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ARCHIVED DISCUSSION FROM 6/30/2001 All times are U.S. Mountain Time (Yesterday's Discussion.) Peter Asher (06/30/01; 23:20:51MT - usagold.com msg#: 57274) @ Perplexed Good post! And glad you understood mine. From Kipling"For it's Tommy this and Tommy thatAnd throw him out the Brute.But it's (something, something) Hero,When the guns begin to shoot!Interesting point about the "Ace in the hole."As to what we could have not done regarding importing unskilled labor. A productive, ethical society elects intelligent ethical politicians. A Welfare State permits charismatic dummies to trade vote for 'Bread and Circuses."This is all very much 'on-subject' especially when you read AG's article below on gold versus the welfare state. Spot on explanation of much that gets hammered away at here. He sure doesn't practice what he preaches! "Sleeping with the Enemy" that is Perplexed (06/30/01; 22:25:50MT - usagold.com msg#: 57273) Asher Repost Thanks PeterA very good article I had not previously read. It's a cut and paster. I think the major thing being overlooked or seriously disregarded in this Euro/dollar debate is the cost of regulation on American production systems. Much of these restrictions were purposely instituted in the 50s and 60s as aids in the re-establishment of war wrecked economies. It resulted the demise of our self sufficiency, and the explosion of multi-national corporations.The initial restrictions, although having long accomplished their objective, have not only remained, but have been augmented to levels that have long mocked our founding principles.Perhaps that is our ace in the hole. By simply trashing most of the regulations and freeing our latent potential, this nation has nothing to fear from any competitor. While the United States is now being kicked in the teeth and accused of nothing but ulterior motives in our massive effort toward the rebuilding the world economies, lets face it: WE DID NOT NEED HELP FROM FOREIGN WORK FORCES TO PROSPER AT THE END OF WWII. We could have called our forces home, and selectively accepted refugees, accepting only those with manifested talents beneficial to our requirements, letting Europe and Asia attend to their own rebuilding problems; acquiring needed capital where ever they could find it, and at what ever cost demanded. We didn't! Whatever dastardly plans and evil schemes eventually hatchedby the International Financial Barons was not part of a planof the American military; neither officers, nor men in the foxholes.We have sorted out problems world wide since 1945 that no other nation, not even those with borders common to the warring parties would touch. We have been accused of imposing our will with military strength and of plans to occupy future strategic nations. While this may or may not be a fair assessment, one thing is clear, the national interest of Europe and Asia, is not divorced from that of the United States. It appears to play out just as scripted in so many western movies, the man that saves the day with his gun is hero only of the hour, but is later despised in "proper" circles.I have a recording made several years ago by an Canadian by the name of Sinclair in Toronto,in which he expounds very eloqunantly on the virtues of American conduct and accomplishment and very soundly thrashes the criticizing beneficiaries. But then why should the platatudes come as a surprise, we Americans and Canadians have long shared more than a common border. Peter, please pardon the rambling off topic post, but I am just getting tired of the constant barating of a nation that has contributed so much to the welfare of the world economy, and safty. ALERT! ALERT! If anyone out there is troubled by an over abundance of those worthless green backs, you can get my e-mail address from Randy and we will arrange shipment to my home.Good evening PeterPerplexed Peter Asher (06/30/01; 22:13:51MT - usagold.com msg#: 57272) More content for a quite night AUTHOR: galileo 5/28/01 9:07:10 PMThe following is culled out of "Why America's recession has 19th century echoes" posted @ Pru-Bear by definitionofbear @ 5/28/01 6:31:48 PM "Although the currency school was right about the monetary causes of the boom-bust cycle it grievously erred concerning money substitutes. It believed, unlike the banking school and American economists of the time, that if the note issue was restricted in accordance with the quantity of gold, booms and busts would not be possible. A conclusion based on the assumption that deposits were not money substitutes ---- Many have directed attention at other money substitutes, which is perfectly legitimate. But these people should bear in mind that these substitutes can only function so long as people believe they can be exchanged for dollars.<Once people come to believe that these substitutes cannot be exchanged for dollars or perform the function of money they quickly become worthless pieces of paper.> Moreover, I do not know of any instance where a significant number of money substitutes appeared in the absence of large-scale credit expansion." (end cull and <emphasis >mine)The <above> is an apt description of the current dependency of the economy on the stock market.Over the last half of the last century, stock ownership has evolved from the majority of investors purchasing ownership of a return on equity, to paying a premium in anticipation of larger dividends or future earnings increases, to the current, buying of paper certificates hoping to sell them for more later. As this latter phase has also become the dominant vehicle for people to (they perceive) save, the primary function of stock certificates is now as a "Money Substitute."The Fed/ Government/PTB dilemma is that the maintaining of the ‘exchange rate’ for those wishing to cash in this money substitute is dependent on the equivalent of the proverbial pulling one's self up by one's bootstraps. Simply put, the exchange rate only stays where it is by maintaining the believe that it will go higher. This, of course, is quantitatively impossible.The explosive potential of the Credit Bubble could be somewhat diffused by extensive rolling over of debt into historically low service costs: note the operative word is ’rollover’ not ‘expansion‘. However, the First National Stock Market Spending Bank can not be kept solvent unless there is a re-write of the laws of monetary physics. Black Blade (06/30/01; 21:25:22MT - usagold.com msg#: 57271) Better Than A Crystal Ball? http://www.markpoyser.com/bartiromotalks/qg.htm I know it's a slow night while we await the markets opening on Monday. So that you don't have to waste your time watching CNBC and would like a "Heads Up" on the markets. Check out what Maria Bartiromo will say ahead of time. This is also good if you're really bored. Cheers!- Black Blade The Stranger (06/30/01; 19:08:40MT - usagold.com msg#: 57270) Reading Recommended By Gene Epstein in The Current BARRON'S GOLD AND ECONOMIC FREEDOM BY ALAN GREENSPAN An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense-perhaps more clearly and subtly than many consistent defenders of laissez-faire -that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other. In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society. Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving. The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible. What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible. More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term "luxury good" implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron. In the early stages of a developing money economy, several media of exchange might be used, since a wide variety of commodities would fulfill the foregoing conditions. However, one of the commodities will gradually displace all others, by being more widely acceptable. Preferences on what to hold as a store of value, will shift to the most widely acceptable commodity, which, in turn, will make it still more acceptable. The shift is progressive until that commodity becomes the sole medium of exchange. The use of a single medium is highly advantageous for the same reasons that a money economy is superior to a barter economy: it makes exchanges possible on an incalculably wider scale. Whether the single medium is gold, silver, seashells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has significant advantages over all other media of exchange. Since the beginning of World War I, it has been virtually the sole international standard of exchange. If all goods and services were to be paid for in gold, large payments would be difficult to execute and this would tend to limit the extent of a society's divisions of labor and specialization. Thus a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold. A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments. When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth. When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one-so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the "easy money" country, inducing tighter credit standards and a return to competitively higher interest rates again. A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World Was I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion. But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline-argued economic interventionists-why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely-it was claimed-there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks ("paper reserves") could serve as legal tender to pay depositors. When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's. With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain's abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed "a mixed gold standard"; yet it is gold that took the blame.) But the opposition to the gold standard in any form-from a growing number of welfare-state advocates-was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale. Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which-through a complex series of steps-the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard. August 19, 1996 Black Blade (06/30/01; 18:47:06MT - usagold.com msg#: 57269) Analyst says power plant demand will overwhelm gas industry http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=TOPST&ARTICLE_ID=105950 Snippit:HOUSTON, June 29 -- Investment banker Williams Capital Group LP, New York, says US natural gas supply must rise a nearly "preposterous" 50% to more than 33 tcf by 2004 to serve electric generation in development. With 90% of a proposed 350,000 Mw of generating capacity scheduled to be gas-fired, unprecedented amounts of new net gas production will have to emerge in the next 3-5 years or just 40-45% of these gas-fired plants will actually get built, said Christopher R. Ellinghaus, the firm's energy analyst.While gas prices have plummeted from $10/MMbtu this winter to under $4 and storage injections are high, Ellinghaus said July will test peak supply capabilities. Fuel for new power plants for the next 2 years will actually come from the "destruction" of existing gas demand in the commercial and industrial sectors, he said. If the analysis is correct, tight supplies should raise prices for gas and thus electricity production costs, regardless of price mitigation efforts by regulators, Ellinghaus said. Regulatory meddling could delay new capacity additions, and regulatory uncertainty could restrict financing for new capacity, the firm concluded.Black Blade: As I have been saying for quite some time, the numbers simply do not add up. There is not enough natural gas exploration and production to meet the growing demand. Unless coal, oil, nuclear, etc. power generation is rapidly - very rapidly developed, we face a true energy crisis of epic proportions. Periodic electrical power and blackouts are likely to become a way of life. The higher costs of energy will cave in the economy and lead to a new way of life. An "Interesting" article. SHIFTY (06/30/01; 18:46:45MT - usagold.com msg#: 57268) The Home Depot / The Ghost Depot I went to "The Home Depot" in Daytona this afternoon. It was like a ghost town. This is strange for a Saturday. On a normal Saturday the place is nuts. Today they only had two registers open. Could it be that people are starting to watch what they spend? Or they don't have anything to watch or spend?$hifty rc (06/30/01; 17:57:56MT - usagold.com msg#: 57267) @megatron - Behind the reserve currency is POWER! Exactly. This is why the US are able to flood the market with supposed to be worthless dollars. Which they are not because of the full backing of the US military might. Take them or else....As you say this will last until the US start to loose their grip on the world. China, Russia and India cannot be manipulated anymore. China and Russia have the means to wreak havoc in the US gold reserve. They could deplete it in 24 hours. It won't happen because the US will never comply. But it will mean big problems for the world economy as a whole.Europe is different. Their economy is as big as the US but they are divided and, at least, two of them (Germany and Italy) are vassal states. Their independence is fictitious. They cannot take any decision without the acquiescience of the US. They are ruled from Washington as most of Europe for that matter. The US do not occupy them for their protection (Against whom? The Martians?) but to take care of their own interests. In Europe history, you have to go back to the Roman times to meet such a situation. How long will it last? I don't know but if history is any guide, it can't last for ever. Already you have a lot of resentment simmering below the surface. This is where the biggest threat for the US hegemony will come from. Max Rabbitz (06/30/01; 17:02:23MT - usagold.com msg#: 57266) Another possible scenario (or my nightmare) http://www.investavenue.com/en/article.html?ART=1702&DIS=36 "Greenspan's Curve Ball !" By Sean Corrigan from Capital Insight Ltd. [6/29/2001]The link above is to an interesting article that points in the same direction as Trail Guide. A lower dollar, U.S. inflation, and rise in the Euro. The Trail Guide scenario for where Europe is headed is likely what is planned, but it is still only a possibility. Another is Anarchy. There exist highly organized groups with military like structures and training that are dedicated to a different kind of change, and I don't mean a gold currency standard. With the Internet they can now rapidly organize mass disruptions anywhere in the Free World. Not your ordinary protestors, they are the "anarchists" and are not afraid of violence. It is their tool for change. They are the ones seen attacking the police with bottles and pavement stones. They are the hard core left.....Utopian Marxists who want another chance to get it right. But first they must discredit and destabilize existing governments. Their utopian system does not allow privately held gold or forums such as this. They are real and they will not go away.These groups are fringe now and can be relatively easily handled ....but later? During economic or currency crisis? Should the euro transition not go well they will be there to pick up the pieces....and any gold hoarded by the selfish. They are not likely to be sentimental about numismatics or jewelry. Remember that the brown shirts in Germany were only a small fringe group for many years, with their leader in jail for a failed putsch. A little economic anarchy turns the table and the game is all new. My point is that we should not be utopians and permit perfection be the enemy of the good (or better). When the dollar reserve system collapses I hope there is something other than anarchy to replace it. Black Blade (06/30/01; 16:52:38MT - usagold.com msg#: 57265) RE: Canuck We also no longer see or hear from many posters from days gone by. Aristotle is one. Others include Aragorn III, Koan, North of 49, etc. We rarely hear from Turbohawg, flierdude, Y2K, and many others. I am sure some lurk while others are caught up in other affairs. Maybe these guys will drop in to say hello occasionally. Cheers! - Black Blade The Stranger (06/30/01; 16:00:52MT - usagold.com msg#: 57264) Barrick/Homestake and Epstein on Meyer I participated in the Barrick/Homestake conference call last Monday, and they did say, in fact, that they do not expect to expand the size of the two companies' combined hedges, which are currently at 18 million ounces.********************************************************For those of you who can get down to the store and buy a copy of "Barron's", doing so might be well worth the trip. Gene Epstein addresses the Martin Meyer WSJ piece in this week's issue. A snippit: "In today's regime, the central bank sets the price of short-term money, and at that price, it provides all the supply the market demands. That was how it underwrote the expansion of money and credit that fueled the Internet and high-tech bubbles. At the same time, Mr. Greenspan was careful to blame it all on those who were prone to irrational exuberance -- while providing all the drugs that kept them high. Then, feeling that the boom was getting out of hand, he cut off their supply by hiking interest rates.The eunuch guarding the harem? Say rather, the fox in charge of the chicken coop.Instead of reading Martin Mayer on this topic, try The Mystery of Banking, published in 1983 by the late, great Austrian economist Murray Rothbard.While his description of the Fed's operations is a bit outdated, Rothbard explains in typically lucid prose what money is, how it is created, how banking evolves and why gold and silver almost inevitably become the money of choice." Canuck (06/30/01; 15:39:01MT - usagold.com msg#: 57263) (No Subject) "The best predictor of higher commodity prices is a sustained period where prices are well below the all-in costs of production. This situation exists in gold industry."Nothing can be produced, at least for very long, at or below cost of production. Physical gold, IMHO, has set its lows at $252/oz. Prudent investors will snatch up gold at these lows. A myriad of potential debacles exist in this world which, at any time, will cause gold to rise. Numerous debates on this examine triggers which will cause this rise. I for one do not have the historical experience or the perspective intuition to make a call. Numerous debates on this forum allude to the aftermath of a rising physical gold price including the demise of substitute paper gold. I have tried to understand the paper options but cannot; I think because I don't care enough. Numerous debates on this forum also discuss the distruction of paper money either before, during or as an aftermath or a rising price of gold. I care but since, seemingly since I don't care enough, I am finding it hard to follow discussions of hyperinflation and/or the 'death' of the dollar.I have not posted much lately, partially due to time constraints but more so because I purposefully wondered away from this forum to digest other points of view. I have made a grand circle back to this forum to let some posters(ie Cavan Man) know that everything is okay. Nothing has changed. Gold is still #1, at least from my vantage point. I miss Aristotle.Canuck. BullDrooy (06/30/01; 15:25:43MT - usagold.com msg#: 57262) @Christian I will agree gold is totally manipulated and won't rise... IF we go through the coming nuclear exchange in the Middle East (this summer?) and POG does not budge.Should that happen, I will give up on gold forever.Not that I or any reasonable individual want nuclear war to happen, but I believe it is now unavoidable.IMHO it will take an event of this magnitude to overwhelm the cabal's control, shake the Dow & Duck to their knees and force investors to look elsewhere for a safe haven.Perhaps at that point, our long term genetic investors' memory will kick in and POG (and related) yellow metal investments will finally soar.Then, the blasted cabal can find holes to crawl into and lick their gaping wounds. Elwood (06/30/01; 15:20:10MT - usagold.com msg#: 57261) Trail Guide Trail Guide, you once wrote that society requires that losses resulting from economic busts be spread among its members, yet, I understand, this Freegold concept is being sold as a way for the common man to avoid this "sharing of the loss."How will this sharing of the loss manifest itself when the Euro bust occurs as it surely must? Are we to believe that the issuers of the Euro will merely step aside and let Gresham's law run its course?Additionally, what exceptions will there be to the "no attachment" rules you foresee?Regards,Elwood Canuck (06/30/01; 15:11:30MT - usagold.com msg#: 57260) @ auspec You are a good man! I had posted the "Outlook for Gold" and saw only one mention and then your post 57110.Thank you.I have received annual reports from several companies who explain the supply/demands fundamentals and I firmly believe we are the cusp of a bull market. Here is the Franco statement which will lead into my last post:Canuck (06/05/01; 20:10:57MT - usagold.com msg#: 55440)An unhedged gold company says it all"Outlook for Gold""We firmly believe that gold prices will move higher but have no strong view as to when this will happen. Our studies and those of our peers, indicate that 90% of gold projects require at least US$350 per ounce of gold to generate after-tax returns in excess of 10%. Gold demand exceeds supply by 1,000 tons annually. The shortfall has been made up by Cental Bank selling and loans to producers who pre-sell their production. These Central Banks sources of supply could possibly go on for another 5 to 8 years or until faith in paper currencies erodes. The US trade deficit is unsustainable at US$400 billion annually.... The best predictor of higher commodity prices is a sustained period where prices are well below the all-in costs of production. This situation exists in gold industry. A positive development for mining in the US was the election of President Bush. His cabinet appointees promise to deliver a more even-handed operating enviroment than the Clinton or possible Gore administration."-End quote- Canuck (06/30/01; 15:01:56MT - usagold.com msg#: 57259) @ nickel62 Excellent post from the other day; this will lead into my next post.Thanks.nickel62 (06/28/01; 19:36:58MT - usagold.com msg#: 57121)MusingsTen years ago as a confirmed gold believer, I would get a sinking in my stomach at the thought of the worlds central banks flooding the world markets with their apparently unwanted gold. I guess the nightmare has come true and I have lived through it I think. The other fear I have had is that their was a mistake in my calculations for the total supply of gold in the world and that there would actually be an endless glut of cheap gold produced by a wave of new mining companies. Each sprung from the hip of some investment banker with the ability to raise capital quickly and using some new technology to either find deposits more easily or process gold more efficently(heap leaching, bio leaching etc.) Well having lived through the last ten years, I guess we have seen the central banks sell off more gold than we feared in our worse nightmare and every other major hoard from Marco's fabled gold treasure, to Russia's dismantling of an entire countries mineral wealth, to whatever has been able to be created from the forward sales of all the hedged producers. Now gold is still standing, bowed , beaten and manipulated but still in demand. The current price appears to be the world clearing price for the excess of all these various hoards being dumped at once on the market. What better valuation could we as investors have then the resilience of the gold market over the last several months. Let's hope the bastards have finally run low on their ability to weave gold from paper. It has been a very long time and I think we are finally there. Belgian (06/30/01; 14:51:55MT - usagold.com msg#: 57258) Dollar >< versus >< Euro The EMU is not imposing membership but inviting !Consumers and all economic actives prefer dreams above sable rattlings. The full swing americanization after WWII was dominated by the undertones of fear and insecurity.Russians, East blockers, had their share of misery and starvation. The Milosivitch effect is significant.So many wish to be invited and join the Euro prosperity party, clearly visible and perceptionnal stable.Avoiding conflict management is not necessarily a sign of weakness. The european prosperity is witnessed by the east bloc mobile and temporary workforce from the different states, who have easy acces into the heart of europ.Another 200 million stand ready to contribute to expansion.They dream about improving living standards and become less conflict oriented. Create improving living conditions and a lot of war-reasons vaporize.That's why the Euro never declared war to the dollar. When the € matures, the dollar reflex for presumed security reasons will evaporate. The dollar will have no interest in provoqing any kind of war but will have to concentrate on repositionning itself in a non exclusive standard position.US force will be used pragmatically by Euro planners.Transition from conflict orientation, poverty induced >>> to economical expansionary, longing for a better live.Who and to what extend, is using Gold in the $/€ evolutive relation, will probably be never known. And the answer will only have academical value after everything went back to normal. The POG manipulation must have been organised at a much higher level than BBs and Hedging producers. It has more the allures of a $/€ (accidental) conspiracy. A live and let live arrangement with a minimum of brutality.The Euro child gets the best educational guidance it can get. And what is particulary important to me is that the "collectivity" is not interested in the "force" aspect of EMU. The collectivity focusses on the political € and not the economical one (so far).Have the European CBs, used Gold, to put the dollar-valuation and timing of it, at their hand ? Gold the leash of the dog, dollar and EMU (BIS) letting the dog out ?Can POG's behaviour be related to an objective optimistic/pessimistic perception parameter (other than $/€ exchange) on the succes of the € ?Labor (UK) victory increasing Euro joining and POG spike (10$).How will an economic contraction impact on both $ and € ?Wich one is the most prepared for weathering a Kondratieff winter ? Who is best equipped to survive its Debt ?Will economic reality, allow for an smooth $/€ unwinding ?Or is this imponderabile the planner's nightmare ?And will Gold break free to arbitrage as the one and only ruler and ultimately decide, who is what ($ value versus € value) ? Will Japan be called in by the US and hugged for love and understanding ? Wich side are the japanese going to choose ?And are the Chineze allowing to be exploited in the geopolitic chess play ? Creation of artificial fear to accentuate the reliable and protective US-force ?Whatever scenario that unfolds >>>> there is not one single reason for "NOT" having physical Gold < TODAY >.That is the message we have to carry around . This forum is providing us waterproof arguments to do so. I see nothing that can compete with Gold on a risk/reward basis to convince hesitant goldinvestors. Peter Asher (06/30/01; 14:30:31MT - usagold.com msg#: 57257) Repost from 5/31/999 Even more relevant now IMO++++++Jade: Whatever time the Saudis were getting whatever price for their oil was not really my point. My understanding is that they, like the rest of the planet, are living beyond their means at the moment. Therefore, they wouldn't have funds for gold hoarding, unless they raided the national "grocery jar".The storage of value in gold, requires one to have some unspent value available to store.Oil trades in the marketplace. Producers sell it by whatever deal they can achieve with users who desire it. Maybe next week the best deal for some producers of oil may be 50 cumquats or 100 oranges per barrel. Or maybe a couple of thousand barrels for an SAM missile. The marketplace may never again trade gold for oil at its historic rate, or maybe it will.Suppose the world collapsed back to basics. You (and certainly Aristotle) may have by then accumulated a substantial stored value in gold. I, on the other hand would probably have prepared for that eventuality by acquiring a wheatfield, a stone grinder and an oven. Unless you use some of that gold to acquire the means to produce something for exchange, I will eventually have all your gold and still have my wheatfield, grinder and oven. So let's move on now to AEL's lovely reality check regarding the Japanese postal bonds.I am fascinated how similar this is to the WWII War Bond. These were ‘pay interest at maturity’ 10- year instruments where you paid out $75.00 for a bond of $100 face value. After the war, as the maturity date came up, the government tried to get people to keep them longer and have the redemption value increase over time according to a table of value that I believe was printed on the back. Basically, perpetual IOUs until cashed. They also came up with new issues, which they then called ‘Savings’ bonds, to replace (or create) the money paid out in redeeming the War Bonds.Bonds, stocks, Savings accounts, money market funds and CD's all have in common the simple, but I think often overlooked, fact that the money which purchased them has been SPENT! The most paramount factor in mankind's economic life is what that money gets spent for. When government spends on welfare, social programs or weapons; nothing which can pay back anything can be produced as a result of that expenditure. Likewise, when individuals spend borrowed money for things that are consumed, such as food or movie tickets, no productive capability is created.Believe it or not, in the 1940's people who bought things on time payments were considered "the poor". Houses were mortgaged, but that was pretty much it. As the post-war economy got revved up, auto loans became socially accepted, and then appliances. However, in those days, the loan spans were definitively shorter than the life spans of the products. Since the convenience and the personal labor saving which was derived from possessions allowed one to produce more in life, there was still some productive payback, even from consumer credit.I think the moment in time when the world began to go hell in an economic handbasket was when the banks came up with the Vacation Loan. I was a young man at the time, no more interested in economics than I was in an old age home. But I remember thinking, "I don't believe this! They're going to lend money for something that will be gone before the loan's paid back!" What once made no sense is now considered totally logical. That, by the way, is the key to the dwindling spiral of our society. Getting people to accept as normal, that which a sound and sane mind would reject out of hand.ET: That's what's happening to these generations you were referring to the other day. Ever hear the expression "Values Neutral"? It's what the New World Order folks are having the shrinks put into our school systems to create a nation of psychopathic "Epsilons" who won't have the ethics or the intelligence to use the law of the land to defend themselves against the Masters of the Universe. All our analysis of monetary function will be to no avail if we don't get a grip on the underlying activities of those who wish to create their wealth by the enslavement of everyone else. Take a starved man, feed him well, chain him to a Galley Oar and only whip him occasionally. He may perceive he's doing better!Way back in the second Forum contest, Michael had listed the Euro as one of the four reasons to buy Gold. At that time, the championed belief on the Forum was that the advent of the Euro would create a demand for Gold due to the fact of direct collateral by the metal. At that time I believe the estimated amount was 20%. My view at the time (5 Dec.) was, "Much has been said about the potential of this "composite" currency to compete with the dollar. However, what quacks like the mark and the franc, also quacks like the lira and the peso. The Euro is, by packaging the Common Market, a currency equaling the dollar in its scope. But, the strength of the major currencies converting into it could be weakened by the historical vagaries of the other components. Therefore, the fact of UNPREDICTABILITY could actually drive assets INTO the dollar, and this could even be negative for Gold."Now, 6 months later, problems with Italy along with a general lack of cohesion amongst the EU, appears to have played this out. (As I quipped the other day, "A camel is a horse designed by a committee.") Two days later the Sunday paper inspired this post: <I just now read a Sunday feature on the Euro. The one item that jumped out was the claim that corporations will incur far greater expense converting their systems to use it than they are spending on Y2K. But also, many companies are putting off coming up to speed on the currency because they are immersed in Y2K preparations.It seems that "electronic transactions" must be denominated in Euros only after 2002.I'm just wondering if my theoretical argument on Friday, that the initial uncertainty might in factcause the dollar to go up, is what's mysteriously holding Gold down. This is a question, not anassertion.> Back in October, a Canadian investment service rated the major nations’ Y2K preparedness as either "O.K.," "Warning," or "Avoid." Five Eu nations were "O.K.," five were "Warning," and Germany was "Avoid." I believe I saw a post the other day, suggesting that the Y2K threat was part of the negative pressure on the EuroNow let's look at this post:<<koan (5/20/99; 9:44:31MDT Msg ID:6525) Future of US economyI would maintain that the US has never been in better economic condition, except for the trade deficit.The US has low inflation, low interest rates, control of an emerging world economy where it holds allthe cards: the computer hardware, software, Internet, markets, money, language(English future world language), management organization, accounting systems, laws, computer literatepopulace, best farmland, best factories, best transportation systems and best political system. We area full blown democracy!. These are the reasons the $ stays strong and probably will continue to doso. For all the US's faults we are like democracy: "a terrible system except for all others" (sic). Iwouldn't bet against the US economy. >>It seems that most of the rationale being set forth for the demise of the dollar has to do with our trade deficit and our money supply being so large. I know there is a lot of debate flying back and forth over hidden financial war games involving the BIS, IMF, Central Banks and maybe the Saudis and even George Sorros.. However, I prefer to evaluate currency as follows. Today, there was an announcement that Ford-Jaguar is taking a Porche frame and some Jaguar Salon technology, incorporating them into a format from the XK-120 (A gift from the Gods in the my 14 yr. old eyes, imported into the U.S. in 1948 and creating the term "Sport Car"), and producing what sounds to me like heaven-on-wheels. So I, as an American, have now had a sizable portion of my future earnings (as regards possession fantasies) transferred from domestic to foreign spending. If I were to purchase that beauty in 2001 (along with a radar detector) the Euro would be stronger and the dollar weaker. If I paid for it by clear-cutting a couple of acres of hemlock and sending the logs to Japan, that would be good for the Dollar. If the Japanese than fabricated those logs into a precut Shinto-style lodge and shipped it to Colorado, the Yen would be stronger. On the other hand, if I instead sent those logs up the road to Boise Cascade and they made veneer or finish trim and shipped it to Japan, that would be even better for the Dollar. Creditors evaluate a debtor both by the amount of debt he carries and by his ability to service it. If a company is seen to have a strong earnings potential, they can borrow a greater percentage of their future earnings. Likewise, I perceive that the strength of a nation's currency is based on the interrelationship of balance of trade, balance of currency debt, productive capability and desirability of product.My belief and philosophy is that the nuts and bolts are senior to the trading games (certainly in the long run). Any earnings (read: "gleanings") from currency trading must piggy-back on the production chain of mine or cut, fabricate and assemble, market and ship, real world of economics.It would be interesting to quantify and compare the trade balance, currency debt, gross annual product, and asset value of the EU and the USA. We might find the real truth behind the current and future Euro-Dollar relationship. Maybe the figures will show that there is a logical reason for the dive towards parity, or maybe it's a smokescreen for a coming dollar disaster. Maybe the size 14-E stock market shoe has to fall, figuratively and literally, before it all plays out. For the moment though, the statistics are singing, "God Bless America."Copyright by Peter Asher, Memorial Day 1999. CoBra(too) (06/30/01; 14:26:11MT - usagold.com msg#: 57256) test test goldfan (06/30/01; 14:19:21MT - usagold.com msg#: 57255) ORO (msg#: 57146) ORO I've asked some questions around some of this post of yours. Again I really enjoyed the opportunity you presented. >>>>Euro area outflows surge - Triffin's initial observation<<<<>>>>The outgoing investment flows were caused by two items; (1)the lower returns available at home, where industry was built up and imports competing with local production, (2) The higher returns available abroad, where industry was being constructed (reconstructed in the case of Europe of the 50s) and imports were out of reach.A third item, related to the first, was the artificially low interest rates maintained in the reserve issuing country. The reason for the reserve issuer forcing low interest rates is maintenance of the political beneficiaries of the reserve currency policy: the beneficiaries can only be the government itself, and the primary currency issuers, i.e. the banks. <<<<I thought that the reserve currency , as the currency of last resort, is the least risky and so gets a lower interest rate? How is this "artificial"? And isn't this effect what the Eurozone people are looking for, so as to make it more attractive for the Euros to stay home?>>>>Even in the case of the issue of currency into the international marketplace against gold, without having the gold available to the holder of the currency at a legally or contractually set par on demand, the currency will be discounted even if it is backed by gold holdings many times more valuable than the volume of currency outstanding. It is so because holding the currency is separate from holding gold. Only if the currency is effectively a redeemable gold note would it matter how much gold backs it. The purchase of gold would supply currency into the international market and cause it to decline in purchasing power just as surely as would a purchase of foreign made tea. The discount arises for the same reason we would not pay the same price for an impenetrable bag of potato chips and a plain bag of chips, even if the permanently closed one is much bigger and contains more chips. The chip quantity in the bag would not matter so long as we can't access them. So far as we are concerned, the impenetrable bag of chips might as well contain nothing at all.<<<<This for me is the crux of a lot of the discussion around Euro/gold/oil etc. But I don't get it. I'm trying to draw an analogy with the gold/silver fund, Central fund of Canada, traded as CEF. Here we get shares in a gold silver hoard. Can't access the gold directly, only buy the shares. But, if the company breaks up, the breakup value will be that of gold and silver at the time, and the shareholders wil get that, since there is no debt. This always trades at some discount, 5% or 10% to the current POG/POS. But the discount goes to zero, or even becomes a premium of as much as 20% when the gold price is spiking. >>>>>>The euro is suffering from the investment flow problem. Soon to follow, if the ECB continues to pursue reserve currency status (pushing it by use of artificially low interest rates – the only possible way to do so), the euro zone would operate a trade deficit. The investment flows, to the extent that they result in foreign borrowings denominated in euro rather than purchases of securities denominated in other currencies, would eventually create a debt repayment demand for the currency among foreign debtors. Without that, the euro will simply fall further in value as more is issued, as is done now.<<<<Isn't this what the Eurozone wants, the chance to get on the tribute gravy train, get stuff just by printing Euros, instead of saving up for it? Why won't they get what they want?>>>As to the euro being a "new" currency with a "new" timeline, that notion should be laid to rest, as it is a continuation of the ERM that has been in place for well over a decade prior to EMU initiation, and carries with it the baggage of decades of economic deformities arising from the EU proclivity to exclude imports, and the decades of indebtedness that are wholly within the banking sector and back the currency directly, rather than in floating value paper used in the US. Thus the EU banking system, like its much more distorted Japanese counterpart, has its clearing system (functionality) directly tied to performing debt payment, whereas the US clearing system is much less sensitive to bad debts since most of the debt (80%) is not owned by investors through banks, but owned directly. While the EU debt markets are dominated by banks, and the bulk of debt obligations (over 60% if I remember right) are owned by investors as bank deposits. Therefore, in Europe, the investor to be damaged in a credit crisis is anyone who holds a bank deposit 60% of the time. In the US, banks have a 20% chance of being hurt from the same relative volume of bad debt. Furthermore, junk US debt is owned directly by investors who knowingly took on the risk and will directly bear the results of their errors. In Europe, the situation is much different, with some 60% of the damage resulting from bad debt being spread over everyone. <<<<Seems to me that somehow the banks in the US are dependent on the economic health of their customers. For example, the real estate market, and construction, etc. and US consumers will be damaged by the failure of the companies that issued the junk bonds, not so ???>>>>As for US households being overextended and over-leveraged, it should be considered that much of this - though the amount is indeterminate - comes from playing leverage with retirement accounts for the upper quintile, and much of the rest comes from a $250-400 billion understatement of income from stock option plans, which register directly no-where in the official statistics. <<<<Are you saying the consumer in the US is in ok shape, and that we needn 't fear a major slowdown in consumer spending??>>>>The Fed has operated a deflationary policy for the better part of two decades, while the EU central banks and particularly the Japanese central bank have operated a sterilized expansionary policy, they exported their credit expansions in order to push sales of their exports. It is from these sources that credit expansion has risen around the globe and in the US.<<<<And still we are about to implode? This means that no government or CB has a workable answer to what we are about to experience? What if they hadn't done this, would the Feds be good guys today? Noland seems to think it is Fed money pumping via GSEs and Brokers that is about to bring down the house of cards, do you disagree??Thanks for your thoughtsGoldfan goldfan (6/30/01; 13:37:07MT - usagold.com msg#: 57254) ORO (msg#: 57049) ORO, concerning your Stranger - Marty Mayer and the Historical Fed - repostI cut some pieces out of your post and appended some questions. Hope you will have time to respond. I really enjoyed reading this, as all your stuff. Find I have to work pretty hard to understand, but it's worth the effort. >>>>>The original central bank structure was a reserve sharing for common note (and account) backing within a country. The notes were demand notes, and the purpose of the reserve sharing arrangement was in order to remove competition within the country for the gold reserves and among the competing notes issued previously by individual banks.<<<<<I don't understand why "they" wanted to reduce competition among the banks. Was this in order to have only one bank for the government to deal with, and so find it easier and swifter to print the money they wanted ?>>>>>Free of competition on note quality and for reserves, the banks had only to consider credit quality and market share in their lending, and reserve ratios of demand notes and accounts were now solely the responsibility of the central bank.<<<<I guess this is why banks would go along with it. Nobody likes competition, especially if it reduces the possible size of the pie.>>>> Furthermore, the central bank removed the major source of competition in the market segment where banks had borrowed; commercial paper. In this area, and later in bank deposit and lending rates, central bank decisions routinely prevented competition on credit quality, and later on returns to depositors and money market lenders to banks, and then proceeded to cram government debt into the banking system with the government telling the central bank what interest rate it would pay. <<<<<Wow!! Now we get a really big pie!!!!>>>>The enormous expansion of government borrowing during WWII dictated that the central bank buy as much government debt as would not be absorbed by the market at the interest rates the government dictated, and thus issue as much currency as was needed to perform these purchases. The funds pushed by the CB into the "fixed income" market dictated the range of interest rates on private market debt. The Fed dictated deposit rates below the government paper rates, and private lending rates above the government paper rates. All was structured to eliminate government's payment of market rates on its obligations. <<<<Makes the distribution of largesse and bribery a little easier, without having to be unpopular by raising taxes.>>>>>The low interest rates on deposits pushed many to buy savings bonds and to start loading up on extra provisions for the home, what is essentially hoarding of physical goods, because keeping resources in a bank or in bonds or stocks was unrewarding due to the negative real return. The low interest rates on deposits also pushed people to buy commercial debt and to invest overseas, bringing about an investment boom in the 50s and 60s in production of consumer goods. Not being allowed to invest at their preferred real rate of return, the public increasingly chose not to invest at all, but to accumulate goods. <<<<<When and how will this begin to happen again? What will it look like when it does happen? The CRB is droppng like stone these days??>>>>With borrowing costs artificially lowered and with apparent demand rising, industries invested heavily, bringing down rates of return on business opportunities remaining. When companies found no further avenues for large scale investment, they simply started accumulating goods in both pre and post manufacturing inventory rather than hold onto accounts paying distorted low interest rates. Bank margins shrank from 2-3% before, to 1-1.5% in the 60s as low rates had forced them into consecutively poorer quality credits.Thus were sown the seeds of the price inflation of the late 60s and the 70s.<<<Don't high inventories help to reduce prices??Are you saying ( a la Fekete) that too low interest rates on savings induced hoarding? And are we about to repeat the experience?>>>>>>The low EU and Japanese interest rates are the result of bad returns there. The relatively open market for monetary flows allowed the EU and Japanese investors to put their resources elsewhere rather than hold them in their home countries, where rather than holding them they would have dumped euro and yen in favor of hoarding goods (and gold).<<<<<Maybe they would have been better off today if they hadn't so easily been able to invest elsewhere?? >>>>The past errors (intentional or not) of the Fed have been repeated ad nauseum throughout Europe and Japan. Doubtless the Fed has performed further errors, as being a central bank, and therefore a central planner, they must. However, the EU and Japan have done much worse, having repeated many of the old errors, and probably out of the same motives.<<<Are you saying the Japanese and European banking systems are in much worse shape than those in the US, not likely to have much to support a new reserve currency?>>>>>>To end this comparison, we must also view the attempts of EU representatives to squelch the internet by assignment of liabilities to carriers for web content they can't control. The complain that the internet is "out of control". This means that the internet is largely free of political control, which is what they are complaining about. They protest about "hate speech" which, as indicated by the EU suit against Bernard Connolly, the former high EU bureaucrat who wrote "The Rotten Heart of Europe : The Dirty War for Europe's Money ", is defined by them as anything that constitutes a criticism of them; which in court they claimed was "blasphemy".<<<<<In general, I take it you are saying as in other posts of yours, that the Europeans haven't much to teach us about how to design an economic system. Maybe ours is about to crash, but theirs won't fly either? Thanks ORO for your work and insightsGoldfan lamprey_65 (6/30/01; 12:57:34MT - usagold.com msg#: 57253) Hmmm, what do you think he's getting at here?... http://www.prudentbear.com/credit.htm "Going forward, I expect the issue of liquidity to garner considerable attention. I will certainly be surprised if it does not now become an ongoing problem for a fragile U.S. financial system. When it comes to "financial fragility," the work of the great Hyman Minsky is invaluable. For thecurrent environment, his analytical focus on borrower and lender risk, as well as the key issue of "refinancing risk", is particularly pertinent. He also had interesting things to say about liquidity. In my definition of money I use the criterion "perceived store of value." The problem is perceptions do change, and confidence and liquidity can be very fleeting things. Over the past few years we have created trillions of new financial claims, with perceptions thus far holding that many of these financial assets are both safe and liquid. But only over time will we see how well this "money" maintains its characteristics of ultimate liquidity and a secure store of value. Ponder the extraordinary contemporary monetary regime as you read through some cogent analysis written by Hyman Minsky in the early 1960's - describing how the monetary system used to operate (excerpts from Longer Waves in Financial Relations: Financial Factors in the More Severe Depressions, from Monetary Theory by Thomas Mayer):"An economy's stock of ultimate liquidity consists of those assets whose nominal value is essentially fixed and which are not the liabilities of any private unit within the economy. The ultimate liquid assets carry no default risk and as they are essentially fixed in market value, they are always available to meet payment commitments. No private unit is constrained by payment commitments embodied in these assets." lamprey_65 (6/30/01; 12:52:12MT - usagold.com msg#: 57252) Gold Weekly Looks to me as if the "hot money" has found gold. We sold off visciously after the rate cut...the trade had become too predictable -- never mind that only 25 basis points were cut instead of the anticipated (hoped for) 50.This hot money includes those hedge funds which have sprung up over the past ten years or so...many are run by what I consider inexperienced money managers.The true accumulators of gold will buy in slowly, without gunning the price.Also...Sold my Homestake this week. I have no desire to be tied to Barrick's hip. megatron (6/30/01; 12:52:10MT - usagold.com msg#: 57251) Prognostication My view on the long term trend/value of the Euro vs. the $The main reason the US dollar has/is reigning supreme is force. Military force and very little else. Confidence, call it what you will. That is the simple lesson of history.It need not be any more complicated than that. When the US loses the 'confidence' of the world in a military conflict the balance will shift. People understand very few things, very well. Force/military power are one of the few. The Euro is the creation of a fractious socialist amalgamation of 'beurocrats' and 'intellectuals' who have dimly recognized a decline or perceived future decline in US$ power/confidence . This is their attempt to halt what they see as an eventual hemmoraging of the value of assets denominated in US$. It will be a poor/vain attempt for one reason only. Focused military power. They have very little and absolutely NO WILL to use it. The world understands this CLEARLY! As US power declines it will become a target for more quick jabs(Iraq) by China,etc. to test it's resolve like an aging lion protecting his pride against younger, more powerful suitors. This game will go on for the better part of the 21st century's first 50 years. At some point the Euro will have to be bolstered by military might. The perception that China has gotten the upper hand will be a great reason to start up the machine. With that decision will come the eventual inflation that comes with all regimes attempts to out muscle enemies.The US$ power structure will become a very dangerous,cornered animal at some point in the next 50 years. They, MILITARILY, WILL NOT ALLOW the structure to be usurped by another currency/power. This you can bank on. When push comes to shove the only thing politico's respect are gross displays of power. If necessary, the US will miltarily absorb the Arabian penisula and defend it like it was 123 Main st. It will occur. The Gulf war was a facinating 'touch of the gloves' before the main event. The 'beurocrats' in Europe have no stomach for this and could never do what the US is and has always been prepared to do. Their 'sissy' attempt to gain some form of control over the oil of the ME pathetically, and yet perfectly in character for 'intellectuals', reveals again their BASIC mis-understanding of the nature of power and how it controls the world. Behind the reserve currency is POWER. goldfan (6/30/01; 12:46:27MT - usagold.com msg#: 57250) Money and Value Money and ValueBacked by dollarsThe physical fiat dollars I spend are somewhat like a magic wand that leaves a trace of its power on whatever it touches. I call this being "backed" by dollars. Same with the electronic spots deposited in my bank account via my paycheck. My work or other trading from which I get paid in dollars means I have for a while the capacity to direct where that wand will go, what it will touch. Those accounting ledger entries, are backed by fiat paper. The fiat paper "backs" whatever it touched. But the backing may be an illusion. It only counts as reality, the reality of a barter, something exchanged for the paper, if the paper is there when the thing is presented for it. The apples in the store, are, at the moment of sale, 100% backed by dollars. Apples left in the store after everyone has run out of money, have no "backing" at all. What makes any investment instrument valuable, is the confidence that it is backed by dollars at some rate of barter for dollars not too far from the original acquisition value, or the confidence that it will return a stream of dollars according to contract or expectation based on past history. No investment is valuable to me in the monetary sense of that word, unless I am confident I will get my expected stream of dollars out of it. When my confidence is shaken by some experience of not getting the "backing’ I was expecting, then, I may well seize any opportunity to turn the dollar backing into something with more credibility as a "backing". ie, gold. or tobacco, or whatever else I can hoard with some expectation of being able to trade it for my future needs. Backed by goldSo according to this analysis, to have gold "backing" fiat currency, credibly, means there is an expectation of getting 100% gold when the dollars are presented for exchange. Just the same way as when I as an apple grower expect to get 100% dollars when I sell my apples. Note I am not saying these dollars will always buy the same amount of apples. The decision to exchange my apples for dollars now, or wait for a better price, is my choice. To have a dollar/gold exchange market backing the dollars, is simply an insurance against there becoming too many dollars around, they being so cheap to print. This market kind of chugs along most of the time without to much wild volatility. However, there will come a time when enough people are suspicious of the "value" of dollars, that they will all seek to exchange for gold at once, so putting the price of gold up, and causing such a devaluation, in the dollars, that many or all of them are destroyed as worthless. Gold/dollar exchange todaySeems to me this is the system we have. What's wrong with it? What I understand is wrong, is that it operates with far greater highs and lows in the purchasing power of the fiat, than it needs to. These highs and lows wreak havoc on the savings of millions of people, and grievously distort economies, causing privation and misery and ultimately violence to a far greater extent than necessary. It's possible to survive with bulimia, binge eating, then vomiting. But it's is not necessary or desirable to live this way.The Euro experimentI understand that FOA/Another and others are pointing to the European experiment as a way of reducing this volatility, producing ultimately more economic stability for more people than the present US dollar reserve system with loose gold "backing" through the dollar/gold exchange markets now existing. Or maybe they are not proposing that it will be better, just that it will be done as an outcome of the inevitable collapse in the purchasing power of the dollar. And they say we can have a life raft to ensure our savings, by owning physical gold ourselves, now, just as the ECB are ensuring themselves by owning physical gold. (note when the banks own your gold backing, you have to rely on them to take care of you. Are you sure they will do this? Why would they? Maybe to the extent they fear riots, or the politicians, loss of power and privilege. Maybe this is why we get alarmed when our nice civilized governments use guns on the people. It suggests the powers are not afraid to use violence to control us without our consent.) The rebuttalI understand ORO is rebutting the above by saying that the Euro experiment will have an even shorter time line than the dollar experiment. Maybe, much shorter. I wonder if he is saying there will be chaos starting with the collapse of the US dollar, which will not be ended by whatever measures the ECB takes to set up some alternative dollar/gold exchange with whatever rules they make?The bottom lineIf I own some physical gold myself, I will have my own economic life raft. Maybe no fiat system ever again, will survive after the collapse of the US dollar system. But they will surely try to design one. And I know I have yet to see into the future with any true clarity, through the varying pairs of glasses being presented to me by the eminent posters on this and other forums. But I am willing to keep on trying.FWIWGoldfan USAGOLD (6/30/01; 11:44:39MT - usagold.com msg#: 57249) Redo of "Note" http://biz.yahoo.com/rf/010629/n6t191035_2.html Let me correct the errors in that note (sorry):Note: This is the first time I've heard that the 18 million ounce hedgebook would not be increased. Knowing Leanne Baker's propensity to track down the story before publishing an analysis, I wouldn't be surprised to learn that she got that from the parties, though I can't say for certain.There's more info at link above. goldenigma (6/30/01; 11:36:39MT - usagold.com msg#: 57248) test test USAGOLD (6/30/01; 11:33:57MT - usagold.com msg#: 57247) Leann Baker on the Barrick/Homestake Merger http://biz.yahoo.com/rf/010629/n6t191035_2.html NEW YORK, June 29 (Reuters) - Salomon Smith Barney said analyst Leanne Baker downgraded Homestake Mining (NYSE:HM - news) to neutral from outperform after valuing the planned $2.3 billion merger with Barrick Gold (Toronto:ABX.TO - news) as neutral given changes to earnings and cash flow seem fairly modest. . . . . Noting the merged company does not currently plan to add to the 18 million ounces position of the combined hedgebooks, Baker said: ``We expect Homestake investors seeking leverage to the gold price may take the premium and choose to re- invest in less-hedged gold equities. . . . . Note: This is the first time I've heard that the 18 million ounce hedgebook would not be increased. Knowing Leanne Baker's propensity to track down the story before publishing and analyhsis, I wouldn't be surprised to learn that she got that from parties, though I can't say for certain. Black Blade (6/30/01; 11:29:49MT - usagold.com msg#: 57246) Power Shortage Not Real, Most Californians Say http://www.latimes.com/news/state/20010628/t000053194.html Snippit:Times Poll: The energy market was manipulated to boost sellers' profits, 86% say. Davis gets low marks but Bush fares even worse. Despite disruptive blackouts and record increases in their utility bills, most Californians remain unconvinced that the state suffers from a shortage of energy, a Los Angeles Times poll has found. Instead, more than five out of six Californians believe power companies have manipulated the electricity market to boost their profits, the poll shows. And although nearly all respondents agree that the state's energy crisis is a serious problem, they express little faith that their leaders can solve it.Black Blade: "…and they danced, sang, and played all summer…" slingshot (6/30/01; 11:22:52MT - usagold.com msg#: 57245) Observation I have been away for awhile and looks like plenty has been going on here. To cut to the chase. People are buying gold and per my observation it is on the increase. They are small purchases but the Gold is going home with them just the same. I put my ear to the track and I feel the rumble of the train in the distance.Slingshot Belgian (6/30/01; 11:19:32MT - usagold.com msg#: 57244) Dollar - Euro - Gold A Fundamental difference between the US$ and Euro :All new EMU countries change their national currency for the Euro. The nations under dollar hegemony, are condemned to produce and serve in their own currency that is kept inferior to the almighty dollar. Weak EMU candidates have the enormous incentive to change everything, converging towards Euro upgrading. This is sharply contrasting with the dollar, master-slave, reality.A dollar-holder is therefore giving many different purchasing powers to that same piece of paper. The EMU members will all have that same Euro force. They just have to align for becoming part of it. And more candidates seem to be eager to do so.Dollar-slaves are dictated at what value they have to produce goods and services and deliver at the dollar holder.The EMU is expanding the economic activity on more equal terms. Future EMU joiners, realise that they have to reduce debt and be more productive as a condition to join.Dollar subordinates have no choice as to compete in quality and price in order to have a piece of the dollar cake.The economic expansion , organised with the dollar, is very unbalanced and short sighted. Due to exhaustive competition.I wouldn't be surprised at all if for instance South Africa would pin the Rand exclusively to the Euro in the future.Especially after the UK should has joined.EMU membership is an incentive to expand and exchange goods and services. It might be "the" answer for the demographic problem of central europ. Backwarded nations suddenly get the opportunity and a strong stimulus to say goodby to anarchic economics and catch up with european wealth.There would also be less reason to provoque war and postpone a consumers paradise. Polen, Bulgaria, Ukraine, Estland...are enthousiastic.The consequences for Gold are obvious, if the dollar has to take one step down. Slowly but surely, I start to realize the profoundness of T.G.'s insights ! They are Genial !And the probability seems to increase with the present activity, observed and translated into FOA thinking.Sincerely THANK YOU SIR ! Black Blade (6/30/01; 11:18:16MT - usagold.com msg#: 57243) Greenspan Discusses Energy Crisis http://www.jsonline.com/bym/news/ap/jun01/ap-greenspan062801.asp Snippit:WASHINGTON - With the price of gasoline and natural gas falling in recent months, the country should be able to escape from the current energy crisis without any further adverse effects on the economy, Federal Reserve Chairman Alan Greenspan said Thursday night. Greenspan said the Federal Reserve has been paying close attention to the big jump in the price of gasoline and natural gas throughout the country and the electric power shortages in California, given the crucial role energy plays in the overall economy.He noted that the last three recession periods in the United States - 1990-91, 1980-82 and 1974-75 - all were preceded by sharp spikes in the price of oil.``As a consequence, we at the Federal Reserve are especially attentive to developments in energy markets and their effects on the behavior of households and businesses,'' Greenspan said in a speech to the Economic Club of Chicago. Black Blade: Not out of the woods yet. A lot of variables that need to be considered with regard to electricity and the seasonal nature of energy use. If weather and temperatures are moderate then we can breathe a bit easier. However, summer just began and fall-winter will draw heavily on energy supply. If this energy crisis pulls the US into another recession (I believe it already is in recession), then gold could respond as it has in the past. I look at gold as portfolio insurance (Golden Life Boat), an anchor to my investment portfolio, - not as an investment in the traditional sense (though in the right situation it could be). We could be at a cross-roads. IMO - Energy is the key. Black Blade (6/30/01; 11:00:38MT - usagold.com msg#: 57242) Mexico says oil, gas reserves in state of crisis http://biz.yahoo.com/rf/010628/n28282926.html Snippit:MEXICO CITY, June 28 (Reuters) - After decades of sliding investment, Mexico's oil and gas reserves are now in the throes of a full-blown crisis and could lead to falling crude exports if new investment does not come soon, said a top official on Thursday. Raul Munoz, director of giant state oil monopoly Petroleos Mexicanos (Pemex), said investment in Mexico's bountiful oil and gas deposits fell by nearly a two-thirds between 1981 and 2000. ``This has provoked a crisis in oil reserves that has already extended to production and should not be allowed to go on any longer,'' Munoz told reporters. ``Production declines are already a reality at some oil fields.'' ``A bigger crisis in reserves and production could mean ... the risk of running out of natural gas, and further down the road, a drop in oil exports,'' Munoz said.Black Blade: The Mexican state-run utility industry is a real mess as well. The socialized nature of the utility industry has lead to many disasters with pipeline explosions, fires, electrocutions, etc. due to the decaying electrical grid from lack of adequate maintenance. Energy regulation in Mexico has been a clear disaster. US communities should not count on energy from our southern neighbor as they have none to spare. They have even hinted at importing US NG and electricity in the past. All this in spite of Mexico as the World's 7th largest petroleum producer. Many of Mexico's oil fields are well past their "Hubbert Peak's" and are in various states of decline. The energy crisis is about to take an "Interesting" turn over the next several months. Perhaps lower demand for petroleum will help as the World's economies tank, though I think that prices will rise as it is plentiful "cheap energy" that fuels the Bull. Meanwhile, gold is still cheap and the best time to buy is when there's "blood in the streets." ax (6/30/01; 10:10:26MT - usagold.com msg#: 57241) CALL FOR REASON AND UNITY This is a wonderful forum for the exchange of ideas for those who believe in the importance of gold in our world financial system. Let us hope it will continue through these turbulent and uncertain times for the gold market. This is no time for disharmony and fighting among those who believe in this unique metal. Black Blade (6/30/01; 10:02:14MT - usagold.com msg#: 57240) Developments in California's energy crisis: http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/06/29/state1105EDT0156.DTL&type=news Snippit:FRIDAY: Congressional investigators say a Federal Energy Regulatory Commission study "was not thorough enough to support its overall conclusion" that power generators were not scheduling maintenance and repairs to increase prices. The FERC study from February looked into whether power producers used outages to reduce supply and raise energy prices in California. But the federal regulators said that they couldn't find evidence of these practices. The General Accounting Office concludes that plant operators have considerable discretion in when they do maintenance or repairs at their facilities, making it difficult to determine if the work is legitimate, or if it's being done to influence prices.Black Blade: Throws a wrench into the "Energy Price Manipulation" theory. A sudden change that could impact the state's efforts to recover billions of dollars from power generators and marketers. The impact of high energy costs are obvious. Gold insurance is more necessary than ever. A Golden Lifeboat to sail through troubled waters. Black Blade (6/30/01; 09:50:12MT - usagold.com msg#: 57239) Study says crisis is dragging down state's economy http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/06/29/MN176476.DTL&type=news Snippits:California's energy crisis is wreaking havoc with the state's economy, a highly regarded forecasting group warns in a study released yesterday. Yesterday, Federal Reserve Chairman Alan Greenspan acknowledged that California's energy crisis has put tremendous pressure on the state budget and hit the pocketbooks of California's businesses and consumers. "To assume that California is going to be able to avoid serious problems as the full brunt of demands for energy mount this summer would be foolhardy," he said to the Economic Club of Chicago last night. Greenspan also cautioned that California's troubles are "worrisome" for the nation's economic outlook because California makes up one-eighth of the U.S. economy. Still, if markets set prices, he said, the short-term energy problems could be resolved without further economic harm. The Anderson Business Forecast's assessment of the effects of the electricity shortage is one of the gloomiest to date, except for a few reports prepared by California industry groups. It contrasts with the views of some experts who have argued that however inconvenient the energy crisis the actual economic effect will prove to be relatively minor.Black Blade: Could prove to be a bit over-optimistic IMO. The higher energy costs and next month's rate increase may prompt some energy cutbacks (conservation). That just might help the Grasshoppers squeeze by this summer. The damage is already done as "Red" Davis locked in long-term energy contracts with state funds (tax-payer dollars) at extraordinarily haigh rates. Meanwhile, more server farms are coming on-line at a faster clip than the building of Californian NG-fired power plants. Could still prove "Interesting." Black Blade (6/30/01; 09:35:19MT - usagold.com msg#: 57238) Record trade deficit keeps U.S. in top debtor spot http://seattletimes.nwsource.com/html/businesstechnology/134311943_netdebtor29.html Snippit:WASHINGTON - Already the world's largest debtor country, the United States saw its total rise sharply last year, reflecting the country's record trade deficit. In its annual look at America's international balance sheet, the Commerce Department said yesterday that the U.S. net debtor position jumped by 43.4 percent last year to $2.19 trillion. That figure represents the shortfall between what foreigners own in U.S. assets: corporations, real estate, stocks and bonds; and what Americans own overseas.Black Blade: Just wait until foreigners pull their investment dollars back home. OUCH! Black Blade (6/30/01; 09:22:57MT - usagold.com msg#: 57237) Economic doomsayer or realist? http://www.msnbc.com/news/593882.asp?0si=-&cp1=1 Snippit:EDWARD LEAMER, director of the UCLA Anderson Business Forecast, said he sees an 80 percent chance of recession beginning no later than early 2002, down only slightly from the 90 percent chance he saw in April, when his gloomy forecast made headlines. Leamer is among a growing chorus of observers who argue that the Federal Reserve, which cut short-term interest rates Wednesday for the sixth time this year, has only limited ability to pull the economy out of its current downturn. "I think we way overestimate the role the Fed plays in the life cycle of the economy," said Leamer. "We're like a primitive tribe, in which we want to pray to a god and have him cure the problem," he said. "The god happens to be Alan Greenspan. When that volcano is going off we pray to him, and if the volcano stops, we think he did it. Right now we're praying pretty hard to him."Black Blade: Soon old Cheetah (AG) will be sacrificing virgins in an attempt to pump the economy. Reminds me of how the Aztec priests supposedly used to summon the rains. It appears that many people should prepare for a career as a Wallmart Greeter, or maybe memorize that famous line: "Would you like fries with that sir?" Orville Goldenbacher (6/30/01; 09:21:01MT - usagold.com msg#: 57236) usagold.com msg#: 57235) BTW, the below post is NOT investment advice. It is a steep and winding road, travel @ your own peril...OG Orville Goldenbacher (6/30/01; 09:14:59MT - usagold.com msg#: 57235) Christian, how right you are... Christian:"We are in the same position as Japan. I do not think Japan has hit bottom. We like Japan will hit bottom when all loans are written off. Default on your credit cards, car loans is the thing to do. Max out your credit cards and buy gold. Then just cut the card in half and send it to the issuer and tell them that it is no longer possible to make payments unless interest cost is removed and principal is reduced to nothing"OG:Sounds like the plan. This is what has happend and is continuing to happen at this very time. THEY have extended SOOOOOOOOO much credit in the last few years. It will catch up as more and more people default on their loans. It is just a matter of time. The Japanese are so much more into saving than us Americans and look what has/is happening to them. escapethematrix (6/30/01; 09:09:59MT - usagold.com msg#: 57234) To me, this is what "The Gold Trail" is all about..... Not particularly this article....But I see it as a clue...Or,as TG has said, a signpost to the future in an evolving transition of monetary systems....Speaking only for myself, I have no problem following the Trail as laid out by TG and Another....Their thoughts and perceptions have allowed me to grasp the "ghostly illusion noone could see from afar". If not for their incredible dedication to this effort, I would still be lost in trying to grasp what was truly going on. In short, Thank you TG for helping many of us prepare for the future, and not get lost in the failures of the past. Thanks also to Randy and MK for providing this forum and the time and effort that goes into it.Treasury Secretary Sees 'Golden Age'WASHINGTON (AP) - Treasury Secretary Paul O'Neill said Sunday that the country is ``on the edge of a golden age of prosperity,'' describing the current economic slowdown as an ``adjustment period.''``I think we're not doing badly for the kind of correction that we're in right now,'' O'Neill said on ABC's ``This Week.''``It's easy to find gloom and doom, but consumers are hanging in there, their spending rates are still quite good,'' O'Neill said. ``The contraction occurred ... in the investment sector, where we had an overexpansion.''The Treasury chief was less optimistic about the future of Social Security (news - web sites). ``We're headed toward a situation where we're going to have a lot more people retired and a lot fewer workers providing payroll taxes, that we've got to do something different,'' he said.The answer, he said, is the Bush plan to let workers invest some of their Social Security contributions into personal savings accounts.``It's a big idea,'' O'Neill said. ``It's time for us to make every American into a wealth accumulator, not a creator of an entitlement benefit.'' dragonfly (6/30/01; 08:34:29MT - usagold.com msg#: 57233) P.S. to last post Randy, Trail Guide How about if I design a Free Gold coin with your faces on the front and back? Maybe Trail Guide on the front, smiling of course, with a sack of gold in one hand and the other raised with the peace sign (or was that the victory sign ;-) and Randy on the back in the famous Thinker pose facing the entrance to a gold mine with folks stumbling out into the light (remember Beethoven's Fidelio and the Ode to Joy?). I think it would be a fitting tribute. Now if I can get my jeweller father-in-law to fire up the furnace.... dragonfly (6/30/01; 08:14:16MT - usagold.com msg#: 57232) Am I Actually Getting It?? Randy, Trail Guide So, since money can purchase gold, or better said, gold can purchase money, the two are easily confused, especially if a sovereign manages to "capture" the wealth of gold and "make" it SERVE as money with the crude stamping of a face (or worse yet "legal tenderized" symbols of liberty) into the metal or the sophisticated abstraction of paper gold derivitives. Making the metal take the form of a rulers face is an attempt to imbue the face with the qualities of gold. It is not that the face gives value to the gold or even that it "permits" it to operate as money. It is more clearly the case that it is the "faces" attempt to appropriate the wealth of gold and also harness its power to capture other forms of wealth by confusing the issue of wealth and money. The same logic applies to the modern use of paper gold to the same effect. The fact that gold was captured for a time on this chessboard of life is simply a fact. Nothing to get too worked up about, especially now that some brilliant moves are occurring that will allow gold to shine brightly in the open once again. The force is with all men!! (smile)I think you two are doing yeomans work in this area and deserve much credit (smile). The eyes you are opening to such fundamental truths are happy to have the scales lifted and a new vision of justice presented. Thanks Christian (6/30/01; 08:01:10MT - usagold.com msg#: 57231) Barrick + Homestake The $2.2 billion merger of Barrick + Homestake will make Barrick No. 2 gold producer in this world. Barrick is a first a bank and then a gold producer.The bank part will control and price and production. Barrick's share holders will own the non-existing profits or loss of the mining operations and the bank will own the gold. Like most gold companies Barrick is privatly owned where the share holders finance the mining operations profit or loss while the real owners own the gold at a set price. Barrick like most gold companies will have to built assets through consolidation. This is the only way to create value. This is true with most companies listed on any exchange. Consolidation, consolidation and more consolidation is the only way to grow assets for years to come. The best time consolidate is when the assets are the cheapest and we have a few years or even a dozen years before we hit bottom. We are in the same position as Japan. I do not think Japan has hit bottom. We like Japan will hit bottom when all loans are written off. Default on your credit cards, car loans is the thing to do. Max out your credit cards and buy gold. Then just cut the card in half and send it to the issuer and tell them that it is no longer possible to make payments unless interest cost is removed and principal is reduced to nothing. KarenSue (6/30/01; 07:13:54MT - usagold.com msg#: 57230) No rollover? No rollover? Just testing to see if we are still alive.Only meKS Christian (6/30/01; 07:13:04MT - usagold.com msg#: 57229) @OG Your plan is good- but they are doing it to us and we are letting them. 90% of all gold above and in the ground they now control. In order to do what they are doing we have to set up and own a bank to facilitate the trades. They own the gold of our central banks gold short positions. The gold short position can only expand and can only be covered by an even greater and new gold short position. Our present gold standard makes possible the strong $ which is maintained by gold derivatives. These are contracts made with no intention of fullfilling them. The gold short positions can and will never be covered. They like our credit system can only expand. Pay the old loan with a new and bigger loan. Gold like evberything else is monetized. A new par-value has to be found or our freedoms are history. I feel that fiat credit expansion and the expansion of the gold short positions will continue. Since credit creation gold is made up of a bundle of commodities (oils, natural gas, metals, grains and housing) the owners of the dollar will now monetize the ownership of all metals, oil, natural gas, grains and housing. I think they will own it all in the next 50 years. There will be no more private property. Once they own all housing, all metals, all grains, natural gas and oil what is there left to own. The only thing we will be allowed to own is our debt made possible from their credit creation. Knowledge is not physical thing they can not have total control unless they take our brains out and install a computer. Orville Goldenbacher (6/30/01; 06:09:53MT - usagold.com msg#: 57228) Christian I've got an idea....Let's take our $2,700 in credit and buy 10 oz. of physical....If WE do this enough times, WE will own ALLof the GOLD! We will buy ALL the GOLD right out from under the little stinker's feet.....Once we own ALL the GOLD, we can make ALL the RULES and THEY can work for Us.....HEHEHE!Long Live CPMOG Christian (6/30/01; 05:10:40MT - usagold.com msg#: 57227) (No Subject) Gold will never be allowed to serve as a currency. The only free market left is between central bankers. The commodity gold price will from now on always be held in check in order for the common people not being able to profit from it. Gold is now used as a vehicle for credit creation. $270 commodity gold is worth $2700 credit creation $'s. A group of men have taken upon themselves to change the rules. Credit creation gold is simply a bundle of commodities made up of metals, oils, grains, natural gas, housing. This group of men own our currency the $, they own the FED, BIS, they own most of the gold and most of the gold in the ground. From here on out a person has to look at money as created credit of available purchasing power. Our economy is a credit based economy where banks create credit by creating deposits in the very act of lending. It is now allmost impossible to get a loan without having a checking account to temporarly deposit the loan proceeds into it. All bank loans can now be sold to the GSE's which allows for new deposits and new loans based on those very deposits. It is now possible to have multiple loans on the very same property sold to the GSE's acting as deposits for new loans. Money is credit not a metallic standard with intrinsic value. The intrinsic value of gold is the credit creation value. People will have to learn how to use it to create their own credit. Only then will gold gain intrinsic value. How can we the people so educated and smart be so stupid and not figure this out. We can create our own credit and free the strangel hold on gold and our freedom. But that is not to be so we just as well celebrate July 4th and kiss up to Bank of England at the same time. We may have won the battle in 1776 but we lost the war on the control of money. Turnaround (6/30/01; 04:15:50MT - usagold.com msg#: 57226) correction "Please do take my word for this "I meant "please do not take my word for this" Netking (6/30/01; 03:54:01MT - usagold.com msg#: 57225) Peter Asher - L. Ron Hubbard & Gold http://www.xenu.net/archive/enemy_names/ Peter: You mentioned on Sunday you had Hubbards callender on the wall, read this, it seems your Hubbard is a goldbug too even if he does find reality a challenge!-----------------------------------------------------------". . . Our enemies on this planet are less than twelve men. They are members of the Bank of England and other higher financial circles. They own and control newspaper chains, and they are, oddly enough, in all the mental health groups which have sprung up in the world. These chaps are very interesting fellows. They have fantastically corrupt backgrounds; illegitimate children; government graft; a very unsavory lot. And they apparently, sometime in the rather distant past, had determined on a course of action. Being in control of most of the gold supplies of the planet, they entered upon a program of bringing every government to bankruptcy and under their thumb, so that no government would be able to act politically without their permission. . . " Netking (6/30/01; 03:45:29MT - usagold.com msg#: 57224) China - Gold Deregulation Cont. http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=21894892&ID=cnniw&scategory=Metals+%26+Minerals%3APrecious ". . .Analysts estimate that with deregulation, annual demand in China could triple to as much as 600 tonnes within the next few years, a volume that could pressure producers, judging by the planned output of 175 tonnes for this year. . ."Therefore simple math says 425 tonnes will add strongly to this forums bullish position for Au's golden future. Netking (6/30/01; 03:38:50MT - usagold.com msg#: 57223) @Randy - Sound money cont. Randy(57151)You posted: "Stocks, Lies, and Ticker Tape says, "Only gold is money. I, too, shall be open minded and will temporarily indulge your notion. What did you, or your neighbor, or most other people obtain from the bank in order to finance their purchase of their homes? Did you (or the others) use "only gold" to pay for your/their home?"When you reach into your wallet to pull out some money to buy tickets to the baseball game, is it "only gold" that you have in there?. . ."------------------------------------------------------------Netking: > From my years spent in banking and also as a consumer I have seen that currency may not be deemed "sound money" by it's users nor gold either at some times past. What constitutes "sound money" is CONFIDENCE. Gold has always been sound money to some throughout history but as confidence is LOST from the fiat this will be regained by gold in all it's fullness again. Confidence is key. - regards Murray ViewYesterday's Discussion.
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