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ARCHIVED DISCUSSION FROM 4/4/2001 All times are U.S. Mountain Time (Yesterday's Discussion.) Tree in the Forest (04/04/01; 20:20:58MT - usagold.com msg#: 51409) Repost from Don_L & Comex metals Most of you know Don Lindley who has done great work with Reg Howe and GATA. Here's a repost from GE:(Don_L.)Apr 04, 20:31I heard a rumor this evening that the Bank of Lebanon turned down the chance to lease up to 185 tonnes of gold to the Bank of England, and that was the reason why the lease rates in London spiked up this morning.Does anyone have any knowledge of this?Physical gold is getting harder to find to support the "rollover of short positions", I supsect. I also suspect that each option and future cycle since December of 2000, has "bad gold paper" that has be rolled forward to now where it is all being squeezed into the June options and futures. If so we could have a very interesting gold market over the next 6 to 10 weeks.Me: It may be that Comex will squeak thru this cycle in gold and silver but will not make it thru the next cycle i.e. May silver and June gold. Don_L seems to think along these lines. As I've mentioned previously, gold could go first with silver catching up later as silver will probably move faster. I was going to discuss this further when my data was ready but since I'm still waiting for a response from Comex, I'll mention it now. Based on what I'm seeing, LDD (last delivery day) is nothing more than a paper settlement day. Stoppers don't seem to be picking up their metal before LDD but after. It could be that LDD is immaterial. The default will only come when someone walks up to the window with their little paper warehouse receipt and says "give me my metal" and they haven't got it. It took most of March for Feb contract holders to get their gold or so it seemed. If that's true, a problem in May silver might not show until the end of June or beginning of July. And a problem in June gold may not show until July or August. One thing we do know, preparations by the military for war are afoot. That war is coming, is getting more and more obvious. So it can't be much longer now. The politicians will want to use the war as an excuse for what we all know must happen soon. The stock market is saying so also. Everything is pointing to a time of reckoning, perhaps by summer. Tree in the Forest (04/04/01; 19:47:15MT - usagold.com msg#: 51408) R Powell I see you are a man of good taste. Gene Pitney's cool. Roy Orbison too. ; ) tg (04/04/01; 18:43:29MT - usagold.com msg#: 51407) Consumer Spending: The Next Disappointment http://www.comstockfunds.com/ Consumer Spending: The Next DisappointmentConsumer spending, the last hope of the optimists, will likely be the next bastion to fall. Since the start of this bear market about 12 months ago the bulls have leaned on one false hope after another, and, one by one, they have all come apart. First, they thought the dot-coms were invulnerable to the normal business cycle, and would grow onward and upward forever. When the dot-coms fell, the conventional wisdom held that the remainder of technology was too strong to be affected. Now that the technology arena has come apart at the seams, mainstream economists and strategists are saying that consumer spending will save the day. Given the negative status of other indicators closely associated with consumer spending, we doubt that this will be the case. A number of factors indicate that the unemployment rate is about to embark upon a steep rise. Help-wanted ads have dropped to their lowest level since 1993. Temporary employment, as reported by the temp agencies, is plunging at a steep pace, and is at the weakest level in at least five years. Layoff announcements have soared to record numbers, while new claims for unemployment insurance are climbing rapidly. With all of this happening in the labor sector alone, we doubt that consumer spending can maintain its present pace. In addition to the labor sector, a number of other factors are likely to drive consumer spending down. The savings rate is negative, and at the lowest point since the 1930s. In recent years consumers have relied upon the stock market to provide their savings, but this is no longer an alternative. Consumer debt as a share of GDP is a record 71%, a ratio almost 50% higher than it was about 20 years ago, while household debt as a percentage of personal income is also at a record. Debt problems are usually not apparent under conditions of full employment, but invariably become a big problem when people start getting laid off from work. Furthermore the decline in the stock market has peeled some $5 trillion off consumer net worth. In the last five years the correlation between the movement of the stock market and consumer spending has been near one hundred percent. In our view, therefore, consumer spending in the months ahead is likely to prove extremely disappointing. This will feed back negatively into the rest of the economy, and deal investor confidence a lethal blow, driving stocks down to far lower levels. R Powell (04/04/01; 18:30:38MT - usagold.com msg#: 51406) (No Subject) http://news.24.com/News24/Finance/Features/0,4186,2-8-133_1004282,00.html 2nd try R Powell (04/04/01; 18:26:47MT - usagold.com msg#: 51405) Gold's big three give their views http:news.24.com/News24/Finance/Features/0,4186,2-8-133_1004282,00.html The big three refers to CEOs of three South Africian gold mining companies. One of these is Bernard Swanepoel of Harmony. Harmony was just mentioned by David Tice of Prudentbear. He was a guest on CNBC. I thought he was well prepared and spoke well. BillyG- this should interest you as an owner of Harmony. Soloman. Here's a link as requested. Hope I typed it correctly! Randy doesn't allow banana peels. Rich R Powell (04/04/01; 16:48:44MT - usagold.com msg#: 51404) Correction Tice on TV at 7:30 EST on CNBC. Sorry. I was reading, listening to CNBC and also listening to the greatest hits of Gene Pitney. Large overload for a small brain. Gene Pitney? Remember Town without Pity, The Man Who Shot Liberty Valence, Only Love Can Break A Heart. Maybe Tice will have a word about Gold! Rich ax (04/04/01; 16:31:52MT - usagold.com msg#: 51403) UPDATE- CATALYTIC GOLD CONFERENCE- CAPTOWN Additional information from the Catalytic Gold Conferenceon new industrial uses for gold from Capetown this week:1. Apart from diesel engines, gold can be used as a catalyst in pollution control in gasoline engines as well.Gold in this case would be used to complement platinum in the relatively cold temperature start up phase . Afterthe engine begins to run and higher temperatures ensue,the platinum catalytic converter would kick in. The GoldCatalytic Converter would operate at the lower or ambienttemperatures.2. Room temperature use of a Gold Catalytic Converter wouldallow the more efficient and effective purification of air in large office buildings hence reducing reliance on airdrawn in from the outside. This would save on heating bills( very important these days) in the winter, and air conditioning electric bills ( also very important these days) in the summer. R Powell (04/04/01; 16:16:45MT - usagold.com msg#: 51402) Tice on the tube, CNBC Coming up on Business Center tonight (6:30 EST) will be among others, David Tice of the Prudentbear Fund. This is good too, no? R Powell (04/04/01; 16:10:40MT - usagold.com msg#: 51401) Mr. Gresham Good luck with the Dow puts. I tried last year with the mini-S+P puts but couldn't time my entries and exits well enough. Many I offer this from Gallacher's "Winner Take All", "I also urge the reader to remember that winning in the market buys time as well as money, and that a winning style may, in a curious way, be connected with that understanding." For what it's worth, I think you may have timed this well. Rich R Powell (04/04/01; 15:56:23MT - usagold.com msg#: 51400) Second Hat Trick Day in a Row POG up (but not enough) XAU index up slightly more than 4 and 1/2%. Very good! Lease rates up for the third day in a row and increased the backwardation somewhat. This also is very, very good. Indicator of stock market's future? Abbey Joe Cohen still giving the valuations indicate "good value" at these levels speech. Her delivery is flawless as is her appearance and camera poise. Her outlook/forecast is still positive for higher year end (year over year) S+P numbers. My take on this- Ron Insana will be carrying his lamp looking for the bottom for a while longer. A hat trick and more downside confirmation from Abbey. Very good, very good indeed. Rich ax (04/04/01; 15:49:12MT - usagold.com msg#: 51399) INDUSTRIAL GOLD CONFERENCE - CAPE TOWN The importance of this conference and research into industrial uses of gold prompts a repost. Further newson the conference pending.ax (04/03/01; 22:59:51MT - usagold.com msg#: 51370)LATEST NEWS ON CATALYTIC GOLD CONFERENCENews from the Catalytic Gold Conference earlier today for new gold uses in industry:1. hydrogen fuel cells ---- clean power generation2. catalyst to clean emissions from diesel powered vehicles3. control pollution in office buildings4. pharmaceutical application such as use in anti ovarian and testicularcancer compounds5. use in production of certain chemicalsThats it for now.ax (04/02/01; 19:14:14MT - usagold.com msg#: 51298)INDUSTRIAL GOLD USE CONFERENCE TUESDAYKeep your eye on the Catalytic Gold Conference commencingin Cape Town tomorrow. Researchers are coming from all over the world. Platinum and Palladium may soon have somesignificant competition in specific areas of industrialconsumption. Tree in the Forest (04/04/01; 15:28:52MT - usagold.com msg#: 51398) Correction That should read 500,000 oz less in stock compared to February. Tree in the Forest (04/04/01; 15:27:14MT - usagold.com msg#: 51397) Gold lease rates Gold lease rates moving up again. 1 month now over 3%. This wouldn't have anything to do with the fact that there are now almost 900,000 oz. of gold being stopped in April on Comex would it? That's almost double last months deliveries with 500,000 oz. less gold in stock to play with. Stocks are down now to just 1.3 M oz. Hmmm. Mr Gresham (04/04/01; 15:05:49MT - usagold.com msg#: 51396) Hey Fred! I've been playing with Dow puts (very small time) -- seeing other bears make bucks since the Fall has piqued my envy, and I figure I have my systemic "puts" shining up at me no matter what, decided to spread my financial efforts over a larger spectrum. Beats video games, MTV, and most of the Internet. Maybe I took whats-'is'name's --oh yeah Panda -- parting shots about making some money. (But I hate not keeping up with my reading here! HATE IT!)OTH, we shall see after a time, won't we. Just trying to raise next month's mortgage and keep those shiny doubloons safe out of reach.BTW, when it's quietest here is when things are about to burst. (Also, when Peter holds a backyard camp-out gathering -- that's a scientifically proven 100% fact! (grins...) grostig (04/04/01; 14:24:07MT - usagold.com msg#: 51395) Currencies Options Broker Wanted I'm looking for an honest and patient full service options broker that deals with currencies regularly. I need help and education for purchasing call options on Swiss Francs and or Euros.Go Physical Gold and Silver. justamereBear (04/04/01; 14:21:49MT - usagold.com msg#: 51394) (No Subject) Yes, It does look like vacationland in goldville. Maybe we do need these food fights to get the rest of us stirred up or something?j'Bear FredBear (4/4/2001; 12:09:43MT - usagold.com msg#: 51393) Where is everyone? Is today a vacation day in goldland?Is everyone panning somewhere? schippi (4/4/2001; 11:32:57MT - usagold.com msg#: 51392) Select Gold Hourly Chart http://www.SelectSectors.com/agpm70.gif FSAGX moving Up FredBear (4/4/2001; 10:53:36MT - usagold.com msg#: 51391) Canuck (4/4/2001; 5:42:10MT - usagold.com msg#: 51388) Canuck, how aboutEconomics of a Gold Standard, SkousenWhat Has The Government Done To Our Money?, RothbardThe Case Against The Fed, RothbardSmith had others also, SuperMoney and another that I forget. I read those back in the 80s. BH (4/4/2001; 7:29:13MT - usagold.com msg#: 51390) ECB/Gold reserves According to Bloomberg:Gold assets fell 273 mln Euros to 118.464 billion Euros, due to a sale of 30 metric tons by a member central bank, the ECB also said. It did not say which member bank sold the gold. Topaz (4/4/2001; 6:30:08MT - usagold.com msg#: 51389) Canuck I trust what ail's you passes quickly mate.Recently read "Goldfinder" by Keith Jessop - a life's work culminating in the recovery of $100 mil in Russian Gold from a sunken British cruiser.All the good stuff - Gold, Guttersnipe partners, Cutting edge diving technology, intrigue.....took me 2 day's to read it....well worth the effort. Canuck (4/4/2001; 5:42:10MT - usagold.com msg#: 51388) Lying low these days Picked up a copy of Adam Smith's "Paper Money" last week-end. What an awesome read. First chapter, on housing, the California boom. Second chapter on the USD, inflation and the inevitable death of the reserve currency. Chapter three, OPEC, the oil barrons and 'energy crisis'.Will post the index soon.Any suggested readings friends?Canuck. Canuck (4/4/2001; 5:36:36MT - usagold.com msg#: 51387) China Hangseng (sp?) down 505 last night, been taking a little drubbing recently.Chinese turn to the ultimate store of value? SHIFTY (4/4/2001; 5:04:04MT - usagold.com msg#: 51386) FredBear Thats funny Sir Dollarhide !! Dollarhide / LOLback to bed$hifty FredBear (4/4/2001; 4:55:28MT - usagold.com msg#: 51385) '49er 10K Gold Piece from Shipwreck http://biz.yahoo.com/iw/010403/0202025369_2.html First ``Mammoth'' Gold Bar From S.S. Central America Shipwreck Treasure Acquired By Private CollectorINTERNET WIRE -- A private collector and investor from Massachusetts has secured the first of the massive assayer gold ingots released for sale from the S.S. Central America shipwreck treasure. Only 13 gold "bricks" from the California Gold Rush weighing over 500 troy ounces even exist today. All existing specimens were recovered from the remains of the U.S. Mail Steamship S.S. Central America, lost at sea in 1857 when it was bound for New York carrying 2-1/2 tons of gold dust, nuggets, coins and assayer ingots from the California Gold Rush. No other large gold bars over 100 years old have survived. In fact, the largest specimen in the Smithsonian's collection of Assayer Ingots is relatively small, weighing just a few precious ounces.The incredible gold ingot just acquired, weighing in at nearly 40 pounds, is the largest California Gold Rush relic in the hands of a private individual. As a numismatic treasure of bona-fide Early-Americana monetary gold, it is fondly referred to as the "10K Gold Piece" because the 1857 currency value stamped on the bar by the famous San Francisco assayers Kellogg & Humbert is $10,020. In the days of the 1850s California Gold Rush, assayer offices like Kellogg & Humbert (rather than the U.S. Mint) would accept gold dust and nuggets from successful '49ers and then process and cast the gold into "unparted" gold ingots. (Unparted gold means that it was not completely refined and contained silver, which was highly prevalent in California's gold ore.) After clipping two corners of the bar for their fee and assaying the purity of the gold, the assayers would stamp a U.S. Dollar value at the then-current gold fix of $20.67 per pure gold ounce. These blocks of monetary gold could then be used to settle domestic and international financial transactions. The "10K Gold Piece" is 879 fine gold, meaning 87.9% pure gold, and is representative of the typical purity of raw California gold.Although the "10K Gold Piece" was valued at $10,020 in 1857, its rare and historical value make it worth well over a half-million dollars today. Note that, as detailed on the shipofgoldinfo.com website, "The most renowned numismatic reference guide, the 'Red Book,' records the auction sale of a 2.5-ounce F. D. Kohler ingot (stamped with a $50 currency value) from the Garrett collection for $200,000 in 1980.The "10K Gold Piece" transaction was handled by Monaco Financial, LLC, a leading rare coin dealer located in Newport Beach, Calif. A member of the Monex family of companies, with rare coin and precious metals bullion transactions in excess of $1 billion last year, Monaco Financial is the primary authorized dealer for the assayer ingots, coins and other precious metal treasure recovered from the S.S. Central America shipwreck. Hill Billy Mitchell (4/4/2001; 4:49:10MT - usagold.com msg#: 51384) Mythical @ # 51366 SirThank you so much for your kind words. I cringed when you mentioned the backlog of work which I have ahead of me concerning SteveH, Leigh, and ORO.Since you already have my e-mail address please forward yours to me with the Subject line "USAGOLD Handle - Mythical. I seem to get a lot of porno junk lately and tend to delete anything that I do not easily recognize. Then I can give you a short response with promise for more as time permits.Very respectfully,HBM FredBear (4/4/2001; 4:49:08MT - usagold.com msg#: 51383) Is This Guy's Name For Real? http://biz.yahoo.com/rf/010403/n03459539_2.html From a paragraph below:``When there is nowhere else for safety, go to gold,'' said Jake Dollarhide.I think I might change from FredBear to SirDollarHide!Gold and retail stocks manage gains as S&P 500 dropsNEW YORK, April 3 (Reuters) - Just 44 stocks from the Standard & Poor's 500 index (^SPX - news) managed gains Tuesday as investors reacted to disappointing earnings and job cuts -- signs corporate profits would not return to health any time soon.Gold stocks were the best performing issues, with the S&P Gold and Precious Metals (^SPGOLD - news) group gaining 5.4 percent. Discount retailers were also one of the few bright spots in a lackluster market, with the S&P Retail Discount stores (^SPRDIS - news) rising some 1.4 percent.The gains came even as S&P 500 slumped 39.41, or 3.44 percent, to 1106.46, a 29-month low.``When there is nowhere else for safety, go to gold,'' said Jake Dollarhide, a money manager with Tulsa, Oklahoma-based Fredric E. Russell Investment Management Co. which oversees $50 million in assets.Barrick Gold (NYSE:ABX - news) rose $0.63, or 4.6 percent, to $14.48, and Newmont Mining (NYSE:NEM - news) gained $1.08, or 7.1 percent, to $16.46.Gold stocks, may also have been helped by U.S. tensions with China that began Sunday when a U.S. EP-3 surveillance plane collided with a Chinese jet fighter. China detained the U.S. crew after they made an emergency landing on the Chinese island of Hainan.Gold is a traditional store of wealth in times of uncertainty, with some investors choosing to buy the shares of mining companies, rather than hold the metal itself.The stand-off with China may also be prompting some of the sell-off in stocks, investors said.``Deteriorating relationships with China are not good for U.S. companies who want to do business there,'' said Dollarhide.Dollar General Corp. (NYSE:DG - news), a discount store chain, rose $0.34, or 1.7 percent, to $20.65.``If the economy continues to slow, discount retailers will have an easier time meeting earnings expectations,'' said Dollarhide, who oversees 150,000 shares of Dollar General.``Discount retailers are not trying to sell a new phone system. Just toothpaste, laundry detergent and other basic, everyday needs.''To be sure, even some technology stocks managed to eke out gains.``Investors are desperately seeking value in technology stocks,'' said Dollarhide. ``They want to own them and are looking for stocks with a relatively low PE is getting picked up.''Semiconductor equipment maker Applied Materials Inc. (NasdaqNM:AMAT - news), wich trades at 32 times 2001 earnings, according to Thomson Financial/First Call, rose 1/8, or 0.3 percent, to $40-1/8, while KLA-Tencor (NasdaqNM:KLAC - news), which trades at 30 times 2001 expected earnings, gained 10/16, or 1.6 percent, to $35-7/8.That compares with Ciena Corp. (NasdaqNM:CIEN - news), an optical networking equipment maker, trades at 54 times 2001 earnings even after a 55 percent drop this year. It fell $6-12/16, or 16 percent, to $35-11/16 Tuesday. FredBear (4/4/2001; 4:44:24MT - usagold.com msg#: 51382) Now Here's a Headline! http://biz.yahoo.com/rf/010404/l04205955.html Gold glistens in Europe, palladium droopsLONDON, April 4 (Reuters) - Palladium prices set nine-month lows on Wednesday as investors switched out of the metal and into its cheaper sister metal platinum, while gold was regaining recent losses. Palladium fixed in the morning at $692.00 an ounce -- its lowest fix since July 14, 2000 -- while platinum was set at $582.00 an ounce.The resulting price movements were pushing platinum closer to $600 an ounce while palladium dipped below $700 an ounce -- and analysts were expecting them to meet somewhere in the middle of the $100-range.``The rendezvous will take place anywhere in between, so there is further potential gain for platinum. Looking forward, there is now a probability that palladium will get weaker in the $500-$550 area while platinum remains above that level,'' said one analyst.Recent palladium weakness has also been attributed to signs that consumption of the metal used in autocatalysts may be weakening because of a global economic slowdown as carmakers look for cheaper alternatives.``Palladium dipped below $700...with sentiment turning negative on car manufacturers' plans to reduce use of the metal and switch to lower-density coatings and platinum catalysts,'' said Lawrence Eagles, analyst at GNI Research.Palladium set all-time highs in January, fixing at $1,094 amid growing jitters over exports from world number one supplier Russia.At 0955 GMT spot palladium was at $685.00/$700.00 versus a New York close of $702.00/$717.00 and platinum was at $583.00/$588.00 from $573.00/$578.00.GOLD FIRMSAfter giving up most of Tuesday's gains in late New York business, gold firmed in early Wednesday European trade on the back of a wave of borrowing, market players said.``The market had already garnered support from the dip in the U.S. dollar, and the blip in lease rates either suggests good physical demand or short covering by speculators,'' said Eagles.One-month gold lease rates were last quoted around 3.4 percent, sharply higher than Monday's 1.6 percent.``It seems the periods being traded are the one, two, six and 18 months mainly. On the back of this, it's difficult to be short on gold, although spot has not really taken advantage so far,'' said another dealer.Further losses in world equity markets could see further gains in the euro, players said, but any more rises in gold's price will discourage buying from India where the bumper gold-buying wedding season is starting.``Over the day ahead, tighter forwards should help support gold at these higher numbers,'' added the analyst.At 0955 GMT spot gold was at $258.95/$259.45 versus Tuesday's New York close at $256.80/$257.30.Silver was slightly higher on the back of gold and looking steady in the mid $4.30s. Spot metal was last higher at $4.33/$4.35 from the New York close at $4.30/$4.32. The Invisible Hand (4/4/2001; 3:00:22MT - usagold.com msg#: 51381) The Value of Gold For yesterday's MK's market report:"Quite often I believe the demand for gold comes more from an intuitive understanding of its value that goes beyond any economic considerations."I liked this, thank you, Michael, for having stated the (not so?) obvious. Topaz (4/4/2001; 2:58:34MT - usagold.com msg#: 51380) Parsifal - Paper Gold Howdy Sir P,I think if CPM took a poll of Posters/Lurkers, we'd find the vast majority would fall squarely in line with your thoughts - Well done!This Deflation/Paper Gold thing has me intrigued.No matter which Fed button is pushed, it will always be up to the Good 'ol average Joe to decide when enough Debt is enough.Based on the fractional reserve system, if Joe doesn't borrow Fred can't pay - and the pack-o-cards come tumbling down.Now DE-flation is basically "too little money" - a situation that, under a Fiat system seems implausable however, to get that money "out-there", Joe has to, in some way, shape or form, borrow it.I think Joe's done with borrowing for the time being and this "should" be very good for Gold. ( BOTH physical AND Paper)WHY?The one thing that defines deflation is "reality" meaning, the whimsical "products" pricing structure will be reduced to ashes and conversely the real items of life will be priced according to need - not necessarily dropping in price...and even increasing.You may say, "you don't NEED Gold" and you'd be right...per se however, we WILL need a debt free asset to denominate our worth once a DEflationary mindset takes hold and Gold is a given in that regard.This, as I stated "should" be good for all gold but as paper gold relies on the full faith and credit of "the usual suspects", I'm sticking to Physical! Old Yeller (4/4/2001; 1:53:46MT - usagold.com msg#: 51379) Japanese debt bomb http://www.prudentbear.com/boards/user/non-frames/message.asp?forumid=4&messageid=37763&threadid=37763 Ole Greenie likes to boast about how he would never get into a mess like the Japanese central bank fueled credit bubble bust.Well,he'd better be right,I'd hate to see conditions like these replicated in the land of the negative savings rate. Topaz (4/4/2001; 1:38:53MT - usagold.com msg#: 51378) CoBra et al. http://www.normandy.com.au/contents/ABA030401.HTM Thought you-all may be interested in the Franco deal from NDY's perspective.You'll note the Chairman reports the Company is now leveraged for a Gold price upswing, luckily as their notional return pretty well represents current A$pog.RBA reduced interest rates by 1/2% today and the A$ promptly ROSE on the news. What else??The current upturn in Lease rates coupled with Global interest rate reductions must translate as "Roll-over/forward sales are yesterdays tactics" surely?POG doing a runner as I type - $258.80 - There! that'll stop it! Black Blade (4/4/2001; 1:38:45MT - usagold.com msg#: 51377) US POWER-U.S. sees no quick fix for California energy woes http://biz.yahoo.com/rf/010403/n02258702.html Snippit:WASHINGTON, April 3 (Reuters) - As California temperatures creep higher and strain the electricity grid, the state can forget about looking to the federal government for help. Barring an unlikely change in philosophy on wholesale price controls in the West, the White House says it does not have a ``magic solution'' to prevent California blackouts this summer when air conditioner use soars.``We don't have a generator in the basement of the Department of Energy where I can automatically send electricity, whether it's to California or any part of the country,'' Energy Secretary Spencer Abraham bluntly told television interviewers on Sunday.Black Blade: BINGO! This is a problem that the whole US faces. This summer is only a preview of what we all may have to expect eventually unless a massive build up of power plants, infrastructure, and production of hydrocarbons begins immediately. The economy is toast! Unfortunately for George Dubya, he will have to contend with an untenable position as the US slips into recession (depression?). Better get some portfolio insurance (GOLD)while it's cheap. Golden Dreams All! tg (4/4/2001; 1:35:50MT - usagold.com msg#: 51376) (No Subject) http://www.gold-eagle.com/gold_digest_01/ackerman040501.html As Austrian-school economist Dr. Kurt Richebacher has taken pains to illustrate, however, his colleagues are entirely wrong in this assumption. In fact, it is quite clear from tables that he has reproduced in his March newsletter that, until year-end, inventory build-up was the major support for the economy, especially in manufacturing. What has slumped, notes Richebacher, is final sales -- which have crashed to around 2% from a heady 6% rate in 2000. What this portends, he says, is that regardless of how much stimulus the Fed tries to apply, consumers and corporate borrowers are unlikely to follow the script. "History has shown that there are times when factors other than the central bank play the governing role in the credit system, and we are furthermore sure that the present is such a time. Considering ravaged balance sheets of consumers and corporations, and drastically diminished profit and income expectations, the two have obvious reasons of their own to retrench their borrowing and spending."Unlike 1990-91Dr. Richebacher sees some key differences between now and 1990-91, when credit stimulus evidently worked to bring us out of recession. Back then, he notes, consumers saved 8.3% of their current income; today, savings growth is negative. Also, the trade deficit was running at less than $80 billion a decade ago, while today it is at $450 billion. And consumer debt has almost doubled, while business debt is up 70%. There are other differences noted by Dr. Richebacher, but one that he doesn't mention that I view as particularly troublesome is the role of mortgage borrowing in the current resuscitation effort. While anyone who reads the business pages will already know that money aggregates have skyrocketed since the beginning of the year, few could tell you where all the money has come from. As of February 25, the three-month annualized growth rate for M2 was 11.3%, and for M3, 13.2%. My colleague Michael Belkin, writing in the current issue of Strategic Investment (800 435-1528), traces this growth, not to expansion of the Fed's balance sheet, but to expansion of Fannie Mae's. "The money supply is not being goosed by the Fed," he notes, "but by Fannie Mae -- as if there is a tacit official agreement to use [a government-sponsored enterprise] as a Keynsian pump-priming mechanism." Black Blade (4/4/2001; 1:29:10MT - usagold.com msg#: 51375) Rate Hikes Revive Calls for Seizure of Power Plants http://dailynews.yahoo.com/h/latimes/20010403/lo/rate_hikes_revive_calls_for_seizure_of_power_plants_1.html Snippit:Private energy companies spent less than $3 billion to buy the power plants at the heart of California's electricity crisis. Those firms made record profits in the past year as their plants generated such high-priced electricity that the state has committed $14.7 billion toward buying power--burning through its budget surplus and authorizing record rate increases that again raised the question of whether it would be cheaper for California to simply seize the plants.It would be a radical step, and one fraught with complicated legal issues, but even the normally cautious Gov. Gray Davis (news - web sites) broached the possibility of grabbing power plants during his annual State of the State speech. "If I have to use the power of eminent domain to prevent generators from driving consumers into the dark and utilities into bankruptcy, then that's what I will do," Davis said in January when he used the legal term for government's ability to seize private property.Black Blade: Could the Kommissar be alluding to seizing private power plants when he gives his speech on Thursday? Socialism in Kalifornia? Go figure. Still, they would Have To purchase natural gas and out-of-state electricity and no one would sell it to Kalifornia should they take such a ridiculous step. Looks like blackouts are guaranteed this summer. Black Blade (4/4/2001; 1:18:48MT - usagold.com msg#: 51374) Calif. gov to address state on energy crisis Thursday http://biz.yahoo.com/rf/010403/n03489440.html Snippit:SACRAMENTO, Calif., April 3 (Reuters) - California Gov. Gray Davis will deliver ``a historic address'' on Thursday on his plans to solve the state's energy crisis, his office said on Tuesday. While officials say they hope that consumers will not be hit for more of the state's mounting power bill, industry analysts have suggested that more hikes could be possible if the situation is not resolved soon.Black Blade: The situation is critical and now Kommissar Davis is forced to go public to convince the Grasshoppers. Only a couple of more months until the air-conditioners are fired up. Without hydroelectric power from the Northwest and low snowpack levels in the Sierra's, there are certain to be blackouts in the Peoples Republik of Kalifornia this summer. The sad fact is that they knew this day was coming for over a decade. "…and they danced, sang, and played all summer…" Black Blade (4/4/2001; 1:06:12MT - usagold.com msg#: 51373) Stocks Endure Brutal Session http://biz.yahoo.com/rb/010403/business_markets_stocks_dc_424.html Snippit:``It's very difficult for research analysts or salesmen, or anybody else, to get up and pound the table and say, 'You have got to own stocks,''' said Ned Collins, a trader at Daiwa Securities America.``People are wondering when there will be an earnings turnaround. It looks like we have more time and more pain before we find a level that people feel comfortable coming and spending a fair amount of money.''Black Blade: As I said before - "interesting." I also heard Bob Pisana on CNBC that the shorts have no fear and they believe that there is a lot more downside. Black Blade (4/4/2001; 0:59:37MT - usagold.com msg#: 51372) RE: Seeker of the Grail msg. #51316 I think that we are on the same page. I say "interesting" as a more subtle way of saying the same thing. It is in reference to the ancient Chinese curse: "May you live in INTERESTING times." It appears that we may see the markets continue to be under pressure tomorrow. The so-called "Earnings season" is now being referred to as "Confession Season" as more bad news will be released over the next several days. Market futures are currently mixed tonight, however, anything can happen over the next few hours. So tomorrow could also be "interesting." My most recent issue of "News and Views" from the Castle finally caught up with me and as I read it and also from recent commentary by financial media, I sense a few more eyes cast toward the glowing yellow metal. Indeed, life could get "interesting." Cheers!-Black Blade Parsifal (04/04/01; 00:14:01MT - usagold.com msg#: 51371) So many responses! Wow, I see several responses to Parsifal. I'll try to reply to each. Randy msg# 51312: Would you want to hold a national currency if that nation's banking system was in trouble?Me: Of course not. I'm certainly well protected, maybe too well protected.Hill Billy Mitchell msg# 51321: You have presented a good picture of the emotional side of the gold dilemma as you question not only why we would choose gold over paper but how much and why when you say regarding the current movement of POG: [. . .] Me: Yes, these days I am feeling more emotional than usual. The hundred or so ounces I am supposing is the "right" amount, I dunno, it just seems like it's about at the limit of what one can carry on foot in an attempt to flee physical danger. I don't find much of what you state that I disagree with; however, your mentioning that you have significant assets to protect but that your daughter and her husband do not have much in the way of assets to protect reminded me of a sad situation I wish to remark on. A retired, somewhat well-off couple I know withheld requested financial help from one of their adult children (who wanted help with buying a home). That couple has recently lost an amount of money in the stock market that could have purchased the home outright. I am reminded that if children are to be given financial help, they need to be given that help before they too become old. I think gold would make one of the very best gifts to children.Journeyman msg# 51351: So, Sir Parsifal, given that by objective standards, gold is now selling _below_ it's $270/oz cost of producion, where would you suggest I put my wealth?Me: Well, if you've pretty much got everything else you need, and you aren't looking for major involvements, such as with starting a business, etc., and if the amount you are looking to invest is equal to or less than $25,000, then buy gold. I think that is what I would do. If you are young (or if you feel young, in the sense that one "feels" lucky), then you might consider buying land and holding it for the long term, developing it, farming it, passing it on to your children, etc. For example, I am currently trying to decide how much energy I wish to expend investigating a 70-acre parcel that looks like it might be a pretty good deal. I could borrow the money and buy it, but then I'd be paying interest. I don't have the cash because I have the value stored as gold. So, I'm frustrated because to get the cash I must either sell gold at a loss or borrow. It's so much easier to always just buy gold and not be bothered with details. But let us not ignore the fact that the POG has been declining steadily. . . . well, that's the best I can do with investment advice.Tree msg# 51359: As soon as I have straightened out the contract inconsistencies in the Comex silver contract spreadsheet I am working on, I will post some new predictions and a response to Carl H's comunique with Ted Butler.Me: I thank you for your Comex silver reports. I look for them, and those reports are some of my favorite types of information. I have grown impatient waiting and watching while gold and silver prices drop. I've grown weary of theoretical speculation on currencies and economics. I appreciate factual data that, essentially, tells me what I want to hear, which would be that the paper markets are crashing. And that is where I and others are vulnerable. We tend to believe what we want to be true, even when credibility is lacking. We must always guard against self deception. Sorry about your investment difficulties. I have made some investment mistakes too. Those mistakes cost me much more in loss of respect from family and friends than those mistakes cost me in money. I have since earned more money than I lost, many times over, but those who warned against the failed endeavors as stupid and risky, and those who were especially hurt and disappointed by the losses, their respect never came back. Oh well.Parsifal ViewYesterday's Discussion.
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