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ARCHIVED DISCUSSION FROM 5/3/2001 All times are U.S. Mountain Time (Yesterday's Discussion.) slingshot (05/03/01; 23:48:46MT - usagold.com msg#: 53019) Black Blade A scientist for Twenty Years with Two Advanced Degrees. Looks like we are in the same boat. Looking to preserve our wealth. Well Black Blade turnaround is fair play. I have been well schooled in thermodynamics as to the expansion or contraction of certain metal within a heat range and its properties to be exploited to the outermost envelope to extract the most effeciency. Can you guess what I do?I perfer to be the Jester. $300.00 Titaniun $ 96.000.000 my part.slingshot Randy (@ The Tower) (05/03/01; 23:44:33MT - usagold.com msg#: 53018) This has been on our radar screens for a long time. http://www.usagold.com/wgc.html Just one of many giant steps being taken these days. But meanwhile, the world's investors slumber blissfully unaware...------From link above, courtesy of WGC-----"The governor of the People's Bank of China, Dai Xianglong, has confirmed that China will launch its first gold exchange in Shanghai in the second half of 2001. The planned system of gold distribution will be abolished, with producers being allowed to enter the market directly. At the same time, the system by which retailers, wholesalers and processors have to apply for licences for gold transactions will also be scrapped. He also said that China would gradually relax restrictions on gold imports along with the country's foreign exchange reforms, but gave no firm timescale for this." working-kirk (05/03/01; 23:06:35MT - usagold.com msg#: 53017) Interview about the Fed http://www.netcastdaily.com/fsnewshour.htm Some said they couldn't find the linkclick on the link about and it will take you to financal sense web page. If you click on complete show or "Ask the Expert" for Wednesday and it should bring up real player slingshot (05/03/01; 22:50:50MT - usagold.com msg#: 53016) (No Subject) Well Black Blade. Thank you for your reply. the Grasshopper and the Ant is a very good story. Still I concur with USAGOLD that all information can be vital at this time. There have been a few post that have not reach the forum. Operator malfunction I persume.For Rockgrabber, What's happening on the west coast?Slingshot Black Blade (05/03/01; 22:44:39MT - usagold.com msg#: 53015) USAGOLD #53001 - All Thank you. I am glad that the energy crisis and gold updates are reaching out. I guess that I could reveal some of my background though my position could be compromised if I get too revealing. I have worked in academia and private industry as a physical scientist for over 20 years. I have 2 advanced degrees and I have done research at one Northwest University, worked in exploration activities for both mining and energy concerns around the globe. I recently closed my office in Nevada and I am now concentrating my efforts to start up operations in the area of Natural Gas exploration in the Western US. I continue to keep contacts with colleagues who keep me apprised of current research in the sciences, and the economics and condition of both the mining and energy industries. And yes, I'm a repentant former California Grasshopper who reformed in the 1970's. I am now proud to be an Ant. I believe that the current energy situation in California will continue to spread beyond the borders to the rest of the continent of NA. My Californian friends (both Grasshoppers and Ants) are a good study as I learn much of how they think about the current energy situation. Amazing as it seems, some believe that the crisis is contrived by the big bad energy Robber Barons, while others tell me that the energy situation is much worse than reported. Some even tell me that they believe that come summer, there will be daily rolling blackouts. And yet another friend who is a hydro-geologist for the state says that the low Sierra snowpack will seriously impact hydro-power generation this year. Similar situations exist throughout the Western region. US mining companies are experiencing high energy costs and many friends and acquaintances tell me that there could be several mine closures as long-term energy contracts begin to expire. Recently Newmont reported that the state of Nevada has guaranteed a reprieve from higher energy costs. We shall see. I too await to hear from our friend Rock Grabber, and what about PH in LA?- Black Blade Netking (05/03/01; 22:23:32MT - usagold.com msg#: 53014) Silver amount for next mint. Can anybody confirm for me the actual amount of silver that will be purchased* by the US Mint on market towards the end of this year(?)for the next silver mint. (*it has been publicly confirmed mint supplies have been used up with needed inventory to be purchased on market) Black Blade (05/03/01; 22:05:09MT - usagold.com msg#: 53013) Slingshot The term "Grasshopper"(taken from Aesop's fable the "Grasshopper and the Ant") refers simply to all who do not take responsibility for preparation but would rather rely on others to provide for them. This does not mean that all Californians are Grasshoppers. Grasshoppers exist all over the World. Those here on the forum I would hope are "Ants" where they take responsibility for their own preparation. The problem with Grasshoppers is that they know that there are potential fundamental problems such as that Bull markets eventually come to an end, that there's an energy crisis, that the economy is not looking so good, etc., yet they do nothing to defend themselves and they believe that someone else will take care of things. The have to learn that the only people that they can rely on are themselves not others. The California Grasshoppers haven't built the proper power generating facilities and infrastructure that they need and yet they believe that it is the responsibility of other regions to serve as energy farms for their benefit. Grasshoppers expect the economy to boom forever, and should the economy go into a recession for example, they believe that it is the responsibility of others, "government, etc. to come to their rescue while they whine about how the rest of the world is so unfair to them. When they should prepare by having sufficient food, clothing, energy, investment portfolio insurance such as gold, etc. they only whine instead of taking action. We are about to enter into a "Brave New World" and the Grasshoppers will have to be dragged into it screaming and kicking or else suffer as a result. Those who make the transition and those who have prepared will be the survivors. Recent news stories and analyses suggest that we are in or slumping into a recession. History as a teacher demonstrates that those who have gold during times of uncertainty survive relatively unscathed. Who has gold? Grasshoppers or Ants? Cheers!- Black Blade Peter Asher (5/3/01; 21:29:19MT - usagold.com msg#: 53012) USAGOLD (5/3/01; 19:15:54MT - usagold.com msg#: 53001) Michael,did you miss this one?Interview with a Grasshopper --Peter Asher (04/29/01; 15:06:33MT - usagold.com msg#: 52822)Last weekend we were in Berkeley and the following is from a nephew who wishes to be quoted by his CB handle "Little Snoopy." Describing himself as "A formal Berkley Liberal in my twenties, now a Hayward Conservative in my forties" he had this to say."Deregulation: When Pete Wilson in the legislature in '95 deregulated the power industry, I thought it was a disaster because the power industry has to be a regulated service for the greater good of the state and all the people in it. The people being not only the customers, but also the businesses and the industries that require power for their production and services.Similar to the deregulation of the airline industry, you have a few large corporations buying out the smaller mom and pop businesses. Therefore you have cyclical swings in the marketplace between outrageous prices and services for free, interruptions in service, and spotty market conditions that are unpredictable.Breakup: When the legislature and the governor deregulated PG&E, PG&E set up two separate companies, with the larger corporation as the parent entity, and the smaller as the utility that provides the service to the state. In doing so, they shifted its wealth to the parent corporation and allowed the parent corporation to go out of state and buy power-generating utilities all over the country.By shifting 80% of the wealth to the parent corp., the utility was left with the responsibility of power transmission and the maintenance of the power facilities after being gutted and left as an empty shell.Two weeks ago, Grey Davis struck a deal with Southern California Edison to buy the utility lines as collateral, by paying or assuming Southern California Edison's debt to the power providers. In doing so, the state legislature and the governor have now assumed responsibility for power transmission lines in Southern California that are 20 to 30 years old and need high maintenance. These will need to be replaced within the next 10 years or so. Southern California Edison made out like a bandit. The legislature will have pay the utility company for the maintenance crews for the utility lines that the state now owns!A third world example of what happens in power outages: In parts of Yugoslavia and Latin America, the factories, the banks and production facilities routinely shut down for hours at a time on a daily basis, during blackouts or brownouts. This summer in California, we're going to face unpredictable, spotty blackouts and brownouts, sometimes lasting for hours if not days. They will happen when people least expect it, in unpredictable places. Parts of Silicon Valley will be blacked out, traffic lights will be out, freeways will come to a stop, and banks will close. We'll have to have people out there like during the New York Blackout with flashlights at every intersection.The reason PGE does not want to tell you where the blackouts will occur is to prevent looters and other criminal elements who might say we've got a free ride in this area because the power will be out for the next six hours. If you have these kind of crises and no one knows where they will happen, the results will be totally unpredictable. I work in a production facility where most of the machines are run by computer. When we are in a production mode, the computers are operating the machines. Most of the time, if the power goes off, we can hit the emergency stop button, we can stop the machine in the middle of the process and nothing happens. * When you are in a critical cycle, that is when the machine has to complete a full cycle before it completes, it may crash in a power outage, and you will not only lose the software, but perhaps also have an accident and break the tool and wipe out the part..* The production part you are working on could be a very simple component, or it could be a very expensive piece of hardware, (Ex, $3000 piece of titanium) in which case the moment the tool is ruined you have also lost thousands of dollars worth of work.The same thing applies to people working on computers in the high tech industry, such as software, data processing or critical programs. When the power goes out, they lose everything. This is the real collateral damage the power outages will create, and no one will be able to predict it. There was a symposium this week on possible business repercussions to the Silicon Valley area in the event of major power outages. Some of the estimates for production losses run as high as forty billion dollars this summer. Our gas prices have gone from $1.75 to $1.95 in the last six weeks. A gas station attendant said it might go as high as $3/gallon. If that happens, the industries won't be able to afford it. The costs all eventually get rolled into what the consumer pays. That's us. And the poor people hurt the most, because they can least afford it.This summer, July to October, we're going to be looking at major social disruptions in California." auspec (5/3/01; 21:16:28MT - usagold.com msg#: 53011) Tree in the Forrest Canuck Repost #48914 & 48916 {2-25-01} Sir Tree,I believe all of our answers as to CB selling lie within this post of Canuck's. It should probably be laminated and put permanently on the computer! Thank you Canuck, Red Baron and ANOTHER!Canuck (2/25/2001; 11:05:09MT - usagold.com msg#: 48914)From the Red BaronAs a novice to gold discussions I highly recommend the 10 part essay from the Red Baron, LMBA: The expose located at Gold-Eagle, Digest. {http://www.goldeagle.com/golddigest/baron907.html}To all 'newbies' and novices (as I) the author in a detailed discussion examines 'paper' gold, the link to oil and IMHO introduces ANOTHER.ANOTHER's theory of gold for oil (oil and gold never move in the same direction) is an amazing concept. From episode #9:First, if the article is correct that the Saudis and other Arab nations have been receiving gold bullion as payment (as well as military hardware) for oil and for favours rendered in keeping the price of gold from rising (in spite of projection production peaks as early as 1999) then where can we look for evidence of gold showing up in the official statistics for the Middle East. Does the World Gold Council statistics provide such evidence that shows an increasing or constant flow of gold into the Middle-East coffers since 1987? Evidence might resolve on of the most nagging questions: where is the gold being sold by CBs going? Perhaps we have found the missing piece of the puzzle.Second, if true, the US would have a particular interest in coordinating the funnelling of gold bullion into the Middle East in order to constrain the price of oil from rising to $40/barrel as it should be given the demand/supply situation in crude oil and maximization of Middle Eastern utilization capacities. The US wants to maintain the illusion that oil is not becoming increasingly scarce in order to avoid price inflation at home thus exploding the market bubble.....they want to avoid a 1973-74 crisis at all cost. Stability in oil prices may have come through past transactions of US treasuries to the Middle East in exchange for "price stability favours" but the Arabs increasingly have requested the real store of value: bullion. Thus the Americans may be actually orchestrating the gold sales of other CBs in the interests of "global oil price stability" objectives convincing the Australians and lesser players to sell their gold for the short term objective of containing a price rise in oil that the Saudis are under increasing pressure at home (Islamic pressures) to let go (as the Sheik suggests) .. Note that "officially" the major gold holders, the US, Switzerland, Germany and France (and most certainly England) have hung on to their CB supplies while other lesser players have been "convinced" to sell under the ruse that "gold no longer plays the hedge or security roll it once did."Third, the LBMA is most certainly a critical player brokering the exchange of gold for oil trading (the Red Baron's plethora of LBMA exposes points to this reality). Recent revelations of daily volumes of 30 million ounces of gold trading daily at the LBMA in London (twice South Africa's annual gold production) may point to the increasing pressure on appeasing the Saudis (and other Arab nations) with gold to keep oil prices in check. The Rothschilds and other merchant banking players with an interest in gold (probably the Morgan Stanley group as well) are also involved in these daily deals. Indeed, a line is most certainly drawn between Washington/New York, London, South Africa and the Middle East (not necessarily in that order).Fourth, based on superb analysis by Deutsche Morgan Grenfell on the relative purchasing power of the US dollar in terms of gold is worth analyzing in the context of the gold to oil price ratio. If the purchasing power of the U.S. dollar in terms of gold bullion has declined to a ratio of less than 0.100 in 1997 compared to gold's purchasing power of 2.000 then this suggests that the US dollar is grossly overvalued in terms of scarce resource (gold), that gold is grossly undervalued as may be oil.Fifth, the ultimate irony is that the laws of demand and supply on scarce commodities like oil and gold have been "nakedized" or "nullified" by an illusion that has elevated an infinitely plentiful fiat currency ( the US dollar ) to mythical proportions. It is in this kind of world in which we transact in the so-called "market."And from exerpts of ANOTHER, episodes 6-9:To avoid a spiking oil price the Central Banks first freed up the publics gold thru the issuance of various types of "paper future gold". As that selling dried up they did the only thing they could, become primary suppliers! And here we are today. In the early 1990s oil went to $30++ for reasons we all know. What isn't known is that it's price didn't drop that much. You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold! Today it costs $19 + XXX amount of gold! Yes, gold has gone up and oil has stayed the same in most eyes. Now all govts. don't get gold for oil, just a few. That's all it takes. For now! When everyone that has exchanged gold for paper finds out it's real price, in oil terms they will try to get it backGold is cornered. Plain and simple. No complicated theories, no options problems. The commodity value of gold was forced so low in paper currency terms that all of the new mined gold, going out some 10 years is spoken for. Between the third world buying physical gold and the jewelry industry ( same people buying ) there is none left for the oil states! They do value oil in terms of gold, but not IN the paper currency price of gold! How much is gold worth in terms of oil value? Just stop supplying gold to them in ultra cheep US$ terms and you will find out by watching the currency price of oil! In any event, LBMA has traded so much paper/oil/gold that any rise in the currency price of gold will implode them. The CBs must become the full primary suppliers of gold or the system as we know it is done.One last note: No form of paper wealth will survive the financial crush once the CBs stop selling! NOTHING!Well a funny thing happened right after the Gulf war ended. What looked like big money before turned out to be little money as some HK people, I'll call them "Big Trader" for short, moved in and started buying all the notes and physical the market offered. The rub was that they only bought low, and lower and cheaper. They never ran the price and they never ran out of money. Seeing this, some people (Middle-East) started to exchange their existing paper gold for the real stuff. From that time, early 1997 LBMA was running full speed just to stay in one spot! In other words paper volume had to increase to the physical volume on a worldwide scale, and that was going to be one hell of a jump. It could not be hidden from the news any longer. This was not far from the time that "Big Trader" said that "if gold drops below $370 the world would see trading volume like never before seen". The rest is history. Now the CBs will have to sell 1/3 to 1/2 of their gold just to cover what's out thereThere is only one oil state that counts! ONLY one! They have made it very clear how important gold is to them. If they had started buying outright, gold would have gone to $5,000+ in days. And only a very few million ozs. would have been purchased! The message has been for some years, "we will accumulate thru the back door, using paper deals if you keep the price at or below the cost of production". Do this and oil will remain THE driving force of the world economy! FAIL THIS AND WE WILL PRICE GOLD IN DOLLARS AT THE TRUE VALUE OF OIL TO THE WORLD!Amazing stuff. A long, long read but Red Baron lays this out well with ANOTHER"S grand finale. A prerequisite to this reading is the understanding of oil, it's reserves and 'swing share'.Canuck.P.S.: To the 'older' astute posters; who is 'Big Trader'? ENDComment- WOW {again}.auspec auspec (5/3/01; 21:04:12MT - usagold.com msg#: 53010) Why Shares Move First We frequently hear that gold shares move prior to a upward movement in gold, yet it is essential to nail down the reason for that initial stock movement regardless of how obvious it is, once reflected upon.Two statements from different sources today tell the story:1. USAGOLD #52996- "He {T. Remital} told me to watch gold stocks {the XAU] carefully at turning points in the gold market because the deep-pocket insiders will move the market before the gold price itself moved, and they might be moving it on knowledge the rest of us probably don't have." Thank you MK.2. From Bill Murphy today- "I maintain my stance that we are days, weeks and, at worst, months away from some major fireworks for the price of gold.""From a very savvy Café member who is very well connected in the gold industry:"He also said he was told by a senior Goldman Sachs UK executive that something has changed in the gold market recently - more demand and less supply. Bullion bankers are buying gold shares." ENDComment-- Bullion bankers are buying gold shares! That's fairly inside wouldn't you say? So the early people into most any play are "smart money" &/or "inside information players". Fact of life. There have been questions and comments on this Forum as to WHO actually has been moving the TSE these last # of months, here's a good answer.See, if you had the proper mentality to be an elitist and had no soul, you too could make the easy bucks w/o going to all this trouble to understand market dynamics. Thanks for considering,auspec slingshot (5/3/01; 21:00:55MT - usagold.com msg#: 53009) T.Remital Msg 52996 Irish Toast To Remital, May you be in heaven a half hour before the devil knowns you've gone. Slingshot. USAGOLD (5/3/01; 20:45:40MT - usagold.com msg#: 53008) WWOracle. . . . .Argentina They did sell all their gold, didn't they. Oh well. . .Sort of reminds me of BOE's letter to the Stranger, where we are told the Old Lady of Threadneedle St. "received value" for her gold. Yes, she did. "How much" and "what kind of" value are left open to question.------------------"Honey, why did you sell our house for $5?""I don't know why you're so upset, dear. After all, I did get value for it."Onward, fellow goldmeisters. . . . . . .. WW Oracle (5/3/01; 20:23:22MT - usagold.com msg#: 53007) @USAGOLD: "Goldization" for Argentina? But they just sold their last driblets of gold -- to US! Thank you, MK. Chris Powell (5/3/01; 20:22:21MT - usagold.com msg#: 53006) Prospects strengthen for GATA African Gold conference http://groups.yahoo.com/group/gata/message/745 We hope to unleash African on theExchange Stabilization Fund.To subscribe to GATA's dispatches by email and get them immediately so you don't have to go look for them, send an email to:gata-subscribe@yahoogroups.com slingshot (5/3/01; 20:19:37MT - usagold.com msg#: 53005) Total Information Sharing. USAGOLD MSG # 53001 Black Blade MSG.53002 Well its seems the tables are about to turn. We have poked a little fun at those Kalifornia prune and raison pickers.I am sure at this link no one hold any malice against anyone. I call on ROCKGRABBER to come forth. I believe your words were sincere. Timing is critical. To Black Blade; As we all at this forum have used the generic term Grasshopper as a derogotory comment as to the general populace of California. Myself included. Should at this time we refrain from the use of this term in order to further our quest in the investmement in gold and our preservation in wealth. Still reserve the right to poke fun.Yes, USAGOLD, Close ranks. (Military ORDER) Slingshot USAGOLD (5/3/01; 19:40:36MT - usagold.com msg#: 53004) Randy. . . .Argentina It is the dollar, not Madonna, singing the refrain. More and more, I think we will see countries hedging their reserves with both currencies. If nothing else, it's good common sense. We should not lose sight of the fact that it was less than a year ago that Argentina was talking about "dollarization." What has changed?? Goldization would be even better -- the third leg on the monetary stool. Sometimes we forget what the bottom line is on the euro. Consider for a moment if the Argentine Break spread (for instance) to Japan. Now when you start thinking like this, gold is even a better option because it truly is the currency without a country (and attendant monetary policies).Also, couldn't help but notice that someone posted (Beesting, I think vis a vis Rep. Ron Paul), that von Hayek had posited a free gold concept long ago wherein gold would compete along side other currencies at the free choice of the saver. (Isn't that what the ECB is subtly suggesting?) I remind you that I mentioned a while back that in my opinion Hayek was the real heavyweight. . . .followed by Rothbard . . . ..The Austrians rated by MK, FWIW. Vindication . . . . thanks Beesting. I wish I could remember the gold advocate at a public forum years ago who shocked his audience when he said that he didn't think there was a reason for a gold standard in practical terms as long as savers could own gold. I know it shocked me (as a young proponent of the gold standard), but I never forgot it. FOA, maybe you'd like to get in on this??? Tree in the Forest (5/3/01; 19:26:17MT - usagold.com msg#: 53003) Kodak silver I should add one more thing. He was unwilling to be specific regarding the frequency of physical silver deliveries to their facility. Kodak has stated publicly that they have "purchased" enough silver for 2001. However, the question remains whether they have all of this silver on site or just promises of delivery. My bet; they don't keep more than a quarters worth of physical silver on site and probably not even that much. So what they have is "paper" promises. Keep in mind these guys use a lot of silver. They must have some kind of storage facility on site but...well at this point I am speculating! LOL! I never do that! <grin> Even if they have a 6 month supply they'll need more physical come end of June. We shall see. Black Blade (5/3/01; 19:16:29MT - usagold.com msg#: 53002) Natural Gas Price Higher In California, Lower Elsewhere http://biz.yahoo.com/bw/010503/2324_2.html Snippit:In Southern California, where demand for gas from the troubled electric generation sector continues to keep spot prices well above other market areas, the average monthly spot price for May rose 19.7% to $14.97/MMBtu from $12.51 in April. Spot prices there are 394% higher than in May 2000 when the average was $3.03. ``Except in California, spot-gas prices declined this month largely because there has been so far very little heat-related gas demand from power generators. That, in turn, has given gas utilitiesa chance to inject healthy volumes of gas into storage for next winter, which takes a lot of pressure off the market,'' said Kelley Doolan, natural gas market specialist for Platts and chief editor of Inside FERC's Gas Market Report. ``For California, prices rose mostly on speculation that there simply will not be enough gas at some point in the months ahead to meet the needs of both the power generators and companies buying for storage.''Black Blade: It should be noted that Kalifornia's problems also include an extremely high tariff on NG piped in on unregulated pipelines and NG. There is also the political and economic risks associated with selling NG and power to Kalifornia. Therefore costs are higher in the state. Small businesses in the state are now in severe distress and Silicon Valley is worried as more companies consider relocation outside of the state. This situation will continue to pressure the state's economy and will surely spread as political solutions are enforced rather than the free-market. Looks like "gold" lifeboats will come in handy. USAGOLD (5/3/01; 19:15:54MT - usagold.com msg#: 53001) Black Blade and All . . . .California Dreamin' I want to first of all thank you for the extraordinary contribution here. I have talked to a number of USAGOLDers who always ask "Who is this Black Blade?" Want you to know that your efforts are greatly appreciated.One of the advantages of having a job like mine is that I get to talk to people from all over the country (the world really), and get to feel the pulse on the essentially human level.I would like to open the door to our California posters and lurkers and to boot up, drift casually to the "Post a Message" prompt and give to us straight and simple what's happening out there from the "man on the street" (or "stuck in the skyscraper"). I have heard some incredible stories and I assure you, the rest of the country is not getting the whole story. Here's where the internet plays an essential role: Let us know what's going on "on the Coast," because what's going on there could very well be in all our futures.I know this might be a little off topic. . .but it all comes back to gold -- systemic risk from everyday people unable to cope with extraordinary energy costs, like the small print shop with the $4000 per month utility bill, or the wealthy homeowner with the $12,000 light and gas bill. (Thanks VdT).There's more where that came from. . . . .Let the people know. . . . . . Tree in the Forest (5/3/01; 19:13:59MT - usagold.com msg#: 53000) slingshot I think silver (or anything for that matter) will flow to whoever offers the highest price and/or to big users first. Kodak is a member of the Silver Users Association which Ted Butler has discussed at length. They are located in Washington DC the better to lobby and strongarm the government into favorable policies for their members. Interestingly though, they were helpful in lobbying Congress to have precious metal tax rates reduced to match other capital gains rates. So they aren't all bad. My "contact" at Kodak is not a friend, merely a contact. I will talk with this person again when the market reaches a crucial juncture. That may not be long now. Black Blade (5/3/01; 19:04:06MT - usagold.com msg#: 52999) California says needs U.S. help on power crisis http://biz.yahoo.com/rf/010503/n03324214.html Snippit:WASHINGTON, May 3 (Reuters) - A California energy official on Thursday said federal intervention is needed to cap the sky-high price of wholesale electricity in his state, even as consumers conserve more power and more plants come on line to cope with peak summer demand starting this month. The plea from Richard Sklar, a senior energy advisor to California Gov. Gray Davis, came on the same day the Bush administration announced new energy conservation measures for federal offices on the West Coast.Black Blade: The Grasshoppers come on their knees with hat in hand as the energy crisis becomes a burden. Even so it is expected that there will be about 35 days of rolling blackouts in Kalifornia. The state legislature is expected to pass a "Windfall Profits Tax" and to order the out of state power generators to reimburse the Grasshoppers for "price gouiging." Yeah, that will give incentive to the out of state power providers to continue selling power to the state. "…and they played, sang, and danced all summer…" slingshot (5/3/01; 18:55:35MT - usagold.com msg#: 52998) Tree In Forest Msg #52995 Hello Tree in Forest, I have read many of your post and I'm always interested in your point of veiw. So I have a question for you to ask your insider. Will KODAK be able to acquier enough silver for their film production or will the flight to poors mans gold overcome industrial requirements. Subsequent will brokers sell industrial or to small time investor first? Which way will the Silver flow?Slingshot Black Blade (5/3/01; 18:52:30MT - usagold.com msg#: 52997) U.S. Energy Sec'y warning rockets U.S. gasoline, oil http://biz.yahoo.com/rf/010503/n03292876_3.html NEW YORK, May 3 (Reuters) - U.S. gasoline prices sprinted on Thursday after U.S.Energy Secretary Spencer Abraham warned summer gasoline prices could top last summer's record prices.Black Blade: Along with higher unemployment, declining earnings and consumer confidence, nervous investors should begin to look for safe havens such as gold as the energy crisis worsens and the economic situation deteriorates. A sign of change is that tonight Sen. Diane FineSwine (D-CA) is now talking of increased energy production - soon she will be eating caribou and wearing baby seal fur. USAGOLD (5/3/01; 18:45:09MT - usagold.com msg#: 52996) T.Remital. . . .Tribute to a friend I wanted to make note of this comment by GATA's Bill Murphy:"What was not was that The Gold Cartel could not take gold below unchanged on the sell-off. Somebody was there to take them on. Those somebodys have been there for weeks. Quietly, some big boys are making a move on gold. One little positive clue after another is showing up that appears to be telling us something is "up."I don't know how many of you remember T.Remital who posted here in the early days. Mr. Remital until his retirement was one of the top working experts on gold in the world at the top levels of both the U.S. government and in the private sector on Wall Street -- a brilliant man, a patient mentor, and a friend. Most of us didn't know who he really was because of his simple humility and humanity when posting here. He just liked being one of the group. He told me to watch gold stocks (the XAU) carefully at turning points in the gold market because the deep-pocket insiders will move that market before the gold price itself moved, and they might be moving it on knowledge the rest of us probably don't have. That's why the Murphy statement is intriguing. He said that strong movement in the XAU was the result of big money betting on a higher gold price. Unfortunately, T's health is not what it should be. The last time I talked to him (several months ago) he told me that gold was staging for its biggest move since the 1970s -- that the dollar-SDR-fiat money crowd could no longer hold the line. I miss our conversations, my friend, and miss your regular input.Keep in mind that all of this is one man's opinion. Those who bet on it do so at their own risk. None of us know what's going to happen. Let's just say that more than one old-timer in the gold wars is taking the lay of the land with a half-smile on his face. The conversations at the FOMC published by James Turk, Reg Howe, et al -- only verify what we've known for a long time -- far from the barbarous relic of past monetary regimes, as some have described it, gold plays a critical role in every serious money-man's repertoire. You can take that one to the bank -- not the bullion bank of course (smile). Tree in the Forest (05/03/01; 17:50:35MT - usagold.com msg#: 52995) Silver & Kodak I had an interesting conversation today with someone who knows a lot about Kodak's silver sources. Definitely an insider. VERY inside. Well actually it wasn't too interesting because he wouldn't tell me much. These are company secrets. But I did learn one thing. I thought (and perhaps most of us thought) that a large silver user like Kodak would get all of their silver directly from the mines. Not so. They have a diversified set of sources including mines, smelters and bullion dealers. He didn't use the word bullion banks, but I think he was referring to the bullion banks as they are after all bullion dealers. I asked about Comex. He wouldn't say too much there but he did allude to the fact that the physical dealers they used also played "COMEX paper". He described them as "reliable bullion dealers". Hmmm. Wasn't Handy & Harmon a "reliable bullion dealer"? Randy (@ The Tower) (05/03/01; 17:24:38MT - usagold.com msg#: 52994) No chance for Argentine "dollarization" now. Overwhelming support shown form euro plan. http://biz.yahoo.com/rf/010503/n03273930_4.html BUENOS AIRES, Argentina, May 3 (Reuters) - Argentina's Economy Minister Domingo Cavallo lauded on Thursday the "overwhelming" support from Congress's lower house to add the euro alongside the dollar in the peso's 10-year-old currency peg system.--------Following a vote with 138 in favor versus 16 against (with 13 abstentions), Cavallo told reporters, "It (the euro plan) is a key piece of the economic program to bring stability to Argentina."The dollar has now lost another incremental leg of past support. slingshot (05/03/01; 16:41:32MT - usagold.com msg#: 52993) Turning the Corner Auspec#52946 Tannehill# 52979 Solomon Weaver # 52949 Auspec, read same editorial. Wonderful information. Tannehill. Goldbugs scramble to unload gold at $200/ounce to buy TECH STOCKS? Scare the pants right off us? I am more of a pesimist than an optomist ruling on the side of caution. Well how about this Headline! Gold Drops to $ 100.00 Per Ounce, Bullion Dealers Beginning To Find It Hard To Meet Demand!That headline sounds a little out of balance. There are two ways to take this statement. One that it is completly BOGUS.Two, should it happen Gold at $100.00 will be a flash in the pan. It can only rise. The demand and supply will rule the day. So, my topic heading "Turning the Corner" is somewhat of the prelude to the above headline. Over the past 8 months I have had conversations about Gold. You would have thought I had a bad case of Smallpox. Now, To my Delight, more people are talking about Gold and Silver. When they ask me questions about PM's I just refer them to USAGOLD and especially the Forum. As to why they have been asking questions? Gasoline is up. Groceries are up. Looking to preserve wealth. You see I thought these people were HARD CORE JOE SIXPACKS! That really shocked me. But $100.00 an ounce as compared to Tannehill's $200.00 per ounce. Pure speculation now. If all these BOOMERS are somewhat straped for cash with the debt they have run up. Wouldn't they jump at the chance to fit it their budget a few ounces of gold at that price? Producing the demand and the rise in price of gold.To me it is a win/win situation considering what the price of gold is now. Even if gold went to $100.00/ounce the bounce I believe would be awesome. So, fellow Goldbugs KEEP your SKIVIES ON. (OLD NAVY SAYING) SOLOMON WEAVER , A True Knight and a Gentlemen.Slingshot R Powell (05/03/01; 15:58:30MT - usagold.com msg#: 52992) "Futures" magazine article Somewhere in the recent past week or so, somewhere in the Kitco-Gold-eagle-Usagold tri-forum area, I read that the May issue of "Futures" would have an article concerning gold. I believe Uptick reported this and knew of it as he is the author of what I now see on page 26, "Precious metals: Bulls still playing the waiting game". Haven't read all of it yet but did notice the line, "perhaps no other market has advocates who are as emotionally involved as does gold." Do you suppose Uptick is familar with Farfel? The magazine lists www.futuresmag.com as it's site but I don't know if the article will be there or just subscription advertisement. I get the publication for free- a present from my broker. First Moutaingold and now Uptick. We live among celebrities! Rich barnacle bill (05/03/01; 15:38:53MT - usagold.com msg#: 52991) Gold at $2500 To: Tom msg.#52989 Thank you so much for posting the article. You saved me a good deal of time. Randy (@ The Tower) (05/03/01; 15:22:54MT - usagold.com msg#: 52990) Fed adds $10.75 billion in temporary reserves to banking system today Of this, $2 billion were via 28-day Rp's, $5.25 were via six-day Rp's, and $3.5 were added via overnight repurchase agreements.Further, the Fed indicated it would also add permanent reserves through the purchase of inflation protected U.S. Treasuries for Friday delivery. The size of the operation was not indicated. Tom (05/03/01; 15:09:18MT - usagold.com msg#: 52989) barnical bill - Forbes Gold $2500!!! http://www.forbes.com/forbesglobal/00/0724/0314048a.htm Forbes Magazine Capital Markets July 24, 2000 Even as Alan Greenspan frets about inflation, most investors have given up on hard assets. Leigh Goehring keeps the faith. Gold At $2,500?By Susan Kitchens Leigh Goehring manages over $400 million worth of metals, energy, and paper stocks for Prudential Investments in Newark, New Jersey, and manages them well. Over the past five years, his Prudential Natural Resources fund has returned an annualized 10.9% --modest compared with the S&P 500's 24.2%, but impressive considering the depressed state of most hard-asset prices during that time. Last year Goehring outpaced the S&P by 24 percentage points. So far this year he's ahead by 15 points. What excites Goehring these days? That most unfashionable of metals: gold. "I am a raging bull when it comes to gold," he declares. "In times of inflation, people always end up just gravitating to it." But hasn't the information revolution led to vast productivity increases that have, in turn, consigned inflation to yesterday's fears? Goehring doesn't see it that way. Despite the fact that he is dealing in what he calls "an out-of-fashion industry," he thinks raw materials still make the world go around, and that the fall of the Soviet Union left the world awash in cheap commodities. Now, however, Russia is beginning to develop again. It will consume much of the commodities it has dumped on the world market--and this at a time when demand from Japan and other commodities-hungry Asian countries is on the rise again. Goehring: "The period where the U.S. economy could expand without fear of inflation is quickly coming to an end." He recommends that every investor hold as much as 20% of his or her overall portfolio in commodity-related stocks. In making the case for gold, Goehring points to the relationship between the price of an ounce of gold and the level of the Dow Jones Industrial average. Over most of this century, the Dow traded at eight times the price of gold. As recently as 1980, when gold spurted to $800 an ounce, the Dow and gold were at parity. But today the Dow/gold multiple is 44, an all-time high. "This ratio has stretched too far," Goehring insists. "At some point it has to snap back and even out." In theory, Goehring says, the price of gold could go as high as $2,500 an ounce. "If all of the dollars in circulation (currently $560 billion) were backed with gold, the implied price would be about $2,500." Goehring concedes that central bank-selling of gold makes $2,500 an ounce unrealistic anytime soon. But equally unlikely, in his view, is a Dow/gold ratio that remains seriously askew. "In the next ten years, something will cause gold to rebound sharply. We can't be sure exactly what, but something will happen." The best way to play gold, Goehring says, is with shares of mining companies. His favorites are Newmont Mining, in the U.S., and South Africa's Harmony Gold Mining. He likes Newmont for its promising new Yanacocha mine in Peru. Harmony, he notes, has been successful at buying marginal mines, cutting costs and increasing the productivity of its work force. Goehring is high on aluminum, too. In 1989 the former Soviet Union satisfied a mere 1% of the Western world's aluminum consumption. With the FSU's collapse, that ratio jumped to 11%, and prices collapsed from $3,260 per metric ton in 1988 to just over $1,000 per metric ton by 1993. Today aluminum fetches $1,580 a metric ton. Goehring predicts it will shoot to $4,400 a metric ton in the next five years, as Russia's internal demand grows. "Once Japan starts to grow again, there's going to be another big, one-time increase in demand, just as the supply starts to shrink." Goehring's pick for aluminum companies? Texas-based Kaiser Aluminum Corp. Platinum? Palladium? Goehring likes them. The automobile industry, which needs both platinum and palladium for catalytic converters, has been consuming 9.5 million ounces a year. Platinum's price is already at an 11-year high of around $580, and Goehring expects the price to continue to go up. With Russian inventories shrinking, Goehring predicts a global shortage of the metal. "Palladium has some of the best supply-and-demand fundamentals out there. The price is going to skyrocket." Stillwater Mining, based in Columbus, Montana, is Goehring's top choice for exposure to platinum and palladium. The price of oil, already up 246% in the past year, is headed higher, Goehring forecasts, as demand from China, India and other big emerging markets climb, and proven reserve estimates have been grossly overstated. Approximately 40% of Goehring's fund is invested in oil-related companies, with most of that in oil service companies. He especially likes Aberdeen-based Stolt Offshore, a contractor to the offshore oil and gas industry, and Bouygues Offshore, a subsidiary of France's Bouygues Group that's listed on the New York Stock Exchange. Say this for Leigh Goehring, he practices what he preaches. "My money is where my mouth is: 100% of my personal portfolio is in commodity-related investments," he says, pulling out a recent bill for the storage of his personal gold and silver bullion holdings. Lafisrap (05/03/01; 14:51:37MT - usagold.com msg#: 52988) COMEX gold and silver warehouse stocks-May 3 http://www.futuresource.com/news/news.asp?story=i4147121078467035137 13,567 ounces of gold were added to COMEX gold stocks today (~+1.6 percent). See link for details. Charts of COMEX gold and silver stocks at:http://www.sharelynx.net/Markets/Charts/CMX-AU-Stockpiles.htmandhttp://www.sharelynx.net/Markets/Charts/CMX-AG-Stockpiles.htm R Powell (05/03/01; 14:30:18MT - usagold.com msg#: 52987) The Stranger BOE settlement Thanks!! R Powell (05/03/01; 14:26:54MT - usagold.com msg#: 52986) two fer day POG was up and the all-important lease rates were also higher but the XAU was down about three and one half percent. POG is starting to display a nice, gradual uptrending motion. Perhaps this will get noticed by the chartist, money managers. They'll see something like that and think, "the trend is my friend" and jump on board with long futures positions. Maybe? Rich TheStranger (05/03/01; 13:50:49MT - usagold.com msg#: 52985) R Powell Below is an email exchange I had with the Bank of England after the last sale. The "Stranger" pseudonym was not used in the original correspondence.Gentlepersons: Please verify that the gold auctioned by the bank this week is being transferred in physical form and not just in the form of receipts. I am concerned that, due to leasing, the bank is unable to come up with bars that are free and clear for delivery. Thanks for your attention to this request.Sincerely,TheStranger************************************************************Dear Mr Stranger:Individuals who have bought gold through the Bank's gold auctions can decide on their own settlement arrangements, the Bank is content for them to do either, physically transfer the gold elsewhere or via a book entry transfer. These arrangements were set out in our Information Memorandum at the following address http://ntfm258.facility.pipex.com/auctnt37.pdf The credit risk in gold deposits is managed in exactly the same way as credit risk in other products (eg dollar deposits or interest rate swaps). For more information on this visit the management of credit risk section in the foreword to the EEA accounts available on Her Majesty's Treasury website at http://www.hm-treasury.gov.uk/docs/2000/eea4wd.htmlYou may be interested to know that the National Audit Office concluded that the UK had achieved value-for-money in the gold sales programme.Yours sincerelyMalcolm Shemmonds R Powell (05/03/01; 13:38:07MT - usagold.com msg#: 52984) Tannehill or anyone in the know Tannehill mentioned (52979) that the last BOE auction was settled with paper. I heard rumors of the same but never any solid confirmation. Is this indeed true? Galearis, your earlier post refering to Sharelynx's link to silver stocks drawdowns is good information, thanks. Sector also mentioned it at G-E with due credit given to you. Old Yeller, thanks for the heads-up and link to Fredbear's post at Prudentbear. Either Fredbear gets around or there are many Fredbears. I see him in many places. Peter Asher/ Black Blade, the bursting of the debt bubble will be mightier than the dot coms, no? Not yet, though, I'm still getting credit card offers in the snail mail almost daily. Rich barnacle bill (05/03/01; 13:05:10MT - usagold.com msg#: 52983) $2500 gold To All: Last week on this site or Gold-Eagle was a message about an article in Forbes. The article had something to do with gold at $2500.00 wasn't that far-fetched after all. Does anyone know the publication date? Barnacle Bill Netking (05/03/01; 13:00:01MT - usagold.com msg#: 52982) Tree In the Forest - Mac'Dollar Tree in the Forest(52976)You write: "I wonder how the price of hamburgers in Moscow compares to here in the US? Anyone care to arbitrage the price difference in McDonald's hamburgers? Perhaps a "golden" (arch) opportunity!"Reply - I take it Sir Forest you saw the recent GE post someone had taken from the Economist magazine re: The value of the Big Mac in USD in different parts of the world. Quite a serious economic study that comes out each year. George S. apparantly reads it, saw it and hesitated before embarking on a Euro/USD play as he got a contrary signal, he went ahead anyway the story goes...and "took a bath" on his currency postion, oh dear how sad never mind.The latest reports conclusion?...apparantly the AUD & NZD(the most undervalued)needing to make up the report suggested about 40% against the USD... Ouch!<McGrin> Randy (@ The Tower) (05/03/01; 12:48:22MT - usagold.com msg#: 52981) You've been waiting for this one! An offer that's sure to go fast. http://www.usagold.com/onlinestore/special.html We've supplied you with gold for your kingdom, now you may select your queen!Better still, there's no need to stop at just one. Get you some! Old Yeller (05/03/01; 11:29:04MT - usagold.com msg#: 52980) The latest from the ECB http://www.afxpress.com/afxpress2/html/story_16234.xml The euro,after breaking through .90 after Uncle Al's cut'seems to be treading water just below that level.My feeling is the market does not take their rate cutting inflexibility seriously.Especially when the French finance minister appeared to side with the US and the IMF on that issue.Stability and purchasing power of the currency continue to be the overriding goal here.Press on regardless,boys,tune out the whiners.Thanks to nomercy at Kitco for the link. Tannehill (05/03/01; 11:05:17MT - usagold.com msg#: 52979) What if? I had a strange thought at work yesterday, "we would truly know that gold was dead, if the BOE held and auction and there were no takers." Since we don't know whom the buyers are, what if the buyers just stayed home? I suspect they didn't like getting paper chits at the last auction anyway... I can just see the headlines **********BOE AUCTION UNDER SUBSCRIBED, GOLD DEAD!******************Goldugs scramble to unload their gold at $200/ounce to buy Tech stocks*****Hang in there, I suspect the volatility will be enoromus, a major push to the downside that will scare the pants right off of us.that's all from Tannehill Old Yeller (05/03/01; 11:00:41MT - usagold.com msg#: 52978) Scary stuff from Fredbear http://www.prudentbear.com/boards/user/non-frames/message.asp?forumid=4&messageid=44594&threadid=44594 There's lots happening out there'so much conflicting info to absorb.Now,get a load of this.The banking/central bank fraternity scares me,they have created this situation;this end game looks plausible to me.Buy gold'sell FRNs,don't let them win. USAGOLD (05/03/01; 10:30:33MT - usagold.com msg#: 52977) Today's Market Report http://www.usagold.com/DailyQuotes.html News & Views complete and on way to printer. With that major project out of the way, I'm back in the saddle again. Extended Daily Market Report today, available to all at the Daily Market Report page (linked above). Includes long term gold graph."Something's afoot in the gold market. . . ." Ian McAvityDeja vu all over again? Tree in the Forest (05/03/01; 10:08:12MT - usagold.com msg#: 52976) j'Bear No apology needed sir as no offense is taken. I love a good joust! I wonder how the price of hamburgers in Moscow compares to here in the US? Anyone care to arbitrage the price difference in McDonald's hamburgers? Perhaps a "golden" (arch) opportunity! As to free markets, Goldenrod at GE expresses it best: Free Enterprise? (<Goldenrod@webtv>)May 03, 11:05 Free Enterprise and Free Markets. The Twin Myths Roll on into the Twenty-first Century.Ask the average American Joe or Joan what he thinks of OPEC and the most probable answer you will get is: "Not very much!"Then ask him why?, and he or she, will tell you it is a cartel which, with the connivance of Big Oil, manipulates the price of crude, so that he, (let's be chauvinistic and let he stand for both male and female!), Joe Blow, is gouged at the pumps and if the free market place was allowed to take its course, he would be a lot better off in the pocket!Now, Joe wouldn't put it quite that way, but, link the bits between the swear words and the above would be a rough translation!Well Joe. Wake up and smell the coffee! Between you and me, there is no such thing as free enterprise or free markets. The price of practically everything is either manipulated up or is manipulated down.Look at what a supposed free market has done to everything that the North American farmer produces! The cost of each item that goes into the production of any crop, except the sweat off of the farmer's brow has relentlessly advanced over the years, whilst the world price for the item has, except for very transient periods of damage wrought by Mother Nature, steadily dropped.How does the American farmer survive these adverse conditions and by the skin of his teeth, stay in business? Well, perhaps the 28 BILLION handed out and reluctantly accepted by independent farmers, last year alone, might give you a clue! Some free enterprise system, some free market system!We all know about gold and silver and how the free market allows those two metals to trade freely on the open market.Oil not very long ago was trading at $10 a barrel, and the pundits could see it trading at $5 a barrel, as they said "into the foreseeable future", and, what was worse, said so with equanimity! Two to three years of $5-$10 dollars a barrel oil would have seen the US oil and gas industry down the tubes, a toilet deposit! If such a low price, by some aberration of the paper markets, could have been kept in place for that long. So much for free enterprise!It was an OPEC cartel that saved the bacon for the U.S., and averted what would have been one of the most calamitous implosions in the energy field since man discovered fire!It is not that free enterprise and free trade do not represent the best way to go in this modern world. It is that we have not had, for a long time, such entities, in a workable, non-manipulated modality to find out! Goldenrod. Galearis (05/03/01; 09:33:07MT - usagold.com msg#: 52975) Oops, hit the enter key in error. The other important chart on silver.... http://www.sharelynx.net/Papers/SilverStocks.htm When compared to the gold supply chart, this one on silver is eloquant, indeed. Ted Butler et al are wholly correct in their belief system.G. Galearis (05/03/01; 09:28:55MT - usagold.com msg#: 52974) @ the USAGOLD silver camp http://www.sharelynx.net/Charts/SumWGP.gif The first link is somewhat off topic but begs a question (or two) in my mind as to the rationale behind Bush's "StarWars 2" coming to your neighbourhood (war) theatre near you.In my mind the current administration is not on a healthy financial stance to ever initiate such a prohibitively expensive ABM system. This particular aberration was the spending nail that sealed the coffin of the old Soviet Union and will, for the same fundamental reasons, never see implementation at this fragile time (for the US) either. It would, however, as aluded to in the article, be a devisive factor for Europe and could not help the EURO cause. Methinks this is a ploy of the Bush administration to deflect attention (classic) to growing domestic economic problems ahead. This is all nonsense IMO and simply a political ploy.The rest of the post is extremely interesting. Recommend those interested in silver on this forum to follow the links and ponder well what is revealed.......snip.. Date: Wed May 02 2001 10:59 GoldBrick (Dollar just went negative.) ID#432102: Date: Wed May 02 2001 10:59 sharefin (Cumulative world gold production) ID#284255: Copyright © 2000 sharefin/Kitco Inc. All rights reserved This chart shows the cumulative world gold production since1835. The sum total is here comes in at just under 120,000 tons So approx 15,000 tons would have been produced prior to thisperiod. http://www.sharelynx.net/Charts/SumWGP.gif Most all of this gold still is in existence today. 135,000 tons = 4.34 billion ounces Now when compared to the silver stocks available we see adifferent situation. http://www.sharelynx.net/Papers/SilverStocks.htm Unfortunately I can't find totals for world silver productiongoing back as far in time to compare to & chart. But with the TOTAL US STOCKS topping out at approx 5.9 billionounces ( in 1942 ) We can see that silver stocks used to outweigh gold stocks bya decent amount. Now it appears that silver stocks would run at 25% or less ofgold stocks. 4 billions ounces of gold to 1 billion ounces of silver -presumably less. With CBs holding ( reputably ) 35,000 tons of gold ( 1.1billions ounces ) in stockpile This dwarfs the currently known US silver stockpiles of approx112 million ounces ( 10% ) The table has turned dramatically and the position keeps onexpanding. Gold's deficit can readily be covered by CB's topping it up. Silver's deficit is rapidly removing all and every stockpilenever to be seen again. There is a vast difference between silver and gold. Silver has a high industrial demand which in many casesremoves the metal from circulation forever. Methinks silver - Tears of the Moon - will one day do apalladium.... AbsoluteX (05/03/01; 09:01:55MT - usagold.com msg#: 52973) Working-Kirk Good Interview about the FED. possible reason why fed panicked I couldn't find the interview with Anne Williams of WorldNetdaily in the link you have given..( http://www.netcastdaily.com/fsnewshour.htm ) Do you have the exact link for that interview...Thanks ausome (05/03/01; 08:56:07MT - usagold.com msg#: 52972) short term high today? I am playing the game of the shorts today. If you cant beat em join em. I agree with your analsis elevatorguy. auspec (05/03/01; 08:53:41MT - usagold.com msg#: 52971) GATA South African Conference If gold holds true to recent form it will get pasted around the time of GATA's S.A. Conference this weekend. In an in-your-face show of force the Power Elite have not missed an opportunity to put down previous rebellions. Shows how seriously they take these challenges. They are playing an all or none game that is likely to leave them with..........NONE.Get Em GATA! elevator guy (05/03/01; 08:41:25MT - usagold.com msg#: 52970) I see how this game is played! If I was playing paper right now, this would be the time to go short. Right after a little paper rally, see?In a day or so, the paper price of gold will go back down due the unseen hand, and the game starts again. But I am not riding that pendulum right now, and have no heart to short gold, paper or otherwise. What do you bet it goes back down to $261 in a couple of days? Someone is raking in those call premiums! auspec (05/03/01; 07:01:15MT - usagold.com msg#: 52969) grostic & Euro Calls Hope this is helpful, grostig: You simply need a futures {commodity} account that would allow you to own a Euro contract or, as you are looking for, calls on a future contract. This can be done easily with your $3-5K. The calls on futures will not be available via another type of account. I like your idea but have no idea of the fair pricing of any of these calls. Best to you. Black Blade (5/3/01; 06:11:17MT - usagold.com msg#: 52968) Stocks View: Slowdown or Ugly Recession? http://biz.yahoo.com/rb/010428/business_markets_stocks_dc_643.html Snippit:NEW YORK (Reuters) - The U.S. economy is changing and Wall Street is telling those bruised investors that there may be something more serious ahead than just a run-of-the-mill slowdown. After being pumped up for five years, stocks have crumbled over the past 12 months. Despite several recovery attempts, a lot of investors still sense that the economic environment is rapidly deteriorating and the nation could be slammed by a recession. ``Avoiding a recession at this stage in the U.S. would be unprecedented, given the reading we now have,'' says Lakshman Achuthan, managing director of the Economic Cycle Research Institute.Black Blade: More interesting global recession talk and predictions from ECRI. During times of economic uncertainty gold usually did well. Looks like time to allocate a bit more into gold. BTW, market futures look dismal this morning. Black Blade (5/3/01; 05:49:48MT - usagold.com msg#: 52967) Executives still on edge http://www.usatoday.com/money/general/2001-05-01-earns.htm Snippit:NEW YORK — With the first-quarter earnings season winding down, there's growing talk on Wall Street that stocks have bottomed and the worst of the "profit recession" is over. But corporate executives aren't as confident. Investors should brace for more ugly earnings. The reason: 244 U.S. firms have already issued profit warnings for the second quarter, putting it on pace to top the record 907 negative pre-announcements issued last quarter, says Chuck Hill at Thomson Financial/First Call. Profit warnings are running at twice the rate they did in the first quarter. "That is an ominous sign," he says. "Despite what the pundits say, there's still a lot of bad news to come." Black Blade: Maybe it's time for analysts to lower their earnings estimates again so they can meet or exceed estimates and get another sucker rally going. Trail Guide (5/3/01; 04:48:34MT - usagold.com msg#: 52966) Comment Hello again!Had some interesting conversations with a few friends recently. I'll try to convey those talks into a trail walk this weekend. Another sent me a letter and has offered a new reply post to the forum. I intend to convey that letter and his letter also. As a change, we are going to post his Thoughts on the Gold Trails page.Now that my computer is finally back up to speed, will begin replies and comments to some of the great posts offered here a few days ago. Will return tomorrow!TrailGuide Black Blade (5/3/01; 03:05:02MT - usagold.com msg#: 52965) Peru to investigate missing gold amid Fujimori probe http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3D119T9MC&live=true&tagid=ZZZ60A9VA0C&subheading=americas Snippit:Peru is to launch a probe into allegations that gold bars have disappeared from the central bank. The probe is part of an investigation into accusations that ousted ex-President Alberto Fujimori stole $1bn before fleeing for Japan. Black Blade: Sure is a lot of excitement over a barbarous relic ;-) Cage Rattler (5/3/01; 02:39:09MT - usagold.com msg#: 52964) Winstar Communications & Greenspan's Panic There is one specifically remarkable element in the April 18 interest rate action by Federal Reserve chairman Alan Greenspan. Senior financial analysts point to the eerie coincidence of the Chapter 11 bankruptcy declaration by the New York-Virginia telecommunications company, Winstar Communications, on April 18, and the Fed rate cut the same day.What has come to light is the little-publicized practice of key telecom suppliers, such as Lucent Technologies and Cisco Systems, of giving huge credit lines to companies, such as Winstar, in order to prevent collapse of their orders for telecom equipment in the present meltdown of the "New Economy."On April 16, two days before its bankruptcy declaration, Winstar had defaulted on $75 million in interest payment on its $6.3 billion debts. Out of the total debt, Winstar had an estimated $1 billion supply credit line from Lucent Technologies, which itself is in such precarious financial condition, that it had to issue several denials of looming bankruptcy during the past weeks. While giving huge credit lines to their customers, the telecom suppliers themselves have huge debts to their banking creditors - a cross-credit chain-reaction situation with a systemic meltdown potential. Thus, according to informed acounts, the Winstar bankruptcy was a key factor in Greenspan's panicked rate cut at 10:54 in the morning of April 18.Despite the Fed rate cut, another large "New Economy" company, PSINet Inc., which announced staggering 4th Quarter losses of $3.2 billion, and a $5 billion loss for the year, is rumored to be close to a Chapter 11 bankruptcy filing. PSINet has $3.6 billion in debts. Winstar and PSINet are but the tip of a very big iceberg of insolvent "New Economy" companies, which can trigger chain-reaction mega-crisis of the financial system in the United States and beyond.Source: Vol. 15, No. 17 , EIR STRATEGIC ALERT April 26, 2001 Netking (5/3/01; 02:37:05MT - usagold.com msg#: 52963) Justamerebear / Tree in The Forrest / Working Kirk / Auspec Tree in the Forrest/Just A Mere Bear - Re: Arbitrage on the markets: Some interesting points made by both of you Sir's. There has certainly been intervention in the past, direct & indirect causing disparity not always rectified through arbitrage. Confiscation has featured in the PM markets in the past, why not again especially Ag,yes?Auspec - Keep those bullish Ag reports a commin Brother! I believe that there is a window of opportunity NOW in Silver, but it will not last for very long. The word has got out & is gathering pace among those on the outside of the "PM community". Look for investment demand to rapidly outstrip industrial.Working Kirk - Oh dear oh dear Sir! No they got the report wrong or you saw an oldy. The last reported near miss(until son of Bush plays 'Star Trek'that is)was three Aussie naval ships being challenged & prevented passage by the PRC close to Taiwan. The Aussies being who they are probably replied something like:"You Shielas get Out of way!"...and went on through!<grin> Black Blade (5/3/01; 02:13:55MT - usagold.com msg#: 52962) Peter Asher Yes, I noticed that in the article and I admit I was a bit confused. There appears to be a split in opinion among various camps of economists. Remember former Head Fed Paul Volker and the Fed gave the economy a bit of "shock Treatment" when we found ourselves in that mess last time around and though it was painful it seems to have worked. AG and the Fed seem to be taking a bit of a different tack with rate cuts, etc. Now we have a massive build up of money creation to add fuel to the fire. AG's quick-fix rate cuts only look to temporarily delay the inevitable. I don't think that we can avoid a major recession. What I have mentioned though is that every postwar recession has been preceded by an energy crisis albeit they have been oil related and each one sent shock waves through the economy. This time the energy crisis is related to insufficient power generation that effects the whole economy from business to the individual. Maybe it is a matter of energy crises that lead to economic shock waves and the Fed aggravating the problem with incompetence? Maybe ORO could jump in on this one again. I haven't seen him here much lately. The unemployment article caught my eye as it supposedly related their historical data to the timing of recessions in the recent past. It was something that I didn't think about before. The correlation deserved some recognition though I am not sure whether it carries much weight as this is not my area of expertise. I notice that Forbes has an ongoing "body count" at their site as they seem to think that the rising unemployment figures could relate to something being seriously amiss. I threw that article in hoping that maybe someone might address this issue. Cheers!- Black Blade Peter Asher (5/3/01; 01:41:39MT - usagold.com msg#: 52961) @ Black Blade msg#: 52958) Rising US unemployment to trigger recession-ECRI I don't think so! Note >>> what caught our eye is the service sector didn't crank out jobs,'' Achuthan said.<<< This is not the sector with the 125% mortgages, 401-Ks and large credit card balances. The quantitative change to the servicing and maintaining of the double-bubble of credit and stocks will not be significant from that.It would take ALLOT of upscale unemployment to trigger a cross-cascading default that would implode the system. Black Blade (5/3/01; 01:40:44MT - usagold.com msg#: 52960) Working-kirk The downgrade of the oil sector is solely based on the 8 million barrel up tick in crude oil inventories. This month on the 15th OPEC meets to reset export quotas again. They could very well adjust production again as they are very wary of low oil prices that hurt them during the 1990's. Crude oil inventories are still below last years levels though and any reduced production could result in another oil sector run up. As I have said the real problem isn't so much the availability of oil but the means to refine it. Refinery utilization is nearly maxed out and any refinery shutdown (accident or maintenance) could push fuel prices higher. Ultimately we must accept that "cheap oil" is will be a thing of the past as the "Super Giant" oil fields are in various states of decline and more costly smaller fields and non-conventional will have to come on line to make up for the eventual shortfall. For that to happen higher prices will be needed to provide incentive to produce more oil. We have a NG shortage and that could get worse if there is less oil production due to the fact that both oil and NG occur together in many areas. A drop in oil production will result in a drop in NG production. There are plans for at least 275 new NG-fired power plants between now and 2006. If there is not enough NG to supply these new power plants they will only still as monuments to poor planning and a lack of an energy policy. Every postwar recession has been preceded by an energy crisis. We have an energy crisis now but it is more an inability to create enough electrical power rather than gasoline rationing. But then again, wasn't it these financial experts in 1998 that said we were looking at $5.00/bbl oil forever? Hmmm… Cheers!- Black Blade Peter Asher (5/3/01; 01:24:17MT - usagold.com msg#: 52959) @Black Blade msg#: 52950) Some Analysts See Stagflation Again Rearing Its Ugly Head That article has some interesting contradictions. First there is >>> However, a pair of economists from the University of Michigan, Robert Barsky and Lutz Kilian, contend that the main reason wasn't the oil shocks but monetary shocks caused by misguided "go-and-stop" credit policies of the Federal Reserve. <<<<Then the (one) money manager says >>> Instead of puzzling over the mysteries of productivity and worrying about whether the falling stock market would dampen consumer spending, Friedberg and other critics say, the Fed should be paying attention to its primary job: restraining inflation. "They should begin to talk about discipline and maybe think about raising rates rather than cutting them," Friedberg said. The economists are right! Following are comments from ORO and I in two posts earlier this year and something from GE last night that realy nails it IMOPeter Asher (2/20/2001; 11:25:46MT usagold.com msg#: 48607)Re ORO >>>> the Fed will not be able to raise interest rates as prices begin rising,because prices will continue rising to reflect the additional cost of borrowing needed to build the capital, up to the point where the Fed raises rates so high as to kill investment completely, <<<<Isn't that exactly what the Fed did twenty years ago thereby creating "The Perfect Stagflation"? They won't this time IMO, because the unbelievable debt bubble would burst.Peter Asher (04/02/01; 15:45:03MT usagold.com msg#: 51282)******The New Fifth Horseman******Stagflation occurs when a confluence of high capital and production costs create an environment in which only the most solvent entities are left standing and able to command the higher price of survival @(JOE) May 01, 09:25 "Stagflation's ugly head" (Diogenes) May 02, 03:07 (This is also posted as an addendum to my earlier below.)The stagflation of the 70's was fueled by both energy costs AND high interest, of which I suspect the interest costs were the greater.This ’paradoxical’ phenomena evolved from an economy that had evolved to the size and complexity that enabled the business entities with strong marketing power to pass along cost increases to the consumer.Simultaneously, the weaker succumbed and middle managers were on hi-way corners running hotdog stands. The companies and workers that survived were the payers of the higher prices. Those that failed, were the statistics of the recession. Simple as that!This time around we have:1) current energy costs are NOT higher, adjusted for inflation. They ARE higher in the workings of th bubble-boom that the exceedingly low cost helped build. 2) Very low interest rates that absolutely cannot be raised without explosively bankrupting the total system.I suspect the Fed and its cohorts realized that they failed back then at "Punishing" inflation out of existence. The rising interest rates served to knock out the very competition that must exist to curtail price increases. If a business gets pushed into the red and has no profit to operate with, along with the unserviceable cost or absence of any new credit then it's toast! The event was the most idiotic act of central bank planning in history.This barley sustainable foolishness is now dependent onkeeping everyone in the earnings loop and able to service dept as cheaply as can be brought about. It is the receivers of interest income, who must be sacrificed to the lions of mathematical reality, if this thing has even a prayer of survival. Black Blade (5/3/01; 01:18:55MT - usagold.com msg#: 52958) Rising US unemployment to trigger recession-ECRI http://biz.yahoo.com/rf/010502/n02462935.html Snippit:NEW YORK, May 2 (Reuters) - U.S. joblessness will rise in the months ahead, and will lead to an outright economic recession this year, the Economic Cycle Research Institute (ECRI), a New York private research firm, said on Wednesday. ECRI's leading employment index (LEI) ``remains strongly negative'' at a 19-year low, following a path seen before when growth recessions, or periods of below-trend economic expansion, develop into full-blown recessions. Black Blade: April US unemployment numbers come out on Friday. working-kirk (5/3/01; 01:13:31MT - usagold.com msg#: 52957) U.S. and China planes collide (again)Please comfirm I saw this as as a late night special edition put out by outlocal newspaper, and I am hoping either the editors made a mistake or I was looking at a month and a half old copy. It said The U.S. and china had another plane collide.I was thinking we got through the last one by sheer luck and the U.S. should be damn grateful we got the aircrew safe and sould and forget trying to get the airplane back. It would have be a worthwhile price. working-kirk (5/3/01; 01:08:08MT - usagold.com msg#: 52956) Good Interview about the FED. possible reason why fed panicked http://www.netcastdaily.com/fsnewshour.htm This is a very good interview Anne Williamson of worldnet daily. It doesn't really tell us nothing we haven't talked on this forum, except one. She mentions in passing one of the lastest bailout was a 10,000,000,000 (10 billion) of International Money Fund loan to Turkey because of the Lirameltdown. Also be sure to listen to the commentary. Jim mention he was watching bubblevision and he noticed that all analysts downgraded oil and energy. He said their companies was shorting the energy stocks and pushing techs. (Black Blade This seem the perfect time for your insight, comments analysis.) Black Blade (5/3/01; 01:03:58MT - usagold.com msg#: 52955) Oil Retreats; US Stocks Record Big Build http://dailynews.yahoo.com/h/nm/20010502/bs/markets_oil_dc_2.html Snippit:LONDON (Reuters) - Oil prices beat a retreat on Wednesday as an increase in fuel stocks in the United States doused concerns about a gasoline supply shortage this summer. Dealers said U.S. industry and government data indicated that a rush of imports had lifted crude inventories while increased refinery operations had boosted petrol stocks. Black Blade: The problem of course isn't the supply of crude oil, but the ability to refine enough reformulated summer grades of gasoline. Refinery utilization rates are at 95.8% - nearly maxed out. Gasoline inventories are still below last years levels. The test comes as summer driving season gets under way. The real test for the energy crisis is NG. NG storage levels are up 19% from record lows though still far below last years levels. The increase in attributed to warmer weather. If consumers experience hot summer weather NG/utility prices will rise with the temperature as air conditioners are cranked up. Meanwhile, currently NG production is falling behind last years pace as decline rates in producing fields are accelerating. Then the problem could get critical come next winter if NG storage levels fall or aren't built up over the summer months. Most US homes are heated with NG and nearly 25% electricity is NG-fired. Virtually all new power plants are NG-fired. In spite of what some "professional" analysts and government bureaucrats at the BLS may say, higher energy costs do hit the consumer in the pocketbook and is in reality a major contributor to inflation. We are in a recession and it looks to get much worse. Many survivors will be found safe in golden lifeboats. justamereBear (5/3/01; 00:39:50MT - usagold.com msg#: 52954) Grostig--Calls Have you considered that not only do you have to be right in the direction, but also within the timeframe of the calls?I have poured a lot of money down the rathole of calls. Still do. In hindsight, it looks pretty foolish. I probably would have been better off to buy the underlying.As I said, I still do buy calls, for my own reasons. I see nothing inherently wrong buying calls, if it is done for the right reasons.Have you considered buying bonds, denominated in Euros. At least that way you are paid interest while you are waiting, and time does not work against you in a flat market, which is certainly the case with calls. You will probably give up some leverage tho.j'Bear ViewYesterday's Discussion.
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