, senior metals analyst at Alaron Trading, said he doesn't expect an extended break lower, and felt this price fallback to shake out the weak longs was probably constructive for the market at this stage. Leonard Kaplan, chief bullion dealer at LFG Bullion Services said gold had "simply gone from the top of its trading range to the
bottom," and that he would be a buyer at the day's lows. He noted that gold lease rates have started to rise again, with one month at1.05% today (last week rates were 0.7-0.8%).

To help appreciate the magnitude of some of the hedging that has been utilized by gold producers, have a look at this press release from Anglogold:

NOV. 30, 1999--ANGLOGOLD BUYS 300,000 OZS OF BANK OF ENGLAND GOLD
AngloGold bid successfully for 300,000 ounces of the 803,600 ounces of gold sold at auction by the Bank of England today (Monday, 29 November 1999).
The purchase, said Kelvin Williams, AngloGold's executive director responsible for marketing, formed part of the broader management of the company's hedge book in the run-up to the financial year-end on 31st December.

Leaves you with the impression that this "part of broader (pre-December 31st) management" is just a drop in the larger bucket, doesn't it?

There was no change in COMEX gold inventory, with 889,793 Registered ounces and 84,928 Eligible ounces. Statistics released today for the previous trading session revealed a third-straight 11,000-contract decline in COMEX December futures open interest. Only 20,747 December positioned remained heading into today's trade, down 11,432 on volume of 32,136. First Notice Day for delivery intentions on the December contract is tomorrow. Some of these position are apparently being rolled into the February future. Open interest on that contract rose 16,048 on volume of 32,193 to 70,196 contracts.

OIL

January crude settled down 91� at $25.96 on traders wrangling over the implications of the in-limbo Iraqi oil agreements. "If the Iraqis are going to make a deal with the UN, you better take some profits now because the market could come off even more," a broker told Bridge News, but Iraq's Oil Minister Amer Mohammad maintained the Iraqi opposition to the UN stopgap resolution to renew the deal for only two weeks. In regard to an anticipated six-month renewal proposal, "Baghdad will deal with such a resolution and clarify its position when the resolution is adopted." Brokers looking ahead to tomorrow's release of API data estimate crude stockpiles to be reported down 1.5 - 2.0 million barrels amid an increase in refinery operations as cold weather sets in.

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

Chris Powell (11/29/99; 21:15:49MDT - Msg ID:19923)
Today's gold news really wasn't so bad
http://www.egroups.com/group/gata/294.html?
Five new dispatches at GATA.

gidsek (11/29/99; 20:44:02MDT - Msg ID:19922)
USAGOLD (11/29/99; 9:10:31MDT - Msg ID:19889)
USAGOLD (11/29/99; 9:10:31MDT - Msg ID:19889)
Question...
Why do so many gold advocates expend enormous intellectual capital establishing the fact that GOLD is "Money" and then criticize the same because it refuses to act like an ordinary "Commodity"?
-----------------------------------
I think the frustration arises because it is paper that is refusing to act like an ordinary commodity. :)

gidsek

Golden Truth (11/29/99; 20:28:41MDT - Msg ID:19921)
TO STRANGER
Thanks Stranger, when ever you find the time is alright by me. It's just that so many things are happening it would be nice to know for sure that we aren't heading for a Global Depression. I worry about it alot especially when the P.O.G drops and then continues to do so.
I remember Alan Greenspan saying that "the P.O.G was trying to tell us something" i have never personally figured out what he meant by that statement. Even more so now since the Washington Agreement. Was he lying before? when he said that, to keep the GOLD shorters going, or was he telling us of something to come? Personally i think he was lying!
But you can never be to sure!

Stranger just so you know, i've always been in your camp on the inflation issue. You always bring the pratical everyday side into play, and it works , but i think you know that already. Where i've found others use text book examples, say of prechter. He might know alot about wave theroy but it doesn't mean people who read it can interpret it correctly,
with reguards to deflation. So far i,am in your camp "Inflation"
Yet since there is so much talk and worry about deflation maybe there is still a threat of it? Otherwise why all the concern. As a result STRANGER, i, am throwing my hat into Dr. Ravi Batra's ring also, the "Inflationary Depression"
I,am sure that holding GOLD would protect us, but i'd like your opinion also, i,am sure, i,am not alone here.

So in conclusion, please, if you get a chance read my earlier request to read Dr.Richebacher that "rsjacksr" Msg ID:19890 posted here at the forum, and comment and contrast that to Dr.Ravi Batra and how it relates to the P.O.G given both scenarios. If you only have time for one then, how will the P.O.G react given Dr.Richebacher prediction, would be greatly appreciated. Hopefully someday i can find a way to repay you. Until then, we all at this forum thank you! :-)
G.T

Peter Asher (11/29/99; 18:40:51MDT - Msg ID:19920)
ORO
>>>> Note for a future post: the strong price inflationary effects of the Internet, high technology and
E-commerce. Thoughts welcome. <<<<

Since you asked, my thought is just the opposite. I see The Internet, E-tech etc. as being the deflationary factor that is causing all the inflation to be hidden in neutral numbers. JIT and .com marketing reduce mercantile costs and increase mercantile competition. So IMO we currently are having a "Check and balance" of opposing forces for the moment. Inflation is peeking it's head out from behind a few rocks and bushes, but Holiday .com shopping may allow one more competitive thrust to keep rising prices at bay.

Since I've now logged in to our current 'Flation debate, I'll give a quick shot at the effects of a Y2K
and/or market sell off. The direction of prices in that event would be a product of goods available vs. Purchasing demand. If 'shopping money' is in play despite a supply crunch, prices go up. If inventories are high when wages, profits and cash-outs are down, then you have a fire sale and there is the deflation.

The next conundrum is in these two scenario, how does the economy respond when the codes are re- written and things are up and running again. Two self proclaimed definitions to think about are; ---

"A Depression is a result of the absence of working capital."

"Unemployment and poverty occurring simultaneously is simply a matter of the poor being unable to work for each other." (This was written in the 70's when there weren't so many unemployable people)

THC (11/29/99; 18:28:19MDT - Msg ID:19919)
To Oro re Exchange Index of US$
Good evening!

I found your most recent post interesting. I checked out the chart at your homepage, and I just wanted to confirm the content.

http://members.xoom.com/_XMCM/Nebucadnezer/dollar%20inflation%20index1.gif

It looks like the "Trade Weighted Exchange Index of US$" is somehow an indication how the US$ has appreciated/exported inflation via the major trading currencies of our trading partners? Is this correct?

A. In the most basic terms, how is the "Trade Weighted Exchange Index of US$" calculated?

B. How would the index go from "2000 to 20 or 30" and what would this mean for the US$, the major currencies and gold?

Thank you!!!!!

Good luck to all,

THC

The Stranger (11/29/99; 17:44:59MDT - Msg ID:19918)
Journeyman's Excellent Flation Post, ORO and Golden Truth
If I recall, the matter which was in debate was whether any central bank, under any scenario, could prove incapable of averting currency deflation. The Asian contagion was presented as an example of just how powerless central banks could be in this respect, but I believe Journeyman's well- documented post proves otherwise. I couldn't have said it better myself. (Which explains why I didn't).

Please forgive me the presumption of adding to Journeyman's remarks. First, a distinction has been made by others between definitional deflation (shrinkage in the supply of money) and the popular conception of deflation (falling prices). If one buys the notion that deflation can ALWAYS be averted with money creation (and conversely, always produced by insufficient money creation), then the distinction should be of no practical importance. I believe this to be true.

Second, the point has been made that the Asian contagion was characterized by an inflation of prices for goods and services but a deflation in the prices of investment assets. It has been suggested further that this outcome may await the United States. I believe this to be misleading.

When price inflation occurs, bonds ALWAYS decline in value. This is not because no one can afford to buy them. It is because no one wants to pay par for something that will return less purchasing power at maturity. Many stocks do poorly also, as was the case in the U.S. of the 1970s. This is for several very good reasons that deflation has nothing to do with. Among them are:
a. Inflation creates more interest in tangible assets.
b. Higher interest rates encourage intermediation.
c. Higher interest rates can discourage risk taking.
and
d. Higher interest rates can reduce corporate earnings.

So, yes, the contagion did produce a collapse in Asian financial assets. But, measured in local currencies, TANGIBLE assets soared. And, while I don't see anything so dire in prospect for U.S. markets, I see no reason why the principle would not be the same here. It's a good thing, too. We all just experienced what can happen to gold when the dollar is threatened by deflation. It literally sucks. And no one should misunderstand: What little POG improvement we have been seeing of late would be impossible were it not for the re-emergence of inflation.

ORO - I am in trouble. I have read 19915 three times, and I guess you are over my head. I don't mean this as an insult. I just don't understand. I hope you or someone else can help me out.

Golden Truth - I will get on your request ASAP. Thanks.

YGM (11/29/99; 17:03:20MDT - Msg ID:19917)
C'mon Y2K....Do your Thing..
And Flush The Paper Down The Financial Toilet
....personally as a Gold Miner I've had all I can take of this putrid manipulation shit and could no longer give a flying you know what for the distress it will cause the innocent. Get it over with and let us take our lumps. The only GOOD part is the Bankers and Funds will bleed openly and die to be reborn, possibly a little more humbled, hopefully poorer for the experience.............along w/ the talking heads who sold this crock.com to the world...................YGM

YGM (11/29/99; 16:38:11MDT - Msg ID:19916)
The Beginning!
World Net...Daily

------------------------------------------------------------------------
PANIC IN THE YEAR ZERO
Clinton set to declare
national emergency
More than 50 simultaneous Y2K crises
expected, stretching resources to limit

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

By David M. Bresnahan
� 1999 WorldNetDaily.com

President Clinton has already made plans to declare a national emergency because of expected disruptions caused by the Y2K computer problem, according to Federal Emergency Management Agency documents.

A final training session followed by a mock Y2K disaster exercise will include the actual disruptions and problems that Y2K emergency planners believe will take place during the change to the New Year.

Plans for the emergency declaration were made known to Federal Emergency Management Agency officials and other federal employees in preparation for use of the Information Coordination Center, set up by the President's Council on the Year 2000 conversion. The plans were also given to the Senate Committee on the Year 2000 Technology Problem.

The staff on hand at the Information Coordination Center have been told to expect a presidential declaration of a national emergency. FEMA staff who will run the regional emergency operation centers have also been told the same thing.

"Should it become necessary, a presidential 'emergency,' rather than a 'major disaster,' will be declared, and assistance will be focused on addressing threats to life, health, safety, and property," the Senate committee was told in a report from Lacy E. Suiter from the Response and Recovery Directorate of FEMA.

A national emergency will be declared because FEMA officials have concluded that there will be more than 50 simultaneous Y2K-related disruptions throughout the country, which will stretch the nation's local, state and national emergency resources to the limit.

The Department of Defense is so concerned that the deputy secretary of defense, John J. Hamre, has issued a memorandum to commanders in the field to be very cautious about using the military to assist civil agencies. Hamre said local requests for help might seem appropriate, but he warned local commanders to be cautious about using the military to help with Y2K disruptions.

"Immediate responses that appear rational from a local perspective, but could collectively undermine the department's ability to execute operational missions" should be ruled out, said Hamre.

Hamre has ordered commanders to avoid using the military for Y2K problems unless there is a threat to life or damage to property. The warning applies to domestic as well as international requests for help.

The anticipation of a multitude of simultaneous problems that would stretch the ability of the government to respond is the driving force behind the plans for declaration of a national emergency.

Sen. Robert Bennett, R-Utah, told WorldNetDaily there is a very real fear that the enemies of the United States could conduct domestic terrorist attacks because they will expect the country to be weakened due to the military's having to deal with Y2K disruptions. He said there is also a possibility that cyber-terrorism attacks might even try to sabotage computers to create what appear to be Y2K computer failures, in order to enhance opportunities for terrorists to conduct further attacks on U.S. cities.

Suiter says many small, localized disruptions are expected to occur. Response should come from local and state agencies "to the maximum extent possible," he said. FEMA has been conducting training for local police and fire officials in an effort to help them be better prepared for Y2K emergencies and reduce the need for federal assistance.

FEMA officials who attended training in each of the 10 FEMA regions were told a major disaster declaration was ruled out because the Y2K problems will not "involve a natural disaster," according to the presentation materials used and provided to WorldNetDaily.

"A presidential 'emergency' rather than 'major disaster' declaration will be made if Y2K consequences exceed state/local response resources," FEMA staff and other federal agencies were told at the regional meetings.

Peter Kind of the Information Coordination Center sent a memorandum to staff members to guide them in preparations for final training exercises Dec. 6 to 9. He wants the exercises to be as real as possible, and asked for recommendations on what Y2K problems are actually expected.

Although Suiter claims "no one knows for sure what will happen following rollover to January 1," those who will staff the Information Coordination Center have been asked by Kind to submit a list of the most likely Y2K disruptions for use in the final Y2K disaster training and exercise.

"We want to exercise the rollover sequence with special emphasis on what could happen when, as midnight and subsequent critical periods such as business hours, opening of financial markets, etc., follow the timeline westward. We invite you to help identify the high probability and high-risk items that might occur, by time zone, both for use in the exercise and to help prepare us all," requested Kind.

Past exercises conducted by FEMA and other emergency organizations have always stressed that they do not know what problems to expect when the New Year begins.

"In order to make the December exercise as realistic as possible, we ask that you provide your ICC core staff contact with your best estimates of possible incidents, anomalies or other systems operation events most likely to be seen during the Millennium Rollover (sic). Receipt of this type information by November 24 will ensure that it will be incorporated into the exercise scenarios when and where appropriate," said the instructions to ICC staff.

"We are hoping for the best, but taking necessary and prudent steps to prepare for any contingencies," said Suiter.

Although emergency planners may be planning for the worst, their Y2K preparation materials provided to the public do not suggest that the general public take the same precautions. The Federal Emergency and Management Agency and Red Cross Y2K disaster planning guides recommend preparations that, in effect, advise the public to have a 72-hour kit similar to what would be needed for a winter storm.

The Information Coordination Center is scheduled to be staffed 24 hours a day beginning Dec. 28 and continuing at least until Jan. 7. Plans include an option to extend the date if the national emergency continues. Virtually all federal employees, including FBI and members of the military, have had vacation time canceled to enable them to be ready for action if needed. Civil agencies all across the country have issued similar restrictions for police, fire and other vital services to be on call or on duty.

"The emergency management community may be facing a potential disruption scenario that it has not dealt with before: simultaneous disruptions in all 50 States and six territories that may require federal emergency declarations. In addition, we may have numerous weather-related major disaster declarations to address during this time frame," explained Suiter.

John Koskinen, head of the President's Council on the Year 2000 Conversion, is concerned there may be problems caused inadvertently. He is warning people not to pick up the phone just after the start of the New Year and make a call "just to see if it works." He said too many attempts to make calls all at the same time would shut down the entire phone system.

He also warned that the public may be fooled by normal failures and think they are caused by the Y2K computer bug. ATM cash machines, phone service and electric services all have localized failures on a regular basis. One of those types of failures may happen right on Jan. 1 and create a mistaken belief that a Y2K failure has occurred when it really has not.

"The presumption is to blame all failures on Y2K that weekend," Koskinen said, and Bennett agreed. He said the public must help to reduce the demand on the system at a difficult time.

WorldNetDaily has learned that a computer hacker was able to alter the website run by the Commerce Department recently. A message was displayed that said: "Run for your lives! Hit your computer's power button and never turn it on again." The hacker was reported to be making a statement about potential Y2K problems and trying to illustrate weaknesses in the government computer system that would permit a computer terrorist access to government systems. The hacker identified himself only as "Comdex0r."

Koskinen said there are many such attacks on government computers all the time. He said hackers will be easily detected during the Y2K rollover period because there will be tighter security at that time. Koskinen asked "recreational hackers" to stay away during the date change rather than complicate what is anticipated to be a difficult time for government agencies. "This is not the best time to do that," Koskinen said.

------------------------------------------------------------------------
David M. Bresnahan is an investigative journalist for WorldNetDaily.com

ORO (11/29/99; 15:54:54MDT - Msg ID:19915)
Journeyman - Currency appreciation
http://www.oecd.org/std/ppps.htm
The only places where currencies appreciated in local buying power have been Switzerland, Japan, Euro area (particularly attributable to Germany and the small Benelux). All of the Asian Tigers, China, and other high export growth countries like Israel, that are anywhere near decently managed had their currencies appreciate locally for a few months, then collapse in what was the "Asian Flu".

The Euro, China, and Japanese deflations, particularly the Japanese, have to do with the fact that they have accumulated dollar reserves to disproportionate levels relative to their economies. This was necessary in order to keep the $ system going and to avoid getting into debt traps (which they and Arab Oil are very adept at setting).

To make the connection between the trade surplusses and deflation a little more obvious, we can start by thinking of what it would look like if current trade patterns were maintained on a pure gold standard.
The countries with a strong trade surplus would accumulate gold, which will circulated in their economy, and even if that gold is only used for investment, it will eventually cause prices to rise locally. The closest indicator we have to measure prices at gold standard equivalency is the PPP - or purchasing power parities. It indicates prices are significntly higher in the creditor nations. By over 25% relative to the US.
In countries running a trade deficit, prices will generally fall as the pool of gold circulating in that economy falls.
In major gold producing countries, the prices would stabilize at a point in between those at creditor and debtor nations. The gold producing country would export gold and receive goods they would have balanced accounts - balanced by the gold export.
As you may notice, prices are indeed lower in PPP terms (higher numbers relative to US=100-as more can be had for the currency) in indebted nations and higher in creditor nations, with the US - reserve currency exporter, sitting smack in the middle.
It is perfectly normal to see some countries maintaining consistent trade disparities because of normal differences in savings practices and in natural demand patterns, most notably in the demographic boom arena where overspending of younger workers getting started in life needing housing, food, transport meets the underspending and overspending of a demographically busted nation of older workers saving for retirement and consuming at relatively low levels.
Interest rates would be low where prices are high in the trade surplus nation, and rates would be high in the debtor nation. In the gold exporter, one would find the intermediate interest rates.
In our system this is still the case with gold being substituted by dollars and interest rates being much higher at the debtor nations and much lower in the creditor nations (2.5% interbank rates in Japan and Switzerland).
The reserve currency, however, can only function in this way if it is convertible into gold in some way. I would tend to expect the current promise of convertibility to be as bad as all previous obligations, and once the system has collapsed in a sea of gold defaults, price levels in the US (reserve currency exporter) would rise well above those in the creditor nations, particularly if they had accumulated gold in the meantime. This ocurred in a limited way during the 1971-1980 period. Since the markets had then a decade of steadilly falling US gold reserves to indicate this was coming, they were prepared. This time, since all the gold reserve operations are hidden from view, the markets will be ill prepared. Furthermore, while in the past gold standards actual gold reserves were backing the currency, today's gold reserve is based on paper obligations and political decisions to keep the current and future global gold supply as backing for the dollar (mediated by the dollar-oil-gold system set up in 1969 and tuned in 1976 and 1980, later enlarged in 1988). Nothing is more volatile than political support, nor as fleeting.

Back to the actual question at hand, the deflation in the creditor nations is a direct consequence of inflation of the dollar supply being met by the creditor nation's resistance to accumulating any more of it. In gold terms, not accumulating more gold in the creditor nation would cause prices to fall because of the demand for gold to clear debt coupled with lower willingness to lend it in this atmosphere.
If one uses the CPI adjusted broad trade weighted dollar index (URL below), the effects of deflation are very obvious, as this reflects the raw increase in the buying power of the dollar in the economies of its trade partners relative to its purchasing power at home (these are Mexico, China, Korea, Brazil, Taiwan, Bangladesh, Phillipines - when goods volumes are used to measure the partnership). All countries that either had or have still a significant dollar denominated external debt. Many are HIPCs. Had we actually used our own gold to back the currency, we would have been at 20 - 30 rather than 2000. In the event of instability in the dollar economy, the drop to 20-30 will actually happen.
http://members.xoom.com/_XMCM/Nebucadnezer/dollar%20inflation%20index1.gif

Why did this system distort to such an extent? Because of the persistent improvement of productivity in the emerging economies as they industrialized, and in some cases overdid it to the point of building uneconomic production facilities. The mechanics of debt traps made it possible to do to these countries what Jefferson feared banks would do to the US. By cyclically inflating and deflating, the dollar banking system has managed to both gain control of assets of young economies and maintain the value of its currency despite reckless printing by the Fed. The productivity arising from their industrialization (imagine undergoing the bulk of the industrial revolution from 1700 to 1990 in all of 20-30 years) has been usurped by the US for the benefit of its citizens and elite, so that they can fight the world's "bad guys" instead of their creditors.

JCTex (11/29/99; 15:41:05MDT - Msg ID:19914)
USAGOLD: Question
Still laughing at us: your "question" is a very good lesson for all of us. The answer is that we are guilty of the very thing we accuse the "sheeple" and media of: we only want to hear what we want. Kaplan got a dose of that.
Good point, MK.
regards

Golden Truth (11/29/99; 15:00:10MDT - Msg ID:19913)
TO STRANGER
Howdy Stranger, Would you please look at the link posted by rsjacker Msg ID:19890
It's an article i've read before by Dr. Richebacher, but it seems to take on a more serious conotation at this point in the game.
I understand what he is saying about the accounting tricks etc, but i can't quite connect the dots as to the impact it would have on the P.O.G. At first blush to my mind it sounds as if all prices will collaspe including GOLD.
Would you please comment harshly on the outcome as you may see it, up or down?
G.T

nickel62 (11/29/99; 14:07:56MDT - Msg ID:19912)
Coinguy Glad you found it helpfull.
My background is in stock trading and there the market manipulation has been massaging expectations for so long there is an entire generation of analysists and portfolio managers that don't even know which direction is up.

Journeyman (11/29/99; 14:06:41MDT - Msg ID:19911)
FLATION QUESTION: ORO, TownCrier, MK, etc., or anyone:
Since abandoning the gold standard (1933), has there been even one single case of economic crisis CAUSED by - - - or FOLLOWED by domestic monetary token APPRECIATION as opposed to domestic monetary token DEPRECIATION? Regards, Journeyman

Journeyman (11/29/99; 14:04:14MDT - Msg ID:19910)
The Great Flation Debate: refinements @ Goldsun
Goldsun is absolutely correct. Exchange rates don't tell the whole story on a currency's depreciation. For example, if widgets are produced domestically with no foreign content, until foreigners start buying them up with their relatively more valuable monetary tokens, the price in domestic devalued currency tokens doesn't change. But as soon as "foreigners" start buying these widgets, the price begins going up. That's what happened several times when Mexico devalued the peso; savy Americans all along the border headed south hunting for bargains, even going into Mexico to buy groceries, to fill-up at the now bargain peso gas prices, etc. And of course, any imported goods or products made with imported goods are more expensive to manufacture (because the cost of these imported goods goes up directly with the exchange rate), and so the price in local monetary tokens must go up. In most countries these days, a fairly large portion of products are either imported or include "foreign" content. _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ At any rate, as Goldsun so astutely pointed out, while the cited lower Asian currency exchange rates are only INDIRECT measures of the domestic depreciation ("inflation") of monetary tokens, the tokens did indeed, as you would expect from these lower rates, depreciate (inflate) significantly. Alan Greenspan explains, followed by a few examples: _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ "Whenever you have a currency fall as sharply as the rupiah has fallen, which is approximately 80%, and you import any significant amount of materials or foodstuffs, which they do, then clearly the domestic price of many of the things which they import obviously skyrockets ...and as consequence there are increasing concerns of food shortages and food prices which are too high for those average Indonesian citizens to afford." -Alan Greenspan, Semi-annual Humphrey-Hawkins Testimony to US House, CNBC, July 22, 1998, 11:45am _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ "The [Indonesian] people are angry about an inflation rate that's hit 40% a month. Some basics are rising even faster: Gasoline has soared 70% the past two weeks; rice has doubled in the same period. "Who can afford to live, let alone eat, here anymore?" said Mozes, a 43-year [old?] accountant." -"Economic despair turns peaceful protests violent" by James Cox, USA TODAY, FRI./SAT./SUN., MAY 15-17, 1998, COVER STORY, pg. 1 _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ Inflation shows its ugly head in Korea. Gas was hiked 16% last week and is up 70% over all. This has cured the traffic problem in Seoul. People rush to buy certain commodities from supermarkets. Sugar, flour and cooking oil, etc. have doubled in price. Korean inflation was running 26% at Christmas, and is expected to go higher. -Terry Kennan, CNBC, 15 Jan 1998, ~4:46:29 PM EST _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ - The international badminton tournament, scheduled for South Korea, has been canceled because the tournament fund can no longer afford the $250,000 [US dollars] in prize money because of the drop in the value of the won. -CNBC, 9 Jan 1998, ~7:27:53 PM EST _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ -Russian inflation is 67% this month, which makes it almost impossible for average Russians to survive. 100,000 Russians in Moscow will lose their jobs in the next two months, and that's just in the financial sector alone. -NBC Evening News, 3 Oct 1998, ~6:36:11 PM EDT _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ SYNOPSIS: Even though falling exchange rates in themselves don't guarantee local currency depreciation, they are indicative, and in Asian-style crisis situations, the currencies all did indeed depreciate (loose buying power.) In no case did the value of domestic monetary tokens in these countrys rise, that is, in no case did prices of goods fall. THERE HAS NOT BEEN EVEN ONE CASE OF MONETARY "DEFLATION" associated with the Asian-style crises which are, apparently, the latest economic fashion. _ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ Regards, Journeyman

Farfel (11/29/99; 13:58:17MDT - Msg ID:19909)
From KITCO...the ONLY Important Post of the Day
Congrats Rhody, another good one. Very perceptive analysis indeed.

Thanks

F*
-------------------

Date: Mon Nov 29 1999 15:51
rhody (LEASE RATES: There was an immense lease driven short) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
attack on gold today. For the past several weeks lease rates
have been quiet to slightly declining until today.
All last week one month gold leases were in the range of .8%
and stable to declining. Then today, they jumped 1.32% to
2.12%! ONE YEAR leases are 1.95%. So we went from a "normal"
looking spread of .8% to 1.7% across the board to instant
backwardation in one day! The drop today was an orchestrated
attack by fiscal interests to attack precious metals at a
critical time ( BOE auction and collapse of 30 year bond and
a weakening DOW ) The attack was across the board on all
PRECIOUS METALS, even platinum where one month leases are now
66.5% up .86%. One month leases are now triple one year rates
in platinum. Talk about backwardation! Yet platinum was shorted
along with silver and palladium. Think about it. People
are borrowing platinum at 5.5% metal interest rates per month
in order to short it down. Yet it is in screaming deficit of
supply! My interpretation of all this is this market is in
end phase. This market is about to die. This market is
so manipulated that there is a feeling of hysteria and panic
about it. It is not just gold that is being attacked, but all
rival money to paper. Interesting situation. We need these
metals to operate a modern industrial system, yet they are
being shorted to death in order to protect the fianacial system.
So if we short down these metals to the point the mines close,
we shall have our paper financial system, and nothing to spend
the paper on. This logical inconsistancy will eventually kill
this manipulation because a dead market cannot be manipulated.

beesting (11/29/99; 13:02:39MDT - Msg ID:19908)
Hot off the press!!
http://www.anglogold.co.za/pressreleases/viewpress.asp?id=6&pressid=92
Anglogold bought 300,000 ounces of Gold at the BOE auction this morning!!!!!....beesting

Bill (11/29/99; 13:01:25MDT - Msg ID:19907)
Y2K Pay
Last week in was announced that we (military) would be paid 2 weeks in advance instead of the normal pay date of Jan 1st. It was stated that the reason for this change of pay date was to eleviate any potential pay problems????

PDCHIEF- Good point about the lease rates. They more than doubled today. It would be a good sign to see them stay up for awhile. I still hold to the belief that Y2K fears will be the trigger rather than the UK auction. As we are near the bottom of the trading range now, POG will show a great deal of strength if it does not lose more than 2-3 dollars this week.

TownCrier (11/29/99; 12:49:45MDT - Msg ID:19906)
Y2K could bite employee paychecks, Companies lack backup payroll plans
http://www.usatoday.com/usatonline/19991129/1694336s.htm
According to a survey, only 35% of respondents have contingency plans for payroll glitches. Among those businesses doing something, some are processing the payroll ahead of time, and others are stocking up on cash for one month of pay in case accounts are inaccessible.

You'll want to read this one if you depend on somebody else for your salary.

TownCrier (11/29/99; 12:39:00MDT - Msg ID:19905)
Millennium Worries Grow; Concert Canceled
http://dailynews.yahoo.com/h/nm/19991128/tc/yk_france_2.html
The French citizens are growing more concerned over liklihood of Y2K disruptions, survey shows.

apdchief (11/29/99; 12:25:38MDT - Msg ID:19904)
Doom and Gloom--POG Headed UP!!
Lest we all drown our sorrows in several pints, we need look at other data which would indicate upward pressure on POG.

http://www.kitco.com/lease.rate.html

There was a LARGE spike in lease rates today. What happened to POG last time that occurred?

Best Regards.....

TownCrier (11/29/99; 12:25:13MDT - Msg ID:19903)
Listening carefully...
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=00d9299be34e48d94255282fb4c4a6b9
Remember how a previous GOLDEN VIEW of ours discussed the Washington Agreement as a recourse because the markets hadn't been listening to Euroland officials in regard to the secure future for gold in the monetary architecture? As a result gold shot up initially about $80. Today, a statement by the finance ministers of the 11 euro countries was issued on the decline of the euro against major world currencies:

"The euro-11 shares the view, established in the recent forecasts, that the European economy is clearly recovering. As a consequence, the euro has potential for appreciation. This is also firmly based on internal price stability and a sound current account position."

Citing that sentence means they aren't just spitting into the wind. The euro fundamentals are in place and they are taunting those that lack the same current account strength. (U.S. comes to mind.)

In an article linked above, European Central Bank President Wim Duisenberg testified to the European Parliament's monetary affairs committee. "The euro has demonstrated signs of weakness over the past few weeks, including today. If you ask me whether we will take monetary action, the answer will be no." On the cause of the weakness he said, "I am ready to admit that we don't have a full explanation for the full movement. It's in part inexplicable, but ultimately the fundamentals will win. It remains our belief that the euro has potential over time to become stronger."

Having received letters from Europeans worried that their savings are losing value, the ECB Pres said he was concerned that the talk about external stability could undermine public confidence, though the currency's decline doesn't "endanger future price stability." He said that should it become necesary to intervene in the foreign exchange markets, the ECB would use its "potential weapons to do so: foreign exchange reserves," not announcing its plans ahead of time but explaining its actions after the fact. He reiterated, "The ECB doesn't target a specific rate. We only have a direction in mind, and that is upwards in the future. I am not sure how distant that future is." [Be on your guard.]

He said this year's 140% increase in crude oil prices has only partially been passed on to higher consumer prices thus far. President Duisenberg spoke as though he had unusually keen insight into the future of oil and pricing. "Oil prices are the reason for the rise in inflation that we've seen and they will be the reason for the rise in the months to come," further adding that though the ECB expects oil prices will plateau, and might eventually fall, "we have to live with high oil prices for the time being."

Why don't we get such frankness from our own U.S. officials? Everyone here remains in denial about higher oil prices.

beesting (11/29/99; 12:17:12MDT - Msg ID:19902)
*****FRAUD**** msg.19898.
Does everyone realize the implications of post #19898? Fraud is a criminal act,and the courts now have the authority to FREEZE all assets of the accused-namely Republic National Bank,one of the biggest players in the commodities game. That could affect the whole commodities markets and cause a mad scramble out of commodities,making the Gold price plunge as per FOA/ANOTHER. It's interesting to note this press release was released after the BOE Gold sale this morning!!!....beesting.

Farfel (11/29/99; 11:59:20MDT - Msg ID:19901)
Corollary to Previous Post...Gold Short Funds Running Low?
Just one other point to add to my previous post:

Given the aberrations today in traditional market behavior, namely a weak bond and stock market occurring simultaneously with a weak gold market, then one might have to draw the following conclusion:

Despite huge infusions of liquidity by the FED this past month, are the populist pre-y2k outflows now overwhelming the inflows?

In order for the spec funds to drive down the price of gold today, it appears they are now forced to sell bonds and stocks. That suggests a distinct lack of surplus funds available for them to short gold...a true zero sum game!
During this past decade, there have always seemed to be ample funds available for both shorting gold and running up the bond and stock markets.

Again, if my observations are correct, then we may be witnessing yet another example of a developing aberration in traditional Nineties markets' behavior.

Thanks

F*

AEL (11/29/99; 11:48:57MDT - Msg ID:19900)
ET
ET: "Any ideas on what is happening to the text from the time it is posted until it reappears on the browser?"

........ seems ter me that html is rendered perfectly literally... a <br> is the literal ASCII character string "<br>", with no interpretation (i.e. in that case no carriage return or break).

Farfel (11/29/99; 11:48:13MDT - Msg ID:19899)
The Trend is Your Friend....
Once again, I am happy to toot my horn (nobody else will) and declare that I most accurately predicted gold's weakness in advance of Y2k (see any of my previous posts on USA Gold over the past two months)

That is because "The Trend is Your Friend." And in this decade, the REAL trend has been the constant intervention in the markets by the Clinton government. They have engineered an equities bubble hand in hand with a gold price decline. They have regularly precluded the markets from moving to their natural equilibrium points and have created enormous moral hazard in the markets. When investors perceive that risk no longer exists in markets, they proceed to place all their monies into investments, borrowing upon their homes and credit cards to do so. This huge borrowing binge and complete fearlessness on the part of the American investor is one of the most notable, contributing factors to the current stock market verticality. When people place every surplus cent they have in the stock market, is it any wonder it trades above 10,000 today?

Why should the Clinton government change strong, regular, interventionist tactics now, particularly with only another month before the critical 00 date when a potential panic can break out upon the spin of a dime?

However, it is worth noting some aberrations in market behavior today. They are most interesting and augur...who knows what????

First, it is most unusual to see today's unusual gold price weakness hand in hand with notable bond market weakness. Normally, they move in opposite directions.

Second, today's capitulation volume in gold is not that impressive so far. It suggests that more and more gold investors are developing a fearlessness to the negative media spin on gold, and even further suggests the extent to which a narrow sector of financial interests are trying to "scare down" the price of gold. The capitulation volume is attempting to lead the market downward and yet does not seem strong enough to sustain the downward momentum for any notable duration of time. Buyers ready to step in at the end of the day? If so, that aberration in traditional '90's gold market behavior would also be worth noting.

Thire, despite gold market weakness, the general equities market has looked weak too most of the day. Again, the normal pattern would require stocks to go roaring through the roof in celebration of another stake in gold's heart.

So, there could be even more developing paradigm shift here.

The central question remains: will the Clinton goverment's herculean efforts to suppress the gold price over the next month succeed?

So far, those efforts have never failed. But chinks in the armor...aberrations from past market behavior...they are all too evident.

Thanks

F*

beesting (11/29/99; 11:46:13MDT - Msg ID:19898)
U.S. Bullion Bank Republic being sued by the Japanese!
http://biz.yahoo.com/rf/991129/wk.html

Message for Sir Farfel!!!

In Sept.Republic said U.S. prosecutors were investigating its futures brokerage's dealings with the New Jersey commodities trader and fund manager Mr. Martin Armstrong.
The trader was later charged with securities fraud and owes Japanese investors close to $1 billion.
Republic Securities played an integral role IN THAT FRAUD and was unjustly enriched at Amada's expense.

Comment: This could open up mainstream publicized investigations into the Gold futures markets dealings worldwide--exactly what GATA's purpose and intensions are IMHO!!! See if the FED gets drawn into this,or business as usual--everything gets hushed up concerning Gold....beesting

TownCrier (11/29/99; 11:27:42MDT - Msg ID:19897)
Yen is clearly allied with the dollar, managed differently than the euro
Senior Bank of France official Jean-Rene Bernard (a member of the central bank's rate-setting Monetary Policy Council) said Europeans had acheived discipline in regard to short-term variations in the single currency. In prepared remarks for a Tokyo seminar on Monday, Bernard said, "The euro has a potential for appreciation. This is especially true given that internal price stability has been and will be maintained in the euro area." Noting that the ECB had no exchange rate target, he added, "A certain degree of flexibility is needed in the exchange rate of the euro."

With the euro flirting with dollar parity and the threat of dipping below, Bernard said, "That would be a little strange. We should be a little puzzled, and there would be a psychological problem. But we could live with that if we take into consideration that, in the long run -- in three months, six months, one year -- we are sure that there will be an appreciation of our currency."

Contrasting Euroland with Japan, he said Europe has a more relaxed stance toward the level of their currency because Europe has had less exchange rate volitility over the past decade. He hoped that Japan's currency intervention today would be successful because "Everybody is interested in the future of the yen."

Japanese Vice Finance Minister Nobuaki Usui reiterated today that the G7's September expression of concern over the strong yen remains in effect, but declined to comment whether Japan was in contact with the U.S. over the recent yen-surge/dollar-slide. "The earlier G7 statement is still alive. Of course, we will respond as appropriate, based on the G7 statement." When asked about the talk of forex intervention today, Usui said, "We are responding decisively." In these operations the Bank of Japan acts as an agent of the Finance Ministry, conducting the actual dollar-buying operations through brokers and private banks. Bankers said the BOJ was buying dollars repeatedly throughout the day, but in late Tokyo dealings the BOJ was seen to be buying euros too. In regard to the intervention of dollar buying, Shizuka Kamei, policy chief of the ruling Liberal Democratic Party, was quoted by Jiji news agency on Monday saying, "We should urge the world to cooperate."

To what extent would the dollar need life-support if not for this active Japanese buying of dollars? This boost to the dollar above recent 4-year lows certainly goes a long way toward explaining why the gold price has fallen...these suddenly strong dollars can buy more gold today. Get your metal while the dollar enjoys the temporary benefit of this value propping.

CoinGuy (11/29/99; 10:30:51MDT - Msg ID:19896)
@nickel62
Your post didn't tell me anything new, but it did snap me back into reality.

It seems on a day like this a person can discount the fundamentals so easily as to deceive themselves into believing that all is well with the fiat system.

I dare to say it's all is not well on the other side of the fence...

CoinGuy

TownCrier (11/29/99; 10:27:25MDT - Msg ID:19895)
More money pumped into the banking system through repos
http://biz.yahoo.com/rf/991129/pc.html
The Fed's two-week reserve maintenance period ends on Wednesday. One analyst estimated the remaining reserve add need at $2.8 billion per day. Too low. The Fed said on Monday its operation of three-day fixed system repurchase agreements totaled $4.500 billion in new reserves for the banking system.

tedw (11/29/99; 10:12:45MDT - Msg ID:19894)
The Futute
http://www.usagold.com

Here is a prediction about Gold.I wish I was wrong but I dont believe I am.

Gold will rise in the New Year. It is beyond the ability of
any price manipulators to manipulate. There is only so much of it in the world. Human beings have always flocked to Gold in times of economic and civil crisis.Therefore, when
crisis comes the price will rise as the demand will and the supply will be constant.

Y2k is likely to be the trigger. When the welfare class in
America does not receive its checks there will be rioting and civil war, along black and white and left and right lines. The price of Gold will rise.

In other words, the coming Civil War in The United States of America will cause the rapid increase in the price of Gold.

He who has ears to hear,let him hear.

Knallgold (11/29/99; 9:59:06MDT - Msg ID:19893)
(No Subject)
BTW, I noticed a pattern.When FOA comes back, it is the best
opportunity to buy!Initially, I was angry when he told the forum of whatever high prices are ahead when they actually tanked (in sync with FOA's comeback.)

tedw (11/29/99; 9:58:31MDT - Msg ID:19892)
test
test

Knallgold (11/29/99; 9:53:42MDT - Msg ID:19891)
(No Subject)
I start to get FOA's message (this is not so easy as it looks!), in short:

The paper game wont STOP, it will FAIL (inherently).
The failure will take the Dollar with it.

FOA said he will come back soon (hello and a huge thank you, Gentlemen! You caused me a lot of sleepless nights (noSmile), and then I bought physical,good medicine , Sir!
(smiling again!))

rsjacksr (11/29/99; 9:10:48MDT - Msg ID:19890)
Dr. Kurt Richebacher's dire predictions for the global economy
http://examiner.com/990822/0822ackerman.html
[Snip] The former chief economist and managing partner at Germany's Dresdner Bank says a deflationary collapse lies ahead that will ravage the world's bourses and usher in a dark period of austerity and financial discipline. Probably not one economist in 50 shares his views, at least not publicly. Richebacher, now living in France, says many of his American colleagues have been seduced into ignorance and complicity by Wall Street's billions as well as by their love affair with mathematical models that shun fundamental laws of economics.

USAGOLD (11/29/99; 9:10:31MDT - Msg ID:19889)
Question...
Why do so many gold advocates expend enormous intellectual capital establishing the fact that GOLD is "Money" and then criticize the same because it refuses to act like an ordinary "Commodity"?

USAGOLD (11/29/99; 8:54:46MDT - Msg ID:19888)
Today's Gold Market Report: Britain's Loss Bullion Banks' Gain?
MARKET REPORT(11/29/99): Gold got hammered overnight and in the
early going in New York on what is perceived as weak demand at this
morning's Bank of England auction. Count us among those who think that
the BOE auctions are accorded too much weight in gold pricing action. A
similarly-sized disposal of gold by Jordan over the past couple of weeks
went off without a ripple in the price -- in fact the yellow tended to
trade higher all week as the news was digested. The BOE auction was
roughly double subscribed.

We concur with the London dealer quoted by FWN this morning as saying
that "an important difference (between this and the last auction), on a
big picture level, is that the market was heavily short on the first two
occasions but is now edging into long territory." One of the significant
features of the last election was bidding by two major gold mining
concerns. Gold Fields, a winning bidder and South Africa's second
largest gold mining company, simultaneously announced it was cleaning up
its hedge book and one would have to assume that the auction purchase
was part of that strategy. Thus far, there has been no leakage, no
announcements, no revealed strategies. Let's see what happens if we get
some reports on who the bidders were.

As far as medium to long term market dynamics are concerned, in my view,
it is not as important to hang our hats solely on price reaction, but to
look closely at who the players were in this morning's auction and what
motivated them. If there are no announcements as to whom the
participants were, we would be inclined to assume that those bullion
banks short the market will end up with most of this BOE offering and
the take will be used to square their own short positions or return gold
to their central bank lenders. On the day of the first BOE announcement,
we theorized then that these auctions were essentially designed as a
bailout of ailing bullion banks short gold. Since then, we have yet to
hear a report of any BOE gold actually reaching the open market. We
stick with that analysis and most of the information that has surfaced
about the gold carry trade situation supports our long-standing thesis.

Bottom line: Britain once again is the big loser in this affair having
lost more gold at ridiculously low prices. Coincidentally, the pound
continues its slide today - a slide which began when the auction
strategy was announced in May. On the other side of today's
transaction, someone has fulfilled their gold needs agreeably. For the
individual investor we counsel staying the course: Acquire the physical,
particularly on the dips, as a long term portfolio insurance and let the
market do whatever it wants. Those betting on gold's long side with
short term options and futures have served as little more than cannon
fodder for the shorts.

That's it for today, fellow goldmeisters. We'll be back tomorrow, or
later today, if anything significant develops.

nickel62 (11/29/99; 8:45:39MDT - Msg ID:19887)
Why is every body Knashing their teeth?
If we have learned anything from watching the manipulation of the various markets. We should know that the way they work their control is to modulate espectations.If they know a "bad"number is going to come out they use the media .yes including the various internet forums, to get the expectations so low that the "reality" seems good. And today vice versa, Being that the manipulators are the ones collecting the bids and polling the likely buyers,they knew last week what the likely results would be. So they ramped up the price before the auction and then when it came out at $293/ounce everyone of us, said oh thats too bad!Two times over subscribed is only a disaster if you got the idea of "ten to twelve times or fifteen times "planted in the crowd to create an impression that that was really ever realistic. The fact is they are in control of a lot of the information to let them also start influenceing the way we think is to become no better than the sheeple that are currently being fleeced in the Stock market boon-doggel. After all all we have to do is watch the heavey handed manipulation of the news and information that goes on every day on CNBC et all. and we can pretty clearly see the pattern. The fact is no overly hedged miner is sleeping any better today than he was yesterday. The price of gold today is $2.00/ounce higher than it was for most of the last month and the manipulators are becoming a lot more obvious which I think belies their fears. Sit back add to your positions in physical gold and unhedged mining stocks and enjoy the show as the b*st*rds get what is coming to them and not too far down the road. Remember the sharks are circling them now not us.They ar short a commodity money that they can't ultimately control.Have a good day!

ET (11/29/99; 7:13:13MDT - Msg ID:19886)
OverHerd
Hey OverHerd - concerning your Linux problem, send me a mail at gears@idir.net. I've got a few things that may help you out.

ET

ORO (11/29/99; 7:10:14MDT - Msg ID:19885)
Dip - for how long?
Considering the ECB's need to fix gold up significantly from here, expect a bottom to form soon, and within 2-3 weeks at the most. Very likely within less than 2 weeks.

Blue Sky (11/29/99; 7:03:03MDT - Msg ID:19884)
Thank You Townie
Just check before going to dentist..Didn't want to order ceramic replacements prematurely..Guess I'll continue giving my golden view..
Positive....another 60 days of opportunity to add to hoard.
Question....do I offer my mining stocks in a covered short?
I admit I really was hoping for a big bounce so as to unload the miners at a good price and exit the market further, reduce overall debt, and wait for buying opportunity in Jan..
Shorting my mining may be too much like rolling the dice.
There is Blue Sky up there ...

TownCrier (11/29/99; 6:15:14MDT - Msg ID:19883)
PRESS RELEASE--HM Government Gold Auction Result: 29 November 1999
The Bank of England announces that the gold on offer (approximately 25 tonnes or 803,600 ounces) has been allotted in full at a price of $293.50 per ounce. Details of the result are as follows:

Amount of gold on offer (approx)__803,600 oz
Amount applied for____________1,669,600 oz
Times covered_________________2.1 times
Amount allotted to bidders_______804,000 oz
Allotment price__________________$293.50 [NOTE: London AM Gold fix US $293.10]
Scaling factor at allotment price____47.9496% [Means that those bidding exactly $293.50 got less than half of their desired gold. Those bidding higher got what they wanted.]

All accepted bids which were made at prices above the allotment price have been allotted in full at the allotment price. Valid bids made at the allotment price have been allotted an amount of gold equal to the amount bid for multiplied by the above scaling factor and rounded up to the nearest 400 ounces.

By close of business in London today, applicants whose bids have been successful in whole or in part will be notified by the Bank of England of the exact weight of the gold bars allotted to them and the amount payable in respect of their purchase. Payment must be made in US dollars to the Bank of England's account at the Federal Reserve Bank of New York, no later than 12 noon New York time on 1 December 1999.
The next two H M Government gold auctions are scheduled for Tuesday 25 January 2000 and Tuesday 21 March 2000.

Blue Sky (11/29/99; 5:54:45MDT - Msg ID:19882)
NO Subject
Good Morning To All....A Wish Of A Bright And Sunny Day To All...We Have Held The Price Of Gold at $40+/- above the last auction. Is this not great??? I'm sure many got in at much higher prices and their discomfort is truly felt, but continue the course, everything offered in the gold education course points upward.
I'm off to the dentist to have my gold crowns cleaned,,,hope to return and find that my molars have appreciated in value..
Remember .. golden sunlight above the dark clouds..Blue Skies to all.

Tanglewild (11/29/99; 5:26:30MDT - Msg ID:19881)
boe
http://www.marketwatch.newsalert.com/bin/headlines?Query=V%fwn+P%M2PR&AdTarget=fwn

all of it auctioned at 293.50

Tanglewild (11/29/99; 5:23:18MDT - Msg ID:19880)
boe
2.1 times overprescribed. boe auction. yuk.

ORO (11/29/99; 4:54:19MDT - Msg ID:19879)
Dip and bid
I have a feeling that the dip in POG was intended to affect bidding on the BOE auction. This could have a few purposes. Discouraging bidding by momentum sensitive bidders - those who want physical would be happy to issue more future paper in return for physical now. Lowering the floor price to get last minute bidders to lower their bid price. Plain frightened stops attacked by the regular crowd, just looking for a quick trade. Some may be completing spreads entered piecemeal.

Note for a future post: the strong price inflationary effects of the internet, high technology and E-commerce. Thoughts welcome.

Canuck (11/29/99; 4:42:36MDT - Msg ID:19878)
auction
http://www.bankofengland.co.uk
LONDON, Nov 29 (Reuters) - The Bank of England will sell 25 tonnes of gold on Monday, the third in a series of sales aimed at reducing UK gold reserves from 715 tonnes to 300 tonnes over the next couple of years.

The first sale was held on July 6, when the price was set at $261.20 a troy ounce.

The second was on September 21, when the price was $255.75.
* Amount on offer on Monday -- 25 tonnes (803,775 ounces).
* Bid deadline -- 1130 GMT Monday, November 29.

* Delivery of bids -- Electronically through SWIFT system or by hand to Bank of England.

* Minimum bid size -- 400 ounces. Prices bid must be in U.S. dollars in multiples of 5 cents per ounce bid.

* Auction procedure -- Conducted on a single, or uniform, price basis. Valid bids ranked in descending order of price and allotments made in mutiples of 400 oz to applicants whose bids are at or above the lowest accepted price.

Bids above the lowest accepted price will be allotted in full at the lowest accepted price.

* Frequency of gold auctions -- bi-monthly to next March, with the method to be reviewed meantime.

* Result of auction -- Details to be published on the Bank of England website (http://www.bankofengland.co.uk), Reuters pages to and other news vendors.

* Duration of gold sales -- The UK Treasury and BoE said it will sell 125 tonnes in fiscal 1999/2000 ending in March 2000. The remaining 290 tonnes will be sold in later years.

Canuck (11/29/99; 4:38:47MDT - Msg ID:19877)
Auction
http://biz.yahoo.com/rf/991129/cn.html

Lists details of auction(as per T.C. previous), also BOE site for results.

RossL (11/29/99; 4:30:15MDT - Msg ID:19876)
Blind bid
It looks like a "blind bid" would be against the rules. If Ashanti wants to buy, they will have to bid high.

Canuck (11/29/99; 4:20:01MDT - Msg ID:19875)
Auction
It's 6:00 am eastern; I believe that's noon London time. We should know in an hour, I think I heard 7:15(12:15 London)

I'm not going to get excited about the drop last night. At
least it shows volatility, it seems to me that bids would be placed at the last moment and since we KNOW the crooked cabal freaks are bringing the price down this may work to an advantage. I'm looking at 'oversubscription', so
bring it down and bring on the bids, oversubscribe this crooked bullsnot auction to the limit.

I tentatively expect a few miners to jump in. I hope Goldfields and Anglogold bid again. If the rumours of hedge unwinding is true, we may see a few others. Did anyone confirm or deny Ashanti's blind bid?

I am hoping a 10x oversubscription. Imagine a 12x, 15x; this will prove demand of the physical. If we get a dismal 5x, 6x I'm going to puke.

TownCrier (11/29/99; 4:16:46MDT - Msg ID:19874)
Bank of England Auction Announcement Notice: HM Government Gold Auction--Monday 29 November 1999
1. The Bank of England announces the sale by Her Majesty's Treasury of approximately 25 tonnes of gold by auction on 29 November 1999. The arrangements for the auction and terms and conditions applicable to the sale of gold are set out in the Information Memorandum issued by the Bank of England on 11 June 1999. Bids are invited from entities eligible to participate in the auction. All bids will be subject to the provisions of the Information Memorandum and to the provisions of this notice.

2. The gold will be available in the form of London Good Delivery bars each having fine weight between 350 and 430 ounces and held at the Bank of England, London.

3. The auction will be open to London Bullion Market Association (LBMA) members, and to central banks and other international monetary institutions holding gold accounts at the Bank of England. All bids must be made either by authenticated SWIFT message using the standard format set out in the Information Memorandum or on printed Gold Auction Application Forms available on request from the Bank of England. Duly completed Application Forms must be lodged, by hand, at the Bank of England, Customer Settlement Services, Threadneedle Street, London not later than 11.30 a.m., London time, on 29 November 1999. Bids submitted by SWIFT must be received by the Bank of England not later than 11.30am, London time, on 29 November 1999.

4. Bids must be for multiples of 400 ounces of gold; the minimum bid size is 400 ounces. Prices bid must be in US dollars in multiples of 5 cents per ounce bid. Each bid at each price must be made via a separate SWIFT message or Application Form.

5. The auction will be conducted on a single, or uniform, price basis. Valid bids will be ranked in descending order of price, and allotments will be made in multiples of 400 ounces to applicants whose bids are at or above the lowest price at which the Bank of England decides that any bid should be accepted (the "lowest accepted price"). Applicants whose bids are accepted will be allotted gold at the lowest accepted price. Bids above the lowest accepted price will be allotted in full at the lowest accepted price. If the total of bids at the lowest accepted price exceeds the amount of gold remaining to be allotted after all higher bids have been satisfied then bids at the lowest accepted price will be scaled back. The procedures for scaling are set out in the Information Memorandum.

6. The Bank will announce the total amount of gold bid for, the lowest accepted price, the scaling factor to be applied to bids made at that price and the amount of gold allotted by 12.15pm, London time, or as soon as possible thereafter on the day of the auction. Applicants whose bids have been successful in whole or in part will be notified by close of business in London on 29 November of the exact weight of gold allotted to them and the amount payable in respect of their purchase. Payment must be made in US dollars by wire transfer to the Bank of England's account at the Federal Reserve Bank of New York, no later than 12 noon New York time on 1 December 1999 (the "value date"). The title of the account to be credited is "Bank of England 'A� Account", No 021086074. Subject to confirmation that the appropriate cleared funds have been received from a successful applicant at the Federal Reserve Bank of New York, the Bank of England will on the value date make gold available for settlement. This will take the form of either (a) a credit to a gold account held at the Bank of England, or (b) allocation for physical collection from the Bank of England.

7. The Bank of England reserves the right to reject any or all bids, or parts of any bids, for any reason and to waive any technical defects in bids.

Number Six (11/29/99; 4:13:10MDT - Msg ID:19873)
Golden Truth - I feel your frustration...

And agree with much of what you've said... the manipulation is brazen and "they" don't care how it looks they are that confident in getting away with it, it's no wonder that GATA and Ted Butler are beating themselves up trying to get the "authorities", the so-called "watchdogs" to take action.

RICO my ass.

The whole thing STINKS, even our Senators are in on the brazen collusion... sickening, absolutely sickening.

One more month - Y2K may just do the trick!!!!!!!

Golden Truth (11/29/99; 3:53:41MDT - Msg ID:19872)
GOLD DOWN $5/oz AGAIN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Like i said earlier in my post GOLD is going to go down tonight. This is so bloody obvious as to what they are doing and nobody can do a dam thing, what a joke!
I say we Kill the bastards! I,am so sick of this B.S
F.O.A you say GOLD going to hit $360/oz and then run into the thousands, could you be a little more specific time wise. I think alot of people are getting so sick of hearing that the P.O.G will rise, but it never does, i think we have a surplus in reality and there is no real shortage of real GOLD.

Just like all other commoditys in the World we have an excess of supply because nobody outside the U.S.A has any dam money to buy anything let alone GOLD!
Just go to a Costco to see how much "stuff" is available.
I think if this doesn't change real quickly the World will dive into a DEPRESSION.
It will be done to teach everyone a lesson for trying to replace the u.s dollar as a world reserve currency.
The u.s government maintains that it wants a strong dollar that means to hell with everything else and everyone.

Mark my words this is only the beginning of low prices for all things, they will drive every thing into the ground to protect the "Dollar" unless they are stopped from doing so.
So far i still see very little actually happening.
Good luck to all of us we're going to need it, Bigtime!!
G.T

ORO (11/29/99; 3:26:57MDT - Msg ID:19871)
Goldsun - $ and Euro outstanding
The number of Eurodollars outstanding - those used for trade - as reserves - for lending-etc. is around 20 $t going on 24 $t and could be higher. Only 6 $t of this actually came out of the US, the rest is interest rolled over into fresh lending.

Since Europe has kept trade balances positive, there are no significant quantities of Euro floating around the markets as a result of deficits. The Euro used in ex-European trade is being created by conversion of current dollar loans and issuance of new Euro debt, net export of Euro from Europe through trade is 0.
The rate of growth of Euro debt is at about 60-70% that of dollar debt (on a change bassis) at 2.4 $t per year rather than the dollar debt growth rate of over 3 $t per year. I am expecting the next set of data to show significant rises in Euro debt rates. The somewhat lower intermediate term rates on Euro debt should push more dollar debtors to convert to Euro debt. I would expect short term credit to make a strong move to the Euro since it is depreciating and carries a much lower interest rate than the dollar, but not much higher than the Yen interest. (Besides that, the Japanese prefer to lend their dollars at these high rates rather than lending Yen. They like lending Yen to US markets.

el St.One (11/29/99; 2:00:33MDT - Msg ID:19870)
SHIFTY
The BOE auction as I understand it; 25 tons to the highest bidders. They sell to highest bidders for the top 25 tons, but all winning bids get their Gold for the lowest bid in that top 25 tons.

There it is.........clear as mud.

Also only selected members allowed to bid.

If the little guy was allowed to bid the auction would be over subscribed 20x....30x or more.

I would bid on a 100 oz at $250.

I'm guessing this auction will be over subscribed 6,8 maybe 10x.

My wild guess is that the winning bid will be over $300 maybe well over.

We will know in a few hours.........el

Goldsun (11/29/99; 1:59:21MDT - Msg ID:19869)
Laying the Euro Debt Trap
Oro
If the idea intrigues you, I would be greatly interested in your thoughts on the quantity of euros needed to function as a reserve currency. My unscientific guess places the world supply of dollars between 6 & 7 trillion and euros around 1 trillion. Obviously the supply of dollars is greater than needed for its function as a reserve currency, but how much greater? If 6 or 7 times greater, perhaps we should move our chairs onto the front lawn so as not to miss seeing the fireworks.
Goldsun

Usul (11/29/99; 1:51:12MDT - Msg ID:19868)
Under the Calm Seas
there is much activity
dragonfly (11/28/99; 18:57:34MDT - Msg ID:19839)
said "There was more going on between 1917 and 1965 than most folks have any idea of"

Would it be too daring to suggest that from 1965 on, yes, even today, there is more going on than most folks have any idea of? Including (and not least) the gold market?

As Marvin Gaye once said,

What's going on?

http://www.sdf.se/~simon/marvin/lyrics.html#sng_whats_going_on

Golden Truth (11/29/99; 1:38:40MDT - Msg ID:19867)
TO STRANGER
Howdy Stranger long time since we last spoke to one another.
I just finished reading "The Inflation Puzzle- Peters-Nov29/99" over at GOLD-EAGLE. Thought you might be interested, it's not to bad, and it really compares and contrasts the "Inflation" vs "Deflation" problem.
TurboHawg might be interested as well? Looks good for GOLD.
Chow! G.T

CoinGuy (11/29/99; 1:01:07MDT - Msg ID:19866)
Just checking in
Been out of town, doing a little hunting and visiting relatives. Thought I'd check in ad join the party. I know theres a few guys lurking around out there waiting for the BOE auction. I was thinking(like most) that the BOE would be good for gold, but spots looking sickly tonight. Tomorrow could be interesting

Guess I won't be sleeping tonight...

gold, got mine!

Coinguy

SHIFTY (11/29/99; 0:54:39MDT - Msg ID:19865)
auction
How can they set the price of gold and have an auction? Do they throw out spot price? If they do then gold could go anywhere tonight?

Number Six (11/29/99; 0:16:59MDT - Msg ID:19864)
New GOLD aftershave :o)
On my UK trip I noticed Aramis has a new aftershave out called "GOLD". Comes in a nifty gold package.

I bought some.

I am a sad bugger...

turbohawg (11/29/99; 0:15:42MDT - Msg ID:19863)
philosophical question, sort of
When was the last time you saw a bicycle rider wearing anything other than a bicycle costume ?

tedw (11/29/99; 0:06:16MDT - Msg ID:19862)
gold down
A poem

Gold down

I am too.

Nuff said

Ted

Smile

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