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ARCHIVED DISCUSSION FROM 5/3/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Black Blade (05/03/02; 23:27:40MT - usagold.com msg#: 74894)
Mailbox bomb letter text
http://www.cnn.com/2002/US/05/03/pipebomb.letter/index.html

Snippit:

WASHINGTON (CNN) -- The following is the wording of a letter found with a pipe bomb in a mailbox in Scott County, Iowa. It is not known if it matches letters connected to other mailbox pipe bombs:


Black Blade: Now there's another nutcase on the loose dropping pipe bombs into mailboxes. We still don't have the guy mailing Anthrax either. Quite a strange letter too.


Mr Gresham (05/03/02; 23:03:23MT - usagold.com msg#: 74893)
Golden Bear -- Thanks!
Damn! I'm gonna make the liberal side of me (what's left of it) write a check to help keep Ron Paul in office.

The Traveler (05/03/02; 22:48:12MT - usagold.com msg#: 74892)
The Ongoing Currency Wars

Just a few quick thoughts.

First consider the many legal precendents already in place.

Should America be in imminent danger of losing its reserve currency status and the "exhobitant privledge" that trades paper dollars for real goods made abroad (read: What? You want us to pay as we go?), do you not think your Uncle will go to ANY lenghths to defend the US$? Progressively trampling the rights of less than 1/10th of 1% of the electorate will be seen as a small price to pay for the vaunted American way of life? Think of this as a delaying tactic in the defeat to come.

Next, can you logically dismiss the above if you believe in the existance of the Plunge Protection Team or the Gold Cartel that GATA fights resolutely?

To confiscate Yahoo or any other high flying paper in the absensce of a national crisis is ludicrous. First it would effect to many of the electotorate and second - Who wants more paper? But all sellers paid taxes on their YAHOO gains.

Second, BUY all the physical gold your understanding permits. However, unless you are prepared to hold gold for generations, you also need to consider how you will eventually reap your NET rewards.

Time reveals all mysteries.

Best regards,

The Traveler







Golden Bear (05/03/02; 22:42:46MT - usagold.com msg#: 74891)
A must read for those who value liberty and justice!
http://educate-yourself.org/ronpaultruthfulness26apr02.html

Congressman Ron Paul's TV Gaffe
By Congressman Ron Paul - House of Representatives

�The other day,� I made a huge "gaffe" on national TV: I told the truth about the crimes of the U.S. government. As you can imagine, the ceiling fell in, and a couple of walls too. Congressman are supposed to support the government, I was� told. Oh, it's okay to criticize around the edges, but there are certain subjects a member of the House of Representatives is not supposed to bring up. But I touched the real "third-rail" of American politics, and the sparks sure flew.

�I was interviewed on C-SPAN's morning "Washington Journal," and I used the opportunity, as I do all such media appearances, to point out how many of our liberties have been stolen by the federal government. We must take them back. The Constitution, after all, has a very limited role for Washington, D.C.

�If we stuck to the Constitution as written, we would have: no federal meddling in our schools; no Federal Reserve; no U.S. membership in the UN; no gun control; and no foreign aid. We would have no welfare for big corporations, or the "poor"; no American troops in 100 foreign countries; no Nafta, Gatt, or "fast-track"; no arrogant federal judges usurping states rights; no attacks on private property; and no income tax. We could get rid of most of the cabinet departments, most of the agencies, and most of the budget. The government would be small, frugal, and limited.

That system is called liberty. It's what the Founding Fathers gave us. Under liberty, we built the greatest, freest, most prosperous, most decent country on earth. It's no coincidence that the monstrous growth of the federal government has been accompanied by a sickening decline in living standards and moral standards. The feds want us to be hamsters on a���� treadmill--working hard, all day long, to pay high taxes, but otherwise entirely docile and controlled. The huge, expensive, and out-of-control leviathan that we call the federal government wants to run every single aspect of our lives.

�Well, I'm sorry, but that's not America. It's not what the Founders gave us. It's not the country you believe in. It's not the� country I believe in. So, on that TV interview, I emphasized not only the attacks on our property, but also the decline of our civil liberties, at the hands of the federal police. There are not supposed to be any federal police, according to the Constitution.

Then I really went over the line. I talked about the Waco massacre. Bill Clinton and Janet Reno claim those 81 church members, including 19 children, burned down their own church and killed themselves, and good riddance. So they put few survivors on trial, and threw them in prison for 40 years.

We're not supposed to remember that the Bureau of Alcohol, Tobacco, and Firearms--talk about an unconstitutional agency--rather than arrest David Koresh on his regular morning jog, called in the TV stations for big publicity bonanza, and sent a swat team in black masks and black uniforms to break down his front door, guns blazing. They also sent in a helicopter gunship, to shoot at the roof of a church full of innocents.

The Branch Davidians resisted, and after a heartless siege of almost two months, and after cutting off food, water, and electricity, and playing horrible rock and roll through huge speakers 24 hours a day, the feds sent in the tanks to crush the walls of the church, and inject poisonous CS gas. Now, CS gas is banned under the Paris Convention on Chemical Warfare. The U.S. could not use it in a war. But it could and did use it against American civilians.

�After the tanks did their work on the church, the place burst into flame, and all 81 people--men, women, children, and babies - were incinerated in a screaming horror. Did some feds set the fire? Did the flammable CS gas ignite, since without electricity,� the parishioners were using lanterns? Did a tank knock over a lantern, striking one of the bales of hay being used against the� thin walls as a "defense" against bullets? Or did the Davidians, as Clinton and Reno claim, kill themselves?

�A new documentary- -Waco: The Rules of Engagement- may show, through FLIR infrared photography, FBI snipers killing the Davidians by shooting through the back of the church, where no media cameras were allowed. This film won a prize at the famed Sundance Film Festival. It was made by people who took the government's side, until they investigated.

Whatever the truth, there's no question that an irresponsible federal government has innocent blood on its hands, and not only from Waco. And the refusal of corrupt and perverse liberals to admit it means nothing.

�In my r~interview, in answer to a caller's question, I pointed out that Waco, and the federal murders at Ruby Ridge- especially the FBI sniper's shot that blasted apart the head of a young mother holding her baby- caused many Americans to live in fear of federal power. Then I uttered the sentiment that caused the media hysteria: I said that a lot of Americans fear that they too might be attacked by federal swat teams for exercising their constitutional rights, or merely for wanting to be left alone.

�Whoa! You've never seen anything like it. For days, in an all-out assault, I was attacked by Democrats, unions, big business, establishment Republicans, and- of course- the media, in Washington and my home state of Texas. Newspapers foamed at the mouth, calling me a "right-wing extremist." (Say, isn't that what George III called Thomas Jefferson?)

I was even blamed for the Oklahoma City bombing! And by the way, I don't believe we've gotten the full truth on that either. All my many opponents were outraged that a Congressman would criticize big government. "If you don't like Washington, resign!" said a typical big-city newspaper editorial.

But the media, as usual, were all wet. (Do they ever get anything right?) The average Congressman may go to Washington to wallow in power, and line his pockets with a big lobbying job for a special interest (so he can keep ripping-off the taxpayers). But that's not why I'm in Congress. It's not why I left my medical practice as a physician. It's not why I put up with all the abuse. It's not why I refuse a plush Congressional pension.

�I'm in this fight for a reason. I want to hand on to my children and grandchildren, and to you and your family, a great and free America, an America true to her Constitution, an America worthy of her history. I will not let the crooks and clowns and criminals have their way. I'm in Congress to represent the ideas of liberty, the ideas that you and I share, for the people of my district, for the people of Texas, for the people of America. That's why I'm working to stop federal abuses, and to cut the government: its taxes, its bureaucrats, its paramilitary police, its spending, its meddling overseas, and every single unconstitutional action it takes. And not with a pair of nail scissors, but with a hammer and chisel. Won't you help me do this work?

Not much of the federal leviathan would be left, if I had my way. But you'd be able to keep the money you earn, your privacy� would be secure, your dollar would be sound, your local school would be tops, and your kids wouldn't be sent off to some useless or vicious foreign war to fight for the UN. But Jefferson and the other Founders would recognize our government, and our descendants would bless us. By the way, when I say cut taxes, I don't mean fiddle with the code. I mean abolish the income tax and the IRS, and replace them with nothing.

�Recently, I asked a famous Republican committee chairman-who's always talking about getting rid of IRS- why he engineered a secret $580 million raise for the tax collectors. "They need it for their computers," this guy told me. So the IRS can't extract enough from us as it is! The National Taxpayers Union says I have the highest pro-taxpayer rating in Congressional history, that I am the top "Taxpayer's Best Friend." You know I won't play the Capitol Hill games with the Capitol Hill gang, denouncing the IRS while giving the Gestapo more of your money. Or figuring out some other federal tax for them to squeeze out of you. I also want to abolish the Federal Reserve, and send Alan Greenspan out to get a job.

�The value of our dollar and the level of our interest rates are not supposed to be manipulated by a few members of the power elite meeting secretly in a marble palace. The Federal Reserve is unconstitutional, pure and simple. The only Constitutional money is gold and silver, not notes redeemable in them. Not fed funny money. Without the Federal Reserve, our money could not be inflated at the behest of big government or big banks. Your income and savings would not lose their value. Just as important, we wouldn't have this endless string of booms and busts, recessions and depressions, with each bust getting worse. They aren't natural to the free market; they're caused by the schemers at the Fed. President Andrew Jackson called the 19th-century Fed "The Monster" because it was a vehicle for inflation and all sorts of special-interest corruption. Let me tell you, things haven't changed a bit. I also work to save our schools from D.C. interference. Thanks to the feds, new curriculums not only smear the Founders as "racist, slave-owning elitists," they seek to dumb down our students so they will all be equal. "Look-say" reading and the abolition of phonics has the same purpose, and so does the new "fuzzy" math, in which there are no right and no wrong answers. That must be what they use in the U.S. Treasury! It's certainly what they use in the U.S. Congress.

�But ever since the beginning of federal aid to education and accelerating with the establishment of the rotten Department of Education, SAT scores have been dropping. Schools, with few exceptions, are getting worse every year. To save our kids, we must get the sticky fingers of the feds off our local schools, and let parents rule. That's what the Constitution says, and the Bible too.

And then there's my least favorite topic, the UN. World government is obviously unconstitutional. It undermines our country's sovereignty in the worst way possible. That's why I want us out of the UN, and the UN itself taking a hike. After all, the UN is socialist and corrupt (many votes can be bought with a "blonde and a case of scotch," one UN ambassador once said). It costs many billions, and it puts our soldiers in UN uniforms under foreign commanders, and sends them off to unconstitutional, undeclared wars. When Michael New, one of the finest young men I've ever met, objected to wearing UN blue, he was kicked out of the American Army. What an outrage! Not one dime for the UN, and not one American soldier! Not in Haiti, not in Bosnia, not in Somalia, not in Rwanda. I know its radical, but how about devoting American military efforts to defending America, and only America?

Such ideas, said one newspaper reporter, make me a maverick who will never go far because he won't go along to get along. Darn right! What does "go far" mean? Get a big government job? To heck with that. And I won't sell my vote for pork either. When I walked through the U.S. Capitol this morning, I got angry. The building is filled with statues and painting of Jefferson, Madison, and the other Founders. Those great men sacrificed everything to give us a free country, and a Constitution to keep it that way. When I was first elected, I placed my hand on the Bible and swore an oath to uphold the Constitution. That's exactly what I'm fighting for. But such ideas drive the liberals crazy. That's why I badly need your help. I've been targeted nationally for defeat. The Democrats, the AFL-CIO, the teachers union, big business PACs, the trial lawyers, the big bankers, the foreign-aid lobbyists, the big media, and the establishment Republicans want to dance on my political grave. The Fed, the Education Department, and the UN are anxious to join in. They can't stand even one person telling the truth. And they're terrified when that truth gains the people's support.

Cavan Man (05/03/02; 22:20:19MT - usagold.com msg#: 74890)
Sierra Madre
Russia sell oil in Europe. Though the dollar settles the trade, a small amount of Euro in tandem completes the bargain.

PS: Charlemagne was overrated. In that age, Irish monaastics played a much more vital role in the evolution of the west. Cheers.....CM

Black Blade (05/03/02; 21:59:56MT - usagold.com msg#: 74889)
World energy crunch worsening
http://www.news24.com/News24/Technology/Science_Nature/0,1113,2-13-46_1176658,00.html

Snippit:

Detroit - As the world's appetite for energy grows, the challenge for all nations will be ensuring that supplies of oil and gas, and the infrastructure needed to transport these fuels, remain stable and secure, US Energy Secretary Spencer Abraham said.


Black Blade: It's already a done deal. Expect to see the energy crunch get worse with tightening supply.


Sierra Madre (05/03/02; 21:52:44MT - usagold.com msg#: 74888)
Miner49er: your post this morning No. 74821
About Mahathir: the man is ahead of all other Presidents and Premiers in the world, because he is at least TALKING about gold and silver. Trouble is, the world has been adrift for so long, the old system has been forgotten and no one living remembers exactly how it was set up. So he and his advisers are quite likely to make serious mistakes. Of course, the news reports are tantalizingly vague, and that doesn't help our speculations.

The image of that H G Wells film, I believe it was "The Shape of Things to Come" - ominous title!- comes to mind, where an insignificant despot clothed in fur wants to coerce a young "New Age" pilot who falls into his hands, into getting his old, broken down biplane into working condition. A most interesting film, quite apropos for the present times, by the way. From the 30's. Technology is part of a system, when the system evaporates, so does the technology. Thus, there is no return possible. We're "Outward Bound".

Once a system as complex as the international monetary system of yore has been destroyed, it appears to me that any reconstruction is out of the question. These things are the product of true "Evolution" and take centuries to build up. In politics, there is no such thing as "Reform" or "Return to Constitutional Government".

Destroying an ultra-complex system is like cutting down a giant Redwood. Once it's down, that's it. You no longer have a huge tree, you just have lumber. And you won't have another giant for centuries.

I think that the dollar will HAVE to persist for much longer than we visualize, because there is nothing else, at present. The Euro? Yes, but...what would a real, savage War in the Middle East do to Europe? No oil...kaput!

It is my feeling that the dollar is going to go down the tubes rather quickly, but, it will still be used. It has to be used. The system will be progressively weaker, with more and more patches and stitches, currency exchange controls(?) and other makeshifts. The downfall will be in relatively slow motion (fast in historical terms).

At the end of the road, nations will have to take stock of what to do, on their own. The master, USA, can no longer hold the fort. (The Legions are called back to Rome). Utter chaos will prevail. International trade will stagnate, and
finally, there will be no more beating about the bush. You have gold, you buy our goods. No gold, no goods. Very simple. Or "vely simple".

At that point, the hundred and some odd fiat currencies of the world will compete in devaluations, and some currencies will devalue far more than others, until a new relative status emerges. The more productive nations devalue less, the less productive devalue more.

The way things will turn out will seem obviously necessary when we get to see them happen. Think "simple"! Think "stupid"!

Sorry I can't address the much deeper thinking contained in your interesting post; I must confess it is over my head most of the time. (I'm slow on the uptake).

Some anecdotal comments:

Visiting Houston these days. Commerce SEEMS very slow - is it just me? Tax base on my Texas home went up from $76,000 to $141,000. Hmmmm....it's not going to kill me, but what about the neighbors? Losses on the S.M. or no gains, and taxes go way up? "In a word, GRIM". I've heard that somewhere before...

And lastly: I read where Charlemagne (crowned Emperor of the Holy Roman Empire at Christmas, A.D.800) carried out the most important monetary reform in the history of Europe. Let's see, that was 1,200 years ago, and we haven't seen his like again, yet. Things are not going to be fixed up any time soon.

Maybe we should begin to think seriously about: IN GOD WE TRUST.

Thanks to all for patience in reading.

Sierra

Black Blade (05/03/02; 21:37:09MT - usagold.com msg#: 74887)
Ruling Could Delay Wyo. Gas Exploration
http://www.washingtonpost.com/wp-dyn/articles/A11959-2002Apr30.html

Snippit:

Oil and gas interests are reviewing an Interior Department administrative ruling that could potentially delay President Bush's plan to expand coal-bed methane gas exploration on 4 million acres of Wyoming's Powder River Basin before they decide on what steps, if any, they can take. Environmentalists say they believe Friday's ruling sets a precedent that could be applied if they decide to sue to invalidate the current gas leases. "That could throw this whole project off by years if all the leases have to be redone," said Tom Darin, attorney with the Wyoming Outdoor Council.


Black Blade: One more step toward the next energy crisis.


Cavan Man (05/03/02; 21:20:49MT - usagold.com msg#: 74886)
Hey PH....
Great point! However, I personally think confiscation is likely; at some point anyway. What's different today vs the post London Gold Pool gang is the gold market is really screwed up badly with derivatives. Further, let's not forget about the IRD's. What a mess. Caution my friend.

Your old nemesis....CM

TownCrier (05/03/02; 20:40:06MT - usagold.com msg#: 74885)
Vision and position...
http://www.usagold.com/gildedopinion/Cockerill.html
Sometimes' times those who see farther find themselves eventually at the helm for their vision, and sometimes those at the helm see farther due to the benefits of position. And, of course, one does not end where the other begins.

With that, if may prove useful to have a look at these recent comments by new Gold Fields CEO Ian Cockerill. (see link above) (Forgive the small graphs. They are as good as I had to work with, but they are better than the text-only format I've had provided here since Wednesday. --Randy)

Excerpts:
--------
Today I want to talk about a few of the myths about the gold industry, but in the process I would like to give you my perspective of reality as I see it in the business today.

...During March 2001 there was a turning point in the price of gold. What you see from here on out is a gold price coincidently testing new highs and concomitantly creating higher lows.

We are seeing a new trading channel, with a general upwards trend, developing. In my opinion, this is a systemic response to the increasing risk profile of the world. Over this period we have seen an upsurge in interest in gold from retail investors, especially in Japan and Germany as well as institutional investors world-wide.

...If we are living in an era of renewed interest in gold as a reserve asset and, if new mine supply and reserves are indeed going to decline as rapidly as I am presenting to you, where are we going to get the gold from?

At Gold Fields we track approximately 90% of all gold hedge books around the world on an ongoing basis. Let me give you an insight into some of the conclusions that we have reached:

** With currency movements over the past 6 to 12 months, and at the current gold price and exchange rates, a significant proportion of global hedge books are under water for the next few years;

** At a gold price of US$312 per ounce and at current exchange rates, the non-US gold book goes underwater. This is exacerbated for some producers by currency hedges that are also under water;

** Ironically, at higher gold prices some balance sheets start to deteriorate rapidly, owing to the marked to market values of their hedge books. You might argue that being "margin-free" ameliorates the situation; then again, the Bankers may not.

What this demonstrates is that there is no free lunch. The hedging of previous years is now coming home to roost and companies who have pawned the family gold, may have to face serious challenges and tough questions from shareholders.

But it is not only the hedged producers who are facing the music. At levels above US$312 gold price, the entire hedging food chain is at risk, including the bullion banks.

I think it is fair to say that, in this scenario one should not expect any Bullion Bank or Central Bank to extend to a producer with a hedge-impaired balance sheet, the luxury of even more hedges. One knows that the hedging game is over when the Bullion Banks start to get out of the business, as we have seen recently.

.....If everything that I have said today turns out to be reality rather than myth, then the Gold Industry has a very interesting time ahead of it.

...Ladies and Gentlemen, I believe that the gold market is about to experience a renaissance. As an industry we should join together to promote to investors, consumers and central banks alike, a compelling case for gold.
---------

Very good stuff! Be sure to read it all.

R.

mikal (05/03/02; 20:38:12MT - usagold.com msg#: 74884)
Protect yourself!
Ya wanna a collectible? I'll git ya one, make that more din one. Consider protectin yer cash with dis: USofA State quarters slabbed er raw, yer chouse. Proof Silver Eagles, certified MS-69, PCGS er NGC, yer chouse a slab. And my famleez favorit: Colorized coinz like ya ain't never seen!

Black Blade (05/03/02; 20:37:13MT - usagold.com msg#: 74883)
A Crumbling Earnings Foundation
http://www.comstockfunds.com/index.cfm?act=Newsletter.cfm&CFID=1041646&CFTOKEN=45159887&category=Comstock%20Daily%20Comment&newsletterid=714&menugroup=Home&aol=1

Snippit:

Investors are slowly beginning to realize that the outlook for corporate earnings cannot come close to supporting excessive market valuations. Although March factory orders rose 0.4%, the key nondefence capital goods ex-aircraft number dropped 3.6%, indicating no rebound in corporate capital spending. Initial unemployment claims fell 10,000 to 418,000, although the prior week's claims were revised upward by 7,000. Since the recent distortions created by the extension of benefits have now worked their way through the system, the plus 400,000 figure remains quite high. Anything over 400,00 usually indicates a declining economy. In addition continuing claims continued to rise while the April Challenger report showed a renewed rise in layoff announcements after a few months of decline.


Black Blade: As one who is on the "Bone Pile" � "I fear no evil" � As I have prepared for the worst and am quite comfy. I have a good supply of nonperishable food and will be doing a lot of fishing in some high mountain lakes and streams before long. While the exposed leeches suffer under these conditions, I look at it as a vacation. I have my PM holdings regardless of what happens to the economy, I am completely out of debt, I have cash on hand, etc. I see that I now have a lot of company coming down the road as unemployment rises, and it will get much worse. I would imagine that those who are prepared such as myself are not worried, while those who are unprepared are living in fear are the pink slips are spread about the offices and the manufacturing floors. I know � it's Darwinian � but that's life. The only person you can count on is you. Prepare for the worst and hope for the best.




sector (05/03/02; 20:24:45MT - usagold.com msg#: 74882)
Who are the Fed?
Judge them by their acts.

In July, 1994 Warren Christopher [Executive Branch SECSTATE] gave Alan Greenspan a letter that authorized him to take two board seats on the Bank of International Settlements [A private corporation]. No other person in US government is allowed to hold such a board seat, let alone make interest rate policy that benefits the private BIS...a flat conflict of interest. The BIS controls vast amounts of gold. The Executive Branch cannot grant to itself powers not granted to it by the Constitution.

A scheme to manipulate gold ensued. It was designed to inflate multiple bubbles and ultimately dollarize the world. In June, 1996 an orgy of US reserves gold selling broke the back of the world gold market, thus smashing the economies of Sub-Saharan Africa. Numerous gold carry trades developed profiting many Wall Street banks who are the United States Federal Reserve system.

All the Fed board members knew this...they all approved it by their continued service. They knew the effect on third world nations, they knew there would be collateral damage to real, human victims. Clinton's "I feel your pain" speech from the gangway of his Boeing 747 ranks as supreme hypocrisy...HE drove home the blade of economic ruin in Johannesburg.

The United States Federal Reserve system took, under the leadership of Alan Greenspan, a course of action they knew to be immoral. They decided that the US could not grow in a free market system...that the US could no longer compete on the world economic stage without a rigged system. They did not ask congress, industry or anyone else.

The academic basis for this ideology of corruption was written by Lawrence Summers in 1988 and published in the Journal of Political Economy [Gibson's Paradox and the Gold Standard]. Robert Rubin front ran the needed interference to fully implement GoldGate.

The massive interest rate derivative book held by JPM was given birth within days of the June 1996 COMEX gold selling orgy...from near zero to a peak of $20 Trillion dollars. Now drastically cut to $16 Trillion presumably in fear of the coming gold rise "disaster".

Incredibly, the entire edifice of the mid and late 90s US economic boom was constructed on the premise of a manipulated gold price. All of it. The tech bubble, the real estate and especially credit bubbles. Many analysts have stopped short of the truth preferring to be impressed by the sheer size of the various financial "structures".

The COMEX gold market rigging had almost nothing to do with trading commodities and its piddling profits. It was "THE ECONOMY STUPID" on steroids.

Now, after the bubbles have started bursting we see deficits because tax receipts were bloated by the false bubbles. We see the beginnings of a true disaster...a failed scheme...a mutated monster gone wide beyond all control.

Alan Greenspan is by inspection an analytical. Their worst fears are to be criticized and they will do anything to avoid loss of face. Destroying the world's number 1 economy is loss of face so we can be absolutely positive he will have to be removed from office and will NEVER admit failure. Lawrence Lindsay is close to the President but he too has economic blood on his hands since he was a FOMC member at the critical junctures of GoldGate. We may not get distress help from him.

So the economic train wreck approaches. The Fed is low on gold to sell and is obviously managing a retrenchment tactic�.first to $310 [As we have just seen]...then to $325, then $350 and on up.

That's their game. The problem is that the spec world knows it and is marshalling all its resources to smash the FED and its cabal. When all their physical has been used up their will be no ceiling to the dollar price of gold.

When judging what the government may or may not do...keep history in mind.





Black Blade (05/03/02; 20:22:34MT - usagold.com msg#: 74881)
Slouching dollar, shining gold
http://money.cnn.com/2002/05/02/markets/dollar_gold/index.htm


The weakening U.S. currency, rising precious metals reflect investors' worries.

Snippit:

NEW YORK (CNN/Money) - The mighty have stumbled and the meek have inherited the Earth. Something like that happened this week in the $1.5-trillion-a-day currency market, which hammered the U.S. dollar, one of the most-clamored for assets over the years. Gold, that perennial cellar-dweller, rose to a new two-year high. Growing concern about the health of the U.S. economy relative to its overseas counterparts has hurt the dollar, which is down about 6 percent against the yen and euro this year. And two years of sinking stock prices have driven investors into tangible assets considered safe havens, like gold.

"I think what has changed is the market's outlook for the U.S. economy," said Alex Beuzelin, chief market analyst at Ruesch International. "The market is now unsure of the economy's ability to sustain its growth rate beyond the first quarter of the year."

A weaker currency brings pros and cons. It helps companies dependent on exports become more competitive since they can sell goods more cheaply in international markets. In addition, a weak dollar boosts overseas profits when those same companies convert sales abroad into U.S. currency. That's also the case for investors buying international stocks. A soft dollar boosts those returns. And strengthening overseas currencies could draw bargain-seeking tourists to U.S. shores.

But for an import-hungry country like the United States, the weak dollar makes imported goods more expensive, raising inflation. That, in turn, could suffocate the fragile economic recovery that the Federal Reserve, the nation's central bank, is trying to engineer.

Treasury Secretary Paul O'Neill inadvertently waded into the currency market this week. In remarks to Congress Wednesday, he said the Treasury Department's official support for a strong dollar has not changed. But he also signaled doubts about the effectiveness of government moves to support the currency, suggesting the United States won't try to stop the dollar's recent slide by stepping into international currency markets to buy dollars. Such moves are always risky because government purchases can be ineffective given the huge amounts of currencies traded daily by banks, insurers, companies and other institutions.

As for gold, it touched $312 an ounce this week, the highest since February, 2000. The gains come as investors seek alternatives to stocks. The Standard & Poor's index of 500 largest companies is down about 6 percent this year following two annual losses as Corporate America suffers its worst profit slump in more than 30 years.



Black Blade: The need to hold Gold is ever more important as the USD falls precipitously. It will deteriorate further as the next energy crisis looms on the horizon. The state of California is toying with yet another fuel standard that will raise the costs of energy. Rising energy costs drop straight to the bottom line. Look for a new energy crisis late this year to late spring of next year and energy supply is consumed with little replenishment of reserves. As always, get out of debt, get enough cash on hand for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities program. Best be prepared that to leech off of others should disaster (economic or natural) hit home. We insure for all manner of calamity and yet there are those foolish people who argue that we should be exposed to other dangers. Prepare for the worst and hope for the best. There is no downside to being prepared.


YGM (05/03/02; 19:34:30MT - usagold.com msg#: 74880)
The Term "Chicken Little".........
Wasn't that phrase coined.......

by a Wall St Anal-yst a few months before the crash of 29?

Seriously tho as the historical malfunctions of humankind do and will repeat themselves in one form or another thru the ages, they definately will increase in intensity and severity, primarily due to over population and dependancy on modernization of basic living needs....One only has to watch the fools on the "Survivor" series to see how patheticaly helpless a few adults are when deprived of basics for a mere 39 days. With knives, pots, shelter, fire
and a tropical island & sea they cannot even fashion wooden hooks, bamboo fish/crab/shrip traps or dig a pit to trap that fat wild pig. Makes me embarrassed to watch the fools.

Well folks the cities are full of millions of such helpless fools....The sky isn't gonna fall, but people are when times get bad enough....And the dirty 30's won't hold a candle to what we'll get next time....WW 2 was won with a nuke but we've not seen a war fought with them....You don't have to be a fatalist to want to speak out or to be one of God's 'Watchmen'.....There are many such Watchmen out there even tho they themselves may not realize it.....YGM.

R Powell (05/03/02; 19:12:35MT - usagold.com msg#: 74879)
Comparisons
I've often heard of the value of one ounce of gold being roughly equal to the cost of a good suit.
Being extra partial toward the poor man's gold I sometimes look for comparisons to the value of one ounce of the white metal.
Today's close,
July silver 461.50
July soybeans 461.25
One ounce silver will buy one bushel of beans with one-quarter of a penny in change. I don't know why I find this interesting but there may be some future value in such trivia.?
Besides, I had to say something before wishing everyone- Happy Weekend!!
Rich

Au-some (05/03/02; 18:56:28MT - usagold.com msg#: 74878)
Re: Gold Confiscation
I'm all for it. When things get bad enough and the price of gold gets high enough, I say we all march on Ft. Knox and confiscate the governments gold.
What? You think I'm kidding?

Rock (05/03/02; 18:35:04MT - usagold.com msg#: 74877)
Graefin
"Leave a trail which no one can follow and blend in with everyone else." Good advise Graefin.


Rock (05/03/02; 18:10:11MT - usagold.com msg#: 74876)
Hoosier Goldbug
Don't be alarmed my friend, thats why its important to consider those pre-1933 euro gold coins that USA Gold has and like MK said the premiums are as cheap as that of American bullion. As for me I have disversified my gold portfolio having some of each, a little American bullion and some pre-1933 French Roosters and Swiss Helvitas.

The fact is no one really knows what to expect from our government in times of a monetary crises but if and thats a big IF they were to pull that same stunt as they did in 1933 and decide to confiscate gold at least you would be protected by having some of those pre-1933 coins which would give you a valid argument to keep your gold as anything deemed rare or religous was exempt from confiscation.

Even knowing that the confiscation word is something I dont like to hear that didn't stop me from obtaining gold. If worst comes to worst the gov't buys it back from you anyway so you didnt lose anything but in effect your much better off knowing you have gold to protect yourself and your family and you have a hertiage to pass on to your children in these volitile times we live.

So don't be discouraged and sit on the side line and let a great opportunity pass you by. This train won't be stopping here again so get on and enjoy the ride while the fares are affordable. Nobody and I mean nobody knows what the gov't may or may not do but one thing we know here at the round table, get yourself some gold and you'll be glad you did. Cheers, even with all of America's faults we still live in the greatest country on the face of the earth.

Sir Rock

PH in LA (05/03/02; 18:07:44MT - usagold.com msg#: 74875)
Is the sky really falling?
If we are to believe the "Chicken Littles" of this forum who run around crying "The sky is falling... keep a few month's worth of cash laying around, and plenty of canned food, etc in case everything goes to pot..." all our precious gold will soon be confiscated and/or taxed.

This is pure ego-centric logic at work. Let me re-phrase their positions:

"The main purpose of government is to take everything away from us small (but honest) folks. The small honest citizens must eventually lose everything and the easiest for all concerned is for the government to take it from them... if not by outright confiscation then by 70% tax rates."

But why then did the government not "call in" all the stock certificates during the tech bull market? I didn't see them going house to house calling "Turn in your Yahoo!" when it was at $250. No 70% taxes on profits either. Windfall or not!

Why is it that everything must be painted in such negative terms?

Gauntlet-Runner2("GR2") (05/03/02; 17:53:06MT - usagold.com msg#: 74874)
Hoosier Goldbug
The Traveler is right about the big brother "cameras on every corner" future we face. Trust in the outback where in Revelations it says, "the woman flees into the wilderness where she has a place prepared for 3 1/2 years from the face of the beast." It has the speed of the leopard and the teeth of iron with claws of brass.
Buy more gold not less because by HIS grace you can use it to survive! At about the same time the beast goes hard after the free the sun heats up and as the polar ice caps melt and Greenlund becomes farmlund the Mississippi delta is looking like the gulf it ran into. Manhattan becomes Venice. And every oceanfront city on every coastline on earth is like 10-20 feet underwater. So the picture of the boat is important.


So when they talk of gold confiscation, that is elementary and "assumed", all goldbugs who know their history have read about how safety deposit boxes in 1933 had tags put on them, "To be opened only in the presence of a government inspector."

Buy it, hide it, wear it, tell it to your closest kin, but don't expect to be popular with it when hyperinflation hits. The best thing you can do is to get your relatives into gold so they don't end up moving in with you.

USAGOLD (05/03/02; 17:37:10MT - usagold.com msg#: 74873)
Hoosier. . .
Pls read my post below and contact jill@usagold.com for a copy of the report. It's not as bad as you think. It is better to understand the dangers of avalanche and make the proper adjustments in one's plans, than to ignore the dangers and find yourself totally buried. . . . . .

USAGOLD (05/03/02; 17:33:29MT - usagold.com msg#: 74872)
Addendum. . .
I should have added to my post below that there is a misconception among investors that pre-1933 gold coins carry very large premiums over their gold content. That is simply not the case. Please call either George, Marie or myself to discuss the details. Most are pleasantly surprised at how close these items trade to the gold price. Also, they follow the gold price up and down just like bullion coins.

P.S. Sorry for the spelling errors below.

HOOSIER GOLDBUG (05/03/02; 17:28:17MT - usagold.com msg#: 74871)
CONFISCATION!
Traveler, if your thesis (confiscation, taxation, property rights trampled, etc.)is any way on the correct path it will go after the dollar burn, WHY should we continue to purchase GOLD coins from our most respected Mr. Kosares at CENTENNIAL PRECIOUS METALS????????????????
From my interpretation of the archives of ANOTHER and FOA, your position on the matter is in direct contrast to theirs!
What information are you privy to that substantiates your claims/predictions. I shall discontinue my purchases of GOLD coins until this matter can be resolved. THANKS in advance! d.j.p.-HOOSIER GOLDBUG.

USAGOLD (05/03/02; 17:21:35MT - usagold.com msg#: 74870)
Nickel 62. . . .Your 74829
It is interesting to see the light go on in individual's the way it did for me some time ago. Quite a jolt once the realization sinks in that gold ownership in the United States is a privilege not a right. For a real revelation read "From Constitutional Republic to Corporate State: The Federal Reserve Board, 1931-1934" by Dr. Walker F. Todd (1995) as excerpted in "How You Can Survive a Potential Gold Confiscation" by myself and George R. Cooper. In that inclusion as an Appendix to the report, Dr. Todd tells the chilling story of a confrontation between Senator Glass (of Glass-Steagall fame) and Franklin Roosevelt the night before Roosevelt's inauguration.

Senator Glass confronted Roosevelt on his plan to close the banks virtually as his first act as president telling him he didn't have the authority. Roosevelt replied that he intended to get the authority which he promptly did for that and other eggregious acts: On March 3rd, 1933 Roosevelt closed the banks. On March 8, 1933 he requested from the banks a list of all persons who had withdrawn gold or gold certificates from the banking system. On April 5, 1933, citing a "national emergency" (which Glass considered preposterous and Hoover likened to the Nazis setting fire to the Reichstag in order to usher in Hitler's "emergency" rule blaming the fire on the Communists), Roosevelt confiscated Americans' gold. On December 28, 1933 Roosevelt issued an additional Executive Order exempting gold coins minted 1933 or earlier from confiscation as collector items. Anyone who thinks that the precedent does not exist for another confiscation or that the U.S. government under pressing circumstances would somehow by-pass that temptation doesn't completely understand the reasons for confiscation in the first place.

Repeatedly, in the documentation you see justifications like "to protect the currency system of the United States," "private hoarding. . .poses a grave threat to peace, equal justice," etc. In the first confiscation executive order, Roosevelt has the temerity to refer to Americans as "subjects of the United States." Comtemptible as it is, we must understand that governments will do what it takes to survive, Argentina being the most recent example -- and that to me is the real lesson of the "Tears of Argentina." It is also apparent that the gold confiscation did not occur so that the government would end up with some sort of windfall. The gold confiscation occurred so that the government could open the field to pursue its monetary policies without worrying that the population would head for gold in protest and in order to protect itself. How can anyone who comes to these essential understandings say that it wouldn't happen again?

Once again, the key is pre-1933 gold coin ownership. As the study shows, these items traded freely in the United States between the confiscation in 1933 and re-legalization in 1975 We believe they provide the best chance for you to come-in under the radar because precedent gives them special standing. As a small and out of the way market, they were not a threat to government plans in 1933. They will not be threat in the future. We continue to believe that they provide the best chance for investors to hold on to their gold even if we have a repeat of 1933. Note, we say "best chance" not gaurantee.

As renowned currency expert, Dr. Franz Pick said many years ago "It is an idiosyncrasy of governments that although they may prohibit ownership of gold in any form, they are reluctant to touch collections of numismatic gold coins. Today (in the early 1970s), there are some 49 counties which forbid ownership of gold by their citizens, but do allow holding gold coins for numismatic purposes." By precedent, "numismatic" has become synonomous with coins dated 1933 or earlier, as Mr. Cooper goes to great lengths to show in "How You Can Survive a Potential Gold Confiscation."

To receive the document in full in pdf form, e-mail

jill@usagold.com

and we will forward it to you free of charge.

The monograph includes an update of Henry Mark Holzer's "Chronology of Documents Relating to Gold Confiscation" by George R. Cooper, JD. Henry Mark Holzer was Ayn Rand's attorney.



Gauntlet-Runner2("GR2") (05/03/02; 17:17:45MT - usagold.com msg#: 74869)
Russian soldiers leave gold behind.
http://www.bluesapphires.net/ladies/mc1593.shtml
I like the contrast between the blue and the gold.

But when it's all said and done,

"Mail picture of boat" still comes to mind.

And,

"Sorry honey I spent all our money on physical gold, so we can't have any kids" because I can't sell it with the premiums that it cost me to get it. I'm feeling blue.-GR2

Graefin (05/03/02; 17:07:19MT - usagold.com msg#: 74868)
Rock...it's story time...
A few years back I was employed in a money-handling position. After a criminal investigation regarding the embezzlement of hundreds of thousands of dollars, my employer put new safegards in place, however, those safegards must be logical. As always, I tucked my deposit cash into a regular envelope and marched over to the cashier's office, but after the review of money-handling, my direct supervisor wanted me to use a brown zippered bag with a lock on it. Good god! I remember telling her, "Why don't you just put a siren and red light on my head as I walk with the cash??"
The moral of the story?
I continued to take my cash deposits over in plain envelopes, but varied my routes each time I left. Leave a trail which no one can follow and blend in with everyone else.

Peace!
- Gr�fin

Rock (05/03/02; 16:41:04MT - usagold.com msg#: 74867)
The Traveler
That was a very mind provoking thesis my friend, thank you for your time. I have a quick question for any of you brilliant knights or ladies of the round table. From time to time I have heard at the table that safe deposit boxes may not be a safe place to store our gold in these times where the gov't can inspect and even confiscate our gold should we go to withdraw it during a financial meltdown of sorts. I would assume that many of us has at least some of our gold in those safe deposit boxes.

Do any of you recommed storing all of it at our homes using construction concealment, burying at the farm and so forth. As far as I'm concerned I have a sophisticated alarm system, a huge watch dog, a few high powered weapons and so forth yet I still don't believe in storing the whole enchilatta (which really isnt that much in the first place) all at the ranch. Any suggestions would be appreciated.

And I'll concur with Black blade, store some extra non-perishables at the house and some extra bucks for a few months you never know if and when public services could be shut down for one reason or another. Take care and thanks for everything.

Sir Rock

Graefin (05/03/02; 16:21:04MT - usagold.com msg#: 74866)
Latest from Arch Crawford...5/1/2000
http://www.traders-talk.com/site/show_article.asp?id=498
Crawford Perspectives 5/1/2
by Arch Crawford

"The planetary aspects affecting GOLD/Oil tonight are the following:

Jupiter quincunx (150 degrees) to Neptune 9:45pmEDT and
Sun square (90 degrees) Neptune 8:11amEDT

GOLD opens at 8:20amEDT

We believe that a near-term TOP is forming, and may already be in place.
If the aspect power maximizes on Wed. OPEN, there may yet be another POP to new highs for the move by then. The Timing is much better/closer in Gold than in stocks, which may show strongest price moves or tops/bottoms +/- 1-3 days. GOLD often makes the turn within Minutes of the aspects!

In any case, we expect some reasonable consolidation against an overbought condition.

We are selling a portion of positions this afternoon, and will Sell More on Wed. OPEN!

For short term trades, we will actually take new SHORT positions.

For anything longer, we will hold Core Positions in Gold & Gold Stocks, for much higher prices later.

We will attempt to Cover Shorts and reposition long side at undetermined future lows."

Arch Crawford
Crawford Perspectives

<Interesting!>
- Gr�fin


YGM (05/03/02; 15:16:16MT - usagold.com msg#: 74865)
A "Must Read"......Thom Calandra...'The Bull' in 'Bull-ion'
http://www.marketwatch.com/news/story.asp?print=1&guid={C8028807-6DC1-48BB-B233-4375B05E226D}
BTW...When I used the Central Fund as a point of interest for Silver ownership awhile back? Well was I ever behind the times. They now hold over 8,000,000 oz of AG....

Read on......Thom's best yet.....

TownCrier (05/03/02; 14:25:08MT - usagold.com msg#: 74864)
The latest personal look at the men behind the big desks
http://www.usagold.com/centralbank/current.html
Some excerpts from updated commentary courtesy of our friends at Central Banking Publications Ltd.
--------

ALL CYLINDERS MAY SOON BE FIRING AT THE FED
The two unmanned seats on the Federal Reserve Board of Governors look like they might finally be catapulted back into action, so that the board could be firing on all seven cylinders before long. The empty seats have been languishing uncomfortably in the background while the board has been working overtime with just five members participating. But it is widely reported that President Bush has now singled out two possible candidates for the board: Princeton economist Ben Bernanke and Federal Reserve official Donald Kohn. ...(more)

GERASHCHENKO'S NEW CALLING
Viktor Gerashchenko, may no longer run the Russian central bank, but he still knows how to grab the headlines. With his usual dry wit, he has been poking fun at the snail-like Russian bureaucracy - of which he was once a part - complaining that they were fumbling over his pension application. The press loved it: "If I don't manage to get the pension bonus awarded to former state employees I'll have to work." He said that he was toying with the idea of becoming a road sweeper, and that at least in that way he could realise his childhood dream of keeping Moscow's streets clean - which is more than he did, some say, for Russia's banks.

AND THEN THERE WERE EIGHT
The old-style council of the Bundesbank has undergone sweeping changes as part of changes bringing the bank in line with the new era of the European single currency.... Ernst Welteke - who will remain the president of the bank - in London recently drew on all his years of experience in answering yet another tedious question on the correct euro/dollar exchange rate. It seems that beneath the tough Teutonic exterior there lies a soft and rather muddled man. "I've seen so many exchange rates in my life I don't know what the right one is!" Now that's what Central Banking calls transparency.

HAYAMI DOESN'T SUFFER FOOLS
Masaru Hayami, governor of the Bank of Japan, does not suffer fools gladly. Some reporters, apparently ignorant of the ways of central bankers, thought they might elicit an insightful answer when they asked him whether the market rumours that he may step down before the end of his five-year term were true. "Don't ask such stupid questions" he retorted. Reporters should do their homework before asking central bank governors questions.

(click URL for more)

Cavan Man (05/03/02; 14:21:39MT - usagold.com msg#: 74863)
The Traveler
Thank goodness for dual citizenship.

GoldnSilver2002 (05/03/02; 14:06:02MT - usagold.com msg#: 74862)
People always ask for a date.
If one looks closely at the 1 year chart for Gold,one sees the cabals fingerprints on every rush.As it accelerates upwards suddenly it is pushed down.But lately Gold has responded to every plunge as one last oppurtunity to get some at artificially low prices.Instead of hating the cabal'some of us must toast them.Firstly they allow the average joe to buy in at prices they can actually afford.Secondly,their folly has helped bring about some of the influences which will ultimatley send gold much furthur than if it had been left alone all these years.We always see the day "it" began in retrospect.In my opinion,if one looks closely one can see it has begun.The media wont tell us until wisely they proclaim "we knew it all along",pretending to have warned a clueless public."gold whats Gold?",many will proclaim.

Clearly Gold is starting to Hammer on the castle doors,the support beams are starting to snap,and some of the foot soldiers(shorts,hedgers) are starting to abandon their positions and run to the hills.All we need now is something to happen to the us economy,that "no one foresaw".Enron was the iceberg?Sept 11 was the end of war on terror? The media is telling us the truth?Dont ask for a date,if anyone knew that the twin towers might still be standing,but they arent are they.Gold to the moon?Your damn rights it is and soon!!

ax (05/03/02; 13:30:49MT - usagold.com msg#: 74861)
USD AX INDEX BREAKS BELOW 99.70MG !

AT THE CLOSE OF GOLD TRADING TODAY IN NEW YORK THE

US DOLLAR AS MEASURED BY THE AX INDEX DROPPED TO

99.69 MG (MILLIGRAMS) OF GOLD

Boilermaker (05/03/02; 13:12:29MT - usagold.com msg#: 74860)
The SM
It looks like the PPT had to get into the market about 10:00AM today to kill a rout. Can any one tell me if this one-sided game can be played long term without risk? It seems there should be a lot of negative paper out there ready to implode. How/when does this happen? Who gets run over?



The Traveler (05/03/02; 13:01:52MT - usagold.com msg#: 74859)
@Nickel62 (#74829)
Do not doubt that your "property rights" will be trampled in the crisis to come.

Since my first visit here three years ago, it has been my constant theme that socio -political pressures will determine your financial survival in the post � dollar world. If all paper burns and the debt supported real estate market collapses (no lenders thus no buyers), how likely is it that the masses ** many of whom have lost their home equity, 401(K) and/or jobs** will demand of Washington a quick fix at any expense! People go berserk now over a 10-cent increase in a gallon of gasoline or a $1 ATM charge. Ponder the social unrest in Argentina � and they have been through this twice in the last two decades. By contrast, Americans are currency crisis virgins!

Remember � less than 1 in 1,000 Americans own any gold coins or bullion and less than 1% of them hold coins or bullion in quantity. Do you not believe their jealous cry will be "Its not fair!" or the campaign slogan will be "To get America rolling again, lets redistribute the PGA's windfall." Your Uncle did it to the oil industry in the late 1970's.

The Fed currently punishes savers with a negative real return to the benefit of debtors. Will not your Uncle also favor the electorate over the PGA in the crisis to come? Bet big on it!

Outright confiscation? Not likely as your Uncle cannot stand behind the legal tender laws as he did in the 1930's. Besides, its simpler just to tax you at a 70% non-capital gains rate. For the youngsters here, 70% was the top marginal rate of the tax code prior to Ronald Reagan's 1981 election.

With the "money laundering" reporting that your PM dealer will soon be required to do � which might now cover numismatic coins and possibly impose a withholding rate to be tendered to the IRS along with his report on your transaction � your windfall will be exposed for your Uncle to tax. Direct barter transactions can easily be taxed as well by incentives to report.

Even if you are lucky enough to have gotten or to get your physical to the EU, reporting requirements there will still tell your Uncle that you had a windfall and thus owe taxes.

Only if the unraveling of three decades of financial experimentation becomes very harrowing will gold be confiscated outright at a "fair" price (smile). Then a two-currency regime will be decreed by executive order - one as a domestic peso-like fiat and the other an international, gold backed currency that Americans will not be permitted to hold even in overseas accounts (SSN and passport numbers will betray you). We will still need to import five million barrels of oil per day despite harsh conservation measures and the producers will want to be paid in something of value. But this too will flop as having twice been burned, the Euro with all its warts will be favored as the new reserve currency by Central Banks whose trade is in a net surplus.

In summary, the welfare establishment hates gold and PGAs and will do all in its power to punish them for their self-sufficiency.

Best regards to all,

The Traveler



And�ril (05/03/02; 12:35:58MT - usagold.com msg#: 74858)
Clearing the message for RobotGuy
Sorry, not YOU the individual, personally. Use of word 'you' was to be understood as general references, equal to 'citizen' or 'saver' playing dangerously with dollar accounts.

Healthy and happy with gold is better.

da2g (05/03/02; 12:31:42MT - usagold.com msg#: 74857)
What economic recovery?
Seems like the preferred footware provider to da2g, Florsheim, is unfortunately going out of business. I was able to procure several pairs of Florshiem Imperial Wingtips at a hefty 58% discount, however.

More bones to Black Blades bone pile. Where does it all end?

RobotGuy (05/03/02; 12:25:07MT - usagold.com msg#: 74856)
Anduril
My apologies, I regret to inform you that I am not aware of the entire meaning of your message. I was implying in my previous post that it is very unwise for a nation's government to continue with ineffective and possibly harmful counter measures to prop up a hollow economy. Do I "think I can go toe to toe with the FED?" ? Not sure exactly what is meant by this question. Perhaps I have misinterpreted your intended message, but it seems apparent there are insinuating undertones in your message. I apologise if I have offended you in any way, perhaps it will be wise of me to not participate in this forum, but merely observe.


RobotGuy.

YGM (05/03/02; 11:54:07MT - usagold.com msg#: 74855)
Gold Hedgers, Silver Miners, Bubble Money
When the Writing's on The Wall.......
Bullion moves approx 5 $, ABX & PDG move 2% or less. Two known Silver miners PAAS & Apex move 9+% and 2+% with silver up $0.06....To my tired eyes this appears to have the earmarks of serious PM investment of Bubble dollars coming out of the Dow & Duck...Imagine when all those Bubble Dollars get after the trend. We all remember the buying frenzy of Dot. Com madness, well all that Fed Wallpaper is still circulating and needs a nest.....

FWIW....Some Silver Stats from past PM Bull Markets, from GE Pages....

"Silver's price hit an all-time high of $52.50 per ounce in 1980, subsequently falling to its recent history low of $3.51 in 1991. Among the most prominent precious metals (gold, platinum and silver), silver tends to be the most volatile in price. In the 1979/80 precious metals bull market, silver's price increase was double gold's. And during the 1982 price surge, silver tripled gold's percent price increase. In the 1985/87 rally, silver just nosed out gold (96% to 79%). However, silver's percent run-up in the 1993 bull market was again twice that of gold."


**Now I'm not advocating AG over AU as investment as I believe Gold is going to be different this time, but some of us need a dose of history to justify our holding of Silver in even small percentages of overall PM's.....YGM













USAGOLD / Centennial Precious Metals, Inc. (05/03/02; 11:48:12MT - usagold.com msg#: 74854)
Hard assets... Easy access!
http://www.usagold.com/ProductsPage.html

"Treasure chests throughout history have been filled with gold, and not by idle choice." -- R. Strauss

If you would like to take full advantage of these insights and perspectives, made available from a leader with three decades of experience in the precious metals markets, then we invite you to request your personal access codes for the online News & Views. With your request, you will also receive a hard-copy introductory information packet on gold ownership which details the products and services offered by USAGOLD / Centennial Precious Metals. We welcome your inquiry and look forward to working with you.


____________________________

"For more than 2000 years gold was viewed by generation after generation as a safe haven in times of crises. Gold was an insurance asset, in fact, formuch of the time the only insurance asset. 2000 years\of history is not wiped out within two decades. This wave of global prosperity cannot continue forever, andI believe, history is busy proving that right now as we speak."
Ian Cockerill, CEO, GoldFields

Gold Market Brief (5/3/02) . . . Gold worked its way higher this morning renewing its assault on two year highs as the Labor Department reported unemployment at a 7 year high and Israel mounted an assault of its own on Hamas strongholds in the West Bank city of Nablus. Hopes that some progress was being made in the conflict between the Israelis and Palestinians were delivered a set-back when Israeli Prime Minister Sharon stated his refusal to sit down at the peace table with Yasser Arafat, and Republicans in the U.S. Congress began to register their disapproval with Bush administration handling of the problem. There are reports this morning of physical buying in both Europe and North America on the back of these developments and attendant concerns about further weakness in the U.S. economy and the wobbly dollar. U.S. stocks are getting hammered. Gold's advance today is without the help of Japanese gold buyers who are celebrating the Golden Holidays. The World Gold Council reports that buying in India has picked up its gold buying in advance of the upcoming wedding season. Alan Greenspan delivered a blow to the stock market today by calling for the inclusion of employee options on the expense side of corporate balance sheets. Reporting and regulation of option positions could put a large number of already fragile blue-chip balance sheets underwater.

The safe-haven metal held its own all week despite a steady drumbeat of negativity from the bears, and concerted attempts to drive it lower. Owners of the metal seem to be in it for the long term with the steady flow of news on losses, abuses and criminal activity in corporate America adding the backdrop.The firm tone gathered pace this morning as negative news seem to hit the markets from all directions. "Gold still looks like it's breaking out of formation and still showing surprising strength," Alaron's Phil Flynn told CBS Marketwatch. "People are going to more traditional investments on concern in the stock markets."
The safe-haven metal has enjoyed something of a resurgence over the past several weeks in response to tensions in the Middle East, strong Japanese buying, bullion bank and mine company covering, and a general sense that world equities markets still have their worst days ahead. The dollar, which had experienced a selloff last week, steadied some this week, and then tipped its nose this morning and took a dive. Doubts have begun to surface globally about the dollar's long term value despite repeated comments from the U.S. Treasury Department that the strong dollar policy is still in force. The markets do not appear to be convinced and the general lack of confidence on a global scale is showing up in the gold market.
Have a good weekend. See you here, Monday.

Mr Gresham (5/3/02; 09:17:53MT - usagold.com msg#: 74841)
Yumpin Yiminy!
http://quotes.ino.com/chart/?s=FOREX_XAUUSDO
I think we got ourselves a gusher, Pa!

Black Blade (5/3/02; 09:02:06MT - usagold.com msg#: 74840)
USD Index Plunges!

Well look at that will ya! The USD just tumbled below 114! Gold should respond by rising. Meanwhile, there is absolutely no positive news for the economy. In a word - "GRIM"

- Black Blade

nickel62 (5/3/02; 08:26:53MT - usagold.com msg#: 74839)
With apologies to Black Blade for adding to his snippits...on the Morgan Stanley Stephen Roach article....
Massive and ever-widening external imbalances can not be financed easily in perpetuity. They require ever-greater volumes of capital inflows that eventually lead to a point of saturation insofar as foreign holdings of dollar-denominated assets are concerned. That's all the more pertinent in light of our current-account deficit forecast of nearly 6% of GDP in 2003 -- and its concomitant external financing need of nearly $2 billion of foreign capital inflows per day. If such a massive external funding requirement doesn't lead to a saturation of the foreign appetite for US assets, I'm not sure what will. Just because America's external financing was manageable in the 1990s doesn't mean it will be so as the as the ever-widening current-account deficit now ups the ante on capital inflows. Needless to say, that conclusion is in direct contradiction to that of the capital-flow-driven justification of the Bush Administration.

Interestingly enough, there are signs suggesting that this point of saturation may now be at hand. As Joe Quinlan and Rebecca McCaughrin have recently noted, the portfolio portion of capital inflows into the United States has slowed dramatically in early 2002 (see their 1 May dispatch, "US Portfolio Flows Update -- Precarious Underpinnings"). Over the first two months of this year, foreigners purchased just $27 billion of dollar-denominated assets, a dramatic reduction from the $100 billion pace in the first two months of 2001. Meanwhile, foreign direct investment into the United States -- the other major piece of the capital inflows equation -- has also slowed dramatically. FDI into the US was $158 billion in 2001 -- only a little more than half the $295 billion average pace of 1999 and 2000. Fully two-thirds of this slowdown is traceable to diminished FDI activity from Europe; that's largely a reflection of a dramatic downshift in the cross-border M&A cycle -- a trend that has continued into the early months of 2002.

One by one, the sources of foreign capital inflows into dollar-denominated assets seem to be drying up. First, it was equities, an understandable by-product of the post-bubble climate. Then it was FDI, reflecting the pronounced downturn in the global M&A cycle. And now it appears that foreign purchases of US bonds are on the wane -- initially Treasuries and, more recently, corporates. Needless to say, this draws the key premise of the current-account defense of the Bush Administration into serious question. To the extent that the capital account is turning, current-account financing difficulties can only intensify. The recent weakening of the US dollar in foreign exchange markets rounds out the picture. This should hardly be surprising -- currencies are the relative price that often picks up the bulk of the arbitrage between current- and capital-account disparities.



AU_Poor (5/3/02; 08:21:51MT - usagold.com msg#: 74838)
@Black Blade - Greenspan on stock options
I recall reading that Microsoft would have lost $8 billion last year (instead of a net of $X billion) if stock options were counted as expenses. Conveniently, Microsoft et al ARE allowed to deduct the options against income for tax purposes.

Any guesses how SMs and PMs might be affected by this very remote possibility?

Greenspan is the "good guy" now on record to do the right thing, but I would bet his marching orders are the opposite.

nickel62 (5/3/02; 08:17:53MT - usagold.com msg#: 74837)
Golden Bear
No, I guess it is not..in fact that was what was so terrifying about the historical account. I was wondering about the real upside of my gold mining stocks as well. As a major part of my retirement and my investment future there positon is of concern as well. And this from a gold stock analyst.

nickel62 (05/03/02; 08:11:53MT - usagold.com msg#: 74836)
Well it looks like Tokyo
Only has 2175 more bank branches to go...I hope there is a need for that many new noodle shops!

Black Blade (05/03/02; 08:11:45MT - usagold.com msg#: 74835)
Dive! Dive! Dive!
http://quotes.ino.com/chart/?s=NYBOT_DXY0

The USD Index is crashing (see graph at link). Meanwhile Gold is moving solidly higher. People are concerned that the much touted "recovery" is nothing but a pipedream. Also the amrket indices are hammered - it's only a matter of time before the word goes out from Washington and Wall Street to: buy! buy! buy! Just as in days of past panics. JP Morgan was famous for propping up the markets and now we have the "Presidents Working Group on Financial Markets".

"Interesting Times"

- Black Blade

nickel62 (05/03/02; 08:06:14MT - usagold.com msg#: 74834)
Sign of the times! Closed banks being made into convenience stores, bakeries and 7-11s
http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nn20020503b4.htm
Hanamasa is among a crop of companies that, thanks to declining land prices and an ongoing rush by merging banks to shut down overlapping branches, have secured a foothold in prime Tokyo locations.

Hordes of other businesses -- from convenience stores to bookstores to restaurant chains -- have also made advances recently.


In what was formerly a bank vault, customers are served "soba" buckwheat noodles at the Ueno outlet of the Takadaya restaurant chain in Taito Ward, Tokyo.

According to the Japanese Bankers Association, the number of branches of city banks, which have realigned roughly into four megabank groups in the last 2 1/2 years, has been steadily declining.

As of Sept. 30, the number of domestic city bank branches stood at 2,408, down 233 from March 1999.



Black Blade (05/03/02; 08:01:22MT - usagold.com msg#: 74833)
Global: Debating the Current Account
http://www.morganstanley.com/GEFdata/digests/20020503-fri.html#anchor0


Snippit:

There's a sharp difference of opinion in Washington these days over the implications of America's gaping current-account deficit. The Bush Administration has taken a fairly blas� stance, suggesting that the external gap isn't a big deal -- that it is nothing more than a by-product of a voracious foreign demand for dollar-denominated assets. A few blocks away, the International Monetary Fund puts it quite differently. In its just-released World Economic Outlook, it highlights the US current-account deficit at the top of a list of imbalances that have the clear potential to jeopardize any recovery in the global economy. Who's got it right?


Black Blade: An interesting question posed by Stephen Roach.

BTW, did anyone notice that last months unemployment numbers were revised downward? In March, firms had cut 21,000 jobs, a sharp downward revision from the 58,000 increase estimated a month ago. That's sixth straight consecutive downward revision!!! Can't the BLS get it right? As I have been saying, it is easy to statistically massage the data. Of course after the fact, revising data is quickly forgotten by wall Street.

Golden Bear (05/03/02; 08:01:11MT - usagold.com msg#: 74832)
nickel62 (msg#: 74829) Paraoia or just historical awareness?
Nickel62,

"To hoard became a crime, to not comply with the consfication became a felony. To have property which the banking system could not control was a punishable offense...Amazing."

Do you think your bullion in that safety deposit box is beyond confiscation? That's not a trade I would bet on...

Paranoia is almost healthy when dealing with beaurocrats!

Cheers.


Brett Woods (05/03/02; 07:54:58MT - usagold.com msg#: 74831)
Austrian gold coins hot items
http://www.japantimes.co.jp/start.htm


VIENNA (Kyodo) Austrian gold coins featuring images of the Vienna Philharmonic Orchestra have logged record sales in Japan since Japanese maestro Seiji Ozawa conducted a New Year concert in Vienna on Jan. 2.

According to Austrian Mint officials, 60,000 ounces (about 1.86 tons) of the gold coins were sold in Japan from January to April, five times the volume registered in the same period last year and in excess of total overseas sales last year.

The gold coin series, first issued in 1989, is known formally as "Vienna Gold Coin Harmony," with the Vienna Philharmonic Orchestra as the central theme. Violins and other musical instruments are featured on the flip side of the coins.

Austrian Mint officials said they are pleased with the sales surge in Japan and said Ozawa's New Year concert triggered the popularity of the coins.

Austria sold 20,000 ounces of the "Harmony" gold coins on the domestic market last year and 50,000 ounces overseas, 80 percent of this total in Japan alone, according to the Austrian Mint.

Four different "Harmony" coins are in circulation: 1 ounce, half ounce, one-quarter ounce and one-tenth of an ounce.

According to coin dealers, the 1-ounce gold coin fetches 46,600 yen in Japan at coin retailers.

The Japan Times: May 2, 2002



Black Blade (05/03/02; 07:52:00MT - usagold.com msg#: 74830)
Greenspan: Options Rules Need Changes
http://biz.yahoo.com/rb/020503/economy_greenspan_4.html

Snippit:

SEA ISLAND, Ga. (Reuters) - Federal Reserve Chairman Alan Greenspan on Friday strongly urged U.S. regulators to overhaul rules on stock options, saying the Enron debacle highlights the need to add clarity to corporate accounting.

The Fed chief said the current system, which does not force companies to expense stock options granted to their officers, distorts the corporate profit picture and poses risks to the marketplace.

"The seemingly narrow accounting matter of option expensing is, in fact, critically important for the accurate representation of corporate performance," Greenspan told a financial markets conference convened here by the Atlanta Federal Reserve.


Black Blade: I agree, these overpaid charlatans posing as corporate officers are looting the companies bank accounts without any accountability. There give the shareholder "the finger" while they and their friends abscond with the cash, ultimately leaving ruin in their wake.



nickel62 (05/03/02; 07:51:03MT - usagold.com msg#: 74829)
Paraoia or just historical awareness?
After having read goldquests post of the URL describing the gold confiscation of Roosevelt in the spring of 1933, I am wondering if the current "war" "emergency" or whatever is really not sufficent justification to confiscate anything the government feels is necessary. My ownership in gold mining stocks and gold coins in a federally liscensed bank safety deposit box(complete with security cameras watching what I put in and take out) is really safe from any future confiscation. If ,as we postulate here, the stakes are as great for the established powers as they appear, it will be a minor step for the government to grab whatever they need to refinance their control. The large gold mines are no doubt aware of this and realize that their resistance would be futile and therefore they have either become part of the group such as Barrick, Placer, and AngloGold or they remain strangely silent like Newmont and the few other majors. The need to put value back into the currency at some future date makes the nationalization of a gold mine a minor issue. If the Congress of the United States could abrogate all of the gold clauses of all the millions of contracts that existed in commerce in the 1930s what is really to stop them from forcing a sale or confiscation of individually held gold in a "crisis" like the war against terroism. The flimsy justifications that the government used in the 1930-1970 period to make ownership of gold a felony is almost unbeleivable in light of the Constitution of the United States. Yet they did it. To hoard became a crime, to not comply with the consfication became a felony. To have property which the banking system could not control was a punishable offense...Amazing.

Gauntlet-Runner2("GR2") (5/3/02; 07:37:47MT - usagold.com msg#: 74828)
The Bulls are still loose at this Rodeo in gold
Sometimes I get tired of speculation and the "when is it really going to happen?" question. Looking at the simple facts. Gold price breakouts have been occuring in approx. 4 month intervals between points of rapid ascent.

We have factual data within the past year of these periodic POG breakouts:

1st= mid May 2001 was a $22 spike with a fallback of $22

2nd= mid Sept 2001 was a $20 spike with a fallback of $15

3rd= late Jan 2002 was a $25 spike with a fallback of $10

So a plain vanilla prediction.........
Next~late June 2002 says a $30 spike with a fallback of $5.
(this is a lean-bean analysis with no fudge factor involved)

Am I really "making this up?" That is from a 1 year gold chart. The slower your time frame the more meaningful it is. For a more current analysis, we can see each spike was "framed" in a head and shoulders pattern. We have passed midway between the first shoulder and the center crescent midpoint awaiting the next first shoulder of the coming June~~~$30 spike~~~. So I'll give you 10 more trading days for POG to rabbit hop up to 315 not 312, and to go flat across not dropping back much over a buck if at all. Then it does the doldrums till mid to late June when the plaster gets knocked off the ceiling and a big hole is discovered in the basement of the stock market where the meteorite landed. Goldshares should do the "giddy willies" volatility reprieve scaring everyone in them attracting millions of minions. Hedged stuff is going DOWN not up and unhedged stuff is doing the air glide off the snowboard jump. Yes we are in for a wild ride. And the folks in the mountains still do not believe we ever walked on the moon saying it was all done on a stage in Hollywood to fool the American people. Have to love the mountain people though, the folks stashing gold and PGMs.
==========================================================
Because Spot is a good pet but he just likes to sleep alot between hunting seasons.
==========================================================
"Hey it's mid June and I have to pay like a $50 premium per coin now............." -history, be a part of it, buy now and make it happen. -GR2

Rock (5/3/02; 07:27:31MT - usagold.com msg#: 74827)
The Level of deception
Hi all, I really burns me up to see people like potato head Neal Cavuto of CNBC and Larry Kudlow who have not deviated from their long held views, there is nor ever was a recession after all the techincal indicators just arn't there. Has these fools been following the stock market lately? How about the unemployment numbers? They announced yesterday that they are going to have Sec of Treasury Paul O'Neil back on CNBC but I missed it yesterday.

I guess after his previous statement or should I say non statement about the dollars future didn't go over that well with the CNBC Cheerleaders and they are blaming him for the down turn and negative sentiment of the dollar lately.

I can't stand the whole bunch of them and I can't wait to see them proved wrong. One stock broker on CNBC recently being interviewed by Maria Bartaloma said he quit and joined the coast guard because his life was threatened. Well thats what happens when you lie to people and people loose their lifes savings. well gold looks good today, go gold. have a great weekend,
Sir Rock


nickel62 (5/3/02; 07:22:55MT - usagold.com msg#: 74826)
Thank you to all who commented on my post...I appreciate the response..and hope it was helpful. goldquest I read the URL you posted about the particulars of the gold confiscation and found it chilling in it's implications...all here should read it as we are clearly now in a state of national emergency again...
http://www.enteract.com/~mgfree/Economics/goldHistory.html
The ramifications for all of us who refuse to have our savings captive of the elite controllers of the judical system are obvious and terrifying.

Black Blade (5/3/02; 07:15:34MT - usagold.com msg#: 74825)
Gold Shares Predict A Strong Gold Move?

I see that GOLD, HGMCY, and DROOY been been moving strongly higher and have crowded out a lot of tech names on the ticker this morning. That is usually a positive sign for Gold as shares front run the physical metal. Since the unemployment data was released the POG jumped higher and USD Index dropped hard. Also, market futures are all down and no one is likely to want to hold stock ahead of the weekend in this crummy investing environment.

Could get very "interesting" today. Can't wait to see the look on the "Mummy's" face tonight if the markets tank and the POG rockets.

- Black Blade

RobotGuy (5/3/02; 07:04:23MT - usagold.com msg#: 74824)
Go on now spot, do what it is you do best!


Black Blade (5/3/02; 06:56:59MT - usagold.com msg#: 74823)
"Interesting Times"

Gold is moving higher now, while the USD is dropping like a rock. Petroleum is higher. Speaking of petroleum I will review some literature:

The Prize: The Epic Quest for Oil, Money, and Power

Hubbert's Peak: The Impending World Oil Shortage

Geodestines: The inevitable Control of Earth's Resources Over Nations and Individuals

The Coming Oil Crisis

Not to mention my studies of the depletion of other resources such as clean water, minerals, and metals. The economy is rather fragile right now and cannot withstand a sucker punch from declining energy. As I have said before, the real sleeper is in Natural Gas as it is the only growing source for electricity. Forget about nuclear, coal, oil, hydroelectric, and renewables. If the production of NG falls and reserves are not replenished � the US economy is toast.

As always, get out of debt, get Gold and Silver portfolio insurance, get enough cash on hand for several months expenses, and get a nonperishable food and basic necessities storage program started. In other words prepare as you would for an extended period of unemployment and even a serious natural disaster. Prepare for the worst and hope for the best.

- Black Blade


RobotGuy (5/3/02; 06:53:56MT - usagold.com msg#: 74822)
Good or Bad?? I can't figure out what the message is of this article,... I think it's good but,.... Help me out here!
http://cbs.marketwatch.com/news/story.asp?guid=%7BDE1478EB%2DA044%2D4511%2D877E%2D9ED043574E44%7D&siteid=mktw
Snippit;

NEW YORK (CBS.MW) -- The gold timing newsletters tracked by the Hulbert Financial Digest are not all that excited about gold right now. Their average exposure to the gold market is just 37.5 percent, with the remaining 62.5 percent allocated to cash.

If you're a contrarian, their tepid feelings about bullion are good news, both for gold itself and the shares of gold mining companies.

I frankly am surprised that today's gold timers are not more enthusiastic. With the yellow metal exhibiting more signs of life than it has in years, I would have expected nearly ubiquitous exuberance among the gold-timing newsletters. After all, that is exactly how they reacted every other time in recent years in which bullion rallied to the $300 per ounce level.

But not this time. After briefly jumping to 90 percent in early February when bullion rose to the $300 level, the HFD's gold sentiment index has steadily declined to less than half that level today. Yet bullion actually is higher today than it was three months ago.

This is a textbook case of what is often seen at the beginning of sustainable rallies. As contrarians constantly remind us, bull markets don't like company; they thrive when relatively few advisers and investors have jumped on their bandwagon. This is why contrarians were not particularly surprised that gold's rally stalled in mid-February, the point at which virtually all the timers followed by the HFD had become bullish. Today, in contrast, gold at $310 per ounce has fewer cheerleaders than it did three months ago when gold was trading at a lower price.

Incidentally, this sentiment picture for gold is just the opposite of what prevails for equities. In that arena the average adviser has been stubbornly optimistic in the face of a significant decline, which is why I grade sentiment among stock timing newsletters as bearish.


miner49er (5/3/02; 06:51:56MT - usagold.com msg#: 74821)
Trade Settlement in Malaysia - Old Wine in New Wineskins...?
http://www.nst.com.my/z//Current_News/BT/Wednesday/Business/20020327025311
(Note - I put this together actually back on March 31st, but frankly forgot about it... So I've dusted it off a bit, and decided to throw it out now, for any who care to read it. ALSO -- the link is no longer valid, unless you can search their archives, but you can find a number of snips from these articles back around this time on the forum archives, if anyone finds the need.)

The other day there was some discussion regarding Malaysia's plans to institute a gold payment mechanism to manage settlement in its international trade. The discussion arose out of an interview with Prime Minister Dr. Mahathir Mohamad of Malaysia as reported by several news organizations.

I admire Dr. Mahathir, as he demonstrates again his willingness to adhere to convictions and principle, even in the face of enormous pressure from the Beast. Although castigated in 1997 for his stance restricting speculative currency movements, his country withstood much of the ravages of the tsunamic lava flows of "hot money" that laid waste the financial landscape of his neighbors.

Looking over the information provided in news accounts of this interview, I saw some things that raised a few questions, though. Dr. Mahathir envisions the use of the Islamic gold dinar to be the means of account settlement in trade between countries. He highlights the general plan of how the gold exchanges would take place. Using a two country example to simplify the illustration, the trade balances of each country are calculated using their respective local currencies, and are then priced in gold, which is employed as payment. It is also used as the medium to conduct these exchanges. In order to reduce the physical movement of gold, these balances wash each other out, so only the amounts in surplus or deficit are exchanged. (Essentially, convert and net...) To further eliminate unnecessary movement, credits or debits can be applied to these imbalances. The assumption here that Dr. Mahathir makes is that the price of gold is reasonably stable. “Its value [gold] may appreciate or depreciate according to the world’s demand and the demand in a given country. But the fluctuation would be minimal,” he said.

Malaysia seems to want to restore gold to its historic prominence, but risks conducting affairs according to the old ways of doing business. They evidently do not wish to fix the price of gold, yet pursuing this course of action, it seems, will make this nearly unavoidable. I would like to analyze this situation in terms of the discussion of money for which we began laying a groundwork the other day [#71878].

A quick review... Money is defined as that means, which takes an individual's inarticulate, and unquantifiable appraisals of things, and translates them into commonly understood terms, so that the individual and others inside this universe of commerce can fluently dialogue about their prices. The currency of the realm is any mechanism that satisfactorily expresses, and transmits, these monetary evaluations. Its primary purpose is to facilitate commercial/financial exchange. Chief properties of the currency must be 1) its ability to dynamically adjust to changes in society's appraisals of these things; and 2) its ability to predictably suspend the considered value held by the parties of any given exchange for the duration of the transaction.

In the past, this was attempted by pegging the currency to a fixed gold ratio (or some derivative of this function). The emerging paradigm seems to want to let currencies discover their value through a truly free exchange ratio to any and all commodities, paramount of which is gold. As we discussed previously, our legacy of commodity-backed currency causes us to confuse the currency instrument with the real wealth denominated by it. This is why we can lend something that has no intrinsic worth, or anything backing it that does, claim it to have stable value, and do it with a straight face. Effectively, our "money" today is nothing more than an irredeemable, you-must-use-it credit claim. And callable, too.

First gold, then gold certificates, gold notes, then contracts for gold not yet born. Then default. We have spiralled so long and far down this vicious vortex, that the intolerable systemic default of the current quasi-gold standard is imminent. Not only will the powers, that exist by virtue of this precarious structure, fight to the death to keep it intact, the more astute among them also recognize the serious threats to U.S. national security (and by extension, global stability) from the instability such a collapse would incite -- especially in this day.

Therefore, the show must go on. This is the inevitable, inescapable result of a system that pegs its currency to a commodity in order to give it worth. The intent may originally be to enhance its currency property of temporarily sustaining value for its immediate transactional use. This quickly gives way, however, to the impression of lasting value being stored in the currency, which then causes it to be perceived as a real asset in the minds of lenders and borrowers alike. This is what ultimately breaks the system. Currency is not meant to be construed as a long term value store. To the degree that it does or should have non-monetary worth, is only to the extent that this property is necessary to make commercial transactions easier for that particular economy. It should contribute to the medium's ability to adequately convey the monetary appraisals held by its users. Otherwise these monetary appraisals end up becoming distorted, and inflexible, as those forces take over, whose interest it is to control the medium's monetary use, by manipulating its non-monetary value. Once currency is wrested from its natural role of expressing fluid monetary processes, and becomes bound in contracts of fixed convertibility, it no longer serves to represent dynamic value concepts, but fixed and arbitrary value illusions instead.

Thus gold in the Malaysia plan (if it works as described in these [very] summary accounts) is set up for a fall. I want to point out that their plan may actually work differently, but owing to the likelihood that the editors undoubtedly perceive things through traditional understanding, they may well have reported the whole affair with the wrong slant. That said, we'll approach our analysis with what we're given.

In the first place, it fails its exchange facilitator role right out of the gate, with concerns about gold's physical movement. The purpose of these account credits and debits, according to the article, is to further diminish the costly transportation of gold. It is obviously inefficient if one designs a process in which gold is to be a vehicle for account settlement, and then has measures put in place before the fact to accommodate transactional obstacles brought about by inherent attributes of the medium.

Additionally, in mandating settlement in gold, we instantly introduce the prospect of default. By permitting credits or debits to be applied against balances ("...the surplus or deficit can be credited or debited against future imports and exports."), it seems we only perpetuate the present dilemma. If the trading partner is gold-poor, then deficits on the part of this country must be met with a gold debt, whose purpose is not for some administrative benefit of efficiency, but genuinely a need for more time to make good. If the gold price fluctuates significantly, and moreover obtains a new, higher plateau, this only exacerbates the situation of the gold debtor. Simply, an agreement that mandates payment with physical delivery fosters an environment of defaults and non-performance, and invites efforts to keep the price down.

Other considerations... Say I run a deficit to you one month, and you agree to let me make up the balance later -- ostensibly for the above-mentioned administrative purposes of reducing gold movement. I compensate you for the delay either with interest payable, or a fee. I do indeed, currently have the gold, but find our negotiated settlement to be more cost effective than the costs of moving the metal itself. Now if the gold price remains stable, or moves in a creditor-friendly direction, then it won't be long before you prefer to just hold onto this paper, as it is effectively stronger than gold, so long as confidence in its convertibility is maintained. It won't be long before this "good as gold" paper is traded, speculated upon, hedged, lent against and lent itself. Then in order to help our speculations, or rescue our over-extensions of credit, assistance will be provided to make sure the gold price doesn't "get out of hand," and we will all agree that it is better for us to manage the indiscriminate volatility of the markets, so as to promote overall stability. Thus we are back once again to fixing (or "managing") the gold price.

Let's look at this yet another way. It appears that transactions will take place in the local currency, and be priced to gold at some point after they are recorded. So now the whole gamut of tricks will be employed to ensure the best exchange rate, from the simple attempts to "time" the transaction's entry to the books, to the panoply of hedging practices currently employed in today's environment. This is so because the transactions are not settled with actual delivery at the time they occur, hence creating all the opportunities to abuse the float that exist today. Since the goal here is to secure the best price, the pressure will continually and always be to depress gold relative to the local currencies.

FOA maintains that the way the Euro courts will avoid these problems is by not enforcing contracted terms that require physical gold delivery. Cash settlement will be the typical workout. In response to the conclusion that this would simply cause contract dealings to take place outside the Euro court jurisdiction, he contends that there will not be any substantial, organized markets in which to do this after the current dollar market cracks up. You could make whatever deals you wanted, but you would not find anyone willing or able to enforce gold delivery, if one party decided to back out. With no one able to bind your counterparty to delivery, you would find it hard to even organize a market to deal in gold paper, as there would be no incentive. The effect of all this, according to FOA, is to drive gold dealing mostly into the physical spot markets. Gold in this environment becomes something that cannot be inflated through credit use (with its subsequent debasement, and defaults). [FOA #78, 6/19/01]

A note that is issued by an entity that owns substantial real-wealth assets free and clear, is genuinely productive, and keeps its debt within check relative to its assets and income, is likely to be used, holding its worth not on the basis of contracted convertibility to the issuer's assets, but simply on the basis of who the issuer is... on his authority... in his good name. This concept is not new and has existed forever. What is different is to contemplate this in the realm of an international currency. FOA discusses this point in addressing some of the very fundamental concepts behind the design of the euro:

"Not long after the US defaulted on it's gold loans,,,, dollars held as gold certificates,,,,,, major thinkers began the long process of forming another world currency. One that would not maintain the fiction of a gold standard with the somewhat fixed gold prices inherent in such a system."

"[ ... ] After operating on a fiat system for 20+ years people are starting to realize that the only thing that backs a currency is the real productive efforts of their people. Yes, over time we always borrow more than our productive efforts can pay back and proceed to crash the money system. But what else is new? (smile)

"We call this a money's "timeline" [ ... ] "

"It seems people saw something else that would make the Euro unique. Paid up assets also stand behind circulating money. Indeed, if someone ow[n]s a $100,000 dollar piece of land , has a good producing job and borrowed $50,000 against his land,,,,,, the world is likely to circulate that debt note as a fiat land backed currency. But, if his gold (the land) is worth $1 million in a free physical market,,, AND RISES FURTHER IF CURRENCY SUPPLY OUTPACES REAL PRODUCTION,,,,,,, and his other debts are relatively low ,,,,,, the same note would circulate just as effectively if the $50,000 was borrowed against his name alone." [FOA #7, 2/26/00]

A currency designed to work in an environment where gold is exchanged free of the impediments of paper manipulations, is likely to be used by those who want physical gold -- as it is not threatened by gold. This is diametrically in opposition to the current reserve currency paradigm. They would seek to use this new currency as the medium with which to conduct their business. It's simply easier (and less costly...).

If an oil producer wants to take partial payment in gold, even a miniscule portion, he simply cannot get it in markets that trade at today's prices. His bona-fide, serious, and completely backed demand, introduced directly to this system would kill it because there simply is not ever going to be enough actual gold to meet this demand at current price levels. But if we should let the price rise to obtain its market level, it would fight this with maniacal desperation, as the entire system relies upon gold at the present artificially low prices. Every kind of pressure, intimidation, compromise and creative forward financing would be deployed, all in an effort to thwart delivery (or at least postpone it into the sweet bye-and-bye). Just do anything to prevent exchange at the offered price...

But isn't the currency supposed to facilitate exchange? It seems if I try to use THIS currency to get the job done, it will prove woefully inadequate for the task. This currency does not freely express the value estimates of buyers and sellers in its markets, so necessary to facilitate transactions. Rather it handicaps and sabotages the effort instead. The policies of its issuers by design do not allow the instrument to perform its job correctly. So, if a new currency ascends from the horizon, whose design is to make the process a lot less painful...

Will the euro be ideal? No, it will have its own pressures that cause its own imbalances, and subsequent destruction. It will have its own timeline... birth, youthful beauty, age and treachery, and ultimately death... But the point is not to create the perfect system, which in an imperfect world is impossible. It is just to identify reality (political, technological, predominant world-views, etc.), and put something together that most successfully accommodates the dynamics at work in that season. That said, it seems a currency modeled like the euro, would better serve the demands of modern international trade settlement. The application of gold is best left as something physically acquired with the surpluses in an open (and free) marketplace.

The Malaysian concept (at least as far as we’ve been introduced to it) is not unlike putting old wine into new wineskins. They correctly wish to allow the free pricing of gold, they also seem to want to elevate gold to its traditional status as "the" premier wealth holding [new skins]. They err, however, in trying to use gold as a currency [old wine]. They confuse the concepts of money, currency, and wealth. They mistakenly wish to make gold function with the dynamic properties of currency, while still attempting to establish in it the longer term, fixed value attributes, required for something you issue paper against. In this day that role is inefficient and inappropriate, as it leaves gold subject to endless manipulation because of these dual conflicting roles.

I know that if you put new wine in old wineskins, the skins burst from the action of fresh fermentation. I don't exactly know what the outcome is of putting old wine in new wineskins, except that it doesn't make sense. (I suppose all you would get is leathery tasting vinegar.) Albeit the interview snippets give only a very removed glimpse into what the Malaysian plan contains. Nonetheless it seems there is a lot of room to "work" the system. However, I'm certain they have thought this through much further than I could even fathom, and have the bases covered. With that, may it be then, that Dr. Mahathir's Malaysia prospers, and their trade surpluses avoid the entanglements of the paper-plying middlemen, and are instead deployed in prudent investment, and in the outright acquisition of this grand metal of the kings...

miner



Golden Bear (5/3/02; 06:48:25MT - usagold.com msg#: 74820)
RobotGuy (msg#: 74816) I know it's around here somewhere.
It's almost there, S&P needs to go to 1100-1110 before she turns and heads lower, some time next week... the old gal had to take a breather before slaughtering the next lot of sheeple.

Cheers.

Black Blade (5/3/02; 06:44:05MT - usagold.com msg#: 74819)
Unemployment Soars to 6%


Unemployment jumped higher by 43,000. That is 6% from 5.7% and it will get worse. Unemployment announcements are rising sharply. This is confirmation of a deepening recession � in spite of CNBC drone Larry Kudlow's assertions that "all is well", the unemployed are just lazy bums and that the benefits extension was a fool hardy move by Congress. The "Bone Pile" is growing! In a word "GRIM".

- Black Blade


Golden Bear (5/3/02; 06:37:59MT - usagold.com msg#: 74818)
Abbey Jo on CNBC after yesterday's close
Amusing quote by Abbey that GS has always used GAAP based analysis to arrive at their forecasts for stocks and the major indices - yeah right!

Her predictions for the major market averages have been ridiculously high for the last 2 years, and still going lower.

Pro forma earnings? What pro forma earnings? Just like the recession that never happened...

Lamprey (5/3/02; 06:23:59MT - usagold.com msg#: 74817)
Unwinding Hedgebooks
I've noticed that many of the hedged gold producers are closing out their hedge positions by "delivering into our hedge book"...

That tells me that whoever is on the receiving end of the forward sale (the buyer) is still getting quite a bargain in price. I'm not seeing much talk about closing out hedge positions by cash purchases (Durban Deep's plans not withstanding).

So, can we conclude that the lack of new forward sales is partly responsible for slowly driving the gold price higher and we won't see a true breakout in prices until a critical mass of these forward sales are "delivered into", thus forcing buyers to pay current market prices for future gold sales?





RobotGuy (5/3/02; 05:41:52MT - usagold.com msg#: 74816)
I know it's around here somewhere.
Charts and graphs would indicate to mine own inexperienced eye that we are on the brink of major shifting. Perhaps Friday is a good day for indecisiveness. DOW will fail in a big way very soon. Of course I don't have my license in cheerleading, so you don't need to take my word for it. Average investor? Getting tired of everyone else doing the profit taking?
I don't know what's going to cause the big dip, but I'll bet my holey t-shirt we're going to see a big dip real soon. Yesterday I wrote "Prepare DOW, Elliot wave theory is upon you," well, it didn't happen yesterday, so you know how much you can trust my ideas.

Have a marvelous day all!!

RobotGuy.

Black Blade (5/3/02; 05:24:25MT - usagold.com msg#: 74815)
U.S. layoff plans rose in April
http://www.msnbc.com/news/746731.asp?0si=-


Snippit:

NEW YORK, May 2 � Layoff announcements at U.S. firms bounced back up in April after a drop in March in a sign that the recovering economy could take some time to gather steam, Challenger, Gray & Christmas said Thursday.


Black Blade: There is a growing consensus among corporate CEOs (if CEOs such as Jack Welch, Wayne Huizenga and other guests on CNBC are to be believed) that the unemployment picture will get worse in face of growing layoff announcements, excess capacity, decreased capital expenditures and growing inventories.



Spartacus (5/3/02; 04:38:25MT - usagold.com msg#: 74814)
Three Cheers for a Weak US Dollar
http://www.morganstanley.com/GEFdata/digests/20020501-wed.html#anchor0

---As the US dollar becomes more unloved with each passing day, investors are growing increasingly nervous about a dollar correction or worse still, a dollar collapse. The main fear is that a steep and sudden depreciation of the greenback could trigger a rush to the exits among foreign investors in US securities and precipitate a spike in US interest rates and a swoon in US financial markets.

We don't buy this doomsday scenario and are predisposed toward the call of our currency strategists. They envision an orderly, broad-based decline in the dollar over the medium term (two to three years), a forecast that nevertheless gives clients the shivers. Recognizing the risks associated with a weak currency, we think market participants are too focused on the negative implications of a weaker dollar. ---

Spartacus: A modest devaluation would be good for America, but then again will it be a mild dollar correction?

Black Blade (5/3/02; 04:11:13MT - usagold.com msg#: 74813)
Energy Leaders to Meet Privately
http://biz.yahoo.com/ap/020503/energy_summit_1.html

Snippit:

DETROIT (AP) -- Energy ministers from the Group of Eight nations plan to discuss the need for a stable, secure and environmentally friendly energy supply during the second day of an energy summit.

U.S. Energy Secretary Spencer Abraham told delegates Thursday that the world's energy challenges will become more acute over the next 20 years as countries face increased demand and try to balance energy growth with environmental protection. All eight countries face similar energy challenges, including demand, growth and inadequate infrastructure for future needs, Abraham said during a luncheon policy address.

In the United States alone, it's estimated that by 2020, oil consumption will increase by 33 percent, natural gas consumption by more than 50 percent and electricity demand by 45 percent, Abraham said. The infrastructure to handle the increased use doesn't exist, he said. For example, to accommodate the projected increase in electricity demand, more than one power plant per week will have to be built, he said.

Abraham also said that over the next two decades, world oil consumption is projected to increase from about 75 million barrels per day in 1999 to roughly 120 million barrels per day in 2020.


Black Blade: The key point here is that the infrastructure does not exist for expanding production and delivery of energy. Rabid environmentalism and their political influence guarantees that we are headed into a severe energy crisis of epic proportions. The end result is the collapse of most modern economies (except perhaps the most primitive agrarian economies). As always get prepared, get outta debt, get Gold and Silver portfolio insurance, get enough cash on hand for several months expenses, and get a nonperishable food and basic necessities storage program started.





Black Blade (5/3/02; 02:27:14MT - usagold.com msg#: 74812)
Spot Getting A Little Frisky Tonight
http://test.crbindex.com/crb/quotes_crbcomp.asp

Gold is moving higher along with other PMs and Petroleum. Earlier CNBC had a guest on that said Gold and Oil are not good - therefore the only conclusion was that they are losing their grip ;-)

The unemployment rate of first time claims is still far above the recessionary level of 400,000. The unemployment data for last month comes out in a few hours. Also, Sec. O'neill hinted that the Treasury will not interfere to keep the USD stronger against other world currencies. The USD has weakened as is expected to continue to weaken. "Interesting Times"

- Black Blade

Black Blade (5/3/02; 01:49:33MT - usagold.com msg#: 74811)
Barbarous Relic Files - Huge quantity of gold, silver seized
http://in.news.yahoo.com/020503/54/1n6ik.html

Snippit:

Chennai, May 2: The Tamil Nadu police seized 38 kg of silver ornaments, Rs 4 lakh worth of gold jewels and Rs 13 lakh in cash following the arrest of two persons yesterday, Director General of Police B P Nailwal said today. The seizure could lead to the recovery of more gold and silver jewellery, he added.

Displaying the ornaments and cash, the DGP said the arrests and seizures were effected by the special teams formed following the alarming number of burglaries in isolated jewellery shops in Chengalpattu East district from November last.

Stating that four more persons wanted in connection with the robberies were absconding, he said the 38 kg of silver ornaments and the cash were recovered from the arrested persons while the gold jewellery was seized from a receiver. Interrogation of the arrested revealed that they had stolen 8.25 kg of gold jewellery and 75.5 kg of silver totally valued at Rs 40 lakh, he added.


Black Blade: What a waste of time � burglarizing all those shops and only finding barbarous relics. Hmmm�



Usul (5/3/02; 01:46:24MT - usagold.com msg#: 74810)
Home loan rates rise
http://biz.yahoo.com/rf/020502/financial_mortgages_bestrates_1.html
As the scattered tent poles of isolated (yield)=(risk reward) spikes pop up, they start to lift the general fabric.

Thanks to Mrw on Kitco for spotting this link.


Belgian (5/3/02; 01:43:20MT - usagold.com msg#: 74809)
Euroland
Wim Duisenberg (ECB) : ...The US trade deficit is a serious threath to global *Stability* !!!...
The French Le Pen syndrome with call for euro-sortie for french franc...is not on any EMU agenda and is radically out of the question !!!...
Wim is talking and acting firm and confidently !

Next to the unresolved US/WORLD steel dispute, US massive subsidies to domestic agriculture is in sharp contrast with serious efforts (+ results) in Euroland to do exactly the opposite at home !
Add the massive and prolonged confetti-feed to the US war-industry...and make your own conclusions about the differences in currency (dollar/euro) managements.

A major Belgian bank (small in global terms) stopped with its tradition of *silver* and *platina* sales ( Physical ) (to clients)! Nothing changed for Gold ! VAT on silver/platina/other remains 21% and zero % for Physical Gold ! What better evidence can you find for making the difference between "industrial" or "monetary" metal(s) !!!
If there is such a tremendous unbalance in the silver-world...why isn't this metal acting as palladium did ? Don't shoot your humble pianoplayer,please. Thanks.

Black Blade (5/3/02; 01:41:14MT - usagold.com msg#: 74808)
Leading gold miners cut hedge books
http://sg.biz.yahoo.com/reuters/nl2542803.html

LONDON, May 2 (Reuters) - Gold miners are racing to ditch their hedge books in a move to take advantage of rising prices for the precious metal, which last week hit its highest in more than two years.

Following is a profile of the intentions of leading miners to reduce the amount of gold sold into forward markets.


N.AMERICA

NEWMONT

World's largest gold producer Newmont Mining Corp has vowed not to hedge a single ounce of its output to take advantage of higher spot prices. But in acquiring Australia's Normandy Mining it now carries hedges on some eight million ounces of future production.

BARRICK GOLD

World number two gold producer Barrick Gold Corp says it will not increase its gold forward sales programme but will put more emphasis on spot sales. Barrick said last month it will sell half its gold output this year at a minimum price of $365 an ounce, with the balance to be sold on the spot market.

The company's hedge book at December 31 included 18.2 million ounces in spot deferred contracts, or 22 percent of reserves. Barrick began hedging 14 years ago when the market allowed producers to lock in higher prices and lower risk by borrowing gold from central banks, which gave it liquidity assurances during a capital intensive time.

PLACER DOME

Close to three years of its annual output of around 2.5 million ounces of gold is estimated to be hedged, according to analysts. Placer has said it will reduce its hedges to under 50 percent of output.

The company said its hedge programme has realised a $65 per ounce premium over a gold spot price of $290, and as of the end of the first quarter this year mark-to-market value of the programme was $235 million at a closing gold price of $303.


SOUTH AFRICA

ANGLOGOLD .

South Africa's biggest miner has cut its open hedge book by 1.7 million ounces to 12.9 million ounces in the first three months of this year. Its hedge book was reduced by another 643,000 ounces by the end of April.

Anglogold had 106,897 kg of gold sold locked in forward prices ranging from 89,939 rand/kg in 2003 to 163,895 rand/kg in December 2011. The rand gold price is currently over 100,000 rand/kg. The group had eliminated the low-price rand gold forward contracts for the rest of 2002.

GOLDFIELDS

South African miner unhedged to gold price. The firm has repurchased the 420,000 ounce hedge position resulting from its new Damang mine in Ghana.

HARMONY

Is unhedged but will deliver production into its newly inherited hedge books from Australian acquisitions New Hampton

(510,000 ounces) and Hill 50 (1.35 million ounces).

DURBAN DEEP

Durban Roodepoort Deep (DRD) has spent $5.6 million to reduce its hedgebook to below 400,000 ounces as of the end of March and aims to close it by July 1.


AUSTRALIA

Gold hedging by Austrlian miners fell nearly eight percent in the December quarter, according to the Australian Gold Council.

AURION

Australia's newly formed Aurion Gold Ltd plans to reduce hedge exposure in both reserves and annual production over the next five years to gain wider exposure to a rising gold price.

Asutralia's NEWCREST MINING and WMC Ltd have also reduced their hedges.

LIHIR

Papua New Guinea miner Lihir Gold Ltd said last month it would continue to hedge up to a third of its annual mine output of around 648,000 ounces.


OTHER AFRICA

ASHANTI .

Ashanti Goldfields Co Ltd last month agreed interim deals on margin-free hedge trading with all its active counterparties as it restructures its debts.

The company said in a statement that Barclays Plc had reached agreement with Credit Suisse First Boston to take over its Ashanti hedges, and that agreements had been reached with all the miner's active counterparties.

Ashanti in 1999 sustained due to heavy hedging losses when a sharp rise in prices left it holding huge losses on short positions in the forward market.



Black Blade: Only insecure losers sell forward their production. Note that the hedgers have lagged the Gold Bull Market. As a general rule - The lower the hedge position the better the share price performance.



Black Blade (5/3/02; 01:33:21MT - usagold.com msg#: 74807)
Malaysia sees small group first in gold dinar trade
http://sg.biz.yahoo.com/reuters/nklr213674.html

Snippit:

KUALA LUMPUR, May 1 (Reuters) - Malaysia said on Tuesday it planned to initially use the gold dinar as a currency for trading with a small group of countries, in the hope it would slowly gain international acceptance. Some Islamic countries have proposed using the dinar, which is a gold-backed standard, in international trade instead of the U.S. dollar.

"We are trying to work it out with three or four countries that we have close ties with," said Prime Minister Mahathir Mohamad, who proposed the system last month to reduce the risk of speculation in bilateral trading. "The Arab and Gulf states...maybe they'll accept it," Mahathir told reporters after attending a Labour Day function. The prime minister, who recently visited Libya, Bahrain and Morocco, said the three countries had responded enthusiastically to the plan.


Black Blade: The Gold standard to return? There is a move to bring about the Gold Dianr and Silver Dirham in Dubai to be used as currency as well. Time will tell.



Usul (5/3/02; 01:22:15MT - usagold.com msg#: 74806)
The future fuel crisis?
http://abcnews.go.com/sections/world/DailyNews/gas_2_000913.html
"A line of red London buses are parked unable to move, after trucks blocked the streets around Hyde Park in central London on Wednesday, as the fuel crisis which is gripping Britain continued..."

The army has deployed 80 fuel tankers loaded with reserve fuel at strategic locations across the U.K., a Defense Ministry spokesman said today. The tankers were on standby in case Downing Street required them to distribute fuel for essential services..."

This is not fiction- it really happened just 2 years ago, from relatively small price rises with no actual shortage of supply. Was it the result of genuine protests, or could it have been a "trial run" to test systems and highlight what measures would be needed in the event of worse crises to come, as the Hubbert peak timeline advances? Casting conspiracy theories aside, complex systems and even human relationships often give us advance warnings in the form of seemingly minor upsets ahead of time. Those who understand these warnings and take sensible precautionary measures ahead of time are wise.

There is no shame in taking precautionary measures against a risk even if the anticipated crisis does not happen- that is the nature of risk. Why not have at least a percentage of your assets in a risk-resistant form such as gold?


Usul (5/3/02; 00:57:06MT - usagold.com msg#: 74805)
Argentinian Tears
http://www.washingtonpost.com/wp-dyn/articles/A24332-2002May2.html
Growing Crisis Leaves Argentines Feeling Helpless

"Argentina's problems are legion -- and, many say, date back to decades of poor leadership and overdependence on the government. Officials here contend the current crisis, however, stems from the nation's corruption-filled transition to a free-market economy in the 1990s, a time when the nation became reliant on massive International Monetary Fund loans and government bond sales to finance overspending"

IMF teats and a dogmatic institution of a "free market" are not a panacea. Once again we see the result of application of formulaic "solutions" without wisdom leading to disaster.


Spartacus (5/3/02; 00:55:12MT - usagold.com msg#: 74804)
Duisenberg says US c/a deficit unsustainable over time, risk to world economy
http://www.ananova.com/business/story/sm_580250.html?menu=business.economy

European Central Bank president Wim Duisenberg said the growing current account deficit of the US poses a risk to the world economy.

"I hope it can be contained in due time, because over time I regard it as unsustainable," said Duisenberg speaking at the ECB's regular news conference.



Usul (5/3/02; 00:52:43MT - usagold.com msg#: 74803)
Xerox drops after debt is cut from junk to crap
http://www.nypost.com/business/42217.htm
Once again the problems of loading up on debt, possibly as a result of the rosy euphoria of a (now fading) mega-bull market in stocks, and an easy money policy from Greeny, are highlighted. Here and there, potential risks in bonds are materialised, and as they do so, interest rates pop up out of the general bond population like tent-poles.

Picture this: A Xerox machine, its LCD display flashing "Out of funding! Please re-fill!" But the funding supplier has the Xerox machine's owner on hold for non-payment of bills.


Spartacus (5/3/02; 00:51:13MT - usagold.com msg#: 74802)
Pressure on dollar forces O'Neill to speak in riddles
http://markets.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3BO400R0D&live=true&useoverridetemplate=ZZZ6MJPM90C&tagid=IXLTN37YICC&subheading=currencies%20&%20money

The US may be the most powerful nation in the world, but on the subject of one of the biggest threats to its economy its has almost no voice.

The critical issue of the value of the dollar has forced Paul O'Neill, US treasury secretary, to speak in riddles.
------
The result has been a confused signal. The message emerging from Mr O'Neill has been that the strong dollar policy remains in place. But he has not opposed the recent fall in the value of the dollar, stating that the market should be left to decide the currency's level.
-----
Causing the dollar to weaken at the moment would be particularly easy, given the vulnerability of US asset markets, analysts argue.

The problem would be controlling the speed. A gentle fall in the dollar would be viewed as a blessing for the US by most economists. With consumer spending and corporate investment likely to be held back by debts accumulated over the past few years, a gentle kick to US exports would thus provide a welcome fillip to the faltering recovery.

A sharp fall in the dollar, by contrast, would probably be extremely disruptive for US financial markets, and would risk provoking an exodus of foreign investors from the US market.

This is considered a growing threat by many currency strategists.

The current account deficit, which is running at about 4 per cent of gross domestic product, means that the US needs to attract a net $1.5bn (�1.04bn) in foreign inflows every day to prevent the dollar from falling. But with US equities underperforming the eurozone and Japanese markets, it is becoming increasingly difficult to attract investment.

"Even though Mr O'Neill seems aware that the strong dollar policy does not mean very much, he is forced to keep intoning it," says Ray Attrill, director of research at the economic consultancy 4Cast.

"Any change of rhetoric could trigger waves of selling of US assets in the current environment."



LeSin (5/3/02; 00:29:14MT - usagold.com msg#: 74801)
Gold Paper "Discounted" just like Cohen's Lamb Chops

A woman goes to her butcher Feinberg and asks the price of lamb chops.
"$2.50 a pound," he tells her.
"But Cohen across the street sells them for $2.00 a pound," she protests.
"Nu, so go buy from Cohen," says the butcher.
"He's all out," she explains.
"Oh," says Feinberg, "when I'm out of lamb chops they're only $1.50 a pound."

When I was a student in California during the 1960s a Hollywood Khosher Deli Owner told me the above joke.
Some how with regard to Gold it is not a joke.

Cheers "S"





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