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ARCHIVED DISCUSSION FROM 9/4/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) SHIFTY (09/04/00; 23:22:10MT - usagold.com msg#: 36032) Bill Murphy / GATA Something strange going on tonight . I just received this e-mail from Bill Murphy. Then again who can be sure ? I did received the first one also.Hang in there Bill.$hifty```````````````````````````````````````````````````````````Le Metropole Members, Good Lord. I worked a good bit of Labor Day Weekend and am now conronted with this email that was supposed to be from me but I did not let it out or said anything of the kind.This does SUCK - and that is a "quote." I spent much of my Labor Day Holiday weekend speaking with Frank Veneroso. He has not published any material in months because he has learned that GATA's accusuations and suppositions are basically correct. He will not talk about the gold market any more because he has learned a great deal that confirms almost all of what GATA has to say and he fears if he stays too close to us that he will be killed.This sounds like Looney Toones. But, what after what just happened tonite, I am fearful for my life too and have to get what I know out there. Who cares about being a dead martyr? I want to enjoy my life, don't you?<p>This is getting too close for comfort. How do YOU like to be a part of this? Rooting for a TV character is one thing, living it is another. That, I can assure you!<p>SOME HOW and SOME WAY some internet freak and part of the "gold cabal" put out the following in some kind of internt technique. It was not me. This is horrible, behond words that I can express in this venue.<p?Ske a Tail Feather out there. Buy gold shares- physicalgold - wake up - stop being embarrased to talk to friends about gold investments.<p>The Phantom email said:<p>Tis the time to:......... Say it Loud, GATA is RIGHT and I am Proud, but who cares about GATA, I will make a fortune by investing in gold now and in gold shares.<p>This is Bill Murphy agreeing and talking. Hound me forever if the "Say it Loud" crowd is wrong. The proof is in the pudding. HOUND ME.<p> The deal is so much different as this pathetic American investment scene unfolds. Then, it will be what should gold stock should we go to - as in Bob Bishop of noted gold stockFAME.<p><A HREF="http://www.LeMetropoleCafe.com/entrance.cfm">Le Metropole Cafe</A>All the best,Bill MurphyLe Patronwww.LeMetropoleCafe.com JMB (09/04/00; 23:06:56MT - usagold.com msg#: 36031) JOURNEYMAN Your "Questions" were not only enjoyable they were most worthwhile. Thank you, keep them coming.[Ultimately, "money" allocates human hours.] That concept is worth the price of admission and I sincerely hope that I have rephrased it properly. If not, do not hesitate to "nail" me. <smile> PH in LA (09/04/00; 22:13:26MT - usagold.com msg#: 36030) Stradmaster's Concert & Welcome to Trail Guide Since I noticed that StradMaster offered a link to a live stream of his concert yesterday, I would like to report on the real thing from the perspective of one (myself) who was in the audience: The concert was a great success on every level... from the golden tones of his Stradivarius to the warm reception accorded the performances. Our collegue should be congratulated and future performances anticipated with pleasure.Trail Guide:May I add my voice to the chorus that has welcomed your return. It seemed like a very long summer without your posts. From the tone and content of your most recent writings, it feels like the boredom may soon be a thing of the past? One minor question: Is the term "Freegold" one that you and/or Another have coined (pun noted) to denominate the new system, or is it one that is already being used by future participants in the new system and others who have occasion to speak/write of such things?Welcome back! Trail Guide (09/04/00; 21:33:39MT - usagold.com msg#: 36029) EuroGold http://www.usagold.com/announcement/europeantelegram.html Great Job, USAGOLD! I'm sure CPM is the first.You know, a "great horse" is always running for the finish line while the "near great" stay in the pack. Just trying to catch the ones in front of them! And indeed, just like riding gold, smart people will stay with a winner.USAGOLD (09/04/00; 11:30:26MT - usagold.com msg#: 35993)Here's the link for details on the European Delivery Programhttp://www.usagold.com/announcement/europeantelegram.htmlPlease e-mail your questions and comments. . . . .Your friendTrail GuideAnd, I add, great timing! (smile) Trail Guide (09/04/00; 20:28:59MT - usagold.com msg#: 36028) Reply Hello Law,Your post:------law (09/03/00; 22:12:07MT - usagold.com msg#: 35970)Trail Guide: Questions concerning your recent posts! First of all, a very WELCOME BACK...it appears you had a most fruitful and enjoyable sojourn. I too, have had a very busy summer and have not had the available time to continue my previous and consummate lurking and occasional posting...but I'm trying to catch up with the thoughtful and intelligent commentary of the many wonderful posters who frequent here.My Questions:(08/20/00 msg#30)You stated, "If this continues further, and now with the blessing of Europe, it's the paper longs that may be had as the shorts are let off the hook as the market is destroyed!" After having read Howe's excellent commentary and also Murphy's, is it your implication thatDeustch Bank is absorbing the derivatives in order to prevent Euro "bleeding" or is there another context to this statement?-------------Mr. Law, I fully well believe all the following: That the Euro and EuroLand's thrust is to have gold compliment that currency in a future context. Buried deep in the trading habits of our ECBs largest bank members are many gold derivatives that were expressly created for Euro cash settlement,,,,,if,,,, and only if the ECB/BIS make good on a FreeGold based value for gold. We must understand that the Euro is not bleeding, it is marking time as the markets evolve from political will. My friend, Euro value is a very movable item. Just as oil was worth only $10 heading to $6,,,, and now has been politically placed at $30 heading to $50+,,,,,,,, so too will the Euro be "politically placed". Further: I think the portion of Deustch's position that is not correlated to FreeGold has no general liability beyond a failing paper gold market. If this world wide arena is inflated into oblivion and politically settled at say $50??,,,,, who is going to hurt? Yes, the very players that were trying to leverage against the odds that Paper gold would keep the dollar going and oil priced in dollars only. Truly, if our modern paper gold price only went to $400 or $500 that move would maintain the integrity of all the gold industry, save the paper markets at the expense of many big banks,,,,, and save the dollar for another day. That is not going to happen! We are on the road to super high priced physical gold at the expense of the dollar,,,,, at the expense of the entire way our modern gold market is valued,,,,, and at the expense of the dollar banking system that maintains that market. In the process we will find out that """your wealth, it not what your dollar say it is"""! Your post:--Also: (09/03/00 msg#34) Concerning the "two ways (or a combination of both):"..."one or two government and /or private entities to pull the cord"...or..."The price of oil rises until price inflation can no longer be contained." In the first way: Who would have the INTESTINAL FORTITUDE! IN THE "OPEN"! To "pull the cord"???-------Well Sir Law, anyone that begins to perceive that holding official dollar reserves makes no sense in a two currency world. Especially where the dollar maker,,,,USA,,,, is forever running a trade deficit. Indeed, why hold dollars when so many more are always coming your way? Most especially today (amd this is the major kicker),,,, if oil is going to punch the dollar deficit through the roof at $40,,,,, how can we soak up the flood that's coming with $50 oil? Truly, rising oil will bring the bid for physical gold and Euros and it will be a worldwide based demand. It will "initially" have nothing to do with perceived (by officials outside)US price inflation and everything to do with our ongoing US dollar inflation. Watch oil,,, it builds INTESTINAL FORTITUDE!Your post:---In the second way: Will the oil producers be able to withstand the political pressure that will undoubtedly be placed on them?------My good man,,,, the pressure is on the US to maintain world dollar oil settlement! The existence of the Euro is the Master Play on this chess board! Please dig through my last posts. ThanksTrail Guide Gold Trail Update (09/04/00; 20:23:42MDT - Msg ID:36027) The Gold Trail Discussion has been Updated The Gold Trail Discussion has been updated. Click on the link to read the latest updates. John Doe (09/04/00; 20:13:54MT - usagold.com msg#: 36026) MERIWETHER SAYS HE'S SORRY FOR LTCM COLLAPSE http://search.ft.com/search/multi/globalarchive.jsp?docId=000822003112&query=ltcm&resultsShown=20&resultsToRequest=100 For Fair UseFINANCIAL POST: MERIWETHER SAYS HE'S SORRY FOR LTCM COLLAPSEFinancial Post - Canada, Aug 22, 2000, 457 wordsGREENWICH, Conn. - John Meriwether has apologized for the collapse two years ago of his hedge fund, Long-Term Capital Management, which sent financial markets around the world into a panic, the Wall Street Journal and the Financial Times reported. "Our whole approach was fundamentally flawed," Meriwether told the Journal. "I feel enormous remorse." Mr. Meriwether's fund lost US$4 billion after a debt default by Russia in 1998 prompted investors to shun corporate and mortgage-backed bonds and buy less risky, more-easily traded government securities. Fourteen securities firms and banks organized a US$3.6 billion bailout in September of that year to avert the turmoil a forced sale of LTCM's investments would have caused. Mr. Meriwether, 52, said LTCM's investing strategy -- bets that relationships between the prices of similar securities would return to historical norms -- was sound. What the firm failed to anticipate was investor behavior during a financial panic. "It worked well in normal times but in the crisis . . . we were left with much more risk than we expected and we didn't have the capital to support those risks," Meriwether's chief deputy, Eric Rosenfeld, told the Financial Times. LTCM's investments included bets on Danish mortgage bonds, takeover stocks and junk bonds. Mr. Meriwether's losses were magnified because the wagers were made using borrowed money -- as much as US$50 for each US$1 of the firm's cash. "We believed that diversity meant safety," Mr. Meriwether told the Journal. "Although high leverage doesn't necessarily mean too much risk, we did have too much leverage," he said. "The possibility of losing that much money was not part of our mind-set." The General Accounting Office, the investigative arm of the U.S. Congress, said in a November report that the Federal Reserve system, the Securities and Exchange Commission and other U.S. financial regulators didn't adequately coordinate to identify risks that led to LTCM's problems. It said the firm's failure to follow "sound risk management practices" may have been due to "overreliance on the reputations of LTCM's principals." "His shortcoming was that he was his own boss, unlike most other traders who are held accountable for their actions," said Joseph Pregiato, co-head of institutional fixed-income sales at Josephthal & Co." It was fortunate for him that he didn't have a boss to answer to, but unfortunate for the investors." Mr. Meriwether formed LTCM in 1993 after losing his job as vice chairman of Salomon Brothers. He was joined by some of his top proteges from the firm as well as by Nobel Prize award winners Robert Merton and Myron Scholes. They initially raised a US$2-billion fund and, in some years, generated returns of more than 40%. The executives lost US$1.9-billion when the fund collapsed. Mr. Meriwether lost more than 90% of his net worth of more than US$150- million, the Journal said, citing people close to the matter. LTCM has paid back all the money it owed the firms. It made private apologies to investors, including UBS AG, which lost almost US$690 million through its work with Mr. Meriwether's firm, the FT said. Mr. Meriwether now has a new fund -- JWM Partners. The firm had about US$400 million of assets, as of July, and returned 7% in the first half of the year, people familiar with the performance said. All Material Subject to Copyright Canuck (09/04/00; 19:49:01MT - usagold.com msg#: 36025) And the Euro/Dollar war And there's the euro/dollar 'fuse'From another site,"Thank you ... my gut feel is that one morning we will wake to see gold limit up in London, as a result of a news release from the European Central banks. Coming in to NY, there will be panic in the "Street(s)".In keeping w/ my prior analogy, one might say the European CB's have a wire cutters and events are forcing them to use it.The shorts will be crushed." Al Fulchino (09/04/00; 19:41:19MT - usagold.com msg#: 36024) Leigh, ET and Trail Guide Thanks for your responses directed towards me this past weekend. It was very kind of you all. Canuck (09/04/00; 19:27:50MT - usagold.com msg#: 36023) Discussions of paper and futures Glad to see the 'futures' and the 'paper game' is STILL in great debate.Let's work this out backwards. What do I want to see? Gold at $5,000 CDN/oz. (I just picked a number). At current CDN/US currency levels, that's about $3,000 US/oz.Now we know that gold is gold and bread is bread and gold can buy cheeseburgers and a fine suit. Gold is relative so I do not believe it's inherent value to rise. If gold's value were to rise enough to buy 2 suits that would be a very,very good thing. However I believe it to be more probable that the currency would drop. It is the money that is inflated. Oil is fetching a high price because of high demand, gold is near a low because of low demand, it really is that simple. CB's are selling and leasing and if you read the first line of the W.A. it states that the 15 member European consortium is limiting sales to 400 tonnes/yr. They are selling gold. New mine production ADDS to this supply consequently supply meets and/or exceeds demand. The CONFIDENCE that supply will meet and/or exceed demand allows the 'paper' boys to short the snot out of gold. When and if this reverses the paper crowd WILL 'walk away'.When there is a foreseeable supply/demand deficit anyone caught short will pay dearly because at 5,000 tonnes short as per GFMS or 10,000 tonnes short as per R.Howe or 14,000 tonnes short as per GATA the price of gold will skyrocket.This I believe to be the essence of this 'paper market' blow-up.But, the paper blow-up WILL be a ramification or an aftermath of the cause. If you have ever mined, dynamite needs a blasting cap to ignite. You can throw a sack of dynamite down an ore pass and watch it bounce all the way down without an explosion. Continuing the 'backwardization' of this story, what will be the blasting cap of gold to set off the dynamite. It may be the reversal or at least the perception of, in the supply and demand statistics. It may be the fall of the dollar, $600 'equilibrium' price of gold will definitely set off the dynamite paper markets. An oil catastrophy this winter could set off some fireworks. The stock market may play into our hands as well; there have been numerous earnings warnings, another April crash could do it. Tensions in several regions of the world sparking war may be the fuse. In short, a trigger causing the 'cap' to explode will in turn light the dynamite.My bet is a falling US dollar. The insatiable US consumer borrowing and buying binge will soon fall. The CONFIDENCE in the US dollar is hinged on the fact that they will buy and buy until every dollar is spent. US imports foster foreign economies and when this slows or stops the CONFIDENCE will fade. Dollars are handed out (money supply) so buy, buy, buy. If you hand kids money to go into the candy store do they come back with change? Never!! So when foreigners perceive the dilution of the buck or a slowdown in imports or a slowdown of economic activity the confidence in America will be questioned. Dollars will be sent home further diluting (too much paper) the currency and we know a lower dollar will cause higher gold. The turmoil conceived from this will cause the nervous nellies in the paper world to cover. The explosion in the paper market (first caused by the 'dollar blasting cap') will send gold to the moon. The resultant higher demand and possible CB withdrawal will further escalate the POG.Result: The price of gold = $11,100US/oz. (+,- 99%)When: Jan.15, 2001. (+,- many moons)Note: This is a dream that occured to me last night so actual occurences as above would be co-incidental. Journeyman (09/04/00; 19:02:12MT - usagold.com msg#: 36022) More journeymen -- or perhaps masters @Marius, JMB, Shermag, Black Blade, ALL Sheesh!!! Sorry -- had some kind of glitch. I didn't know anything got thru cause I couldn't read the forum after I tried to post!! Some sort of problem with leading spaces on successive lines again, I think. Anyway, here's the message I've been cluttering up the forum with for most of the day:As a result of one of Black Blade's excellent posts, I posted thefollowing two "Questions of the Day:"QUESTION 1: Why wouldn't increased energy prices show up as"inflation" if we were on a true (convertible) gold standard?QUESTION 2: What WOULD happen?Several fellow posters responded, all good answers. In lookingback over things, I discovered that Marius had answered QUESTION1 particularly well (from my viewpoint) in responding to theprevious "Question of the Day" some hour and three minutes beforeI even asked it! Pretty durned impressive! Particularly, hewrote:"Wage Inflation", like "demand pull" inflation or "costpush" inflation seems to be a fundamentally dishonestattempt to obscure what is being inflated. *As theAustrian economists argue convincingly, rising pricesare a symptom of inflation, not the malaise itself.Follow the money (supply)!! *... I remember that theeconomists were in the process of inventing anotherfake form of inflation while I was in college: oilshock inflation! ... THERE IS NO INFLATION WITHOUT ANINCREASE IN THE MONEY SUPPLY! -Marius (09/02/00;21:47:34MT - usagold.com msg#: 35900JMB also nailed it:Q 1: Why wouldn't increased energy prices show up as"inflation" if we were on a true (convertible) goldstandard?....hmmm, the extra money spent on energywould take away from expenditures on hot dogs and whathave you, no? -JMB (09/02/00; 23:26:46MT - usagold.commsg#: 35905As did Shermag:Inflation, otherwise defined as a general rise inprices, would not occur, as there would be acorresponding price decline of other goods. Sort oflike saying the same amount of money now chasing somegoods (energy) more than others. -Shermag (09/03/00;13:16:53MT - usagold.com msg#: 35936Shermag nailed QUESTION 2 as well.Interesting response from Black Blade!Sorry if I missed anyone.I would simply say that without an increase in the money (gold)supply -- and no counterfeiting of REDEEMABLE IN GOLD ON DEMANDpaper gold certificates without gold to back them allowed -- a_general_ price inflation simply can't happen. In thissituation, any increase in energy prices simply MUST come out ofother parts of "the economy" (yea, like hotdogs for example) asreduced sales or lower prices. Of course, increased productivitycould soften the blow in some sectors.Now before someone out there claims, "It is in just such asituation as this that we need 'flexible' fiat," keep in mindthat ultimately what "money" is allocating is human hours. Itcould be current hours, saved-up hours, or promised (debt) hours. Even in a robotized industry, it is ultimately the human hours ofthe maintenence workers, programmers -- and past hours ofinvestors and founders in the case of capital equipment. Butthere are only so many _current_ human hours available. And noderivatives can increase the supply of these. Thus _somethingelse_ has to give.Valuing human hours is highly complex, depending as they do onbuyers in dynamic markets, etc., etc., etc. --- and that's why weuse "money." None the less, it is hours allocated, and you can'thave something for nothing. Therefore, even if you increase themoney supply to accomodate increased oil prices, unless youbelieve in Santa Claus, _someone_ eats it. If you're solidly in the _classical_ gold free-banking system (orother relatively stable) money supply situation, the lower-price,fewer-sales chips fall where "the market" determines. That is,what people decide they can no longer afford is what the"invisible hand" plucks from the economic vine. If the bankers increase the "flexible fiat" money supply on theother hand, those who get to "spend" the money first (i.e. thebankers and their government cronies and borrowers) get to spend"uninflated" currency while everyone else's "stored hour" value,stored in that currency, deteriorates as the supply is diluted bythat first spending. T.A.N.S.T.A.A.F.L.Regards,Journeyman Journeyman (09/04/00; 18:44:11MT - usagold.com msg#: 36021) More journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL As a result of one of Black Blade's excellent posts, I posted thefollowing two "Questions of the Day:"QUESTION 1: Why wouldn't increased energy prices show up as"inflation" if we were on a true (convertible) gold standard?QUESTION 2: What WOULD happen?Several fellow posters responded, all good answers. In lookingback over things, I discovered that Marius had answered QUESTION1 particularly well (from my viewpoint) in responding to theprevious "Question of the Day" some hour and three minutes beforeI even asked it! Pretty durned impressive! Particularly, hewrote: "Wage Inflation", like "demand pull" inflation or "cost push" inflation seems to be a fundamentally disho g, (ge/p ûZà ü ¨ Accept-Encoding: gzipAccept-Language: enAccept-Charset: iso-8859-1,*,utf-8set: ¸ M û] úß° 9Þ¸GET /business/cpm/logohorizon.jpeg HTTP/1.0Referer: http://www.usagold.com/cpmforum/Connection: Keep-AliveUser-Agent: Mozilla/4.72 [en] (Win95; U)Host: www.usagold.comAccept: image/gif, image/x-xbitmap, image/jpeg, image/pjpeg, image/pngAccept-Encoding: gzipAccept-Language: enAccept-Charset: iso-88 Hill Billy Mitchell (09/04/00; 18:23:02MT - usagold.com msg#: 36020) @ Leigh # 36007 and Bobbo Re: Genesis 47 Leigh, you said,"...Egyptians sold their land to the government and offered themselves as servants. A deal was worked out for the government to own the land and the people to work it. Egyptian citizens would receive four-fifths of their harvest and the government would claim one-fifth. The people, for temporary safety, gave up claim to their own land forever."HBM comments:A few months back while I was reading the account of Joseph and the Egyptian famine I made a mental note about it as follows:'This was the first historical account of agricultural sharecropping. As you, Leigh, have noted the sharecroppers kept 80% of the produce.'My grandfather was a sharecroper and I have always been interested as to how the arrangement works. My understanding is that, though sharecropping no longer goes on where I live it is not unlike a farmer renting land and paying the landowner in a couple of ways. One common way is to pay the owner with 1/3 of the crop. The other is cash rent up front. Cash rent up front would run less than an expected 1/3 of the crop because the entire risk goes to the renter in a "cash rent up front" agreement.I know this seems a trivial subject but I did want to point out that compared to our situation today, it seems that the sharecroppers in Egypt were not quite so oppressed percentage-wise, paying only 20% as opposed to 33%.Also the gold which an astute one places in hand today may very well put him in a position to acquire land from those who thumb their noses at "gold bugs", and to become the landlord of the future. No doubt there is going to be an enormous transfer of wealth when the coming liquidation of debt comes to pass.HBMPS: From your insight we have a good example of the fact that if you have no property you are a slave, ie. you have no other way to earn food and shelter than to hire out your physical mind and body. 'if one does not have enough of the physical stuff he may run out of it during the liquidation and end up as a slave with no other choice but that of selling himself into slavery just to eat. Journeyman (09/04/00; 18:17:27MT - usagold.com msg#: 36019) More journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL As a result of one of Black Blade's excellent posts, I posted thefollowing two "Questions of the Day:"QUESTION 1: Why wouldn't increased energy prices show up as"inflation" if we were on a true (convertible) gold standard?QUESTION 2: What WOULD happen?Several fellow posters responded, all good answers. In lookingback over things, I discovered that Marius had answered QUESTION1 particularly well (from my viewpoint) in responding to theprevious "Question of the Day" some hour and three minutes beforeI even asked it! Pretty durned impressive! Particularly, hewrote: "Wage Inflation", like "demand pull" inflation or "cost push" inflation seems to be a fundamentally disho ` õx ›¸ ³ˆ fcfc ú8 ³ˆ ' s/dhpd/images/atmu/33.jpg HTTP/1.1Accept: */*Referer: http://www.denverems.org/ Cavan Man (09/04/00; 17:48:27MT - usagold.com msg#: 36018) Aristotle 36012 Why would they walk away? If the discovery market is populated by sellers and buyers who, for the most part, have no intention of taking possession, why wouldn't they be content with "business as usual". Further, if gold market traders are content with the paper game to settle their "bets", won't it take a large BELIEVER(s) in the metal to create a marketplace more to their liking? If not, why not?Signed,An enquiring mind Bobbo (09/04/00; 17:40:07MT - usagold.com msg#: 36017) Leigh on the Story of Joseph... Leigh, I have wanted to thank you for the warm welcome you had extended to me when I first began posting at USA. It was not overlooked and is greatly appreciated. Thank you.In regards to your: (09/04/00; 15:37:41MT) post, you are absolutely correct. However, it sounds so much like 19.99% credit card debt that I hesitate to make that obvious connection, although one could. The government of Egypt, under Pharaoh's rule and Joseph's guidance, did in fact grab up virtually everything for a song and a seed (the excess food stored during the 7 fat years). Of course, all belongs to the Lord, but it seems that again He will permit all to be grasped by the beast (i.e., the NWO thingy this time around). The ungodly world system will be permitted to prevail and the time will come shortly when the people will exchange their remaining freedoms and rights for a few crumbs to feed upon and restoration of civil chaos. But first things must begin to unravel. Perhaps as the USD hits the skids, the Chinese flex their military muscles, the MidEast erupts and the Euro regains stature and takes gold higher as it rallies, perhaps, just perhaps the scenario will begin to burst full bloom on the world scene. It seems that Solomon was correct when he said "There is nothing new under the sun."GOT GOLD?....Go Gold!!!... Journeyman (09/04/00; 17:25:53MT - usagold.com msg#: 36016) More journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL As a result of one of Black Blade's excellent posts, I posted thefollowing two "Questions of the Day:"QUESTION 1: Why wouldn't increased energy prices show up as"inflation" if we were on a true (convertible) gold standard?QUESTION 2: What WOULD happen?Several fellow posters responded, all good answers. In lookingback over things, I discovered that Marius had answered QUESTION1 particularly well (from my viewpoint) in responding to theprevious "Question of the Day" some hour and three minutes beforeI even asked it! Pretty durned impressive! Particularly, hewrote: "Wage Inflation", like "demand pull" inflation or "cost push" inflation seems to be a fundamentally disho /2 p sW uÈ sQ¸ GET /business/cpm/gildedopinion/crowdsandgold.html HTTP/1.0Host: www.usagold.comAccept: image/gif, image/x-xbitmap, image/jpeg, image/pjpeg, */*Referer: http://www.sharelynx.net/Markets/RecentArticles.htmAccept-Language: en-usAccept-Encoding: gzip, deflateUser-Agent: Mozilla/4.0 (compatible; MSIE 5.0; AOL 5.0; Windows 95; DigExt)Via: HTTP/1.1 df[AC12208C] (Traffic-Server/3.0.9 [uScMs f p eN:t cCMi p s ])pe Aristotle (09/04/00; 16:52:54MT - usagold.com msg#: 36015) Hello Sharefin Although miles of cyberspace may lie between us, it looks like we are close enough to shake hands. The pleasure is mine.Gold. Get you some. ---Aristotle Journeyman (09/04/00; 16:50:45MT - usagold.com msg#: 36014) More journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL As a result of one of Black Blade's excellent posts, I posted thefollowing two "Questions of the Day:"QUESTION 1: Why wouldn't increased energy prices show up as"inflation" if we were on a true (convertible) gold standard?QUESTION 2: What WOULD happen?Several fellow posters responded, all good answers. In lookingback over things, I discovered that Marius had answered QUESTION1 particularly well (from my viewpoint) in responding to theprevious "Question of the Day" some hour and three minutes beforeI even asked it! Pretty durned impressive! Particularly, hewrote: "Wage Inflation", like "demand pull" inflation or "cost push" inflation seems to be a fundamentally disho þ Ð ý.ˆ ý‘ð GET /orgs/dgh/now_an1.gif HTTP/1.0Host: www.dghems.orgAccept: */*Referer: http://www.dghems.org/Accept-Language: en-usAccept-Encoding: gzip, deflateUser-Agent: Mozilla/4.0 (compatible; MSIE 5.0; AOL 5.0; Windows 98; DigExt)Via: HTTP/1.1 db[AC121F88] (Traffic-Server/3.0.9 [uScMs f p eN:t cCMi p s ]) ¸ þ!` ý>ø ý.ˆ fcfc fcfc fcf Sharefin (09/04/00; 16:45:54MT - usagold.com msg#: 36013) SteveH http://www.sharelynx.net/Markets/Master.htm Let me say that your guess is way off.I read the post here and enjoyed it immensely.Couldn't resist posting it back at Kitco. Aristotle (09/04/00; 16:41:08MT - usagold.com msg#: 36012) Price discovery failure Hi Cavan Man.I think it may be even easier than the manner you suggest.Try to imagine the impact on price discovery, and consequential credibility of those prices, if the would-be buyers of these paper positions simply walked away.Gold. Get you some. ---Aristotle Journeyman (09/04/00; 16:35:53MT - usagold.com msg#: 36011) More journeymen -- or perhaps masters? @Marius, JMB, Shermag, Black Blade, ALL As a result of one of Black Blade's excellent posts, I posted thefollowing two "Questions of the Day:"QUESTION 1: Why wouldn't increased energy prices show up as"inflation" if we were on a true (convertible) gold standard?QUESTION 2: What WOULD happen?Several fellow posters responded, all good answers. In lookingback over things, I discovered that Marius had answered QUESTION1 particularly well (from my viewpoint) in responding to theprevious "Question of the Day" some hour and three minutes beforeI even asked it! Pretty durned impressive! Particularly, hewrote: "Wage Inflation", like "demand pull" inflation or "cost push" inflation seems to be a fundamentally disho Ð '¸ à eè Cavan Man (09/04/00; 16:20:14MT - usagold.com msg#: 36010) Aristotle 36009 Aristotle, I am not in disagreement with you but I wish to make a point. For the current price discovery mechanism for POG to fail, someone(s) must step forward and take delivery; there must be massive buying. I mean "massive"! Am I right? Aristotle (09/04/00; 16:13:22MT - usagold.com msg#: 36009) A follow-up question for 714 Your words--The key to gold is the world's reserve currency, the US$ [...] Someday, who knows when, the US$ will be devalued. And then gold will soar..."What will make this "modern gold market evaporate"?"Devaluation.--------------------------------------------------------Please pardon my interjection during your dialog with FOA, but I find this all to be far too fascinating a subject matter to sit idly by on the sidelines.Could I possibly encourage you to share your thoughts regarding the following?Please consider what it is that underlies this fiduciary media we call the dollar, and then accordingly, how is it that the fiduciary dollars will be "devalued" against this same underlying element--whatever it is?This question must be addressed before moving on to the next, or this exercise is meaningless....OK, having given thought to that matter, does it not now strike you as more conceivable that it will not be dollars but rather the "devaluation" of fiduciary Gold contracts in all shapes and forms against the underlying Gold asset that will bring about "a new reality" in the Gold market?The dollar need not fail as a prerequisite for Gold to leap to a new valuation (in terms of goods and currencies, dollar included) coming as a result of the paper Gold falling into discredit; but just the same, under such an event the dollar itself would have lost its last supporting leg in the international arena, and would subsequently plunge even further against the rising physical Gold valuation.Gold. Get you some. ---Aristotle tedw (09/04/00; 16:09:56MT - usagold.com msg#: 36008) Real Money http://www.usagold.com Real money is not Federal Reservem Notes. And real money is not Gold either!!!As anyone in any prison in these United States knows real money is cigarettes!!!Now, when I quit smoking in 1978 cigarettes were .50 Cents a pack. They are now $2.60 a pack and thats if you buy them discount in cartons. Therefore anyone can obviously see that the oveerall rate of inflation since 1978 is 500%+.Cigarettes,real money, get you some. Leigh (09/04/00; 15:37:41MT - usagold.com msg#: 36007) Bobbo Genesis 47:15-26 Thanks for the information about Joseph. You left out one really interesting fact about the story. When the Egyptians' money failed (was all spent)later in the famine, the Egyptians sold their cattle to the government. The government fed them. The following year the Egyptians sold their land to the government and offered themselves as servants. A deal was worked out for the government to own the land and the people to work it. Egyptian citizens would receive four-fifths of their harvest and the government would claim one-fifth. The people, for temporary safety, gave up claim to their own land forever. beesting (09/04/00; 15:27:25MT - usagold.com msg#: 36006) Sir Journeyman's Questions. Was out of town (Highland Games) for the weekend and didn't get a chance to respond to these questions by Journeyman:<<QUESTION 1: Why wouldn't increased energy prices show up as "inflation" if we were on a true (convertible) gold standard? QUESTION 2: What WOULD happen?>>My simple answer for 1.:We have to look back at the "Barter" system to answer this, and use a little math.Using "barter", prices should reflect "TRUE" supply and demand.Here's what I come up with pricing crude oil in Gold:If we divide $275 per ounce Gold by $30 per barrel oil we come up with 9.167 barrels of crude oil for an ounce of Gold.Lets make the math easier:If Gold is about $311 per ounce and crude oil is about $31.10 per barrel we would get about 10 barrels of crude oil for an ounce of Gold.Now lets price "things" in Gold! Most of the world uses the easier metric system, so instead of using infinitesimal small fractions of an ounce of Gold, lets switch amounts of Gold to grams.One ounce of Gold = 31.103 grams.(We could use "grains"( 1 ounce Gold = 480 grains{Troy Wt.} , but nobody I know uses this measurement either)So using the above, 10 barrels of crude oil now costs 31.103 grams of Gold, one barrel of oil(55 gallons?) would cost about 3.1103 grams of Gold(or $31.10).One gallon of crude oil would cost .0565509 of a gram of Gold(or .57 cents). Lets break it down further:If one barrel of oil equals 55 gallons(?? U.S. measurement)how much Gold will it take to buy refined gasoline at the pump?I'm going to use a 3 to 1 ratio because in the U.S. about 1/4 of the cost, at the pump, is taxes. 3 times .0565509 = .1696527 of a gram of Gold.(or about $1.70 per gallon)The ratio of Gold for stuff wouldn't(hasn't in the 5000 year history of using Gold for money)change dramatically until either the "stuff" or Gold becomes over abundent or scarse.Question 2. What would happen?Well IMHO, as the supply of oil worldwide decreases over a long period of time( Thank You Black Blade)the cost(oil for Gold)of the oil would increase "UNTIL" an equilibrium is reached, making hydrogen powered engines more economical than gas and diesel.( I think the process has already been developed to run vehicles directly on altered hydrogen gas derived from water) Than as the "cost" of production of hydrogen fuel from water decreases(big rush to be first) the "price"(Gold)would stabilize the entire worlds economies along with unlimited, clean burning, hydrogen fuel.(Also if We the People can retake control of Government expenditures.....IN GOLD!!!)From John Lennon's "Imagine":"You may call me a dreamer, but I'm not the only one, I hope someday you'll join us,and the world can be one.(At Peace)Thanks for Reading.....beesting. 714 (09/04/00; 14:15:46MT - usagold.com msg#: 36005) re: FOA I read with interest FOA's latest and noted his comments on the "paper market" in AU. "If the gold market was to shift to say, 5 day hard delivery, how could one trade their contracts for gold? Yes, you guessed it, paper would trade all right,,,,, at a huge discount."And why would paper trade at a huge discount? If the last few years are any indication, a non-performing contract could simply be rolled over by way of a commonly used clause in gold leases. We didn't see paper tradeat a huge discount during last fall's spike up. What we saw was an increase in leasing, probably due in large part to rollovers. And as long as the world'sreserve currency, the vaunted US$, remains stable, what better way to inject liquidity into the paper trade? And this, "...what counter party on the other side of your contract could deliver?" This is exactly what's occurred in palladium, but what happens? The price isfrozen, volume vanishes, and the market adjusts to palladiums absence. Would not the market adjust to gold's absence, and instead, trade on dollars and yen and euros? Is this not the history of money?And here's one that just doesn't jibe, "More and more investors pay a larger escalating premium to get physical "now"." All this year, I've been finding incredible dealson French, Swiss, and English bullion coins, among others,that are available for only 5% above spot. Very fine grade coins minted in the 1800's, some of them. I've NEVER seen such deals as I have this year. And everything I see in the AU market indicates investors have been sellingoff their bullion more than they've been buying.Paper gold reflects the "real thing". The real thing is being unceremoniously dumped into the marketplace by CBs, who rightly or wrongly, no longer value it as they once did.The key to gold is not oil. The key to gold is the world'sreserve currency, the US$, and the opportunities it presentsfor usurious profits, such profits that are mimicked by the paper market in gold. Someday, who knows when, the US$ will be devalued. And then gold will soar..."What will make this "modern gold market evaporate"?"Devaluation. ************************************************************Salaam. auspec (09/04/00; 14:14:02MT - usagold.com msg#: 36004) POINT of ORDER To Steve H- The author of this article is me, AUSPEC. The article was posted on this forum as well as LeMetropole Cafe. Unaware of Kitco posting and doubt there are 2 tangled minds that simultaneously thought up this piece. Am honored to possibly be nominated to HOF by my CHOSEN peers, thank you.AUSPEC SteveH (09/04/00; 13:46:30MT - usagold.com msg#: 36003) Point of order for nomination The HOF nomination in question is also located on kitco authored by Sharefin. Either they are one and the same or one has borrowed the others work. HOF verification is in order. What says the author? Clint H (09/04/00; 13:42:19MT - usagold.com msg#: 36002) Oil http://www.hubbertpeak.com/campbell/commons.htm Something to add to the oil thoughts. http://www.hubbertpeak.com/campbell/commons.htmPresentation to a House of Commons All-Party Committeeon July 7th 1999 THE IMMINENT PEAK OF WORLD OIL PRODUCTIONbyC.J. Campbell Gandalf the White (09/04/00; 13:42:16MT - usagold.com msg#: 36001) Second "Second" for CoBra (too)'s Nomination of #35986 auspec (09/04/00; 08:53:16MT - usagold.com msg#: 35986)GOLD ECONOMICS- ABBREVIATED VERSION====The Hobbits are happy to provide the 2nd Second !ANYone for the Required 3rd Second ?---<;-) USAGOLD (09/04/00; 12:33:05MT - usagold.com msg#: 36000) Cavan Man It's a bet. Cavan Man (09/04/00; 12:21:41MT - usagold.com msg#: 35999) peterasher Peter,I had the pleasure of seeing a tape of Mr. Browne (is it Harold) speak at the Libertarian convention the other day. I am very impressed with him and will probably vote his way. Cavan Man (09/04/00; 12:19:47MT - usagold.com msg#: 35998) USAGOLD You drive a hard bargain! I would be happy to make the wager; done.I am hearing that Warner's arm is bothering him. We'll see tonight. Thanks....CM Bobbo (09/04/00; 11:53:37MT - usagold.com msg#: 35997) Response to Black Blade Good day Black Blade and everyone. I will attempt to briefly address your posted requestfor a "religious perspective." I do not wish to upset any poster by my response, but I willpresent a biblical perspective to your inquiry. IF you will be offended by religious stuff: PLEASE SCROLL PAST THIS POST!Black Blade (09/03/00; 23:11:16MT - usagold.com msg#: 35973)I'm not what you would call religious by any measure (probably due to my extensivebackground in the earth sciences perhaps;-)), though I know that there are some religiousfolk here, they may be able to compare the necessity of preparation for such events toJacob in Egypt and the 7 years of plenty vs. following 7 years of famine. Gold and Silverare a means to transfer wealth over the great divide, for portfolio insurance, and as thecurrency of last resort. Remember the persecuted in WWII and in Kosovo who had goldas opposed to those who didn't.-----You are astute to make the comparison between current global economic conditions withthe events of Joseph (the son of Jacob; Joseph become prime minister of Egypt about3900 years ago) and Pharaoh. Joseph was able, through God's interpretation of Pharaohsdream, to give an interpretation to Pharaoh's request for an interpretation of a troublingdream he had. Pharaoh's court mystics, astrologers, mediums, etc., where unable tointerpret, but The Most High God gave Pharaoh an answer through Joseph. To make thelong story short, Joseph told Pharaoh that the interpretation was that there were to come 7very prosperous (fat) years followed by 7 very economically horrible (lean) years. As aresult, Pharaoh appointed Joseph to a powerful position with all necessary officialauthority given to him for the purpose of preparing for the 7 lean years. The 7 lean yearsin the days of Joseph were caused by natural conditions during which crops failed andfamine ruled the day in that area of the world. Joseph had saved Egypt, his family(Jacob's household) and others from famine and untold suffering. Today, we areeventually going to face another lean period caused by economic abuses, bubbles andmanipulations. The wise have been preparing and will intensify preparations, especiallyas we come closer to the end of our prosperous years, even as Joseph prepared back inancient Egypt. Gold is an essential element in that preparation.Other related Biblical teachings:Proverbs 27:23 Be diligent to know the state of your flocks, And attend to your herds; ----Which tells us to be diligent in business (and investments) and continually attend totheir status.1 Timothy 5:8 But if anyone does not provide for his own, and especially for those of hishousehold, he has denied the faith and is worse than an unbeliever. ----We must provide for our family: both in fat years and lean years. Thus we must makepreparations for lean years during the fat years (as did Joseph). AKA: Buy low, Sell high!1 Peter 1:7 that the genuineness of your faith, being much more precious than gold thatperishes, though it is tested by fire, may be found to praise, honor, and glory at therevelation of Jesus Christ,----Our faith is in God and not in the gold we possess. The gold (and other wiseinvestments) is a preparation for lean year turmoil and not an end in itself. At least not forthe believer. I hope that this has cast some religious perspective on your post. SteveH (09/04/00; 11:52:22MT - usagold.com msg#: 35996) Am I wrong? Auspic=Sharefin? USAGOLD (09/04/00; 11:44:53MT - usagold.com msg#: 35995) Cavan(St.Louis)Man. . . How about five points and lunch the next time we get together? Don't have any Canadian silver dollars (I don't think). Is Warner healthy? Cavan Man (09/04/00; 11:39:08MT - usagold.com msg#: 35994) USAGOLD Over here in humidityville the weather is balmy. Actually we've a respite from the 100 in absolute temps combined with high humidity this past week. Our brethren across I70 were not so lucky.Will you take the wager for (4 points to Broncos)with the prize being a Canadian Silver Dollar? USAGOLD (09/04/00; 11:30:26MT - usagold.com msg#: 35993) Here's the link for details on the European Delivery Program http://www.usagold.com/announcement/europeantelegram.html Please e-mail your questions and comments. . . . . USAGOLD (09/04/00; 11:18:22MT - usagold.com msg#: 35992) Various. . . . Turnaround. . . .Thanks for the kind words. We just today introduced here at USAGOLD our European Delivery Program -- a service by which we will be offering gold coins to Euro-based private investors. We believe that USAGOLD/Centennial Precious Metals is the first U.S. based gold firm to overcome the nuances of offering gold in Europe. It took a long time to put the system together, but it is now solidly in place. By co-incidence, it was no more than thirty minutes after putting the final piece in the puzzle that we had our first European gold order. An auger of things to come? That order came from a goodly knight who has occupied his esteemed seat at this table almost from the beginning. Though we come from many backgrounds and countries, we all have one thing in common -- an understanding of the importance of gold, not just for our personal portfolios but in the larger sense as a symbol of our standing as individuals apart from government. We will be bulk-shipping information packets to Brussels next week for futher dissemination to interested gold buyers in Europe, so please go to the "Request Info" link, if you have an interest. With the ECB making noise about raising interest rates to combat inflation in Euroland, it echoes through the financial sector that rising oil is having its effect. The fact that Europeans must first convert euros to dollars to buy oil exacerbates the currency problem in Europe and sets up situation exploitable by the speculators. I admire Mr. Trichet's comments about speculators trashing the euro undeservedly. Sounds very much, though, like the comments made by leaders in the Tiger countries a few years age when the hedge funds trashed their currencies and economies in the process. Until central bankers in concert move to throttle the profliferation of derivatives, and the EU in particular moves to cut the dollar out of the middle, they will find their policies, like the positions of gold owners, undermined by traders who can place a position bet at pennies on the dollar. In the case of currency trashing, the implications are wide and deep as we found out in Asia -- and Europe though it has teeth remains vulnerable. In the case of gold, most gold owners can afford to wait out the attacks of the derivative slingers. For Europe, as a nation, it is a different story. Because derivatives' players can take a currency in whatever direction they see fit -- like dogs on the trail of a fox -- they can do extraordinary damage to individual portfolios within the targeted zone -- including, as saw in Asia, tearing the quarry to pieces. Investors in Europe will find protection, as they have for centuries, in the comfortable confines of gold ownership, and we hope to help with that process.LeSin. . .Thanks for putting up Sheik Yamani's comments. However, I do not buy his argument. Though fuel cells, and hydrogen based systems are in our future, it will be a long time until oil is driven from the economy -- I would guess at leasat a decade, maybe longer. Just the problem of conversion is a technical problem with a long lead time. Add to that the vested interests of the oil industry working to protect its turf and you have the makings of a long drawn out process. The changes Sheik Yamani envisions are likely to happen but the driving force will not be the price of oil; it will be environmental concerns, and as I've said, I don't see it happening overnight. I do not know what's driving his thinking these days, but it has a surreal quality that I find difficult to bet hard money on. Remember there was much talk of alternative energy after the last oil siege in the 1970s and early 1980s. Little or nothing happened to the point where we come full circle. The San Francisco Examiner today tells us that the Sierra Club will begin a campaign against the SUV -- as a gas guzzling, global warming, air polluting symbol of American excess.Cavan (St. Louis) Man. . . . I will take the Broncos in the big game later, but I need at least six. Rams are no fluke! Elway picked them late season last year to go all the way, and they did. Bronco's rebuilding. New faces everywhere, though Terrell is ready to play. What's the weather like there today? Cavan Man (09/04/00; 10:38:56MT - usagold.com msg#: 35991) auspec 35986 This post has my second for HOF nomination.I'd just like to add that GLOBL FIN/MON ORDR est FUBAR! oldgold (09/04/00; 10:35:32MT - usagold.com msg#: 35990) Yamani has been talking like this for years. Nothing new here.Although a Saudi by birth, his primary allegiance now is too oil consumers, not producers. His predictions of the end of the oil age are nothing but propoganda designed to encourage oil producers to push down the price.BTW, when discussing oil prices people should realize that even at today's $32 oil, many European nations probably receive more in tax revenue from gasoline sales than the oil producers do for the crude used to make that gasoline. When these nations complain about the inflationary impact of "high' oil prices, the stench of hypocrisy becomes almost too strong to bear. CoBra(too) (09/04/00; 10:18:47MT - usagold.com msg#: 35989) Re: Abbr. Version - Gold Economics by auspec This brilliant short essay is not only state of the art, but a compressed, though extensive observation of today's financial markets - leading the underlying economy - or vice versa? - deserves a place in HOF - with some annotations for the less initiated (smile) - so I'd love to "initiate" the first nomination - in the hope to find seconders - cb2 CoBra(too) (09/04/00; 09:31:36MT - usagold.com msg#: 35988) Hi Auspec - Thanks again for posting your msg. over at this site - I've just had to respond again - as GTW said FUNTASTIC! Cheers -cb2 Gandalf the White (09/04/00; 09:22:29MT - usagold.com msg#: 35987) auspec's Shorthand FUNTASTIC !<;-) auspec (09/04/00; 08:53:16MT - usagold.com msg#: 35986) GOLD ECONOMICS- ABBREVIATED VERSION CURRENT EVENTS- We may as well have some fun while patiently awaiting more fireworks!GATA's GDBC says POG is manip. by US & UK via OTC derivatives backed by ESF w\o OK of AG & FED. SOS came from LTCM fiasco & stress to CBs, BBs, IMF, & AU lingers. WA is a jolt to mkts., but GS, JPM, etc. douse the flames. 1\2 of PGMs run anyway as TS hits TF re Pd. on TOCOM & NYMEX, CFTC is MIA re COMEX. OPEC amps the POO in order to buy more yell. met. yet no inflation. The pols get involved as govt. honesty is AWOL. The FIG is no fraud, but the CPI is. They contam the XAU yet the obscure HUI remains pure. The DOW, S&P, NAZ, & US$ soar as planned, while the ECBs & Euro languish. LBMA, under H2O w 2 many IOUs, gets dissed by BIS. BuBa vs. Bubba debuts, UBS, DB, & SNB scramble for physical. POG plummets & the PUDCs w HIV\AIDS are SOL. The GBs are PIAs to USG, claim FAZ articles are WA 2, await >POG ASAP.Recs for Au HOF IMHO- Midas, Chris, Frank, Reg, Ted B., & TG\FOA.Recs for Au HOS- FDR, RMN, wjc, BoE, GS, & GFMS.Hope this clears up any confusion!AUSPEC [no FOB]P.S. Ag also. CoBra(too) (09/04/00; 07:41:36MT - usagold.com msg#: 35985) @LeSin Hello there, According to your latest post it seems some others are starting to hop onto the contrarian bandwaggon - bombed out assets may be best candidates for a turnaround! Though not a great "pile" tet. How about digging deeper in Goldman's bomb crater and get some real value for your $'s - cb2 LeSin (09/04/00; 06:37:00MT - usagold.com msg#: 35984) Capital Flows to EURO - Herd mentality Begins "SAFE BET" http://www.bondweek.com/bw/article.html?NOAUTH=1&SECTION=strat&XP_TABLE=current&XP_RECORD=967828682 September 2000 4, 2000 VOL. XX, NO. 36 TWO U.S. MANAGERS PILE INTO EURO ASSETS. —Matt Benz & Julie E. Satow At least two U.S. bond managers are implementing allocation shifts into euro-denominated assets on the view that the beleaguered currency—which was trading below $0.90 last week, down from $1.05 a year ago—is poised to roar back. Officials at Brandywine Asset Management and Waddell & Reed cite Europe's strong growth, and the prospect that the resultant higher interest rates will reverse the currency's stubborn downward spiral, as compelling reasons for dollar-based investors to ramp up their euro-denominated bond exposure. Brandywine has extended its position in euro-dominated bonds by $330 million and is planning to move another 7% of its $1.1 billion in global fixed income assets to euro-denominated sovereigns and corporates, on the view that the euro is going to strengthen against the greenback. Since last fall Stephen Smith, high yield portfolio manager, has foreseen the U.S. economy slowing—even as Europe's picks up speed—because of the ballooning U.S. deficit, interest rate hikes and the price rises in oil and low-end goods such as cigarettes. Dollar weakness "could cause capital to flock to Europe," said Smith. Prior to last year, the global bond portfolio was almost entirely hedged into dollars, but the hedges largely have been eliminated. Though the majority of his foray in the European market has been in sovereigns, Smith is cautiously dipping his toe into corporates as well; his first such purchase was $30 million worth of a recent euro-denominated deal from Clear Channel Communications. Brandywine, which is looking for more seven- to 10-year euro telecom paper, especially if spreads go 150 basis points off the 10-year Treasury, is especially keeping its eye on the upcoming deals from British Telecom and Telefonica. It has cut back to zero U.K. issues, and decreased exposure to Swedish, New Zealand and U.S. paper. WADDELL & REED’S ‘CURRENCY BET’ Waddell & Reed recently used cash to purchase $15 million in euro-denominated bonds, on the view that the euro will strengthen as investor attention shifts from the U.S. to brighter economic growth prospects in Europe. Jim Cusser, portfolio manager for some $500 million in fixed-income, says he bought three- and four-year paper from Dutch financial behemoth ING Groep and two American companies, GMAC and IBM, which issued global bonds denominated in euros. "There's no bond bet going on here—and I don't think there's a credit bet—so much as there is a currency bet," he says. Cusser foresees the euro strengthening over the next 6-12 months on rising local demand for European goods, business-friendly tax reform in Germany and a possible end to the European Central Bank's rate hikes. Meanwhile, the U.S. is beginning to see the effects of the Federal Reserve's tightening cycle in indicators such as home purchases, he says. The Overland Park, Kan.-based fund is allocated 50% to corporates, 30% to mortgage-backed securities, 10% to asset-backed securities, 9% to Treasuries and 1% to cash. At 6.19 years, duration is long its benchmark, the 4.81-year Lehman Brothers Aggregate Bond index LeSin (09/04/00; 06:12:13MT - usagold.com msg#: 35983) Sheikh Yamani & OPEC FOA - Black Blade & ALL - ? Is Sheikh Yamani serious as quoted below or does he represent a smoke screen and a convenient diversion from the real action of new currency settlement arrangements for Oil? I respectfully question his statements, as I hold him in high regard. "S"Monday September 4 4:21 AM ETYamani Says OPEC Accelerating End of the Oil Era By Richard MablyLONDON (Reuters) - Saudi Arabia's Sheikh Ahmed Zaki Yamani is in little doubt -- petroleum prices now spiralling out of control will prove a last hoorah for OPEC oil power.For the former Saudi oil minister, the return to $30 a barrel crude has only hastened the day when the Organization of the Petroleum Exporting Countries will be left staring at untouched fuel reserves, marking the end of the oil era.``OPEC has a very short memory. It will pay a heavy price for not acting in 1999 to control oil prices. Now it is too late,'' he said in an interview with Reuters.``The Stone Age came to an end not for a lack of stones and the oil age will end, but not for a lack of oil.''As Saudi oil minister from 1962 to 1986, Yamani, now 70, was the embodiment of Arab oil power.The architect of a dramatic upheaval in the world's economic order during the 1970s' oil price explosions, his name became synonymous with OPEC.The cartel this weekend marks the 40th anniversary of its birth in Baghdad on September 10, 1960. Petroleum ministers meet on Sunday to decide output policy for this winter.Yamani says it is too late now for OPEC to refill petroleum product tanks in the West where inventories of heating oil are running short for the northern hemisphere's cold months.``I think prices might go a bit higher this winter but further ahead in 2001 prices will start to come down and longer term it is horrible for OPEC,'' he said.Technology To Squeeze OpecWithin 20 years, he predicts, technology will have cut deep into demand for transport fuels.Crude will slump even more heavily than the single-digit prices seen during the last glut, in 1998.This year's oil price scare will feed rival non-OPEC production, suppress demand and, most damagingly for OPEC, breed new fuel technologies.He sees hybrid engines for automobiles and hydrogen fuel-cells drastically cutting the consumption of gasoline while big new finds lift crude flows from non-OPEC nations.``Technology is a real enemy for OPEC. Technology will reduce consumption and increase production from areas outside OPEC.''``The real victims will be countries like Saudi Arabia with huge reserves which they can do nothing with -- the oil will stay in the ground for ever.''OPEC, said Yamani, had failed to learn the lessons of the series of gluts and shortages which have marked its turbulent history.Its leading negotiator during the oil price rises of OPEC's heyday, Yamani says his warnings against pushing crude too high went unheeded.``I will never forget. It was 1979. I was in Caracas and I said that at this price -- it was $28 a barrel at the time -- OPEC production will drop, OPEC countries will fight each other. I said production has to be raised to lower prices. They said I was crazy.''While Saudi Arabia, sitting on 100 years of reserves, now favors prices no higher than $25 a barrel, fellow OPEC members remain keen to squeeze their customers for as much short-term revenue as possible.``There are some members in OPEC who always tried to resist extra production -- like Venezuela, Iran, Libya. In OPEC, from day one that has not changed,'' said Yamani.Leading Role In Producer SovereigntyYamani remains proud of his role in wresting power over petroleum revenues from the oil majors, the assertion of OPEC's central objective -- sovereignty by the exporting countries over their resources.He cites the Tehran Agreement of February 1971, when the oil companies abandoned their long-standing 50-50 share of revenues to cede the Gulf producers a majority return of 55 percent.``That was a big step forward for OPEC,'' he said.And then on October 16, 1973 just days after the start of the Arab-Israeli war, Yamani and five other Gulf OPEC petroleum ministers took charge for the first time of the price of oil.Unilaterally they lifted posted crude prices, previously set by the oil companies, by 70 percent to over $5 a barrel.``Prices were now fixed by producers. Now we were masters of our own resources,'' remembers Yamani.The following day Saudi King Faisal sanctioned the Arab oil embargo to punish the West for its support of Israel.Within months oil prices had trebled and the industrialized world was tipped into the sort of recession which some economists fear could be repeated again if oil prices do not ease soon.Carlos The JackalYamani, born in Mecca in 1930, remains a devout Muslim despite daunting personal experience.He was present in 1975 when an assassin shot his mentor, Saudi King Faisal.Later that year he was among ministers taken hostage and held to ransom at OPEC headquarters in Vienna by the guerrilla Ilich Ramirez Sanchez, alias Carlos 'the Jackal'.Taken on flights to Algiers, Tripoli and then back to Algiers Yamani was told that he and the Iranian oil minister irrevocably had been sentenced to death.``Carlos told me I would die. I was sure I would die. I wrote my will. I was prepared.''Famed for his softly-spoken negotiating skills, Yamani also was a favorite with the press.``Often they knew more about OPEC affairs then the ministers they were questioning,'' he said. Zenidea (09/04/00; 05:58:10MT - usagold.com msg#: 35982) (No Subject) Sometimes its cheaper to put 10 cents under a fridge to level it than to go out and buy a wedge. I was once asked in Basic Engineering the question " How strong is a piece of chain " and most said " what a daft question". Some said in essence that depends what carat it is or re: Breaking strain ='s Safety factor X's Safe working load or WWL etc, or I would ask the authorised authority etc etc . . Oops the pass answer ( A piece of chain is only as strong as its weakest link) But re: Oil and energy etc & 10/1 ratio's re: Pt and Pd and Technology dependant country elements and $. What safety factor i.e.( A proportion of the breaking strain ) will it take to expose the truth in the United States newspapers. the Answer US... :) Black Blade (09/04/00; 05:52:15MT - usagold.com msg#: 35981) "Morning Wakeup Call!" (such as it is) Source: BridgeNews Asia Precious Metals Review: Gold firms on Australian buyingBy Mari Iwata and Polly Yam, BridgeNewsTokyo--Sept. 4--Buying from Australia supported spot gold in Asia on Monday despite selling from Japan and profit-taking from other Asian Sources, dealers said. Gold is expected to move in a narrow range of U.S. $276.50-$278.50 per ounce later Monday amid the long-weekend in the United States, they said. Spot platinum rose following the strength of the price of the Tokyo Commodity Exchange platinum futures.Weaker Australian-dollar denominated gold prices triggered buying from Australian sources in the spot market, dealers said. But, profit taking from physical traders later shaved gains and capped the price of gold below $278 during the Asian trading, they said. Dealers see gold meeting strong resistance at $280. The price of silver and palladium hardly moved Monday in Asia, while spot platinum was supported by strong TOCOM platinum prices, dealers said, adding trading of spot platinum remained sluggish. In Japan, end-users remained reluctant to buy platinum in the spot market due to relatively high prices, Japanese traders said. Japanese physical platinum buyers said they had not heard of news about the arrival of Russian 2000 delivery of PGM (platinum group metals) under long-term contract. The delivery is expected to start in September. On the TOCOM, short-covering and fresh buying pushed up platinum futures prices sharply in the afternoon hitting its limit-ups as a slow response to Friday's NYMEX platinum futures rises, TOCOM dealers said. As TOCOM gasoline and kerosene futures hit limit-downs early in the morning, TOCOM inter-day traders retreated from trading of the two futures and joined the platinum futures rally, dealers noted. TOCOM gold fell on profit taking in thin trade, TOCOM dealers said.Black Blade: Ho Hum. But Pt spiked up sharply, while Pd paper trades continue to languish since the TOCOM and NYMEX manipulation schemes were recently publicly revealed.IPE Oil: Oct Brent called to open 10-15 cents higher By Jim Washer, BridgeNews London--Sept. 4--IPE October Brent crude futures were called to open up 10-15 cents Monday morning at the start of what is expected to be a quiet day on the London market, brokers said. September gas oil futures had started the day stronger, up $2.00 at $312.00 per tonne in electronic trading. -Overall sentiment for the energy complex remains firm, but the little profit-taking seen late Friday on IPE Brent could encourage a rebound in early trade Monday, one IPE broker said. Trading was expected to be quiet, with the NYMEX closed for the U.S. Labor Day holiday and some players likely to be absent from the London market attending industry events. --Both NYMEX and IPE crude futures had posted modest gains Friday as the market awaited word of whether or not OPEC will raise production at its Sept. 10 meeting in Vienna. The market was also influenced by flattening out of positions ahead of the U.S. Labor Day long weekend. With the NYMEX closing early, the IPE will also shut early at 1700 BST. --The statement issued last week by Saudi Arabia reiterating the kingdom's commitment to a rise in production to cool spiraling oil prices is of "considerable significance" despite its lack of positive impact on oil prices when it was released on Aug. 30, the Middle East Economic Survey said Monday. -Farmers and truck drivers in France have begun blockading petrol depots and oil refineries in protest against the price of diesel fuel, British Broadcasting Corp. radio reported Monday. The organizers, led by French road haulage federation FNTR, said they would deploy some 2,000 lorries at more than 70 installations around the country. Black Blade: US Markets are closed for Labor Day. With the continued strength in North Sea Brent oil, there could be significant follow-through on NY Crude tomorrow. A new Goldman Sachs prediction of $40.00+/bbl has been released. The stage for a severe recession is being set. Meanwhile, Au is up +$0.90 at $276.80, Ag down -$0.02 at $4.93, Pt up now only +$8.00 at $601.00 ($612.00 London AM), and Pd down -$8.00 at $710.00 ($718.00 London AM). The Saudis are trying to talk oil down by hinting at production increases, but there is not much room for increased capacity either in production or refining capacity. Looks as if petroleum is going to come under a lot of pressure with accompanying price spikes. Anyway, I will be off for a few days in the Great White North conferencing with some clients. I will check in periodically and see if are long-lost friends appear ;-) The Invisible Hand (09/04/00; 05:37:36MT - usagold.com msg#: 35980) Today's FAZ Had anybody today's Frankfurter Allgemeine in his hands?If so, anything on Gold/GATA? Turnaround (09/04/00; 03:27:27MT - usagold.com msg#: 35979) Guidance from the electronic beyond And a most hearty welcome back to our Trail Guide, and thank youfor being.Wish ORO were here, wish I could 'grasp' it all. Turnaround (09/04/00; 03:19:34MT - usagold.com msg#: 35978) swapping for pre-1933 coins An acquaintance of mine has recently concluded a small trade with Centennial Precious Metals, swapping some of his bullion coins for pre-1933 coins. Apparently, CPM does this type of transaction as a matter of course. The coins he received back are exceptionallynice (I'm not a numismatist, so can't call the grade), some of the later-date Sovereigns looked nearly uncirculated.What also made this particularly outstanding was the amount of personal attention and customer service my friend received (he's a worrier and something of a pain), even to the point of personal calls from the proprietor. He tells me that each and everything that CPM said they would do, they did.For the record, I do not have any connection with CPM, just an interested and admiring bystander. Black Blade (09/04/00; 02:51:50MT - usagold.com msg#: 35977) Here We Go Again: The oil surplus won't last as long as we might wish. Source: Barron's by James Srodes, Barrons, Oct 19, 1998 Most news analysts got it wrong when they credited low oil prices for the recent proposed $48 billion takeover of Amoco by British Petroleum. What's really driving this mega-merger is an impending global oil shortage that will have profound economic and social implications. Seen in this light, the BP-Amoco merger makes short and long-term sense, and the light also shines on other oil companies.For European companies like BP, marriages of convenience with American merger partners will offer shelters for profits from the uncertainties of the European monetary union. Also, there will be cost savings from cutting staff and consolidating offices. And U.S. oil companies like Amoco bring retail service-station networks and refineries into the world's largest market for petroleum products. But most of all, the new hybrid giants will have the muscle to survive critical challenges that loom in the not-too-distant future.Behind the BP pursuit of an American base is a recent series of alerts from many respected petroleum engineers, acknowledged by oil-industry executives and government energy planners: We rapidly approach the point where the global output of new discoveries of oil will begin to contract sharply even as the world demand for energy products becomes still more acute.Put most simply, a consensus has formed in recent months that within a few years new supplies of conventional oil energy will be outstripped by spiking world demand. Very soon after that the real volume of oil output will begin to shrink abruptly -- even as demand growth coasts a bit higher.We've seen this before, but the 21st century's supply disruptions and soaring prices will dwarf the OPEC crunches of 1973 and 1979.The best industry estimates reckon that the world began this year with 1,020 billion barrels of oil in "proved" reserves. At the current production rate of 23.6 billion barrels a year, these supplies would last only another 43 years -- if there were no growth in demand.As for growth in supply, the industry has spent the past 20 years exploiting a new age of discovery technology. Now many oil geologists say that 90% of the globe's oil fields have already been tapped and many are already exhausted.Bigger ProblemThere are several things wrong with the current consensus. Many of the OPEC nations have been inflating their estimates of proved oil reserves. More obviously, consumption of oil products has already jumped by 50% in Asia and by a third in Latin America, since 1990. By the estimated peak production year of 2010, world demand will have risen by more than 60% to as much as 40 billion barrels a year. Finally, there is the geological bad news that once a mature oil field reaches the midpoint in its productive life it becomes harder to pump out each remaining barrel. Examples of mature fields include much of the Middle East, the North Slope and the North Sea.Two remarkable things about this latest crisis outcry are how recent it is and how authoritative are the alarmists. It was only last November that two top oil geologists presented papers on the impending oil depletion to a conference of the International Energy Agency of the United Nations in Paris. Colin J. Campbell, an Oxford-trained geologist, and his French counterpart, Jean H. Laherrere, have been senior geologists for firms such as Total, Texaco and Amoco for more than 40 years. Currently they work at the industry think tank Petroconsultants in Geneva.The two geologists were so convincing that the IEA dropped a generation-old view that held oil discoveries to be merely a function of price -- that is, the higher the price the more oil will be found. Last March, at the Moscow summit of the Group of Eight major industrial nations, the IEA presented its own paper to the national leaders accepting the Campbell-Laherrere view that sometime between 2010 and 2020 the crisis will be upon us full blast. The Campbell-Laherrere analysis also cut the reserve of oil currently known to be in the ground to about 850 billion barrels.Since then, others have joined in the public debate. Recently, Franco Bernabe, chief executive of the Italian oil company ENI SpA, has given a series of interviews in which he moved the doomsday clock forward to between 2000 and 2005. He forecast that today's world price for a barrel of oil would soon begin to rise from its $15 base and quickly pass the $30 mark. He forecast that both the British and Norwegian sides of the North Sea will begin to see production declines within three years. The United States passed its peak (even with Alaska) long ago. Left open for argument is the amount of new oil left to be discovered in the Third World.So much global economic progress depends on the exploitation of oil. Energy from all hydrocarbon sources accounts for 80% of what makes our world go and oil accounts for 38% of all energy used. And it's oil that truly powers economic activity because it produces so much raw lift for activities, since it is so movable and can be used in so many ways.Most "alternative" energy sources require more energy to get them running than they ever produce. For instance, it takes 71% more energy to produce a gallon of ethanol from grain than the energy contained in a gallon of ethanol will generate in use. A barrel of oil routinely offers 10 or more times the raw power for our activities than it takes to get it, conferring an enormous profit not only on the companies that supply oil but on the entire economy.Some alternative sources are just the figurative drop in the bucket. Wind generators require technological investments that outweigh the power they can generate, even if every windy hillside is sown with them. Solar cells pay off only in remote locations. Other substitutes are possible and may provide almost as much economic profit. But construction of nuclear reactors or projects to wrench oil from shale deposits have mostly been cancelled during the last 20 years of oil surplus and low prices. And coal, which is abundant and profitable, has environmental costs. The recent uproar when strip miners blasted the top of a scenic West Virginia mountain showed just how much of our environmental consciousness will have to be reassessed during the next energy crisis.Advancing the MarketThis is where market forces come in and why the BP-Amoco merger fits the rough logic of the days ahead. Soon enough the giant oil combines of the next decade will find themselves doing battle with the likes of Vice President Gore and British Prime Minister Tony Blair. The bigger the major oil producers become, the longer they can hold out against the temptations of politicians to redistribute what oil remains. The 'Seventies offer a convincing example of the impulse to tax "windfall profits" and spend the proceeds on vegetarian-style alternative energy sources.Then very quickly the fight will be over the dwindling petro-reserves themselves. Those nations rich with oil and strong in resolve will get their energy fix. By that standard America can thrive quite nicely; so, too, can countries as diverse as Britain, Mexico and South Africa. Other European Union members will fare according to their ability to command and pay for energy (in dollars and not in euros, thank you).Much of the social safety net that defines the industrial West will be up for debate again at considerable political pain. Nuclear power, with all the fears it raises, will be back on the policy agenda again.There will be obvious nations at risk too. Some are already visible on the horizon. Russia, which has lost control of the petro-energy subsidies that made collectivism possible, is imploding before us. Japan, which must import each barrel it uses of economic growth, is adrift. Even some nations that have oil -- Indonesia and Nigeria, for example -- must show they can control it, lest it be poured down the drain of civil strife.Other productive and oil-rich regions face challenges. The Middle East with its easy pickings grows increasingly unstable with each passing day. Some new fields, such as the Caspian Sea area, are hostage to rival bands of terrorists whichever way their pipelines head.Finally there are the have-nots, those poor nations strangled by a poverty that can be alleviated only by massive use of more and cheaper energy. Think of China, India or Pakistan unable to obtain the means of prosperity and the picture grows dark indeed. The struggle for national prosperity fueled by energy will not automatically go to the rich and already powerful. The nuclear wild card makes players of all nations.Left to market forces, the energy producers of the world will find and exploit a range of energy resources at the prices that reflect the needs of the world. But the vision of the last half century -- that anyone can have everything -- is no longer likely.JAMES SRODES is a Washington writer specializing in international business.Black Blade: Both Colin J. Campbell, an Oxford-trained geologist, and his French counterpart, Jean H. Laherrere, have quite a bit of research on this subject. Laherrere has put forth some rather complicated mathematical models that I have tried in the past. I could post some of that research, however, it is more detailed and complicated than what should be posted on this forum. I don't know what it is, but the French seem to put out a lot of Geo-statisticians. I have worked with several and most really are on top of their game. Campbell has presented several professional papers as well as a book on this subject as well. Though this Barron's article is almost 2 years old, it is somewhat accurate. The political speculation is a bit hard to digest, but then you hust never know. Stranger things have happened. SHIFTY (09/04/00; 00:45:48MT - usagold.com msg#: 35976) Kitco chart gold still going up!UP $1.50 so far tonight!$277.40:)$hifty ViewYesterday's Discussion.
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