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ARCHIVED DISCUSSION FROM 4/3/2001
All times are U.S. Mountain Time
(Yesterday's Discussion.)
ax
(04/03/01; 22:59:51MT - usagold.com msg#: 51370)
LATEST NEWS ON CATALYTIC GOLD CONFERENCE
News from the Catalytic Gold Conference earlier today for new gold uses in
industry:
1. hydrogen fuel cells ---- clean power generation
2. catalyst to clean emissions from diesel powered vehicles
3. control pollution in office buildings
4. pharmaceutical application such as use in anti ovarian and testicular
cancer compounds
5. use in production of certain chemicals
Thats it for now.
megatron
(04/03/01; 22:40:46MT - usagold.com msg#: 51369)
Zero interest
My companions and I have talked at length recently about interest rates. One of the funny things to emerge in our conversations is that no one would presently think of taking on new debt, even at zero interest rates.When I broach the question of PM's they stare off into the distance, not willing to admit they no nothing about a subject. I guess it is what they say it is: zero interest = zero interest!
Journeyman
(04/03/01; 22:39:13MT - usagold.com msg#: 51368)
"Taking on extra debt" @tg, ANYONE
Hi tg!
Your last post contained the following, excerpted from the link you included:
"Yes, one that is beginning to resemble the Japanese economy - where consumers are reluctant to spend and where borrowers don't want to take on extra debt, even if they can borrow at nearly zero interest."
This sounds almost like there's something selfish or unpatriotic about any borrower who doesn't want to take on EXTRA debt!
Could someone explain to me why anyone wants to take on debt of any kind under any circumstances if it can be avoided?
Or has McTeer-itis infected the whole world?
Regards,
Journeyman
tg
(04/03/01; 22:28:38MT - usagold.com msg#: 51367)
(No Subject)
www.dailyreckoning.com
*** Still, spending may not increase as hoped. The Houston Chronicle reports that a "Wait For Lower Price Syndrome" is developing. Consumers expect prices to fall. In deflation, people typically hold onto their money, rather than spend it. "If money no longer burns a hole in pockets," says the paper, "if we are all persuaded that the price of everything but yogurt will be lower next month, we're in a different economy."
*** Yes, one that is beginning to resemble the Japanese economy - where consumers are reluctant to spend and where borrowers don't want to take on extra debt, even if they can borrow at nearly zero interest.
Mythical
(04/03/01; 21:20:18MT - usagold.com msg#: 51366)
HillBilly Mitchell
Hello Everyone! I originally intended to send the following as an e-mail to HillBilly Mitchell, but after further thought, realized that it may be inapropriate in that manner. And besides, I think my modest "contributions" to Michael and Centennial warrants at least one humble post on this gracious forum.(smile) Anyway, here is the original message directed toward HBM...But please forgive me for any grammatical errors and anyone...please feel free to post your thoughts. I respect you all.
HillBilly Mitchell,
First let me apologize in advance for bothering you...I hope you don't mind. I don't normally take advantage of an e-mail address given out in confidence, but when you posted it, I selfishly considered responding to you because I sincerely enjoy your posts on the forum regarding Gold and especially your thoughts on the Bible and the Lord. I enjoy most of the posters that respond at USA Gold, but your style is most enjoyable (other than FOA/ TrailGuide) and I respect your opinion. OK, enough kissing up and on to my reason for e-mailing you... I (as probably many others do also) wonder what to think of this mysterious poster (FOA) and the very intruiging ideas he bestows on us "average thinkers." I have faithfully followed the forum ever since the enagmatic posts of Another graced the pages at Kitco and then USA Gold, and have digested every last post these individuals have offered, but I come away with the thought that what they offer up at times seems...a little too good to be true? I guess my good nature at times leaves me to believe things the others find gullible, but I must admit...I find FOA's posts "comforting" in a sense, considering the carnage that lies ahead. What do you make of FOA HillBilly? Looking at some of your previous posts, I get the impression you believe most of his scenario also do you not?
,,,,,,,,, Also, I get the impression that a few astute posters (Oro, ET, Elwood) are beginning to "move away" so to speak from FOA's ideas relating to the Euro, and where they're taking us. Then again, I could be just misinterpreting what Oro simply rattles of the top of his head-right? I guess I miss Steve H and his talented efforts at deciphering all that information so dummies like me can feel they have a purpose...and Aristotle with his eloquent posts that seemed to drive the overall message home. Where is Aristotle anyway? He just vanished. Sad.
,,,,,,,, Well, my rambling is getting endless...To the point HillyBilly- You posted some time ago that you needed to respond to Steve H and more importantly, Lady Leigh in regard to a certain passage in Revelations that mentioned gold and silver cast into the streets. Could you be so kind as to enlighten me on your thoughts to that particular subject? It would be greatly appreciated. Here is the quote:
"I owe you some lengthy response to your past thoughts concerning the link between oil and gold. I owe Lady Leigh some information from A.W. Pink and the Holy Word concerning the time when gold and silver will be cast into the streets. I owe ORO much response to his facts about the trees."
,,,,,,Well, I feel I've taken enough of your time, so I'll part with one last note: From someone who has probably 90% of his family's wealth tied up in physical gold, I certainly don't think of you as crazy. Just a little less crazy than myself friend!
Respectfully,
Michael
megatron
(04/03/01; 20:27:58MT - usagold.com msg#: 51365)
CoBra
With the spectre of Cambior, Ashanti, and Nortel hanging over the market, I assume the men behind FN know full well the dangers of hedging from the stand point of investor driven class action suits. The motivation must be the inside knowledge that they will be able to unravel any potential time bombs discovered during due diligence. Other wise they were putting the barrel in thier mouth. I view this transaction of the KenSnyder mine for shares as a sign that gold is NOT going to rally significantly in the NEAR future. Obviously many FN owners felt the same, although maybe not for that reason alone. I am sure Casey will have something insiteful to opine about this.
R Powell
(04/03/01; 19:50:03MT - usagold.com msg#: 51364)
Mr. Tree
"...and my family thinks I'm out of touch with reality..."
You aren't by any chance, a goldbug??
Rich
R Powell
(04/03/01; 19:40:27MT - usagold.com msg#: 51363)
Ten Bears
I believe you have taken the conspiracy theory to an all new level with the idea of a planned financial meltdown to keep us from retiring. I thought they were going to be satisfied enough by paying our social security benefits in devalued dollars worth much less in value than the dollars we are forced to pay in over a lifetime. Honest money??
BTW- Good post!
Rich
Econoclast
(04/03/01; 19:28:48MT - usagold.com msg#: 51362)
Truth is stranger than fiction/Someone is still holding cards up their sleeve
There are certain characteristics, I would guess, that we (at this forum) all have in common. We all have open minds, we are all slightly cynical; we have a tendency to doubt the motives of those in authority, and as a group, we are more adept than average at recognizing dis-information and propaganda.
As gold holders/investors, we are very unique thinkers. Currently, less than 1 in 1000 people think like we do.
We are a product of our genes in combination with our environment. The environment that we (generally) have lived and developed in, is twentieth century US of A. We are part of a small group of humanity, and a time in history, who have been afforded the luxury of being able to not only think of concepts such as freedom, and the supreme rights of the individual, but to actually get a glimpse of a world where such concepts reign supreme. For whatever reasons, it is my belief that we are all witnessing the slow erosion of the liberty and sovereignty of the individual that we were promised as part of our birthrights of being Americans.
To all of us here, the economic freedom and political sovereignty we all crave as thoughtful individuals, is represented by GOLD, and perhaps even a return to an honest money system based on a commodity, a role which gold has filled quite nicely in the past.
My own fascination (some in my family call it an obsession, although those same people wish they would've gotten out of the stock markets when I told them to) with gold was a seed that was always with me (back to genetics again?). That seed was cultivated by my environment growing up. From the first time I saw it, I wanted my dad's five dollar gold piece from the mid 1800's. My grandpa (now passed away-never got to ask him about his fascination) used to take me out to the streams around his house where we would pan for gold. We never really found anything, but could there be a better way for a six year old to spend the day? Growing up in California in many other ways exposed me to the history of gold, since it was such an important part of California history ( I wonder if it's the same for kids now?).
My point is that I have always been drawn to gold. It is something innate and intangible. Even before I grew up and came to understand the true nature of money, and the truth and freedom inherent in the shiny yellow, I was always a rebel, but always felt I could be, because I said the pledge of allegiance every morning and believed in its principles and our country. I took my freedom for granted.
I was a teenager in 1980. I remember following the dollar price rise of gold and wishing I had some. But where does a teen get those kinds of dollars? Then I watched the price retreat over the next few years. It settled back above $300 and I still wanted some. It never seemed to actually hit 300 though, at least not when I was paying attention. In my mind, that number gradually became some kind of barometer of the price. When it came down closer to 300 I would want some but didn't have the extra dollars to convert (or more likely, I had the wrong priorities).
Fast forward to the late 90's. I have learned the reality of the world. I see that the freedom I took for granted when I was a kid is being whittled away by either conscious or unconscious forces. I have learned of the fraud inherent in our fiat money system and the government/banking/corporate nexus that it supports and makes bloated and corrupt. I have become exposed and educated to the whole global new world order conspiracy thing. Whether it is real or not, whether gold is being sat on or not, today, now that I am older and have access to dollars occasionally, that can be earmarked for conversion to that timeless wealth known as gold, I can buy it for a dollar price that I would've considered absurdly cheap even 25 years ago. This truly is the opportunity of a lifetime for me. I have waited thirty-something years for this chance to accumulate my own little chunk of real wealth. I have a feeling that this is the one chance I'll get to accumulate during my lifetime and I only wish that I had more dollars to convert for as long as this fire sale lasts.
Do I think this gold market is manipulated? Let me say this, even though it has been usurped as a transactional currency for use by the little people (us), it most definitely IS money. Central Banks throughout the world are not holding vaults full of pork bellies. Since it is money, its manipulation must be taken for granted. But who and why? What is the ultimate goal and what will be the ultimate outcome? Have you ever heard the saying "truth is stranger than fiction"? I really get the feeling that the saying will reaffirm itself in this case. Although some of the pieces of the puzzle might be the theorized culprits who may have their own motivations or parts to play, I feel that the truth of the gold market (and dollar price) is not so plain to see. We would all do well to keep our minds open and try to shine a light into all the dark corners of our own belief systems as well as the dark places where the minions of fiat money and global tyranny hide.
I am an eternal optimist. I also am an American who loves both the "land of the free", and the principles that our government was founded upon. I refuse to believe that those principles are either dated or dead. If I think and feel this way, someone else does also. If there is a new world order, there is also an order working against it. Otherwise it would already be here. Or something completely different is going on. The reality is that the world is a huge and complex place with many opposing forces. We would all be served by keeping open minds and trying to look at people and events with an innocent and non-judgmental perspective.
History is a great story, and remember, the truth is stranger than fiction. Until it is just history, we can not know what the true story is. I think this forum has, as a whole, a pretty good handle on a couple variations of similar belief systems. Is there a way to "push the envelope" and look beyond what we're trained to see? To open our minds and expand our horizons. Based on a lifetime of observation and evolution, I have the nagging feeling that this gold story just does not fit into the nice, neat package we've got it wrapped in.
Sorry for all the words. If you've read until here, I appreciate it, and hope that somewhere you found something you can relate to, or that gets your thought processes going. And while you can, keep loading up-things will change.
P.S. Ever since I have become disillusioned with the state of individual liberty and sovereignty in the USA, I have been searching for a winnable method of non-violent revolution. I believe the answer lies in exposing the fraud that is the IRS. If the truth reaches a critical mass of Americans who decide they're not going to do it anymore, again, things WILL change.
Thanks Journeyman, I'm looking forward to it.
R Powell
(04/03/01; 19:20:15MT - usagold.com msg#: 51361)
BillyG
I believe both Harmony and Newmont are good, solid, unhedged mining companies that will do well when the price of gold rises. Since you have them, why not consider owning some of the metals (gold or the poor man's gold-silver).
Just so happens they can be purchased here from our host, Centennial Metals. Or, if gambling is in your blood, you might consider the futures markets but do not, repeat do not, place money there without fully understanding how it works. This is offered as educational food for thought- not as investment advice!!
Buy physical metal=investment
Futures markets=gambling
Rich
Ten Bears
(04/03/01; 19:20:08MT - usagold.com msg#: 51360)
Dollar, Fed, Share Mkt., & GOLD
Greetings Knights & Ladies:
Thank you for many enlightening posts over the past several years at this most excellent forum.
A summary of a few of many points of wisdom you as a group have shared; as well as a speculation or two follows, in this my first post.
A.The US dollar is a unit of control over resources, both human & natural. It also serves as a ration coupon for the masses. The supply of dollars has rapidly increased since the early 1970's, and has accelerated since 1995. Purchasing power for more than 80% of US citizens has declined, partially due to inflation. Simultaneously, US share prices have exploded upwards. A chart of broad money supply tracks the S&P 500 from 1995 to 2000.
B. Why has the Fed, the holders of the most lucrative franchise in the history of the world, allowed the asset bubble and how have they so far been able to prevent hyper-inflation in markets other than assets? As to the why; the inherent nature of the credit money system requires an increasing supply to pay back the money creators (the original amount plus an interest increment). Otherwise, defaults occur and destroy a portion of the supply. Over the past 12 years the Fed has expanded money supply with a series of bailouts for their cohorts(Goldman Sachs Mexico loans, RTC for savings & loans, Morgan & Goldman's Russian loans,LTCM, & so forth). Members of the banking community were spared writing off bad debts and the money supply boomed. Not coincidentally the percentage of total income tax revenues required to pay interest on US govt. debt had reached critical levels by the mid 1990's. Through the sciences of mass psychology, statistical analyses, and computer modeling the huge money supply increase was used to influence share markets and to suck in unsophisticated investors. (Remember the trader's advice: Most people buy shares because they have gone up;shares do not go up because most people buy.) The resulting boom generated increases in tax revenue due to increased money supply and velocity. Currently, longterm government debt is being retired.
C. How has hyper-inflation been restricted primarily to share and real estate markets? and not allowed to surface in the general consumer price level?
(1) The true consumer price level increase is currently closer to 10% per year than the official figures. To quote Mark Twain, about "lies, damn lies, and statistics" is accurate when applied to the USDOL BLS.
(2) The US trade policies have allowed the importation of consumer price deflation from developing countries with low labor and environmental protection costs. Without low cost Latin American and Asian labor, US consumer prices would have more closely tracked share prices.
(3) Gold and commodity prices have been held down primarily through futures, options, and other derivative schemes. Farmers and miners are going broke while the prices of their products are controlled by leveraged paper instruments.
(4) The US dollar, relative to other currencies, has been held up by carry trades in Yen and Gold,and by strategically timed purchases of dollars and dollar instruments with Gold(BOE auctions, Swiss auctions, etc.)
(5) Oil prices have been held down by holding gold down. The Arabs will not take dollars in payment for oil at gold prices above $ (X) (perhaps $420 per oz.)
Speculation as to what comes next: To those with the money franchise, the number of tax paying units in the "Baby Boom Generation" is about to become a liability as they retire and cease to pay tribute in the form of income taxes. A 70 to 90% decline in 401K accounts wil keep the "boomers" working longer and paying those taxes longer(a front page article in the Dallas Morning News on April 2nd, says as much). Or perhaps the markets will be propped up with yet more money supply increases, and the boomers will have to work longer and pay for $3.00 per gal. gasoline and $.20 per KWH electricity.
I hope I am wrong, but the excesses of the '90's appear to be an engineered catastrophe in the making, with both the Fed and the SEC involved.
Ten Bears
Tree in the Forest
(04/03/01; 19:19:26MT - usagold.com msg#: 51359)
Parsifal
I find your arguments for not holding gold compelling. You are correct. But now consider my track record:
In June of 1997 I was told by a man who I met at an investment seminar that the market would crash by the end of the year. He explained to me how many millionaires he had made over his lifetime and how he knew what was going to happen and how many wealthy people trusted him. He said to me, "Trust me!" I did. I invested in gold (futures at that time). I lost money.
I was told in 1998 by a well known guru with a PhD. that the derivative situation would bring down the market in October 1998. He trotted out a message from his dead father who had made a fortune in the '29 crash. It was one of those, "if you're reading this, I must be dead now" messages that really makes you think that what you are hearing is gospel. I invested. I lost money.
By 1999 the chant was Y2K with all of the gurus, hype etc. You know the story. I invested. I lost money.
By 2000 it was the election story. First it was, "They'll have to bring it down before the election so Gore will lose." I invested. I lost money.
Then it was "It'll have to happen right after the election so Bush can blame it on Clinton". I invested. I lost money.
Even investing in "physical", and I'll put it this way, it wasn't worth more in dollars.
The only thing I can say my friend is that I will hang onto this PM "thing" like a pitbull. Stubborn and stupid though I may look (and my family thinks I'm out of contact with reality when I know full well that it is they who are out of contact with reality). And furthermore I will shamelessly admit error and shamelessly alter my predictions again, and again and again a hundred times or a thousand times or however many times it takes until I am finally right for as long as they let me post on this board, if necessary UNTO DEATH!!
I have quoted him before and I will quote him again now, one of our greatest presidents, read it and believe it!
"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."
Calvin Coolidge
PS: As soon as I have straightened out the contract inconsistencies in the Comex silver contract spreadsheet I am working on, I will post some new predictions and a response to Carl H's comunique with Ted Butler.
PPS: HBM, you are the smart one!
Journeyman
(04/03/01; 19:08:43MT - usagold.com msg#: 51358)
60 MINUTES 2 & the Enlightened Taxpayers @ALL
Hi ALL!
60 MINUTES 2, beginning at 9:00PM EST, the second segment I think, will be covering We The People and others, including employers who are no longer withholding from their employees.
Regards,
Journeyman
JMB
(04/03/01; 19:07:47MT - usagold.com msg#: 51357)
BILLYG
DROOY
R Powell
(04/03/01; 19:04:55MT - usagold.com msg#: 51356)
Now?
If we assume that the dollar prices of gold and silver are going to rise which most here do and we assume that it will happen when certain things transpire which most of us do, then I'm thinking that an awful lot of those things we've discussed for so long are now really, actually happening. I hate describing things as "things" as I was taught that "thing" is a most nondescriptive noun but I don't want to rehash all the things refered to that I believe may now be happening.
Point is, if even half of the conclusions we've reached concerning the whos, whats, whens and whys of a much higher (explosive?) POG are correct, then IMHO it should be damn near time! All the topics covered in all the horseman contests, all the financial scenarios covering currencies, Fed, policy, equities' market behavior, herd mentality, stock and debt bubbles, manias and their aftermath etc.
Does anyone else have the feeling that this can not long continue without a response or some serious rethinking of a whole lot of our suppositions?
No, I'm not second guessing. I believe it will happen. I'm saying that I think it is happening with an ever growing velocity. Will another intermeeting rate cut intervene. Could even that stop it now? What thoughts?
Rich
BILLYG
(04/03/01; 18:36:21MT - usagold.com msg#: 51355)
Gold Stock
I have been holding NEM (converted from BMG buy out) for a year, HM for a month. Both I am about even. I have a few more investment dollars and looking for a low price (under 3) stock to buy. With all ths knowledge on this message boards I was wondering if anyone has any ideas? I am encouraged that the stocks are holding up from the lows with metal hitting new lows.
R Powell
(04/03/01; 16:38:18MT - usagold.com msg#: 51354)
ET
I too have been burning up brain cells following you and Randy. Much appreciated, thanks to both of you.
ET said, "..it's always nice to know someone actually takes the time to read this stuff I write." I suspect that most of us would be amazed at how many are reading. A while ago I inquired "how many" of our host. Without having to justify advertising costs to perspective clients, there is no need to keep a running tally as is done at the G-E castle but I suspect the number of daily, weekly, ytd or total visiters here is considerable. Best of all, it's free. Thanks!
Rich
R Powell
(04/03/01; 16:24:55MT - usagold.com msg#: 51353)
Good press again
I'm reading while listening to the peoples' stock TV channel. Market watch just mentioned that the best sector of the day is the precious metals mining sector. Good move up today and probably the only "up" sector. Also, IBD newspaper lists the different sectors every day along with their year-to-date gain or loss. Mining stocks were, until about a week ago, the only positive ytd sector. Another quick daily update is the commodities report (usually just before the hour) on CNBC. The very last index given is the XAU or preious metals mining index.
Good hat trick day today with POG, XAU and lease rates all up. This helps after yesterday when, I believe, all were down.
CNBC also showed a cart full of gold bricks being wheeled around when they mentioned the mining sector.
Yesterday Ron Insana mentioning gold as a safe haven. Today the mining sector getting some recognition. Perhaps some investment interest will be generated. The right word from someone might be all it takes. I watched the frozen concentrate futures lock "limit up" for three days a few years ago after someone overheard a remark from Judith Ganes (O.J. analyst). She was overheard talking while eating lunch! Who knows??
Rich
IronHead
(04/03/01; 16:18:15MT - usagold.com msg#: 51352)
Journeyman - Confused RE: your #51351
Hello Sir Journeyman - Not being the sharpest tack in the bag regarding the stock market; are these examples of the illustrious "stock splits" that were all the rage over the last few years? Seems a perfect inverse corollary in affect...only quicker. <kidding of course>
Really enjoyed your new horseman and make that other number 30 mil. and 1.
Salutations,
IronHead
Journeyman
(04/03/01; 15:42:52MT - usagold.com msg#: 51351)
Seeking advice @Sir Parsifal
Hi Sir Parsifal!
Considering such as the following:
Trading in the stock of internet service provider PSINet has been
halted on news that it will run out of money soon and has no
borrowing prospects. As a result, PSINet has postponed official
release of it's income and profit projections, and the stock,
which traded at a high of approximately $35, was halted at $.17.
-CNBC, April 3, 2001, 2:35PM EST [A 99.5% loss - - - IF you could
still sell at $,17.]
Lucent Technologies is trading down at $7.74 from a high of $83.
-CNBC, April 3, 2001, 3:39PM EST [This is a loss of about 91%.]
CISCO stock has lost $458 billion in market capitalization since
it's top at about $80 per share. -CNBC, March 28, 2001, 9:43AM
EST
CISCO the tech darling, is now selling at $13.80, a new 52 week
low. -CNBC, April 3, 2001, 3:22PM EST
CISCO has lost 81% of it's value over the past year. -CNBC, April
3, 2001, 4:21PM EST
The NASDAQ has lost $4 trillion in market capitalization, and is
down 66.9% from it's high. -CNBC, April 3, 2001, 4:21PM EST
"Official" Bureau of Labor Statistics figures suggest that
dollars are depreciating at the rate of about 3% per year and
there is a huge supply of them, in the case of paper dollars
estimated at between sixty to eighty percent, in foreign hands.
So, Sir Parsifal, given that by objective standards, gold is now
selling _below_ it's $270/oz cost of producion, where would you
suggest I put my wealth?
Perhaps a little context will help us all sleep a bit better!
Regards,
Journeyman
IronHead
(04/03/01; 15:25:18MT - usagold.com msg#: 51350)
Trail Guide - Proverbs
Hello Sir FOA, from the trenches.
Ancient proverbs say wise and compassionate general never strays too far from sight or sound of loyal troops.
Any word from the front? All quiet on the Western; perhaps not?
Salutations,
IronHead
Belgian
(04/03/01; 14:25:40MT - usagold.com msg#: 51349)
Gold Manifesto
The unwinding process of " ALL" Hyper priced paper, is in progress.
The psychological impact will bring change. Change in attitude towards value. Once, the illusionarry wealth is clearly understood...all naked eys, will see, the sickening undervaluation of essentials. The majority of investors will be confronted with Decimations and Defaults. An excellent atmosphere and timing to start talking, publicly, about...Gold . Thanks to FOA and Another, the 30 year history of Gold and its past price-valuation can be, plausibly, explained. The past global expansion will be analysed. And a new born and therefore attractive currency
is making its entry into the arena.
China, Russia, India, and the Middle East, are postulating to participate in the next global expansion. All of them are strongly Gold-related. They don't need the geniality of FOA lectures. They have gold already under their skin for quite a while. It was us, who needed to be reminded about Gold. These new global participants might change their previous dollar-affection for the goldplated Euro. Up until now, I couldn't find any argument to contradict FOA his theory.
Right or wrong...the theory, seems to materialize, piece by piece. China's opening for goldtrade. Russia's quick respons to Goldactivism. And above all, the M.E. force who has already started to adjust the dollar-price to its oil.
Europ keeps on stressing on currency-stability and has therefore chosen the gold-backing. And post crash considerations and analysis, will admit, that speculative paper circusses are doomed anyway. ALL arguments are in place for Gold to participate in the coming change. And change there will be. Each burned woodland re-appears with changed vegetation and wildlife.
If we have to make choices within this perspective...GOLD stands in pole position. The anti christ of speculation !
Future perceptions of value will be less offer/demand oriented. Essentials will be valued in relation to each other. Total volume of Gold will be valued at a reciproque of total tangible economy and its progress. There will be less place for continious depreciation, through paperization. Inflation and Deflation will only indicate, brief moments of change in speed of global expansion.
I hope, the present unfolding Drama will get the chance to go deep enough as to trigger that fundamental change-process. Breaking hyperboles is as good as axing green wood.
That's why I am prudently confident, it will happen now.
Intuitive, we all point to the global dragon Dollar.
He is the one who can make things happen. He is the one who has been protected for so long. Do we have a good reason why his time to go has come. The Euro battering and POO revaluation ? The mysterious reschufflings of Gold ?
SM hyperboles ? Decadent Derivatives replacing economy of tangibles ? Eternal unproductive Debts spirals ?
Totally unrealistic welfare and social decay ? ...who knows, but IM trés HO...a bit too much confluence of negatives. No doomsday but radical change !
Seeker of the Grail
(04/03/01; 13:53:28MT - usagold.com msg#: 51348)
ET
Thanks for the link, more info for my cup. Will it ever get full? I doubt it. Thanks again I just hope I can understand the wisdoms but I'm learning or atleast trying hard.
SOTG
CoBra(too)
(04/03/01; 13:51:25MT - usagold.com msg#: 51347)
@ Old Yeller Re: FN and BPN
Sir, I sure envy your memory capacity and I don't even remember to have given away the mean meaning of my handle.
OY, thanks for responding and as I try to accumulate unencumbered gold in the ground, I've been taken aback by
the FN deal.. again without knowing the ultimate wisdom of so well regarded guys.
PS: And yes you're right Bralorne Pioneer Gold Mines is a turn key, ready to go gold miner at total costs of about 220 - 30 $/oz and I am a director of the board since inception, as well as Coral Gold, next to PDG's Pipeline Deposit ... hence my handle ... Evermore no investment advice!
... and as some of the majors will feel the sting not only being unable to service their forwards, others highgrading and so diminishing their future - all of them will be hard pressed to replenish their reserves.
PPS: There still are some juniors, which may never be destroyed - since they're too valuable as to their function of risking capital and finding vast deposits the majors beaurocratc systems will forever miss.
... and here we are - the majors sent their exploration teams to the pasture (mostly because they didn't mean a bean)and now the industry has to consolidate and commiserate - though they still don't know, who's goin' to gleam in this "new paradigm" ... tough enough - so go and show the industry, that there are a few world class deposits left ... for their theft?
- OY, you got one or two - good for you - cb2
JMB
(04/03/01; 13:03:50MT - usagold.com msg#: 51346)
Gold sure is cheap, imo.
Considering everything going on in the world at the moment, e.g. stocks, the buck, energy, PANDA's friends, a whole bunch of suspect debt, and now even Mr. Parry of the S.F. Fed saying the grasshoppers are in trouble, you just have to tip your hat to the gold cabal if they can keep the lid on gold.
I really think our time has come.....well, soon....I hope.
Old Yeller
(04/03/01; 12:54:06MT - usagold.com msg#: 51345)
Reversal of fortune
Wow,dollar is getting roasted.USDX;115.9-1.60,Euro;89.56+1.52,gold lease rates jumping up again.
Safe haven tsunami may be changing course.She's breaking up,Cap'n,can't keep her aloft much longer.
ET
(04/03/01; 12:53:22MT - usagold.com msg#: 51344)
Al, Seeker
http://www.gold-eagle.com/research/heinndx.html
Hey Al - how you been doin! Good to hear from you.
Hey Seeker - it's always nice to know that someone actually takes the time to read this stuff I write. Thanks! As Al could tell you, I take ideas very seriously. I've believed for nearly my entire life that good ideas are what foster civilization and bad ideas are what destroy it. In my opinion the idea of phony money is by far and away the most harmful idea of all. Given time, it will completely destroy any civilization that adopts it.
Mises, Rothbard, Rand, Bastiat, Hayek and others have been instrumental in forming my views. More contemporary writers such as Paul Hein have written some of the best commentary out there. We are blessed to have many fine thinkers here at the forum and I hesitate to mention any for fear of leaving out many but I do believe ORO has offered some of the finest political/economic thought I've read in years. I continue to look forward to "The Book". <g>
At any rate, thanks for the kind words. If you haven't read Paul Hein, his commentary is available at the above link.
Old Yeller
(04/03/01; 12:22:19MT - usagold.com msg#: 51343)
Cobra(too),#51331
Hello,CB2
I.too,am puzzled and somewhat disheartened by this somewhat strange direction that FN has chosen.One important thing to bear in mind ,however,is management's commitment to shareholders to maximum upside to a rising gold price.
What does this development mean when viewed in this context?All we can do is speculate as to the motive.I don't pay much attention to Normandy because they hedge'so I not sure if they have the potential to do the "Ashanti".We do know that the Aussie producers as a group are in deep doo-doo,and the implications of another gold spike could produce a spectacular fireworks show.So, being that FN is very liquid(1 billion $C,the last I heard),perhaps they plan on delivering into Normandy's hedge position,thereby transforming the company into a Aussie powerhouse.Wouldn't that be a lovely scenario?
These guys are well regarded,they think methodically and in the long term.Looking back,the GOLD/FN merger would have been a huge winner if only SA could have appreciated what it would have meant to the big picture.I'm sure this deal is a positive,we'll have to wait to see their next move, before condemning them as another brick in the hedging wall.
On a side issue,maybe you could refresh my memory.Doesn't Cobra(too)have something to do with Bralorne?
FredBear
(04/03/01; 12:04:37MT - usagold.com msg#: 51342)
IronHead (04/03/01; 11:24:16MT - usagold.com msg#: 51339)
IronHead, thanks for the warning on the bucket shops. Futures is a dangeous endevour that I have been in for about 4 years. So far, still alive, but I have my bruises.
As for what I would shoot, definitely the cell phone. I refuse to own one, and living in Europe, they are everywhere.
I hate living life in interrupt mode. This is what I called it when I was a computer consultant. I used to disconnect my phone when I was doing actual programming so I could concentrate. Voice mail was my savior.
Regards.
IronHead
(04/03/01; 11:57:05MT - usagold.com msg#: 51341)
HBM - Fools Abound
Hello Sir HBM - From another greater fool I know - me.
"Some of the better posts are those in which we pour out our souls" Amen; and over in the other part of the library (HOF), with the best that has ever been offered here, I find the quote, "by retaining control of our own wealth which truly does represent our freedom of life, property, privacy and even the right to defend that freedom. I dare not hope to be free without gold in my physical control."
My response to Sir Parsifal are similar thoughts, so aptly put, by your words.
Thank you for sharing your soul,
IronHead
Belgian
(04/03/01; 11:30:59MT - usagold.com msg#: 51340)
@ HBM
I do admire your courage and consequence with your 75% physical Gold-Holding. Not foolish at all, Sir !
There is not one (repeat one) single argument, *"against"* holding physical Gold - NOW- !
It is rather a pity that nobody is even trying to contradict.
A big smile from another...even greater...fool.
IronHead
(04/03/01; 11:24:16MT - usagold.com msg#: 51339)
Rockgrabber and FredBear
Rockgrabber: Avoid "MainStreet Trading" - Jack (Ripoff) Roberts and company like the plague. They are the lowest form of scum and villany in the brokerage world - (and there are many). It's a bucket house chop shop maximus. Keep in mind that the arena you are contemplating is a sieve, gauranteed to drain the shekles from the unawares/newbies.
Good luck - you're gonna need a mountainfull. Gold - in hand, needs no luck or timing; it's always content. All above offered not so humbly from the hand of experience.
FredBear: So, would you shoot the satelite, the computer, or the cell phone?
Salutations,
IronHead
Al Fulchino
(04/03/01; 10:23:04MT - usagold.com msg#: 51338)
ET and Randy
Good job, good show.
Seeker of the Grail
(04/03/01; 09:53:21MT - usagold.com msg#: 51337)
Spelling Corrections....sorry
Sir Knights,
Over the last week, I have really enjoyed the tournament.
It has been very thought provoking.
I am extremely impressed with your arts of jousting, while not making any personnel directed inflammatory remarks at each other. I wish that Panda and Slatt could have acquired this skill. I do miss their informative posts.
But, picture this, there is a horse with a head on either end(no tail). This horse has two saddles facing in opposite directions, and a rider in each saddle. By the way, the horse's name is GOLD. From each rider's point of view he views a landscape. Are they exactly the same? Are they not viewing the lay of the land? Is it not the same land just the landscape is different?
Everyone can have their own reasons and opinions for saving/purchasing gold, and what uses it should have or serve. Non are wrong.
As in the case of the two headed horse, neither landscape is incorrect, it has a lot to do with relativity. (Eienstein...two different observers can look at the same event from two different perspectives and see that event differently). Someone does not have to be wrong here.
Respectfully...just observing,
SOTG
Seeker of the Grail
(04/03/01; 09:44:38MT - usagold.com msg#: 51336)
Humour!!
Hey Randy,
Does M.K. offer congeniality awards?
Maybe we could have a congeniality contest?
By hook or by...... I'll get a piece somehow!
SOTG
Seeker of the Grail
(04/03/01; 09:41:08MT - usagold.com msg#: 51335)
@ ET & Randy
Sir Knights,
Over the last week, I have really enjoyed the tournament.
It has been very thought provoking.
I am extremely impressed with your arts of jousting, while not making any personnaly directed inflamitory remarks at each other. I wish that Panda and Slatt could have aquired this skill. I do miss their infomative posts.
But, picture this, there is a horse with a head on either end(no tail). This horse has two saddles facing in opposite directions, and a rider in each saddle. By the way, the horse's name is GOLD. From each rider's point of view he views a lanscape. Are they exactly the same? Are they not viewing the lay of the land? Is it not the same land just the landscape is different?
Everyone can have their own reasons and opinions for saving/purchasing gold, and what uses it should have or serve. Non are wrong.
As in the case of the two headed horse, neither lanscape is incorrect, it has a lot to do with relativity. (Einstien...two different observers can look at the same event from two different perspectives and see that event differently). Somone does not have to be wrong here.
Respectfully...just observing,
SOTG
USAGOLD
(04/03/01; 09:33:34MT - usagold.com msg#: 51334)
Today's Market Report: The Golden Queen of the Nile: Naas, wife of Gad Khensu
Eyuf Ankh (ruler of Bahriya oasis
between 589 and 570 BC)
http://www.usagold.com/Order_Form.html
4/2/01. . . ..(www.usagold.com). . . . .Gold rose in early trading as tensions mounted in Asia and Wall Street took another tumble. The dollar is down in early trading as well. Even yesterday, when New York paper traders took the yellow nearly $3 lower at one point, there were reports of strong physical demand from Asian and U.S. buyers. That demand apparently accelerated this morning beginning in Asia and carrying over to the European session.The gold lease rate bumped up almost .7% in London this morning at 2.47% . This is a firm indication that the supply tightness and substantially higher rates that had been in the gold market for the past couple months may take on more of an air of
permanence as Commerzbank's Ian MacDonald (Please see right) suggested last week.
Over the past few years of publishing these daily ministrations, I have suggested many times that gold should be used as a talisman to ward of the evils of political economy -- numerous as they may be. It has been said that there are no new things under the sun. And that apparently stretches to the concept of golden protection. A tomb of a Pharoah's wife was discovered in Egypt last week wearing an extensive array of 100 gold amulets and other jewelry -- a first in terms of quantity according to a Reuters report this morning. Included in the collection of Naas, wife of Gad Khensu Eyuf Ankh (ruler of Bahriya oasis between 589 and 570 BC), is an Osiris pendant, that will be probably be appraised at priceless. Quite often I believe the demand for gold comes more from an intuitive understanding of its value that goes beyond any economic considerations. Perhaps finding a 2600 year old mummy in the Egyptian desert adorned extensively with gold meant to buy passage to the next life reinforces that observation. In the end, we are all linked one generation to the next and going back as far as our beginnings. We carry with us from one generation to the next all that we consider sacred and of value. Through it all, gold has played a role because mankind has always granted it
value beyond any other inanimate substance. . . . .So it is. So it shall be. MK
P.S. Spent the last few days getting the next issue of News & Views completed. This month's News & Views is going to be a block buster -- 8 pages of Short & Sweet that pretty much covers what's going on in the gold market. If you are new to USAGOLD, you can receive News & Views as well as these (Almost) Daily Commentaries on-line by registering at the'"registration" link above. We are getting to the bottom of the barrell on the German 20 mark coin. If you have an interest, you should act on it as soon as possible. We'll probably be sold out of this item by the end of the week.
ET
(04/03/01; 09:28:27MT - usagold.com msg#: 51333)
Randy
Hey Randy - thanks for your thoughts. You write in part;
"If condescension comes across, then I apologize."
No need to apologize, just try to keep in mind that many of us out here in citizenland consider fiat currency schemes to be the root of all evil in today's world. I am criticizing your idea Randy, not you. Another fiat scheme is simply that, whether or not it is dressed up in words like "real wealth asset", "currency function", "best practices", etc.
"Perhaps it is a manifestation of my unavoidable human reaction to the
outright dismissive barrage (statements of "wrong", "false", "no", "nonsense", "ludicrous", etc.) which I have patiently
endured from you."
Well, I'm not sure how I should express my thoughts if indeed I believe you and others are foisting just another fiat currency scheme on the rest of us. I do believe this scheme is wrong, non-sensical, and ludicrous. My comments are directed at the scheme, not you. My apologies to you if you have interpreted this debate in any other way.
"To be sure, I have labored to treat your thoughts with more respect than to dismiss them outright. I
have frequently attempted to take the high road of recommending that you "reconsider" where we differ, and have
provided additional evidence or commentary in the effort."
Thanks. I have endeavored to do the same.
ET
(04/03/01; 09:11:21MT - usagold.com msg#: 51332)
Randy
Hey Randy - thanks for the Mises quote. He was always a very observant commentator.
As you have quoted, Mises saw the problem as you and I both have, that inflation is the order of the day for governments worldwide. Attempting to preserve wealth in this environment is of course our goal. We do not differ in that respect.
My argument with you is over your apparent preference for all things European as a panacea for our ills. Your contention that the currency (trading) function of any given asset can somehow be selectively removed and the resulting asset can properly be valuated does not make sense to this observer. You can save all the gold in the world and if things remain as they are today you will never realize gold's true value because you have supported and agreed to not trade gold freely in the marketplace. This is the essense of what you say when you say that people do not understand or need gold's currency function. I'm saying gold is worthless without it. Am I making myself clear?
Thanks.
CoBra(too)
(04/03/01; 09:08:43MT - usagold.com msg#: 51331)
Franco Nevada's price - fell 10% early today
on news that the co. exchanged its Ken Snyder Mine (Nevada) and 48 Million $ for a stake of almost 20% in the shares of Robert de Cespigny's overhedged Normandy.
Apparently shareholders have been annoyed by this decision to give away real and unencumbered gold in the ground for an interest in pre-sold (ergo) paper gold.
As Pierre Lasonde and Schulich usually don't subscribe to such deals I ponder, what the real reason might be? Anyway, I'm pondering to sell half of my position in what used to be one of my core holdings in the gold mining sector.
Not (dis-)investment advice, though frustrated as I don't see the merit of this move - do you? cb2
Randy (@ The Tower)
(04/03/01; 08:53:24MT - usagold.com msg#: 51330)
ET
"Thanks for the reply, your condescension is noted if not appreciated. Please carry on."
If condescension comes across, then I apologize. Perhaps it is a manifestation of my unavoidable human reaction to the outright dismissive barrage (statements of "wrong", "false", "no", "nonsense", "ludicrous", etc.) which I have patiently endured from you. To be sure, I have labored to treat your thoughts with more respect than to dismiss them outright. I have frequently attempted to take the high road of recommending that you "reconsider" where we differ, and have provided additional evidence or commentary in the effort.
If I have failed to be adequately respectful and offended as a result, then I must now reiterate my apologies to both you AND to MK, for most assuredly this forum is an extension of his company and he deserves a better public face than I can apparently provide.
Rockgrabber
(04/03/01; 08:53:22MT - usagold.com msg#: 51329)
FredBear
Thank You very much for your response. I am off to check them out! LOTS of good reading here over the last day here! Thanks everyone!
Seeker of the Grail
(04/03/01; 08:49:08MT - usagold.com msg#: 51328)
Euro Questions @ Randy of @ All
Sir,
Could you please explain to me, with respect to the Euro, how is the monopoly game going to be set up between the players?
I believe I read that they are maintaining a 15% gold reserve. Is that fixed or can they change this fractional reserve ratio. If that's the case (that they will manipulate it to expand their money supply), it still seems a little bogus to me.
Will each participant have their own gold reserve?
How will they determine how many Euros each country will get to distribute to the populus in exchange for their present fiat?
Does everyone get (2)-500's (2)-100's (2)-50's (6)-20's etc?
Can individual countries and their respective citizens own gold?, or only the ECB?
If they (ECB) wish to increase the money supply, does the ECB have to increase their gold holdings?
What happens to the gold reserves that the individual countries presently have on Jan. 2002?
Could all of these auctions have to do with getting their gold reserves in line with each other?
When is the next 20 tonne BOE auction?
When will the Swiss start auctioning their 1000 tonnes, and in what size parcels? Considering effect of the BOE auctions at 25 tonnes suppressing market POG, at 100 tonnes per year, the Swiss will take 10 years....of suppression.
By the way Randy, I agree with your concept of gold as wealth preservation/insurance as well as
Hill Billy Mitchell's personal "fractional insurance reserve theory/practice." (US/China...I don't think that they are going to play roll over puppy dogs...to US whims)
I also believe, first get out of debt, then with disposable income buy gold. Especially true if one has progeny because who knows what the time line will be when you will need to use this reserve wealth. I will be there soon and we will be talking.
In my mind's eye, the only place at this present time, that I see gold being linked to currency will be with the Euro. That's why I was wondering about the set up of same. Will this be a true gold standard currency?, or some derivative of such?
Since the value/strength of the dollar is inversely proportional to POG, I do understand why everyone hopes the price of gold (physical) to hit the upper stratosphere.( Paper gold sure because you are dealing paper to paper (apple with apples...)) The reason I say this, or what confuses me, is the implication that one would convert their physical into worthless paper. Seems to me that they would retain more real worth keeping it in the ... "physical in hand is better than paper in BUSH!!!!!"... Pun intended.
May your chalice overflow,
SOTG
ET
(04/03/01; 08:45:46MT - usagold.com msg#: 51327)
Randy
Hey Randy - thanks for your thoughts. You write in part;
"ET, among other items, you also made this misrepresentation of my position on Saturday, saying to me, "You have
further stated that ... we should trust a European bureaucracy to arbitrarily price this store of value in a currency of their
issue."
"Where does this come from? I have expended considerable time explaining the ECB's utilization of "best practices" now
in vogue in the international banking realm, specifically with regard to the quarterly marking of gold reserves to market
value."
Well it certainly can't be argued that these "best practices" are best for those wishing to continue the status quo.
"As anyone knows who have followed this, my commentary does not indicate that these values are arbitrarily set
like they were here in the early 1930's by U.S. President Roosevelt and SecTreas Morgenthau, but rather, they are taken
from London's gold fix on the last business day of each quarter."
Har! Apparently we disagree as to the arbitrariness of this London gold fix. Wasn't it you that was contending that this market is "fixed"?
"So you see, as long as the LBMA maintains confidence
in its expansive paper gold banking system, the dollar-denominated price will reflect the vast paper supply of gold, not
the smaller physical supply. It is thus in the ECB's future best interest to not hinder any movement toward a
physical-based gold market, and to curb gold lending as revealed by the Washington agreement."
Well of course this is in their best interest. If gold was trading freely they wouldn't be able to artificially lower market interest rates to their advantage. They also wouldn't be able to flood the world with worthless paper as a substitute for something real, like gold. They further wouldn't be able to enslave the general populace with their debt. No doubt the ECB wishes to take over the fiat racket when the dollar fails for lack of credibility, it's human nature. The ability to "mark to market" gold at an arbitrary value and calling it a free market is just more nonsense.
Thanks.
Randy (@ The Tower)
(04/03/01; 08:31:57MT - usagold.com msg#: 51326)
More on the Savings and Currencies debate: Modern-day Mises, for those who will hear nothing else
Why do we each expend the effort to participate in this thought-provoking gold discussion forum? The details of the reasons will surely vary from person to person, but the general reason is likely to be summarized as follows:
"Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself in society is sweeping toward destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historic struggle, the decisive battle into which our epoch has plunged us."
Were von Mises alive today, he would no doubt be still engaged vigorously in this "intellectual battle", doing yeoman's work to carry a part of society on his shoulders as he expressed in the above passage.
Above all, we do well to remember that Economics is not a firm science like physics or chemistry wherein those scientists observe inanimate items reacting consistently and predictably with their environment in total absence of a variable called "free will". Absence of free will is a blessing not bestowed upon the critter studied by the philosophers and social scientists who engage in the field of human behavior studies known as Economics.
Despite liberal possession of free will, generalities can be formed, particularly where individuals have latitude to act in their best interest among a range of options. This leads to much effort to write observed behaviors into economic law. Complicating the "science" is the degree to which predictions for individual behavior may be applied to behavior as a group, and by the fact that not only does man REACT TO his environment, he may also choose to ALTER characteristics of the environment in which he interacts and operates. As a gifted philosopher and social observer, von Mises had no trouble recognizing that "trends can change". It is therefore unfortunate that he did not live past 1973 to witness any significant changes, and to subsequently shoulder the burden of thinking for those who will not do it for themselves.
So what did von Mises have to offer in commentary based on observations of his latter days? The following was penned by von Mises for an article in June 1965 based on his observations and thoughts of the (then modern) day, and was subsequently "tweaked" ever so slightly (but obviously) by editors to reflect changed circumstances for its republication in 1980.
An objective review of this will find an appropriate degree of antecedent harmony between this 1960's text and what I offered for the modern day in last week's (3/29/2001; msg# 50963) post which was approximately titled "Savings and Currency: the separation of wealth and state". With that, I shall let von Mises speak for me to those who will not hear it otherwise.
-----(1965) The venerable von Mises wrote: --- In many parts of the earth an increasing number of people realize that the United States and most of the other nations are firmly committed to a policy of progressing inflation. They have learned enough from the experience of the recent decades to conclude that on account of these inflationary policies an ounce of gold will one day become more expensive in terms both of the currency of the United States and of their own country. They are alarmed and would like to avoid being victimized by this outcome.
+
Americans were once forbidden to own gold coins and gold ingots (from 1933 to 1976).[sic] Their attempts to protect their financial assets consisted in the methods that the Germans in the most spectacular inflation that history knows called "Flucht in die Sachwerte" (flight into real values). They are investing in common stocks and real estate, and prefer to have debt payable in legal tender money rather than holding claims payable in it.------
With this demonstration from von Mises, I hope I have managed to put some of my detractors at better ease regarding this theme of thought. If not, I can live with it. Can they?
ET
(04/03/01; 08:02:16MT - usagold.com msg#: 51325)
Randy
Hey Randy - thanks for your thoughts. You write in part;
"ET took exception to that comment, saying to me:
--- "I beg to differ. ... I would be willing to wager you that "most people" would have little difficulty understanding gold's
currency function given the opportunity."---
"I would ask him, realistically, under what conceivable scheme will "most people" be given this opportunity?"
That old scheme of free trade. Do you believe free trade is obsolete?
"And therefore, where is the relevance in the real world we are living in today?"
Did you not see the article I referenced regarding what is happening today in Argentina? The citizens of Argentina would have no difficulty at all assessing gold's value as a currency and frankly I'm unaware that any of them read this forum. I would posit that gold and silver are likely being used as a currency today in Argentina although it would be simply a guess on my part based on my studies of history.
"I submit that even among the visitors to this Discussion Forum, the world's best-educated gold-minded people, most of
us have more experience with -- and a better conception of -- gold as a WEALTH ASSET (like real estate or other
tangible hard assets and tradable property), than as a currency."
Randy, in one paragraph you state that individuals cannot possibly conceive of gold as a currency (tradable property), and in the very next paragraph you claim gold is easily understood as a wealth asset (tradable property). Do you understand my confusion in your explanation of your idea?
"This is perfectly fine and perhaps as it should be, though
it must be said that the "wealth asset value" is currently diminished by the artificial supply radiating from the residual
"paper gold currency" operations among the bullion banking players."
And the reason for this disparity, I might humbly submit, is the notion that gold's currency function can somehow be separated by government decree from its wealth asset function. By attempting to do so, you produce exactly the problem you claim to want to overcome.
"As I have explained how gold's usage will subsequently come to be dominated as a primary savings asset in much the
way that it currently is in many parts of the world, ET protested on Saturday, saying that I have made "no provision for
determining gold's value when [I] subtract its currency function."
"What??? Do houses and cars and computers and corn not find their proper value in the absence of their "currency
function"? I would therefore suggest, in like manner physical gold, too, can be priced by the available and excess paper
currency of the world, and the relative value of gold metal will be found in comparing its resulting price to the price of all
other things...just as we compare the value of bread to the value of bicycle tires or to soap."
If this is true Randy than you should have no problem with gold's "price" at the current $260. Yet, you claim above that this "price" doesn't reflect gold's true value because of government decree. Government through its manipulation of gold's currency value has produced the problem you despise, yet you claim this is OK with you and will somehow resolve itself in your system of the future. I remain confused.
"As more excess national
currency falls into the hands of would-be savers, the price of gold will rise in terms of that currency as the conversion is made."
How could this ever happen in your system of the future if you continue to allow government by decree to remove gold's currency function? Without the ability to actually trade gold in the free market as a currency you would be no better off than today in my opinion.
"But alas, the true nature of our problem now comes to light. It is clear that ET and I shall not get past the simple use of
terms, though through no fault of my own. After I have taken care to define the concept behing represented behind the
usage of a 5-letter english-sounding word that I have employed in recent posts, ET dismisses my effort as "nonsense",
apparently because he refuses to see the concept behind the familiar letters. Perhaps I should have used numeric symbols
instead? Specifically, he rejects anything connected to my usage of recognizing only real wealth items (such as gold) to
be attached to the term "money" in my posts. Et says to me:
--- "Nonsense. Fiat dollars are currency as well as money."---
"I am ill-equiped to discuss matters toward a meaningful resolution when such a superficial level of participation is put
forth by the other party. However, I promise to offer up a body words in short order toward which ET and others may
be more receptive or tolerant."
Randy, I don't believe the problem here is semantics. When confronted with the notion that gold can be a wealth asset at the same time it cannot be freely traded, I have responded to you with the notion that that idea is nonsense. You subsequently have attempted to redefine terms to suit your theory as if calling gold something else somehow makes it something else.
You have contended from the start that in your system of the future we should allow everything but gold to be traded freely. You have posited that for some reason gold should have its currency function removed by government decree. I will once again contend that you haven't shown me any reason to believe this makes any sense at all. The world is replete with examples of why this is a bad idea.
Why not let the free market determine gold's function like it does anything else that is traded? Why do you feel your judgments should be substituted for the judgments of everyone else trading between themselves in a free market?
By the way Randy, in future posts I will endeavor to work on my perceived problem of "superficial level of participation". Thanks for the reply, your condescension is noted if not appreciated. Please carry on.
canamami
(04/03/01; 07:06:11MT - usagold.com msg#: 51324)
Reply to Randy - Various Posts
Randy,
Your point re paper gold affecting the physical price is well-taken, but at some point there must be physical to back up the paper. Up to now, the "manipulators" have been able to find sufficient physical to back up their paper. For example, there has been no default on the COMEX, in that physical is delivered when requested.
Now, in the period prior to the Washington Agreement, I recall there was indeed substantial physical gold tranferred/settled through the COMEX. This was the one period since 1997 when the shock predicted by FOA looked like it would come to fruition, when the price shot up to about $330.00 from about $255.00. However, the physical gold was found to effect settlement. (I do note that the COMEX altered its margin rules to hamper the longs, on that occasion).
In short, are we seeing a price determined strictly by paper, or a genuine physical gold settlement price, but one determined by manipulation, paper gold merely being one of the tools of manipulation and the release of official physical reserves being one of the other tools?
Randy (@ The Tower)
(04/03/01; 06:54:31MT - usagold.com msg#: 51323)
Addressing another issue for ET before moving on...
ET, among other items, you also made this misrepresentation of my position on Saturday, saying to me, "You have further stated that ... we should trust a European bureaucracy to arbitrarily price this store of value in a currency of their issue."
Where does this come from? I have expended considerable time explaining the ECB's utilization of "best practices" now in vogue in the international banking realm, specifically with regard to the quarterly marking of gold reserves to market value. As anyone knows who have followed this, my commentary does not indicate that these values are arbitrarily set like they were here in the early 1930's by U.S. President Roosevelt and SecTreas Morgenthau, but rather, they are taken from London's gold fix on the last business day of each quarter. So you see, as long as the LBMA maintains confidence in its expansive paper gold banking system, the dollar-denominated price will reflect the vast paper supply of gold, not the smaller physical supply. It is thus in the ECB's future best interest to not hinder any movement toward a physical-based gold market, and to curb gold lending as revealed by the Washington agreement.
Data for the ESCB revaluation will not be available until Wednesday, but this article regarding similar activity in Switzerland is instructive...note that the price has risen in Swiss francs since December even as our price in dollars has fallen. This phenomenon, too, has been discussed.
------
SNB GOLD: Swiss gold reserves up 21.8 mln Sfr to 34.123 bln
Zurich, April 2 (BridgeNews) - The Swiss National Bank said the value of its gold reserves rose 21.8 million Swiss francs in the last 10 days of March to reach 34.123 billion francs, it announced Monday. The rise in the reserves is due of the regular revaluation, with the value being raised to 14,388 francs per kilogram from 14,355 francs at the end of 2000, it said.
Seeker of the Grail
(04/03/01; 06:50:16MT - usagold.com msg#: 51322)
FredBear
Sir,
My sentiments exactly.
Presently in my country we are in the process of undergoing gun registration. Hand guns have had to be registered for a long time now and that's ok with me.
But, I can find no crime fighting practical purpose for regestering hunting rifles. A 30-06 with a 3x9 variable scope is useless at robbing banks. (accuracy at 40 ft is terrible do to bullet tragectory & scope resolution).
As far as crimes of passion go, if the rifle is registered or not, they will still happen due to the irrarional situation of such.
It appears though the only useful purpose of registration is for confiscation. Just as sheep to the alter though, there is nothing we can do about it.
SOTG
Hill Billy Mitchell
(04/03/01; 06:37:47MT - usagold.com msg#: 51321)
Parsifal @ # 51300
Sir
Some of the better posts are those in which we pour out our souls. When we do this the integrity of the post is transparent. Such is the case with your post # 51300.
Another characteristic of a good post—the post sparks the thinking of the readers and they cannot help but respond in one way or another. You have presented a good picture of the emotional side of the gold dilemma as you question not only why we would choose gold over paper but how much and why when you say regarding the current movement of POG:
"It is such that a very thin case can be made for holding an amount of physical gold in excess of a hundred or so ounces for use in times of the worst types of crises."
My comments:
The case is very thin indeed. A hundred ounces or so, you say? That is what makes your case thin. This physical amount offers no relationship to anything.
One hundred ounces would be extremely large for my daughter and her husband. They have no assets to protect. They have no savings except what they put back to pay for replacement of their autos and to pay for the expected cost of the healthy delivery of the future children. These savings are to avoid debt when the future, sure to come need, arises. Above that they do not have the wherewithal to protect themselves with much physical gold. I encourage them to do their best to buy enough to protect their net assets (15%-25%) At this time their assets net of debt and their total assets are identical because they are debt free. Their net assets in this case are in the neighborhood of only $15,000. About all thy can afford to hold in gold would be say, eight to thirteen ounces of Gold Eagles.
Now I have a client who has a net worth conservatively valued at $6,000,000. One hundred or so ounces of physical gold would be extremely low for him and his family. This case calls for more than 100 ounces. 3,200 to 5,400 ounces would be more appropriate for this family.
Why do I suggest 15%-25% in holdings? Long before I had ever heard of the notion of "walking in the footsteps of giants" I developed the very approach. I had been reading the likes of Harry Schultz, James Dine, and John Pugsley and discovered that—over the centuries the extremely wealthy have always held 10% to 25% of their assets in physical gold and that even the central banks of the world held a similar proportion of their reserves in gold. This appears to be true still today.
It partly depends upon the purpose one has in holding physical metals. As you suggest, "for use in times of the worst types of crises." I do not know what you mean by this. Could you elaborate? It seems that if it were to take 100 ounces to buy political freedom my daughter and her husband would certainly become political slaves, unless of course, enough time expires for them to accumulate more physical or until that time comes the parents accumulate an excess for the needs of their children. If the purpose of the physical were to insure net worth against paper loss the 100-ounce figure would certainly be a variable. A fair observation, I think, would be—‘the higher the propensity for upheaval the greater the need to increase the percentage of gold holdings.’ This could possibly explain the historic range of 15% to 25%. In any event everyone has to determine reasons for holding physical and assess the propensity for upheaval.
Then you have the extreme nut case, me!!! I am paranoid at this point. I try not to pass this disease on to others. I hold at this time approximately 75% of my net worth in physical precious metals. Perhaps I am the fool of the ages. Time will tell.
Very respectfully,
HBM
FredBear
(04/03/01; 06:32:53MT - usagold.com msg#: 51320)
SOTG
"Just imagine what you would do if you caught someone looking in your bedroom window every night."
I would count, 3-5-7.
Little bullet of humor.
FredBear
(04/03/01; 06:27:18MT - usagold.com msg#: 51319)
Rockgrabber (04/02/01; 12:29:00MT - usagold.com msg#: 51256)
http://www.xpresstrade.com/index.html
RockGrabber, I use XpressTrade and am very happy with their service. They are the only company I could find that does "contingent orders" online. For example, I can put in my Buy order and a sell stop at the same time, with the stop only activated when the Buy is filled.
Good luck.
Randy (@ The Tower)
(04/03/01; 06:07:54MT - usagold.com msg#: 51318)
HEADLINE: Asian Currencies Find Calm Before Brewing Storm
http://biz.yahoo.com/rf/010403/sp265813.html
SINGAPORE, April 3 (Reuters) - Japanese officials expressed concern over the swift decline of the yen to Monday's 2-1/2 year low ..... Authorities in Seoul and Bangkok also tried to ward off further losses in their currencies through verbal, and in the case of Korea, actual intervention.----
And with the yen expected to slide further, Reuters goes on to report...
----- analysts said the other major bugbear regional currencies were facing was investor risk aversion, which has gripped the market recently.
"Risk aversion is bad news for Southeast Asian currencies where investors are faster at getting out of positions when things look ugly," said Rebecca Patterson, regional currency strategist at JP Morgan Chase in Singapore.--------
Having built up foreign exchange reserves since the 1997 Asian currency crisis, Reuters reports that analysts expect central banks are "unlikely to spend precious foreign exchange reserves defending their currencies", suggesting that such a hands-off attitude facilitates a degree of competitive devaluation to keep pace with the yen in support of national exports.
When Real Wealth is offered for cheap prices, seize the day -- whether it's in the form of needed household appliances from Korea, or everlasting gold-money from the LBMA.
Seeker of the Grail
(04/03/01; 06:03:19MT - usagold.com msg#: 51317)
Is it too late for a Fifth horseman entry????
Sir's & m’Ladies,
Seems to me that US government got their meddling hands caught in the proverbial "cookie jar" (intentionally or otherwise) and have the audacity to give a stern warning to China. Maybe, the PE are just keeping the pot stirred. New Fifth Horseman could be US meddling in China's affairs.
Just imagine what you would do if you caught someone looking in your bedroom window every night.
SOTG
Seeker of the Grail
(04/03/01; 05:34:17MT - usagold.com msg#: 51316)
Black Blade
Sir Black Blade, post #51309
If I may suggest, rather than "life is about to get "interesting""
Substitue....life is about to get painful for most.
Sir if I may, I would like to confess that I am a great "fan" of your post.
I believe that this energy crisis (oil/ng/electricity) and related infastructure problems, can and will cause massive unemployment in the states. I work in an industry, that requires 250 MEG on going and we also generatre our own.
As far as the production process goes, it could not tollerate unexpected shutdowns of any sizeable duration because plant start-ups are so costly. If this was to happen on an ongoig forseeable future I'm sure the plant would be shut dow, due to profitability.
If I am correct in assuming that you said that the US produces 40% of its consumption, and outside sources were cut off, 60% of the industrial base would have to be shutdown. IMHO that and the reprocussions of same would not be interesting, more like pain I think.
May your chalise overflow.
SOTG
Randy (@ The Tower)
(04/03/01; 05:34:02MT - usagold.com msg#: 51315)
Building from the previous post to address outstanding issues...
This "paper gold" currency aspect of the gold market is something that most modern people do not see in their daily lives, and that is why I suggested in a previous post that people would not miss it (the currency aspect) upon the subsequent punishing failure of the bullion banking sector resulting from the so-called "crack-up boom" experienced in the expansion of gold-denominated credit as metal flows from leasable accounts.
Perhaps I can build some common ground with Elwood when I say that his comment is a natural fit with these thoughts I have shared. Elwood said Saturday night, "Nothing short of the crack-up boom will change the ingrained western view of money."
Once bitten by bullion banking, will gold owners travel that road of risking gold again at these levels? Not likely. That is a glimpse of what stood behind my comments from last Wednesday where I said that 'gold shall lose only its "currency" function...which most people cannot today recognize or comprehend. Nor, then, shall they miss it.'
ET took exception to that comment, saying to me:
--- "I beg to differ. ... I would be willing to wager you that "most people" would have little difficulty understanding gold's currency function given the opportunity."---
I would ask him, realistically, under what conceivable scheme will "most people" be given this opportunity? And therefore, where is the relevance in the real world we are living in today?
I submit that even among the visitors to this Discussion Forum, the world's best-educated gold-minded people, most of us have more experience with -- and a better conception of -- gold as a WEALTH ASSET (like real estate or other tangible hard assets and tradable property), than as a currency. This is perfectly fine and perhaps as it should be, though it must be said that the "wealth asset value" is currently diminished by the artificial supply radiating from the residual "paper gold currency" operations among the bullion banking players.
As I have explained how gold's usage will subsequently come to be dominated as a primary savings asset in much the way that it currently is in many parts of the world, ET protested on Saturday, saying that I have made "no provision for determining gold's value when [I] subtract its currency function."
What??? Do houses and cars and computers and corn not find their proper value in the absence of their "currency function"? I would therefore suggest, in like manner physical gold, too, can be priced by the available and excess paper currency of the world, and the relative value of gold metal will be found in comparing its resulting price to the price of all other things...just as we compare the value of bread to the value of bicycle tires or to soap. As more excess national currency falls into the hands of would-be savers, the price of gold will rise in terms of that currency as the conversion is made.
But alas, the true nature of our problem now comes to light. It is clear that ET and I shall not get past the simple use of terms, though through no fault of my own. After I have taken care to define the concept behing represented behind the usage of a 5-letter english-sounding word that I have employed in recent posts, ET dismisses my effort as "nonsense", apparently because he refuses to see the concept behind the familiar letters. Perhaps I should have used numeric symbols instead? Specifically, he rejects anything connected to my usage of recognizing only real wealth items (such as gold) to be attached to the term "money" in my posts. Et says to me:
--- "Nonsense. Fiat dollars are currency as well as money."---
I am ill-equiped to discuss matters toward a meaningful resolution when such a superficial level of participation is put forth by the other party. However, I promise to offer up a body words in short order toward which ET and others may be more receptive or tolerant.
Black Blade
(04/03/01; 05:02:43MT - usagold.com msg#: 51314)
Gold Fields to Support Research Into New Industrial Uses for Gold
http://biz.yahoo.com/cnw/010403/gold_fields_new_uses.html
Snippit:
Chris Thompson, Chairman and Chief Executive of Gold Fields said; "Gold producers have in the past not spent enough time and money on developing new product applications for gold. Through this project we aim to explore the potential for gold and gold alloys to be used in catalytic and other new applications. We believe there is substantial potential for gold to replace existing products and to create new ones.
While these types of devices might only use a few hundred milligrams of gold a piece, their potential market runs to tens of millions of units and they could end up being a significant consumer of gold."
Black Blade: I almost forgot, today begins the Catalytic Gold Conference in Johannesburg, SA. I've posted on this subject in the past. We should hear more over the next 4 days as the Conference proceeds.
Black Blade
(04/03/01; 04:50:51MT - usagold.com msg#: 51313)
Another Down Day on Wall Street?
http://www.mrci.com/qpnight.htm
The market indices futures are falling fast. We head into the so-called "Earnings Season" and the results are guaranteed to be disappointing. One common theme has been and will continue to be "higher energy costs." Gold has recovered most of yesterday's losses in overnight trading. Joe Battapaglia of Gruntal and Co. is still pounding away his message that the markets have bottomed. He has been beating this dead horse since Nasdaq 3500 and Dow 10500. Erik Gustavson of Stein Roe is pleading for calm and begging for investors to plunge back in to the market. Janus Funds have reported that they have experienced net withdrawals recently. As investors back off and look for safe habor, the markets are sure to head into a "Death Spiral." They are just now recieving their quarterly statements and the fear and panic will likely take hold. Today's market action could be "interesting." Golden Dreams All!
- Black Blade
Randy (@ The Tower)
(04/03/01; 03:51:46MT - usagold.com msg#: 51312)
Parsifal, this is somewhat related to our conversation...
Check out this comment from a London gold trader as quoted by Reuters yesterday:
--- "Gold tends to take its lead from currencies these days and behaves much like a currency itself," said one trader.---
Would you want to hold a national currency if that nation's banking system was in trouble? The lesson here is that it is the paper aspect of gold that dominates the bullion banking system and provides the aspect of "currency". Therefore, given the apparent position of the bullion banking system, it is no wonder that the gold derivatives continue to be sold down the drain, even as the World Gold Council statistics continue to report record demand for the physical metal.
The reason to take action to lock orders into physical positions sooner rather than later is that there is no way for ANYONE to know in ADVANCE when this favorable system for buying will turn or when rules might be changed.
Randy (@ The Tower)
(04/03/01; 03:07:31MT - usagold.com msg#: 51311)
Black Blade's "Fool's Gold" post
I took a look at your article. Even though I grasp the hidden dual purpose underlying these anti-gold rants, the fact that they continue to expend this much anti-gold propaganda effort never fails to impress me.
The milder attacks on gold are surely the workings of those with interests in maintaining the status quo of investment sentiment to support brokerage houses and investment services as you've said. That's the first purpose underlying this attacks on gold.
But it is telling that our own beloved MK, with a vested interest in drawing more business to Centennial Precious Metals, does not himself find a corresponding compulsion to beat the streets to foster "tit-for-tat" anti-Wall Street sentiment. He calmly, consistently and presciently advises prudent partial diversification of investment portfolios into precious metals, notably gold.
But back to the anti-gold propaganda. The second purpose behind the negative sentiment being foisted upon us via the media is evident by the source of the more virulent attacks against gold diversification. With few exceptions, these anti-gold spinmeisters are involved in bullion banking and gold leasing operations.
They are fearful of the unrelenting tightness in the physical market, and are therefore putting forth this effort as a means of fostering relief. It is the classic confidence game played by the bank managers during the banking days of old when faced with an imminent bank run. You can almost hear them say, "Don't worry folks...you have no need to take physical hold of your money. Just trust us at our word on these matters." Sheeeeeesh.
Such efforts belie their tenuous positions, and I would not therefore have a single ounce of gold in an unallocated leased account unless I were willing to relinquish entirely the pseudo-notion of current ownership implied by the monthly or quarterly account statements. Call your custodians and ensure the safety of any stake you have in such leased accounts...accounts which are themselves a form of "paper gold" that is subject to counterparty risk.
Black Blade
(4/3/2001; 2:02:40MT - usagold.com msg#: 51310)
Beware of Fool's Gold (Anti-Gold Propaganda)
http://biz.yahoo.com/smart/010402/20010402asksmar.html
Snippit:
QUESTION:
With the market still slumping, should I start buying gold?
-- Nick Marriott
ANSWER:
To be perfectly blunt, the answer is no. Unless you're looking to adorn yourself in glitzy baubles, there's no financial benefit to buying gold, silver or any other precious metal for that matter. If anything, these trinkets add risk to your portfolio.
Black Blade: This is from a publication called "Smart Money." There's an oxymoron here. Of course these are some of the same people who urged that investors throw cash into the Dot.Coms with abandon. And we know how that advice turned out. Mr. Marriott misses the point altogether. The point is that the financial benefit is that gold is a form of portfolio insurance. Of course there is no financial benefit to having a subscription to "Smart Money" either as it is nothing more than a running advertisement for brokerages, mutual funds and investment advisors.
Black Blade
(4/3/2001; 1:45:22MT - usagold.com msg#: 51309)
Low Natural Gas Storage Levels Critical
http://biz.yahoo.com/prnews/010402/dam065.html
Snippit:
``The weather for the past week at the 15 critical weather points that affect storage levels at this time of the year was about 67 percent colder than normal. This draw down will put the U.S. natural gas system at only two-thirds the average storage levels for recent years at the beginning of April. We can expect the added demand to get gas into storage before next winter to put upward pressure on gas prices over the next six or seven months,'' said Dr. Donald Murry, vice president of C. H. Guernsey & Company.
Black Blade: The energy crisis is going to hit hard over the next few months. With low NG storage, minimal snowpack levels in the west, a decaying Third World power grid and increasing demand, the cost to the economy will be rather burdensome. Life is about to get "interesting."
Parsifal
(4/3/2001; 1:19:16MT - usagold.com msg#: 51308)
TEX, Randy
Thanks TEX. Life is full of surprises.
Randy, not sure what my intention was, probably just expressing disappointment, howling in pain. Perhaps I have been imprudent, too aggresive, in my gold purchases. The more the POG slowly drops, the more I think that is the case. On the other hand, if the POG were to . . . [you know the story].
It is this very slow, agonizing decay that is so difficult to tolerate. It is like the decay of any investment going bad. There are many opportunities to bail and cut the losses, as with those who invested heavily in stocks that dropped, having passed on so many opportunities to bail. Surely this is not the time to sell, I hope.
[about the gloom and doom items]
Randy: Do they build your confidence in continuing future strength of the dollar in currency markets?
Me: No.
Randy: Do they build your confidence in the economy at large, thus making the stock market look attractive?
Me: No.
Even though such an act might very well compound my possible imprudence, I frequently wonder if the right thing to do is to buy all I can, now, because this is the bottom. For a long time, it has been correct for me to wait, because the POG has continued to drop, and physical gold continues to be available at the low paper-gold derivitive price.
Parsifal
Randy (@ The Tower)
(4/3/2001; 0:38:58MT - usagold.com msg#: 51307)
I know it wasn't your intention, Parsifal, but that was a great summary!
You listed these items:
--- "Washington Agreement, hyperinflation, deflation, depression, war, Comex defaults, TOCOM defaults, BOE overextended, LBMA paper-gold derivitive defaults, market breakdown, Chinese physical gold market coming soon, EU, European Central Bank physical gold market, BIS plays trump card, euro becomes reserve currency, U.S. dollar falls from reserve currency status, Arabs hold mountains of paper gold contracts that must be honored, gold for oil, euro will displace the dollar in trade for oil, . . ."---
Personally, in light of these conditions (particularly the "gold scramble" at the Bank of England after the failed appeal to the IMF for gold during 1998-99), if I held any positions in the Paper Gold System, I would see the writing on the wall for the coming default and add to the selling pressure to get out. As you know, there is counterparty risk in paper gold, but none in physical gold.
Although the price of gold metal remains detatched from the physical market (due to the derivative price discovery mechanism), with all these conditions you've mentioned, we would do well not to take them lightly regarding their impact on other markets. Do they build your confidence in continuing future strength of the dollar in currency markets? Do they build your confidence in the economy at large, thus making the stock market look attractive?
Hard assets remain the place to be, and prudent diversification into gold remains a solid course of action for as long as the metal continues to flow from the mines and the leased accounts at these 22-year low prices. (And with that im mind, anyone with unallocated, leased gold accounts would do well to ask their account custodians to either deliver the gold, or else move it into an unleased holding account.)
TEX
(04/03/01; 00:07:15MT - usagold.com msg#: 51306)
Parsifal - post 51304 - Hall of Fame Material
That "conversation" between the "Gold Salesman" and "Me" is a classic. It should be required reading for anyone interested in investing in gold! You have my nomination (not that it means much).
ViewYesterday's Discussion.
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.
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