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ARCHIVED DISCUSSION FROM 12/31/2003
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Simply Me
(12/31/03; 23:44:43MT - usagold.com msg#: 114436)
@Waverider RE: Lease rates
Just noticed that myself....but, thanks for the heads-up. Another one of the big 'K's chart glitches. Damn!~
The paper/physical break isn't here yet. I've been watching for it since 1999. Oh well...someday.....
I'll keep watching. Till then, there's good solace in 12 year old scotch and spending New Year's Eve with my family.
Warm wishes for all,
Simply
the golden granny
Caradoc
(12/31/03; 23:27:18MT - usagold.com msg#: 114435)
Outlook for 2004
As the US dollar collapses, the year 2004 will begin with rollover of federal debt using shortterm bills:
http://biz.yahoo.com/rf/031231/economy_bills_announcement_1.html
Business as usual in a world where not everyone wishes us well:
http://www.khayma.com/iraqihell/1.wmv
Whatever the validity of such threats, the government takes them seriously enough to have snipers on rooftops for the Times Square New Years Eve celebration and armed forces on the ground and in the sky:
http://www.homelandsecurityus.com/images/30dec03-nypd-timessquare1.jpg
http://www.homelandsecurityus.com/images/1582715_SH.jpg
And even without such threats, the ongoing economic considerations discussed on this forum indicate that holding physical gold is a wise move for 2004 and beyond.
Regards to all,
Caradoc
Druid
(12/31/03; 23:10:52MT - usagold.com msg#: 114434)
Happy New Year All
I would like to thank each of you caring and giving individuals for your many fine intellectual contributions to this forum. While we may not always agree, I thank each of you for your perspectives because they always expand mine. This last year of "thoughts" has been incredible and continues to be the best reality based reporting concerning all markets, but primarily the gold market, that can be found anywhere, and I do mean anywhere!
From an economic and political point of view each of us knows down deep that we are approaching an inflection point in time where our lives are going to be changed in some form or fashion. I'm an eternal optimist who hope's for the best but am trying like heck to live up to part of BB's credo of "preparing for the worse."
It is with this optimism that I know that some of our country's best and brightest who reside here at the castle will emerge as future leaders and do what's right for all of us as best as humanly possible.
I can honestly see the day where MK's and many others names here at the castle are part of the mainstream business lexicon as they champion the virtues of "honest and sound money." As the battle for the "thoughts" of many unfolds, I will raise my sword and shield to fight for you, as this will be a difficult battle. MK, a splendid job Sir.
I raise my goblet to each of you and wish you all good health and a happy New Year!
ski
(12/31/03; 22:47:24MT - usagold.com msg#: 114433)
Gold in 2004 (or other pm's)??
Perhaps a sequel to "Lord of the Rings"???
This time, instead of trying to DESTROY a gold ring, the Hobbits must BUILD a silver ring!
Their quest for some silver will take them:
1. To a host of mom n' pop coin shops ... "WE KNOW OF SILVER AND WE CAN MOST ASSUREDLY ORDER IT FOR YOU ... BUT THE DELIVERY ... THAT, OF COURSE, WILL BE THE DIFFICULT PART." ... But, no silver is to be delivered, no orders filled.
2. To the household of Mr. J.Q. Public ... "I HAVE HEARD OF SILVER OFTEN. THERE CERTAINLY SHOULD BE ENOUGH FOR A SINGLE SILVER RING SOMEWHERE ABOUT. UNDER THIS STACK OF BILLS NO DOUBT." ... But he has no silver for the ring.
3. To the halls of the all powerful, military empire of the world ... the U.S. Government ... "FOR MANY, MANY A YEAR, WE HAD WAREHOUSES STACKED TO THE CEILING WITH THE WHITE SHINNY." ... but not a tace of the white precious was to be located among the hammering printing presses.
4. To the greatest silver trading center in the world where millions of ounces of silver are bought and sold each and every day ... the COMEX ... "COME BACK TOMORROW AND TOMORROW AND TOMORROW ... WE HAVE TONS TO SPARE ... BUT FOR SOME REASON, THE CUPBOARD SEEMS TO BE A LITTLE BARE TODAY." ... again and again ... over and over ... not enough for a single silver ring!
Waverider
(12/31/03; 22:02:20MT - usagold.com msg#: 114432)
Sir Goldilox
Very clever (((^O^)))
Have you another source for lease rates? I had two sources bookmarked on my other computer that crashed and burned...or Sir Rich...I don't see the link here...TIA! Cheers!
a nation of one
(12/31/03; 22:00:13MT - usagold.com msg#: 114431)
To R Powell (12/30/03; 15:47:56MT - usagold.com msg#: 114343)
I am of the darkness. (This is not a joke.) When I
encounter convention, it appears to me differently from
the way it appears to people well-versed in markets.
In all areas of my life I tend to do things which other people sometimes think are extremely unusual.
I used to fight this tendency and tried to destroy it.
While I was in the most intense aspect of this attempt, I learned that it is the essence of my nature.
Carefully and unremittingly, therefore, I cultivate it.
As it increases, it emerges as that which I most genuinely believe.
One result has been that I like for my actions to be simple. As to how this effects my interest in gold, I have a number of contracts, which I hold onto while pog goes up. As long as I think it will continue to go up, I will do what is necessary to hold onto them. I don't engage in wise or learned conventional market practices. I am only intending to maximize the effect that pog's rise will have on my wealth, according to what I know and can see. I am a man with a self-generated idea, acting on that idea. So far it is working. I don't strive to understand the complex details of markets, any more than a carpenter tries to see the atoms in a piece of wood. I know my tools. And I know only a few other things: the dollar has been falling; more fiat money is being created; these things spell trouble; I have some dollars that I can put somewhere; I can see somewhere to put them: gold is going up. There is more to it than that, but not much.
I suspect that Karl von Clauswitz's observation may have been generally correct, that, "Given the same amount of intelligence, timidity will do a thousand times more damage than audacity."
Life is war. I have a good military mind. These things I understand. Therefore I do them.
Druid
(12/31/03; 21:30:21MT - usagold.com msg#: 114430)
Belgian (12/31/03; 06:32:53MT - usagold.com msg#: 114385)
@Druid
"The Gold Trail link (A/FOA) you posted...Could Libya soon become *another* privileged oil-reserve-state, qualifying for Gold-inflow for oil-outflow ?"
Druid: Sir Belgian, you know, this thing "economic" in its earliest and crudest form had more to do with total and complete confiscation then anything else. I took what you perceived was yours. Then we moved on or did we? Now you ask, if ANOTHER world leader sitting on black gold is fortunate enough to be holding the latest winning "lotto" ticket whereby we (USA) might deem him "privileged" enough to engage in some sort of "mutual" exchange.
My favorite Shaman (Econ. Prof.) would always ask; What governs what? Do markets govern politics or do politics govern markets? His answer was as crystal clear as you could get. It depends. At what point in time in history are you analyzing? The way I am reading the tea leaves at this point in time POLITICAL WILL is primary and markets are secondary. Have a wonderful New Years friend.
Goldilox
(12/31/03; 21:22:17MT - usagold.com msg#: 114429)
Grinches, Glitches, and Glistens
To all the Knights and Fair Ladies-
Heed not the Grinches who would try to steal your gold. They know the weak will submit, but the strong will prevail.
Believe not every datum you encounter, as Glitches occur often. Double check your sources, as they all publish disclaimers to warn of their fallibility.
Seek not every glitter thus presented, as the Bard spake:
"All that Glistens is not Gold!"
Live well and prosper!
(:> Sir Goldilox
Paper Avalanche
(12/31/03; 20:56:51MT - usagold.com msg#: 114428)
Happy New Year
My thanks to all posters for a year's worth of education that could not be obtained anywhere else. My special thanks to MK and CPM for this terrific forum and educational resource that has changed the way I view life. Mike, you are making a bigger difference in the world than you could ever imagine. Future historians will write books some day about the financial turmoil that lies ahead of us and there will be many, many references to this forum. We are living and making history during "interesting times."
Take care and have a bountiful 2004.
Paper Avalanche
R Powell
(12/31/03; 20:36:41MT - usagold.com msg#: 114427)
Rates: LIBOR - GOFO
Ladies, I too noticed the rate increase but the numbers from the LBMA. do not confirm K's numbers. Below are the one, two, three, six and twelve month numbers from our own link to the LBMA for gold. Who knows which are right? Maybe we just wait a day or two to see. Happy + Safe New Year to All. 0.021% 0.043% 0.066% 0.142% 0.338%
Waverider
(12/31/03; 20:07:50MT - usagold.com msg#: 114426)
To All...
I wish everyone here a healthy and prosperous New Year for 2004. Thank you one and all for your thoughts, dialogue, and contributions - each and every thread partakes in the Golden tapestry engraved upon the forum archive pages. All the best to each and every one of you.
Simply ~ I noticed the lease rates too this morning. Then upon second glance I noticed that the rates are the same across the board which makes me think it may be a computer glitch...I'm not sure but it seemed suspicious. Cheers!
Waverider
specie-man
(12/31/03; 20:06:28MT - usagold.com msg#: 114425)
New Year's Resolutions- part 2
And here is one more thought to help you quit:
Do you want some fat-cat lyin' tobacco executive to go laughing all the way to the bank with YOUR money, or would you rather be stuffing your pockets with silver dollars and gold ?
I can't think of any stronger incentive than that !
Waverider
(12/31/03; 20:02:11MT - usagold.com msg#: 114424)
New Year's Haiku for Sir MK
Warriors - eat, drink.
As Golden Eve melts to Dawn
Victory is born.
specie-man
(12/31/03; 19:58:34MT - usagold.com msg#: 114423)
Pizz - New Years' Resolutions
Good luck with your resolution #1.
I've NEVER bought a pack (thankfully !), so I don't know what they cost. Isn't it well over $2 ?
Think of it this way -
Every three packs or so and one genuine USA Morgan/Peace *silver* dollar goes up in smoke !
In other words, just think where else you could be putting your money :)
Simply Me
(12/31/03; 19:55:43MT - usagold.com msg#: 114422)
A joyous 2004 to all!
My gold forecast for 2004:
Tremendous early gains followed by a pull back and consolidation, at which time CNBC et al. will declare the gold bull dead. Then, after a lot of weak hands have been relieved of their heavy gold burden, a bigger and better gold bull break out. Gold $600/oz by year end.
Any body know if our sister site's charts are up to their old screw ups again?
Take a look at the current gold lease rates as quoted on the big "k".
Gold lease rates:
1 mo....1.12 (Change +1.1)
2 mo....1.13 (Change +1.09)
3 mo....1.15 (Change +1.09)
6 mo....1.22 (Change +1.10)
1 yr...... 1.46 (Change +1.10)
If these rates are true, then the fuse has been lit on a big golden rocket!
Silver and palladium lease rates took a big jump too. Only platinum rates were down.
A golden new year to all!
Simply
Cavan Man
(12/31/03; 19:53:49MT - usagold.com msg#: 114421)
Let the reader understand.
Truer words have not been spoken.
"The Wild card in all of this for the public, is maintaining some semblance of purchasing power going forward. The Stock Market will not do this, so please do not try. Most serious investors don't only hedge their currency risk, but they hedge the hedge of their currency risk to actually stay ahead of the game(another story). It is becoming apparent that some diversification into the precious metals is needed, just to stay even."
The Coin Guy
Many thanks for your contributions.
specie-man
(12/31/03; 19:49:28MT - usagold.com msg#: 114420)
Sign Posts along the "Trail"
Hello CoinGuy,
I think you might be referring to my "Gold Price Countdown" post (also known as "The Fall Of 2005"). If not, then sorry for the lengthy re-post !
The next key sign along the Trail will be when inflation rises to uncomfortable levels in Asian countries that are currently buying large quantities of US debt. China is approaching those inflation levels but Japan is holding things up right now. So when Japan "breaks" and is forced to stop dumping Yen for Dollars, look out !
Here is the entire post:
Gold Price Countdown - the Fall of 2005 A Speculation By "specie-man" - 10 November, 2003
In 1997, a mysterious individual began a series of anonymous postings on gold-related internet bulletin boards. This person, and their associate, seemed to have inside knowledge of world gold dealings. The information they relayed indicated, in a somewhat cryptic way, that there were two completely different gold markets in existence.
One of those markets is the paper gold market that we all see (COMEX) - a market who's hidden purpose is to suppress the price of gold and to generally manipulate the market in favor of commercial (short) entities, at the expense of speculative (long) entities.
The other hidden market was larger, and traded in physical gold only - at prices far higher than the paper gold market. As the theory goes, this market was the vehicle for transferring large quantities of gold to rich oil-producing countries. This arrangement was secretly agreed upon by banks and governments, so that in return, the price of oil (as measured in US dollars) would remain stable even during the economic boom years of the late 1990s. This was at the core of the so-called "strong dollar policy", which the US Government frequently mentions but never seems to be able to explain.
The two markets worked together such that the paper gold market would effectively siphon off world gold supply and production at reduced prices, and deliver it to the secondary "hidden" market at a profit. Why would the large buyers acquire gold on this hidden market, rather than buying contracts for future delivery for lower prices in the paper market ? Because it would have been impossible to purchase the desired quantities of physical metal on the limited paper market, and any attempt to do so would send the price of gold much higher on both markets, possibly destroying the paper market and ending the price suppression of gold. This would cut off their supply of relatively cheap gold. Perhaps the intentions of these major buyers are to first obtain large quantities of gold, and then go to the paper market to drive up the price.
The individuals responsible for bringing this information to light predicted that at some point, the world price of gold would be revised sharply higher (by orders of magnitude) in conjunction with a move by oil-producing nations to officially reduce their intake of US dollars and increase their intake of other currencies and gold. This monstrous gold price increase would signal the beginning of a new world order. That prediction was made around 1998, possibly to occur in the 1998-1999 time frame.
These individuals correctly predicted a badly-faltering stock market and economic malaise. But now, four years later, their predictions about a rapid gold re-pricing event have not taken place. Gold has increased in price significantly in the last four years, but the rise has been relatively gradual. Gold bugs are still waiting for that big event. Will it come and, if so, when ?
Before any major gold price upheaval (increase) can occur, certain conditions must first exist. Some have already occurred, and others are developing. Watching the progress of these conditions will be like watching a rocket launch count-down ! Those who are watching will know when their last chance will be to jump on board before lift off. Here is the count-down as towards an explosion in the price of gold (as a result of a crashing US Dollar):
12. Rapid expansion of world-wide credit (debt).
11. Stock market declines.
10. US government, state/local governments, corporations, and households go much deeper in debt.
9. US trade deficit expands relentlessly.
8. The US dollar starts declining in value relative to other world currencies.
7. Long-term interest rates increase relative to short-term interest rates, bond market declines.
6. Housing prices level-off and start declining in some areas.
5. Other (Asian) countries counter the falling US dollar by working to devalue their own currencies.
4. Gold starts rising in price relative to all major world currencies, including the Swiss Franc.
<===== WE ARE HERE !
3.
Inflation/stagflation starts taking hold in Japan, China, and other countries that have a large trade surplus with the US. Bad debts are monetized en-masse (paid off by "printing" large quantities of the local currencies). This is highly inflationary. To forestall hyper-inflation, Asian central banks will be forced to cash in some of their dollar reserves to bail out large debtors (commercial banks, etc.). This will bring an end to the "strong dollar" policies of those governments. Japan, for example, will no longer print and dump as much Yen on the market and buy dollars to weaken the Yen relative to the Dollar.
2.
Consumption in foreign (especially Asian) economies starts growing more rapidly and oil-producing nations realize that they will no longer have to rely as much on the US market to sell their oil. At that point they won't have to worry about how much oil the US consumes (or how much a barrel of oil costs in US dollars). Due to the world-wide glut of declining-value US dollars, and a revulsion for US foreign policies, some oil-producing nations begin switching their official oil pricing currency from US dollars to another currency and/or gold.
1.
The paper gold market (COMEX) shows a large increase in speculative long positions. The long speculators have been trounced many times over the years by the commercial (short) traders. This time, however, the ranks of the long speculators will grow and grow. They will hold firm in the face of the commercial shorting onslaught, as if being commanded by General Stonewall Jackson himself. The commercial shorts will break and run as people world-wide attempt to take delivery of gold. Some major financial institutions will fail as a result.
0. Blast-Off !
Foreign countries no longer have a need for the excessive amounts of US dollar assets (US Treasury bonds) that they hold because it becomes increasingly difficult to purchase oil (and/or gold) with them. Foreign governments do not buy and hold US Treasury bonds out of the goodness of their hearts. The second that they no longer have the need or ability to hold and acquire those assets, or the instant they perceive that their ability to exchange them for something useful is diminishing, they will dump them for something else. A world-wide "crash" in the US dollar will result, leading to a world-wide revulsion of anything and everything US dollar, much higher US interest rates, a severe case of hyper-"stagflation", and higher prices for all tangible assets. The derivative pyramid will crumble. The US dollar will become the "laughing stock" of world currencies - akin to some of the weak currencies of the Central American and South American regions. All this occurs just as the first wave of American "baby doomers" are scheduled to retire. Life will go on in the US and it won't be all bad, but it will be very different and difficult.
Right now, the countdown is at 3 and counting. Many of these events have been (and will be) occurring concurrently. What is still lacking is significant world-wide wage inflation (but world-wide commodity prices are now escalating). When you hear the phrase "wages are increasing to keep up with inflation", you will know that the time is very close. Current indications are that the final prerequisites for a blast-off in the gold price are forming. Hints of inflation in Japan, commodities, and elsewhere are starting to appear, as is talk about doing something about the bad debts in Japan, and bad debts rapidly increasing in China. The US Federal Reserve will aggressively fight any significant downturns in real estate prices. They will do anything, even drop cash from helicopters, to prevent consumers from defaulting on their mortgages en masse. The alternative is just to catastrophic.
The COMEX open interest in gold is now increasing. Battles between the commercials (short) and the speculators (long) have usually ended in favor of the commercial traders. This time, it will end in a stalemate - a moral victory for the longs. The day when the longs totally rout the commercial shorts is coming fairly soon.
History is riddled with unfulfilled predictions of gold's price soaring (and collapsing). Gold is heating up now. But realistically, how long might it be before the price explodes rapidly upwards in an economic upheaval of epic proportions ? That is hard to say. The old saying definitely applies here: "markets always do WHAT they are supposed to, but never WHEN they are supposed to". Such drastic economic realignments are always fought against by governments, and they always take longer than expected.
Should all the current COMEX longs hold firm and a quantity of them demand physical delivery, then the countdown could go to blast-off immediately. Other "wild-card" events (war, terrorist attack, major California earthquake, etc.) could ignite the rocket as well. The countdown process started in the mid 1990s and it should last about ten years. The closer the countdown gets to zero, the faster it will tick. Gold will continue to increase in price during the remainder of the countdown. ! Lacking any unexpected triggers, the countdown will finish during the Fall of 2005.
Druid
(12/31/03; 19:48:38MT - usagold.com msg#: 114419)
Operative (12/30/03; 22:06:51MT - usagold.com msg#: 114362)
@ Druid Re: Lybia
"I wonder if the Lybian leader is a better reader of the "writings on the wall" than Saddam was?
Is this recent turn of events showing a two prong effort on the USA's part? The arab world is divided in many avenues. It would be an error to think otherwise. History has shown this to be true. Arab nation vs arab nation. Most arab nations have major conflicts amongst even their own populataions. Has the US declared "war" on the most radical arab countries, and at the same time offered an olive leaf to the one's willing to negoiate thier future?"
Druid: Operative, you are absolutely correct in what you stated above about the arab world being divided. It would would appear that our recent military actions might be the common denominator that brings them together to our detriment. Let's see how the "olive" leaf towards Lybia works out.
The CoinGuy
(12/31/03; 19:05:28MT - usagold.com msg#: 114418)
MK,, Appreciate the Reply(ies)...
Hanta Yo...to the Physical yellow metal in 2004. "The newsletter writers", as Sinclair is calling this group who had turned bearish in the $390's, will probably get scared at $450. My official call for 2004 is $565-70, technically and fundamentally I believe we are headed there post haste. If my arm was twisted, I would also state, two periods of consolidation will be involved in this process. I never, and I MEAN NEVER, thought I would say this, "buy the dip".
Perhaps we are headed to another bend on the Gold Trail in regards to FOA's scenario. As you have commented on the dollar, it has been on my mind alot lately. The dollar decline is becoming quite interesting. The Relentless decline is getting some notice, a bounce might be in order for a good scare to the Dollar shorts who are leaning strongly to one side of the boat, but I'd have to say FOA has/d made a good call. Although, the oil call is the ace in the hole, and I'm betting he is holding a Royal Flush by the time this hand is played out.
The Wild card in all of this for the public, is maintaining some semblance of purchasing power going forward. The Stock Market will not do this, so please do not try. Most serious investors don't only hedge their currency risk, but they hedge the hedge of their currency risk to actually stay ahead of the game(another story). It is becoming apparent that some diversification into the precious metals is needed, just to stay even.
I'm looking forward to gold rising in all currencies as we go forward.
I am in firm resolution to my convictions, as well as my own study of Geo-Politics that I believe we are indeed on the right Trail, so to speak. I recall someone, and I do apologize for forgetting who, posted a list of signs to watch as we move along this trail. Perhaps, this could be "re-posted", I glanced at it when posted and felt it was a fair representation. Whoever did the work, did some homework as well.
I understand it is hard to stay on the Trail when the Trail Guide himself is lost, MK ought to get a search party together and find him. Although, if he is never to be found, I believe enough was said, afterall as FOA quipped the story was never about him.
I'm heading back into my lair, but I sincerely wish the best for all at USAGOLD for 2004.
The CoinGuy
2004: War, Gold, Oil and the Dollar.
Buongiorno!
(12/31/03; 18:42:42MT - usagold.com msg#: 114417)
2003 'item' of the year
Gentlepersons, may I respectfuly suggest that there is a difference between Barrick announcing the 'end of hedging as we know it' and Newmont actually covering 10-12MM oz au--somehow, during this last year? Both are significant, but one represents deeds done, while the other represents things to come?
I know, a small detail, but (aw shucks) just had to point it out.
To all, HAPPY NEW YEAR!
"Buon Finalmente, Buon Principio, 'e Buon Anno Nuovo!"
Andrea Bocelli is singing for me, my bride awaits an evening of dancing....life is good!
Chin-chin--ting
BUONGIORNO!
TownCrier
(12/31/03; 18:15:32MT - usagold.com msg#: 114416)
There he is, Spot, ringing in the new year... gads, Mike.
http://www.usagold.com/AMK/MK-gold.html
Seriously. That's (almost) criminal.
(Just only as long as everyone knows I had no part in it.)
No haikus this time, just this: My very best wishes to ALL -- for a New Year filled with inspiration for shaping what lies ahead, and for comprehension of all that unfolds.
Randy
CoBra(too)
(12/31/03; 18:11:37MT - usagold.com msg#: 114415)
On the Other Side of Midnight -
for almost 2 hours already into 2004.
I would like to take the opportunity to wish all of you a great and golden new year.
Mike has expressed it nicely in one of his recent posts - 2004, the year of gold's victory.
Thanks to all of you and especially to MK and his brilliant team ... and also special thanks to BB for his excellent efforts - cb2, who loves you all ...
MK
(12/31/03; 18:02:21MT - usagold.com msg#: 114414)
Black Blade, Randy, All: The dollar carry trade/What goes around, comes around
http://biz.yahoo.com/rf/031231/markets_forex_carry_1.html
For years we emphasized that the gold carry trade was the primary drag on the gold price, because through leverage it worked to flood the market with paper gold. Now, stories like the one linked above are beginning to emerge about the 'dollar carry trade' -- a trading opportunity, no doubt, that the hedge funds are very happy to find gift-wrapped and waiting for them on the financial table. The new 'trade' is accelerating the upward movement in the euro no doubt and playing a role in the gold price.
One of the more interesting aspects of the carry trade situation, whichever financial instrument is targeted, is the fact that off-shore hedge funds are able to magnify the movement in currency markets far beyond what would occur without the leverage and carry trade locked-in profits. When gold was targeted and Alan Greenspan was pressed on regulating the hedge funds in this respect during Congressional testimony, he begged off saying that the free market should be allowed to be the free market. Now, with the dollar under attack, and people like Soros and Buffett publicly admitting to speculation with massive capital against the dollar, one wonders what the response of the authorities -- particularly the U.S. Treasury and the US Federal Reserve Bank -- might be. The article above implies that the Fed, for one, might be on gold for the entirety of 2004 (an election year). The trashing of the dollar, it would seem at least on the surface, is policy, except of course in Japan.
Most of us recall Soros' successful speculation against the British pound, and the impotence of both the British government and the Bank of England in terms of effective reponse to defend the currency. Now the dollar -- the world's reserve currency -- has been targeted. With Japan, a trash currency (as BB points out in his report today) on par with wampum and seashells (I believe is how he put it), there aren't many alternatives out there for this high-velocity, highly leveraged money to make these carry trades worked.
I think we may be surprised in the coming year what happens in the gold market. The same leverage that was a blessing for the dollar and bond market in the 1990s may become a curse in the 'oughts' with gold the ultimate beneficiary.
Pizz
(12/31/03; 17:06:12MT - usagold.com msg#: 114412)
Year End
As we enter a new year, keep in mind that for all short term, practical aspirations, we gold advocates have had a pretty good year. In fact, a good couple of years, and will more than likely have a good decade relatively speaking.
My greatest concern over the next few years is not problems with stocks, bonds, interest rates, trade deficits, budget deficits, debt levels, reserve currencies, derivatives, real estate values, accounting irregularities, resource depletion, global warming, mad cows, SARS, or any of the other myriad of imbalances that have, are, or will occur (We've had a bunch, though haven't we?). Most have all been problems before, have been solved one way or another, and will be again, and again.
My greatest concern is the relatively rampant influx of technology into the world and our ability as humans, to be able to deal with these problems psychologically, intelligently, and emotionally.
Computers and our information technology have managed to take the business, economic, and social cycles and compress them into immediate awareness. Patience has never been one of my better traits, and I'm far from being alone. Now keep this thought, multiply it a few hundred million times, factor in the Internet and instantaneous monetary reactions to virtually all information available, and you have a macro situation that we, as mere mortals are about as apt to win without SEVERE pain, as a high school football team in the Super Bowl.
In the past (prior to 1992 or so), we've had both the time and capital resources to handle economic problems. Oil embargos, dollar devaluations, stock market corrections, etc., etc. have all been weathered, but with time and some pain. Now, when a problem appears, we demand instant solutions, and use up capital that DID NOT just instantly appear. Immediate gratification has caused knee-jerk reactions and politically expedient misallocations of capital, that in times past would have been solved or at least mitigated with the resources at hand, whether social or monetary capital. Is it surprising that the government has had to finally go to the instantaneous creation of capital (printing) to try to keep up?
Between the government and citizens of this country, we have used up nearly every nickel of our savings, our home equity, our Social Security funds, borrowed on the future, sold into the future, and are now holding our debt over the heads of other countries. Japan is playing the bungee cord for the dollar. The Euro block will be next as the pain from a too strong of a currency will be too much politically. China will play, but within their own rules and Taiwan will be the spoils. Russia scares me right now, since they've already bottomed, survived, and while we are about to have our own little "awakening".
Will the playing field worldwide be able to be leveled to some sort of equilibrium that allows for some type of "living" as we (used to) know it? I have my doubts. Too many people, too few resources, too much greed, and without enough pieces of the pie to go around no matter how thin it's cut. When in doubt, most hedge their bets, and when too many hedge, the hedges have a tendency to be the problem. Derivatives may be a good example, and we'll probably find out first hand.
What will history say as to what should have been the warning to all that both the Fourth Turning and the Kondratieff Winter could not be both socially and economically defeated? In my humble opinion, it will be the hedge that our government has created under the guise of . Namely Patriot I, II, and Homeland Security. Keep the presses running, pull out every stop necessary for as long as you can, until. . . . .. I personally think the government has given up on economic solutions. None that will work are politically acceptable (like a gold standard – and it could be done). As in life, business, or government, we the people demand that the problems be fixed, but the fix cannot include anything that affects US in a negative way. Fix it but don't change a damn thing that affects my available time or living standard except to have both go up . . .now just how many times have I been in that situation in my career. . . . . quite a few, and you know, it can't be done.
Gold in 2004? The anti-gold crowd will be trying to convince us that we're going to have the mother of all double tops at about 850.
Silver in 2004? Going to surprise everyone, and live Rhode Island Reds will become an endangered species as all try to figure out "why".
To all, may 2004 be as good or better than 2003.
P.S.
My resolutions for the year are as follows, in the order of, (and if I failed last year, it goes to the top for this year)
1. Quit smoking (been number 1 for a while)
2. Be not a borrower or lender (debt free totally by end of 2004)
3. Double my physical gold.
4. Triple my physical silver.
5. Learn how to beat both 2 and 3 into plowshares, bullets, fishing lures, or anything else required in case SHTF.
Pizz
MK
(12/31/03; 16:47:33MT - usagold.com msg#: 114411)
Add on to Coin Guy post
CG. . .When I posted my reaction to the Barrick story, I ended with the inscription "hanta yo"
Hanta yo in the Lakota Sioux dialect translates to
"Clear the way!"
The Barrick reversal clears the way.
MK
(12/31/03; 16:42:37MT - usagold.com msg#: 114410)
Yes, Coin Guy. . .
I see Barrick as the number one gold story for 2003. Right behind it, the devaluation of the dollar. And third the 20%+ rise in the price as the third top story.
Happy New Year, CG!
MK
(12/31/03; 16:39:39MT - usagold.com msg#: 114409)
C-Man
Happy New Year, C-Man. I appreciate your presence here and friendship. Blessings and Happiness for 2004!
No, I see a victory -- victorious battle -- not in the sense of an ultimate victory. The coronation -- ultimate victory -- may come down the road. There is much ahead of us between here and there.
As this financial/economic drama unfolds over the coming year, we -- all of us -- will reinvent this forum and website continuously and again as a personal, vital 'tool for the modern era.'
Cavan Man
(12/31/03; 16:25:34MT - usagold.com msg#: 114408)
Hi Mike....
Could be "Return of the King"? I like the ring :>). Happy New Year...God bless all here....CM
The CoinGuy
(12/31/03; 16:21:08MT - usagold.com msg#: 114407)
Barricks Reversal on hedging...
MK,
The icing on my cake will always be "Barrick's 48hr Reversal".
Classic,
The (PHYSICAL) CoinGuy
P.S. A HAPPY NEW YEAR TO ALL POSTERS!!!
MK
(12/31/03; 15:39:51MT - usagold.com msg#: 114406)
New Years Message
Last year on New Year's Eve I said that if 2002 was the year of gold's return (it was up 24% on the year), then 2003 would be the year of gold's revenge (gold was up 20% on the year). The epitome of that revenge, need I say it, was Barrick's renunciation of hedging and promise to essentially put its book to rest. Gold's revenge was also illustrated by the steady drop in LBMA volumes -- which (those of you who have read my writings over the years already know) represents the paper portion of the gold carry trade in all its manifestations. You will continue to see the banking portion of the gold business shrink in size as the physical business continues to expand on a global basis.
So how do I characterize 2004?
I'll put it in a nutshell:
If 2002 was the year of 'gold's return' and 2003 the year of 'gold's revenge'. Then 2004 will go down as the year of 'gold's victory -- the ascent to its rightful place atop the world of financial assets '. And that will not be the end of it. It will be just the beginning.
MK
2004
To all our greatly appreciated posters who have kept us informed, kept us thinking, kept us in the game through good times and bad, I invite you to post your thoughts and feelings for 'Gold 2004' over the next few days. I think many of us would like to hear from our favorite posters on this subject. Now is a good time to get it on the board. I just thought I'd lead the way.
Mr Gresham
(12/31/03; 15:04:06MT - usagold.com msg#: 114404)
Operative
I say "ditto" to your last two posts. New Year's greetings, and a hero's reward. They are both in full keeping with what our fine company shares here each day.
And the same greetings to our neighbors, some of whom do stop by to check our thoughts here. You may be like me; I have foregone registering to post at other fine castles, for, my time must be apportioned sparingly, and, I fear I would grow confused if my thoughts were to mingle in the discussions at more than one castle. (I can barely keep up here, to do justice to the efforts you put in.)
Know that I read you with much appreciation, and I hope you know how deserved your increased wealth has been this year. Among all who hold real wealth, I know you will use it most wisely.
Goldilox
(12/31/03; 14:05:16MT - usagold.com msg#: 114403)
Failed Manipulation
@ Gandalf
perhaps the manipulators were too busy helping NASDOG finish 2003 at 2003.xx!!
TownCrier
(12/31/03; 13:42:46MT - usagold.com msg#: 114402)
Eurosystem reserve revaluations
On this, the day of the Eursystem's quarterly mark-to-market revaluation of Int'l reserves, the bottom line is that paper has suffered while gold has held firm since the last revaluation on Sept. 30th.
Holdings of yen have fallen in unit value from ¥128.8/€ to approx 135 yen per euro.
Holdings of dollars have fallen in unit value from $1.16/€ to approx 1.26 dollars per euro.
Holdings of Special Drawing Rights have fallen in value from EUR 1.225 to approx EUR 1.18 per each.
Holdings of gold, however, have nudged higher, from EUR 329.986 to approx EUR 331 per ounce.
The final, official revaluation numbers should be available next Wednesday.
R.
Operative
(12/31/03; 13:26:28MT - usagold.com msg#: 114401)
Reflections of Time Past
http://www.usagold.com/cpmforum/archives/31200212/default.html
In reflecting back on this years trek along golden trail, you may wish to start at the beginning, December 31, 2002.
Wishing All a Happy New Year, and Blessings For 2004.
* Safe trip to Jon W on his homeward bound journey.
* Special thanks to MK and staff, for providing this cyber castle where the heart can be warmed, and thoughts engaged.
* Offered to each poster is a heartfelt Thank You, for all that is shared within these silver guilded pages with golden thread weaved as binding. I never knew, I knew so little.
USAGOLD / Centennial Precious Metals, Inc.
(12/31/03; 12:55:55MT - usagold.com msg#: 114400)
Real gold, real easy. Delivered to your door.
http://www.usagold.com/ProductsPage.html
Gold Today!Because you never know what the New Year will bring.
Call USAGOLD - Centennial Precious Metals
(800) 869-5115
Gandalf the White
(12/31/03; 12:26:27MT - usagold.com msg#: 114397)
Today's chart of the US$ !
http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y&Interval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10
Can you all say "Attempted and FAILED MANIPULATION" ?
===
http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y&Interval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10
===
YES, that is a long LINK (and it can be supersized !)
<;-)
Goldilox
(12/31/03; 11:59:27MT - usagold.com msg#: 114396)
Ring images
ooooooo - If I select random desktops, I get a slideshow of the movie characters I downloaded in the background of my work. This is TOOOOOO COOOOOL.
Goldilox
(12/31/03; 11:54:43MT - usagold.com msg#: 114395)
Minas
yes, what a great find. Gandalf looks so good, I added him to my desktop pictures folder.
It even worked on my Mac!!!
USAGOLD Daily Market Report
(12/31/03; 11:53:21MT - usagold.com msg#: 114394)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Afternoon Gold Report by Jon H. Warner has been
updated.
If you are considering investments in gold we invite you to
request our free
introductory information packet detailing the products and services offered
by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look
forward to working with you.
Happy New Year one and all. We end the year with gold well above $415 an ounce and the other precious metals looking good as well. Still, you boyz and girlz a little slow on the draw can still get an order in before this year is out unless the Castle closed up early today. If not, then a another three or four hours are left.
Anyway, I am off until next year and must get on the road with the current break in the weather. I have been marooned in Utah for the last few days due a a blizzard (worst since 1972 they say - where's Global Warming when you need it). Otherwise be happy and celebrate an above all else be safe - I hope to see (or at least read from you all soon).
Cheers!
Jon H. Warner PG
Gandalf the White
(12/31/03; 11:48:00MT - usagold.com msg#: 114393)
"GREAT FIND", Sir Operative ! <;-)
Operative (12/31/03; 11:15:36MT - usagold.com msg#: 114392)
A New Look For 2004
===
WOWSERS !!!
Thanks, Sir Operative
These will keep all the Hobbits busy "wallpapering" all the computer monitors in the Shire.
I must go out and get more of that "Silver based PHOTO" paper to print each and every one !
YES, 2004 is going to be GOLDEN !!!
"HAPPY NEW YEAR", ALL.
<;-)
Operative
(12/31/03; 11:15:36MT - usagold.com msg#: 114392)
A New Look For 2004
http://shipofdreams.net/lotr/index.htm
Give that computer a new look this year. Many thanks to "SILVERCOON" from a nearby castle for posting this link. Dare I say, Gandalf never looked so good. <grin>
Operative
(12/31/03; 11:01:16MT - usagold.com msg#: 114391)
The Right Stuff
http://ap.tbo.com/ap/breaking/MGARED9MVOD.html
West Virginia Boy, 12, Rescues 18-Month-Old Sister From Fire; Credits Boy Scout Training
PARKERSBURG, W.Va. (AP) - A 12-year-old boy saved his 18-month-old sister from a fire in their home, running through smoke and flames and carrying her out through a second-floor window onto a porch roof.
She's my sister, and I'm supposed to take care of her," said Michael Wedekamm, who suffered minor burns and smoke inhalation in the fire early Tuesday.
"Michael went up to get the baby. The rest of them went out the back door," said Lt. Carl Sizemore, Parkersburg's chief fire inspector.
The boy had to kick out a window screen and climb onto the porch roof because the stairway was filled with smoke, authorities said.
He handed his young sister, Allison, to his 11-year-old sister on the ground and jumped to safety.
Michael credited his Boy Scout training with helping him pick the best escape route.
"He went through some flames; he got singed up pretty good," said Michael's father, Shane Wedekamm. "I'm proud of him. The boy did good."
Comment: I hesitated to post this story thinking at first it was off topic for this esteemed table. But then, what better way to add a true epic of heroic proportions to demonstrate the ideals and goals that we all here share. I felt this post needed to be added to the last page of this forum, on the last day of this year, 2003. Perhaps, one of the topics to be discussed here in '04, will be to set up a Golden Eagle award for occasions such as this. This young man certainly gets my vote for the first one to be given out. A hero in heart, and deed, he is one of us.
Mr Gresham
(12/31/03; 10:59:13MT - usagold.com msg#: 114390)
And a "morning after 'oops'"
Of course, that's "Markets can remain irrational longer than you can remain solvent,", not "insolvent."
(However, perhaps they'll make a special exception in my case, to include all eventualities...;) )
Goldilox
(12/31/03; 10:25:58MT - usagold.com msg#: 114389)
CIA Asian economy numbers
@ Melting Pot
You cetainly get the award for the longest post in a while.
A quick summation of the "major" partners in the CIA Import/Export numbers reveals the following:
Japan:
Exports 57.6%
Imports 44.4%
China
Exports 59.2%
Imports 53.1%
According to these reports, major partners account for barely half of Japan and China's imports and exports. It would be interesting to know, for instance, which group of MINOR trading partners account for the bulk of 55.6% of Japan's imports. Are they really willing to risk the other 71.2% of their business to "prop up" the 28.8% they sell to the USA?
As you so aptly put, "The math doesn't add up!"
Not to suggest that numbers should be ignored, I believe the quantity of FUD in "official" gubmint and corp'rit numbers places their "fudge factors' rather on the HIGH side.
What was that my father said?
"The three major forms of deception include lies, damn lies, and statistics."
Melting Pot
(12/31/03; 09:49:07MT - usagold.com msg#: 114388)
The Desires of individuals for Larger or Smaller Holdings: A look at the Facts
http://www.libertyhaven.com/regulationandpropertyrights/bankingmoneyorfinance/valuemoney.html
The following machinations are presented to stimulate thoughts and logical debate on the coming new year:
The most important determinant of purchasing power of money under this heading of "money-induced factors" is the very attitude of the people toward money and their possession of certain cash holdings. They may decide for one reason or another to increase or reduce their holdings. An increase of cash holdings by many individuals tends to raise the exchange value of money, reduction of cash holdings tends to lower it.
This is so well understood that even the mathematical economists emphasize the money "velocity" in their equations and calculations of money value. Velocity of circulation is defined as the average number of times in a year which a dollar serves as income (the income velocity) or as an expenditure (the transaction's velocity) . Of course, this economic use of a term borrowed from physics ignores acting man who increases or reduces his cash holdings. Even when it is in transport, money is under the control of its owners who choose to spend it or hold it, make or delay payment, lend or borrow. The mathematical economist who weighs and measures, and thereby ignores the choices and preferences of acting individuals, is tempted to control and manipulate this "velocity" in order to influence the value of money. He may even blame individuals (who refuse to act in accordance with his model) for monetary depreciation or appreciation. And governments are only too eager to echo this blame; while they are creating ever new quantities of printing press money, they will restrain individuals in order to control money velocity.
It is true, the propensity to increase or reduce cash holdings by many people exerts an important influence on the purchasing power of money. But in order to radically change their holdings, individuals must have cogent reasons. They endeavor to raise their holdings whenever they foresee depressions ahead. And they usually lower their holdings whenever they anticipate more inflation and declining money value. In short, they tend to react rationally and naturally to certain trends and policies. Government cannot change or prevent this reaction; it can merely change its own policies that brought forth the reaction.
When more and more individuals begin to realize that the inflation is a willful policy and that it will not end very soon, they may react by reducing their cash holdings. Why should they hold cash that depreciates, and why should they not purchase more goods and services right now before prices rise again? This reaction intensifies the price-raising effects of the inflation. While government inflates and people reduce their money demand, goods prices will rise rapidly and the purchasing power of money decline accordingly.
Passing the Buck
It may happen that the government may temporarily halt its inflation, (Think the created illusion of a declining M3: my emphasis) and yet the people continue to reduce their cash demand. The central bank inflators may then point to the stability of the money supply, and blame the people for "irrational" behavior and reaction. The government thus exculpates itself and condemns the spending habits of the people for the inflation. But in reality, the people merely react to past experiences and therefore anticipate an early return of inflationary policies. The monetary development during most of 1969 reflected this situation.
Finally, the people may totally and irrevocably distrust the official fiat money. When in desperation they finally conclude that the inflation will not end before their money is essentially destroyed, they may rush to liquidate their remaining cash holdings. When any purchase of goods and services is more advantageous than holding rapidly depreciating cash, the value of money approaches zero. The money then ceases to be money, the sole medium of exchange.
END SNIP:
Oh so thats the deal eh, it's really a mixed bag of 1720 and 1929 again? Drop the value of the dollar, declare war on the savers and herd the sheeple into the stock and bond markets as a safe haven to save the world economy....or is there something more sinister lurking?
"The fate of the world economy is now totally dependent on the U.S. stock market, whose growth is dependent on about 50 stocks, half of which have never reported any earnings." --Paul Volcker, Ex-Chairman of the Federal Reserve, September, 1999
The thought continues to enter into my thinking that the world economy and US government has already financially collapsed, it just hasn't been televised or publicly addressed yet. These thoughts eminate from the continuing collapses of large major corporate entities such as Parmalate, Enron, World Com, Tyco, etc., etc., etc. The only time in economic history that such collapses continue to occur are in times of inflationary or deflationary depression. Are the debt bombs igniting slow motion as the dollar drama ripens and comes to fruition!
It would seem Mr. Greenspan has resorted to John Law's
"Real Bills Doctrine" in a last ditch effort as money is applied as the "reflux principle" to the money supply. Money, as Law argued, was credit and credit was determined by the "needs of trade". Consequently, the amount of money in existence is determined not by the imports of gold or trade balances, but rather on the supply of credit in the economy. And money supply (in opposition to the Quantity Theory) is endogenous, determined by the "needs of trade".
http://cepa.newschool.edu/het/profiles/law.htm
(REF: The response to the crash since March 2000 has been to create even more money. Just as it was 300 years ago. Strange things are going on in the world at large. But not strange to a citizen of Paris in 1720***.--Barron's Interview with Hugh Hendry - by Vito J. Racanelli)
In the end, what else can Greenspan do when such debt and trade imbalances exist in global trade but to print Weimar Style hoping to inflate away or buy just a little more time? He knows the scenario all to well....yet fails to address how these imbalances were created in the first place. The "livre & dollar debt bubbles 1720 & 1920's style" has the world economy imbalanced and trapped....
"By 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed." --Alan Greenspan Gold & Economic Freedom 1966
The question remains...are the common people consciously and intentionally seeking safe haven from declining dollar, or are they a part of a herding process? I do not give the common investor much credit as an individual thinker, therefore I assume s/he is being herded...but by whom? The Institutional Investors (401, Roth, Mutual Fund managers, etc.) that understand the concept of safe haven investing or by FED & Government intentions? If by FED intentions, are the institutional investors being herded too?
"The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves." --Alan Greenspan, Gold and Economic Freedom 1966
How would a bankrupt and insolvent state continue to operate long term with growing $7 trillion outstanding public debt, $44 trillion contingent liabilities, mounting trillion dollar triple annual deficts, tax cuts and massive off balance sheet debt and derivative positions???
Mr. Speaker, we are here now in Chapter 11. Members of Congress are official trustees presiding over the greatest reorganization of any bankrupt entity in world history, the U.S. Government. --Congressman James Traficant, The Congressional Record, Volume 134 Number 33, Wednesday, March 17, 1993
http://autarchic.tripod.com/files/bankrupt.html
Somethings very amiss wouldn't you say? This is contrary to 5000 years of economic trade laws and principles...so wheres the funding really coming from? Are we really to believe that private and sovereign foreign investors, the most prudent class of investor would continue to finance a proven insolvent entity without regard to financial and economic self preservation? Are we really to believe Japan is willing, "AS REPORTED BY MONOPOLY PRESS" to intervene in the FOREX markets to the tune of $1 trillon annually when their 2002 export market is estimated to be $383.8 billion to KEEP the Yen competitive??? The math doesn't add up! Look at these facts then YOU decide:
Japan:
Annual GDP: purchasing power parity - $3.651 trillion (2002 est.)
GDP - composition by sector:
agriculture: 1.4%
industry: 30.9%
services: 67.7% (2001 est.)
Labor force - by occupation: services 70%, industry 25%, agriculture 5% (2002 est.)
Budget:
revenues: $441 billion
expenditures: $718 billion, including capital expenditures (public works only) of about $0 NA (FY 01/02 est.)
Exports:
$383.8 billion f.o.b. (2002 est.)
Exports - partners:
US 28.8%, China 9.6%, South Korea 6.9%, Taiwan 6.2%, Hong Kong 6.1% (2002)
Imports:
$292.1 billion f.o.b. (2002 est.)
Imports - partners:
China 18.3%, US 17.4%, South Korea 4.6%, Indonesia 4.2%, Australia 4.1% (2002)
Debt - external:
$NA
Source: CIA Factbook
http://www.cia.gov/cia/publications/factbook/geos/ja.html#Econ
Next lets take a quick look at China,
GDP: purchasing power parity - $5.989 trillion (2002 est.)
Labor force - by occupation:
agriculture 50%, industry 22%, services 28% (2001 est.)
Budget:
revenues: $224.8 billion
expenditures: $267.1 billion, including capital expenditures of $NA (2000)
Exports:
$325.6 billion f.o.b. (2002 est.)
Exports - partners:
US 21.5%, Hong Kong 18%, Japan 14.9%, South Korea 4.8% (2002)
Imports:
$295.3 billion f.o.b. (2002 est.)
Imports - partners:
Japan 18.1%, Taiwan 10.5%, South Korea 9.7%, US 9.2%, Germany 5.6% (2002)
Debt - external:
$149.4 billion (2002 est.)
Source: CIA Factbook
http://www.cia.gov/cia/publications/factbook/geos/ch.html#Econ
Now a glance at US data:
GDP: purchasing power parity - $10.45 trillion (2002 est.)
Labor force - by occupation:
managerial and professional 31%, technical, sales and administrative support 28.9%, services 13.6%, manufacturing, mining, transportation, and crafts 24.1%, farming, forestry, and fishing 2.4%
note: figures exclude the unemployed (2001)
Budget:
revenues: $1.946 trillion
expenditures: $2.052 trillion, including capital expenditures of NA (2002 est.)
Exports:
$687 billion f.o.b. (2002 est.)
Exports - partners:
Canada 23.2%, Mexico 14.1%, Japan 7.4%, UK 4.8% (2002)
Imports:
$1.165 trillion f.o.b. (2002 est.)
Imports - partners:
Canada 17.8%, Mexico 11.3%, China 11.1%, Japan 10.4%, Germany 5.3% (2002)
Debt - external:
$862 billion (1995 est.) (Gee no updates since 1995, are you surprised?)
Source: CIA Factbook
http://www.cia.gov/cia/publications/factbook/geos/us.html#Econ
When comparing the data of USA v. Japan, USA v. China is there any wonderment that the US dollar is collapsing against Gold and all major currencies? The numbers just dont add up or BALANCE in logical order.....
"Some economists also cite the level of taxation as an important factor in the determination of the exchange value of money. According to Colin Clark, whenever governments consume more than 25 per cent of national product, the reduction in productive capacity as a result of such an oppressive tax burden causes goods prices to rise and the purchasing power of money to fall. According to that view, with which one may disagree, high rates of taxation are the main cause of "inflation." At any rate, there can be no doubt that the American dollar has suffered severely from the burdens of Federal, state, and local government spending and taxing that exceed 35 per cent of American national product."
http://www.libertyhaven.com/regulat...valuemoney.html
And as another last ditch effort to support the FED and the phoney fiat dollar experiment in America, immigration runs unabated whilst domestic unemployment rises and jobs are exported directly against "the will of the sovereign peoples," and the social unintended consequences of such a policy, to wit;
Factors on the Side of Money
There also are a number of factors that affect the demand for money on the money side of an exchange. A growing population (Think unabated immigration: my emphasis), for instance, with millions of maturing individuals eager to establish cash holdings, generates new demand, which in turn tends to raise the purchasing power of money and to reduce goods prices.
On the other hand, a declining population would generate the opposite effect.
http://www.libertyhaven.com/regulat...valuemoney.html
In conclusion it appears all stops have been pulled out to support the fiat dollar, yet the entropy continues to decline as the pressures of the debt-berg begin colliding with the USS Titanic. In such an environment, where and how does the fictional government gather and raise needed funds to continue operating? Thats a very good question. How low would the bureaucrats and politicians alike go to
continue perpetuating their self-perceived authority and cushy government jobs?
Who Made The AA 'Put'Options The Days Prior To 911?
http://www.rense.com/general46/911.html
It has been written:
"Had political-economic rulers directed humankind's destiny throughout history, mankind would by now be extinct!"
I don't know what the future holds for 2004 and beyond, I can only judge from the past. In light of the foregoing, and the continued broken promises of today that paper assets represent, there is but one storehouse of value remaining, that is physically held Precious Metals.
Good luck to all in 2004, we are going to need it with or without PM's.....
MK
(12/31/03; 08:45:20MT - usagold.com msg#: 114387)
News & Views
http://www.usagold.com/AMK/MK-gold.html
Updated.
Best Wishes for a Happy and Prosperous New Year from all of us at USAGOLD - Centennial Precious Metals.
Breaking News!! One of our staff surreptitiously snapped this photo of Spot celebrating the New Year (at the link above).
Toolie
(12/31/03; 07:56:25MT - usagold.com msg#: 114386)
Dear Uncle Al,
http://www.freep.com/money/business/tool30_20031230.htm
I hope this letter finds you well.
How are the new high flow oil cooled ceramic bearings working out on the Turbo Printzilla 10,000? No more instantaneous product combustion, I hope!
Last we spoke, Cousin Ben was hadn't decided on were to place the "Great Wall" of presses he had on order. So is it next to the Hoover Dam of the Nuclear reactor? Or is he still playing with his economic models? Call me stubborn, but I still think you would be farther ahead by off-shoring production and letting the Chinese worry where the energy is going to come from. Of course you could just add a couple of zeros to each bill (HA, HA, just had to say it).
My trade is picking up a little, but things are still tough (see link). I kinda got what you said about your problems with "triffins Dilemma" but before I could think it through, I got Triffin confused with Tribbles and couldn't get the picture out of my head of you getting pelted by Triffins falling from the cargo bay doors. I'll try again, following your advice; a bottle of whiskey and some country music should drain the humor right out of me.
Belated congratulations on your invite to stick around the shop. Wasn't that right around the time your house got broken into? You said something about lifting prints from the water gate; I didn't notice the creek last time I was over. I'll have to pay more attention. Did they ever catch those guys?
For a considerable period, un-disrespectfully yours
Toolie
P.S. OUCH! Just noticed this. Tell Ben to put down his models a pick a place for those presses.
http://biz.yahoo.com/rb/031231/economy_mortgages_7.html
Belgian
(12/31/03; 06:32:53MT - usagold.com msg#: 114385)
@Druid
The Gold Trail link (A/FOA) you posted...Could Libya soon become *another* privileged oil-reserve-state, qualifying for Gold-inflow for oil-outflow ?
Mr Gresham
(12/31/03; 05:21:17MT - usagold.com msg#: 114384)
Uncle Billy & J.M. Keynes
Images of two famous personalities come to mind, as I drift toward bed (yawn):
Imagining Congress, when ultimately asked "Where did all our Social Security/retirement money go?" I get the picture of the doddering, drunk Uncle Billy from "It's a Wonderful Life" losing all of the bank's cash as he goes to deposit it at Potter's bank.
And, R Powell, Solomon, Waverider, physicalman, others -- silver's move has me thinking of an answer to Keynes' great old witticism: "Markets can remain irrational longer than you can remain insolvent." (Boy, haven't I been lashed by some of that this year!)
"Not if you're holding unleveraged physical."
(And my take, from all I have gleaned from ski and Butler and others, is that they see the suppression's resulting leverage in physical silver as moving its performance closer to the leverage you would expect in the silver equities, than is the parallel case with gold.)
(One of the risks of gold equities -- governmental intrusion into the flow of profits to owners -- I read as being more likely than with silver equities, a more obscure and so far off-the-radar market. So, I see a 2 x 2 grid between the physical and equities of gold and silver, with these factors improving the returns on physical in both relative to the greater leverage in equities you would expect under a stable financial system of booking profits and paying dividends. Risk/reward calls for respecting a greater allocation to physical, and then venturing out to equities. A systemic breakdown which denies profits from mining will be likely compensated by profits in physical.)
(You just want to be sure you don't get "dematerialized". Beam me up, Ari... ;)
Caradoc
(12/31/03; 04:16:53MT - usagold.com msg#: 114383)
Hall of Fame nomination
Mr Gresham's post 114381 belongs in the Hall of Fame. I've already pasted the text into emails sent to friends and relatives.
Superb insights, Mr Gresham!
Caradoc
Caradoc
(12/31/03; 04:00:35MT - usagold.com msg#: 114382)
Mortgage?
Lady Liberty: Instinct would say to pay off the house. But... since there's only enough to pay it down by a fraction... since you'll still be making house payments anyway... and since those ARE retirement dollars rather than "house dollars," I lean in a different direction. Specifically, take advantage of the fact that the next several months offer the combination of a collapsing dollar and artificially low short-term interest rates.
Most adjustable-rate mortgages will be heading north despite "re-election special" short term rates, but a so-called line-of-credit or equity line (usually employed a second mortgage) can serve admirably at least between now and some time after November to carry your whole mortgage. Schwab, for example, is doing these at 3/4% less than prime which amounts to 3 1/4% interest. Payments are interest only and should be low enough to reduce your payments by hundreds of dollars per month while you put your retirement dollars into some mix of silver and gold numismatic coins. For example, MS-64 Saint Gaudens and MS-65 Peace dollars.
With any luck. a handful or two of Saints might pay off the whole mortgage next November.
Just how I see it....
Caradoc
Mr Gresham
(12/31/03; 03:52:42MT - usagold.com msg#: 114381)
Thoughts on Savings, and Social Security
I updated my own long-term savings plan today. (Plan #1, though modest, was right on target after 15 years. A lot of luck in there -- and some good company -- helped me ride out some bad times.)
To update was simple, but the conclusion sobering.
I pick a target, figure out my monthly increase in net worth necessary to reach it, and set up a tracking system to look at my progress every few months. Of course the target is a guesswork at how I'll want to live decades from now, and leaves out the unknowable interim events, But -- you have to make a guess at SOMETHING -- and it gives me a prompt for how hard I need to work now, and how frugal I have to be with my earnings. (Plus how to factor in my investment results -- to let me relax somewhat, or intensify my efforts.)
(I'm also easy, at least for now, with my own slippages. That monthly goal is going to be a tough one, and I may need time to get used to it. It's not a prescription for panic, just for ramping up to some smarter efforts.)
Social Security is not in my plan, and like most people today say, it will be a bonus if it happens. The problem is, most of them really don't have anything else going besides SS and they really ARE counting on it. For most, it would be like having a $200,000 annuity going for them, and their personal savings are something like $50,000 and their home equity.
It's just impossible to believe that a $200,000 potential payable nut really can exist anywhere, in protected form, for more than the small percentage of our CURRENT retirees, let alone an onslaught of future ones. The Ponzi scheme has run too long already.
I wonder how the de facto Social Security default will play out. For political PR purposes, of course, the program will be kept propped up on the podium, like Brezhnev toward the end.
But cuts effectively will happen. And politicians will make career moves to slide down the middle of cloaking financial reality in PR illusion to "Save Social Security." But the Fed Gov will be largely insolvent by that time, bleeding from a thousand other debt obligations.
Which aspect of elderly income support will be compromised first?
My guess is that the COLAs will bear most of the loss. It was their adoption in the early 70s under Nixon that put the "trust" fund in the jeopardy it reached a decade later, when the tax rate had to be raised to its current 15.3%.
A flat, frozen paycheck for life, like the old job pension checks that were inflated away in the 70s. A likely result, given government finances and the limits on taxability of the labor force.
Expect this to be accompanied by a blitzkrieg campaign to BLAME INFLATION on outside forces (Arabs? Chinese? Euros?) and not our own Fed and Gov. They need to lose at least half the real SS obligation level before anyone notices enough to forcefully demand COLAs again.
I don't know if most people know the investment comparison on SS "contributions", by employee and employer. For the low-income person who retired 20 years ago, it has been like holding T-bonds (well, not quite as good as) with annuity-like returns something like 6%, probably all tax-free.
For the high-income earners of that time, maybe a 3% return, and that taxed down to 2%.
Today's Boomer retirees will probably see the 3% return for the low-incomers, and a flat "return of capital paid in" dollar-for-dollar for the high-earners. (Taxed, of course.)
Gen-Xers? Well, they're on to it. They say they expect zero, but the PR machine will be at work to show them it is "doing something for them, too." Probably a small minimum flat benefit?
A lot will be made of increasing longevity (that could reverse quickly, however -- as it did in post-Soviet Russia as retirees were left with defaulted pensions), in order to raise the age for each benefit level. And, by 2012, when they find me and a few million others running to grab the reduced benefit at age 62, they'll panic over the drain on the Federal cash flow. Wouldn't be surprised at a sudden age raise, or another means test.
I also can't imagine millions of elderly being allowed to "pass their golden years in dignity" in the homes in which they've built up some spendable equity. In other words, I think they'll be forced to sell (or take reverse-annuity mortgages -- selling on the installment plan) in order to survive. Plus take in boarders, or kids, or -- like one 84-year-old woman I know -- party animal grandkids. Sheesh!
Playing the inter-generational battle will be some politicians' forte, as well. I wonder if AARP has strategists at this point talking about how to counter that? Politically, they would talk a good "social contract for the good of all generations" line, while holding what they can for their constituency.
Statesmenlike conduct would call instead for them becoming "good parents" to society and maintaining the best elements of SS while equalizing the lifetime returns of ALL contributors to the fund. And sequestering it from the rest of US Gov finances.
Our role in all of this? I'm not one who thinks we need to promote the role of gold. I think that is for INDIVIDUALS to arrive at, one by one, on their own. Gold is real savings, which remains after all other schemes fold up and leave town.
Society cannot benefit AS A WHOLE by adopting gold saving. Only individuals can, by their own astute decision-making. One individual will get the Eagle the other does not. The Eagle will exist, in one hand or another, no matter how we try to teach common-sense economic saving. And US Americans will not reach for their share, no matter what we say, before the rest of the world has beaten them to the lion's share. In other words, the price will be high before we stop the bleeding on these shores.
But the sudden onset of panic over SS (the great narcotic against self-saving) and the realization of how small an individual's reliable savings truly are will lead to those individuals cashing in what they can of the other plans and tucking away those few small gold holdings, in hopes that the high price they've paid will still be doubled or tripled before they need to cash it in, so they may eat.
That hope, and the hope that their kids will still take them in.
Those last-ditch efforts by them will help re-price our "too-early" efforts at the same necessary saving. We may have enough extra to help a few others, but perhaps we'd do better to collectively endow a Mises chair at a few universities?
The decline of life's working energies into death is the ultimate Fundamental, and everyone will intersect that curve somewhere. To be helpless without savings was perhaps the ultimate preventable fear in all human history. It was certainly paid attention to as a natural part of life. Among other choices, and gambles.
Our fiat and social "safety-net" system has short-circuited and WASTED the fruitful years that should have gone to meeting that fundamental. The consequences may be tragic for some, but I choose to hope that many will adopt simpler living with a sense of relief, and a view toward a human future more sustainable than the time we have just lived through.
In other words, people will reap what they have sown, mostly. It's just sad that some will find that they have bought, and tended, bad seed, all these years...
Mr Gresham
(12/31/03; 02:43:33MT - usagold.com msg#: 114380)
Triggers
http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y&Interval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10
Gandalf's USD link above -- pretty dramatic, and even more so since he posted it.
I wonder if there are various thresholds in currency swap or other contracts -- big ones between big institutions internationally -- that call for a re-pricing, or basically a margin call, or a cancellation, if the USD drops at an unexpected rate?
How can the Fed back up such contracts with its own product -- US Dollars -- when producing more of them only depreciates the lot of them? It can rush a few spare defenders to onee breached wall, but the enemy sweeps in at a dozen other openings. Only a matter of time...
Mr Gresham
(12/31/03; 01:52:02MT - usagold.com msg#: 114379)
ski!
Congrats on your widespread publication -- it was an exciting read on FSO and it'll be exciting to see the additions to it as we go forward.
One of the most COMPLETE expositions of an investment argument we'll ever see. (But sort of like Ted's been hammering on, it's a slam-dunk decision so examples just kind of throw themselves in front of you ;).
ski
(12/31/03; 01:47:11MT - usagold.com msg#: 114378)
Silver over $6 ......
R. Powell .... been here all this time! Watching the silver price over the past 5 months is a lot like watching an EKG monitor hooked up to one of your best friends. I'm sure my pulse went up when I saw it pass $6 yesterday evening. Celebrated by taking the wife out for a good movie!
So, why has silver performed so well? Several ideas come to mind in no particular order.
1. Deliverable COMEX supplies are very, very low with a lot of physical delivery taken in December.
2. There is a good chance that Eliot Spitzer and company may me watching the shorts this time (as mentioned by another poster here).
3. Barrick and other silver hedgers, who have learned their lesson from gold, may be liquidating.
4. Central Fund of Canada has ordered a nice chunk of silver bullion for the fund to sit on. (Incidently, this represents INVESTMENT silver versus industrial silver .... a very important distinction and fundamental turning point in silver demand.)
5. At the recent San Francisco gold show, numerous speakers used "gold and silver" in the same sentence ... a departure from past presentations.
6. Ted Butler recently pointed out that if you expect larger % gains in silver versus gold ..... you should be buying silver. Although this is not "rocket science", it is my experience that many investors NEED TO BE TOLD WHAT TO DO by a recognized authority.
7. Some high powered financial publications in India have very recently done feature articles on silver.
...........................
"Approaching Forces for Higher Silver Prices"
79. (added 12-18-03) (first time in print!) One of the "sciences" within the investment world is the study of "cycles". Personally, I think "cycle studies" are usually nothing more than a fancy way of predicting the past. However, some of what Bob Prechter says about cycles is positively "spot on". Particularly his idea that PEOPLE LEARN FROM THE PAST CYCLE AND APPLY IT TO THE NEXT CYCLE. This implies that because silver went to $50, gold to $800 and platinum to $1,000 in the last cycle, people will more easily believe that the metals can equal or exceed these levels in the present cycle. Consequently, the investing public will act on the "common knowledge" that they "gained" from the past, keeping demand strong right through the old highs.
regards to all who contribute here....
Gold Standard
(12/31/03; 01:31:33MT - usagold.com msg#: 114377)
@ 1340cc
Hmm, sounds like a slow-revving twin to me.
I have a number of black painted, very, very ugly 5kg doorstops. (Ag rather than Au, unfortunately!)
However, a brick wall would be nice!
Cheers! GS
Druid
(12/31/03; 00:58:30MT - usagold.com msg#: 114376)
Lady Liberty (12/30/03; 23:26:50MT - usagold.com msg#: 114368)
http://www.usagold.com/GoldTrail/archives/ANOTHER1.html
Druid: Welcome Lady Liberty to the best think tank on the Internet as it pertains too, among other topics, the topic of "free gold." World events as they pertain to finance, economics, and geo-politics...are picking up speed so buckle up because it's turning out to be a bumpy ride. As you keep up with the current discussion, might I encourage you to click on the posted URL as a foundation read on the topic of free gold. This foundation read might be a great aid in providing a backdrop against any possible confusion that you might encounter when coming across posts that are weighted towards gold ownership in the form of various securities (paper gold)as opposed to outright gold bullion ownership or a combination of both.
It's an exciting discussion and a wonderful crosscurrent of "thoughts." Good luck with your investment decisions and enjoy the chat.
Liberty Head
(12/31/03; 00:57:36MT - usagold.com msg#: 114375)
Hide The Gold
1340CC,
I like your idea for the silver lined flower bed.
I hope noone minds if I have a little fun. Continuing with that theme, perhaps add some nice wind chimes made from Philharmonics. Hide a few more coin rolls inside the lawn flamingos and a knome pushing a wheelbarrow. Toss an assortment of bullion coins in a Statue of David fountain as well. At that point, most folks would be afraid to go anywhere near it. :-)
Best Wishes
Belgian
(12/31/03; 00:44:42MT - usagold.com msg#: 114374)
Re :
The €-$ exchange rate going back to 1,30-1,40 is "nothing" extra-ordinary ! Simply back to the 1993-1995 period.
It is about time that all those "so-called" expert- analysts, start to see and...finally, understand the completely different (opposite) relationship of the dollar and the euro, vis a vis GOLD ! But this remains impossible for as long as a dollar-centric, tunnel-vision is on the order of the day. Amen.
Libya/Bush/Blair : Theaterical infotainment.
Oil for dollars or euro : Dollars are "offered" for oil and soon (or later), oil will "demand" (golden)euro ! Quite a nuance.
Let's keep it very simple, dear forumers : A dollar is a military fiat and a euro will become a golden fiat. Gold wins all wars !
1340cc
(12/31/03; 00:22:04MT - usagold.com msg#: 114373)
Lady Liberty post #114368
Hidy holds. Go to the next gun show in your area. There will be someone there selling "survival" books and books on how to hide something in plain sight. Think air ducts, the area under your kitchen cabnits, hollow core doors, etc.
I have been thinking of painting my 100oz. silver "bricks" red and making a flower bed out of them. ;-)
Goldilox
(12/31/03; 00:13:54MT - usagold.com msg#: 114372)
Yen Intervention at all-time high
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1071251836223&p=1012571727201
snippit:
Japanese currency intervention reached its highest level on record in 2003 as the weakening dollar threatened to impair the competitiveness of the country's exporters.
The finance ministry spent ¥20,057bn on intervention this year, dwarfing the recent high of ¥7,641bn in 1999, monthly figures released on Tuesday showed.
Although the yen has appreciated by about 10 per cent against the dollar since January to stand at ¥106.94 on Tuesday, intervention has slowed its rise and kept Japan's export-dependent economy on a recovery tack. The government's selling of yen and buying of dollars is likely to continue on a massive scale in 2004 as the US currency is forecast to remain weak. In the past 10 days the finance ministry has taken preparatory steps by replenishing the currency intervention funds it has drained this year.
The finance ministry said that in the new year it would raise the amount it can borrow for intervention until March by ¥21,000bn to ¥100,000bn and by ¥61,000bn to ¥140,000bn for the year starting in April. The increase is almost equal to the size of the US current account deficit.
Goldilox:
Wouldn't it be more fun if they just came on over and lost the money at an Indian Casino? It would accomplish about the same result.
Goldilox
(12/31/03; 00:08:40MT - usagold.com msg#: 114371)
China: The New Fulcrum Of The Global Economy?
http://www.prudentbear.com/internationalperspective.asp
snippit:
"But if the attempt is to achieve covert devaluation in response to weakening domestic conditions, then such a move makes much more political and economic sense. If this is indeed the road China is choosing to go down, it will certainly reduce its ability to continue purchasing US assets at the rate at which it has been doing over the past few years, which has perilous implications for the dollar exchange rate. Indeed, one would envisage similarly smaller inducements to purchase US assets on the part of all of Asia, since most would almost certainly respond to a Chinese devaluation (covert or overt) by a comparable competitive currency devaluation – a great backdrop for gold perhaps, but certainly not in the interests of global economic stability.
Today, China uses the peg to recycle massive dollars back into Treasuries to the US, which enables it to continually expand its capital expenditure to overproduce goods that the world doesn't need and which the Americans can only buy on credit. It has become an increasingly important, albeit fundamentally unhealthy, dynamic in terms of engendering the current blow off witnessed in many areas, notably commodities. If the Chinese do embrace a gradual de-linkage against the dollar, then there will be a risk of at least a short-term downdraft in growth in East Asia, even as Japan and Europe will be struggling to a greater degree. Were a financial accident in the US to arrive at the same moment -- always a possibility -- then one could easily envisage a synchronised global growth stall. This is not what the doctor ordered in a world already characterised by massive manufacturing overcapacity and virtually no pricing leverage, but it may be (given China's underlying financial fragility) the means by which the Chinese seek to devalue their way out of disaster. How China copes with its ongoing financial problems, and the corresponding global policy response, are likely to be major themes emerging in 2004."
Goldilox:
Marshall Auerback's latest International Perspective over at PruBear. It's an interesting risk analysis of the depeg issue.
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