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ARCHIVED DISCUSSION FROM 12/29/1999
All times are U.S. Mountain Time
View Yesterday's Discussion.
Netking
(12/29/99; 23:23:54MDT - Msg ID:21830)
Major World Indices
http://quote.yahoo.com/m2?u
It looks like one way traffic on the world indices with about 4-5 minor exceptions.
Update on the Crash alert link herewith to -2 up from -10 in recent days bodes "all well" for the Dow for the moment anyway.
http://www.wwfn.com/crashupdate.html
THX-1138 (21825) Off topic but take IPeter 2:24 3 x day until well!
Bonedaddy
(12/29/99; 22:43:48MDT - Msg ID:21829)
Thank you Cavan Man.
http://www.strategicintel.com/atomic.htm
It seems as if everyone has been laying low the past few weeks. I've been here reading posts every few days. I picked the above link off of the website of J. Orlin Grabbe. What a guy! Anyway, it's about a briefcase nuke. I've seen quite a few posts on the oil supply. For the record, I have been employed at the plant operations level in this industry for about 20 years. I have worked for majors and independents. The Y2K problems are very real. Many of the more modern SCADA (Supervisory Control and Data Aquisition) systems are running on Wonderware and communicating with F*#@er ROC's and A\B PLC's. These systems are usually compliant. But, most systems have programs that store data in custom built data bases that are accessed by the compliant systems. Many of these data bases WILL CRASH. In the case I'm currently involved with, the plant will have to be run manually until the bugs can be ironed out. It is a small plant, we have written the manual proceedures, it will keep us on line. In a refinery, our method wouldn't fly for a minute. The systems are too complex and the process variables that must be controlled to make gasoline are too strict. This will result in a lot of product going to the re-run tanks. Pipelines seldom ship only one product. It is common practice to ship 10000 bbls of propane, separated by a buffer, followed by 10000 bbls of diesel or jet fuel. In the old days, (1980's) the operator had to watch for a gravity change and switch into a re-run tank breifly, then switch to the tank for the other purity product. It took a well trained operator to make a flawless transfer. If someone was alseep at the switch, alot of product got mixed and had to be re-run. (The guy who let it happen was kicking his lunch box down the road.) A lot of these programs were written in the mid 1980's. Y2K was not considered.
I have also spent some time around NPR#3, Teapot Dome. It has become something of a proving ground for new technologies. There is some sort of Gov't backed research program going on out there. Up until a couple of years ago, it was contractor operated at "cost plus". A lot of money was literally poured down a hole in the ground. Bottom line, it isn't much of a reserve, we've been pumping the hell out of it for years.
THX-1138
(12/29/99; 22:29:41MDT - Msg ID:21828)
Shopping for Y2k
I find that shopping at my local Albersons at night is the best time. That seems to be when they restock the shelves.
Was in there and bought a couple jugs of distilled water.
I think I will head out and pick up a few more. Also probably will pick up some more Top Ramen. That stuff is even edible dry and uncooked. Almost like chow Mein noodles. Only uses two cups of water to cook it too. Saves on water.
Doesn't look like any supply problems yet.
Cavan Man
(12/29/99; 22:10:55MDT - Msg ID:21827)
ALL
Bonedaddy, Leigh, elevator guy, Solomon Weaver
Bravo all. Congratulations are in order.
Al Fulchino
(12/29/99; 22:10:15MDT - Msg ID:21826)
Ramblings to my online friends.
My nephew, who is computer tinkerer, took out the battery from his old computer....the one that he states operates the bios clock. He says the computer has continued to run without problems, including reboots. This *may* be a solution for keeping some old machines operative. Please consult a techie or find someone who has a machine they are willing to lose and check it out.
www.ally2k.com has a free downloadable Hardware diagnostic program, that will tell you exactly where your PC stands.
Gas sales are up this week! And much earlier than I expected. We even have customers walking in with shopping carts filled with *empty* gas containers looking for fillups. Supposedly 18 million gas cans are hanging around in peoples sheds in the US. Don't wait until Friday to have your fuel.
I entered the E*Trade contest, that awards a million dollars for the correct guess on the DOW JONES Ind Ave close at the end of 12,31,99. If, it ended yesterday, I would be calling MK for a large shipment...:)Please help bring the Dow *down* a bit the next two days...thanks <smile>.
People who never talked about y2k, are now out and about storing supplies. I find this a very curious sight, to watch people all of a sudden be concerned. The computer problem of the date change never really hit home with the average person. But, implant the idea that in a couple of days they *might* not have their daily comforts and see what they do. This y2k thing, if it becomes a serious situation, is a great time for opportunists. Especially for those that offer solutions. People like our fearless and honorable leader will be only to happy to help us. Watch out for the price he asks for. Let us hope that all the millions spent on this problem are well spent. Because the y2k corrections if well done will protect us from opportunists. This whole affair, (y2k, a spread out military, a man in the white house who enjoys degrading women more than valuing truth) may finally be the "rope" that we hand over to our enemies.
We shall in time see. It will not be the end of the world as we say, but it IS a most unusual event. The *ultimate* man made expression of will and intelligence, the computer, failing us.
THX-1138
(12/29/99; 21:48:21MDT - Msg ID:21825)
Flu like sickness going around
Lots of people at my office have been talking about co-workers, and relatives who have come down with a bad flu.
Lots of people from church also have been coming down sick.
I have also been seeing some of those strange contrails in the sky.
This afternoon after getting home the talking head on the news said if you haven't taken the flu shot you should do so. He seemed to be very adamant that people take the shot.
From what I have witnessed, it seems like some of the people at work who took the shot have gotten sick. I was slightly sick for about 3 days. Then had a lingering cough, not much else. I have since pretty much gotten rid of the cough, and have been fairly healthy since and still haven't taken the shot.
Thanks to who it was who started discussing colloidial silver. I now know how to make it, and after trying it once my cough seemed to subside.
Anyone else notice a lot of sickness going around?
Journeyman
(12/29/99; 21:46:53MDT - Msg ID:21824)
What's so great about the euro? @ FOA, TC, ORO
If the euro *IS NOT DIRECTLY CONVERTIBLE,* and thus only
nebulously connected to gold through the back door, and
reluctantly so at that --
"In recent years, I've asked [Nobel Laureate Robert]
Mundell several times about the lack of progress on the
design of the euro, specifically how the Europeans
could ever hope to make it work without a gold anchor.
Mundell, who thinks in terms of epochs, dismissed my
concerns and said that as they got closer to the target
date, they would realize they will have to think about
gold. He seemed to think that to bring up the subject
before they were ready to think about it would be a
waste of time ... I said we would have to wait for Part
II, as I expected Mundell would "sneak gold" into the
equation. I remember Mundell telling me more than 20
years ago that gold would have to be "snuck" into the
new international monetary system when the world was
ready for one, because it was so demonized by the
economics profession after WWII. -Jude Wanniski, Memo
on the Margin, 10-14-99 <http://www.polyconomics.com/>
-- then what's so great about it? You just have to trust a
different unbacked paper currency and thus the integrity,
that is "the full faith and credit" of a different group of
bankers and their government cronies. In the case of the
Euro, Americans using euros would be put in the position of,
say, Russians using dollars today. As someone who thinks he
understands the inevitable fate of all fiat currencies, why
would I want to do that? More particularly, why would I want
to settle for this new fiat currency, knowing the pain and
disorder it would eventually cause my children and
grandchildren? See "Asian Currency Crisis" news for
examples.
The only value of the euro that I can see, as it's currently
constituted, is that it would serve as a stepping-stone for
the future free use of gold as a medium of exchange for any
who prefer the "barbarous relic." I would use the euro only
because, being a new fiat currency, it has to be on it's
best behavior for awhile, and it isn't yet carrying the
repressed overseas "rot" and other smelly baggage of the
already embalmed dollar.
FOA, are there other better reasons to support the euro than
as a stepping stone to gold?
FOA, you suggest that "The modern reserve currency [probably
euros & dollars?] will be in demand for trade settlement in
conjunction with gold, but will not be in competition with
it."
It seems to me that once gold gets it's nose back in the
tent, it'll take over from fiat currencies as it always does
because of the immutable tendancy of "monetary authorities"
to create just a little extra fiat and the workings of
"Anti-Gresham's Law" (good money drives out the bad -- and
apologies to our Mr. Gresham.) I'd bet Mundell knows this,
in fact, is counting on it. If you had the option of being
paid in gold vs. chronically depreciating paper money, which
would you choose?
This "Anti Gresham's" effect is why the Kensyians,
monetarists, government worshipers, and particularly
bankers, made such a concerted effort to eliminate gold as
competition to fiat currencies, both by drastically reducing
the supply available for trade (by stealing it from the
people and locking it away in central bank vaults and
depositories like Fort Knox) so we couldn't use it, and by a
persistent anti-gold disinformation campaign so we wouldn't
want to.
It seems to me that gold always ends up competing with fiat
whenever both are equally available, and there aren't
effective legal tender laws or other trade externalities
handicapping gold. The use of anonymous, convertible, gold
e-currency, should it evolve, makes hampering gold by such
externalities less and less feasible for central authorities
of all stripes. Am I incorrect in this?
FOA, can't international settlements be done with gold
nearly as easily as they can with paper as you yourself
described in the IMF revaluing gold through Mexico and
Brazil? That is, IMF only imaginarily transfered gold -- it
never actually left IMF vaults. Similarly banking settlement
functions make it only necessary to transfer paper money --
or gold -- once in awhile to compensate for long term
imbalances. Thus while as you suggest, "Gold as a 'real
wealth settlement money of slower speed' and Euros as a
'modern digital money of high speed'," it seems to me that
this speed differential is small enough to make the
difference largely inconsequential. Am I mistaken in this
perception?
Finally, Murray Rothbard was fond of pointing out that even
if there was a temporary shortage of gold for transactions,
many alternatives were available. First, demand would fuel
higher trade value for gold which would stimulate
production. Second, alternative modes of credit would
develop, and third, an increase in the value of gold could
be reflected in the value of derivative trade units, thus
spreading the existing gold over more transactions, so to
speak. That is, trade unit derivatives of gold could be
devalued. Thus a "shortage" of gold was really just a
subjective and temporary PERCEPTION and though people might
worry about it, it wouldn't cause any serious long term
economic difficulties.
So, why not have convertible E-gold as the goal rather than
the unbacked euro, which is just another (better) paper
backed fiat currency? Or better yet, all sorts of unfettered
competing currencies?
Regards,
Journeyman
elevator guy
(12/29/99; 21:46:34MDT - Msg ID:21823)
Y2K rears its ugly head?
We are having trouble using our American Express card. Its all paid up in full, but the teller cant swipe it. They had to call in.
Has anyone else noticed this? Maybe its similiar to the current trouble in Britain?
The local grocery store is out of bottled water. (But its not the first time)
Bonedaddy
(12/29/99; 21:43:53MDT - Msg ID:21822)
I've been lurking.....
Hello again Leigh. I enjoyed your last post tremendously. Was it really off topic? Maybe we should just have a few good rants about personal responsibility around here! Quirky as I am, I feel that it is my part, as a citizen of this country, to keep off of the government dole. Hypothetically speaking, one method of demonstrating fiscal responsiblity might include owning some real money. Oh say, GOLD, for instance. The nice thing about GOLD is that it would not evaporate into thin air the very moment that it was needed most. It has been stated at this forum many times that gold and silver are the only money that are not based on someone elses promise to pay. Now, for all you lurkers out there, a question: Upon whom does the responsibility lie to see that your family has sufficient food? Sufficient money? Who is responsible for your personal safety? Is it Uncle Willy and Donna Shalalalalala? The gummit is telling people to have 3 days supply of food and by the way, please don't top off your gas tank. (That proves it! They really believe we are morons!) I'm not classically educated, but have earned a Phd from the school of hard knocks. So let me try some country boy logic on anyone who has cared enough to read this far. Nationally, the federal, state, and local governments have spent BILLIONS on attempts at Y2K avoidance, but they are telling the people not to spend fifty bucks? Why? So, if the system does have a problem, the sheep will comply quickly, as soon as their bellies are empty. No gas? Guess you can't go see Uncle LLoyd down on the farm now can you? Too bad. Now, be a docile little chump and Uncle Willy will give you a nice bag of rice for your pea shooter. I can see this one comming as clear as a freight train under a full moon. As Bogart said in the closing scenes of Casablanca, "If you don't get on that plane, you'll regret it. Maybe not today, or tomorrow, but soon and for the rest of your life." Folks we have a lot of learning to do.
THX-1138
(12/29/99; 21:39:26MDT - Msg ID:21821)
US Gov't upgrades security levels today
I received a message today at work that the base was enacting added security procedures.
The base is still on a Threatcon Alpha footing, but they are adding extra security measures to follow.
Most of the extra security seems to be from the Threatcon Bravo security procedures. I really don't know why they just didn't upgrade to Threatcon Bravo.
Stupid idiots I guess don't want to cause any worries.
If you don't know government Threatcon procedures they are as follows:
Threatcon Alpha - Lowest
Threatcon Brovo - Next highest. Look for strange packages and be more aware of strangers.
Threatcon Charlie - I think that is possible terrorist threat. Tighter security.
Threatcon Delta - Terroritst threat likely. The base pretty much gets shut down and all badges are checked by gate guards.
elevator guy
(12/29/99; 21:37:28MDT - Msg ID:21820)
Um, I mean a "tennis ball at 15 miles", if I remember correctly.
.
elevator guy
(12/29/99; 21:34:52MDT - Msg ID:21819)
How many people can the Earth support?
I used to fly a lot. All over the world. First in the military, then for business, in civilian life.
As I glided over vast expanses of earth below, from the vantage point of 35,000 feet, I could see great plains, huge fields, towering mountains. Lakes and streams where no buildings were. Land mostly unoccupied.
The places where mankind has set up nest, amounts to only tiny little specs, (cities), and the freeways just little barely visible scratches. And the spaces in between these little dots, are huge, sprawling, vast, um, I'm having trouble searching for adjectives here, but you get the point. Not just "useless" land, but rich, beautiful land. Very inhabitable. And many thousands of times more empty than the cities are full. (Get on my mathematical trampoline, and lets do some jumping) Its the same pattern seen in the stars at night, when you look up, and realize that the space in between the stars is far greater in distance and volume, than that of those little points of light, occupy. Its the same pattern seen in atoms, where the nucleus is encircled by electron(s), whose orbiting distance from the center is akin to a basketball in a football field, with a tennis ball at its edge. This is the structure, pattern, and fabric of the universe.
What has this got to do with gold? Well, its a derivative discussion, and falls more into place when examining the cosmos a whole, how our lives fit into it, and what effect the "way things are" have on everything, which includes the POG. All sciences, all philosophy, all wondering lead to a point, and gold illumines the way.
THX-1138
(12/29/99; 21:32:24MDT - Msg ID:21818)
A really good commentary about Y2K and Gold finances in history.
http://x26.deja.com/threadmsg_if.xp?AN=565458822&CONTEXT=946339034.1942290455&thitnum=6
Got this from Kitco.
The discussion about gold mirrors what has been discussed on this site. Great history lesson.
Canuck
(12/29/99; 21:15:04MDT - Msg ID:21817)
(No Subject)
http://2000andyou.com/2000/
From 'Pam, Ohio - 9:18 EST'
Canuck
(12/29/99; 21:12:36MDT - Msg ID:21816)
Number Six
Have you seen/heard this?
--------------------------
Now, I've come across information from an embedded systems oil engineer who served as the chief designer of embedded systems for a major oil company. He has over 20 years in the industry and until this past summer was involved in remediating those systems that he designed. He also assisted in helping other oil companies with their refinery embedded problems.
He has indicated that after reviewing the famous DD1 Light oil chat dialogue, he indicated that the projections made by DD are very "possible." He also said:
"No one (in this industry) is putting out accurate information any more, its impossible."
He goes on to say:
"When I was at ______ [Ed. Note: Oil co. name is deleted by this editor] site in ______, [Ed. Note: city location deleted for confidentiality] they said they were shutting down at the end of the year. There are a lot of other refineries doing same. "_______ [Ed note: Oil co. name again deleted] is having problems world wide. ARCO and EXXON are shutting down the two major international pipelines." . . .
"Gulf is announcing they are shutting down overseas as non-compliant." . . . .
Leigh
(12/29/99; 21:03:27MDT - Msg ID:21815)
Y2K
This brilliant piece was just posted on the Michael Hyatt Y2K website. It is in response to a woman who wrote in stating that she was too poor and too late to prepare adequately, and that she might have to beg, borrow, steal, or kill to provide food for her children:
My husband and I have 6 children and I am a stay-at-home mom.
We decided to have six kids.
We decided to be a single income family.
But....
We also choose to prepare most meals from scratch.
We choose to shop at yard sales.
We choose to wear hand-me-downs.
We choose to live in a modest house.
We choose to drive a 10 year old car.
We choose to avoid all the trappings of the newest fads that are designed to strip a person of their finances (Pokemon, Beanie Babies, etc.).
And entertainment in our home consists of boardgames, reading aloud together, cooking, playing the piano, lots of laughing, singing, dancing, swimming, lively conversation, a variety of sports, walking along the beach, and an occasional video rental.
We also chose to independently research and prepare for Y2K.
Was it hard for us? Yes.
Was it time consuming? Yes.
Was it a financial burden. Yes.
Did we make sacrifices? Yes.
Did we face ridicule? Yes.
The point is that WE MADE THESE DECISIONS and we alone will pay the consequences or reap the benefits of those decisions.
Will we help those in need?
Well, let me answer it this way....
For years, we have fed needy families, given money to charity, worked in the homeless shelter, delivered homemade meals to the sick, etc. I believe that we will continue to do those things throughout any Y2K crisis.
But, we have never done any charitable work that would put our children in danger. That is where we draw the line. Plain and simple.
And I believe that anyone who starts DEMANDING that we feed and care for them, wouldn't even think twice about hurting my family for the sake of their own welfare.
I suggest that anyone who expects my family to be their contingency plan, had better run out to Sam's and pick up a 100lb. bag of rice for $22.99.
_______
"Have I not commanded you? Be strong and courageous. Do not be terrified; do not be discouraged, for the Lord your God will be with you wherever you go." So Joshua ordered the officers of the people: Go through the camp and tell the people, "Get your supplies ready."
________
Sorry to be off-topic, but we were discussing this issue about a month or so ago. This is the best response I have ever seen.
SteveH
(12/29/99; 20:50:14MDT - Msg ID:21814)
ORO
The Nasdaq and equity indices seem to have reached epic proportions of growth. You contend that the tech stocks meet or are justified not by their profitability but rather their ability to grant options, which when excercised (AND through an accounting government allowed loop-hole) provide for a high degree of right-offs thus allowing what constitutes a loss to constitute a profit. You further state that said practice is only as good as long as the stock price rises, encouraging options to be excercised, and thus become a self-perpetuating practice. Should the stock fail to rise several quarters, then options would not be excercised, profits would falter, the stock would plummet and the cycle would be broken.
In your latest you content that bonds and interest rates will break this pattern sometime in the first quarter of next year, thus causing the above fall in stock values that will break the momentum of the option excercising pattern discussed above.
In this readers viewpoint, the market valuations would seem to be narrowly sustainable and that for every percent rise now in these indices causes a further step to their own demise. In other words, the crescendo of rise is briskening rapidly towards its own demise and that to believe the vast majority of people involved in this seemingly impossible event will come out with their cash in hand doesn't seem ring the bell of truth or justice or common sense, for that matter.
Isn't the law of "if it is too good to be true, especially for the greatest amount of people" about to kick into overdrive fairly soon?
What say you?
Solomon Weaver
(12/29/99; 20:41:18MDT - Msg ID:21813)
who understands today's silver???
Yes, wow...silver made a little run today. Just a couple days before the big rollover.
What strikes me is that in that very thin market, it would be very easy for some friend of the FED to use a teeny weeny bit of those billions the FED has been pumping out to use some vapor contracts to SLAM SILVER BACK IN PLACE TOMORROW.
It is patently obvious that silver cannot continue doing what it did today without gold starting to follow....thus, the hand of gold will be in the silver market tomorrow.
Here is my read on the whole story:
The FED and the USGovt have been holding their finger in the y2k dyke. As long as the computers all are working, the classic manipulations will work...unless there is panic.
In January, there will be so much happening that the old rules will not apply and the FED will be happy to let havoc reign for a while....in a worldwide y2k panic, the rise in the price of gold and silver will be seen as "rush" into the safety of PMs and not as a loss in the faith of the dollar (at least for a while). In that time, there may be a chance for the USA to generate a rally around the dollar...if they can convince the world that we still "own" the gold in Fort Knox.
By the way, the word from the FED to the gold carry trade mob was "no promises after Jan. 1"
Poor old Solomon
TownCrier
(12/29/99; 20:25:44MDT - Msg ID:21812)
The GOLDEN VIEW from The Tower
In an interview today with CNBC, U.S. Secretary of Treasury Lawrence Summers perhaps poked a little fun at himself when he expressed, "Let me say for the last time this millennium that a strong dollar is in the national interest of the United States," and he continued by saying that the focus of the administration would be on the fundamentals, not the daily details or trends in financial markets. "If we can manage the fundamentals of the economy right, that's the right priority for us."
In regard to the outlook for the economy, SecTreas Summers offered a few thoughts. Which one of the following three sentences would you characterize as his political obligation, which is the standard pabulum for the media, and which is the one that demonstrates a measure of integrity in the event that his audience is intelligent and capable of independent thought?
"As I look to the year 2000, I see an economy that is in a strong situation, an economy with strong fundamentals."
"It's got the longest expansion in our history and there's no reason why expansions need to die of old age."
"It's always important for all of us to be aware of the risks that are an inherent part of economic life and not to become complacent."
For those of you keeping score, if it makes it to February this latest run will go down in U.S. history as the longest-ever expansion (beating the 1960's...which, by the way, ushered in the end of the international gold market/gold standard as we knew it. What are the odds that the current expansion is also wreaking havoc upon the latest paper-based evolution of the gold market? All signs point to strong odds. In that event, brace yourself for considerably higher gold prices.)
The Tower sent its most intrepid member out for a frank conversation with the manager of a local bank today. In response to The Tower's suggestion that the banking industry must be breathing a collective sigh of relief at having dodged the bullet of panicky depositors, the manager said surprisingly, "Not yet." She said they weren't out of the woods until end of business on the 31st...that most people actually held the na've belief that they could get as much cash as they wanted on a moment's notice. A laugh was shared that were the truth widely understood, the people seeking cash would have acted at long, long ago. The bottom line here is that The Tower was genuinely surprised that the bank manager did not feel they were out of the woods yet. Amazing, isn't it? It seems that the piles of cash seen yesterday on the tellers' counters truly were there for the psychological impact. We truly live in interesting times, yet nobody else seems to notice.
The London markets resumed operations today, but trading remained thin. Spot prices continued their upward trend undeterred, last quoted up 90¢ in NY at $290.20. February futures contracts traded higher by an equal measure, closing on COMEX trade at $292.40, reaching a new one-month high. According to a report on FWN, one trader observed that prices were moving higher simply because the selling had dried up. Year-end book squaring and Y2K fears were again cited by traders as driving the markets today.
After yesterday's termination of trading in the December futures, 3 contracts remained in open interest, and those three were called for delivery on this, the final notice day for declaring delivery intentions. In total, in a contract month that was ushered in with over 100,000 contracts in open interest, 8,297 were ultimately held up for physical settlement instead of cash. Even though that figure represents only 8% of the pseudo-gold that was "held" and "traded" by the investing public through the NY Commodity Exchange, this tiny 8% that requested settlement of the contract with gold has put pressure on an impressive 829,700 ounces in total to change ownership before end of business tomorrow. Goldman Sachs and Deutsche Bank were the two largest recipients of gold this month. But as much as we'd love to tell you what their total was, the stats from the early part of the month are stored in one of The Tower's systems which is currently down for repairs.
Over the course of the month we've seen some sizable reshuffling of gold inventory. The end of month has been pretty calm, however. Today our scout in Manhattan saw that 673 ounces of Registered gold (21 kilograms, representing seven contracts) was withdrawn from the Republic National vault, leaving 1,107,21 ounces in Registered stock, and 112,232 Eligible ounces divided among the two COMEX gold depositories.
OIL
While yesterday's after-market data released by API showed crude inventory decline by over three million barrels, today's DOE report indicated a decline by only 300,000 barrels. Adding an element of depression on prices was the suggestion by Venezuela oil minister Ali Rodriguez that his country might increase production if it had the "support and cooperation" of other OPEC members in order to raise additional funds for disaster relief following their devastating flooding. February crude closed down 35¢ at $26.47 per barrel in NYMEX trading.
And that's the view from here...after the close.
Solomon Weaver
(12/29/99; 20:22:44MDT - Msg ID:21811)
malthus and infomagic
Cavan Man
Please permit a few of my musings on Malthusian logic and Infomagic's meltdown scenario.
Malthusian logic predates the concept of carrying capacity. Malthus simply noted that ANY POPULATION which continues to grow exponentially inside of a system which has finite resources will EVENTUALLY exceed the ability of that system to nourish the population.
The way that a locust population breeds exponentially over several years...eventually growing large enough that it decimates its food supply, and dies off in numbers after expending its natural food supply, is an example.
The concept of carrying capacity was originally used by ecologists to describe the number of animals (deer, bear, etc.) that a given local ecosystem can maintain...it was later coopted to describe the idea that the earth had a given carrying capacity for humans.
In actuality, in the days when humans primarily used hunting and gathering to live, each bioregion did have a general human carrying capacity (contrast the rich and fertile oceans of southest asia which supported large coastal villages with the dry and arid deserts of north africa which were thinly populated by nomads.
In the last 300 years (and dramatically in this century) humans have used science and technology to defy the old carrying capacities...and the use of oil for both energy and materials (drugs, chlothing, telecommunications, etc.). In the coming 100 years, humans may be able to dramatically increase the use of solar energy, develop manufacturing technologies that are almost 100% recycling of materials, manipulate our metabolisms to reduce the amount of food, etc. Considering that at least 3 billion of todays humans live confined in smelly busy cities which collectively take up much less than 1% of the surface of the globe, there is no reason to believe that when we know how to build better cities, and have much more efficient technologies, that we can't have 30 billion humans all lovingly and peacefully populating this planet.
I agree with infomagic that the y2k problem is not nearly as solved as the media and "Grabit" keep saying. I also agree that the interconnectedness of human activities will multiply and amplify problems. I also agree that the use of abundant oil has driven us into lives and jobs that will be devastated if y2k causes a breakdown in oil flow to 25% of normal.
But having all that oil has been like being the son of a millionaire with a $1000 per week allowance...we have done a lot of foolish things (like letting 2% of the people grow our food).....
The great miracle in y2k is that no matter how much is broken....some will NOT be broken...humans have eaten from the tree of knowledge (and published the results in millions of scientific publications and patents)...even if only 10% of the oil flows...that oil will flow in ways that will bring more back on stream.
My expectation is that it will not be the breakdown in y2k that will be traumatic (we will all be in it together)...it will be the massive amount of change and restructuring manifested in the building back phase.
Infomagic is probably right...we will fall farther than most people expect....what the readers of this forum need to do is to realize that right in the middle of the worst, the seeds of recovery are planted.
Since humans are economic beings, and like water seeks a level, they will return to understanding the value of gold as the only "real money", the owner of some physical gold can rest in the knowledge that he is carrying forward some of the liquid capital assets which will invest in the restructuring....but he needs to remember that some of that real money gold will have to be sold and invested in other forms...
Poor old Solomon
Solomon Weaver
(12/29/99; 19:43:18MDT - Msg ID:21810)
when to head for th bunkers
If there are, in addition, noticeable problems just after
midnight, Dec. 31, that's a VERY bad sign -- head for the
bunkers. Remember most of the remediation money was spent to
prevent particularly these immediate midnight problems. If
these haven't been solved, how about the much more difficult
and chronic ones that got less attention?
---------
Journeyman
I will beg to differ with you on the fact that most of the money has been spent on the immediate midnight problems...at least since most businesses are closed, the immediately visible and high profile problems will involve embedded chips controlling electric and telephone. Other "grids" like regional natural gas and air traffic control might make national news. Most of the money has been spent on the management software issues...like billing, etc.
I have watched this great y2k story for about 1.5 years...I have read Gary North and Infomagic and Cory Hamasaki along with more moderates like Ed Yourdan. There is an immense amount of information out there on this. The most amazing thing is the great difference between the info and discussion available to someone with time and an internet browser vs. someone who only has limited time to read newspapers and listen to evening news.
I sincerely hope that all of the marvelous posters on this forum have a reasonable solution to the practical problems which y2k may bring...gold will certainly be king in the end but if times get real tough, showing gold will be dangerous...
We are already in our bunker...actually a lovely house out in a small town in a rural region...far away from the big city...with a well and a woodstove....
I hope many of you are too...
Poor old Solomon
Cavan Man
(12/29/99; 19:38:28MDT - Msg ID:21809)
ORO 21807
Yes, that's it; Malthusian reasoning. How many people can Mother Earth support? That's interesting fodder for discussion. However, what I meant in the context of ny question was, do you subscribe to his Y2K meltdown scenario? You have already been kind enough to comment on the embedded chip issue relative to the oil patch. What conclusions have you drawn about other sectors of social, political and economic organization relative to next year?
Thanks for the jog about Malthus. BTW, who was it that wrote, "A Modest Proposition"; Dickens?
Thanks a bullion....CM
Phos
(12/29/99; 19:00:45MDT - Msg ID:21808)
@Number six - Infomagic's previous writings
http://www.gold-eagle.com/cgi-bin/gn/get/forum.html
Infomagic's previous writings are described in a post at gold-eagle:
----------------------------------------------------------
@Marcia re your post of Dec 28, 22:55
(Jack) Dec 29, 19:55
The Y2K pessimistic writer, who goes under the name "Infomagic", and who so strongly advocates gold in hand for what Y2K might bring, has been published in Cory Hamasaki's
"D.C. Weather Reports". This is a "computer geek" newsletter for those in and around the area of Washington, D.C. It's focus for the past couple of years has been on Y2K.
You can find Infomagic's previous writings as follows, all of which are archived "D.C. Weather Report" newsletters:
The first of his "SET RECOVERY ON" series, including the "Charlotte's Web" that he mentions in the paper that you referenced:
http://www.sonnet.co.uk/muse/DCW-100.TXT
The second installment of Infomagic's series:
http://www.sonnet.co.uk/muse/DCW-103.TXT
Infomagic responds to critics of his writings:
http://www.sonnet.co.uk/muse/DCW-106.TXT
Infomagic's last installment (prior to his recent writing that you linked to in your post), where he also mentions the importance of having gold in the Y2K meltdown to come:
http://www.sonnet.co.uk/muse/DCW-107.TXT
ORO
(12/29/99; 18:49:32MDT - Msg ID:21807)
Cavan Man - Malthusian thinking
The thing that seems to bug you and which I know bugs me about the guy's thinking is that it is Malthusian.
It assumes the current level of technology would not be improved upon in the duress of a computer glitch. It assumes that ingenuity is not going to come in to solve problems once it is profitable or necessary to solve them.
Furthermore, there is no thought given to the fact of their being quite a few technologies that are viable for both food and liquid fuel production, though not at current relative prices.
Netking
(12/29/99; 18:42:30MDT - Msg ID:21806)
Journeyman
Journeyman 21799
I'm sure the media will do their best to make a mountain out of a molehill on this. E.g. my associations confirm that an average 3-5% of cash money machines do not work at ANY given time during the year due to technical difficulties of one sort or another, when this happens on January 1st it will be due to "Y2K" of course and will make headlines, guaranteed! Power shorts early on Saturday mornings are common & are often caused by cars hitting transformers & polls etc your power co will say, but come January 1st..."Bug Hit's Power Supply!"
Any resulting public panic on January 1 will be facilitated to a large extent on media hype.
Vox
(12/29/99; 18:11:48MDT - Msg ID:21805)
RobertG re Silver Rally
The news out of the silver rumor mill is that George Soros' son has purchased or is purchasing a significant stake in a silver mine/company whose identity is unknown. Could not find further information.
.....Vox in deserto
Cavan Man
(12/29/99; 17:49:19MDT - Msg ID:21804)
Sir ORO: Your opinion please
RE: Number Six 21788 link to Infomagic
Cory Hamasaki, Doug Macintosh and now this guy; talk about the brothers grim. His pleasant thoughts are quite comprehensive and he does echo the thoughts here regarding gold.
Why do I find myself in disagreement with his Y2K prognostications? What's your take good Sir Knight?
TownCrier
(12/29/99; 17:15:18MDT - Msg ID:21803)
A weak answer to RobertG's question about the rise in silver price today
Reuters quoted one dealer as saying, "There has been some good fund buying in silver in New York." As to WHY they might be buying...a dealer said, "People would rather buy than sell in the run-up to Y2K and associated problems." As to why the price climbed so well...another dealer said, "The market is extremely thin and the odd customer order goes in and it just making the moves appear bigger."
Maybe by taking this all together you get something approaching a satisfactory explanation. Maybe not.
RobertG
(12/29/99; 16:59:34MDT - Msg ID:21802)
Silver
Just curious. Does anyone know the reason for the big jump in silver today?
TownCrier
(12/29/99; 16:52:40MDT - Msg ID:21801)
"Holey underwear, Batman!" HEADLINE: Fruit of the Loom files Ch. 11 bankruptcy
http://biz.yahoo.com/rf/991229/xg.html
Don't get your undies in a bunch when things do in fact turn sour in a "perfect" economy. Earlier in the year, stock traded as high as $19 per share but dwindled to $1.25 in this tough turn of fortune. Buyer beware. After all, stocks are shares in corporate ownership at the end of the day. Some thrive, some fail.
Number Six
(12/29/99; 16:39:39MDT - Msg ID:21800)
@ORO and Infomagic
Maybe someone can post links to Infomagic's previous three essays and his "Devolutionary Spiral" theory which effectively predicts the end of the human race due to the effects of y2k and the fact that 6 billion people is the carrying capacity of current technology.
With computers in a state of digital anarchy he predicts that the earth's true carrying capacity will reassert itself.
Yup - nothing like a little light reading for the Holidays!!!
Journeyman
(12/29/99; 16:35:11MDT - Msg ID:21799)
Will Y2K be trivial?
http://www.abc.net.au:80/news/newslink/nat/newsnat-30dec1999-8.htm
It's interesting to watch how CNBC trivializes Y2K problems.
They only report the "cute" glitches -- like the Fla. power
co. that sent out bills marked with "Past Due" after Jan. 3,
1900. The "cute" was the apology letter saying the glitch
had been fixed. Smile. Twinkle. May all Y2K glitches be as
trivial.
But how about my local sewage bill that has a due date of
00/00/00? How could the year digit confusion lead to an
impossible month and day as well? Hope the computers
involved in processing the sewage aren't as glitched. And
what about Chase Manhattan, and Hershey's, stories I haven't
seen covered at all?
A story entitled "Millennium bug look-alike strikes Britain
early" reports that a particular credit card terminal won't
accept transactions because it "is having difficulties
recognising the date January 1." [URL above] I suppose it is
a look alike problem, just much simpler -- if the companies
are telling the truth.
But if you reject the implicit message in this story ("what
me worry") and think for yourself, the conclusion you would
probably reach is that if the problem is only that the
terminal can't recognize January 1, yet is wreaking enough
havoc to gain international coverage, 1. Y2K problems in
much more complex systems are quite probable and 2. they
will ALSO wreak concomitant havoc.
The Y2K news is biased by which stories AREN'T covered, and
by the atmosphere of coverage, minimizing the potential
impact of the ones which ARE reported in many subtle -- and
some not so subtle -- ways.
Hopefully Y2K will be trivial and nothing serious will
happen, but remember, most of the problems aren't clock
based, won't occur until programs using the mountains of old
data start looking back over the Y2K boundary from 2000, or
are embedded chip related. These problems, should they
occur, won't be immediately apparent and will build up
gradually over the first weeks or months of 2000.
If there are, in addition, noticeable problems just after
midnight, Dec. 31, that's a VERY bad sign -- head for the
bunkers. Remember most of the remediation money was spent to
prevent particularly these immediate midnight problems. If
these haven't been solved, how about the much more difficult
and chronic ones that got less attention?
It's not time for complacency. It ain't over till it's over,
and it won't be over till at least April, 2000.
Regards,
Journeyman
ORO
(12/29/99; 15:58:00MDT - Msg ID:21798)
Number 6 - Deja post
Number Six (12/29/99; 11:07:42MDT - Msg ID:21788)
Very good find.
Thanks
silent runner
(12/29/99; 15:25:08MDT - Msg ID:21797)
silver
atta boy silver. its never to little to late
ORO
(12/29/99; 14:51:58MDT - Msg ID:21796)
Aristotle - Valuation
http://www.economist.com/editorial/freeforall/19990807/sa1604.html
Aristotle, the valuation story is not as straight forward as may seem. The ESOP issue, that I have been beating hard over the early part of December plays into valuation.
Right now, the tech sector, a.k.a. "the mountain way beyond critical slope", has a typical 20% of stock outstanding in ESOPs, while the market as a whole has 12%. Overall market excercise rates have been in the 2.5%-3% rates - amounting to a 100-130 $B contribution to reported earnings, and a total contribution of 1.2 $t in both cash injections and cost savings, just under 50% of that was in Tech. Beginning next year, QCOM, MSFT, AAPL and many others will see a rise in excercise rates from just above the current market average to 30-50% of outstanding amounts. The impact will be to increase the earnings of these "old" tech companies, and those of early internet companies, by at least 100 $B and probably by 130 $B. For the market as a whole, the sum for next year is probably over 170 $B in direct contribution to the bottom line - over 60% of it to tech. Total value of contributions will be near 2 $T. Over 1/2 $t in options excercised will come into the market in the first 4 months of 2000.
The result will be a rise in earnings of tech companies from the current level of just over 15 $B in 1998 to 70 $B in 2000, even after losses from operations double from the current 15 $B to over 30$B - even if a gazzilion write downs of the perpetually recurring "in process research and other nonrecurring charges", they can only come to losing an extra 20 $B, which would still get their reported earnings to the 50 $B level. This is still about triple the reported tech earnings of 98 and justifies at least a tripling of stock tech stock valuations. The market seems to expect a quadrupling of these earnings to the 60 $B range, meaning that operating earnings for the company would fall only to negaive 40 $B.
See
http://www.billparish.com/msftfraudfacts.html
for the expected impact on government intake of income tax, both individual and corporate.
Bottom line, the feed forward mechanism of stock prices into the reported earnings of publicly traded companies justifies the stocks going up. But only as long as they go up.
I am still working on the breakdown scenario for the system - the ESOP pump. So far, I think it will come to this:
1. Jan-Apr, ESOP related options excercise comes to over 200 $B in Jan, over 100$B for each of the following months. Depending on market dynamics, it could be further concentrated in the first week of Jan.
2. Early in Jan earnings reporting season, the stock market tops out with gobs of fresh tech stock issuance from ESOPs hits the market while bonusses and cash from ESOPs flows back into the markets. The sum put in will be smaller than the sum taken out, as the stock options overwhelm the seasonal cash from bonusses.
3. Stock buyers waiting on the sidelines for Y2K to clear, will reenter on the first trading day even if there is significant disruption. Hey, "I could still call my borker", he could still trade.
4. The peak in the techs will occur in the first week or two of Jan. By that time, the sideline money and recycled bonus and ESOP money will have been back in the markets and ESOPs will continue draining money out during this whole time. Come the second week of Jan, this stream should overwhelm the incoming stream.
5. Fund managers will start the Jan effect selling of tech highfliers and purchase of basic industry stocks - the exact opposite of the market till yesterday- the advance decline ilne has moved into positive territory since trade settlement will occur in Jan - thus tax loss selling is over, and proffit taking will start.
6. Led by declining stocks in the latter 3 weeks of Jan, the pros will receive less money than usual because of hefty payments to the IRS being somewhat larger than they were for the refunds (usually refunds are greater during March and the balance shifts in the first week of April). It would only get worse as the runup to April earnings numbers is limited by selling for raising funds for tax payments.
7. The earnings nubers in Jan will have big chunks for ESOPs and will make everyone happy. Annual reports will stream to Wall Street in the March-April period, as supply of stock from ESOPs continues. A lower high than Jan should be made in early Apr for most tech indices.
Dollar effects will start with the fall of the dollar in the first week of Jan, as Y2K flight to safety (as in from pan into fire) money will start its journey home. EU, Emerging market, and even Japanese companies will report much better earnings and push these foreign stock markets up during the remainder of Jan, further draining funds from US markets.
The Fed will hike interest rates in the beginning of the third week of January. Tech index heavies will be hurt further by this.
The decline in US stocks later in Jan will cause the dollar to fall further. Interest rates will continue rising if Y2K is not a great disaster right off the bat in the world outside the US.
Rolling disruptions in refineries and oil production will add to the OPEC engineered US oil inventory deficits to raise prices to the stratosphere. Inventories will disappear within Jan, and gasoline supplies will become unreliable - price inflation will rise from the current 6% level (No, it is no where near government numbers) to 10-12% because of oil prices working into prices of everything.
Emerging economies will continue to do quite well because of the partial collapse of automation due to Y2K causing large scale hiring to keep business going. This will cause further pressure on commodities prices because of the greater cash flows in the emerging markets - where cost pressures will start and feed into US import prices just in time to join Americans spending their ESOP money.
I would be surprised to see long term interest rates below 7% in April if the global economy continues to limp along with brownout type disruptions due to Y2K glitches.
These issues should add to the pressures on the stock market and contain the early Jan burst of buying. The higher rates will start pulling funds from stocks into the credit markets and banks. It will be interesting to see whether PPT operations continue, or the Fed stops them.
rsjacksr
(12/29/99; 14:38:51MDT - Msg ID:21795)
Interest Rates: The Golden Connection (AS PER THE HYPER-INFLATION THAT'S COMING)
http://www.egroups.com/group/gata/
Subj: [GATA] Interest rates: The golden connection
Date: 12/29/99 12:22:22 AM Eastern Standard Time
From: GATAComm@aol.com
Reply-to: gata@egroups.com
To: gata@egroups.com
12:05a EST Wednesday, December 29, 1999
Dear Friend of GATA and Gold:
Reginald H. Howe, lawyer and former mining executive,
examines the prospects of a world financial order
totally disconnected from gold in this essay, "Interest
Rates: The Golden Connection." Implied is a forecast
of hyperinflation for the United States and other nations
relying on the U.S. dollar.
Please post this as seems useful.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Interest Rates: The Golden Connection
By Reginald H. Howe
www.goldensextant.com
December 27, 1999
The absence of an international monetary order rooted
in gold makes the century now ending unique. Professor
Robert H. Mundell emphasized this point in accepting
the 1999 Nobel Prize in Economics a couple of weeks
ago. (See R.L. Bartley, "Money: The Century's Agony,"
The Wall Street Journal, Dec. 10, 1999, p. A18. Cf. A.
Swoboda, "Robert Mundell and the Theoretical Foundation
for the European Monetary Union," IMF Views and
Commentaries for 1999,
www.imf.org/external/np/vc/1999/121399.HTM.)
Gold's propensity to retain over long periods of time a
reasonably constant purchasing power is widely
recognized. Less widely appreciated but just as
significant is the long-term stability of gold interest
rates. Both together are the defining attributes of
gold money, features that governments have heretofore
proven incapable of replicating with their fiat money
substitutes.
Relatively low and stable interest rates under the gold
standard were the product of measuring economic value
by a shared and real international yardstick. Money --
dollars, pounds, francs, etc. -- was a certain weight
of gold, not an artifice of bankers or governments. A
lawful dollar had a real cost of manufacture, related
to the cost of producing gold. Seigniorage was close to
zero, not virtually 100 percent. Money was not simply a
means to facilitate exchanges; it was both a store and
standard of value.
Because international balances were settled in gold,
small countries could trade on relatively equal terms
with larger ones. Trade deficits could be offset by
capital flows, but no country was required to hold
large amounts of another's paper in its reserves. Any
country, small or large, could achieve monetary
sovereignty and a sound currency simply by following
the prudential rules imposed by gold. Quality of
monetary policy and banking practices mattered more
than economic size, permitting Switzerland, one of
Europe's smaller countries, to become a banking and
financial powerhouse.
Of course the gold standard was not perfect, and some
of today's monetary problems were also issues a century
ago. For example, excessive credit inflation was always
a potential problem under the gold standard, and many
were the panics resulting from overexuberance in this
regard. So too, in the area of productivity, whether
the gold supply could grow enough to provide adequate
increases in the monetary base remained a constant
concern, particularly for expanding industrial
economies.
But as it turned out, gold discoveries in California,
Alaska, and later South Africa were adequate to the
task, enabling most major countries to maintain
substantially unchanged gold parities from the early
18th century to the outbreak of World War I. Indeed,
the gold discoveries in South Africa were large enough
to cause a short but unusual period of U.S. peacetime
wholesale price inflation averaging 2.5 percent
annually from 1897-1914. (See M. Friedman et al.,
"Monetary History of the United States," Princeton
University Press, 1963, p. 135.)
World War I so shaped the history of the 20th century
that it is hard to imagine what it would have been like
without this almost inadvertent cataclysm. The
classical gold standard could not accommodate at
existing gold parities the wartime financing
requirements of the principal belligerents.
Considerable gold flowed to the United States, swelling
its money supply and raising the general price level.
After the war, the British made a critical error in
trying to return to gold at the prewar parity,
effectively forcing a severe deflation. France, which
devalued after the war, faired somewhat better.
The gold standard, in a sense, fell victim after the
war to its own earlier success, for a century of
largely stable gold parities rendered the notion of a
"good" or "necessary" devaluation anathema to many.
Economists who assign major blame for the Great
Depression to the effort to stay on gold are partly
correct. But it was not so much the effort to stay on
gold as Anglo-American policies aimed at preserving
prewar parities that lay at the root of the difficulty.
The enormous credit expansion associated with World War
I was beyond remedy by a mere panic; it simply could
not be handled other than by severe deflation or
devaluation.
Although the gold standard could not prevent excessive
credit expansions or even fix permanently appropriate
gold exchange rates, it did effectively set interest
rates within a rather narrow range. Under the classical
gold standard prior to World War I, short-term interest
rates in both the United States and Britain tended to
cycle between 2 and 5 percent. Very rarely and never
for long did they breach these limits. (S. Homer et
al., "A History of Interest Rates," Rutgers Univ.
Press, 3d ed., 1996) pp. 207, 321, 357, 364-365.)
Under the gold standard, business and credit expansions
were typically associated with higher interest rates.
Panics normally brought lower rates as fear reduced
both willingness to lend and demand for credit. Prior
to the stock market crash in 1929, short-term rates
moved over 5 percent as they had prior to the Panic of
1907 and during the war years. What was different in
the 1930s was that short rates not only fell but also
remained stuck under 1 percent for several years.
Central banking under the Fed, exacerbated by the
monetary excesses of World War I, managed to accomplish
what free banking and the Civil War never could: a
severe multi-year national bust.
Today what was once simply banking is "gold" banking.
Interest rates on gold are now "lease" rates. Yet their
levels cycle within substantially the same range as
before. Last fall's gold banking crisis demonstrated 5
percent gold lease rates to be as much a harbinger of
trouble as 5 percent short-term interest rates under
the gold standard. Both signaled too much paper gold --
too much gold credit -- relative to available physical
gold.
The question now is whether the recent gold banking
panic will prove a relatively brief episode caused
largely by temporary factors, or whether more
fundamental distortions were at work. In the latter
event, the 1929 experience suggests that gold lending
and gold interest rates could remain depressed for a
considerable time and that a fundamental revaluation of
gold may be necessary before the gold credit market can
fully recover.
As the millennium turns, U.S. economists hail the
"Goldilocks" economy. The Fed, originally formed to
stabilize the gold value of the dollar, instead wages
an undeclared hidden war on the discipline of gold. And
for now, at least, relegated to the realm of quaint
ideas from long ago is John Stuart Mill's admonition
("Principles of Political Economy," orig. ed. 1848, 5th
ed. 1877, Bk. III, Ch. XIII, s. 3):
"Although no doctrine in political economy rests on
more obvious grounds than the mischief of a paper
currency not maintained at the same value with a
metallic, either by convertibility, or by some
principle of limitation equivalent to it; and although,
accordingly, this doctrine has, though not until after
the discussions of many years, been tolerably
effectually drummed into the public mind; yet
dissentients are still numerous, and projectors every
now and then start up, with plans for curing all the
economical evils of society by means of an unlimited
issue of inconvertible paper. There is, in truth, a
great charm to the idea. To be able to pay off the
national debt, defray the expenses of government
without taxation, and in fine to make the fortunes of
the whole community is a brilliant prospect, when once
a man is capable of believing that printing a few
characters on bits of paper will do it. The
philosopher's stone could not be expected to do more."
For almost 70 years, the United States -- contrary to
its own Constitution and the most deeply held beliefs
of its Founding Fathers -- has led the world down the
path of unlimited fiat money. Its paper dollar has
become the de-facto international monetary standard;
its debt the world's principal international reserve
asset; and its trade deficits the world's main source
of international liquidity. As a result some 40 percent
of outstanding U.S. marketable debt securities are now
held by foreigners, up from 20 percent just five years
ago. (See M. M. Phillips, "Foreigners' Share of
Treasurys Is Growing," The Wall Street Journal, Dec.
20, 1999, p. A2.) And the U.S. trade deficit is now
running at an annual rate exceeding $300 billion, a
level previously quite unimaginable.
This situation would be dangerous under any
circumstances. A historic U.S. stock market bubble
fueled in large part by an out-of-control domestic
credit expansion makes it explosive. Why? Because a
simultaneous decline in the stock market and the dollar
could cause interest rates to rise sharply rather than
decline. The Fed cannot simultaneously support the
domestic financial structure with lower rates and
defend the dollar with higher ones. Its vaunted
domestic powers could be checkmated by international
demands, heightened by the dollar's role as the world's
main reserve currency.
Under the severest strains, a system of unlimited paper
money backed by a lender of last resort behaves quite
differently from a system based on gold -- the money of
last resort. Ultimately neither system can save
imprudent lenders or borrowers from the consequences of
their acts. But whereas the latter will stabilize at
lower interest rates with the underlying monetary
system still intact, a system based on unlimited paper
will tend toward hyperinflation unless checked by very
high interest rates, themselves business killers that
will prolong and intensify the economic downturn.
In recent years many small countries have learned this
lesson the hard way as international capital fled their
currencies and financial markets. Boom has turned to
bust, often quite suddenly. Few illusions are as
dangerous as: "It's different this time." Except,
perhaps: "It can't happen here."
-END-
Leigh
(12/29/99; 14:30:30MDT - Msg ID:21794)
$275 Gold by Year's End
Tomorrow's the LAST gold trading day of 1999, and it's only a half day! Not much more time for Goldman Sachs to fulfill its prediction of $275 gold by the end of the year.
Aristotle
(12/29/99; 12:21:17MDT - Msg ID:21793)
Govt / Fed's Top Priority: Survive 1999 at any cost
My perception--
More than anything, a government strives to maintain order such that the State does not degrade into a condition where the mob rules (not good for ANYbody.) Government and Fed officials have not underestimated that Y2K could have been (still could be?) such a trigger, and they've acted accordingly in words and deeds. Again for emphasis, except for foreign invasion, there could be nothing more threatening to a Government than a condition of mob rule--herd mentality and actions driven by emotion.
If you pause to consider the cost a government is willing to pay during war or for national defense, you are then better able to grasp the 'price' they would be willing to pay preserve the system through this time by staving off Mob Rule.
When material has accumulated, piled high at a critical slope, it takes only a few pebbles in motion to trigger a devastating avalanche. Consider the following list as an overview of both rolling pebbles and a mountain looming at critical slope.
1) Everyone who reads TownCrier knows of the extraordinary amount of money the Fed has had to provide to the nation's banks over the course of the year. This in reaction to funds being removed by banking customers, and qualifies as rolling pebbles. The fractional reserve banking system that has expanded the apparent money supply through the miracle of legislatively tolerated bookkeeping priviliges would represent the mountain at critical slope--everyone can't have their money or else the banks all fail in a national crisis of confidence.
2) Speaking of dollars, there has been a yearlong slide in prices offered for Treasury bonds, indicating that increasingly the worldwide investors are demanding a higher and higher premium (higher yields) in order to hold these yet unborn dollars. Not a good sign for the world's reserve currency! Consider the bond's falling price (rising yield) to be the tumbling pebbles, and the huge overhang of bonds in the world to be the mountain miraculously overhanging its critical slope.
3) Gold lease rates (the interest rate for Gold loans owed in Gold) began to get out of hand (signaled by a significant departure from normal 1% level) as early as July of this year. The World Gold Council has documented all-time record demand for Gold for the past two consecutive Quarters. Consider that fact to be one of the rolling pebbles, and consider the Washington Agreement limiting future Gold lending as another scattering of pebbles. The mountain at critical slope is represented by the annual shortfall of mining to meet physical demand for Gold for the first part, and also is represented by the overhang of outstanding Gold loans and forward sales that will absorb most future production or attempt to claim any Gold reaching the spot market.
4) Irrational exuberance. Alan Greenspan warned in December of 1996 that the equities markets (that means stocks, little Sister) were looking rather frothy. Look how far the highly visible stock indices have soared since that time! Perhaps the failure of the broader market to participate (new lows outpacing new highs, or decliners outnumbering advancers on most days) as movement somewhere beneath the surface, coupled with the failing bond market (failing dollar). The mountain of material at critical slope would be the unwarranted stock valuations for these select highly visible stocks under traditional valuation guidelines. Maintaining this super-critical pile is highly dependent upon the continuation of "Good Times" in the U.S. economy.
Extra) The unsustainable trade imbalances are some very big pebbles that are rolling over both the overhang of bonds mentioned earlier, and also on the prospects of Good Times in the U.S. built on the back of the spend Spend SPEND mentality of the American consumer fostered further by the current strength of the dollar--or should I say the depressed dollar-denominated price of international commodities.
As you can see, touching off any one of these "avalanches" would likely trigger the others also as the shaking ground would be more than they could tolerate. We have all seen the greed mentality drive the Mob everytime we turn on CNBC or leaf through any of various investment/financial magazines. Greed is an easier emotion to manage than Fear is. Of all the elements mentioned above, you can be sure that the government and the Fed dreads a banking crisis more than any other, and Y2K is the one thing that threatens that most directly. Once we get through the first week in January, I would not be surprised to see this goldilocks economy "allowed" to unravel simply because the threats will be more manageable once the banks have been safely delivered through 2000.
I can't begin to give anyone any direct "expense" that the Government or the Fed may have incurred in this brief critical period where confidence in EVERYTHING had to be maintained, but I can say this. The price of Gold is a highly visible item that subconsciously speaks to every investor on Wall Street. That the price is so remarkably low at this critical period is no surprise to me at all...consider it the cost of national defense. I don't expect this condition to last much longer when the fate of the banks have been secured safely into 2000. You can lock in a great price today, or you can roll the dice on tomorrow.
Side note to FOA--your Msg 21774 this morning was an excellent presentation. Not long ago I paid a visit to MK. He asked what I saw as Gold's role in the future financial architecture (we were discussing the significance of the IMF's latest action and the euro in general). Although like in concept, your presentation to the forum is far superior to my clumsy attempt at describing it while distracted by the nice view out of MK's office window. Congratulations are in order, and thanks also, for you have put a difficult concept into very clear terms suitable for general consumption. Time to put some paper in the printer.
Gold. Get you some. The "cheap Gold contract" in this war effort need not be renewed a few days hence. ---Aristotle
ORO
(12/29/99; 12:15:39MDT - Msg ID:21792)
FOA - Pump
http://members.xoom.com/_XMCM/Nebucadnezer/FedMonetization.htm
--->Note: The "money pump" term ORO uses to lable this is more like a pump that keeps our system floating. Again, in Western eyes, it's wildly price inflatiobnary. Yet, in reality it only turns lose the price inflation the dollar already has built in! ORO, your view yes? No?
The money pump the IMF has been given has not been available for anyone in the past. The key is the repeatability of the excercise without limit.
The structure of the operation allows the IMF to revalue the same gold repeatedly, clearing debt while limiting money supply destruction that would accompany debt retirement the "regular" way. In quotation marks because it is not usual to retire debt, but to roll it over.
Even the FED has to accept a debt for its issuance of currency. It is not allowed to just give away currency directly (it needs some debt issuer to create debt). The FED has monetized debt consistently before, but never in such a direct way as the IMF has.
Back to the pump's significance, yes, the monetization of the debt inflation is the source of subsequent price inflation. Yes, the inflation was already there, it is only now beginning to climb out of the hole as the liquidity crissis in the Eurodollar arena (see below) forces all the dollar reserve system stabilizer systems to cut debt outstanding and retain cash dollars.
You are indicating, it seems, that the current consensus in the G20 is that the dollar reserve system should be allowed to slowly dissolve into cash-full oblivion. Through the mechanism of IMF and other "debt forgiveness" mechanisms, the future demand for dollars due to debt settlement is eliminated, while retaining the outstanding "cash" dollars.
Do you see it this way?
According to this scheme for 1999, we are down 1% in outstanding eurodollar debt, down an additional 2% due to US balance of payments deficits, and down another 1%-2% due to refinancing of dollar debt into Euro debt. Furthermore, there is a complete halt to the growth of Eurodollar debt, which is resulting in a liquidity squeeze in the credit markets outside the US. This credit limitation is flowing into the US markets and raising interest rates here, because of a squeeze in US liquidity with each of the occasional spikes in the Eurodollar rate and Libor.
The liquidity problem is at once pushing the Fed to add liquidity into the system and raise the Fed Funds and Discount rates. The liquidity injections raise the lending capacity of banks, which are widening their lending. The extra lending turns into additional currency balances in the banking system. The Fed is raising rates to prevent further cash buildup in the US - which is price inflationary, and to prevent damage to the dollar - which would be price inflationary as well.
The result is that US banks are being pushed aside by Japanese and EU banks that have a much lower cost of funds, and can supply the US banks with the necessary funds below the Fed rate. The result, seems to me, is that further carry trades are being put up by the EU banks. These would be dangerous to the dollar when unraveling time comes.
Please comment on this, as I am looking for flaws in this set of arguments. I would be so much happier if they were not true.
Thank you for the commentary on the IMF, it does push the logic to an extreme.
phaedrus
(12/29/99; 12:11:33MDT - Msg ID:21791)
silver on the move
broke 540, last trade 542, up 18 cents at 2:11 EST
Cavan Man
(12/29/99; 11:31:51MDT - Msg ID:21790)
Dear FOA
RE: NUmber six 21788
This is food for THOUGHT. I think the writer undermines credibility with all the inflammatory rhetoric but what do YOU think? Thanks...CM
beesting
(12/29/99; 11:18:23MDT - Msg ID:21789)
Preview Of Coming Attractions!--------Or Early Y2K Problems???
http://www.abc.net.au:80/news/newslink/nat/newsnat-30dec1999-8.htm
In Britain, thousands of retailers have resorted to putting transactions through on paper slips, because the swipe machines are not working. Officials try to downplay problem....beesting.
Number Six
(12/29/99; 11:07:42MDT - Msg ID:21788)
@Holtzman
http://x26.deja.com/threadmsg_if.xp?AN=565458822&CONTEXT=946339034.1942290455&thitnum=6
I very much enjoyed your recent piece, but was dumbfounded that, like Stratfor and Kaplan, you have completely discounted the y2k effect, or the fact that we are on the verge of a major depression.
Worldwide over 1 trillion dollars have been spent on this problem, and ithasn't been fixed.
Watch what happens in the next six months.
Aside from all this, we will all thank our lucky stars that we own physical gold.
ALL
If you haven't already done so, the above link from INFOMAGIC is essential reading.
Draws together much of what FOA has been saying, with several twists...
Joe Bob says check it out!!
[snip]
Which brings us to gold. According to our beloved bankers, who
strangely still want lots of it for themselves, gold is just a
"barbarous relic" whose only viable modern use is strictly as an industrial commodity. In reality gold is still, also, money. To those of us who own it, gold is the only true money there is, created directly by our most high and living God, in a fixed amount which can never be inflated by pollyticians or economystics, and which grows in circulation only slowly in response to human endeavor. It is the only money worth having when the other moneys begin to return to their intrinsic, commodity value. Government paper money, unless backed by an irrevocable promise to repay in gold, is intrinsically worthless. When it fails, as all fiat moneys eventually do, about the only thing you can do with it is burn it for heat or flush it down the toilet (after appropriate terminal usage, of course).
The founding fathers knew this truth when they constitutionally
limited the individual states to money consisting solely of gold and silver coins (a restriction which is legally still in effect and which was certainly also intended to apply to the Federal Grabit). Franklin Roosevelt knew this truth in 1933 when he defaulted on the Grabit's solemn promise to repay US citizens in gold for the hard earned sweat they had deposited into the bankrupt Federal Reserve system. Richard Nixon knew this in 1971 when he, too, defaulted on the Grabit's
promise and stole from trusting foreigners the gold that they were entitled to from the same bankrupt Federal Reserve. The Arabs who control the world's oil have known this for thousands of years and it was only a gentle reminder when they were among those whose gold was stolen by the Nixon default.
The Nixon default was the real cause of the Arab oil embargo and the global recession which followed it. Contrary to conventional American prejudices, Arabs and other Middle Eastern peoples are not a bunch of stupid sand diggers. In many cases they are far more intelligent and much better educated than the average American. This should not surprise us since they spring from the same well of civilization, between the Tigris and Euphrates, from which ancient and modern
Babylon are also watered. Historically, gold has been the only
trustworthy means of exchange, the only reliable store of wealth, in this turbulent region of constantly changing borders, countries, princes, dictators and even religions. These intelligent Arabs have always known the true and finite value of their only major resource, even when they were being exploited and cheated by the Anglo-American companies who first possessed the technology to retrieve their oil.
In fact, it was their understanding of their lack of other resources, their lack of a modern industrial infrastructure, and their desire to acquire both, which induced them to trade their oil in the first place. But only for something of equal value, something which could in turn be traded, even after many years, for something else of equal value. In short, they always wanted historically reliable gold for their oil and, in this respect, they are certainly more intelligent than the average American or European.
Prior to the Nixon default, the Middle Eastern countries happily accepted dollars for oil because, effectively, they were "as good as gold". Each and every dollar they received really could be physically exchanged for a fixed and promised weight of gold -- real, true money. Americans lost this right in the 1933 Roosevelt default, and were too stupid even to complain about it. Not so our Arab friends. They knew the value of their gold and when Nixon stole it they were pissed. The oil embargo was their way of recouping their losses through higher prices and it didn't end until an agreement was reached through which they could once more reliably receive physical gold for their oil, as we shall see.
I doubt that Nixon ever really understood what was happening back then, just as I doubt that most of the Americans reading this today even understand what I am saying. But try very hard, because I'm talking about the cause of World War Three and the kind of
misunderstandings which can lead to it. In 1971, Richard Nixon was faced with a problem. Because of inflation and the rapidly escalating trade deficit (sound familiar?), foreigners were losing confidence in the dollar. When they received dollars for their goods, it made a lot more sense to invoke their legal right to redeem them in gold, rather than hold the paper dollars and watch them daily depreciate in value. As a result, the US Treasury was being rapidly drained of it's gold reserves and would soon be unable to keep it's promise to repay it's dollar debt in gold. Nixon could not possibly understand why these crazy foreign persons would prefer gold to the almighty dollar. After all, he received his own salary in paper dollars, which seemed to work quite well, and he didn't feel any need for any gold of his own (in fact, after the Roosevelt default, it would have been a felony for him to own any). From his parochial, bigoted American viewpoint the solution was really very simple. If the promise would have to be broken eventually anyway, why not just break it now and keep the gold reserves the bankers said was necessary to keep the bankrupt Federal Reserve from completely collapsing? After all, when Roosevelt did that in 1933 it worked and everyone had to keep on using paper
dollars, even if they did lose their value over time. Why couldn't foreigners, especially Arabs, understand and accept this as the
American sheeple had?
Which brings us to the dollar. Believe it or not, the software which runs area navigation systems like INS and GPS determines the predicted position of an aircraft by first deciding where it isn't! Likewise, we can best understand the paper dollar by first describing what it isn't. In the first place, it isn't money and it isn't legal tender. The US constitution clearly limits the member states to gold and silver coins as the only form of legal tender they may use for
private and public debts. It also reserves to the United States (the Grabit) the duty to mint such coins and specifically forbids the individual states or private individuals from doing so themselves. It does allow the United States to emit "bills upon the credit of the United States" but has no provision, and indeed prohibits, the use of such "bills" as legal tender. In fact, there is no place in the US Constitution, or in federal law, or in the constitutions or laws of the individual states, which actually defines what a dollar really is or where it comes from.
This has interesting intellectual and legal implications which I personally find fascinating, but in the context of this particular discussion they are largely irrelevant. The question for us is where do practical, every day dollars come from and what are they really worth? As I write this, I have before me a single dollar "bill", taken from my wallet, with the serial number "H04383516F" (which obviously must make it very important and very valuable). But let's take a look at what is actually printed on this "bill" and what it legally means.
First, the largest typeface is used to say "The United States of America" at the top, and "One Dollar" at the bottom. Both phrases are criminally, fraudulently deceptive. This bill may be printed by an agency of the Federal Grabit, but only on the orders of a privately owned banking monopoly called the Federal Reserve, which is solely responsible for actually issuing it. This is why it is called a "Federal Reserve Note" in smaller text at the very top of the bill. The even smaller print in the top left says "this note is legal tender for all debts, public and private" which is completely and utterly false. Even the US Congress has no power to make anything legal tender other than gold or silver coin, and it certainly has no power to delegate such authority to the privately owned corporations which make up the Federal Reserve. It is in no way, shape or form a bill emitted by congress against the credit of the United States, and there is absolutely no obligation for anyone to pay anyone else a "dollar", even if there really were such a thing as a real dollar. This bill is not money and it is not legal tender. It is a counterfeit.
The only reason Americans accept this fraud as money is because this country has been under the thumb of an illegal, unelected dictatorship since 1913, when the Federal Reserve was first created. At this time, a cartel of criminal bankers traded the unpayable debts of the
bankrupt United States for the greatest power of all -- the power to print the people's money. This gave them the power to steal all of the real money, the gold, of the United States but, being the sly scum they have always been, they didn't want to do this directly or openly in case the sheeple woke up, put on their wolf's clothing, and tore them into tiny pieces! In any case, they didn't have to. Given the lack of interest and study by average people of the important, but boring subject of money, it was easier for them to steal the gold slowly and quietly through the greater fraud of fractional reserve banking.
When banks are allowed to keep only a tiny fraction of their
customers' deposits in the form of "reserves" (currently about 2%), they are free to create billions upon billions of new paper notes out of thin air, just by issuing loans to other customers from the
remaining deposits. This is because the loans themselves first become new deposits, and are recycled through the banks to create even more loans and more deposits of imaginary money. It works like this
(greatly simplified, of course). Mr. A deposits $1,000 and the bank must place 2% or $20 with the Federal Reserve. But there is still $1000 in the system, the number in A's account. Mr. B wants to build a house and borrows $500, which would build a pretty good house back in 1913. He doesn't need all the money right away, so he leaves it in his account. The bank has to place 2% or $10 with the Federal Reserve but there is now $1500 in the system, $1000 in A's account and $500 in B's account, created out of thin air. Now Mr. C wants to outdo Mr. B and build an even bigger house for which he borrows $1000. The bank is allowed by law to lend him this money because there is enough to do so with current deposits, less the reserve. Likewise, C doesn't need the money straight away, and leaves it in his account. Again 2% or $20 goes to the Federal Reserve and the banking system now has $2500, mostly created out of thin air from the original $1000. To repay the banker for his generosity, the law also lets him charge 10% interest on the $1500 in loans, while paying only 2% interest on the original $1000 which got this whole thing started.
Would you like to be a banker? Sorry, ordinary people are not
considered to be "honest" enough! If you didn't understand this before, you stand in good company. From the parable of the ten
talents it is clear that, in His human form, even Jesus Christ didn't fully understand the insidious evil of bankers (although they weren't quite as bad back then). In His heavenly form, though, I'm certain He fully understands their behavior, and I really would not want to be a banker when He returns. I also have no regrets about charging banks large fees to fix Y2K problems I helped to create in the 1970's.
But back to the dollar problem. The fabrication of imaginary paper dollars could continue indefinitely, were it not for inflation. As the money supply becomes inflated, there are more and more dollars chasing the same goods, services and commodities. Prices begin and continue to rise, especially the price or value of the ultimate
commodity -- gold. At some point, the general public always loses confidence in this inflated funny money and converts it into something of real value, like gold and silver. In 1913, the Federal Reserve wanted to forestall this inevitable loss of confidence so they lied, and pretended that their paper notes could always be exchanged for the gold which supposedly backed them. But the bankers knew that very few of the sheeple would actually do this, since paper money is so much lighter and more convenient, especially as their numbers are inflated and more of them are needed to buy everyday items. Their scam worked for twenty years and would have gone on much longer if it weren't for something that happened in 1929.
In October 1929, what was until then the biggest equity bubble in history, burst. The huge economic contraction which followed put an end to the myth of gold for dollars. The smartest money saw the same signs we are seeing today and got out of the markets before the bubble even burst. Taking the Federal Reserve at their word, they converted Reserve Notes to gold, and stored it in their bank safety deposit boxes. After the crash, the other money took what they had left and tried to convert that into gold. They were too late. As everybody and their uncle tried to convert paper dollars into gold the paper was quickly becoming worthless. So in 1933, just twenty years after its founding, the Federal Reserve defaulted on their notes and Franklin Roosevelt not only made private ownership of gold illegal he even went so far as to steal it from safety deposit boxes. This is why I keep most of mine away from the US and its UK puppet. I keep only enough to get me out of the country and to my stores of wealth.
Thus, by 1933, the United States was completely under the illegal dictatorship of the Federal Reserve and their White House shill. The sheeple were forced, by fiat and dictate of a Dammcorrupt pollytician, to accept meaningless and valueless reserve notes as their money. But even a Dammcorrupt couldn't dictate to the rest of the world, because nuclear weapons had not yet been invented. If Americans still wanted to buy goods and services from the rest of the world, and they did, they would have to buy them with dollars which were at least perceived to have real value. After 1929, it took the bankers four years to come up with the idea to use the same scam they had started in 1913. Just change the geography and limit the redeemable dollars to the few in foreign hands and we're back in business, just about where we were in 1920 when we started that stupid bubble!
The new scam worked until the end of the Second World War, which was a historical accident. Our benevolent bankers only ever start little wars, and revolutions, and only for strictly financial reasons. World wars only happen when they make a mistake and lose control of the situation. At the end of the war, the global economy was a shambles. Only America still had a workable economy, and that only because a geographical accident had protected American industry from being bombed back into the previous century, allowing American business to reap a windfall at the expense of the rest of the global economy. At this point, however, even the bankers realized the world needed a stable global reserve currency (as long as it wasn't gold and only they could print it, for nothing, out of thin air). The result was the Bretton Woods agreement, which simply devalued the dollar to a lower rate against gold, allowing more, redeemable dollars to be printed in order to finance a restart of the global economy.
Which brings us to the yen (and the mark, and the pound and the franc, etc.). All of these foreign bankers were thoroughly familiar with the pyramid scheme of fractional reserve banking, because they had been using it themselves for years. But they had always felt the need to back their scams with some real gold, to give at least a semblance of honesty (and to give themselves an exit strategy into real money when that became necessary). That's why they would not themselves accept an unbacked foreign dollar. They watched in sheer amazement as this fiat dictatorship continued to work in America. After all,
historically, all previous similar scams had always ended in disaster when the sheeple woke up and the fiat currency collapsed in a
worthless pile of paper. What they failed to recognize was that the sheer size (and dynamics) of the US economy, compared to their own, was merely slowing the rate at which domestic confidence was being lost in the dollar. In addition, they initially missed the true significance of creating a special class of money which was redeemable in foreign trade but intrinsically worthless at home. They didn't realize that this, too, was just slowing the rate at which the dollar would eventually become worthless.
Each of the major nations created, (or redefined) an intrinsically worthless domestic fiat currency, which they could force their
citizens to use by fiat or dictate, and which traded internationally not against gold, but rather against the dollar. But only foreign exchange dollars which the Federal Reserve pretended were still fully redeemable in gold. The intent, and I do mean intent, was to create a huge supply of inflated paper trade dollars, backed by a fractional reserve consisting of all the gold in Fort Knox, gold stolen from American citizens by Roosevelt in 1933. But the pyramid scam was still the same -- these dollars were not worth the amount of gold which the Federal Reserve promised to pay for them. There was never enough gold to pay off even the foreign trade dollars at the official price. The smart money (the Arabs and others) knew this from the start, and they traded their dollars for gold as soon as they received them. By 1971 it was clear that the gold would soon run out. Which led to the Nixon default (by a Republicoward this time, may a pox be upon both their houses). Which led to the Arab oil embargo.
Which brings us to the Euro. After the Arab oil embargo and the following recession, it was clear to the rest of the world that the dollar was no longer viable as a long term global reserve currency. It was not as "good as gold" and the defaults clearly proved it was not backed by the full faith and credit of the United States of
America. In addition, the rest of the world was more than a little miffed at the unfair advantage given the US in creating a mountainous balance of trade deficit simply because of the reserve status of the dollar. In effect, the rest of the world was subsidizing the US national debt simply because of the need to accept dollars which could then be used to buy oil. This need in turn only arose because of a private agreement between the US, Britain and the OPEC nations to end the embargo in return for a way by which the Arabs could easily and cheaply convert dollars into the gold they demanded for their oil (more about this later). The world needed a new trade (reserve) currency, but it couldn't be gold. If it were gold, eventually all of the smart money would be converted into gold and all of their fiat currencies would become worthless (actually they already are). The rest of the world was temporarily forced to use those worthless
dollars, but eventually there would have to be a reckoning.
With that strange synchronicity which seems so tightly bound to the year 2000, there were two events which occurred in 1999 to start the reckoning. One was the introduction of the Euro (almost twenty years in the making, after the Nixon default). The other was the US running out of gold with which to pay for oil. I admit that I don't have all the details, and probably nobody ever will, but the signs are clear for those who want to see them. There have been rumors for years that the gold is no longer there in Fort Knox, that "somebody" has stolen it. The "proof" is that "they" have not allowed it to be audited since long before the Nixon default.
This view is probably more than a little naive. The gold is probably physically still there (and in other repositories elsewhere) it just doesn't belong to the sheeple any more. Some of it has been
fraudulently transferred to the bankers, and more has been secretly paid to the Arabs in return for their oil. For me, the clearest indicator of something rotten in the state of the Fort is the recent gold sales by the Bank of England, initiated by the socialiar Klinton Krony living at Number 10, Downing Street. Why on earth would a G5 nation publicly announce the sale of half it's gold reserves in such a way that it would inevitably force down the price of that gold,
thereby greatly reducing the number of worthless dollars the BOE would receive in return for their valuable gold? Why would the European Union respond by forcing Britain to publicly join them in a
repudiation of more gold sales and an elimination of the gold lease short sale scams which have depressed the price of gold and pushed the gold mining industry to the brink of destruction? Why would they make sure that a European announcement was made in New York? Why would the price of gold, determined largely by insiders, then immediately jump by about $70 per ounce?
The nudge-nudge, wink-wink answer is that the BOE is covering for one or more deeply short members of the LBMA (London Bullion Merchants Association). Bravo Sierra. A G5 nation doesn't put up half of all it's real money just to cover a few banks. It doesn't have to. It just prints more paper and takes the inflation hit, as America has done time and time again. No, a bailout of this magnitude is only done for another nation, and a very close ally at that. The only nation close enough to Britain to receive this kind of special
treatment is the United States. In fact, a bailout of this size isn't even likely for a close ally, just on it's own merits. Even if Bully Blair does owe his temporary Downing Street address to the Klinton Machine and to campaign funds provided by Goldman Sachs (the villain of the Ashanti gold mine disaster). Such a bailout could only occur if Britain itself is also in deep moneta
beesting
(12/29/99; 10:36:25MDT - Msg ID:21787)
Hi Cavan Man # 21782.
http://www.quoteline.com/qfeedbe.asp
Your question;
Are you aware of a Euro index fund?
My answer--no, but the above URL is a Swiss site, and could probably answer all questions concerning Euro index funds.
I haven't tried trading on line yet, and I'm not going to try until I'm sure all Y2K bugs have been worked out.Imagine what will happen if even a small amount of financial data gets lost in cyberspace over the next few days.Opening an account in Euro land should be quite easy, but banking laws are quite different over there.Glad you liked my patriotic post....good luck....beesting.
Strad Master
(12/29/99; 10:28:40MDT - Msg ID:21786)
Extra cash on hand at the bank.
TOWN CRIER: Your most recent post is fascinating, especially in light of an article I read a few days ago. It was either on the front page of the LA Times or IBD (I can't remember) but it wrote about how all the much-vaulted cash shortages that Y2K doomsayers had forcast were not coming to pass. Indeed, according to them, banks had a big surplus of cash on hand because they had prepared so well (and unnecessarily) in advance.
Cavan Man
(12/29/99; 10:25:51MDT - Msg ID:21785)
TC: Too tricky for me
How do you explain 4.25%? Thanks.
Journeyman
(12/29/99; 10:24:52MDT - Msg ID:21784)
Bubble report:
The FED has pumped more than $120 billion into the economy
in preparation for Y2K. "If you want money from your ATM,
you can be sure it will be there." -Sue Herera, CNBC, 11:12
AM, December 29, 1999
The S&P 500 is in record territory, the DOW is in record
territory, the NASDAQ is in record territory. -CNBC, 11:45
AM, December 29, 1999
The NASDAQ is more than four standard deviations above it's
200 day moving average, further than any stock index has
ever been, further than the DOW in 1929. -John Roak, CNBC,
11:30 AM, December 29, 1999
The French CAC 50 closes at a new all-time high, as does the
British FTSE. -CNBC, 11:57 AM, December 29, 1999
Regards,
Journeyman
TownCrier
(12/29/99; 10:17:06MDT - Msg ID:21783)
Money: the Fed, banks, and Y2K
http://biz.yahoo.com/rf/991229/in.html
It came as no surprise that the Fed once again found itself in a position needing to provide additional funds to the nation's banks today. Using 5-day repurchase agreements, the Fed added $8.525 billion to bolster the level of banks' cash reserves, temporarily buying bond-type assets held by private banks under the agreement that the banks will later buy these assets (collateral) back.
Two remarkable things to report in connection with this business...first, the availability of cash among the banking system must be incredibly TIGHT!! What evidence is there, you ask? Pay attention now...this is important stuff, but it is tricky if you are unfamiliar with banking.
The Fed sets monetary policy at its regular Federal Reserve Open Market Committee (FOMC) meetings. Their primary tool here is to decide upon what should be the target rate known as Fed Funds. Fed Funds is the odd little name given to the interest rate at which the various nation's banks lend dollars to each other overnight. To a degree, this interest rate fluctuates daily because it is determined in a fashion that is akin to the yield on Treasury bonds established in open market conditions.Like bonds, the more in demand the Funds are, the higher the "price" paid and the lower the effective interest rate. It is very rare to see the open market Fed Funds rate trade much more than an eighth or a few 1/16ths of a percentage away from the Fed's target rate (currently set at 5.5 percent.) You'd better sit down for this...Fed Funds as traded among banks this morning were going for ONLY 4.25 percent! A full one and a quarter percentage less than the target rate! And keep in mind that this is coming in an atmosphere where everyone fully expects the Fed to further raise their target rate at the next FOMC meeting. Banks tend to trade Fed Funds in a manner that anticipates the coming new rate, particularly as the day draws near.
The second bit of evidence that cash must be tight is anecdotal. I had to stop at a bank yesterday, and when my turn came to visit the teller I could see that each and every teller had several disorderly piles of ones and fives in prominent view which they would make a grand show of reshuffling and counting when not themselves occupied by a customer. Looks like their stealing a page from the playbook of Banks in Argentina. You may recall several posts from The Tower a couple months ago that explained how bank managers would make displays of what available cash they had whenever a bank run was threatening, in the hopes of convincing those waiting in line that there was plenty of cash for everyone so they might as well be content and simply go home empty handed. (That was the rationale, anyway.)
My, things have gotten interesting suddenly. What truly amazes The Tower is that seemingly, such a large precentage of those opting to take some measure of Y2K precautions were content to wait until the very last minute to do so. Had those who acted early chosen instead to also wait until the last minute, the system probably would have broken this week.
Cavan Man
(12/29/99; 9:53:10MDT - Msg ID:21782)
beesting
Are you aware of a Euro index fund (not WEBS)?
BTW, your comments this AM on the Declaration of Independence were much appreciated. Thanks.
beesting
(12/29/99; 9:39:09MDT - Msg ID:21781)
Try this URL on EURO stock markets.
http://biz.yahoo.com/rf/991229/mz.html
Yahoo changed the URL......beesting.
beesting
(12/29/99; 9:29:04MDT - Msg ID:21780)
How EURO zone stock markets performed in 1999.
http://biz.yahoo.com/rf/991229/14.html
Euro zone stocks up 43.27% for 1999.
The above link gives a complete run down and welcomes feed back.(London release).....beesting.
Cavan Man
(12/29/99; 9:20:24MDT - Msg ID:21779)
FOA 21774
You must be only one among a team of architects designing a new paradigm for the world's financial organization. You mentioned your involvment beginning (I think) with the NYSE crash of 1987. At that time, there was some degree of alarm among ME oil interests perhaps culminating in the THOUGHTS expressed here.
Has Dr. Mundell's work been a coincidence from your perspective?
It appears to most I think that the current $USD/IMF system can continue to run its course almost indefinitely. Some thing would be needed to upset the apple cart further. That "something" if a market driven force might be a long time coming.
I wager your associates are very patient people. Why wouldn't they simply allow the $USD/IMF monetary system to runs its course and collapse under its own weight, finally? Perhaps that is the plan? If that is the case then, it could be many years before the end is nigh. Then, voila, the contingency plan has been and still is in place.
Still trying to look at events (with western impatience) and anticipate the next move(s). Thanks.....CM
USAGOLD
(12/29/99; 9:04:52MDT - Msg ID:21778)
Today's Gold Market Report: Gold Fueled by Worldwide Y2K Buying
Market Report (12/29/99) Gold extended its winning streak this morning
with a respectable 80¢ gain in the early going. As reported here
yesterday gold's year end rally is being fueled by Y2K concerns,
according to Leonard Kaplan, the head bullion trader at Chicago's LFG
Bullion Services. "We've got short covering in front of Y2K led by the
funds and we've got some big buyers hedging Y2K troubles," says Kaplan.
In Hong Kong, the primary Asian gold market, there are reports of strong
physical demand as gold bars were being sold in Shanghai, China for the
first time in fifty years. The Chinese is sanctioning and boosting
ownership in the private sector through issue of millennial coin. Though
there have been rumblings for the past twelve months about official
sector purchases, there has yet to be a public announcement of gold
acquisitions. The London market was also buoyed by year end gold buying.
One trader told Reuters that "People would rather buy than sell in the
run-up to Y2K and associated problems."
That's it for today, fellow goldmeisters. See you here tomorrow.
Cavan Man
(12/29/99; 8:55:03MDT - Msg ID:21777)
FOA 21774
"The whole reason for allowing gold to return to its free market physical price value is to use it as a background official/private currency".
Hello FOA. Isn't gold an official/private currency for central banks, ME oil, large blocks of wealth etc today?
What I mean to say is; gold for those "in the know" and fiat for the masses? Thanks.
Leigh
(12/29/99; 8:35:56MDT - Msg ID:21776)
FOA
Thank you, FOA, for responding! Your answer was so different from my assumptions that it's going to take numerous readings and some time to assimilate it! Please have a very happy New Year -- I hope we'll be able to hear from you after the 1st!
elevator guy
(12/29/99; 8:02:31MDT - Msg ID:21775)
@Peter Asher, post# 21761
Yes, you have a compulsion for puns! That may be a treatable condition!
But only genius can cause those puns to roll out with such fluency. You yield your sword of language with ease, cutting swaths at the dense underbrush of ignorance, like a razor sharp scythe mowing down heavy weeds.
Ok, I'll stop now. Must have been the breakfast tea!
Please post if you hear anything about the effect of Y2K on the markets.
FOA
(12/29/99; 7:51:39MDT - Msg ID:21774)
Reply
Leigh (12/28/99; 20:15:43MDT - Msg ID:21752)
Hello Leigh,
My reply to your comments / questions:
-----I have a few questions to ask, and I hope you don't mind if they seem to cover old ground. I'm trying to clear up some fogginess in my understanding. First, regarding the proposed three world currencies -- will they be gold backed (like the Euro), based on a true gold standard, or backed by nothing at all? Will the three currencies compete against one another? Do you think that eventually the three currencies will merge into one world currency?-------
-----------Also, you've mentioned about digital money, and I assume you mean that a gold owner's gold is placed in the bank and he can draw upon its value. What if the gold owner (or cash owner) doesn't trust the bank or the government to take good care of his money? Could he refuse to use the smart card and function on a cash basis?----------------
Leigh,
Let's take a short walk.
I don't propose three world currencies and neither do our Euroland friends. There is only room for one world reserve "digital" currency that would take on the trade settlement functions of our present dollar system. We understand that the Euro alone will become that "digital settlement reserve currency".
The Euro is not and never will be gold backed like the various gold standards of the past. The ECB / BIS have no intentions of making that mistake again. The whole reason for allowing gold to return to it's free market "physical" price value is to use it as a background official / private
currency. A real money (gold) that will trade at whatever level it seeks because "this new" Euro currency will not be defined in a set amount of bullion. It's price (gold) will rise as a function of world supply and demand based on gold held and used as a "wealth asset", not it's commodity use.
"Wealth asset" money is an old line function gold has always had throughout history. This use exists today, even as it's value is hidden in the fiction of a "paper gold" marketplace. This "Wealth money" is the very attribute the Western financial system has so much tried to destroy as it competes against the retention of our debt structure. A structure ingrained in the dollar world and requires that
no one discount dollar debt.
The old gold standards needed gold to completely back their moneys because without gold, they (cash) had no purpose of exchange. Except to denominate a fixed gold transfer during trade. Today, modern commerce has evolved to the point that paper "digital" settlement is the cornerstone
of an efficient trading system. Indeed, without international computer settlement, using fiat currencies, our system would not function. Too this end, our modern commerce and lifestyles require "digital" currencies and that need imparts a new value to their use and existence. One that did not exist during the relative "slow society" of the gold standard days.
Therefore, this modern reserve "digital paper currency" will not be backed using a fixed amount or price of gold, rather it will "use gold" as a real money reserve. A reserve that can be traded, lent or retained as national savings. As such, any world "free market" value rise of gold will only be seen as an "good" increase in savings and therefore better "reserves" for a national society. Not to mention any "physical gold savings" held by the private citizen. Contrast this with the today's Western view that any rise in the gold price means a loss of wealth and a economic disaster. Truly, this will not be a disaster for the majority of world citizens. Just those that tie their saving assets into the illusion a dollar presents.
The modern reserve currency will be in demand for trade settlement in conjunction with gold, but will not be in competition with it. Their values will move up and down against each other using their true attributes. Gold as a "real wealth settlement money of slower speed" and Euros as a "modern digital money of high speed".
Our modern currency history (the last 20 years) has shown that the world needs both of these moneys, but needs them in a different format from the past. Our present dollar could do the same but it carries the baggage of huge unpayable international and local debts. Debt made non payable by the dollar reserve system that forces the social needs of just one people upon upon the world using unbalanced, rigged exchange rates. It eliminates the escape route of a "free market" gold price and therefore locks down the ability of other nations to trade outside this system. Free the world of this system and a great deal of American wealth will be seen for what it really is, an illusion of
bookkeeping. Indeed, create a workable reserve medium, based on world needs and wants in a settlement format and the race will be on to use your product. I submit that that product is in the process of being built today. A return to a new one world currency is the best thing for all of us.
Especially if it "includes" the money the world has wanted for all it's history. Gold!
Onward:
Mr. Holtzman, does not understand how the diversity and different social nature of Euroland will become it's most profound currency strength. It they were a more homogenizing people like the US, the Euro would become just another dollar! Their "Old World", "Hard Money" conflicting nature will be reflected in a "New Gold Market" and a responsible world currency. Their practical "Real World" focus will not allow them to reject this "digital currency" as we move forward in world trade. The very best balance for the next 1,000 years.
National states and broad based cultures, such as China and India will wholeheartedly embrace such a system. The prospects of using the Yen in such a world demonstrates the lack of understanding about how that currency and it's society functions. More later.
thanks FOA
PERMAFROST
(12/29/99; 7:40:27MDT - Msg ID:21773)
Thanks CavanMan for responding
I find your train of thought quite pragmatic for the most part. But I personally don't think we'll have a "fix" to our dollar-based monetary systemic problem. That would be like trying to cure the disease...I think it'll be a wake up in the morning into a new world sort of cathartic affair. For gold and finance are mutually exclusive.
Don't have much time to stay on-line; office closing. Have a good one!
phaedrus
(12/29/99; 7:16:17MDT - Msg ID:21772)
hi-yo silva
march silver up 12 cents at 9:15 est
Cavan Man
(12/29/99; 7:15:25MDT - Msg ID:21771)
PERMAFROST Various
Hello PERMAFROST and welcome.
The USA is a product, if you will, of 5000 years of world history and the intellect, genius, ethics, morality and good intentions of the founders of this nation. It is our unique (in world context) system of government that has enabled the USA to become the dominant political and economic force that the world competes with today. It is this very same system of government and subsequent economic organization that attracted immigrants from all corners of the globe (still today) to build the foundation of the country as well as that of their families.
It is the supreme good fortune of those that live here (today) to enjoy and benefit from "history". Too bad for us the SUV has become a contemporary icon of this once proud nation I agree. Since I detect just a hint of ill ease with our culture in your posts (to which I am sympathetic), let me say that there are many serfs (aka "regular guys") such as myself who are also ill at ease with contemporay American culture so, please don't dip all of us in the same bucket of tar. I too am a serf who, through sheer good fortune, happens to live on a much better plantation than the rest of the world and for that I am Eternally grateful every day.
As to the dollar potentially destructing the economies of those nations and their citizens who compete for it, I think you must admit that all will suffer although perhaps not equally. SUV owners and serfs will suffer alike. Perhaps SUV owners will suffer more because they lead lifestyles that to some seem overly complex and misdirected.
Having read here for many months, it occurs to me that the world has a "dollar" problem that needs fixing. The "fix" will be gradual and experience unpleasant but it appears this is a road we must travel.
Thank you for your thoughts.
SteveH
(12/29/99; 6:10:47MDT - Msg ID:21770)
Holtzman
Mr. Holtzman,
I find you words comforting but analogies slightly lacking.
You speak of gold as though there is no 10 ton to who-knows-how-many-ton shortage in Commodity markets. You discount history that showed gold at near 1:1 parity with the DOW twice in this Century (what little is left of it). You discount that a passing train at 100 mph creates a great suction or vacuum that could knock off balance or suck in the unwitting by-stander on the platform. Finally, your thought of the dollar as a reserve currency is quite susceptable to being dethroned from that status when another rival currency has potential and economic powerhouse behind it, even if they don't all speak the same language. There is only so much market share for a reserve currency. It is at 100%, when it is the only one. What is it (and what happens to those dollars) when it competes with the Euro for that 100% market share? Less than 100%.
Keep the good posts coming. Just my $.02.
Canuck
(12/29/99; 6:05:12MDT - Msg ID:21769)
Peter Asher : Your messages last night.
Msg #21749.
I am new to the accounting/high finance game; please bear with me through a couple of questions.
If the big 'movers and shakers' were aware (and I'm sure that they were) that the FED had to let money loose to avoid a Y2K lockup towards year-end, did they ride the NASDAQ train fully knowing it had to rise regardless of ANY
event? Let me rephrase that question, knowing that the FED had to loosen all purse strings in Dec. and knowing that the FED could not raise interest rates Dec. 21, has the smart(big) money chased NASDAQ because it could not go down?
Being that it's two and a half days until rollover and the
super-inflated NASDAQ has not succumbed to a melt-down, is it then logical that profits will be taken 01/03/00? Are profits to be taken to defer tax implications to the following year?
I think I understand and I think I agree. Please let me know.
Msg #21762
I too am holding a couple of dollars of Harmony. I am holding physical for the longer term which I believe is the prudent thing to do. Being human with the greed factor in play, I am looking for a little leverage as well.
I don't have the intestinal fortitude for options nor the money so I playing Harmony in the USA and Agnico-Eagle in Canada.
Your comment re: Harmony is most interesting. I must pose a question of which, if you elect to answer, I will not construe as investment advice, are you holding your gold stock through the rollover?
Thanks in advance.
Goldy Locks Guy
(12/29/99; 5:43:25MDT - Msg ID:21768)
Contest
Ok guys...I tried to post last night but it doesn't look like it made it...Anyway, not to sound childish, but was there any announcement on the winners of the 5 events for 1999?
I could have missed it, but don't think so.....Goldilocks Guys
SteveH
(12/29/99; 5:37:19MDT - Msg ID:21767)
Did you see this?
The other day MK was discussing the slant of news stories. I am of the opinion that news entities must be extremely independent and independtly owned. When all the news comes from one management organization, all editorial and slant decisions come from one viewpoint. If that viewpoint is counter to ones beliefs or philosophies or political bent, the you have the potential of a news monopoly, which isn't a news monopoly, rather an information monopoly. And of that, we must truly distinguish the differences. News reports all newsworthy events without preference to politics or idealogies. Information services choose what to disseminate and as has been oft heard said, there is much as much in the shadows as there is in the light. In other words, what an information source chooses not to report is equally important as what they choose to report. How they report it is equally important as how they didn't report it.
With that in mind, I received this in email:
News on the News
by DOUG FIEDOR
fiedor19@eos.net
Heads Up
If anyone thinks the TV "news" fed the American public is
filtered through a strongly liberal prospective now, just
wait until next year. Cause, you ain't seen nothing yet.
Three of the major news networks have joined together as
equal partners to form a single domestic news cooperative
called Network News Service. ABC NewsOne, CBS Newspath and
Fox News Edge will all contribute people, money and
facilities to Network News Service (NNS).
According to news sources, the new venture will be managed
by the senior executives of all three news organizations and
the operation will be coordinated from a single newsroom
located in the CBS Broadcast Center in Manhattan.
Three equal bosses will be running one newsroom. That should
be great fun to watch. But, on second thought, they are all
running pretty much the same things every night anyway. The
only real differences between them is the hair styles of the
news readers.
At any rate, they say that the three news services will
continue to operate as separate competing entities. The
agreement is that each network's news service will select
from all of that day's NNS material for inclusion in its
regular feeds to affiliates.
The agreement is that NNS will collect video from the
affiliates of all three news services, as well as the three
network's newsgathering units and other sources. Supposedly,
they will then shoot the "raw video" back to ABC NewsOne,
CBS Newspath and Fox News Edge.
That's what they say, anyway.
CBS News president Andrew Heyward said that the new
arrangement "enables each network news service to devote
more resources to its own coverage ... which will ultimately
differentiate one station or one service from its
competitors."
Sure. They are differentiated by such things as the hair
styles, the amount of pancake makeup applied and the acting
ability of the on-air personalities.
Fox News chairman, Roger Ailes, agreed: "NNS will be
particularly important to breaking news coverage. It will
dramatically enhance the ability of each network news
service to cover breaking stories by offering more than one
source of video."
This is an interesting arrangement that could really please
the political elite in Washington. Sure, it looks like
three of the five biggest corporate media giants are
conspiring to form what could easily become a monopoly on
the news coverage. But don't look for any government
antitrust interference. This arrangement is but one short
step away from a dream come true for people like Hillary and
her White House war room and propaganda mill. Heck, with
this system they could stop a story from getting to most
news outlets with but one telephone call. How sweet it is
for the controlling elite!
Three major corporations own the three NNS equal partners.
The executives of all three major news organizations will
run NNS. Which means, any of the three executives can spike
a story. Which also means, any of the parent corporate
executives owning the major news outlets can pick up the
telephone any day and order the news outlet executive to
call NNS and have them spike a story.
NBC and CNN are not involved in NNS at this time. NBC
spokeswoman Alex Constantinople told reporters, "We think
it's curious that we were not included in these
discussions." But, according to Bob Murphy, ABC senior vice
president of news coverage, neither NBC nor any other
newsgathering organization is excluded in the future.
Nothing in the arrangement prohibits talking to others who
would subsequently participate, Murphy told reporters.
Eventually, they probably all will be included, too. NNS
will be much too important of a political tool to have any
major news distributor left out.
Meanwhile, all of the network newscasts are losing viewers
and most of the major daily newspaper subscriptions are way
down. And the controlling media executives can't seem to
figure out why. Interesting.
Shaping the news via groups like Network News Service is but
one of the systemic problems with corporate "journalism"
today. Their complete disconnect with the feelings of the
American people is another. "News" is such big business
today that the American people are starting to understand
that it's all marketed to us with a politically correct
corporate/political spin. That's why the unfiltered
atmosphere of the Internet is suddenly so popular.
The fact is, the more the corporate media organize their
huge conglomerates, the less the American people believe
anything they report. Consequently, many thousands of
American people now get their news from alternate news
sources on the Internet. That is also why many of these
"alternate" news sources are now prospering and are being
looked at by many as the only good news sources available.
PERMAFROST
(12/29/99; 3:37:56MDT - Msg ID:21766)
TO PETER ASHER re Msg ID: 21760
Dear Sir,
As per the "Serfs and Lords". Please add this to your "carton full of notes".
The Serfs in other parts of the world do not sport the privilege of charging extorted goods and services on their Plastic BUT they must pay 4 dollars or more per gallon of gasoline even if they make 50 bucks a month working 50-60 hours a week.
If the dollar ponzy scheme ends, just look yourself in the mirror if you're wondering who's turned those "lesser" serfs into potential "terrorists." I'm afraid the West will not only hurt its "serfs" in a monetary collapse but make open enemies of many emerging regional powers who do not have to shut up and take it once their "bone" (the US dollar) is no longer thrown their way. Much suffering to ensue...
And yes; the fatter the Master, the bigger the bone i.e., the closer you live to a "Rotschild" or Citibank the less you'll suffer and actually may even buy yourself an SUV in the process!
PERMAFROST
(12/29/99; 3:21:27MDT - Msg ID:21765)
FOA Msg ID: 21734
Dear Sir,
Based on your logic, two outcomes are possible.
1) If you're right and we are witnessing the re-monetization of gold than all those that benefited from the fiat money scheme will lose their power. A gold-backed and restrained financial system (An oxymoron, in my belief) will simply preclude them from accumulating goods and services against monopoly money--the source of their power.
2) If you're not and gold is merely being used as a relatively-untapped "new" source of non-debt-backed dollar creation, than it's a very old game we're playing, indeed.
Was not gold itself responsible for one of the greatest INFLATIONARY explosions in History when the Conquistadors "expropriated" Aztec gold and brought it all to Europe to consume (chase after) a "limited amount of goods and services"?
Colombus turning over in his grave?
QUESTION: Do you know of any emperor (I think you called them 'Grandees' here on this forum) who's willingly abdicated power--Besides God himself?
N# 1 out of question, I'm afraid.
Netking
(12/29/99; 2:13:51MDT - Msg ID:21764)
Ross L
Sir Ross - What would happen to the POG if Y2K turned out to be a 'non-event'.
Dramatic increases of currency in circulation(reserve) by various reserve central banks is
no big deal. It is not an admission of 'impending apocalypse' in my opinion but is rather a
wise action given peoples actions in a 'perceived fear' situation given the constraints of
reserve assets ratios in banking regulations.
RossL
(12/29/99; 0:22:03MDT - Msg ID:21763)
The Millennium Tune
From what I have seen lately, most analysts in the media are predicting a Y2K no-show. No big deal. A big joke.
What is the reasoning behind this thought process? From what I can tell, this is the story: The stock market averages are hitting new highs. The media is ecstatic over the new era of NASDAQ. We are all happy campers. The stock market would have crashed by now if Y2K were to be a problem. The stock market is a perfect market and will perfectly discount all problems as soon as they are apparent.
The media hype is supreme. Gold Dancer brought to our attention yesterday about the advertising boom that feeds the media frenzy. Where is a reporter saying "what if?"...
What if gas is $2.50 by January 7th?
Why are NYMEX/COMEX and LBMA closed January 3rd?
Why did the FED "currency in circulation" figures go up by 91 billion dollars last week?
We shall see.
Two months ago, I was the one predicting a big short squeeze on the COMEX that would have happened this week. Well, I was wrong about that prediction. My predicting skills need work but I can still ask questions!
Click Here to view yesterday's discussion.
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