 | "Treasure chests throughout history have been filled with gold, and not by idle choice." |
ARCHIVED DISCUSSION FROM 1/3/2006
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Goldilox
(1/3/06; 23:31:51MT - usagold.com msg#: 140051)
THE GOLD TREATMENT by Richard Karn
http://www.financialsense.com/fsu/editorials/karn/2006/0101.html
snip:
If the American central bank's goals are to provide monetary stability and to control inflation, gold standard advocates submit they are not doing a very good job. According to this chart, the US dollar has lost about 93% of its purchasing power since going off the gold standard in 1933. To put that in perspective, when the US was on the gold standard, a $100 basket of goods purchased in 1800 could be purchased in 1900 for $102, amounting to a 2% inflation rate over the course of a century; today that same basket of goods would cost more than $4,000. On the gold standard, they claim inflation is next to impossible simply because without increasing the gold in its vaults, a government cannot create more money.
Supporters of the gold standard suggest that the inflation created by a government operating a fiat currency amounts to a secret, or hidden, tax its citizens neither recognize nor understand. By unilaterally printing money whenever it wants to, without either explanation or public debate, the government is in fact defrauding its constituents by diluting the purchasing power of their money. And this ability to increase the amount of monetary instruments in circulation is the fatal flaw of all fiat currencies, for there has never been a successful fiat currency.
Not one.
The failure of every fiat currency in history has been due to miscreant politicians, aided and abetted by clever bankers, creating so much money and credit to finance their various agendas, including enriching themselves and their cronies, that the money in circulation eventually becomes worthless and collapses under its own weight. This idea is best summed up by the phrase "confiscation by inflation"[6]: the deft transference of naive citizens’ savings to slick operators who understand how to manipulate the financial system.
Whereas in more than 800 years of fiat currency use there has never once been a successful fiat currency, during that same time there has never been a currency based on the gold standard that failed—until it was either corrupted or taken off the gold standard. In fact, fiat currency crises resulting in either outright collapse of severe devaluation are so common the public hardly notices anymore. In the last generation, Mexico, Thailand, South Korea, Indonesia, and Russia, to name but a few, have experienced currency crises that adversely effected the economic well being of their citizens. And do not be lulled into dismissing such events as phenomena that only occur in third world countries: the British pound's most recent crisis was in 1967; the US dollar-gold convertibility crisis of 1971 resulted in the dollar devaluation of 1973, which led to the inflation prevalent for the rest of the 1970's and was followed by the dollar exchange crisis in the mid-1980's[7]. Fiat currencies over time simply do not work.
- Goldilox
Nothing new here, but a solid restatement.
Caradoc
(1/3/06; 21:52:39MT - usagold.com msg#: 140050)
email to friends, relatives
http://quotes.ino.com/chart/?s=NYBOT_DX
I thought I'd given up on my brother-in-law (as others at this Table may have given up on some friend or relative?), but I went ahead and included him in an email I sent earlier today. Nothing new for anyone here, but I tried to make it so clear that maybe even my brother-in-law (or yours?) could read the handwriting on the wall.
To enhance the odds that some addressees would actually read it rather than just say "It's him again ranting about gold" and delete it unread, I titled the email "Implications of Fed ceasing to report M3 and what to do about it."
Text follows and any of you can feel free to relay some or all of it to any friends, inlaws, or outlaws who are likely to hit you up for help when TSHIF.
Caradoc
***text follows***
All:
Check out the recent surge in how much the feds are pumping into the economy as overnight (so-called "repo") money to the banks. Since this overnight money is one of the differences between M2 and M3, it might well explain why the feds are going to cease reporting M3 in March.
M3 is in red charted against S&P 500 in blue:
http://www.omo.co.nz/Plots-US.htm
Throw in the fact that March is when Iran begins selling its oil for Euros rather than dollars...
* less international demand for the dollar since countries like France, Germany and Japan will no longer have to buy dollars first in order to pay for oil
* greater stateside supply of dollars since existing Petrodollars/Eurodollars will gradually leave Swiss bank accounts and shift back to the US every time a Middle Easterner buys a Cadillac or some other US product and redeposits Euros rather than dollars into his Swiss account.
* Between greater supply of dollars competing with the ones in your pocket and less demand for dollars, the old "supply and demand" thing kicks in and the dollar is due to head south. More specifically, it's due to have already headed south by March. And since markets generally anticipate when there's clear handwriting on the wall, we've already got the dollar down sharply today (the first trading day of the year):
[Paste in graphic from link above by doing a right-click on chart and selecting "copy" or "copy image" before doing "edit, paste" into the message.]
and gold up by more than $13 per ounce to over $530.
Last thing to consider: some 43% of US debt is owed to China and Japan. They've been real obliging about propping up the dollar by buying our debt so that US consumers can afford to buy their products, but as the dollar tanks they're likely to buy less of our new debt (less demand for debt denominated in dollars) while cashing in the dollar instruments they hold for things like Chevy Suburbans and Boeing jets (more dollars headed back to stateside).
Bottom line is twofold:
(1) Over the next few weeks, we should begin to head into a deflationary depression.
(2) High likelihood that feds will respond by cranking up the printing presses and creating enough dollars to stave off any deflation. Instead, we'll have inflation like nothing any of us have ever experienced.
So, if you have a foreign car you plan to keep, I'd suggest buying all the parts needed for a couple of brake jobs. Other than that, every financial asset you own has a lot in common with Cinderella's carriage because sometime between now and March it's going to turn into something the color of pumpkin. To avoid that outcome, switch to some mix of (1) physical gold held in your possession and (2) stock in gold mining companies that have NOT sold their future product into the futures market; i.e., won't benefit from gold going up and which are not involved in so-called "non-recourse" loans for their operations since such loans invariably include a derivitive short-sell put against gold (sometimes labeled as "variable cost of financing") placed by the original lender at the time the loan was made for protection against the chance that gold would go down. Using those two criteria, I've focused in on producer Goldcorp (GG), royalty collector Royal Gold (RLGD) and explorer/ would-be royalty collector Tan Range (TRE). As a matter of disclosure, I'm in both GG and RLGD and am kicking myself for having sold TRE.
Just my opinion, but I'll bet you a nickel I'm right.
***end of text***
Those here might consider buying a few extra ounces to be able to help those you fail to convince.
Regards to all,
Caradoc
TownCrier
(1/3/06; 20:01:39MT - usagold.com msg#: 140049)
"Holey underware, Batman!"
I tend to think that's a lot of drama for a 'young man' like me to cope with, cb2!
:-)
Randy
YGM
(1/3/06; 19:57:02MT - usagold.com msg#: 140048)
Cb2
You got to know you'll be missed. Alot of water passed under the bridge over the years. Maybe we can still swap some stories one day. Just ask B Murphy or C Powell (GATA) to put you in touch w/ the Yukon Gold Miner and you can find me. Adios` and stay well. Vancouver Gold Show Jan 22 & 23. I'll be there for a week....Ken
CoBra(too)
(1/3/06; 19:36:36MT - usagold.com msg#: 140047)
Gist & Drama
I can't care less, if I miss the the gist of it! (What gist of what), nor am I enjoying my own sense of drama.
I personally think young man, you're way ahead of yourself. That's fine with me and you're probably doing a great service to the rest of the world.
TC, Randy or whoever - think again - there may be some not appreciating your recurring lectures - as they may have arrived at your goals long before you've ever thought about it .
Dramatize your own future and please never mention cb2 again - he's gone . from here forever ...
USAGOLD Daily Market Report
(1/3/06; 19:22:15MT - usagold.com msg#: 140046)
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http://www.usagold.com/DailyQuotes.html
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TUESDAY Market Excerpts
Gold begins New Year with a Bang
January 3 (from MarketWatch) -- Gold futures stretched their winning streak to seven sessions Tuesday.
COMEX February contract climbed to a session high of $533.20 and finished the session up $13.60 at $532.50 an ounce, the highest futures closing level since April 1981.
"There's a lot of upside left in the entire metals complex," said Dale Doelling, chief market technician at Trends In Commodities. And "as some of the financial uncertainties become more clear as we head into 2006, gold is going to take the lead and achieve exceptional returns for traders who continue to focus on the long-term trends in these markets," he said.
Echoing this theme, the factors that drove gold up by more than $80 an ounce over 2005 remain intact, said Peter Grandich, editor of The Grandich Letter.
The foremost of these -- physical and investment demand -- shows no sign of cooling down.
"The rapidly growing economies in China and India have been key and while soft patches are likely going forward, the enormous wealth creation ongoing there appears to assure strong demand for gold for the foreseeable future," Grandich said.
---(see url for full news, 24-hr newswire, market quotes)---
TownCrier
(1/3/06; 19:00:18MT - usagold.com msg#: 140045)
CoBra(too), you're either missing the gist of it or else enjoying your own sense of drama
As I refer again metaphorically to the process by which a mountain range is picked apart grain by grain and atom by atom and delivered to the seashore, what part of the the erosional process in "mind-numbing" detail are you eager to have described?
When I said, "Respectfully, no thanks", I am fairly sure that that sentiment applied EQUALLY both to the weary audience of such a mind-numbing geologic dissertation as well as to the prospective writer who, I'm sure, has more interesting ore to mine in the use of his fingers' remaining energy.
R.
Goldilox
(1/3/06; 18:58:01MT - usagold.com msg#: 140044)
Griffin interview
@ Cobra (too),
The Griffin link didn't work, but it gets us to the home page, where we can search on Griffin as a guest to get to the interview.
Muchas Gracias for the reference.
David Linkley
(1/3/06; 18:50:41MT - usagold.com msg#: 140043)
Tick tock tick tock
The gold fuse is now lit in light of the recent strength above $500 and there are those lurking who feel the end of the US - IMF system is ney. Not so as nature abhors a vacuum and no country or entity is ready to replace the US or the dollar. If fact the US is racing the printing presses as fast as possible and are still having difficulty bringing the dollar to a lower level. No military, technology base, or free market orientation can currently match the good old USA. MTM all you want but all players will be forced into a "Bretten Woods II" agreement because right now all other options lead to a responsible system which the insiders of course cannot tolerate. Keep up the the good work gang and watch the ECU dishoard the only real wealth they have while falling futher behind the rest of the world with there socialist ways.
Goldilox
(1/3/06; 18:50:32MT - usagold.com msg#: 140042)
Posting rules #139995
The last clarification from MK suggested a return to pre-open-forum topics. Silver, energies, and currencies are NOT out-of-bounds in the flavor of the forum, especially as they relate to POG and/or gold markets.
"Acceptable posts include discussion of economics, financial and monetary markets, and geopolitics -- that is, insofar as they each are made to demonstrate relevance to the topic of GOLD ownership. "
CoBra(too)
(1/3/06; 18:47:30MT - usagold.com msg#: 140041)
Re my latest
Lacking some real depth! As I figure - still fair enough to say fare well ... cb2
CoBra(too)
(1/3/06; 18:30:34MT - usagold.com msg#: 140040)
Purists vs Realists a/o spoilists
No Thanks - says (un-)graciously TC.
Well, we'll forgive the young ones - They may have a lot to learn - still - even if they feel it's their order to feed us with their own un-distilled magnitude of pro gold fodder.
Even that may become its own main stream (street) nonsense. Knowing what your aiming at it's like an arrow missing the apple of old - your repetitive pro-active gold advocacy is missing the crucial point - as you've never experienced it in reality!
I'm as aware as yopu and other spoilists are, that the ever growing debt situation in the West has to be redeemed. Redemption is pro'lly beyond reality and so ... what?!
Let's blow up the world as we've known it - as we might be slowly adapting to the old Club of Rome asessement of Limits to Growth! Only 35 years later the (then seemingly)idiotic logic was deemed to be correct - only having lost 35 plus years of preparation.
The same logic is bound to specify purists, realists and potentially spoilists. And before you want to really engage me - please grow up and try to learn your own lessons.
So, my friend don't ever try to teach me the lesson I've personally learned and don't ever try to convert to me to to your "purist" ideas - been there and have gone through all phases you try to re-convert me to.
Anyway - Thanks for your consideration - but as you've hinted - NO Thanks!
and
Good Bye - cb2
Mthirsty1
(1/3/06; 17:58:50MT - usagold.com msg#: 140039)
contest
Whiterose,would you please put me down for $640 high and $640 EOY.Thank you.M.
TownCrier
(1/3/06; 17:47:47MT - usagold.com msg#: 140038)
CoBra(too), purists
Maybe this wasn't at all your point, but given comments that I've read in the past, I'm under the impression that persons such as Belgian and myself are part of this unsavory lot which you call 'purists'.
But that begs the question: What's the opposite of a purist? A 'spoilist'???
I certainly wouldn't count myself among any group of 'spoilists'.
Closer to the mark, however, I would call myself a 'realist'.
I have assessed to the best of my ability (and to the extent that it matters) the lay of the political and economic landscape. There are certain driving forces akin to gravity, and there are certain constraints akin to 'immoveable' mountains. In the same way that one can assess the trend of future erosion or even public works that affect the actual landscape, one can also reasonably assess a realistic pattern of development upon the monetary landscape.
In making the most useful assessment possible, there is no room for me to cling to any sort of 'purist' mindset that sees only gravity-like drivers while ignoring the various (usually social) constraints. But with that said, in the end, even the highest immoveable mountain is inevitably worn down to the golden shores of the sea.
Is it possible that the difference in interpreting whether a person is a 'realist' or a 'purist' is in their available time and energy to describe the intervening erosion in mind-numbing detail?
Respectfully, no thanks!!
So speaking for myself, I'll continue to make assessments as a 'realist', even though my necessarily brief commentary in this format may risk giving me the outward appearance of a 'purist'.
R.
Henri
(1/3/06; 17:42:22MT - usagold.com msg#: 140037)
Kiwi
For the moment separating gold/silver stocks from the malevalent paper gold players meaning futures and options...the price will of course break free when there is no more gold coming onto the market to be sold in the future. Then all existing contracts will be settled for cash and not much since there will be no real gold backing the action. Naked shorts will be saved by regulators settling contracts at a price far below the free market gold price...just an opinion...
Clink!
(1/3/06; 17:32:00MT - usagold.com msg#: 140036)
I guess this answers my question
A snip from tonight's Midas :-
And Adrian:
Bill,
In case you haven't had time to look back through the database, gold today made its BIGGEST one day gain in this bull market to date closing up a whopping $13.30. The closest big move to this was on May 18, 2001 when gold rocketed up +$12.65 in a single day.
There has only been one day that has beaten this move in the last 21 years which was +$14.20 on September 27, 1999 due to the announcement of the Washington Agreement.
End snip.
I don't know if the 2001 date is yours, Rimh (you seemed to specific for that to be the case), but as the POG is currently at $534.80 (up $17.80), this largely eclipses the WAG spike. Mind you, I suppose he is probably quoting closing numbers, so we will have to wait till tomorrow to see if it can be bettered !
More roo ! More roo !
C!
CoBra(too)
(1/3/06; 17:03:07MT - usagold.com msg#: 140035)
@ Galearis and all
I'm sure it's not as strict as you (or I) have put it.
Your info was and will be most appreciated - IMHO - everything else will be our loss.
... and if I'm wrong - so be it! ... But then it's probably time to wander off any way and not just wonder!
Thank you - USAGOLD (for 7 years, I guess also true as a poster) - of a great learning experience ... the last thing I want to see spoiled by purists only is this great website!
It may be time to listen to a free market news interview by Edward G. Griffin - author of the Creature of Jekyll Island:
http://www.freemarketnews.com/News-Video.aspn
Meanwhile Gold and Silver is showing stealth in view of the marketeers calling for a big reaction. Free gold marketeers will have their day anyway - give us other guys, having put in their stash before playing paper and other games some credit and please don't disservice your own agenda, by paraphrasing every and any suspected "dissenter" as a renegade.
I guess, most of us have loaded up on physical before the purists have even arrived.
... and in the end I'm not really challenged by people calling me "my dear cb2 or whatever else"; Since I really hate any kind of governess, however well-meaning it may be!
Thank you all and have a great year!
cb2
YGM
(1/3/06; 16:58:59MT - usagold.com msg#: 140034)
Galearis
I don't think Mr Koasares is condeming Ag discussions to the trash heap at all. Silver has always been contentious here by some, but I (correct me if wrong) think Michael is urging "moderation" (not aguementative repitition) and respectful discussions. Not the my way or the highway mentality. Silver is also purveyed by CPM don't forget. I cannot think in terms of one without the other myself and many others who have posted here for years are of similar mindset. I favour owning alot more of the Yellow than the White on a personal level, but I still want to hear and read about both, and would miss your input. If all the posters leave who have some interest or holdings in Silver (alongside their Gold) or even paper traders left the hall who would be here to grace these pages with thought? Not very many!
LimitUp
(1/3/06; 16:44:03MT - usagold.com msg#: 140033)
Galearis
May you have a wonderful journey.
spotlight
(1/3/06; 16:28:41MT - usagold.com msg#: 140032)
Gold vs. gold stocks
Belgian
Re:
Your statement:
"The paper mutants of gold (and silver-metal) will gradually lose their affinity (old links) with the growing free gold. The prices are distributed at the END of the race, Sir !!! And it is free gold that is going to win the race and collect the BIG price."
I believe most of us here are fundamentalists at heart'so would be interested in your reasons why Physical gold will leave gold stocks (paper gold) behind.
I have my own reasons to be wary, but would like to hear yours.
Galearis
(1/3/06; 15:58:46MT - usagold.com msg#: 140031)
@ gold AND silverbugs
I have some very interesting news about the gold and silver markets (to do with the supply/government sales side) from a well informed citizen of India. His was the letter posted on Midas from last night about Indian PM markets, but I find myself leaning toward reticence with the new posting policy of accepting gold discussions only. I regret this shift because the news would be quite gold positive too. But as the forum wishes to return to the narrower focus, I feel I should not go against the desires of our hosts,,,who I feel now have only been (just) tolerating our discussions. I do not feel comfortable about posting information that may or may not be appreciated so,...
It is time to move on.
Best regards, and good luck in the years ahead.
G.
Rimh
(1/3/06; 15:24:05MT - usagold.com msg#: 140030)
sorry, it's a moot point.....
Rimh
(1/3/06; 15:22:38MT - usagold.com msg#: 140029)
re: Clink!
I believe it was Feb 4, 2000 when Placer announced they were going to reduce their hedges (I think I recall that as the news that day, but I could be wrong) - not that they made much effort to follow through on that announcement, but that's a mute point now......
Belgian
(1/3/06; 14:02:22MT - usagold.com msg#: 140028)
@kiwi chick
This is not a matter of goldprice but "gold-market" !
But be careful...and don't hope for being able to switch racing-car (paper gold to goldmetal) during the ongoing race (gold-market evolution) as to catch the big price at the finale.
Many (an increasing number) of paper goldbugs are thinking about this smart (?) strategy. Taking profits on paper gold instruments...gradually losing their leverage...and switch to physical gold...just in time for the spurt. Good luck !
Clink!
(1/3/06; 13:48:46MT - usagold.com msg#: 140027)
@ Kiwi chick
That is the proverbial $64,000 question. Which might also turn out to be the answer too !
C!
Clink!
(1/3/06; 13:41:00MT - usagold.com msg#: 140026)
Remember the good old days ?
Yes, those long-ago times, when we were limited to only $6 up days ? I must be getting old, it seems so far away - was it.... November ?!
Hmm. There doesn't appear to have been much of a pause in the upwards trajectory moving into the Access hours. We're about $16 up on the day as I type. A trivia question - when was the last time this happened ? The first WAG announcement ?
C!
USAGOLD / Centennial Precious Metals, Inc.
(1/3/06; 13:31:43MT - usagold.com msg#: 140025)
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