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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...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

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WELCOME TO THE ARCHIVES!

ARCHIVED DISCUSSION FROM 11/30/2001
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Solomon Weaver (11/30/01; 23:57:03MT - usagold.com msg#: 66180)
Doug Noland's Credit Bubble Analysis published today is an exceptional one.
http://www.prudentbear.com/credit.htm
I read his stuff almost every week...and this week he takes a look at the Great Debate....deflation or inflation.

POS

Gandalf the White (11/30/01; 23:48:24MT - usagold.com msg#: 66179)
Waverider (11/30/01; 22:44:50MT - usagold.com msg#: 66175)
Thanks Waverider!!! Mr. David Walker explains it much better than I. ---- AND it shows that he thinks the same, but much faster than I !!!
<;-)

goldquest (11/30/01; 23:12:21MT - usagold.com msg#: 66178)
contest
$$$$$289.50$$$$$

Solomon Weaver (11/30/01; 23:03:28MT - usagold.com msg#: 66177)
(No Subject)
Price Guessing Contest
$$$$$$$280.50$$$$$$

mikal (11/30/01; 22:54:23MT - usagold.com msg#: 66176)
Price Guessing Contest
$$$$$$274.00$$$$$

Waverider (11/30/01; 22:44:50MT - usagold.com msg#: 66175)
Gandolf the White #66174
http://www.gold-eagle.com/editorials_01/walker111901.html
Sir,this editorial of November 19th 2001 may be of interest to you.
Cheers,
Waverider

Gandalf the White (11/30/01; 22:18:32MT - usagold.com msg#: 66174)
OOPS --- that one did not work -- TRY this one !!
http://pacific.commerce.ubc.ca/xr/plot.html
enter One Oz Gold vs. the SA Rand and get plot !
<;-)

Gandalf the White (11/30/01; 22:14:09MT - usagold.com msg#: 66173)
Black Blade (11/30/01; 21:17:42MT - usagold.com msg#: 66169)
http://blacktusk.commerce.ubc.ca/cgi-bin/fxplot
Take a look at the LINK which shows that the SA Gold Miners are getting much better return because of the weakness of the Rand to the US$ in which they sell their GOLD !
<;-)

Waverider (11/30/01; 22:07:59MT - usagold.com msg#: 66172)
Musings....
Argent: 66053
A fun read. On behalf of the neophytes with a thirst for truth and a spirit of inquiry - thank you.

Ski: 66144
Thanks for taking the time to post the info from the conference. Could you provide conference information -where/when, etc. or others similar (US/Canada/Europe)hope that's not out of bounds site steward.

Cavan Man: #66158
I learn from you, so please don't admit to me that you're not very bright - it doesn't reflect well on me! Sounds like "animal instincts" and they're usually right 99% of the time!

Black Blade: 66151
Very informative - thank you. Is it possible to predict the *way* in which these variables play out? There's the surprise economic event - Enron, there's Argentina on the brink of default (I think we'll see a "Bank Holiday" declared for Monday), and there's the Japanese banking sector, as you pointed out. Do you see this Global Financial Meltdown as a slow "rippling effect" played out over time or a sudden, unexpected tidal wave? In either event I agree with - I think things are going to get very, very ugly. Maintaining self-sufficiency is the only way to prepare and it bears repeating again and again.
Cheers,
Waverider

Gandalf the White (11/30/01; 22:02:50MT - usagold.com msg#: 66171)
UPDATE ------GC1Z Price Guessing Contest
Progress Report as of 11/30/01 21:30MT
------
USAGOLD (11/29/01; 19:37:04MT - usagold.com msg#: 66079)
HEAR YE! HEAR YE!! A POSTING CONTEST CALLING UPON YOUR MOST POWERFUL, WELL-HONED & ERUDITE SKILLS!! AND THIS IS GOING TO BE A GOOD ONE. .
In addition to the posting contest, we will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex -- the December contract. Each entry must be surrounded by $$$$$$ dollar signs as follows $$$$$30,000$$$$$. The winner -- he or she who comes closest to that closing price -- will receive a one tenth ounce Austrian Philharmonic.
----
USAGOLD (11/29/01; 19:41:44MT - usagold.com msg#: 66080)
Contest!!
I neglected to put a close date on the price guessing contest. All entries must be posted by 5pm MST Tuesday, December 4th.
----
USAGOLD (11/29/01; 21:07:22MT - usagold.com msg#: 66096)
All. . .Contest!!
I have the good news that my far-seeing and wizardrous friend, Gandalf the White (who I predict will be starring in a movie real soon) will be monitoring the price guessing contest. Let's make the guesses in 50¢ increments.
====
*****300.00*****Max Rabbitz (11/30/01; 20:07:20MT
$$$$$$296.50$$$$$$tedw (11/30/01; 19:50:42MT
$$$$$ $292.50 $$$$$darkhorse (11/30/01; 18:48:35MT
$$$$$287.75$$$$$Hydro (11/30/01; 20:53:23MT
$$$$$282.50$$$$$ uponroof (11/30/01; 20:57:34MT
$$$$$ 281.00 $$$$$VanRip (11/30/01; 21:05:14MT
$$$$$$279.50$$$$$$The CoinGuy (11/29/01; 21:48:53MT
$$$$$$ 278.50 $$$$$$Broken Tee (11/30/01; 10:52:21MT
$$$$$277.5$$$$$Gandalf the White (11/29/01; 20:17:49MT
$$$$$277.00$$$$$Waverider (11/30/01; 01:23:24MT
$$$$$$276.60$$$$$$wiley (11/29/01; 22:47:01MT
$$$$$$$276.50$$$$$$$goldenpeace (11/30/01; 04:45:06MT
$$$$$276.00$$$$$ cwa (11/29/01; 21:29:00MT
$$$$$$ 275.00 $$$$$$ Gimli_ (11/29/01; 22:00:38MT
$$$$$274.50$$$$$Black Blade (11/29/01; 21:54:25MT
$$$$$$ 273.50 $$$$$$$ Christian (11/30/01; 06:41:42MT
$$$$$272.50$$$$$Mythical (11/30/01; 18:08:12MT
$$$$$ 272.00 $$$$$Henri (11/30/01; 11:44:46MT
====
Lots of room for the CORRECT Price !
<;-)










Black Blade (11/30/01; 21:36:32MT - usagold.com msg#: 66170)
Argentina May Dollarize Peso Deposits
http://biz.yahoo.com/rb/011130/business_economy_argentina_dc_3.html

Snippit:

BUENOS AIRES, Argentina (Reuters) - Argentina could be poised to convert peso bank deposits into dollars and temporarily limit bank withdrawals to halt a run on the fragile financial system, a Central Bank source said late on Friday. Panicky Argentines lined up at banks and dried up cash machines in downtown Buenos Aires on Friday amid fears of a freeze on their savings -- still mindful of measures taken by ex-president Carlos Menem who froze deposits and turned them into bonds overnight to stop a bank run in 1989.

Black Blade: Argentines run on the banks while the banks are about to go tits up. Argentine bankers now consider giving up control of monetary policy and be at the mercy of the US FED. "Interesting Times"


Black Blade (11/30/01; 21:17:42MT - usagold.com msg#: 66169)
Rand in free fall
http://www.news24.co.za/News24/Finance/Markets/0,4186,2-8-21_1115518,00.html

Snippit:

Johannesburg - The rand crashed to fresh lows against major currencies on Friday as economists and market watchers battled to make sense of the currency's rapid decline.

Black Blade: I think that it was within the last couple of years that Mark Mobius of Templeton Funds had visited with SA government officials and had made the recommendation that they back the Rand with SA Gold. Oh well, another missed opportunity.


Black Blade (11/30/01; 21:10:12MT - usagold.com msg#: 66168)
AngloGold may give up Normandy battle
http://www.busrep.co.za/html/busrep/br_frame_decider.php?click_id=345&art_id=ct20011129212507566P524222&set_id=60

Snippit:

Johannesburg - AngloGold would walk away from the fight for Australian gold producer Normandy Mining if its revised bid failed, Bobby Godsell, the chairman and chief executive of AngloGold, told analysts yesterday. AngloGold raised the stakes in the battle for Normandy yesterday by adding a $450 million cash component to its initial $1,65 billion share offer after Normandy went ahead with its recommendation of a rival bid from Newmont Mining in the US. Should Newmont make a higher counter bid, AngloGold said it would be willing to sell the shares it had secured and use the profit to recoup some of its costs.

Black Blade: Throwing in the towel or a reverse psychology bluff? AngloGold needs Normandy or they need to quickly acquire another large Gold producer. This should get "Interesting."


VanRip (11/30/01; 21:05:14MT - usagold.com msg#: 66167)
Contest
$$$$$ 281.00 $$$$$

The Invisible Hand (11/30/01; 21:04:31MT - usagold.com msg#: 66166)
FT's Lex column: A drama not a crisis
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3NR1AFOUC&live=true
Trading exposures to Enron are also large. Many, however, are deliverable or can be netted off against other positions. If Enron's implosion does not drag down the rest of the energy sector - and it need not - the banking system will survive. Most banks will lose more from lending to airlines than from Enron.

Remember Y2k, asks Philip Coggan in the same December 01, 2001 FT?
The Enron collapse was also a reminder of the kind of corporate disaster that often accompanies recessions and equity bear markets. It would be a surprise if Enron was an isolated case. As the saying goes "recessions uncover what auditors do not". http://markets.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT32DU09OUC&live=true&tagid=ZZZDQOQD20C&subheading=UK%20equities

uponroof (11/30/01; 20:57:34MT - usagold.com msg#: 66165)
ORO/Solomon Weaver/sector/Cavan Man
ORO-Thanks for your very detailed and deep observations on the Enron scandel.

I understand your condemnation and use of REGULATION regarding the Greenspan put and pump. But where does Glass-Steagal fit in? Couldn't that be considered deregulation?

Commercial banks have become investment-lending-advising-underwriting- etc, etc institutions to those they serve. It stinks to say the least. This may be where conflict of interest became honor system status.

That little moral hazzard comes nowhere near the elitists and their agendas. Reading Chapman tonight, he points out:

"...Senator Phil Gramn's wife, Wendy, has been on the Enron board since 1993. She was appointed five weeks after she left the Chairmanship of the CFTC. She had relaxed regulations on trading of energy futures and derivatives. Due to the fact that Enron controls distribution of large supplies of energy, its futures' traders have undue influence over prices. What they had was tantamount to insider trading. If you had that position in the stock market you'd go to jail..."

And so this seems ingrained or germane to our society. From Wall St to Capitol Hill. Which raises a question if you would be so kind: Did Japan exhibit the same regulatory recklessness before their collapse? Can we expect a similar fate assuming ceteris paribus? (with all other factors remaining the same) Or will it be 'different this time'?

***

Solomon Weaver (or anyone else in the know) Thanks for that post on China (and the one on jewellery). A while ago saw a report on chinadaily.com which stated that the producers would not be participating in this market. Now it appears they will be. PRC passing up cheap gold and allowing it to be sold at fair market value? It just doesn't sound right. If anyone knows whether China's miners will be selling on the new market, and what their terms are, please post.

***

sector-Saw a golden retreiver today. He had a deformed financial launching platform for a tail. It was of course, made of gold. Very heavy. Everytime he tried to wag it, his body shook instead. Interest rates very high for this freak as he walks down the street. Some think he's rabid. Now where do you put the bullet? In the body or the tail?

***

Cavan Man- 66154 & 66158 thanks.

***

$$$$$282.50$$$$$ (NDY situation pops)


have a great week end all.


Hydro (11/30/01; 20:53:23MT - usagold.com msg#: 66164)
contest
$$$$$287.75$$$$$

Horatio (11/30/01; 20:46:28MT - usagold.com msg#: 66163)
Greenspans finger
Greenspans latest speach with its veiled sub-linimal message was trying to put doubts in the minds of investors about the EURO.
The EURO has him running scared ,he is running around trying to poke his finger into all the holes sinking the American economy. He thinks he can give investors no other option than the American Dollar,close off off-shore options,close off Euro Dollar threat,close off Gold and Silver options,etc.What he dosen't realize is this diversity of investments is Americas strength its a resource to be drawn upon in times of stress by individuals and therefor will serve to hold up the purchasing power of the U.S. consumer.I'm afraid he spent too much time with Clinton and now believes in "spin" and the power of the big lie.He wants the resources in the hands of the banksters not individuals.
He has become irrelevent since the return on U.S.bonds went negative when you include inflation and taxes.His remaining 2 % is nothing but a fictional ability to control the economy .Interest rates can go to zero and we would hardly notice.Look at Japan.Listening to him is about as inportant as lisiting to Gabby Abby at Goldman Sachs.
Couple this with Treasury Sec.O'Neill being a lackey to Robert Rubin and what you got is the Financial system being captive to traders or is that"traitors" at Goldman Sachs and fiat Federal Reserve that thinks the answer to all problems is print more money.Got problems at Enron?Print money,got problems in Afghanistan?print money,got problems in Argentina?,print money.Got problems in stock market? ,print money to buy dirivatives with. Greenspan is giving us the finger !

Max Rabbitz (11/30/01; 20:07:20MT - usagold.com msg#: 66162)
TEDW...I'll see you and raise you 0.50
I've got *****300.00*****
and off to bed. Big day of leaf raking tomorrow.

tedw (11/30/01; 19:50:42MT - usagold.com msg#: 66161)
(No Subject)
$$$$$$296.50$$$$$$

Horatio (11/30/01; 19:47:17MT - usagold.com msg#: 66160)
Cayman Islands just signed away thier economy
AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE
GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
INCLUDING THE GOVERNMENT OF THE CAYMAN ISLANDS, FOR THE EXCHANGE OF
INFORMATION RELATING TO TAXES



The Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern
Ireland, including the Government of the Cayman Islands, ("the parties") desiring to facilitate the exchange of information
relating to taxes, have agreed as follows:



Article 1

Scope of the Agreement

The competent authorities of the parties shall provide assistance through exchange of information relating to the administration
and enforcement of the domestic laws of the parties concerning the taxes and the tax matters covered by this Agreement,
including information that may be relevant to the determination, assessment, verification, enforcement or collection of tax claims
with respect to persons subject to such taxes, or to the investigation or prosecution of criminal tax evasion in relation to such
persons. The territorial scope of this Agreement, in respect of the United Kingdom, is the territory of the Cayman Islands.



Article 2

Jurisdiction

To enable the scope of this Agreement to be implemented, information shall be provided in accordance with this Agreement by
the competent authority of the requested party:

(a) without regard to whether the person to whom the information relates is, or whether the information is held by, a resident or
national of a party, and

(b) provided that the information is present within the territory, or in the possession or control of a person subject to the
jurisdiction, of the requested party.



Article 3

Taxes Covered

The taxes covered by this Agreement are federal income taxes; provided that the types of tax covered may be extended by
agreement between the parties in the form of an exchange of letters.



Article 4

Definitions

In this Agreement ­

"competent authority" means, for the United States of America, the Secretary of the Treasury or his delegate,
and for the Cayman Islands, the Cayman Tax Co-operation Authority or a person or authority designated by it;

"person" means a natural person, a company or any other body or group of persons;

"tax" means any tax covered by this Agreement;

"requested party" means the party to this Agreement which is requested to provide or has provided information in response to a
request;

"requesting party" means the party to this Agreement submitting a request for or having received information from the requested
party;

"information gathering measures" means judicial, regulatory or administrative procedures enabling a requested party to obtain
and provide the information requested;

"information" means any fact, statement, document or record in whatever form;

"items subject to legal privilege" means

(a) communications between a professional legal adviser and his client or any person representing his client made in connection
with the giving of legal advice to the client;
(b) communications between a professional legal adviser and his client or any person representing his client or between such an
adviser or his client or any such representative and any other person made in connection with or in contemplation of legal
proceedings and for the purposes of such proceedings; and

(c) items enclosed with or referred to in such communications and made ­

(i) in connection with the giving of legal advice; or
(ii) in connection with or in contemplation of legal proceedings and for
the purposes of such proceedings,

when they are in the possession of a person who is entitled to possession of them.

Items held with the intention of furthering a criminal purpose are not subject to legal privilege.

"criminal tax evasion" means wilfully, with dishonest intent to defraud the public revenue, evading or attempting to evade any tax
liability where an affirmative act constituting an evasion or attempted evasion has occurred. The tax liability must be of a
significant or substantial amount, either as an absolute amount or in relation to an annual tax liability, and the conduct involved
must constitute a systematic effort or pattern of activity designed or tending to conceal pertinent facts from or provide
inaccurate facts to the tax authorities of either party.



Article 5

Exchange of Information Upon Request

1. The competent authority of the requested party shall provide upon request by the requesting party information for the
purposes referred to in Article 1. Such information shall be exchanged without regard to whether the conduct being investigated
would constitute a crime under the laws of the requested party if it had occurred in the territory of the requested party.

2. If the information in the possession of the competent authority of the requested party is not sufficient to enable it to comply
with the request for information, the requested party shall take all relevant information gathering measures to provide the
requesting party with the information requested, notwithstanding that the requested party may not, at that time, need such
information for its own tax purposes.

3. If specifically requested by the competent authority of the requesting party, the competent authority of the requested party
shall provide information under this Article, to the extent allowable under its domestic laws, in the form of depositions of
witnesses and authenticated copies of original records.

4. Each party shall ensure that its competent authority, for the purposes of this Agreement, has the authority to obtain and
provide upon request

(a) information held by banks, other financial institutions, and any person, including nominees and trustees, acting in an agency
or fiduciary capacity;

(b) information regarding the beneficial ownership of companies, partnerships and other persons, including in the case of
collective investment funds, information on shares, units and other interests; and in the case of trusts, information on settlors,
trustees and beneficiaries.

5. The competent authority of the requesting party shall provide the following information to the competent authority of the
requested party when making a request for information under this Agreement in order to demonstrate the relevance of the
information sought to the request:

(a) the identity of the taxpayer under examination or investigation;

(b) the nature of the information requested;

(c) the tax purpose for which the information is sought;

(d) reasonable grounds for believing that the information requested is present in the territory of the requested party or is in the
possession or control of a person subject to the jurisdiction of the requested party;

(e) to the extent known, the name and address of any person believed to be in possession or control of the information
requested;

(f) a declaration that the request conforms to the law and administrative practice of the requesting party and would be
obtainable by the requesting party under its laws in similar circumstances, both for its own tax purposes and in response to a
valid request from the requested party under this Agreement.

6. The competent authority of the requested party shall forward the requested information as promptly as possible to the
competent authority of the requesting party. To ensure a prompt response, the competent authority of the requested party shall:

(a) confirm receipt of a request in writing to the competent authority of the requesting party, and shall notify the competent
authority of the requesting party of any deficiencies in the request within 60 days of receipt of the request;

(b) if the competent authority of the requested party has been unable to obtain and provide the information requested within a
reasonable period relative to the nature of the request, or if obstacles are encountered in furnishing the information, or if the
competent authority of the requested party refuses to provide the information, it shall immediately inform the competent
authority of the requesting party to explain the reasons for its inability or the obstacles or its refusal.



Article 6

Tax Examinations (or Investigations) Abroad

1. The requested party may, to the extent permitted under its domestic laws, allow representatives of the competent authority of
the requesting party to enter the territory of the requested party in connection with a request to interview persons and examine
records with the prior written consent of the persons concerned. The competent authority of the requesting party shall notify the
competent authority of the requested party of the time and place of the meeting with the persons concerned.

2. At the request of the competent authority of the requesting party, the competent authority of the requested party may permit
representatives of the competent authority of the requesting party to attend a tax examination in the territory of the requested
party.

3. If the request referred to in paragraph 2 is granted, the competent authority of the requested party conducting the
examination shall, as soon as possible, notify the competent authority of the requesting party of the time and place of the
examination, the authority or person authorised to carry out the examination and the procedures and conditions required by the
requested party for the conduct of the examination. All decisions regarding the conduct of the examination shall be made by the
requested party conducting the examination.



Article 7

Possibility of Declining a Request

1. The competent authority of the requested party may decline to assist
(a) where the request is not made in conformity with this Agreement;
(b) where the requesting party has not pursued all means available in its own territory, except where recourse to such means
would give rise to disproportionate difficulty; or
(c) where the disclosure of the information requested would be contrary to the public policy of the requested party.
2. This Agreement shall not impose upon a party any obligation to provide items subject to legal privilege, nor any trade,
business, industrial, commercial or professional secret or trade process. Information described in Article 5(4) shall not by
reason of that fact alone constitute such a secret or process.
3. A request for information shall not be refused on the ground that the tax liability giving rise to the request is disputed by the
taxpayer.
4. The requested party shall not be required to obtain and provide information which the requesting party would be unable to
obtain in similar circumstances under its own laws for the purpose of the enforcement of its own tax laws or in response to a
valid request from the requested party under this Agreement.



Article 8

Confidentiality

1. All information provided and received by the competent authorities of the parties shall be kept confidential.
2. Information provided to the competent authority of a requesting party may not be used for any purpose other than for the
purposes stated in Article 1, without the prior consent of the requested party.
3. Information provided shall be disclosed only to persons or authorities (including judicial, administrative, and Congressional
oversight authorities) officially concerned with the purposes specified in Article 1, and used by such persons or authorities only
for such purposes or for oversight purposes, including the determination of any appeal. For these purposes, information may be
disclosed in public court proceedings or in judicial proceedings.
4. Information provided to a requesting party under this Agreement may not be disclosed to any third party.



Article 9

Safeguards

Nothing in this Agreement shall affect the rights and safeguards secured to persons by the laws or administrative practice of the
requested party, provided and to the extent that these are not so burdensome or time-consuming as to act as impediments to
access to the information.



Article 10

Administration Costs or Difficulties

1. The requesting party shall reimburse the requested party for direct out of pocket costs of processing each request (including
direct out of pocket costs of litigation directly relating to such request), as agreed by the parties.
2. In the event that compliance with the obligations under this Agreement occasions undue difficulty for either party, either as a
result of the number or complexity of requests, the respective competent authorities shall consult with a view to resolving the
difficulty under Article 11.



Article 11

Mutual Agreement Procedure

Where difficulties or doubts arise between the parties regarding the implementation or interpretation of this Agreement, the
respective competent authorities shall use their best efforts to resolve the matter by mutual agreement.



Article 12

Entry into Force

1. This Agreement shall enter into force when each party has notified the other of the completion of its necessary internal
procedures for entry into force. Upon entry into force, it shall have effect for criminal tax evasion beginning on 1 January 2004,
and with respect to all other matters covered in Article 1 beginning on 1 January 2006.
2. Upon entry into force, the provisions of the Agreement shall have effect with respect to criminal tax evasion for taxable
periods commencing from 2004, and shall have effect with respect to all other matters for taxable periods commencing from
2006.



Article 13

Termination

1. This Agreement shall remain in force until terminated by either party.
2. Either party may terminate this Agreement by giving notice of termination in writing. Such termination shall become effective
on the first day of the month following the expiration of a period of three months after the date of receipt of notice of termination
by the other party.
3. A party which terminates this Agreement shall remain bound by the provisions of Article 8 with respect to any information
obtained under this Agreement.

IN WITNESS WHEREOF, the undersigned, being duly authorised in that behalf by the respective parties, have signed this
Agreement.

Done at Washington, in duplicate, this day of November 2001.

For the Government of For the Government of
the United States of the United Kingdom of
America: Great Britain and Northern
Ireland:



For the Government of
the Cayman Islands:



Retu

Max Rabbitz (11/30/01; 19:44:30MT - usagold.com msg#: 66159)
MSFT
I used MSFT grammar/spell check before posting the last message. Before postingt I had to go back and undue most all the corrections this program made ....but missed the first sentence where this idiot program joined two perfectly good sentences. I take full responsibilty for using it instead of Corel Wordperfect, a much better wordprocessor but unlikely to survive the monopoly wars.

Cavan Man (11/30/01; 19:35:38MT - usagold.com msg#: 66158)
PS: (to my last post)
I am not an intellectual nor am I even very bright. However, when I read of the Enron fiasco and the IMF reforms that would indemnify sovereign nations from private creditors, I know and feel quite deeply that something is terribly, terribly wrong. These last two "current events" are but the tip of the current event iceberg. Let the reader recall the long litany of global monetary/economic/financial FUBAR's post 1987 as well. Feeling bullish? Bon chance and bon voyage.

R Powell (11/30/01; 19:35:03MT - usagold.com msg#: 66157)
Wrong link
http://minecost.com
Even though the first one posted works, this is the one I meant to give.

Max Rabbitz (11/30/01; 19:31:19MT - usagold.com msg#: 66156)
Signs of the times
I saw Maria on CNBC tonight there must be trouble brewing. I thought I saw a little décolletage.......distracted me a little. Best diversion known to man. She wants me to buy some stocks. But...she's got to go a little lower for me to bite .... or maybe a few more beers for me.

I heard Allen Greenspan on the way home from work (PBS). He was saying the Euro is just fine but it just can't compete with good old American productivity. I think he is right in a way. We can fire the un-needed (deadwood) and pile their bones with nary a complaint whenever the profits dip. I have relatively little problem with this in a free market. But we don't have much of a free market left. Our industrial base has been in a depression for a long time while the financial institutions have cleaned up with the high dollar policy ...... thanks to Ruben, Summers and the Central Bank and friends.

As far as I know this is Mr. Greenspan' s first public foray against the coming competition.

I'm looking forward to more of Maria



R Powell (11/30/01; 19:29:00MT - usagold.com msg#: 66155)
Heavy information
http://www.miningcost.com
Anyone (perhaps Black Blade) interested in mine cost spreadsheet models and operating cost information based on verifiable engineering and production data and peer review by mining industry analysts from around the world???

Cavan Man (11/30/01; 18:55:39MT - usagold.com msg#: 66154)
Euro/FOA/ORO (love those acronyms)
"An international currency emerges because it is a solution to an economic problem".

Alan Greenspan 11-30-2001

I love this quote but to pull it entirely out of context is self-serving; much akin to pulling OT/NT verses out of the Bible to make whatever point(s) an individual hopes to make.

Mr. Greenspan likely goes on to paint "the big picture" in this speech (not sorry to say I haven't parsed it all). In the Bible, the "big picture" is also detailed; that being God's relationahip with man in secular space and time. While it is important to understand "the big picture", tiny pixels can illuminate; often as well or better. Whether Scripture verses or Greenspan verses, the points are CLEAR.

Looking in the mirror, the USD looks invincible. Looking at the horizon with the sun rising in the East, the USD looks less than good. Within two years we shall have an excellent indication of whether or not the EURO project is a success and, whether or not our friends FOA/TG and ORO are right or wrong.

While one waits to, "find out", why not own physical gold?







darkhorse (11/30/01; 18:48:35MT - usagold.com msg#: 66153)
$$$$$ $292.50 $$$$$
What the heck...just in case there's a bigger meltdown than expected.

Mythical (11/30/01; 18:08:12MT - usagold.com msg#: 66152)
Contest
$$$$$272.50$$$$$

One must never pass up an opportunity for free gold! Thanks MK.

Black Blade (11/30/01; 17:37:55MT - usagold.com msg#: 66151)
Bank Exposure - Derivatives

The exposure position of many banks is nothing more than a disaster waiting to happen. Jeez, didn't we see this before when LTCM blew up? In October 1998 when currencies from Japan, Russia, and Europe crashed against the strong US dollar, highly speculative currency derivatives cost Union Bank $240 million, Deutsche Bank $770 million, and Credit Lyonnais $2 billion. Yeah, I know that this is not that much cash to blow off, but these are just some minor examples of what can happen when on the wrong side of the trade.

In 1998, US banks held roughly $27 Trillion in derivatives contracts. Today that exposure is roughly $41 Trillion in derivatives (Last night I was going from faulty memory and said that JPM was exposed to about $47 Trillion in derivatives - I was wrong). However, $41 Trillion in exposure to derivatives contracts is more than four times the entire US Gross Domestic Product! That is about $142,000 for every man, woman, and child in the US. Yeah, I know all about leverage, but gimme a break!

Over 400 commercial US banks trade in derivatives (not to mention numerous other institutions and US corporations). Any surprise economic event could trigger a chain of events that could theoretically result in unheard of losses at US banks and effectively threaten the entire banking system. If the FED was so concerned that a piss ant operation like Long Term Capital Management could collapse the US economy, then the Enron affair could possibly trigger a cascade of failures of epic proportions. There is a name for this kind of derivative risk - "Systemic Risk." The US economy is in a very sensitive position with a deepening severe recession that threatens to exceed the pain of the Great Depression, in effect a Global Financial Meltdown.

The point is the extreme leverage provided by derivatives contracts can cut both ways. Also consider the growing consumer and corporate debt that I harp on. The banks are also exposed to growing levels of bad debt. A prime example is the Japanese Banking sector. Mix bad debt and a few badly played derivatives and you can begin to see a very "Grim" picture develop. Yep - "Systemic Risk' - and as America goes, so goes the World - Global Financial Meltdown.

In a word - "GRIM"

- Black Blade


ORO (11/30/01; 16:36:08MT - usagold.com msg#: 66150)
Greenspan speech
Watched the Euro 50 speech. Could not find anything much to disagree with. Some of his words could have come right out of my own postings and work, and no, I did not write his speech - nor did I give it, if anyone wants to ask that one again. I just hope he is not too cocky about the euro and about fiat currencies in general. Hopefully the competition with the Euro will be that, rather than a "gold war". While the first restrains both Fed and ECB, the latter makes both institution's efforts meaningless.

I also hope neither Greenspan or anyone else actually take Summer's work on the "Gibson effect" seriously, since it does not deserve it. It is a typical mathematical economist's problem: the equations do not show cause and effect because they just relate the statistics to each other, and thus do not necessarily elucidate more than they hide.



Waverider (11/30/01; 16:24:07MT - usagold.com msg#: 66149)
Argentina: "Have faith in the banks"
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APAf70hW2QXJnZW50
Snippit:
Buenos Aires, Nov. 30 (Bloomberg) -- Argentina's peso futures plunged and depositors lined up to buy dollars as concern grew the government will devalue the currency or freeze accounts. Bonds fell and overnight rates climbed as high as 900 percent.

Economy Minister Domingo Cavallo vowed to keep the decade-old system that fixes the peso at par with the dollar and appealed to Argentines to have faith in banks. As crowds gathered inside Banco de la Nacion's main branch, the government said foreign reserves fell to their lowest level since Sept. 7, a day before the International Monetary Fund provided emergency loans.

``The momentum is out of their control right now,'' said Charles Cassel, who helps manage $450 million in emerging market assets at Standard Asset Management. ``They've pulled every rabbit out of their hat at this point. The question is, what kind of policy decisions do they have left to them?''

Banks, already struggling after clients pulled $12.2 billion, or 15 percent of deposits, since June, will incur further losses after today's swap of government debt for lower-value securities, part of a restructuring aimed at reducing Argentina's financing costs. The government, which ran short of cash to pay its debts after a recession cut tax revenue, this week ordered banks to limit deposit rates to help keep them solvent.

``There are people taking out deposits and there is expectation of devaluation, and this is horrible,'' Cavallo, who helped set up the dollar peg in 1991 in a previous stint as minister, said at a press conference. ``If people begin to have confidence and don't pay attention to the doomsayers who talk of devaluation, this will help so that all of the problems start to reverse themselves.''

Cheaper Rates

Argentines flocked to state-owned Banco de la Nacion, where they may exchange pesos at the lowest rates in the country, or 1.006 pesos per dollar. Citibank NA charged its customers 1.015 pesos per dollar. At the Banco Piano private exchange house, customers paid 1.04 pesos per dollar.

The central bank's cash and gold reserves, which back the exchange rate, dropped by $495 million Wednesday to $16.9 billion. The bank used reserves in November to help the government pay its debts.

Argentina is defaulting on at least $95 billion of bonds to try to free up cash to revive economic growth. An initial debt exchange that closes today and is aimed at domestic investors will swap more than $40 billion of debt held by domestic banks, Cavallo said. A similar swap with overseas investors is planned."




ORO (11/30/01; 15:55:53MT - usagold.com msg#: 66148)
sector - sheep and wolves, JPMC and Ness
The assumption that Ness was not coexisting with the Mafia is incorrect. He was simply working some of the competitors against the others. Had he not done so, he would have been dead, since the resources available to the mafia as a whole to put against him would have overwhelmed his organization. He could only survive by joining one group within the Mafia against the rest.


The JPMC mess follows the same pattern as any other credit expansion. This case was gold. A traditional gold credit bubble formed by JPMC and associated banks with the assistance of the Fed and the other BIS members in supplying gold liquidity at artificially low rates. Thus leading to the gold derivatives expansion we are familiar with. This same date in 1994 coincides with the BOJ lowering interest rates to 1.75% in late 93 and to 1% in Apr 95, and to 0.5% in Sep 95.


As to Summer's work, it is wrong because he has mixed causes and effects. People do not trade gold and other money. We trade real present economic resources for other current and future real economic resources. We trade them THROUGH gold and other monies. We distinctly do not trade real resources for money. At the end of a trade what we do not have is money.

A bond or a bank loan to a business may be denominated in monetary form but both lender and borrower are trading real resources so long as there is no "money out of nothing" in which case actual resources are traded for money. If a bank is the lender, and it creates "money out of nothing" rather than use depositor funds in order to provide the loan, then it is allocating resources of someone other than its depositors to the borrower - which is where one finds a harmful credit expansion. (The bank may find depositors AFTER the loan is made, by raising interest rates offered, which would undo the "money out of nothing" action if it had deprived another bank of depositor funds.)

Summers never saw the reason for the "Gibson effect": the low and worsening real return (of future resources over current resources saved) during the 70s period he studied. Higher and growing government spending during this time coupled with high effective tax rates (through 1, direct tax; 2, government borrowing; 3, monetary expansion) and a rain of regulatory burdens on industry served to lower the real return on financial assets: i.e. higher taxes lowered the nominal monetary return from business, regulatory compliance costs lowered returns, and government spending funded by monetary expansion caused prices to rise as government outbid the private sector for resources, thus further lowering real returns.

Since outstanding financial assets (backed by real productive assets from factories to service companies to mines etc.) were providing consecutively lower real returns as government spending, taxing, and regulatory costs expanded further each year, people simply stopped allocating savings to future production and kept them physically at home, in the form of canned goods, full closets, gold, antiques, frozen meat, while businesses kept theirs in warehouses, and coal dumps, lumber piles,and the like.

Thus prices of anything that could be accumulated at low loss rates rose relative to financial assets and the businesses they represented. Gold, having a much lower bid-ask spread than any other commodity, and being a rarity as well, simply rose further than other commodities and rarities did. Gold and Silver were starting to resume their traditional monetary positions resulting from their natural characteristics as commodities. The monetary premium, however, was in a continuous process of being transferred from all currencies in which financial assets are denominated, to a broad range of commodities - not just gold.

The trade of the day was to borrow currency and buy commodities. Only when Volcker finally raised rates above people's price inflationary expectations and thus punctured the commodity bubble, did commodities start returning to normal relationships to labor income, and only when Reagan's promise of lower taxation government spending and lessened regulatory burdens was accepted by the markets did financial assets start rising.

Financial assets, by the way, being debt instruments for the most part, are the main source of demand for monetary balances, which are accumulated largely by the borrowers as interest and principal payments come due, and are mostly spent immediately upon receipt by the lenders receiving them - largely on other financial assets (again, backed by actual productive enterprises).

If you plot GDP as a return on financial asset values, you will see that it grows and falls according to government tax and spending, as well as according to regulatory costs. Thus GDP went from 60% of financial assets in the early 1960s to 106% in 1980, and back down to 40% in 2000. It has gone up to 53% since then.

If you apply to GDP figures the double sided tax effect of government (once by removing income from private allocation, then by using the funds to remove resources from private allocation - thus a balanced budget of Federal Local and State budgets of 20% of GDP is equivalent to an overall tax rate of 36%) and add inflation and government borrowing as taxes, you see a flattening downward curve of "after tax GDP" as a return on financial assets. The value goes from 35% during Kennedy's short years, to about 45% in the pivotal 1980 turnaround, going back down to 30% in 1990, and to 30% currently, after passing a short period under 25%.

This reflects various effects, including the effects of the baby boom and GI generation on rates of return on investment, as boomers first came as added demand and reduced savings in the late 50s and early 60s, thus lowering profits and then again as added income earners in the 70s which increased demand further while the GI generation retired - thus eliminating productivity born of experience. It also reflects the discounting of future tax and spending increases or decreases on the value of financial assets. These expectations were growing along with government in the 70s, and cut down in the 80s, accounting for a large portion (if not all) of the rise of the "after tax" GDP returns.

The effective tax rate for the calculation grew from 42-44% in the early 60s to 60-61% in the early 1980s, 55-60% in the rest of the decade, and back down to 47% in 2000. Government spending and taxation had grown from a bottom level of 46.0% in late 2000, to 47.2% as of June this year. If the markets had discounted a reversal of the falling trend as government spending acceleration was discussed in Congress, this may very well have contributed to the sudden dry-up of investment funding well before other business issues came to the fore.




site steward (11/30/01; 14:16:03MT - usagold.com msg#: 66147)
...and life goes on
Ted Kooser, a Nebraska Poet, has been a good voice in particular on behalf of professional engineers and architects; and here we see him convey this sentiment of life going on as inspired from recent tragic events. Thanks for the lift, Ted.

Towers
It is the fate of great towers to fall.
How they presume, how they shine with pride!
Behind each gleaming shield there is always
a flaw, some hidden weakness, and fate
will ferret it out. A cracked rivet will snap,
a rat in the wall will gnaw the insulation
from a wire. And sometimes the pure hubris
of towers drives men so wild with hatred
that they give their lives to bring them down.
We stand in the ashes, stand coughing in the dust
from thousands of years of these lessons,
while the architect climbs on his stool,
brushes the broken glass from his paper,
and draws the next verical line.

The CoinGuy (11/30/01; 14:14:15MT - usagold.com msg#: 66146)
Ski
Just wanted to let you know, I appreciate your efforts recapping the conference. I didn't realize there was going to be such a lineup of speakers. I should have gone...

ALL: I caught the last minute or so of Greenscams diatribe, was there a message in there?

The CoinGuy

Gimli_ (11/30/01; 14:04:32MT - usagold.com msg#: 66145)
Greenspan talks about Euro & commodity based fiat currency
http://www.federalreserve.gov/boarddocs/speeches/2001/200111302/default.htm
Remarks by Chairman Alan Greenspan
The euro as an international currency
Before the Euro 50 Group Roundtable, Washington, D.C.
November 30, 2001
---------snipped excerpt below--------
Contracts can be written in terms of ounces of gold or, more conveniently, in terms of a unit of exchange. The pound sterling, of course, was originally a pound of silver. The U.S. dollar was originally defined for legal purposes in the Coinage Act of 1792 as either 0.05 ounces of gold or 0.77 ounces of silver.

In today's world of government-issued monies, the unit of currency is not, and need not be, defined. It circulates as legal tender under government fiat. Its value can be inferred only from the values of the present and future goods and services it can command.

In the international arena, however, no overarching sovereign exists to decree what is money. Instead, a myriad of private agents must somehow reach agreement on which currency to use as an international currency.



ski (11/30/01; 13:51:31MT - usagold.com msg#: 66144)
New Opportunities Conference .... cont.


ADRIAN DAY
Terrorist war has unknown consequences. Dollar will fall and gold will improve. Debt levels are much too high. SM is still far too expensive and will fall further. We simply have not seen the type of sentiment that would be indicative of a bottom. Mutual funds now only have 5% cash. The potential for things to get much worse is very high. For gold, the story is getting better all the time. Only a dollar fall will result in a sustained gold rise. There are few silver stocks avaliable. Natural gas: Higher production has not come on stream.

ROBERT CHAPMAN
Q? why did you recommend taking physical possession of COMEX silver. Ans. 1. you need to have physical possession of silver. 2. it will put pressure on the shorts. Was positive about GATA. Sees sharply lower dollar and higher interest rates. Real estate on average to drop 25%. Real estate is overpriced and people are becoming more conservative. There will be a re-test of the DOW lows.

DAVID TICE
(Drew the biggest crowd and was given the most time to speak. Manages a prominent bear market stock fund that has done very well since the top) Continue to be short the SM and hold gold stocks. Govt policies cannot overcome the busting of the bubble. Gold shares represent the investment opportunity of the century. Tax cuts are too small in relation to SM losses. We are now seeing "what the hell" spending. Its going to hell, so enjoy it while you can. Earnings are crashing but wall street expects higher EPS for 02' ... this won't happen. This time it is different. Super bear markets usually follow super bull markets. Inflationary pressures are channeled toward asset prices. Real estate refinancing is a boom and a bubble. The 30 year rebound in interest rates is a major danger sign. Credit quality is falling rapidly.

END OF REPORT FROM THE NEW OPPORTUNITIES CONFERENCE

................
R. Powell #66065
This is one of the few gold, silver, PM, and mining conferences that remain for investors to visit. The confrence is FREE to investors. They pay each speaker about $1,000. They charge each exhibitor about $4,500. It provides an opportunity for mining company PR, newsletter writers to meet their readers, and for anyone to ask questions to anyone. In most cases everyone freely exchanges information. The fact that so few people attend the free educational program suggests how much out of favor the mining & PM complex is with the average investor. There were over 20 featured speakers and about 70 companies represented. There are no internet links. You have to be there.


site steward (11/30/01; 13:49:45MT - usagold.com msg#: 66143)
Here Comes the Sun
George Harrison
1943-2001

Among friends and fans, that time is too brief. But thanks for the incredible legacy and gift of music you've left behind as you now move on to bigger and better. "Here comes the sun"...indeed. May you always glow with gold.

On a more personal note, I believe I'll make a special point to place an order with MK today for a small cache of gold sovereigns (British) -- to hold as a personal memorial of the "quiet Beatle", glowing with gold... here comes the sun.

an admiring fan,
Randy

USAGOLD (11/30/01; 13:03:04MT - usagold.com msg#: 66142)
HEAR YE! HEAR YE!! A POSTING CONTEST CALLING UPON YOUR MOST POWERFUL, WELL-HONED & ERUDITE SKILLS!! AND THIS IS GOING TO BE A GOOD ONE. . . . . . .
- - - - - - - --

You know what, Dark horse, I've been thinking what you've been thinking.

We're due for a contest and it would be productive to tap the collective wisdom around this noble Table. I agree.

But how to break the psychic dam and get the ideas to flow?

Nothing like a challenge to match the quality of the poster and lurkers present. This idea came to me while having
lunch today and browsing over the latest GRANT’S Interest Rate Observer. It seems that one of James Grant's
friends -- a fellow named Paul L. Kasreil who does economic research for Northern Trust Co. -- posed a most
far-reaching question. One that is making the rounds among people who talk markets as well as those who enjoy the
same as a worthy pre-occupation.

The question is this:

------------------------------------ Alan Greenspan: Maestro or Music Man? ----------------------------

The book, "Maestro", was the subject of a great deal of conversation here when it came out several months ago and
opinion was pretty much divided on it -- some thought it characterized a master at the peak of his powers. Others
saw it as a whitewash of a Fed chairman who simply injected liquidity willy-nilly at a time when the world had no
where to turn but the dollar. Some called him genius. Others called him lucky. Still others called him confused --
pumping money into the system at one turn and deriding "irrational exuberance" the next.

But Maestro or Music Man?? Now that's intriguing, and very much worth a contest.

For those of you scratching your head at the choice, I will remind you that The Music Man, one of America's
favorite all-time musicals, is the story of band director/con artist. The following from famed critic, Clifford Ridley
captures the Music Man for our purposes:

"Bierko is a younger Hill than Preston, yet with his slicked-back hair, his self- dramatizing gestures and his roving
eyes constantly scouting for trouble, he's every inch the two-bit con man. As advertised, he delivers Hill's fervid
patter with dash and musicality; and at the end, when he's unmasked by the unconditional love of a good woman,
he's quite touching. And he has a splendid foil in Luker, who sings Marian's arching melodies in a limpid soprano
and persuasively metamorphoses from chilly skeptic to loving co-conspirator. She also has a fine way of saying
"Ssssh" - an admonition, fortunately, that this ebullient production mostly ignores."

And then here's a passage from the preface to Bob Woodward's "Maestro" which more than adequately captures the
essence of the Maestro side of the coin:

"Greenspan is slated to remain chairman of the Federal Reserve until 2004. Not only is he a major figure in the
world's economic past, he is central to its future. He has been frank enough to stand before the new and amazing
economic circumstances that he helped create and in the end declare them a mystery. It is impossible to account fully
for the continuing high growth, record employment, low inflation and high stock market."

And, toward the end of this important book:

"Greenspan also represents something more than the confidence wing of the American Personality. He stands at the
point where the country's eternal optimism meets the country's abiding suspicion that something will go wrong. . .
That fear also creates a kind of excitement and anticipation.Greenspan stands at the crossroads of optimisim and
pessimism. Each of us is a character in the nation's great economic soap opera; Greenspan is both director and
producer."

So, the question before the table is this:

***** "Alan Greenspan, Maestro or Music Man?" *****

Lovable Con-Man or Brilliant Fed Chairman?

I will leave with another thought of Mr. Kasreil -- as I think the computer cannot be taken out of the present
equation without missing a major part of the analysis:

"Economics how do we measure that? Well, I can tell you there has been a very increase in productivity, at least at
my shop. When I joined the Northern Trust over 15 years ago, it took three senior economists and three research
assistants about two weeks to come out with an inaccurate economic forecast, and with this laptop, I can do it all by
myself in one day."

The world, I know, is not spinning any faster than it used to be but who among us would deny that it is. . . . . . . .
.So Maestro or Music? You be the judge.

Each entry must address the question in sufficient length but no more than is absolutely necessary to make the point
-- the eternal bane of the writer. An appropriate link is acceptable. The contest will be judged not on the choice you
make but on the erudition and argumentative skills used to make your case. Please surround your entry with stars as
shown. The winner will get a lucky French Angel gold coin -- the one they say Napoleon carried throughout his
campaigns until he lost it . . . . .the day before Waterloo. As Darkhorse suggests the entry-post must also include
some reference as to what the future might bring by the end of the year (for posterity's sake). As always, the post
must conclude with how all of this relates to gold and gold ownership -- and it is there that the worm turns, where
the contest will decided. The runners up -- two of them -- will receive a Mexican Azteca silver coin.

First time posters will receive a one-ounce U.S. Silver Eagle but in order to claim the price you must indicate that
you are a first-time poster with Jill Snyder (jill@usagold.com). The post must be an entry into the main contest --
"Alan Greenspan, Maestro or Music Man." First time posts in the price guessing contest (see below) do not count
toward the Silver Eage Prize. Pls include your current mailing address.

The posting contest will go from this moment through Sunday, December 9, 2001 when midnight graces the purple
mountain majesties.

* * * * * * * * * * *

In addition to the posting contest, we will have a price guessing contest. Where gold will close on Friday,
December 7th on the Comex -- the December contract. Each entry must be surrounded by $$$$$$ dollar signs as
follows $$$$$30,000$$$$$. All entries must be posted by 5pm MST Tuesday, December 4th.
The winner -- he or she who comes closest to that closing price -- will receive a one
tenth ounce Austrian Philharmonic.

* * * * * * * * * * * * *

Good luck all. May the best poster win.

Cavan Man (11/30/01; 12:12:45MT - usagold.com msg#: 66141)
site steward
I wish to note this, "buying in the market yesterday" was proxy; derivative receipts and not hard METAL.

Henri (11/30/01; 11:44:46MT - usagold.com msg#: 66140)
Gold Guess
$$$$$ 272.00 $$$$$

site steward (11/30/01; 11:38:36MT - usagold.com msg#: 66139)
Good daily commentary today from Rhona O'Connell of the WGC -- good relevance W/R/T Enron
http://www.gold.org/
The physical demand in the market continues to underpin values at the lower levels, and there is talk that some of the buying in the market yesterday, which propelled prices towards the $275 level (where there is some trade-related selling pressure), may have been related to concerns over Enron. Enron's activities were much more closely involved in the energy and non-ferrous metals markets than the precious sector, in which there was only limited interest. There should not therefore be a direct line of any size through to the gold market purely on this basis. It does look, however, as if there is interest in the form of uncertainty hedging, given the size of the organisation and fears over the potential ramifications into the financial system of the collapse (the dollar is a beneficiary here also). This may in part also reflect the tightening in the lease rate market, with cautious operators looking to ensure liquidity. A technical note: as of today the active COMEX contract is now February.

Market factors
The dollar's strength is related in part to concerns over Enron, with talk swirling around the markets of different levels of exposure in different parts of the world. The Yen has come under pressure for this reason, with a number of money market funds experiencing redemptions on fears over counterparty exposure - although it is also suggested in some quarters that this may merely be a gloss for more fundamental economic reasons. There is talk also of the possible need for US organisations to repatriate dollars with a view to covering against Enron debt.

Cavan Man (11/30/01; 11:10:57MT - usagold.com msg#: 66138)
Hello Solomon Weaver
The link about China's gold market was teriffic--a hearty thank you! Eastern minds and markets strike me as being very "physical" oriented. Would you agree?

If AU futures are ever traded in China perhaps it will be periods of price volatility to the upside and a much higher POG that will encourage development of same.

Broken Tee (11/30/01; 10:52:21MT - usagold.com msg#: 66137)
Contest
$$$$$$ 278.50 $$$$$$

Solomon Weaver (11/30/01; 10:46:50MT - usagold.com msg#: 66136)
good article on how gold jewelry lowers gold prices
http://www.321gold.com/editorials/parks/parks113001.html
With the increase in gold production and official sector selling, where would the producers be had they not promoted gold-as-jewelry?

For openers, those producers who supported the gold-as-jewelry strategy would be $800 million (the amount they spent promoting gold-as-jewelry) plus the time value of the money, a sum exceeding $1.2 billion, to the good. That would not be an inconsequential amount on their aggregate balance sheets. More important, had the industry not worked to reposition gold-as-jewelry, then perhaps younger people would have been more amenable to the age-old notion of gold as money. This is vital because there is a continuing demographic shift in the ownership of gold. Older people, who are the major owners of non-high-workmanship gold and who are mindful of the monetary issues, are passing on.

Their heirs, not knowing about the monetary issues, but being influenced by the repositioning of gold-as-jewelry, are selling off inherited gold to participate in other investment vehicles, such as equities. A shrinking audience of other older people is purchasing this gold. Thus, absent gold-as-jewelry promotion, perhaps more gold would have been saved by the younger generation in anticipation of it being put to its higher-value use, gold-as-money-and the gold price would be substantially higher.....


Chris Powell (11/30/01; 10:42:46MT - usagold.com msg#: 66135)
GATA finds success in New Orleans
http://groups.yahoo.com/group/gata/message/930
Great presentations and a magnificent contribution
to GATA at the New Orleans Investment Conference.

http://groups.yahoo.com/group/gata/message/930


To subscribe to GATA's dispatches by email and get
them immediately so you don't have to go look for
them, send an email to:

gata-subscribe@yahoogroups.com

Econoclast (11/30/01; 10:39:44MT - usagold.com msg#: 66134)
2002 should be THE year for Gold to shine
First, we have the Euro introduction as a new world reserve currency and all that possibly implies for the future of the dollar. Second, we have areas around the world where gold is making a comeback and unveiling itself; the China gold market, the Chevronetz in Russia, the Islamic dinar. Mine consolidation is occurring as total production is dropping due to years of low prices. This Enron derivatives thing, through the vast linking of the banking sector and large financial companies will ripple itself through the economy and grow into a massive wave as it is revealed in financial statements over the next couple quarters. The effects of the current recession will grow as it impacts both individuals and corporations. The stockmarket will fall to new low levels as companies will no longer be able to support current valuations. There are other absolute knowns that are present as structural weaknesses in the economy that have not been listed in this short list. Then there are the other unknown events and effects of our current "managed for short-term gain" economy that are sure to manifest themselves as we go forward.

The above paragraph leads me to conclude that it will be a miracle if gold fails to reveal itself and shine as the "wealth of ages" next year. If we make it through next year and the economic status quo is able to hold, I will be forced to reevaluate my thinking and view of the world.


Solomon Weaver (11/30/01; 10:33:38MT - usagold.com msg#: 66133)
Where you can win your own body weight in gold
http://www.miningweekly.co.za/mw/editors/?show=1460
Where you can win your own body weight in gold

--------------------------------------------------------------------------------
The Middle East boasts the fastest-growing largest gold market in the world.
From 1999 to 2000, its gold off-take increased by 14%, while demand increased by 51% over the last five years from 547 t in 1995 to 825 t in 2000.

The area has a longstanding affinity with gold, which is clearly reflected in its people's age-old cultural and religious practices.

However, modern gold consumption, driven by a sophisticated and youthful market, has resulted in a need for more ingenious and creative branding.

It is against this backdrop that gold marketers in the Middle East have launched an ambitious regional advertising programme, reaching 200-million viewers, to meet the needs of this unique market, as well as the World Gold Council's (WGC's) continued objective of influencing consumers to buy and retain more gold.

The ‘Win your Weight in Gold’ competition is the world's largest gold promotional campaign ever.

The principle of the competition is quite simple – prequalified contestants who buy gold jewellery from participating outlets will be given the opportunity to take part in a general-knowledge quiz.

For each correct answer, the competitor moves towards the ultimate target of reaching one's weight in gold.

The competition will carry a 700 kg-a-year prize and is sponsored by Emirates Media Incorporated and one of the largest gold jewellery manufacturers in the world, Taiba For Gold And Jewellery..........




sector (11/30/01; 10:21:07MT - usagold.com msg#: 66132)
@ORO Derivatives as a "Young Business"
http://www.goldensextant.com
The meteoric rise in JPMC's interest rate derivatives began within weeks of a four standard deviation preemptive selling COMEX gold event. This event occurred in June of 1996. It was the culmination of several other selling events which first started in July 1994, immediately following Greenspan's assumption of two BIS board seats. Professor Lawrence Summers had paved the way with his "discovery" that "Determining the general price level [inflation] then became a microeconomic problem of determining the relative price of gold".

These big COMEX selling programs broke the back of the COMEX gold market under the rubric of "Central Bank Selling" of an unneeded asset and the "goldilocks economy" Wall Street propaganda.

If one can describe extortion as a "business" then JPMC's interest rate derivatives is indeed a "young" business. With gold capped, there could be no true challenge to depress the US currency or to indicate nascent inflation therefore there could be no threat to the low volatility side of interest rate derivative trades...which JPMC acquired with abandon...now at $20 trillion. The pattern is a nearly linear growth since June 1996.

JPMC has wagered its entire capital base...$300 billion... in actual value at risk in these IRDs.

As the bond market reels today under a 24 year spike in volatility JPMC faces very large [$50 billion or so] losses as it is short volatility.

To protect this JPMC IRD behemoth, the Fed has now eliminated another indicator of inflation...the 30 year bond. This is one more effort to support the fragile, pernicous derivatives "business".

As a new "business", JPMC's IRDs could not co-exist in a freely traded gold enviornment just as mafia extortion could not co-exist with Elliot Ness.

The fragile, artificial nature of derivatives fit the chaos inclined, econophysicist's description of a "dissipative structure"...an entity that would not otherwise exist without deformed financial launching platforms.

Betting against these contrived platforms and in favor of gold requires patience. Such patience will be rewarded. We can already see strong evidence of the coming systemic derivatives disintegration.


Solomon Weaver (11/30/01; 10:19:26MT - usagold.com msg#: 66131)
China
http://www.miningweekly.co.za/?show=15739
China gold exchange starts trading

--------------------------------------------------------------------------------
China's gold exchange market, the Shanghai Gold Exchange (SGE), started simulated operations yesterday.
The gold exchange provides a platform for regulated operation of China's gold market to develop from a planned economy to a market economy.

This represents a milestone in China's move towards gold market deregulation following the newly introduced ‘Weekly Gold Pricing System’ and the abolition of ‘Gold Products Retail License System’ by the People's Bank of China (PBoC), stated the World Gold Council in a press confrence yesterday.

The exchange will have a positive influence on China's gold-mining, trading and gold demand in the future.

The SGE and the simulated operation was approved by the State Council, in coordination with the PBoC, the State Development Planning Commission, the State Economic and Trade Commission, Ministry of Finance, Ministry of Foreign Trade and Economic Cooperation, State Administration of Taxation, State Administration of Industry and Commerce, General Administration of Customs, other relevant ministries and departments, with the strong support of the Shanghai Municipal Government.

The SGE is a non-profit organisation and a self-disciplined legal entity aiming to concentrate gold transaction activities.

The exchange's daily operation will be supervised by the PBoC.

The basic function of SGE is to provide location, facilities and related services for gold trading, to coordinate and supervise the transaction, settlement, delivery and shipment of gold and other precious metals, to determine a fair price for the commodities transacted in the exchange and publicise market information.

SGE has 108 founding members including commercial banks, gold-mines, gold refineries, and gold jewellery manufacturers, mints, gold import and export enterprises, and gold trading companies that meet the required qualifications.

SGE has adopted an electronic order-matching system in accordance with the principle that ‘the earliest best price in the queue gets matched’.

Under certain circumstances, transactions can also be realised through other methods, such as ‘proprietary asking system’ for non-good delivery gold items.

Members have different options to link to the trading platform, either on-site transaction at the Exchange or through on-line connections.

At this early stage of operation, only physical trading will be conducted at the exchange.

With the further enhancement of the exchange and its systems, and after the approval by the relevant authorities of the State Council, ‘gold futures’ trading may be introduced in due course.

It is anticipated that the exchange will start official operation early next year after the trial operation period.

In order to ensure the smooth transition of the gold management system, PBoC will run a two-tier system of gold market management during the early stages of trial operation of the SGE.

In other words, a certain proportion of gold purchase/allocation business will still be carried out under the current PBoC ‘purchase and allocation’ system, mainly servicing some special requirements, such as military and scientific research.

In order to promote the continuous development of the gold market, relevant management policies will be adjusted gradually based on the evolution of the exchange's operation.



ORO (11/30/01; 09:28:33MT - usagold.com msg#: 66130)
Slight rewording of last paragraph in prior post
Corrections in paragraph in caps.

Thus if the Fed was 0.25% behind the curve in raising interest rates in 1999-2000, then 0.25% behind the curve in lowering interest rates on the way down in 2001, then the wipeout of capital of 10% reserved derivative issuers would be assured because of the reverse error, of having rates 0.25% HIGHER causes market clearing issuance levels to fall by a further 17% beyond the fall from 120 to 100. Outstanding contracts would TREND TOWARDS A fall from 120* to 83 as the premium's prices would rise 11.7% (AT 5.25% RELATIVE TO THAT AT 4.75%) and bring a 14% CAPITAL loss. Only those reserved at a level much higher than 14% would survive. All the derivatives issued by the weaker issuers would become near worthless (commonly 20 cents on the dollar), and would be repurchased from the surviving issuers at the higher premiums resulting from the erroneously high interest rates, and from the fact that capital offered for risk would be, initially at least, insufficient to fill market demand (because of the wipeout of weaker competitor's capital).



* corrected from 100

ORO (11/30/01; 09:09:35MT - usagold.com msg#: 66129)
uponroof, sector - Greenspan is right
The derivatives market is still in its formative stages. It is young as a large scale business.

Greenspan, out of his own familliarity with regulatory failure by his own institution was right to come out in defense of maintaining a (semi) free market in derivatives.

The Enron Boom and Bust were an immediate and unavoidable result of REGULATION. The regulator who caused the disaster was Greenspan himself. He did this by forcing upon us a credit expansion, which allocated capital to Enron through the use of bank credit. Once through direct bank lending at below market rates in 1998-99, and again by artificially lowering derivative time premiums - which are proportional to the exponential of the interest rate. This allowed Enron to open trading operations that were only marginally profitable using bank credit, and then forced them to compete with under-priced premiums - which forced the profit margin below that required to justify the initial investment. The losses drove the company under. Once they were weakened, everybody took positions counter to Enron's in expectation of their forced liquidation, thus amplifying the potential losses.

The mechanism of failure was the normal and routine mechanism seen in every central bank inflation activity since these were first created. The credit expansion in response to LTCM's near collapse, a 1 trillion dollar problem, created Enron's 1 trillion dollar problem.

Hopefully, Greenspan will not try to inflate this one away. Japan's experience should dissuade him.

Japan's BOJ did the same on a much more massive scale for Japan in the 80s and continued through the 90s in Asia, Europe, and the US. Since 1995, they managed to inflate their money supply at by 23% while bank lending FELL 8%, meaning that up to 30% of Japan's then existing money supply was spent by government (about half) or EXPORTED since 1995 at near 0% interest rates in the form of foreign currency loan assets backing the new Yen bank liabilities. This is nearing $1 trillion dollars that circulates the globe creating booms and busts wherever it goes - and then leaves - Asia, South America, Eastern Europe, EMU, Britain and the US.

The credit creation in Japan has caused massive bubbles in insurance, in banking, in telecom, in steel, in cement, in auto production, in R&D and marketing, and again in the derivatives trades.

The derivatives trade is just quicker to react to credit expansions and more sensitive to departures of interest rates from their market clearing levels. Excess Bank Credit is immediately applied to derivative trading, by expanding outstanding risk capital. Volumes of derivatives grow when interest rates are at low artificial levels because the fees charged by traders to put their capital at risk are lowered exponentially. The time premiums are lowered by the artificial low interest charges as they are proportional to an exponent of the interest rate, and demand increases at a higher rate than a drop in price.

Thus at say, 5% interest rate, the result of an error in interest rate setting of 0.25% too low (the Fed's favorite step size) would cause the time premiums to fall by 5.4% and would cause outstanding volumes to expand by some 20%. If that error is followed by simply setting the "right" interest rate, then the market will try to contract the 20% excess derivative volumes. As the new price would be at the higher level of 5.7% higher (5.4% on the way down is 5.7% on the way up), the result would be that the issuers of the prior (lower priced) derivatives would have a loss of 5.7% on a volume of 120 derivatives vs, the 100 they would otherwise have issued, or a loss of 6.8% of capital put at risk. If the issuer was operating with 10% reserves, the borrowing at 4.75% at which the 120 derivative contracts (instead of 100 at 5%) were issued would have obtained a wipeout of 68% of their capital, effectively putting them out of business.


Thus if the Fed was 0.25% behind the curve in raising interest rates in 1999-2000, then 0.25% behind the curve in lowering interest rates on the way down in 2001, then the wipeout of capital of 10% reserved derivative issuers would be assured because of the reverse error, of having rates 0.25% causes issuance to fall by a further 17% beyond the fall from 120 to 100, outstanding contracts would fall from 100 to 83 as the premium's prices would rise 11.7% and bring a 14% loss. Only those reserved at a level much higher than 14% would survive. All the derivatives issued by the weaker issuers would become near worthless (commonly 20 cents on the dollar), and would be repurchased from the surviving issuers at the higher premiums resulting from the erroneously high interest rates, and from the fact that capital offered for risk would be, initially at least, insufficient to fill market demand (because of the wipeout of weaker competitor's capital).


Bottom line: Greenspan created the financial conditions that led to Enron's mistakes and then proceeded to bring about the realization of the losses caused by these errors, and then some.

Gandalf the White (11/30/01; 06:51:39MT - usagold.com msg#: 66128)
GC1Z Contract Closing Guessing Contest
MK said, "We will have a price guessing contest. Where gold will close on Friday, December 7th on the Comex -- the December contract. Each entry must be surrounded by $$$$$$ dollar signs."
Then as an AFTERTHOUGHT, MK says, "All. . .Contest!!
I have the good news that my far-seeing and wizardrous friend, Gandalf the White (who I predict will be starring in a movie real soon) will be monitoring the price guessing contest." "Let's make the guesses in 50¢ increments."
====
So, let the bidding guesses continue !!
<;-)


Black Blade (11/30/01; 06:49:32MT - usagold.com msg#: 66127)
Economy Shrinks at 1.1 Pct. Rate - Weakest in a Decade
http://biz.yahoo.com/apf/011130/economy_1.html

Economy, Hit by Terrorist Attacks, Shrinks at 1.1 Percent Rate in Third Quarter, Weakest in Decade

Snippit:

WASHINGTON (AP) -- The U.S. economy, which slipped into recession in March, was shrinking at an annual rate of 1.1 percent from July through September, the weakest showing in a decade. The revised reading on Gross Domestic Product -- the total output of goods and services produced within the United States -- marked a much bigger drop than the 0.4 percent rate of decline estimated a month ago, the Commerce Department reported Friday.

The 1.1 percent rate of decline in the third quarter was the worst performance since the first quarter of 1991, when GDP decreased at a 2 percent rate. Some analysts believe the current quarter will prove even weaker than the third quarter, forecasting economic output will fall at a rate of at least 1.5 percent.

Black Blade: The US economy is floundering in a sea of worsening data and gloomy outlook. There is absolutely nothing that is positive to trade on. Look for the "Bone Pile" to grow much higher, corporate earnings to keep declining, and consumer and corporate debt to continue rising. Get prepared - get out of debt, get basic goods (food and dry goods), several months cash to meet expenses, and of course Gold and Silver portfolio insurance. Then hang on for the ride.


Christian (11/30/01; 06:41:42MT - usagold.com msg#: 66126)
(No Subject)
Dec 7 $$$$$$ 273.50 $$$$$$$ ---------------------- Official price of gold will close out 2001 at $290.00. Enron is a partnership. Enron stock holders have ownership of their monthly bokerage account statement. A Enron so called stock holder does not own Enron stock. This is true with most listed stocks. It should be noted that all of Enron derivative positions expanded in lockstep with Chase, who was smart enough to cash in and is presently the leading bank to exchange their fiat paper and credits for tangible assets that make up Enron. It is only a matter of time before fiat loans made on home mortgages is exchanged for the physical homes. Enron's collapse is the work of Dick Cheney working with and for Daddy Bush. The same bunch who bankrupted the S+L's. Enron's present and past CEO's all worked the Bush 41 Cheney gang. Bush 41 created the Taliban when he was president. At the time it was a good idea and like all things it comes to and end. It is just this time we have to destroy what we the taxpayers have funded. Talking of destruction I just as well make a prediction. Greenspan will destroy the fixed income funds before the end of 2002. He has no choice, for it costs less to print new money then to pay interest to fixed income fund holders.

Black Blade (11/30/01; 06:39:07MT - usagold.com msg#: 66125)
Third Quarter GDP Revised Down

The Third Quarter GDP was revised downward from -0.4% to -1.1%. Times are worse than previously thought. The Trolls on Wall Street say - "well if we can survive Enron we can survive lower GDP." or "It's a backward looking number anyway." Hope springs eternal. This economy is in bad shape and getting worse. Enron and falling GDP are just symptoms of a more serious problem - economic meltdown.

- Black Blade



Mr Gresham (11/30/01; 06:23:11MT - usagold.com msg#: 66124)
George
"``He left this world as he lived in it, conscious of God, fearless of death, and at peace, surrounded by family and friends,'' the Harrison family said in a statement. ``He often said, `Everything else can wait but the search for God cannot wait, and love one another.'''

While my guitar gently weeps...

Black Blade (11/30/01; 06:14:49MT - usagold.com msg#: 66123)
George Harrison Dead at 58
http://dailynews.netscape.com/mynsnews/story.tmpl?table=n&cat=51180&id=200111300555000164479

Bummer! The end of an Era.

Canuck (11/30/01; 04:51:00MT - usagold.com msg#: 66122)
@ site steward, All
Randy,

I apologize Sir.

I re-read my post this morning; the adjectives were approaching, perhaps crossing, the threshold of 'bar-room' conversation.

MK,

Do you remember the chat we had 6-9 months ago? I don't think you are wrong about systematic failure. When NG quadrupled from $2.50 to 10 and now back to near $3 you have to wonder many more were chasing either up or down?

Mon amies,

Thanks for the notes of encouragement. The search for answers (truth) is a difficult one. Maybe time for a break and re-group, 'see' you in about a week.

Canuck.





goldenpeace (11/30/01; 04:45:06MT - usagold.com msg#: 66121)
Price Guessing Contest
$$$$$$$276.50$$$$$$$
Thanks all!
Blessings
Bowing

Belgian (11/30/01; 04:14:02MT - usagold.com msg#: 66120)
@ Canuck # 66074
Your outburst with 50 K flapping around. Being in that privileged position of still having the opportunity of exchanging paper for Gold. Lucky you !

The POG (price) we are staring at, daily, for quite some time now, is nothing more, but a commodity-consuming price.
It is a *pro-forma* price, to satisfy and settle the demand of the globe's Gold buyers, be it Indian, Chineze or hottentots. It is a *price* and NOT a *VALUATION* !!!!!
It is a very, very special price : A rockbottom price !
And even rocks can be pushed deeper into the sandbed on wich it is resting. Take a deep breath and focus on this as long as possible.

People know the price of everything, but have no clue on the *Value* ! This is the one and only recipe for permanent succesfull investment results. All other actions are temporary little/ephemeric successes.

When Giants want to put their claws on a valuable, they always have the same strategy, ad nauseum. First make it *worthless*. Totally worthless ! Give it a "price". De-value it ! The same modus operandi goes for the opposite.
When you want to milk the cow, stuff it with dry powder milk.

What is it that makes so many people, stick faithfully and loyal to this forum, for so many years ? The sub-conscient conviction that we are exchanging ideas about something very valuable that is declining in price. Trying to resist the frustrating pressure of the Giant devaluators of Gold.
This devaluation could impossibly be succesfull if POG should have stayed into the 500$/600$ zone !

This very same basic theory, applies for every other valuable, other than Gold. It is that old fashioned theory of perfect plundering.

The "show me" reflex, will come after the denouement of the whole modus operandi. Too late for the restless weak.

Those, who know the eternal "Value" of Gold have been *pricing* it for quite some time now.
Believe it or not (anecdotical): the former Belgian CB-president (Verplaetse F.) was on an idiotic TV show and his first words were about Gold ! The Belgian 1.000 tonnes of Gold-reserves that were shifted to the ECB ! Nobody asked him anything about Gold, but he just wanted to say it !
What other (simple) evidence for the Valuation of Gold, do I have to look for ?

The " Confidence " factor of Gold is still there ! Even with the abysmal pricing. And the daily show of a rising POG in Europ, followed by the New-Yorker knock at opening goes on and on ! Europ gives daily evidence of its confidence in the -value- of Gold and the US is forced (!!) to hate it and to -price- it !

My crystal ball has no price compartment, but a yellow value shine. Keep on pricing ! I'm happy with the value.

Waverider (11/30/01; 01:23:24MT - usagold.com msg#: 66119)
Guestimate$$$$$277.00$$$$$
$?

Black Blade (11/30/01; 00:23:55MT - usagold.com msg#: 66118)
Australian banks caught in Enron's bad debt net
http://biz.yahoo.com/rf/011130/syd290533_1.html

Snippit:

SYDNEY, Nov 30 (Reuters) - Australia's four major banks succumbed on Friday to the scourge of bad debts flowing from troubled Enron Corp (NYSE:ENE), detailing exposures totalling US$350 million. The collapse of Enron, thrown into crisis by a cash crunch and investor doubts about its viability, would be one of the biggest corporate failures in U.S. history.

Black Blade: Going Global.




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