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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...

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ARCHIVED DISCUSSION FROM 10/30/2000
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Chris Powell (10/30/2000; 23:03:14MT - usagold.com msg#: 40295)
Iraq gets OK for euro account
Iraq Gets UN OK for Euro Account

UNITED NATIONS (AP) -- A United Nations committee gave Iraq the green light Monday to open a euro-denominated bank account to handle deposits from oil sales - a victory in Baghdad's campaign to stop using the hated American currency. The decision eased fears that Iraq would follow through on a threat to disrupt oil exports if its request to start collecting payment in the common European currency was denied. The U.N.'s sanctions committee on Iraq, made up of the 15 Security Council members, agreed Monday it could not object to the request because it had no legal basis to block it.

Perplexed (10/30/2000; 22:34:48MT - usagold.com msg#: 40294)
Oro, Journeyman, Mearbear, HI HAT
ORO thanks for the reply, however, I have tried that route
and it would be good advice, except for one thing, the political system is plagued by the same pitfalls as the gold market, only many time worse and over a far longer period of time. Most of us on this forum feel very strongly that the time line on this particular financial structure has a very short time left, and from the links posted to other information, we are not alone. If there was time to achieve meaningful change through the existing system, the postings on this forum would follow a totally different course, and the charts would make sense. Anyone on this forum that expects fair sailing if and when the dollar tanks, is living in a dream world. My posting, like yours, are derived from history, and my postulations, like yours, are the result of deductive reasoning. You and I are both libertarian to the core, and I see this political philosophy manifesting itself and making sense to many more of our fellow citizens once reality explodes on the scene.

Journeymen I have read enough of your posting to know your sentiments, and I appreciate the encouraging words. If I came across as a wild eyed revoltunary, it was not my intent. As the last part of my post stated, I see a major financial wreck in our future, created by the policies of government over an extended period of years. The worse thing that could happen at this time is for some group to start an armed insurrection. If a second amendment rally is to be held, then by all means leave the guns at home. The guns are an ace in the hole, and I believe will not be required simply because they are there. The monied and political elite cannot afford even a mild interruption in the river of fiat currency that even a protest the size of the one in France, when magnified to equal scale, just caused. And and when diesel hits $2.50 per gallon next summer, they will get their interruption.

HI HAT I agree whole heartedly.

mereBear Thank you for the kind words. And if the post will be of value you are more than welcome to use it my friend. I enjoy your post very much, your insight is terrific.
You once stated that you thought my characterization of things to come as messy and anarchy was too mild,I hope my last post clears it up. As the old saying goes "When you'r up to you'r a** in alligatiors, it's hard to remember that your objective was to drain the swamp"
Well I see alligators the size of locamotives, but I am sure not going to pick a fight with them. Just stay out of their way, let them die of old age or kill each other, and then drain the swamp.

Perplexed

ThaiGold (10/30/2000; 22:15:08MT - usagold.com msg#: 40293)
Virtual Confiscation: The Full Text (post date/number)
Attn: elevator guy (10/30/2000; 20:34:44MT - usagold.com msg#: 40290)
...
..
.
elevator guy:
Thanks for your interest. Here's what you requested:

The "Full Text" of my "plan/scenario" was posted as:
ThaiGold (10/25/2000; 1:10:23MT - usagold.com msg#: 39835)
====================================================================
Virtual Confiscation: Draft Memo to the President-Elect
The Full Text: Economic Rescue and Reform Essay for 2001
====================================================================

Next, you asked:
"What do you make of Iraq accepting Euros for oil?"
Answer: I feel he's in for a surprise. Saddam will be stuck
with a bunch of EURO's, when what he will find that he
really needs, is US Dollars, to purchase his country's
essential food, medicine, and even his military stuff.
So, he's just shooting himself in the foot. For spite.

Also, you asked:
"And if the other Muslim OPEC nations follow suit, to strike a blow
against the evil Satanic Empire, and its instrument of tyranny, the Federal Reserve Note, then what will save the dollar?"
Answer: It is unlikely they will follow suit, for the above
reason(s). Also, the USA is their major source of revenue.
But, if it somehow did occur, and it becomes necessary to
save the US Dollar, then my answer is, simply, my Plan.
Quickly/Easily/Fairly.

It's a worldwide stability/integrity plan that hurts nobody
yet helps everybody. What could be any better than that.?.

Regards,
ThaiGold@OperaMail.Com

WileyBadger (10/30/2000; 21:45:32MT - usagold.com msg#: 40292)
Nice Technical Analysis from Kitco Board by TFG2
http://www.kitcomm.com/comments/gold/2000q4/2000_10/1001030.221830.tfg2eeeee.htm
Thought this my interest some of you!

Thanks to TFG2 for all his/her work.

Regards,

Wileiy

Al Fulchino (10/30/2000; 21:32:02MT - usagold.com msg#: 40291)
ET
Thanks for the thoughtful post. We honestly agree that the markets will decide. And like you, others will choose the euro, not because it is perfect, but because it,is better than other choices, closer to what you hope for, or even less bad than another choice. All the same in a way. Now. The euro and the dollar are the front runners for your wealth. You will likely trade towards the euro. And you are worried about your dollar. I associate Gore with that dollar and Bush with that euro. He ain't gold but he is a bridge for a better time.

Best.

elevator guy (10/30/2000; 20:34:44MT - usagold.com msg#: 40290)
@ThaiGold, msg id 40236
Thanks for your reply. Very interesting points you have to make.

I think I remember you laying out your contrarian viewpoint on this forum, some months ago. Unfortunately, at the time I did not give it a good soild reading to properly acertain just what your views were.

Can you provide the message id in which you laid out your view? TIA

What do you make of Iraq accepting Euros for oil? And if the other Muslim OPEC nations follow suit, to strike a blow against the evil Satanic Empire, and its instrument of tyranny, the Federal Reserve Note, then what will save the dollar? It truly looks like a fight is about to begin, a fight which is long overdue, and one which the dollar might not win. It is possible, no?

Hi-Hat (10/30/2000; 19:09:26MT - usagold.com msg#: 40289)
Perplexed___The Soft Parade
The ansuer is bloodless Revolution.

King, Gandhi, Haval, point the WAY.

The threat of violence plays into the THUGS hands.

The new tools are TAX REVOLT, cival disobediances, ridicule
of the black hooded violence prone goons, subversive
intellectualism, political education campaigns, demostrations, and lawsuits.

canamami (10/30/2000; 18:46:22MT - usagold.com msg#: 40288)
Peter Cook article on dollar's future and the euro
http://www.globeandmail.ca/gam/ROBColumns/20001030/RCOOK.html
I reproduce portions of this interesting article. (I have concerns about reproducing it all, due to copyright laws). Here are the portions:

Will the U.S. dollar still reign after next week's election?

PETER COOK

Monday, October 30, 2000

..............................................

What is being purposely avoided here? Well, one subject that has not been raised, because to do so would require the candidate to talk about a remedy, is the United States' world-beating current account deficit. Americans may know in passing that every month yields up a $30-billion (U.S.) trade deficit with the rest of the world and that, added up over 12 months, it amounts to a considerable figure. But do they know that -- at 4.3 per cent of gross domestic product -- the U.S. current account deficit is larger than Latin America's?

........................

Figures from Merrill Lynch in New York show that, since the launch of the euro, Europeans have invested $260-billion (which is actually 4 per cent of their GDP) in the United States, with half of it going to Wall Street. That, of course, tells us why the U.S. dollar stands where it does against the euro. But it also raises the question of whether such an immense flow of money will continue.

Remember that, without it, the United States cannot finance its deficit. So if the flow were to diminish, drastic action would be needed to try to maintain it -- such as raising interest rates substantially. And even that might not work.

Take a close look at how the United States has managed so far and it is not reassuring. A lot of foreign money has gone into buying U.S. corporate bonds but, with many U.S. firms facing profit declines, that market is no longer attractive. A lot has gone into buying U.S. telecom firms, but this market is drying up because European telecom firms have bought what they want. Huge sums have been going into Wall Street. But that, too, is becoming unattractive: U.S. stocks have been doing worse than European stocks.

In the world as it is, the U.S. economy and the U.S. dollar are king and Mr. Gore and Mr. Bush have no need to worry about a thing. But change the global economy by even a small degree and the United States becomes a nation struggling to pay its bills.
pcook

tg (10/30/2000; 18:26:29MT - usagold.com msg#: 40287)
(No Subject)
http://www.smithers.co.uk/standard147.html
Does the following sound deflationary.

"Debt is in trouble. William Gross, who manages the world's largest bond fund, has told investors to avoid corporate bonds at all costs. If they take his advice, companies will have to look elsewhere for money. There are only two other sources. Companies can borrow from banks or they can sell shares.

Until recently banks have been happy to lend. Things may be changing, with telecoms starting the rot. Banks do not want to lend to them anymore - in fact they want some of their money back. So far this year European telecoms companies have borrowed $171 billion (�118 billion) and they need another $100 billion to pay for their new mobile phone licences. This has made banking supervisors nervous and they are telling the banks to reduce their exposure to the industry"

Farfel (10/30/2000; 18:20:32MT - usagold.com msg#: 40286)
@PH in LA RE: LGB, Loral, and Globalstar
Actually, it seems there are three probable scenarios with respect to LGB's urgent BUY recommends for Globalstar and Loral:

1) He honestly believed that his beloved stocks would rally on bad news today, except never realized that in a tech bear market, bad news is always bad news, and all good news is always bad news too.

2) He knew bad news was coming and figured today he would dump his shares into the hands of naive gold investors who don't realize what a tremendous BS artist and sub-moron he truly is.

3) He hates gold investors so much that he would do anything to screw them, even recommending shares he knows are going into the crapper.

Anyway, LGB is certainly my top nominee for the "Bad Karma Coming" award.

Thanks

F*

PH in LA (10/30/2000; 18:00:23MT - usagold.com msg#: 40285)
LGB, Loral and remembrances of things past
With apologies to PROUST
Hi Farfel,

I mostly try to never even THINK about LGB for fear that he might show up here one day. Imagine all the mud we would have to dodge (and sling back at him) if that ever happened. (He seems to spend his intellectually valuable time at some Yahoo board, where ever that is.)

Actually, it was constant potshots at Another/FOA that was his most irritating behavior, as far as I was concerned. Since he was intellectually unable to understand anything said by or about them, he is most likely not even dimmly aware how clairvoyant their thoughts have turned out to be. And he's welcome to his opinions about Loral, whether or not he loses his shirt or not. because I doubt very much that he will comprehend the storm sweeping the modern world's financial terrains until it is decidedly too late. Now, THAT'S karma!

Farfel (10/30/2000; 17:35:22MT - usagold.com msg#: 40284)
@PH in LA re: LGB and Globalstar
Looks like LGB from Kitco is losing his financial ass in Globalstar and Loral. They guy has been a superbull in that stock & Loral for years now, and all the while, he has been crapping all over gold investors, day in and day out.

Bad Karma is coming to visit him, big time.

Thanks

F*
-------

-
"Globalstar Telecommunications Ltd. ( NasdaqNM:GSTRF - news ) on Monday said its third-quarter loss increased more than five-fold, far more than expected, as the beleaguered satellite telecommunications provider's management described its growth in revenue, subscribers and usage as ``unacceptably slow.''

Globalstar's stock plummeted as much as 67 percent after the earnings announcement and a published report that said its co-founder and chief financial backer, Loral Space & Communications Ltd. ( NYSE:LOR - news ) , would provide it no further financial support."

The company's bond's also tumbled, falling to just pennies on the dollar...

Its stock was off $3-1/2, about 60 percent, at $2-1/2 in late-morning trading on Nasdaq. Earlier it had fallen as low as $2, a new 52-week low.

Globalstar's 11.25 percent notes maturing in February 2004, which are considered ``distressed'' were bid Monday at 8 cents on the dollar, down from 18 on Friday, traders said."

http://dailynews.yahoo.com/h/nm/20001030/tc/globalstar_earns_dc_1.html

FROM LGB at KITCO:

------------ [L]GB link: ------------
"Buy 40% Loral owned GSTRF Monday open ( Globalstar ) and watch the 20 to 60% gain you will make in LESS than three full trading days next week if you use a good stop loss strategy. Oops, it may gap UP 15 or 20% on the open Monday before you have a chance to get it at 6..."
http://www.kitcomm.com/comments/gold/2000q4/2000%5F10/1001027.171144.gbeeeeeee.htm

goldhunter (10/30/00; 16:46:12MT - usagold.com msg#: 40283)
Justamerebear...clarifications
"I am not quite sure if you were asking but the European gold option is quite a different creature by reason of one only major difference. You may not call your gold at any time, only at the date of expiry.

Thus the US option represents a gamble that gold will, in this case, go up at ANY TIME in the future, in which case you can call it. In Europe the gamble is strictly a one date gamble, and thus is pretty much restricted to, for example, a jeweller who wants to guard against a price increase after he prints his catalog, but before he actually manufactures."

First, with US options, you may only call a futures contract any time, not physical...the short decides delivery date (only) in delivery period...

Second, both represent the SAME gamble or (risk) in the case of long call option

Third, Your example is wrong. Your jeweller is actually a long "hedge" example, and therefore a risk mgt tool, not a "gamble" in either US or Eoropean option.

Note: A US option holder is (usually) better off to liquidate his option (before option exp. date) rather than exercise the option because there is usually intrinsic PLUS time value in the option...If the holder exercises early, they give up any/all time value....

Also, an EFP may be done to receive the physical gold early if (absoultely) necessary...more fees however...option, futures, and EFP fees all assessed.

Journeyman (10/30/00; 16:10:02MT - usagold.com msg#: 40282)
Money Masters: Central Banks vs. Central governments @beesting, ALL

Money Masters: Great series --- except they suggest that we trust
governments to control the issue of paper currency. As the
record shows, this is a fatal error. Time after time history
shows that governments are the _worst possible_ choice for
"controlling" the money supply -- if your society is ill advised
enough to allow _anything_ except the physical difficulties of
producing gold and/or silver to control the _basic_ money supply.

... Though an indispensable requirement for the
functioning of an extensive order of cooperation of
free people, money has almost from its first appearance
been SO SHAMELESSLY ABUSED BY GOVERNMENTS THAT IT HAS
BECOME THE PRIME SOURCE OF DISTRUBANCE OF ALL
SELF-ORDERING PROCESSES in the extended order of human
cooperation. The history of government management of
money has, except for a few short happy periods, been
one of incessant fraud and deception. In this respect,
governments have proved far more immoral than any
private agency supplying distinct kinds of money in
competition possibly could have been. -F. A. Hayek,
_THE FATAL CONCEIT The Errors of Socialism_, [Cap.
emphasis added] (Chicago: The University of Chicago
Press 1988), p. 103.

Anyone looking closely at the current budget deadlock realizes
that, as several congressmen (Phil Gramm, R-TEXAS, Don Nickels,
and even 'W') have observed, ~"The government is going on the
biggest spending spree in over thirty years." And this is with a
supposedly fiscally conservative _Republican_ congress.

Nope, if you have the unhappy task of choosing a central bank OR
a central government to control money supply, the unfortunate
choice, hands down, (and I'm really sorry to say this) is the
central bank. And this, essentially, is the choice you're forced
to make if you don't have a freely convertible free-market gold
standard and free banking.

Regards,
Journeyman

P.S. Liked the rest of your post too, beesting!

justamereBear (10/30/00; 15:35:25MT - usagold.com msg#: 40281)
Mr Gresham 40263

I am not quite sure if you were asking but the European gold option is quite a different creature by reason of one only major difference. You may not call your gold at any time, only at the date of expiry.

Thus the US option represents a gamble that gold will, in this case, go up at ANY TIME in the future, in which case you can call it. In Europe the gamble is strictly a one date gamble, and thus is pretty much restricted to, for example, a jeweller who wants to guard against a price increase after he prints his catalog, but before he actually manufactures.

Mr Gresham (10/30/00; 15:33:16MT - usagold.com msg#: 40280)
Iraq & Euro
http://www.arabia.com/article/0,1690,Business|32119,00.html
Cross the Empire, you vill be punished, and everyone in your village vill be shot...

I've heard of some expensive banking fees, but this one takes it... "We also must put a 6-month hold on your deposit."

HEADLINE: "Iraq oil currency switch to cost $270m a year "

Baghdad informed the UN that its State Oil Marketing Organisation would price Iraqi crude oil in euros after November 1st

October 28, 2000, 08:49 AM
UNITED NATIONS (AFP English)

- The switch from dollars to euros which Iraq wants the United Nations to make when billing customers for Iraqi oil would cost at least 270 million dollars a year, UN financial experts said.

This reflects only the cost of converting oil prices in a market dominated by dollar sales, and the lower interest earned by oil revenues held in a euro-denominated, rather than a dollar, account.

The expense would make less money available for humanitarian imports under the UN's oil-for-food programme, set up in December 1996 to lessen the impact of sanctions on the Iraqi people.

In a report to the Security Council's Iraqi sanctions committee, the UN Treasurer, Suzanne Bishopric, also warned that the switch would oblige the UN to open new bank accounts and could mean delays in settling accounts.

Mr Gresham (10/30/00; 15:24:11MT - usagold.com msg#: 40279)
Oro -- 26%
Did you get it reversed? I thought that what the survey showed was an historically phenomenal expectation (rightly deserving of your inquiry -- bring on your writing on this model!) and indicative of a very likely trigger-happy wave of disappointed selling when returns hit, as you said, 15% (or less). In other words a truly short-term emotionality hiding behind long-term rhetoric sold them by the dead fish on CNBC, etc.

They would tell us: "Yes, I'm a long-term investor, since I'm 35 and I want to retire at 52. I've got it all right here on my Quicken spreadsheet. I plug in 26% gains and it comes out just right for me." Chicken and egg problem. Or is it just software GIGO one more time?

Oro: "This is what is so interesting - only at much higher interest rates would people stop spending if there is no financial asset with a high enough expected return to absorb the flow of income. So long as expected returns (as trailing SP return on equity) are above 15% at current interest rates and inflation expectations would the spending stop."

In other words, they'll keep their credit cards (4% teasers rates with 13% followup, if they shop them well) pumped up, as long as they _expect_ stocks are worth 15% per annum. The Morning After comes, oh, say in January when they see Dow was -8% for 2000, S&P -6%, or whatever. Or in April when they pay capital gains tax on mutual fund distributions in a down year. That would dampen those expectations and cause them to switch 401k inflows, and finally transfer balances to money markets.

You mean then the consumer spending would then reverse toward retrenchment. End of "wealth effect" happens below 15% gains expectation?

justamereBear (10/30/00; 15:18:46MT - usagold.com msg#: 40278)
Wplavka 40268 Perplexed 40262

Wolavka
Even if the constitution is not, the US dollar is definitely the ultimate derivative.

Perplexed
It is said that plagerism is the sincerest form of flattery. I have copied your 40262, and with your permission, intend to use those arguments.

justamereBear (10/30/00; 14:43:05MT - usagold.com msg#: 40277)
ORO 40273

Oro
I am not sure that I will understand, but I am sure interested in trying to.

Journeyman (10/30/00; 14:27:39MT - usagold.com msg#: 40276)
Yea, but easy does it! @Perplexed

Hi Perplexed!

My original post (directly below), addressing as it does only the first part, doesn't do your well justified rant justice!

I know how you feel -- but as Claire Wolfe said it her book 101 Things To Do Until the Revolution, "It's too late to fix the system but it's too soon to start shooting the bas****s." I ask her periodically if people think it's still too soon. For what it's worth, the consensus seems to still be that it is.

Regards,
Journeyman

Canuck Gold (10/30/00; 14:26:20MT - usagold.com msg#: 40275)
Request for clarification from FOA
After lurking about the forum for a number of months now, keeping up with the discussions, but not feeling qualified to contribute due to their very technical and economics oriented nature, a number of thoughts have been weighing on my mind that I have not seen addressed. They were brought into focus while following the Gold Trail of 14th October where FOA wrote the following:-

"Further, do you see why even gold mines will suffer such a loss of share value as the paper price descends. Yet, once to it's (gold's) final destruction level (and the share prices follow it), the rise in physical will come in a full scale crisis that demands crisis nationalization of all paper trading. Not Physical trading, just paper contract trading! Paper market shut down for adjustments?

Because the new fiat competitor for our dollar system has based it's strength on a functioning free gold marketplace, every nation will be forced to do the same using bullion.
To compete they will have no choice but to free gold for their citizens, even as they lock down in ground reserves with grandfather "windfall profits taxes"! All enacted while share trading and paper bullion trading is halted for months on end."

These comments are primarily directed to FOA but all other thoughts would be welcome.

1. The first paragraph above appears to assume that the physical price of gold will follow the paper price down. Would not a point be reached when the prices of physical and paper gold diverge, at which point the value of mining shares would respond to the physical price rather than the paper price? Even now, there appears to be a floor under share prices, even as the gold price has been falling over the last few weeks while their prices do not appear to need much encouragement to rise.

2. Windfall taxes have not been introduced following the recent jump in oil prices. Why do you assume that goverments will impose grandfathered windfall taxes on gold profits?

3. After suffering years of depressed gold prices, do you think that shareholders will stand idly by while governments confiscate their investments? Most of these people have suffered enormous losses and would rightly expect to be rewarded for their years of patience and
loyalty to, and support of, the mining companies.

4. I just cannot foresee Michael Kosares continuing to trade gold in a quickly falling market because he would go out of business. The end game of your scenario would surely occur within a very short timeframe and at some point, all gold dealers would suspend business until the dust settled with the expectation of enormous windfall profits to come. However, if a windfall tax was imposed on mining companies, how could a government politically avoid imposing a similar tax on gold dealers and individuals?

Awaiting your response with anticipation.

CG

Journeyman (10/30/00; 14:15:08MT - usagold.com msg#: 40274)
You're RIGHT! @Perplexed msg#: 40262 & ORO
http://fly.hiwaay.net/~becraft/MONEYbrief.html

You're right!!

Both of you!!

Perplexed, you're somewhat in the position of Columbus telling TPTB that the earth is spherical when they believe it's flat.

And unfortunately, that extends into the court rooms of this once great and just country. See the link above for a VERY extensive and scholarly treatment of what happens when the "money issue" is taken into court. The article is by noted anti-establishment attorney Larry Becraft, and I believe someone on this forum (sorry, I don't know who) is the original source of the link.

It's long and worth the read but for those two busy watching their stock/fiat/gold gambles, here's my brief synopsis:

By massive legal, historical and pragmatic reasons, all thoroughly documented, here in the uS, gold and silver should be the only legal tender. Fiat should be prosecuted. But in the court room, the establishment ignores all of the above by any means available. As Becraft sums up:

The only case which has ever been plead the best was Solyom v.
Maryland-National Capital Park & Planning Comm., 452 A.2d 1283
(Md.App. 1982), and this is attributable to Dr. Edwin Vieira, the
most knowledgeable attorney in America regarding the money issue.
However, due to the adverse decisions then existing, Solyom was
unable to prevail.

Pro ses do not need to raise this issue.

Perry Mason must be spinning in his grave.

Which is why ORO is also correct. Very unfortunately, as Attorney Becraft has reluctantly suggested elsewhere, this is not the only example of how the courts, as an alternative to violence, have been rendered almost completely useless.

Regards,
Journeyman

ORO (10/30/00; 13:44:13MT - usagold.com msg#: 40273)
Mr Gresham - people expecting 26% -how right you are
There is indeed this issue.

However, the problem there is different perhaps from what you think in that investment flows from the high end consumer will reverse quite suddenly when returns are insufficient to keep them invested in stocks.

I have been working on modeling this for a while. Very interesting. Flows of funds from the model indicate that consumers will either sell or borrow against their investments (no such things as savings, those funds called by that title constitute a paltry portion of household financial wealth) if expected returns fall to 15% or less. By "borrow against" I don't mean margin debt, just that they will collect liabilities on the other side of that.

This is what is so interesting - only at much higher interest rates would people stop spending if there is no financial asset with a high enough expected return to absorb the flow of income. So long as expected returns (as trailing SP return on equity) are above 15% at current interest rates and inflation expectations would the spending stop.

Maybe I should post what I have of it written up.

Any takers?

Trail Guide (10/30/00; 13:29:32MT - usagold.com msg#: 40272)
Reply

Hello Mr. Gresham,

Your $40263:

-----you are basically saying that the official targeting of a gold price was a game that could be played only until the remaining "goldbugs" woke up to the shell game, and stopped playing the Comex/LBMA markets. Betting their margins against officially-sanctioned and guaranteed margin
money.----------

You know, a certain amount of the action in these markets is very real and based on the give and take of actual legitimate metal trading. I think this is what gives so many of the convinced (paper = physical) paper traders fits in understanding how the other parts are little more than cash against cash bets. They don't see any of it going wrong just because someone is legally bound to deliver the goods. Yet, if push came to shove, there isn't enough material existing in the world to cover all this betting. The only way these guys will grasp it is when it all shuts down and settles at some forced fixed level while people outside the betting game bid physical prices through the roof. But, by then
these paper boys, along with everyone they talked into this game, will be out side, looking in.

In this process, large institutions can literally and very legally sell the daylights out of our paper arena with no gold at all. Hell, it's free money as long as the game has a currency to mark itself in. Mr. G, when you have a market that (relative to volume) almost none of the players execute against (take delivery), even when they are way ahead, it's a dead give-a-way that they won't execute when they are under water! You agree, right?

My goodness, even a lot of the mines settle their short commitments for cash and roll over to keep the game going. And they mine the actual gold! Some of the biggest (most vocal) Western Gold Bugs, run like mad to sell any bullion they get held up for in a delivery. They get stopped after last notice day, and unless the metal is for a commercial use, it's sold right then and there.

In this environment, one that has existed for some time, is it no wonder the major "political will" (in favor of the dollar) has such an easy time drafting paper sellers? Is it any wonder that with every player alive using their tools to dig this hole as deep as possible
(for the good old Red- White- and- Blue!), the ECB/BIS is standing back as long as able. Watching to see just how far (deep) we'll dig ourselves?

I have to smile when thinking how; one day, a few CBs and other dollar holders are going to place a serious bid on physical. Don't worry, at your age you'll live plenty long enough to see it (smile). They'll say, we want a little gold now. No, no paper, just all you got in your little warehouse. That's all you got? Good, take it all! Right now!
Ha! HA! Soo-Long entire dollar gold derivatives market, forever!

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

You point out: -----Until this moment, I just assumed the paper gold market was a normalphenomenon of markets instead of a recent put-up job just to absorb physical demand, but now Ican't recall actually hearing of any other locations for it.----------

Good item Mr. G.! Stop and think and ask anyone that same thing. Truth is, the entire gold market on this planet is a huge derivative of just the LBMA! Even our Comex. They all mark themselves to dollar settled contracts and prices out of London. Just like oil. You want to know something
Another told me? The moment oil pricing begins it's full shift away from total dollar pricing, that very same moment, gold will do the same! Because oil and gold don't flow in the same direction, they can't settle in different reserves!
And if Euros become the predominate fix for gold, it will be based on predominately physical trade. What a change this is going to be, ha, ha!

------------(Hmmm... What a choice!) I should learn more about art works,collectible coins etc,---------------------

Mr. G., you read about the great German inflation's, read also about what they took when in Paris. When huge transitions of power mediums happen, money becomes things. Violins, paintings and antiques are good, but gold coins rule the roost! This idea about rare and almost rare old gold coins was not invented by MK or anyone else, the market made it so and will do so again.

-----------The boom in some real estate markets------------

Well, I expect that once "real inflation" comes to town, no one is going to have any problem holding onto their residential real estate. All other forms????? But individual houses will zoom right with the money meltdown and stay right with it all it's failing days. How long? Could take years.

But, remember, Real Estate will be hard to keep leveraged. You risk having the banking rules change as the whole economy switches into an inflation mode. Sure, houses will go up, but you may have to sell or refinance if it isn't paid up, full. In addition, houses will not come anywhere close to making you money once this starts. They will only keep up. Bullion, on the other hand must roar way way ahead, just to come up to the starting line! This is the real reason so many paper players cannot understand the leverage in physical gold today. But, boy, I'll tell ya,,,,,,, there are a few other quiet people out there that understand it.

So tell me, do you think I'm bullish on physical gold? Ha! Ha! (smile)
OK, enough for me, time for important things, gardening!

Good Luck, my friend

Trail Guide

nickel62 (10/30/00; 13:10:47MT - usagold.com msg#: 40271)
Wolavka!
Oh Cisco! Si Pancho?

SALMON (10/30/00; 12:59:58MT - usagold.com msg#: 40270)
Metals UP!
Comments welcome

Metals UP!

PD 47 5/16 +4 13/16
AA 28 7/16 +3 �
Al 31 � +1 13/16
X 15 1/16 + 1 1/16
FCX 8 1/16 +5/16

Why? Except they are very cheep.

Giovanni Dioro (10/30/00; 12:22:48MT - usagold.com msg#: 40269)
Repost of article Germans Fight to Dump Euro
http://www.the-sun.co.uk/news/13124606
I cleaned up the presentation of the article posted earlier

GERMANS FIGHT TO DUMP EURO
By TREVOR KAVANAGH
Political Editor

TOP German economists last night launched a legal battle to save the Mark and ditch the sagging euro.

They pounced on a 1993 constitutional court ruling that the Deutschmark can only be replaced by a "stable" currency. Far from being stable, the euro has COLLAPSED in value by 30 per cent since its launch last year - and it is still falling.

Germany's former finance minister Hans Apel backed the challenge and said: "We should be like Britain and keep out of the euro. "We have no worries with the Mark - let's keep it that way."

Professor Wilhelm Hankel, of Frankfurt University, is leading the battle to stop the Mark being replaced in January 2002. He said yesterday: "I am preparing a fully-blown constitutional case. It's not too late to get out of this thing." Prof Hankel warned there is NO sign of the euro stabilising. "It continues to perpetually fall," he said.

"When Greece comes into the euro zone, the currency will be further diluted and the Mark will become even weaker against the Dollar and the Pound. "Prices for imported essentials like oil will explode and I predict next year we will have four per cent inflation - double the official limit."

Another economist behind the action is Professor Karl-Albrecht Schachtschneider of the University of Erlangen. He said: "Great Britain has managed to keep its currency and economy strong while out of the euro."

Germans greeted the launch of the euro on January 1 1999 with fireworks and street parties. But two out of three now say it was foisted upon them by Chancellor Gerhard Schroeder and are opposed to scrapping their currency.

The legal challenge was backed by Opposition CDU member Joerg Horny, a Berlin investment lawyer. He said: "We have managed to become the world's third largest economy on the strength of the Deutschmark. "To hell with the euro. It is going down the drain. I only hope it doesn't take Germany with it."

There are warnings of yet another collapse in the euro from the inflationary impact of more countries joining the 15-strong EU. The Czech Republic, Estonia, Hungary, Slovenia, Cyprus and Poland are set to join. Latvia, Lithuania, Slovakia, Malta, Bulgaria and Romania may join later.

wolavka (10/30/00; 12:19:05MT - usagold.com msg#: 40268)
IS THE U.S. CONSTITUTION
a derivative??????????????????????????????????????

Giovanni Dioro (10/30/00; 12:17:20MT - usagold.com msg#: 40267)
GERMANS FIGHT TO DUMP EURO
http://www.the-sun.co.uk/news/13124606
I posted several weeks ago that the main reason there had been intervention to support the euro was because they didn't want a negative association with Denmark's rejection to joining the currency.

Now I read that a German group is taking a legal battle to dump the euro and restore the Deutsch Mark, the reasoning being that Constitutionally the DM can only be replaced by a stable currency.

In other words unless the euro starts regaining its lost ground to a large degree, the Germans might make a great escape.

The Germans never wanted this esperanto currency, and it would have never passed a popular vote. So in fascist German fashion which is the norm these days, the German people were never given a chance to vote on the matter by referendum.

The story below appeared in a British tabloid, The Sun, that has been the most influential paper keeping Britain out of the euro. The paper's links usually don't last longer than a day, so here is the article in full:

GERMANS FIGHT TO DUMP EURO
By TREVOR KAVANAGH
Political Editor

TOP German economists last night launched a legal battle to save the Mark and ditch the sagging euro.

They pounced on a 1993 constitutional court ruling that the Deutschmark can only be replaced by a "stable" currency.

Far from being stable, the euro has COLLAPSED in value by 30 per cent since its launch last year - and it is still falling.

Germany's former finance minister Hans Apel backed the challenge and said: "We should be like Britain and keep out of the euro.

"We have no worries with the Mark - let's keep it that way."

Professor Wilhelm Hankel, of Frankfurt University, is leading the battle to stop the Mark being replaced in January 2002.

He said yesterday: "I am preparing a fully-blown constitutional case. It's not too late to get out of this thing."

Prof Hankel warned there is NO sign of the euro stabilising. "It continues to perpetually fall," he said.

Lost its sparkle ... Germans
hail euro's launch last year

"When Greece comes into the euro zone, the currency will be further diluted and the Mark will become even weaker against the Dollar and the Pound.

"Prices for imported essentials like oil will explode and I predict next year we will have four per cent inflation - double the official limit."

Another economist behind the action is Professor Karl-Albrecht Schachtschneider of the University of Erlangen.

He said: "Great Britain has managed to keep its currency and economy strong while out of the euro."

Germans greeted the launch of the euro on January 1 1999 with fireworks and street parties.

But two out of three now say it was foisted upon them by Chancellor Gerhard Schroeder and are opposed to scrapping their currency.

The legal challenge was backed by Opposition CDU member Joerg Horny, a Berlin investment lawyer.

He said: "We have managed to become the world's third largest economy on the strength of the Deutschmark.

"To hell with the euro. It is going down the drain. I only hope it doesn't take Germany with it."

There are warnings of yet another collapse in the euro from the inflationary impact of more countries joining the 15-strong EU.

The Czech Republic, Estonia, Hungary, Slovenia, Cyprus and Poland are set to join. Latvia, Lithuania, Slovakia, Malta, Bulgaria and Romania may join later.

ORO (10/30/00; 12:06:24MT - usagold.com msg#: 40266)
Perplexed - tell your congressman what you think

Organize people who think like yourself and make the words heard.

We are not in your various legislative election districts for anything from county comish through judges and legislators to state and federal houses and the Senate. The only thing we might share is the presidential election. Chew on this for a short while and ask yourself why the Federal government, with only one representative of the people at its head should have any power? Answer: it was not intended to.

So go and act within your various elective districts and get the right people elected. Then with one district represented in this way, to your liking, push into the larger districts and make them represented this way - in municipal (control police), county (controls sherif), school district (control what your kids are taught), if not part of the municipal government, then your state legislature etc... Also stay very active in your representative elections to congress. Find the right candidate and organize support for him.

If you move every 5 years, like most Americans do, don't complain that your "investment" in the district, municipality, county or whatever is going to be wasted, it won't. You can retain your influence there even if you have moved away.

Its good to be mad about things like these you complain about. Use this anger to energize your action. Teach people what is around them. They won't want to listen to the whole story, so start with a simple one, like you do for little children. Most people spent less time thinking about the political system (rather than politics and politicians) than they have about the color of Madonna's underwear. Therefore, they have the educational level of 4 year olds when it comes to the political system. Talk to people, don't write them. They won't read the stuff and they don't care because they think it does not matter and won't affect them. Teach them slowly and carefully, and they will care. But remember that their attention span is 5 seconds initially. As time continues, you will be able to expand on to the more controversial and "sacred cow" topics.

Good luck.

Mr Gresham (10/30/00; 11:33:31MT - usagold.com msg#: 40265)
FOA #47 -- Weimar?
http://www.usagold.com/GermanNightmare.html
Time to re-read the excellent Gilded Opinion piece on the most famous hyperinflation? Where will our Rentenmark come from?

FOA: Similarities you foresee? Differences?

"currencies have "timelines" that upon close examination are really just an expression of the changing social expectations of the society that uses said currencies"

Germany's social situaton really shows up in that story, all the way through it.

"Because our money has been built as a debt money system, if you only just carry or use dollars, you are part of the "lending class".

The whole "save for your Boomer retirement" propaganda campaign. And who has borrowed the money? Business institutions who can arbitrage the rate spread and expect bailouts -- heads I win, tails you lose.

It looks like this time, there are more intermediators to lending and borrowing -- financial institutions creating a daisy chain of risks and repercussions.

When I was 19, in college, I read up everything in the library I could find on Weimar. I thought 1969 seemed like a pretty good marker for American post-Versailles, er, post-Vietnam chaos.

That's why I always empathize with those bearish economists who've forecast "7 out of the last 3 recessions." It's hard to trust myself on putting this picture together, when I don't feel a whole lot wiser at 50 than I did at 19.

Rockgrabber (10/30/00; 10:30:05MT - usagold.com msg#: 40264)
(No Subject)
I think this is what they want folks to think = Yes the economy and the dollar are great, just look at how much gold the dollar is worth...

And you cant argue it, cause as of right now its actually true.

You dont have to believe it though. Just stay hush and trade the dollars for gold then. So I dont buy that the dollar is strong, but phycologically its strong enough to beable to actually purchase physical gold for under 270 for a short time here in history. Gosh darn they can fool them easy! DONT be a fool and be fooled.

Mr Gresham (10/30/00; 10:03:31MT - usagold.com msg#: 40263)
Trail Guide/FOA
The air IS fresh this morning, but that coffee was good! Together it makes me chatty, I admit, and I apologize for the length, but I won't be in company this good the rest of the day.

In msg #44, "we have the entire American dollar based contract gold market predicated on a limited commodity price range policy, pushed by the US, that kept gold in a pocket of dollar valuation. Not allowing it to leave this range allowed the growth of paper only gold because the outside extremes of price risk (both bottom and top) was known", you are basically saying that the official targeting of a gold price (via ESF or contract players like GS who were guaranteed a "sure thing" for long enough to make some big bucks even on low margins) was a game that could be played only until the remaining "goldbugs" woke up to the shell game, and stopped playing the Comex/LBMA markets. Betting their margins against officially-sanctioned and guaranteed margin money. The game would only be there UNTIL they caught on, and then the table would be folded up and moved. (Why do images of New York City streets stick in my mind when I think of those games?)

Is there any paper gold market in the rest of Europe? Any DeutschBank contracts, or Swiss, or anyone making those? Or has it all been Anglo-American? Everyone in Europe just buys physical, or dabbles in those markets? Until this moment, I just assumed the paper gold market was a normal phenomenon of markets instead of a recent put-up job just to absorb physical demand, but now I can't recall actually hearing of any other locations for it.

#46 : "Real wealth loss" :

So the debt holder has to calculate, along with everyone else, "what am I really holding here, and what will it stack up against when all things are squared together?"

I'm having trouble thinking of anything but real estate (already price-inflated and debt-supported) and gold (officially beaten-down). (Hmmm... What a choice!) I should learn more about art works, collectible coins etc, but they still vibe too much like baseball cards and beanie babies for me. Maybe hard business assets, but it's a hard gamble in uncertain times as all rush toward liquidity.

I guess that you and Another expect that gold will benefit from the extra push as wealth holders (or wealth losers) rush to the other side of the boat to try to make up for what's already disappeared, as they contemplate that short short list of real holdings.

It's clear that the flimsy rules of fiat "stability" have been broken, many times in many ways, so the current dollar strength is a market phenomenon (accident?) akin to the stock market (100+ P/E) mania -- "I can get out when I need to". Psychology at work in so many ways. Not logic, as much as they pretend. Not reality, as much as they "research".

One of the phrases I loved from Mehrling on Minsky (my #40197): "Mere ideas about the future become realities as they become embedded in financial relations, but inevitably over time the reality embodied in the pattern of cash commitments diverges from the reality embodied in the pattern of cash flows. Inevitably our ideas about the future are wrong, even when we all agree, indeed especially when we all agree." Following the crowd, market players get to be right for awhile, build up a self-image as "smart" guys, and lose it all in the deluge (at which they slink away quietly and you don't hear much from them anymore -- so most market chatter over time will be bullish rather than bearish).

My curiosity, FOA: The major institutions have created "funding corps" to securitize their risky debt, and protect their survival by cutting them loose in a crash. Do they expect the Fed to pick those up, if no one commercially is standing behind them?

And, is the Fed likely to set up some separate vehicle (like RTC was for S&L's) to hold private failed debts, in order to isolate that debt from dragging down T-bill and T-bond credibility and cash flows? Changes in psychology on those vehicles has major cash flow effects on govt. Or is the whole thing likely to get quickly lumped together by market players?

In your Barn Deed analogy, add another factor, four of those other deed owners got them on lousy credit standing (90% backing with the 10% coming from their margin account on Cisco stock which they bought with their 125% equity line on their home), and one of them was on his way over to the bankruptcy court directly from the auction. Hey, everyone gets to play the game, right? You can see more quickly how the $10,000 price has cheated you. None of those nine deeds should have been issued, but some are even worse than the others!

The boom in some real estate markets, however, says that some people have gotten this (subconsciously, at least) -- that the prices will never be allowed to deflate, or at least that the property will never be taken from them because of deflation, and so they have clawed their way into real ownership, however bad their credit or meager their income. Fragility.

From our point of view vs. gold, they just won't get much more dollar appreciation from real estate. The sellers got out with that. (What are THEY doing with their gains, I wonder?) The buyers just might get to slide on their debt payments, as they watch many big entities do in a crunch. That's their best hope of "appreciation", or getting something for very little, as we all hope to, right?

Check me on this: Many of the "deeds" that have been already created are those "non-money", off-the-books round robin of debt papers that have been written between the TBTF players, and will be monetized by the Fed against your meager holdings of paper dollars sooner than you can convert them into something solid.

Everyone's long-term, "buy and hold" commitment to future "savings" will telescope into short-term liquidity anxiety almost overnight. (It was always present in their psychology, because when they expect 26% annual stock gains, they are NOT patient savers with real math in their minds.)

It's the "Let's Pretend Awhile Longer" time horizon that keeps prices from jumping right now, and holds back the already-written money flood for now. The auction you mention is the return of the "long-term" to the immediate, and the squaring of cash flow realities. "Oh. I didn't think so many sellers would show up today."

Monetization won't show up in the M-1 statistics, I think you said. They'll try to balance the destruction with the new creation, but it will be the QUALITY of what it is going for that makes the difference. Monetizing the junk in place of more prudently-managed assets disappearing. Stagflation. Inflationary depression.

"Often, in order to slow things just a little before we start again the fed stops it's manufacture of deeds (err,,,,,, currency reserves)." Start WHAT again? If this one spirals unmanageably and they can't manage the statistics to look like stable management, will they cut the bottom half out of the pack and pick the favored institutions to bail out and carry capital forward into the "New Dollar" era? And who and what will that be? (After all, we'll still be living here, and not in Euro land.)

Perplexed (10/30/00; 09:43:11MT - usagold.com msg#: 40262)
FIAT CURRENCY TRANSLATES FIAT CRIMINAL
"No State shall ... coin Money; Emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts." Article 1, & 10, clause 1 of the United States Constitution.

As we are aware, President Roosevelt contravened this section of the Constitution by Presidential Order.

SURPRISE!!!!

The only way the Constitution may be lawfully changed is by Amendment.

Because a Presidential Order is not sufficient to alter a section of the Constitution, the Federal Reserve, its policies, as well as its currency, is founded on nothing more than an unofficial judiciary variance.

GOLD AND SILVER IS STILL THE LAWFUL MONEY OF ACCOUNT!

Let's face it, The Federal Reserve has its neck on the chopping block so long as the Constitution is accorded recognition as the Supreme Law of the land.

When Roosevelt, sans an amendment, criminalized the possession of the money of account, he did so under the color of law; the only thing changed was appearance, however, given the atmosphere of the created crisis, that
was sufficient to serve the purpose-----THINGS CHANGE!

The haunting words within the Constitution designating gold and silver as the only lawful currency, represents the sword of Damocles hanging over the head of the Federal Reserve.

Until Congress, by Amendment, recognizes this fact, and designates something else as lawful money, Federal Reserve script, though legal tender, is not lawful money; its survival remains at the discretion of the judiciary, as
always.

Should conditions arise in which it becomes necessary to ditch the Federal Reserve to restore order and even save
the government, given Holtzmans very appropriate commentary on sacrificing a lesser entity in order to save the primary, it would be a no brainer for the Supreme Court to kill the variance by ruling in favor of the Constitution.

If you think unwinding the gold carry trade will be a can
of worms, well these worms would have rattles on one end and fangs on the other.

As we are also all aware, in 1913 Congress created the Federal Reserve with legislation which has been under a cloud of suspicion in regards to the ratification process from the day of its enactment; the same is true of the 16th
Amendment which created the income tax.

These Amendments, coupled with the Presidential Order, is responsible for the creation of trillions of dollars in fiat currency.

Well guess what! It has also created millions of fiat criminals, and set the stage for real criminals with pens, to plunder a greater amount of wealth, from a greater number of people, within a shorter period of time, while residing
with honor among their victims--- than is possible by an army with guns.

While the ratification process may or may not be provable at this late date, perjury is.

Success in the election process is merely a ticket to the building. An oath to preserve, protect, and defend the Supreme Law of the Land--- in short the Constitution, is the price of admission to the office.

Thus, legislation in blatant disregard to the Constitution, constitutes perjury, is punishable as a felony, and may culminate not only by removal from office,but by serious prison time.

Legislation created under these circumstances is null and void per:

Sixteenth American Jurisprudence, Second Edition Section 177. A statement with many long years of lawful as well as legal standing: QUOTE:

" The general misconceptions is that any statute passed by legislators bearing the appearance of law constitutes the law of the land.

The U.S. Constitution is the supreme law of the land, and any statute, to be valid, must be in agreement.

It is impossible for both the Constitution and a law violating it to be valid; one must prevail.

This is succinctly stated as follows: the general rule is that an unconstitutional statute, though having the form and name of law, is in reality no law, but is wholly void, and ineffective for any purpose; since unconstitutionality dates from the time of its enactment, and not merely from the date of the decision so branding it.

An unconstitutional law, in legal contemplation, is as inoperative as if it had never been passed.

Such a statute leaves the question that it purports to settle just as it would be had the statue not been enacted.

Since an unconstitutional law is void, the general principles follow that it imposes no duties, confers no rights, creates no office, bestows no authority on anyone, affords no protection, and justifies no acts performed under it.

A void act cannot be legally consistent with a valid one. An unconstitutional law cannot operate to supersede any existing valid law.

Indeed, insofar as a statue runs counter to the fundamental law of the land, it is superseded thereby.

No one is bound to obey an unconstitutional law and no courts are bound to enforcement it. UNQUOTE

Persons who commit crimes such as robbery, rape, and murder etc. are criminals whether or not they elude identification, capture, or punishment.

The results of their actions do not vanish even if they are erroneously acquitted in a court of law; if they were guilty of the act, they are still criminals.

The same is true of people who gain power over their fellow citizens by deceit, lies, and perjury.

Thus when Roosevelt, in violation of his oath, by presidential order declared the possession of Constitutional money a crime, he in affect declared inanimate metal, (gold and silver) to be criminals, instantaneously creating millions of fiat criminals through the avenue of guilt by association. Who was the real criminal?

Hint: Although guilt by association was and is an abomination to our criminal justice system, it has since become part and parcel of it, and politicians now
routinely campaign on promises which will require a perjured oath to fulfill.

The 16th Amendment, a bastardization of the Constitution, was nothing more than the legalization of unlawful enabling legislation required by the Federal Reserve---legislation necessarily unlimited in scope and quantity, and free
from restrictions imposed by the Constitution itself.

Although the responsible "officials" are long in the grave, the system they instigated continues to enrich their progeny and the legal but unlawful legislation, flowing in unabated torrents, continues to create a new crop of fiat criminals daily, further corrupting our criminal justice system.

It makes no difference how dedicated, honest or sincere those currently elected to serve as representatives to the federal government appear, when they prostitute their oath of office in order to pay off campaign debts and promises, they become just one more turd in the political sewer.

100% of their time is devoted to raising and spending money thru legislation.

No one understands even a small part of this legislation, and by design, no one ever will.

It is convoluted, in constant evolution, and is intentionally written to be totally indiscernible.

Written over an extended period of time by language experts, and then approved by "representatives" too busy swimming in the turd pool, to even attempt to read it, it annually adds another layer of garbage their constituency must sort through in the yearly ritual of avoiding the latest list of fiat criminals.

With references back and forth to clauses and sub clauses, it is what any given agent of the IRS say it is, and is backed by judges with no desire to handicap "the system."

The enforcement arm of the Internal Revenue Service is only one part of the mountain of legislation comprising the national tax code.

By allowing officers of this agency to assume facts not in evidence, those unfortunate enough to be caught in its tentacles must prove innocence, turning upside down, the procedure known as due process.

Because the purpose of the proceedings is to legitimize the charge against the fiat criminal, not to ascertain the truth, in many cases the charge itself is allowed to constitute proof, as well as intent, thus proving innocence
becomes a mission impossible----a digression to the British Star Chamber.

Although the system, according to literature published by the Internal Revenue Service, is voluntary, those who fail to volunteer, or to produce records required by law, become instant fiat criminals, in direct contradiction to both letter and intent of the Constitution.

Talk about the Devil and the Deep Blue Sea; should the Supreme Court rule that the Constitution may be changed by presidential order, they will have left the nation with no semblance of either legal or lawful government.

Thus the government, on behalf of the Federal Reserve, has been very careful to avoid taking cases to court, in which
a review could conceivably focus on the question of whether or not gold and silver is still the lawful money of the
United States.

The closest the subject has gotten to the courts to my knowledge, was at the height of the tax revolt of the 70's, when the court responded in a case brought by the Internal Revenue in which the argument was the impossibility
of paying income tax, absent lawful money.

The court ducked the question by ruling that although FRN's are not lawful money, as legal tender, it is neither unlawful to offer, accept, or refuse to accept, but once accepted, taxes not only may, but are required to be paid,
using FRN's as the medium of exchange.

IT GETS BETTER !!!

On January 29th 1918, the 18th Amendment was proclaimed prohibiting the manufacturing, sale and transportation of alcohol.

Presto! One more inanimate criminal was added to the list, and as if by magic, millions more fiat criminals were created.

The Amendment armed the federal, as well as the state governments with the authority to ignore the Constitution while enacting enabling legislation, and this they did with gusto.

A taskforce was created within the Federal Bureau of Investigation for the express purpose of bringing these legislatively created criminals to justice.

Expediency replaced due process and suspicion supplanted the requirements set forth within the Fourth Amendment, unleashing an army of thugs, utilizing the legitimizing authority of law enforcement officers to break down doors,
destroy private property, and to even kill those with the audacity to object.

Our nation was under siege by those who were supposed to be the guardians of our freedoms.

Unquestioned obedience to authority became the rule, and agencies were created within the government for the sole purpose of directing and coordinating the effort aimed at destroying the right of personal choice.

JUST BEFORE THE NATION SUCCUMBED TO ANARCHY

Proclaimed on August 26th 1920, the 21st Amendment repealed the 18th.

It should have been declared unconstitutional.

Although previous legislation and Presidential orders had mocked the principles of the Constitution, the 18th Amendment was the first direct assault, and the most damaging.

Although it was very short lived, the precedents it set
have become the vehicle for the intended destruction of the Constitution itself.

Contrary to all previous Amendments, rather then preserve and extend the protection of rights required of self determining individuals,(the purpose, according to the Declaration of Independence for which governments are
instituted) the 18th was a denial of personal freedom.

Although the Amendment died, much of the enabling legislation remained on the books and active. The powers acquired by the federal enforcement agencies were not only not diminished, but were contrarily expanded.

Demon Rum, the embodiment of the Satan himself, became socially acceptable once the Federal Government secured a monopoly on its control, and a piece of the action.

The violent resistance, to the violence instigated by government enforcement of the 18th Amendment was used to knock a hole in the 2nd Amendment,just as it had been used to accomplish the same thing with the 4th, 9th and 10th.

Thus the government acquired the "right" to control certain guns, as well as dirks, daggers, knives, brass knuckles,
and firearm silencers.

They were not forbidden, but the right to own or possess them disappeared, to be replaced by purchased permission.

Because they, as well as Alcohol, and Tobacco became part of the revenue stream, another agency was created within the Treasury Department.

The Bureau of Alcohol, Tobacco and Firearms was given the tasks, as well as the police power, of determining who would be permitted to deal in the controlled items, and who, in an effort to avoid the label of "criminal" with
the attendant repercussions, would be allowed to purchase the permission to own the restricted items.

Because of the obvious similarities, intent, intensity, and results I am not going into the "war on drugs" other than one question and one answer.

If a Constitutional Amendment was required to legitimize the enforcement legislation necessary to fight the war on alcohol, why was an Amendment not required to legitimize legislation necessary to fight the war on drugs?

The answer: Legislation survived which should have died with the Amendment, thus establishing precedent for governmental right to create fiat criminal citizens, by merely creating fiat criminal objects--criminals who can
neither vote nor have any association with a modern firearm.

The nations prison system is now a growth industry, yet much of the American citizenry are incapable of associating the concept of assumed innocence, guilt by association, and destruction of the criminal justice system, with the loss of freedom.

Some either don't notice the loss, or, are too stupid to care.

Others, recognizing it as the corrupt, entrenched system it is, hurtling toward a concrete wall at 90 miles per hour, realistically feel powerless to even slow it down--we just brace for the impact, and prepare to rebuild the wreck.

Thus the prisons are overflowing with our fellow citizens with the audacity to associate with, or the mis-fortune to be caught within close proximity to the fiat criminal objects.

Who needs an archaic criminal justice system anyway; a system dedicated to determining the truth in a lawful court of law; through the procedure of due process, a procedure grounded on the principle of assumed innocence, when we can have--da-da--trial by press?

The government now must only demonize the intended target, and the press is only to happy to legitimize the action before, during and after the event.

We don't need the rules of evidence and witness qualification, they just get in the way in trial by suspicion, innuendo, hearsay, and character assassination.

Isn't it exciting to watch live television coverage of our fellow citizens being tried by the police on our streets
and in their homes?

To see doors splinter, people thrown to the street or floor, boots on the back of the neck, and a half dozen guns pointed at everyone in the car or house by a band of police clad in black terrorist uniforms and wearing masks.

Remember Ruby Ridge Idaho? How would we ever have survived the threat of a 14 year old boy and a woman with a baby in her arms, without the protection provided by the Federal government.

Why those criminals might have come out of that mountain cabin with guns blazing at any time.

And remember "Waco" the sequel. Man what a treat. For 51 days we were entertained by our government in action.

Real live coverage of our fellow citizens being attacked with automatic weapons, tanks, helicopters, and gas; with constant, detailed narration of the evils of one man serving to explain why the government was not to blame, and why innocent men, women and children were acceptable sacrifices for his apprehension.

And the climax! Who will ever forget the church compound
in flames, swept by strong Texas winds, and terror stricken people attempting to flee the fire.

Filmed on location in Texas with a special thanks to the United States Government, without whose participation this extravaganza would not have been possible.

Executive producer Bill Clinton--Director Janet Reno--Official Stooge Texas Governor Ann Richards, with a cameo appearance by Lloyd Benson, talking heads courtesy ABC, CBS, NBC, and other public "news" media.

Cast and crew compliments of the FBI, BATF, Delta Force, Texas National Guard, Texas Department of Public Safety, and only God knows who else.

Very entertaining, if you were not one of the reluctant participants.

Don't worry, if by some miracle the officers can't find some law they have broken, those who havn't been killed will be released--maybe; the survivors of Ruby Ridge and Waco were tried and imprisoned----no crime worthy of death was proven; a government operation simply required targets; they unfortunately were available, and justification for the raid demanded they be tried.

The officers won't apologize for violating: the rules of evidence, search and seizure, unlawful detention, and due process, because that would be admitting error; but they will release them-- just not on camera.

And who needs confidentiality and integrity anyway? Isn't it exhilarating to have intimate details of ongoing police investigations, privileged information, or results of grand jury proceedings etc. leaked by "trusted" insiders only
minutes after they occur?

Although the preceding examples of legislatively created criminals barely scratchs the surface, their numbers run into multi-millions; and you and I may be next.

The criminalization of objects, and legislatively creating criminals of people who possess them, has been indulged in by governments since the beginning of "civilization."

However, if the system enjoys so much merit, why have so many young Americans died on muddy battlefields in foreign lands fighting it, only to have we, their decendants, see it embraced as a prominent feature within our society, and to be victimized by it, as it became part and parcel of our
criminal justice system?

The list of victims is incalculable, and grows daily, even in the land of the free and the home of the brave.

NOW A QUESTION

If, in a nation whose government is said to be of, by and for the people, every person, at one point in time, is a governmentally created criminal, doesn't it follow that
you must, by definition, have criminal government?

If so, the time line has not only run out on the current world financial system, but in all likelihood, upon the American government as we know it.

Because change will occasion those who own and control the Federal Reserve presiding over a bankrupt empire, they will resist it at any and all cost, as we on the forum are aware--- to our consternation.

They are very cognizant of the fact, that given the quantity of weapons, and patriots alike in this nation, that an event of sufficient magnitude to trigger the Constitutional crisis is, in all likelihood, unavoidable.

If events transpire as planned, the crisis will be postponed until a means can be found to confiscate our weapons and engulf our citizenry in an enhanced, all encompassing form of oligarchic government; a system painstakingly
constructed over a period of time---embracing many centuries, many generations, and many nations.

If the plan is successful, a few people will own the rest, and few current politicians will rule as directed.

If they miscalculate the resolve of the American people to retain our soveriengty, the oligarchs lose everything, and
a few American politicians will be tried for treason.

In any event, the world is going to find out very shortly just how highly we Americans value our freedoms, by how many of us are willing to stand up and be counted....

Still Perplexed

Gold Trail Update (10/30/00; 08:31:19MDT - Msg ID:40261)
The Gold Trail Discussion has been Updated
The Gold Trail Discussion has been updated. Click on the link to read the latest updates.

ORO (10/30/00; 08:23:52MT - usagold.com msg#: 40260)
Mr Gresham - debtor in possession effects
That case was different in that operating cash flow at the time could be maintained positive, whereas prior to that time, cash flow was negative - that's how they got into debt - by bad investments with borrowed funds that produced negative cash flow.

Since the whole industry was leveraged, with no one participant of size substantially free of debt, there was a different effect. A look at many balance sheets of large corporations will reveal that many of them are not particularly in debt, but are using debt to maximize liquidity.

As for the Euro. You are right in the observation. That is why they need the book balancing trick provided by gold purchases with Euro, making gold infinitely inflatable. They can print up Euros to buy gold and thus inflate the value of gold on their books - to balance the books on the marked to market asset side. Something that can't be done with bonds, because of a financial and an economic reasons.

Financial - because lowering rates during (not after as the Japanese did) the initial stages of deflation would cause consumers and businesses to jump into debt again, thus making the future inflation needed that much greater.

Economic - because the lowering of interest rates saves the weak players with bad judgement instead of just saving the credit system.

Gold can be made into any shape - and any price. When debts are deflating, you just buy gold till enough Euro are injected into the system to clear the debt problem without reducing the interest rate. The clear beneficiaries would be the holders of bullion.

A simpler method would have been making gold and silver and whatever else is appropriate into legal tender again. Thus saving the holder the need to sell his gold into the market in order to pay a debt.

wolavka (10/30/00; 08:18:15MT - usagold.com msg#: 40259)
Cisco skid was a friend of mine
Go Gold!!!!!!!!!!!!!!

Mr Gresham (10/30/00; 07:57:37MT - usagold.com msg#: 40258)
Oro
Well, then, I guess we got one of them Hedonic washing machines. Ver-r-r-y quiet, it is.

I still haven't figured out how they can Hedonize hamburger (but then if I did, I'd probably get offered a BLS consulting contract, and I'd be toast here forevermore).

Thought while driving: is Oro a "geek" (your term), as in computer, or as in Econ.? Probably both. You go back and forth, as do I, and it's a delight to watch you draw on your well of knowledge and experience in both.

However, all three of my programming jobs were with entities that went under or suffered a major loss upon my arrival or shortly after my departure.

"One can't build a house of cards on a shaking table, which is what gold does to the debt market". Sometimes, Sir, you do build a poetry of images. Product of a clear mind.

Sounds like you read Minsky in original, while mine so far is only "derivative", though his disciples do seem inspired by him. I thought you'd clench at the "lender of last resort" bit, which hadn't been as discredited 10 to 30 years ago, when Minsky wrote.

Malcolm Sawyer's Minsky-based paper (better than most econ works, but I get triggered at the first sight of an equation to go off to a good night's sleep) concluded that the Euro has a deflationary bias because:

1) Euro member nations are constrained in their fiscal policies, and

2) ECB is constrained in its monetary policy.

What do you think about that?

Sounds ideal, like it's doing what stable fiat ought to do with or without gold backing, but I think I remember seeing that Euro creation is at a 10% annual issue rate. While maintaining a 4.5% interest rate? How they do that?

Debtor-in-possession certainly can lead to price-cutting. Didn't Continental Airlines (or was it Eastern?) lead the fare wars after it went into bankruptcy, to the complaints of others that they only had to meet immediate cash flow and not their other obligations. Unfair competitive advantage. Some thought engineered to create just that.

With gov/Fed/taxpayer as ultimate backer, shouldn't we study the few upsets in the gov bond market for clues to fragility points? I remember being surprised at the "Jimmy Carter" bond market freeze-up (79? '80?) as being more of a psychological phenomenon than I thought such big (BIG BIG) money would have let itself be involved in. A few other cracks occurred over relatively small market players (Drysdale?) going down with obligations to big clearing banks. Why would such hiccups take Treasuries to the brink in relatively stable times?

So, obviously the Larry Summers buy-back is crucial in that there will always be a bid in on T-bonds. They are probably targeting all of the volatility measures to take them to historic minimum (have they succeeded? seems pretty quiet lately) and to remove all of the "Japanese selling Tbond", "CBs selling tbond" scares that have blown through.

wolavka (10/30/00; 07:23:01MT - usagold.com msg#: 40257)
U S A
Tomorrow and for the next 3 years the country can celebrate:

BEGGARS' NITE!!!!!!!!!!!!!!!!!

ORO (10/30/00; 07:01:07MT - usagold.com msg#: 40256)
Mr Gresham - collecting SS
When the time comes, if SS collection is actually attempted, the guy with the 5 kids will not be here, but in Mexiceo, together with your kids.

Govvie has already declared its intentions to (1) print up money for SS payment through private market inflaiton of the money supplies. (2) To hide the fact of the inflation from the SS recipients as much as possible, in the same way that Pravda used to print "news".

The official methodology is now set: cchain weighting to hide long term effects (SS recipients can't buy steak, and are therefore served equally well by hamburger, later to be replaced by dog food). Weighting adjustments to eliminate the components of CPI that are rising from the index. And Hedonic multipliers and deflators in order to dilute the rising components with artificial components that are growing in numbers and falling in price, like the number of dots your printer prints per square inch. 1200 you say? So what if you can't read letters that are 11/1200 of an inch tall (old dot matrix standard lettering of 11 dots tall letters).

Don't think they don't do this. They are doing it now with memory: each piece of memory needs an address, as your memory increases, the portion of it needed to manage the addresses grows more just as quickly. The actual usefulness of computer speed and memory grows with their log. The result of linear hedonic adjustments is an exponentially rising error in the data.

This is now said to be done for washing machines.

ORO (10/30/00; 06:45:16MT - usagold.com msg#: 40255)
SteveH - no correct number
Listen to Greenspan. Greenspan says that he can't point out what financial assets exactly constitute money. If so, how can you conceive of backing any particular portion with gold?

Answer: there is no correct number.

ORO (10/30/00; 06:40:15MT - usagold.com msg#: 40254)
Minsky guiding Noland
Minsky did his work in the 60s, when the dollar was kept at par with gold by the defacto exchange maintenance by the London gold pool.

While his work on the formation and stabilization of credit bubbles is very informative, and is interesting, he does not realize that the debts to be repudiated are not formed by "capitalist activity" alone, but by the prospect of a monetizer of last resort standing behind the markets. Otherwise, the markets would not have taken these risks and would have taken out the weak players earlier rather than rolled over their debt. It is the infinite credit mechanism that credit money provides - by having government backing - that causes the trend towards fragility.

One can't build a house of cards on a shaking table, which is what gold does to the debt market. Debt money has an unstable cash component and a steady debt component. The gold system has a steady cash component and a fluctuating debt component. Since the debt market is constantly "shaking" in the gold system. Such financial fragility can not form.

Finally, while debt can deflate, prices of items produced by non-debtors do not deflate because non-debtors are not under pressure to repay debt "at any cost". While they might be under competitive pressures from debtors, they are more likely to stop production rather than produce at a loss because having low debt, they are not obliged to run the business.

When debt is deflating in the credit money system, the operations of defaulting debtors have no need to repay once their operations are given to their creditors in settlement of the debt claim. They are now a non debtor. However, the cash that was produced by the defaulted debtor when he borrowed is still circulating because of government guarantees to print up money to cover the obligations of defaulting leveraged creditors (like Fannie Mae and the banks).

Thus we have money with no demand, and operations that will close if prices do not allow profits, because having no debt, the operations previously owned by defaulted debtors are not obliged to repay debt. Thus, while the process of debt deflation occurs prices might drop, while settlement occurs, prices will go up. Remember the satelite telephhone system that went bankrupt? Creditors took control of the satelites. Seeing no prospect of profit, the sent the satelites, lifted at a cost of $20 billion, to burn in the atmosphere.

Long before the operation was officially bankrupt, the stock and debt lost 95-98% of their values. The lost purchasing power preceded the bankruptcy by months if not years. The portion of the debt held by banks was balanced with bank liabilities during the bank's taking on of the loan. The liabilities, are guaranteed by government (i.e. the printing press). These remain, but the satelites are gone, not having allowed anyone to sell any services.

While deflation of securities related to distressed businesses does reduce purchasing power outstanding, the operation produces no more product at a loss. Beside which, actual market experience shows that there is no possibility of substantial deflation in assets when the banks issue so much "price insurance" (derivatives) to assure just that. The only reason banks can sell such insurance is that their obligations are backed by the government printing presses (now in electronic form.

Bottom line, forget about substantial price deflation inside the US. It can't happen.

Perhaps you might want to think of a dollar as a receipt of debt. If the debt is no good, could the dollar be?

Mr Gresham (10/30/00; 06:03:49MT - usagold.com msg#: 40253)
Oro -- Silly, now serious
If gold ends up backing USG debt in some form, you can bet it will be constructed and papered-up in some way that John Q will have no idea it is gold behind it. It will be presented as "this is our dollar, same as it has ever been, immutable, impenetrable, triumphant". Just like they kept the quarters looking the same after taking out the silver.

Only the foreigners and the central bankers will be in daily contact with the golden reality, and allow the American authorities to "save face".

Q for you, Oro, that I may have simply forgotten or we never vetted fully here:

What was FOA telling us about the US official gold being off-screen as far as backing due to prior legalities of the Bretton Woods era, sort of a legal limbo where claimants could appear with "old dollars" seeking $35 gold, I think it was?

Mr Gresham (10/30/00; 05:56:14MT - usagold.com msg#: 40252)
Oro -- No assets?
"provide the SS future claimants no assets"

When I get there in 12 or 14 years, I think they're going to give me the address of a young semi-employed Hispanic father in El Paso with 5 kids and tell me to "go collect your $560 every month yourself."

SteveH (10/30/00; 05:56:06MT - usagold.com msg#: 40251)
So ORO
What is the correct number to divide ounces into? 1.2 or .6 Trillion?

ORO (10/30/00; 05:33:49MT - usagold.com msg#: 40250)
SteveH Treasury debt
The external portion of the US debt is under 3.5 trillion. Social security held treasuries is a bookkeeping trick and provide the SS future claimants no assets. Of that, about 560 billion (+) is in the Fed, and another 800 billion is in the banking system waiting to be monetized.

That leaves 2.1 trillion in the markets.

Of that, over 1.2 trillion is in foreign hands. Half of that in CB hands.

I don't believe the Fed and the bank holdings need to be backed by gold payment. Beyond that, I would expect that if such an idea were entertained, the purveyors would prefer to see these T bonds make their way back to the US before they are "cashed" in gold.

ORO (10/30/00; 05:24:10MT - usagold.com msg#: 40249)
Lease rates
... ... ... ...Gold... ... ... ... ... ...Silver
... ... ... ...October 30 2000...October 30 2000
... ... ... ...Bid...Change... ...Bid...Change
1-month...0.82%...+0.2... ...0.62%...0
2-month...1.04%...+0.3625...0.79%...+0.1625
3-month...1.06%...+0.1513...0.86%...+0.0012
6-month...1.12%...+0.1212...1.12%...+0.0213
1-year...1.48%... -0.02.....2.03%...+0.03

Note that traders commitments have been rather favorable as well.

SteveH, am looking at the charts from the URL you gave.

SteveH (10/30/00; 05:20:56MT - usagold.com msg#: 40248)
On the news again
Euro for oil on major networks this morning: CNBC and CNN! Russia seen supporting Euro for Iraqii oil.

SteveH (10/30/00; 05:17:09MT - usagold.com msg#: 40247)
Using your math...
I believe your answer should have been something like this:
$43596.730245231607629427792915531/oz AU. or rounded $44,000 per ounce.

wolavka (10/30/00; 04:36:11MT - usagold.com msg#: 40246)
Wave with middle finger
To the U. S. Dollar, bye bye!!!!!!!!!!!!!!

Canuck (10/30/00; 04:23:27MT - usagold.com msg#: 40245)
From G-E.
TRYING TO DECIPHER MANIPULATION MECHANISM
(Alpinegb) Oct 29, 16:45

I have been an assiduous lurker of this forum for the last four months. My hobby is studying, trying to figure how markets work and understanding maneuvers, manipulations and other official interventions for keeping them in line with present politico economical needs. I have been especially focussing on AU and here is my opinion.

One should not be overwhelmed by the role of the US $ nor depressed by the present weakness of the Euro. I believe we are now in the midst of an engineered stealthy massive devaluation of currencies, which has picked up speed in the last few days as a result of the stock market turbulence and other factors. The BIS freezing-out its private shareholders is one more sign. The BIS and CBs (G 20?), with the silent complicity of the media, bankers and influential gold + silver miners, have probably taken the opportunity of the launching of the commercial Euro for Jan. 1, 2001 to proceed with this massive devaluation. This most certainly for justifying part of the monstrous amount of fiat money around the world and to prevent the tumble of the DJ to "irrational exuberance" level (DJ 6400).

This requires a substantial amount of time, maneuvering or manipulating for fine tuning each currency and gold (+ silver) in order to reach a given objective. This procedure has, at first, followed a relatively free road, but things became more complicated with the nascent "bred & butter" inflation (no to be confounded with present money hyperinflation), GATA intervention and ME turmoil. One may wish to add the WA, but I believe this was a diversion and was part of a misleading maneuver to eliminate possible suspicion over the devaluation scheme and to gain time. Incidentally, the present oil crisis might have also been engineered to mask or provide an alibi for the massive currency devaluation. The dead line for this objective of convergence must have been set for the end of 2000 or beginning of 2001. Now things have been running off and the target date must have been anticipated. Now let me develop why I came to this conclusion.

One should first consider a fundamental fact: despite what is being hammered in the media, gold is still the universal standard, at least for BIS and for CBs. The unit of account of the BIS is the Franc Or equal to 0.29 grams of fine gold. It is this Franc Or which determines the value of an ounce of AU at US $ 208; it is not the contrary. A standard cannot be a "yo-yo" as all currencies are. The Franc Or is not a "yo-yo", though the currencies, especially the US $ might make it appear this way. I am sure Mr. Greenspan would agree with that. Once this is understood, let's consider the present situation of currencies. Almost all of them except the US $ have been heavily devaluated. Let's take the US $ and the Euro for demonstration:

1999 gold low = US $ 252 (rounded off figure)
current gold price* = US $ 266 " " "
difference = US $ 14 = or 5.6 %

1999 gold low = Euro 246 (rounded off figure)
current gold price* = Euro 322 " " "
difference = Euro 76 = or 30.9%

*Values of Oct. 25, 2000. This date is taken for demonstration, as it appears to have been the currency and gold conjunction point or a turn for another direction in the gold and silver prices.

This means the Euro has already been devaluated by 30.9 % against AU. The US $ is devaluated by only 5.6%.

See what one gets when one divides current Euro gold price by US $ gold price:

322 : 266 = 1.21

On Oct. 25, one US $ was equal to roughly 1.21 Euro. Consequently this obviously confirms that both currencies are linked to AU price.

The Euro was introduced at US $ 1.18 for 1 Euro. The current rate is US $ 0.82 for one Euro; that amounts to a decrease of 30.5% for the Euro. As one can see, it is almost equal to the devaluation in gold price. The slight difference is due to rounding off figures for calculation. This shows again the link with AU.

At this particular date, the price of the Euro should have been going down to 0.815 to be devalued by 30.9 %. One will admit that the lowest rate of exchange came virtually down to this value on Oct. 25. The small discrepancy is also probably due to rounding off figures.

The US $ is partially devaluated by 5.6%, but is still overvalued by 25.3% in accordance to the Euro. This might be the reason Mr. Fabius, the French Finance Minister, can say without taking a great risk that the Euro has a potential of increase of 20% in the future.

Now let's try to form a mental picture! Imagine a line, close to half way between the upper and lower stations of a cable car installation. At the upper station is the overvalued US $ at + 25.3%. At the lower station is the Euro at -30.9 % (as well as all other already devaluated currencies). When the cars will start running to reach this imaginary line � they seem to have already started � the US $ will come down and devalue against AU and the other currencies will come up and revalue to meet a converging point (the mentioned line). This point should be equal to a POG of US $ 333 (current US $ 266 AU price + 25.3%). Surprisingly, the AU price reached this level after the WA. One can assume that it will be the next level of currency convergence and probably the new future price per oz of AU to be settled by the BIS. At this point all currencies will be devaluated by 60% in relation to gold. When the ounce of gold was increased to US $ 36 from US $ 25 (44%) in the early 30s, the same procedure must have been applied.

After this "correction", I believe the trading average of POG has the potential to be increased from around US $ 400 to US $ 600 � 650. The boys will make sure of that, unless they wish to create another wealth effect.

Following the same reasoning and making the same demonstration with the Swiss Franc one gets the same result. The S.Fr. has been devalued by 28% and is overvalued by about 3% to the Euro, which makes the same total, i.e. close to 31 %. Surprisingly again, I noticed a study, on one of the gold sites, indicating that the sale of 1 % of the gold reserve of one given country will usually have a devaluating effect of 0.5 % on its currency. Switzerland plans to sell 56% of its reserve!!

As a gold bug completely invested in gold + shares, I am feeling very comfortable and I am waiting for the cable car to start moving. As mentioned above it might already have started four days ago, but I believe the motion will be more perceivable after the US presidential election.

I am sorry for this rather long and maybe fastidious reading, but I thought some of you might be interested to have the opinion of a confident overseas gold bug. This is not intended to lead anybody to invest accordingly; there are merely my own humble thoughts. Obviously any critic will be welcome.

Alpinegb
----------------------------------------------------------

??

ThaiGold (10/30/00; 03:49:18MT - usagold.com msg#: 40244)
Roose-A-Think
Attn: SteveH
Hi again, SteveH:
The more I think about what you posted in your #40238,
the better it sounds..
You wrote:
"One possible scenario would be a valuation of US gold such
that 50% of it was marked to a value that would retire the US
debt, leaving 50%. So, what would that make gold worth?
4,050 tons at $6Trillion? Anybody care to tell us what an
ounce of gold would be worth under that scenario?"

So I just pushed my Roosevelt-Mode Think Button and here's
what I came up with:

I recall Roosevelt once said: [paraphrased]
"Don't worry about repaying the National Debt, because..
..We Owe It To Ourselves!"

Now then, using the same Roose-A-Logic, we apply that same principle to your suggestion:
ie: we payoff the National Debt with 50% of our gold.
To ourselves!. Great idea. We'd have our cake and eat it too.

Roosevelt would be pleased. He also Confiscated Gold.
At $35 / oz. However, were he still around to help us out, I'm
sure he'd adjust somewhat for modern times.
And opt for $50 / oz. It's a Virtual Certainty.

Time to run Rain_Dog. Goodnight.

ThaiGold

wolavka (10/30/00; 03:39:06MT - usagold.com msg#: 40243)
Thai Gold
Shorted dollar to max, long swissie, since thursday.

Gold has alot of support here, be careful

YELLER! (10/30/00; 03:37:25MT - usagold.com msg#: 40242)
!!Good Morning America!!
techbull....
I think you may be on to something here; maybe both Gore and Bush don't want the job, cuz they've been told... they read USAGOLD threads.

All:
Canadians:
...if you love your country, vote for Ralph Nader. Oops, oh well.

Americans:
Please don't waste your votes. If you love my country�

All silliness aside� history books may mention Gore or Bush in footnotes but Ralph Nader will be described in bold as a major force of our time.

Fish's next question: once the Euro has stabilized, how long will be before the Canada/US border crossing stations are converted into precious coins-&-bars dispensaries?

ThaiGold (10/30/00; 03:10:55MT - usagold.com msg#: 40241)
Investment Advice
Attn: wolavka
...
..
.
short pork bellies @ 60 buyback @ 50
do same dec gold bring home the bacon enjoy breakfast

ThaiGold (10/30/00; 02:51:14MT - usagold.com msg#: 40240)
New Math
Attn: SteveH (10/30/00; 01:20:32MT - usagold.com msg#: 40238)
...
..
.
SteveH:
Let me try to answer your math problem...
Hmmm.... 4050 x 32,500 divided by 6 Trillion ....
Ooops my calculator hasn't enuf LED's. I'll just
guess.. Yes.. Here's your answer: $50 / oz. Right.?.

Or better yet: Let's just monetize the National Debt,
in EURO's, than declare it ZERO, as they expire worthless.

Regards
ThaiGold

SteveH (10/30/00; 01:36:08MT - usagold.com msg#: 40239)
partial repost
www.kitco.com
CompGeek quote below:
**
To quote Emerson in this regard... "The ingenuity of man has always been dedicated to the solution of one problem, -- how to detach the sensual sweet, the sensual strong, the sensual bright, &c., from the moral sweet, the moral deep, the moral fair; that is, again, to contrive to cut clean off this upper surface so thin as to leave it bottomless; to get a one end, without an other end."

This then is the situation with derivatives. They have taken a device, designed to transfer risk, not realizing that risk/reward go hand-in-hand, and have cut off the reward part, and leave the risk go ito a corner. Woe be the holder of that risk-with-no-reward.
**

SteveH (10/30/00; 01:20:32MT - usagold.com msg#: 40238)
comment
http://csf.colorado.edu/forums/longwaves/oct00/msg00174.html
First, Oro, sink your teeth into the link.

Next, ThaiG: One possible scenario would be a valuation of US gold such that 50% of it was marked to a value that would retire the US debt, leaving 50%. So, what would that make gold worth? 4,050 tons at $6Trillion? Anybody care to tell us what an ounce of gold would be worth under that scenario?

ThaiGold (10/30/00; 00:28:28MT - usagold.com msg#: 40237)
Boxing Match
Attn: THX-1138 (10/29/00; 23:51:49MT - usagold.com msg#: 40235)
THX-1138:

I didn't see the movie. But in your analogue, I envision Rocky
as being the US Dollar. And the EURO being the USSR boxer
initially being narrow mindedly favored in a parochial way. And
the much-hated outsider (Rocky) eventually (re)gaining their
affection when their favorite is shown to be the wimp that he
really is. No staying power.

I'll bet you, a $50 Eagle to your 300 EURO's, that Rocky wins.

Regards,
ThaiGold@OperaMAil.com

ThaiGold (10/30/00; 00:16:03MT - usagold.com msg#: 40236)
What's REALLY Inflated.?.
Attn: elevator guy (10/29/00; 23:38:43MT - usagold.com msg#: 40234)
elevator guy:

Well said. You made several good points.

My take, is that indeed, inflation is covered up and rampant.
But we should all ask ourselves: What's REALLY inflated.?.
My answer to that, is: The US Dollar, of course. And by a
factor of about six times it's original (true/uninflated) value.
In other words, this example:
Gold at $300 / oz in todays faked/inflated dollars, should
really more realistically be: $50 / oz in UnInflated dollars. And
indeed, doesn't the US Treasury still carry all 8100+ tonnes of
our Gold on their books at a logical $46 / oz, even today.?.

The government knows this. And in the inevitable outcome of
the dollar going "south" is that, the only way they can quickly
and easily (and fairly) rescue the harsh situation is to freeze
some markets, ban some destabilizing derivitive gambling,
and peg the US Dollar to it's ultimate saviour: $50 GoldEagles.

It's not such an unthinkable think. Else why would those nice
coins have been minted at such an unrealistic (?) Face Value
in the first place.?. They've known it all along, and are keeping
it as their last resort ace in the hole life preserver. Life as we
know it, here in the comfortable USA. And consumer of last
resort to the world. There is no other nation nor group of them
(such as the ECU) that could step-in and take that place. We
(USA) are indispensible to the world. And they know that.

Talk of a EURO, or whatever, doing "better", is nonsense and
pure folly. Wishfull thinking at best, by agendized persons
who put forests before us, hoping we will not see the trees.

Do not, anyone, underestimate the US Government's power
and ability (devious or otherwise) to maintain world superiority
of their currency as the international standard of settlements.

I have previously put-forth a detailed scenario. Nobody has
seen fit to put-forth a more logical one, indeed, infact, none
whatsoever. I guess that speaks well enough to the issue.

Cordially,

ThaiGold@OperaMail.Com

ViewYesterday's Discussion.

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