Home Gold Primer Q&A Daily Market Report Gold IRA Gold Coin Prices Charts Stats Essays Site Overview High Net Worth How to Buy Gold Live Gold Price Breaking Gold News Mobile Gold Price Gold Coin Images About Us-Contact Search Video Round Tables

Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

FORUM ARCHIVES

Select date of the archive you wish to view Month 1 2 3 4 5 6 7 8 9 10 11 12 Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Archives date back to September 22, 1998

WELCOME TO THE ARCHIVES!

ARCHIVED DISCUSSION FROM 6/30/2003
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Druid (06/30/03; 23:12:49MT - usagold.com msg#: 105268)
Dollar Bill (06/30/03; 20:21:08MT - usagold.com msg#: 105260)
Dollar Bill, I agree with you 100% that there appears to be a coordinated effort in managing this currency fire. What I believe Prof. Fekete is arguing, is that this coordination is finding it's way into our bond market and sucking the life blood out of the productive sector of our economy thereby adding additional fuel to an already out of control fire. It's my best guess that this maps in bond markets throughout the world and is having the same affect.

slingshot (06/30/03; 23:00:47MT - usagold.com msg#: 105267)
Midas Crusade
Gandalf the White, would on occasion walk the castle walls.
Looking out across the countryside he thought of days gone by. The village below reminded him of the one he grew up in and the one he left for his apprenticeship. Touching his white beard he wondered where the years had gone. Remembering the tricks he had played on unsuspecting travelers only to be counseled by his instructor. He chuckled at the punishment that was administered for his misdeeds.Oh, to be young again. He sighed and desended the staircase and walked to his chamber. On his route he encountered many friends greeting him. Always willing to talk to his fellowman it took some time to reach the door.
Finally entering his room and closing the door behind him, he stood for a short time peering at the crystal ball,covered on a small table in the middle of the room. He approached the table and removed the cloth. The sphere was clear and held tightly in its holder. He pulled a chair close to the table and sat down. He placed his hands about the sphere and commanded it to reveal the future. But the crystal ball remained clear. Never before had this happen to him. Again he commanded it to reveal and again it remained clear. Gandalf, knowing not to tempt the forces of nature, covered the sphere with the cloth. It was time to retire for the night and he was ready for sleep. Sitting on his bed he pondered why his encantations were of no use and
then stretched out and found himself comfortably for a good nights sleep. But sleep would not find him, for as he started his slumber, a voice came from the darkness.
Gandaaaalffff! He sat up in his bed. Again like a word whispered on the wind. Gandaaaalf! He lit a candle and move to the table where the crystal ball sat. Once again his name
was softly spoken. He snatched the covering from the table and the sphere was dark with a small light in the center that gave no illuminance on the table. The good wizard stared at the light contained within. Again his name was pronounced. He then covered the sphere and with eyebrows raised exclaimed, That voice!

Slingshot----------------<>

Black Blade (06/30/03; 22:00:55MT - usagold.com msg#: 105266)
While stock market rallies, insiders are cashing out
http://www.chron.com/cs/CDA/ssistory.mpl/business/1971407

Snippit:

NEW YORK -- Corporate insiders sure liked this stock market's recent rally, but not for the buying opportunities. They were selling. Big time. Just as small investors warmed up to putting money back into stocks, executives were cashing out of their company's shares at a pace not seen in two years.

Black Blade: Insiders know when to bail and pick the pockets of the Lemmings as they squeeze out the door. There simply is not a lot of good economic news out there in spite of all the spin coming from Wall Street primates and CNBC carnival barkers. Of course the insiders are bailing out.



Black Blade (06/30/03; 21:45:55MT - usagold.com msg#: 105265)
Deflation Danger for Top Economies - BIS
http://story.news.yahoo.com/news?tmpl=story&ncid=1203&e=3&u=/nm/20030630/bs_nm/economy_bis_deflation_dc&sid=95609869

Snippit:

BASEL (Reuters) - Pernicious deflation is a very real danger for many of the world's largest economies and central banks and governments should consider preparing policies now to tackle it, a top monetary institution said on Monday. Debt levels are at record highs in many leading industrial nations, inflation and official interest rates already are very low, economic growth is weak and rigid labor markets make wage cuts unlikely -- all pre-conditions for deflation to take hold. "The successful taming of inflation has increased the possibility that most advanced industrial economies might be one deep recession away from experiencing deflation," the influential Bank for International Settlements said in its annual report.

Black Blade: Sounds like the BIS is getting a bit anxious.



Dollar Bill (06/30/03; 21:31:37MT - usagold.com msg#: 105264)
@>@
Greetings Sir Black Blade,
I will have to try a Negra Modelo on your reccomendation.

I didnt notice the below info posted, It HAS to be the peak.
Although, I suppose the US govt will step in at the last moment to rescue California. Heck, it is only 39 billion.
Just a mouse click away. Why let this fabulous real estate bubble pop when monopoly money is so available?
Once Sept 5 comes and goes, after politics gets its time, there will be a rescue of some sort.

..According to the California Association of Realtors, "The median price of an existing, single-family detached home in California during May 2003 was $369,290, a 15.6 percent increase over the revised $319,590 median for may 2002 (up $5,330 for the month and $49,700 y-o-y!)."
The median price…posting double-digit increases in 22 out of the past 24 months,

Black Blade (06/30/03; 21:19:39MT - usagold.com msg#: 105263)
Mr. Gresham

I see on the news tonight there is a name for dead end jobs that is apparently in the new Webster's Dictionary - "McJobs". I believe that one criticism against the "Flat Tax" proposal was that several thousand IRS workers would become nonessential "bones" and the tax preparers and accountants were none too pleased with the idea either.

BTW, a Negra Modelo does sound good right about now. Just got back from the gym and an ice cold one would go down well I should think. Yummy!

- Black Blade

Dollar Bill (06/30/03; 21:02:13MT - usagold.com msg#: 105262)
(:- I)
Greeting Mr. Gresham,
You mentioned LTCM, you know, there is a book about that, and I read it, scanned it. There is one key part of that book that bears mentioning. At first, the situation was not dire, foolishly, they let potential rescuers look at the derivitive hedge book, and at one point, someone is seen feverishly typeing into his laptop, the contents of that LTCM hedge book. The fall of LTCM unfolds from there.
That deriv. book, now in the hands of traders at banks and trading firms, is bled dry, it is no secret that some of the big bets played against LTCM by those now knowing the Lctm bets, were in fact banks that ltcm owed money to and these banks let thier traders drain off at least as much as
they had invested IN ltcm. Those that stepped in to rescue ltcm, walked blind into a trap that cost them about 700 million. Traders finally stopped killing the ltcm rescuers when they knew they were at thier limit.
It was not some "accident", maybe at the very start, but by letting thier bet book get out, it was just a big fleecing.

That is actually the gist of the LTCM story. It was a highway robbery, where the robbers then robbed the rescuers and probably stopped only because if they had crushed the rescuers, they knew the govt would come after them eventually.

I havent read the enron books, but I'll bet there were opponents planting thier own guys at enron derivitive desks, getting key data, and with other derivitive players, eating enron.

Some insider derivitive player someday will, should write a book.

Mr Gresham (06/30/03; 20:26:48MT - usagold.com msg#: 105261)
I mean, like, whatEVER! ... (today's rant)
http://www.msnbc.com/news/933114.asp?0si=-
Isn't California supposed to be the bellwether of the nation? Isn't California about to fire 30k workers, and put the rest on minimum wage? Is anyone paying attention?

Or is this just like Congress and the Pres duking it out over the budget around Sept. 30 in recent years? Of course, they'll figure out who blinked last, and get the presses rolling again. But the Feds have the, uh, Fed behind their bonds. Does California have the "Cal"? (They shoulda thought of that one, huh? The "California Reserve System". Coulda saved some headaches right about now. ;)

Minimum wage? Can you imagine the Fed Gov going onto that limitation, oh, in about two years? Stop that twittering, you two there in the back of the room. I hear you, "shoulda done that ages ago". Well, maybe so. IRS employees taking second jobs at Wendy's, if there are any. Now, that's a sweet thought that deserves getting up to the fridge for a Negra Modelo to toast the future!
(Back again)

OK, so my big fat mortgage came through a couple months ago. And almost immediately, it gets flipped over to GUESS WHO -- our favorite nemesis -- yeah, the Deriv King itself.

And immediately after, I'm embroiled in trying to straighten out my payment records between them and the other bank. Still going on.

And today, it's the handy "Customer Service" pack in the mail. Weighs about 5 pounds, with all the notifications, and rules, and disclaimers etc etc. And so what area are all the phone numbers for? HOUSTON! (I don't live in TX, nope.)

The fragrance that arises from the whole schlemiel is Arrogance. "We're big, we're the 2 most famous names in banking, you GOTTA trust us. Who do you think you are, you little s*** not to trust us! Did we say we're big?"

Bodes well for the first deriv lockup. I'm going to propose a new spell-out for our old favorite acronym "LTCM" : "Let's Trust Chase-Morgan". Think we could sell it to Marketing?


Dollar Bill (06/30/03; 20:21:08MT - usagold.com msg#: 105260)
:-/
Greetings Druid, in that link, the writer guesses;

"The trouble is not that the Fed is following a script that has become stale. The trouble is that the Fed has given away the store by telling speculators that all remaining risks have been taken out of bond speculation. They can now bid up bond prices to unimaginable heights unopposed."

There is an amazing level of control over gold buying, and
a tremendous amount of control over many aspects of international finance. Someone posted a link to a chart of the Japanese market over 15 years and I regret I didnt put it on my favorites column. It showed the completely coordinated 3 waves that made up the decline in Jap equities. It was not in the least bit chopped up in the long term view. It was as rythmic as could be.

Since seeing that within the last month, I am more inclined to guess that the writer of the above qoutes, as interesting as his writing was, is not seeing the vast control and coordination the big boys are quite capable of.

Notice what happened to the euro, since the EU linked up in a big way with the US to stand up to Iran, in this nuclear issue, the US rewarded the euro by (my guess) not only commenting again about the strong dollar, but the Euro fell in value, to 114, which is a more breathable range for Germany according to Morgan's EU analysts. Coordinated, is my guess. The Euro Yen and US Dollar dont plummet, they decline, and rise, in ways that tell me that the really big money keeps some boundries of order. Based on whatever....

Tacitus (06/30/03; 19:59:05MT - usagold.com msg#: 105259)
The Effect of Inflation
Recently, I was using my savings calculator on my computer and was surprised to notice the following. If one invested 10,000 and obtained 7% growth and no inflation for 35 years, the total real return would be $106,800.

If one invested the same amount for 35 years and obtained 8% growth with 1% inflation annually, the total real return would NOT be $106,800 like I thought would have been the case. It would only be $104,371.

That isn't so bad but if 10,000 were invested for 35 years and obtained 17% nominal return but endured a 10 percent inflation rate annually, the real return would only be $86,868.

I do not understand the mathematics behind this. I originally thought each increase of 1% nominal return would offset each 1% increase in inflation. What am I missing.

Thanks,
Tacitus

Druid (06/30/03; 19:48:36MT - usagold.com msg#: 105258)
THE BUBBLE THAT BROKE THE WORLD
http://goldisfreedom.com/Aladdin.htm
Druid: Woops, sorry bugs, somtimes I have difficulty multiplexing, like typing, thinking, cutting and pasting, chewing gum, to name but a few tasks. This should make it easier.

Druid (06/30/03; 19:25:04MT - usagold.com msg#: 105257)
http://goldisfreedom.com/Aladdin.htm
THE BUBBLE THAT BROKE THE WORLD
"The date May 21, 2003, should be remembered as a historic landmark. On this day Aladdin Greenspan let the genie out of the bottle. The genie is now at large, entirely on its own, roaming around the world, visiting disaster upon the economies wherever it may go: a depression possibly worse than that in the 1930's. Aladdin hasn't got a clue how to put it back in the bottle because, if he tried, the genie would threaten to plunge the world into another bottomless pit: that of hyperinflation. Aladdin sowed the wind to let the world reap the whirlwind.

As the reader probably gleans it from the above, the genie symbolizes bond speculation. Greenspan testified before the Joint Economic Committee of Congress on that fateful day, explaining the strategy the Fed has developed to combat deflation. He would climb the yield curve, that is, go out to buy government bonds of all maturities, if need be up to and including the 30-year Treasury bonds, in an effort to push interest rates down thereby enlarging the monetary base that would, according to him, contain the weakness in prices.

It is a long shot from open market purchases of bonds to a buoyant price level. After all, once in circulation, the new money created by the Fed is no longer under its control. It is under the control of the speculators. They will not necessarily deploy it in the commodity or stock markets, as the Fed is hoping. They may see a better opportunity for profitable speculation elsewhere, say, in the real estate or the bond markets. The trouble is not that the Fed is following a script that has become stale. The trouble is that the Fed has given away the store by telling speculators that all remaining risks have been taken out of bond speculation. They can now bid up bond prices to unimaginable heights unopposed. This could also be an act of desperation on the part of the Fed. According to this script, the speculators are being bribed by risk-free opportunities not to dump the bonds that would reduce them to worthlessness."

Druid; It seems like there was "ANOTHER" that predicted this scenario some few years back. This speculative activity is gathering a tremendous amount of momentum and compressing the time schedule. Good luck all and grab the Gold.



Arcticfox (06/30/03; 18:02:11MT - usagold.com msg#: 105256)
us$ for Yuan
If Mexico's Fox is, as he stated, sitting with US dollars that he doesn't know what to do with, why not dump the 50 billion which should cause the US$ to dip and pick up Chinese Yuans. The Chinese currency is pegged to the US$ and therefore will dip as well. Now sit back and wait for the rumoured break of Yuan from the dollar. Remember that many believe that the Yuan is 50% undervalued. Seems too obvious so I must be missing something...

Ten Bears (06/30/03; 17:57:46MT - usagold.com msg#: 105255)
The overwhelming influence of gold...good read
http://www.chaos-onomics.com/morn.htm
: Like a Greek tragedy - but without a chorus to reveal the plot - events are following the path made inevitable by the actor's character. Blair, less a liar than a fantasist, easily convinced himself of what he wanted to believe. - Norman Tebbit former Chairman, UK Conservative Party

I choose the opening quote less to reflect on the rapidly declining fortunes of Tony Blair, although his fate may well put the fear of the public back into the "spinners" in positions of public trust, but rather to reflect on the inevitability of events given the current institutional framework. Many commentators have described current economic events as a "slow motion train wreck," which also captures that air of inevitability. It seems to me ironic that education's institutional love affair with computerized standardized testing reduces the necessary, to the extent one wishes to avoid being an object lesson for others, acquaintance with the study of inevitable tragedy to: "to be or not to be" is a line in which play?: a) Hamlet b) Julius Caesar c) Macbeth d) none of the above. In keeping with the opening quote, this essay intends to play the part of the chorus and reveal the tragic plot.

One of the keys in communication is the use of terms whose meaning is defined and known to all parties to the communication. If, for example, I write of deflation, referring to the deflation of claims within the financial system, while you think of the term as referring to a general decline in the price of goods, we won't be communicating very well. For the purposes of this essay, by deflation I mean a reduction in financial claims and by inflation I mean an increase in financial claims. Also for the purposes of this essay we will assume that changes in claims are reasonably accurately quantified by the Federal Reserve's Money Stock measures. One final point on the issue, if fixed definitions of terms, i.e. the basis of communication, seems a good idea, why fixed value of money, i.e. the basis of trade, is not, escapes me.

Under these definitions one can, I contend, see the history of american finance, which should not be conflated with american economics, as a series of cycles of faith in paper as proxy for money. When faith in the financial system is rising, there will be an inflation of claims. Conversely, when faith in the system is ebbing, there will be a deflation of claims. To the extent that the value of money is explicitly defined throughout the cycle, claims inflation will tend to be coincident with general price inflation and claims deflation will tend to be coincident with price deflation. Thus the track record of the Gold standard which demonstrated that under such a system while general prices would fluctuate around a baseline, the baseline, over time, would be retained.

When the value of money is not explicitly defined, the same rise and fall of faith in the financial system manifests differently in terms of general prices but similarly in terms of relative prices. That is, while, for example, general goods prices fell during the depression, and rose during the 70s the relation of Gold prices to goods prices was roughly similar. An ounce of Gold bought more goods over time as the imbalances were wrung from the system in both cases. Under a floating system of exchange deflations in claims will manifest in generally rising prices and inflation of claims in subdued or even falling prices. "Hang on a second," you might be thinking, "are you claiming that higher money supply means lower prices?" In a sense, yes.

Money supply, broadly defined, will, in general, I argue, rise when faith in the value of the currency as store of value is rising. Consider today's second chart which depicts the ebb and flow of y/y% changes in M2 and CPI during the 60s and 70s. As you can see, contractions in the stock of money were coincident both with rising prices in general and rising prices for Gold in particular. Conceptually it may help to think about the issue in terms of denomination of value. If I owned a farm and had the requisite skills and equipment, I could imagine a future of crop production extending many years. I could denominate this value in goods, by farming, in some medium of exchange, by selling, or in financial sector claims, by securitizing, whether via equity or debt instruments.

Imbalances between goods denomination, or the actual output, and claims denomination, or the value of the hoped for output, lie at the heart of the 'flation problem. Ebbing faith in the financial system comes as people begin to realize that actual output is worth less than that claimed. The restoration of balance comes as those false claims are erased from the system. To see this in action using a modern example, consider the financial build-up of the "information superhighway", which generated a mountain of claims but, as the rationalization of claims to output progressed, the relation of output of the sector to other goods prices proved far less than claimed and the deflation, in terms of equity and debt value was on.

Where am I going with this? The global monetary authorities are, according to the annual BIS report, worried about deflation. I share their fear, although not their sense that the event is not of their making. The deflation which they fear, to my mind, is a deflation of claims in the financial system, a process which has been suppressed and reversed any number of times over the past few years, delaying but not preventing the inevitable. How this deflation manifests in the economy is, in large part, a function of the policy choices. Should the price of Gold be held near current levels, the deflation of claims will result in a deflation of prices. Should, however, the price of Gold rise, the deflation of claims will manifest as rising prices. In relative, i.e. Gold vs. other goods, terms the change will be roughly speaking, the same, it is only due to the confusion caused by calling an undefined currency money, and thereby a basis for comparison over time, such as is evidenced by the CPI series, that we conceive of the 30s and 70s as different phenomena.

For all the talk of fighting falling prices, the monetary authorities have done little to address that issue. Simply by buying Gold, and thereby demonstrating their preference for the metal as store of value over paper money, they could immediately reverse price changes as evidenced by the first chart. If, however, they intend to keep Gold at current levels, the recent inflation of claims, as evidenced by, inter alia, the coincident rise in equity and bond markets in Q2, will deflate in place. If Gold stays at $350 then short trades in equity and bond markets should prove profitable in the second half, while if Gold prices rise, the effect of the deflation on those markets will be diffused. Longer term, however, I will be quite surprised if the monetary authorities retain control over the financial system without debasing world currencies.




TownCrier (06/30/03; 17:41:03MT - usagold.com msg#: 105254)
Gold to find use in international trade settlement
WGC reports:

"The Malaysian Deputy Finance Minister Dr. Shafie Mohd Salej has said that his government is in early discussions with Iran over the possible use of the gold dinar as a method of settling trade transactions under the countries’ bilateral trade agreement."


My question: If this takes wing, will the element known as a "dinar" come to represent a unit of account, or will it signify always and specifically a physical item of known size, shape, appearance, content, and weight?

One of these alternatives for the future would be positive for gold, the other would make no matter (if not actually being a net negative).

R.

Goldilox (06/30/03; 17:23:50MT - usagold.com msg#: 105253)
Be thankful for this forum- The "free press" is under much pressure
http://www.haaretz.com/
snippit:

CNN says it erred in its coverage of Israel-Palestinian conflict

By The Associated Press

CNN erred in giving more programming time to the family of a Palestinian suicide bomber than to his Israeli victims and tried to rectify the mistake, the network's top news executive said Sunday during a damage-control visit to Israel.

CNN's coverage of recent suicide bombings has provoked anger in Israel and led a local cable company to start carrying CNN's chief U.S. competitor, Fox News Channel. Fox said it expects others to follow suit. Recent comments from CNN founder Ted Turner describing both Israel and the Palestinians as terrorists have fueled Israeli anger.

snippit2:


Last Update: 29/06/2003 13:30
Israel cuts off ties with BBC
By Anat Balint, Haaretz Correspondent

Israel declared over the weekend that it is cutting
off ties with the BBC to protest a repeat
broadcast on non-conventional weapons said to be
in Israel.

The program was broadcast for the first time in March in
Britain, and was rerun Saturday on a BBC channel that is aired all over the world.

The boycott decision was made by Israel's public relations
forum, made up of representatives from the Prime
Minister's Office, the Foreign Ministry and the
Government Press Office.

It was decided that government offices won't
assist BBC producers and reporters, that
Israeli officials will not give interviews to
the British network, and that the Government
Press Office will make it difficult for BBC
employees to get press cards and work visas in
Israel.

. . .The broadcast deals with Israel's attempts to
maintain a policy of ambiguity on its nuclear
weapons, through the Va'anunu affair, the trial
of Brigadier General Yitzhak Ya'akov and the
incidents of cancer among the Dimona nuclear
reactor workers.

snippit3 (verbal):

Listening to Puplava's Saturday broadcast, all the panel members (Russell, Wood, et al) agreed that since the NASDAQ crash they were persona non-grata at all network financial programs, as Bear sentiments are not to be tolerated on a national broadcasts.



CoBra(too) (06/30/03; 16:04:50MT - usagold.com msg#: 105252)
La La Land?
Have we finally arrived at la la land? Everything seems topsy turvy.
Old adages have been willingly thrown overboard to make room for the make-belief and delusional new economy. An economy, which produces ... debt upon debt.

Bill Bonner says it better - "Currently at $935 billion, foreign banks' dollar holdings approach the $1 trillion level. "They have to keep supporting the dollar," say U.S. economists. "Who else can they sell their exports to?" These neo-economists see a clear and happy division of labor in the world economy: foreigners save the money; Americans spend it. Foreigners make things; Americans buy them. Foreigners lend; Americans borrow. Thus it is and so it ever shall be; at least, they cannot imagine anything different".

It's akin to the ever lasting search for the perpetuum mobile -a next to impossible task - as Greenspan's FED has as yet to discover the secrets to neutralize gravity and other natural and physical laws.

While, what's left of my intellect, tells me that a tanking dollar would call for much higher interest rates, the opposite is happening. The stock market stages a rally as well as the bond markets and gold languishes.

Ok, the above quote at least gives a reason. The question will be for how long the rest of the world will be prepared to prolong the charade. The charade of a - sorry my friends - bankrupt US dollar hegemonial system, which in turn has bankrupted too many productive countries already.

Reality will set in, when the systemic stress becomes unbearable by some major competitors. The rather extravagant excesses of late - Afghanistan, Iraq - may be finally tipping the scales.

As the US and the rest of the "West" may be on the verge of the day of reckoning ... are you personally prepared to face the consequences?

Black Blade is hammering in the solutions with his recurring admonitions to his great posts (BTW, tku BB).

Go gold - the metal of kings - and the only money preserving real value over milleniums ... cb2





Waverider (06/30/03; 15:37:59MT - usagold.com msg#: 105251)
VIP:DAILY GOLD MARKET REPORT
http://www.usagold.com/DailyQuotes.html
Snip:
"Gold also gained as the U.S. dollar gave back earlier gains against the Euro on weaker than expected U.S. manufacturing data. Also hurting dollar sentiment on the day according to some was the Bank for International Settlement's warning that the current account pressures on the US are greater than in the 1980s. The soaring current account, trade, and Federal budget deficits will continue to plague the U.S. dollar as these record debt levels are broken everyday with no end in sight."

Zhisheng (06/30/03; 15:06:08MT - usagold.com msg#: 105250)
Weary Dollar
http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s
The dollar rally looks about played out today: last quote was 94.60. Looks like the 95 barrier has been too much for it.

USAGOLD / Centennial Precious Metals, Inc. (06/30/03; 11:42:45MT - usagold.com msg#: 105249)
Build your base with bullion at less than $4 over our cost!
http://www.usagold.com/gold-coins.html






21mabry (06/30/03; 11:21:58MT - usagold.com msg#: 105248)
Mr. Gresham
Your take on lawyers is right on. I have always been of the opinion law is a cartel, in true fair competion would not one lawyer take cases for 25 percent instead of the standard one third.That way they would get more buisness,but you do not see that happening.In the past if you could pass the bar you could be a lawyer,now you have to take the lsat,a ripoff,then pay out the butt for law school.It seems we got better lawyers in the past,now its just a rich boy club keeping their hold on privlege.21

R Powell (06/30/03; 10:56:09MT - usagold.com msg#: 105247)
BIS news alerts
As usual, most of these are in PDF form, but, not all of them.

**************************************************
Your current news on phrase "gold(any word)" at a glance:
*****************************************************

7 new document(s) found since 20.06.2003:

1. Activities of the Bank - BIS 73rd Annual Report - June 2003 (30.06.2003 08:20)
Part 9 of the 73rd annual report of the Bank for International Settlements - June 2003
http://www.bis.org/publ/arpdf/ar2003e9.pdf (PDF, 187095 bytes)

..internal audit function. Operations of the Banking Department At 31 March 2003 the balance sheet stood at 92.8 billion gold francs,1 a third successive new record for the end of a financial year, which represented a 5.8% increase...

2. Activities of the BIS - The year 2002-03 in review (BIS Speeches 30 Jun 2003) (29.06.2003 17:50)
Speech by Malcolm Knight Speech delivered by Malcolm D Knight, General Manager of the BIS, on the occasion of the Bank's Annual General Meeting in Basel on 30 June 2003. (BIS Speeches 30 Jun 2003)
http://www.bis.org/speeches/sp030630.htm (HTML, 54210 bytes)

..financial operations and performance is presented. As a complement to this, after 73 years, the BIS abandoned the Gold franc as the Bank's unit of account on 1 April 2003. It was replaced by the Special Drawing Right, a weighted...

3. BIS holds Annual General Meeting and releases its 73rd Annual Report (BIS Press Releases 30 Jun 2003) (28.06.2003 18:03)
BIS Press Release on Annual General Meeting 2003 and 73rd Annual Report
http://www.bis.org/press/p030630b.htm (HTML, 33423 bytes)

..The Bank reported a balance sheet totalling 92.8 billion gold francs (GF) at 31 March 2003, and a net profit of GF 362.0 million (GF 1 = USD 1.94149). The Annual Report and Nout Wellink's speech are available in English, French,...

4. Monetary policy in the advanced industrial economies - BIS 73rd Annual Report - June 2003 (30.06.2003 08:18)
Part 4 of the 73rd annual report of the Bank for International Settlements - June 2003
http://www.bis.org/publ/arpdf/ar2003e4.pdf (PDF, 1109534 bytes)

..partly reflects the rule-based nature of the monetary system during that time ? the gold standard. Under the gold standard, the price of gold was maintained by national governments at a fixed parity, which effectively constrained..

5. The BIS in profile (28.06.2003 14:00)
Summary profile of the BIS organisation and activities - June 2003
http://www.bis.org/about/profil2003.pdf (PDF, 34165 bytes)

..offers a range of banking services designed to assist central banks in the management of their foreign exchange and gold reserves. It also acts as a banker to, and manages funds for, international financial institutions. As of 31...

6. Index and letter of transmittal - BIS 73rd Annual Report - June 2003 (30.06.2003 08:17)
Table of contents and presentation of the 73rd annual report of the Bank for International Settlements - June 2003
http://www.bis.org/publ/arpdf/ar2003e0.pdf (PDF, 55717 bytes)

..financial year which ended on 31 March 2003. The net profit for the year amounted to 362.0 million gold francs, compared with 268.5 million gold francs for the preceding year. The figure for the preceding year has been restated to...

7. Foreign exchange markets - BIS 73rd Annual Report - June 2003 (30.06.2003 08:19)
Part 5 of the 73rd annual report of the Bank for International Settlements - June 2003
http://www.bis.org/publ/arpdf/ar2003e5.pdf (PDF, 3956478 bytes)

..in sentiment towards the dollar and financial markets in general. The tightening of the franc?s correlation with gold price movements in 2002 was also suggestive of the currency?s role as a safe haven. In nominal effective terms,...


a nation of one (06/30/03; 10:55:18MT - usagold.com msg#: 105246)
Mr. Gresham

I agree.

The pragmatic reality seems to be that there is no principle on which a government action can be based,
which cannot be effectively defeated, in the minds of men, by some argument. And realities do seem to
necessitate the committing of some actions contrary to every principle.

The fact that a large proportion of our legislators are lawyers is indeed one of the very worst things about our
present government. There are many reasons why this is bad. I won't state all the reasons here, but there are
many. I'll just mention two.

I learned this one during many years of trying to act on the laws placed into effect by Congress: While
lawyers are extremely skilled in writing every detail into a law, every intelligent bureaucrat sooner or later
learns that no detail of law is exempt from numerous very profound exceptions which no human being can
possibly write into a law. This is different from saying that there is no detail of law that people cannot
comply with. Most details of law can be complied with. But there are many very significant exceptions
which prove that real justice will never be achieved in that way.

The second one is that many lawyers are taught that there is no right or wrong, that everything depends on
the subjective perceptions and judgement of the individual involved, also, that whether something is a fact or
not depends on how well it can be argued. This implies that there is no objective reality. And it encourages
the belief -which is erroneous- that there is some relationship between what can be stated verbally, and
whether something exists in reality. It also excuses men from having to discover what is true by using their
senses, instead of merely by exercising their imagination.

The problem as I see it is that there is no group or profession whose understandings and actions will ever
produce a body of principles by which a government can be created which will endure without necessitating
some instances of injustice, and which will not need to be modified in some way on account of this, and that
this necessarily ends in corruption, and subsequently in a complete change of government. Nor do I believe
that a ‘beneficent despot’ is an acceptable alternative. I believe that only those services should be provided
by group effort -government action- which are necessary (by this I mean ‘necessary’) and modest in cost.
There are no laws that can determine or control this, I believe, just men of good moral character who have
acquired decent educations and broad experience using their best personal knowledge and judgement from
moment to moment. Our government has been lacking in this type of man for as long as I can remember.

What this has to do with gold of course, is that there will always be a need for it. And the worst things get,
the more valuable it will become.


Mr Gresham (06/30/03; 10:36:51MT - usagold.com msg#: 105245)
Discount rates
After reading MK's comments on the fiat inflation in France (long ago) as to why did they do it, having been through the exact same thing 70 years prior, and why is Greenspan/Bernanke willing to do the same now, the following thought:

The Fed is able to "discount" its money at 1% (short) to 4% (long).

Over the span of "three score and ten" a human seems to look for a 3% (real) return on savings. At least that number has been suggested in many intervals of history.

But, politicians. Now, what is THEIR discount rate? How quickly do they write off their nation's future for their short-term gain? 10%? 20%? More?

When you have a mis-match of "discount rates" of the future time value of money by different contending segments of society, do you get an "averaging out", or "triumph of the worst", that ends up dooming all human-created moneys?

Because politics always exists, in every time and place. Only the "shiny yellow", mute to all our pleadings of increase, is above politics.

Pizz (06/30/03; 10:32:31MT - usagold.com msg#: 105244)
Governments With Ultimate Wisdom
State of Washington is raising sales taxes .3% on only motor vehicles, trucks, motorcyles, and anything on wheels that uses public roads effective tomorrow.

Guess autodealers don't have a big enough lobby. Hit us while we're down. Seems kind of funny that they could raise a lot more going after real estate. . . . .

AND. . .in a vain attempt to plug their deficit hole, state sales tax payments, normally due on the 25th of the month, are now going to be due on the 20th with increased penalties for deliquencies. Let's leach a little more out of business cash flow - bound to spur long term business investment within the state. But they did give us 7 weeks warning - plenty of time to adjust our cash flows -

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

Probably missed all the good GSE discussions, but if earnings are to be restated up for the last few years (that was the last I heard on CNBC one morning), who is going to have to restate DOWN? Or are we now into onesided transactions? Or has someone already taken a 3 billion or so hit? Ah, heck, it's just accounting entiries at this stage, no cash yet, just capital imparement for someone.

Pizz

Mr Gresham (06/30/03; 09:46:42MT - usagold.com msg#: 105243)
a.n.o.o.
One of my thoughts about the problem of government developed after I learned that over 50% (you could check out the actual %) of people elected to Congress were lawyers in their original career.

The experience of a lawyer in earning money is that it comes "at the end of a gavel" or from a jury award or a settlement. It does not come from making and selling a product and meeting a payroll, etc, etc. i.e., running a business. (From what I've seen of most law offices, the "running the business" end comes in dead last. Dysfunctional to the max.)

Thus, lawyers think that you can legislate money, you can legislate productivity, you can legislate prosperity. (And central bankers think you can print all of the above?)

Their "business" is getting elected, and a "productive" legislative session is one which passed lots of "laws", rather than what made the economy more efficient, or the work/living environment more harmonious.

In the absence of privation or evidence to the contrary, people act out of their own life's experience, what worked for them, as to what they think ought to work for others. So lawyers in legislatures do likewise.

I guess small business people are too busy getting by day to day to weigh in against these fantasies, or maybe there just aren't enough of them/us, but in an economy based on growing credit lines used to spend on "fluff" items, and with 91% of the working adults spending their days in the employee mentality, don't expect much reality to enter in, until it all falls apart, and people have to find out what they can do that is really needed by others.

It is just sad the extremes to which things seem to have to swing, to where kids (like ones I met in Africa) can't afford to go to school, or get a decent pair of shoes.

I think we'll hear the word "hand-me-downs" come back into acceptance before this is over.

mikal (06/30/03; 09:40:25MT - usagold.com msg#: 105242)
U.S. oil and gasoline stockpiles a concern; Iraq output slow
http://money.cnn.com/2003/06/30/markets/oil.reut/index.htm
Nigerian strike threatens oil supplies
Prices rise as wary traders watch unfolding strike, global oil flows
June 30, 2003: 11:09 AM EDT
LONDON (Reuters)-
Snippit: "Oil prices rose Monday following a nationwide strike in Nigeria that could threaten crude supplies from the world's eighth-biggest exporter. Benchmark Brent crude futures rose 39 cents to $27.69 a barrel in London while U.S. light crude added 22 cents to $29.50 a barrel. Traders are nervous that any supply disruption could bite into fragile global energy stocks, especially as Iraqi crude has yet to make any substantial return to international markets since exports were halted ahead of the U.S.-led war.
"In the light of continuing bad news from Iraq, Nigeria is just adding to the whole series of factors that will support prices this week," said Paul Horsnell, analyst at JP Morgan."


admin (06/30/03; 09:22:07MT - usagold.com msg#: 105241)
MK's Gold Commentary & Review
http://www.usagold.com/AMK/MK-gold.html
Updated.

How did gold do during the French assignat inflation of the 1790s? Even you will be surprised.

That and more.

"A Thought or Two after Reading Andrew Dixon White's 'Fiat Money Inflation in France' over the Weekend"

With thanks to 'ge' for pointing the way.......






a nation of one (06/30/03; 09:14:22MT - usagold.com msg#: 105239)
five things wrong with our country

1. Legislatures believe it is only necessary to address problems, and unnecessary to prevent them.
2. Legislatures believe it is only necessary to find money to pay for their expenditures, and unnecessary to
reduce their expenditures.
3. Legislatures believe that if they don't see anything wrong with doing a thing, there can not be anything
wrong with doing it.
4. Legislatures believe that if something causes something good to happen, it can not cause anything bad to
happen.
5. Legislatures believe that their subjective opinion is what makes facts real, not the reality of the facts
themselves.

Of many good things about our country, one is -for the time being at least- that humans can legally own gold.


mikal (06/30/03; 08:37:36MT - usagold.com msg#: 105238)
Yuan (renminbi) "event" approaches IMO
http://www.bloomberg.com
COMMENTARY -June 30, 2003
William Pesek Jr. is a columnist for Bloomberg News. The opinions expressed are his own.
Forget Japan -- Is U.S. Now Jawboning China?: William Pesek Jr.
June 30 (Bloomberg) -Excerpts: "Either John Snow knows something we don't about China's currency plans, or he's attempting something at which the U.S. hasn't been too adept: telling Asians what to do.....
None of this means Beijing won't shift its currency policy, but the reasons against such a move this year outweigh those for it. It would mean too much uncertainty for China's new leadership, which has been around all of a few months. Also, China can't risk the slower growth that may result from a stronger yuan.[Mikal: Not a problem with a shuffle of ALL currencies]
Snow's role in all this is thickening the plot. If China has in fact tipped him off about a currency shift, would they really let him tell the media about it? Doubtful. More likely, the U.S. Treasury has embarked on a campaign of subtle pressure to prod Beijing toward letting the yuan float.
It's odd, indeed, that Snow seems keener to discuss China's currency than his own. China has come under fire from U.S. industry groups who accuse it of keeping the yuan's value too low, which they say boosts Chinese exports at the expense of U.S. jobs. Snow is playing to the gallery, letting exporters know the Bush administration feels their pain.
Tokyo used to be the target of Washington's advice and, often, its admonishments. Over the last dozen years of so, Japan got rapped for everything from weakening the yen too much to not buying enough U.S. automobiles to not acting faster to halt deflation.
Washington, Tokyo Pressure
Is it China's turn now? Snow's increasing focus on the yuan could signal a more activist approach toward China's economic policies. If so, Washington would be joining Tokyo, which has been complaining China is exporting deflation and keeping its currency undervalued.
More importantly, will pressuring China, even subtly, accelerate a change in its currency policy? Probably not.[Mikal: True, because it's already in the cards] .....Until now, corporate governance scandals and concerns about the banking system have been manageable problems for Beijing. That won't be so once the currency is fully convertible.....[Mikal: Not true, if the whole world is in crisis] leadership taking such a drastic step anytime soon. On top of China's financial system, it's still unclear how much damage SARS is doing to the economy, and confidence in it. It's just not a great time for Beijing to alter its currency policy. Besides, China's policy makers seem more interested in taking steps -- including tax rebates -- to help manufacturers export more. [Mikal: Like Fedspeak, paradoxical muddle. And SARS estimates are small and largely irrelevant]
.....If the Bush administration is turning its sights on China's exchange rate, and stepping up the pressure, the months ahead could be interesting here in Asia."


mikal (06/30/03; 07:47:14MT - usagold.com msg#: 105237)
Recession, dollar hangover not over
http://www.siliconvalley.com/mld/siliconvalley/6201892.htm
Plunging interest rates alarm critics
ANALYSIS: SOME WARN CUTS JUST DELAY INFLATION, SLOW GROWTH, LOWER DOLLAR
By David A. Sylvester -Mercury News
June 30, 2003 -Snippits:
"After cutting interest rates to a half-century low last week, the sacrosanct Federal Reserve Board is now facing unusual controversy: Are rates too low? A growing number of economists are asking if Fed Chairman Alan Greenspan went too far in trying to stimulate economic growth.
The fear is that ultra-low interest rates may encourage consumers and businesses to take on debt that will prove difficult to repay when rates rise. Low rates may seem a temporary godsend for homeowners who want to refinance their existing mortgages and pay less each month, but some say Greenspan and the Fed governors are postponing unpleasant consequences: higher inflation, slower long-term growth and a sharply lower dollar. ``They are moving us completely in the wrong direction,´´ says Edward Leamer, director of the UCLA Anderson Forecast in Los Angeles. ``They´re setting the stage for the next economic problem of stagflation with higher inflation and sluggish growth.´´.....

For one thing, negative interest rates tempt unsophisticated investors to violate prudent investment guidelines and transfer money from safe, short-term investments to more speculative investments with higher yields, such as junk bonds.
If the economy sours, risky investments are hardest hit.
Fed critics also argue that low interest rates are medicine for the wrong illness. Consumers buy more cars and homes, but major corporations won't install new equipment and build plants -- not when the real problem is overcapacity."


Mr Gresham (06/30/03; 07:32:31MT - usagold.com msg#: 105236)
Fleck on taxing savings
http://moneycentral.msn.com/content/p51071.asp
Just starting in to read this...

Goldendome -- Excellent summary of Sinclair.

Does anyone have a thought on why the dollar goes up as bonds are going down lately (and v.v.)? I would think it would be the opposite, since those bonds represent dollar-denominated assets.

Or is it something about the normal mechanics of the transactions, in size, where you are using the proceeds of a bond sale to by some more liquid dollar holding that quickly affects the exchange rates?

Or is it that the ESF or whoever only has enough of a "budget" to hit on one market on any given day? So that when they boost one, the other goes lacking for their attention.

I dunno, hard to visualize a world I've never been part of -- that's why I enjoy reading someone like Sinclair who gives me a sense of proportion as to what things are logical relative to the world I know, and what things really are out of my reach.

Black Blade (6/30/03; 01:46:31MT - usagold.com msg#: 105235)
Calif. Near Financial Disaster
http://www.washingtonpost.com/wp-dyn/articles/A48925-2003Jun29.html

Hours Remain to Solve $38 Billion Shortfall

Snippit:

As many as 30,000 government workers who had been expecting pay raises in the fall are instead receiving formal notices warning that they could lose their jobs by then, because the state is broke. The nation's most populous state, home to one of the world's largest economies, has been staring in disbelief at the same dire predicament for months: a $38 billion deficit, the largest shortfall in its history and an extreme example of the budget woes afflicting many states. But now it has only hours left to solve the problem.

"It looks bleak," said Perry Kenny, president of the California State Employees Association, which represents more than 100,000 government workers. "This is the biggest hole we've ever been in, and no one can seem to find a way out. We're all sweating bullets here."

For weeks, the state's budget has been hostage to an intensely partisan political war over taxes and spending that is now getting even more bitter and complicated because of a Republican-led campaign to recall Davis from office. Organizers of that movement have collected nearly 400,000 voter petitions in favor of ousting the governor, and political strategists in both parties say a recall election, which would be unprecedented, is looking ever more likely. There is no end in sight to the impasse, which California voters are watching with increasing exasperation. Polls show that public support for Davis has plummeted below 25 percent, and that two-thirds of voters are dismayed with the legislature.


Black Blade: These are "Interesting Times" in fiscally irresponsible states. Much higher taxes and service fees will kill any hope of economic recovery in this state and others like it. Of course rising energy costs will contribute as well. Many of these problems of course result from the voters making decisions that have consequences in their own lives. The chickens apparently have come home to roost.

Aside from these minor problems it was a nice weekend in Yellowstone. Something I pass along from a state with no income tax while munching on a couple of golden fried trout and a golden ale. ;-)

Belgian (6/30/03; 00:57:28MT - usagold.com msg#: 105234)
Rich - Liu
Liu is certainly aware of the growing dollar-avalanche in the East, waiting to slide down in the dollar valley.
Japan has serious troubles but has an almost unbelievable stash of 12 TRILLION $ savings.
Liu seems to suggest that the Eastern exporters are simply going to let their dollar-excesses melt under an artificial dollar sun. Seems extremely unlikely to me. On the contrary, these earned export-dollars will surely find cover under one or other form.
I remember that (GE)essay of "The Sting". About the yen-carry + Gold-carry.
June 24 1997 : The Japanese Prime Minister, Ryutaro Hashimoto, told a luncheon meeting at Columbia University : I hope that the US will engage in efforts and in cooperation maintain exchange stability so we will not succomb to the temptation to sell off Treasury bills and switch our funds to Gold !
Who's Treasuries is the FED buying now ??? Japanese ?
What did Duisenberg mean, recently, with his statement that CB cooperation/alignment is difficult !?

Who can keep resisting of selling dollar-bonds at their 50 years high and buy Gold still around decades lows ?

Japan could acquire Gold in a different way. They could sell $-bonds and buy euro, a package combination of Gold and paper.

I can understand that the dollar-system, wants to contain Euroland + euro and emerging China, but bringing Japan into this seems again a very dangerous (kamikaze) step too far by the dollar !?

How can Liu's brilliant dollar-strategy be combined with the almost hysterical wish of the FED of the ECB to follow IRs cuts in lockstep ? If the dollar wants the euro up to 1,40...why is an ECB rate cut so desired and obtained ?

The 13% euro part in CB reserves will increase as fast as the dollar declines.

A detoriating global currency-war will always end by the shiny yellow !




ViewYesterday's Discussion.

Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.

Wednesday February 8
website support: sitemaster@usagold.com
Site Map - Privacy- Disclaimer
The USAGOLD logo and stylized gold coin pile are trademarks of Michael J. Kosares.
© 1997-2012 Michael J. Kosares / USAGOLD All Rights Reserved