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ARCHIVED DISCUSSION FROM 5/31/2002 All times are U.S. Mountain Time (Yesterday's Discussion.) Black Blade (05/31/02; 23:06:00MT - usagold.com msg#: 77233) Dollar bears ready for golden day http://cbs.marketwatch.com/news/story.asp?guid=%7B826C0C6D%2DD13F%2D4512%2D9FD6%2D13F89E9B618B%7D&siteid=mktw Commentary: Linking weak dollar to rising bullion SAN FRANCISCO (CBS.MW) -- As the Nasdaq fends off its September lows, economists, analysts and technicians are pointing to the storm signals of rising gold prices and the falling dollar. The dollar's fall -- down about 7 percent this year against the currencies of America's biggest trading partners -- is increasingly linked with gold's relentless gains. Black Blade: Many of us thought that the US Dollar would weaken once Dubya took the reins of power. However, the USD strengthened until February's high of 122. Secretary O’Neill would continuously state over and over that the government's position on a "Strong Dollar Policy" remained unchanged. That was crazy of course as it only delayed the inevitable – or was it? It appears that what the government agents said and what they did was perhaps a crafty strategy so as to not spook the markets. While touting a strong dollar, they may have bought some time to attempt a "soft landing" – or so they thought. The weakening US Dollar is accelerating even though today Dubya reiterated the public government position while behind the scenes they may have been secretly pursuing a policy of weakening the dollar. Who knows the real story, however, given the alternatives it makes sense unless we were to believe that they have completely lost control and there exists the threat of a crashing dollar spiraling out of control – and that too would seem quite plausible. timbervision (05/31/02; 22:56:58MT - usagold.com msg#: 77232) miner49er "whoever said we were supposed to save this stuff...?" (paper that is).So things saved should be things that were designed to be saved. Things that were designed to be consumed should be consumed. I just have to think of the contents of my fridge. Fiat currency tries to be gold and is really just lettuce.If you have the time I have another question. As the US fiat currency slides will the Euro with its gold element result in a narrowing of the disparity of weak versus strong currencies around the world. Will the world be on some kind of a "gold standard," or will the third world be just as poor again.Thanks so much,timbervision Black Blade (05/31/02; 22:46:13MT - usagold.com msg#: 77231) Howard's End: The Squeeze On Gold http://www.scoop.co.nz/mason/stories/HL0205/S00174.htm Snippit:The price of gold and gold stocks is sky-rocketing with Central banks across the world coming in for severe criticism for the way they have sold official gold reserves, although in a disguised form. Maree Howard writes. One of the biggest financial scandal stories, on the level of Enron, is about to break.Central banks are said to have lent their gold for about 1% per annum - the cheapest borrowed money on earth. They have not reported these loans as sales meaning their official gold reserves remain constant. But the leased gold is gone. It has been borrowed by large trading companies called bullion banks. They borrowed at 1%, sold the gold, took the money they earned by selling the gold and invested it at 5% or more. It was sweet multi-billion dollar deal. But now they are in a squeeze. They owe billions of dollars of gold bullion to Central banks but to get it back, they must buy gold bullion in the open market, which is now a rising market. They are losing money, big time.Gold mining firms burdened with forward contracts set at a lower price see losses ahead when they have to sell a commodity on the back of rising prices. This is really going to hurt those mines that are loaded up with obligations to sell at a fixed price. They will face a profit squeeze and are less likely to add to their positions of forward sales. I don't expect a gold-rush on Wall Street. They are too conventional and too closely allied to the highest levels of Central banks and bullion banks. Wall Street is the Establishment. In fact, I expect to see a propaganda campaign to try and take the head of steam out of gold and to prop up their ailing financial system.Black Blade: So far we have only heard a few dissenting voices of how dunce Gordie Brown gave away the peoples Gold at a humongous loss. If this story were to be picked up by the mainstream media we would definitely have a story that would dwarf Enron and Arthur Andersen. A young hungry reporter could make his mark in the world with this story (Gold Carry Trade).Still "Significantly Bullish!" TownCrier (05/31/02; 22:03:39MT - usagold.com msg#: 77230) Centennial in the Minneapolis news. George Cooper! Who luvs ya, baby! http://www.startribune.com/stories/535/2873624.html HEADLINE: Gold dealers doing big business(Minneapolis Star Tribune) Jun 1, 2002 -- Gold has its glitter again.On Friday, as gold prices rose to their highest level in more than two years, coin and precious metals dealers said their phones won't stop ringing."The world has changed," said George Cooper of Centennial Precious Metals, a Denver-based company with dozens of customers in the Twin Cities."I get calls from New York City, and they wouldn't have talked to me two years ago to save my life. They believed in Wall Street, and now they're basically running scared. Greed feeds the stock market, fear feeds the gold market."...Bill Himmelwright of Premium Quality Coin in downtown Minneapolis said that not only is he seeing a 30 to 40 percent increase in the number of customers in his store, people are buying more. The average customer is spending $4,000 to $6,000, compared with $500 to $800 in the past.----------------Bottom line: The gold buying spree in Japan is small potatoes compared to what Americans could potentially bring to bear on the physical market. The strain could very well be more than this market can bear.R. Black Blade (05/31/02; 21:49:01MT - usagold.com msg#: 77229) California Issues Power Alert, First in Nine Months http://quote.bloomberg.com/fgcgi.cgi?ptitle=Energy%20News&s1=blk&tp=ad_topright_energy&refer=topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_all&bt=ad_position1_energy&tag=energy&middle=ad_frame2_energy&s=APPeCSRUEQ2FsaWZv Snippit:Folsom, California, May 31 (Bloomberg) -- California power grid operators issued their first alert in nine months in response to low supplies because of a heat wave in the U.S. Southwest, the Associated Press reported. The heat wave forced out-of-state wholesalers to divert electricity elsewhere, AP said. The heat swept through Nevada, Arizona and New Mexico. Black Blade: Here we go again? All that it would take is a hotter summer and a cold winter to strip out the energy supply leaving the US in a real bind late this year. The lack of power generating capacity, energy bottlenecks and dilapidated energy infrastructure makes even the current energy supply questionable. turkey hunter (05/31/02; 21:44:23MT - usagold.com msg#: 77228) Thank you USAGOLD Wow! Can't believe I won. Thank you MK for the forum and the contest. A special thanks to Gandalf the White for keeping track of the entries and Canuck for keeping me in the $325 - $328 price range with your $325 line in the sand post. I come to the forum and try to learn something new each day by reading all the posts made at this forum and especially the ones outside the USA. I like to understand how they see things. I'm sitting here thinking that two years ago I never knew a thing about gold or investing in anything for that matter. But now I have more understanding about how the world really works behind the scenes and that we are about to embark on a new monetary policy that will include gold. The GoldTrail keeps me thinking. Have a great weekend all as I will be heading for South Dakota. Turkey Hunter Tannehill (05/31/02; 21:43:50MT - usagold.com msg#: 77227) Wasting Gold and Silver, they are I can't believe the media is going to try to play the environmenalist card, to shut down the gold bull maket....Greedy, greedy sob's how much money have computer manipulators sucked out of the economy and now they have the environmentalists threaten gold investors with shutting down gold mining because it is not needed. Rant, rant, rant./// WHICH INDUSTRY WASTES YES, WASTES TONS AND TONS OF GOLD AND SILVER EVERY YEAR??????? The same industry that has been manipulating the 'information hi tech new age economy', dare say black mailing the holders of gold and silver.... Hardcore gold investors, read the article pasted below and weep, I'm talking to those few that believe gold and silver are money.... Here is the skinny on how the electronics industry wastes real money... They talk about getting only 10 ounces of gold, out of a ton of mother boards, the sob's greedy, greedy, greedy,,,, How many mines have ores that average 10 ounces of gold per ton of rock? Not many...this is enough to make a gold bug sick. The computer industry, stamping out goldbugs -- dozens at a time. Rant over, go back to what you were doing...that's all from TannehillFebruary 12, 2001 Computer CompostBy Robert Bryce here is the link: http://www.eweek.com/article/0,3658's=722&a=2718,00.aspMost computers are born in spotless, well-lit factories where every task and part is carefully choreographed. Most of them die inside cluttered, dimly lit warehouses like the one operated by Axcess Technologies, an Austin electronics recycling firm.On a cool afternoon in early February, a trio of Axcess employees equipped with bulky electric screwdrivers methodically plow through a shipping pallet loaded with dozens of 80386-based computers. Every wire, board and circuit gets pulled out of the machines. The guts are then sorted: Power supplies get tossed into one huge cardboard hamper. Other hampers hold motherboards, modems and sound cards. It's a slow process."It can take us nearly as long to tear down an old computer as it does for one of the big companies to build a new one," says Randy Weiss, general manager at Axcess. In an average week, he estimates that his workers can demanufacture a couple thousand computers. During that same week, factories operated by Dell Computer, the glittering headquarters of which sit about 20 miles north of Axcess' warehouse, can produce more than 400,000 brand-new computers.Therein lies the crux of the computer recycling problem: Can companies like Axcess keep pace with the growing tsunami of obsolete computers?Last year, the National Recycling Coalition predicted that between now and 2007, about 500 million personal computers will become obsolete. In 1998 alone, the group found that 20 million computers were taken out of service. Of those, only about 10 percent were recycled. The low recycling rate worries environmentalists, who point out that computers can contain several dangerous substances that should be kept out of landfills.Computer and electronics manufacturers are responding. On Feb. 1, the Electronic Industries Alliance (EIA) launched a program to educate consumers about recycling waste electronics. The group's new Consumer Education Initiative Web site, www.eiae.org, includes state-by-state lists of electronics recyclers. It also lists charities and schools interested in taking used computers, and industry- and government-run collection programs, as well as facts about used electronics and links to other Web sites.Later this year, members of the EIA, including Apple Computer, Dell, Hewlett-Packard, IBM, Sony and Toshiba, will begin distributing information sheets on electronics recycling alongside the owner manuals they give to new customers. They will also begin putting labels on their electronics to guide consumers to the EIA Web site.H. Scott Matthews, research director of the Green Design Initiative at Carnegie Mellon University, has been studying the computer waste issue since 1991. The EIA's action is a "a huge step in the right direction," Matthews says. But he adds that the education campaign is "not a big commitment" by computer manufacturers.Rob Nichols, an EIA spokesman, says criticism of computer makers is "somewhat unfair. This is still an emerging issue. It's an issue that is just now hitting families and consumers for the first time." He says the EIA's new effort is an acknowledgment by the industry that it needs to do more.Computer makers and environmentalists are concerned about proper disposal of computers because they can contain a toxic cocktail of materials, including mercury, cadmium and arsenic. They may also contain marketable metals: copper, gold, iron, lead and silver.Of all the materials used in computer equipment, the lead contained in monitors may be the most problematic. Like televisions, computer monitors contain cathode-ray tubes, each of which is up to 20 percent lead. A single monitor may contain 5 pounds to 8 pounds of lead that can seep into the ground water, or, if the tube is burned in an incinerator, be released into the air. Massachusetts recently banned CRTs from its landfills, and other states may follow. Some landfill companies are also considering a ban on CRTs.Although some monitors and computers are being put into trash bins, most are being stashed in closets and attics. "There's an instinctual knowledge that the computer doesn't belong in the trash, but people just don't know what to do with it," says Randy Lewis, general manager of All Tech Computer Recyclers in Hawthorne, Calif., which processes about 40,000 pounds of computer-related materials every month.Recycling Hardware Holds Few GuaranteesBut recycling electronics is a risky business with razor-thin profit margins. For instance, the scrap value of an 80386-based machine may be as little as $2. Newer machines can be more profitable, but each one must be evaluated, tested and then resold as either scrap or as a low-cost system. Constantly changing commodity prices and difficult logistics add further uncertainty. When they are smelted, a ton of motherboards might yield 10 ounces of gold. Depending on commodity prices, American recyclers may ship old monitors or other electronics to South Africa, Indonesia, the Philippines or China for smelting or reuse.Although the economics of computer recycling are precarious, several manufacturers have launched initiatives to address the issue.One of the earliest to embrace large-scale recycling was Hewlett-Packard. Three years ago, the company teamed up with Micro Metallics to open a recycling plant in Roseville, Calif. The plant now handles about 3 million pounds of used electronics per month.In June, Gateway launched a program that gives customers a $100 discount on a new machine if they donate a functioning, 386-class or better computer to Goodwill Industries, an organization that works to better the lives of people with disabilities.Dell has a recycling program for its commercial customers.In mid-November, IBM announced one of the most innovative programs in the industry. If consumers will agree to pay $29.99, box up their old computer of any make or vintage, and haul it to the nearest United Parcel Service station, IBM will make sure the machine is either donated to a charity or recycled."There's a global trend for manufacturers to be part of a better solution," says Wayne Balta, director of corporate environmental affairs at IBM.The company began the program, Balta says, because consumers were asking for it. IBM was also concerned that obsolescence was increasing the number of old computers and it wanted to keep its used machines out of landfills.IBM has had computer recycling programs in place in Europe for several years. There, regulations on computer recycling vary from country to country. But that could soon change. European regulators are considering rules that could force manufacturers that sell their products in the European Union to take back their obsolete equipment. According to Balta, the Netherlands requires manufacturers to take back their old electronics. In Switzerland, he says, consumers pay a recycling fee when they buy a new computer. The money goes into a fund that covers the cost of recycling the machines when they are discarded.David Stitzhal, president of Full Circle Environmental, a Seattle consulting firm, believes the Swiss model deserves consideration in America. "We need to take environmental costs and shift them to the consumer," says Stitzhal, a member of the Northwest Product Stewardship Council, a collaborative effort that includes local governments, businesses and nonprofit organizations. The group encourages manufacturers of electronics, apparel, groceries and medical products to integrate environmental stewardship into their design and manufacturing.Some computer makers are making changes. Both Panasonic and Sony now use lead-free solder in some of their products. HP has eliminated the use of mercury in some of its printers. Apple has standardized the type of plastic it uses in many of its products. IBM and several other computer makers are using snap fasteners instead of screws — a change that allows faster manufacturing and demanufacturing.While the design changes will help, computers will never be as easy to recycle as commodities like newspaper or glass. For years to come, coping with waste computers will require brigades of workers equipped with screwdrivers in drafty warehouses."It's labor-intensive and it's expensive. So a lot of companies don't want to do it," says Axcess' Weiss. And because margins are so thin, his company has to process large numbers of computers to make a profit. Right now, Weiss has plenty: Stacked on two dozen shrink-wrapped pallets — each of which is six feet tall — several thousand old 80386 computers are waiting to be scrapped.But once his workers finish gutting them, Weiss may not get another large shipment of old computers for several weeks. For analysts like Matthews, that spells trouble. "The problem is the waste stream in electronics recycling is very hard to predict," he says, and few businesses are able to survive for long without predictable revenue.Although he fears there won't be enough companies like Axcess to handle all the obsolete computers now stashed under desks and in closets, Matthews is pleased that the EIA and computer makers are getting involved. And after years of pessimism about the future of electronics recycling, Matthews is starting to change his opinion. Now, he says, "I'm cautiously optimistic." Black Blade (05/31/02; 21:28:24MT - usagold.com msg#: 77226) The Top Ten Reasons to Invest in Gold http://www.financialsense.com/editorials/barron3.htm Bull Riding Ain't Just for TexansSnippit:It never fails to amaze me; the material that passes for informed financial journalism these days. Most of it is complete fluff - the worst of it is actually hazardous to your financial well-being. The gold story continues to be dumbed-down into bite-sized, easily-digestible morsels by the mainstream media. This week the bull run is blamed on "terrorism fears" or "war jitters" in the majority of the mainstream press - as if the bull run is an ephemeral phenomenon; a fleet of fancy which will go away if we just all calm down! What utter and total nonsense! Even in a bull market such as we have, the defenders of gold have to man the ramparts against the journalistic Huns coming over the hill, who would drag us back to the Dark Age of the tech wreck for one more go around. It is indeed amazing. The gold market is not rocket science, nor is it intimidating – it is understandable by anyone. And by not giving you the full story, most commentators are doing gross disservice to the general investing public.Black Blade: A good rundown on reasons why to invest in Gold. No argument from me. Nicely presented. USAGOLD (05/31/02; 21:22:41MT - usagold.com msg#: 77225) Within the Great Hall. . . . At the Castle. . . . The Chamberlain announces. . .."Hear ye! Hear Ye! We have Winners! Begin the Celebration. Bring on the trumpeteers, the Royal Percussionists. . . . ."*****OK. . .OK. . . .Enough of the trumpets! I know we have some winners, but please. . . . . . Can we dispense with the royal cacaphony? This regalia. . . My ears! Whose idea was it to add the drums. . . I tell you with no regret, that these ceremonies pain me greatly. Must we??? It seems that the number of trumpeteers has grown, my Wizardrous Friend. And now DRUMS? Please tell me it's my imagination, because there is only so much these ears can take. What's that? You say the number of trumpeteers has grown with participation in this Forum and the Contests? And you thought drums might be a NICE TOUCH. . . Oh my. . . . .A nice touch. By royal decree, let it be known today that the number of trumpeteers is halved forthwith and the drums must go. . . . as in Immediately. . . Right Now. Huh!?. . . . What do you mean we can 't do that? You say the posters LOVE the trumpets? LOVE? And you want to see if the drums are workable? Can it be so?? OK. . . .OK. . . Please, Gandalf, just get them to stop now. . .just for a short while, while I speak. . .briefly. Yes, Gandalf, I'll make it brief. . . .(Hush descends upon the Great Hall. . . .)Now. That's better. Thank you, O Great Wizard of Olde. . . .Your wisdom is matched only by your generosity. . . .It can so pleasant here under the right ( ahem ) circumstances.Onward.I wish to congratulate the royal Turkey Hunter -- he who graces our Thanksgiving table with Nature's bounty each November. This was a great victory -- for which we all share in your honor. Your skills from here on out will be greatly admired by all assembled at this TableRound. For your efforts the gold is yours -- a .1867 ounce Swiss Franc. And congratulations as well to slingshot and Kevin$. For getting close -- the silver Maples are yours. I want to thank all who participated in this contest -- over 140 participants! That's terrific. . . . . Please th, ss and K$, stand to the approbration of your fellows. . . . . . . OK, Knights and Ladies, you may now sheath your swords. . . . .Salutation is over. I must now take leave. . .Marie. . . .MAAAARRIEEEEEE. . . .Dust off the Keys. Summon the Guard. We're off to the vaults. Where did you put those Swiss francs. . . . What's that? You say I must dull that hard edge? What in the world are you talking about? Just listen to those trumpets. And now we have more of them? Plus DRUMS! You expect me to have a pleasant demeanor about this? Remind me that I must discuss all this with Gandalf at first opportunity. Now to find that gold. I don't know how I get talked into these contests. . . . . . . . . .. Voices fade (as do the trumpets and drums) Thankfully. . . . . .. *************I have been asked on several occasions how the Round Table concept came to be, and I have to say it all happened quite by accident. It started the day this forum started and carries through to today. Anyone who wants to trace its evolution can go back to day one -- see it there and follow it through to today. I would say that its evolution was guided -- but by whom. . . or what? I cannot say. It just happened. The concept has served us well, my fellow knights and ladies, both in terms of getting the point across that we were involved in a battle with the forces attempting to denigrate gold (against which we must all unite) and making sure that we honored and appreciated our fellow posters at this table. We found solace in that and strength and now that we find ourselves perhaps at the brink of a gold bull market (as some of the same experts who once denigrated gold are now telling us), we also can count growing confidence in our arsenal. As I have said many times, this forum is your creation. It exists because you want it to exist -- as the little morality play above attempts to illustrate. The service you perform for you fellow savers and investors is beyond anything I can put into words. Thank you one and all. . . .And. . .Carry on, my friends.To all our new posters, I would like to extend our welcome. I get calls at the office from various people who tell me how much they love the forum but fear posting. I just tell them this is a great group of people -- that there's nothing to fear. In fact, as you almost daily here, the new posters are often welcomed heartily. Your participation, in short, is welcome. Now that you've broken the ice. . . Don't be a stranger. Your views, questions, concerns are welcome here.Gandalf, thanks as always for making these contests fun for everyone.________ Hipplebeck (05/31/02; 21:22:34MT - usagold.com msg#: 77224) YGM Thanks for the information about the malleability of gold.I have been wanting to, and I think I am going experiment. Kodie (05/31/02; 21:17:23MT - usagold.com msg#: 77223) Contest Congratulations to the winners of the POG contest. turkey hunter, slingshot, and Kevin$; and thanks Gandalf the White for overseeing the submissions. Well done! Hipplebeck (05/31/02; 21:15:46MT - usagold.com msg#: 77222) (No Subject) It used to be that the government experimented covertly on its citizens with chemical and biological weapons, but I do believe experimenting with psy-ops is in vogue these days. Chap X (05/31/02; 21:10:31MT - usagold.com msg#: 77221) Hello to all....... Hi to all…... Been reading on a daily basis for about a month and have enjoyed every minute of it. A special thanks to TC for getting me into the contest on time. It is appreciated. And thanks to Gandalf and any others involved in having it. Its been great to find a group of individuals who share such invaluable info and discussion. Hope I will be able to contribute in at least even a small way.Black Blade, Aristotle, and so many others have given me hours of excellent reading and the excitement these days is simply great! The lid is coming off and there's not a whole lot the vampires are going to be able to do about it any longer!Some of my students are "reborn again" Goldbugs, and I have directed them to this site. Hope to see some of them joining in soon!I will be writing more soon, but for now just want to say a big HELLO and thanks to all for all the great things going on here. X Black Blade (05/31/02; 21:03:08MT - usagold.com msg#: 77220) The Sum of My Fears http://www.financialsense.com/stormwatch/update.htm The Threat of Rising Gold PricesSnippit:The rise in the price of gold threatens the ability of the Fed to inflate the currency and expand the credit creation mechanisms within the economy. Fiat currencies have a poor track record of stability. Eventually, the public wakes up to the fact that the dollars they hold are depreciating. They notice it when they try to exchange those dollars for other goods. Although the Fed claims to be an inflation fighter, they are in reality the chief source and creator of inflation. This is because inflation, as defined by Webster's, is "a rise in the general price level, caused by a relative increase in the supply of money and credit." Look again at the M3 Money Supply chart above. The printing presses at the Fed, and within the credit-creation mechanisms of the financial system, have been running nonstop since the early 90's. The decline in the dollar and the rise in gold are now acting as a check against the dollar debasement policy of the Fed.Black Blade: Interesting weekly update from Puplava. Cavan Man (05/31/02; 21:01:58MT - usagold.com msg#: 77219) @YGM Go and do likewise. Agree! vermillion (05/31/02; 20:52:54MT - usagold.com msg#: 77218) @speedy eek. please avail yourself to the mind-bendingly complete answer to your question in the Forum Archives and assorted posts from "ANOTHER". (keep a supply of aspirin and nerve tonic handy!) When you emerge, veins pulsing from your eveballs, you will be one of the leading experts (in a relative sense of the term) about GOLF....no.. sorry, GOLD on your block!Good Luck!Posts...read you some. Black Blade (05/31/02; 20:51:10MT - usagold.com msg#: 77217) Debt mountains threaten avalanche http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1021991187849&p=1012571727108 Snippit: The band of fallen angels, once favoured companies now facing big debt troubles, grows with each passing week. The bonds of WorldCom and Qwest Communications, which together owe more than $50bn to creditors, were both downgraded this month to junk. Their travails and the bankruptcy of companies such as Enron, Global Crossing and Kmart have infected debt issued by a swathe of companies as distinct as AT&T and AOL Time Warner. Corporate defaults reached record levels last year, and this year the picture is forecast to be no better. It could be even worse. If the forecast is right, the impact will be felt by a large group of investors inside and outside the US, and by the foreign exchange market.Black Blade: The crushing debt continues to build as corporate profits are declining. YGM (05/31/02; 20:49:31MT - usagold.com msg#: 77216) Hipplebeck Beating that Gold Coin...... Gold can be beaten into a transparent gold foil (0.00013 mm thick) over 500 times thinner than a human hair. You can beat Gold thin enough to see tru it. I just forget how many mile/feet 1 oz of Gold will make but it's unreal...YGM Speedy (05/31/02; 20:27:52MT - usagold.com msg#: 77215) gold mutual funds! can anyone out there tell me why gold goes up and the other major markets fallflat on their faces,and the gold mutual funds falter to? Example is the 29-30 0f this month! Hipplebeck (05/31/02; 20:09:57MT - usagold.com msg#: 77214) Abusing a coin Has anyone out there ever taken a gold maple and just beat on it with a hammer till it got flat just to see what would happen? Hipplebeck (05/31/02; 20:03:01MT - usagold.com msg#: 77213) Black Blade (05/31/02; 18:20:44MT - usagold.com msg#: 77203) Black Blade you hit the key when you cut to the chase and went right to this paragraph.Snippit:"Everyone knows that a soft landing of the dollar is in the world's best interest."What a joke!So little do the folks here at home see that from afar we are not so pretty as we think.Will the world meet this summer to decide the fate of Jerusalem?When it comes to gold,Take physical possession. Don't trust any of the paper.In the post new world order, everyone will have coins of gold and silver. Do your part to become a distribution center. Black Blade (05/31/02; 20:00:24MT - usagold.com msg#: 77212) The Perfect Storm and a Higher Gold Price A number of events are converging that are carrying the price of gold higher. As these events converge along with additional economic concerns we will see the price of Gold and Silver rocket to higher highs and possibly eclipse the prices seen in 1980. The tensions in Central Asia between Pakistan and India threaten to erupt into nuclear war with as many as 12 million dead and many millions more after suffering the lingering effects of radiation. Secretary of State Colin Powell was asked if it were likely that nuclear war could break out. He said: "I cannot answer that". Meanwhile more than a million troops face off against one another across the Kashmiri border. Military leaves are cancelled, opposing warships have been placed offshore, military aircraft have been moved closer to the front, etc. All that it could take now is just one misstep. One other wildcard are the actions of terrorists such as Al Qaeda and Islamic radicals who wish to see war erupt in the region. The US has sent Secretary of Defense Donald Rumsfeld to the region to give a stern message that this is a no win situation.The weakening US Dollar is yet another concern. The US Dollar must weaken in order for the US to stake claim to an ever-shrinking global economic pie. There is a "race" between major the producing nations of the United States and Japan to weaken their currencies against one another. The stakes are that the nation with the weaker currency wins as exports and domestic goods are cheaper. Another problem is that as more consumers are joining the ranks of the unemployed (at least 6% of US population) there are fewer willing spenders. Plunging equities markets are taking a toll on foreign investment. As the value of stocks plunge foreign investors are inclined to take their funds out of US based investments. The Federal Reserve will likely raise interest rates in the near future and this also will further pressure the markets. As the US Dollar continues to weaken, foreigner investors will accelerate withdrawals in order to beat a weakening exchange rate that threatens to compound their losses. This will have a devastating effect as the US has depended on the inflows of over $1.2 billion/day. On the other hand large US based multinational corporations are unable to compete in the global market place with a strong US Dollar. If money supply growth accelerates the threat of inflation is a constant danger. Fortunately for the United States we are experiencing a deepening recession, otherwise we would be in the clutches of a severe energy crisis. We still face the prospect of another energy crisis as we have not addressed the very same problems that led to the previous crisis last year. Exploration and production of hydrocarbons is off sharply. There has been little new power plant construction to meet the needs of a recovering economy. The antiquated energy infrastructure is not being replaced or repaired. Transmission and pipeline capacity is woefully inadequate to meet an expanding economy. Every postwar recession has been preceded by an energy crisis. This time is no different.The effect on the price of Gold and Silver is obvious. As consumers worldwide lose confidence in paper assets they will flee to the safe haven that has been proven time and again. As the price of precious metals climb higher the short positions will be forced to unwind hedged PM positions – in some cases they will likely be very drastically unwound. Hedged (forward sold) Gold miners will be forced into covering their short positions or be forced out of business as public corporations.All these events are coming together to form a new "perfect storm". In short the outlook for Gold and Silver is "Significantly Bullish". - Black Blade YGM (05/31/02; 19:58:10MT - usagold.com msg#: 77211) Aristotle...... My...YGM (05/31/02; 10:31:39MT - usagold.com msg#: 77186) A Little "More" Inside Info.....I posted the earlier commentary as it was a reinforcement for me. I made the calls to the gentlemen because they are Multi-Millionaires thru the Mining of Gold and playing of markets. Both men have literally financed their companies thru tough times w/ Millions of personal wealth thru Private placements (one of which I did very well on myself) Now my point is this, these guys know the Gold and Silver biz inside out, from the Corporate, the Brokerage and the Geological Mining sides. Both are in their 60's and by any measure of rule, very sharp. Now to me if they are worried or prudent enough that they are themselves lightening the load of paper so as to free up cash for Physical Gold & Silver and only maintaining enough paper to keep the CEO chairs under their butts, then I must seriously consider that others of the same position and stature are quietly doing the same...Plus (and we didn't get into this)...are they contemplating a run on Gold while markets tank? They both 'are' concerned that the Dow/Duck will be toast by Oct. /02, that much we agreed on, that and Physical is cheap, Markets are rigged, and The Great Reckoning is at hand.....I think anyone who is firm in their beliefs should not be deterred by any outside influences not even mine....I believe in the Creator, "Myself" GATA, Gold, Silver, Guns, Love of Fellowman, and Truth!....And I believe I'll go have a Marguerita, lay in the Hammock and watch the sun go down over my horses and the Rockies.Have a great wkend....YGM. Cavan Man (05/31/02; 19:56:43MT - usagold.com msg#: 77210) Here's some cheery news: India alert as nuclear war looms Luke Harding in New Delhi, and Richard Norton-TaylorSaturday June 1, 2002The Guardian The foreign secretary Jack Straw last night urged Britons to leave India immediately because of its "dangerous" military stand-off with its nuclear rival Pakistan and advised all nationals against travelling to the region. The decision was taken after western intelligence assessments warned that a new terrorist attack in India or the Indian-controlled part of Kashmir could spark war between the two countries, leading to a nuclear exchange. "The situation is extraordinarily serious. It could very rapidly lead to nuclear war," a well-placed source said last night."This is a credible scenario, millions of people would be killed and untold damage be done to the infrastructure."Diplomatic sources insisted that such a doomsday scenario was "very real". Neither the Indian nor Pakistani government had grasped the seriousness of the situation and the leaders of both countries would find it very difficult for domestic political reasons to back down, the sources said. Mr Straw's announcement came shortly after the US state department said all non-essential US diplomats would be pulling out of India and urged the 60,000 Americans living in the country to leave. Whitehall fears that a major terrorist incident by extremists based in Pakistan or Pakistani-controlled Kashmir would provoke a massive Indian attack. The Indians, according to intelligence assessments, are prepared for a nuclear response by Pakistan, which has fewer conventional forces and, unlike India, has not declared a "no first use" policy. Diplomatic sources said last night that, unlike the sides in the cold war, India and Pakistan did not appreciate the dangers of a conflict escalating into a nuclear exchange and their leaders had no experience of personal "hotline" communications. They said the situation had markedly deteriorated over the past week despite frantic diplomatic efforts, including a visit by Mr Straw to the region. President George Bush is sending his defence secretary, Donald Rumsfeld, to the region next week to pile further pressure on the Pakistani leader, General Pervez Musharraf. Mr Straw said that the families of British government staff in New Delhi, together with officials in non-essential positions, and in British consulates, would be offered the chance to return home. The advice to Britons to leave India was voluntary because the government did not want to appear alarmist, diplomatic sources said. Mr Straw described his move as a "precautionary measure" but it is likely to spark chaos in India, where the government estimates more than 20,000 British nationals live. Any evacuation over the next few weeks is likely to be fraught. Restrictions on airline travel to Delhi by the Indian government mean getting a ticket out of the country at short notice is virtually impossible. The US deputy defence secretary, Paul Wolfowitz, yesterday warned that conflict between India and Pakistan would be "somewhere between terrible and catastrophic". Speaking in Singapore Mr Wolfowitz hinted that the US would withdraw aid to Pakistan unless Gen Musharraf delivered on his promise to end "cross-border terrorism". Pakistan and India continue to exchange fire on the border, where a million men are dug in. Indian officials said a soldier was killed by Pakistani shelling in Kashmir. Pakistan said a person was killed in the Pukhlian area by Indian shelling. Kevin$ (05/31/02; 19:45:03MT - usagold.com msg#: 77209) Thank You all... I would just like to thank the Academy and Most Of All, Michael Kosares for allow this contest to happen.My prize will keep the "shadier" coins company as the lines reach skyward!!! :)Also congrats to Slingshot and Turkey Hunter for some fine analyzing!Kevin$ Mr Gresham (05/31/02; 19:42:06MT - usagold.com msg#: 77208) Ozzie: Stephen Solomon's "Confidence Game" I agree; my own copy (used, for $5, think it was) just arrived. After having it out of library twice. The ONLY book on central banking, to my knowledge. Dated 1995, he interviewed 200 important players as a Forbes reporter. Lots about the Greenspan reign.Immersing in this book is the closest we amateurs can get to the view from FOA's ridgetop, as he (FOA) describes the shape of Euro formation, and the quiet struggle between currency blocs for the 21st century's richest "franchise". To my recollection, there is not much corroboration about oil, gold, and the Euro in it -- but that was a fairly quick skim over a year ago. Ozzie (05/31/02; 19:28:52MT - usagold.com msg#: 77207) Solomon's 'Confidence Game'... ..is out of print. An amazing book for the inter-bank relationship aspect of......Banking! Black Blade (05/31/02; 18:58:36MT - usagold.com msg#: 77206) Friday's Stock Market WrapUp - Puplava and Surprise Comments on Louis Rukeyser About Gold http://www.financialsense.com/Market/wrapup.htm The Dollar, Gold and WarSnippit:There are three words that sum up this week's market news: the dollar, gold and war. The price of gold closed out the week close to a five-year high. The price of gold has been rising all week as India and Pakistan edged to the brink of war. There has been a battle all week between investors and bullion banks over the price of gold. Bullion banks, such as J.P. Morgan Chase and Goldman Sachs, are heavily short the metal and have been doing everything in their power to knock the price of the metals down. On the other side has been hedge funds and investors who have been buying gold and silver bullion as well as gold and silver mining shares. The one new element that has been introduced into the equation in the metals markets is a new found investment demand for gold and silver. Up until recently, the demand for gold and silver has mainly come from the industrialized side. That is about to change. With tensions in the Middle East, possible war between India and Pakistan, falling stock markets around the globe and growing bankruptcies, investors are looking for a safe haven.Unlike the past, with U.S. equity markets in decline and the U.S. high on the list of terrorist targets, the dollar is no longer viewed as the only safe haven during times of political tension or financial duress. Gold and silver are resuming their historical roles as real money. Gold has been a sleeping giant and it has just awoken from its decade's long slumber. Many knowledgeable firms, with no conflicts of interest because of short positions in the metals, are now raising their price targets for gold and silver. At the moment the main driver for higher gold prices has been a sinking dollar and short-covering, and mining companies unwinding their hedges. But the real fundamentals for gold and silver look even better. Both metals are running supply deficits, and stockpiles, especially when it comes to silver, and are in short supply. Even more important is the fact that there just aren't any new discoveries coming on stream that can help rectify the supply deficit. This means prices are heading much higher in the next six months and in the next several years.Black Blade: Jim Puplava hit the marks again. We have been driving home the point about the weakness in the US Dollar, the overwhelming demand for Gold and Silver, and the prospect of a nuclear war. The word is out and people are taking notice. I watched Louis Rukeyser's guest Douglass Cliggott, president of the research office of Brummer and Partners give a glowing review of Gold and his thoughts on a continued bear market in equities. Louis did not appear none too pleased to hear this. His guest continued to discuss the weakness in the US Dollar. It was amusing to watch old Louis squirm (OK – so I consider a slight rocking motion as squirming for that old rigid buzzard). However his guest did appear to catch Louis off guard with his position on Gold. Black Blade (05/31/02; 18:38:35MT - usagold.com msg#: 77205) The Bubble to Beat All Bubbles http://www.guardian.co.uk/business/story/0,3604,722878,00.html Snippit:All good things come to an end, and for the mighty dollar the end is definitely in sight. The only surprise is that it has taken as long as it has for the financial markets to accept the inevitable. Countries that live beyond their means eventually pay a price. Anybody who believes, however, that the overdue fall in the currency means a painless rebalancing of the global economy is in for a rude awakening. Soft landings are to the world of contemporary economics what snow leopards are to the world of nature: everybody has heard of them; few have actually encountered them. In theory, what should happen is that the weaker dollar makes American exports more competitive, allowing the US to close its frighteningly large trade deficit. Domestic demand in the US grows less strongly, with the slack taken up by consumers in Europe and Japan. Once this has happened, the fundamental improvement in US economic performance over the past decade will again be reflected in a higher growth rate. Theory is fine for the textbooks. In the real world, things tend to be different. The strong dollar has been the glue that has held the core of the global economy together even as bits on the periphery have flaked off. Consumer demand in Europe and Japan is weak, and the only reason there is even the semblance of growth is that their exporters in Munich and Nagoya are using the weakness of the euro and the yen to feed America's spending habit. But at some cost. The strength of the dollar and the debt-fuelled spending spree in the world's biggest economy means that the US has a current account deficit that dwarfs anything in its history. Snippit: Yet, a weaker US Dollar is a necessity in order to stimulate growth for the multinational corporations. The writing is on the wall as the American consumer is tapped out and can no longer keep up the spending spree financed by ever growing debt. This does not look like it will end well. The USD is more likely to plummet in a hard landing and foreign investment flees US markets in a desperate bid to outrun the collapsing exchange rates. More upward pressure will be forced onto Gold as more and more search for a safe haven to ride out what appears to be another brewing "perfect storm". Oh yeah, of course Louis Rukeyser got his dig in on Gold as he said with a smirk: "I wonder if those Tabloid editors put their money into Gold?" I do hope that he is faring well with his "New Economy" holdings. Hmmm... CoBra(too) (05/31/02; 18:22:46MT - usagold.com msg#: 77204) @ Aristotle - Re Hubris - and thank you CM - Hubris - Greek - hybris- an over-estimation - though not seriously meant - of one's mental capacity - Did you ever meet Diogenes - outside his barrel - and never got out of his sun ... in time ...Then, better think again - as you two have been standing in my sun and telling me after the fact - what I should have done - the day after tomorrow! ... And you will be right - totally - and as nobody knows - when the comatose systemic problems - aka Argentina will grip the rest of the "Dollarized" Globe and I'll be looking past the potential of gold - I' could have had - instead of paper - worthless as the wall I lost as mine - and may plant again my own potatoes, tomatoes and wine ... and that's when I may need the gold - to re-acquire the reality of my own soil and the ability to sow and plant ... without any hubris or rant... cb2 Black Blade (05/31/02; 18:20:44MT - usagold.com msg#: 77203) What If the Dollar Crashes? http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0 Snippit:Everyone knows that a soft landing of the dollar is in the world's best interest. Stephen Li Jen has also done a masterful job in making and defending this case (see his 22 May dispatch, "The Case for a Soft Landing in the USD"). Yet, however compelling the logic, history cautions against betting too heavily on soft landings in overvalued asset markets. Once they finally give way, market excesses have a painful knack of getting corrected rather quickly. Remember Nasdaq 5000? The Nikkei at 38,900? The dollar collapse of the mid-1980s? In all of these instances, the adjustments were swift and wrenching -- with landings that ultimately had little respect for the equilibrium valuations of our finely calibrated models. While the trade-weighted dollar is down only about 3% so far this year, it has now fallen about 9% against both the euro and the yen. With the downslide accelerating in recent days, fears of a hard landing are now in the air. As always, it's the tails of the probability distribution that tend to have the greatest impact on financial markets. Black Blade: Considering the hefty current account deficit I would not count on a soft landing for the US Dollar. I expect Gold to continue climbing as the USD weakens. Surprisingly Gold did rise over $325.00/oz. today and finished higher. Congrats to turkey hunter, slingshot and Kevin$. The "line in the sand" has been crossed and the weak position of the Gold shorts has been exposed. I notice that now many media commentators are suggesting a near term top of $340.00/oz. I would not be surprised if the POG shot higher (perhaps much higher) in coming weeks. I wonder if a few certain Gold Bears are still "significantly bearish"? Hmmm… An interesting article by Stephen Roach of Morgan Stanley speculating on soft and hard landing scenarios for the USD (see link). ax (05/31/02; 17:51:39MT - usagold.com msg#: 77202) USD AXINDEX SLIDES MORE TO **** 95.32 ***** mg of gold USD AXINDEX SLIDES MORE TO 95.32 mg of goldAt the close of gold trading today, May 31, 2002, in New York the U.S. Dollar AXINDEX fell to 95.32. The value ofthe U.S. Dollar, the world's reference and reserve currency,was ***** 95.32 ******** mg of gold.*Even though the Euro and Yen rates are generally tracked to give valuation to the U.S.dollar, it is better to directly value the U.S. dollar in terms of milligrams of gold.After all, the Euro and Yen are "fiat" currency. The U.S. Dollar , at least, has thedistinction of being the world's foremost currency in that all other countries : a. consider it as part of their deepest reserves second only to gold b. it is the reference currency by which all other currencies are generally measured Inasmuch as the U.S. Dollar is the world's reference andreserve currency, it makes less sense to quote the valueof the U.S. Dollar in terms of other currencies or an indexmade up of its relation to a mixture of other currencies.The USD stands alone as the world's foremost currency andas such must not be quoted in any other terms but its value in milligrams of gold.On May 3, the USD AXINDEX stood at 99.69 and looking backto Nov 26 2001 the USD AXINDEX stood at about 114.14.July 27, 2001 saw an even higher USD AXINDEX of about117.06 mg of gold per one U.S. Dollar.Conversely in January of 1980 when the price of gold hitits all time high, the AXINDEX stood below 40 mg per oneU.S. Dollar.In many respects the world situation is much graverand more precarious than it was in 1980. The U.S. Treasury as well as all private U.S. citizensshould take the opportunity now, while the gold value of theU.S. Dollar is still a relatively high 95.32 milligrams,to buy as much gold as they can. Since the USD is the world reserve currency and referencestandard for all other currencies the U.S. Treasury cannever have too much gold. It should accumulate over theshort and long term as much as it can.Private U.S. citizens should do likewise for their ownsafety and security particularly in these troubled times.British citizens concerned about the future value of theBritish Pound should likewize urge their government torestore British gold reserves to previous levels. Otherwizethe British Pound may have difficulty in maintaining itsrelative value to the other currencies. Reports indicate that Russia, for example, has no intention of selling offany of its actual gold reserves - just their surplus foreigncurrency holdings.*Later reports from the Russian press indicate that the Russian Central Bank is definitelybuying gold.*It behooves all U.S. citizens to encourage their government to also augment USA Treasurygold reserves. Anytime the U.S. Dollar begins to sink on foreign exchange markets,the U.S. Treasury should compensate the fall by purchasing gold : either directly on theopen market or from the central banks of Switzerland or any other smaller country whichthinks it has too much gold in its reserves.AX Aristotle (05/31/02; 17:23:25MT - usagold.com msg#: 77201) Cavan Man, I'm quite sure I don't know the meaning of the word Did I not say in a post as recently as April 24th, "My thinking is that people, in general, are far smarter than discussion groups tend to give them credit for..."?Yes. Those were my words.Just as a good trout fisherman changes flys, there is a time for sugarcoated handholding and a time for shouting "Move! Move!! Move you damned fool!!!" Sometimes, as the rope breaks and the piano is falling, time is simply too short to allow for people to comprehend the danger they're in on their own sweet timeline.Sorry if I've offended you in the process of clearing the sidewalk.As a show of good faith, I'll try to do my part to accommodate your concern.Gold. Get you some... if and only if it pleases you. --- Aristotle Solomon Weaver (05/31/02; 16:59:42MT - usagold.com msg#: 77200) Those within a buck of the bird. Congrats to turkey hunter...who landed his prey from 20 meters. Honorable mentions to vermillion, Hipplebeck and Broken Tee who took bowshots shots from 700 meters away even as the bird was moving, Just thought it would be fun to highlight the nearest neighbors that were within a buck by the end.It was fun to watch how in the late hours of this game, as the target grew closer, the spots near the winning point were quickly filled.....in the end...the latest had to take the outside spots....and hope for volatility.$$$$ 327.5 $$$$ koala bear (5/29/02; 13:03:51MT msg#: 76874$$$$ 327.4 $$$$ Canuck Gold (05/30/02; 12:23:48MT msg#: 77024$$$$ 327.3 $$$$ The Hoople (05/30/02; 13:35:47MT msg#: 77034$$$$ 327.2 $$$$ vermillion (5/23/02; 19:19:38MT msg#: 76437$$$$ 327.1 $$$$ purist (05/30/02; 20:43:26MT - usagold.com msg#: 77102*$$$$ 327.0 $$$$ Solomon Weaver (05/25/02; 21:59:46MT msg#: 76568 $$$$ 326.9 $$$$ Achilles (05/24/02; 04:29:15MT msg#: 76466$$$$ 326.8 $$$$ Hipplebeck (05/23/02; 06:07:51MT msg#: 76357$$$$ 326.7 $$$$ ProGold (05/30/02; 13:22:18MT msg#: 77031$$$$ 326.6 $$$$ slingshot (05/24/02; 19:24:09MT msg#: 76519$$$$ 326.5 $$$$ turkey hunter (05/30/02; 15:43:58MT msg#: 77061$$$$ 326.4 $$$$ Kevin$ (5/29/02; 21:34:57MT msg#: 76929$$$$ 326.3 $$$$ Yukon (05/30/02; 11:34:08MT msg#: 77018$$$$ 326.2 $$$$ Econoclast (05/30/02; 20:35:31MT msg#: 77100$$$$ 326.1 $$$$ Chap "X" by TC (05/30/02; 21:07:26MT msg#: 77107$$$$ 326.0 $$$$ Broken Tee (5/23/02; 15:38:46MT msg#: 76416 $$$$ 325.9 $$$$ Simply Me (05/30/02; 22:49:03MT msg#: 77127$$$$ 325.8 $$$$ ore stone (05/30/02; 12:52:11MT msg#: 77027$$$$ 325.7 $$$$ OZ (05/26/02; 23:20:25MT msg#: 76635$$$$ 325.6 $$$$ Artie Farkle (05/30/02; 14:08:01MT msg#: 77040$$$$ 325.5 $$$$ steady (05/24/02; 15:26:22MT msg#: 76503 Cavan Man (05/31/02; 16:51:52MT - usagold.com msg#: 77199) Hey Aristotle..... Hubris is contagious. Please don't make too many assumptions. Will the real Aristotle please stand up? Aristotle (05/31/02; 16:04:13MT - usagold.com msg#: 77197) Miner, your analogies are fantastic! I've read the Chalkboard collection and highly endorse it. However, let me be the first to caution you against the perils of being labeled a "car basher." Ha ha! I've discovered that there simply aren't enough caveats and qualifiers that a guy can include in his post to avoid somebody (whose foot fits the shoe being described) from making the accusation that you're "bashing."Maybe, just maybe, the positive spin on these "bashing" accusations is that we've successfully touched a nerve by exposing in their own mind the vulnerability of their positions and actions. Let's hope. And if they insist on stomping and pouting around under the Blue Sky of this interim period, then so be it. I won't weep overmuch when the first rains ruin their picnic.You strike me as a good sounding board, so let me just say a few things in your direction, with no reply needed unless you insist.A person who recently and unjustifiably accused me of "bashing" all paper (also unjustly implying that I'm "bashing" those who trade it) actually went so far as to indicate that to his ears I have offered nothing new or of interest to him, implying that either I should break new ground or be silent.Here's a quandary. What does one do when the core message has obviously not been grasped by the likes of these guys, and likely never will be? Making matters worse, they're getting bored! Here's my dilemma: Finding a successful approach to penetrate the THICKEST of skulls is a challenge that I enjoy more than almost any other!! What to do, what to do?And further, did I not say in my "Stating the Obvious" post on May 7th, "...here's my latest contribution for the benefit of new arrivals, at the risk of boring the old timers."?? Yes, those were my words.I've also somehow falling into a trap, Miner, that I hope you can avoid the taint of. Reading through the comments of others, I seem to have picked up a bit of a renegade reputation -- as a person who has no use for paper in any form and no tolerance for those who do. Can you imagine that??!To set the record straight, in my "Personal Gold Standard" post on May 13th, did I not summarize my position in this way, "Take your paycheck, earnings, income, whatever; drop it in your checking account, pay your bills, contemplate an attractive investment or two, buy some new patio furniture, and roll the purchasing power represented by any leftover money into Gold."Yes, those were my words. Clearly, latitude for a personally selected level of "risk-reward gambling" (i.e., investing) is indicated. So why do these guys insist on chapping my bum? Is it because a shaft of light has penetrated the dark regions of their mind, revealing a cause for doubt amid their formerly blind optimism for reliance on Blue Sky trading?Happily, I hasten to add, most people here seem to be able to discern the core message amid the failing of my delivery. And where I've "jumped right to it," offering *conclusions* without explicitly stating a fair degree of the background sociopolitical context that impart uncertainties to EVERYTHING, there are some good folks hereabouts (like Sir Belgian) who are helpful and quick to step in and nod and point and paint this context where it is most important that the reader bear it in mind from my shortcutting of Point A to Point B.So with that, let me extend the favor to you in your post today -- to point and nod at a thing or two. The first is a technical correction on your comment to Henri about use of the PM fix. At the current time, it is the AM fix in London that the ECB looks to as it's benchmark for quarterly revaluations, then adjusted accordingly for euros based on their quarterly settlement rate on dollar/euro exchange. No big deal, but now you know for sure. <wink>Your car/currency analogy was awesome in providing a fresh look at "boring, repetitive subject-matter." <standing applause>Finally, on your late post yesterday, after quoting Greenspan you added, "One of the keys to a successful world currency in today's world is its liquidity. Therefore one of the principal strategies of the dollar faction must be to deny the euro, as much as possible, a chance to grow."You did a nice job on the economic ins and outs of the dollar's fight for maintaining hegemony, but I was struck with one important omission in your commentary that will surely result in the dollar's fall in international usage and relevance. Simply put, it is the expansion of the Mundellian "optimal currency area."An aside: whether or not it is truly "optimal" is a moot point insofar as the political will is in place to have several countries come on board the European Union, putting the currency into further use simply through ASSIMILATION of their existing monetary base when joining the EMU. Notably, though Sweden didn't pass muster in the recent assessment, Britain seems to be making good progress toward this final important step of EMU.By my count, ten are seeking to join the EU in 2004:Cyprus Czech RepublicEstoniaHungaryLatviaLithuaniaMaltaPolandSlovak RepublicSloveniaWow! That strikes me as being more momentum than the dollar ministers can either repel or deflect with their simple tricks of the trade. Follow me?Therefore, the outcome is clear...Gold. Get you some. --- Aristotle Golden Bear (05/31/02; 15:41:57MT - usagold.com msg#: 77196) The Winners... A hearty congratulations to the winners of the Castle's recent challenge: turkey hunter, slingshot, and Kevin$ - enjoy your spoils! Ozzie (05/31/02; 15:41:11MT - usagold.com msg#: 77195) France in charge of the ECB..... ....an inevitability!!...Suspect we'll see who are the Hard Money proponents in Europe. Gandalf the White (05/31/02; 15:37:05MT - usagold.com msg#: 77194) AND YGM, you said you could not help !!! THANKS <;-) The COMEX GOLD JUNE '02 Settlement Price GUESSING CONTEST WINNERS YGM (05/31/02; 12:49:17MT msg#: 77192) says:$$$$ 326.5 $$$$ turkey hunter (05/30/02; 15:43:58MT msg#: 77061Looks like you got your Bird.......Congratulations......YGM.==========$$$$ 326.6 $$$$ slingshot (05/24/02; 19:24:09MT msg#: 76519$$$$ 326.5 $$$$ turkey hunter (05/30/02; 15:43:58MT msg#: 77061$$$$ 326.4 $$$$ Kevin$ (5/29/02; 21:34:57MT msg#: 76929==========THANKS YGM, I am so far in the DARK FOREST that sunlight does not shine through !!! I too congratulate Sir Turkey Hunter as the WINNER and both Sir Slingshot and Sir Kevin$ as the RUNNERS-UP !!! I hope to get a message to the CASTLE as soon as the NAZGULS are grounded.<;-) TownCrier (05/31/02; 13:37:11MT - usagold.com msg#: 77193) A clearing view to the horizon -- "We recommend dismissing the charges." http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Currency%20Europe&tp=ad_uknews&T=news_storypage99.ht&ad=euro_currency&s=APPeoaBVwRUNCJ3Mg Paris, May 31 (Bloomberg) -- Bank of France Governor Jean- Claude Trichet shouldn't stand trial over a 1990s false-accounting probe into Credit Lyonnais SA, a Paris prosecutor said.The recommendation boosts Trichet's chances of succeeding European Central Bank President Wim Duisenberg, who retires in July 2003. Duisenberg took the job in 1998 after promising to resign before his eight-year term ended and make way for the Frenchman....``We recommend dismissing the charges,'' Paris prosecutor Jean- Pierre Dintilhac said in a statement faxed to news agencies.-------------(click link for more background)-----------Bottom line: What will be the foundation of YOUR portfolio when a "pro-gold Frenchman" takes the helm? It is said not idly, "The right man for the right job".R. YGM (05/31/02; 12:49:17MT - usagold.com msg#: 77192) $$$$ 326.5 $$$$ turkey hunter (05/30/02; 15:43:58MT msg#: 77061 Looks like you got your Bird....... Congratulations......YGM. miner49er (05/31/02; 12:00:22MT - usagold.com msg#: 77191) Henri @ 77178 Good Sir Henri -- thank you kindly for your words. I'll just address this one thing now: You mention that "[t]his sequence of events may already have been completed up to number 3..." This implies #2 has already taken place. This is a good issue, and I was wondering if anyone would broach it. As recently as the end of last year (as best I know), they were still using the London PM fix. I would imagine if they had changed that at this point, it would have sent massive shockwaves through the system. Let's say they did though, and that nothing extraordinary happened. It would only serve to indicate that this other indicator (Dubai or wherever), was still being influenced by the old dollar pricing mechanisms, and this would not change the basic premises of what I was discussing.It would seem that any move like you mention in #2, would disrupt things unnecessarily. In fact it would negate #3, insofar as your wording: "allowing the London...". If #2 had already taken place, there would be no allowing of these markets to implode, it would be thrust upon them with a fury (IMHO). Well, ok, let's look at #1, while we're at it. I'm sure some of this is taking place already, but will accelerate as the euro strengthens. Let's set aside the speculation of behind-the-scenes diplomacy between the U.S. and oil producers to postpone this type of thing. While the euro was weakening, the dollar, for whatever reasons, still had superior current purchasing power, and an ability to bring better investment returns. From my cheap seat perspective, I can't see why oil would be in any hurry to switch over while this was still the case. Any very obvious and major move on their part would also cause uncertainty, and risk a financial accident.Just another reason for the dollar to so desperately fight a strengthening euro.As I've already spent considerable time yesterday and today posting (to the neglect of other pressing affairs), I will try to get back to you next week, re: your thought provoking question, "How do you see this all playing out?" Darned if I know... but I love these broad, open-ended questions... All - thank you for your comments, and HOF nominations... My wish is always that anything I might be able to add to the discussion, should stimulate thoughtful analysis as we all address this (fascinating) quest for truth.cheers,miner sector (05/31/02; 11:37:19MT - usagold.com msg#: 77190) Feds Biggest Banks...In Deep SEC Trouble Over Fraudlent Energy "Trades" [Project Alpha] http://www.msnbc.com/news/759832.asp?cp1=1#BODY Wall Street Journal 5/31/2002Snippit:The inclusion of Citigroup into the regulator's probe once again shows how the nation's largest financial-services firms are finding themselves swept up in the turbulence in the energy industry. A number of the nation's most powerful financial institutions — including Citigroup — have become targets of regulatory scrutiny and shareholder lawsuits for their involvement with Enron Corp., even as the company's finances were spiraling out of control. The financial firms have said the suits are without merit. J.P. Morgan Chase & Co., the nation's second-largest bank after Citigroup, already is the target of an SEC investigation over its role in helping establish an offshore company, Mahonia Inc., for Enron that allegedly helped disguise some Enron bank loans as trades. J.P. Morgan has said it did nothing wrong. The bank hasn't been charged with any wrongdoing. A bank spokesman declined to comment.The SEC and the U.S. attorney's office in Houston are both investigating Project Alpha, which critics say had no other purpose than to boost Dynegy's reported cash flow and reduce its tax burden. Dynegy has said that the transaction provided a stable source of gas supply. But reports about Project Alpha were the first in a series of unwelcome disclosures about Dynegy, which culminated in the resignation earlier this week of Chuck Watson, Dynegy's chairman and chief executive officer.+++++++++++++++++++++So what ELSE is new?The Federal Reserve's largest banks, Alan Greenspan's babies, involved in out-right fraud. First they found Mahonia, now "Project Alpha" at Citi-Bank.The regulators know all about GoldGate...they just can't manage to deliver the coup-de-grace by bringing it up. miner49er (05/31/02; 10:53:00MT - usagold.com msg#: 77189) timbervision @ 77151 Hi timbervision,Gotta run, so I'll try to answer these quickly... (first thank you for your comments, it's nice to know when people benefit from what one posts.)Your q's:1) [W]hat happens to the other fiat currencies, like the Canadian dollar, which if I understand correctly holds US dollars as its reserve currency, when the US dollar hegemony collapses? For currencies like Canada's (or any currency that is holding primarily dollars as its reserves), it has a very serious problem, as it is likely to suffer right along with the dollar in a hyperinflation. Countries that have significant gold holdings, or which are aligning themselves with the euro, and holding euro reserves, will benefit in respect to the value of their reserve base (euros as reserves will indirectly benefit the holding countries in a rising POG environment, as euros themselves are designed to benefit in this environment).Countries with dollars in reserve, but gold also, can wash their dollar losses with their gold gains, and depending on the mix, perhaps come out ahead on a net basis. (The large gold holders will come out way ahead in this respect.)--------2) [W]what happens to the value of a European citizen's Euro based portfolio if the Euro becomes the dominant currency. Will not the Europeans also have to suffer from years of fiat production and unending central bank debt creation?Well, the first part of your question should yield a big hurrah for euro holders. The value of being the dominant currency will reap tremendous benefits for those who have assets denominated in it. The second part of your question brings into the discussion what FOA aptly refers to (and discusses in quite a bit of detail) as a currency's timeline.To start off..., as any product moves from the drafting board to production, whether a car or a currency, its showroom condition is bright and shiny, with everything in perfect running condition, just like it was designed to be. And if you meticulously take care of it, replace the worn out parts, perform all the required maintenance, and use it according to the instructions, the product should basically last a very long time, and could in theory maintain a near mint-like state indefinitely. But currencies, like cars, lawnmowers, or shoes, are prone to one common inescapable condition -- they are used by humans.Therefore, whether operating from the worst, or the best of intentions, they will end up not being used entirely according to design or the instructions. People will stretch the limits of their use, find "creative" applications for the items, not maintain them adequately, not upgrade them, and not replace them when they become obsolete. Thus over time the brand-spanking new showroom model, becomes fit for the scrap heap -- and not necessarily because of its engineering or its manufacture...So, yes, eventually (how long -- who knows), euro holders will suffer the demise of their currency as well. But a distinction needs be drawn in terms of savings and investments. Let savings be defined as holding something long term with a view toward it storing the value of what you expended to procure it in the first place, in order to have it for later use at the same value. And, granting the modern understanding of the concept, we can modify this a bit by adding: the depositing of these savings effectively as "safe" loans to a bank or other "savings" institution, where yield is minimal, but the tradeoff is "security." Then let investment be defined as a calculated, studied, risk-taking venture made with one's capital, in order to procure a better return than mere "risk-free" savings; the trade-off for more reward being of course more risk. One understands (presumably) that they may lose some or all of the invested capital, as there are no guaranteed returns, but one stands the chance of doing very much better than low-yield (no-yield) savings.If one is saving long term in the euro, one subjects one's self to the whims and caprice of the forces behind it. If (when) they stretch the limits of its use, find "creative" applications for it, not maintain, upgrade, or replace it when necessary, and the euro begins to show all the signs of wear and tear associated with such use, misuse, and abuse, then those who hold it for the duration will experience and accrue to themselves all the depreciation that goes with it. Yet if one obtains some euros at any point in time, one takes them on (presumably) for what they are currently worth, and if they are deployed again relatively quickly (spent), there is little depreciation risk. It basically finds its current use-value in its exchange for some other item(s): consumption or investment.Let's say I buy a brand new car. I can any of three things with it basically. I can put it in the garage, and "save" it for later use. I can lend it out to others, and receive some recompense for the exchange. Or I can drive it myself. It's my choice. Each option has its own risks and rewards, costs and benefits. If I just park it in the garage, and never use it at all, and then take it out in 20 years, I will find all sorts of issues to contend with. First, I'd be lucky if it even starts, as no use in an automotive vehicle is equivalent to misuse, as the engineers and manufacturers designed it to be used. Additionally, except from some historical or collector's curiosity, the car will be worth much less simply because of improvements that will have been made in automotive vehicles over time. It is also likely that changes in laws and driving practices might render the vehicle unroadworthy as is.Face it, the car wasn't supposed to be "saved." It was designed to be used. So let's say I have no use for this car, as I have enough cars already that I prefer to use now. Not wanting to save it as above, I lend it out to someone. Let's say I don't want to take a lot of time with this, and I'm still somewhat under the impression that my purchase of an additional car is something of a means of saving. So I find some firm who will borrow my car from me, and give me a little bit of return for the effort. They then (because it's what they do) turn around and loan it out more aggressively for a greater return. They do this for lots of people and make a decent living on the spread. As I really didn't need to use the car at this time, and did not want to undergo the effort, or incur any particular risk in lending it out, I'm basically happy with a smaller, "risk-free" return, and don't begrudge the borrower his greater returns. I don't frankly even give much thought to what he does with it anyway, so long as I can get it back when I want it, and he pays me my fees for use.Sadly, when I go to get my car some years later, I find I still get my car, but it's not quite what I remember it being. It's old, beat up, and not nearly as usable as it once was. Well, that's really my fault. Poor decision making on my part. The car was used, certainly, but not by me. And the return I got for lending out the usage opportunity, was not worth the depreciation the car incurred because of the use. I still tried to deploy it as a store of the original value I attributed to it, when I expended my current productive efforts to obtain it. I expected it to retain as much over time, with what depreciation that took place being compensated to me through the fees I charged. I still tried to use the car a savings instrument. Bad choice. Cars are not designed to do this. They are designed to drive.So, let's say I've wisened up a bit, and now I choose to purchase this car with a view toward loaning it out like the guy above. (Assume I magically incur all his knowledge, experience, contacts, and operations.) Now I am actively engaging a business prospect, in which I am putting a representation of my capital (the car) to use. My fees here will account for the costs of someone else using it, and build in a profit margin that makes it worth my while to do this. The car will be doing what it was designed to do, just not by me. I will have put it to use, and while it still depreciates over time from this use, now I am accounting for this, and getting remunerated commensurately (if I'm good at it). This is active investment.If I really don't want to take on the business operation itself, I perhaps might make some agreement with the local car business, whereby I passively partner with them, investing this extra car into their business directly, and participate in the profits of their venture by receiving some periodic dividend which represents their earnings allocated according to the portion of my stake in the business. And if enough people see this as a good investment, I perhaps one day can sell the car as invested into the business to someone else at a premium over what it would be worth by itself -- the buyer perceiving additional utility in its current deployment as being additionally profitable.Finally, I might just buy the stupid thing to drive around town, or to take the family out to the lake. After all, it is a car, and that's what it's used for.The moral of the story: gold for savings, currency for use -- spend it or invest it, but as FOA once said, "whoever said we were supposed to save this stuff...?"thx for reading...miner kramrich (05/31/02; 10:49:26MT - usagold.com msg#: 77188) WEB SITE WITH WITH CHARTS ON JUST ABOUT EVERY ECONOMIC DATA SERIES YOU MAY WANT. Great site for charts.http://www.EconoMagic.com/popular.htm CoBra(too) (05/31/02; 10:37:43MT - usagold.com msg#: 77187) Gandalf - - it's one and a half hours to go - to know - who has won the big price in guessing the correct - Comex, June future Price of Gold ... ... and as every-one is mesmerized - looking and betting at a paper price - I quietly squirreled away some more physical - sans contango ... though thanks for all you're doing my White Knight, Gandy!... on a pretty volatile POG and POS day ... cb2 YGM (05/31/02; 10:31:39MT - usagold.com msg#: 77186) A Little 'Inside' Information...... FWIW Column.....The Personal Hedging of Mining CEOs' I've noticed much being asked of late re: insiders selling and option exercising of Mining exec's etc...Well this AM: I phoned two CEO's of VERY well known miners, guys I've known for years thru my previous stock promoting days and many Mining Conferences (hospitality suite parties)and guess what the answer was...as if we couldn't guess...They're both buying Physical Gold as paper is up and AU is still cheap...One has of late invested $500 K in the Central Fund(CEF)...Both are worried about paper assets and feel if the markets crash it could be years before Certs have good value again...One fellow compared Homestake after 1929 as it was down for a few years before rebounding to great hieghts....FWIW......YGM USAGOLD / Centennial Precious Metals, Inc. (05/31/02; 10:27:55MT - usagold.com msg#: 77185) NEWS FLASH: Gold IS "good as gold!" 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