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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...

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ARCHIVED DISCUSSION FROM 1/4/2000
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TownCrier (1/4/00; 23:31:23MDT - Msg ID:22307)
The GOLDEN VIEW from The Tower
To borrow from Charles Dickens, "It was the best of times; it was the worst of times." In a 24-hr period, we've been given a lesson how quickly fortunes can change on the stock market. Yesterday after a session of wild price swings, the Nasdaq Composite Index closed at its highest mark ever, and today it closed down, suffering its largest point loss in Nasdaq history (229 points, 5.7%). Far be it from us to rub salt in others wounds, so we'll move on without further comment.

From The Tower's lofty view over the financial plains, here is the reason bonds collapsed yesterday but recovered today, and why gold was sold down today despite the stock market woes.

Fortunately for all of us (we hope you agree), the world didn't end with the Century Date Change. Thanks to this pleasant discovery, many of those who had taken defensive financial positions likely resolved themselves when the Sun came up on Saturday morning to liquidate these postions at their first opportunity in order to join the party on Wall Street--a party which they watched from the sidelines in the final days of 1999...pouting no doubt, (but hopefully stress-free over the uncertainty of the coming rollover.)

Those that had bonds to sell were able to do so Monday because the bond market was open Monday, but not so with gold. As a result, the bond closed sharply lower yesterday, and was better positioned to gain today in a flight to safety as the stock market tanked. Those who had predetermined to sell their gold were naturally doing so today on this first day back from the holiday...overshadowing any similar flight to safety effects that benefited the bonds today. You'll also recall from our post earlier in the day that the Dutch Central Bank comfortably moved three tonnes through the BIS during the "non-week" between the two holidays last week. When we pause to reflect on the situation, we can not conceive of any condition that would justify gold prices being sold lower by any rational trader. (That is, unless the world were to be swept suddenly by another Asian Contagion-style currency crisis in which citizens were forced to spend their only remaining viable savings--with the dollar remaining immune once again from the contagion. We see this as unlikely.) While we have been gold buyers out of prudence these many past months, we are now buyers with the added confidence that no amount of waiting would likely yield significantly better prices.

Many people have tried to call the bottom...and somebody's got to get it right at some point. The $250's in August was likely it, and we seem to have shaken through the final downside-correction to the Washington Agreement run-up. In this spate of post-Y2K selling, spot gold reached $282.20 when NY closed on this first round-the-world trading day since last Thursday's close of markets for the New Year's holiday. The February futures contract on COMEX closed down $5.90 to end at $283.70.

There is no open interest in the current COMEX contract month, but February gold futures stood at 67,872 contracts when trading began this morning. Gold movement in the warehouse was limited to 2 kilos being withdrawn from the Scotia Mocatta vault.

OIL

February crude also traded sharply lower on NYMEX's first day back from the four day weekend. It slid in early trade by 85�, likely on the same initial knee-jerk sale instinct that swept through bonds yesterday and gold today. Before trading concluded for the day, this effect had largely been worked through, and short covering ahead of the API's anticipated afternoon report of crude stockpile declines lifted crude back up to its starting point, ending the day down only 5�. Brokers estimated a decline in U.S. crude inventory by 2 - 4 million barrels, but the report released at day's end revealed a somewhat disappointing decline of only 1.568 million barrels. We'll wait and see what tomorrow's DOE data reveals.

And that's the view from here...after the close.

SteveH (1/4/00; 23:21:43MDT - Msg ID:22306)
Interesting
http://www3.techstocks.com/stocktalk/msg.gsp?msgid=12461836
eom

GFD (1/4/00; 23:16:59MDT - Msg ID:22305)
Koan
The thing with "technological revolution" is that it will not have a uniform impact on the economy. The net will certainly allow revolutionary things to be done in the area of business to business interactions. And it will allow catalog companies to operate more efficiently. But it certainly will not make it any easier to produce a ton of steel.

The markets reflect this spottiness. Some areas are very hot but those sectors reflecting the bread and butter of the economy have definitely seen better days. If you could filther out the noise caused by the net hype and the distortions by a lot of liquidity chasing a relatively select and scarce group of stocks I wonder what kind of a picture the overall economy would present.

SteveH (1/4/00; 22:44:16MDT - Msg ID:22304)
Feedback and ORO
Oro,

Your on a roll today. Am still digesting. And for your pleasure, I got this question from a person. What are your thoughts?

Not to nit pick, but you mention that the Euro is not as indebted as the
dollar.

If you go to the EU Web page and add up the cumulative debt of the 11 Euro
states you will find that the ratio of debt to GDP exceeds that of the US.

This is the one element that has made the potential for the success of the
Euro suspect to me.

Mr Gresham (1/4/00; 22:26:54MDT - Msg ID:22303)
Analysis of M3 increase by Paul Kasriel
http://www.ntrs.com/rd/rd35/pos2000/pos_econ_04jan.html
Passing the day at Prudent Bear's chat threads; wanna see a bunch of happy bears?! This was a link from there -- a lot of people digging up good stuff!

lamprey_65 (1/4/00; 22:18:36MDT - Msg ID:22302)
Disclosure
I hold no positions in the stocks mentioned in my last post...nor do I intend to in the NEAR future.

L.

lamprey_65 (1/4/00; 22:17:23MDT - Msg ID:22301)
The Internet Revolution
Are we really seeing a revolution?...I believe we are, of sorts. I do believe, however, that it may not be as great in some areas as people believe, and possibly greater than they think in others.

For example, let's look at a favorite of mine -- Ebay. I love the company - I'm a coin collector and have found their auction process to be the very best on the net. The company is growing rapidly and is profitable NOW. I have perused other auctions such as Yahoo's -- no contest...Ebay is far superior in number of items offered, quality, and number of bidders. Ebay already has critical mass and should continue to remain far ahead of competitors.

HOWEVER, the stock valuation is completely ludicrous. There simply is no justification to pay a 2000+ PE for anything, imo. The point here is -- one must separate the company from the stock. If Ebay ever sports a PE under 50, I'll start to be interested.

Now, that's auctions - business to consumer (Amazon, Cyberian Outpost, Buy.com, etc. etc. etc.). Forget it. It's the Sears catalogue concept online and it's just too early to figure out who will survive and how long before any of these companies can make money. In addition, although growing rapidly, let's get a grip...there is an upper limit to how much people will buy online, no matter what hype CNBC et al may tell us. Most people like to shop...they like to actually see and feel what they are buying and many enjoy the social experience. This sector of the net is not a good investment IN MY OPINION. (Of course, that does not mean you can't make money trading the stocks!)

Next, the picks and shovels...Rare Medium or Razorfish and the like. They make websites and provide integrated software solutions for companies establishing an online presence. They really are like the sellers of picks and shovels during the gold rush...they should make money regardless of how well individual businesses do (as a matter of fact, they are turning away contracts, they are so busy). Definately a sector to look at, but also currently overextended - like just about everything else.

The last on my list...business to business. This really will be huge and where much of the revolution takes place...the buying of items by businesses through online companies. I will be researching this sector and hope to build some long positions AFTER we have a real pullback (not holding my breath!).

After a year of trading and watching this sector, I truly believe that most of it is hype and that most of the i-net companies on the NASDAQ will not survive (Anyone ever heard of CyberGold?...amazing what venture capital can do to help you get a listing).

A little off topic, but hopefully helpful to someone here. Yes, this is a true revolution -- no, the stock prices, for the most part, are not justified.

Lamprey

Peter Asher (1/4/00; 21:42:50MDT - Msg ID:22300)
koan (1/4/00; 18:48:02MDT - Msg ID:22276)

I have always agreed with you regarding the exponential expansion of this "Second"technological revolution and it's unique place in history. However, the "Stock market" as a whole, has many companies that are not part of this new business world and some will even be hurt or wiped out by it. For instance, what will on-line commerce do to Wall-Mart, Target, and Penny's and Sears etc. Or conversely will they overpower Net-only rivals with their own on-line operations.

It would be interesting to know what percentage of overall Market Capitalization, or overall corporate intrinsic value, is part of this technological paradigm.

lamprey_65 (1/4/00; 21:20:39MDT - Msg ID:22298)
Updated Story
http://biz.yahoo.com/rf/000104/bes.html

lamprey_65 (1/4/00; 21:16:46MDT - Msg ID:22297)
Batten down the hatches!
http://biz.yahoo.com/rf/000104/beq.html
I don't think we'll know for sure until we get at least one failed bounce...nevertheless, it's sure looking like rough seas!

Lamprey

ORO (1/4/00; 21:14:10MDT - Msg ID:22296)
FOA, TownCrier - a request
If I may, I would like to ask you both for comments on the posts I put up earlier today.

The historical post and the bullion banking post contain many details. Many of these are difficult to estimate, some are shrouded in an opaque fog where barely an outline can be discerned, let alone seeing an image to the detailed level I've drawn.
I am trying to put together a more complete and more accurate historical overview.
FOA any comments - particularly errors of fact you may (probably will) find, would be greatly appreciated.

Thank you.

All, of course, are invited to comment.

Solomon Weaver (1/4/00; 20:43:48MDT - Msg ID:22295)
gold down to protect hedge books
beesting (1/4/00; 8:54:10MDT - Msg ID:22239)
Why is Gold taking a hit right now? Some speculation!
http://quote.yahoo.com/m2?u
The European and America's stock markets are all in correction mode, see above URL. It had to happen eventually.

Now, many here believe the Gold markets are manipulated, by the big boys with the solid approval of the US FED. With that in mind, as the stock markets correct in order to prevent a mass exodus from stocks into Gold, the "spot" Gold price is forced down big time to give the illusion that Gold is not a good place to store assets, looking for a home.
If Gold was climbing real fast today, it could spark a landslide correction in stocks.Follow the mob mentality.

----
Beesting

Perhaps Alan Greenspan and his buddies, when looking at the structure of hedgebooks like those at LTCM, have discovered that the gold carry trade is jeopardizing almost every one of the big ones....

I have always had my personal belief the the "plunge" protection team works on the S&P 500 and at the same time they can be called the "surge" protection team when speaking of gold.

If there is a big drop in the major US stock indexes, there is certainly a lot of margin money being called in...possibly requiring physical gold longs to cash in so they can ante up on their losses....with so many longs in the stock market melting down the big "too big to fail" hedgebooks can't afford misbehavior in gold.

Poor old Solomon

BTD (1/4/00; 20:43:08MDT - Msg ID:22294)
Ray Patten - Crude Oil Rally
http://pub3.ezboard.com/fdownstreamventurespetroleummarkets.showMessage?topicID=17.topic
"Does anyone know if there is any particular reason why crude oil had a 70 point rally from last night's low. I've searched some news sites but can't find anything."

There is an article on the Petroleum Markets forum (see link above) about 3 refineries that are having problems.

Peter Asher (1/4/00; 20:38:13MDT - Msg ID:22293)
They don't GET it!

Yardini on CNN says "This may even give the economy a boost. People will be selling their stocks now and buying things with the money."

FACT, the sellers of stock have had money to buy things all the way up. The "flow through" is a zero sum game. Money "in" the market equals money "out" of the market. What will change is that lower prices will mean less money is circulating through the market as a whole. More importantly, as equity prices decline, less outstanding margin will mean some of the money supply goes back from the brokerage houses, to their banks and then into the black hole of the Fed from whence it came.

The economy will be altered by the fact of affluent people who have put off their furniture purchases and home improvements, now doing so instead of feeding the market. Conversely, what ever people were buying with their hot and heavy profits will have a slow down.

The other thing that will happen, is that when people realize that their "Perceived" savings were just that, then more of their money will go into real savings and less into spending.

There will be a shake out and hopefully a return to more rational consumerism and the better survival of those who produce quality goods and services in a sane economic world.

CoinGuy (1/4/00; 20:31:31MDT - Msg ID:22292)
Asia
WOW! The Hang Seng down 1000 pts in the first five minutes of trading? Japan down 770. Could tomorrow be as interesting in the US? Or, are the Asians following our cue from today and the bull market continues tomorrow? Anyones guess...

Coinguy

canamami (1/4/00; 20:14:33MDT - Msg ID:22291)
Reply to Town Crier
I'M the one who should stop posting, in that it seems I'm conveying the wrong impression in my recent posts. I understood your comment to koan to be a "playful" one, not an attack. It did appear you were expressing disagreement with koan's views, but like I said in a "playful" manner.

Re my views of Greenspan, he was an associate of Rand's, so he must be okay. My view is that Greenspan is Chairman of the Fed, not dictator of the Fed. The Fed's actions are not necessarily Greenspan's, IMHO.

Re your posts, they are excellent and informative, and I greatly enjoy and appreciate them. I think I need a posting holiday, to facilitate conveying my intended meanings more accurately.

CoinGuy (1/4/00; 20:11:43MDT - Msg ID:22290)
Stranger
No problem here at all...I should do the research myself anyway, and I understand your respecting the forum. I should have too.

Got physical, might go Newmont Mining,

CoinGuy

TheStranger (1/4/00; 20:08:18MDT - Msg ID:22289)
Gold Up 30 Cents in Hong Kong Amidst Stock Market Carnage
The second leg of the new bull(ion) market has begun!

TownCrier (1/4/00; 20:02:50MDT - Msg ID:22288)
Sir canamami...
"In defence of koan..."???
Have we mixed signals again? My comment regarding Sir koan's recent post was highly complimentary. In today's search for news I twice encountered seperate quotes by the Fed Chairman that were exactly echoed by the words of koan. A review of the TownCrier announcement of Mr. Greenspan's re-nomination will confirm that I personally hold the Fed Chairman in highest regard. Unlike the impression conveyed by some who fault him for the stock market's excesses, I have never personally had my arm twisted by Alan forcing me to participate in those excesses. I have used the opportunity to add to my gold holdings. If/when the markets collapse from their own weight, I will be watching from atop The Tower with calm emotional detachment. I'm unsure of your predispostion toward Mr. Greenspan, but I can see now with hindsight that the possiblity existed for those that held the Chairman in contempt to see my playful post to koan as derisive. I assure you all, it was not. I like them both. Perhaps I'd better turn the rooftop over to another 'Crier for the GOLDEN VIEW...

R Powell (1/4/00; 20:01:53MDT - Msg ID:22287)
Agreement with TownCrier
I was shocked by your equating Koan with the Fed chairman so I reread Mr. Koan's post. I agree with both the opinion of the post and with your opinion that if those weren't the chairman's words they must have been written by his speechwriter. Sure sounds like him replying to a congressional question. Mr. Koan, thanks for the post.

canamami (1/4/00; 19:41:25MDT - Msg ID:22286)
Town Crier, koan
In defence of koan, his theory has been propogated by George Gilder for years, and Gilder is the pre-eminent thinker of our time (at least outside the world of science, about which I know next to nothing).

Not a day goes by without my questioning the wisdom of opting for gold, a decision contrary to most of my beliefs prior to about July/August of last year. Technology and mutual funds may have made the equities markets a viable investment vehicle for many due to risk and cost reduction, thereby causing a permanent upward revaluation in shares' values. Moreover, relatively few predicted the ease with which the equities markets shook off last summer/fall's correction (though perhaps at the price of an influx of liquidity which has yet to make itself fully manifest). On the other hand, current valuations just defy logic and sanity, and must somehow be reconciled to reality, at some point.

For good or evil, technology has further democratized our society. Without a doubt, real knowledge of the markets and the economy is more diffused than ever. However, the "quantum" of knowledge is not as important as the "direction" of knowledge- i.e., in other words, sometimes one is better off knowing less. Better to have 2 units of knowledge, and make the right decision based on expert advice, than to possess 5 units of knowledge and get it wrong on a do-it-yourself basis. To use a example from the field in which I was trained: Who is better off, the unsophisticated client who allows an expert to do it right, or an intelligent layman who acts as his own lawyer, inflicting harm on himself becuase he knew just enough to get himself in trouble?

Perhaps we in North America are going through what the Albanians went through, only we are somewhat further along in the process. They went through their primitive Ponzi scheme, and we are now going through the same process, but at a more advanced level. To steal from Blake, perhaps we are losing innocence through experience, only to achieve a higher order of innocence, as part of the diffusion of knowledge through our society and the achieving of a broader-based maturation of our society.

I forgot the original point of this, so I'll stop here.

TheStranger (1/4/00; 19:35:02MDT - Msg ID:22285)
Top Stocks For '00
http://biz.yahoo.com/rf/000104/4k.html
I just found out today that Newmont Mining made Goldman Sachs' top stocks pick list for 2000. Homestake is on Standard and Poors' pick list for 2000. Hey, we're starting to get respectable around here!

TownCrier (1/4/00; 19:29:42MDT - Msg ID:22284)
Sir ORO, excellent posts today!
Thanks for sharing your time and talent. For lunch I had The Tower's kitchen staff send up a bite...I enjoyed a toasted sandwich, bowl of soup, and fine french roast espresso while reading every word. Much better than anything offered by the BBC! Thanks again.

TheStranger (1/4/00; 19:26:15MDT - Msg ID:22283)
koan and Japan
koan - that is the answer I was looking for, especially in an election year. We shall see. BTW, thanks for everything, buddy. You are Joe Cool in my book.

For all my crowing about Japan, I sold out today. I hope nobody invested there in recent days because of anything I said. (I told Jon just 2 days ago that I saw no reason to sell). The problem is the weakness in New York is of a magnitude that I would expect it to continue for awhile and to spread round the world. Again, we shall see.

Follow the yellow brick road!

FOA (1/4/00; 19:24:50MDT - Msg ID:22282)
Comment
ALL:
I guess everyone knows by now that I am somewhat "irregular" in my replies here. Still, I read
most everything when time comes my way. My linkup saves all the forum (even when I'm not around).
A few quick notes:

Aristotle (01/03/00; 17:39:33MDT - Msg ID:22153)
Aristotle, you prove the point that one person cannot understand everyone, nor can everyone understand the thoughts of one. You have a wonderful way of presenting things. Thanks, so much!

PH in LA (01/03/00; 20:59:55MDT - Msg ID:22175)
Another's e-mail address
" Geneva Steel Company, located in Provo, Utah;" ????

PH,
I'm thinking real hard as to why someone would set up in Provo to do that,,,,,,,,,'still thinking.
No, can't make any connection in my mind. (smile)

There is an old saying; "children of the sand curse the sun, yet run from the night". Adults often act the same way when they lack understanding of the world around them.

I'll be back when I can, PH. And be certain, so will Another.

FOA

RossL (1/4/00; 19:24:18MDT - Msg ID:22281)
Japan, Hong Kong, Singapore, Korea, NZ, Australia
http://quote.yahoo.com/m2?u
Markets take a dive in the opening hours.

TownCrier (1/4/00; 19:07:40MDT - Msg ID:22280)
Thanks for the assist, Leigh.
On the issue of the stock market valuation vis-�-vis the technology revolution, I always knew that the Fed Chairman was a visitor to this site. Now I know who he is...thanks for showing yourself, "koan." And congratulations on your re-nomination today. You've really got your hands full with this one. But don't worry too much about engineering a soft landing, just make sure it's a golden landing. :-)

Netking (1/4/00; 19:06:57MDT - Msg ID:22279)
Y2K Apologies continue
Ed Yardeni from Deutsche Bank securities on CNN just now; "I was wrong about Y2K" ... bring on the sackcloth & ashes guys!

Cavan Man (1/4/00; 19:01:50MDT - Msg ID:22278)
Leigh
Thanks. That sent a chill down my spine then and it does now as well. My daughter wants me to put clothes on her "naked barbie" so must run...CM

Leigh (1/4/00; 18:52:13MDT - Msg ID:22277)
Town Crier, Cavan Man
The post in which Another talks about Japan is #14770 on September 28, 1999. That was an unforgettable one.

koan (1/4/00; 18:48:02MDT - Msg ID:22276)
fed and macro economic trend
If the mkt goes into freefall the fed will increase liquidity.

I think the important concept that is being overlooked by many regarding the valuation of all stock mkts, is that whereas the stock mkt may be overvalued, in the short run, the technological revolution is impossible to quantify other than to say it sits right up there with the discovery of fire, the invention of farming and the industrial revolution in its impact on our species.

General productivity will keep rising at an exponential rate, which cannot be understood or quantified; and which means no one can really tell if our stock mkt is overvalued or not, in the long run (long run - just a few years as most <g>)

TownCrier (1/4/00; 18:23:34MDT - Msg ID:22275)
Sir Cavan Man's 22272... Right you are!
I do recall that phrase you mentioned distinctly provided for our benefit long ago. And a quick check of the archives yielded this related tidbit as recently as yesterday from Sir FOA:

"Another force is at work in the world today and it is attacking the dollar behind the bushes. ... The Japanese are and always have been up to their eyeballs in US paper. They have to stay this way because of their dollar trade deficit. As they continue to decend into deflation, the strong Yen still locks their hands from selling our debt and the BOJ has always known this. So, they continue to add dollar reserves on balance with this deficit in an effort to keep the Yen from rising even higher and killing their US market share. These people are done in and will eventually print Yen (hyperinflate) in and effort to match any US dollar price inflation. Locked step to the end!"

And also, our Tower's minions game up with this other related sentiment from the archives that may be of interest in this matter. You've gotta love the archives, and having trained minions to search them for you!

These are excerpts from Sir Aragorn III (2/20/99; 19:17:11MDT - Msg ID:2603):

"Answer to Stranger's Question #4: 'Is this week's decline in the yen temporary?'
Everthing is relative. I trust that you mean a decline relative to the dollar? As I showed in the original Msg 2506 (repeated below for continuity) the yen has every opportunity to rise against the dollar, or they could lock arms and stride step-by-step into fiat oblivion, neither rising or falling significantly against the other, but falling steadily against real goods and gold. It seems that these chapters are soon to be written."

[TownCrier's note: for perspective, The Stranger's question came after a 6-week period in which the yen had fallen from �110 to over �120 against the dollar, over half of that coming in that recently elapsed week. Followning this post, the yen did in fact promptly stabilize at �122 +/- for a four month period, then began to steadily strengthen against the dollar from July's �122 level to September �105, at which point it has essentially leveled off "in lock step" with the dollar amidst many BOJ interventions along the way. Continuing with some catchy tidbits...]

"The stock market is a bee upon your face. (But the bond market is a rhino charging at your back!) One may sting. The other will change your life. [From elsewhere in this post it was stated: "Woe is he that does not understand the dollar stands upon bonds alone."]
+
got perspective?"

nickel62 (1/4/00; 18:09:00MDT - Msg ID:22274)
Lamphrey
I enjoyed your post and couldn't agree with you more. The stock markets have gotten so far removed from reality that they don't even seem to reflect anything except gambling anymore. Very sad and very dangerous.

TheStranger (1/4/00; 16:47:36MDT - Msg ID:22273)
Lamprey and Coin Guy
You guys have a better grasp of this stuff than most professionals. Gees, maybe you are professionals.

Coin Guy, I can't answer your question about AAA. Because the forum is a proprietary service of USAGOLD, I am committed to keeping my relationships here away from my professional activities. I hope you understand. But thanks for asking.

Cavan Man (1/4/00; 16:33:01MDT - Msg ID:22272)
Townie
Didn't Another and FOA warn of this?

"We told them long ago to buy gold but listen they would not." Something to that effect?

I recall that statement about the time FOA was verbally mauled by someone exhibiting sychophantic behaviour.

lamprey_65 (1/4/00; 16:25:35MDT - Msg ID:22271)
TheStranger...Today was NOTHING
It seems few understand where the averages are in relation to both the '82 Bull Market trend and the '95 "Super Bull" Trend. Let me throw out a few numbers:

The DOW closed today at 10,997.93...just to touch the '95 up trendline, it could fall all the way to 9700 -- this bull move would STILL BE INTACT!

The DOW would have to break below 6700 or so to break the '82 Bull Market trend line.

It has been my opinion that we were starting to get our much needed pullback in October when the markets were paying attention to rising interest rates...unfortunately, "Easy Al" threw money into the system (just like he did in '98) to protect against Y2K and the financials used it for a quick pop in the equity high fliers (what else could they do with it? -- 90 days is too short for loans). This hyper move since '95 has been too much, too fast...it's only FED liquidity that's propt it up for so long.

Today should be nothing less than a beginning of a much deeper correction...in a rational environment - we don't live in such times. Today's move down is nothing...until the buy on dips crowd learns some fear, I'm afraid 400 points on the DOW is not going to mean much -- we need several days like today just for starters.

Lamprey

TownCrier (1/4/00; 16:25:09MDT - Msg ID:22270)
Must Read/Must Comprehend the Implications
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=21aa0d674a00a2c4ec561fedd090a51b
This offering from Bloomberg does a nice job giving you some of the insight you need into the forces at work.

In a nutshell, the Japanese government is trying to foster an economic recovery fueled by international demand for Japanese exports...demand that is curbed if the yen is "expensive" compared to the importing nation's own currency. To that end, even while other market forces are trying drive the dollar lower against the yen, the Bank of Japan is right there to meet them halfway...selling yen and buying dollars such that the exchange rate between these two currencies is maintained at roughly �102 = $1. The larger effect is that they both go into the toilet together while the euro remains safely on the sidelines. Grab your own safe seat on the sidelines with gold...a safe seat that also offers a potentially thrilling rocket ride to the moon.

Netking (1/4/00; 15:57:25MDT - Msg ID:22269)
Hold that gold...
Bloodbath in Techland (aka Bubble.com)
http://cnnfn.com/2000/01/04/markets/techwrap/

Meltdown on Wallstreet' http://cnnfn.com/2000/01/04/markets/markets_newyork/

R Powell (1/4/00; 15:55:39MDT - Msg ID:22268)
Good read
Found this from Mr. or Ms. Permabear on Kitco's forum www. gold-eagle. com/editorials 00hickel 010500. html

CoinGuy (1/4/00; 15:43:47MDT - Msg ID:22267)
Stranger
I agree with you about contracting the liquidity injected into the system. Didn't the institutional investors realize it would be taken out on the other side of Y2K? I guess my simple logic would go like this: Y2K bad = stocks down, Y2K good + Fed contraction via RA's + fed tightening( probably throw maniacal valuations in here as well)+ long bond = stocks down.

As a side, any way to trade stocks cheap, via the AAA account?

CoinGuy

TheStranger (1/4/00; 14:22:59MDT - Msg ID:22266)
Sopping Up The Liquidity?
Lots of people think the Fed is going to run around sopping up liquidity now that y2k is passed. Ask yourself what you would do if you were the Fed and you saw the stock market in freefall. Would you contract the money supply?

TheStranger (1/4/00; 14:16:06MDT - Msg ID:22265)
Gold Closes At Its High Of The Day In New York
Sure, it was higher last night, but at least it rallied this afternoon. I don't know if this takes care of all the misguided y2k fugitives or not, but I suspect it does. In fact, I think much of the selling was from those who had covered their shorts prior to New Years and simply wanted to replace their positions. But, whatever it was, it is probably already over.

Nearly everyone is expecting higher interest rates now. That means nearly everyone is finally seeing the inflation argument. Boy, what a difference a year makes.

If you didn't buy gold today, you will soon wish you had.

beesting (1/4/00; 13:58:58MDT - Msg ID:22264)
Hi, Cavan Man--Can I explain stock actions--
I can only guess why NASDAQ- ("GOLD") is going up in price, while everything else is going down.
Gold Fields Ltd. is a newly formed company(1999), that last week completed another phase of their of their formation, 100% ownership of St. Helena Gold Mines.

They consolidated several smaller Gold mines into one big company.( 2nd largest in South Africa behind Anglogold)Now produce over 4 million ounces of Gold annually.
It's my understanding their hedge book is very small, and their making every effort to stop hedging complete-ly.They are dependent on a rise-ing price of Gold for their profits. South African Gold mines and Gold Companys have historicaly paid much better dividends than all the other Gold mines in the world.They are making every effort to help cause the price of Gold to rise.(bought Gold at the 2nd BOE auction)The president of the company has publicly stated, he feels the price of Gold is going to rise.They have recently opened an office in Denver USA, a gathering site for major companies in the Gold business.

IMHO the stock was trading low awaiting the final outcome of the St. Helena merger, now that the merger is complete,(Dec.28, 1999) as the price of Gold rises, the stock price of Gold Fields will rise in relation. I honestly feel as the price of Gold moves towards $400, Gold Fields stock price should climb to the $40 to $50 Dollar range.

Of course Cavan Man, none of this is meant as stock advice, only a few random thoughts.
Thank You for asking......beesting.

TownCrier (1/4/00; 13:27:33MDT - Msg ID:22263)
Clinton Nominates Greenspan for 4th Term as U.S. Federal Reserve Chairman
http://quote.bloomberg.com/fgcgi.cgi?ptitle=U.S.%20Economy&s1=blk&tp=ad_topright_econ&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=aa4c75a52f59edbe648bf14f78427dc1
Rather surprising that this news didn't prop up the stock markets more than it did. But then again, how much worse might things have been?

This article is a must read. Speaking for myself, knowing Chairman Greenspan's favorable disposition toward gold, I'm pleased to see him remain at the helm if/when this goldilocks economy comes unglued. (Even Bloomberg reports that the Fed is in a delicate spot.) The Chairman said he accepted the re-nomination because he's "enjoyed every minute...It's truly been an extraordinary challenge."

Getting to Know the Man...

On a personal note, Bloomberg wrote of the 73-year old Fed Chairman:

"---Greenspan is a devoted tennis player and a fixture on
Washington's social scene. He's a disciple of free-market
novelist Ayn Rand, and for several years in his youth, a
professional jazz musician.
"I played tenor saxophone, clarinet and bass clarinet. If I
were a lot better I would probably be still doing that at the
moment," Greenspan told the House Banking Committee
on Feb. 11, 1999.
Greenspan is married to NBC News correspondent Andrea
Mitchell. ----"

Strad Master (1/4/00; 13:07:51MDT - Msg ID:22262)
Interest(ing) juxtaposition
I just looked over at Quote com and found these two market news items back-to-back. I find their juxtapositon to be quite fascinating. Make of them what you will:

Market Update: Tues., Jan. 4, 2000

Stocks opened sharply lower this morning, prompted by weakness in the bond market. After ignoring the bonds for a little over two months, traders coming back from the New Year's weekend found that they could no longer be disregarded with the yield on the thirty-year Treasury bond trading at its highest levels in the past two years. The sell-off in bonds has sparked a worldwide fear of rate hikes, which is focused on the Federal Reserve meeting the first week of February. The growing concern is that in order to prevent any disasters that could come as a result of Y2K, the Fed took a much looser approach to monetary policy than intended to maintain to boost liquidity. As a result, a series of rate hikes is now required in order for the Fed to reign in the economy.

Clinton Renominates Greenspan

Alan Greenspan, who has guided the nation's monetary policy since Ronald Reagan was president, has been chosen by President Clinton to serve a fourth term as chairman of the Federal Reserve, White House officials said.

Meanwhile the Dow is down 360 points!

TownCrier (1/4/00; 12:58:02MDT - Msg ID:22261)
Sir Twice Discipled's questions...
"Are 1 oz bars considered bullion?" --Yes.

"Are there any disadvantages to owning a bar instead of a coin?" --On a bullion to bullion comparison, and assuming you won't adopt a "day-trader" strategy of frequent buys and sales on every price swing, it comes down to personal preference. I mention the day-trader bit because on frequent turnover of bullion, you might find there to be some small advantage in the premium spread betweed buy and sell prices. And further, there is the chance that as one form of gold comes "into vogue," it may command a larger premium over other forms...just like one beanie-baby versus another. But in general, bullion is bullion...solid gold.

There are possibly some other subtle elements that MK's near 30 years of experience might reveal. Give Michael a call (800-869-5115) and chat things over. He's a great one to talk with, and there's never any pressure for you to buy. He's all about helping people live under their own terms. A most noble businessman if ever there was one! Here in The Tower we'll also be putting his service to use. As Sir beesting says, "Those in the know...buy gold."

TownCrier (1/4/00; 12:38:41MDT - Msg ID:22260)
Mull this one over, if you will...
http://biz.yahoo.com/rf/000104/qs.html
As revealed by the Dutch bank's release of their weekly balance sheet for last week (ending December 30), it became known that the Dutch central bank moved another �27 million in gold through their stated program of sales conducted clandestinely through the Bank for International Settlements. A Dutch CB spokesman confirmed the action, "The gold reserves went down 27 million euros and we sold three tonnes of gold (last week)."

What we here in The Tower want all of you knights gathered at the round table to appreciate is that this gold was moved during that mid-holiday week...the slowest of all possible weeks in the gold market...and shorted to boot. Does any doubt remain that these sales are officially channelled, and at "official prices" that aren't market dependent? Bottom line: get your own will it is cheaply available at these prevailing market prices...we don't know for how long they will *prevail*.

Sir SteveH, in answer to your inquiry in yesterday's final post; Yes, the ECB partcipates in conformity with the best international practice of periodic gold asset revaluations through, in the ECB's case, quarterly revaluations marked to market. By comparison, the Bank of Canada we believe revalues their gold assets weekly. From our above discussion, you can readily see that a misguided market price which is improperly low has an adverse effect on these most important CB (and personal) assets.

Twice Discipled (1/4/00; 12:18:33MDT - Msg ID:22259)
Bars vs. Coins
Are 1 oz bars considered bullion?
Are there any disadvantages to owning a bar instead of a coin?
I have never seen this discussed before and I am considering a few more oz's as they continue to discourage AU purchases by sheople as the stock market falls.

Thanks in advance,
Twice Discipled

ORO (1/4/00; 12:14:52MDT - Msg ID:22258)
Beesting, Nickel 62 - all
Thanks.

If you care to spend some time on it, please do question and comment.

ORO (1/4/00; 12:10:51MDT - Msg ID:22257)
Silent runner - Casey's portfolio
http://quote.yahoo.com/q?s=prpfx&d=3m
http://biz.yahoo.com/p/p/prpfx.html - description

http://biz.yahoo.com/p/p/prpfx_h.html - holdings/portfolio

This fund is run according to Casey's structured "permanent portfolio" Which includes gold, silver, TED spread (maybe dropped from the lineup at some point -methinks), Real Estate and natural resource stocks, aggressive growth stocks, and a hefty chunk of cash and equivalents.

It was originally designed to hedge price inflation, credit crunches, and general political/economic/financial instability.

TownCrier (1/4/00; 12:04:07MDT - Msg ID:22256)
Another gift from the Bank of Japan last night
http://biz.yahoo.com/rf/000103/2c.html
Dollar holders received a new year's gift as the BOJ propped up the American currency in the course its continuing effort toward curbing the escalation of their yen. This is a good bulletpoint-style article that provides an overview of the conditions in place today.

Of particular note, despite the Japan Finance Ministry's efforts through the BOJ in a thin market to get the best bang for their yen, dealers noted that dollar selling interest was strong among interbank operators and by Japanese exporters. In these thin conditions, they said that without further intervention from the BOJ, the dollar could quickly give up its gains.

It should be getting clearer to you by now that if you are holding dollars, you don't have a lock on your own destiny...you're on a tightrope on a windy day, and others are holding the net (if any).

ORO (1/4/00; 11:58:01MDT - Msg ID:22255)
PERMAFROST - "usury"
The line of thinking you put in your last post is near the truth, but far far from it.

The wheat grown by an iron age farmer is 50%+ profit. Only one extra grain was available from agricultural production for every grain sown.

The wage of a laborer is his profit from provision of service.

The businessman's profit is a result of judgement, gumption and the trust of investors (whether justified or not). Trust brings us to the tiny world of top executives of major corporations, where networks of acquaintance, at times older than the nation, make for this important component of the businessman's profit.

It is often profitable to take time from the routine operations of making a living in order to improve the tools of the trade, or to invent new ones. When the economic structure is appropriate, there would be someone who sells these improvements or sells the service of making them. There would be profit for both the tool seller and the tool buyer if the buyer consumed less of his production, and traded the excess for the tools that improve his production. The price the tool buyer is willing to pay is limited in one of three ways. (1) Given an equivalent alternative to the new tool, the lowest cost tool. (2) if the productivity improvement is expected to be very great, the buyer would be willing to pay the portion of his production that is not necessary to assure smooth continuation of his production and does not threaten survival - in short: whatever he can afford. (3) If the expected improvement in future production at the same level of effort can be quantified, the tool buyer will pay a certain portion of the expected improvement in production.

Often times, one sees large scale irrigation systems dating back to the 4th millenium BC in Egypt, for example. The producer/s had undertaken a lifetime's work to improve their lot in life. The second limit, that of the ability to pay was obviously breached. The capacity of the people to do so stems from their coming to an understanding as to the division of labor. There are a few ways to accomplish this feat.
1. The people join together to support the familly of the person taking on the responsibility of making the tools or improvements. The flaw here is in that the person is motivated to put in a lesser effort than he would put into work for his own direct benefit.
2. They all join together and pool the necessary production "surplus" into a "fund". They have one person manage the fund and the project. His task is to find an available and capable person to put in the improvement, negotiate the price, quality, and timing of the work. This contract manager would not necessarily have a large interest in the efficiency of the project, though the problem of the dis-motivation of the person doing the work was solved by putting up a contract to specify what must be complete before payment is made.
3. One producer may calculate that he could obtain a certain excess production in each of the forthcoming seasons if he could get the improvements made, but having dealt with the problems above, he thinks of doing the following. He will borrow from each of the others around him and hire the tool/improvement maker, paying him other's production during the work. The lenders, in order to assure themselves of compensation in the event of the borrower not meeting his obligation, come to demand that the borrower lose his productive property to them if he does not make the promised payments.
Of course, of the many trustworthy people, the one offering the greatest return is the one expecting the greatest benefit from the improvements. In both fear for losing his property and livelyhood, and in his greed for the benefits of the improvements to production, the borrower will keep close tabs on the expenditure of his contractor.

The rate of return that will satisfy the lenders and the borrowers is the interest rate. It would be high enough to entice the lenders not to consume their production, and low enough to allow the borrower a decent return, sufficient to compensate him for the risk of losing his property.

This is the basis of "usury", the "renta", the time value of money. It is the reward for one's foregoing of current consumption for the purpose bettering one's position in the future. It is also the cost for having now, what you could otherwise not afford.

Cavan Man (1/4/00; 11:55:11MDT - Msg ID:22254)
beesting
Can you explain....

Stocks down
POG down
"GOLD" up
"NEM" down

I don't get it???????????

nickel62 (1/4/00; 11:51:15MDT - Msg ID:22253)
ORO
Your analysis as usual is very interesting stuff. Thanks for your time.

Blue Sky (1/4/00; 11:48:42MDT - Msg ID:22252)
Y2Koed,
My computer must have taken a shot to the brain..couldn't pull up the forum..thought it was down.. last post I could get was Dec. 31 A.M.....My bookmark was wrong, or did the url change? I was out of loop quite abit in Dec..
Happy to have found my way, started withdrawal symptoms.
B.S.

TownCrier (1/4/00; 11:41:37MDT - Msg ID:22251)
Fed stays on sidelines today in both open market operaions and reserve adjustments via RPs
http://biz.yahoo.com/rf/000104/js.html
If you read this article you will see that economist don't have a clue as to what prescription is called for at this time. If the "experts" can't see what must me done (add vs. drain reserves) we are surely on thin ice of some sort.

beesting (1/4/00; 11:37:03MDT - Msg ID:22250)
For those that insist on staying in Stocks!
http://quote.yahoo.com/q?s=GOLD&d=1d
Gold Fields Ltd. (NASDAQ -[GOLD]) is up 2.10% for the day!
Those in the Know....Buy Gold.....beesting.

silent runner (1/4/00; 11:36:42MDT - Msg ID:22249)
i confess. i started the meltdown.
being overloaded with gold and silver bullion i decided to buy into a mutual fund. i thought it was sound 20%gold 5%silver all physical purchase and held by the fund the other 75% was made up of 15%aggressive growth stock and solid conservative placements. sorry everyone, oh well if the fund performs as described the metal should make it hold its own. fund sign is prpfx

beesting (1/4/00; 11:22:45MDT - Msg ID:22248)
Margin Calls Initiated!!
http://quote.yahoo.com/q?s=^DJI&d=t
I don't think the PPT can stop it today!
ALL US Stocks Plummeting today!
Today may be known as Black Tuesday with over 2 1/2 hours of stock trading time left.
I'm sure glad I don't have my life savings in stocks, right now!!

Those in the Know.....Buy Gold.....beesting.

Cavan Man (1/4/00; 11:06:27MDT - Msg ID:22247)
Whither gold?
Noon CST

DOW -251
NDQ -125
S&P -38

CoinGuy (1/4/00; 10:47:08MDT - Msg ID:22246)
TedW
TedW,
I'm impressed by your forthrightedness, but I think it was uncalled for. I don't think any person knew for sure what was going to happen with Y2K. I respect your willingness to step out and show concern for other peoples welfare. I thought "the bug" could have been a heck of an event as well.

I appreciated all of the articles that were posted here on Y2K(yeah SteveH, you too). They were informative, and got me off my duff to do a little preparing for myself. I learned that it's nice to be more self sufficient. I guess that's why I own gold.

get physical, Armstrong did...

CoinGuy

beesting (1/4/00; 10:34:46MDT - Msg ID:22245)
CRASH-TIME!!
http://biz.yahoo.com/rf/000104/to.html
The London FTSE ends with record point loss!!!
Down 264.3 a 3.8% loss.
Eclipsing the 250 points lost in the 1987 crash!
Article goes on to say,"It's no big deal, only a small correction."
US Stocks are currently nose-diving also!
Keep the faith people, Gold WILL have it's day.....beesting.

mhchuck (1/4/00; 10:30:29MDT - Msg ID:22244)
John Meynard Keynes: The Banker's "Machiavelli"
From 1930..."But we may remind the reader of what he knows well--namely that gold has become part of the apparatus of conservatism and is one of the matters which we cannot expect to see handled without prejudice. One great change, nevertheless--probably in the end, a fatal change--has been effected by our generation. During the war individuals threw their little stocks into the national melting-pots. Wars have sometimes served to disperse gold, as when Alexander scattered the temple hoards of Persia, or Pizarro those of the Incas. But on this occasion war concentrated gold in the vaults of Central Banks; and these banks have not released it. Thus, almost throughout the world, gold has been withdrawn from circulation. It no longer passes from hand to hand, and the touch of the metal has been taken away from men's greedy palms. The little household gods, who dwelt in purses and stocking and tin boxes, have been swallowed by a single golden image in each country, which lives underground and is not seen. Gold is out of sight-gone back again into the soil. But when gods are no longer seen in a yellow panoply walking the earth, we begin to rationalize them; and it is not long before there is nothing left.

.....It is not a far step from this to the beginning of arrangements between central banks by which, without ever formally renouncing the rule of gold, the quantity of metal actually buried in the vaults may come to stand, by a modern alchemy, for what they please, and its value for what they choose. Thus gold, originally stationed in the heaven with his consort silver, as sun and moon, having first doffed his sacred attributes and come to earth as an autocrat, may next descend to the sober status of a constitutional king with a cabinet of banks; and it may never be necessary to proclaim a Republic. But this is not yet--the evolution may be quite otherwise. The friends of gold will have to be extremely wise and moderate if they are to avoid a Revolution."

John Meynard Keynes.

mhchuck.

mhchuck (1/4/00; 10:19:30MDT - Msg ID:22243)
ARISTOTLE
Aristotle

Thanks for the (what should have been unnecessary) clarification of your thoughts, I did get defensive at the nature of your inquiry because I didn't know the specific "failings" of the Bretton Woods, or the Pre -1933 Gold Standard you requested of me. I should have pleaded my ignorance in the matter.

Sorry I didn't read your Keynes comment in the nature you intended it, but more as a personal criticism. Had I read your words carefully, I wouldn't have made the mistake. You were making a good point, and It was discussed in subsequent posts, that maybe Keynes was indeed the "outright" greater villain (sans even the "wink" and the "economics forum" consideration.)
I regret and apologize for my misunderstanding you.

It seems to me that these so called "monetary scientists" are practicing in a discipline that just won't give itself over to the term " science." Too bad for them...and sadly, tragic for the world.

I contend that the transition to the era of "managed finance" at the expense of "honest money" i.e. the gold standard, was made to accommodate (allow pilfering privileges to) bankers and statist politicians. This is corrupt and dishonest, and has spawned innumerable forms of corollary dishonesty and corruption. While some might say "That's life, we have to live with it," Others, like REP. Ron Paul, of Texas, introduced a bill in Congress to abolish the FED.

The blueprint for this state of affairs crystallizes in the writing of Keyne's. What does this have to do with gold? Plenty, I think, since Keynes was not a friend of gold in the least.

mhchuck.

beesting (1/4/00; 10:00:31MDT - Msg ID:22242)
To FOA
http://www.bis.org/index.htm
Steve H- "Good one #22209!"
ORO- Great posts today--Thank You!!

FOA, I have researched the above URL "BIS" site, and my conclusion is, the BIS only conducts business with Central Banks. So, in the recent Dutch sale of Gold, and future Gold buying by the BIS, ALL that Gold would stay withen the Central Banking System, and have NO effect on world "normal consumption" of Gold.

FOA, do you agree with that analysis? Or, do you think the BIS could enter the world Gold market, replace the LBMA, and buy and sell non-paper Gold only?

In My Opinion it would be a large European Bank that would first compete with the LBMA, and then after a collapse of paper Gold, join forces with The LBMA, sometime in the future.

Your thoughts and opinions are always greatly appriciated....beesting.

SteveH (1/4/00; 9:06:15MDT - Msg ID:22241)
Beesting
Agreed. Except I believe that gold is so far off most everyone's radar screen that they aren't even looking. Now if gold did another $85 rise and then another $85 rise then I think people would sit up and take notice.

The Invisible Hand (1/4/00; 9:03:09MDT - Msg ID:22240)
TB 2000
http://hv.greenspun.com/bboard/q-and-a.tcl?topic=TimeBomb%202000%20%28Y2000%29
PH in LA,
This should be the link

beesting (1/4/00; 8:54:10MDT - Msg ID:22239)
Why is Gold taking a hit right now? Some speculation!
http://quote.yahoo.com/m2?u
The European and America's stock markets are all in correction mode, see above URL. It had to happen eventually.

Now, many here believe the Gold markets are manipulated, by the big boys with the solid approval of the US FED. With that in mind, as the stock markets correct in order to prevent a mass exodus from stocks into Gold, the "spot" Gold price is forced down big time to give the illusion that Gold is not a good place to store assets, looking for a home.
If Gold was climbing real fast today, it could spark a landslide correction in stocks.Follow the mob mentality.

FWIW......beesting.

USAGOLD (1/4/00; 8:42:21MDT - Msg ID:22238)
Today's Gold Market: Bug Remediation Times Two
Market Report (1/4/00): When the dollar and U.S. Treasuries took a
major hit yesterday and the financial pundits blamed it on market
remediation of successful Y2K remediation, many in the gold market
braced themselves for remediation in the gold market as well. And
remediation there has been -- almost $10 worth at one point and now it
looks like our old friend -- Yellow -- is saying enough is enough and
has retraced about $3.50 of that loss. We'll see if the bounce becomes a
trend.

Meanwhile, the equities markets have been bitten by a bug of their own
called "interest rate remediation" courtesy of the Fed. Since Y2K is no
longer a problem, the Fed appears to be reaching for the bug spray to
deal with the "maniacs" on Wall Street. Every bug has its day...and its
remedy. At last look the S&P was down a formidable 16.70 on the Globex
and the DJIA was in the usual
"my-computer-trading-program-made-me-do-it" lock step with the S&Ps.
Pass out the gas masks.

Previous to this morning's decline, gold had been on a winning streak
partly because of last minute insurance buying by some of the big
players. They are the ones seemingly unwinding their positions in the
early going. Once its over, the market could actually get back to the
base-building business. The amount of money created by the Fed and
pumped into the economy at record levels is no illusion; neither is the
overblown stock market nor the carnage in the U.S. Treasuries market.

When private investors look around at the investment landscape,
opportunities look a bit on the thin side. A drop in the gold price
might be just what these investors are looking for, hence the early
morning bounce from the lows in New York. $280 looks to be at least a
temporary support zone. One London trader was philosophically objective
about the whole thing: "There is good physical demand all the way
down...but it is still pretty quiet. I think we will wait to see what
New York does. They have not traded since last week," the trader said.
Reuters adds this comment: "Once the current spate of sales are absorbed
the market is expected to recover with the short-term objective seen
around $285.00."

So we watch with interest, holders of the bullion itself -- without
angst, without anxiety, without margin calls....

That's it for today. We'll see you here tomorrow.

ORO (1/4/00; 8:20:41MDT - Msg ID:22237)
SteveH - historical commets to one of your previous posts
SteveH

--->As a result of this default, the Jamaica Accords saw the demonitization of gold and an allegedly secret deal that would keep dollars strong and gold weak while the Arabs become the Fanny Mae, Freddie Mac of paper gold delivery contracts from large mining companies. In other words, the Arabs were able to take long-term delivery of gold mining production while the dollar was kept strong and oil kept low as the Arabs were able to buy cheap gold with cheap dollars. This is the reason, again per some experts, that gold has been held down and actually dropped over the period of 20 years since 1979.

I think there is a small error here. The gold miners had only minor involvement in the 1976-1980 period. The thought seems to have been that the bridge to gold would go through oil. However, physical gold was being bought by Oil Royals, paper and physical were bought by westerners. By 1971, oil was the largest component of international trade as measured in dollars. The major reason Europe went along at that point was because the new format allowed European countries to use dollars accumulated over the 60s and then in the 70s to buy something they needed, oil. France was building nuclear plants and needed much less coal and oil than other European nations, and thus found less to be gained from the arrangement than its neighbors. In 1976-80 gold and oil continuesd to trade in tandem as the Fed continued to raise the float through the end of 79. All that was needed in order to stabilize the dollar was a direct relationship between the three components, oil, gold, dollars. Prior to 1971, gold was tied to the dollar at a fixed amount - allowing central banks to arbitrage between them. Already in 1969, oil was trading for dollars exclusively. The dollars were traded for gold and for whatever other economic needs the Arab oil countries had. Up to 1976, the situation was out of control, the gold auctions by the IMF were not helping the situation because they allowed the investing public to see the bids coming from private investors and Oil Royals cashing in their oil dollars.
After 1976 (Jamaica Accords) the US was to put its house in order and straighten out its trade deficit. Carter made serious efforts to have that happen. Among other things, the agreements required less foreign expenditures on arms - meaning less arms purchases by Israel, which brought about the peace with Egypt, which was pushed by the Oil states into a peace that assured Saadat's political death. The defense expenditure of the US fell significantly at that point. Carter attempted to bring US exports to balance with imports. But all was to no avail, because of the physical needs of the baby boomers and women coming into the workforce as a result of the splitting of households (divorce and gays ceasing to mary) and the change in attitudes towards women working. The new workers needed cars and oil to get to and from work, and needed new housing and furnishings. This had to come from somewhere, it came from abroad. Furthermore, the Carter administration and the Burns Fed did not want to raise real interest rates because of fear of returning to massive riots still fresh in the minds of politicians who lived through the late 60s. In 1979, new household formation tapered off to a steady rate, as demographics no longer pushed in this direction.
By this time, oil was in the sky rising beyond $40 after the Iranian revolution. Less developed countries were sinking quickly into debt spurred by arteficially low US rates and the need to obtain oil. At the new prices, gold proportions to the Fed's dollar float were back to the original ratio of backing. New gold exploration was coming up with great new finds in North America, and gold reserves in South Africa had increased. If oil conversion to gold were to be done just a few years down the road, the gold could be obtained at a lower dollar price. The North Sea oil was found and Mexican Gulf oil was found, which allowed some leverage over OPEC. A new arrangement could be assembled. The terms were as follows (as far as I could ascertain):
-The US will put the dollar float undertight control.
-Interest rates in the US would be sufficiently high to force dollar debtors to absorb new dollar creation (in the form of new debt and US trade deficits), whether within the US or without.
-The dollar float would be backed by private gold debt, to be purchased at a regular quantity in proportion to oil sold into the markets by the OPEC countries.
-The accounting for gold purchases would be maintained outside the markets at an official price related only to this arrangement. (In a way, the "right" to buy certain amounts of gold were traded at a high premium to market prices of the gold being purchased.) Keeping tight reigns on gold demand.
In this way, a fixed arbitrage could be maintained between oil, gold, and the dollar, though they were all floating in the markets. The arbitrage was available only to central banks. The tight money would assure Europe of a sufficient return on dollars so that non-US and non-oil goods could be obtained from third parties at favorable exchange ratios.

This arrangement was functioning quite well but for one hitch. The oil to gold ratio could not be maintained. The rapid development of Japan and emergence of Asia, had brought new demand for oil along with the dollar debt of Asia (contrary to South American debt and World Bank loans, this was invested in useful productive capital). Oil volumes increased as a result, increasing the amount of gold necessary to trade for it. Much of the expected growth in gold production never materialized. By 1985 global gold production in general, but particularly North American gold production had ceased to grow. Non OPEC oil production flattened, and there was no longer any way to avoid growth in OPEC market share. The gold price of oil had to be reduced without the markets being aware of the result.
Note on Japan: Japan had decided to maintain trade surplusses with the US in return for greater US defense expenditure in Asia, and maintenance of steady oil supplies

Interest rates needed for the maintenance of dollar demand were too high for US banks to grow, and Emerging Market economies were severely strained by the burden, and near default. The default would have eliminated future dollar demand, and undermined the arrangement. As interest rates were lowered in the US to combat this problem, the dollar plunged and gold prices started rising. The credit markets needed to come back to equilibrium. Japan lowered rates and the Fed raised rates through 87, but the dollar was not helped sufficiently, and the dollar rates were too high for the US, creating a liquidity shortage that the monetization limits prevented the Fed from solving. In 1987 Europe (Germany) refused to cooperate to help. The US equity markets tanked. A new plan was necessary. The arrangement was about to collapse.

To accomodate the reality of interest rate needs, the arrangement was modified to allow for a higher off-market gold price (lower oil price as denominated in gold), and an extension of the buying period for gold. One key aspect was that Europe would guarantee gold accounts and forward contracts, in effect setting of gold interest rates by acting as lenders of last resort to the gold banking industry. Europe had to start taking aggressive action to unify and issue a single currency that could serve Europe and its trading partners.
ANOTHER and FOA tell us that the studies of monetary history in preparation of the single currency negotiations revealed that there was not a single case of a paper currency surviving long term. The conclusion was that even if the politicians doing the negotiations and coming to agreement don't want to talk about gold being involved, the only way to create a common currency with solid fundumental structure was to have it backed by gold. In order to prevent the kind of short term instability in banking arising from the tight control of the gold redeemability standard, the currency was to be let free to float, acting much like a semi-closed end gold bullion fund. Long before things were finalized in the negotiator's minds, the inclusion of gold was already a done deal in the eyes of some of the important parties.

By 1992, the EU accords were finalized, and then written in the Maastricht treaty. Britain came to a monetary crissis by running bad current account balances and had to drop out of the Euro precursor's ERM=Exchange Rate Mechanism.

The low interest rates in the US at the time caused an incredible boom in the Emerging Markets. Gold prices stabilized and then started rising. The EU Central Banks had difficulty in maintaining low gold prices, and so lowered gold interest rates while keeping ex-US short rates high. The result was a huge growth in gold derivatives and gold banking. The gold price surge was capped but the size of the gold obligations outstanding grew tremendously. The Fed raised rates following this, in 94-5 and the Japanese and EU lowered rates substantially, carry trades were put on in enormous proportions, Gold interest rates were so low that the risk of a price rise was outweighed by the great spread on rates. The increases in oil purchases by the Asian nations in the last years of their boom was causing a great issuance of paper gold as the Asians were draining physical supply. The Europeans had to come forward and support their commitments to keep the market going till the Euro was ready for prime time. Had they not done so, the dollar would have imploded as gold skyrocketed in the way ANOTHER indicated would happen, though he talked of this as an imminent event, I think it was a thinly veiled threat rather than an immediate forecast. The threatened gold spike did not happen because of the agreement to assure further lending and some selling by EU member CBs. This continued till 97, whereupon gold tanked because of the cessation of Asian buying, their selling of some of their accumulated gold, and the hysterical hedging by gold miners. At this point, Oil Royals were aware of the disproportionate overhang of gold debt and ceased buying paper gold. The fall in gold prices continued as each new ounce of physical supply was accompanied by an extra ounce of paper gold. The physical gold went away and the paper version continues to circulate, just as Gresham's law would predict.

--->...the Euro is less encumbered with debt than the US is, whose debt is estimated to be 5.7 Trillion dollars ...

The numbers you are quoting are on an original sum bassis. There are no official values available for accrual numbers, which include relending and interest accrual. The IMF and OECD are attempting to assemble the statistics. Simple calculations give the number 21 $T. FOA thinks this is higher, perhaps around 40 $T.

The Market Cap of the US equity markets stands at some 17 $T. Global Market Cap is about 32 $T. Yes, the US bubble is (was?) over half.

ORO (1/4/00; 8:16:45MDT - Msg ID:22236)
A (bullion) BANK NOTE
A note about the implication of the banker's situation: through the banker's borrowing and lending, all modern bullion owned outright has an equivalent part, nearly three times larger, of paper gold. The bankers have formed a 60,000-80,000 ton gold banking system using 20,000 tons of gold, most of which is now held by "cash" holders.

Common estimates of private gold bullion holdings available to the financial markets, most notably the one produced for the Fed in 1997 (estimated for 1995), put the gold at 20,000 tons. I have reason to believe that there are 10,000 tons more, bringing the total to some 30,000. I will not go into the iffy details of the estimate, but note that one of the major components is "Yamashita's treasure", which has been in the gold markets since 1984, some of it even before that date. Whenever stories come up about the reappearance of that hoard to act as an overhang on the markets, you can rest assured that it has already been introduced to them in its entirety. These 10,000 tons are in "semi-official" hands of Royals of the Oil countries, the Vatican. Much of the rest of the remainder (once the gold jewelry deficit is accounted for) sits in Rothchild vaults, and a few other large holders, "giants" much as described by FOA and ANOTHER.

The volumes of gold paper traded by the LBMA become much clearer when taken in context of the gold banking system rather than in context of annual gold production. The 1000 tons traded daily are well proportioned to the normal trading patterns in currencies. Eurodollar interest derivatives constitute about 5.5 $T traded on New York exchanges, and another 55 $t or so are traded OTC with 62% netting (figures are from memory so don't shoot me if I'm off a little) bringing it to 19 $t. This is equivalent to the estimated 21 $t in Eurodollar debt outstanding (my estimate). This comes to 7%to 7.5% of outstanding positions traded daily. Applying this proportion to the gold market's 1000 tons, one comes to 14,000 tons of net debt - the same kind of debt as Eurodollar debt. This is debt generated by the sale of physical gold in the four part transactions.

While the physical supply actually went into hoards of all sorts, the paper remained circulating in the markets. The gold accounts now stand at an incredible level of over 40,000 tons by my reckonning. Nearly 30,000 tons are owed by bullion bankers directly - without counter obligations denominated in kind. They have only 4,800 tons in credible gold mining company obligations, and another 9,000 tons were borrowed by speculative funds playing the carry trade. The remaining reserves, some 10,000 tons, can not be used to pay off the gold denominated debt because the reserves are mostly borrowed and must be kept on hand to cover obligations to Oil Royals (the major lenders of these reserves). Of the other 20,000 tons in private gold hoards, only 6,000 remain in private hands outside of the Bullion banking system. 14,000 were supplied to the market over the years, and hang around the necks and in the noses and from ears of a billion people. The total commitments of bullion banks (including derivatives) are most probably around 60,000 tons, with an imbalance of some 35,000 tons, where gold was "borrowed" by the bankers (in reality only dollars arrived at the bank for most of this, and the bank issued a gold denominated obligation), and the lending by the bankers was in dollars.
Their remaining gold denominated assets:
- Gold reserves are 10,000 tons, (I hope)
- mining company obligations are at 5,000 tons,
- Speculative fund obligations are 10,000 tons.
The remaining counters to the bullion banker's gold obligations are denominated in currency.

Physical gold lent TO bullion banks, about 25,000 tons.
Physical gold lent BY bullion banks, about 15,000 tons.

ORO (1/4/00; 8:09:17MDT - Msg ID:22235)
Talking Physically.
FOA (01/01/00; 14:42:33MDT - Msg ID:21993)
--->All the while, the bullion buyer slowly amasses a large "highly leveraged" position, just by channelling his would be trading loses into paid up physical and rare gold coins.

FOA has clarified the issue further, but I will post this anyway.

In the way of clarification for others, I think FOA is trying to tell us that the leverage is indeed there, just that when one buys bullion without leverage, the leverage you have is that put against you by the couner pairs to your "cash" position. Most notably, the counterparties in a typical gold transaction have claims traded among themselves and physical gold sold into the market. The trades involve a lender, a borrower, a bullion bank, and a physical buyer.
--The bank is both long and short gold denominated or gold indexed obligations. This is a complex multiple contract position. More on this later.
--The borrower is short "physical" which is due for delivery. This is a contract obligation. Gold miners and bank trading desks, as well as speculators hold these positions.
--The lender is long gold denominated obligations. This is a contract position. The contract is as good as the counterparty. If you own a gold account, or are long a derivative contract, this is what you have.
--The cash buyer holds gold bullion and is obligated to nobody. His holdings do not rely on anyone fulfilling an obligation.

The leverage built into the market, which we goldbugs will benefit from in the long run, is that of the many obligations denominated in gold. We need not buy leveraged instruments, because the leverage comes from the extreme volume of gold obligations issued within the "paper gold" trading arena described above. The same elements that make gold an attractive investment at this time and a long term store of value (over a lifetime), particularly during banking crises, make the various forms of leveraged gold unattractive. One should note the point of gold being protection from an environment of default on obligations. The same obligations that gold derivatives are.

The most important aspect of gold as financial disaster insurance is that it is immune from default. The second point, particularly important for the gold mining investor, is that in financial crissis, desperate governments are prone to disregard the property rights of large holders of industrial assets. The most captive form of industrial asset are the mine and the oil well. The most attractive asset for taxation and expropriation in time of crissis is a gold mine. Very large hoards of precious metals may prove attractive to a government seeking survival. The small hoards remaining in the West are not attractive targets.

The use of gold futures and options in the battle for financial self preservation during a financial crissis is equivalent to a knight charging at his enemy with a shaking kielbasa. Gold mining shares are similar to waving one's title to the land in face of the Mongol horde's charge. Wouldn't it be rather smart to hold a sword on top of the ramparts of a castle?
Taking our little Midieval setting further, one does not complain of the building of the castle, though long after its construction came no attack. The expense of time and effort, of missed opportunities and reduced performance will come to be appreciated when disaster strikes.

PERMAFROST (1/4/00; 7:46:33MDT - Msg ID:22234)
Cavan Man
I'll up the ante: How do you know that you know?

see you tomorrow!

PERMAFROST (1/4/00; 7:43:18MDT - Msg ID:22233)
Now the second one...
I shall briefly state why I disbelieve that any form of a financial system that assimilates to any degree fiat money and its concomitants (the bond and stock markets) cannot cohabit the same planet with a real, self-sustaining and stable economy.

A stable economic environment proscribes EXCESS REVENUE OR GROWTH, which are necessary conditions to turn a profit. Such a situation is anathema to the financial markets because it eradicates the very reason to invest in them: the potential for profit. Who would put money in a stock with ZERO yield or capital appreciation?

For here's how a truly stable economy would function.

Let's scrutinize the basic economic process in a barebones paradigmatic model of such a system. Let us postulate that there is a demand for good or service X and its production is our ONLY concern--the satisfaction of the consumer/citizen. To produce it necessitates 1)Investment in infrastructure including factory, roads, utilities, education for the work force etc. 2)Paying the salaries of the employees, from blue-collar to highest management-level white-collar; 3)Incurring distribution/marketing costs. IF all the aforementioned were so achieved as to generate enough return on capital to make reinvesments to compensate for depreciaton and redundancy of assets of production AND continue paying the workers' wages; in a truly free market [not "free" to the extent that it impinges on basic human rights and needs] where various enterprises compete against each other without any unfair market manipulation present, an equilibrium price will naturally assert itself WHEREBY ALL THE AFOREMENTIONED CONDITIONS ARE FULFILLED AND PRODUCT X IS MANUFACTURED/REALIZED----BUT----Such an economic model that caters solely to the material satisfactions of man, PRECLUDES PROFIT, or unnecessary growth and excess revenue, which, in financial terms, correlates to the charging of a price for product X that is higher than the equilibrium price.
No one one in their right mind would invest in financial instruments related to such a "business"; but, deep in their hearts, I sincerely believe that everyone would like to work in one--or at least have one in their town.
I assure you, I didn't smoke NOR inhale anything!
Nor do I think it's a "utopian" dream. I think this is what the economic workings of a humane society could look like.
Goodnight everyone!

Ray Patten (1/4/00; 7:31:49MDT - Msg ID:22232)
Crude oil rally...

Does anyone know if there is any particular reason why crude oil had a 70 point rally from last night's low. I've searched some news sites but can't find anything.

Al Fulchino (1/4/00; 7:22:33MDT - Msg ID:22231)
PHinLA and Tedw
http://hv.greenspun.com/bboard/q-and-a.tcl?topic=TimeBomb%202000%20%28Y2000%29
PH, I agree it would seem not to be Another, but take a look at the link above. I thought maybe FOA would shed some light on it. Either way, it is not really anything new as far as content. But simply a curiosity at this point.

TedW,

Takes a lot of character to apologize. But! 250 Billion dollars WERE spent. It never was going to be teotwawki, but like you, I prepare for inclement weather in the winter, and when I get a sixty degree day like yesterday and today, I take my jacket off and enjoy the respite. To be honest, I now have such a nice security blanket now that I am thankful for y2k coming along.

Best to all and nice to see your writings again Aristotle.

Cavan Man (1/4/00; 6:51:46MDT - Msg ID:22230)
PERMAFROST
Not sure what post of mine you are referring to. Sure glad you joined the discussion here. I'll do you one better; would you agree that the gold and silver formations on this planet were put here for a reason? Just curious.

PERMAFROST (1/4/00; 6:29:43MDT - Msg ID:22229)
Cavan Man...
I'm presuming your message was addressed to me. If so, thanks for the kind words.

As to the gist of the matter, the "background information" you inquiried about: the things I say are corroborated by sources as disparate as Karl Marx, common sense and the Bible itself. In fact, the holy book strictly prohibits usury--you know, that stuff you call T-Bonds, repos et al. In effect, our present-day financial system is wholly antinomic to Christian (or Jewish or Moslem for that matter) ethics, being nothing but an upside-down pyramid built on a mountain of debt.
I have the inkling that the bit about perpetual fluctuation
and instability being what generates "profit" is what got your intellectual eye blurry. I'll illustrate my point with two anecdotes: one referring to an actual recent crisis; the other, my personal musings as to why money (paper) and economy (wealth) are incompatible. [I consider gold to be a form of wealth and not a mere "medium of exchange" or "unit of account".]

Remember the Asian Crisis of '98? Here's what happened in a nutshell.
A) The Western banker chants the mantra of the "formidable Asian Tigers" and tells the Asian boys: 'Good boy! here's a loan denominated in dollars; go and build a factory with it!' RESULT: interest earnings on loan start accruing. [fluctuation/profit #1] B) The same banker cabal borrows from, or jawbones into printing, local Asian currency from the same (stupid) Asian which they swiftly proceed into selling short against the dollar making a killing on the FOREX. [fluctuation/profit #2] The new mantra now is, "too
many factories!" C) The Asian can no more afford to service debt denominated in USD due to the crash of his national currency; goes bankrupt. RESULT: the very same banker cabal that loaned them the money for the factories in the first place buys them back at fire-sale prices, say, 10 cents on the dollar [fluctuation/profit #3] PROVIDED D) even the 10 cents must come out of someone else's pockets in the form of an "IMF bailout package" [fluctuation/profit #4 E) The IMF loans really are taxes on Western citizens which are surreptitiously levied on them by the selling of bonds (borrowing money) in THEIR name by their respective governments. [different terminology for fluctuation/profit #4] F) Now Americans start paying interest on loans they did not take to build factories they do not own. [fluctuation/profit #5] AND ALL THIS IS TRIED-AND-TRUE OLD-FASHIONED STAID "FINANCIAL ENGINEERING"....
I'll post the next in a little while...

Hermit Club (1/4/00; 6:25:03MDT - Msg ID:22228)
Just a thought...
Would the drop in gold be because many are selling their paper gold holdings? who's buying it or are they just getting dollars for their paper contracts?

ORO (1/4/00; 6:15:22MDT - Msg ID:22227)
tedw - hold your fire
Before falling on your sword. Take into consideration that the fears were justified, though repairs turned this corner better than one could have expected. I can now say with certainty that the process control industry can now join the rest of computerdom in putting in last minute, or rather after last minute, fixes in. We are now ready to start remediation of Y2K on a full scale, fixing the small problems.
As far as the rest of the problems - including embeded chips - they were never supposed to keel things over in their entirety. Definitely not at once, and not at the date receiving so much attention. Only the chips with longer horizons than a day had any reason to keel over - the ones controlling service functions rather than the process. Even so, failures that have occurred, were probably overcome through workarounds prepared long ahead of time.

One of the things I think occurred, was that a methodology of running fixes for problems on a fix on fail bassis, but on running parallel copies of systems and system simulations some few months ahead of the actual date. This should have helped immensely, so long as they are actually ahead. Whether they will manage to keep ahead is another question altogether. Let's hope so. Larger corporations that have started on this early are only 6 months ahead.

Hermit Club (1/4/00; 6:09:57MDT - Msg ID:22226)
again
http://www.cnn.com
test

Hermit Club (1/4/00; 6:07:16MDT - Msg ID:22225)
$billions return to fed?
www.cnn.com
no message

RossL (1/4/00; 6:00:46MDT - Msg ID:22224)
Permafrost

The earlier American Eagle coins with the Roman numerals are beautiful works of art, aren't they? I have one (1/2 oz.) coin from the first year. I don't know if that one is low mintage or not, I'm having trouble finding an online price guide for bullion coins.
I wonder why the mint dropped the Roman numerals in the 1990's? Too confusing for the masses?

PERMAFROST (1/4/00; 5:31:50MDT - Msg ID:22223)
Thanks beesting and Gandalf the White...
...for clarifying the issue on that 1/2 oz. coin. I paid 200 dollars for it after haggling a bit with a local merchant. It was my first coin purchase since 1987....
It loooked so beautiful amogst all that nondescript Middle-Eastern jewelery I couldn't resist!

tedw (1/4/00; 4:50:45MDT - Msg ID:22222)
Y2k
Http://www.usagold.com

I was wrong about Y2k and I apologize to anyone that may
have been harmed in anyway by anything I posted or any links
I provided: (especially Jim Lords Newsletter).

Jim Lord,Worldnetdaily, and Gary North did not due their due
diligence (in my opinion) especially in regards to embedded
chips.

So, again I apologize, I relied on their advice and I should not have done that.

CoinGuy (1/4/00; 3:51:19MDT - Msg ID:22221)
Farfel, and an update...
Farfel,
I concur wholeheartedly with your posting, but I do believe we have become a society of risktakers, or fools, whichever term you prefer. I have neighbors that just moved into my neighborhood, new houses go for 325-500K. Their forgoing new furniture so they can put all their money in the market. They only put %5 down on the house...enough said.

S&P futures down 12 at last check, with a fair value of +3.92. Yield on the long bond, still ugly. Gold spot bid down 5.92 at 281.88. Overseas markets down anywhere from %1 to %3. CNBC seems to be mentioning the world is worrying about a rate hike in the US. I'm going to have to agree with Stranger, the bond goes to %7 in no time flat...Before or after the FOMC, I don't know.

screw the asparin and rolaids, I own physical...

CoinGuy

Farfel (1/4/00; 3:23:36MDT - Msg ID:22220)
Wall Street/Clinton Spinmeisters Target Gold for Drop Today
Gold dropping like a rock tonight. It would be scary if it were not so damn funny.

You see, it works like this: if there had been any notable significant infrastructural y2k problems, then Wall Street and its subsidiary media whores would have stomped on the gold price, claiming that the current low gold price already discounted EXPECTED y2k problems, and now that the news was in, it was time to sell the yellow metal. The old adage, "Buy on the expectation, sell on the news," would have been heard all over The Street by each and every heavily gold short bullion bank.

Of course, the dominant spin today will be that everybody in America/the world is selling his/her gold because Y2k proved to be no more than a fart in the wind. Forget that such spin completely contradicts the earlier mainstream media spin claiming that the populist and institutional y2k gold purchases were relatively insignificant, especially in comparison to recent Bank of England gold auctions.

Remember, we are living in a New Paradigm whose hallmarks are the complete absence of so much as a single scintilla of logic...the proffering of one oxymoronic statement after another...the requirement that the American public's collective memory MUST never extend beyond one week (at best).

As a nation, America is fast moving into a final vortex of unbridled mania...a final frenzy of mass indulgence and social depravity never before seen in the country. With madness spilling over, all standards must be subverted and revoked. And GOLD remains an historical standard that must be overthrown if the current Establishment is to have its way free of all societal restraints.

Gold remains in a lose-lose situation because, no matter what the outcome, the Wall Street/Clinton spin machine always looks at the glass as half empty where gold is concerned.

So witness gold as it is sold down in paper terms today by those Establishment interests who have no dearth of official American paper by which to effect such sales Yet realize that nothing has changed! The gold short position is still a physical position. It requires obtaining physical real AVAILABLE gold to cover that position and there is only a small amount readily available relative to the astronomical gold short position.

At some point in time, some powerful entity or some shrewd collective will step forward from left field and make a grab for that physical gold, demanding to take delivery. Nor will they need any y2k scares to inspire them to make such a dramatic move. Instead, simple basic logic, common sense, and an overwhelming profit motive will drive them to do it. When that happens, all hell will break loose.

Those who panic and dump gold in order to chase hot air Ponzi schemes on the NASDAQ are not simply abandoning a metal...they are abandoning the last vestiges of logic and sanity with it. You can call basic logic or good common sense or pragmatism an OLD PARADIGM or any other pejorative. But words alone will not kill the heart of reason. It will survive, it will resurrect, it will have its day again. Without reason, there is only chaos, the pre-Millennial madness that now spills across the American nation.

The problem with "thinking OUTSIDE the box" in terms of each and every action in life is this: castles in the air, New Paradigms, and dreams are necessary ingredients in life, but they are not sufficient. Humans greatly need some historical standards, they crave some absolutes, and any new fashionable mass intellectual movement that threatens to eliminate them altogether does so at its own risk.

Thanks

F*

nickel62 (1/4/00; 2:51:39MDT - Msg ID:22219)
Simply Me
I liked your post for its honesty. You of course know that most of us are as confused most of the time as you claim to be. I took heart a few years back when both George Soros and Allan Greenspan admitted that they didn't really understand derivitives either.

Simply Me (1/4/00; 2:38:18MDT - Msg ID:22218)
Black Blade
http://www.usatoday.com/money/charts.htm#SP500_GOLD
Wierd. These charts put Feb. gold at $866.61 and Oil at $42.75. Probably not true...but a lot more fun to look at than Kitco tonight!

It's a good time to say goodnight.
Hoping for better tomorrow.
simply me

Black Blade (1/4/00; 2:29:01MDT - Msg ID:22217)
Pass the rolaids and asperin please!
Au down -$7.25 at $280.55, T-Bonds trending lower, and s&p futures off -3.20. It looks down-right ugly.

Simply Me (1/4/00; 2:27:21MDT - Msg ID:22216)
Shifty
Nothing left to do tonight except tease the paranoid? <Laughing>
I'm not such a nut case in real life. But the stuff I know about aren't subjects for this forum (nothing kinky). I'm just doing the best I can to participate. Who knows, one of my crazy ideas may spark a direction of discussion no one thought of before!
simply me
simply me

PERMAFROST (1/4/00; 1:44:52MDT - Msg ID:22215)
TownCrier re Msg. ID: 22114
Thank you Sir for the information. No, it was not a trick question. I'm not familiar with American gold coins as my interest in them coincided with the years I lived between France and Constantinople. As for the mintage year, I thought that its being out of production might make it more valuable. Apparently not the case.
Looking forward to reading your regular posts!

SHIFTY (01/04/00; 01:16:22MDT - Msg ID:22214)
Simply Me
What if it is all by design. To bring down the U.S.A. and give us their New World Odor!?

Simply Me (01/04/00; 01:09:33MDT - Msg ID:22213)
Gold $283 at London Open 1/4/00...Ouch!
Sure hope that's paper I smell burnin'!

SHIFTY (01/04/00; 01:09:26MDT - Msg ID:22212)
Simply Me
Im left wondering if the Fed's wounds are not self inflicted.

Simply Me (01/04/00; 00:44:48MDT - Msg ID:22211)
The Fed's Unseen Assailant
Hello all,
Since I usually only get to read the day's posts after everyone else has gone to bed (the effort is always well worth the loss of sleep), everything there is to say (on a level I'm capable of comprehending) has usually been said.
But tonight, a thread has been left hanging that intriques me. MK referred to:
FOA's #21792:
"Back to your (Oro's) thinking; notice how the Fed is still pumping money even after the year turn over! The liquidity squeeze is arriving and it has nothing to do with price inflation, Y2K or the stock markets. Another force is at work in the world today and it is attacking the dollar behind the bushes."
Please, bear with this train of thought that really has no substantiating facts or logical conclusions. I am trying to follow hints and inuendos concerning actions that are hidden.
There is a "war of currencies", yes? In this war, the Fed is a VERY LARGE and powerful foe, yes? Therefore, one must engage in guerilla tactics...never engaging the enemy face to face. (Lao Tsu; Only fight battles you can win.)
The Fed, and thereby the US Dollar, has been placed in an unusually vulnerable position: [1]Ballooning stock market with political (election year + Y2k vulnerability) blocking any possible graceful retreat. [2]Liquidity (life's blood) pouring out all over the place! [3] Internet stocks holding up appearances while being leveraged paper thin. Bought with signature loans, repayable with nothing tangible! [4] Gold maneuvered into a range where, if it goes up or down the game is over. Up and the miner's get shaft...Down and Asia is ready to buy with both hands.
It seems to me the Fed (the Dollar) is bound and gagged, has an artery cut, and is hanging over the edge of a cliff! All done with the artful use of opportunity, leverage (meaning balance, not loans) and skilful hiding of one's moves (or motives)until the point where they are unstoppable. It also reminds me very much of ju-jitsu, where the skill and knowledge of the smaller, weaker opponent overcomes the brute strength of the attacker. Although, I readily admit, the moves may only be hidden from me!
It seems to me, though,an excellent time to administer the "coup de gras"...before the giant can regain a foothold on the cliffside, climb to safety and staunch his wounds.
Whoever is "attacking the dollar from the bushes" might even be clever enough to get the giant to commit "hara kiri" in dispair! Would it be stupid of me to suggest that maybe a forced "rate hike" at just wrong time will do it!?
Then some mighty fine gold mines will belong to whom?
OK, so I'm no economist. Maybe I'm just plain nuts to try and figure out what's so well hidden from general knowledge. But as long as I still can't figure out derivatives, I might as well try to see what's moving in the shadows behind them.

Rock covers paper. Physical Gold wins everytime.
simply me

lamprey_65 (01/04/00; 00:39:45MDT - Msg ID:22210)
Sound Familiar?
http://www.gold-eagle.com/editorials_00/hickel010500.html
A nice summary of the market/gold/euro

L.

Click Here to view yesterday's discussion.

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P.O. Box 460009
Denver, Colorado 80246-0009

1-800-869-5115 (US)
00-800-8720-8720 (EU)

303-399-6759 (Fax)

admin@usagold.com

Office Hours
6:00am - 5:00pm
(U.S. Mountain Time)
Monday - Friday

American Numismatic Association
Member since 1975

Industry Council for Tangible Assets

USAGOLD Centennial Precious Metals is a BBB Accredited Business. Click for the BBB Business Review of this Gold, Silver & Platinum Dealers in Denver CO

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Thursday February 9
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