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ARCHIVED DISCUSSION FROM 8/29/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) JMB (08/29/00; 23:25:44MT - usagold.com msg#: 35726) JOHN DOE...Do you take requests? If you could present your rendition of "L.A. Woman" by the Doors, I'm sure FARFEL would take notice and hook you up with a little Hollywood action. You got talent, Sir. That was really something, thanks. Black Blade (08/29/00; 22:46:53MT - usagold.com msg#: 35725) API numbers Inventories Rise Aug. 29-MAR--[B] Add 2: API Review: NYMEX mixed as crude, distillate inventories rise--NY Oct crude down 14c as API stock gain exceeds expectations--API: US crude stocks up 5.261 mln barrels in latest week--API: US gasoline stocks down 3.072 mln barrels in latest week--APIs imply US gasoline demand 8.91 mln bpd vs 8.97 mln--API: US distillate stocks up 1.040 mln barrels in latest week--APIs imply US distillate demand 3.71 mln bpd vs 4.36 mln--API: US refineries operate at 95.5% in latest wk vs 96.9%By BridgeNewsNew York--Aug. 29--NYMEX crude and gasoline futures dipped in overnight Access trade as American Petroleum Institute data showed U.S. crude stockpiles last week rose a sharper-than-expected 5.261 million barrels, while gasoline stocks fell 3.072 million. Heating oil futures were flat to up slightly as inventories rose only 1.040 million barrels, less than half what was expected. API also reported that U.S. refinery utilization rates last week fell by 1.4 basis points of capacity from the previous week, exceeding expectations for runs to have dropped only 0.3 to 0.6 points. At 1757 ET, NYMEX nearby Oct crude was up 5 cents at $32.79 a barrel, up from its earlier Access lows, while nearby Sep gasoline was down 72 points at 96.60c a gallon. Sep heating oil was up 66 points at 99.25c. The data are for the week ended Friday, Aug. 25. The U.S. Department of Energy will release its weekly inventory data on Wednesday after 0900 ET. Brokers, traders and analysts had expected crude oil stockpiles to rise by only 3.7 to 4.1 million barrels due to continued strong imports, a prediction that was exceeded. At the same time, crude input to refineries fell last week. Gasoline inventories were expected to have dropped only 1.0 to 1.5 million barrels, mainly due to lower domestic production as refiners begin maximizing distillate output at gasoline's expense ahead of the winter heating season. Output levels indeed dropped off last week, while import levels also receded. Distillate inventories, which include both heating oil and diesel fuel, were expected to have risen by 2.5 to 3.0 million barrels as refiners continue building up seasonal stockpiles. However, domestic production rose only marginally last week, while imports were nearly halved.CRUDE: Up 5.261 million barrels Brokers and traders attributed about half of the rise in crude inventories to a combination of slightly higher imports and much lower refiner operations. But they also said the balance of the gain was due to an internal adjustment. Import levels last week rose 167,000 barrels per day to 9.304 million bpd, while crude input to refineries dropped by 236,000 bpd, to 15.814 million bpd, from the previous week's 16.050 million bpd. Regionally, stockpiles rose the most, 5.112 million barrels, on the Gulf Coast while also rising a strong 1.372 million bpd on the East Coast. The Rocky Mountain region saw its crude inventories rise by 269,000 barrels, while the West Coast saw its stockpiles grow by 229,000 barrels. These gains helped the overall year-to-year deficit in crude narrow to 31.7 million barrels, from 35.4 million barrels the prior week. In the Midwest--which includes the key Cushing, Okla., pipeline hub, the delivery point for NYMEX light, sweet crude futures--there was a sizeable drop of 1.721 million barrels. Regardless, the Midwest year-to-year deficit also narrowed, to 9.886 million barrels, from 10.225 million barrels the prior week. The huge drop in crude inventories in the Midwest "will likely cause the Oct/Nov WTI spread to widen from Tuesday's settlement of a 91c premium in favor of October," one trader suggested.GASOLINE: Down 3.07 million barrels Gasoline inventories fell across the U.S. last week as distributors stocked up for Labor Day, the last holiday weekend of the summer driving season. Also, refiners are responding to rising heating oil prices by boosting supply. "We are seeing a shift in production, distillate production increased while gasoline came off," an analyst said. Domestic production of gasoline feel to 8.26 million bpd, from 8.47 million bpd a week earlier. Imports also declined to 209,000 bpd, although when including blending components the levels were near unchanged. Gasoline demand was near unchanged at 8.91 million bpd versus 8.97 million a week earlier, as motorists appeared unfazed by rising prices. The average retail regular gallon increased 1.3 cents last week to $1.481 per gallon, the second consecutive gain after eight straight weeks of falling prices at the pump. The deficit to year-ago levels widened again to 4.75 million barrels from 4.6 million barrels. The Midwest and East Coast led the drawdowns, both registering stock drops of close to 1.2 million barrels. Inventories of reformulated gasoline, which can be delivered against the NYMEX futures contract, fell 1.1 million barrels on the East Coast, which includes the New York harbor delivery point. A change in specifications for RFG on Sept. 15 may have led distributors to pull out as much of their summer supply as possible before then.Black Blade: API still bullish. Pump more oil out of the ground? Fine. Now what? Where will you store it? At the refinery? I don't think so. If the price should drop then the refiners are on the hook. A matter of "catching a falling knife". Besides, the refiners have more inventory as refining has eased back slightly. Refine it? With refiners at near full capacity, that should prove difficult. And with the usual refinery explosions and maintenance, there could be the occasional reduced refining capacity. Also a drop in gasoline and other distillate inventories will have to be replenished. Therefore, there is still a crisis at hand. Not to mention winter is coming and heating oil stocks look grim as consumers are buying stocks now to ensure a supply at the arrival of colder temperatures. Truckers are whining about increased diesel prices. Many could be forced out of business or have to pass along their costs. But hey, it isn't in the core rate so no inflation, right? Raha (08/29/00; 22:08:28MT - usagold.com msg#: 35724) 714 I agree with your observation that the Central Banks selling of gold is a major factor in holding the POGdown. The BOE is has announced they will sell 400 tonsand the Swiss will sell 1300 tons. So far the BOE has soldabout 150 tons and the Swiss are averaging about a ton aday (about 89 tons so far last I read). So there is still alot of selling to be done by these two alone. Plus every time we think we have heard the last of it another one popsup like Kuwait or Uraguay or Austria. It gets a little frustrating and IMHO it is a factor that is contributing to holding gold down. Geaux Gold. Canuck (08/29/00; 21:15:04MT - usagold.com msg#: 35723) XAU From another poster,"Today copper is a big leader on the CRB index, up + 2.21%And of course, logically, the big copper producer, Phelps Dodge, is down -1.8% on this news that copper is soaring."---------------------------------------------------------And now we see why PD was included in the XAU?Unreal. 714 (08/29/00; 20:00:14MT - usagold.com msg#: 35722) Fleckenstein on gold and the euro (among other things) http://www.siliconinvestor.com/insight/contrarian/ "Gold continues to labor, in part because of the continued avalanche of selling emanating from the world's central banks. Selling has hit a 30-year high according to a recent survey by Merrill Lynch, so that continues to weigh on the gold market."I hate to ask again, as it is only the third time, but Trail Guide, can you give us any guidance as to when the central banks will stop selling gold?It sounds like the Euro dying, too........ schippi (08/29/00; 19:30:08MT - usagold.com msg#: 35721) Select Gold Hourly chart http://www.SelectSectors.com/agpm70.gif FSAGX Up today SHIFTY (08/29/00; 19:28:55MT - usagold.com msg#: 35720) Bonedaddy Bonedaddy:You just may be correct.I hope you are wrong.According to an e-mail I received tonight :This bill was introduced on Feb. 24. This bill will become publicKnowledge 30 days after it is voted intolaw. This is an amendment tothe Internal Revenue Act of 1986. Thismeans that the Finance Committee can pass this without theSenate voting on it at all.($hifty: I don't know if this part is true. I fear it could be.)$hifty Cavan Man (08/29/00; 19:26:57MT - usagold.com msg#: 35719) USAGOLD MK- Just read the article. You are right on. That is the very best summing up I have read in the last 18 months. Buy more gold all. Time is on gold's side as never before. SHIFTY (08/29/00; 18:58:48MT - usagold.com msg#: 35718) CoBra(too) Reg is on my list for tonight! I received it this morning but did not have time. Hope its a good one!$hifty USAGOLD (08/29/00; 18:57:22MT - usagold.com msg#: 35717) On Reg Howe. . . http://www.goldensextant.com/campaign2000.html#anchor48727 I want to join my friends, PH in LA and CoBra, on the recommendation of the Reg Howe article linked above.And extraordinary work.If the internet were to go down and you had the opportunity to pull one article on gold for your permanent library in hard copy, this would be the one you would want.Reg, I'm glad you're on our side.MK Cavan Man (08/29/00; 18:50:37MT - usagold.com msg#: 35716) FT: "Report pours cold water on UK-US trade pact From the article...A free trade arrangement between the UK and US would have virtually no impact on overall economic growth in either country, and could be negative under some circumstances, the US International Trade Commission said yesterday.......But the study concluded that because there were relatively few trade restrictions between the two countries, the benefits would be minimal and could be outweighed by the weakening of UK trading links with the EU.We talked about this a way back; Phil Gramm's proposal to put the UK in Nafta. The article is a good one. sorry I couldn't provide the link.I still maintain the Gramm suggestion seemed odd then (and now). Cavan Man (08/29/00; 18:36:09MT - usagold.com msg#: 35715) Trail Guide/FOA...RE: ix What do you make of the OM bid for LSE as reported in the FT today? Also and to all....a number of articles in today's FT about the controversey surrounding the proposed merger of LSE and Deutche Bourse....a good summation of the concerns and negatives etc......BUT, not a word about the issue of quoting equities in Euro. Seems a bit odd to me 'cause a week or so ago there was talk of list in $USD. 714 (08/29/00; 18:33:07MT - usagold.com msg#: 35714) @goldfan @journeyman Goldfan, for some time now actually, in fact since 1997, we've been seeing gold RISE in price against many currencies while it falls in price in the US. The current price action in gold verifies historical trends of POG moving in different directions in different markets.It's difficult to compare the market in illegal drugs to the gold market, because there is no paper market in illegal drugs. And it is NOT officially valued at $0. Every time there is a big "bust", the authorities put a very inflated value on it because it makes them look better. As for the rich using gold and the poor using gold, anything is possible. Personally, like many here, I prefer gold.*********************************************************************Journeyman, why waste your time with smuggling gold? Transportation costs, in an era of a devalued dollar, will be much higher than now. Besides, it will be regulated, or at least its movement will be, whether it is here in the US or in Arabia. What was the "black market price" of gold during the 40 or so years it was illegal in the US? You can bet it wasn't much higher than $35! The oil-for-gold trade dissolved when prices were twice as high in Jidda than NY. That is why the Saudi king settled for a railroad and renegotiated the terms on a lower gold price than he could get in Jidda. Has Trail Guide ever shared that with you? *****************************************************************....a friend of gold is a friend of mine. Bonedaddy (08/29/00; 18:19:25MT - usagold.com msg#: 35713) Cobra, I'm going to read Reggie now, on your recomendation. John Doe, don't make it bad..... you took a sad song and made it better...Those Beatles parodies are some of the best I've ever read. My favorite lines: "It's wonderful to be here, It's certainly a thrill. You're such a lovely credit risk, We'd like to take your home from you, We'd love to take your home." ....of course there were some good ones on Willie C. also, but I'm kinda winding down on bashing him and beginning to focus on Algore. It's time for Clinton to take his place on the ash heap of history along with Benedict Arnold, Timothy Leary, and the first guy who got aids from a monkey. CoBra(too) (08/29/00; 17:51:51MT - usagold.com msg#: 35712) $hifty & Bonedaddy - Hope you're reading Reg Howe @ Golden Sextant - may be late for "Kathy close the ... ... cb2 Bonedaddy (08/29/00; 17:38:51MT - usagold.com msg#: 35711) Shifty? Maybe this is all part of the repayment plan for the '94 campaign contributions from China. The money was directed through Mochtar Riady, the Indonsian connection and the Worthen Bank In Little Rock. Among other things, Clinton and Gore probably agreed to disarm us to make it easier for the multinational peacekeeping force to impose the "rule of law". Last Chance Nov. 7th. Next stop socialism. Ammo may turn out to be the currency of the new millenium. HOLD ON TO YER GOLD! SHIFTY (08/29/00; 16:47:30MT - usagold.com msg#: 35710) Time to Clean Out the Barn ! Handgun Safety and Registration Act of 2000 (Introduced in the Senate)S 2099 IS 106th CONGRESS2d SessionS. 2099To amend the Internal Revenue Code of 1986 to require the registration of handguns, and for other purposes. IN THE SENATE OF THE UNITED STATESFebruary 24, 2000Mr. REED introduced the following bill; which was read twice and referred to the Committee on Finance --------------------------------------------------------------------------------A BILLTo amend the Internal Revenue Code of 1986 to require the registration of handguns, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,SECTION 1. SHORT TITLE.This Act may be cited as the `Handgun Safety and Registration Act of 2000'.SEC. 2. REGISTRATION OF HANDGUNS.(a) HANDGUN INCLUDED IN DEFINITION OF FIREARM-(1) IN GENERAL- Section 5845(a) of the Internal Revenue Code of 1986 (defining firearm) is amended by striking `and (8) a destructive device' and inserting `(8) a handgun; and (9) a destructive device'.(2) DEFINITION OF HANDGUN- Section 5845 of the Internal Revenue Code of 1986 (relating to definitions) is amended by adding at the end the following:`(n) HANDGUN-`(1) IN GENERAL- The term `handgun' means any weapon (including a starter gun) which--`(A) is designed to or may be readily converted to expel a projectile by the action of an explosive, and`(B) has a short stock and is designed to be held and fired by the use of a single hand.`(2) DISASSEMBLED PARTS INCLUDED- Such term shall also include the frame or receiver of any such weapon, and any combination of parts from which a handgun can be assembled if such parts are in the possession or under the control of a person.`(3) EXCLUSION- Such term shall not include a firearm classified as `any other weapon' under subsection (e).'.(b) TRANSFER TAX IMPOSED ON HANDGUNS- Section 5811(a) of the Internal Revenue Code of 1986 (relating to rate) is amended by inserting `or as a handgun under section 5845(a)(8)' after `section 5845(e)'.(c) TAX ON MAKING FIREARMS IMPOSED ON HANDGUNS- Section 5821(a) of the Internal Revenue Code of 1986 (relating to rate) is amended by inserting `, except, the tax on any firearm classified as a handgun under section 5845(a)(8) shall be at the rate of $50 for each such firearm made' after `firearm made'.(d) IMPORTATION POLICY CONTINUED-(1) IN GENERAL- Section 5844 of the Internal Revenue Code of 1986 (relating to importation) is amended by adding at the end the following: `This section shall not apply to any firearm classified as a handgun under section 5845(a)(8).'.(2) CONFORMING AMENDMENT- Section 925(d)(3) of title 18, United States Code, is amended by inserting `(without regard to paragraph (8) thereof)' after `section 5845(a)'.(e) SHARING OF REGISTRATION INFORMATION WITH STATE AND LOCAL LAW ENFORCEMENT AGENCIES-(1) IN GENERAL- Section 6103(o) of the Internal Revenue Code of 1986 (relating to disclosure of returns and return information with respect to certain taxes) is amended by adding at the end the following:`(3) TAXES IMPOSED ON TRANSFER OF HANDGUNS- Returns and return information with respect to taxes imposed by part II of subchapter A of chapter 53 (relating to tax on transferring firearms) on any firearm classified as a handgun under section 5845(a)(8) shall be available in an on-line format for inspection by or disclosure to officers and employees of--`(A) any Federal law enforcement agency, and`(B) any State or local law enforcement agency,whose official duties require such inspection or disclosure.'.(2) CONFORMING AMENDMENTS- Section 6103(p)(4) of the Internal Revenue Code of 1986 is amended--(A) in the matter preceding subparagraph (A)--(i) by striking `or (o)(1)' and inserting `(o)(1), or (o)(3)(A)',(ii) by striking `or (l)(6)' and inserting `(l)(6)',(iii) by inserting `or (o)(3)(B),' after `(16),', and(B) in subparagraph (F)(i)--(i) by striking `or (l)(6)' and inserting `(l)(6)', and(ii) by inserting `or (o)(3)(B),' after `(16),', and(C) in subparagraph (F)(ii), by striking `or (o)(1)' and inserting `, (o)(1), or (o)(3)(A)'.(f) TRANSITION RULE FOR NONREGISTERED HANDGUNS-(1) IN GENERAL- Any person possessing any firearm classified as a handgun under section 5845(a)(8) of the Internal Revenue Code of 1986 not registered in the National Firearms Registration and Transfer Record maintained by the Secretary of the Treasury under section 5841 of such Code shall register such handgun--(A) within 1 year of the date of the enactment of this Act, or(B) upon the transfer of such handgun before such 1 year anniversary date.(2) TREATMENT OF REGISTRATION AS TRANSFER- For purposes of any tax imposed by part II of subchapter A of chapter 53 of the Internal Revenue Code of 1986 (relating to tax on transferring firearms) on any firearm classified as a handgun under section 5845(a)(8) of such Code, any registration of such handgun under paragraph (1)(A) shall be considered a transfer of such handgun.(3) NONAPPLICATION OF PENALTY- Section 5861(d) of the Internal Revenue Code of 1986 shall not apply with respect to the possession of any handgun before the date of the registration of such handgun under paragraph (1).(g) PROVISION OF REGISTRATION FORMS-(1) AVAILABILITY- To promote and assist compliance with the handgun registration requirements under the Internal Revenue Code of 1986, as amended by this section, the Secretary of the Treasury shall make available such registration and fingerprint forms as may be required by the public for compliance with such requirements--(A) to State and local law enforcement agencies and facilities of the Department of the Treasury throughout the States, the United States Postal Service, and such other agencies and departments of the Federal Government as the Secretary determines would aid in making such forms available to the public; and(B) through the Internet in a downloadable format.(2) SINGLE FORM- The Secretary of the Treasury shall make available registration forms that allow an individual to register the possession or transfer of more than 1 firearm classified as a handgun under section 5845(a)(8) of the Internal Revenue Code of 1986 on a single form.(h) PROGRAM OF PUBLIC AWARENESS- Within 60 days after the date of the enactment of this Act, the Secretary of the Treasury shall commence a program to broaden public awareness of the handgun registration requirements under the Internal Revenue Code of 1986, as amended by this section. Such program may include voluntary cooperative efforts with Federal, State, and local law enforcement agencies and public service announcements as deemed appropriate by the Secretary.(i) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as may be necessary for the Secretary of the Treasury to carry out the provisions of and amendments made by this Act.(j) EFFECTIVE DATE- The amendments made by this section shall take effect on the date of the enactment of this Act. John Doe (08/29/00; 16:05:24MT - usagold.com msg#: 35709) Here's a tuneful summary of the entire US political economy in three easy pieces: *** Sgt. Paper's Phony Stats Club Bank ***It was thirteen years ago today,Sgt. Paper taught the bank to play.They've been getting in and out of trouble,But they've guaranteed to raise a bubble.So may I introduce to you,The act you've known for all these years,Sgt. Paper's Phony Stats Club Bank."We're Sgt. Paper's Phony Stats Club Bank,We hope you will enjoy the show.Sgt. Paper's Phony Stats Club Bank,Sit back and let the $ go.Sgt. Paper's Phony, Sgt. Paper's Phony,Sgt. Paper's Phony Stats Club Bank.It's wonderful to be here,It's certainly a thrill.You're such a lovely credit risk,We'd like to take your home from you,We'd love to take your home."I don't really want to stop the show,But I thought you'd might like to know,That the fibber's going to a tell a lie,And he wants you all to rub his thigh.So let me introduce to you,The one and only Willie C.And Sgt. Paper's Phony Stats Club Bank.Wil...lie...C.*** With A Lotta Help From My Friends ***What would you think if I told you a lie,Would you impeach and walk out on me?Lend me your ears and I'll tell you a lie,And I'll try not to lie blatantly.Oh, I get by with a lotta help from my friends,Mmm, I get thigh with a lotta help from my friends,Mmm, gonna lie with a lotta help from my friends.What do I do when my wife is away?(Does it worry you if you get caught?)Who do I feel by the end of the day?(Aren't you glad ‘cause they can all be bought?)Yes, I get by with a lotta help from my friends,Mmm, get thigh with a lotta help from my friends,Mmm, gonna lie with a lotta help from my friends.(Do you need anybody?)I just need Hillary C.(Could it be anybody?)I just want an intern or three.(Do you believe in a Globalist State?)Yes, I'm certain that we'll have one in the end.(What do you see when you see the word "is"?)I can't tell you, ‘cause "it all depends".Oh, I get by with a lotta help from my friends,Mmm, get thigh with a lotta help from my friends,Oh I'm gonna lie with a lotta help from my friends.(Do you need anybody?)I just need Hillary C.(Could it be anybody?)I just want an intern or three.Oh, I get by with a lotta help from my friends,Mmm, gonna lie with a lotta help from my friends,Oh, I get thigh with a lotta help from my friends.Yes, I get to lie with a lotta help from my friends, with a lotta help from my friends.*** Leveraged to the Sky with Derivatives ***Picture yourself by the tube with a ticker,With record p/e's and charts way up high.Somebody tells you to check prices quickly,The girl on CNBC live.Broad sector trends, in blue and in green,Towering over your head.Look for the girl with the hype in her eyes,And she's gone.Leveraged to the sky with derivatives,Leveraged to the sky with derivatives,Leveraged to the sky with derivatives, Ahhhh.Follow along in her talk with a punditWhere profits don't matter and sales are passé,Everyone smiles as they quote false statistics,That tell us what they want to say.Newspaper stories appeal on the page,Waiting to take IRA's.Climb in a fund with your head in the clouds,And you're done.Leveraged to the sky with derivatives,Leveraged to the sky with derivatives,Leveraged to the sky with derivatives, Ahhhh.Picture yourself with a stock in the market,With employee options and earnings surprise,Suddenly someone is there on the TV.The girl with CNBC live.Leveraged to the sky with derivatives,Leveraged to the sky with derivatives,Leveraged to the sky with derivatives, Ahhhh. TownCrier (08/29/00; 15:28:19MT - usagold.com msg#: 35708) Updated Weekly Gold Market Commentary from the WGC http://www.usagold.com/wgc.html Hightlights:"There was little response to reports that the government of Uruguay plans to sell 750,000 ounces (23 tonnes) or about 40% of its gold reserves. Uruguay recently placed its entire gold holdings of 56.6 tonnes on deposit in London."Won't be much more where that came from."The dollar edged higher against most other currencies as the week progressed, and gold prices continued to soften, slipping on Wednesday to a fraction over $270.00 in intra-day trading in New York, the lowest level since the Washington Agreement on Gold was signed last September."With four more years to go under the current agreement, the market participants seem to forgotten the intent of the agreement, or have at least chosen to ignore it. Creates a nice purchasing environment for those who recognize that the Washington Agreement wasn't frivolously contrived. goldfan (08/29/00; 15:24:30MT - usagold.com msg#: 35707) 714- the conversation continues many thanks for your input. You note among many other points that during WWII the gold price in Jidda was double that inthe US. I guess that during WWII people in Jidda couldn't travel to the US, nor could the people in the US travel to Jidda, to arbitrate this trade in gold. So, after the crash, the only way the US can stop arbing that further kills the purchasing value of the US $, is to restrict travel and investment and information, the way the Russians did for so many years, is that what you foresee for the US?And even then, the US $ circulated on the black market in Russia. I f you had them, you had access to any goods. In this country, the official price of marijuana and cocaine is capped at zero. Yet, there is a thriving and growing black market, at huge prices!!! Government attempts to control something people truly want, especially, that which rich people truly want, are futile, IMHO.In Russia, sub commanders making $275 per month (in roubles converted to US$) are not buying gold with their excess earnings. They are trying to survive. People whose access to money is confined to US $ will not be interested in buying gold. That is the meaning of the figure of $30 000 per ounce gold. Right now, in the US, submarine commanders or airline pilots earn probably 10 000 per month. This is 30X what they would earn in Russia. So, $10 000 per ounce gold seems about right, when the US$ dissolves the way the Russian rouble did. In Ecuador today, poor people use the sucre, and in Russia, the poor use the rouble. But in both countries, the rich do their trading with US $. So it will be after the crash, the poor will use the dollar, the rich, will use gold.What say you??Thanks for your extensive and thoughtful replies . I'm enjoying this conversation.Goldfan goldfan (08/29/00; 15:19:45MT - usagold.com msg#: 35706) FOA- Thanks!! Thank you sir for your many great efforts to make your concepts simple and accessible to those of us who are definitely behind you on this trail. You are blazing it well, easy to see the marks on the trees, even in the twilight. Your efforts will save lives, believe it!and I among many here am grateful..Goldfan oldgold (08/29/00; 15:11:47MT - usagold.com msg#: 35705) Oil and Gold The following post from SI speaks for itself. The author is one of the best energy analysts around -- bullish for many months. But now he has turned bullish on gold as well. A first for him: Bingo ! - glad to see others are seeing the high "potential" of an Oil crisis coming to fruition this winter during peak demand season - creating a true "Oil Crisis" and the accompanying market reactions & flights to safety. <<. Alot may depend upon the energy complex getting quickly out of control, price-wise. Fundamentally everything is in place. Add in the fact that the US has treated Muslims worse than dirt for decades, and some fundamental uprising may be underway. But I can wait if not. Empire collapses aren't that much fun anyway.>> ... I still think that Black Gold's spike will create THE breakout for Yellow Gold. Politically; given the present realization that OPEC has no substantial additional capacity to bring to market; Saddam & Iraq now have the ability to bring total chaos to the Oil markets. Should G.W. Bush be elected; would that bring an interesting scenario to mind ? Saddam & Iraq can not only control Oil prices as they are unquestionably now the "true" swing producer; but they can literally place an immediate "Pox on the House of Bush" - with an inflationary Oil crisis to greet him upon innauguration. A peak demand season spike in Crude & related products (heating Oil)will create an initial flight to safety move in gold's and should "this" move have enough additional follow through - which I think it will given the technical double bottom the XAU has put in and the general "value play" nature of many Gold Stocks; the short covering is the key to the spike in the POG. All of these short-derivative plays will be unwound one day and it is far, far more likely to be caused by a "LTC" type of crisis; than any future slow & steady unwinding of the position accompanied by a slow steady climb in the POG. It will be "event" driven and the "event" potential is falling into place. Black Gold's spike will unleash the fall of the house of cards that the Gold Carry Trade has built. A great trading opp is shaping up as well. We've got the potential to hop off of a new alltime OSX high - taking the profits & nearly simultaneously rotating to a near historic low in the XAU stocks - the 3rd leg the "Hat Trick" will be a "short" on the NAZ & Tech - as an Oil spike will generate enough inflationary pressure to greet the new Presidential administration (perhaps Greenspanless - he should have "got" while the "getting" was good - with Rubin) and further 2001 rate hikes will lead to a collapse of the Tech valuation multiple bubble. I am NOT a "Gold Bug" - never have been. I merely see the unsustainability of the present short-derivative positions & the blatant manipulation of the POG as very similar to what Crude Oil just went through. In late 1998 we saw $8 Crude Oil and the talk of $5 Oil. Everyone spoke of Crude Oil as being a commodity whose time had come & went - given new technologies; not to mention its now much diminished role in inflation (remember food & energy are free - certainly not inflationary, or consumer spending components, or related to future industrial costs; right ?). This theory of course proved to be unsustainable & history taught us that $8 crude virtually guarantee's and equal price spike swing back into the other direction - this unsustainable short position in Gold can not be sustained either & it will also trigger a price spike swing in the other direction led by an unwinding of the short derivative positions that have become irrational. It only needs an "EVENT" to trigger it and the reasonable potential of a Crude Oil spike this winter may just become that catalyst. I wonder if Saddam & Iraq have accumulated any Gold of late with the proceeds of all that smuggled black market crude ? By the way - there are some interesting intelligence reports circulating from the Israeli's on this issue - it's doesn't take much "Thinking Outside the Box" as to what's Saddam's thinking here now does it ? Saddam vs. the House of Bush - part deux We shall see... - The "Hat Trick" is falling into place: 1. Ride Black Gold (OSX) to new highs 2. Take substantial Black Gold profits & Rotate to Yellow Gold - to ride the "Crisis" flight to safety & the resulting collapse of the short derivative positions 3. Short the NAZ Slider on the Black TownCrier (08/29/00; 14:44:29MT - usagold.com msg#: 35704) ECB snapshot The weekly financial statement for the week ending August 25th reveals that the European Central Bank's gold assets remain unchanged at 120.911 billion euros. The net foreign exchange assets are down 400 million on the week to 260.7 billion euros.The next revaluation of the ECB gold assets will be September 29.-------------------------The Sixth Sense and markets..."And they only see what they want to see." USAGOLD (08/29/00; 14:16:52MT - usagold.com msg#: 35703) RPowell. . . At the moment our foreign competitors are raising their rates only after we raise our first -- if they raise them at all -- thus perpetually keeping their currency weaker than ours. If they aggressively raise rates faster than we raise ours, then that will be a story. . . . . . On the effects of these policies on the United States, it gets back to this concept of the inflationary tide lifting all boats which I believe to the case at present. I still hold to the disinflationary scenario, or inflationary depression, or deflationary inflation -- or however you want to characterize what happened in Asia -- rising unemployment and inflation (the return of Reagan's misery index) high bankruptcies, banks in trouble, etc. It will be the test of the Fed chairman whether or not it will be properly handled and we avoid sliding off into either a hyperinflationary or deflationary nightmare. As for the stock market, do you remember the chilling scene from the Sixth Sense when the young boy tells Bruce Willis:"They (the ghosts) don't know that they are dead."That's the stock market: It doesn't know it yet, but it's dead. Rates are going up. USAGOLD (08/29/00; 13:56:44MT - usagold.com msg#: 35702) Various JMB. . .Thanks for the compliment. The Daily Market Report page has a cleaner version of the Commentary. Somehow I got the uncorrected version to the Forum. oldgold. . .Don't count me in the dollar bull camp either. I'm saying most, if not all, currencies will depreciate against real goods and services, including the dollar, but that this will not show up as the dollar markedly depreciating against any single currency -- not unless the beggar-thy-neighbor policies are throttled. The New York Times ran an op-ed piece over the weekend which quoted a paper delivered at the Jackson Hole conference (Obstfeld and Rogoff) saying that "the next big international economic problem could arise closer to home." They said the current account deficit is running at 4.3% of GDP when 1.7% is the recent average. They went on to say that the dollar's depreciation could be 45% if the "turnabout" were abrupt, and 12% if it were more "orderly." They did not say what the "depreciation" would be measured against. I will leave that question on the table for discussion. My article this morning pretty much says where I come down -- I think the cost of living in the United States is about to experience some rapid inflation once the cat gets out of the bag. ( Best estimate: Post election possible even this winter.) On the current account deficit as a percentage of GDP, there has to be a number to which the markets react and I think we are going to find out soon if going over 4% is it. I think we are in for a rough winter. As I've said often, the next victim of the Asian contagion might not Asian or Latin American, it might be the United States -- and behind all the discussion at Jackson Hole this could very well be the subtle message that is emerging.By the way Greenspan set off another claymore mine when he said, ". . .our past endeavors at long term forecasting afford us little confidence in being able to anticipate seminal changes in global economics and finance." If I employed as many economists as he does and found myself drawing that same conclusion, I would clean house and save the Fed some money. Makes you wonder: When the Fed acts pre-emptively what they acting pre-emptively against? I happen to agree with him, but I didn't expect to hear such an admission from the Fed chairman himself. Isn't it precisely because we don't what the future might hold that we own gold?Intresting note: In 1992 the trade gap was $36 billion for the year; the trade gap for the single month of June was $30.6 billion. R Powell (08/29/00; 13:55:30MT - usagold.com msg#: 35701) USAGold and foreign inflation If foreign inflation becomes troublesome, will it be fought off with higher foreign interest rates? Isn't this the Feds'(and universal) remedy to cure inflation? Won't higher interest rates on foreign currencies threaten to weaken the U.S. dollar. Could this cause the return of foreign held dollars (big float)? If the Fed tries to avoid this by raising rates again here to strengthen the buck, is there not a recession risk involved? Do we see the Fed in that hard spot again between wanting/having to raise rates and not wanting to tank the DOW and Duck?? If any of this happens, (IMHO) the fan gets hit hard. Thoughts?? JMB (08/29/00; 13:03:08MT - usagold.com msg#: 35700) USAGOLD Take heed gentlemen. After reading today's DAILY COMMENTARY we should begin to understand why "The Man" makes the big bucks. INSIGHT, gentlemen, INSIGHT! Journeyman (08/29/00; 12:57:49MT - usagold.com msg#: 35699) Another fortune @714 (08/28/00; 20:21:09MT - usagold.com msg#: 35673) Sir 714,If your opinion comes true -- and gold sells at twice the price in the "Indian Ocean Rim," I will make a fortune buying gold here (uS) at, oh, say $100 over fake spot and smuggling it (if necessary) to said Indian Ocean Rim where I'll take my profit for the operation, recycle the money into more underpriced gold back in the uS, etc.Unfortunately, I won't be the only one doing this, and soon I'll probably have to up my price to $200 over fake spot to deal with the competition here, etc. Before you know it, the so-called "black-market" price will be approaching the real-world price in the Indian Ocean Rim. Bummer.By the way, the difficulties of smuggling are highly over-rated -- according to Clinton, 1 one millionth of all goods shipped into the uS are "illegal" drugs, despite the $300 billion the idiots here spent over just the last 15 years trying to fight the so-called "War on Drugs."Regards,Journeyman wolavka (08/29/00; 12:37:10MT - usagold.com msg#: 35698) dec gold Again closes near magic # 277.40Globex pop over high @ 279 could catch'em with pants down.take out 282289then off. oldgold (08/29/00; 12:10:13MT - usagold.com msg#: 35697) USA Gold We should indeed be looking at inflation pressures as well as the dollar, but I would not join the camp of dollar permabulls just yet. Current action in the buck reminds me of the NAZ earlier this year. A final blowoff before A BIG DROP. wolavka (08/29/00; 12:07:31MT - usagold.com msg#: 35696) watch nov beans close run up, 4.94, running to fill gap @ 520-25grains to support crb more coming. USAGOLD (08/29/00; 10:19:36MT - usagold.com msg#: 35695) Why We Should Forget Watching the Dollar and Instead Start Watching Worldwide Inflationary Buildup http://www.usagold.com/Order_Form.html DAILY COMMENTARY (8/29/00) www.USAGOLD.com . . . Gold pretty much held its own in today's early going with little in the way of news to take the market in one direction or the other. Gold opponents in recent weeks have made much hay in the past few weeks about the run of sales and the financial press sounds like a broken record in its ongoing "assist" to the shorts in trying to keep investors out of the physical metal. The mantra is familiar. Switzerland has sold 85 of the 120 tonnes earmarked for 1999 and continues to sell at the rate of about one ton per day. Uruguay leased its gold (25 tonnes) and Chile sold (35 tonnes). And the ever present coup de grace: Later this month, Britain will auction another 25 tonne lot. But what the press reports fail to point out is how easily the market absorbed all this gold with barely a hiccup and stubbornly resists going through the $272 mark despite a massive short position against it and the steady menu of sales and leases. That stubbornness comes from two important factors that we need to keep in mind: 1. Despite the hoopla that goes with these gold "tackles" and the deplorable, "piling-on" (Please excuse me, I'm revving up for football season.) by the so-called analysts for the major trading firms, the fact remains that all these numbers still fall comfortably within the parameters of the deficit between mine and scrap production and international demand -- the one item these same self-serving "analysts" conveniently fail to mention. I'll take it a step further: On the supply side, how long until the shorts get to the bottom of the check list on eligible third world gold sellers and find all the boxes checked? In other words, aren't we getting close to the bottom of the barrel in terms of gold sellers? Also, I hear from credible sources that the mining companies capable of high grading to supply gold at these prices are just about at the end their string. So what happens when these high grade pockets run out? Quit mining? Run at a loss? No matter how you stack it, the amount of gold coming out of the mines is likely to drop at the worst, or remain static, if we do not break out of these price levels, and at some point you run out of third world gold sellers to mesmerize out of their gold. In short, demand will continue to rise, while supply sources dry up one after another. 2. This gold is going somewhere. Where is it going? We think two places. The first is to fulfill old gold loan contracts that need to be paid back, perhaps not to see the light of day for some time to come (the effects of the Washington Agreement.) The second is to investors around the world who smell something burning amidst the Grand New Economy (kind of like your typical Rocky Mountain morning these days)and are purchasing gold at these bargain basement prices. More. . . . Italy joins Germany, Ireland, Britain, France and just about every other European nation today in making public its inflation problem. We've commented before about the international scope of the inflation now in progress. The new phenomena seems to be most currencies depreciating against real goods. Gold seems to be doing well against many currencies save the U.S. dollar -- where the year over year apprecation has been marginal. But what does this mean to the typical investor? Here's some answers in a nutshell. With U.S. account deficits running in the danger zone as a percentage of GDP, even traditional Wall Street economists are beginning to ask questions whether or not the dollar can remain at these levels. But watching the dollar may be passe in the new International Economic Arrangement. Fearless Forecast: Exporters to the United States will continue to do what it takes to keep their currency cheap vis a vis the dollar -- that includes the other two global economic powerhouses, Europe and Japan. In their view, such policies are akin to national survival. So the dollar will not depreciate against other currencies as much as it will against goods and services -- oil being the primary indicator, and perhaps the first "good" to run higher. In other words, it looks to us like we are in for a bout of inflation that will frustrate the Fed and the markets, even as the dollar seems to be holding its ground. The same inflationary situation will become the status quo in most, if not all, the industrialized countries. Once investors get the message, the move to gold will begin in earnest, and even the dollar price will move on fundamentals as the supply evaporates. At one time, I said watch the dollar for it will forecast gold's destiny. I now retract that. Watch instead the inflation rates in various countries (assuming they report their inflation rates objectively) and the demand for gold itself. That is where upside push will originate. In this environment worldwide currency inflation is raising all ships no matter which flag flies at the main mast, and you won't be able to hedge it by running to a stronger currency. Investors worldwide will see that the only real haven against the policies of the various nation states working in concert to mask their inflation problems is yellow gold -- hard money that has no country, flies no flag, and remains universally recognized as the premier asset of last resort. That's it for today, fellow goldmeisters. We'll see you here tomorrow. If you are looking for a source of news, commentary and analysis on gold and all that affects it, we invite you try a free trial subscription to our widely read monthly newsletter, News & Views: Forecasts, Commentary & Analysis on the Economy and Precious Metals. We offer solid commentary in a rapid fire, no-nonsense, bullet format designed for busy people who want gold related news and opinion without the unnecessary fluff. Please call Marie at 1-800-869-5115 or click here to request News & Views as well as our helpful introductory information packet for gold investors. We invite you to stay tuned to the gold market through our DISCUSSION FORUM featuring round the clock gold news & commentary from the public. PLEASE REMEMBER: It is your purchase of gold from Centennial Precious Metals that nourishes these pages. Call us at 1-800-869-5115 for prices and to have your questions answered.Had it with the tired, one-sided anti-gold financial press mentality? If you want a fresh view of the gold market go to the link above for an information packet on gold ownership which includes our widely read newsletter, News & Views. wolavka (08/29/00; 09:00:39MT - usagold.com msg#: 35694) Texas nothibut dust. Beans are next wolavka (8/29/2000; 6:38:19MT - usagold.com msg#: 35693) gold Okay, time to breakout. Black Blade (8/29/2000; 6:34:20MT - usagold.com msg#: 35692) "Morning Wakeup Call!" Sources: BridgeNews and Reuters THE EASTERN FRONT:Asia Precious Metals Review: Gold up on expectations of Aus buyingBy Mari Iwata and Polly Yam, BridgeNewsTokyo--Aug. 29--Spot gold remained firm in Asia on Tuesday following its rise early in the morning on expectations of lower gold prices in Australia as that could trigger Australian players to buy gold in the spot market, dealers said. Although that expectation did not materialize in Asia, the lack of aggressive selling underpinned the gold price during the Asian trading day, they said. Spot gold opened in Asia near the late U.S. level in thin trading, but went up later as players expected Australian-dollar denominated gold prices to fall, which could boost buying of gold from Australian sources in the spot market, dealers said. But Australian sources did not aggressively buy gold Tuesday during Asian trading, they said. Physical demand also supported the price of gold amid a lack of aggressive selling interest, dealers noted. Some dealers see the price of gold easing in the near term on a lack of fresh supportive factors. Others see the price testing its nearby resistance of U.S. $276 per ounce. Silver extended its overnight firmness to Asia on expectations that the metal would rise in the near term due to short-covering, dealers said. But some dealers argued that Friday's Commodity Futures Trading Commission commitment of traders' report which showed a rise in speculative shorts in silver could support the price of silver and prevent it falling sharply in the near term, but the increased shorts might not necessarily translate into a short-covering rally. Trading of spot platinum and palladium was dull with thin trading interest in the market, dealers said. On the Tokyo Commodity Exchange (TOCOM), trading of gold, silver and platinum futures was active, triggered by the stronger yen against the U.S. dollar, TOCOM dealers said. The U.S. dlr/yen traded at the 106.50 level for much of Asian trading. Attracted by the lower price of TOCOM gold futures, local individual speculators made some fresh longs despite the planned U.K. gold auction in September, they said. Short-covering also pushed up the price of TOCOM gold futures, they noted. "We have had bad news about gold these days, such as central banks' selling. It's amazing that people still buy gold futures," a TOCOM analyst said. TOCOM silver futures traded actively along with gold futures, and the price of the futures firmed following overnight COMEX silver futures price rises, the dealers said. TOCOM platinum futures also rose on the back of strong NYMEX platinum futures prices.Black Blade: A lot of talk without saying anything of substance. Ho-Hum.THE RUSSIAN FRONT:MOSCOW, Aug 28, 2000 -- (Reuters) The Russian state will only sell platinum group metals (PGMs) from its reserves next year "in case of high necessity", the head of the state precious metals and gems reserve, Gokhran, was quoted as saying on Monday.Valery Rudakov, who is also a deputy finance minister, was quoted as saying by Interfax news agency that the government had not yet taken a decision on PGM exports from the state reserve. The government said in a statement last Tuesday that it planned to sell precious metals and gems worth $110 million from the state reserve next year to repay a state debt. Rudakov said that in 2001 Russia would probably increase sales of diamonds. "Yet the final say on how to reach the targets set in the budget rests with the president and the government," he said.Russia has three main sources of PGMs. Besides Gokhran, those are the metals giant Norilsk Nickel and the central bank. The three were recently joined by one of the largest banks, Vneshtorgbank, which said it had a license to export five tons of platinum in 2000. Norilsk is currently believed to be the only supplier of PGMs to the world's markets. Official figures on production, stocks and sales volumes of PGMs in Russia are unavailable as they are considered a state secret. With the sole exception of Norilsk, other holders of PGM stocks have to be issued quotas and licenses to export them every year. Norilsk has a 10-year quota and the necessary license. Bureaucratic delays in issuing quotas and licenses have kept the metals out of the market at the beginning of several recent years, sending their price up. Russia is an important exporter of PGMs, mainly palladium, used essentially in the car industry, and platinum, also used in jewelry.Black Blade: What reserves? Maybe they expect to get some reserves next year. I wouldn't be in any hurry to sell any PGMs on the world market after all the shenanigans on the TOCOM and NYMEX. Set a minimum floor and offer at auction. By-pass the TOCOM and NYMEX all-together and get a much better price. Of course, that would require some reserves. Catch-22.OIL RISES ON THE WESTERN FRONT:Oil prices rise in Europe October Brent crude oil futures jump 92 cents a barrelAugust 29, 2000: 6:36 a.m. ETLONDON (Reuters) - Oil prices rose in Europe Tuesday on continued worries about supply after sharp gains in the United States Monday. October Brent crude oil futures jumped 92 cents to $31.30 a barrel in early trading after touching $31.49 early in the session. "No one's going to have the guts to sell into this market with any conviction at the moment," Steve Kwan at Standard and Poor's MMS said. The London markets were closed for a holiday Monday, when winter supply jitters in the United States boosted energy prices in the United States. U.S. light sweet crude futures for October delivery jumped 84 cents to $32.87 a barrel on the New York Mercantile Exchange (NYMEX) Monday. U.S. heating oil prices also rose, adding 2.9 cents to about 99 cents a gallon as traders bet that any OPEC output rise would not adequately cover an anticipated boom in U.S. heating oil demand this winter. With U.S. heating oil demand commanding center stage, oil traders were anxiously awaiting the release of weekly inventory data from the American Petroleum Institute after the close of business on Tuesday. Oil dealers were growing concerned that increase in production by OPEC would not meet an expected surge in U.S. heating oil demand. OPEC President and Venezuelan Oil Minister Ali Rodriguez has made clear that the oil cartel would not take any supply action until the group's policy meeting in Vienna on Sept. 10.Rodriguez said on Monday the market was not short of crude oil and blamed rising oil prices on speculation in financial markets, taxes and refining bottlenecks. And after a weekend meeting with his Mexican counterpart Luis Tellez, Rodriguez said the non-OPEC producer was not lobbying hard for an output increase. Rodriguez and Tellez sent a joint message Monday which said that while crude supply and demand were moving toward equilibrium, low product inventories and other external factors were distorting oil prices.Black Blade: Oil should go higher for NY Crude today. Reality is setting in. In Fantasy Land, oil is unimportant, people don't need energy, food, travel, or to keep warm. They have a Core Rate of CPI and PPI numbers that are bogus inflation indicators to keep them nice and cozy, as the talking heads tell them all is well and that oil is not a big part of the economy. Now, let me tell you how it is in the Real World. Petroleum is very important. Fertilizers and insecticides come from petrochemicals that ensure enough food for the world's population. "Organic" production aside from being prohibitively expensive, is not realistically going to provide enough yield to feed 6 billion people. Electricity and gas utilities are nice to have. Personally I like to keep warm in winter and cool in summer, but then, that's just me. You poor folks in the northeast are really going to feel it when the oil man cometh! I travel to work in a 4X4 (a necessity), and of course goods and services must be delivered. And finally, when the cost of petroleum goes up, I pay more - I don't know about you, but I call that inflation! But then I live in the Real World, not in Fantasy Land.Meanwhile, S&P Futures are down -1.40, Fair Value down -1.15, a slight negative. Oil is down a nickel at $32.82/bbl but could rise at the open on European news of rising North Sea Brent Oil prices. NG is brushing against all-time highs at $4.71 Mbtu. Expect Heating oil to probably go well over $2, as there is only 16,000 bbl in reserve with winter coming on. Can you say Brrrrrr? I knew you could. Au is unchanged at $273.60 in lackluster overnight action, Ag down -$0.03 at $4.87 in spite of a two day uptrend off the recent lows, Pt unchanged at $584.00 ($588.00 London AM), and Pd down -$6.00 at $704.00 ($715.00 London AM) as fallout from the TOCOM and NYMEX default and manipulation schemes continues to drive off would be investors in the paper chase. Trail Guide (8/29/2000; 6:16:10MT - usagold.com msg#: 35691) Comment Your Post:-------Hill Billy Mitchell (08/28/00; 21:58:38MT - usagold.com msg#: 35678)Anyway thanks for the insight. Better get out of here before I jam up the traffic any further. I think I may have ruffled FOA's feathers. It appears that maybe this is his forum.-------Hello HBL,I checked my feathers, all nice and flat. (smile) Traffic jams are good, they show that no one owns the thought freeway! Thanks for your posts and insights here. Trail Guide SteveH (8/29/2000; 6:09:45MT - usagold.com msg#: 35690) ESF http://www.gold-eagle.com/editorials_00/dsmith083000.html eom PH in LA (8/29/2000; 5:24:08MT - usagold.com msg#: 35689) Reginald Howe does it again: New thought-provoking commentary at Golden Sextant http://www.goldensextant.com/campaign2000.html#anchor48727 Just a few morsels from the Golden Sextant essay:"...The strength of the October 1999 rally in gold prices, not to mention the dangerously large short physical gold position that it revealed, seems to have surprised if not scared the signatories to the Washington Agreement. In any event, since their September 26, 1999, announcement, the European central banks have made gold sales at the maximum rate allowed under the agreement. On December 6, 1999, of the 335 tonnes of future sales not identified previously, 300 tonnes at a rate of 100 tonnes annually over the next three years were allocated to the Dutch. By the end of March, the Dutch had already sold their entire first year's quota. Then the ball was picked up by the Swiss..."...In the wake of the October 1999 rally, two very odd disgorgements of official reserves were disclosed by countries outside the Washington Agreement. That very month, Kuwait announced that it had made its total official reserves of 79 tonnes available to the Bank of England for leasing. Soon afterwards new U.S. military aid to the country was disclosed. With regard to the Kuwaiti announcement, a top BIS official observed that it was so far outside normal practice as to permit only one conclusion: someone was trying to manipulate the gold market. On the heels of Kuwait's transfer, Jordan revealed in November that it had sold half its gold reserves (13 tonnes) during October..."According to a recent article (G. Zuckerman, "Long-Term Capital Chief Acknowledges Flawed Tactics," The Wall Street Journal, August 21, 2000, p. C1), LTCM lost $4 billion over a matter of months, global stock and bond markets almost seized, and the bond market has never fully recovered its former liquidity. The article, which makes no mention of any gold position, focuses on LTCM's inability to sell many large stock, bond and other positions into falling markets with deteriorating liquidity. Precisely why $4 billion of losses mostly in bonds required a $3.6 billion bailout to save the world's financial structure is not explained. However, here is what seems to have happened. "With LTCM's capital base shrinking rapidly due to its high leverage, its creditors became nervous. However, calling in its loans would have forced more distress sales of its investments, roiling markets still further and generating even greater losses for LTCM and its creditors. As alarming as this picture must have been, a short gold position of 300 to 400 tonnes would have made it immeasurably worse. On a position of 350 tonnes, every $100 increase in the gold price equates to over $1 billion. Any effort to cover a position this large, particularly in the circumstances of an unfolding international financial crisis, would almost certainly have driven gold prices much higher, ballooning the dollar amount of LTCM's gold-denominated debt. What is more, given the already large aggregate short physical gold position of the bullion banks, gold loan defaults by LTCM might easily have set off a sudden and severe contraction in gold banking generally, sending gold prices upward by several hundred dollars and quite likely precipitating a massive international financial panic across all markets..."If today's new era dissolves into another big new error under a President George W. Bush, the legacy candidate will be remembered above all else for fixing his predecessor's legacy: "Apres moi, le déluge." If a President Al Gore is at the helm during the upcoming financial storm, "Gored" will likely replace "Hooverized" as a descriptive term for political castration."But these unhappy outcomes are far from the rhetoric of the campaign. Each candidate promises to manage prosperity better than the other. Apparently oblivious to the extraordinary economic distortions built up over the past decade, neither candidate even hints at the possibility of hard times unless perhaps the other guy wins. In the event of victory, each is leaving himself and his party with little room for maneuver should economic conditions change for the worse. Yet the victory each seeks is likely to come with a dangerous political derivative: the chance to be crucified on cross of gold far more real than any imagined by William Jennings Bryan a century ago. " HI - HAT (8/29/2000; 4:43:02MT - usagold.com msg#: 35688) Epic Mistakes A catalyst that may begin rolling the anti-dollar ball downhill, may be precipitated by an arrogant act by U.S.officialdom to undermine and not play fair with Worldsettlement consequences of the blizzards of dollars and debtthat their virtual gambler polocies have engendered.The dirty pool act may have confidence fly off the table.My take, is that Greenspan believes that with a derivative and sophisticated financial shell game any and all defaults and imbalances can be juggled.This I believe will turn out to be their Marginot Line. TownCrier (8/29/2000; 4:21:38MT - usagold.com msg#: 35687) Attention: to the would-be poster who registered today as "Foreigner" Won't name names, but you know who you are.Upon e-mailing your password, the message bounced back as undeliverable. A typo? Would you please e-mail us here at The Tower (sitemaster@usagold.com) to claim what is now yours and to assist us in delivering this to you? TownCrier (8/29/2000; 4:14:58MT - usagold.com msg#: 35686) The Gold Trail is now looking nice, too http://www.usagold.com/goldtrail/ Trying to facilitate and improve your ease of navigation and passage through these golden corridors of USAGOLD. TownCrier (8/29/2000; 2:49:16MT - usagold.com msg#: 35685) A treat for those who follow The Gold Trail guided by FOA http://www.usagold.com/goldtrail/archives/goldtrailone.html An archive of the early "Gold Trail" posts has now been made available, re-assembled into an easy-to-read format...top-down.You'll also find this archive link on the HomePage. CoBra(too) (8/29/2000; 2:47:31MT - usagold.com msg#: 35684) Re. R. Powell/your msg. 35677 Sir,allow me to add 4 more words: "When greed turns to fear".regards - cb2 ViewYesterday's Discussion.
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