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ARCHIVED DISCUSSION FROM 12/3/1999 All times are U.S. Mountain Time View Yesterday's Discussion. Bonedaddy (12/3/99; 23:58:34MDT - Msg ID:20214) Hey, Sippin! Bullseye with that last post! And think also about this: The Wizard of FED has only been tweaking in .25% interest rate hikes because they don't want to be accused being the reason the market crashed. If Y2K doesn't cause a market crash and make all those bad old programmers into a tidy corral of scape goats, Big Al will surely have turn up the heat and pop this balloon some time in the first quarter of 00. Bonedaddy (12/3/99; 23:45:36MDT - Msg ID:20213) Gold is the money you get to keep It must seem, to many of you, that the price of gold should have risen by now. I assure you that you are quite correct. If this were any normal situation,it would have risen by now. The current low price is a result of a great many misconceptions and perhaps a few manipulations. In reality the current gold price is just a mistake. It really is no different than the cash register ringing up the wrong sale price on a valuable piece of jewelry. LATER IT WILL NOT MATTER WHY THE PRICE WAS LOW. IT WILL ONLY MATTER WHO HAD THE WISDOM TO PERCEIVE THE OPPORTUNITY AND THE COURAGE TO ACT ON THAT CONVICTION. But to the very, very, select few who do recognize this opportunity, your wisdom and patience will be rewarded. American popular culture is filled with myths. So we believe that the stock market can grow at 28%, while the economy grows at 2.5%. (What is the stock market if not a proxy for the economy?) The hypnotized will respond that the difference is in productivity. We'll see.The decision to buy gold should not be based on predicitons of $30,000 an ounce gold. Don't you see, if gold reaches $30k, bread may be $100 a loaf. No, you don't aquire gold to become rich! If you can afford to aquire gold right now, you are already are rich! When the rest of our so called "wealth" is distroyed in a credit contraction or currency collapse, we will still have the GOLD! Only then will many of you see how truly rich we once were. Sippin (12/3/99; 23:36:43MDT - Msg ID:20212) Rolling the dice Just an observer here. I thought it was time I spoke up to what I sense is a monumental crap roll by the american public and others on this stock market frenzy.I have a sense that there are those on this board along with the population at large that have little doubt in their minds that the 2000 rollover will mean very little in disturbance to the world around them. It may be so, that the computer glitches can be solved in due time and everyone will survive problems that will occur, dispite some inconveniences. This is as rosy a picture as you can find. ( and I mean all of the experts, both pro and con)What fails to be said is that the financial markets will be the most affected, not the least, in even the most rosiest of all predictions. If you think about it, the inconviences of all the other scenarios, water, power, heat, food, etc., there are ways around it and preparedness to soften the blow. But the same can not be said about financial matters. ( Unless you have a diversification in precious metals)There are no government agencies or official guidelines to prepare for anything that could happen to the financial markets. I don't care if the odds are 90% that nothing will happen over the next few months or so on the 2000 rollover. That still leaves 10% possibility that the stock market can very well take a major hit. It's almost like covering black and red on the roulette wheel and being equally diversified to prevent any way to lose. The only problem is that the 0 or 00 has a way of cleaning house now and then. In my view, the stockmarket is overblown with crap shooters believing that they have the system figured out and there is no way to lose. Blindly they see the 2000 rollover as no threat at all. In fact a 0% threat, at that. Those that are playing the stockmarket game may be right and their porfolios may survive and even prosper more after Jan.1st, but they are letting it all ride in the greatest crapshoot mankind has ever witnessed. SHIFTY (12/3/99; 23:21:58MDT - Msg ID:20211) THC In the case of a war,I think Wall Street would offer a newIPO WAR.COM . With this market the money would come by the train load. THC (12/3/99; 23:04:31MDT - Msg ID:20210) To Oro regarding Future of US and Gold/Dollar Scenarios Oro, thank you again for the very insightful response."All roads lead away from Rome – but only after everyone has arrived at Rome!" (ggg)Once again, I agree strongly with your long term view of the weakening trend of US influence. As has been documented so well by Richard Maybury, the US military is being forced to perform increasingly numerous overseas missions, with a shrinking military resource base. As a result, the some say that the US military is stretched to the limit, and could only fight up to wars in 2 theaters…….a war occurring in a 3rd theatre would be beyond the current strength for conventional warfare.I also agree that the US has no interest in actually having a "hot war" with Japan, Europe, or the pro-West ME regimes. However, I think it will most likely take many years if not decades for the "Roman legions" to go back to Rome. They will certainly not give up their wonderful bases in Japan and elsewhere because the local politicians "politely ask them to go home."It does appear that the US international influence, the dollar, and Wall Street are at their zenith, and that some time in the near future then must begin a long downward slide.Now, before we digress to far, I would like to confirm your outlook on our proposed gold bull market/dollar bear market. Do you see the decline in the dollar/ascension of gold to be caused/triggered primarily by natural market forces (supply/demand gap no longer filled by CB sales/loans), or do you think it will be driven by some sort of long-range plan by Europe and/or the ME?If you do see Europe favoring stronger gold, how will they avoid becoming a repeat of the US? In other words, a fiat currency (Euro) with large "gold reserves" which provide "psychological backing" but are not actually available to the marketplace.And, if the ME is tired of being paid for "hard goods" with "paper money", why would they select another fiat currency such as the Euro instead of asking for payment directly in gold or silver?Looking forward to hearing from you!!!!!!Have a great weekend,THC SHIFTY (12/3/99; 22:58:52MDT - Msg ID:20209) try this one http://www.spotlight.org/ Wall Street story SHIFTY (12/3/99; 22:55:48MDT - Msg ID:20208) bad link Will check again. SHIFTY (12/3/99; 22:53:39MDT - Msg ID:20207) Peter Asher http://www.spotlight.org/nov_16/Wall/wall.html Thank you for the past post#. I will check it out.I just found this article about Wall Street Coruption Scandal. See link TownCrier (12/3/99; 22:52:33MDT - Msg ID:20206) Sir Lafisrap!! >>>>Best sentence ever posted at at this forum: "Freedom is a fine thing, especially when you realize you have it." It was one of Town Crier's, from a day or two ago.<<<<<A giant thank you! Just the kind of warmth needed to defeat the chilling night air...as though you threw another log on the fire out here in this old stone tower. Cheers! To you and to all! TownCrier (12/3/99; 22:45:13MDT - Msg ID:20205) Final thought from The Tower for the evening...the air is getting cold up here There's been a lot of talk about the possible identity of FOA and ANOTHER and their motives. I have no notion of their identity, and in a conversation with MK he said frankly he didn't either. If you've ever called to do business with Mike or visited him at his office, you'd take him at his word. To save some of you some time with the he/she business, I distinctly remember FOA making a passing reference to a wife, and that he is from the USA (whether now or originally, I don't recall.) I'm as intrigued as the next guy, but these discussions should focus on sluething out the various intrigues of gold rather than the identities or moral character of other posters. MK has already demonstrated the level of tolerance for personal attacks. An artful individual can surely find a way to challenge any given idea without casting disparagement or shame upon the source. Cosider this forum as good training ground for participation in a civil world.Here's some food for thought. Imagine taking a trip seven years ago from your home in Istanbul to do a little recreating on the shores of the Black Sea. While there, you encounter a fatherly old figure of a man fishing with nary a care in the world. He motions you over and engages you in conversation. He asks if you've ever given much thought to gold. You search your brain, but only manage to say with any certainty that you were aware that gold was currenty 3,000 Turkish Lire per ounce. As he stands there fishing, he calmly relates a tale of history and of the future. He mentions some government policy and some international institutions that you'd never even heard of, let alone thought of. He tells you that in your eyes, gold was destined to look like the best of all possible "investments" although it was itself nothing more than the honest wages of your own past labor. He quotes some monetary value in terms of Lire to help you relate, but the value was so high you instantly dismiss him as a pleasant but raving fool. As you continue your vacation, his words hound you...or should I say it is your own ignorance that hounds you. You can't believe that in the past you had never given much thought to something as your own money, and had never heard of or had little knowledge of the various prominant institutions he mentioned. You realize you had been living on auto pilot, and really weren't positioned to control your own destiny as well as your own responsible instinct told you that you should. So, you do some research, and you get some gold...prompted by that old fisherman, but based on your own conclusions. In fact, you do remember one thing he said quite clearly. Even though his steadfast claim was that gold was destined for incomprehensible values, he warned you to buy gold only in accord with your ability to understand the tale he told. And sure enough, the more you reserched on your own, the more you became comfortable with the shifting daily price of gold, and the more gold you desired to hold over your previous paper wealth. The more you came to know, the happier you were that gold was only 3,000 lire per ounce...though yu still harbored some rational reservations about gold ever rising to those ridiculous figures quoted by that old man by the sea.Flash forward---gold in Turkey today is 146,325,000 lire per ounce. You have never gone hungry or worried about the future...unlike your neighbors. Well, you tried to tell them only a short seven years ago when gold first moved from 3,000 to 3,500, but they laughed in your face when it fell back to 3,300. You've since moved discreetly to a new neighborhood. These numbers are true; only the names have been changed to protect the innocent. Lafisrap (12/3/99; 22:42:54MDT - Msg ID:20204) Various Best sentence ever posted at at this forum:"Freedom is a fine thing, especially when you realize you have it."It was one of Town Crier's, from a day or two ago. About Stranger being gone, I don't like it, and I am unable to form my own opinion as to the justice of him having his posting privilege removed, because the purportedly offending post has also been removed. I want Stranger back.And I still am hoping for gold at $275 per ounce, because that is the price at which I have decided to make my next big physical purchase; however, I am feeling as if the additional cost may be small enough to justify buying now. Perhaps I will wait a few more days. I may be sorry.I sure do need gold to go to $30,000, but later, after I get some more.Lafisrap Peter Asher (12/3/99; 22:28:45MDT - Msg ID:20203) Shifty Best one is the post composite on 9/5/99 msg #12858 Peter Asher (12/3/99; 22:19:56MDT - Msg ID:20202) Typo Same, not sake Peter Asher (12/3/99; 22:18:58MDT - Msg ID:20201) EG A crashing Dow and a beaten down POG, can not occupy the sake economy at the same time SHIFTY (12/3/99; 22:15:27MDT - Msg ID:20200) Peter Asher I was not sure. Thank you. Peter Asher (12/3/99; 22:13:43MDT - Msg ID:20199) In-credible Floor traders said the computer screens went blank at about 1020 ET."Computers were down for some reason," one trader said. "The pricesweren't going up." <<<<Put that one along side of "Let them eat cake"*** Crossroads (12/3/99; 22:13:10MDT - Msg ID:20198) Take Him back? Dear Megatron,You said, "Let the Stranger come back as long as he agrees to play nice."Regarding your comments about Strangers behavior? I thought you might like to know, this is not his 1st offensive attack on a fellow poster. MK thanks for the discernment, for I grew weary of the constant antagonism from the professional.FOA, I just want you to know that I look forward to your posts.Town Crier, Regarding post #20179…Good Job!ET, post # 20175….my thinking exactly!Farfel, jump right on the ol bandwagon….#20190…that's just what they want us to do! elevator guy (12/3/99; 22:10:06MDT - Msg ID:20197) Farfel's last post. Very insightful, Mr Farfel. Very realistic and pragmatic.You know, the gold market is just so absolutely stepped on by the vested interests of the banking/industrial establishment, that I really wonder why we have any hope of transparency at all. Their manipulation is brazen, calculated, and shameless. I pray for GATA like I would pray for a little scrawny David going out against the unbeatable Goliath, without armor on, with nothing but his little sling.Its quite disheartening to see how powerful they are. I think it was FOA, or was it Another, that talked about "weak hands", that will capitulate, and give up their gold.When we see just how enormous the issue of depressing the POG is, it is overwhelming, and we find no solace or quarter with idealism, or truth. We tend to give in to what we see as a greater power, and bow low to the evil king of fiat.Gold may be truth on earth, a litmus test of b.s., a connection with holy things above, ok, it may be all that. But if the DOW does not crash, and gold remains successfully beaten down, gold is no more useful than fiat currency. Maybe less useful, because you will not buy a suit with it, or bread. It can only sit in the safe, and re-assure you of its importance with its true yellow hue. I would like to see a world where truth and justice reign supreme. I would like to see our paper currency tied to gold, so that the rewards of our labor are not stolen by those who print paper.But for the time being, it does not look like this world I dream of will come about any time soon. BS reigns supreme. Everyone is buying tulips like there is no tomorrow. The dollar is on life support, but no one knows it, like a long dead leader propped up in front of the camera. And the tape of his voice plays the same party line over and over. "There is no inflation. Everything is dandy. Your government cares about you"OK, maybe you can sense I'm a little despondent. I guess I'm coming to grips with a rush of greed and pride that came over me when my options increased 2000%. I've been waiting for gold to take off again, only to see it hammered by the powers that be, like an innocent getting slaughtered by an oppressor. And thats exactly what it is about. The oppressor maintains control of his rip-off fiat currency system by bashing gold down. What an unholy thing it is indeed. It slike they have to quash the truth of gold, for it reveals their dastardly acts, like the light of day reveals the work of the theif. Peter Asher (12/3/99; 22:05:59MDT - Msg ID:20196) Shifty It already went!unfortunately we do not have e "Thread Archive" and the Forum probably equals 5000 printed pages by now. I think I and some others had some disscusion on this recently though, I'll take a look in my own files Peter Asher (12/3/99; 22:00:26MDT - Msg ID:20195) Town Crier's #20179 A very much needed reminder for everyone. Continues the thread of the "Values" contest in the HOF.In the euphoria of the Washington announcement rally, most of us got carried away by the excitement of the same kind of "Something for nothing" wealth transfer, that all these stock traders are achieving. Those posters who are upset that their speculative investing in Gold has been a losing proposition should take a hard look at the fact that EVERY profit on 'buy low - sell high' has a winner and a loser in the quantitative whole.Holding Gold as a storage of Value is an ancient and noble pursuit. Profiting by wealth transfer vias may be necessary in a society that mostly underpays true productive endeavor, but that activity falls short of Ayn Rand's prime directive "An honest man is one who knows he cannot consume more than he produces."Profiting by non-productive wealth transfer in this society is necessary to survive, but let's not lose sight of the possibility of a better world. SHIFTY (12/3/99; 21:58:52MDT - Msg ID:20194) Dumb question? If we see the stockmarket crash, were does the money go? TownCrier (12/3/99; 21:53:20MDT - Msg ID:20193) The GOLDEN VIEW from The Tower The Labor Department's employment report today failed, as usual, to signal an imminent end-of-the-world through alien invasions or asteroid strike, and the tickertape parade on Wall Street commenced immediately upon hearing the non-news. But seriously, what the Labor Department reported was that nonfarm payrolls rose only slightly more than expected, the unemployment rate was steady, and average hourly earning rose...but less than was expected. Investors naturally threw caution to the wind and rushed headlong into the stock markets. Those who thought it prudent to step aside did so by dabbling in bonds (lifting the long bond by 24/32 in price at 6.257%).Investors, it would seem, live these days from moment to moment with no personal or institutional memory of what has transpired in the past, losing all perspective and appreciation for the big picture. Lightning may strike, they say...but not here. That's right. We all know that nobody ever falls off the gravy train, and that baby can keep on rollin' to the horizon. <sarcasm>The DOW climbed and impressive 247.12 points (+2.24%), but new 52-week lows still outnumbered the new highs by 185 to 98. The Nasdaq Composite reached a new record with a 2% gain, but oddly enough, advancing issues finished at a dead tie with declining issues. The high fliyers, however, did beat those in the dumps by 269 to 85. GOLDLiveInvestor's Forum hosted an interview with U.S. Rep Ron Paul (and others) yesterday to discuss various issues surrounding the gold market. To paraphase some of Congressman Paul's comments, he said early on that 'gold is a natural money.' He said he has had conversations with Alan Greenspan and many other bankers in regard to gold. The bankers without exception 'cling to their gold reserves because it is the only real money they hold.' It was noted by the panel that none other than the brilliant mind of Aristotle had once spelled out the necessary characteristics of money with the conclusion that gold fits them all...reiterating that gold is a natural money.Rep. Paul said that in time the Washington Agreement would be seen as 'a seminal event that will lead to higher [gold] prices.' He said he could assure us that the government's solution to problems has been to print money, and they they have printed 'alot of it.' He said that we [as a gold market] are behind in the discounting of the past dollar-creation...that there has been decades of such creation out there and the discounting [falling dollar/rising gold] 'could happen at any time.' On the trade imbalance with other countries, he indicated that these countries would be well-advised to 'swap their excess dollars for the stability of gold.'In the gold markets today, Bridge News was told by Leonard Kaplan, chief bullion dealer at LFG Bullion Services, that gold is still in a follow-through from its recent fall, noting that "with equity markets screaming higher, capital is flowing into equities and out of metals." Bridge added that the strong dollar was adding to the price fall.The bottom line is: "Hey, don't blame the gold. Give thanks (if you're an American) to have a strong dollar to use to your advantage." --quote from a visitor to The TowerFWN offered these comments from David Meger on this strong dollar issue:"It's technical liquidation and there's not much else to say," notedDavid Meger, senior metals analyst at Alaron Trading, pointing out thatthere was "no physical demand in the spot market last night."He said that the "currency situation" continues to be a problem forprecious metals, with the dollar's strength "taking away demandpotential."The dollar's jump this week against other currencies, with theexception of the yen, has made gold expensive, particularly in euro andAustralian dollar terms.The dollar has recently reached parity with the euro, closing today at $1.0020 per euro. A year ago, early optimism for the soon-to-be-born single currency drove the price up from the ECU level in the ballpark of $1.05 to official introdution at the exchange equivalent of $1.18. ECB President Wim Duisenberg had these thoughts as reported second hand by Bridge News."ECB President Duisenberg told the Wall Street Journal that the euro's weakness was a disappointment, but not a cause for worry and that it wasunlikely to spark intervention. He said that the ECB would "never" interveneusing its own money to change the value of the yen, unless the US agreed topartake in the effort."That's about as unequivocal a statement as anyone could hope for. And while we're quoting sources, here's another brief but unrelated story that might be of passing interest for our Y2K watchers...CSCE, NYCE reopen after computer glitch forces trading haltBy Gloria Gonzalez, Bridge NewsNew York--Dec 3--Futures trading on the Coffee, Sugar, Cocoa Exchangeand the New York Cotton Exchange has reopened after technical difficultiesforced trade to be suspended for more than one hour.A spokesman for the New York Board of Trade said a problem with theprice reporting system forced trade to be suspended. "I just know thatthere was a problem with the pricing systems," said Terry Gordon, a NYBOTspokesman. "I don't know exactly what went wrong."Floor traders said the computer screens went blank at about 1020 ET."Computers were down for some reason," one trader said. "The pricesweren't going up."***(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:http://www.futuresource.com/internet.shtmlNo further reproduction without written permission from FWN.---So with the dollar and equities markets in overdrive, gold prices suffered accordingly, and spot was last qoted in NY at $279.30, down $5.40. Gold derivatives traders at COMEX watched as February futures were sold down $5 to settle at $282.10. One-month gold lease rates belied the story behind the soft price by climbing 0.15 percent to 1.9288%.Open interest on the COMEX December gold futures fell by 3103 to 2,982 positions in yesterday's derivative trading. Delivery intentions this morning totaled 229 contracts (22,900 ounces), bringing the December total to 6,258 contracts to be settled with delivery before the month comes to a close...that 625,800 ounces. Likely in response to that requirement, COMEX vault action saw 32,118 ounces arrive to be counted among the ranks of Registered gold inventory.OILJanuary crude futures had a sideways session ahead of a scheduled vote by the UN Security Council on whether to extend the Iraq 1-week oil-for-food deal. A technicality really...Iraq's UN ambassador Hasan said Iraq would reject a brief extension. After the trading day ended, the UN did in fact vote to extend the deal for one week. Crude settled up 1¢ at $25.81.BACK to GOLDWe'll repeat the bottom line, now that we're here at the bottom: "Hey, don't blame the gold [for the fall in price]. Give thanks (if you're an American) to have a strong dollar to use to your advantage." We'll throw in the added thought that it is up to you to portect what you've worked for...such as through the 'stability of gold' in the words of Conressman Paul. The dollar itself has a weak master and too many would-be assassins. Again,even the big bankers admit that gold is the only real money they hold. And that's the view from here...after the close. tg (12/3/99; 21:51:10MDT - Msg ID:20192) FOA, STRANGER & OTHERS I've been lurking the forum much too long. I've read brilliant insights and theories of many on the this forum. Whether those insights and theories come to surface or not only time will tell.However I seem to sense that sometimes to much value is given to FOAs opinion. He is given an almost religious overture. This is by no means any fault of his own but rather that of those on this forum who worship his every word. They do so because he gives them hope.However reality should be put in perspective. Even though I too find his insights and theories stimulating and entertaining, one should remember that to date he has been wrong in many of his writings and one should question that fact.Though many may discredit and abuse S.J Kaplan, he in my mind has a better track record. His writings may be unemotive and cold, as science and statistics often are, and nowhere near as inspiring as that of FOA, but reality is reality. THX-1138 (12/3/99; 21:44:22MDT - Msg ID:20191) Farfel you may be right. I think your right about the Gold Bull being dead.For now that is.Just got my Mutual Funds magazine in the mail today.Front cover has a giant US Gold Eagle on it and the bold headlines:GREAT INVESTMENT IDEAS FOR 2000. WHERE TO MAKE MONEY IN THE YEAR AHEAD.Almost no mention in the magazine about gold. Nothing about Gold funds or anything. Until the last page.Article reads:Gold's Glow GoesWas the recent gold rally a flash in the pan?Bill Martin of American Century Global Gold says yes; the end was hastened by gold producer, who pessimistically sold short.But there's more to this story, says Caesar Bryan of Gabelli Gold."You have an amazing technical situation where people have shorted and shorted and can't pay it back," he says."Some 10,000 tons of gold has been lent by central banks.It must be returned. But how do they move gold from around someone's neck back to the central bank vault?"They buy it, Brian says, and prices rise again----but who knows when?*****The word seems to be getting out. Farfel (12/3/99; 21:03:47MDT - Msg ID:20190) Gold Reality Vs. Goldbug Ideology I noticed that Puetz capitulated to the equities bull market on KITCO tonight. Although some doubt his sincerity on account of his extremely sarcastic "tone of voice," I have NO doubt myself that he truly did capitulate.Whenever anybody capitulates, the person experiences much internal dissonance. Sarcasm is often a phase one goes through on the way to capitulation. In effect, Puetz is saying that although he really does not believe in the soundness of this market, he is tired of losing money and missing out on great profitable opportunities. So he will begin the process of placing greater wealth into general equities and dumping precious metals. No doubt his decision has been made with a great deal of anguish.It is simply a case of facing the reality presented by the various markets: the DOW will surpass 13,000 this month, it is as certain as the sun rising in the East, and not because it should, but because the mania is in full force and the Clinton government and its subservient media agents regularly intervene to ensure the mania will sustain itself in perpetuity. At a certain point, a person must ask whether it makes sense to become a financial martyr for an ideology (even an ideology of "basic common sense") or simply move on and benefit from the investor mania that shows zero evidence of ending anytime soon. Puetz is choosing the latter course although he may never really come to believe in the basic "sanity" of his actions.As for gold stocks...it is impossible to have any faith in them given that they are piloted by the greatest collection of self-serving morons who ever left the backwoods villages of Northern Ontario. They have ZERO interest in serving their shareholders while maintaining MAXIMUM interest in serving themselves and their bullion bank masters. The gold producers exist solely to hedge, sell forward, short gold, and drive their various companies into bankruptcy, all the while bullsh__ting their shareholders into believing that blue skies lie around the corner. There is not a single gold producer I would not sell short today, every one of them stinks to high heaven. Most of them will be in bankruptcy court before the end of 2000. The only exception will probably be Barrick Gold....but then Barrick was NEVER truly a gold producer, it was always a de facto gold hedge fund.As for the price of gold...it can only fall at this point, until Y2k-phobia is well over (maybe in March?). Next year, the Clinton establishment might consider allowing the metal to experience a $10 -$15 upspike but I would expect that will be the most dramatic rise it will see for the entire year as it works its way BELOW $200.Although I have argued this point with various die-hard goldbugs, I will repeat that so long as the Clinton Establishment runs the show, then gold will never be allowed to rise for any more than a day or two. I honestly believe that if the Clinton Establishment ever saw gold racing upward dramatically again and could not figure out how to instantly stop the rise via friendly central bank proxies, etc., then they would simply shut down the gold market until the ante status quo returned. Some would argue that the Clinton government would have a hard time controlling the price of gold on foreign exchanges in London, Hong Kong, Sydney, etc. However, I simply do NOT believe that fact. Britain and Australia have proved time and time again that they are no more than mere slave colonies of the United States today...they exist simply to do America's bidding, no more. Meanwhile the Chinese are so busy ingratiating themselves to America in order to gain entry into the WTO that they would never rock the boat of US Dollar hegemony.Puetz's capitulation to the equities bull market seems hard to believe but for all its cynicism, it is so obviously a genuine surrender. So Bravo Puetz! Go ahead and take one last swipe at your chronic detractors, and now go make some money like everybody else is doing. It never feels fun to be a "market whore" and surrender one's inner beliefs...but it is certainly much more profitable and a person's got to eat.Sad but true...the Gold Bull is dead.ThanksF* Peter Asher (12/3/99; 21:03:19MDT - Msg ID:20189) Tobohawg, Towncrier TC, good post on #20179, I be back on that.Turbo, mail-call! Tanglewild (12/3/99; 20:45:48MDT - Msg ID:20188) The Road I haven't been seated at this tableround for very long but I have been here long enough to see that A/FOA never gave a date as to when gold will go to $30,000. I believe they are presenting a scenerio that it could go that high and the reasons for it. This is the road to $30,000. We are on it. It's a long road with peaks and valleys(and bandits..). I will not be discouraged but remain steadfast in my beliefs that one day a dire scenerio concerning the currencies of the world may come to pass. I for one think that what they say MAKES SENSE and much more sense than what we are witnessing in todays markets. Whether it's tomorrow or 10 years from now makes no difference to me as I will be ready...I will have GOLD!Let the price go down as it allows me to buy even more, confident that one day A/FOA and many others here are going to be right in their forecasts.I can't imagine sleeping as well knowing that my insurance policy(GOLD) is not within reach or worse yet I just sold it when that scenerio unfolds.I am not putting all my apples in one basket but along with the delicious, rome and grannysmiths are GOLDEN apples. Why? Because it makes sense to me.I end this note with thanks to all that gather here. I appreciate the knowledge of not only A/FOA but the many fine people that grace this table. Thank you all.I welcome any comments.Get physical, Tanglewild Just Weight & Measures (12/3/99; 20:29:03MDT - Msg ID:20187) @ Megatron "Under the table 'juice'" I like that phrase. What they used to be able to do with a casual flick of the wrist like tossing a $100.00 bill over your shoulder to solve the market/drug users need for at least a week, they are now frantically digging in to the money barrell with both hands, shoveling faster and faster, trying to keep pace with the insatable demands of the market. Every slight downturn in could spell disaster with a bottom of "who knows where". The "under the table juice" led to a picher full and then a 40 gallon drum, next a tanker truck and soon a continous 40inch pipline spewing money into the market, but alas, all the juice in the world won't be enough to keep this wagon on the road. Just Weight & Measures (12/3/99; 20:13:31MDT - Msg ID:20186) "Flucht in die Sachwerte" . . . a phrase refering to one of the most spectacular periods of inflation in German history meaning "flight into real values". With the dow up 247 points today I speculate that Americans are investing in common stocks like never before prefering to have debt payable in fiat money rather than holding claims on it. So far most people have choosen to hold parts of real companies rather than fiat money, also, unfortunately than gold. So far they have been right. But, there will come a moment when financially potent individuals - not to imply that any of you wise readers are impotent - and institutions once again begin to buy gold like the French did in the 60's. When that happens, we will all be vindicated.In the mean time, continue to plan for freedom. Teach your children that the foes of the gold standard are wrong. Show them the tools of wise financial management including hard work and savings - naturally in gold money. The "easy money" machine is like a drug user, requiring ever increasing doses to placate the need. One day it will OD. Like Aristotle says, get a little more gold. megatron (12/3/99; 19:52:18MDT - Msg ID:20185) exponential madness The latest parabolic upswing in the NASDQ and S+p so closely matches the gold spike that my conclusion is that Greenspan must have thought "this is the BIG one" and started going at 'it' with BOTH HANDS! What is the man trying to prove? The under the table 'juice' they must be pumping in will be astounding when finally revealed in Congressional statements in the year 2050!! beesting (12/3/99; 19:42:41MDT - Msg ID:20184) ON GOLD--Can traditional mining methods keep up with the demand? http://www.kitco.com/_a/news/3513.htm Source: The Independant London.Dec. 3, 1999 (some excerpts)Nobody knows who was the first human being to value Gold,but likely someone in Central Europe before 4000 BC.Bacteria is being used in Gold extraction.This is the BEST pro Gold article I've seen in a long, long time,I wish it would hit all the main stream newspapers worldwide....enjoy.......beesting DD (12/3/99; 19:20:51MDT - Msg ID:20183) Dialogue Hi All - It's interesting that we seem to go through these waves of emotion on the forum much like we experience waves of emotion (positive or negative) in life. This forum is alive because it is people that give it life. We're like a family. We have our opinions and differences, our ups and downs and all the other stuff of families. However, for the most part, we care about the other members of the forum family and treat them with respect. This is a good thing, I believe. It allows people to be open without being open to attack. I believe this is called communication, or something like that.I can't think of a single reason to pick on FOA or any other member of this nobel table. To the contrary, I find the opinions and information presented by rather brilliant people like FOA, ORO, TC, MK, Aristotle and many others to be gifts of the highest order. Do I agree with everything that's written here? Certainly not. Not by a long shot. But that's the magic of the forum. It's opens our minds to new ideas and different twists that we may not have considered before. It's a learning experience and a rare and valuable one at that. It's said that it's darkest just before the dawn. It is in this darkest hour that the creatures of the night ply their illusion with most realism. But the illusion cannot prevent the dawn. Nothing can prevent what is and will always be. It feels to me that we're seeing the first glimmers of the dawn and a brilliant sunrise it will be. But we must remember that the sun rises on its own time as a part of a natural cycle. The dawn of real money is no different. Those who feel the need to predict the timing of rising suns and golden metals may feast on the sour gruel of unrealized expectation most than once. Possibly a remembrance that truth has and always will triumph over illusion. We just don't get to pick the time. Best, DDMy experience TownCrier (12/3/99; 19:19:41MDT - Msg ID:20182) Safra Death Sparks Questions http://biz.yahoo.com/apf/991203/safra_the__4.html "The Safra family started as bankers and gold traders, financing camel caravans moving goods between Aleppo, Constantinople and Alexandria. The name Safra means 'yellow' in Arabic."In this article that covers the recent killing of Edmond Safra, the founder of the Republic Bank of New York, our old friend Martin Armstrong gets a mention. CoBra(too) (12/3/99; 19:18:37MDT - Msg ID:20181) @MK -re "Fremder", while I concur wiith your plight to keep your ... fabulous forum at highest standards of civility, integrity and intellect - I would beg not to be too harsh on a slip of tongue in mostly enlightening verbal battles versus A/FOA.Personally, I try to travel a route between these extremes and I feel there are so many more agendas in life where wealth - however accounted - takes a backseat towards real achievement, not measured in virtual, though instant monetary rewards -.though readily exchangeable to reality?3 a.m. -long day - Best CB2unrevised - not only as usual - but by late night! TownCrier (12/3/99; 18:58:48MDT - Msg ID:20180) Sir Rhialto, "IMF: A universal duty of solidarity? What could this duty be?" It could be that the proper context was lost in my selected excerpts. The gist of it was that due to the interreliance of the global financial structure, no single nation should manage its currency affairs with such reckless policies that it becomes a threat to the system as a whole. A "United we stand, divided we fall" sorta thing. At what point will the easy solution jump up and grab them to the point where they admit publically that gold is the solution, and that gold and fractional reserve banking practices don't mix? I'm encouraged by the grassroots comment. The little people of the world speak of gold, and not in whispers! TownCrier (12/3/99; 18:44:35MDT - Msg ID:20179) Hello Sir Canuck! If I may, a tug on my sleeve here in The Tower alerted me to a fine opportunity to make a subtle point in regard to some of the conversation you gentlemen are having at the Round Table.As free individual, you are certainly within reason to pursue whatever activity you feel suits you (within the genernally accepted "laws of the land," of course,) so don't feel for one split-second that this is an admonishment. However, your post (12/3/99; 13:05:09MDT - Msg ID:20157) presents a fine opportunity for a larger study that was too good to pass up. Again, you have no reason to be on the defensive, so please see this commentary for the non-personal post that it is. Hopefully the result will be yet another small bit of evidence in support of physical gold accumulation as a vital foundation ahead of any subsequent contract, bond, or stock based investments.You we're kind enough to share with us the events of your day:"I took the day off and played 'day trader'. Barrick opened very low and rose until noon. I rode the wave up. I have a second play on the go which is playing out well... I hope to wrap up the day ahead $500.I have enjoyed the day, sipping a couple beers, teasing the dog with pizza, relaxing and scooping easy cash. What the hell, I'll buy sheep manure if it's going up."On the sheep manure example, I'm sure you'll agree that it is impossible to *know* the future direction of price movement, so at best, you are saying that in a look back at a review of the recent price history, if the asset has been previously lower and climbing in price, you are willing to buy it today at prices higher than anyone else that came before you in the hope that investor psychology will reward you with a continuation of "The Greater Fool Theory" rather than a premature termination upon your own purchase. That's fine, but ultimately risky. Wouldn't it be better to rely on fundamentals for your decisions? When the punchbowl is finally removed from this drunken investment orgy, you would at least find yourself away from the carnage. At best, you would come out far ahead.Why do we favor gold over fiat currencies, or outright leveraged speculation on any stock or commodity (gold futures included)? That can be answered in small part from the insight gained from your day off from your usual activities.This day of play was a one-time thing for you, however there are growing numbers of jubulient delinquents out there that are dropping out of productive endeavors to do nothing but trust to their luck and consume the efforts of others. Just the other day I saw one of those prime-time game shows in which a pretty and young contestent told the host of the show that her occupation was "Day Trader." Here we see a (bright?) girl with her whole life ahead of her, and if her luck holds out for another 60 years, she will have added nothing to this world but empty beer cans and pizza boxes.Let's imagine for a moment at seemingly best-case scenario...that the stock market will forever go up with no significant declines. (Remember: this is just a best-case assumption to make a point.) As more and more people cash out of productive society to daytrade their savings into ever larger and larger amounts of currency, it wouldn't be long before everyone saw the brilliance of this scheme and joined in. Nobody would be left to brew the beer, and nobody to make and deliver the pizza. They'd be day trading too. And they'd have to trade on price "momentum" (kinda funny for something with no physical mass) because the fundamentals would be meaningless. There would be no people dumb enough to keep working for these various corporations when riches are so much more easily attained through day trading. Homestakes miners would all be at home day trading. Yahoo's computer staff would all be in their living rooms shouting "YaHOO!" Former Ford Motor Corp employees would all be at home, counting their new riches from their Homestake and Yahoo investments, wondering what model of new car they should be buying next, or whether they should buy some physical gold. Let's hope they don't try to do a websearch for more info, because the Yahoo search engine ceased working long ago...as did new gold from Homestake and new car production from Ford. There is no pizza to eat, and no beer to drink. And you can't bake your own pizza because the stores have no flour...the wheat farmers are all day traders now. The only thing the world has is currency. Lots and lots of currency.Here's the point were trying to make. At any place in any age, there will always be a small few who press their luck and survive. There are others who somehow manage to find a way to ride the coattails of the system. Anyone is free to explore these avenues for themselves. But the bottom line is that when the world is viewed as a closed system, there must be meaningful production that is at least equivalent to the consumption. Anything else is unsustainable and unstable. The sunburned stoop-backed field workers of the less "advanced" nations will one day tire of laboring to produce goods while the consumers spend their time day trading their way to riches (and the fruits of others' labor) in air-conditioned comfort. At some point the workers will stand up, wipe the sweat from their brow, and after a brief survey of the land around them and their neighbors, they'll say with a rich accent "Go on an' keep your clean paper money. If you get too hungry, you can wash it down with water."And you know what? More and more ordinary people in developed and industrial nations are adopting such an attitude toward their own governments and corporations. These giants aren't much different than daytraders, getting ever fatter off the sweat of honest people who in turn are given paper to show for their labors. Even some of the sharper guys at the top have looked around and realized that the party is now on very shakey ground. (On a slightly related note, read the IMF's directors recent comments posted earlier.) Critical mass is reached the hard way when closed-system consumption of basic requirements exceeds the available production. It is reached the easy way through an earlier shift in psychology. The result in either case is a shift in favor of real things instead of credits from a gambling casino.At the least, when the shift arrives the host of day traders will have to develop a productive skill and earn their keep in the world. At the worst, everything they've manged to accumulate in the mantime will have been wiped out completely...no more casino credits, and maybe no more house if they've played a leveraged game. Betting on gold and having gold are two distinctly different paths that won't likely reach the same desired destination. Be careful out there my friend. The signs of irrational exuberance and bubbles are no longer subtle and worthy of debate...for the same reason that no sane person would debate that two plus two equals four. It is self evident. megatron (12/3/99; 18:44:15MDT - Msg ID:20178) stranger/FOA We're all big boys and girls here attemping to dicipher an extremely deep and nefarious 3,000 year old business. I would think that we're intelligent enough to know that even though there could be $30,000 gold prognostications we don't sell our houses and run to the coin store. 5% of everything is useful, including gold opinions, so let's take the rational approach to FOA's analysis by running it through OWN mind/filter and make a decision based on our OWN situation. Some of his insights are brilliant, some I don't agree with. Fine. Let the Stranger come back as long as he agrees to play nice. tedw (12/3/99; 18:35:12MDT - Msg ID:20177) KEEP IT SIMPLE HTTP://WWW.USAGOLD.COM A short gold course on gold investing:Buy low, sell high.The average price of gold over the last 18 years is $340,excluding the highest and lowest year. Gold at $280 is a bargain.Buy!!! CoBra(too) (12/3/99; 18:25:05MDT - Msg ID:20176) NY Investment Banking may be great for your wealth! ... though lethal to your health - as Edmond Safra had to experience, no wonder, as he seems to have had enough of the insid(-eous)e monetary perpetrators, the alledged keepers of the bubble. A deal with HSBC, valued at 10 plus billions was soured by Marty Armstrong of Princeton Economics International (what a great name for allegedly ripping Japanese investors to the tune of a billion Bucks), though eventually ratified this Tuesday at the same price for shareholders - not so for the founder, who BTW agreed to 19% lower compensation for his own 29% interest.What bugs me? - The colluder federal advocates: Accumulation of physical gold may be disastrous to your {W-)health.I'm worried, friends - who is going to be the next victim - and by whom???CB2 ET (12/3/99; 17:27:38MDT - Msg ID:20175) NewGold Hey NewGold - how ya doin'? I seem to have gotten here a bit late and have missed the now-deleted post of the Stranger. Frankly, if it wasanything similar to the one yesterday I doubt I missed much. Despitesome attempts by myself and others to get our resident 'professional'to re-examine his views concerning money, the Stranger seemed moreinterested in counting coup. In my opinion, it was his loss.You wrote;"I am mostly a lurker here and Kitco, and I must say that I agreeentirely with The Strangers views on FOA, I mean this person did saythose things, Gold is going to $30,000.00 and not just once, onnumerous occasions, and further the $30,000.00 figure was mentioneddirectly in connection with the so called "short squeeze" last month,"we are well on the road to $30,000.00", This is not my interpretationof what FOA said look up the words yourself."I don't recall FOA saying that gold was going to be trading at $30,000 an ounce anytime soon. As a matter of fact, Another and FOA haveconsistently tried to explain that the value of gold would not changeat all. What would change would be the currencies you use to price thegold. This point is fundamental to understanding their argument. "But beyond that I must also say that for a while I was rather upsetwith Kitco for making "fun" at FOA and Another, such as they did againthis week, BUT I now understand why they make "fun" of FOA andAnother. A poster must be held accountable for his opinions, if he isto be given any credibility."If you find the opinions of any poster to lack credibility please feel free to ignore them. Some at Kitco have never understood money as far as I can tell hence it isn't surprising they might find Another andFOA difficult to understand. "And at the moment, unless goes to $30,000.00 very soon, I would saythat FOA and Another have lost credibility with me and I am certainmany other lurkers."I suggest you reread what the two of them have actually said."Thank-You The Stranger for saying what many of us are thinking, andI'm sure what many more are thinking but afraid to say. I beleivethat USA Gold Forum will become much more credible if opinions statedby any poster are scrutinised and debated, instead of just followingand accepting every word of a particular poster, including FOA."It would be helpful if some would stick to criticizing the argumentsinstead of attacking the individual. Some at Kitco also have greatdifficulty with the concept of civil discourse."I hope FOA continues to post here, but we must hear some explanationas to why Gold is not $30,000.00 or at least why it is not well on theroad to $30,000.00. Many posters unfortunately,make investmentdecisions based on the so called "gurus" of these discussion forums."If this is indeed true then they must take responsibility for their ownactions rather than blaming someone else. My father called it'growing up'."As I said, I beleive this will make for a much more crediblediscussion group. This is my opinion of course, and I hope others givetheirs."Well, you've got mine.Frankly, NewGold, I haven't found a better source of information thanthis forum. I've been hanging around this internet for years and thisforum by far has more thoughtful and knowledgeable individuals on thesubject of money than any other. Rarely do I find the opportunity toadd to the discussion as I'm usually two or three chapters behind mosthere. ET Rhialto (12/3/99; 17:24:12MDT - Msg ID:20174) IMF A universal duty of solidarity? What could this duty be? For years the Mexican government has popularized the term solidarity, altho it has never been clear what the term meant. Now the head (ex-head?) of the IMF has started up the same chant. Has sort of a nice socialistic ring to it tho, doesn't it. Sort of like, gee, we all are thinking the same thing now, thanks to our caretakers. This seems to be where we are headed in the twenty-first century. YGM (12/3/99; 17:14:38MDT - Msg ID:20173) Chemical Plants and Y2K.....Stateside.... http://www.sightings.com/politics5/y2kchem.htm (excerpt only)"In the past, we have had very little information about small chemical handlers and manufacturers, and the assumption was made that they were not prepared for Y2K," said Senator Robert Bennett, the Utah Republican who chairs the committee. "To a large degree, that assumption has been confirmed by this in-depth, independent report." The report was prepared by the Texas Engineering Experiment Station's (TEES) Mary Kay O'Connor Process Safety Center headquartered at Texas A University in College Station. Its results include the following: * 86.5 percent of firms surveyed were not yet prepared for Y2K * 85.6 percent had not coordinated emergency plans with local/community officials * A majority had not linked contingency planning to community emergency services such as police, fire and rescue, or hospitals * 79 percent said they had never before been surveyed about Y2K preparedness * A majority of respondents do not belong to industry organizations or trade associations, which have been the primary gatherers of Y2K preparedness information in the private sector * 4.1 percent said Y2K presents a potential for a "catastrophic event" An estimated 85 million Americans live within five miles of one of the 66,000 sites that handle hazardous chemicals. ......................................................... YGM...Comment....As a constant poster here I wish to make clear that at no time is it my wish nor intent to foster scare-mongering w/ my repetitive posts concerning Y2k. I fully realize that the date change IS going to have a bearing on Gold & Silver values if the end result is as ugly as many expect. What I am doing is searching with all my free time to find any and all Y2k related info and some of what I find I feel is worthy of further dissemination. There's more at stake here than just our collective wealth, it's also about collective well being and as such I'm very grateful for my posting priviledges here and the ability to pass on info once read.....With that said I'm sorry to see Stranger lose his posting priviledges because of indescretions. I too have been there and done that, thru anger and hopefully I am wiser for the experience........I'll always feel indebted to have been allowed even reading priviledges here, let alone having a voice..................YGM.. NewGold (12/3/99; 16:58:22MDT - Msg ID:20172) ORO, Canuck Gold, 714 One last word on FOA/Another, I think most posters atGold Forums are "Gold bugs" and know only too well thatsomeday soon Gold is going to is going to be valued muchhigher in fiat. But the specific"call' that the Gold Squeezein October which did move Gold to $US345 ,was going to take Gold there, was, let's be judicial, premature.Now the question that remains is What is going to take Gold there? so enough with the $30,000.00 gold call.I think that the story of the head of the Republic bankMr. Suffra who was deliberately BURNED in his homein Monte Carlo most of you here I'm sure know aboutthe Republic Bank of New York, and also the BIG proptests at the WTO meetings may revive anti_US sentiment worlwide and their acceptance of the BIG BULLY"S dollar. TownCrier (12/3/99; 16:39:47MDT - Msg ID:20171) The Features and Conditions of Use of the IMF's Y2K Facility http://www.imf.org/external/np/sec/nb/1999/NB9979.HTM Earlier in the fall, the IMF established a temporary facility to help member countries that might experience balance-of-payment difficulties arising out of Y2K. As stated in the release, "This News Brief elaborates on the terms and conditions under which the facility can used." I've given below only the portion that would be of some interest to the widest audience. For those interested in the technical details of the loan facility, click the link.News Brief No. 99/79 December 3, 19991. Access to the facility is available for balance of payments needs arising from Y2K-related problems arising in either the current or capital account of a country's balance of payments. There is no restriction on the type of problem that might qualify for Y2K financing under the facility, other than that it should be identifiable asY2K related and should generate a balance of payments need. Examples of possible problems that might affect a country's current account in its balance of payments could include, (i) interruption to shipping, (ii) interruption to government services, (iii) shutdown of oil pipelines, or (iv) export-related factory shutdowns. Problems may also arise in the capital account of a country' balance of payments. Such problems could result, for example, from failure of financial sector computerized transaction registration systems, or from a general withdrawal or withholding of capital related to fear of possible Y2K problems. Capital account problems related to latter concerns could occur in anticipation of the New Year, or subsequently on the basis of actual events.[Quite a string of potential problems, wouldn't you say? Either the IMF has an overactive imagination, or they are taking the same kind of conservative assumptions and precautions that everyone would be wise to take.] JCTex (12/3/99; 16:30:05MDT - Msg ID:20170) Hipplebeck I think you are right. One of the large banks that I am familiar with here in Texas is expecting some very large deposits from abroad specifically spanning the y2k period. Initially, they do not anticipate it remaining here very long, unless the countries are hit hard by y2k. This information is about 30-45 days old: if it has changed, I have not heard about it.regards TownCrier (12/3/99; 16:23:52MDT - Msg ID:20169) From the Crises of the 1990s to the New Millennium http://www.imf.org/external/np/speeches/1999/112799.HTM Remarks by Michel Camdessus, Managing Director of the International Monetary Fund to the International Graduate School of Management Palacio de Congresos, Madrid, Spain November 27, 1999 :[excerpts]I will try to identify the crises that explain the tremendous instability of the last ten years and, with the clearer understanding that we now have of these crises, the strategies that could make the next ten years more stable and more prosperous. Several major factors, with intertwining effects, can explain the recent instability. I will mention just four of them:-- a new breed of national economic crises; -- a crisis in the world financial system; -- poverty, as the ultimate systemic threat; -- a crisis in world governance.These four factors are directly relevant to the activities of the IMF, and indeed each of them calls for large-scale changes, including in the way in which the IMF operates.I. The new breed of economic crisesThe IMF long considered itself fully conversant with economic crises. Crises were its job. Indeed, it had been created in the first place to respond to such crises and to ensure that they did not, as had occurred in 1929, turn into global catastrophes and lead to war. For the first forty years of its existence -- until the mid-1980s -- crises were mainly external payments crises, often resulting from macroeconomic policy weaknesses and exacerbated by unsustainable debt.The Mexican crisis, and much more evidently the Asian crisis, were unlike any seen before. Crises of this new type explode on the open capital markets, arise from complex dysfunctions, and are much less exclusively macroeconomic in nature. They quickly take on systemic proportions, and can be checked only through the immediate mobilization of massive financing. Take the three major Asian crises, for example: Thailand, Indonesia, and Korea. Dealing with them meant dealing with a three-dimensional problem: a dimension, obviously, of macroeconomic imbalances, along with massive outflows of short-term capital; an acute crisis in the financial sector, reflecting institutional and banking practice weaknesses; and a much more fundamental crisis in the economic management model to which the previous successes had complacently been attributed, but which was quite simply in conflict with the new demands of a globalized economy. I'm thinking here of unhealthy -- I would even say incestuous -- relations among corporations, banks, and government. This third dimension, which the students in Djakarta shouted down in 1998 with cries of corruption, collusion, and nepotism, implied that fundamental reforms were immediately required.If there is any characteristic distinguishing this series of crises from others, it is the prominence of the private sector -- financial institutions and corporations -- on both sides of the equation as creditors and debtors.I lack the time today to go into greater detail, but it is clear that the multifaceted factors behind today's national economic crises have been evident -- mutatis mutandis -- in a good many other cases, particularly in Russia, of course, on a grand scale. As we well know from our annual analyses of each of our 182 member countries, these symptoms exist in differing degrees almost everywhere and they were no stranger to the Japanese protracted crises of the 1990s. Whether a country is large or small, any crisis can become systemic through contagion on the globalized markets.The aim of an international financial organization in making such suggestions is not so much to seek balanced books at all costs, but rather to encourage countries to discover and realize what the consequences are of the circular relationship between integrity of monetary and financial management, high-quality growth, and poverty reduction. Without the last, the first two have little chance of enduring, and without the first two, any efforts to reduce poverty will be protracted. I call your attention to this circular relation: it was not seen that way some time ago. The recognition of this fact by the world policymakers is a major silent breakthrough. [That's a key point!]II. Identifying and correcting the weaknesses of the global financial systemIt goes without saying that while crises are different from what they used to be, we have to look beyond their national components alone in order to explain everything. Countries have not only been actors in crises; they have also been victims. Systemic cracks have also come to light. To repair them, it is necessary to analyze the weaknesses of the global financial system and not only of national economies.Considerable thought has been given worldwide to the ambitious project of designing a new financial architecture. The defects of the current architecture are well known.III. Poverty, the ultimate systemic threatThe slow progress on poverty around the world and the fact that in many places poverty reduction seems to be losing ground are clearly the most serious crisis factors at the end of this century. Here more than anywhere else, we must reflect on our collective capacity to place the human being at the center of our policies -- to humanize globalization.I hardly need dwell on the global dimension of the problem, and on the risks that it will grow worse.I am far too familiar with the constraints and inertia we face as we wage this battle to suggest that there is an easy solution of some kind,Do you remember the Copenhagen Declaration, in which we promised to reduce by half the number of people on this planet living in abject poverty by 2015? Do you remember Rio, Jomtien, Cairo and Beijing, where we promised to achieve at least six other objectives in the next fifteen years...I will come right out and say it: we must undertake to ensure that the pledges made in our name are fulfilled. I have asked the heads of state of the G7-G8 to make the first decade of the new century the decade of fulfillment of existing pledges. The key is clearly our solidarity. With 1.3 billion people living in extreme poverty, what is needed is something that is also fundamental in human relations: abiding by one's word. If we allow cynicism to prevail in this area, we may as well give up the dream of progressing to a more fraternal global society. It is a matter of great urgency, my dear friends. I see the time soon coming when we will say that, considering the amount of time we have lost since these pledges were made, the targets are no longer attainable. We have not reached this point yet, but the situation is urgent. We need a jolt of responsibility and solidarity.[One initiative...]...is the adoption of a new joint strategy by the IMF and the World Bank, aimed at making poverty reduction the centerpiece of their joint strategies in the 75 poorest countries....Even with all these initiatives, we know only too well that in the world today many people feel that they lack control over their own destiny, and fear that there is no legitimate authority to deal with problems that are increasingly taking on worldwide dimensions: the environment, drugs, corruption, crime, money laundering, etc. Which brings me to our fourth crisis: it is the question of the pilot in the plane! What we might call the crisis of world governance.IV. The world governance crisisHumanizing globalization also means creating conditions -- institutional or other conditions -- that will enable us to better protect ourselves as a group against collective risks on a global scale, and together obtain a clearer view of our collective destiny.To be sure, what is currently being accomplished with the available resources by the Bretton Woods institutions and all forms of bilateral and multilateral cooperation is certainly not negligible, and it is probably for that reason that the Asian crisis and its aftermath did not turn into the major systemic crisis that loomed just a year ago. But we all still feel that we could, and must, do a lot better.All we can do is persevere with this effort, because it is the right one. It calls for only a modest first step in an urgent and essential task. To understand this, we need merely compare our world to the world in 1945. Each country has now achieved sovereignty, each wants to shoulder its full responsibility in the face of global problems, and we know full well that the effective participation of each country in managing the "Global City" is key to its proper functioning. What is more, while globalization has until now operated at the whim of more or less autonomous financial and technological forces, it is high time that we took on these responsibilities and took the initiative, so that progress toward world unity can be made consistently and in the service of humankind. ...Clearly, we need to be imaginative enough to visualize the institutions that would best serve the global common good or, at least, to make the necessary changes in the institutions created in San Francisco and Bretton Woods.The task is certainly monumental. We are the first generation in history to be called upon to organize and manage the world, not from a position of power such as Alexander's or Caesar's or the Allies' at the end of World War II, but through a recognition of the universal responsibilities of all peoples, of the equal right to sustainable development, and of a universal duty of solidarity.The 21st century must be one of gradual strengthening of the global institutions, but also one of decentralization and strengthening of all the echelons of responsibility. Affirming this does not take anything away from the need to better structure the world architecture, to create regional organizations where they are still lacking, and to strengthen the political dimension of the regional economic organizations already in place, such as the European Union. The more we see the need to consolidate or vest new responsibilities in world bodies, the more it is necessary to ensure that they are accepted by public opinion, and the more it is necessary, as well, to let them know that their contribution can only be subsidiary and ensure that everyone understands that nothing can be accomplished at the global level unless it is taken up at the grassroots level and supported by initiatives up the entire institutional chain. Citizenship at all levels must be one of the key values of the 21st century.I have used the words "key values," and that is indeed what is needed: to identify the values that men and women today can use to make sense of our history and participate in it. Our history has not yet been written -- it is still in our hands. Notwithstanding its risks, globalization is an opportunity to move toward a world economy that is more worthy of the human race. This is a new chance given to humanity. It is also an opportunity to take action on the three values that many of you will certainly have detected behind my comments and with which many around the world identify: responsibility, solidarity, and this new kind of global citizenship. It is these three values that must guide us as the new millennium unfolds before us. Hipplebeck (12/3/99; 16:19:43MDT - Msg ID:20168) (No Subject) It dawned on me while reading an article on Brazilian Govt putting out dollars to make everyone feel secure, that there is a large force leaning on dollars as security during this y2k thing. No matter what happens with the computers, there is going to be a big change in things after the first of 2000. If things go smoothly, some money is going to leave US markets, if things don't go so smoothly, it may stay for a while. The higher it rises, the harder the fall. My opinion is that the strongest force that ever influences gold is fear and insecurity. The public has no fear of y2k at this time, that is obvious. Myself, I think the great fear coming will be inflation like in the 80s. The law of exponentials is at work. JCTex (12/3/99; 15:45:35MDT - Msg ID:20167) ORO - herding cats Oro, I spent the first 40 or so years of my life "cowboying." The picture of herding cats may have me laughing too much to go to bed, tonight. Brilliance aside, that one description should put you in everybody's Hall of Fame.Regards and thanks JCTex (12/3/99; 15:42:08MDT - Msg ID:20166) FOA If I remember correctly, both FOA and Another were always prompt and very courteous to reply and explain [be held accountable for] what they said.If I remember correctly, FOA said on several ocassions said that the $30,000 figure was the HIGHEST extrapolated number that he had seen.It would seem to me that it might just be a little presumptuous and premature to be condemning their forecasts just yet. As for what the folks at KITCO think, I really don't care. What I do care about are the thoughts and opinions of the posters at USAGOLD.COM.Sorry for ragging, but I do not think FOA deserves that kind of treatment from any of us. He may be proven right, he may be proven wrong; but by G--, he was always courteous, and he was always thoughtful.regards RobertG (12/3/99; 15:32:01MDT - Msg ID:20165) GREED Well stated Crossroads. Reminds me of a quotation by Faulkner: "Man is not the victim of fate or destiny, but simply of greed, and the greed of his friends if he is not careful." Crossroads (12/3/99; 14:22:33MDT - Msg ID:20164) Pied Piper It would seem to me that there are some here who have demonstrated the mentality that Stranger spoke of in the post that described FOA as some sort of Pied Piper. Unfortunately, Stranger took it upon himself to be some sort of critic. As one who has greatly appreciated FOA and Anothers opinions at this site from a long ways back, I consider the information as just that, information. Regardless of the POG. If the mindset here is to utilize this as inside information, then I believe it has been taken out of context. Stranger recognized this "following" as he named it, as potentially damaging to these individuals. Unfortunately, there is a responsibility of each individual to learn to discern what works for him or herself. How often in our enthusiasm we get caught up in the maelstrom of euphoria. These responses are based largely upon emotionalism and it will cloud the view of logic. The depth and breadth of knowledge that is expressed here is a fantastic wealth of information. I for one am grateful for the lessons that I have learned here and it would be a great loss if the posting ceased because of criticism. I will go out on a limb here and suggest that as a group of people with lots of differing opinions to express that we do not attempt to achieve credibility at the expense of those who have already acquired the respect of others. The attack of Stranger on FOA, demonstrates this weakness by criticizing him personally. As for those who are now asking for proof of the $30,000 figure, I suggest that you sit back and observe the times rather than jumping in and out of the scene. If your purpose on this earth is to just acquire wealth and riches, then you will be better served to "follow" the Stranger. I'm sure he would like nothing better than to win over FOA's so called, converts. I'm afraid that you have grown to appreciate something that I try to avoid. It reminds me of the little rich kid in Willy Wonka and the Chocolate Factory when she would say "I WANT IT NOW!" Of course the crowd will now press against the jailhouse doors and shout "Off With His Head" since we haven't reached $30,000. Oh FOA I'm afraid you overestimated our intelligence when you applied logic to something that stirs every emotion possible, especially greed! TownCrier (12/3/99; 13:56:13MDT - Msg ID:20163) Fed adds more funds to banking system reserves http://biz.yahoo.com/rf/991203/pf.html Fine tuning the reserve levels after yesterday's 70-day repurchase agreements, ahead of the weekend the Fed has added another $2.9 billion via 4-day RPs. Monday or Tuesday will probably be a biggie. TownCrier (12/3/99; 13:39:38MDT - Msg ID:20162) Canadian foreign reserves jump in November http://biz.yahoo.com/rf/991203/kb.html This is a helpful snapshot of Canada's foreign reserves and the country's efforts to "work" their "portfolio" through various investments and cross-currency swaps of domestic obligations. It seems that they mark everything to market on a regular basis, so they always have a good sense of where they stand. For example, as the yield on U.S. bonds changes, the market value of the bond is adjusted accordingly.This report compares end-of-November books to those of October. Interestingly enough, even though the market price of gold fell during that time, their book-loss on gold value was only $14 million, while their book-loss on paper asset values was $230 million. And keep this in mind...these values are all given in US Dollars as the benchmark. If the price of food, energy, clothing, and real estate increases, they could actually be suffering a real-world loss in reserve value, even though the book values might show an increase in dollar valuation.On another note, their gold sales have ceased for many weeks now. Accross the pond, with the European Central Bank marking their vast gold assets to market values on a quarterly basis, the ECB is likely eager for gold increase at the end of this year. As we mentioned long ago, their Washington Agreement came in the final week of the previous quarter...just in time to produce a healthy new book value for their gold. Stay tuned. ORO (12/3/99; 13:36:37MDT - Msg ID:20161) Stanger NewGold - timing Gold is a very short term tradeable and a very long term investment hedge. Today, at rediculous prices, it is also a good long term investment.FOA and ANOTHER, though they may not have benefited you to date, have come with a view quite different from that of most modern day investors. Their view is shared, in part, by the likes of Dale Davidson and Reese Moggs, Yardeni, Faber, Ackerman, Dines, Casey, and many others who have great long term records, but have missed the boat on the latter part of this dollar and equity rally, predominantly because they did not expect the Japanese to dump money into the US's continuous losing proposition.To make one thing clear, the GDP numbers and the growth in employment are both products of the monetary regime and fiscal favoritism policy. The government made two critical decisions to make the profit margin on employees greater. The first was the lowering of taxes on corporations, and the shifting of costs of government functions and social insurance from the corporation and high income individuals onto the employees. The second was the policy mix that brought us such wondrous things as the options compensation disease and R&D and Marketing expensation. Much of the rest has to do with the monetary system and the "new era" of financial rules dictated by record real interest rates in the US.ANOTHER and FOA have warned us that the rule of rate of return will be replaced by the rule of return of principal. The level of dishonesty in the financial system in the US can only be matched by Soviet Era propaganda. The rate of return of nothing has been very high by historical standards. However, the standards from which people make the extrapolation have changed. Whereas in the past there was a rate of return of something, today it is nothing that is returned. Any attempt to cash in the nothing will quickly reveal its value. Upon that process starting, there will be a "revaluation" of gold. Up to that point, gold will be controlled in price by the combination of the need to satisfy powerful accumulators and the level of success the financial firms have at marketing their papers as equivalents to the real thing. So far, only a smidgen of doubt has come into the markets. During this whiplash swing in sentiment, bear bull bear, much gold was shaken out of individuals and released from the hordes of accumulators for the purpose of collecting significantly more gold in the near future.To complain that a major shift in the structure of the monetary system that has large and complex powerful forces pitted against each other could be predicted to within days weeks or a year or two is quite absurd. Organization of the EMU and the gold plan revealed by ANOTHER and FOA are long processes that bear much resemblance to the herding of cats.Rather than complain about the process repeatedly being halted and delayed as one cat or another finds a frightened golden mouse to pounce on or a patch of catnip, you could note that the existence of the process has been confirmed by multiple events. We all owe much gratitude for the two for their revelation of some of the thinking and motivations behind these events long before any occurred.Back in late 97, when ANOTHER posted most of his commentary, there was barely a suspicion outside of Veneroso's work (and he was not quite aware of the enormous scope or importance of the market) as to how overextended the gold market had become. The surprise release of LBMA volumes in late 97 was an eye opener to many. I remember my own surprise at the magnitude of OTC derivatives contracts reported by the OCC, I was even more surprised to find that the highest estimates I had made were very close to the reported numbers from the BIS - higher in fact. Without ANOTHER and FOA's pointing of direction, I would never have been aware of how close we are to the end of the gerra Americana. For years I had known that the US is slated for decline and that what it is doing around the globe wins it no friends. For way longer, I knew that the US was being subsidized by the world through its role as issuer of the global reserve and trade settlement currency, and that had to end because the US was consuming global resources at ever greater proportions, that the rewards of the spread of the industrial revolution from the West to the developing world was not benefiting the participants as much as it was benefiting the US. Without A/FOA I would not have been able to prepare for the upcoming demise, be it today or tomorrow, 1998 or 1999.Timing of the events is probably impossible to the outsider, it is probably hard for the insider as he is stuck in many pointless meetings and strategy discussions that leave things in the air most of the time, and he often despairs of resolution coming.Fortunately, some such as Cyclist and Kaplan do a reasonably good job of timing from technicals. The timescale of A/FOA is not that which traders could use, but large players can't move that fast and must convert holdings methodically over great lengths of time. A/FOA stand with these people.I should put things in sharper perspective. Up to the BOE sale I was very skeptical of A/FOA. The research I did from that point on has all confirmed their case, none of their main points were challanged by the reality of data and the reports out of Europe. The US media is about as reliable as Pravda because so much of the advertisement revenue is coming from the financial firms and their young client corporations. Buena Fe (12/3/99; 13:31:50MDT - Msg ID:20160) PH in LA (12/3/99; 13:14:38MDT - Msg ID:20158) "Surely you would offer no argument that the professionals who dreamed up and presently administer the Federal Reserve System take every advantage of us. A system based on incomprehensible complexity designed to cheat every one of us of the fruits of our labors is nothing in which to take professional pride." To you I say AMEN & AMEN!!!!!No need for excile PH.....timing is NOWKeep Well Canuck Gold (12/3/99; 13:27:16MDT - Msg ID:20159) NewGold,megatron Newgold, the manner in which you express your opinion is eminently more acceptable than that of The Stranger. It's one thing to have a dissenting opinion. It's quite another to insult people you don't agree with. As a matter of fact, I don't for one minute believe gold will be worth US$30,000 any time soon (unless, of course, the US dollar suffers from hyper-inflation). In fact, I'd be surprised if FOA really believes it will go that high either. I recall that he (she) said it could go that high but it appears to have been meant as the upper end of the range rather than a target. I wouldn't want gold to go that high anyway. The fallout from US$30,000 gold would be far worse than any of us would care to contemplate. However, I figure that gold in the US$600 - US$1000 range will be with us in the not too distant future, maybe by the end of next year. I can wait another year, even more if necessary. I'm convinced gold is going to move significantly (and I don't mean just $80) and I'll be ready when it does.megatron, I referred to CB loans not CB sales. I'm more concerned with loans than sales at this point in time. Loans have to be repaid eventually (unless there's a default) and they have to have been at least as big as the sales each year for the last few years to make up for the lack of supply. Loans have been mainly covert transactions until recently and no-one seems to know what the outstanding short position really is. My guess is that the CBs had reach their comfort limit on gold loans and the Washington Agreement was their way of avoiding admitting to that fact. The barrel is being scraped for new suplies, to which the Kuwait and Jordan announcements bear testament. They're running out of options and their collars are starting to feel tight. Tick, tick, tick.........CB PH in LA (12/3/99; 13:14:38MDT - Msg ID:20158) 2nd reply to Stranger Stranger:No offence whatsoever taken for calling me an amateur in financial matters. Your insinuations that you mean no offence is likewise taken with a grain of salt.No, I have no aspirations towards professionalism in financial matters. In fact, the opposite would be the case. Meaning no disrespect to yourself, either, in fact I find it fair to say that professionalism in the financial field is mostly a matter of legalized theft...the lowest form of sculduggery. Surely you would offer no argument that the professionals who dreamed up and presently administer the Federal Reserve System take every advantage of us. A system based on incomprehensible complexity designed to cheat every one of us of the fruits of our labors is nothing in which to take professional pride. Calling a system-wide depreciating currency "wealth" stretches our English language even as it stretches the thinking person's credibility. One has only to examine and understand the bucketshop mentality and modus operendi of the average broker's office to find a perfect example of moral corruption in financial professionalism. And how about those morons on FNN every day, touting this stock or that, this index or that all the while giving lip service to an independent media?No, in my book, professionalism in financial matters is nothing to hold up as a paragon of virtue, nor even something to admire.And yeah sure! We all know about compound interest. As consumers, we have been on the losing end of it all our lives. And not just whenever we fire up our credit cards, either. Compound interest is built into the price of virtually everything we buy, and into everything even remotely touched by our "modern", so-called capitalist system. But your often-heard bromide about compound interest making us wealthy is still impossible to swallow. Percentages are not magic. The magic is the deception that powers them.You mention timing: Yes, as others have commented on, timing IS crucial. Many of us believe that the system is on the verge of change. Timing it is one of our greatest frustrations. But throwing the stability of the past in our faces sheds no light on the basic timing question. Because that is how change happens... by changing. Just because an asset has only appreciated by x.x% during the last xxx years doesn't mean it will continue to do so at the same rate for the same period of time into the future, etc. Obviously! Most of these questions have been amply discussed at length here at this forum. And in a much more civil tone of voice. I regret that I seem to get drawn into this kind of exchange against my will more often than others seem to. I ask the indulgence and forgiveness of all. I'll return to my self-imposed exile now. Canuck (12/3/99; 13:05:09MDT - Msg ID:20157) General comment re: The Stranger You guys should shouldn't be so quick to just on our Stranger. You have to follow him over a few posts, over a couple days. Recently he commented on his good fortune and luck. Stranger is up (handsomely) in all his asset classes.Sticking and holding one asset is against all diversification 'rules'. I took the day off and played 'day trader'. Barrick opened very low and rose until noon. I rode the wave up. I have a second play on the go which is playing out well. Meanwhile gold is floundering about like a beached whale. I hope to wrap up the day ahead $500.I have enjoyed the day, sipping a couple beers, teasing the dog with pizza, relaxing and scooping easy cash. What the hell, I'll buy sheep manure if it's going up.This little tidbit re-inforces Stranger's quote:"The point is, gold is inherently a short term investment for which timing is ABSOLUTELY ALL THAT MATTERS. Furthermore, I submit that people who hold gold year in and year out in quantities which are disproportionate to their other investments are squandering any opportunity of ever achieving wealth in their lifetime." USAGOLD (12/3/99; 13:02:02MDT - Msg ID:20156) Stranger... I hoped that you would keep the discussion on this side of being civil, because at time I feel you have something to offer. Apparently you cannot keep it to the issues. Your code is deleted and the offending posts have been removed. We do not conduct personal attacks around here. I have no problem with respectful, intelligent disagreement. You crossed the line. Good luck in all you do. MK 714 (12/3/99; 12:52:52MDT - Msg ID:20155) NewGold re: opinions I don't know how to hold someone accountable for their opinion, but certainly FOA is free to express his/hers here. That is, after all, the purpose of these forums (in part anyway). I too have been skeptical about Another's and FOA's opinions, but it does appear that some of it is coming to pass (on a small scale anyway). There is a Kitco post this afternoon describing how bullion is no longer available at Mexican banks but is still available from private dealers for a higher premium. And recently I began reviewing Another's old Kitco posts that have been graciously posted on the web (unfortunately I lost the URL although I saved the files). I've tried to address some questions to FOA regarding some of Anothers statements, but got no response. In particular, Another stated at one point that when the gold market went up, goldbugs would not be happy with it, and I remain concerned with confiscation. I do not think confiscation is an issue in an orderly market rise, but if gold goes to $30000 as FOA states, forget about trying to sell it. You better hide it. It WILL be regulated (taxed or confiscated). In fact, IMHO, if gold sees $1000+, it's in the "red zone" (US govt. crosshairs), IMO. Another and FOA, being foreigners (I live in the States), don't recognize that the government operates much differently here than in other countries and routinely interferes in the markets. Real estate is a prime example. All residential real estate in the US is tax-subsidized by way of deductions. If the local government can outlaw gas masks at the drop of a hat, as demonstrated in Seattle this week, how safe is your gold? I'd hope FOA addresses this issue when he pops in this weekend. In regards to looking to these forums for financial advise, they are probably no better or no worse than anywhere else one may turn for advise. Unfortunately, the greatest of all human weaknesses, that of suggestibility, is amply demonstrated time and time again on the internet. Tomcat (12/3/99; 12:46:54MDT - Msg ID:20154) The Stranger I feel that your recent post where you welcomed FOA back and then proceeded to undermine him with name calling is both offense and highly inappropriate. This kind of post brings disgrace to this group which is known for its integrity. This forum was born and has grown on recognizing the value of another viewpoint; respectful disagreement has been it's hallmark. I hope that you will respect others in your future communications with them. YGM (12/3/99; 12:15:15MDT - Msg ID:20153) McAlvany Audio...... ANYONE CONCERNED W/ OIL FUTURES OR Y2K Shortages.. DEFINATELY does not want to miss this talk...(sorry for caps, but this is very, very important listening).....example...INRON (sp) the worlds largest Natural Gas producer and Electrical Co in the world admits it's not going to make it..also very worried about feeder companies etc...projecting a minimum 30% shortfall, which will trigger a "Depression, not a Recession" ...still listening here...YGMbeesting.....Hi, Sorry I couldn't get that Kitco Audio either, but will search for a transcript...they did say that they believed Gold Confication was in the cards if Gold rose to extreme highs.....IMO...the changes to public perception on Gold & Y2K are about to change dramatically over next 45 days.....YGM. Rhialto (12/3/99; 12:10:17MDT - Msg ID:20152) (No Subject) Does anyone know why I can't open YGM's link by clicking on it? I can't open it by clicking on it and can't open it in another window with my right click on the mouse. Thanks NewGold (12/3/99; 12:09:48MDT - Msg ID:20151) Geat post Stranger, it's about time I am mostly a lurker here and Kitco, and I must say that Iagree entirely with The Strangers views on FOA, I meanthis person did say those things, Gold is going to $30,000.00 and not just once, onnumerous occasions, and further the $30,000.00 figurewas mentioned directly in connection with the so called"short squeeze" last month, "we are well on the road to $30,000.00", This is not my interpretation of what FOA said look up the words yourself. But beyond that I must also saythat for a while I was rather upset with Kitco for making"fun" at FOA and Another, such as they did again this week, BUT I now understand why they make "fun" ofFOA and Another. A poster must be held accountablefor his opinions, if he is to be given any credibility.And at the moment, unless goes to $30,000.00 very soon,I would say that FOA and Another have lost credibilitywith me and I am certain many other lurkers.Thank-You The Stranger for saying what many of usare thinking, and I'm sure what many more are thinking but afraid to say.I beleive that USA Gold Forum will become much more credible if opinions stated by any poster are scrutinisedand debated, instead of just following and accepting every word of a particular poster, including FOA.I hope FOA continues to post here, but we must hearsome explanation as to why Gold is not $30,000.00or at least why it is not well on the road to $30,000.00.Many posters unfortunately,make investment decisions based on the so called "gurus" of these discussion forums.As I said, I beleive this will make for a much more credible discussion group. This is my opinion of course, and I hope others give theirs. Rhialto (12/3/99; 12:07:53MDT - Msg ID:20150) Beesting Thanks. I think you have wise parameters for using your money. I too am persuaded in the wisdom of holding gold over time, especially today when the NAZdog continues to make new highs and gold is being manipulated down in price. And not because I think gold is a good investment but rather because it is a good place to store the reward of many hours of my blood, sweat and tears. I refuse to participate in discussions about the demise of the dollar from an investment standpoint because if the dollar does totally tank so will all investments. This is not true of the stock market, which if it tanks will not destroy all other investments, and not just in the US. It has been clear for the past three years that the stock market will thrive as long as the dollar does. The forces supporting the dollar are very powerful and my investment strategy is based on their continued efforts. People who hope the dollar tanks have, in my opinion, no notion of what that will entail to their own future and everyone else's.It is possible to open an account with the Fed at any of their branches. The Fed buys treasuries at the next auction as a market order or you can put in a limit order if you wish. I have done that because I want some type of income stream which is isolated from what I perceive is the inevitable future of the stock market. It isn't a great yeild but I think it is a safe investment.Offshore bank accounts for US citizens are a trap for the wary and unwary alike, beginning with the question on your 1041 asking if you are a signator on a foreign bank account, and the explanation required of a yes answer. Not impossible to do legally, but care required. And the socialist governments have mounted a big campaign that is going on right now against Euro area tax havens which will affect them all in the near future. Nothing will happen immediatley because the Rothchilds and Rockefellers have to move their trusts somewhere else first, but it is inevitable that things will change soon. beesting (12/3/99; 11:55:15MDT - Msg ID:20149) Sir--YGM. My real audio doesn't work, could you give a synopsis and analysis of what was discussed by Ron Paul and the others concerning Gold on the other site last night...Thanks in Advance......beesting. YGM (12/3/99; 11:51:42MDT - Msg ID:20148) Latest Don McAlvany Audio.....The Real Y2K Status... http://www.audiocentral.com/rshows/mir/default.html No comments as I'm just now listening......YGM. beesting (12/3/99; 11:43:14MDT - Msg ID:20147) CAVAN MAN!! Good to see you buddie......beesting. YGM (12/3/99; 11:43:02MDT - Msg ID:20146) China------Worlds 5th Largest Gold Producer Feeling the effects of Manipulation....... Gold miners hit by price fluctuationsDate: 11/28/1999Page: 7Author: JU CHUANJIANG and ZHAO GANGBusiness Weekly staffYANTAI: Shandong Province, which produces 25 per cent of China's gold, is being heavily affected by price fluctuations on the world gold market. China has been able to produce more than 150 tons of gold within recent years, making it the fifth-largest gold producer in the world even though the gold industry is still tightly controlled by the central government. The State purchases gold at prices set by the People's Bank of China and sells to gold processing enterprises also at fixed prices. To support the gold industry, the State increased the gold purchase price from 48 yuan (US$5.78) to 96.48 yuan (US$11.62) per gram in 1993. However, the bank has reduced prices seven times since 1997 in response to fluctuations on the international market, a 25 per cent price decrease. The price cuts reduced income to Shandong's producers by about 1 billion yuan (US$120 million) per year. About 90 per cent of its gold enterprises fell into great difficulties. China's gold purchasing prices reflect price fluctuations on the international market. When the British central bank sold 25 tons of gold on July 7, 1999, and announced that it would sell another 400 tons, the International Monetary Fund and some European countries also sold gold in large quantities on the international market. This resulted in the lowest gold prices since 1970. However, sales of big quantities of gold ended in early September. The price climbed by 27.8 per cent between September 3 and October 6. In China, gold prices increased from 69.6 yuan (US$8.42) per gram to 85.2 yuan (US$10.27) in October. Price changes on the world market have brought uncertainty and risk to the gold industry in Shandong. To reduce risks, the province's gold industry has taken several steps to increase its income. According to a local official, the gold industry reduced 20 per cent of its management costs and 10 per cent of its production costs during the first six months of this year. The industry is placing emphasis on the development of non-gold sectors in the province. More than 300 enterprises engaged in the manufacturing of machinery, electronics products and building materials, as well as hotel services have been set by the province's gold industries. A foreign-funded metal processing company set up by the Penglai Gold Group has exported its products overseas. ------------------------------------------------------------------------Copyright by China Daily. All rights reserved. megatron (12/3/99; 11:37:39MDT - Msg ID:20145) canuck gold Don't be too quick to assume a 'lid' has been placed on CB gold sales. I can see how it was a short term 'sucker punch' for some people, but as I've said before, NOTHING substantial is going to happen until macro-economic events COMPLETELY over-whelm the situation. The maggots that presently run this world are extremely hostile towards gold and personal freedom and will not let something like illegal activity stop them. We're going to have the last laugh, just not yet. YGM (12/3/99; 11:33:22MDT - Msg ID:20144) Russian Oil Export Tariffs... Possibly to near double....(and measured in Euros!) Russia Mulls Raising Oil Export Tax To 12.5 Euro/TMOSCOW, Dec 3, 1999 -- (Reuters) Russia is considering raising the crude oil export tariff to 12.5 euros per metric ton from 7.5 euros now, but a final decision will be taken by Prime Minister Vladimir Putin, a senior trade ministry official told Reuters on Thursday.Andrei Kushnirenko, head of the ministry's tariff policy department, said that the commission for protective measures in foreign trade had examined oil tariffs on Wednesday but could not reach a unanimous decision."Our commission examined this issue but could not reach a common position," Kushnirenko said. "So it was decided to leave the right to decide on the issue to the head of the government."Russia raised its crude oil export tariff to 7.5 euros per metric ton in September from five euros previously to take advantage of rising crude oil prices on international markets.Since September oil prices have continued to firm.The government took a decision in October to increase budget revenues by increasing commodity export tariffs. This was followed by speculation that the increase would be extended to hydrocarbons, which make up the bulk of Russian export earnings.Kushnirenko declined to forecast when the new crude oil export tariff could become effective if a decision was taken to raise it."It can only be set after a government resolution has been published," Kushnirenko said, ruling out the possibility of the new tariff being imposed retroactively.Customs tariffs normally become effective after a government resolution is signed by the prime minister and published in the official gazette, but in urgent cases this procedure can be overruled by a presidential decree. beesting (12/3/99; 11:31:59MDT - Msg ID:20143) Rhialto msg.#20098--Response--. Part of your post:What would you suggest today if I have $150K Gold and $150K cash.Do I add to the Gold holdings or try to diversify my retirement portfolio? My choice is T-bills and notes.My answer:First,thank you for asking these questions of me,but I'm not qualified IMHO to help you. Each persons situation and goals are unique.A lot depends on present age,life style,family size,present retirement plans,health plans, etc.I can share some of the pitfalls I've encountered;1. Usually lost money when I followed advice from anyone else.2. Don't loan money to friends or relatives.3. As my deceased father would say,"there are no sure things in life."4. I am a devout Goldheart(for 30 years)so my opinion would be biased by that.Prior to 1983 I made money on Gold stocks.The stocks purchased after 1983 are still way down from original purchase price,but by 1994 we had recouped most of our original investment thru dividends.5. In 1996 started acquiring physical Gold as part of a deversified portfolio.Currently 1/3 of our portfolio is physical Gold. 5% is cash on hand(in case Y2K is a big problem)I think your choice of U.S. Government debt is a wise move,however strange things can happen in a life-time...try to prepare for any scenario.....check out retire-ment in foriegn lands...I am. With proper planning you should be able to live comfortably anywhere in the world(thats politically stable) presently.Remember(if your in North America)our ancestors migrated successfully from all over the world. Anyway to sum up, those decisions right or wrong are yours and only yours to make, it's your life your planning here.P.S. If you've already got $150K in physical Gold, you could become a Goldsmith upon retirement and turn $150K into $1 million.Best of luck......beesting Cavan Man (12/3/99; 11:31:01MDT - Msg ID:20142) The Stranger on FOA et al Interrupt Self Imposed Exile "Never concede with spontaneous alacrity or calculated observation that things are as they appear to be.Never assess and conclude with comprehensive finality of judgment the consonance and consistency of current events with events past despite lifetimes of experience and academic progress".The Rule of Cavan Man (BY CM)Return to self-imposed exile. nickel62 (12/3/99; 11:19:41MDT - Msg ID:20141) Canuck good post ! The confusion between the two of you might lie in the fact that The Stranger is forgeting that the 21/2% return(?) he is ascribing to gold over the last hundred years has almost all come because of the gradual depreciation of the paper fiat currency over that time. In fact he would find that almost all of that cummulative 100 year 2 1/2% decline has happened since the tie to gold was severed in 1971. And more importantly if he thinks that the rate of 2 1/2% per year over a hundred years was slow he is saddly mistaken,and has not learned his own lesson of compund interest very well.The fact that almost all the decline of the fiat currencies value his "return" to gold has happened in the last 28 years in spite of the fact that the current price is the lowest of most of that perieod, reenforces exactly what you and most of us have been saying that the game is ending for fiat currencies rapidly and the high returns to those who hold non depreciating gold lie ahead.In 1981 the return on the stock market for the preceeding fifteen years had been less than 2% per annum over the period,this said nothing about the next eighteen years return did it? Stranger perhaps you want to revisit the investment merits of your arguement. YGM (12/3/99; 11:12:03MDT - Msg ID:20140) This Applies to MOST of Forum Members, as Educaters Some are seriously lacking in the "Manners" Dept. From the Hans Sennholz site---Quote of the Week------------------------------------------------------------------------The Week of November 28, 1999:A Good Education: "A good education is the apprenticeship for life; in its widest sense it includes everything that exerts a beneficial influence on a young person and prepares him or her for virtuous and fruitful living. There are five criteria of a good education: correctness and precision in the use of language; gentle manners which give form and color to our lives; sound standards of morality and a character based on those standards; the power and habit of reflection; and the ability to work. In short, a good education develops the ability to speak and write effectively and imparts a sense of right, duty, and honor. " (A Good Education, p.1) Canuck Gold (12/3/99; 11:02:01MDT - Msg ID:20139) The Stranger (12/3/99; 9:39:27MDT - Msg ID:20134) Maybe your recent posts are intended to rattle a few cages and generate some controversies or something but I think your hostile attitude is way out of line. In fact, I find it hard to imagine that you truly believe what you're posting. The consistent opinion (of most of the thinking posters at this forum) is that when the US dollar takes the inevitable hit, whatever investments you are holding that are not tangible assets (like gold, diamond, art etc) are going to take such a beating that their value will be squat relative to today. When you're burning US dollars and Microsoft stock certificates to keep warm, what good will be the power of compound interest then. Why do you think the bond market is going to pot. Do you really think 30 year bonds will return true value when they mature? If you really believe your statement:"Yet, over the past 100 years, gold has risen in price against the dollar at an annually compounded rate of about 2.5%, probably less than any other investment you can think of.The point is, gold is inherently a short term investment for which timing is ABSOLUTELY ALL THAT MATTERS. Furthermore, I submit that people who hold gold year in and year out in quantities which are disproportionate to their other investments are squandering any opportunity of ever achieving wealth in their lifetime." then you're truly in the wrong place. You're looking for a quick fix. You have the day-trader mentality. Instant gratification.Doesn't your above statement scream at you? Something as important as gold should have appreciated at a significantly greater rate. The supply/demand numbers dictate that the price has to take off sooner or later, especially now that a limit has been placed on future CB loans. Look what's happened to the price of oil in the last 6 moths. The powers that be can only manipulate the market so far, but when it goes, it will unwind like a clock spring or more likely an earthquake. The trouble is, no-one can accurately predict when that will happen. Those of us who are patient know it's only a matter of time and we're prepared to wait.One of the cardinal rules of investing is that you cannot time the market but you're using this forum in an attempt to do just that. You're frustrated that the predictions posted here have not come to pass during your short attention span. Like a spoiled child, you're lashing out at those around you because you can't have what you want when you want it. Everyone is entitled to their opinion. Just because you interpreted FOA's writings to mean that what he anticipates will happen should have happened by now is your problem, not his. He has never predicted when gold will move, only that it will move eventually. Those of us who agree have established our position and will patiently wait it out. You can disagree if you like, but there is no call to be insulting about it.Please take out your frustrations somewhere else. jaydeevee (12/3/99; 10:56:21MDT - Msg ID:20138) POG now around $280 http://www.usagold.com POG now about $280..........GATA Chairman Bill Murphy .......'despair is everywhere again. One would think by the price action of gold and silver that we are in for some tough times ahead. ... Well, that is JUST NOT THE CASE... the shorts are in dire shape. (just luv the use of caps here!)Confidence! Confidence! Confidence! ......mumble....mumble....mumble.... the shorts are in dire shape......the shorts are in dire shapeC'mon chin up!the shorts are in dire shape.....mumble....mumble....mumblethe shorts are in dire shape......mumble....mumble....mumblethe shorts are in dire shape......the shorts are in dire shape......the shorts are in dire shape......the shorts are in dire shape......Whose 'shorts'? The Invisible Hand (12/3/99; 10:54:14MDT - Msg ID:20137) Safran intrigue http://news.bbc.co.uk/hi/english/world/europe/newsid_548000/548288.stm This is from the BBC whose World Service EuropeToday and WorldBusinessReport programmes just reported that the Russian mafia may be involved. beesting (12/3/99; 10:09:30MDT - Msg ID:20136) **INTRIGUE** When it was announced this week that HSBC take over of Republic National Bank(a large U.S. bullion bank) was approved, I spent one day on the internet trying to find out who HSBC is and who the major stockholders are....Search results almost -0-.This is what I did find out;HSBC-Stands for the 160 year old Hong Kong Shainghi Banking Corp.(3rd largest banking corp. in the world)offices in 79 countries.Headquarters in London England.And thats it!!!Don't know who the officers are,owners are,who has controlling interest etc.Does anybody out there know???I have suspicions, could this be a banking arm of N.M.Rothschilds & Sons????And a murder mystery also to solve.....beesting USAGOLD (12/3/99; 10:06:46MDT - Msg ID:20135) Today's Gold Market Report MARKET REPORT(12/3/99): Gold continued to track down in today's early trading.The metal had slid to below the $280 mark in London before staging a rally that brought it back to $282.75 at the afternoon fix. The rally extended to the open of the New York session. Another 64,236 ounces of gold came into the Comex warehouses yesterday and it appears that most of the gold is going into the accounts of Goldman Sachs and Deutsch Bank (the "stoppers" per Comex parlance). The largest deliveries were made by Cargill, the Bank of Nova Scotia and to a lesser extent, Morgan Stanley (the "issuers" per Comex parlance). (Thanks TC) Does this indicate a squeeze? We wouldn't go that far but it does establish that there are now parties on the other (long) side of these Comex futures' contracts who want delivery. Hence, the metal is pouring into the Comex warehouse. Meanwhile, the price continues to move downward in most mysterious fashion. London traders are blaming the fall on the usual culprit -- "fund-selling." If these funds keep selling on paper, and people like Deutsch Bank keep taking delivery someone is going to end up with a boatload of cheap gold and someone is eventually going to run out of sources -- shades of the late 1960s when DeGaulle led a European charge on U.S. gold reserves. Being owners of the physical metal as our primary portfolio hedge, CPM/USAGOLD clientele can afford to take an academic interest in the proceedings, continue accumulating on these dips and calmly wait to see how this interesting scenario will play out. Speaking of watching and waiting: I would direct readers to a very important post at USAGOLD FORUM (Message #20118, posted by YGM, look under the heading, ALL THINGS TO ALL MEN). The article published yesterday in the London Financial Times delves into the back room activities of Goldman Sachs, the Bank of England, and British regulators during the Ashanti crisis in October. Well, that's it for today, my fellow goldmeisters. The snow's falling, it's beautiful actually -- and I'm fighting one of those winter colds. Looks like gold might be on the mend. We will see what the day brings. Have a nice weekend. Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving a trial subscription to our widely read newsletter, News & Views: Forecasts, Commentary and Analysis on the Economy and Precious Metals. Or you can go to our ORDER FORM and submit your request by E-Mail. You will also receive our introductory packet on investing in gold. For ongoing discussion on economic and political issues near and dear to gold, please visit our USAGOLD FORUM. I think you will enjoy and benefit from the on-going discussion. nickel62 (12/3/99; 9:07:08MDT - Msg ID:20133) Excellent post for a more recent conparison the Russian Ruble! I believe that if you account for the 10 for 1 reverse split of the early 1990s the Ruble has done about a 100 to 1 decline in about twelve years. This would be the magnitude of a decline in the dollar needed for $30,000 gold. More than I expect but John Templeton was called a wide eyed optimist in 1980 for calling for a 3000 yes that is 3000 Dow. So maybe $30,000 dollar gold is possible after all. ORO (12/3/99; 8:31:34MDT - Msg ID:20132) Futures driven rally Some are selling into the futures rally.Futures have been above fair value for the whole hour but for 4 minutes. As trend-is-my-friend money is leveraging into the futures the arbitrageurs bridging between the rally in futures and the individual stocks are being stuck with them - the tech stocks are being sold to the Arbs. Indications are that shorts in the stock market are getting cleaned out.Volatility is indicating that tradeable stock in tech companies remaining outside retail index products is limited.We are in a hyper version of July 98. It is more concentrated this time, with fewer participants than ever, hence the stronger performance of the tech laden indexes.The VIX is back at the 20 level. Watch for it dropping further. If we manage 19 we are in business for a serious decline towards mid-late Dec. Triggering the decline should be a push by Wall Street firms to take the current outstanding call options on stocks back out of the money.Cycles from the FFT breakdown indicate a major quarterly top is forming. Mr Gresham (12/3/99; 8:23:02MDT - Msg ID:20131) Cleaning up past crises http://financeservices.about.com/business/financeservices/gi/dynamic/offsite.htm?site=http://commdocs.house.gov/committees/bank/hba43661.000/hba43661%5F0.htm This morning's reading -- I had meant to research more fully the longterm outcome of the S&L crisis, but this is about all the time I could spare for now.Problem: Financial crisis?Solution: Throw it on the National Debt." From its inception in 1989 through its closure at the end of 1995, the RTC took over and resolved 747 failed thrifts having over $400 billion in assets at book value. The RTC ultimately disposed of all but $8 billion of those assets, which were transferred to FDIC management at the sunset of the RTC, along with the RTC's remaining liabilities. According to the latest GAO financial statement audit of the FDIC, the RTC incurred total costs of $86.4 billion. Overall S&L clean-up costs significantly exceed that amount, however, because of losses incurred by FSLIC between 1986, when it officially became insolvent, and 1989, when the RTC assumed responsibility for resolving failed thrifts. Based on GAO and FDIC estimates, overall S&L clean-up costs since 1986 totaled $156.4 billion, of which taxpayers financed $128.4 billion, or 82 percent of the total cost." nickel62 (12/3/99; 7:42:42MDT - Msg ID:20130) Gold stocks trading very strongly in the face of bullions decline The market action in the gold equities is quite encouraging. nickel62 (12/3/99; 7:32:50MDT - Msg ID:20129) After the Extholing of Robert Rubin's vitues in the Financial Times two days ago http://www.spotlight.org/Nov__16/Rubin/rubin.html And now Safra's death. Perhaps we should get ready for the Apothoesis of Rubin to his rightful position as head of the US Federal Reserve. Robert Maxwell knew too much and maybe so did Safra.http://www.spotlight.org/Nov__16/Rubin/rubin.html nickel62 (12/3/99; 7:32:16MDT - Msg ID:20128) After the Extholing of Robert Rubin's vitues in the Financial Times two days ago And now Safra's death. Perhaps we should get ready for the Apothoesis of Rubin to his rightful position as head of the US Federal Reserve. Robert Maxwell knew too much and maybe so did Safra.http://www.spotlight.org/Nov__16/Rubin/rubin.html Black Blade (12/3/99; 7:30:01MDT - Msg ID:20127) Hang on for a rough ride today friends! s&p futures up +18.90 on benign unemployment report. Au continues downward......bummer! Black Blade (12/3/99; 7:04:43MDT - Msg ID:20126) POG down $2.60 to $282.10 and s&p futures up +12.00 Au coming up slightly after dismal overnight trading, breifly going below $280.00. Markets look to open strongly. SteveH (12/3/99; 6:08:55MDT - Msg ID:20125) Significant read www.goldensextant.com In here, Howe says Fed's gold activities forced an increase in cash reserves that found its way into the markets. In other words, the Fed is responsible for maintaining the markets' levels while protecting a lower gold price. That was my take on it.11:55p EST Thursday, December 2, 1999Dear Friend of GATA and Gold:Our old friend Reginald H. Howe, the Harvard-trained lawyer and former mining company executive, sounds more like GATA than GATA itself in another brilliant essay he has posted at his web site, www.goldensextant.com. I think that Reg may get closer to anyone else to what is really happening behind government doors on both sides of the Atlantic.Please post this as seems useful.CHRIS POWELL, SecretaryGold Anti-Trust Action Committee Inc.* * *Fed Options: The Plot ThickensBy Reginald H. Howewww.goldensextant.comDecember 1, 1999 My commentary of September 20 suggested the possibility that the Bank of England's gold sales were triggered by a plea from Washington aimed at rescuing the Fed from potential big losses on the writing of gold call options. Nothing that has happened since is inconsistent with this suggestion, and what new evidence there is supports it. But to go back, an initial question -- on which I accepted the opinion of others -- was whether the Fed has statutory authority to write (sell) call options on gold. In my opinion, it clearly does. What is now codified as 12 U.S.C. Section 354 provides in relevant part: "Every Federal reserve bank shall have power to deal in gold coin and bullion at home or abroad, to make loans thereon, exchange federal reserve notes for gold, gold coin, or gold certificates, and to contract for loans of gold coin or bullion, giving therefor, when necessary, acceptable security...." This provision, included in the original Federal Reserve Act (Dec. 23, 1913, c. 6, s. 14(a), 38 Stat. 264), has remained unchanged and in force ever since. While it does not specifically mention writing call options, the broad grant of authority "to deal" in gold and to make or receive gold loans can readily be construed to include writing or purchasing options. This authority, it should be noted, addresses only what the Fed can do for its own account. It has nothing whatever to do with buying, selling, or otherwise dealing with the official gold reserves of the United States, which are under the control of the secretary of the treasury acting with the approval of the president (31 U.S.C. ss. 5116-5118). Whether the Fed's authority to deal in gold for its own account may in some respects be limited by other statutes is a question that I will leave to others, but under Section 6a(d) of the Commodity Futures Trading Act, any transactions for its account are expressly exempt from trading or position limits. Testifying in July 1998 before the House Banking Committee looking into the regulation of over-the-counter derivatives, Fed Chairman Alan Greenspan distinguished financial derivatives from agricultural derivatives, saying that it would be impossible to corner a market in financial futures where the underlying asset (e.g., a paper currency) is of unlimited supply. The same point, he continued, also applied to certain commodity derivatives where the supply was also very large, such as oil. Greenspan further volunteered: "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise." In other words, the Fed Chairman opposed any action by Congress aimed at greater regulation of over-the-counter derivatives, specifically including gold derivatives. One reason -- left unstated -- for this opposition may well have been concern that any new legislation might interfere with the Fed's own activities in the derivatives markets, particularly in the gold area. Why might the Fed have engaged in writing call options on gold? The Fed's immediate purpose and effect would be to facilitate gold leasing by enabling the bullion banks to hedge more easily short positions resulting from the sale of leased gold. Indeed, as the so-called gold carry trade grew, demand for this sort of hedging by bullion banks likely strengthened, since here, unlike in mining finance, their customers were not themselves producers of gold. More generally, by thus exercising control over the amount of leasing and resulting short sales, the Fed could have achieved considerable influence over the gold price. Indeed, perhaps it was just this kind of activity that led a former Fed governor to claim on CNN's "Moneyline" in October 1998: "The Fed has precise control over the price of gold and therefore over commodities such as crude oil. No inflation, therefore no need to raise rates." A recent analysis by Ted Butler faults the Commodities Futures Trading Commission for not taking action against certain bullion bankers over the option strategies foisted on certain mining companies. The basic strategy to which Butler refers is the sale by mining companies of long-dated call options to finance the purchase of relatively short-dated put options -- that is, the strategy that crippled Ashanti and Cambior. In all that has been written or disclosed about this strategy in recent weeks, two facts stand out. First, the risks were not fully or widely understood. Second, the strategy experienced a surge in use right after announcement of the Bank of England's gold sales program. No doubt, as many have suggested, this sudden spurt of options hedging reflected the gloom that descended over the gold market in the wake of the Band of England's announcement. But to the extent that the bullion banks actively pushed the strategy onto their mining customers, it may also have represented an effort by them to replace Fed call options that were in process of drying up. Efforts at market manipulation almost always come to a bad end because ultimately market fundamentals will assert themselves. Central bankers tend to have a better appreciation of this than politicians, which is almost certainly why the Bank of England's gold sales program was ordered by the British government over the objection of bank officials. If the BOE's gold sales were originally intended to rescue the Fed from a losing options position as gold threatened to move over $300/oz. last May, it has probably largely achieved that narrow goal by now. But the cost has been enormous, not only in British gold but also in undermining continued central bank control of the gold price. Neither the BOE nor its political masters foresaw that their attack on gold would trigger the Washington Agreement, announced Sept. 26, 1999, which overnight caused an almost complete reversal in negative attitudes toward gold created by several years of highly publicized central bank sales and huge increases in their gold leasing activities. The resulting spikes in the gold price and in already high lease rates effectively killed the gold carry trade and forced far more prudent use of hedging by mining companies. While the troubles of certain mining companies caught wrong-footed have been widely noted, the damage to the bullion banks themselves, not to mention certain hedge funds, has yet to be fully disclosed. The Bank of England's reputation for prudent oversight of the international gold market, long based in London, is badly tarnished. Kuwait's release of its entire official gold reserves for loan through the BOE has only underscored the parlous condition into which that market has fallen. The BOE itself now appears locked into a gold sales program that amounts to a fire sale of British gold, so much so that two of the world's largest mining companies have successfully used the last two auctions to cover some of their own forward sales. Whether wholly unsubstantiated or floated as a trial balloon, the mere rumor -- quickly denied -- that the BOE might cancel future planned gold sales caused an almost immediate $10/oz. spike in the gold price a couple of weeks ago. Charges fly that the BOE's sales are part of a government plot to join the European Monetary Union. If so, it's a pretty dumb plot. By not joining the first round of the EMU, Britain regained possession of 173 metric tons of gold previously deposited with the EMI (predecessor to the EMU) and increased its total gold reserves to 715 tons, which its gold sales program when completed will reduce to around 300 tons. Should Britain join the EMU, it will probably have to allocate about 140 tons to the European Central Bank, leaving national gold reserves of around 160 tons. Britain would thus be the only major EMU member without substantial gold reserves, and thus the only one not to benefit from any future upward revaluation of gold. Beyond these direct consequences, some believe that the Fed responded to the October gold banking crisis and presumed problems of the bullion banks by adding liquidity to the banking system, thus providing much of the fuel for the November stock market rally. In this connection, it is worth noting that the bullion banks with apparently the greatest exposure to Ashanti's problems are among those most often associated with suspected Fed activities in the gold market. So too the question of whether and to what extent short gold positions may have played a role in last year's Long-Term Capital Management affair remains shrouded in mystery. What does appear, however, is that the Fed is very reluctant to allow the U.S. stock market to progress from a correction into a true bear market, adding credence to the growing belief that the stock market, however overvalued, is too big and too important to be allowed to fail. There is a certain irony in the fact that since Alan Greenspan assured Congress in July 1998 that over-the-counter financial and gold derivatives required no further regulation, these very same derivatives have twice presented the Fed with an opportunity to allow a stock market correction to turn into a bear market for which it could escape much of the blame. In each case the Fed may properly have been concerned that the decline might cascade into a disorderly rout. But by intervening to head off these stock market declines, the Fed may also have undercut the credibility of its own interest rate weapon. Searching for a way to freeze the bubble or at least to let the air out slowly, and unwilling to let market forces have their way, the Fed has steered the whole American economy into uncharted waters. The Fed was founded to stabilize the gold value of the dollar on the theory that central banking could achieve this goal better than free banking. Having utterly botched that mission, it has accepted a new one: guardian of the American economy's paper wealth. The Fed has never had nor will it ever have "precise control" over the gold price. The question now is whether its control over the stock market will prove equally illusory. No doubt, should its traditional monetary tools or suspected derivatives activities appear inadequate to the task, the Fed will unveil some new weapon. But if the Bank of England ever announces a plan to achieve greater diversification of its dollar assets by investing proceeds from its gold sales in U.S. blue chip stocks, beware. For if the first rule of investing is "don't fight the Fed," the second is "bet against the Bank of England."-END- ------------------------------------------------------------------------Introducing the revolutionary Rocket eBook: an electronic reader thatlets you fit 10 books in one hand. IPO at $239 with a $25 bn.com giftcertificate and four McGraw-Hill management or investment bestsellers.http://clickhere.egroups.com/click/1904-- 20 megs of disk space in your group's Document Vault-- http://www.egroups.com/docvault/gata/?m=1 Number Six (12/3/99; 6:07:26MDT - Msg ID:20124) Armstrong connection... Wasn't armstrong supposed to be turning states evidence for immunity...He'll be next..."The deal was put on hold in September when U.S. fund manager Martin Armstrong, a major client of Republic's futures brokerage, was charged with bilking Japanese investors out of $950 million in a securities fraud scheme."Reuters Wotan (12/3/99; 6:03:00MDT - Msg ID:20123) HSBC Says Appalled by Safra's Death http://dailynews.yahoo.com/h/nm/19991203/bs/hsbc_safra_1.html knew too much??? RossL (12/3/99; 5:53:26MDT - Msg ID:20122) $30000 gold - in perspective Take a look at an Italian 20 Lire coin from the late 19th century. It is now worth somewhere near 100000 Lire. This is the history of fiat money. Now, free your mind from artificial boundaries and ponder at a US $20 gold coin from the early 20th century. SteveH (12/3/99; 5:44:06MDT - Msg ID:20121) Saffra? CNBC reports Edmund Saffra (?spelling) 29% owner of Republic Bank of New York (one of the Comex repositories) was murdered in Monoco by two armed knife men. His appartment was torched. Scandal or coincidence to his bank's releationship to gold? Netking (12/3/99; 2:45:33MDT - Msg ID:20120) POG stops breached Good Evening - Looks like all of those stops around $286 have been breached (as predicted) & POG appears to be in freefall down to the next support level ($280?) to settle in the 270's maybe?. Not a time for gloom but rather another excellent opportunity ahead to buy cheaply.Where the Commercials are net short the market will not be powered to move upward. el St.One (12/3/99; 1:55:03MDT - Msg ID:20119) PH in LA Msg #20110 Please stand and bow while I give you a standing ovation.One more..............el YGM (12/3/99; 1:19:01MDT - Msg ID:20118) This is a Late Nite Long Read AND Worth Every Minute..........GATA on the MOVE Dear Friend of GATA and Gold: Here's a special "Midas" commentary by GATA Chairman Bill Murphy at www.LeMetropoleCafe.com, wherein he says that the gold shorts are still very much in trouble and appeals for support for GATA's forthcoming advertising campaign to ask the crucial questions about manipulation of the gold market. Please post this as seems useful. CHRIS POWELL, Secretary Gold Anti-Trust Action Committee Inc. * * * "MIDAS" COMMENTARY BY BILL MURPHY www.LeMetropoleCafe.com December 2, 1999 Spot Gold $284.50, down $4.80 Spot Silver $5.08, down 8 cents Throw out the technicals when a market is rigged. This is not sour grapes talk. I had thought the market was sold out. For whatever reason, it was not. I was wrong. Despair is everywhere again. One would think by the price action of gold and silver that we are in for some tough times ahead. That is what many of you told me today. Well, that is JUST NOT THE CASE. Ironically, the feedback I am receiving from all my very good sources is that the shorts are in dire shape, that the surprise $80 rocket move up in the gold in early October devastated bullion dealers and gold producers alike far more than is realized. The word is that several other Cambiors and Ashantis are being kept under wraps. The word is that United Bank of Switzerland is laying off 65 of its personnel in the foreign exchange and gold operations. We have alluded that to you for some time now. Other bullion dealer operations are also being pared down. That can mean only that the derivative selling game of the past years is winding down to a significant extent. I will have much more to say on this soon. Today was a very busy day. The Gold Anti-Trust Action Committee received more favorable commentary from highly regarded gold industry people than any other day this past year. For it is becoming apparent to even those most skeptical of us that certain powers are manipulating the gold market. Because of that recognition, forces are being mobilized to fight back. In addition, I received a call today from a highly respected hedge fund manager who told me that he chucked his entire Barrick Gold stock position as a result of the company's refusal to change its hedge strategies. I can tell you that his ( or her ) position was greater than 3 million shares and this person pleaded with the company to change its ways, but to no avail. He wanted Cafe followers to know that he agreed with the great novelist, Arthur Hailey, who also sold his long-held Barrick Gold position recently. The bottom line is that it makes no sense to own that stock. If Barrick does not even believe in its own market, why own it? Sell it and come back another day when Barrick thinks the gold price is going UP. In the meantime, invest in some other industry or some other gold company. This is a significant development and I have been passing this word on to other money managers: Owning Barrick Gold is a trip to mediocrity. Many other senior gold companies that are superb investments, especially now. So why not buy the ones that will benefit most when the price rallies, which it surely will? Any why will it? THE HEAT IS ON THE "HANNIBAL CANNIBALS," and they are beginning to really feel it. That is what I was told today. For one year GATA has labeled Goldman Sachs "Hannibal Lecter." At times we called them the leader of the goon squad that killed every rally attempt that gold made. You know why by now. For one year many looked askance of that description of such an esteemed financial operation as the lordly Goldman Sachs. Who were we to suggest that Goldman Sachs was acting like a cannibal toward its own clients? Well, take a gander at this Financial Times article. * * * Thursday, December 2, 1999 The Financial Times ALL THINGS TO ALL MEN The various roles played by Goldman Sachs came under strain when a rising gold price hit Ashanti, write Lionel Barber and Gillian O'Connor. On Friday, October 1, a worried Mark Keatley, finance director of Ashanti, the Ghanaian gold mining company, flew from Accra for a crisis meeting in London. Mr Keatley knew his company was in trouble, but he was about to discover that things were a great deal worse than he had feared. Mr Keatley was carrying a three-inch stack of papers. The papers summarised several thousand derivatives contracts which Ashanti had entered with 17 banks, including Goldman Sachs, the company's main financial adviser. Six days before, the European central banks had announced they were limiting sales and loans of gold. The price of gold, which had been falling steadily since spring, suddenly surged, rising from $269 an ounce to $307 over the week. On the face of it, a rising gold price should have benefited one of the world's biggest gold producers. But the papers Mr Keatley was carrying told a different story. For Ashanti, aided by Goldman, had for months been placing a huge bet on gold prices continuing to fall. Ashanti was not the only one in trouble. Goldman Sachs' multiple roles as corporate adviser to Ashanti, seller of over-the-counter financial derivatives, and trader in the bullion market were about to converge in a way that was to test not only the bank's expertise but its reputation. The full extent of the crisis began to emerge that Friday evening at Goldman Sachs' headquarters in Fleet Street. With Mr Keatley's agreement, Goldman secretly ran Ashanti's trading positions -- over 2,500 in all -- on a computer model. The results were shocking. Ashanti's "hedge book" of derivatives contracts was deeply in the red. If the 17 banks that were its "hedge counterparties" demanded the cash deposits they were entitled to, Ashanti would go into default. Ashanti would also squeeze the bullion market in closing all its contracts because it would need to purchase gold. Over the next few days, under the watchful eye of the Bank of England, an extraordinary sequence of events unfolded as the banks, led by Goldman Sachs, sought to rescue Ashanti and prevent a crisis in the bullion market. The effort was successful, but it left lingering questions among rival banks in the City about Goldman's role. Ashanti was built up on the century-old Obuasi mine in Ghana. In 1994, it became the first black African firm to list on the London Stock Exchange. Thanks to the charm and political connections of its boss, Sam Jonah, the company expanded rapidly through acquisitions in other African countries. Goldman became the main corporate adviser to Ashanti in 1996. Like other investment banks, Goldman allowed the two sides of its operations - the private advisory arm and the public trading operation - to deal with the same client. It imposed safeguards to prevent confidential information passing across the "Chinese wall" from private to public. This arrangement was subject to constant monitoring by a "control room" of compliance officers and corporate lawyers. In the case of Ashanti, Goldman's special place in the bullion market made these arrangements highly complicated. Goldman sold a wide range of financial derivatives to gold companies. It was the leading member of a so-called "big four" of investment banks with which Ashanti traded. The others were Credit Suisse Financial Products, Société Génèrale of France and UBS of Switzerland. For Ashanti, derivatives were much more than an insurance against a falling gold price - they were a source of profit and cash. This was important for Ashanti which had a heavily indebted balance sheet, partly because it had been forced to borrow to finance acquisitions rather than issue equity. The main reason for this was that neither of Ashanti's two principal shareholders -- the Ghanaian government and Lonmin, the rump company originating from Tiny Rowland's empire -- wanted to have their stakes in the company diluted. Sam Jonah boasted that Ashanti had "earned" more than $700 million by using derivatives to make forward sales of its future gold output. As long as the gold price was falling, Ashanti was able to make a profit from the gap between the current and future price. By the middle of 1999, the company had "pre-sold" some 50 percent of its reserves. But when Europe's central banks intervened on September 26, Ashanti's hedge book suddenly turned from an asset into a crushing liability. And as its derivatives positions spiralled into loss, its counterparties started to demand cash deposits -- known as margin calls. At the end of June, Ashanti's hedge book had a positive value of $290 million. In early October it was $570 million in loss, and there were margin calls pending of $270 million. The dramatic deterioration in Ashanti's financial position was being closely watched by Goldman's derivatives salesmen. But they did not know that their colleagues in Goldman's advisory team were also taking an active interest in Ashanti's affairs. For over a year, advisers led by Richard Campbell- Breeden had been working on a possible merger between Ashanti and its shareholder Lonmin. But Mr Campbell- Breeden had not yet fully grasped the implications of Ashanti's financial hedging activities. "We thought that if the gold price went up it was good for Ashanti because it enhanced its long-term value," says Mr Campbell-Breeden, "We did not appreciate that it could produce a short-term liquidity crisis." The truth dawned when he was told of Ashanti's looming cash crunch by Ron Beller, co-head of fixed income, currency and commodity sales for Goldman in Europe. Mr Beller told Mr Campbell-Breeden that J. Aron, Goldman's commodity trading subsidiary, would soon have the right to make margin calls. Mr Campbell-Breeden immediately called Mr Keatley in Accra. Mr Keatley assured him there was "no margin problem." But three days later he called Mr Campbell- Breeden at 1am and modified his position. There was indeed a margin problem, but he insisted it was containable. Later that day -- Thursday, September 30 -- Ashanti issued a statement to the London Stock Exchange, saying it had reorganised its hedge book. It said the "management was satisfied that the hedge portfolio is robust in the current gold market." As the market absorbed news of Ashanti's problems, Mr Beller tried to stabilise the company. He assured Ashanti and Mr Campbell-Breeden that J Aron would temporarily waive its right to margin calls. Mr Beller then took on an additional role. At Ashanti's request, he approached SocGen to inform the French bank of Goldman's decision to waive margin calls. At the same time, he informed SocGen about the merger talks with Lonmin. As Mr Keatley prepared to fly to London, Goldman was becoming entangled. First, it was trying to prevent a client from going bankrupt, with the risk of turmoil in the gold market. Ashanti's heavy derivatives exposure made the position more serious because other gold companies could come under pressure. Second, Goldman had to avoid the suspicion that it would exploit its access to Ashanti's books in its trading. Goldman admits this required "extraordinary measures". Mr Beller and a few Goldman traders were operating full-time during the crisis on the advisory side of the Chinese wall. Third, Goldman had to reconcile its position as corporate adviser with being Ashanti's principal counterparty. The former role involved Mr Beller not only advising Ashanti and Lonmin on derivatives, but acting as an intermediary with 16 banks. By its own admission, Goldman found these multiples roles extremely hard to manage. It created special confidentiality agreements for several people from Goldman's trading side before they were seconded to Ashanti. It also kept the Bank of England informed. Over the weekend of October 2 and 3, Goldman led frantic efforts to sort out Ashanti's hedge book and persuade the hedge counterparties not to make immediate margin calls. There was a brief break from negotiations on Sunday as some of those involved watched a football match, in which Chelsea beat Manchester United 5-0. Linklaters, the law firm, helped in negotiations with the "big four", some of which were wary about agreeing to a moratorium on margin calls without similar commitments from others. On Monday evening, most counterparties met in Fleet Street. Others took part by telephone. Later one executive from Westdeutsche Landesbank was tracked down on his honeymoon in Australia. He was told his bank had an exposure of $3 million -- 10 times the amount he had believed. After agreeing to a series of temporary standstills -- and after the appointment of CIBC in place of Goldman as principal corporate adviser to Ashanti -- the 17 banks extended the moratorium to a three-year margin holiday. But they extracted a price: the right to acquire 15 per cent of Ashanti's equity through cheap warrants issued by an offshore subsidiary of the company. Ashanti was saved, although the Lonmin bid ultimately failed because the Ghanaian government was determined not to lose control. But one month later, questions remain over the role of Goldman. Many involved pay tribute to its skill in resolving the crisis. But some rivals remain concerned about Goldman's privileged access to information. One complaint that went as far as the Bank of England, concerned a large trade executed by Goldman in the middle of the crisis. Some rivals believe it traded gold heavily at $325 an ounce in an effort to extricate both itself and clients from derivative liabilities. Goldman agrees that it traded heavily at $325 on Monday, October 4. But the bank insists it was trading options on behalf of clients, rather than spot trading for itself. Any information used for trading was gained from its own exposure to Ashanti, as well as market knowledge. The bank says it offered to resign as corporate adviser to Ashanti several times, but Ashanti resisted. As a compromise, Goldman says it encouraged Ashanti to appoint CIBC as its lead financial adviser in charge of discussions with the other banks, as soon as possible. With hindsight, some Goldman executives admit that some of the derivatives it sold Ashanti may not have been ideal for a heavily-indebted company. But it argues that the deals were "client-driven transactions" - the responsibility of Ashanti's management. Wherever responsibility lies, the result is beyond dispute. Ashanti is heavily in debt, and dependent on the goodwill of its banks. In the words of one person involved, the company is "a prisoner on the run." * * * Nice huh? Weeks ago I told you that a friend of the Cafe spoke to Sam Jonah. Jonah told him that Goldman Sacks was squeezing them by the balls. Go back and check the record. Even the FT article is more polite toward Goldman Sachs than they really would like to be. The libel laws in Britain are tough so the authors have to be careful. Who wants to fight the Goldman Sachs money? GATA is a different story. If they come after us they will have to open up their gold books. Forget about it! That is yesterday's story. Tomorrow's is: What are we all going to do about it, especially since the mainstream world is getting the drift now about what the gold market has been all about for some time? I can assure you that this FT article has REALLY raised the heat on Goldman Sachs. I received a call today from France assuring me that is the case. Our supporters in Europe also told me it is time to be very aggressive, so we are going to go all-out against the gold market manipulators. Much of our plan has been inspired by the famed newsletter writer Harry Schultz, who continues to urge his readers to support GATA. Because of his followers' support, money has been coming in so that we may soon be able to launch an effective counterattack on the Cannibals and their sugar daddies in officialdom. We are not too far from launching that campaign, but we need a bit more money in the till to make it effective. GATA would like your support and that of all the gold companies NOW. The following letter was sent to many of the major gold producers today and now is being sent to you: * * * Dear Friend: Last spring I met in Washington with U.S. Rep. James Saxton, vice chairman of the Joint Economic Committee of Congress. He told me that the best way to gain congressional support for the Gold Anti-Trust Action Committee was to tell congressmen that we are on a mission to find out the truth about the gold market. GATA now believes it is time to accelerate that quest. The gold market is rife with rumors that the U.S government is intervening in various ways to hold down the price of gold. The rumors grew the other day after the government of Kuwait's extraordinary announcement that it was sending its 79 tonnes of gold to the Bank of England for leasing purposes. This should not be a surprise to any of us in the gold industry. After all, on July 24, 1998, Federal Reserve Chairman Alan Greenspan told a House committee: "Central banks stand ready to lease gold in increasing quantities should the price rise." Gold mining companies and their employees and shareholders, less-developed countries that produce gold, and investors in gold bullion and coins have all been hurt by the unnaturally low gold price. Everyone connected to the gold industry wants to know if the gold price is being held down by some sort of concerted action and, if so, the reason and parties behind it. GATA would like the Federal Reserve Board and U.S. Treasury Department to answer 11 questions. We believe that the following plan is best suited to ferret out some truth: 1. Place the attached letter to Fed Chairman Greenspan and Treasury Secretary Lawrence Summers as an advertisement in The Wall Street Journal, Barrons, and The Washington Post so that we may be heard in government and financial circles. 2. Following publication of the ad, begin an Internet campaign to gain congressional attention for our agenda. GATA will request that all gold-oriented Internet sites get behind this campaign. 3. Once the campaign begins, GATA will ask its congressional contacts to help us get a response from the Fed and the Treasury Department. Posing our questions in public is essential. A spotlight must be focused on our issues to raise hopes that we might actually succeed. We must let the U.S. government know that if it is acting surreptitiously to hold down the price of gold, congressional inquiry will make the scheme difficult to maintain. The Treasury Department is responsible for the U.S. gold at Fort Knox, and GATA is going to call for an audit of the gold there. It would be the first gold audit since the Eisenhower Administration. Gold reserves are an important government financial asset and the American people have a right to know that it is all accounted for. They and we also have a right to know if any government gold has been lent out. This specific request for information should be helpful in gaining public support, as it is easy to understand. GATA is not re-inventing the wheel here. We are just following in the footsteps of Peter Hambro, president of Mines d'Orde Salsigne SA; Chris Von Christierson, chairman of Rio Narcea Gold Mines Ltd.; and John Morris, CEO of Gold Mines of Sardinia. They recently asked similar questions of the Bank of England. To achieve our goals, the Gold Anti-Trust Action Committee needs your support. We have received substantial contributions from two senior gold companies. Without them we would not have been able to retain our excellent lawyers and gain publicity around the world in the last 11 months. We hope that you also might help us, particularly by contributing to our ad campaign. We need additional support to pull this off, as the ads will be expensive -- but well worth it. If you do want to help our ad campaign financially, your contribution will be used only for that. Communications and contributions to GATA are kept in strictest confidence. You will not be identified with us without your permission. GATA has received financial support from many gold company shareholders. Because of it we have made great progress. But we have to keep plowing ahead on behalf of gold. We can do so with your help. Thanks for your consideration. Best regards, BILL MURPHY, Chairman Gold Anti-Trust Action Committee Inc. * * * The following advertisement is under final construction and was presented to many gold companies in the following manner: ADVERTISEMENT, layout under construction To: Alan Greenspan, Chairman, United States Federal Reserve System, and Lawrence Summers, Secretary of the Treasury. From: Bill Murphy, Chairman, Gold Anti-Trust Action Committee; Chris Powell, Secretary, Gold Anti-Trust Action Committee; B. Ethan Stroud, Attorney, formerly Department of Justice, Treasury Department, Washington D.C.; John R. Feather, Attorney, formerly Legal Staff, Federal Reserve Bank. Dear Chairman Greenspan and Secretary Summers: On July 24th before a House Banking Committee and on July 30th before a Senate Agricultural Committee, Alan Greenspan Black Blade (12/3/99; 0:32:31MDT - Msg ID:20117) News from the 51st state (aka Canada):) The Vancouver Stock Exchange and the Alberta Stock Exchange have been combined into one junior market called the Canadian Venture Exchange. All companies that were previously listed on either the VSE or ASE are now listed on the new exchange, CDNX. ORO (12/3/99; 0:22:58MDT - Msg ID:20116) THC - All roads lead away from Rome Was it not Visigoths who found Roman roads so convenient for transporting troops into Rome?Was not the Atomic Bomb gracing the Soviet arsenal soon after it was developed and used for the first time?Contrary to what some may think of the US military might, there is a limit as to how effective it can be, and there is a question as to how significant a victory would be. How would a victory against Japan translate into any benefit for the US? Or a victory over France? A victory over Saudi and IRAN?What possible good could that do to the US? The poppulations there would not provide anything the US could not obtain with the simple work of its people? The return on violence is just not there. Since WWII, when the Bretton Woods agreement essentially built both the terms of reparations for surrender of the Axis and the structure of payments by the rest of the world for the US effort in the immediate past and that for the role only it and Britain could take - for everyone else was flattened.The idea was not to allow actual redemption of gold for the dollars held, but that was the essence of a gold standard, and not having it would have meant foregoing the deal. My best guess is that the Europeans were done with the deal in 1959. At that time, the redemption of gold started and continued to grow as the US, already leveraged into oblivion, was steadilly monetizing the deficit - trying to prevent recessions by using Keynesian principles. Greshams law took hold, and over the next decade, US gold holdings were sucked out of the country despite a very frightening cold war - every post war building in Europe has a bomb shelter. But that did not stop the attack on the dollar. DeGaulle nearly broke up the whole economic system around this issue. France had no qualms about going it alone despite the US taking over its fight in Vietnam.Under threat of the hard line Brezhnev, the dollar tumbled to a fraction of its value (a small fraction) against major currencies and against any and all goods as the gold - oil exchangeability standard set up in 1969 as a replacement for the gold redeemability standard failed miserably.There is no particular military item that would limit the capability of the world to rid itself of the $. The US may intimidate and threaten, but it is obvious that it has nothing to gain from unpaid violence in a modern economy - until the reality of the "new age" settles in. (to be covered in a different set of posts). The US role as paid protector was a mercenary role - once the US got addicted to the payments. The Brits too have fallen into this hole.The final shut down of the Soviet threat left only the US as current major threat to the world. China is being prepared to be the next one, but that will take a while. With due patience and some coaxing, it may never become a threat. So, to your question, there is no need to answer it, the US will not take any great military measures to protect its currency and economic standing. It can only convince the world that it is necessary for something. If the perceived benefit is more limited than the cost, the exodus of dollars from reserve accounts will continue. As the Washington agreement makes obvious, the piggis are singing "we're not affraid of the big bad wolf". And they are doing it at the opening to his lair. The military downsizing will actually happen after the decline of the dollar breaks the nation's ability to field this order of magnitude of force.Bullion shortsAgain, the EMU CBs did not lend out more than 2000 tonnes. The BOE and a gazzillion others have done so. Probably filling another 1000-2000 tons. The US has probbably assisted in control by the sale of call options from the Fed (no proof at hand - only rumor). The old Fed gold market simmulation and report, the comments from Angel and other former Fed officials indicate that that is the case. Howe's article on Gata and Golden Sextant includes a wee bit of extra research beyond mine that indicates that the Fed has indeed been an active player in this arena. I still hope that settlement did not include gold settlement, but there is no end to the possible idiocies a self deluding CB staff can indulge in. Finally, I repeat that the bulk of the gold in the gold banking system, which is structured as a minimum 2 to 1 short by its definition, came from the gold accumulators themselves (see the Kuwaiti and Jordanian gold that was offered to save Ashanti and others) Most of the rest came from your everyday large gold investor who believed in the bluster of the banks about their creditworthiness. The Fed report of some infamy quoted 20000 tonnes were in primarilly private western hands. A large chunk of that was used alongside the Oil Royal's own gold to keep things going, to fund new contracts.The CBs manipulated the price the same way they do with any other item, they subsidized the interest rates, letting the market do the rest. Click Here to view yesterday's discussion.
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