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ARCHIVED DISCUSSION FROM 1/3/2000
All times are U.S. Mountain Time
View Yesterday's Discussion.
SteveH
(01/03/00; 23:55:43MDT - Msg ID:22209)
I actually wrote this to a friend when he sent me a rosy
outlook of the US from Stratfor. I did get a question on the source of the information whereby the EU marks gold to market. Did I get this wrong or do I remember that at the end of each quarter they mark their gold to spot? Anybody have a source on that?
Euro Speaks
Stratfor has been accused by some readers of being an Intelligence organization front and tends to ignore certain key elements that might otherwise be obvious to other analysts, including ignoring Y2K and the Euro.
For example, the Euro is directly competing with the dollar for market share as a world reserve currency. At first glance that doesn't seem frightful because Europe and the US both have about the same amount of gold (which everyone says is dead, except all the people who have bought the 10 thousand tonnes of metal that has been sold short into the market) with the EU at 11,000 tons and the US at 8,000 tons. The US has burned its gold bridges twice: first was with the US citizen back in 1932 when Roosevelt made all US citizens turn in their gold. Next, President Nixon defaulted on the dollar's gold backing in 1971. This is considered by some experts to have been the reason for the Mid-East oil crisis, as the Arabs love their gold and didn't want to give up their oil for fiat dollars (fiat is faith in Italian).
As a result of this default, the Jamaica Accords saw the demonitization of gold and an allegedly secret deal that would keep dollars strong and gold weak while the Arabs become the Fanny Mae, Freddie Mac of paper gold delivery contracts from large mining companies. In other words, the Arabs were able to take long-term delivery of gold mining production while the dollar was kept strong and oil kept low as the Arabs were able to buy cheap gold with cheap dollars. This is the reason, again per some experts, that gold has been held down and actually dropped over the period of 20 years since 1979.
Currently the Federal Reserve and Goldman Sachs and other bullion banks have been actively participating in a large paper gold sales effort culminating in the Bank of England auction whose direct result was to knock gold down to its 20-year low of $252 per ounce. Some suggest that the BOE gold auction is being orchestrated to keep the price of gold down while certain key bullion banks unravel some of their 10K to 14k ton paper-gold short position. Paper gold is defined as gold derivative contracts that leverage physical gold at times up to 100 times the actual amount of metal available.
Why are bullion banks trying to restrain gold? Gold is earmarked informally in some circles as the great inflation indicator. We have all heard the express gold only goes up in times of inflation. One analyst I know believes that inflation is currently running at 6-10% per year. One thing is certain is that 79 billion dollars have been added to the money supply in the last several months in direct anticipation of Y2k. Now, if your entire dollar supply (physical dollars) is only $400 billion or so dollars and you add to that in one year by almost 25%, one might construe that inflation isn't dead. Certainly gold isn't reacting to normal market forces as excess dollars compete with gold.
As I see it, the US dollar is likely to lose its stature as a world reserve currency. When that happens, the Euro will takes its place. Signs of this are evident now. EU long term bonds seem to be equal or better sellers than US long-term bonds. I am even hearing discussion of oil contract settlement in Euro dollars versus US dollars. As oil turns the world, as oil countries prefer gold to dollars, and as the Euro is less encumbered with debt than the US is, whose debt is estimated to be 5.7 Trillion dollars and whose derivative positions and counter-party risk contracts go into the 10's of trillions, the Euro and EU investments will likely become more enjoyed by savvy investors, including gold-based investments, stocks, and bonds.
The EU is going to treat gold differently this time than at any other time in history. They have said they will allow their currency to be marked to market or be valued at the price gold on the open market at the end of each quarter. If the price of gold were to double, that would back the Euro effectively with a 30% gold-backing. If gold doubled again, they their current money supply, which is all digital currently, would be backed by 60% gold. This is sufficient to interest the Saudi's in their quest for gold instead of dollars. For when Saudi oil is gone they don't want dollars, they want the gold.
So what does this mean for the US? I believe it means a massive stagflation or inflation of commodities and gold ($10K gold ?) and a recession where current housing prices and real estate come down as this market mania unwinds with the flow of dollars overseas to EU investments.
Is this a guaranteed analysis? No, but it certainly breaks a mold of current CNN and CNBC financial guru's and wizards who talk their book and predict the trend. Any market at an all-time historical high is subject to a massive reversal coming out of left field, from where nobody suspects. I say watch the gold market, watch the EU, and watch England. They are making noises about jumping the dollar ship and moving into the EU. Further, watch the settlement of oil. If that moves towards the Euro then the writing is on the wall.
One other factor may also surprise people. The stock option plans of the tech companies creates a bookkeeping profit only if the prices of these stocks continue to rise. Here is how it works:
Company A hires employee for less than good wage with stock options. Employee A sees that stock rises and exercises options. Company A gets to expense at the tax rate of the employee the amount of the options exercise and puts the cash from the sale of options into its bank account. Company A profit rises as a result of the write off. Now, if the stock doesn't go up, Employee A doesn't exercise his or her options. Company A doesn't get the cash, doesn't get the write off, and their profit is reduced accordingly. Profit goes down, stock price drops further.
If the company isn't making a profit then the pattern intensifies.
Combine these factors and the rosy outlook of the US economy becomes somewhat susceptible to foreign inflow of cash and an ever rising high-tech stock market. Combine that with a competing Euro for world reserve currency status that will orphan lots of excess dollars whose sole purpose was a reserve of a foreign CB. When that money needs a home, where will it go? The US.
When that situation reverses because of the liquidity that is constantly being pumped into this market dries up then this could turn out to be worse than the crash of 1929. Keep in mind that the 30-year old stock broker has never seen a bear market, never seen a depression or a recession and never handled a one-ounce gold coin. That tells me since they have been trained to buy on dips, they may just buy all the way down on the dips of the big dipper. Interesting thought anyway. I know that I have held stocks down to a low, in hopes of a reversal, and I did it even knowing about recession and stock collapses. What of the 30-year olds out there. Are they that smart they will know when to get out of a down market? Not.
No, somehow, we have gotten used to an ever increasing stock market that now can't afford to go down. When the momentum dies, then so will lots of wealth. The market is friendly to the least amount of people possible. When the market breaks that rule then it is time to turn on the bear sensors. Beware the Ides of March not to mention any oil disruptions as a result of Y2K glitches (FED EX already announced a 3% surcharge on shipment prices as a result of high oil prices).
SteveH
(01/03/00; 23:43:02MDT - Msg ID:22208)
Bond
down .09 at 89.19.
Gold down $4.1 at $285.50
Crude down .75 at $24.85
lamprey_65
(01/03/00; 23:41:23MDT - Msg ID:22207)
Stranger
Will do.
L.
TheStranger
(01/03/00; 23:37:29MDT - Msg ID:22206)
Lamprey
Please be very careful! As the article suggests, my views do not necessarily represent the official recommendations of the firm. Morgan Stanley Dean Witter currently rates Newmont only a "Hold". They also are not very optimistic about gold at the moment.
I semi-retired from the firm some years ago, and I have no right to try and represent the views of so many hard working and professional people. PLEASE make that clear to your father so that I don't get sued!
Black Blade
(01/03/00; 23:36:03MDT - Msg ID:22205)
Chinese proverb (or curse) "may you live in interesting times"
Au still getting hammered (now -$4.45 at $283.35), crude down -0.78, bonds down slightly, and s&p futures trending lower. Let us see what happens when London opens for it's first trading day of the year.
TheStranger
(01/03/00; 23:29:21MDT - Msg ID:22204)
Peter
No, not exactly. But the article was supposed to be about investing in tech stocks. I did wonder if he might shelve the whole thing if I only talked about gold. As it turned out, the word "gold" didn't even get in. Too bad. I tried.
Still, I was surprised at how close he came to what I did tell him. I have been interviewed for television numerous times and been featured in print, but they never get it exactly right.
lamprey_65
(01/03/00; 23:22:48MDT - Msg ID:22203)
TheStranger...Talk about coincidence
My dad has an account with your firm (don't get excited, he lives in Alabama!). Anyway, I just recommended NEM to him about two weeks ago - he's dubious on gold's future. I'll send him the article and highlight your firm and Newmont...maybe he'll take it more seriously!
Lamprey
TheStranger
(01/03/00; 23:16:30MDT - Msg ID:22202)
You Are a Good Man, PH
Actually, Provo sits on the large Utah Lake, and the sailing is pretty good when it ain't snowin' outside. By the way, you have a friend in me forever. I'll bet you know why.
Peter Asher
(01/03/00; 23:13:55MDT - Msg ID:22201)
Sorry David
Didn't mean to shout. did you try to slip in some gold advice and get stone-walled?
TheStranger
(01/03/00; 23:09:48MDT - Msg ID:22200)
Peter
Remember, I didn't write it. You'll find a mistake or two also if you look carefully, but I think the guy did a pretty good job, all in all.
PH in LA
(01/03/00; 23:07:22MDT - Msg ID:22199)
Provo and Another (reply to Stranger)
Greetings Stranger, and welcome back!
I'm pretty sure you understood my comment about Provo and Another. (Many suspect that Another resides outside of the USA and that FOA almost certainly lives a bit to the East of Provo.)
No doubt Provo is a very nice place to live, though. Even if the climate can't compete with LA, and it's kind of inconvenient for sailing, too. (smile)
Peter Asher
(01/03/00; 23:06:46MDT - Msg ID:22198)
YO! DAVID
Wher's the "G" Word ???
TheStranger
(01/03/00; 22:59:21MDT - Msg ID:22197)
Get To Know Me
http://utah.citysearch.com/E/G/SLCUT/0000/09/75/cs1.html
The above article is about me and may be of interest to some. (I am David Davenport).
Aristotle
(01/03/00; 22:33:12MDT - Msg ID:22196)
Golly, Solomon--
One of the few times I venture to use a relatively unsavory term, and wouldn't you know it...somebody feels compelled to paste it up for a second viewing. Never again.
Your question is my question exactly--which one killed more people? Certainly, one was directly responsible for deaths with malice aforethought, but what of Keynes? His school of thought was one that reached well beyond the U.S. and U.K. How many emerging nations failed to emerge because they could never build the wealth to climb out of abject poverty? How many others have been reduced to poverty because savings once meaningful became a currency that was poorly managed (with best intentions?) and reduced to nothing. How much malinvestment has resulted based on easy credit and too-big-to-fail mentality, putting us on the brink of economic and civil calamity?
Perhaps I've misinterpreted your words, but it seems that you are saying that the masses need the Keynesian type of money to survive/thrive. Please clarify if I've missed your mark.
But to that end, I'll leave you with this simplest thought from my innocent mind, which to me rings with a certain truth:
"There is nothing that a fiat currency can buy that can't also be bought with real Gold money."
So there you have it. Who needs Keynes, eh?
But in the interest of meeting Keynes halfway, I refer you to my prior Msg ID:22153 several inches lower on this page--for what it's worth. So it must be when we live in a world of compromise as this.
Gold. Better than paper every day of the week. ---Aristotle
Black Blade
(01/03/00; 22:24:25MDT - Msg ID:22195)
Solomon and Swiss Au sales
The Swiss have not given the go-ahead on the sale yet. There is a waiting period to allow for petitioning for a referendum that expires in March. BTW if the Swiss Franc rises from a corresponding rise in POG, I'm switching from Nestle's (too expensive) back to Hershey's ;)
Black Blade
(01/03/00; 22:17:42MDT - Msg ID:22194)
THX-1138 and IRS (Internal Racketeering Service)
THX-1138, Ditto on your last post! The IRS has been known to be wwwwaaaaayyyy behind on their y2k preparations for quite some time. Now just think if most people simply "forgot" to pay their tax this year..............hmmmm.....
BTW great handle and movie too!
Solomon Weaver
(01/03/00; 22:16:41MDT - Msg ID:22193)
what I forgot to say about the Swiss
On very large danger to the Swiss folk is their gold...
The Swiss Franc has so much gold behind it, and the numbers of Swiss Francs is miniscule compared to Yen, DM, Pound, Dollar...
If there is any sustained rush to gold and Euro, the Franc will surely rise like a rocket...making Swiss folks rich...but they might wind up earning the equivalent of $200 per hour...that will kill any export business...and tourism is an export business..
Thus, it behooves Switzerland to rid themselves of (some)gold and back themselves with (some) Euros.
FOA, ORO, GANDALF, ANYONE, please refute me on this story with the SFR...perhaps you insiders see it better than I do.
Poor old Solomon
THX-1138
(01/03/00; 22:15:53MDT - Msg ID:22192)
What about Cambior?
Didn't Cambior or Ashanti have their loan calls pushed out to 12/31/99. Are they being called in again or were they renegotiated?
Black Blade
(01/03/00; 22:12:36MDT - Msg ID:22191)
Solomon Weaver
I saw some gold and silver miners "safety and attendance" awards at one of the local pawn shops here in Au country. I haven't seen them appear all that often, but now since the new year began maybe PM's will be unloaded or maybe some outta work miners need to pay for Christmas. I continue to snap em' up though. This of course is only a localized observation, but coupled with the current drop in POG who knows?
Solomon Weaver
(01/03/00; 22:10:39MDT - Msg ID:22190)
the swiss vote
Also a question-- Have both houses of the Swiss parliment okayed the upcoming 1300 ton Swiss gold sale? If not, when do they vote?
---
As I understand it, the issue must be voted on by the common folk...Referendum
Having lived some years in Switzerland, I learned this much about Swiss politics....most referendums do not pass....but, the parliment looks very carefully at the outcome of the vote (numbers and regional balance) and smaller laws which do not require a referendum are often enacted that help to satisfy the balance of those who wanted it passed.
My prediction therefore: The general public will not pass a referendum to sell gold in large amounts...but based on a 30% yes vote, the government will initiate capital investment projects (railroad expansions etc. as well as selling minted coins to citizens) to slowly let go of gold.
I also believe that the Jewish will be given Euros (not gold) in any settlement.
Poor old Solomon
THX-1138
(01/03/00; 22:05:06MDT - Msg ID:22189)
IRS computer files
If the IRS can't get computer files out of their computers, is that rally a bad thing?
Go gold, Go GATA, Go Alan Keyes.
Black Blade
(01/03/00; 22:04:37MDT - Msg ID:22188)
oil and gold reaching new highs (wink-wink).
http://www.usatoday.com/money/charts.htm#SP500_GOLD
Thanks to RossL for the link. If it were only true but good for a cheap laugh. Y2K bug?
beesting
(01/03/00; 22:04:01MDT - Msg ID:22187)
Reply to Chicken man #22164
Your words:
But why the $208 value of Gold.... it doesn't really work out converting US $ to Gold at $ 208.....I'm missing something here.
BIS statement:
The BIS employs the Gold Franc SOLELY AS A UNIT OF ACCOUNT for balance sheet purposes, assets and liabilities in US Dollars being converted into Gold Francs at a FIXED RATE of US $208 per ounce of fine Gold(approximately equivalent to one Gold Franc=US$1.94).
My comments:
Chicken man I had trouble understanding that also, but see if this sounds logical.
The $208 per ounce of Gold is a fixed rate set many years ago.At this point in time it has to be a fixed rate because of the minute by minute fluctuating "spot" price of Gold worldwide,It would make math calculations changing by the minute, to complicated.They could have used Swiss money as a fixed rate, but chose US Dollars because thats what the world is using in their paper calculations.
Look at it this way,the paper currencies float against each other constantly,each changing value against each other by the minute, some of these exchange rates are questionable.The BIS converts all the worlds paper currencies into a fixed rate ($208= 1 ounce) of Gold, then into any currency they want to,to conduct business.
One Gold Franc(0.29 grams fine Gold) is worth $1.94 Dollars(paper money).
I would suspect as the paper loses value over time, it takes more paper to equal a Gold Franc.
Example given:
At March 31,1999 it took $1.94 to = 1 Gold Franc.
Right now it may take $2.00 to = 1 Gold Franc.
The BIS's Gold Franc is the real base of the worlds monetary system, not the US Dollar!!
I hope this hasn't confused both of us even more.Maybe some of the other Ladies or Knights can explain this better than me.....beesting.
Solomon Weaver
(01/03/00; 22:00:21MDT - Msg ID:22186)
no leverage needed
summicron (01/03/00; 20:55:21MDT - Msg ID:22173)
$3 Drop in the POG is presumably for the same
reason that the long bond is going down: the Y2K fears are over and the safety of gold is thought to be no longer needed.
canamami (01/03/00; 20:43:44MDT - Msg ID:22172)
POG Down $3.00
The POG's getting whipped tonight. Any theories or news explaining why?
------
OK folks, Alan Greenspan just loaned out a bunch of dollars (on the order of $200 billion) based on repos of low quality debt instruments....the last thing he wants right now is for hedge books to start exploding....
If the S&P 500 futures market, and the gold market were fixed before y2k, why should anything be different?
FOA is right...at some point, gold buyers are going to realize that possession is 9/10 of the law and all these paper games are going to catch on fire.
Like MK said the other day....what is the real price for physical when he can't even find a supply of coins for a large client to buy???
The POG we see on the screen is the POG for a guy who is using a lot of margin...trading fast. That margin is what gives your physical all that leverage that FOA keeps pounding into our heads.
Poor old Solomon
RAP
(01/03/00; 21:51:00MDT - Msg ID:22185)
IRS Y2K Problems
I have a very close relative who is an IRS agent, gun and all. They said they can't get there files out of there computers, and are waiting for "experts" to come and unlock them. This was a whole group of agents, not just one.
Y2K is not over!
USAGOLD
(01/03/00; 21:47:51MDT - Msg ID:22184)
Deja Vu...
I thought it a deja vu. This afternoon I read the following in Adrian van Eck's "Money Forecast Letter" for January which I received about two weeks ago and just got around to:
"The New York Fed (which controls much of the money supply and deals with foreign banks and currencies) issues a decree that foreign bonds will now be accepted for the first time as collateral at the Fed's re-discount window. It is though they expect serious Y2K financial problems overseas despite reassurances that all is well. We think something big and bad is brewing behind the scenes. And we decide to put up a red flag warning DANGER MAY LIE AHEAD IN THE ECONOMY."
"We are of the opinion that the Money he and the Fed have been creating in the past two months ( going on $200 billion...an awesome amount ) reflects his efforts to avert a crisis situation that is being kept hush-hush."
Then this evening I read this in FOA's #21792:
"Back to your (Oro's) thinking; notice how the Fed is still pumping money even after the year turn over! The liquidity squeeze is arriving and it has nothing to do with price inflation, Y2K or the stock markets. Another force is at work in the world today and it is attacking the dollar behind the bushes."
So what am I missing here, guys?
By the way, the last time Adrian raised the Red Flag on the cover of his newsletter?
Your guessed it.
1987.
Solomon Weaver
(01/03/00; 21:47:48MDT - Msg ID:22183)
who killed more people, Keynes or Hitler?
Aristotle
And finally, my guess is that your verbal jousting comment was in regard to my turning the tables to paint Keynes as the greater villain. I hope that wasn't seen as something done in bad taste, but considering that this is an economics oriented forum, and my indication that Keynes' infamy was one of a broader nature, I felt people might see where I was coming from and get a wry smile out of putting that sunnuvabich in his proper place. Sure, Keynes had his moments of brilliance, but I can't help but lay primary blame at his feet for the spoiling of America through the influence he had on Roosevelt and his economic cronies.
-----------------------
My wife is from Russia. Her parents still live in a southern republic now free....free to be poor that is...they see how friends die of disease because they cannot afford medicine. The death count is slow and people don't blame anyone really....just the times.
Keynes realized that easy money was both the opiate of the masses and the heroine (hero) of the Gov. If there is a coming economic collapse, which impoverishes Americans, it will also impoverish many around the world...who will suffer much, and die prematurely.
The people of the future will just have to find some way to avoid creating money in pyramid schemes...or they will all die like fruit flies when the apple is tossed.
Poor old Solomon
THX-1138
(01/03/00; 21:44:26MDT - Msg ID:22182)
Y2K gold dip
I hope the price keeps falling until next Monday.
I get paid this Friday and want to get a couple more ounces.
At least I hope I get paid.
Crossing my fingers that the Gov't payroll system is working.
More than likely will also be cashing in the extra $400 I had in cash for another coin this weekend.
Solomon Weaver
(01/03/00; 21:37:34MDT - Msg ID:22181)
y2k goldbugs cashing in
Now that Y2K has been shown, (up to now), to be a non-critical event, weaker hands dump what they see as a losing position.
Hey elevator guy.....the number of people who believed in y2k enough to buy gold may have been enough to give guys like MK some extra business...but even if they all went en-masse to return their physical gold to the market, the massive short covering gang would just "sssssuuuuckkkk up" that new supply like nothing....
Although, I won't be surprised to hear of a murder story where some pedestrian gets killed by a guy who throws his unit of junk silver out the apartment house window.
Poor old Solomon
Solomon Weaver
(01/03/00; 21:32:11MDT - Msg ID:22180)
Stranger, how did you read my mind??
This subject of central bank interference raises a question in my mind. Towit: Why do we criticize paper money so, on the one hand, and yet denounce central banks for trying to maintain its value on the other? And if we hold central banks responsible for maintaining cross-CURRENCY exchange rate stability, then why all the sturm and drang over their efforts to maintain an orderly exchange rate for real money (GOLD)?
When gold becomes money, she will always be attacked by the fiat princes...in her wisdom, even in her sleep she eventually wins out?
Poor old Solomon
TheStranger
(01/03/00; 21:24:47MDT - Msg ID:22179)
PH in LA
" Provo, Utah; hardly a likely place for the poster and sage we know as Another to reside."
I beg your pardon. That's right near where I live! ;-)
elevator guy
(01/03/00; 21:21:43MDT - Msg ID:22178)
@ canamami (22172)
In answer to your question, I humbly offer my limited perspective and insight.
Many gold bugs, myself included, were hoping, (against Stranger's better admonitions), for a Y2K driven rally, which never materialized.
Now that Y2K has been shown, (up to now), to be a non-critical event, weaker hands dump what they see as a losing position.
Gandalf the White
(01/03/00; 21:21:11MDT - Msg ID:22177)
a VERY humble, "Thank You" MK
"The Ol'e Wiz" truly thanks USAGOLD for award of the Silver Eagle. Most of the Hobbits think that it is far more than enough for you to allow the Ol'e Wiz to sit silently (but sometimes mumbling) at the TableRound, and soakup wisdom from the mouths of the Giants, -- but to reward the Ol'e Wiz with tokens of SILVER for just awaking long enough to relay a few golden thoughts, is like the Hobbits seeing the White Tree of Minas Anor flower again!! ALL Hail MK!!
<;-)
TheStranger
(01/03/00; 21:16:45MDT - Msg ID:22176)
Jam Yesterday, Jam Tomorrow, But Never Jam Today
http://www.gold-eagle.com/editorials_99/dvcohen122299.html
I just reread Farfel's impassioned letter to Congress in which he indicts nearly everybody for just about everything. (I am just teasing you, David. It is a marvelous piece, or I wouldn't have read it twice).
This subject of central bank interference raises a question in my mind. Towit: Why do we criticize paper money so, on the one hand, and yet denounce central banks for trying to maintain its value on the other? And if we hold central banks responsible for maintaining cross-CURRENCY exchange rate stability, then why all the sturm and drang over their efforts to maintain an orderly exchange rate for real money (GOLD)?
Clearly, though some may disparage these activities as market manipulation, there is a de facto gold-standard which exists today, is there not? Why should it be considered any more or less suspect than the de jure one which was so easily abandoned in 1971? The point is, in the absence of monetary discipline, aren't both approaches equally ill-fated?
In 1971, official gold-backing failed to stand up to rapid currency inflation. To be sure, significant effort had been expended to depress the price of bullion in those days. The result, as we all know, was that what could have been a more gradual increase in gold prices was transformed into a tectonic shift. Perhaps today's attempts at unofficial gold-backing, if you will, will turn out just the same.
PH in LA
(01/03/00; 20:59:55MDT - Msg ID:22175)
Another's e-mail address
Al Fulchino:
Wouldn't the e-mail address <another@geneva.com> have to reside at the <www.geneva.com> website? "geneva.com" is the website of the Geneva Steel Company, located in Provo, Utah; hardly a likely place for the poster and sage we know as Another to reside. In any case, can you direct us to the site you refer to as TB2000? What is the policy there on internet identities? Are posters required to register and use passwords like we do here at USAGold? The message you quote could not be considered to be a very original message from the poster we know here as "Another". At first glance it looks to be an attempt to imitate his style and message, something the real "Another" would be very unlikely to do since he has always been a very original thinker.
Aristotle
(01/03/00; 20:58:53MDT - Msg ID:22174)
Thanks for the compliment, and for the reply, mhchuck
No need to be on your guard around me; to the core I'm just a simple country boy. I didn't intend to engage you in verbal jousting, or to test your mettle as an economist, or to imply you were presumptious in devising the perfect monetary system. To address these three items in reverse order: for the purpose of exploring our opinions, it was I that gave us license to devise the perfect monetary system. Why? Because we can do that here--we're not bound by our words like a high official at a press conference.
Second, you seemed to have some strong emotions and opinions regarding what should and shouldn't be in the monetary scheme of things. I wanted to know what was important to you--not necessarily looking for a clinical dissection of past monerary ills. (If you look at my Msg ID:22153 you see my own concessions and desires on this same matter.) Thanks for sharing your additional opinions with the latest post. I would guess that some of my current neighbors don't hold an opinion on these matters at all. Sad, but true.
And finally, my guess is that your verbal jousting comment was in regard to my turning the tables to paint Keynes as the greater villain. I hope that wasn't seen as something done in bad taste, but considering that this is an economics oriented forum, and my indication that Keynes' infamy was one of a broader nature, I felt people might see where I was coming from and get a wry smile out of putting that sunnuvabich in his proper place. Sure, Keynes had his moments of brilliance, but I can't help but lay primary blame at his feet for the spoiling of America through the influence he had on Roosevelt and his economic cronies.
After the country had learned the best possible long-term monetary lesson in the hardest of ways (speculative stock market crash followed by several years of crippling bank failures), Mr. Keynes offered a viper's voice to the sympathethic New Deal ears of a misguided and nave Administration. However, it could also be argued that America was destined to make this mistake whether Keynes had come along or not. Anyway, judging from your own comments, it would seem that you might agree with me in choosing to paint him as the greater villian--insofar as an economics forum is concerned. <wink> ---Aristotle
summicron
(01/03/00; 20:55:21MDT - Msg ID:22173)
$3 Drop in the POG is presumably for the same
reason that the long bond is going down: the Y2K fears are over and the safety of gold is thought to be no longer needed.
canamami
(01/03/00; 20:43:44MDT - Msg ID:22172)
POG Down $3.00
The POG's getting whipped tonight. Any theories or news explaining why?
canamami
(01/03/00; 20:32:43MDT - Msg ID:22171)
Reply to Journeyman - #22095
Journeyman,
Of course stealing is immoral, and it would have been preferable for the US to comply with Bretton Woods, or to withdraw while it was still able to meet extant obligations, so there would not figuratively have been a "breach of contract".
That being said, we are dealing with the actions of sovereign states, which are indeed immune from the ordinary principles of contract law, including the principles of private international law as they relate to contracts. My post related to the assertions of FOA, that the US would face demands for the honouring of gold backing just as the Swiss and Germans faced demands relating to Holocaust-related matters, years after the fact. I countered that the two matters are too dissimilar for there to be a valid analogy - i.e., like comparing apples and oranges.
However, if obligations relating to 1971 are to be dug up, then the US is free to dig up the defaults of countries after WW1. Back then, basically all currencies were completely gold-backed. In the course of WW1, the major countries became indebted to the US. Except for Finland, all the Europeans defaulted on their official debt to the US. So, if some countries can dig up ancient breaches of contract like 1971 (at law, an ancient issue, and I would also say a breach that has already been waived even on a moral level), then the US can dig up the WW1 breaches of contract by European countries - with accumulated interest. Also, such demands for compensation are made against Ger/Swit because Germany/Switzerland are willing to listen to such demands. On the other hand, the Japanese have ignored demands to compensate Hong Kong veterans and others who were tortured, and to compensate the victims of the Rape of Nanking. Thus, few demands are even directed at Japan. This is how sovereign states generally operate. Given that most of the putative complainers concerning 1971 have "shafted" the US in the past, I doubt any demands for the honouring of the Bretton Woods gold backing will be made.
Some of your post could be interpreted as asserting that I somehow benefitted from the closing of the gold window in 1971. I will assume that "spin" could not possibly have been intended by you. FWIW, I'm not an American, but a Canadian, so I'm not talking my country's book, so to speak.
Cavan Man
(01/03/00; 20:18:13MDT - Msg ID:22170)
Why I Recommend USAGOLD
For learning about wisdom and instruction,
for understanding words of insight,
for gaining instruction in wise dealing, righteousness, justice and equity; to teach shrewdness to the simple,
knowledge and prudence to the young--
Let the wise also hear and gain in learning,
and the discerning acquire skill,
to understand a proverb and a figure,
the words of the wise and their riddles.
Proverbs 1. 1-6
Thank you MK et al.
Cavan Man
(01/03/00; 20:13:13MDT - Msg ID:22169)
Aristotle 22151
Who is your Socrates?
Although I am the product of a mediocre midwestern university and poor planning on my part (don't feel bad for me I turned out OK), I have had a few good teachers along the way. Let's see, there were my HS french teachers; oohlala(!); two history teachers, one "stat" and one algebra teacher and, two wise old "beer men" down in Houston; Goober and Clayton.
Seriously though, the very best teachers I have ever had are right here and you, my friend are one of the very best. To what do we owe such kindness, patience, understanding and wisdom? My return on your investment of time and intellect can only be to, "pass it on". I am in the process of doing just that.
Thank you for taking the time to reply. Gramercy good Sir Knight!......CM
mhchuck
(01/03/00; 19:43:52MDT - Msg ID:22168)
Prior Post
Hope my priore post below is not unclear. My response to Aristotle begins with. "Let me unequivically state....
R Powell
(01/03/00; 19:39:16MDT - Msg ID:22167)
Thanks
Hello again I was dazzled when I read my name as a co-winner of the holiday contest. Most of my understanding and knowledge of the gold market is directly attributable to this forum and referenced sites from posting found here. I have been what you refer to as a lurker for some time because I am impressed by the information, imagination and presentation of knowledge found here. I don't always agree with everything but I'm most always impressed with the thought and research expressed. I feel truely honored to be a co-winner with Farfel among such company! Also a question-- Have both houses of the Swiss parliment okayed the upcoming 1300 ton Swiss gold sale? If not, when do they vote?
mhchuck
(01/03/00; 19:35:53MDT - Msg ID:22166)
ARISTOTLE
Aristotle. Your five part series was a gem!
Aristotle (01/03/00; 12:28:13MDT - Msg ID:22128)
Question/comment for mhchuck
On your Keynes/Hitler comparison, you might have it turned around. Given the breadth of the social infamy of Keynes against
the specific depth of individual infamy of Hitler, it is already said in some circles that it is Hitler who played second fiddle--the
John Maynard Keynes of national leadership.
On your comments about a world currency, I wish you would elaborate on your thoughts as expressed in the first paragraph
specifically. A lazy policy-maker might read your words and say, "Fine, let's return to the gold standard as existed internationally
through Bretton Woods until 1971, or else let's return to the gold standard as existed prior to 1933."
My thoughts being, as long as we are giving ourselves license here to define the perfect monetary system, how would you
suggest we overcome the failings of either of those systems, each of which at face value would seem to fit your demand."
Let me unequivocally state that I am not an economist, (I am probably brighter than that) nor am I an expert at verbal jousting. Frankly, I have a distaste for it.
In response to your questions: I let my Keynes/Hitler comparison "Stand." You may interpret it as you like. I guess if you were my college professor and I had submitted a term paper, I would consider your critique.
To your statement that I was giving myself license to define a perfect monetary system (Gee, I didn't realize I was doing that) But I will say that there is no "perfect" monetary system, and from my readings, it was my understanding that the gold standard is the one that worked best, because it precluded the possibility of bankers and politicians from stealing and cheating.
"The metal gold might not possess all the theoretical advantages of an artificially regulated standard, but it could not be tampered with and had proved reliable in practice."
John Meynard Keynes.(From: "Inflation and Deflation")
Now I'm not an expert Keynes, nor have a read a lot of his material, but I have read some of it.
And let me tell you this man makes Bill Clinton look honest. I will be posting others Quotes and lengthy passages from JMK.
So the point of my Post is quite simple. Either we go back to free markets, or we continue on this road of interventionism to its logical conclusion....Totalitarianism.
Gold. It will do you no good in an unfree world.
Goldfly
(01/03/00; 19:33:23MDT - Msg ID:22165)
Al,... geneva.com
http://www.geneva.com/
Is a steel company in Utah. The have a link up to Geneva Switzerland as a courtesy though....
Chicken man
(01/03/00; 19:27:52MDT - Msg ID:22164)
beesting - Thank-you....!
Thank-you for responding to my question.....you were right....I did miss that part....! got to thinking about the gold bit...and I smells like lack of trust.....as long as all the players have gold held by the house,every body is honorable and there is no need to worry about one country kitting checks so to speak.....I don't think the China deal and BIS is so much as China "wants" in,as how mush the BIS wants China in the "system" to keep China honorable in there dealing with the world.(They had some GITCs default and then there is the big sugar default not so long ago)
But then why the 208 value of gold.....it doesn't work out converting US$ to gold at 208......I'm missing something here(A lot of you think I'm missing a whole lot).......pesonally...thought there would have been more heavy duty thinking on the subject....
See you either here or "there"....{;)}
R Powell
(01/03/00; 19:20:55MDT - Msg ID:22163)
Thank you!
Hello and thanks
Netking
(01/03/00; 19:18:58MDT - Msg ID:22162)
FOA
FOA(22158) - Good comment Sir, when the Taxi drivers, Bar Maids & Firemen are throwing (being the operative word) all they have (and next years as well) into the market.... 'tis indeed time to run for them hills!
(The propensity for human misery only increases when we continually see this happening around us in both of our locations). Cheers Netking.
Al Fulchino
(01/03/00; 19:12:35MDT - Msg ID:22161)
Posted on TB2000
1/1/2000
Al Fulchino
(01/03/00; 19:07:27MDT - Msg ID:22160)
Lookeee here...didn't know he would put his email address out....
Is it him FOA? If not tell him there is another Another :)
GOLD? SOON YOU WILL HEAR THE POWER, FURY AND THE THUNDER OF GOLD.
"As I breath and walk today, gold will rise to the stars with the greatest triumph and fury the world has ever seen.
Will be gone for some time.
ANOTHER
"YES, I AM ANOTHER. GOLD MARKET IS NOT LIKE ANY BEFORE. IN YOUR LIFETIME THIS EVENT ONLY BE ONCE. WEALTH WILL BE FOR THOSE BRAVE HEARTS.
Will be gone for sometime.
ANOTHER"
-- ANOTHER ( another@geneva.com ) , January 01, 2000
Al Fulchino
(01/03/00; 18:57:24MDT - Msg ID:22159)
Thanks FOA......
.... for the article (link). Even I understand it!
FOA
(01/03/00; 18:46:32MDT - Msg ID:22158)
This tells it all! I'll be back much later.
http://www.siliconinvestor.com/insight/contrarian/
Read it on this site!
http://www.siliconinvestor.com/insight/contrarian/
On borrowed time?... Last but not least, I want to share something that Dennis Gartman wrote late last week when I was out. It is the perfect period piece to capture the mood of what is really going on. To any sane person, it should be frightening; but then again, anyone who's frightened isn't having any fun. And those who are not frightened are making gobs of money speculating their heads off. Here's what Dennis said:
"As a final aside for the year, we went to our local branch bank yesterday to transact some business [Ed. Note: we actually got some cash for the Y2K `turn'...just in case!], and spent some time chatting with the branch manager. She does not know what business we are in, so when we asked her if she'd seen any increase in personal loans she replied out of hand that indeed she had. Indeed, the personal loan demand at her branch had escalated rather substantively.
"She then proffered that the sole reason for the sharp rise in personal loans was the investment in the stock market. She said that local doctors, lawyers, farmers, auto dealers... all of the leading figures of the local economy (and their wives) had been in recently to borrow money to `put into the market.' We asked her how long this had been going on, and she said that the branch had been making personal, signature loans like that for some while, but that the demand had really escalated in the past several months and has really become `hot' in the past several weeks. She
wondered if it was too late for her to join in the market's enthusiasm!
We said, `We don't know,' and left bemused and afraid.
"It is perhaps not new news, but we find it odd that the public is borrowing money on signatures without collateral (other than CDs and/or sizeable demand deposit accounts) that is then used to buy stocks, very probably upon margin. The leverage is immeasurable, for the public is apparently `Reg-T'ing' money that it has already borrowed with nothing down. She said that those who've been borrowing the most indicated that they `could get more out of the market than the interest charge,' and considered it unwise not to take advantage of the circumstance.
"Friends and clients, if this is not rampant, tulip - bulb' - like speculation of the worst sort, we've no idea what is. Of all of the things that we've read about, heard about and discussed at length concerning the mania that is the U.S. stock market, this is the most manic of all. When speculation comes to small-town southern Virginia, it is rampant and it is dangerous. We have at this point said enough."
TheStranger
(01/03/00; 18:20:20MDT - Msg ID:22157)
Black Blade #22084
Sorry to make you wait for a response. I think the answer to all of your questions is "probably yes". Clearly, the U.S. bond market was getting some support from fear of Y2k. Part of this was safe-haven investing. Another part of it was, no doubt, belief in the Yardeni recession scenario. All of that is gone now, and I think there is little to hold bond yields below 7% at this juncture.
It is evident tonight that we are also getting some selling in oil and gold which I relate to disappointment on the part of those who were expecting (hoping for?)a y2k disaster. I have fretted for months that those who didn't see the entire picture might pull the plug at this point. I can only hope the selling is very short-lived as I have no idea how much of this disappointment is out there.
1999 was the worst year for the 30-year long bond since they invented the darn thing back in 1977. Likewise, Alcoa, an aluminum company, was the DJIA's top performing stock. All of this should reassure us that we are not the only ones who have smelled this recovery in inflation. I do not yet see any reversal in this picture, so I think it obvious that gold will come alive soon and OPEC is not about to take leave of their senses. There is hope!
Dead Goat Saloon. The name alone is enormously appetizing, is it not? Still, I'll raise a glass with you anytime, Black Blade, dead goats or no. Maybe turbohawg will join us!
Thanks again to everybody for the warm wishes. I'd just like to know how the heck I am going to live up to this.
FOA
(01/03/00; 18:06:02MDT - Msg ID:22156)
Long over due reply to ORO!
ORO (12/29/99; 12:15:39MDT - Msg ID:21792)
FOA - Pump
Hello ORO,
Your follow up post about the IMF money pump was very interesting. You state: ----- You are indicating (FOA), it seems, that the current consensus in the G20 is that the dollar reserve system should be allowed to slowly dissolve into cash full oblivion. --------
Yes, offering this analysis from the view that the dollar is being driven into a "cash position" is right on the mark. In hind sight, this would be the only way to prevent the reserve currency from deflating through the obliteration of world dollar debt. Further, as the Euro takes a larger and larger portion of debt financing, the left over dollars holders are forced into an ever more short term maturity. If you were a dollar holder and could see the transition ahead, you would not want to lend long either. This effect is well understood looking backwards, as it was usually caused from the Fed tightening credit. Today, the squeeze (on longer term dollar credit) comes from a perception that this market may be falling away. Making room for the Euro. Eventually culminating in an "almost cash" position for the dollar, the fastest moving currency derivative of them all.
I think this has to be the first stage of "flight" before a true gold run begins. This is the period where no past guidelines direct the trading. Everyone is looking around and saying, what are you going to do? Most will shorten maturities offered and feed slowly into the Euro and gold as a hedge. As you know my thoughts about the paper gold market; the enormous sums of floating dollars will easily crush this illusion. Long before any significant paper is exercised into physical gold that market will discount cash price in a big way and close.
Back to your thinking; notice how the Fed is still pumping money even after the year turn over! The liquidity squeeze is arriving and it has nothing to do with price inflation, Y2K or the stock markets. Another force is at work in the world today and it is attacking the dollar behind the bushes. You mentioned the Japanese and Eu banks in the carry trade. The Japanese are and always have been up to their eyeballs in US paper. They have to stay this way because of their dollar trade deficit. As they continue to decend into deflation, the strong Yen still locks their hands from selling our debt and the BOJ has always known this. So, they continue to add dollar reserves on balance with this deficit in an effort to keep the Yen from rising even higher and killing their US market share. These people are done in and will eventually print Yen (hyperinflate) in and effort to match any US dollar price inflation. Locked step to the end! The EU can play the carry game as long as they hedge in Euros (or gold) because it will balance the dollar fall. They will some day be seen borrowing Euros at 4% (??) and buying Eurodollars at 30% (??) or something like that. What else can be done with the eventual pool of Eurodollars floating offshore the US? It will already have
been devalued against gold and they will still want to trade with the US. After working through Exchange Rate controls that is.
ORO, more clearly, the period directly before us will be like a fiction book. Good reading, but I don't believe this is happening! Once the Euro gets it's legs, there will be no use for a Eurodollar holding as long as the US keeps it's trade deficit wide open. As the dollars flood in, we cannot
spend them in Europe because we will have to buy Euros first. As the existing Eurodollar holdings go further into cash mode their value must fall. And fall big!
These paper bullion boys at the front desk talk about all the excess ECB gold that must be sold. They are going to sound like the Y2K bugs after the fact. When the ECB and the BIS start moving unneeded reserve dollars for official bullion (this has started already) off market, we will see it in the US % rates (like today) and the Exchange rates (like today). The real bugs in 2000 are going to be in the paper gold market. Just watch it all unfold!
Thanks FOA
Aristotle
(01/03/00; 18:05:44MDT - Msg ID:22155)
Hi Thriver
Thanks for the Matrix endorsement. I see too that ORO has seen it, as have many others here. Your comment was the last straw--I'll have to make a point to rent it. To return the favor, I thought "Three Kings" to be fine piece of cinema, with lots of Gold as an added bonus! Seriously, though, it carried a very good human lesson. I also seem to recall JCTex (or another poster) saying it sparked a new intrest in Gold within his son. That, my friend, is a very fine thing!
Gold. Get you some. ---Aristotle
Netking
(01/03/00; 17:48:26MDT - Msg ID:22154)
Euro Celebrates Birthday With Rally
http://dailynews.yahoo.com/h/nm/20000103/bs/markets_forex_23.html
...go Euro!
Aristotle
(01/03/00; 17:39:33MDT - Msg ID:22153)
A quick explanation before we get put off the track by misunderstanding
I can see where my comment to mhchuck is possibly causing some unecessary hand-wringing. Let me walk through this. I suggested that in response to mhchuck's plea, a hasty politician might plunge recklessly back into the past, where there is no doubt that there were problems. Please bear with me. Further, I said,
"as long as we are giving ourselves license here to define the perfect monetary system, how would you suggest we overcome the failings of either of those systems, each of which at face value would seem to fit your demand."
The key thing to recognize is that I didn't say the failing was with the Gold itself. Nor did I say that the problem was with the implied convertability standard of pre-71 or pre-33 (although I will now state without hesitation that any system in which the people cannot own Gold--as in pre-71--is financially AND morally bankrupt.) The proper recognition/conclusion to be drawn is that the SYSTEM (not the "standard") failed. We can't be hastily returned to that same "sytem."
What do I mean by 'system'? That would be the entire financial architecture that includes not only the fixed Gold convertibility, but also the banking structure. I've said it before and I'll say it again. In my puny little childlike mind I can't conceive of sustainability for FIXED Gold convertibility of any currency that exists concurrently with tolerance for fractional reserve banking. You can have one or the other, but not both over an enduring span of time.
I think it is fair to say that fractional banking has become an entrenched fact of life that we must all live with. Therefore, Gold must be set free to float in a new financial "system" that reaps no benefit from the restraint of Gold. Savers (individuals and Central Banks) will hold Gold because it will gain in value over time. Spenders will borrow fiat currency from banks, and repay with interest, because that is what they do. Even as we can see and must admit today, a fiat currency is not utterly worthless as long as the loans are performing, and that the monetary policy is managed such that a credit contraction isn't allowed to collapse the banking system or the economy.
For some reason, people are more comfortable to see supply inflation erode the purchasing power slowly over time--to get pay raises and to pay higher prices--than they are to renegotiate lower prices and lower rents and wages due to a currency that gains value over time. In this perfect system, the Gold savings will gain (or simply hold) value without the need to risk it on loan for a share of interest. Today we can see that dollars must be "risked" in a banks' savings account, and yet that still falls short of inflation.
Allow me to be so bold as to suggest directly to ANOTHER, if you are in a postion to shape these wheels that turn the Earth (don't laugh, people...even I have had my hand upon wheels in other realms of endeavor), my perception leads to this recommendation. Gold must be the immutable North Star of the monetary world, and therefore it must itself be kept immune from the pricing influences of fractional reserve lending, forward sales, and the like. Financial operations with Gold must be managed such that no person thinks they have "ownership" of Gold when in fact it has be lent out for another entities use. It must be like the money in my wallet that I loan to a friend, not like the money in my savings that a bank loans to my friend. Clearly, in this later case we both believe we have the same currency, and that is the supply inflation that erodes its value over time...just as the current supply and use of paper Gold has hidden the real value of real Gold. You of course know all of this, but my perception is that you want to know if it matters to anyone else. It does. And I'm nothing more than a babe in the woods. Imagine what better minds might say if they looked at this as I have done. I look forward to FOA shedding more light on the potential for this protection of Gold being entrenched. It would seem that the ECB's (and others') Washington Agreement was a glimpse in this direction.
Gold. Nothing else will do. ---Aristotle
Blue Sky
(01/03/00; 16:45:50MDT - Msg ID:22152)
Happy New Year
I sure hope you get your site up and running. Miss one and all.
Blue Skies to all.
Aristotle
(01/03/00; 16:45:41MDT - Msg ID:22151)
Thanks Cavan Man. My fingers have only just now recovered from the typing.
Anything to add, you ask? Only that the sum of all that I've encountered since then further supports rather than refutes that blueprint.
If I were asked to evaluate its primary shortcomings, I'd say that I got rather hasty to bring the epic to a conclusion, and therefore came up short on painting the clearest picture on the various forms of "paper Gold" and what their existence portended for the fate of our currency and the price of Gold. It isn't enough for me (or anyone) to TELL you (or anyone) something. The challenge is to SHOW the path and let others reach an understanding. Blind following gets nobady anywhere with any degree of comfort along the way. If you clearly see the path, you will be better able to step over the odd tree root that lies ahead.
It might help you to understand the context in which this was written. Then, as now, we had FOA as a grand tour guide offering the "recollections" of a seasoned traveller of the road ahead. It seemed that too many people, perhaps based on a lack of knowledge, where too quick to see FOA's message as something akin to a conspiracy rather than the rare insight that it was and is. It was important to help people work through their historical and monetary ignorance (not said as disparagement--a plain fact is that most people have simply never made a study of their own money) so that they could concentrate on the content of FOA's message without distractions of the boogeyman lurking in the hedgerows. Simply put, you can't learn alegebra until you are comfortable with addition and multiplication.
Although in my haste I may have come up short in my original goal to work toward building people's understanding of the various species of paper Gold, and to give the reader an better appreciation for the "other side" of these deals that seemingly have been getting crapped on all these years, it was of no matter--shortly after its completion such sharp minds as John Hathaway took the effort to thorough completion. I encourage anyone who hasn't done so to read John's "Golden Pyramid"--you can track it down quite easily in USAGOLD's Gilded Opinion page.
Where I feel I did succeed, maybe to an excessive degree, was in giving the reader an appreciation for the fluid and evolutionary nature of our monetary system. I guess subconsciously I had decided that making this point was the more important of the two. Why? To stave off the debilitating notions of that "conspiracy-boogeyman" mentioned earlier that too easily befuddled the minds of many that by chance stumble upon this same trail of ours. Far be it from me to foist any manner of religious views upon another, and only in that context do I offer this thought attributed to Karl Popper in "Conjectures and Refutations." He writes:
---- The conspiracy theory of society...comes from abandoning God and then asking: "Who is in his place?" -----
Hopefully I have successfully helped to demonstrate that there is no diabolical hand in all of this. (I encourage people to read the good words of Holtzman for more on this notion.) More importantly, I hope I have helped the reader see that the natural hand of man has greatly bumbled through an attempted departure from the universal and natural money (Gold), and has in fact failed. The end of this experiment is necessarily at hand.
However, it would be a mistake to think that history will repeat itself, or that the coming rise in Gold will be a simple, symmetrical mirror of its fall. It will more likely be very sudden, and will be more like a reflection of the steep mountain of accumulated credit. My final thoughts on the matter is that rather than blame others for anyone's perceived misopportunities (such as through holding Gold instead of various internet stocks,) I'd suggest that these same people at least acknowledge that they are both playing Monday morning quarterback AND counting their chickens before they have hatched. (I'd also recommend that they read MK's good words on that topic posted Saturday.) Essentially, I would encourage people to seek historical monetary awareness and to read the road ahead with the help of the many patient and interested Goldhearts found at this forum. There is nothing to be gained by anyone (other than demonstrating immaturity) through publically bemoaning missed "opportunities" that are seen with 20/20 hindsight. I'm willing to use my hindsight to suggest that these same people may have as easily lost their butts on the whipsawing of the Nasdaq today.
Cavan Man, you're one of my favorites. Thanks for giving this simple child a chance to share his thoughts with you.
Gold. Get you some. What can stop you in this most natural, intelligent financial act? After all, you earned it. ---Aristotle
nickel62
(01/03/00; 15:47:31MDT - Msg ID:22150)
Aristotle the 1922-1933 gold standard
If i remember correctly the use of foreign currency caused the banking reserves to balloon in the late twenties.The money was put to work too aggressively and the French I believe began to be concerned about the real value standing behind the British pound. The British had four times as much sterling outstanding as they had gold to cover it and the French i believe began to convert their foreign currency sterling into gold and ship it out of London. The English were already in a deflationary enviroment due to their attempt to repeg their pound to the price of gold at the pre war rate which by then was unrealistically high. The french draining of their gold caused them to have to raise interest rates at a time when their economy needed the opposite.The threat of devaluation caused a panic of currency conversion and the world central bankers rapidly converted their foreign currency holding into gold and in the process quickly drained all the liquidity out of the world system. The resulting devluations and subsequent break from gold convertibility caused a panic into gold hording of momouth proportions. I believe the ensuing panic caused 3100 tonnes of gold be horded in 1931 alone when total world production was only 600 tonnes /year.
Solomon Weaver
(01/03/00; 15:41:59MDT - Msg ID:22149)
gold bashing vis-a-vis monetary crisis
"There seems to be a correlation between the
intensity of the official attacks on gold and
the severity of monetary crises."
Hans F. Sennholz.
Hey mhchuck - thanks for posting this simple but lucid quote.
Gold (and and little brother silver) as well as its cousin oil, are about the only liquid assets outside of fiat paper that play major roles in hedgebooks worldwide.
In a time when almost all nations abuse seniorage rights, create massive government debt, the safety net is built by massive portfolios of counterbalanced risks as seen in hedge books. The math behind these books, being the basis of Nobel Prizes is of course worshiped and used worldwide.
Sorry to say this in a goldheart forum, but it is probably true that gold is a monetary relic...well at least in the sense that in a barbaric world, gold was used instead of trust.
Today's world is more glittering (Times Square, Wallstreet and the like) but it is still barbaric. Ted Butler's recent accusations of Barrick and Goldman's behavior to the point.
The world moves too fast today (electrons). Gold in hand will have to be augmented by digital receipts. In order to understand the value of gold, we must take a barometer reading on the level of trust in international finance.
Poor old Solomon
nickel62
(01/03/00; 15:35:56MDT - Msg ID:22148)
Is Chris still with us?
Has the CIA operative Chris disappeared with the past?
ORO
(01/03/00; 15:29:09MDT - Msg ID:22147)
Happy Y2K to all
Hello people
Happy Golden Millenium to us all.
Wellcome back Stranger.
FOA, Aristotle, mhchuck, Golden Truth, Permafrost, thanks for the many thoughts and questions.
FOA, your latest big post on the trading of stuff'n srvice through the currency is a marvel. Thank you.
--------------
Market comments:
Watch Dollar and Bond.
See the institutionals dump stock.
See small speculators who spent the 1st weekend of the millenium deciding which techno trollop stock to buy. See trollops jump on market buy orders put in before the the morning open.
See ball drop from Wall Street hands with 5% NASDAQ decline in 40 mins. See speculators jump back in, yelling dip! dip! dip!
Euro and Asia money exits as the flight to safety liquidity in the US is falling away. Who will buy the bonds? American speculators seem not to be of a mind to pick them up. Perhaps the Fed will buy the bonds - turn some of the temporary money into permanent money? What happens when the yields are enough to pull Americans from stocks?
We have broken solidly out of the 6.5% bond yield range. Well on the road to 7%. The value stock January effect has all but disappeared so far.
Will be back with some postings.
nickel62
(01/03/00; 15:09:34MDT - Msg ID:22146)
Aristotle thank you for your response.Your thoughts are always welcome.
I was intrigued by your earlier post concerning the various weaknesses of the gold standard as instituted between 1922 and 1931-33. and the Bretton Woods version between after the Second World War and 1971-72.As I remember the 1920's version allowed foreign currency to be included with gold for reserves and this led to an exhorbitant creation of money in several national economies.
Solomon Weaver
(01/03/00; 15:04:01MDT - Msg ID:22145)
price chart
When I went there the price was around $899
Not too far off if the unit is 100 grams.
Remember, some of the world thinks in grams.
Vielliecht werden Amerikaner nochmals Deutsch lernen mussen.
Poor old Solomon
Thriver
(01/03/00; 14:53:10MDT - Msg ID:22144)
Aristotle, re Monopoly
Aristotle, your analogy of Monopoly can be taken a step further. Consider the recent movie, The Matrix: A web of citizens plugged into paper. Unplug, and what do you find?
Gold - welcome to the real world!
(or to steal another good scene from the movie) "Do not try
to break the dollar; for the dollar doesn't exist. Only recognize that it is the perception of a dollar that is in your mind."
This is indeed a good forum for such rehabilitation.
Back to lurking...
Aristotle
(01/03/00; 14:52:10MDT - Msg ID:22143)
Journeyman -- Msg ID:22136
Thanks for chiming in on this issue. Your question, "Could someone out there perhaps come up with a somewhat comprehensive list of objections to the pre 1933 gold standard...?" is along the same path I was hoping to travel in my earlier post to mhchuck. I could immediately offer some thoughts on the matter, but I've found that the more time I spend talking, the less progress I make on these issues. Hence the Golden pacifier.
Gold. Make you some. (an oldie but a goodie, thanks to FOA) ---Aristotle
Cavan Man
(01/03/00; 14:52:00MDT - Msg ID:22142)
Ari
I recently read for the third time (thick-headed Irish) your wonderfully illuminating five part series. Are you quite certain about all of the background information you presented? Do you have anything to add? Each time I read your series of posts, I am a more convinced goldheart.
Thanks.
Aristotle
(01/03/00; 14:32:56MDT - Msg ID:22141)
nickel62 and Barrick--
I don't recall seeing this issue discussed before, so maybe you've started the ball rolling. I'm not a fundamental supporter of investment in public mining stocks, so what I have to offer on Barrick you'll have to take with a grain of salt. (Please be aware of the distinction that this postion does NOT equate with me being anti-mining. As an organizational business structure or corporation, I feel the best operations would be among those that are PRIVATELY held. If you literally "had a Gold mine," would you be hasty to give it away in an IPO? By way of contrast, internet companies all rush toward IPO's because many are dogs, and this represents their only real payday. Not so if you have a good Gold claim.")
Having said that, mining companies available for public investment are first and foremost CORPORATIONS--corporations that happen to be primarily in the business of mining in their efforts to turn a profit. In this era of the mega-merger, we are all accustomed to the acquisition of one corporation by another. They don't even have to be in related fields. Isn't it true that RJReynolds (cigarettes, etc) and Nabisco (OREO cookies, etc) are as one?
Corporations often cross industry or sector lines in their efforts to turn a buck or otherwise enhance their position. I could look into Barrick's principle shareholders, or the nature of individual that populates their management team and board of directors, but I'll leave that effort to those of you that are actually interested in buying into partial ownership of that particular corporation. My point, founded or not, is that any given corporation such as Barrick may in fact be more aligned with banking or hedge fund interests than with pure mining interests of such Goldhearts as our very own YGM, for example.
I seem to recall that George Bush and like individuals once served on Barrick's boards, or some other such nonsense. Are these guys miners with every fiber of their being, or are they merely three-piece-suits that feed their agenda, employing miners in the course of pursuing that agenda?
This candid opinion comes from a guy who has worn both a mining hat and a three piece suit (NOT at the same time!)
In an extension of my post yesterday building an analogy with the game Monopoly, imagine a hypothetical Monopoly property called Goldshaft Mines (located near the Short Line Railroad.) Would buying that particular property bring you any closer than owning Boardwalk (replete with commercial development) toward having the real-world assets you need to function when the game ends and the table is cleared for the evening meal? I'll maintain my contention that the special square called USAGOLD next to the Free Parking corner of the board would serve you the best. This is where you could convert your gaming assets to universal, immutable assets.
Thanks for the excuse to wander around amongst the cobwebs of my mind. I'm just a babe in the woods, so if this makes no sense at all, blame it on lack of adequate worldly perspective.
Gold. The best pacifier I've found. ---Aristotle
Netking
(01/03/00; 14:22:53MDT - Msg ID:22140)
Fed Rate Rise Looms As Y2K Fears Fade
http://dailynews.yahoo.com/h/nm/20000103/bs/economy_fed_1.html
"...Investors breathed a sigh of relief Monday over the uneventful passing of the millennium bug, but celebrations were overshadowed by mounting fears that U.S. interest rates may rise yet again as early as next month..."
SteveH
(01/03/00; 13:51:46MDT - Msg ID:22139)
must read!
http://www.gold-eagle.com/gold_digest_00/butler010300.html
eom
USAGOLD
(01/03/00; 13:45:58MDT - Msg ID:22138)
Farfel...
We need your new address. Please call or e-mail me. Thanks Marie
CoinGuy
(01/03/00; 13:40:04MDT - Msg ID:22137)
Thanks MK
Welcome back Stranger!
I haven't posted in awile, have to admit I was upset about the whole Stranger ordeal, but I believe in letting bygones be bygones. Glad to have Stranger back though...again Thanks MK
FOA: been some greating reading from your posts, still catching up...Where does gold end the week?
CoinGuy
Journeyman
(01/03/00; 13:38:39MDT - Msg ID:22136)
Old Gold standard problems -- how about a comprehensive list?
Many posters here allude to severe short-commings to the "old" (pre 1933) free-market gold standard. I believe the Austrian economists had answers to most or all of these. Perhaps I'm just out of date? Or are some people just ass-u-me-ing that since the standard was abbrogated, there MUST have been something severely wrong with it?
Most of these references to such problems seem to me to be somewhat nebulous and/or overblown, or trivial when compared to fiat currencies' records. I believe, over the course of many posts, I've covered some of the classic Austrian answers to the more specific objections to gold as the primary trade medium -- shortage of gold, exacerbation (or perhaps even a cause) of normal business cycles, etc.
Could someone out there perhaps come up with a somewhat comprehensive list of objections to the pre 1933 gold standard (for "official" currencies) so I can either find an answer to them, or failing that, convert from free-market (competing currency) Austrian to monetarist or neo-Keynsian? Thanx!!
Regards,
Journeyman
TownCrier
(01/03/00; 13:28:29MDT - Msg ID:22135)
Hear ye! Hear ye! Witness gold that is earned, not bought!
Gather around to witness the conclusion to the challenge raised by our host in the final days of 1999 to list the five most significant events to shape the physchology within the gold market.
Let a new year begin with the proper recognition of those knights who by their efforts of illumination have rendered valuable service to us all at the Round Table.
On behalf of MK, let me first thank everyone for their participation...this latest call to service proved particularly challenging for our judges to narrow the precious candidates down to match the precious quantity of metal offered for this challenge. Well done, one and all!
After the difficult selection of the three entries to be considered for the French 20 franc gold "rooster" coin, and the two American silver Eagle coins, it was generally felt that we had a virtual tie for the top award. Therefore our good host MK gave the nod for the appropriate alteration in the awards.
Congratulations and a French 20 franc gold coin are offered to Sir Farfel (12/26/99). We particularly liked these three nuggets found among his top five events...
+
On Martin Armstrong denouncing gold while acquiring his own impressive cache of metal: "His actions may well
prove to be the micro- metaphor for what is really transpiring amongst the central banks as they trumpet their gold sales to the world whilst actually acquiring cheaper gold in a most quiet, shrewd manner."
+
On the IMF stats that total Central Bank gold inventory has actually risen since 1997 despite the highly publicized sales: "This net gain suggests that these sales might more appropriately be perceived as interbank transfers, coupled with the acquisition of additional gold from nonbank sources. So the next time a major media organization headlines another Central Bank gold sale, gold investors should realize that the vast majority of the gold sale will likely NEVER reach the public trading markets."
+
On the mobilization of Kuwaiti gold: "America appears to have persuaded Kuwait to lease its entire gold reserves immediately following Europe's surprise announcement to cap gold sales and terminate gold leasing. ... immediately following Kuwait's gold lease announcement, the US government declared it would provide almost two hundred million dollars of military aid to Kuwait. In doing so, the US government proved that it is much easier today to print millions of dollars than it is to obtain a mere 79 tons of gold."
Congratulations and a(nother!) French 20 franc gold coin are offered to
Sir R Powell (12/26/99). In addition to his good choice of events, he provided this most exceptional conclusion:
"General Review--
This past year has shown that gold is money! Backing the Euro with gold and defending the same with the Washington Agreement emphasizes this fact. More importantly this agreement implies limits on the supply of gold which, with central bank sales and leasing, had been unlimited for years. This should refocus the psychology of all gold investors back to the basic fundamentals of supply and demand. No market can be manipulated forever. Simply stated, gold is money and supply is not unlimited."
And finally, congratulations and a silver Eagle are offered to Sir Gandalf the White (12/22/99). We particularly liked Gandalf's culmination of events toward the conclusion, in Gandalf's words, that we now have "[the] GREATEST buying opportunity of the last two decades ...[which]...allowed the Hobbits the opportunity to gather together their lifetime financial insurance for their future years and therefore was the most important happening of the year."
Thank you, one and all. The Castle's heavy treasury doors have been ordered open wide so that this metal may now be sent by trusted couriers to your own future care.
Let the good thoughts and discussions continue!
nickel62
(01/03/00; 13:22:06MDT - Msg ID:22134)
The American Barrick Web page
I was recently reading on the barrick web ppage trying to understand their specific exposure to a rising gold price and I was shocked to see the following assertion:"keeping in mind that Gold has never
consistently risen in price and stayed there. It is a volatile
commodity."
From the American Barrick Web Page regarding their hedging policy.
Are they not aware of the move from $20.67/ounce to $35/ounce in 1934 thanks to Roosevelt and Mellon forcing the devaluation of the US dollar? And the rise from $42.50 to the prices of the last twenty nine years ? I know this quote has come up before, if someone could shed some light on what was said about it I would appreciate it.
CoinGuy
(01/03/00; 13:20:39MDT - Msg ID:22133)
test
test
SteveH
(01/03/00; 13:13:42MDT - Msg ID:22132)
Long term bond yield
6.598% ouch!
Netking
(01/03/00; 12:48:51MDT - Msg ID:22131)
Goldy Locks Guy (01/03/00; 12:43:28MDT - Msg ID:22130)
I was under the understanding these had already kicked off again. If you are thinking however that Russia's exports will affect the worldwide price, I have already been down this trail ... and as they only make up about 15% of world supply there will be no real threat here either way. (As an aside, Putin's background concerns me a little) Cheers Netking.
Goldy Locks Guy
(01/03/00; 12:43:28MDT - Msg ID:22130)
Putin and platinum shipments
Hi folks....I'm just wondering if anyone has in input on the platinum shipments from Russia since the new guy is on the block. I'm assuming he will be a good boy until he actually gets re-elected, thus signing the papers for shipments to begin.....Any comments from you guys that know alot more than me???
Thanks....Goldi
beesting
(01/03/00; 12:39:23MDT - Msg ID:22129)
1989 1/2 ounce Gold Eagle!
From Coin Prices magizine January 2000 edition:
Date........Mintage..........Unc.............Prf.
MXMLXXXIX(1989) 44,829-------$400----------------
MCMLXXXIX(1989)P 44,264----------------------$305.
Seems like Gold is valued at either $800 per ounce or $610 per ounce if you are smart enough to hold it in that form.
Coins are collectibles which may raise value thousands of dollars above Gold content.
Anyone that owns coins should invest in an up to date coin book to find the latest published value of their coins, In My Humble Opinion.
Hope this posts correctly......beesting.
Aristotle
(01/03/00; 12:28:13MDT - Msg ID:22128)
Question/comment for mhchuck
On your Keynes/Hitler comparison, you might have it turned around. Given the breadth of the social infamy of Keynes against the specific depth of individual infamy of Hitler, it is already said in some circles that it is Hitler who played second fiddle--the John Maynard Keynes of national leadership.
On your comments about a world currency, I wish you would elaborate on your thoughts as expressed in the first paragraph specifically. A lazy policy-maker might read your words and say, "Fine, let's return to the gold standard as existed internationally through Bretton Woods until 1971, or else let's return to the gold standard as existed prior to 1933."
My thoughts being, as long as we are giving ourselves license here to define the perfect monetary system, how would you suggest we overcome the failings of either of those systems, each of which at face value would seem to fit your demand."
Gold. A simple solution in a complex world. ---Aristotle
elevator guy
(01/03/00; 12:10:39MDT - Msg ID:22127)
@mhchuck...correction
Sorry, I didnt get your handle right the first time, Sir "mhchuck"!
elevator guy
(01/03/00; 12:09:16MDT - Msg ID:22126)
@mchuck
And so it would seem, given TPTB are hell bent on attacking gold, that we wait for an end game to play out, where the worlds economic powers will either stay at the dollar table, and continue to do business on "our" terms, or if they will find another way out for themselves.
So the "Washington" agreement is signifigant, because it is clear public policy by the ECBs not to support whole hog gold bashing, and also the launch of the Euro is signifigant, because it begins a new alternative currency system to the USD.
My prognostication is that the FED/US gov/Big Business, et al, will continue to bash the paper price of gold, to support the USD, and try to manipulate our local economy to appear that nothing is wrong. Kind of a loss management statedgy.
And what can keep them from doing this indefinitely? Nothing that I know of, except victory by GATA, or a change in the general public's perception of gold as an investment or inflation hedge.
I may be a little behind the curve of understanding of possible outcomes to this dollar vs gold scenario, since I am not an economist, nor do I study even USA GOLD enough to absorb all that is said here (seing how there are no pictures), but I am catching on. At least I can see what Another means when he says "Things are not as before" Slowly, I am seeing through the fog, thanks to USA GOLD.
Gandalf the White
(01/03/00; 11:43:16MDT - Msg ID:22125)
PERMAFROST's and TownCrier's discussion -- Re: '89 half oz Eagle
The Hobbits wish to supplement TC's answer to PERMAFROST
-----
TownCrier (01/03/00; 08:12:33MDT - Msg ID:22114)
Answer for PERMAFROST?
You asked "Could you please tell me what an 1/2 Oz. Gold Eagle vintage 1989 goes for?"
Assuming this is not some sort of trick question, with a spot price per ounce near $290, the gold content on a half-ounce coin would be $145, but the final price would also include a fabrication and distribution premium, (some of which you would recoup upon selling the coin.) The unbinding ballpark price anticipated from this tower outpost is $160-$165, plus or minus. What's the significance of 1989?
******OOPS -- you are getting closer Townie -- yes, the 89 Half oz. was a low mintage year and does command a prem! -- In fact the present ask price is $300. (yes, you are seeing correctly -- THREE HEUNDRED for a 89 half oz. !!)
The only thing is to find someone that wants to buy one !!
Other years like 90 and 91 also command prems because of low mintage.
<;-)
mhchuck
(01/03/00; 11:13:27MDT - Msg ID:22124)
WORLD CURRENCY?
The success of any single world currency must have the backing and/or redeemability in a standard of value that has more intrinsic worth than paper. If it has no commodity backing, then it will be backed with GUNS, and we will have global Totalitarianism. In the economic sense, the one world "Big Brother" voice would in essence be dictating to its minions, "We shall dilute and pillage the fruits of your labor in terms of any remunerations you have received at our discretion." "All saving will be at your own risk--We do not encourage saving."(Not much unlike today)
In this upside down convoluted Keynesian economic world, the Japanese, with a savings rate of twenty percent-plus, are said to be mired in depression, while the prototype of the
keynesian model, the U.S., has a negative saving rate, continuous "record" twenty-five billion dollar monthly balance of trade deficits, and is said to have a robust economy. What's wrong with this picture? I think History will one day view John Meynard Keynes as the "Adolph Hitler" of economists.
"Of all the contrivances of cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.
Daniel Webster.
"It is important to remember that government interference always means either violent action of the threat of such action. Taxes are paid because the taxpayers are afraid of
offering resistance to the tax gatherers. They know that any disobedience or resistance is hopeless. As long as this is the state of affairs, the government is able to collect the money it wants to spend .Government is in the last resort the employer of armed men, of policemen, of gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating,
killing, and imprisoning. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom."
Ludwig Von Mises.
"There seems to be a correlation between the
intensity of the official attacks on gold and
the severity of monetary crises."
Hans F. Sennholz.
"Never have the world's moneys been so long cut off from their metallic roots."
Murray N. Rothbard.
18KARAT
(01/03/00; 09:02:41MDT - Msg ID:22123)
Interesting comment from Australian website
http://www.afr.com.au/content/000104/news/news2.html
Happy new year to you all fellow bears and bugs.
18K
TownCrier
(01/03/00; 09:00:47MDT - Msg ID:22122)
Fed seen fighting expiring repos, still adding cash to maintain banking reserves
http://biz.yahoo.com/rf/000103/gx.html
The Fed added $8.99 billion through overnight repurchase agreements...approx 3/4ths were as mortgage-backed securities.
elevator guy
(01/03/00; 08:58:07MDT - Msg ID:22121)
@ RossL (22117)
That gold chart has to be someones idea of a joke, or wishful thinking. Every other chart on that page seems reasonable, (except oil?)
Someones having a laugh right now, I think!!!!
TownCrier
(01/03/00; 08:54:13MDT - Msg ID:22120)
Wall Street Volatility
No play-by-play to waste your time and space, but in a market snapshot less than 90 minutes into trading, the Nasdaq has plunged 130 points into negative territory from its post-Y2K euphoric opening. Volume now exceeds half-billion shares. Incredible blow-off look to this stuff.
USAGOLD
(01/03/00; 08:45:34MDT - Msg ID:22119)
Today's Market Report: London, New York Closed Today
Market Report (1/3/00): The London and New York gold markets remained
closed today. We do have some market-making in the $290 area this
morning which essentially reflects the Thursday close. The big story
this morning is the bond market which is taking a major hit -- down
nearly a full point. There was some talk over the weekend that this
might happen given the fact that the dollar has been viewed
internationally as a Y2K safe haven. The theory is that if Y2K ends up
being a minor, or non-event, then a dollar exodus would begin. As most
of our readers know, the U.S. Treasuries market struggled through most
of the last quarter of 1999 under the threat of a Fed interest rate hike
sometime early this year and rampant money creation through most of
1999. Today's action could very represent an acceleration of trends
already in motion in the Treasuries market. The dollar seems to be
holding its own despite the bond market woes -- up marginally against
the European currencies and down marginally against the Japanese yen. So
far the world's computer systems appear to have passed the Y2K bug scare
with only minor problems.
That's it for today. We'll see you here tomorrow.
TownCrier
(01/03/00; 08:44:32MDT - Msg ID:22118)
Indonesia's Central Bank Needs Government Cash to Remain Solvent
http://quote.bloomberg.com/fgcgi.cgi?ptitle=U.S.%20Economy&s1=blk&tp=ad_topright_econ&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=7201e74ebee8ca07e33c3dea67ebb8d1
The headline says enough.
RossL
(01/03/00; 08:39:27MDT - Msg ID:22117)
Oil and Gold charts
http://www.usatoday.com/money/charts.htm#SP500_GOLD
Wow take a look at these charts. Must be a bug.
Gold is at 11506 !!
TownCrier
(01/03/00; 08:38:01MDT - Msg ID:22116)
Cavan Man, regarding the spectre of self-doubt
You posted, "all economists (those interviewed for the article) agree rising productivity, tame inflation and rising consumer spending will keep the economy "humming in 2000"" and wondered what you were missing.
You are missing nothing other than proper perspective in coming to terms with this "news." You are genuinely interested in these affairs of gold, have done your research, and by your presence here we'd wager you are better versed in the developments that will "blindside" these economists.
Your self-doubt is only in your misplaced confidence in the quality of these unknown economists. Similarly speaking, you wouldn't likely expect the great former coach and professional football announcer, John Madden, to have any inkling of your local high school football programs. This isn't to say that gold is amateur in the realm of economics, but that it is not an area into which many so-called professional economists give much attention. Their opinion wouldn't affect the progression of events (as we see them unfolding) anyway. Had we been among them, the article would simply be altered to read, "*most* economists agree..." etc.
Aggie
(01/03/00; 08:31:15MDT - Msg ID:22115)
not the y2k bug
http://biz.yahoo.com/rf/000103/b8.html
what will this do to oil and commondity prices?
TownCrier
(01/03/00; 08:12:33MDT - Msg ID:22114)
Answer for PERMAFROST?
You asked "Could you please tell me what an 1/2 Oz. Gold Eagle vintage 1989 goes for?"
Assuming this is not some sort of trick question, with a spot price per ounce near $290, the gold content on a half-ounce coin would be $145, but the final price would also include a fabrication and distribution premium, (some of which you would recoup upon selling the coin.) MK could give you a quote based on current market conditions. Give him a call or e-mail if you're interested. The unbinding ballpark price anticipated from this tower outpost is $160-$165, plus or minus. What's the significance of 1989?
Cavan Man
(01/03/00; 08:12:15MDT - Msg ID:22113)
Townie and all
According to the WSJ, today's edition; paraphrasing.....all economists (those interviewed for the article) agree rising productivity, tame inflation and rising consumer spending will keep the economy "humming in 2000".
CM question(s): What am I missing here? What are forum members missing? What is the WSJ missing?
I suppose everybody is entitled to their opinion and events will determine future economic context. (?)
TownCrier
(01/03/00; 07:58:01MDT - Msg ID:22112)
Perhaps the dollar was the primary beneficiary of pre-Y2K jitters, now it suffers
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=0ad5f79c53148a0f994ac7c4e3386e32
U.S. Treasury Bonds fall to nearly two-and-a-half year low prices, the yield of the bellwether bond rising so far today to 6.55 percent.
Bloomberg reports that for the year 1999, holders of 30-yr bonds lost 12.6 percent (including reinvested interest), their worst performance since regular sales began by the Treasury in 1977.
Can their be much doubt that the days of the dollar's reign are thus being signaled as nearing the end?
Black Blade
(01/03/00; 06:49:32MDT - Msg ID:22111)
Interesting day on Wall Street today?
S&P futures up +9.80 and bonds plunging. What next? Meanwhile Au up +0.70. Let's see if any "bugs" crop up.
FOA
(01/03/00; 06:13:31MDT - Msg ID:22110)
Reply
PERMAFROST (1/3/00; 3:35:05MDT - Msg ID:22106)
Dear FOA
Sir,
I thought you may mistake the tone to be on the inflammatory side.
Hello again PERMAFROST,
Did you ever go to a family gathering where everyone is in the living room after dinner. They are all talking over each others conversation,, get the picture. Then someone asks uncle Bill a question about his favourite political / religious subject. He goes on and on and soon is on the edge of his chair talking ever louder. Next he is up, walking around waving his arms in the air and seemingly telling everyone about his views. Finally, someone says, "Bill why are you shouting?" Bill says, "I'm not shouting"?
PERMAFROST asks, FOA, why are you answering in a defensive way? FOA says, "I'm not defensive!" (big smile) Sorry PFrost, I'll try to sit down when I talk.
Be back later (answer the rest)
FOA
THC
(1/3/00; 4:09:55MDT - Msg ID:22109)
Questions for FOA & Oro
Gentlemen,
I would like to second the questions asked by Permafrost. There has been much written here about how the Euro will dethrone the US$, and how the Euro will be pro-gold. It has also been suggested that the Euro is necessary for the convenience of gdigital payment systems.h
I have struggled with this for some time, and I have yet to find this to be completely logical from my perspective.
1. Is the Euro not just another fiat currency?
The Euro is not worth a fixed quantity of gold or any other commodity. How does this differ from the US$ and all other fiat currencies? Why would the oil producers or others who want gold settle for payment in Euros?
2. Why not digital gold?
It would be technically quite simple to set up a digital banking and international trade payment system based on gold should there be the will to do so. Why should those who truly desire an honest and fair global monetary system settle for a fiat currency like the Euro instead of gold??????
I think that these questions deserve to be settled, and I look forward to your thoughts.
Many thanks,
THC
Number Six
(1/3/00; 4:09:19MDT - Msg ID:22108)
Gold drains away in Perth Mint fire...
http://www.theage.com.au/breaking/0001/03/A4984-2000Jan3.shtml
Pity it wasn't Comex or the LBMA!!!!!!!
PERMAFROST
(1/3/00; 3:44:49MDT - Msg ID:22107)
Request for a little information...
Dear Forum;
Could you please tell me what an 1/2 Oz. Gold Eagle vintage 1989 goes for?
Thanks!
PERMAFROST
(1/3/00; 3:35:05MDT - Msg ID:22106)
Dear FOA
Sir,
Having noticed that the last of my three part posting is shown first, I thought you may mistake the tone to be on the inflammatory side. It's not the case. I consider it a privilege to have an intelligent conversation with people of knowledge. Please go to Msg. #1 then proceed "upwards."
Thank you!
PERMAFROST
(1/3/00; 3:09:12MDT - Msg ID:22105)
Reply to FOA Msg. ID: 21859
Lastly,
As to even the 'emperor running to higher ground when he sees the flood coming'--if he were to do so, he'd be emperor no more for what makes an emperor an emperor is the "land" he rules. Without it he's nothing.That's why captains do not abandon their sinking ships; and why sometimes even emperors get their heads chopped off. To die an emperor is perhaps preferable than to live as a normal human being for some...You?
PERMAFROST
(1/3/00; 3:02:19MDT - Msg ID:22104)
Reply to FOA Msg. ID: 21859 Part 2
Capitalism, this familiar but insidious term really stands for the willful confusion of a descripitive proposition [that private property exists] with a PRESCRIPTIVE one [that private property and the wealth that can be generated from it is GO(O)D]. It's a logical fallacy that doesn't survive the glare of critical analysis.
Omit the adjective "private" from the premise and what you end up with is the other side of the coin, or communism. Both systems are basically worship of materialism and humanistic (man is the measure of the universe) propaganda.
Now, whereas communism theoretically aims at generating its "GOD", or 'goods and services' in economic parlance, via the sweat and toil of its fellow gods (the proletariat), capitalism is predicated on CONSTANT INSTABILITY [the insidious rhetoric of the bankers notwithstanding] of the prices of these very goods and services, the [managed] fluctuations of which allow the people Greenspan works for to earn wealth they did not work for.
Therefore; I find myself obliged to conclude that, due to your avowed devotion to the Euro and the "The King is dead; long live the King" tradition it propounds, the only difference between you and an "Alan Greenspan" lies in your respective handles. If you already are not one of them, you wanna join 'em. Incorrect?
PERMAFROST
(1/3/00; 2:31:57MDT - Msg ID:22103)
FOA Msg ID: 21859 Part 1
Dear Sir,
Thanks for your response.
You are advocating a global financial system predicated on the peaceful and mutually-beneficial "concubinage" of gold and the "new girl in town" fiat money the Euro which you unwarrantedly presume to be relatively more "chaste" than the Old Whore, the US dollar, ONLY because it is not "backed" by as much debt as the dollar, and its "lovers" (the EU Central Bankers, the Rothschilds?; an assorted variety of Illuminati and various other power brokers playing both sides [the sheeple?] against the middle [more sheeple]) tip their hat at gold without solemnly declaring their allegiance at sovereign money, PM etc.
This fiat money is necessary, you say, because it will allow management [manipuation] of the economy without suffering the deleterious side effects that a rigid gold standard has saddled us with in the past. Would you care to draw for the benefit of the forum the the philosophical line that separates you from, say, an Alan Greenspan, as per the gold/fiat money relationship? do we not have TODAY a fully-floating POG alongside the dollar? What shall we gain in re-baptizing fiat money with a different name, i.e., the Euro? except the prolongation of the Game? IF gold IS money than nothing else is. Disagree?
Goldsun
(1/3/00; 2:25:13MDT - Msg ID:22102)
Wave Reversal
Canuck
Y2K ok causes US equities decline.
Y2K not ok causes US equities decline.
At least, that's how I've placed my bets.
Great mining story! Did the other miners consider you a little strange? BTW, when the pressure wave hit the end of the tunnel you were heading toward,it reversed sign and direction. That's what moved the smoke back, rather than vacuum. The same thing happens in the exhaust pipes of internal combustion engines and has long been used to increase the power of small, high specific output engines like those found in motorcycles.
Like you, I turned to explosives to explain Y2K peace and quiet. Y2K is like a minefield. Rollover armed the mines.
Goldsun
Goldsun
(1/3/00; 1:42:24MDT - Msg ID:22101)
When Ducatis Are Priced In Euros
can oil and gold be far behind?
Goldsun
SteveH
(1/3/00; 1:06:13MDT - Msg ID:22100)
BTD
Thanks.
Netking
(1/3/00; 0:32:11MDT - Msg ID:22099)
Asia roars to life.
http://dailynews.yahoo.com/h/nm/20000103/bs/markets_asia_3.html
Hong Kong and Singapore share markets hit record highs on Monday up 1.6% & 2.5%.
SHIFTY
(1/3/00; 0:14:22MDT - Msg ID:22098)
Irrational Exuberance ?
I spent my afternoon siting here reading, with a cup of coffee and some home made fudge. Spent some time outside in my garden, ( I live in FL.) just a real nice day. I feel like a weight has been lifted. I hope it's not irrational exuberance setting in on me.
We will soon see.
Just wanted to say thank you to all.
Netking
(1/3/00; 0:08:26MDT - Msg ID:22097)
GATA; Gold's propensity to retain purchasing power over the long term.
http://www.egroups.com/group/gata/330.html?
Latest GATA post; Reginald H. Howe, lawyer and former mining executive, examines the prospects of a world financial order totally disconnected from gold in this essay, "Interest Rates: The Golden Connection." Implied is a forecast of hyperinflation for the United States and other nations relying on the U.S. dollar.
Excerpt; "...Gold's propensity to retain over long periods of time a
reasonably constant purchasing power is widely
recognized. Less widely appreciated but just as
significant is the long-term stability of gold interest
rates. Both together are the defining attributes of
gold money, features that governments have heretofore
proven incapable of replicating with their fiat money
substitutes..."
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