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

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ARCHIVED DISCUSSION FROM 7/3/2001
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Netking (07/03/01; 23:19:18MT - usagold.com msg#: 57416)
Gene
OK! The answer to your question is that this was written by Professor von Braun(as quoted). Randy@TheTower kindly provided a link shortly after my post where you may see other articles of his also. He welcomes any E Mail questions sent to him on <Profvonb@aol.com> - regards Murray.

SHIFTY (07/03/01; 22:59:26MT - usagold.com msg#: 57415)
Return To Gold Standard
Short and sweet
I would have to say 50% - 50%

If the people controlling paper money end up controlling the gold , Why would they care?

$hifty


Mythical (07/03/01; 22:52:33MT - usagold.com msg#: 57414)
Gold Standard?
My humble opinion...although Oro,Journeyman,ET and the rest of the bunch have fought an excellent battle, they will eventually lose the war. Trail Guide undoubtedly, has explained why. I'm afraid that the Gold Standard is now the "barbaric relic" that many attach distastefully to gold itself. My probability rate... 95%

Humbly, Mythical

Journeyman (07/03/01; 22:41:11MT - usagold.com msg#: 57413)
Return to gold @USAGOLD, ALL

Return to THE "gold standard?" I don't know about that.

BUT I give it at least 90 to 10 that there will be WIDE-SPREAD transactions in gold, beginning with the currently expanding "electronic gold" thru James Turk's enterprise and that other one as well as others sure to evolve. Perhaps USAE-GOLD?

Will this put enough stress on some government trying to compete with "transactional gold" to HONESTLY peg their national brand currency to gold because it's being driven out of business?

That would be a gold-standard for THAT country.

Tough call indeed, but unlikely. They would rather go down printing, I'm sure.

Regards,
Journeyman

P.S. I've given my reasons for this prognostication many times over the past months.

P.P.S. Anyone heard from beesting lately?


RossL (07/03/01; 22:31:20MT - usagold.com msg#: 57412)
Return to Gold Standard
The gold standard will return in my lifetime.

deal with it.



Warren (07/03/01; 22:26:52MT - usagold.com msg#: 57411)
A prophecie of gold and silver standard>>>>>
The time is now come -
I will make a prediction that there will never be another gold standard in any country in the world. My prediction is 90% no money will even be used ever again as a means of payment, or goverment currency very few years or months.

Gold silver and all currencies has been trampled under the feet of the peoples the world.All precious metals, rubies diamonds and all other valauables will end up in the hands of one goverment. The The nation of the Mid East.

BUT, it will not favor them for the time has come when, Those who own will own not,those that have will have not, and those that see, see not.

This will be their pay for partaking of the rotten lucre that is the root of all evil. Not all eyes are closed and some have sought after the precious gifts of life.

All this I will change to 100%.
For There are presently banks even now falling never to rise again.

Remember a few years ago that some predictions were laughted into the gutter. Only to be raised up by a weak hand.

Goldfly (07/03/01; 22:22:58MT - usagold.com msg#: 57410)
USAGOLD - Gold Standard
In the next 5 years?????

No way.

The gold standard will come only after a complete collapse of the current order. (Which means worldwide.) Odds of that happening are 100%.

I suppose it COULD happen overnight. At any rate, it's just a matter of time......

gf

Journeyman (07/03/01; 22:20:09MT - usagold.com msg#: 57409)
I wish I could be half so sure - - - @Strad Master msg#: 57407

of ANYTHING!!

The world is full of surprises. The folks who had been using gold as THE transactional medium for over a century were certainly just as sure as you are that that would never change.

Your conviction is interesting. But give me some reasons.

Regards,
Journeyman


Black Blade (07/03/01; 22:16:56MT - usagold.com msg#: 57408)
Gold Standard?

OK, I'll take a stab at it as I have consumed some adult beverages and my mind wander into the more esoteric realm of thought. Today while I had little to occupy myself while helping out the hapless Grasshoppers with their energy debacle, my mind wandered to thoughts of John Law. We have just passed through a bubble Dot-Com mania, and I was thinking a bit about the Mississippi Bubble and banking crisis of early 18th century France (Hey, what can I say - sometimes it gets a bit tiring and boring in the petroleum patch). Not only did many investors lose their entire fortunes in the stock market, the French government nearly bankrupted itself under the economic strain.

John Law was a convicted felon, he was a convicted murderer and gambler who left his native Scotland. How fitting it is that so-called honorable men and women credit him with pioneering the use of currency (paper money as the J-man calls it) and bank credit. These are cornerstones of modern finance. It also relieves government from adhering to fiscal discipline. Even though gold and silver coin was a medium of exchange that held its own intrinsic value, paper was easy to create at therefore abuse once the ties to hard assets were cut. This is not to say that abuses under a gold standard did not exist (remember when the Communist … er Democrat FDR made gold ownership illegal, he easily devalued the dollar). Anyway, to make a long story short, the French printed too much currency and the felon John Law's experiment failed miserably.

Now to address the question of a US gold standard. Maybe! But not until the US currency crumbles. The reason is simple - power. Our Government rulers can not stomach giving up power, especially to a populace that they despise. Sure, there are a few who promote a gold standard such as Steve Forbes, Jack Kemp, etc. However, most prefer to have a system of constant crises and reliance on government. Perhaps they feel that they actually have important positions and are "needed." It is easier to fire-up the printing presses than to exhibit some backbone and show some fiscal discipline. For this reason alone we will never see a return to a "Gold Standard," at least not until the US currency collapses and confidence requires a shift to hard assets like PMs. Therefore I say that it is a 100-1 bet against a return to a "Gold Standard." Hey - whadda ya expect - politicians to do the right thing? Gimme a break!

Cheers!

- Black Blade


Strad Master (07/03/01; 22:04:39MT - usagold.com msg#: 57407)
Return to the Gold Standard
My Vote
Absolutely, unequivocally - 100% certainty that it will NEVER happen!!

Gene (07/03/01; 21:58:37MT - usagold.com msg#: 57406)
@ Netking
Your 57380 today. Sorry bout that. Regards, Gene

Gene (07/03/01; 21:53:34MT - usagold.com msg#: 57405)
@ Netking
Your 53780, 7th paragraph.

Gene (07/03/01; 21:46:57MT - usagold.com msg#: 57404)
@ Netking
You quoted a central banker as saying,"How do we get our gold back?".I just wanted to know what central banker you were quoting. Thanks, Gene.

USAGOLD (07/03/01; 21:40:28MT - usagold.com msg#: 57403)
Return to Gold Standard Update. . . .
Megatron. . . . . . . 100-1 probablility against

Mountain Gold. . . . . 100-1 probablility against

Netking . . . . . . .. 60-40 probability againt

Auspec . . . . . . . . 85-15 probability against

C'mon you lurkers and fellow "posterscourageous". . .

Here's your chance. You can't be right or wrong on this. Let's just see where the table stands on this.





auspec (07/03/01; 21:25:34MT - usagold.com msg#: 57402)
Return To Gold Standard
Being a real optimist, I will assign a 15% probability of a return to Gold Standard.
It would ONLY happen under duress as in collapsing of current system. Its 'purity', longevity, and ability to withstand compromise would be highly suspect. We would be much more likely to see another spurious monetary format, even if somehow tied to gold.

Netking (07/03/01; 21:22:40MT - usagold.com msg#: 57401)
Gene
Gene(57399)Which quote?(date or post no?)

Netking (07/03/01; 21:17:06MT - usagold.com msg#: 57400)
Return to the Gold Standard - Re: Forum Question
Given that the USD has reached a very important long term top and that it's now in free fall from here(IMHO);

- It will depend on far it(USD)falls (and how quickly)as to how big the crisis is. Given a worse case scenario (for the greenback)and also a freefall in the equity markets with inflation kicking in and gaining momentum at the same time, not to mention as an aside a residential property crash in values happening simultaneously. The 'Return to the Gold Standard' is possible & indeed plausable as presented to the forum. Before this happened we would witness a flight by the people to PM's away from paper assets, driving up the POG to dizzy heights. The move to return to the gold standard would be a move from the Govt. to alleviate this flight of capital within the USA & also to outside of it. It would be a shot to try & prevent the Euro from superseding the USD's perceived roll & as "urgent surgery" to save it.

- The percentage likelihood of this occurring in 5 years? It would have to be 40%. regards Murray

Gene (07/03/01; 21:15:37MT - usagold.com msg#: 57399)
@ Netking
Please, Who is the central banker you quoted????

USAGOLD (07/03/01; 21:07:26MT - usagold.com msg#: 57398)
OK. . .Megatron and Mountain Gold. . .
Let's just max out the negative reaction at 100-1. Here's where we stand so far. . . .

Megaton. . . . 100-1 probablility against

Mountain Gold. 100-1 probablility against

C'mon you lurkers and fellow "posterscourageous". . .

You can't be right or wrong on this. Let's just see where the table stands on this.

Netking (07/03/01; 20:53:42MT - usagold.com msg#: 57397)
KarenSue - Money
KarenSue(57393)Re:"Gold is durable Fiat currency lacks durability! War is not peace. Currency is not money. Who changed the definition of money?"
------------------------------------------------------------
Karen, good comments from you. However CONFIDENCE is THE King amongst the sheeple. Things that are real may seem not, and things are also not always what they seem. Something is "whatever people think it is".

If they "perceive" that Gold is a dog (from the orchestration of financial media attention) then they will have no confidence in it, UNTIL the paradigm changes in their perceptions yes.

Therefore, currency is money, but only as long as people actually believe it is, and gold is "some dirty metal dug out of the ground" only if they believe it is.

At the end of the day though Karen CONFIDENCE IS KING(IMHO) & this will guide the peoples perceptions & value of their unit of store and exchange. regards Murray

megatron (07/03/01; 20:50:45MT - usagold.com msg#: 57396)
I'll take a shot
My estimate is based on the fact that for the last 13 years the US gov't FED bank has been HEADED by the 'world's most popular gold bug', who apparently 'loves' gold and 'can't wait' to re-instate the old relic, and absolutely NOTHING has been done or will be done, by him, in the next 5 years.

My odds-99.99-.o1 against re-instatement.(.the .01 is in case an 'actual' honorable human takes over as FED chairman)

Mountain Top (07/03/01; 20:50:16MT - usagold.com msg#: 57395)
Return to gold standard
I see the odds of a gold standard in the next five years (or fifty) as being slim to none. Only a sucessful, bloody revolution could possibly precipitate it. TPTB would see us all dead or in "re-education" camps before they would relinquish their control.

USAGOLD (07/03/01; 20:12:10MT - usagold.com msg#: 57394)
I would like to ask a question of all the members of this esteemed table:
What kind of odds would you give me that the United States government would go back on a gold standard in the next five years? Let's talk numbers. 50-50? 60-40? etc.

Oh, and one more:

What would precipitate it?

After we've kicked that one for awhile, I'll have a follow up for you.


KarenSue (07/03/01; 20:04:08MT - usagold.com msg#: 57393)
Gold is durable
Fiat currency lacks durability! War is not peace. Currency is not money. Who changed the definition of money?

Only me

KS

Black Blade (07/03/01; 19:59:00MT - usagold.com msg#: 57392)
Gas prices continue to tumble - Slowing economy dampens demand
http://www.miami.com/herald/content/business/digdocs/029730.htm

Snippit:

WASHINGTON -- Gasoline prices fell in much of the country for the fifth week in a row, the Energy Department reported Monday, the latest evidence that two years of rising energy prices may be coming to an end.

Black Blade: Good news - bad news! "Falling" energy prices and a "falling" economy. Is this a case of what was first, the chicken or the egg? The higher energy prices slow the economy, the slow economy lowers energy prices, the low energy prices increase energy demand, in turn higher demand raises energy prices, etc. Hmmm…


Black Blade (07/03/01; 19:37:57MT - usagold.com msg#: 57391)
Hot weather strains southwest U.S. power grid
http://biz.yahoo.com/rf/010703/n03355131.html

Snippit:

SAN FRANCISCO, July 3 (Reuters) - Continued triple digit temperatures forecast on Tuesday across much of the Southwestern United States prompted heat advisories and renewed calls to conserve energy to avoid overloading the power grid. Officials at the California Independent System Operator (ISO) said a high pressure blanket of hot air was smothering the entire Southwest, making it hard for neighboring states to scrape together extra power to help energy-starved California.

Black Blade: It's one heck of a heat wave. The last couple of days have been down right hot! The grid is about to melt down and if it weren't for the 4 th of July break tomorrow, western businesses may have taken a hit and the energy grid could have been overloaded. What does this mean for the economy? Plenty - this could be just the tip of the iceberg. The US and the rest of the World is headed into Global recession. Every postwar recession has been preceded by an energy crisis. "Go for the Gold!" A little insurance can go a long way.


goldfan (07/03/01; 19:31:36MT - usagold.com msg#: 57390)
RossL (07/03/01; 18:06:48MT - usagold.com msg#: 57386)
Sir RossL. Thank you for this post to the tower on money, currency gold and the debates here about these. You have well said what I have been puzzling and fretting about for some time. And I have not had your courage to directly address the Tower about his silence on these differences. My thought is that maybe he is too high above us to experience the smoke and fog in which we labour.

A happy 4th to all here, We in Canada celebrate July 1. Hopefully these days will be ever more "golden" holidays in future.

FWIW

Goldfan

Curious (07/03/01; 19:28:46MT - usagold.com msg#: 57389)
The Declaration of Independence, Our Freedoms, and the 4th of July.
http://www.law.indiana.edu/uslaw/docsdeclaration.html
The link above to the Declaration of Independence and an analysis of the Freedoms that we still have indicates that our freedoms have been severely reduced and compromised during the 225 years since the Declaration of Independence was signed. Our rights to be secure from Government interference in our lives including the right to build up an estate free from confiscation by the Government have been seriously abridged. Since the right to own gold as a store of wealth, free from manipulation has been compromised, the following comments are offered to show the current status of citizens of the United States. Many of the abuses identified back in 1776 still exist. The paragraph numbers refer to the corresponding paragraph in the original document for ready reference. Some of the current abuses are listed below:

10. Congress has failed to pass necessary legislation to fix major problem areas including affordable health care, adequate funding for social security, and inequitable income tax provisions such as requiring payment of a tax on stock options where the value of the option has declined as much as 90% before the option was exercised so that a tax is paid on a net loss.

16. Congress, The Executive Branch, and various Federal Agencies have obstructed the Administration of Justice in various cover ups including Ruby Ridge, Waco, The Oklahoma City Bombing, the missle attack on TWA flight 800, the assassination of President Kennedy, and the bombing of the World Trade Center.

18. "He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance." These abuses today include confiscation of property and money from people carrying large sums of cash on the premise that it was money involved in the sale of illegal drugs with no evidence that the people had committed a crime. The property is alleged to have committed the felony. Cases such as the US Governmemt vs. a 1999 Mercedes result in the seizure of the Mercedes and the loss of the property to the owner without a trial and without compensation. Some of these cases are clear abuse where $50,000 cash is confiscated from a elderly domestic worker where it can be proved to be proceeds from an insurance settlement or the sale of real estate and the trigger was that she paid cash for the bus ticket and her luggage was searched.

19. "He has kept among us, in times of peace, Standing Armies, without the consent of our legislatures." Why are som many foreign troops stationed over here?

21. "He has combined with others to subject us to a jurisdiction foreign to our constitution and unacknowledged by our laws, giving his Assent to their Acts of pretended Legislation." The Federal Reserve System, a private bank that has full control over our banking system under the cover and implied authority of the non Federal entity called the Federal Reserve System, is the prime example of this abuse. Would it be accepted to the same degree if it were called the Smith Bank or the Rothschildren Bank?

21-3. "For cutting off our trade with all parts of the world." NAFTA, other pending free trade agreements etc. come to mind. How can a document with 1100 pages of conditions and restrictions be called a free trade agreement? This is a managed trade agreement to benefit certain parties. These agreements are to the detriment of farmers, factory owners, employees in these occupations, entire industries such as shoe making, and the manufacturing of TV sets and VCRs, and numerous other items no longer produced here.

21-4. "For imposing taxes on us without our consent." The Federal Income Tax comes to mind. Was it ever properly ratified by the required number of States? What is the specific statutory authority for this legislation? The IRS seems to be unable to provide a citation to a specific law.

21-5. "For depriving us in many cases of the benefits of trial by jury." The forfeiture laws mentioned in 18 above come to mind. Congress enacted the seizure laws. Are they constitutional? Several Property Rights abuses also come to mind. At least the Supreme Court overturned some of these taking by regulation cases where there was a taking without the payment of Just Compensation as required by the 5th Amendment. A major case on this subject was discussed on the editorial page of the July 3, 2001 edition of the Wall Street Journal.

23. "He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people." See 18 and 21-5 above.

28-1. "We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us." This relates to Federal usurpation of rights and powers reserved to the States by the Constitution. Gun Control, the national speed limit, the Federal requirement to control outdoor advertising signs adjacent to highways on the Federal System, the legal drinking age, and numerous other examples come to mind.

The signers of the Declaration of Independence would be appalled by the excesses of the Federal Government which have occurred over the years. We think our two political parties are protecting the people against these abuses? What is required to restore the Constitution to what was intended? Would the signers of the Declaration of Independence feel that they sacrificed in vain?

An interesting side note. The first signer of the document is a Mr. Bartlett from New Hampshire. Is it a coincidence that President Bartlett in the hit TV series WEST WING was from New Hampshire? He presents the image of a President who tries to do what is right.

This paper is not proposing another Declaration of Independence from the abuses of our leaders in the Nations Capitol. Rather, it is a request for our leaders to read and reflect on the Declaration of Independence and the Constitution and to try to follow the principles included in those documents that our forefathers sacrificed so much for so we could enjoy our freedoms and be secure from the abuses of our government. What good does it do to work and save and try to secure our future by buying and holding gold, real estate and other valuable items, if our government has the ability to negate these efforts through oppressive regulations and taxes that in effect confiscate our wealth?

We should be thankful that we have the privilege of living in the United States with all of the benefits that go with living here. We must be vigilant or these freedoms could easily be lost.



Black Blade (07/03/01; 19:27:45MT - usagold.com msg#: 57388)
Calif. eyes new power grid links to Nev., Ariz.
http://biz.yahoo.com/rf/010703/n03365828.html

Snippit:

SAN FRANCISCO, July 3 (Reuters) - California, rushing to add much-needed power plants to meet its voracious appetite for electricity, is looking into building new transmission lines to tap power plants planned in neighboring Nevada and Arizona. Next week, the Independent System Operator (ISO), which controls most of California's grid, will issue a ``request for proposals'' to energy consulting firms to study the economics of a new transmission system linking up with plants near Las Vegas, Nevada and Phoenix, Arizona. ``There is a lot of interest about this work,'' Armando Perez, director of grid planning for the ISO, told Reuters in a interview on Tuesday.

The ISO's Perez said about 12,000 megawatts of new generating capacity is planned for the Phoenix region and about 5,000 megawatts near Las Vegas. Tapping some of that energy and delivering it to California would help ensure more reliable electricity supplies, especially during summer emergencies when soaring air conditioning demand drives reserves dangerously low. California looks to the Pacific Northwest for summer imports of hydroelectricity, but that region has been hit hard by drought and its energy exports are limited. The Southwest is also facing its own energy crunch, and Nevada was hit with blackouts for the first time on Monday when power was cut to about 10,000 Las Vegas homes and businesses.

Black Blade: The Grasshoppers now are hatching new plans to steal from the Ants in neighboring states. We predicted this months ago, and now it is beginning to take shape. Their neighbors have energy problems of their own and now the Grasshoppers must satisfy their voracious appetite at the expense of the Ants.


Journeyman (07/03/01; 19:21:57MT - usagold.com msg#: 57387)
Not to fan the flames, but - - - well said! @RossL msg#: 57386

Regards,
Journeyman


RossL (07/03/01; 18:06:48MT - usagold.com msg#: 57386)
Randy -msg#: 57382 - ownership

Randy said: (parts snipped)

"Money, on the other hand, is an intangible creature of credit -- conceived in man's desire to enjoy a lifestyle today that will be paid for with his future productivity, and born with the spirit of a promise embodied in a contract."

"Money can flow like an electric current, but its nature, these units of "manpower" can't be easily held to a rigid definition like units of "horsepower".

"Like electricity, money can be put to use within your lifetime to improve your lifestyle, but it is not something to own."

(end of Randy snipped parts)


Randy, of course, you are defining what we call paper money, which is currency. This is not defining gold money, the real money. Of course. There are many links in the archives that discuss what money is. Why do you continue to post this?

We still have a fundamental difference that you or TG will not acknowledge. You continue to refuse this point and it is causing a large difficulty among the contributors to this forum. Please address or acknowledge this difference or the silence will split us all. Your "bully pulpit" is gaining you no audience.

I was "on the trail' with the "FREEGOLD" and the "Trail Guide" until we got to the part about Euro governments being able to default on gold contracts with more paper. That is not my idea of "free gold".

You and FOA still have not elucidated about what is different from that and what we have now. As one poster put it: "Meet the new boss, same as the old boss", a quote from a late 60's album by The Who. We still a have a welfare state and incentives for politicians to print "money" and cheat on gold.

Another point that was brought up months ago (and ignored by the Sir Trail Guide) was TG's vision that the BIS was somehow "on our side" and willing and able to crush the anti-gold cabal. When Howe and GATA showed us that the BIS was definitely not "on our side", not a word from our "Trail Guide"... (unless I missed it. I have read about 90% of the posts here since mid-99 and I believe that Sir TG has not addressed the issue.)

I'm off the trail.

My post (06/29/01 msg#: 57163) "Gold is the only money the world has ever known" highlighted a direct contradiction between the writings of "Another" and Trail Guide. I didn't see a response to this or the excellent post (KarenSue msg#: 57175) other than denial and another temper tantrum threatening to leave.

In the long run, "FREEGOLD" is not in the best interests of European welfare states. Gold will not be set free by the EU.

As long as politicians still have the incentive to pander to the welfare state, they will print currency and trash gold. Sir TG's writings may certainly occur in the short term and I hope that some of the TG prophecies may come true. The Euro governments certainly may have a short term incentive to let gold run free as it destroys the big US banks and the reserve currency status of the dollar.

In the long run, I will continue to defer to the opinions that comprise the works of von Mises, von Hayek, Rothbard, Davidson/Rees-Mogg et al, and our endless efforts to convey that message by ORO, Journeyman, HBM, ET and all the rest.

Randy, I'm still not convinced. Your propaganda style postings aren't going to cut it. (#57382)

Gold is money. paper is currency.

Have a happy 4th holiday!


Netking (07/03/01; 17:40:05MT - usagold.com msg#: 57385)
Dow Theory Study
The latest 'Dow Theory Letter' has an interesting piece on Cycles (bullish for gold), disputing the "hold for the long haul theory" for stocks.

The Dow from 1914 to 1929 rose 620% over 15 years.
The Dow from 1929 to 1949 was down 58% over 20 years.
The Dow from 1949 to 1966 rose 520% over 17 years.
The Dow from 1966 to 1982 was down over 22% over 16 years.
The Dow from 1982 to 2000 rose 1400% over 16 years.

Conclusions:

***The conclusion to the study is that it is estimated the Dow will be down 30% from 2000 to 2016, over a period of 16 years.

***Current stock market valuation as a percentage of GDPis around 150%. This is around 3 to 5 times what we usually see at the bottom

***Currently the S&P is selling at about 85 times dividends. At bear market bottoms the S&P may sell for as little as 15 times earnings.

There has NEVER been a better time to invest in Gold!

A very happy 4th July to all US goldbugs & especially to all at CPM - regards Murray

Gene (07/03/01; 16:55:43MT - usagold.com msg#: 57384)
@ Netking
I think your comments are "right on". Who is the central banker who posed the question,"how do we get our gold back"?
While I'm here; can anyone tell me why Hecla was up over 30% today? Happy 4th everyone!

Turnaround (07/03/01; 16:28:06MT - usagold.com msg#: 57383)
expectations
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/03/BU35295.DTL&type=business

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/03/BU35295.DTL&type=business


"The vast headquarters of Sun Microsystems, the computer server manufacturing titan in Palo Alto, was as deserted as a high school during summer break yesterday.

"The normally busy parking lot, big enough for the needs of a small city, was empty except for a few cars. Only a handful of people were at their desks, mostly in case of an emergency.

"Wounded by a slowing economy, technology companies across Silicon Valley have taken the unusual step of shutting down this week. In an effort to cut costs, they have asked or ordered thousands of workers to go on vacation, creating an eerie calm in offices where frenetic activity is the tradition. ..."


Think back three years.
Can you remember any business articles making this kind of economic projection "going forward"?
Or did it seem an endless summer of linear time, ever onward and upward?

Now think about some other possible illusions you may hold.
Will the government be there for you in you winter?
Does Alan Greenspan care about you?

Is the dollar as good as gold?



Randy (@ The Tower) (07/03/01; 16:21:31MT - usagold.com msg#: 57382)
Ownership of gold and money
There is little question about the ownership of gold. You either have it or you don't.

Or, perhaps it's not quite that straightforward in this modern age of banking. There are some people who, seeking a return, have placed their gold into unallocated accounts which bear interest. Many of these people would surely claim that they still own this gold. But sadly, they do not. Their "ownership" goes only so far as their depository's ability to maintain the overall illusion that requests for withdrawals can be delivered; and that outstanding lease contracts will not fall into default -- if so, leaving collateral that is truly "good as gold".

Gold, wholly owned, is a supreme hedge against monetary collapse because it has instant international liquidity and cannot be counterfeited or defaulted upon. You either have it, or you don't.

Money, on the other hand, is an intangible creature of credit -- conceived in man's desire to enjoy a lifestyle today that will be paid for with his future productivity, and born with the spirit of a promise embodied in a contract. Money can flow like an electric current, but its nature, these units of "manpower" can't be easily held to a rigid definition like units of "horsepower". This is not an insurmountable problem as long as you are conscious of it from the start.

Like electricity, money can be put to use within your lifetime to improve your lifestyle, but it is not something to own. You can make/generate it with a degree of effort, but it does not lend itself fully to the concept of "ownership". Money, like electricity, can be prone to "outages" and various other interruption in service. Owning gold is like owning oil lamps, candles, flashlights, and even a backup generator and fuel.

Our infrastructure to deliver "reliable" electric power reminds us how individually enriched we are through a cooperative society based on specialization efficiently driven by capitalistic motivations. But tommorrow is Independence Day. We should all take this moment to assess the amount of independence that is prudent for each of us to maintain. "Survival of the fittest" is no longer measured in terms of life or death among a modern, interdependent society. However, that does not mean that everyone shares the same fate. Those who prudently prepare against society's natural uncertainties will have options not available to those who did nothing.

Show your spirit of independence and add to your gold holdings as you deem appropriate.

Randy (@ The Tower) (7/3/01; 14:36:57MT - usagold.com msg#: 57381)
Thanks, Netking. That von Braun piece and an index of others can be easily found at the URL below
http://www.usagold.com/gildedopinion/RocketSchool/vonBraun.html


Netking (7/3/01; 13:58:14MT - usagold.com msg#: 57380)
Professor von Braun - Homestake/Barrick
"May I come into your parlor?" - Said the fly to the spider.

If you were a Homestake shareholder, having purchased these shares because they were a non-hedged gold producer, you certainly received an unpleasant surprise last Monday. It seems that the Homestake CEO could not sell his company quick enough. For Barrick's CEO, a Mr. Randall Elephant, who must have been delighted, perhaps Christmas did come early this year.

Owning shares in mining companies is a risky business these days, as you never really know what the senior management is up to. As we have said before, one is better off owning bullion, rather than risking one's capital in a market arena that can be full of surprises, most of them negative in outcome. The poor old shareholder is often the last to know what's going on and usually ends up owning wallpaper material.

The world of gold mining stocks is getting smaller and smaller. Getchell Gold has gone, as has Battle Mountain Gold, now Homestake, Alta Gold went under, and Franco Nevada gave its producing mine to an Australian company in return for a large supply of wallpaper material. Rumors abound about Newmont as well, but they appear to not have been prompted into action by the closing of the pooling window that put such a sense of urgency in Homestake's senior management. Unless of course the party they may have been talking to decided they too were at risk.

What is left of the various gold funds and their respective management should find it relatively simple to decide where to put the money they manage as the choices are getting less and less. There is the likelihood of more downside surprises as this 21- year bear market enters its final phase.

With gold at $270 an ounce most mining companies are in serious trouble. The actual cost of production, as opposed to the cash cost that is announced, is considerably higher than $270. There is debt servicing, head office expenses, reserve replacement, etc. This is where the problem lies, there is not enough of a profit to go round and it is only a matter of time before something gives. It is indeed a strange world when gold production has become a liability.

What seems to go unnoticed is the fact that most of these companies have investment bankers advising them and one wonder's as to who was advising Homestake? Was it somebody friendly to Barrick? Letting an investment banker have access to your books is a bit like putting the bank robber in charge of the vault. It's them that are indirectly responsible for the gold market and the conditions that have created this dismal market.

Should there be a massive short position in terms of gold that has been borrowed from the Central Banks and sold into the market, well what better way to cover one's derriere, than to secure existing gold production by way of putting it under the nominal control of as few owners as possible. Lets go global and secure US, South African and Australian gold production just in case we need it may be the driving thought behind the "how do we get our gold back" question that at least one Central Banker has raised.

Market conditions such as what we are seeing can do strange things to the thinking of senior management and I am sure that they are clutching at straws at present. They appear to be just ripe enough for a modern day version of Henry Morgan the pirate, a well -dressed investment banker, to walk in the door and charge them exorbitant sums for "advice" about what to do. Without of course ever telling the poor old gold mining CEO what the real plan is here.

Any farmer knows that prior to sending the sheep to market, it is best that one puts the sheep in a pen first. And one pen is better that two, or three.

It will not be long before nearly all US gold production is under the control of three or four companies. That's a large chunk of world production with only a small portion of it US owned.

The real question is who is advising these companies and whoever they are, what if any is the size of their gold related derivative portfolios. One suspect's that mine production and mine reserves are being looked at for reasons other than to benefit shareholders. After all spiders do eat spiders.

Randy (@ The Tower) (7/3/01; 11:49:45MT - usagold.com msg#: 57379)
U.S. laissez-faire going into Saturday's G7 meeting
http://biz.yahoo.com/rf/010703/n03227027.html
According to Reuters:

---- ...the Bush administration has repeatedly said it does not favor tampering with the currency's value.
+
"The Bush administration has absolutely no intention of encouraging interest-rate policy in any country," a Treasury official quoted O'Neill as saying. "We intend to encourage economic growth at home and abroad, but how countries stimulate growth is their own business, not ours."-----

Make it YOUR business to protect yourself domestically from the Fed's easing monetary policy. You can't stop the press, but you can take steps to limit your exposure to potential currency devaluations.

Grab the helm and buy gold. Be the captain of your own fortune.

Centennial Precious Metals, Inc. / USAGOLD (7/3/01; 11:09:33MT - usagold.com msg#: 57378)
Hard assets... Easy access!
http://www.usagold.com/onlinestore/special.html

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Wednesday February 8
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