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ARCHIVED DISCUSSION FROM 4/29/2001
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Hill Billy Mitchell
(04/29/01; 21:15:56MT - usagold.com msg#: 52836)
Canuck @ #: 52835
Sir
If you are wrong about all three categories nothing remains to protect you. Of course you are correct about the third category. It seems that we both buy all three categories. It is amazing that our expressed reasons, though they differ bring us to the same conclusions.
I do wonder though: If neither gold nor silver is underpriced and fiat is properly priced why one would need to accumulate the items in the third category. Fiat, it would seem, would always be able to convert into mountains of the stuff if it really has the currently perceived valued.
You are right though, if you already have the stuff accumulated and the ability to accumulate more or replenish what you have, why sould you need to accumulate fiat.
Very respectfully,
HBM
Canuck
(04/29/01; 20:50:24MT - usagold.com msg#: 52835)
@ HBM
A slight revision to yours:
I buy gold because it is the most underpriced hard asset in the world.
I buy silver to protect me in case I am wrong about gold.
I buy wood, art, land, guns, energy and 'hard assets'
in case I am wrong about both.
slingshot
(04/29/01; 19:02:07MT - usagold.com msg#: 52834)
Coins in General
There has been some discussion on what to do when price of gold and silver starts to move to their proper value. One of the inconsistincies is that although the spot price of silver and gold fluxuate the Times/Face value of a coin never decreases. It appears Gold coins price go up but not as pronounced but have faired well aginst the drop in the price of gold. I first started with Ben Franklin's at
4x face value. Now the same coin is 6x-8x face value. These are common dates ,good to very good grade, for quanity was my goal. The other side of the coin is that even common dates are starting to command a good price in proof or Ms63 grade. Let us not forget the Gold Eagle are brought in proof and the Silver Eagle in Ms63. So what does the coin collector know that we don't know. Could it be he is waiting for a meltdown of common coins making them scarce.
There has been pro and con on buying coin verse bullion.
To me since the Times/Face value of a coin has not dropped along with the spot price proves to me that when Gold/Silver
start to rise to there proper value the move to Gold/ silver
bullion will be swift.
Will the coin collector be one of the jumpstarts waiting in the wing?
Slingshot
auspec
(04/29/01; 19:00:03MT - usagold.com msg#: 52833)
More Chapman
http://www.gold-eagle.com/gold_digest_01/chapman031301pv.html
From a recent Robert Chapman:
"An extremely important fact to remember is that as gold prices rise, short positions will have to be covered. That means leased gold positions will have to be bought in to cut losses and return the gold to its original owners. What is extremely important is not only the upward pressure that will be brought to bear on gold prices, but the withdrawal of liquidity from world markets. Trillions of dollars have been infused into the world financial system by lease gold sales, an event not previously experienced. The covering of these positions will either cause a world liquidity crisis or world central banks will have to create trillions of dollars to keep the world financial system running. That in turn will create tremendous inflation, which in turn will force gold prices ever higher. If they do not create this enormous liquidity then there will be deflation and depression. Currencies will lose value and there will be a flight to quality, which is gold. As you can see once the game begins either way gold and other precious metals will be big winners." END
Comment- WITHDRAWAL OF LIQUIDITY! What, pray tell, is the multiplier effect of this loss of liquidity should the shorts have to be pulled back up? The dollars have been leveraged to create many more dollars and Christian tells us {repeatedly} that the gold can be leveraged multiple times also: "The people that have the smarts to create $2600 worth of credit from every ounce of gold own most of the world and the rest of us who can not figure this out work for them." {msg #51771}. Of course none of us can get Christian to stay around long enough to convince anyone of his repeated message. Are there any confirmers out there?
Anyway, it certainly shows to what degree the Power Elite, or at least a certain faction of them, has painted themselves into a corner with the 'mountain of gold shorts'. We are witnessing the world's greatest juggling act, no? What was done with LTCM, but a 'workout'? Some things are impossible to workout!
COMMENTS?
Hill Billy Mitchell
(04/29/01; 17:45:10MT - usagold.com msg#: 52832)
Why I buy silver.
I buy silver because it is the most underpriced hard asset in the world.
I buy gold to protect me in case I am wrong about silver.
Nothing remains to protect me if I am wrong about both.
VR
HBM
Hill Billy Mitchell
(04/29/01; 17:33:18MT - usagold.com msg#: 52831)
Sierra Madre @ # 52779
Good Sir
I smiled at the (1/3rd physical 2/3 fiat) pay plan you described. It did not surprise me when you said that you had no takers.
I have been toying with the opposite side of the ledger. I have some fifty clients who pay me on a monthly basis for an annual service. Part of my service is performed each month, part quarterly, and part annually. Since the monthly billing averages out all that I perform to a monthly fee, I find myself in a situation where I must perform a great deal of work at year end even though I have already been partially paid for this year end service by the prior frontloaded monthly payments. Each year I tell myself that I am going to reduce my volume of business but never follow through because I am indebted to them for a good deal of prepaid services. The logical time to eliminate most of my accounts is at calendar year end but I find it psychologically too difficult because my cash flow stops while I have this mountain of work to perform. I have been kidding myself for years in my claim that I have no debt. I have been in debt all along becauses of these unperformed services.
I have come up with a solution to the problem. You see, although it almost never happens, a client could terminate my services upon 30 days notice prior the end of a year and my obligation for year-end work would cease. I am working on a formula whereby I require payment for my services in gold (payment based upon the spot price on the last day of each previous month). My clients will have the option of paying me in a set amount of physical or fiat adjusted by the change in spot POG.
The difference in my offer and yours is that I am the payee. My client is protected from fiat deflation and I am protected from fiat inflation. Should my client desire to protect himself from upward movement in POG he can simply purchase physical in advance and pay me each month by handing over a monthly portion of the hard stuff.
Now comes the tricky part. What if I have no takers? I will be out of business, no? No problem. I am tired and need to slow down. I know how to earn enough to survive in semi-retirement until MLK III makes the soon to be famous speech, ‘Free at last, free at last, gold is free at last’.
VIOLA, my clients terminate me and take the horrible decision of terminating them out of my hands. Our contracts are of the handshake variety – month-to-month – either party can walk away with 30 days notice. This arrangement has worked for 15 years. All my clients have been told from day one, "All you have to do to get of rid of me is to fail to pay me one month and all I have to do to get rid of you is to not show up one month.
I plan to put my new proposal into effect as of June 1, 2001 (phase in one third or so of my clients each month) After ninety days I expect to have about one third to one half of my clients still on board. If I lose most all of my clients in the first two phases I will probably abort and end up with the minimum amount of work for a semi-retired old geezer like myself.
I do believe that we could call this putting most of my money where my mouth is.
FWIW
Very respectfully,
HBM
YGM
(04/29/01; 16:59:40MT - usagold.com msg#: 52830)
Please allow this repost.......
From Gold-World.net
From: "Josh Wright" <joshwright@goldworld.net>
Date: Sun Apr 29, 2001 4:18 am
Subject: Excellent Post From Rarebird at GPM
Excellent Post From Rarebird at GPM
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=15730455
"What bothers me the most is the blame some place on Clinton for the bear market in gold."
What most people on this thread don't realize is that Gold and Gold stocks are the ONLY asset class which the U.S. Government has a vested interest in keeping the lid on, whether the Republicans or Democrats are in power. There is NO other asset - no currency, no stock, no bond, no real estate investment, no retirement fund, no derivative, that has seen its price purposefully pushed DOWN by Government.(OK, Richard, I admit it, but I take that as a given.) All the asset classes which Americans invest in are dependent upon the health and well being of the U.S. Dollar. The health and well being of the U.S. Dollar is threatened by NO other asset class - EXCEPT GOLD.
A BULL market in Gold would be a potential catastrophe for the U.S. Dollar. Why else do you think that guys like Tevee, Ken Benes, Ron Reece and a host of other gold bears, post their perma bearish Gold thoughts here?
Greenspan is boxed in. Stagflation is now here and may get much worse. Stagflation is the best environment for gold stocks. The alternative is extreme Deflation, which is the second best environment for Gold.
The risk here is not being long gold stocks in spite of short term overbought readings.
PS I continue to buy Gold Bullion and Gold Stocks on every single dip. And this is coming from someone who loves high tech more than Gold.
YGM
(04/29/01; 16:54:15MT - usagold.com msg#: 52829)
ANOTHER FINE DAY.....
.........here on the first string team......
Exceptional day of relaxation/education....Thank you ALL...
Black Blade
(04/29/01; 16:51:53MT - usagold.com msg#: 52828)
RE: Genoo #52811
I don't really wish to go into all the complex details so I will try to keep it simple (short and sweet). As far as ABX and PDG are concerned, their forward sales programs have left them exposed to higher gold prices. When gold spiked after the WA announcement, we saw what happened to Ashanti, Cambior, and Emperor Mines. Recently Centaur in Australia suffered the consequences when the allure of forward sales resulted in the sales of more gold than what they had in reserves. This is not uncommon and we could see more such failures in the mining industry in the near future. ABX and PDG are vulnerable to higher POG. The energy crisis in the US is taking its toll as I pointed out in the previous post to tedw. AU is a strange animal as it is currently profitable with a good dividend yield, however, if the numbers are correct they are forward sold to the tune of 70% of their reserves and that I find unacceptable. HM and NEM are lightly hedged, however, the profit picture is speculative at best. I prefer the flavor of HGMCY and GOLD because they are currently profitable and are fundamentally good values with several excellent prospects for growth. HGMCY for example cuts out the middle man by refining their own gold on site and both GOLD and HGMCY pay for their needs in devalued Rand and get Dollars for their Gold. The currency exchange is quite beneficial. The dividend yield isn't bad either. The only real downside is the potential political risk in SA. However, I don't believe that the government in SA would want to follow in the chaotic footsteps of the other African nations after having some relative stability and a somewhat functional government. I would suggest that you consider the fundamentals such as P/E and PEG (on past and projected growth) ratios, debt to equity, etc. Then you will see that the other gold miners don't quite measure up. Of course, one could by pass up the risk all together and stick to physical precious metals as it is the ultimate insurance and won't go tits up in the event of bankruptcy. All stock investing comes with certain risks and yet physical gold is always still physical gold that one could hold and keep no matter what. Cheers and Good Luck!
- Black Blade
Black Blade
(04/29/01; 16:00:35MT - usagold.com msg#: 52827)
RE: Tedw - Energy and Gold
Mining companies are having difficulty extracting their product and even more so with higher energy costs. Not long ago Phelps Dodge (PD) warned that it was cutting back on its Copper mining operations in Arizona and New Mexico due to the high energy costs. I said that the higher energy costs could be devastating to the mining industry. Copper mining and smelting operations are very energy intensive. Most of these mining companies have long term energy contracts, however, many of these contracts are beginning to expire. Montana Resources, another copper miner in Butte, Montana closed up operations due to the high cost of energy. They have been trying to negotiate another set of lower cost long term energy contracts to no avail. Recently Placer Dome Gold said that their Golden Sunlight Mine in Whitehall, Montana was to close next month. If they are able to get a low cost energy contract the closure could be delayed at least another 18 months.
The higher energy costs will start to have great effect on the Western US gold mining industry as long term energy contracts begin to expire. Given the current state of affairs in the Gold industry, energy cost could determine the viability of many gold mining operations. For example, Newmont has several energy intensive operations in the West. In particular at the Twin Creeks Mine in Northern Nevada they have 2 of the world largest autoclaves that require an immense amount of energy to "cook" the refractory ores prior to placement on the heaps (leach pads). Last week Barrick warned that that higher energy costs were cutting into earnings, a situation that will only get worse with higher costs. At their Miekle Mine they use a trolley system to tow their haul packs (ore trucks) up the ramp for example in order to save on wear, tear, and diesel costs. Now the energy to power this system is going to cost a bit more. These are just a couple of minor examples, however, mining operations overall are very energy intensive and with the low metals prices and high energy costs, it is very likely that there will be mine closures (care and maintenance). And of course, less gold available to be sold into the market or delivered against hedges. And probably resulting in a higher gold price? Rumors are that over the last few weeks executives from a couple of major NA gold miners had visited their Northern Nevada Mines and the discussions centered on high energy costs. If so, this could be an indication that some mines are preparing for the worst (closure).
Yes, Shell has raised their offer (again) for Barrett Resources. Barrett had postponed their shareholders meeting presumably to study the offer. They have already turned down as many as 2 previous offers. There have been a couple of mergers in the NG industry already. The majors realize that they missed the boat and the land leases are already tied up by smaller companies and now the "big boys" want a piece of the action. The only option left is for them to buy out the "little boys." If they do, they will have to do so at a premium. Indeed - the "writing is on the wall." Cheers!
- Black Blade
Hill Billy Mitchell
(04/29/01; 15:43:41MT - usagold.com msg#: 52826)
Lafisrap @ # 52823
"But both Mr.Duisenberg and US Treasury Secretary Paul O'Neill said there was no discussion?"
That may have been the truth! A discussion requires the involvement of at least two parties. Duisenberg may well have taken an opportunity to tell O'Neill all about the real world. Part of his explanation may have been, 'There is no room for discussion, so do not even think to try to present your side of the ledger, period.'
Na, you're right, they were both lying, although I do think the Europeans are beginning to feel their oats. There has always, in the past, been a degree of arrogancy in proportion to relative strength of two parties, when it comes to political gamesmanship.
Very respectfully,
HBM
Lafisrap
(04/29/01; 15:40:41MT - usagold.com msg#: 52825)
Things may be not what they seem
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOuxYNhQ8Ry03IEZp
The link is from the USAGold news feed.
Me: It appears that the interest-rate propaganda wars resumed immediately after the G7 meeting. It also appears to be a coordinated effort in which the U.S. Treasury and IMF take a low-key role and send out the finance ministers from Canada, France, and Japan.
Is this the political gamesmanship that FOA mentioned? I think so.
Lafisrap
(04/29/01; 15:29:43MT - usagold.com msg#: 52824)
Shameless "political gamesmanship"
http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news&news_id=reu-wbt023873&feed=reu&date=20010428&cat=USMARKET
From the USAGold news feed:
***
Asked whether the G7 had put any pressure on the European Central Bank to lower interest rates, he said: "No we didn't. I didn't raise this."
Responding to speculation before the meeting that the United States would prod the ECB to lower interest rates in the euro zone, O'Neill said he had considered suggesting a resolution to finance ministers that they refrain from commenting on second-hand reports without checking with the people who were supposed to have made the comments in the first place.
***
Me: Very funny, yes, suggest a resolution, no talking.
Lafisrap
Lafisrap
(04/29/01; 15:14:47MT - usagold.com msg#: 52823)
ECB warns: don't expect an interest rate cut soon
http://business-times.asia1.com.sg/news/story/0,2276,5945,00.html?
Link from the USAGold news feed:
excerpt
***
The meeting of the G-7, which is made up of the United States, Britain, Canada, France, Germany, Italy and Japan, was preceded by immense speculation that the United States might press Europe to follow the Fed's example and cut rates.
***
Me: Well, that's one way to put it. A more accurate description of the events leading up to the G7 meeting would state that the U.S. Treasury and the IMF embarked on a media blitz aimed at forcing the ECB to lower rates. The U.S. propaganda was clearly designed to offload some blame on the ECB, blame for U.S. economic conditions.
***
But both mr Duisenberg and US Treasury Secretary Paul O'Neill said there was no discussion of European interest rate policy at the meeting. Mr Duisenberg also said that the meeting offered him 'an ideal opportunity' to explain its stance.
***
Me: Ever watch a liar contradict and expose himself in a single statement? In the "ideal opportunity" that Mr. Duisenberg was given to explain the ECB's stance, the explanation counts as discussion, no? The "ideal opportunity" was used to explain something else? No, we are talking about interest rates, ECB interest rates.
***
Mr Duisenberg said that even though mainly temporary factors were keeping inflation high, the ECB feared that it could become entrenched if the overshoot of its ceiling continued. 'We earlier thought we could return to consumer price levels of under our upper limit, that is 2 per cent, during the second half of this year,' he told a news conference. 'We now think that it may take some time longer, until early next year, before we reach that goal again. That may explain why the ECB has kept interest rates on hold,' he said.
***
Me: " . . . may explain why . . ." ? You'd think he would know. He expects us to think we are all bozos on this bus?
Well, there it is. The U.S. Treasury and the IMF will find it difficult to misunderstand the message, which is that they should not expect the ECB to lower interest rates for the remainder of this year. No blinking witnessed.
It would seem that if the Fed is to lower its interest rate further, to a rate at which it would be profitable for dollar-denominated investment captial to move to euro-denominated assets, then we would see a drop in the U.S. dollar. In fact, making a guess based in very spotty knowledge of these matters, I expect we will see the U.S. dollar start to drop almost immediately. Perhaps we can see evidence of such starting in a few hours.
Lafisrap
Peter Asher
(04/29/01; 15:06:33MT - usagold.com msg#: 52822)
Interview with a Grasshopper
Last weekend we were in Berkeley and the following is from a nephew who wishes to be quoted by his CB handle "Little Snoopy." Describing himself as "A formal Berkley Liberal in my twenties, now a Hayward Conservative in my forties" he had this to say.
"Deregulation: When Pete Wilson in the legislature in '95 deregulated the power industry, I thought it was a disaster because the power industry has to be a regulated service for the greater good of the state and all the people in it. The people being not only the customers, but also the businesses and the industries that require power for their production and services.
Similar to the deregulation of the airline industry, you have a few large corporations buying out the smaller mom and pop businesses. Therefore you have cyclical swings in the marketplace between outrageous prices and services for free, interruptions in service, and spotty market conditions that are unpredictable.
Breakup: When the legislature and the governor deregulated PG&E, PG&E set up two separate companies, with the larger corporation as the parent entity, and the smaller as the utility that provides the service to the state. In doing so, they shifted its wealth to the parent corporation and allowed the parent corporation to go out of state and buy power-generating utilities all over the country.
By shifting 80% of the wealth to the parent corp., the utility was left with the responsibility of power transmission and the maintenance of the power facilities after being gutted and left as an empty shell.
Two weeks ago, Grey Davis struck a deal with Southern California Edison to buy the utility lines as collateral, by paying or assuming Southern California Edison's debt to the power providers. In doing so, the state legislature and the governor have now assumed responsibility for power transmission lines in Southern California that are 20 to 30 years old and need high maintenance. These will need to be replaced within the next 10 years or so. Southern California Edison made out like a bandit. The legislature will have pay the utility company for the maintenance crews for the utility lines that the state now owns!
A third world example of what happens in power outages: In parts of Yugoslavia and Latin America, the factories, the banks and production facilities routinely shut down for hours at a time on a daily basis, during blackouts or brownouts.
This summer in California, we're going to face unpredictable, spotty blackouts and brownouts, sometimes lasting for hours if not days. They will happen when people least expect it, in unpredictable places. Parts of Silicon Valley will be blacked out, traffic lights will be out, freeways will come to a stop, and banks will close. We'll have to have people out there like during the New York Blackout with flashlights at every intersection.
The reason PGE does not want to tell you where the blackouts will occur is to prevent looters and other criminal elements who might say we've got a free ride in this area because the power will be out for the next six hours. If you have these kind of crises and no one knows where they will happen, the results will be totally unpredictable.
I work in a production facility where most of the machines are run by computer. When we are in a production mode, the computers are operating the machines. Most of the time, if the power goes off, we can hit the emergency stop button, we can stop the machine in the middle of the process and nothing happens. * When you are in a critical cycle, that is when the machine has to complete a full cycle before it completes, it may crash in a power outage, and you will not only lose the software, but perhaps also have an accident and break the tool and wipe out the part..* The production part you are working on could be a very simple component, or it could be a very expensive piece of hardware, (Ex, $3000 piece of titanium) in which case the moment the tool is ruined you have also lost thousands of dollars worth of work.
The same thing applies to people working on computers in the high tech industry, such as software, data processing or critical programs. When the power goes out, they lose everything. This is the real collateral damage the power outages will create, and no one will be able to predict it. There was a symposium this week on possible business repercussions to the Silicon Valley area in the event of major power outages. Some of the estimates for production losses run as high as forty billion dollars this summer. Our gas prices have gone from $1.75 to $1.95 in the last six weeks. A gas station attendant said it might go as high as $3/gallon. If that happens, the industries won't be able to afford it. The costs all eventually get rolled into what the consumer pays. That's us. And the poor people hurt the most, because they can least afford it.
This summer, July to October, we're going to be looking at major social disruptions in California."
megatron
(04/29/01; 14:34:29MT - usagold.com msg#: 52821)
slingshot
I posted this thought a few months ago. Last summer I drove through Eastern Washington and Oregon/Columbia Valley on the July 4th weekend. The campsites and highways were virtually empty! I was shocked! This was certainly a foreshadowing of things to come.
TheStranger
(04/29/01; 13:56:00MT - usagold.com msg#: 52820)
AbsoluteX - How Safe Is Your Broker?
You raise an issue which I have often wondered about. Firms like Ameritrade do not screen their customers for suitability the way full service brokers do. That means clients can really stick their necks out using margin, and no one is there to coach them about the risks. How will a firm which only charges $8/trade have the necessary capital to protect their customers if these margin accounts start to blow up on them?
Historically, when a broker/dealer went under, other firms stepped in and acquired the business of the failing firm. The only real hurdle was that it could take some months to clean up the problems, leaving the clients unable to trade for a while. Whether this would happen with a SIPC bailout or not, I don't know. But, given the huge improvement in record-keeping due to increased computerization, I doubt it.
The disadvantages which go along with ordering out your certificates are numerous. They include the risk of loss or missplacement, the added chore of keeping track of your own dividends and splits, the inconvenience of having to go to your safe deposit box whenever you wish to trade, etc.
One good compromise you might consider: If you must use a discounter, use one that is offered by a better-capitalized firm. Merrill Lynch offers discount services. So does Morgan Stanley. They may charge you $30.00 instead of $8 for a trade, but you might find yourself sleeping better at night.
Finally, make a habit of reading the financial page (if you don't already). The greatest safety of all is accorded those who stay informed.
auspec
(04/29/01; 13:53:33MT - usagold.com msg#: 52819)
Black Money?
More from Robert Chapman at LeMetropole Cafe:
"A perfect example of why the dollar is strong is that now that the euro is coming Spaniards are running to the dollar to dump their ill-gotten, non-taxed pesetas. Economists estimate there is $25-$53 billion or 4% to 10% of GDP hidden in mattresses. Black money, called dinero B, is what makes life worth living and makes up 40% of GDP. A country overrun with people and companies keeping two sets of books. The government doesn't want a liquidity crisis so they are trying to look the other way."
We got Black Gold, Black Silver{?}, Black Blade, and now Black Money! Pretty soon the neat and tidy official world will have Black Eye. Sorry.
auspec
(04/29/01; 13:42:15MT - usagold.com msg#: 52818)
There Really Is A Surplus, But Of.......
From Robert Chapman's International Forecaster at LeMetropole Cafe:
"Surprisingly, Walter Winston, former Chairman of Citicorp, and elitist CFR-Trilateral member, has hit the nail on the head. He said, "even if Congress decides to use the surplus to pay off the debt, instead of cutting taxes, where would the money come from? It would be borrowed from the social security trust fund. If a company did that they'd have the SEC all over them." When the Treasury borrows money from the fund it gives it a promissory note repayable at some future date on demand. That promissory debt is currently $1 trillion. The essential fact is the total debt of the US is not declining, and our children will have to redeem those notes. The lock box is full of IOU's. When the debt comes due the Treasury will have to raise cash to redeem those notes or issue even more debt. There is no surplus, as we've been telling you for years. The inflationary implications are enormous." END
Anyone know how to protect themselves from inflation {hee hee}?
Canuck
(04/29/01; 13:27:53MT - usagold.com msg#: 52817)
G-8
According to Kitco the Asian (gold) markets open in 34 minutes, 04:00pm eastern; seems early?
Any rumours/gossip re: the G-8 meeting(s)?
Ulysses
(04/29/01; 12:52:19MT - usagold.com msg#: 52816)
AbsoluteX
http://www.usagold.com
You're insured up to the value of your shares at the time the brokerage goes poof! If you're paranoid about it,take delivery of your shares.
slingshot
(04/29/01; 12:44:52MT - usagold.com msg#: 52815)
The Ice Factor
Well it seems we will be in pinch this summer with this energy crisis on the horizon. Gasoline at $3.00 USD per gallon. Electric bills to double in the summer heat. Sounds nasty, but it will not set in the public's mind till Joe sixpack wants a cold one. Think of how much energy is used to make ice. Transport it and then store it for sale to the public. So, if you hit the open road like me,ice can be very important. Imagine heading out and costs you $45.00 to fill up the truck. then $36.00 gas for the boat and $24.00 for the three 8 lb. bags of ice you have to have to keep your drinks cold. What sticks in your head. Not the gas! The bloody ice! My point of this story is what it will take to get you to think of what is happening around you.
There are to many things going on all at once which will have an effect on the price of gold. I have noticed at my coin dealer that PM's are selling steady. The 1oz eagle
still the best mover with 1 0z silver rounds also doing well.
Somebody is still buying. I hope the CB's are blind to this accululation of gold by the small investor. Wonder just how much has been taken out of the CB's hands?
So tune up your vehicles and check the air in your tires.
New air filter and even an oil and oil filter change could give you a few extra MPG. Going to be a long HOT SUMMER.
Slingshot
AbsoluteX
(04/29/01; 12:28:34MT - usagold.com msg#: 52814)
Brokerage Accounts
I have a question about stock accounts on a possible bankruptcy of the brokerages...
I have some gold shares on my Ameritrade account. I talked with an representative about the issue what will happen if ameritrade goes bankrupt.. The answer was that all the accounts are insure up to $500.000 and $100.000 in cash by SIPC.
What I wanna know is how trust able is that insurance and SIPC in crisis envoirement??
Thanks in advance.
AbsoluteX
+ Are they any suggestion for secure, reliable and cheap broherage??
Rockgrabber
(04/29/01; 11:56:23MT - usagold.com msg#: 52813)
Srtrong Dollar has helped offset inflation
As our economy expanded, our dollar value has strengthened. At a rate of 6% per year from 95-(not including this year). Foreighn manufactures saw 6% gains per year just from that. They did not need to raise prices. American manufactures have been forced not to raise prices as well. ((((SIDE NOTE))))) (((THIS IS WHY WE ARE IN TROUBLE FOR ONE BIG REASON. ENERGY PRICES ARE GOING TO FORCE PRICE RISES. WE CANNOT COMPETE DOMESTICALLY OR INTERNATIONALLY. THAT GOES TO HURT EARNINGS)))) they saw gains in terms of their locall currencies rise with the rise of the dollar. not no more. So they paid for our technology to be devolped. Now it has been. Its extreemly overvalued here now. They have much more room for growth with their underdeveloped markets and underfunded markets. Japan and Europe have a much more realistic chance for growth. Capital flows shall not flow towards those underdeveloped and underfunded areas. (((Another Side note.. You know where the most undervalued and underdeveloped area is?? You can find it everywhere in the world. It belongs to no one country. And people should be throwing money at it, as it is way underdeveloped for when it is soon to be needed... I know its why we all gather here.))) As this happens inflation should rip. The tide comes in and the tide goes out.
tedw
(04/29/01; 11:33:08MT - usagold.com msg#: 52812)
Energy and gold
http://www.usagold.com
It goes without saying that there is an energy cost to every product, and that includes gold. The machines used to take it from the earth require energy, and as energy cost soar so will the cost to take it out. Presumably, this will result in even less gold at the current price levels.
Relatedly, I noticed tha Shell raised its offer from $55 to $60 for Barrett Resource, a rocky mountanin independent gas/oil exploration company, and Barrett is still not selling. . I guess they see the handwriting on the wall.
If shares of gold mining companies are akin to non-expiring gold options, the purchase of shares in companies like Kerr-mcgee,Amerada Hess, Unocal, and Barret are like non-expiring options in Natural Gas. Personaly, Amerada Hess looks interesting.
What do you think Black Blade?
Genoo
(04/29/01; 10:55:32MT - usagold.com msg#: 52811)
BLACK BLADE #52804
First of all let me say that I find your analysis of the energy situation to be second to none. I appreciate your efforts as well as finding your style of presentation an easy way to learn.
As for #52804 I was very interested to know your gold picks. HGMCY and GOLD I don't know much about: FN I see as primarily a royalty play with somewhat limited leverage to higher gold prices.
My own interests are focused on the old big four in NA and here is how I think of them. I would be very interested in your comments and perspective here.
With ABX, virtually all of their profits come from forward hedging and are more properly considered a hedge fund which is vulnerable to a rising gold price. At a market cap of about $5.4b I see them as overpriced compared to the group.
PDG has a head who apparently recently stated that he does not believe that the gold price will rise for 5 years which I feel was ill advised. They have a number of mine closures in the U.S.and Australia, the once prolific Pipeline project in Nevada is now yielding lower grades and there doesn't seem to be much coming on stream.
NEM appears correctly leveraged for a higher gold price and at a market cap of about $3.4b is relatively cheap. Cash costs are low ,the biggest negative right now is their heavy debt load. Say gold were to rise 50%, IMO they would easily pass ABX in market cap.
HM I see as the current gem. According to the 2000 annual report cash flows over the last number of years has been around $120m despite the increasingly poor gold price. Production is a record high, costs a record low. Cash costs are down $20/oz in the last year alone and rival the best...and Eskay Creek is acc to GFMS I believe, the lowest cost gold mine in the world. Mines in Canada and Australia, in addition to their native value, have become positive currency plays. Debt was reduced by $88m in the past year and net debt is now just $23m. Reserves increased to 20.8m oz last year at $300 gold and would only be down only 1% at $275 gold. All reserves are politically stable including the currently expanding 60% owned [ABX has the 40%] mine at Veladero in Argentina, where drill reserves have basically tripled to around 15m oz since the acquisition 2 years ago..and to date only a fraction of this amount has been included in the official reserves. Because of this combination of numbers I see them as a takeover target, poison pill or not...perhaps especially for someone who wants to instantly balance an excessively hedged position, like ABX or ANGLO.
So I see HM as the best investment in a low gold price environment because of their low debt, low cost, high quality reserves and with Veladero, a massive,low cost and metallurgically favorable heap leach operation [and thus low energy intensive] soon to come on stream...with NEM a close second, with both stocks having good leverage to the upside as gold rises.
There are a lot of market savvy people who read this website...I would really appreciate your input.
WAC (Wide Awake Club)
(4/29/01; 10:04:04MT - usagold.com msg#: 52810)
MI5 builds new centre to read e-mails on the net
MI5 builds new centre to read e-mails on the net
http://www.urban75.com/Action/news114.html
new bill promises email tapping
by Nicholas Rufford, Sunday Times 30th April 2000
MI5 is building a new L25m e-mail surveillance centre that will have the
power to monitor all e-mails and internet messages sent and received in
Britain. The government is to require internet service providers, such as
Freeserve and AOL, to have "hardwire" links to the new computer facility so
that messages can be traced across the internet.
The security service and the police will still need Home Office permission
to search for e-mails and internet traffic, but they can apply for general
warrants that would enable them to intercept communications for a company or
an organisation.
The new computer centre, codenamed GTAC - government technical assistance
centre - which will be up and running by the end of the year inside MI5's
London headquarters, has provoked concern among civil liberties groups.
"With this facility, the government can track every website that a person
visits, without a warrant, giving rise to a culture of suspicion by
association," said Caspar Bowden, director of the Foundation for Information
Policy Research.
The government already has powers to tap phone lines linking computers, but
the growth of the internet has made it impossible to read all material. By
requiring service providers to install cables that will download material to
MI5, the government will have the technical capability to read everything
that passes over the internet.
Home Office officials say the centre is needed to tackle the use of the
internet and mobile phone networks by terrorists and international crime
gangs.Charles Clark, the minister in charge of the spy centre project, said
it would allow police to keep pace with technology.
"Hardly anyone was using the internet or mobile phones 15 years ago," a Home
Office source said. "Now criminals can communicate with each other by a huge
array of devices and channels and can encrypt their messages, putting them
beyond the reach of conventional eavesdropping."
There has been an explosion in the use of the internet for crime in Britain
and across the world, leading to fears in western intelligence agencies that
they will soon be left behind as criminals abandon the telephone and resort
to encrypted e-mails to run drug rings and illegal prostitution and
immigration rackets.
The new spy centre will decode messages that have been encrypted. Under new
powers due to come into force this summer, police will be able to require
individuals and companies to hand over computer "keys", special codes that
unlock scrambled messages.
There is controversy over how the costs of intercepting internet traffic
should be shared between government and industry. Experts estimate that the
cost to Britain's 400 service providers will be £30m in the first year.
Internet companies say that this is too expensive, especially as many are
making losses.
About 15m people in Britain have internet access. Legal experts have warned
that many are unguarded in the messages they send or the material they
download, believing that they are safe from prying eyes.
"The arrival of this spy centre means that Big Brother is finally here,"
said Norman Baker, Liberal Democrat MP for Lewes. "The balance between the
state and individual privacy has swung too far in favour of the state."
Belgian
(4/29/01; 08:27:25MT - usagold.com msg#: 52809)
Sunday Afternoon thea.
- Hedging : I've been very emotional, in the past, about it.
Today, I see it as a blessing. Underground gold, already sold at ridiculous prices. Goldproducers can't sell it a second time. And the whole set up is nothing more than added dynamite for the explosion to come. Gold-Holders like the idea of scarcity in the future. Anyone an idea about how much hedged gold (total-tonnes) is still underground and sold at what (average) price ?
But, let us remember, that offer and demand on newly produced gold is marginally impacting the actual valuation of 140.000 tonnes aboveground at present price !
It is only shareholders of goldminers with hidden (not transparant)hedgebooks, that need to worry. Price and time are fighting against these holders.
Let the gold-producers play their (stupid) game. The longer they play, the more, physical holders will harvest.
Sierra Madre : About the 1/3 gold salary. Indeed, gold can't be popularizised with such an hypothetical idea.
Employees accepted paper (stock options) as long as they could see increasing prices on the SM-tickers. Such a similar bonanza can't be produced with physical gold.
The 30 yrs old Krugerrand initiative was never rejuveniled with an adapted (modernized) alternative. Wonder if Goldavenue will ever get wings ? Convinced that USAGOLD has taken over much of the gold-activism and is succeeding in providing the proper and much needed gold-(re)education.
Hope, they (USAGOLD) get materially rewarded for all the good that is produced.
Probably some more evidence that wise-individuals are organising themselves against populism. Happy to have this freedom, still, at our disposal.
Black Blade
(4/29/01; 07:23:04MT - usagold.com msg#: 52808)
Canuck
If the USD drops 10% which isn't to far fetched, it could be as a result of the massive money creation that is under way. I would suspect just on the basis that energy is considered a defensive play there would be an increase in interest. It played out this way before in the 1970's and many did very well with oil shares. However, I look at the big picture and I see a serious energy crunch coming regardless. That alone will boost energy shares, especially those that have NG holdings. But a large drop in the USD would probably suggest some increasing inflationary pressures and that would likely boost gold as well since gold is often considered a safe harbor in an economic storm. There would also be a big push to supply "cheap energy" in order to prime the economic pump if the economy falters. So both energy and gold prices could very well rise. As far as Noranda, I haven't followed them for a few years. I had a friend who used to do work for them and have since contact over the years. Good luck,
- Black Blade
Canuck
(4/29/01; 06:37:55MT - usagold.com msg#: 52807)
BB, All
I have looking at Noranda (NOR.TO) in recent weeks. Statistics show they produce a significant amount of gold.
Thoughts?
Canuck
(4/29/01; 06:35:51MT - usagold.com msg#: 52806)
BB, All
If the USD drops 10% does the POO stand to rise in a similiar fashion as POG? I suspect it must, yes?
Will this provide a boost to energy shares as well?
Canuck
(4/29/01; 06:15:33MT - usagold.com msg#: 52805)
"Don's latest call"
http://www.jonesheward.com/commentary.cfm
Don Coxe's weekly commentary.
A long ramble on the lowering of the USD. Mr. Coxe is speculating a drop from current levels to approximating 105.
Also several references to gold and get this, a recommendation to buy.
Excellent, excellent news.
Black Blade
(4/29/01; 05:51:59MT - usagold.com msg#: 52804)
ausome
I do own GOLD shares. I have HGMCY, GOLD, and T.FN shares. I also have physical gold and silver (bullion and numismatic). I am a contrarian investor and I look for profitable deeply undervalued investments that are overlooked by the herd. In other words I look to get more bang for the buck. I bought energy shares when the "Economist" periodical said that oil would be at $5.00/bbl forever for example. The magazine is a great contrary indicator. I also bought into REITs and Utes when they were dogs. Right now there still some bargains in energy and Utes, however, you have to dig for info. The screaming bargain right now is cheap gold and silver. I had purchased shares of PAL and SWC when I saw stockpiles and strategic reserves of PGMs seemly disappear. I have since taken profits and only have some PAL (free and clear) and some Pt bullion. You have to buy when there's blood in the streets and when everyone despises a certain industry if you want to win. I hate to lose and I rarely do when I cut against the grain so to speak. When Techs got so grossly overvalued I bailed early last year (Thank God) for a decent gain. But like I said, Gold and Silver are screaming buys for a contrarian investor and on a valuation basis, both HGMCY and GOLD are arguably the most undervalued and most profitable gold miners, whereas marginal ABX is an absolute dog. For portfolio insurance, physical PMs are excellent hard asset investments. That's my take on it and that's how I play it. Cheers!
- Black Blade
ausome
(4/29/01; 05:23:21MT - usagold.com msg#: 52803)
BB (Harmony vs Goldfields)
Black Blade Why don't you own Goldfields then? They are completely unhedged? They run a reasonable business and the stock moves quite a bit.
Belgian
(4/29/01; 05:22:38MT - usagold.com msg#: 52802)
Sir R. Powell....tell us what you think......
Behind Closed Doors (James Turk) :
Am a bit surprised with your, invitation to comment, in post 52781. All posters here are already as excited as you are, for quite some time now. With the most respect for Mr. Turk's work...exposing, the "if" and "how" of manipulative speculation, is not going to impact on the unfolding of the Gold-Drama (opportunity).
...How much longer can this continue ? As long as it takes to satisfy the desires of all parties involved in this Mutual Interest web (Oro). If we want to stop this today...mobilize 1 million, 1 Kg, physical buyers...and off it goes. The mainstream press will follow as usual and not lead.
...contain POG and Panic to buy : "THE" Tools of the Gold oligopoly (Closed Doors) ! Sorry for repeating these same old wisdoms (?)...but are so difficult to understand toroughly and even more difficult to "accept".
... Precarious situation and excits : FWIW, but I remain convinced that "they" are still in control of the pre-meditated, unfolding, they had in mind. Each symphonic orchestra, starts its performance with the "chef's" signal.
Gold-outsiders (individuals) can only dream of their impact on Gold. Outsiders are only usefull with possible impact when the rulers decide it is time to make it work. You know very well the speculator's psychology.
Refexions on the Behind of the closed doors :
- Gold-manipulators know damn well what the effect on POG will be , once most of them are satisfied. Most probably, they already have a price-zone target on POG ? They can orchestrate the masses with the only thing that masses perceive : PRICE !
There was not a single reaction on my previous question : what would happen if POG rose to 400$/600$ - 1.000$(plus) - x.1.000$. In other words...are wise individuals going to take over (rule) from undisciplined officials ?
- ESF truth and today's exceptionally low POG : the truth could be hidden whilst all Gold-Philes are in pain (agony)...will the truth have any importance, when Gold has exploded (euphoria)?
- ...Damage to goldmines/goldminers/goldindustry ...:
POG will tell if all that suffering was worth it. We have the opportunity to accumulate the shiny at give-away prices and the mines (leaders) could expand their position with Hedged expansion of reserves, while diminishing the amount of competitors. Each drama has his advantages (opportunities).
- What if the US/EMU, governments come up (much later) with an explanation on good and justified reasons, "WHY" the goldprice happened to be managed ? Meager consolation for the ones who suffered but happy thanks for the ones having grasped that opportunity ?
- ESF motives : Another financial mismatch added to the long list ? The Gold-Drama, covering up another Drama (worse) ? Most probably. And surely in the context that no one is allowed to bite the dust. No defaults allowed ! Fiat-Trust holding together to the bitter end !?
Is the ESF-involvement-discovery, relevant in the broader context ? My answer would be "yes", if it should provide us with clues about future gold policies. But I'm afraid there aren't any.
I personally would welcome, with open arms, the idea suggested on GOLD-DESTRUCTION. Than we are relieved of that artificial gold-management and we can decide at what price we value Gold (my vision on free gold)(cfr. Picasso).
And aren't we making the mistake to point the US-Government as the only reason (cause) for a contained Goldprice ?????
The whole world is free to buy or sell gold, every second of the 24 hours. If you don't buy gold at 264$ dollars today and keep it, why should you start buying it at 600$ and keep it ? I am very exited NOW with my physical in hand.
I don't need an excit...am already in plain fresh air.
The ongoing paper speculacircus is very amusing and not bothering me at all. ON THE CONTRARY ! I don't care how many mismatches have to be covered...because I have already what will be valued later on !
Sir Richard, I sincerely appreciate all education provided on this forum. Slowly but surely, I'm building on my own strong conclusions. Gold will never go away. It is timeless. Gold will always compete with paper. Paper will always come and go.
Once this is clearly understood, all other arguments are "details", quickly to be forgotten.
Black Blade
(4/29/01; 05:21:48MT - usagold.com msg#: 52801)
Calling an ounce an ounce and hedging a blasphemy
http://www.mips1.net/MGCurve.nsf/Current/8525686A00324CF585256A2C0067A375?OpenDocument
Snippit:
AN EASTER RECITAL. The gold industry is divided into three camps – the hedged, the unhedged and the halfway crowd. The halfway lot spends its time in a no-man's land separating the two main factions from each other, wondering whether to cross over or turn back.
Black Blade: And yet another hedging article. A bit more rational than the others.
Black Blade
(4/29/01; 05:11:25MT - usagold.com msg#: 52800)
Tax gold forward sales while you can
http://www.mips1.net/422567CB004DBB8F/($All)/4225685F0043D1B285256A3100503F27?OpenDocument
Snippit:
Surely governments have an interest in ensuring their slice of the pie and by 'a fair slice of the pie' we mean a tax stream premised upon a long-term equilibrium price. What number is this? Everybody has their own ideas but $400 might not be too far off a consensus mark; accelerated sales at prices well beneath this level thus not only cheat the shareholder but also cheat the government as well. One compensatory step would be to simply tax the difference. In other words, from the point of view of Mr. Tax Collector, an ounce hedged at $290 will be deemed to be sold at (say) $400. The logic of this scheme is clear: an ounce taxed today at $260 – thin gruel at best – is an ounce that can't be taxed when prices inevitably correct. Catch while catch can.
Black Blade: A novel idea? The comments at the bottom of the page are quite interesting (pro and con).
YGM
(4/29/01; 04:28:24MT - usagold.com msg#: 52799)
B-B
ABX
Peter Monk is a "SKUNK".....and ABX stinks to high heaven
Black Blade
(4/29/01; 04:21:11MT - usagold.com msg#: 52798)
ausome - Some Drivel on ABX Gold Short Sales
http://m1.mny.co.za/MGGold.nsf/Current/4225685F0043D1B285256A3B005F076A?OpenDocument
Barrick – gold pragmatist or villain?
Snippit:
The passive version of the debate, the most popular among gold bugs, suggests that value flows from an unencumbered gold price. Naturally, hedging encumbers gold and therefore blights the entire industry. The active version, favoured by the likes of AngloGold and Barrick, treats wealth creation as the skilful navigation of circumstance and opportunity. Hence hedging is a no-brainer when your core product is losing value all the time.
Black Blade: The article suggests that Barrick is prudently hedging gold and somehow enhancing shareholder value. Yet other unhedged producers are vastly more profitable than Barrick so the point of the need to hedge for shareholder value alludes me. My comments (and others) are at the bottom of the same page as the article.
ausome
(4/29/01; 04:06:00MT - usagold.com msg#: 52797)
merrills barrick recommendation
If Merrill is recommending ABX you can sure bet that POG is not going up too much. ABX thrives on hedging so why would you pick it? The higher POG goes the more their hedge book makes their balance sheet look sick.
Topaz
(4/29/01; 03:40:39MT - usagold.com msg#: 52796)
ET.
Hi ET,
Whatever way this goes, I sincerely hope we're not sitting here 12 Mth's from now pining for the "good 'ol days" of $300 PoG.
Yes, historically there's no precedent for these actions but - can I go out on a limb and conjure up the old SM bubble war-cry...."this time it's different" ?
Never in history has the omnipotent power had at it's disposal (a) the wherewithal to render the planet uninhabitable and (b) elements within who seem hell bent on same.
I think the motivation to "cut off the Nose" is linked to the US's abuse of it's reserve currency status and the concurrent development/deployment of (let's say) grossly overeffective ordinance in it's associated role as International "Peace-keeper".
As Sierra pointed out, we of the west have lost, or more correctly had stolen, our ability to endure the AUsterity, restraint and morality of a genuine Gold standard and if given a choice I feel "Joe" would opt for Fiat every time....unless he is re-educated to think otherwise. I believe the Euro is designed to achieve this.
Why even in the M-East, the Islamic Bi-Metal currency has been less than a roaring success as both lenders AND borrowers percieve they can benefit from the volatility of Fiat.
The consensus is "trade the Fiat and save the Gold".
We watch.....and worry.
YGM
(4/29/01; 02:26:32MT - usagold.com msg#: 52795)
Black Blade....
Nope...
No Gold to market hence no web site.....Life has taken a drastic change. Now I buy the Yellow and put it back in the ground instead of digging it up......Life is good just the same.....and alot less stress!!!!!....Regards to you....
Black Blade
(4/29/01; 02:16:46MT - usagold.com msg#: 52794)
YGM
Is there a futures market for woodstove manufacturers?........YGM.
Black Blade: Maybe the Amish Futures Market? BTW, You still got your web site up?
Black Blade
(4/29/01; 02:11:16MT - usagold.com msg#: 52793)
California producers face higher electric rates amid rolling blackouts
http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=TOPST&ARTICLE_ID=99588
RockGrabber - You won't like this news - Doesn't look good.
Snippit:
A rate hike proposed by the California Public Utilities Commission (CPUC) could add $2/bbl or more to oil production costs in that state, said officials of the California Independent Petroleum Association (CIPA). Members of the industry association are calling it "the largest energy tax on California consumers and businesses in state history." Unlike other oil and gas producing areas, most California operators can't use natural gas to fuel their field operations. "Emissions regulations in this state have forced the electrification of virtually all of California's fields. Rolling blackouts already have periodically shut down oil and gas production, its transportation through pipelines, and downstream processing and refining. California producers expect to face another "20-30 days of rolling blackouts in June-July." Tight supplies and higher prices for natural gas are shutting down cogeneration plants and threatening heavy oil production
Black Blade: The "long hot summer of discontent." Grasshoppers on a hot griddle? Hmmm...
YGM
(4/29/01; 02:03:08MT - usagold.com msg#: 52792)
Black Blade.....
Foreward Thinking....
.....Stockpile firewood to sell in NY or LA....Got heat?
One day it won't just be the bums in the alley gathered around the 45 gal barrel keeping warm....Is there a futures market for woodstove manufacturers?........YGM.
Black Blade
(04/29/01; 01:32:03MT - usagold.com msg#: 52791)
Hydro-Carbon Man's Addiction About to be Exposed!
For the week ending April 20, refinery utilization increased by 2.0 percentage points to 94.6% according to the API, and increased by 2.5 percentage points to 97.8% according to the EIA. Refinery utilization is at near capacity. Much of the problem is the lack of capacity to refine enough reformulated gasoline. Stocks of reformulated gasoline are now some 3.7 million barrels below their level one year ago. High natural gas prices have constrained the production of MTBE, an additive produced from natural gas that improves octane and helps gasoline burn more cleanly. The effects are a shortage of reformulated gasoline and increasing prices. In effect that means several regions of the US are likely to experience much higher fuel prices this summer. It also means that natural gas prices will come under increased pressure just as the summer season arrives along with a severe drain of available energy as air conditioners are fired up.
Higher prices will be the norm, especially in regions mandating reformulated gasoline. Gasoline supplies would most likely be inadequate during the summer to meet continued strong demand even if crude supplies were plentiful. California, the Midwest, and the Northeast are prime candidates. There is effectively no spare refinery capacity. This will result in higher costs of goods and services as the higher costs of transportation are factored in. Also remember that fertilizers and pesticides are manufactured from hydrocarbons. These too be cost more due to demand. Your food that arrives at the supermarket is transported from the farm and distributors via rail and trucking. Inflation? Most definitely. It should be noted that supermarkets keep about a two week supply so any disruption in transportation and steadily rising fuel costs will also result in higher food prices.
The self-serving economists and government drones that have mislead the US public will be exposed. The only comfort that we have is that the CPI core rate discounts food and energy. Whoopee! What to do when push comes to shove? It is every man for himself. Don't expect any help, there will be none as hydrocarbons just don't magically appear at the gas station and electricity doesn't magically pop out at the electrical socket in the wall. The economy depends on the abundance of "Cheap Energy." It won't be cheap anymore. This will crater many portfolios of unsuspecting people. Many who can ill afford such a crushing loss of wealth. This is where gold and silver come in as portfolio insurance. During times of economic uncertainty, precious metals have saved many from economic ruin. The self-serving pundits, analysts, brokers, and financial media continue to buy stocks for the long term and hold on. As stocks flounder and lose more value, the more shrill the cries from these self-serving dolts. I don't suggest that all stocks are bad and will crater, far from it. However, one must be discerning and be very selective. Precious metals are like a life preserver when the ship goes down. This has been proven time and again throughout thousands of years of history. This energy crisis is the trigger and the hammer is coming down in spite of all the frantic cries from Wall Street to remain calm and buy more (good money after bad? - or trying to catch falling knives?). At some point wishful thinking and dubious statistics must come face to face with reality. When that happens, Hydro-Carbon Man's addiction is exposed before the world for all to see.
- Black Blade
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