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

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ARCHIVED DISCUSSION FROM 6/3/1999
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View Yesterday's Discussion.

Tomcat (6/3/99; 23:55:15MDT - Msg ID:7123)
True Trader versus True Believer

This debate was posted on Kitco earlier today by farfel. Who do you think wins the debate?

farfel (@GOLDEN GLOVES...re: GOLD psychological BULL.) ID#341227:Copyright © 1999 farfel/Kitco Inc. All rights reserved

Golden Gloves said...

You speak of the gold market's ability to ignore bad news. It did not, in fact, ignore any of the items on your list. Each of them played a part in bringing gold down below $300 in the first place. Each of the items was already factored into the market. Accordingly, the gold market was not ignoring this information during the bounce, but rather had already factored those items into the price.

-----------------------
Farfel Says...

When the Swiss Gold Sale was announced originally, gold analysts noted that the Swiss people would have to vote on a new constitution allowing gold to be de-linked from the franc. Many pundits suggested the Swiss people would never vote in favor of this amendment. YET THEY DID...and upon the announcement gold DID NOT FALL. Gold ignored the NEW bad news regarding the Swiss popular vote.

When the the Bank of England's top dog initially proposed the IMF sellits gold, various gold analysts suggested it would never happen because the US would never approve such a measure. Yet, when Clinton, Rubin, and Gore abruptly announced ( within a one week period ) their desires to see the US sell its gold, the market essentially ignored their announcements. Gold ignored the NEW bad news indicating the American government's sudden keen interest in selling IMF gold.

When the Bank of Canada announced its most recent sale of gold, it was unexpected and left field in nature, given that the government had announced earlier a subsidization relief effort for the ailing gold mining industry. Yet, the gold market ignored the ensuing BOC gold sale bad news.

All these issues were left field events that goldbugs essentially shrugged off. You can argue that they were already factored into the gold price...but in reality, that was not the case.

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

Golden Gloves says...

The violent reaction to the BOE news was due to the fact that it was a new piece of bad news... each time there has been a new piece of bad news, gold has reacted very decisively -- by going down.

Farfel says...

Again, see my previous paragraph plus my earlier post from yesterday. Gold's violent reaction downward was a case of market rigging by gold shorting institutions that had been alerted earlier of the announcement and proceeded to bombard the market with sell orders. Ask Bill Murphy
for further details.

Further evidence that gold is basing into a psychological bull market (albeit a broad ranged base ) is provided in the reactions of its complementary markets' inability to respond positively to good news.
DELL reports fantastic earnings ( 40% increase ) ...but the stock falls 30%. Several internet stocks have IPO's in the past month and only rise 30% vs. historical norm of 200%-300%

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

Golden Gloves says....

Mr. Fleckenstein doesn't help much by telling us that it will stop going down when it stops reacting badly to news. Tell us at what price this will happen Bill. Tell us when to buy.

He sounds a lot like Mr. Steven Kaplan. He has advised buying it all the way down.

Farfel says...

Why is Fleckenstein wrong to promote a pro-gold perspective in the market? Only through such promotion will people finally "get it" and move from ludicrously overpriced equities and bonds valued in (unofficially ) depreciating US dollars into a true flight to safety. But any transition from a bull to a bear and vice versa is usually not an overnight process and takes much time. The promotion of gold, even while it falls, is not wrong or invalid. The pro-gold voice should be heard, even as the market suggests it is wrong. As long as that voice is heard, the bear CAN
change to a bull. You advocate silencing it and almost demand goldbugs simply accept the New Era gospel that gold is effectively of no value.
You essentially say, "Roll over and die...or else join the gold shorting crowd." No gold bull can be erected on the basis of the extinction of goldbugs and a goldbug voice. For long term traders, the gold drop should not be too bothersome. So, I do not understand why you are so
upset by Fleckenstein's or Kaplan's perspectives?

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

Golden Gloves says...


Well yes, one day it will stop declining and will even move up for a while. If he keeps repeating this day after day, does that make him "right" when it finally happens?


Farfel says....

Yes, he will be RIGHT if the upspike in gold makes up for some 20 years of the metal's decline. Based upon market analysis and the huge uncoverable gold short position, there is every reason to believe that, absent government intervention, gold can climb to a new price that will make up for many years of decline.
-------------------------------

Golden Gloves says...

Finally, a point about this ongoing argument about manipulation. Manipulation won't work over a prolonged period of time, swimming against the fundamentals. If the shorts were truly WRONG then there would be a pack of buyers waiting for their every sale. Ain't happening.
The duration of the move down should tell you that there is much more than manipulation at work here.

Farfel says...


The shorts control the paper market. Their game is a paper game. If there is any event that compels huge purchases of metal AND THE PURCHASERS DEMAND DELIVERY, then the game is over for the shorts. They cannot deliver, plain and simple. So, as long as the paper markets are healthy ( and lately they are looking particularly sickly ) , then the shorts can manipulate their paper trades and avoid concretizing the paper into gold reality. A stock or bond market crash will end this paper game and compel a flight into real hard assets. If I believe that event MIGHT occur tomorrow, then why would I want to hold paper for so much as 24 hours? Remember, FIVE PER CENT of the population controls NINETY FIVE PER CENT of the wealth. I prefer to be in the five percent of the population that is swimming against the populist mania, especially since I know that when the hysterical crowd is racing for hard assets, the upspikes will be tremendous and ONE MIGHT NOT BE ABLE TO GET POSSESSION OF THE DESIRED ASSET At ALL.

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

Golden Gloves says....

The manipulation argument is very curious for another reason. Many gold bulls are, in effect, arguing that the government, cabal, whoever, is ALL POWERFUL. They can not be overcome by the fundamentals --yet. The argument continues that there will come a day when they are rendered POWERLESS -- forces will overwhelm them ( Y2K or otherwise ) which they are incapable of defending against. In other
words, an all or nothing analysis. ALL POWERFUL now...
POWERLESS later.

Of course, odds are that neither is the case.

Farfel says...

Prior to the crash of '29, some of the most powerful men in the nation called the shots. Later, those same powerful men were jumping out of windows to their death.

Powerful now, powerless tomorrow....more than likely, THAT is exactly how this corrupt manipulation of the markets will resolve itself. Former idols will be disparaged, ridiculed and extinguished...and those who
were out of favor raised in stature.

Only in America is such a revolution seen as "inconceivable." But America is no longer the country it once was. All evidence suggests an empire in decline, no different than Britain at the beginning of the century.
---------------------------

Golden Gloves says...

Just recognize it for what it is. one of the all time bear markets. it remains so until proven otherwise. the burden of proof is on the bulls. When it is finally back in the bull mode, it will be apparent to all. you won't have to call it a psychological bull market. and you will be able to make plenty of money playing that TREND. you don't have to be in ahead of time, absorbing all this pain... contrary to the prevailing analysis on KITCO.

Farfel says...

Perception is an interesting thing. You insist that we continue to recognize gold in a BEAR market mode. You are aghast at the idea of somebody like myself denying the existence of a gold bear any longer.

Well, I remain adamant that all indications are a notable change in goldbug psychology...a diminishing fear and self-assuredness in the validity of goldbug perception. It is a prolonged basing of a gold bull, but it is truly occurring....what I call a psychological gold bull.

Let me tell a little story....in creating the light bulb, Thomas Edison utilized a variety of experiments and failed 500 times before finally reaching his goal.

A journalist asked him, "Mr. Edison, how did it feel to fail 500 times on the way to achieving your incredible invention? Were you not immensely depressed and discouraged by the entire process?"

Edison responded, "Actually, I never saw it that way. As far as I am concerned, the invention of the light bulb was a 500 step process. Each step was absolutely necessary to reach the goal and I am proud of each and every step.

My point is this...it is all a matter of perception. I have long advocated a change in perception in the gold market and the dissemination of that perception to the media and public.

On the other hand, you, Mr. Golden Gloves, insist that goldbugs adhereto the Establishment's single-minded, unrelenting negative perception on the gold market.

Goldbugs are all Tom Edisons, who believe in the certain truth of their perceptions even as all those around them insist that it is invalid.

Of course, that is why they must be extinguished...but Truth will rise to the top and Truth will find its own bull market someday.

Thanks

Peter Asher (6/3/99; 23:42:37MDT - Msg ID:7122)
Steve
That whole speech reminds me of something I read recently about the media war coverage, "that journalists were commenting on everyone's perception of the events, rather than on the events themselves."

Also, It seems like they want market forces to somehow behave according to the desires of whoever makes the most persuasive lecture, rather than to behave according to what they are.-- Market forces!

"The name is not the thing"

P.S: posting problems tonight, much delay.

something else (6/3/99; 23:27:04MDT - Msg ID:7121)
Currency exchange rates
Does anyone know of any websites that post the daily exchange rate for dollars & the yen?

Also on a side note. With the amount of US debt outstanding (reference the May newsletter), Fed Chairman Greenspan would not prove to popular should the interst rate be allowed to rise. Any thoughts?

Gandalf the White (6/3/99; 23:15:48MDT - Msg ID:7120)
BIG SPARKS in my crystal ball !
It keeps telling me to hold on as "we ain't seen nuttin yet!" --- good for Gold, but the bottom may fall out of the balloon. -- Something is going to snap SOON. -- Do you all get the same feeling ? -- OK, what will it be? -- Speak to me MK, "Ari", the PhD of LA, PeterH and Aragorn III.
<;-)

Richard, Oregon (6/3/99; 22:26:39MDT - Msg ID:7119)
I'm A Man Of Faith
I generally just sit back and listen to you "wiser than I" knights discuss the world of economics and just why things are happening the way they are. But as of late, I've heard an increasing number of round table participants worrying or complaining about the continued fall in the POG (price of gold) for what ever reason.

I just wanted to state that you are not alone. I believe everyone here is disappointed with the POG. We're all waiting for that illusive 'significant rise' and when we often feel/think it's just around the corner, but then bang, another bomb is dropped and the POG continues it's fall.

When I purchased my first gold, the seller told me to plan on a '3-5 year' turn. Now that's only been a year and a half ago, so I've got 1 ½ to 3 ½ years left. I planned for my holdings to supplement my retirement and that's not for at least ten years or so, so I think I'm ok, no matter what the POG is today.

I've disciplined my self to purchase an ounce or half or so, occasionally, just to increase my holdings, ever so slightly. I pick up a ½ the other day. The local guy said 'The markets really down. Selling is good and I'm buying all the way down.' I said 'Yep, that's how you make money'. He agreed. He buying all he can get, even though he's losing money on every coin he sells today.

Cheer up you who are not seeing the big picture. For me, I'm a man of faith and 'God is still on the throne.' Nothing's changed. Buy gold! As someone here 'wiser than I' said once, "Gold, created with the universe". It ain't over. Buy what you can! (If the POG was rising and rising, you'd be wondering why you didn't buy more when it was down. (Try dollar cost averaging for your gold.)

Cavan Man (6/3/99; 21:27:11MDT - Msg ID:7118)
The New Graphics
Just a thought but has anyone considered the impact of the new paper's graphics on the public psyche if indeed there is a dollar crisis or any other affecting the world's reserve currency? In my opinion the paper looks like monoploy money and the coinage looks like subway tokens. Is my perception off the mark?

Cavan Man (6/3/99; 21:22:49MDT - Msg ID:7117)
The New Graphics
Just a thought but has anyone considered the impact of the new paper's graphics on the public psyche if indeed there is a dollar crisis or any other affecting the world's reserve currency? In my opinion the paper looks like monoploy money and the coinage looks like subway tokens. Is my perception off the mark?

SteveH (6/3/99; 21:21:16MDT - Msg ID:7116)
$268.20
What is August gold now?

Cavan Man (6/3/99; 21:18:23MDT - Msg ID:7115)
Email On Gold Loans From Chris
USAGOLD: Your response is teriffic!. I am humbled by the knowledge and intellect displayed at this forum. For those who are becoming frustrated and forlorn with regards to market direction I say; be extra patient and bide your time.

SteveH (6/3/99; 21:15:34MDT - Msg ID:7114)
Banc(ruptcies)
http://www.cnnfn.com/hotstories/economy/wires/9906/03/banks_meyer_wg/
WILLIAMSBURG, Va. (Reuters) - The U.S. banking industry is showing signs of strain, Federal Reserve Governor Laurence Meyer told an industry group on Thursday, as he said the Fed was stepping up its supervision of big banks.
"We are beginning to see slippage in important indicators of industry strength," he told a conference of state bank supervisors, noting that bad loans were on the rise for the first time since the end of the 1990-91 recession.
"Though still low by historical standards, the volume of non-performing assets increased last year for the first time since 1991 with the deterioration concentrated within commercial and industrial loans," Meyer said.
In addition, delinquencies on agricultural loans have risen because of extremely weak markets for many farm products, he added. Farmers have suffered in recent years because of ailing demand from crisis-stricken Asian nations and Russia that has driven commodity prices down.
As one of several agencies with regulatory authority over U.S. banking, the Fed has begun "sharpening its supervisory focus" over their increasingly complex operations to make sure the banking system is not placed at risk, Meyer said.
Fully 82 percent of the assets of the 50 largest bank holding companies are now held by 20 large banks, Meyer noted, which are more and more involved in activities like packaging their assets into securities and in derivatives dealing.
"We now give increased attention to roughly 20 U.S.-owned and another 10 foreign-owned banks," Meyer said, basically the biggest ones and those with the most complex domestic and international oversight structure....

SteveH (6/3/99; 21:12:08MDT - Msg ID:7113)
Peter
http://www.the-times.co.uk/news/pages/Times/frontpage.html?999
You can answer that question by looking at how they say things they want you to understand. My guess is obfuscation makes the obvious obtuse, eh?

How about this?

BY ALASDAIR MURRAY, ECONOMICS CORRESPONDENT



EUROPEAN Union leaders are to try to introduce a euro-gagging order in a desperate attempt to restore confidence in the ailing single currency.
Under a German proposal presented to finance ministers at the EU summit in Cologne yesterday, only Wim Duisenberg, President of the European Central Bank, and his deputy Christian Noyer will be allowed to comment officially on the euro's performance.

The move came as Tony Blair joined a co-ordinated rallying call from EU leaders to help to boost the beleaguered currency, insisting that he wanted Britain to join the single currency soon after the next election.

The euro's dire performance recently has become a source of severe embarrassment to the euroland countries. Although Europe's poor economic performance is regarded as the root cause of the euro's decline, often contradictory comments from European Central Bank (ECB) members and European finance ministers have created confusion in the markets and raised a big question over the currency's credibility.

Heavyweights such as Hans Tietmeyer, the Bundesbank President, have indicated their unhappiness with the currency's decline and raised the prospect of ECB market intervention to prop the euro.

The official ECB line, however, has been to play down the euro's slide as a normal function of the currency markets. Some politicians have also hinted that a weak euro may prove helpful in boosting EU export prospects.

Speaking at the summit yesterday, Mr Blair said that his intention to hold a referendum on British entry early in the next Parliament was "real" as long as the Government's conditions were met. He added: "What is important to realise is that it is in Britain's interest that the euro succeeds."

His comments on the timing of possible British entry differed in tone from his remarks at Labour's European election campaign launch two weeks ago, when he said that he would not be tied down by an "arbitrary timetable".

The Tories accused Mr Blair of trying to make up for an earlier "lapse of leadership", but welcomed the fact that "belatedly" he had introduced the Government's euro-enthusiasm into campaigning for the June 10 polls.

Government officials denied that Mr Blair had shifted his position. However, his attempt to talk up the single currency and the likelihood of British entry betrayed the concerns among EU leaders at the euro's continued slide.



then...

Bundesbank chief hints at ECB prop for euro

BY ALASDAIR MURRAY, ECONOMICS CORRESPONDENT



HANS TIETMEYER, President of the Bundesbank, yesterday hinted that the European Central Bank could still intervene in the markets to prop up the ailing euro, insisting the ECB is not neglecting the exchange rate.
"We are not in favour of any neglect of the exchange rate. The markets have not realised the potential of the euro, it is up to them if they want to lose money," Herr Tietmeyer said in a speech at Oxford University.

The comments, however, appeared to contradict the views of Wim Duisenberg, President of the ECB, who on Wednesday said he was inclined to play down the recent fall in the euro.

Mr Duisenberg's views were yesterday echoed by Guy Quaden, Governor of the Belgian Central Bank and an ECB governor, who claimed the euro's decline in value was "not greatly important".

The ECB's apparent inability to agree a coherent line on the euro has been one of the main factors in the currency's rapid slide this week.

The latest confusion took a fresh toll of the euro, which earlier had enjoyed a brief respite bolstered by the news that the Yugoslav Parliament has accepted a peace plan for Kosovo.

The euro climbed from a new dollar low of $1.0303 to clear $1.04 before tumbling back towards $1.0330. The euro also shed its gains against the pound to trade at about 64.30p, compared with a high of 64.76p earlier in the day.

A leading economist yesterday forecast that the euro could fall as low as $0.90 by the end of the year. David Hale, chief economist of Zurich Financial Services and a member of the academic advisory board of the Federal Reserve Bank of Chicago, said the failure of European politicians to kick-start structural reforms and strong growth prospects in the US would continue to depress the euro.

He added that Germany had entered EMU with an overvalued currency and would need "a soft currency to compensate".






Peter Asher (6/3/99; 21:02:12MDT - Msg ID:7112)
Thanks Steve
Glad to see I achieved something. And, thanks for the quick response

I wonder if the purpose of the doublespeak is to keep us from seeing what's going on, while being able to say they told us so.

SteveH (6/3/99; 20:53:47MDT - Msg ID:7111)
Peter
By George, I think you have it. The fed just admitted that banks may just have a systemic problem caused by new paradigms and regulations that don't even account for them, let alone regulators who can figure them out.

Odd that you chose the word blindside as often times a traffic light only goes up after several or one fatal accident. In other words, traffic lights (regulations) only happen when accidents point out safety problems. This is management by exception. Well, as derivatives, and the yen and gold carry trades are accidents waiting to happen. To those of us who either drive through that intersection or who are merely pedestrians witnessing the congestion and traffic at that intersection, we fully realize there is a problem, we have enven notified all we know in government that their is a problem, but either government isn't listening or it has been stalled in committee or the engineers can't decide what kind of traffic signal, four way stop, yield sign is really needed to control that traffic.

From my perspective, it appears that until derivatives can be blamed as the cause of a major traffic accident at that intersection in our financial system, either nothing will be done or the wrong sign will be put in place. But if you are a believer in homeostasis or equilibrium, then all systems out of equilibrium will return to a steady state given enough time, time that we all agree is running out for the new-paradign financial markets of leased gold, PPT's, and derivatives (whose definitions boggle the mind, not even counting the complexity of managing them). In other words, sit at that intersection long enough you will see lots of close calls then the big one. I think lots of close calls have already ocurred. Now we await the big one. You can see it is inevitable, you just wish you could get someone out their direct traffic until it happens but you just can't get through to the number at city hall to make it happen.

So the next time each of us drives through our home towns, try to imagine which of the traffic signals you are passing were put there only after an accident that caught city official's attention enough to warrant the placement of that signal. Then think of the gold market today. Scary.


USAGOLD (6/3/99; 20:50:05MDT - Msg ID:7110)
E Mail Question on Gold Loans from Chris
I wonder if you would not mind answering a question for me, actually two
questions. First how do we KNOW that there is so much gold sold short,
forward etc? Second if we agree that 8000 to 10000 tons IS sold forward, how
big an economic impact would that have on the world economy if all that had
to be covered fairly quickly. And of course what gold price might we see
after the dust settles, that is what range would be see gold trade in for
the year or so after such dust were to settle? The main question is how we
know that so much gold is short and how big a financial impact covering
might have? Thanks. I ask this because in the March June Kaiser Bottom
Fishing Report ( you can get a copy probably from him at 925 631 9748, there
is a very intelligent article on gold when points how that the numbers
thrown around seem to be speculations and to his knowledge, he does not know
of any subtantive proof or evidence that there in fact is such a large short
position. Thanks. Chris.

----------------
USAGOLD Reply:

Chris, I will post your questions and let things take their course. I am sure you will get much opinion from the Table Round, and invite all to comment on your important questions.

Let me just say that the risks are large and give you a rough outline why:

1. Most of the top people in the industry believe that 8000 tons are short of the mark. Some go as high as 14,000 tons. These numbers did not come out of the clear blue. They came from people like Frank Veneroso, a respected analyst with deep ties among central bankers. The traders also believe that the exposure is significant. I was told today by a major trader that the current rumor is that LTCM alone is short 1000 tons. Please note: You have not seen one top line central banker refute these figures or even comment on them.

2. The risk is with the counterparties who have gauranteed these gold loans to all sorts of borrowers but primarily mining companies and hedge funds. These are some of the top financial institutions in the United States. If for some reason the borrowers can't make good, the counterparties will have too.

3. I continue to believe that the BOE sale might be related to bailing out a counterparty in Britain. I don't think they would be doing this unless the entire British financial system were jeopardized by this counterparty failing. Just think what would happen if a similar circumstance were to develop here in the United States As you probably already know the pound is plummeting and the reason is that the market smells blood in the water. This is not a minor event.

4. Ultimately, what it all might mean is that once counterparties are threatened with failure central banks might be required to bail them out with gold -- an item unlike paper that cannot be printed. It could mean massive depletion of reserves in the host countries and all that that would portend, including an attack on the currency.

I would not make the mistake of taking this lightly. If reserve depletion is an abstract to you, consider what happened to Malaysia, Thailand, the Phillipines, Indonesia, S. Korea, Brazil, Argentina and Russia once their currency reserves were depleted. It is not a pretty picture.

Hopefully this will tie some loose ends together and perhaps help you develop some conclusions of your own. At the least I hope it encourages further study, because this is my purpose. My answer is not comprehensive but meant to offer a starting point.

MK



Peter Asher (6/3/99; 20:33:44MDT - Msg ID:7109)
Steve
First, a definition of an earlier part of the statement:

<<I would emphasize that bank supervision is, by its nature, a dynamic process. Our
practices must constantly improve or they will become quickly outdated. Supervisors must also
be flexible, both in their application of supervisory techniques to banks and in their expectation regarding what practices individual banks should follow.

This translates to "There is no policy. What ever we do will depend on which way the financial and political wind is blowing."

I will attempt to translate the statement in question, but I may do no better than they did.

<<Most importantly banks here and abroad have been engaging in capital
arbitrage techniques designed to move their higher quality, lower-risk assets to securities
markets, sometimes reducing their capital charges on these assets more than proportional to the
retained risk positions. In addition, the remaining higher-credit risk assets have the same
regulatory capital charges as the lower-risk assets that have been securitized, changing the
meaning of the resultant capital ratio. For these and other reasons, the 1988 Accord has become
increasingly undermined and the risk-weighted capital ratios have become more difficult to
interpret.>>

When they lend (sell) gold, to buy securities that will yield more, they are not properly quantifying the increased danger of getting wiped out due to owning paper instead of gold. Therefore whatever regulations exist to protect the assets are being circumvented. And therefore who ever is responsible for monitoring this is being blind-sided.

mike55 (6/3/99; 20:23:53MDT - Msg ID:7108)
NYSE Extended Trading Session
http://cbs.marketwatch.com/news/current/nyse.htx?source=htx/http2_mw
Interesting to note that in April of this year over one hundred of the largest firms held a marathon session of simulated trades leading up to the 12/31/99 rollover and a few days following that date. As I recall, the report was essentially rosy, some minor glitches, and plenty of time to fix things.

Now the evolution of the paper trading mania turns to extended hours, kinda' like your local 7-11...."we're always open!" (Disclaimer: Barring any unforseen meltdown). A couple of days ago it sounded like it was full speed ahead to almost round-the-clock trading some time this year.

Today comes news that "we're really too busy with that fraction-to-decimal conversion work and that pesky Y2K thing". Wait a minute....what changed between April and June that increased the Y2K workload and made it such a priority? Nothing. It's been there all the time.

If you're going to trade paper, make sure it's for metal!

USAGOLD (6/3/99; 20:10:19MDT - Msg ID:7107)
Steve,
For what it's worth, that looks like something Alan Greenspan would have written -- skillfully arcane. An answer without an answer to a question no one would bother to ask. I think there are a number of politicians in Congress who would move to regulate derivatives if they could just figure out where in God's name to start. AG is making sure they keep looking around for the starting line. The quote was meant to confuse. And you say, "huh?" Me too.

SteveH (6/3/99; 17:38:37MDT - Msg ID:7106)
Interpretation?
For the largest institutions, the Accord has increasingly
been weakened by the changes that have occurred in
financial markets. Most importantly banks here and abroad have been engaging in capital arbitrage techniques designed to move their higher quality, lower-risk assets to securities markets, sometimes reducing their capital charges on these assets more than proportional to the retained risk positions. In addition, the remaining higher-credit risk assets have the same regulatory capital charges as the lower-risk assets that have been securitized, changing the meaning of the resultant capital ratio. For these and other reasons, the 1988 Accord has become increasingly undermined and the risk-weighted capital ratios have become more difficult to interpret....

Some large banks have been lending gold out to obtain a return on investment (can't figure out what it means: sometimes reducing their capital charges on these assets more than proportional to the retained risk positions).

Then I can't really understand the next sentence. At least I got the gold lease part right. Thoughts?




USAGOLD (6/3/99; 17:36:07MDT - Msg ID:7105)
JCTex
Your post is appreciated. It's no biggie. We need to be ever alert and if an occasional error is the cost of that than it's a small price to pay. Please do not hesitate to send me other information as it comes to you.

Gandalf the White (6/3/99; 17:23:22MDT - Msg ID:7104)
Here are a couple of items from SJ Kaplan which confirms my crystal ball is NOT in need of adjustment !
Gold Mining Outlook
http://www.goldminingoutlook.com.
by Steven Jon Kaplan
Updated @ 6:20 p.m. EDT, Thursday, June 3, 1999.

COMMENTS OF THE DAY: Commodities ended significantly higher on Thursday, their fourth consecutive strong showing, while precious metals closed mixed once again with sharp divergences. Gold edged up 50 cents to $265.90 spot after touching a new historic low of $263.25 spot at 11:18 p.m. EDT on Wednesday, June 2, 1999. Silver fell 4.0 cents, platinum surged $4.00, and palladium retreated $1.25. The
spread between the XAU and spot gold continued to fall, dropping 0.7 to 203.5, and is now quite substantially below recent norms near 220. This gap is likely to widen especially as the yellow metal rallies above $290; it is recommended that investors continue to switch from North American to non-North American gold shares. In other markets, bonds fell slightly, while the U.S. dollar rose
slightly and equities closed mixed.

KAPLAN'S CORNER: Question: What will happen to the spread between the XAU and spot gold as the gold price rises? Answer: The spread essentially represents the cost per ounce of production. As the gold price rises, demand for qualified workers increases, pushing up wages of gold miners. In addition, expansion projects are undertaken which would not be economic at lower prices, thus
increasing the average cost per ounce of production. Therefore, as the price of gold rises, so does the spread. At $300 per ounce the spread is about 220 (i.e., with gold at $300, the XAU will be roughly 80). At $350 per ounce it is likely to be closer to 230 (XAU = 120).
---
<;-)

jinx44 (6/3/99; 17:03:28MDT - Msg ID:7103)
Revolting Rivlin Routed
Dear Alice is a socialist hack that bj-boy WJC got into the USTreasury. Here first pronouncement was to suggest a one time 15% tax on ALL savings accounts, 401's, etc and a yearly 15% tax on the remainder. She has certainly made the rounds and will now exit with a cushy ivory tower job where she can help plot the rest of the demise of this country. We haven't seen the last of her third way machinations.

TownCrier (6/3/99; 16:51:20MDT - Msg ID:7102)
Remarks by Governor Laurence H. Meyer from the Federal Reserve Board
During the 1990s, banking organizations have increased tremendously in size as a result of the consolidation process, and the complexity of many bank activities has grown as well. These developments have crucial implications for bank supervisors, including those pertaining to systemic risks. In many respects, they have also made bank supervision more difficult.

We have not yet achieved "financial modernization" in terms of legislation, but we certainly have a far different banking and financial industry than existed a decade ago. Undoubtedly, more change is on the horizon, as distinctions among financial institutions continue to erode. That fact simply underscores the need for Congress to modify U.S. banking laws and permit the regulatory environment to catch up with market events.

Meanwhile, bank supervisors and regulators should remain focused on their principal tasks. First, to ensure that the banking system remains sufficiently safe and sound, posing little risk to the federal safety net and adequately protected against systemic risk. Second, to ensure that the industry continues to provide the American public with a full range of competitively priced banking services and conforms to legislative standards of competitiveness.

...

We are pursuing our objectives both domestically among ourselves and abroad through the Basel Committee on Bank Supervision, under the auspices of the Bank for International Settlements in Basel, Switzerland. We are designing a way forward, building upon the "three pillars" approach outlined in a consultative document released today by the Basel Supervisors Committee, a subject I will return to in a moment. This approach encompasses (1) a strong, risk-sensitive regulatory capital standard; (2) an active supervisory program; and (3) improved bank disclosures that allow the marketplace to evaluate an institution's risk posture and to reward or discipline it appropriately.

In my remarks today, I would like to address many of these and other points, with particular emphasis on the supervisory process and how we at the Federal Reserve are adapting to change. At the outset, I would emphasize that bank supervision is, by its nature, a dynamic process. Our practices must constantly improve or they will become quickly outdated. Supervisors must also be flexible, both in their application of supervisory techniques to banks and in their expectations regarding what practices individual banks should follow.

...

One aspect of supervision that has become more crucial to our oversight process relates to systemic risk and to the activities of our largest banking organizations. A decade ago, for example, the 20 largest U.S. banking organizations held 68 percent of the assets of the 50 largest bank holding companies; now its 82 percent. Then, the 20 largest holding companies held 37 percent of all U.S. commercial bank assets; now that figure has risen to 64 percent.

Those figures conceal, of course, the dramatic increase in the complexity of their activities represented by securitizations and derivative products. The notional value of derivative and futures contracts held by U.S. banks now exceeds $33 trillion, nearly five times the level at the end of 1990. Securitizations by U.S. banks, at $270 billion, have grown as fast and are expanding beyond consumer-based loans, such as credit card and auto loans, to commercial credits. Virtually all of these securitization and derivative activities are concentrated among the largest banks. While notional values and amounts securitized say almost nothing about the level of underlying risk to individual banks, they speak strongly to the increased volume and complexity of large bank activities and of the somewhat hidden risks they face. For these organizations, balance sheets and traditional lending have much different meanings from a decade ago.

... [here is the good part. Why can't they say GOLD instead of masking the term as "high-quality, low-risk assets"?]

New Capital Proposal
As I mentioned earlier, the Basel Committee on Banking Supervision has now released its long awaited consultative report on revisions to the 1988 Basel Capital Accord. For the largest institutions, the Accord has increasingly been weakened by the changes that have occurred in financial markets. Most importantly banks here and abroad have been engaging in capital arbitrage techniques designed to move their higher quality, lower-risk assets to securities markets, sometimes reducing their capital charges on these assets more than proportional to the retained risk positions. In addition, the remaining higher-credit risk assets have the same regulatory capital charges as the lower-risk assets that have been securitized, changing the meaning of the resultant capital ratio. For these and other reasons, the 1988 Accord has become increasingly undermined and the risk-weighted capital ratios have become more difficult to interpret.

Modifying the Accord is an incredibly complex and difficult procedure, not only because it must be negotiated among 12 nations and affect the policies of many more, but also because the issues are so difficult...

[That should be enough brain food for one evening!]

TownCrier (6/3/99; 16:24:56MDT - Msg ID:7101)
Ms. Rivlin resigns...BOARD OF GOVERNORS VICE CHAIRMAN
The Honorable William J. Clinton
President
The White House
Washington, D.C. 20500

Dear Mr. President:

I write to submit my resignation from the Federal Reserve Board of Governors (and from my position as Vice Chair) effective July 16, 1999.

I have had a wonderful time at the Federal Reserve. It has been a privilege to serve with Alan Greenspan and my fellow members on the Board for the last three years. The Fed is a strong bulwark of U.S. economic policy, and I believe we have contributed to keeping the American economy growing and reducing strains in the international financial system. Thank you for giving me this opportunity...etc.
...
With warm personal regards,
(Signed Alice)
Alice M. Rivlin




Peter Asher (6/3/99; 14:55:56MDT - Msg ID:7100)
Michael, Goldfly,
Did you see my # 1761 at the bottom of today's page. At least one Senator is on top of whatever may come at us regarding Internet taxation. And, at least I heard it directly from him in person, rather than from a journalist's allegations. I feel that what a Politician say's at a grass roots local meeting is more likely to be his true intentions than pre- election campaign events.

Regardless of the Hoax report, I say "where there is smoke there is fire", and I still smell something burning! I predict we'll hear more about this. The specifics of that report may have been false, but the concept sounds to bad not to be true.

TownCrier (6/3/99; 14:51:59MDT - Msg ID:7099)
S.F. Fed head expects few Y2K bank problems
http://www.computerworld.com/home/news.nsf/all/9906034feds
During the second and third quarters, some of the most severe cases of Y2K noncompliance could be made a matter of public record according to the S.F. Fed official.

Citizens were discouraged from withdrawing money from their accounts, with the rationale that the FDIC (Federal Deposit Insurance Corp) could cover losses up to $100,000, but not if the money was under your mattress.

OK, now wait a minute. If the money is under your mattress, it would seem that you wouldn't need the FDIC at all. Further, if Y2K glitches shut down the bank, surely those same glitches would derail the FDIC!
These are the times that try men's souls...



JCTex (6/3/99; 14:48:23MDT - Msg ID:7098)
e-mail tax hoax
To All:
I apologize to all of you for the hoax "e-mail tax warning." I sent it to MK, so any barbs should be aimed at me. MK I apologize to you, too, my friend. Also, thanks to whoever posted the hoax warning site...think I'll be checking it from time to time.

TownCrier (6/3/99; 14:42:54MDT - Msg ID:7097)
EU worried about Y2K, nuclear power plants
http://www.news.com/News/Item/0,4,37310,00.html?owv
The European Commission expressed alarm today about potential Y2K disruptions to public infrastructure within EU borders--including electricity blackouts, breakdowns of wastewater pumping stations, and overloading of telecoms networks, saying it was especially worried about nuclear power plants in the former Soviet bloc.




TownCrier (6/3/99; 14:35:44MDT - Msg ID:7096)
Stocks End Mixed After Late Wave of Selling
http://www.thestreet.com/markets/mktupdate/753062.html
A recap on the market action of the day.

TownCrier (6/3/99; 14:31:06MDT - Msg ID:7095)
The Fed Prepares to Go Hiking
http://www.thestreet.com/markets/marketfeatures/752871.html
Will they, or won't they? Analysts weigh in.

TownCrier (6/3/99; 14:27:21MDT - Msg ID:7094)
TECHNICALS-Forex market views and key chart levels
http://biz.yahoo.com/rf/990603/9h.html
Gimme a break. If we all used gold, we could send these clowns packing for home...

TownCrier (6/3/99; 14:23:58MDT - Msg ID:7093)
Fed's Meyer sees strains emerging in U.S. banking
http://biz.yahoo.com/rf/990603/86.html
The U.S. banking industry is showing signs of strain..."the volume of nonperforming assets increased last year for the first time since 1991 with the deterioration concentrated within commercial and industrial loans," Meyer said.

Credence Clearwater Revival says, "I see a bad moon (er, loan) risin'..."


koan (6/3/99; 14:15:55MDT - Msg ID:7092)
egg on my face
Well, I was obviously wrong about gold holding above $268. Like many, I have no idea where we go from here, but I just do not see gold going much lower or silver for that matter. My G and S junior metal stocks are way above what I paid for them in August 98. Wait and watch I guess. I still think this is the time to buy any precious metals or metals stocks.

TownCrier (6/3/99; 13:37:28MDT - Msg ID:7091)
NY Precious Metals Review: Jun gold up after new 20-yr low
By Melanie Lovatt, Bridge News
New York--Jun 3--COMEX Aug gold futures managed to recoup early
losses, settling up 50c at $267.60 per ounce. Aug had fallen to another
contract low and fresh 20-year low on continuous charts of $265.20 per
ounce in the overnight NYMEX Access trading session. Traders said that
gold saw little activity in the US session, managing to edge up as day
traders were caught short by the uptick.
However, they warned that sentiment remains negative and suggested that
gold could be due for a further slide.
One trader suggested there was "little rationale" for today's climb,
attributing it mostly to day traders, but also to some short covering from
one major fund, which was "probably getting a bit nervous."

"Fund buying late in London caught the market short and there was a
rally ahead of New York. People did what they had to do, leaving NY alone
to slowly and painfully drift back up," said Tony Caen, senior precious
metals dealer at Credit Lyonnais Rouse, noting that interest in today's
market was "light."
He said that after day traders had covered, they were "left to lick
their wounds" for the rest of the day. He noted that activity was subdued
because players were treating the market with some caution. "people just
don't know how to trade gold at these new low levels," he said.

The overnight slide was triggered as spot gold fell below $265 support
on selling from Australia, with stop-loss selling then leading to a
further tumble.
Some believed that sell orders were placed by US investors through
Australia based dealers, while others said selling could have come from
Australian producers.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN

Aristotle (6/3/99; 13:33:05MDT - Msg ID:7090)
Here's a nifty nugget I found while dredging through the archives.
Can you guess who said it?
- - - - - - - -
"You asked if you were on the right track. Well...there are as many
facets as shattered glass, different facets holding the strongest appeal
for different people. You touched upon but a few. Nor will I attempt
it...BOOKS are written on this. To the limited extent we discussed some
of these matters I thoroughly enjoyed the exchange. Thanks for your
part. My gold awareness and position has developed as I see through the
eyes of an engineer. The world abounds with opportunities for the
professional art of applying science to the optimum conversion of
resources to benefit mankind. If put to the task, a team of engineers
could NOT devise a monetary tool or system nearly as perfectly suited
for use as is gold. Economists certainly could not do it. Witness their
track record. Any viable monetary system MUST use gold as a fundamental
element. Any resistance to using gold could be viewed as a product of
intellectual stubbornness and arrogance...or else it must be admitted
that the device is crafted for the benefit of the few at the expense of
the others. You do not use a screwdriver to drive nails when a hammer is
at hand. Similarly, why would you build bridges with paper and
imagination when there is a world-class engineering alternative?
Beginning with honesty, integrity, and ethics, you arrive at gold.
A different conclusion reveals a different beginning..."
- - - - - - - - - -

Perfect money. Get you some. ---Aristotle


TownCrier (6/3/99; 12:37:13MDT - Msg ID:7089)
Fed looking for inflation acceleration-Gramlich
http://biz.yahoo.com/rf/990603/5c.html
But he declined to comment further on the U.S. monetary policy outlook. "I'm sorry but this a very delicate time," he said.

TownCrier (6/3/99; 12:33:46MDT - Msg ID:7088)
NYSE Delays Extending Trading Hours
http://biz.yahoo.com/apf/990603/nyse_exten_3.html
Y2K cited as a significant reason for the delay. They must be VERY concerned about Y2K in general, because frankly, I don't see much connection between Y2K and length of trading hours. Either everything works--from opening to closing bell--or it doesn't. Are you willing to bet your wealth that it doesn't?

Gandalf the White (6/3/99; 11:07:39MDT - Msg ID:7087)
GC9Q is now "lookin good"
268.3 on my crystal ball now.
<;-)

NORTH OF 49 (6/3/99; 10:55:18MDT - Msg ID:7086)
E-mail taxation--the forces of evil thwarted again!!!
MK
Don't feel bad, the exact same thing hit Canada about three weeks ago. It came out with the exact same format, complete with the address of a "reputable" law firm that was supposedly battling for our rights---"for free"---like that's going to happen in our lifetime!!!
No49

USAGOLD (6/3/99; 10:43:26MDT - Msg ID:7085)
Thanks, Goldfly....
Glad it is a hoax...

Goldfly (6/3/99; 10:29:35MDT - Msg ID:7084)
Gee MK, I wish youda asked me first!
http://ciac.llnl.gov/ciac/CIACHoaxes.html

That email tax thing is a hoax. That is, HOAX!

Click on the last link in the second paragraph of the above link.

Always check your source!

GF



Golden Truth (6/3/99; 10:20:23MDT - Msg ID:7083)
Thanks Cavan Man!
Your right in everything you spoke of to me. I guess i have been hitting my spirtual thumb with a golden hammer lately. I might add i think i wacked myself in the head a few times lately as well. Thanks for the "most excellent" and kind words, my spirt has been encouraged and may i please also some day, be able to watch over you to be able to repay my debt of "Spirtual Encouragement" unto you. Time to go out and buy "John Hagee"s book, His Glory Revealed. N.B The Truth shall Set You Free! thanks Golden Truth.

USAGOLD (6/3/99; 9:54:56MDT - Msg ID:7082)
Incredible!!
WARNING...IMPORTANT...URGENT!!!

Please read the following carefully if you intend to stay online and
continue using email:

The last few months have revealed an alarming trend in the Government of
the United States attempting to quietly push through legislation that
will affect your use of the Internet.

Under proposed legislation the U.S. Postal Service will be attempting to
bilk email users out of "alternate postage fees".

Bill 602P will permit the Federal Govty to charge a 5 cent surcharge on
every email delivered, by billing Internet Service Providers at source.

The consumer would then be billed in turn by the ISP. Washington D.C.
lawyer Richard Stepp is working without pay to prevent this legislation
from becoming law.

The U.S. Postal Service is claiming that lost revenue due to the
proliferation of email is costing nearly $230,000,000 in revenue per
year.

You may have noticed their recent ad campaign "There is nothing like a
letter".

Since the average citizen received about 10 pieces of email per day in
1998, the cost to the typical individual would be an additional 50
cents per day, or over $180 dollars per year, above and beyond their regular
Internet costs.

Note that this would be money paid directly to the U.S. Postal Service
for a service they do not even provide.

The whole point of the Internet is democracy and non-interference.

If the federal government is permitted to tamper with our liberties by
adding a surcharge to email, who knows where it will end.

You are already paying an exorbitant price for snail mail because of
bureacratic efficiency.

It currently takes up to 6 days for a letter to be delivered from New
York to Buffalo.

If the U.S. Postal Service is allowed to tinker with email, it will
mark
the end of the "free" Internet in the United States.

One congressman, Tony Schnell (r) has even suggested a "twenty to forty
dollar per month surcharge on all Internet service" above and beyond
the
government's proposed email charges.

Note that most of the major newspapers have ignored the story, the only
exception being the Washingtonian which called the idea of email
surcharge "a useful concept who's time has come" (March 6th 1999
Editorial.

Don't sit by and watch your freedoms erode away!

Send this e-mail to EVERYONE on your list,

and tell all your friends and relatives to write to their congressman
and say "No!" to Bill 602P.

It will only take a few moments of your time, and could very well be
instrumental in killing a bill we don't want.

Kate Turner
Assistant to Richard Stepp, Berger, Stepp and Gorman Attorneys at Law
216 Concorde Street, Vienna, Va.






Louis Williams
Louis B. Williams, Jr.
Austin Area Manager
Chicago Title Insurance Company
1601 Rio Grande Street, Suite 300
Austin, TX 78701
512-480-8353, (F) 512-469-5814, williamslo@ctt.com

USAGOLD (6/3/99; 8:58:52MDT - Msg ID:7081)
Today's Gold Report: Y2K Buying Recharges
MARKET REPORT(6/3/99): Gold opened slightly lower today after trading down nearly
$2 in yesterday's session. Overnight the metal was pushed to the $263.50 level in Tokyo
where short covering entered the market and prevented the yellow from dropping further.
The Tokyo drop was attributed to Australian producer selling. The trend continued into
European trade. There were no new features to the market today and the trends evident
since the BOE announcement appear to still dominate trading. Rumors of an additional two
million ounce "put" purchase by Morgan Stanley on Tuesday have kept most paper traders
on the short side of the market.

At the same time, the low prices continue to encourage physical purchases. At CPM (and I
am certain other gold firms), purchases of gold coins have reached levels that we haven't
seen since the fourth quarter last year and first quarter this year. It is not as hectic as it was
then, but it is close. April was subdued, but volume began to pick up in mid-May and now
the Y2K buyers are back in full force.

Speaking of Y2K, talking with many of the people interested in purchasing gold as the price
drops, we find that investors are not as concerned at this time about massive disruptions in
the United States resulting from "the bug." Instead most are concerned about breakdowns
in raw material supply lines, particularly oil, as the embedded chip problem manifests itself
in a slowdown, or even shutdown, of delivery systems in oil producing areas. In turn many
investors think that those breakdowns, or slowdowns, could manifest themselves in higher
prices and an inflationary tone next year. They are buying gold in case those breakdowns or
slowdowns translate to acute shortages, rationing, etc.

There are also concerns about the banking and settlement problems in international trade due
to the large number of unresolved computer problems all over the world. R.E. McMaster,
editor of the The Reaper newsletter points to a acute problem in Japan -- the world's second
largest economy. He says that of the 19 big Japanese banks, only two are 75% Y2K ready,
over 50% are 25% prepared. He goes on to point out that eight of these banks rank among
the world's top twenty. "Japan," he says, "is a mammoth Y2K domino that could topple the
whole financial system globally."

The other concern bothering investors is the over-valued stock market. Many see it as a
bubble waiting to burst and have decided to convert some of their paper profits into gold to
preserve the gains.

Bridge News reports this morning that "The Gold Anti-Trust Action Committee (GATA)
chairman Bill Murphy today said that the massive gold lending has reached a point which
may pose a 'systemic risk' and called for greater transparency in central bank gold lending
practices. GATA estimates that gold speculative borrowing is around 3,000 tonnes and that
total gold lent into the market ranges from 8,000 to 10,000 tonnes."

The featured article in this month's News & Views centers on government finance in an
article entitled "The Financial State of the Union." I'm sure it contains many
surprises for our readers. There is a great deal of difference between what our government
leaders are telling us and the reality with respect to the government's books. This issue is
one or our best and most informative. Please go to our ORDER FORM or call Marie at
1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly newsletter
-- and introductory packet on gold ownership.

TownCrier (6/3/99; 8:13:35MDT - Msg ID:7080)
ASIA FOREX - Regionals relaxed despite yuan scare
http://biz.yahoo.com/rf/990603/4.html
A pile of currency commentary...lots of paper with little substance.

TownCrier (6/3/99; 8:07:33MDT - Msg ID:7079)
Serbia accepts peace plan
http://news.bbc.co.uk/hi/english/world/europe/newsid_359000/359803.stm
Slobodan Milosevic accepts an international peace plan for Kosovo - but bombing is set to continue until he withdraws his troops.

From the Ernest & Julio Gallo School of military thought, "We will spare no infrastructure before it's time."

TownCrier (6/3/99; 7:56:54MDT - Msg ID:7078)
Greenspan voices free trade fears
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_359000/359301.stm
US Federal Reserve Chairman Alan Greenspan says he is concerned at signs of weakening support for free trade in America. "It is clear that all economic progress rests on competition. It would be a great tragedy were we to stop the wheels of progress because of an incapacity to assist the victims of progress."

TownCrier (6/3/99; 7:44:58MDT - Msg ID:7077)
Steel Producers Seek More Tariffs
http://biz.yahoo.com/apf/990603/steel_trad_1.html
The industry filed its latest complaints Wednesday, asking the federal government to impose tariffs.

Here is one for our free trade people to rail about. Should we pay more for steel because our next-door neighbor can't or won't sell it as cheaply as a source across the road will sell it?
Al says, "I don't THINK so, Tim."

TownCrier (6/3/99; 7:36:28MDT - Msg ID:7076)
from the Something Is Brewing Department -- "China to Banks: Close Yuan Accounts"
http://biz.yahoo.com/apf/990603/china_curr_1.html
Read this! A precursor to yuan devaluation? Something else?

TownCrier (6/3/99; 7:30:00MDT - Msg ID:7075)
Belgrade accepts peace document brought by envoys
http://biz.yahoo.com/rf/990603/oo.html
"Yugoslavia accepts the peace document brought together by the highest representatives of the European Union and Russia"
Will NATO reject it and keep dropping bombs? Place your bets...

Peter Asher (6/3/99; 7:19:23MDT - Msg ID:7074)
Cavan Man
Good Morning. Well said,"truth for Golden Truth" good start on the day.

Peter Asher (6/3/99; 7:14:57MDT - Msg ID:7073)
Getting un-stuck
$263.50 to $$266.40 to $265.00, now $265.25 in less than two hours. Volitility + mobility + recovery = ecstasy

Cavan Man (6/3/99; 7:07:51MDT - Msg ID:7072)
Golden Truth Continued
The good guys always win in the end!

Cavan Man (6/3/99; 7:02:48MDT - Msg ID:7071)
A Golden Truth
Dear Sir: I am posting this because of concern for you. That last post from yesterday that gave the Dines interview link unmasked your frustration and probably others as well. You are quite right about the degree of corruption in the American government and among the government's minions. The United States is at the same time "Slouching Towards Gomorrah" while maintaining at least a profile as the most religious country on earth. How can this be? Simple; today's opiate of the masses is economic prosperity. We have all been lulled into a stupor. I am not stupefied and apparently neither are you. However much "EVIL" has made its mark upon this government, it has not marked you unless you acquiesce. Do not fear in your frustration; fear leads to the dark side Golden Truth; the path is hatred. I share your sentiments and your frustration. However, I do not believe the perception in these economic times is reality. History is a good teacher. History can help us predict the future. The big money and mockers of this day and age will eventually crash the system. It may take time though. The world economy is balanced precariously much like the US stock market. Some outside force/event will upset the apple cart. When that happens, gold will soar. Since gold is an inherent threat to government monetary policy, at that time expect a full court press on gold. Maybe then it will be time to get out. As for me, I am keeping what I have bought through thick and thin. Gold is more than insurance; it is freedom. So, my final thoguhts are (and I apologize for the rambling), be in the world but not of it. Go about your business and keep your own counsel. Be at peace. Many will eventually receive their just desserts. Let us be certain that you and I are counted among the just men who are barely saved.

Technician (6/3/99; 7:02:38MDT - Msg ID:7070)
Friedrick A. Hayek
http://www.homestead.com/purifoysfutures/purifoy.html
I was 22, 40 years ago, when I read Hayek's " Road to Serfdom" I remains the one definitive book for me above all others. I have seen the world change with an understanding eye thanks to Friedrick. Published in 1944 it remains must read for all who seek to understand. If you have not read, please do.

Gold is terribly oversold, would not be surprised with an up day today.

Julia (6/3/99; 6:37:41MDT - Msg ID:7069)
FOA
FOA, It's been awhile since our exchange on 5/21/99. I paste it here for your convenience. Thank you for responding to me.

Forgive me, but was that your answer? I've watched for more from you but haven't seen these issues addressed. Did I miss something? Thank you. Julia


Julia (05/21/99; 13:19:20MDT - Msg ID:6574)
FOA - About the U S Dollar's Fall From Grace
FOA, Please forgive me if you have answered this question a million times in a million ways but I still don't
quite have in focus all the logical sequence of events or indicators that are revealed when a currency is going
down, especially US currency.

Please, would you explain what happens to the private citizen as their currency is being devalued? What is
their life like as it happens? What would be prudent things to prepare with other than buying gold. I've read
assorted bits from the good minds here but I have to admit that I'm having trouble piecing them all together
enough to be able to make decisions for my family. I would like to hear your thoughts about what the big
picture looks like in a simple step-by-step fashion using layman's terms....sorry, I don't know much about this
FOA and it's hard to keep it all straight over so many posts.
"When this happens then look for this to happen." "Prepare for this to happen by doing that."

For example, I think someone here recently mentioned that one of the things that will happen is that the USG
will call for the exchange of all the old 20's, 50's and 100's and if you happen not to be an insider and didn't
meet the deadline then you lost those dollars. Does this mean if my cash, not talking about my gold stash now
but my spending money, is in all new 100's, 50's and 20's I won't have anything to worry about when the US
currency crashes? Or does this mean I need to be in 1's, 5's and 10's?

Again I apologize for taking up your time with this naive request. I will be eternally grateful for your thoughts.

Please feel free not to waste your time on this if you wish. You will not hurt my feelings and I will read your
other thoughts with just as much enthusiasm. Thanks. Julia

Your response:

FOA (05/21/99; 18:09:04MDT - Msg ID:6587)
Julia, I get your point and will try to offer what you ask. Keep in mind that this is all like a chess game, with
each player holding a different motive for their course of action. Just as has happened with Britain and the
BOE thing. Their purpose differs greatly from the wants of the USA. Even the US was walking one direction
and may now have changed that!
As for the citizen / investor, their perception of most modern political maneuvers is difficult at best because
most Westerners have no formal education of real money and how the recent (20 years) events have been an
anomaly.

We will talk at length about this. thanks FOA



SteveH (6/3/99; 5:13:28MDT - Msg ID:7068)
August gold is now...
too depressing to post. I wrote this elsewhere:

Gold at $263.50 is a paper price. I don't think much actual physical is being delivered at these prices. I remind myself that the futures market requires a seller and buyer. The buyer of the contract pays dollars, the seller gold, if delivery takes place.

So, what will bust this price is soon to arrive,imo, to a theater near you: the physical delivery of gold in record proportions at this price.

As proof of not being able to get gold at this price, coins still cost $280-plus plus tax where I live.

What we have here is a market whose paper is disproportionate to its physical demand. This drive lower in paper gold appears strongly to be a deliberate attempt by questionable forces to discredit gold and to drive it as low as will gold, just as it seems S&P futures seem to be equally manipulated higher by unknown and questionable forces (could these be one and the same?). So, it seems every step lower is a step closer to the end-game.

All I can say is join GATA, write your congressmen and women, senators, SEC, etc. be vocal and politely point out to these folks the blatant and unacceptable onslought of market-makers upon these two market areas.

Remember also that this is about a currency war and who will rest the position of world reserve currency. The US$/IMF camp has lots of ammunition in what appears to be a loosing game since every dollar that is printed without one being destroyed further weakens the $.

Gold is discipline and people always find discipline returns in hard times. In the meantime, this would seem to be the grandest of all physical gold and [gold-related stock] buying opportunities.



Silver Tongue (6/3/99; 5:01:39MDT - Msg ID:7067)
Clay Pigeons
I understand that we can get $270.00 per coin per Candian Maple leaf from a hunting club up in Canada for use as clay pigeons at a hunting range. This gold will also make great paper weights as well on my desk at the office. Since the price has dropped so dramatically it reminds me about the automobile burglary up in Denver where the thief broke in and deposited several tickets to a Denver Nuggets basketball game. With the price of gold this low we won't have to worry about someone stealing our gold. Boys and girls I think that if we can weather the storm this gold is going to make us proud. Obviously it is not going to happen this month however. Frustration being the mother of despair helps us to realize that we are not economic orphans. Have faith and buy your ration of gold today.

HLime (6/3/99; 2:25:41MDT - Msg ID:7066)
Gold mine closes
Just read in our local rag that the Nixon Fork mine will close.
That is 40,000 oz Au per year that they can not manipulate.
The mine was way out in the sticks a few clicks from McGrath.
Perhaps that was part of the reason, higher production costs.
Then and again it may be the tip of the ice burg.

Harry

Golden Truth (6/3/99; 1:10:01MDT - Msg ID:7065)
Gold Spot Now 263.65 up 15cents Whoppee Do!
Where is F.O.A when you really need him eh!

Golden Truth (6/3/99; 0:44:49MDT - Msg ID:7064)
Steve H
Howdy Steve H loved your Clint eastwood quote he was definately one of the Good guys! Loved all his movies, especially The Good The Bad and The Ugly! The theme music really added substance also oh the good old Days.

SteveH (6/3/99; 0:34:34MDT - Msg ID:7063)
Depression
I am depressed. Yup. Why?

Everything is opposite the way it should be. History will favor the crazy late nineties. Hindsight will be strong then.

Where is Ralph Nader when you need him?

Where is my proza...?

August gold is depressing too...$265.50.

Peter...don't post spot...it is even more depressingly lower.

Well, Clint Eastwood said as Josey Wales, "...When things are looking real bad, you got to get real plumb mean...."

or something like that. There I feel better.

Golden Truth (6/3/99; 0:25:57MDT - Msg ID:7062)
Peter Asher
Please elaborate on my url drawing a blank i was just posting that gold was now 263.50 but it didn't work and your post beat to the punch. Yet what happened to my message did you see it for a brief micro second? If not what is your meaning? Golden Truth.

Peter Asher (6/3/99; 0:11:47MDT - Msg ID:7061)
Speaking of free trade.
Another thing that came up at the meeting yesterday with Senator Wydon, was that there is a story out that the Post Office wants a tax levied on E-Mail, with them receiving the funds to make up for their "losses'. The Senator said that since he is the author of the Internet Freedom Bill, he would certainly be waging war against that idea.

If something like that were to be considered, I think our motto should be "If they tax E-Mail, Go Postal !"

Peter Asher (6/3/99; 0:01:43MDT - Msg ID:7060)
B.O.E. & Spot at $263.50
I do belief I'm getting a morbid satifaction out of this. That'll teach 'em.



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Thursday February 9
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