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ARCHIVED DISCUSSION FROM 12/30/2001
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Horatio (12/30/01; 22:18:59MT - usagold.com msg#: 67488)
Black Blade
I am no fan of Barrick.I became a stockholder via Homestake,my largest gold holding.It was just an observation that among my computer geek friends thay all hated AOL and Microsoft and yet those stocks went up with or without earnings.Its a perverse thing.I learned a long time ago stock markets are not rational ,they are "perverse" and if you want to make money go with perverse stocks.
Its just the way the world is,not as I would like it to be.


Cavan Man (12/30/01; 21:26:12MT - usagold.com msg#: 67487)
@MK
You could make a fortune writing newletters. The analysts I follow I can count on one hand. You're one of the fingers on that hand. Best2U.....CM

USAGOLD (12/30/01; 21:20:36MT - usagold.com msg#: 67486)
Correction:
Textual error:

"[European gold investors should be aware that pre-1933 gold coins were treated as collector's items in the new VAT tax exemption.] "

Should read:

[European gold investors should be aware that what we refer to as "pre-1933 gold coins" were exempted from VAT tax in the new directive.]

The first rendering was not very clear. European investors can call for details.

USAGOLD (12/30/01; 21:09:22MT - usagold.com msg#: 67485)
CM, Siochain: Of Blood, Turnips, the IMF and the Cry from Argentina
I thought it might be interesting to re-post a report I wrote on July 30th of this year that got pretty wide dissemination over the internet and some comment. The main theme was gold swaps but Argentina came up as you will see. Unhappily, these unravellings are predictable as I mentioned in my report last Friday -- as are the reponses on the part of the domestic politicians whether they make speeches in Argentina, Indonesia, Korea, or the United States for that matter. There are more Argentinas out there (and Enrons for that matter). You can be sure.

* * *

From the Daily Market Report 7/30/01

Essentially, the relief mentioned takes the form of
debt that eventually becomes impossible to pay
without further infusions from the IMF -- and, though
the IMF and country in trouble by time, the cycle
moves to the next level of instability. In Indonesia
the result of IMF attention was rioting in the streets
and the imposition of a police state. Be assured,
the international banks and IMF will not cry for
Argentina. They will demand the austerity required
to pay back the loans. It will not end happily. The riots
will begin down the road and everything will be done
to disassociate the riots from the IMF's lending
activities in the public's mind.

Noted gold analyst Timothy Green in his "The Gold
Companion: The A-Z of Mining, Marketing, Trading,
and Technology'" defines a "swap" (beyond a
simple trading of one hallmark for another) as the
"simultaneous spot sale of gold with a forward
transaction to buy the same amount back at a later
date. For governments and central banks it has
become a way either of raising cash to meet short
contingencies or simply to invest the money on an
interest-bearing basis." It is also a way to keep gold
on the asset side of the ledger while enjoying the
benefits of its utility. For the IMF it might be a
convenient way to end run the restrictions the U.S.
Congress put on selling the metal. However, it
defies the intent of Congress which was to keep
the IMF from depressing the price of gold, and by
extension, undermining various Third World
economies.

I note that in the Federal Open Market Committee
discussions under scrutiny, the subject of the
discussion was the collapse of the Mexican peso
and banking system. Surely, the discussion had to
be how a bailout was to be structured.

Now we have Argentina near collapse and a
Reuters headline this morning reads "U.S. says
Argentina could get IMF cash early." In these carefully
crafted public relations tap dances, it is difficult to
see through the haze and discover what's really
going on behind the scenes. That usually comes
later -- sometimes years later -- when the memoirs
are written and the responsible parties have moved
on to "private" pursuits. We can only surmise.

*** End Comments 7/30/01***

Comment 12/30/01 -- Five short months later. . . . .

President Bush called for Argentina to work closely with the IMF. One wonders how he expects Argentina to do that under the circumstances. They are bankrupt and there's nothing for them to offer except another promise to pay -- austerity measures and the whole wretched, repetitive IMF gaggle that will allow the international banks to keep the loans on their balance sheets. Not even the IMF can get blood out of a turnip -- Argentine or otherwise. One thing is certain: The Argentine people will continue to suffer and those who own gold are about the only ones feeling a modicum of comfort. Those who do not, well. . . .they just do not. For the gold-less Argentinian, one can only hope that the opportunity to purchase will present itself, but they may be wishful thinking.

Too many believe they will be able to buy gold whenever they want to. Not the case, as Argentina shows. As a matter of fact when you most need it is when the authorities are likely to pull out all the stops to keep you from going to it. In Argentina they simply froze everyone's account to keep them from escaping the currency. The incentive is to act now. Gold is not an investment. It is an insurance. It should be purchased a stuck away just in case something like this happens in your country. Those in Argentina who had the wisdom to go to gold -- even on July 30th when the article below was written -- are surviving. They've come to understand the benefit of that insurance. (Also, the events in Argentina -- the citizenry's inability to access their savings -- folds into the argument in favor of pre-1933 gold coin ownership, an extra layer of gold insurance. These historical items stand the best chance of escaping capital controls, and possibly even sneaking beneath the radar should dollar exchange rates become tightly controlled as it has in Argentina.)

[European gold investors should be aware that pre-1933 gold coins were treated as collector's items in the new VAT tax exemption.]

One more point: Argentina is not just about Argentina. It's about the world monetary order and whether or not it is capable of dealing with the crisis that began in 1997 -- the one the financial press calls the Contagion. Argentina is prototypical for the average investor. Perhaps, my fellow Table members, the real Fifth Horseman is the Contagion after all -- the Cry from Argentina.

A gold broker's wish: May the next 365 days be a little easier to understand than the last 365!


Black Blade (12/30/01; 20:00:23MT - usagold.com msg#: 67484)
Argentina Ripe For Revolution
http://www.reuters.com/news_article.jhtml?type=topnews&StoryID=484082

The new president Adolfo Rodriguez Saa couldn't stand the heat so he got out of the kitchen. He was not the first choice as other replacements refused the position. The situation is so dire in Argentina that some have even considered asking the military to resume control of the Government. Now that's a scary thought. The IMF is apparently going to forget about any bailout in Argentina. "Interesting Times"

- Black Blade

Black Blade (12/30/01; 19:45:03MT - usagold.com msg#: 67483)
White Hills and Pizz - Rollover - Green Monday
If you like financial thrillers, then you might like the book "Green Monday", by Michael Thomas. The following is a review of the author and the book "Green Monday".

Michael M. Thomas, himself an intimate of worldwide money strategies (he was a partner of Lehman Brothers, in charge of the corporate finance dept.), creates an all-too-plausible scenario in which the clandestine manipulation of world oil prices results in the most fantastic bull market the world has ever known--a day that will always be referred to as GREEN MONDAY. Who arranged this giant financial coup? How was it possible to invest more than $8 billion in the NYSE without the source of the funds becoming known? And what do the manipulators intend to do with their colossal political influence? GREEN MONDAY is more than a thriller or an adventure novel--more than a "crisis book". There is nothing in GREEN MONDAY that could not happen, that might not happen, or, indeed, that might not have already happened.

Actually I have not read the book as it is out of print, though I believe that someone here mentioned it once. Perhaps it was even our sitemaster Randy. Anyone here read the book? Comments? TIA

- Black Blade




Siochain (12/30/01; 19:35:31MT - usagold.com msg#: 67482)
Argentine new Prez now out


Argentina's Interim President Quits After Protests
Last Updated: December 30, 2001 09:19 PM ET



BUENOS AIRES, Argentina (Reuters) - Argentine interim President Adolfo Rodriguez Saa resigned on Sunday, the country's second leader in just over a week to quit after violent street protests amid a grinding recession.

Rodriguez Saa said in a televised address his resignation could not be rejected and was effective immediately. He had been due to hold office until elections in March but blamed his departure on a lack of support from his own Peronist Party.

Thousands of Argentines took to the streets late on Friday, protesting Rodriguez Saa's handling of an economic slump now in its fourth year and accusing him of putting corrupt politicians in his cabinet. After several hours of calm, violent clashes with police erupted, leading to looting of Congress and downtown banks.

Violent protests that killed 27 people forced Fernando de la Rua to resign as president on Dec. 20 only halfway through his four-year term.





Cavan Man (12/30/01; 19:14:27MT - usagold.com msg#: 67481)
See link
http://www.drudgereport.com
for headlines

White Hills (12/30/01; 19:03:12MT - usagold.com msg#: 67480)
Pizz
Yes, I do have a copy of "Rollover". As you know it basically is a story of the Arabs getting out of the Dollar into Gold and the resulting Global meltdown. Very interesting. Also a movie I saw last night " A Simple
Twist of fate" with Steve Martin. In one scene he is buying a Gold Coin and is asked if he would like to buy a Silver coin also. He replies" No, I only buy Gold" She asks " Why do you only buy Gold?" He says " Because it is always there when you need it" That says it all to me. Reading your post and others it seems pretty clear that the US monetary and economic system is like an inverted pyramid resting on a sharp point of Liquidity that will begin to dissolve as soon as the Mortgage market has run its course and the real estate market bubble bursts. I have seen it before, only not as bad, and without really knowing I would bet that it is being fueled with "less worthy paper" than ever before. I remember similiar times when Mortgage companies actually made the borrower credit profile fit the Loan, Particularily when the know they can unload the paper, bad or good, as soon as they write it. Remember the Savings & Loan mess. What is coming is far worse. White Hills

Black Blade (12/30/01; 18:11:37MT - usagold.com msg#: 67479)
Venezuelan Currency to Depreciate
http://biz.yahoo.com/apf/011230/venezuela_currency_1.html

Venezuelan Currency to Depreciate Faster in 2002, Central Bank President Says

Snippit:

CARACAS, Venezuela (AP) -- The Central Bank will let the country's currency, the bolivar, depreciate faster in 2002, the institution's president said Sunday.

Black Blade: Yep, another currency crisis. A very good time for Venezuelans to consider exchanging bolivars for Gold and Silver insurance against the toilet paper currency's inevitable collapse.


Black Blade (12/30/01; 18:03:43MT - usagold.com msg#: 67478)
Newmont Acquisition Going Well
http://biz.yahoo.com/apf/011230/newmont_normandy_1.html

Newmont Mining Corp. Says Planned Acquisition of Normandy Going As Planned

Snippit:

DENVER (AP) -- Gold giant Newmont Mining Corp. said Sunday its planned takeover of Australia's Normandy Mining Ltd. and Toronto-based Franco-Nevada Mining is going according to schedule. Newmont chief executive Wayne W. Murdy said the takeover should be completed by mid-February as planned. ``We remain committed to the timely completion of these transactions,'' Murdy said. The takeover would create the world's largest gold-mining company, with 22 mines on five continents, interests in eight other gold operations and 12,500 employees.

Black Blade: This bidding war could be far from over. On another note, it would be more patriotic for US citizens to support a US corporation (NEM) rather than a foreign corporation (either AngloGold or Barrick) in the Normandy takeover. After all, isn't this the argument that Wall Street has been making since 9-11?


Black Blade (12/30/01; 15:05:10MT - usagold.com msg#: 67477)
Horatio - Barrick

Barrick shareholders have not fared very well, however, I suggest that you invest very heavily in Barrick. Keep in touch and let us know how well to do. I for one will invest only in profitable ventures with an expected return and keep a physical PM position for insurance purposes. Cheers!

- Black Blade


Pizz (12/30/01; 15:03:40MT - usagold.com msg#: 67476)
Derivatives

The following Greenspan quotes (early 99) have always bothered me.

"the value added of derivatives themselves derives from their ability to enhance the process of wealth creation."

"As we approach the twenty-first century, both banks and nonbanks will need to continually reassess whether their risk management practices have kept pace with their own evolving activities and with changes in financial market dynamics and readjust accordingly. Should they succeed I am quite confident that market participants will continue to increase their reliance on derivatives to unbundled risks and thereby enhance the process of wealth creation."

It now appears to me that the "interest rate derivitives" now being held by banks (JPM) and non-banks (hedge funds) just may be the other side of "put options on US bonds".

Could it be, that in order to both increase and rollover our US debt ("wealth creation????), we've been, thru our banks and "Enrons'", actually been tossing out a kicker similar to warrants on stock? If it works for oil (cheap gold), why not debt? As long as you're forcasting budget surpluses, the puts are worthless. After a busted stock bubble, 911, and a major recession forcing inflation .............

Could it be that the current holders of these "puts" not only bought a hedge, but also a method to bring down the Infidels knowing full well we'd have to reinflate rather than deflate, therefore having us by the proverbial .....

Could it be these holders are at work to try to bring these derivatives into the money before expiration to offset the losses that will be incurred with full Euro deployment and the coming and planned reinflating of the capitalistic fiat enonomies (financial market dynamics) and/or just to bring down the "Infidel West"?

Could these holders be buying long PM derivatives and (with a little suggestive guidance from the government) FORCING our banks,(friendly or maybe connected) hedge funds, and (niave)miners' to write them?

Could these holders also be buying bullion and forcing European CB's into both leasing and selling bullion thereby keeping these derivatives "out of the money" until full Euro deployment?

Mr. Greenspan, I now regard your derivatives statement more as a very weak veiled warning. Your "Should they succeed . . . " statement,in hindsight, should have been followed by - "If they fail, our house of (fiat)
cards and capitalistic way of life will more than likely . . . . . ."

We don't just have a potential short squeeze on PM's. We've got a MAJOR SHORT SQUEEZE on these derivatives that may just go nuclear (literally).

Wouldn't want to be JPM's auditors this quarter.

Anyone got an old copy of the movie "Rollover"?

Pizz












Black Blade (12/30/01; 14:48:02MT - usagold.com msg#: 67475)
Experts Urging Broader Inquiry in Towers' Fall
http://dailynews.yahoo.com/h/nyt/20011225/ts/experts_urging_broader_inquiry_in_towers_fall_1.html

Snippit:

Structural engineers and fire-safety experts are calling for a new, independent and better-financed inquiry into how and why the twin towers fell on Sept. 11. Saying that the current investigation into how and why the twin towers fell on Sept. 11 is inadequate, some of the nation's leading structural engineers and fire-safety experts are calling for a new, independent and better-financed inquiry that could produce the kinds of conclusions vital for skyscrapers and future buildings nationwide.

Senator Charles E. Schumer and Senator Hillary Rodham Clinton, both of New York, have joined the call for a wider look into the collapses. In an interview on Friday, Mr. Schumer said he supported a new investigation "not so much to find blame" for the collapse of the buildings under extraordinary circumstances, "but rather so that we can prepare better for the future."

The lightweight steel trusses that supported the tower's individual floors, the connections between the trusses and the buildings' vertical structural columns, as well as possible flaws in the fireproofing have been drawing scrutiny from fire safety consultants and engineers in recent weeks. "

The investigation, organized immediately after Sept. 11 by the American Society of Civil Engineers, the field's leading professional organization, has been financed and administered by the Federal Emergency Management Agency. A mismatch between the federal agency and senior engineers accustomed to bypassing protocol in favor of quick answers has been identified as a clear point of friction. This is almost the dream team of engineers in the country working on this, and our hands are tied," said one team member who asked not to be identified. Members have been threatened with dismissal for speaking to the press.

Black Blade: Charley and Hillary had better be careful what they wish for. There is strong evidence that the WTC would have remained upright for about 4 hours after the impacts if it were not for environmentalists (Schumer's and Hillary's friends). Sound bizarre? Let me explain. I was reading a technical article (that I unfortunately misplaced) that details the WTC construction. The article describes the original planning and construction of the WTC and the use of asbestos heat resistant coating used on the steel beams. The asbestos coating was designed to withstand the impact of a Boeing 707 (757 aircraft did not exist in the early 1970's). However, during the WTC construction the environmentalist movement had asbestos use in construction banned. The upper floors of the WTC were completed without the use of asbestos heat resistant coating. Instead of holding up for about 4 hours, the WTC towers collapsed in about an hour taking nearly 3,000 lives. In other words environmentalists extremists helped to murder 3,000 US citizens.


Horatio (12/30/01; 14:33:45MT - usagold.com msg#: 67474)
Barrack and the companys people love to hate.
I am pleased that Barrack has become the company everyone loves to hate.My recollection is similar companys were AOL and Microsoft ,and both made a lot of money for the stockholders and traded at very high p/e ratios at some point .If Barrack trades at 100/share and has no earnings it woulden't bother me at all.

Black Blade (12/30/01; 14:21:38MT - usagold.com msg#: 67473)
Normandy & Newmont Represent Gold's Best Future
http://www.gold-eagle.com/gold_digest_01/vaughn123101.html

Snippits:

What this means is that if Newmont wins Normandy then the largest gold company in the world will become a NON HEDGING gold company & the gold price will inevitably go up as a result of this merger. And if AngloGold or Barrick wins Normandy then the price of gold GOES DOWN!

In sound business dealings you ALWAYS question someone wanting to close a deal in this big a hurry. What are they wanting to hide & what is AngloGold afraid that Normandy Shareholders may soon find out? This is equivalent to a used car salesman trying to make a fast SALE ON HIS BIGGEST LEMON ON THE LOT! So, if AngloGold wins Normandy the shareholders will lose if gold goes in EITHER direction. AngloGold has made it clear that their intention is to continue hedging Normandy's gold production if they succeed in taking it over. "ANGLOGOLD HAS VOWED TO CONTINUE HEDGING NORMANDY'S MINE OUTPUT".

This last year gold was the top sector performer with no other sector even coming close. All the top ten senior gold stocks did well. Newmont is up around 16% for 2001. ONLY ONE SENIOR GOLD COMPANY PERFORMED POORLY IN 2001. That company was Barrick, DOWN for 2001 by 6.5%. And what about AngloGold? You will not even find AngloGold carried by most of the gold funds because they hedge. Yes, the grand glory days of those gold companies that chose to follow hedging & the derivatives markets are soon to be over. Investors & Institutional Gold Funds want non hedged gold companies. You want to purchase AngloGold or Barrick and risk an Enron style bankruptcy? Not with my money!


Black Blade: I DITTO THAT! As anyone here and at other sites know, I have hit this same nail over and over again. This article is well worth reading if you want to know why AngloGold is in dire straits and is so DESPERATE to win Normandy in this bidding war and why Barrick may have to come to AngloGold's rescue. The days of the Gold Hedgers are over. I suspect that this bidding war for Normandy is far from over. We could easily see AU and ABX in a tag-team "Death-Match" against NEM-FN and possibly GOLD. "Interesting Times"


Waverider (12/30/01; 13:52:31MT - usagold.com msg#: 67472)
Black Blade
You're incorrigible! On that note I'm throwing on my dry suit and going for a swim in the ocean - it's a beautiful sunny day here -time for a break from the computer!
Cheers,
Waverider

Waverider (12/30/01; 13:40:55MT - usagold.com msg#: 67471)
R Powell (67467)
I guess you could call it a combination of university studies and professional enhancement. I do health care consulting and teaching, mostly in the rural areas of BC. I've been fortunate in that I love my work and it's taken me to some interesting places around the world. In the 90's I had an idea for a home health care technology which, after years of research, angst, and exorbitant legal fees, I somehow managed to obtain US/world patent rights. I started my PhD because I wanted to do further research on the device. But wwwhhooaaa....the work (all statistics and research courses)has kept me hopping at an exhausting pace. I write comprehensive exams in mid-January, then my workload lightens considerably. (Sorry for rambling but this is the shortened version). Meanwhile, my love is here at this forum - it's here that I find the greatest intellectual stimulation. I think maybe it was RobotGuy who said that he's learned more here than ever possible through formal education - I concur with him completely - you are awesome (and humorous) professors! Now, I definitely need to get back to my other studies...
Cheers,
Waverider

RS (12/30/01; 13:19:01MT - usagold.com msg#: 67470)
@ Mr Gresham - usagold.com msg#: 67462
Thanks for the link. Direct and to-the-point.
I copied the article to several friends who would not likely bother with this topic in a longer more verbose piece.
.......................................................
I must ask though.... Inflation? What inflation?
The Fed and the Federal government claim there IS NO inflation.
So many absurdities, so little time... :^)

Thank you also to those here from whom I learn so much daily. Thanks especially to USA Gold for providing this forum. I wish everyone a very prosperous new year.

Black Blade (12/30/01; 13:15:13MT - usagold.com msg#: 67469)
Bulls Seen Carrying Gains Into 2002
http://biz.yahoo.com/rb/011230/business_column_stocks_outlook_dc_1.html

Snippit:

The week ``is going to be busy,'' predicted Brian Pears, head equity trader at Victory Capital Management, of Cleveland, Ohio. ``At the end of the year, a lot of accounts need to do once-a-year sort of trading. Some of that is done for tax purposes, and some of it is window dressing. My guess is you will probably see a strong week.'' With window dressing, professional investors drop losers from their holdings and add winners. The result is a better-looking portfolio when the pros inform clients of their year-end positions.

Investors also will be keenly interested in the first five trading days of the year. If this period finishes in the black, history says the odds are overwhelming that the year, too, will end positively. Over the past 52 years, according to the Stock Trader's Almanac, the broad stock market has climbed in 32 years, and dropped in 18. Of the winning years, 28 had a positive five-day kickoff. Of the 18 losing years, nine had declines over the first five trading days. The week also will bring the likely confirmation that 2001 was the worst year for the broad market since 1974. While still subject to Monday's trading action, the Standard & Poor's 500 is on track to close down about 12 percent. In 1974, the S&P 500 fell nearly 30 percent.


Black Blade: Actually my favorite stock market indicator is the "hemline indictor." The higher the hemline on women's skirts - the higher the market. Hey what do you expect being the male chauvinist pig that I am ;-)

Seriously though, I really don't see much in positive news for the markets. The "Bone Pile" continues to grow. Just last week the Pied Pipers of Wall Street were pointing to a declining rate of unemployment claims - that is until this last week when new unemployment claims "unexpectedly" jumped higher. We should see a resumption of layoff announcements and higher unemployment claims after the holidays. Durable goods orders also slumped sharply. Corporate earnings have fallen off a cliff and are still sinking further in spite of meeting or beating the "Street's" lowered (sharply lowered) expectations. Corporate and consumer debt is rising higher to all-time record levels as well as record bankruptcy filings. Gains in the markets are due to the "hopes" and "prayers" that next year or the year after or the year after that will be better. And the list goes on. In a word, the outlook still looks - "GRIM"


Centennial Precious Metals, Inc. / USAGOLD (12/30/01; 11:43:57MT - usagold.com msg#: 67468)
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