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ARCHIVED DISCUSSION FROM 8/31/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) SHIFTY (08/31/00; 22:56:35MT - usagold.com msg#: 35822) Canamami/ Peter Asher Canamami/ Peter Asher : The Stranger's last post from what I can see was: The Stranger (07/30/00; 20:24:57MT - usagold.com msg#: 34258)I don't know how I thought it was 8 weeks. Its just under 5 weeks. Still that is not like The Stranger to be away for more than a few days.Thanks Peter for sending him an e-mail. Peter Asher (08/31/00; 22:26:07MT - usagold.com msg#: 35821) Hey, Bonedaddy That fit right in there! Peter Asher (08/31/00; 22:23:27MT - usagold.com msg#: 35820) Last post That "Do not copy" paragraph was a surprise, they ought to omit the nine line blank space. --- But, they're part of the problem, I guess Bonedaddy (08/31/00; 22:17:52MT - usagold.com msg#: 35819) Is that inflation I see ahead? Twenty years ago when I first went to work in a natural gas plant I was taught how to load and unload propane tankers. I met some pretty interesting characters out on the rack at two a.m. I still remember a story about a new kid that one old driver told me. With winter on the way and natural gas, heating oil, and propane prices all at record highs, the old story came back to mind in a different sort of light. I hope you enjoy it: A propane transport company was training a new driver and he was teamed up with a thirty year veteran of the road. His instructor was along on a check ride and giving a verbal examination. The instructor asked, "What would you do if you were driving across Mississippi in the middle of the night over-weight, with no tail lights, and you got pulled over by the highway patrol. "Well", said the young student, "I guess I'd have to wake up Leroy, 'cause he's been dealing with cops for almost thirty years and I would just watch and learn from the old pro." "O.K. said the instructor, I suppose that would be the smartest thing to do under the circumstances." "Next question, your driving across Wyoming at night and you get caught in a blizzard on I-80 between Rawlins and Rock Springs, what do you do?" "Well"'said the student, I suppose I'd wake up Leroy and ask him if there's a truck stop close by. "O.K."replied the instructor, "I guess that's a reasonable course of action." "But tell me this, what if your hauling a load of propane down a steep icy mountain road high in the Colorado Rockies, and there's a sheer 400 foot drop off on the left side of he road and a truckload of dynamite slid off on the right side of the road and a freight train stopped on the crossing ahead, then you realize you have no brakes?" "Well", said the kid, " I believe I'd hafta wake up Leroy." "There's no time", shouted the instructor, "you've got to figure this one out by yourself!" "Oh,I believe I got it figured out", replied the kid, "I'm still gonna wake up Leroy." "But why", shrieked the instructor, now quite agitated. "Well", said the kid, "I'm gonna hafta wake up Leroy because he's been hauling propane fer damn near thirty years and he ain't NEVER seen a wreck like the one were a fixin' ta have!" Peter Asher (08/31/00; 22:16:08MT - usagold.com msg#: 35818) "Dumbing Down" the population. It's getting bad out there!(Allegedly) True StoriesI went to McDonald's. I looked at the menu and saw that youcould have an order of 6, 9 or 12 Chicken McNuggets. I asked for ahalf-dozen nuggets."We don't have a half-dozen nuggets," said the teenager at the counter."You don't?" I replied. "We only have six, nine, or twelve," was thereply. "So I can't order a half-dozen nuggets but I can order six?" ="That'sright." So I shook my head and ordered six McNuggets.A lady at work was seen putting a credit card into her floppy driveand pulling it out very quickly. When inquired as to what she wasdoing, she said she was shopping on the Internet and they asked for acredit card number, so she's using the ATM "thingy".I recently saw a distraught young lady weeping beside her car."Do you need some help?" I asked. She replied, "I knew I should havereplaced the battery to this remote door unlocker. Now I can't getinto my car.Do you think they (pointing to a distant convenient store) would havea battery to fit this?" "Hmmm, I dunno. Do you have an alarm too?" Iasked."No, just this remote thingy," she answered, handing it and the carkeys to me. As I took the key and manually unlocked the door, I replied,"Why don't you drive over there and check about the batteries .... it's along walk."Several years ago, we had an intern who was none too swift. Oneday he was typing and turned to a secretary and said, I'm almost outof typing paper. What do I do?" "Just use copier machine paper," thesecretary told him. With that, the intern took his last remaining blankpiece of paper, put it on the photocopier and proceeded to make five ="blank"copies.I was in a car dealership a while ago, when a large motor home was towedinto the garage. The front of the vehicle was in dire needof repair and the whole thing generally looked like an extra in "Twister".I asked the manager what had happened. He told me that the driver had setthe "cruise control" and then went in the back to make a sandwich.Sign in a gas station: Coke -- 49 cents. Two for a dollar.My neighbor works in the operations department in the centraloffice of a large bank. Employees in the field call him when theyhave problems with their computers. One night he got a call from a woman in one of the branch banks whohad this question: "I've got smoke coming from the back of my terminal.Do you guys have a fire downtown?"I was sitting in my science class, when the teacher commented thatthe next day would be the shortest day of the year. My lab partner becamevisibly excited, cheering and clapping. explained to her that theamount of daylight changes, not the actual amount of time. Needless tosay, she was very disappointed.Police in Radnor, Pennsylvania, interrogated a suspect by placinga metal colander on his head and connecting it with wires to aphotocopy machine.The message "He's lying" was placed in the copier, and policepressed the copy button each time they thought the suspect wasn'ttelling the truth. Believing the "lie detector" was working, the suspectconfessed. - - - - - - - Appended by Scientific-Atlanta, Inc. - - - - - - - This e-mail and any attachments may contain information which isconfidential, proprietary, privileged or otherwise protected by law. Theinformation is solely intended for the named addressee (or a personresponsible for delivering it to the addressee). If you are not theintendedrecipient of this message, you are not authorized to read, print, retain,copy or disseminate this message or any part of it. If you have receivedthis e-mail in error, please notify the sender immediately by returne-mailand delete it from your computer. HI - HAT (08/31/00; 22:15:10MT - usagold.com msg#: 35817) EURO I am finding the implosion of the EURO, to be an extremely interesting drama.At some point this becomes an issue of system instability,and can only lead to negative conotations.More must be going on here than meets the eye. It would appear that European's are buying big American assets,withEurodollars ? Not supporting EURO. Again, more here than meets the eye. Peter Asher (08/31/00; 22:05:19MT - usagold.com msg#: 35816) E-Mail to Stranger DONE! SHIFTY (08/31/00; 21:22:19MT - usagold.com msg#: 35815) Canamami / The Stranger Canamami : I have not seen The Stranger here for I think about 8 weeks. I posted something, I think it was about China trade. I thought he would have a response to it. I never heard from him and have not seen him post since that day. I hope I did not cause him to blow a gasket or something. We had a few heated discussions on the subject. I must say I have been feeling a bit uneasy about him. I hope he is OK. I don't think he said anything about going away. Maybe our host could send him an e-mail to see that all is well? $hifty ET (08/31/00; 20:50:43MT - usagold.com msg#: 35814) Boxman, CM Hey guys. Glad to hear business is still good.Boxman - please keep us posted on volume numbers if possible. Down 8% would seem to be significant, but in your business this may be the norm. CM, you wrote;"Will we inflate to "infinity and beyond" or, stagflate? That is the question eh?"Go CM - I think it's the question also. I believe those that can will inflate until the system becomes meaningless. I'm looking forward to that time. A little gold will go a long way! canamami (08/31/00; 20:15:36MT - usagold.com msg#: 35813) News re the Stranger? Has anyone heard from our long absent friend? Cavan Man (08/31/00; 20:09:59MT - usagold.com msg#: 35812) ET You said, "The hyperinflation is upon us." Certainly, we're on that road. I see signs of symptoms of burgeoning money supply and credit growth everywhere. The snowball is gathering steam in its downhill run. Will we inflate to "infinity and beyond" or, stagflate? That is the question eh? Truly CB's don't have many policy choices as I believe a deflationary environment will be avoided at any cost.Aside: There's a grocery store where I live that has been offering $500 signing bonuses. Imagine that. Cavan Man (08/31/00; 19:59:24MT - usagold.com msg#: 35811) Boxman Salutations! $7MM is a record amount of earnings in ANY division! I've always liked the smell of a box shop. In good times and bad it is the smell of money. Congratulations.....CM Chris Powell (08/31/00; 19:53:48MT - usagold.com msg#: 35810) "Midas" commentary for August 31, 2000 http://www.egroups.com/message/gata/518 Latest from GATA Chairman Bill Murphy.To subscribe to GATA's dispatches by email and get them immediately so you don't have to go look for them, send an email to:gata-subscribe@eGroups.com Boxman (08/31/00; 19:52:35MT - usagold.com msg#: 35809) ET's post # 35793 Thanks for the article ET. Cavan Man is correct, our industry has flourished, compared to most years. The plant that I sell for will earn close to 7 million dollars this year. In our industry that is exceptional, in fact, it leads our division. If you can find a niche, and not rely exclussively on "brown boxes", there is money to be made.I had mentioned earlier that I would post, should anything change. Our August volume was down about 5%, and I was told that we had finally shipped a large amount of orders that were produced in July. It would appear that we missed volume forecasts by closer to 8%. I don't put a lot of stock into 1 month's numbers, so next months figures will be much more informative. I also do not know if this was typical of the industry, but I will attempt to find out. lamprey_65 (08/31/00; 18:50:39MT - usagold.com msg#: 35808) CRB Today CRB today closed at a new two-year high, as did the dollar. So, there it is...the dollar continues to rise, but now the commodities are compensating...tracking the rise of the dollar.Looks like dollar's strength can no longer hide the underlying bullishness in commodities.Lamprey MarkeTalk (08/31/00; 17:21:20MT - usagold.com msg#: 35807) Labor Day Turning Points and GATA articles in Germany http://www.egroups.com/message/gata/517 Once again, I would like to thank Buena Fe who posts regularly at this site for bringing the above-referenced link to my attention last night. He had only the German version in hand and was trying to get me a fresh copy. Although I read and speak the language, I came into the office this morning to find that Bill Murphy had enlisted the help of some Cafe members to translate the articles which appeared in the Frankfurter Allgemeine Zeitung. I find it more than coincidental that these articles would appear at the traditional Labor Day turning points in most markets. There is that overused word "synchronicity" which describes the dovetailing of events, resulting in a new paradigm shift or perception of the world (Weltanschauung). And we cannot forget the work of Chris Carolan of Spiral Calendar Research who was calling for a major shift in the gold market after July 26, 2000. Who knows? Perhaps the powers behind the two German articles were discussing it even in July. It is common knowledge that GATA's materials had been widely disseminated. And we hear rumors that the Europeans are not happy that the Wall Street gang (Chase, Citibank, Morgan, Goldman Sachs, et al) have found a way to circumvent the intent of last September's Washington Agreement to limit gold sales/leasing by loading their off-balance sheets with gold derivatives. For those of you who are new, I refer you to Centennial's August issue of News & Views where the World Gold Council reported the figures from the U.S. Comptroller of the Currency. There are further rumors and speculations that another showdown between Wall Street and Europe is brewing which will catapult gold more than last September's $84 rise. Hold onto your hats!Finally, we are in the seasonal time frame when the precious metals start moving up,usually associated with weakness in stocks. Even if stocks stay strong until the election and then fall, gold and silver will skyrocket. Count on it. CoBra(too) (08/31/00; 17:17:53MT - usagold.com msg#: 35806) Haphazardly - the ECB fulfilled minimum expectations - and Wall Street took it with glee - is it total surrender, or is it l.t. strategy - who can be sure - except your predominant paper markets may live a little - bore a little - and lose a little - dominance longer! Big deal - we've still got to insure our $'s - even at the expense of the validity our own euro ... until we safely may dump this paper ... after getting back some real productive asse(t')s in the USA of virtual and grossly overestimated, bubbly doubly and fatally twin deficits in the trillions- though sporting an illusion of a budgetary surplus! - An illussion, enhanced by refinancing l.t. 30 yr. tsy bonds for shorter terms ... leap- sounds like and is malpractise, as the inversion states - doom. As it seems to me - paper is set up to burn in the context of reality - hard and real assets - and I wouldn't count on Bay Shore RE either - remember Tokio ... and all's relative - even being a dot.com squillionaire is`-more - relative to value...as it is real - to non valeur ... than value ... paid in paper - piper's paper -sell some for value - cb2 RossL (08/31/00; 17:04:59MT - usagold.com msg#: 35805) re: The News from SSCF Gandalf the White said:Did read this correctly ? Shareholders will be getting 4% of the newly reorg'd company ? Just whom is the owner ?<;-(That is kind of like asking: who is the owner of a house that is mortgaged to 125% Topaz (08/31/00; 13:18:40MT - usagold.com msg#: 35804) MIA par deux- nuggets101 On a more serious note., Today marks the Third anniversary of the death in Paris of HRH the Princess of Wales.This tragedy and the attendant Month of Sorrow in it's aftermath will go down as the lowlight of the latter quarter of the Millenium.Spare also a thought for Sheik Mahommed el Fayed who is (still) endeavouring to seek Truth/Justice in relation to the events leading up to and including the fatal accident.This Quixotic crusade is, alas, doomed to failure although I'm sure many a Father's heart wishes it wasn't. <mine certainly does>nuggets101:May have something to do with the bulk of "big float" residing in Japanese coffers, Yes? Gandalf the White (08/31/00; 12:52:11MT - usagold.com msg#: 35803) The News from SSCF www.sunshinemining.com Sunshine Commences Reorganization Under Chapter 11 August 23, 2000 02:19 PM Eastern Time BOISE, Idaho--(BUSINESS WIRE)--Aug. 23, 2000--Sunshine Mining and Refining Company SSCF announced today that as part of an overall financial restructuring the Company and three of its subsidiaries commenced reorganization cases under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Company and its affiliates have prepared a proposed plan of reorganization cosponsored by four of its major bondholders holding more than 70% of the Company's outstanding indebtedness. The joint filing underscores the Company's goal of completing its reorganization and emerging from Chapter 11 as quickly as possible. The Company announced that it has arranged $5 million of debtor in possession (DIP) financing from affiliates of the major bondholders cosponsoring the reorganization, and has a commitment for $5 million of long term financing after the Company emerges from bankruptcy, expected by year-end. The DIP financing will be secured by substantially all the assets of the Company. The Company expects to continue business as usual and will be filing motions with the court seeking approval of the continuation of all Company compensation and benefit plans, and payment of funds due to suppliers of essential goods and services, and otherwise conduct business as usual. The restructuring was necessitated by the Company's operating losses and inability to refinance its outstanding obligations in the severely depressed silver market which has continued for the past 12 years. The Company and its major creditors recognized that the Company's silver assets are world class, and that with a restructured debt-free balance sheet the ability of the Company to put the Pirquitas Mine into production will be greatly enhanced. Under the plan as proposed all equity in the Company will be canceled; however, the cosponsoring bondholders have agreed to cede approximately 4% of the new equity to existing shareholders. In addition, approximately 6% of the new equity is being reserved for other unsecured creditors, most of which is ceded to the other creditors by the cosponsoring bondholders. The cosponsoring bondholders will retain approximately 90% of the new equity to be issued under the plan, and will name a majority of the directors of the reorganized company. In addition, the cosponsoring bondholders will have an option to acquire the Company's subsidiary, Sunshine Argentina, which owns the Pirquitas Mine in Argentina. Such option may be exercised upon the occurrence of certain adverse events to the Company or its subsidiaries. The Company previously issued 8.3 million warrants to purchase common stock of the Company to the holders of its 8% Senior Exchangeable Notes and its 10% Senior Convertible Notes for extensions of maturity and for agreements to exchange debt for equity in the reorganization. The warrants represent the right to acquire one new share of the Company's common stock at its par value, and have a cashless exercise feature. In a letter to employees advising of the filing, John Simko, Chairman and Chief Executive Officer, and William Davis, Executive Vice President and Chief Financial Officer, told employees to take pride in their accomplishments in a very difficult market. In the letter, Simko and Davis pointed to deteriorating market conditions for precious metals mining in general as contributing to the difficulty of restructuring the debt. They pointed out that in 1996, on the basis of a few drill holes in Pirquitas, the Company was able to raise $30 million to further explore the property. In the current market, with a completed feasibility study demonstrating its excellent economics, the Company could not access the money to refinance the debt. ******Did read this correctly ? Shareholders will be getting 4% of the newly reorg'd company ? Just whom is the owner ?<;-( Topaz (08/31/00; 12:39:23MT - usagold.com msg#: 35802) MIA @C-Man Another notable absentee of late is Aragorn 111.Perhaps Ari knows?Ari., Where's Ara-gorn?...........<sorry-smile> TownCrier (08/31/00; 11:46:59MT - usagold.com msg#: 35801) Here's an early look at the latest Gilded Opinion text http://www.usagold.com/gildedopinion/howederivatives.html We are quite pleased that Reginald Howe was willing to provide his most recent commentary for publication within our Gilded Opinion, making sure this important work is now permanently available for your convenient future reference.There are a few formatting adjustments remaining before this link is added to the Gilded Opinion Index later today, but the link provided above will take you directly there in the meanwhile.A must read. Cavan Man (08/31/00; 11:46:01MT - usagold.com msg#: 35800) Thanks ET Appreciate your insight. I am staying with the game plan.Where are Stranger and ORO anyway? nugget101 (08/31/00; 11:39:17MT - usagold.com msg#: 35799) Why Yen? Can anyone explain why the US dollar is continually pegged to Yen instead of the other currencies? Why is that ratio more important than say... Marks or Pounds?Thanx. ET (08/31/00; 11:25:30MT - usagold.com msg#: 35798) Cavan Man Hey C-Man, I'm glad you enjoyed the links. Regarding the Fannie Mae article, it would seem even our GSE's are finding funding in Euros to be the way to go. I'm sure ORO pointed out awhile back that this was going to happen. I guess you have to go where the money is, eh? No doubt before long my neighborhood will have a lien against it held by the ECB. <g>It's the nature of a credit bubble C-M. It has to be replenished and grown daily to keep it going. The hyperinflation is upon us. I found the oil article fascinating. It would seem everything is coming together to produce higher energy prices as far as the eye can see. I suspect the only relief in sight would be a severe economic downturn hammering demand for energy by 10-20%. Even that would most likely not effect crude prices all that much as they appear at the mercy of the oil for gold deal. Like the Stranger has said, I believe the CB's will continue to try to reflate as they really have no choice. MK's commentary goes to the heart of the matter. The dollar has remained strong only versus other currencies. Versus real things, all currencies are becoming very weak. Like MK, I believe it is nothing more than a perception thing. I hope you had a chance to read the link I posted last night from antiwar.com. It goes to the fact that people today are very trusting of the state and very uninterested in learning how the world works around them. Perhaps this explains much of the problem with the demand for gold. If we could bring back some people from about three generations ago, they would be on the floor laughing at our collective naivete. I'm sure they would be buying gold with both hands wearing a grin from ear to ear. CoBra(too) (08/31/00; 11:14:16MT - usagold.com msg#: 35797) Hello Forum - May we live in interesting times - we may! Just a quick note inbetween. As you all know the ECB raised rates by "only 0,25%" today. Said before- may be too little, too late in view of overall inflation no's throughout EU. France is willing to subsidize oil price for fisheries, since they are blocking all seaports, including the "Chunnel" ... Time to wake up to realities, politico's overin Euroland and BTW Blair is stepping up pro euro advertizing, while FAZ and Handelsblatt (two lading papers in Germany) carried articles on gold manipulation by major banks, treasury and administration, including GATA. Meanwhile - gold up over $3 - won't be long and the seachange of pereption will haunt Wall Street and finally Main Street. Cheers - cb2 Cavan Man (08/31/00; 10:17:01MT - usagold.com msg#: 35796) ET Thanks for the link. The situation in our industry is not that dire--really. BTW, I compete with companies like OCC. While it is true that it is increasingly tough to find US manufactures, the industry by and large is pretty healthy financially; at least for the quarter.Regarding the other two links from PB. It is difficult for me to know and understand what to believe anymore. My gut instinct tells me something(s) is/are terribly wrong. However, I have been wrong before (many times). I've also been right.Without energy, we're all eating grass. Without energy, we all forfeit our lifestyles. This new economy business in the context of, "oil/gas are not as important as they once were" is simply a wagon load of manure. wolavka (08/31/00; 10:14:05MT - usagold.com msg#: 35795) Support gold Gotta go visit daughter @ MIT,keep buyin. schippi (08/31/00; 10:02:00MT - usagold.com msg#: 35794) Select Gold Hourly chart http://www.SelectSectors.com/agpm70.gif FSAGX Moving Up ET (08/31/00; 09:44:58MT - usagold.com msg#: 35793) Cavan Man, Boxman http://www.latimes.com/business/20000830/t000081517.html ET (08/31/00; 09:36:48MT - usagold.com msg#: 35792) Energy http://216.46.231.211/economic.htm From the article;"Shipping is another critical bottleneck is in the crude marketplace, with an increasingly insufficient number of VLCC (very large crude carrier) fleet. During the early 70's, right before the oil crisis that caused demand for ships to plummet, there was a staggering amount of tankers commissioned. These tankers typically have a 25-year life span, which means these ships are nearing retirement time. With supply of VLCCs critically low, charter rates are soaring. Charter rate are over $74,000 per day, more than triple the rate last year. Shipping companies are talking about breaking the $100,000 per day rate. There are reports that there is one $100,000 per day charter, the first time in over 25 years. Despite these rates 4 VLCCs were scrapped in July. So far this year, there have been 23 VLCCs scrapped while there were 24 deliveries to maintain supply. However, for the rest of the year there are about 30 VLCCs that will turn 25 years old with only 17 new ships being delivered, a trend expected to continue into 2002." "The "new-economy" might not be as isolated from the oil as most investors seem to think. Technology accounts for 12%-14% of the country's power consumption, which is more than the steel and paper industries combined. A lot of this is due to the proliferation of data centers that companies have been building to house Internet and ASP servers. These data centers require enormous amounts of power. Not only do the computers have to be powered, but also the computer rooms need to maintain a cool 70 degrees. Com Ed says the typical data center in Chicago requires ten times the power of a conventional office building. If all twenty planned data centers in Chicago reach full capacity, their annual power consumption will almost equal the output of a small nuclear reactor." ET (08/31/00; 09:13:01MT - usagold.com msg#: 35791) Credit http://216.46.231.211/international.htm From the article;"Thus far, there is little evidence as yet to suggest that such a turn in foreign sentiment is imminent. Indeed, judging from the positive reception accorded to the recent announcement that Freddie Mac, the US mortgage lender, will issue at least 20 billion of euro-denominated bonds into the European debt market each year, the love affair with all things American appears to be continuing apace in Europe. To be sure, the bonds are denominated in euros (although the proceeds are almost certain to be immediately swapped back into dollars), but they would hardly be snapped up so eagerly if European investors seriously thought that the current state of affairs in the US financial system was unsound and unsustainable (particularly from a company whose balance sheet growth over the past 3 years is so vividly representative of the unalloyed expansion of credit that has done so much to sustain the boom). It is interesting to us, however, that Freddie Mac (in the words of one of its underwriters for this deal) "recognizes its need to diversify its funding away from depending on the US dollar market." Does this imply Freddie Mac's belief that the Government Service Enterprises (GSE's) are near the saturation point with respect to funding access in the US capital markets?" USAGOLD (08/31/00; 08:30:19MT - usagold.com msg#: 35790) Headline News: Dog Wags Tail http://www.usagold.com/Order_Form.html DAILY COMMENTARY (8/31/00) www.USAGOLD.com . . . Gold upped the ante by $3.60 in the early going with reports of physical buying in Asia pressing against thin supplies and subsequent short-covering on the New York open. So much for the summer doldrums. (Goldmeisters, do you notice something peculiar about this morning's opening sentence?? Surprise. The physical dog seems to be wagging the Comex tail.) We refer you back to our report from Tuesday to see the reasons why we believe this is going on. (Please scroll down.) To sum it up, we believe the impression is making the rounds that all currencies will depreciate against real goods in future months, even while the dollar from all outward appearances seems to be doing well against various currencies. Gold, in our view, will be the primary beneficiary of the trend. In the process it will reinforce and strengthen its reputation as the primary currency hedge around the world and we go into the fall/winter seasons. All of this will be driven by oil as it makes its presence felt and inflation begins to creep into the industrial economies. The charge to gold will be led, as it was overnight, by the Tigers of Asia where citizens pummeled by the currency breakdowns of 1997-98, won't be caught flat-footed a second time around. Don't forget the price of oil is going up in those countries as well. Have a good day, fellow goldmeisters, we'll update if anything interesting develops. Scroll below for Tuesday's more detailed treatment of these issues. Had it with the tired, one-sided anti-gold financial press mentality? If you want a fresh view of the gold market go to the link above for an information packet on gold ownership which includes our widely read newsletter, News & Views: Forecasts, Commentary & Analysis on the Economy and Precious Metals. We offer solid commentary in a rapid fire, no-nonsense, bullet format designed for busy people who want gold related news and opinion without the unnecessary fluff. And stay tuned here for our Daily Commentary. Please call Marie at 1-800-869-5115 or click here to request News & Views as well as our helpful introductory information packet for gold investors. 8/29/00 Commentary Why We Should Stop Watching the Dollar and Start Watching International Inflation Rates Gold opponents in recent weeks have made much hay about the run of sales and the financial press sounds like a broken record in its ongoing "assist" to the shorts in trying to keep investors out of the physical metal. The mantra is familiar -- Switzerland has sold 85 of the 120 tonnes earmarked for 1999 and continues to sell at the rate of about one ton per day; Uruguay leased its gold (25 tonnes); Chile sold (35 tonnes); and, the ever present coup de grace: Later this month, Britain will auction another 25 tonne lot. But what the press reports fail to point out is how easily the market absorbed all this gold with barely a hiccup and stubbornly resists going through the $272 mark despite a massive short position against it and the steady menu of sales and leases. That stubbornness comes from two important factors that we need to keep in mind: 1. Despite the hoopla that goes with these gold "tackles" and the deplorable, "piling-on" (Please excuse me, I'm revving up for football season. Broncos/Rams Monday Night.) by the so-called analysts for the major trading firms, the fact remains that all these numbers still fall comfortably within the parameters of the deficit between mine and scrap production and international demand -- the one item these same self-serving "analysts" conveniently fail to mention. I'll take it a step further: On the supply side, how long until the shorts get to the bottom of the check list of eligible third world gold sellers and find all the boxes checked? In other words, aren't we getting close to the bottom of the barrel in terms of gold sellers? Also, I hear from credible sources that the mining companies capable of high grading to supply gold at these prices are just about at the end their string. So what happens when these high grade pockets run out? Quit mining? Run at a loss? No matter how you stack it, the amount of gold coming out of the mines is likely to drop at the worst, or remain static at best, if we do not break out of these price levels. In addition, at some point logic dictates the shorts run out of third world gold sellers to mesmerize out of their reserves. In short, demand will continue to rise, while supply sources dry up one after another. 2. This gold is going somewhere. Where is it going? We think two places. The first is to fulfill old gold loan contracts that need to be paid back, perhaps not to see the light of day for some time to come (the effects of the Washington Agreement.) The second is to investors around the world who smell something burning amidst the Grand New Economy (kind of like your typical Rocky Mountain morning these days)and are purchasing gold at these bargain basement prices. More. . . . Italy joins Germany, Ireland, Britain, France and just about every other European nation today in making public its inflation problem. We've commented before about the international scope of the inflation now in progress. The new phenomena seems to be most currencies depreciating against real goods. Gold seems to be doing well against many currencies save the U.S. dollar -- where the year over year apprecation has been marginal. But what does this mean to the typical investor? Here's some answers in a nutshell. With U.S. account deficits running in the danger zone as a percentage of GDP, even traditional Wall Street economists are beginning to ask questions whether or not the dollar can remain at these levels. But watching the dollar may be passe in the new International Economic Arrangement. Fearless Forecast: Exporters to the United States will continue to do what it takes to keep their currency cheap vis a vis the dollar -- that includes the other two global economic powerhouses, Europe and Japan. In their view, such policies are akin to national survival. So the dollar will not depreciate against other currencies as much as it will against goods and services -- oil being the primary indicator, and perhaps the first "good" to run higher. In other words, it looks to us like we are in for a bout of inflation that will frustrate the Fed and the markets, even as the dollar seems to be holding its ground. The same inflationary situation will become the status quo in most, if not all, the industrialized countries. Once investors get the message, the move to gold will begin in earnest, and even the dollar price will move on fundamentals as the supply evaporates. At one time, I said watch the dollar for it will forecast gold's destiny. I now retract that. Watch instead the inflation rates in various countries (assuming they report their inflation rates objectively) and the demand for gold itself. That is where upside push will originate. In this environment worldwide currency inflation is raising all ships no matter which flag flies at the main mast, and you won't be able to hedge it by running to a stronger currency. Investors worldwide will see that the only real haven against the policies of the various nation states working in concert to mask their inflation problems is yellow gold -- hard money that has no country, flies no flag, and remains universally recognized as the premier asset of last resort. We invite you to stay tuned to the gold market through our DISCUSSION FORUM featuring round the clock gold news & commentary from the public. PLEASE REMEMBER: It is your purchase of gold from Centennial Precious Metals that nourishes these pages. Call us at 1-800-869-5115 for prices and to have your questions answered.Please go to link above for an information packet on gold ownership that will get you started on the right foot. Black Blade (08/31/00; 08:18:02MT - usagold.com msg#: 35789) Monkey index http://www.monkeydex.com Obviously Portfolio managers and Mutual fund managers wouldn't want that info about a monkey picking winning stock portfolios get get around. Of course until now I thought of these managers as primates. My apologies to the monkeys. Black Blade (08/31/00; 08:04:53MT - usagold.com msg#: 35788) Even a Monkey can do better! http://www.monkeydex.com/ The link shows a monkey can beat an analyst! I have been saying that analysts are nothing but charlatans. Check out the monkey index at the link. wolavka (8/31/2000; 6:56:34MT - usagold.com msg#: 35787) 282 watch 282 in dec wolavka (8/31/2000; 6:54:57MT - usagold.com msg#: 35786) range over yesterdays high Good sign, keep buying wolavka (8/31/2000; 6:53:48MT - usagold.com msg#: 35785) Labor of love Gold! Black Blade (8/31/2000; 6:49:29MT - usagold.com msg#: 35784) @Wolavka and Topaz a couple of quick replies Wolavka: Canadian NG is piped into the US, however, they are straining to provide enough to satisfy domestic demand and also export contractual obligations to the US. Looks grim! There is still some talk about advancing the importation of liquid NG, however, a lot of technical problems with cooling tankers, etc. and cost is still prohibitive.Topaz: If I were a Kuwaiti Royal, I would be uneasy trusting the west with paper gold. We westerners tend to cheat, lie and steal. In other words "Treaties are meant to be broken". We don't have a good record with treaties. Ask any American Indian ;-) If I were a Kuwaiti peasent and saw that the official reseverve were a palty 79 tonnes, I would not be happy and might think that monarchies are a complete scam. Could be seeds for a "Revolution" a la America 1776 or Good old Franco-style with the guillotine. Just a thought anyway. SteveH (8/31/2000; 6:49:01MT - usagold.com msg#: 35783) In case you missed it... Bloomburg this morning discussed the money flow of three gold stocks saying that 10K blocks have been increasing for the last few months while the price has remained low. Money flow is a chart that shows the price chart compared to 10K block buys over time. The charts looked like packmans with their mouths open, with the price being the lower jaw and the money flow the upper. FYI.Newmont, PDG, and one other stock. Black Blade (8/31/2000; 6:39:01MT - usagold.com msg#: 35782) "Morning Wakeup Call!" Sources: BridgeNews, and goldminingoutlook.com THE EASTERN FRONT:Asia Precious Metals Review: Gold rises on physical buying Tokyo--Aug. 31--Buying from Japan and physical demand from other Asian countries pushed up the price of spot gold in Asia Thursday, while trading remained moderate, dealers said. Silver continued to trade at about $4.91 per ounce on a lack of trading interest from players. Spot platinum failed to rise in Asia on fears of selling from Russia, though the metal rose overnight in U.S. trade, dealers noted. (Story .2200)Black Blade: Yawn.THE WESTERN FRONT:Europe: Dollar Higher; Gold Lower 13:17EDT LONDON (AP) --The U.S. dollar rose against most other major currencies in European trading Wednesday. Gold fell. The euro was quoted at 89.25 in late European trading, down from 89.64 Tuesday. Later, in midday trading in New York, the euro traded at 89.25 cents. Other dollar rates in Europe, compared with late Tuesday, included 106.40 Japanese yen, up from 106.16; 1.7345 Swiss francs, up from 1.7229; 1.4788 Canadian dollars, down from 1.4868. The British pound was quoted at $1.4568, down from $1.4614. In midday trading in New York, the dollar bought 106.33 yen, and the pound was worth $1.4568. Based on euro rates, the dollar is worth 2.1897 German marks, up from 2.1797; 7.3439 French francs, up from 7.3103; 2.4672 Dutch guilders, up from 2.4559; 2,167.79 Italian lire, up from 2,157.88. Gold closed in London at $272.80 bid per troy ounce, unchanged. In Zurich the bid price was $272.75, down from $272.85. Gold fell $1.80 in Hong Kong to close at $272.75. Silver closed in London at $4.87 bid per troy ounce, down from $4.88.Black Blade: In other words, Gold buys more of these European Pesos! The UK Peso to drop one to the dollar soon after a few more Au auctions.FROM S.J. KAPLAN’S GOLDMININGOUTLOOK:The traders' commitments for the white metals as of August 22, 2000, released at 3:30 p.m. on August 25, 2000, were moderately better for silver, slightly better for platinum, and no longer exist for palladium. For COMEX silver futures, commercial insiders were long 32,778, short 47,165; speculators long 34,195, short 32,983. This means that the commitments for silver were moderately improved, and became modestly bullish, compared with slightly bearish two weeks ago. Looking at NYMEX platinum futures, commercial insiders were long 2,681, short 6,748; with speculators long 4,990, short 1,887. These commitments improved slightly, and remain significantly bearish. There are no longer any commitments for palladium.Black Blade: Notice the lack of COT for Pd! Go figure! Good as delisted!Meanwhile, Oil is down -$0.12 at $33.20/bbl and poised to go higher as Saudi is not in any hurry to ramp up production, as if it would do any good anyway. - Not much refining capacity left and going into the Sept. maintenance season. NG is at new highs! At $4.84, and going to at least $5.00 or better. S&P Futures numbers are not readily available, one source has futures at -14.70 and another at +1.90, Fair Value at -2.44, could be mixed or wildly lower. Will keep an eye out for updates. Au is up +$0.70 at $274.00, Ag up a penny at $4.90, Pt is down -$3.00 at $587.00 and likely to go to $600.00 and beyond soon, and Pd is up +$4.00 on meaningless paper trades. LeSin (8/31/2000; 5:44:44MT - usagold.com msg#: 35781) EURO v DOLLAR v GOLD LONDON, Aug 31 (Reuters, 31 Aug 2000 13:13) - Implied volatility in euro/dollar options approached historical peaks on Thursday, with dealers gunning for new record lows in the single currency, possibly in the wake of the ECB's decision on rates later in the day. The single currency was trading within a cent of record lows of around $0.8845 hit in May, drawing little support from expectations that the European Central Bank will increase interest rates by a quarter of even half percentage point at 1145 GMT. The euro had already hit record lows agains the yen on Wednesday and traders said the historic trough in euro/dollar was likely to be retested as well, a move certain to further boost option prices. "People are aggressively bidding euro puts against euro calls across the whole period in anticipation of euro moving lower in uncharted territory," said a trader at a British bank in LondonSNIPWhat if ECBs start Selling US$ andstart Buying EUROs andIncrease Gold Purchases andRaise Interest Rates ??? Is the question to simple for such a complex problem? "S" Henri (8/31/2000; 5:18:24MT - usagold.com msg#: 35780) 10 tola bar Klunk! Henri (8/31/2000; 5:16:07MT - usagold.com msg#: 35779) 714 Msg 35771 "..What is too much money chasing too many goods?"Economic expansion? Topaz (8/31/2000; 5:00:18MT - usagold.com msg#: 35778) Black Blade Just thinking a little more on the ME Gold thing and, I hasten to add again, mere speculation but:Let's assume the bulk of Au-for-Oil Bullion ended up in Private (Royal) hands with only a token amount officially on the books of the "countries". Move now to the ME of the 90's, Gulf War, Pal/Israeli, Rak-n-Ran, Conflict's-R-Us, You, as a Bullion holding Royal would be pretty conserned as to the security of your hoard No? Then along comes your friendly bullion Bank with the (at the time) sensible solution-"paperise the stuff and earn a bit of interest on the way" Voila....Megatons of Paper AU. wolavka (8/31/2000; 4:50:29MT - usagold.com msg#: 35777) topaz Watch S.A. au's, (au asa gold) remember nice dividends in the 70's. Topaz (8/31/2000; 4:30:13MT - usagold.com msg#: 35776) Aggie- Good (longish) read via Lucky@K http://www.gold-eagle.com/editorials_00/sanders072700.html Don't recall this being linked here before. wolavka (8/31/2000; 4:26:43MT - usagold.com msg#: 35775) Black Blade Enjoy your work, engineer from pipeline going thru northern Indiana and Michigan (coming from canada) informed me that almost all natural gas coming into u.s. is from canada.Any info? Thank you. wolavka (8/31/2000; 4:10:45MT - usagold.com msg#: 35774) Gold stops below 276 in dec. globex tonite trading is support with short covering ahead of ecb hike and long week end.282 major breakout in dec with 284 286 289 resistance points. nice base line forming with massive support at 252 275.Clown could always try a spike down to clean house then close higher on range of day which would be expected.Ultimate investment makes us suffer for what is rightfully ours to begin with, govt will eventually pay the price for mind games. Watch dec cattle, maybe Hillary will buy today. Black Blade (8/31/2000; 3:38:47MT - usagold.com msg#: 35773) Au is clawing upward tonight. Gold is bouncing around on that $275.00 ceiling tonight. It is flucuating between +$1.50 and +$1.70, being repelled at each attempt to break through the $275.00 barrier. Could get interesting before NY opens. Black Blade (8/31/2000; 3:37:32MT - usagold.com msg#: 35772) Au is clawing upward tonight. Gold is bouncing around on that $275.00 ceiling tonight. It is flucuating between +$1.50 and +$1.70, being repelled at each attempt to break through the $275.00 barrier. Could get interesting before NY opens. 714 (8/31/2000; 3:27:33MT - usagold.com msg#: 35771) Thoughts for Aristotle Investors love US$. Hot money from around the globe has flooded into US financial markets (and dollar investments) the last few years and props the US economy up. Japan was similarly flooded with foreign capital during the 80's before their crash in 1989.As for derivatives being a problem for the US$, this is true. Maybe more so for dollars than for gold, but only when valuations start to change. And the supply and demand of US$, like the gold supply, has inflated, the effects of which have yet to really be felt. Someone once described inflation as too much money chasing too few goods. What is too much money chasing too many goods? Black Blade (8/31/2000; 3:27:01MT - usagold.com msg#: 35770) @Topaz #35767 I'm sure that the Royals have socked away a lot of Au among other valuables. The whole purpose of being a ruler is to exert dominion over others (a.k.a. "the Peasants ") and to steal them blind. I did find that the whole of Kuwaits official gold reserve was a paltry 79 tonnes of Au to be somewhat meager. They are one of the primary sources of oil and one of the wealthiest nations on earth, unless of course ole Saddam made off with the Au and never returned it under the surrender agreement. This whole episode raises a few questions about oil for gold. Is this gold for oil hypothesis really valid or is Kuwait and its paltry 79 tonnes an isolated case in comparison to other major ME oil producers such as Bahrain, Saudi, Oman, etc.? Of course we no longer have the pleasure of Another's" presence to clarify this for us. Maybe TG/FOA could address this. Topaz (8/31/2000; 2:00:07MT - usagold.com msg#: 35769) TIH Thank's for the suggestion- t'would seem appropriate however, I did exactly that with my last "super" (superannuation- kinda like your 401 retirement benefit a/c) cheque - due to admin stuff-up's, the thing didn't arrive for three mth's. I'm now being audited (my super Fund) and problems with receipt's resulting from above actions, I could be in deep doo-doo.This time I'll wait----and hope TS doesn't hit TF until after it's safely converted.Good to see you back! The Invisible Hand (8/31/2000; 1:05:21MT - usagold.com msg#: 35768) @ Topaz re Wolavka Why don't you ask your banker for a loan for a few days and repay the loan when you'll get the check? Topaz (8/31/2000; 0:10:00MT - usagold.com msg#: 35767) Black Blade- Arab Gold & Wolavka G'day BB,Re: your "where's all the Arab Au" this am, I believe most Arab countries gov'ts are mere shell entities (not the company) and the Bullion resides in the coffers of individual Royal Households.Or so....it would seem....to Me!caviat- like 99% of info on PM's that finds it's way into the public domain, this too is mere speculation.Wolavka:Can you please hold back for one more Week?A "Super" cheque is due any old day and of course, I'll be wanting to convert it to "MONEY" on arrival.Just one lousy week isn't too much to ask -is it? ;-) ViewYesterday's Discussion.
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