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ARCHIVED DISCUSSION FROM 1/4/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) TownCrier (1/4/06; 23:47:45MT - usagold.com msg#: 140104) Ten Bears msg#: 140092, money and war I read your comment about the "the record of almost continual warfare associated with states using 'debt' fiat currency".This question is sure to put a smile on EVERYONE's face.Please give me the name of ONE single war that was prevented by a monetary gold standard.<general laughter dies down>Ok, now in all deadly seriousness, consider that we were on an international gold standard AND YET the Great War (WWI) still managed to spring into being.Now I'll grant you that many participants subsequently chose to suspend the gold standard, but please answer this: How exactly does a gold standard prevent a war when the standard is so easily suspended in accordance with the political will to do so?Even good ol' Ferdi could never quite figure that one out, but bless him, he never let it stop him from stating that false claim anyway.R. TownCrier (1/4/06; 23:22:12MT - usagold.com msg#: 140103) Goldi, your question "Does solid backing of a currency lend itself to less corruption and longer life?"Revisiting square one, the premise was that a fiat currency NEVER fails, but a gold standard (currency) ALWAYS fails eventually.So there's there answer to that. Also arguing against the gold standard currency is that when it DOES fail, there is usally a large dislocation among the users of the system who had so-called convertible accounts in the bank which one fateful day suddenly no longer are convertible.A currency on a fixed gold standard leads to gold with a frozen price/value along with shocking devaluations; whereas a fiat currency with floating MTM gold reserves provides all the while solid and ever reliable gold values and easily-coped-with gradual currency devaluation.R. Goldilox (1/4/06; 22:58:30MT - usagold.com msg#: 140102) Gold currency failure @ TC,I totally agree that even gold backed currencies will finally fail, once the pyramid scheme runs its course. A reasonable question, and probably not very easy to answer, is:Does solid backing of a currency lend itself to less corruption and longer life?Obviously not, if the controlling entity is completely rotten, but a hypothetical comparison of backed vs. unbacked currency life given similar conditions might be an worthwhile study. TownCrier (1/4/06; 22:53:45MT - usagold.com msg#: 140101) Goldilox says, "Currencies don't fail, people who control them fail" Exactly.And when we say the people fail, what we mean is their management is bad -- to the detriment of the currency's purchasing stability.A gold standard currency will ALWAYS fail, thus giving over to a sudden disruptive dislocation of currency value (at the moment of suspension of convertibility) and subsequent transition to a less 'shocky' fiat currency regime, because even the 'almighty' gold standard is controlled (operated) by fallible human beings.Technically, 'currency' is whatever your social structure (most frequently this means your government) says it is, as a portable unitized portion of that society's monetary system. 'Money', however, is the same wherever you go -- and you CAN'T quite put your finger on it... except in the form of its designated currency.Amen.R. Goldilox (1/4/06; 22:53:05MT - usagold.com msg#: 140100) Trade in countries with bad currency @ TC and Flatliner,One of my favorite reads in the last couple years was Jim Rogers' book "Investment Biker", the story of his trek around the world on an "Airhead" BMW. He describes his entry into each country as an adventure in checking out the health of their local economy via this route:First he would go to the bank and exchange a small amount of US$ (1980-ish) for the local FIAT. Then he would seek out the local money changers in the street markets and compare the exchange rates. If they were similar, he ruled the local economy healthy, if not, he suspected that government controls were operating at a level that stifled commerce.Not unlike your gold market analogy, with a more emperical basis. TownCrier (1/4/06; 22:10:59MT - usagold.com msg#: 140099) Flatliner msg#: 140086, well done! Very well said. I stand and applaud.However... (did you see that coming?)In the pursuit of rock-solid thinking on this matter, I want to challenge you further on one small thing... the conclusion you drew in the second paragraph where you said "...the PoG in that currency will climb to the moon and international trade with that country will falter."Firstly, taking your introductory remarks, I fully agree that if indeed the Governments forsake reasonable management, then yes, absolutely, the PoG as expressed in that currency will 'climb to the moon'. So far, so good.However, I think on the face of it you might be overly hasty in concluding "international trade with that country will falter".Think about it like this. Based on the same rationale and understanding that you so excellently expressed in all other areas of your post, a clever fellow like you would not maintain much more than a superficial level of currency in your checking account. You'd select just enough from your income stream to meet your expected expenses, whereas any excess you had (the portion that you would earmark as savings) would prudently be exchanged for the security of tangible gold metal.Not only would you do this, but so would all of the other equally clever people of the land! And in fact, if you travel to many places of the world where the government's management of the currency has a bad track record, you'll find a lot of people there are already on this sort of gold savings paradigm.And that right there, my friend, is the essential BEAUTY of the system; because these folks shall be using gold as their savings, they will not be losing their international purchasing power -- even as the government is driving their currency into the floor!The people of the nation will, just as before, be able to dip into their savings to buy foreign goods (imports).Now take it a step further, and stand on the outside looking in. If that country's currency is going to the floor and yours isn't, that exports will certainly look very affordable, and foreign capital will certainly bid aggressively on their available goods (exports).So you see, international trade need not suffer at all, and in fact, the paradigm will do great service in preserving, through time and all sorts of currency storms, a better continuity of balance between the imports and the exports.Finally, picture yourself as a tourist to that fair but far distant land of the weak currency. In fact, say the country is so small, and its currency so unattractive and exotic that your hometown bank can't provide you with any of its folding money to have in you wallet upon you arrival at the airport.Furthermore, being a land of gold savers, let's say they really have no need for your own pathetic currency, either, because you, too, are from a fair but far distant land with an equally weak and exotic currency.No problem! Being a gold saver yourself, you pocket one of your many gold sovereigns that you've bought from USAGOLD-Centennial Precious Metals, and you hop on your airplane with dreams of a righteous sun tan.You land in that fair land, find the local gold merchant (there shall be many of them on account of the locally active gold/currency exchange) and hand over the sovereign for enough cash to see you through your vacation -- paying for all of your locally rendered services (hotel, haircut, shoeshines, meals, etc) as well as the goods that you take back home as souvenirs.now think about it the balance of trade upon your return. That country effectively IMPORTED one sovereign (0.2354 oz gold), the local economy was stimulated by your use of local services, and only the small balance of physical souvenirs that you took home registered as EXPORTS.Meanwhile, perhaps your own country's government will be 'hip-hip-hurrahing' because you single-handedly contributed towards a net EXPORT of what had previously been domestic goods (your own gold) meanwhile IMPORTING less. And in the currently topsy-turvy world, isn't that what every government seems to be striving for -- a net EXPORT of goods... which they perversely call a trade SURPLUS?!Naaaaaaaaaw!!Thanks a mint for your participation in this critical discussion. It's the future as you'll soon enough know it by experience rather than just as a mental exercise. And the premise of a monetary system built upon a framework of floating MTM gold reserves is the critical ingredient to deliver it to our future doorsteps.Now THAT's a cause for cheering. Hip-hip-hurrah.Randy Mthirsty1 (1/4/06; 21:58:49MT - usagold.com msg#: 140098) contest Flatliner,i am new to this forum as you know.My posts come from a 55 year old sheetmetal worker who built all of those buildings where the white collar workers have their board meetings.Whiterose asked if anyone would be interested in taking a guess at end of year prices of gold period.Why does a simple little contest that is all in fun have to be dragged into the global market of rubles,paper,and whatever else is happening in the world.It's like signging up for a football pot at the work place.You just pay your money and pick your squares.This is whiterose's contest.If you do not want to enter no big deal.If you want to see a contest that includes what you discussed start your own contest.With all respects M.(p.s.i have posted 640 high and 640 end of year) Goldilox (1/4/06; 21:58:10MT - usagold.com msg#: 140097) Missed reference http://www.commondreams.org/views05/1017-28.htm For those who want to read the Doug Soderstrom article where he presents his theory of "Cognitve Foreclosure", here is the URL.It's too far afield topically to elucidate here, so go read it for yourself, if you care to. Smeagol (1/4/06; 21:57:24MT - usagold.com msg#: 140096) Currencies... We looks at paper-currencies as the sstock-certificates of corporation-governments...which people are forced to use rather than freely trade...at least within corporate government borders...and as the corporation goes, so goes it's sstock. And even with good management, corporations may sstill die.S. Liberty Head (1/4/06; 21:55:08MT - usagold.com msg#: 140095) Re: TC or Karn Actually both statements are equally correct yet overly simplistic.Each statement does reveal something about the perspective of the speaker.Since any currency system will eventually fail once it is corrupted, perhaps it would be more instructive to ask what currency system would offer the most resistance to corruption? Is the chosen currency system supported by the use of force, fraud and terror to maintain monopolistic control? Are competing, alternative currencies readily available once corruption is found out?Is the currency inflatable?Best Wishes Goldilox (1/4/06; 21:48:13MT - usagold.com msg#: 140094) Point vs. full view of inflation @ Flat-liner,I think your analysis is right on. We are progammed to think of "inflation" as a natural "linear" progression of money supply growth by insincere types like Bernanke, and the incredibly obtuse system of hedonic measurement has evolved to keep us in that thought pattern even as the inflatinary curve slope crosses over the point of unity. All hyperbolic curves approach a slope of zero in one direction and infinity in the other. That's the definition of hyperbolic.Nothing is happening (or may even be available) to alter that curve, as no one has come up with a monetary theory that defies the hyperbolic trend.Most people aren't even alarmed by the idea that the dollar has lost 96% of its value since 1933, as they say "it's just numbers in a ledger". But the bottom line is that, while this is true, the "controllers" use this obtuse calculation to run the pyramid scheme to its logical conclusion EVERY TIME. Unfortunately, that logical conclusion is greater and greater distortion of the distribution of wealth. Like any Monopoly game, the game must end and be restarted when the balance is completely lost.Unfortunately, the repeated success of this system lies in something I recently read called "Cognitive Foreclosure", wherein the masses decide it's not worth standing up for rights or equality and prefer instead to just stay "under the RADAR" of the controllers. Smeagol (1/4/06; 21:44:48MT - usagold.com msg#: 140093) Oopsss...please put quote marks around the third line in our lasst, precious Ten Bears (1/4/06; 21:43:45MT - usagold.com msg#: 140092) "Successful" gold or fiat? Message 140083It depends, obviously, on how one defines "successful". If one defines a successful fiat monetary system as a system which successfully fleeces, and over time impoverishes the majority and richly rewards those who have the monetary franchise, then your contention is correct.If, on the other hand, success is defined as a sound-money system which does not allow the "hidden tax" associated with a continually depreciating monetary unit, and one which provides reasonable prosperity for the majority at the expense of power for the few , then Karn is correct.Additionally, if one addresses the record of almost continual warfare associated with states using "debt" fiat currency, requiring continual monetary expansion, and a borrower of last resort (often military expenditures), then "success" associated with fiat currency looks even less desirable for the majority. Or perhaps, like one favorite professor commented long ago, "Maybe everything I have learned over the last half-century about economics is wrong (just not up to speed)……But I doubt it." Smeagol (1/4/06; 21:43:09MT - usagold.com msg#: 140091) The Silence of the Gold "Thus, don't look at the one time adjustment of MTM as the end game." - FlatlinerWe doesn't...So, laugh today because it would be ridiculous to imagine trying to sell a round a factor of 100 above today's prices. But, to the kids, when they sell, that is what they will get and laugh they will joyously.100, 1000, 1,000,000... there is no number that is ridiculous...and we are not laughing, and rarely do... where It is concerned.S. Goldilox (1/4/06; 21:26:38MT - usagold.com msg#: 140090) Currencies don't fail, people who control them fail Reading the ping-pong between opinions of currency failures, whether FIAT or backed, one thing becomes obvious to me.Currencies don't fail, but management of them has failed regularly. Some are harder to manage, and some leave more room for abuse, but the failure itself always boils down to corruption and greed. One can comfortably say from the sidelines that a government that implements a 100 to 1 or some value trade-in didn't really fail. But those trying to live through that episode might suggest that in its ability to serve its populace, it certainly did fail, and it required complete replacement.Like Larry the Cable guy says:"Guns don't kill people. Husbands who come home early do!"We're debating nothing but semantics on this issue. Flatliner (1/4/06; 21:22:44MT - usagold.com msg#: 140089) @Smeagol, I can almost hear your hissing snicker of a laugh. But today, I do not part with the precious round. Part of the reason why I believe the outrageous 100 factor, can be found in my previous post. I believe that we will forever have inflation – not just US hyper-inflation that has been held of for nearly forever (and my never come), but inflation in every currency for the rest of our lives and the lives of our children, grandchildren and so on. If you untie Gold from a particular government currency, you will never find the problem of having to get off ‘the gold standard.’ But, unlock gold, let it trade free. Then, governments and their central banks can create money all they want. If they create too much, every business in that country will fail, there will be no long term capital investment gold will fly across the boarders and its price, in that currency, will skyrocket.My belief is that this is what the coming financial system will look like. Gold will trade free and currencies will be measured against economies (not gold). The success of the economy will provide confidence to the people to enter the currency carry trade of that country thus, reducing the price of gold in that country.But everywhere, we will have inflation. It is just part of the process. The best part is that as gold trades freely, it will find its natural worldly value. That value will transcend boarders and be redeemable anywhere and everywhere. But, still we will have inflation.Sure, we might have a one time readjustment to the price in dollars, but, if you think about it, the fundamentals of inflation remain and will forever remain. Thus, don't look at the one time adjustment of MTM as the end game. You, my friend, will most likely be in this for life and your children for their lives and so on and on and … Well, you get the point. The PoG, in an inflationary environment will always go up. And by inflationary environment I mean as world wealth grows, so will the value of gold and so will the supply of currency.So, laugh today because it would be ridiculous to imagine trying to sell a round a factor of 100 above today's prices. But, to the kids, when they sell, that is what they will get and laugh they will joyously. Rook (1/4/06; 20:54:59MT - usagold.com msg#: 140088) .,. In the past 800 years, there has not been a successful monetary structure, because of poor achitecture, insufficient cooperation, and human nature.Well, you did invite attempts at rewrites;-) Smeagol (1/4/06; 20:50:57MT - usagold.com msg#: 140087) Entertainment... "I would entertain circulating a round at a factor of 100 over today's prices..." - Flatliner (msg#: 140081)And it might even be entertaining, precious...Ssss... flag that posst of yours, Ssir Flatliner, and recall it when the opportunity actually arises to exchange that precious Krugerrand at that price. Do you assume today's purchasing power...as many do...at that time?Many have ssaid and prophesied that It would be priced in five, maybe six figures...in dollars of course, precious... but even after a once-in-a-lifetime MTM "gain", by then many other things may also be much more expensive than they are today.It will indeed be very interessting, yess...and entertaining?...what people will think of It, and do with It, then. And that time is now one day closer...S. Flatliner (1/4/06; 20:44:59MT - usagold.com msg#: 140086) @THE GOLD TREATMENT TownCrier, Well said. I have found that it's extremely hard for people to separate gold from currency and replace that association with currency and economy. I believe that this is in the cards for the world in the coming years. We will have governments that dictate currencies and print those currencies as they see fit. Gold, will stand out not as an alternative currency, but as a place to store wealth before getting back into a currency.With that, people will have a choice, hold fiat currencies and be subjected to inflation (taxes), or hold gold. Governments can print all the currency that they want, but if they can not provide reasonable confidence that it will hold value over time, the PoG in that currency will climb to the moon and international trade with that country will falter. This belief implies that we will forever have inflation! This belief also implies that we will always have boom and bust business cycles. But, countries with good political systems, where they are able to manage their currency well, will be rewarded by businesses that will be able to function! It will be in the interest of the governments of the world to find stability in order to support business that will improve the quality of life for all in it's boarders.Exhale! You may thing that you stir the pot, but, there are many that see the words that you write and don't find it offensive – yet. TownCrier (1/4/06; 20:43:10MT - usagold.com msg#: 140085) Pre-emptive comment Before everyone rushes in to suggest that the hyperinflated mark of the Reichsbank represents a failure, as does so many hyperinflated old Latin American pesos, please give long patient thought to what actually occurred, i.e., in the respective transitions to Rentenmarks and to so many 'new' pesos... all with fewer zeros.Thanks!R. Smeagol (1/4/06; 20:28:58MT - usagold.com msg#: 140084) What would happen... ...if the US-country began marking it's Gold-reserves to market?sss... granted, the US reserves of It would make up a very tiny part of the total number of dollars floating around out there...but over time......will they be eventually be forced to do this anyways?Can they?S. TownCrier (1/4/06; 20:12:34MT - usagold.com msg#: 140083) From yesterday's linked article, "THE GOLD TREATMENT" by Richard Karn He said in his concluding remarks:"In more than 800 years of fiat currency use there has never once been a successful fiat currency, whereas during that same time there has never been a currency based on the gold standard that failed -- until it was either corrupted or taken off the gold standard."<Now, taking a deeeeeeeeeep breath before taking the plunge...>I'd say he's got it all topsy-turvy. It would have been more accurate and more instructive if he had said this instead:In the past 800 years there has never once been a successful gold standard, whereas during that same time there has never been a fiat currency that failed -- until it was either corrupted or put on the gold standard.In that form the statement is nearly perfect.Unfortunately Mr. Karn doesn't yet understand it as he talks prematurely from his podium. God bless him... if he delves deep enough and thinks on it long enough he'll come up to speed (just like I, too, eventually did).That, or else he (or any volunteer) will please endeavor to show me the error of my reckoning.On with the discussion...R. The Invisible Hand (1/4/06; 19:22:45MT - usagold.com msg#: 140082) The truth shall prevail! http://www.commonvoice.com/process.asp?type=h&id=23377 January 4, 2006 –If the United States invades Iran, or if Israel starts military actions by launches missiles at Iran's nuclear power facilities, which then opens the door for the United States to intervene, most Americans will believe that our military actions in Iran will be to defend freedom and liberty while spreading democracy, when the TRUTH is that we'll be fighting a war in Iran because of our nation's relationship with the Federal Reserve, a so-called bank that is not owned by the federal government, maintains no reserve, and isn't a bank at all, but a cartel. UNSNIPAlan G. retires later this month.As I posted earlier:http://news.bbc.co.uk/2/hi/business/4562488.stmSNIP… at the end of January, Mr Greenspan retires from the position of Fed chief. Although approaching 80, he is already planning his new career. "He's going to write. He has many ideas about how economies work and free markets," his wife Andrea Mitchell, NBC's chief foreign affairs correspondent, told me.UNSNIPMaybe, he'll speak. Flatliner (1/4/06; 19:19:59MT - usagold.com msg#: 140081) White Rose, Is it too late for contest? I do not foresee nuclear war, bird flu, martial law or ‘reasons of law’ that would prohibit anyone from purchasing a fine round Krugerrand in the current year from our fine host. Also, I do not foresee uncontrollable hyper-inflation or gold confiscation. If I were a level headed individual, I would point to MK's entry in the contest and smile knowing that it is a reasonable and educated guess. In all reality, it could very well be the most probable. But, today, standing out on a thin limb is how everything feels to me. Will this year be the year that gold hyper-inflates? Will the mother of all gold rushes hit the world in a yellow blizzard of hording? Will we even be able to buy a round 12 months from now? We… shall all see.In light of the fact that I hold a round and I have protested here that ‘you may never want to sell your gold again’, it will take a lot to get me to part with, what Smeagol has said, is most preciousss! I would entertain circulating a round at a factor of 100 over today's prices, but figure many others would be happy with a factor of 10. Thus, if it is not too late, I will venture an insanely high guess, somewhere around $5000 with a close in the $3500 dollar range.I will be looking forward to the following contest and the one after that. It may even take longer then that for the gold market to settle down into a predictable pattern that would make for easier guessing (constant world wide inflation rates). It will be most interesting to see if the value of gold, in the coming years, means anything more then buying the right to survive. I look forward to being around to see. Caradoc (1/4/06; 19:15:15MT - usagold.com msg#: 140080) Iran: oil paid in precious metal? http://www.freemarketnews.com/WorldNews.asp?nid=4765 The linked article is supposedly about the possibility of an attack on Iran, but squeezes in some "background" about Iran maybe allowing payment for oil in gold. As a source, this site is sometimes wrong and sometimes first with what others don't have for a week.No clue whether they have a source for the idea or are just guessing.Caradoc White Rose (1/4/06; 18:31:00MT - usagold.com msg#: 140079) Re: Flatliner, msg. 140077; clarifying the contest rules OK, I was thinking of the value of the Krugerrands that I bought from our hosts. While I appreciate the 24 hour ability to get the gold price from places like Kitco, I know these prices are influenced by paper gold prices. Since it is my contest, I will define the price as "the gold price coming from a recognized source for which it is possible to purchase Krugerrands for a reasonable $5-$20 dollar premium." If the listed gold price is $800, but Krugerrands cost minimum $1230, then the listing source is no longer valid. If it is impossible to buy Krugerrands for reasons of law, banking rules, nuclear war, bird flu, or martial law (or all of the above), then this contest is null and void and no winner will be declared, except to issue a special statement that all gold holders are winners. USAGOLD Daily Market Report (1/4/06; 17:36:56MT - usagold.com msg#: 140078) Page Update! http://www.usagold.com/DailyQuotes.htmlThe Daily Gold Market Report has been updated.If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.WEDNESDAY Market ExcerptsJanuary 4 (from Reuters) -- U.S. gold futures rallied to a three-week high on Wednesday, as fund buying bolstered the precious metal amid positive sentiment and a weaker U.S. dollar this week, dealers and analysts said.COMEX February gold contracts gained $3.10 to $535.60.On a settlement basis, the close was the priciest for futures since January 1981, although on Dec. 12 the price reached a higher session peak, at $544.50.Gold got a lift from commodities index-based buying more than anything else, said trading sources, as fund-type accounts continue to diversify away from underperforming assets such as equities, currencies and bonds.Gold also drew support in its role as a currency alternative from a weaker dollar amid ideas that 1-1/2 years of U.S. interest rate increases may be near an end. The Federal Reserve's minutes from its mid-December meeting of policymakers hinted late on Tuesday that the rate rise campaign might be almost over.Leonard Kaplan, president of Prospector Asset Management he was bullish on gold. "I would think we will get past resistance at $544.40, to perhaps $550, or $600. "The stock market is not doing well, real estate is off the boil and commodities are the flavor of the year," he said. "Last year, $25 billion to $50 billion went into commodities; this year, people are saying, it will be $50 billion to $60 billion."---(see url for full news, 24-hr newswire, market quotes)--- Flatliner (1/4/06; 17:10:41MT - usagold.com msg#: 140077) @White Rose and the Unofficial New Year's contest Hi White Rose, It is interesting to see your unofficial contest here. What a great way to kick off the New Year. What I find interesting is that the contest only seems to cover the price of gold with regards to the high spot and closing spot. That is, if I understand the contest correctly. Have you given any thought into conducting a non-spot contest? I seem to remember a poster by the alias of Holtzman, now found in the hall of fame, that talked about the separation of spot and physical with regards to pricing a Krugerrand in a pure physical market (See message 14297). Currently, derivative markets seem to drive the PoG based on paper liquidity. What if the paper becomes worthless and our current system no longer functions as it does today? I would think that the derivative price for paper gold may find its own price separate from the real physical price. Thus, we could end the year with a price of paper gold at zero – or find that the market is closed.At that point, how will you determine the contest closing price or high price? It is also interesting that you selected the PoG in dollars. Why not Euros? Rubles? I would think that any currency, with gold officially on reserve, may act differently then one that doesn't. The reason why I mention this is that if the markets close, for some unknown reason, in the US, how will they (you and I) find the true value of gold? How will we really know what a reasonable ‘world’ market value is for our ounce? I guess when it really comes down to the contest, what I would have found very interesting is a contest where we can challenge each other to come up with a date where the PoG breaks free from the paper gold driven spot price. If you really think about it, many that tune in here are looking for that information. When will gold break free? It would also be interesting to debate the reasons why someone selected their date. There are hundreds of reasons why systems fail, but foreseeing the sequence of events that may lead up to it may spark discussions for months to come! Anyway, I appreciate your contest and look forward to praising the winner. May your year be golden. TownCrier (1/4/06; 16:37:27MT - usagold.com msg#: 140076) Federal Reserve buys Treasuries outright today Following the holiday season, one would normally expect the Federal Reserve to be spending its time now mopping up the bulge in excess commercial banking reserves that it usually helps create at the end of the year as a consequence of the inordinate amount of cash swirling around in the hands of shoppers and holiday revelers.But these time we seem to be living through a scenario far from ordinary.Despite a market in fed funds that was trading in line with the FOMC directive target of 4.25, the Fed's trading desk began the morning with open market operations to temporarily pump an additional $7.75 billion fresh money into the coffers of the nation's banking system via two-day repurchase agreements.Flexing its muscles more fully just a short moment later, the Fed bought U.S. Treasuries outright on the open market to the tune of $844 million, thereby 'permanently' injecting the money supply with fresh cash made instantantly in the process of the transaction.When you see how easily money is made, you question the wisdom of various parties (especially foreigners and CBs) who have for so long been willing to hold onto it as though it were a reserve asset of particular merit.To be sure, there was a time for it, but that time is now passing. The move is on to gold.R. Flatliner (1/4/06; 16:35:44MT - usagold.com msg#: 140075) @Belgian and DYOD(D)? Hi Belgian, I love trying to decipher your messages. It's like working a crossword puzzle – in a good way! There is always something exciting about the discovery that keeps me going. So, in an effort to D my ODD, are you willing to share a little more about your first paragraph? Did you really just return from a meeting? From reading that text, it appears as if the meeting was 7 years ago. Also, would you be willing to share the gold-statements that were analyzed? It seems to me that anyone that understands the words of Another and FOA would have a point of view that would be considered very unique by main stream standards. Also, in the second paragraph, can you point out the ‘actions’ of the day that really stand out in your eyes? I mean, sure the price went up, but it's hard to find things like volume or physical sales volume on a daily basis. We also watched the value of the dollar drop almost 1.5%. At the same time, I totally understand the wealth angle – I mean, look at Google! Where is the intrinsic value there? Going further, ‘everything’ seems a little vague. You have much experience in the field of gold understanding, it would be nice to see you say something more then ‘everything’. Do you mean anything? As in, we could run out? New mines could come online flooding supply? I would like to understand.And, don't get me wrong. I value your words *highly*. Really. Following your own words, I do not believe that you are a shrimp at all. Anyone that is 100% invested in gold is a true bulldog in hiding. (I hope bulldog doesn't hold any adverse meanings here. Those things are loyal, determined and downright huggable!) Please note that I value your time and look forward to seeing anything that you post. Belgian (1/4/06; 15:44:14MT - usagold.com msg#: 140074) Gold Just returned from a meeting where some significant (authoritive) gold-statements were analysed : It is very remarkable how many authorities, of all kinds and places, have been at a loss about gold, during the past 25 years ! Nobody, exactly knew WHAT to do with monetary gold. Since 1971, there was an orderly chaos in the entire global gold arena. Many recent statements and gold actions already happened in the period '71 > '90. Those random statements and actions gradually started to converge in an organized architecture since '90 > '95 and has taken a definite form, today ('99).Today's market action in gold-oil-stockmarket and euro/dollar exchange rate, was a repetition of yesterday...fitting nicely in the architecture of gold's future. Today, gold is not existing in a vacuum anymore. A new "purpose" for gold has been outlined and is in application. Gold shall become "wealth" again...without much DRAMA (as little as possible)! That is exactly what is confusing the majority of stereotype observers. Something "different" is now definitely happening with gold and they can't guess what it possibly could be.W're coming closer and closer to a point where "everything" can happen with gold. I mean the real change and not the usual (stereotype) kind of gold-drama that comes and goes, as it did in the past 2 decades since 1971.Disclaimer : The Belgian shrimp still has 100% of his (modest) wealth savings in physical gold...and feel 100% comfortable with it, whilst remaining open minded for every argument that evidences that I have it wrong.Gold's future (its VALUE) is very unlikely going to remain in the (standard) vacuum of the past decades. I do imitate the ECB's concept and have stopped to see/consider gold as an misleading (perceptive) "insurance". A new role for gold has been found. And a strengthening (rather silent) majority is going to make it happen. The idea and will, for it, have matured.Only one man's personal opinion !!! DYOD. TownCrier (1/4/06; 14:49:22MT - usagold.com msg#: 140073) Yuan Rises to New High Vs Dollar http://www.startribune.com/535/story/161937.html SHANGHAI, China (AP) - China's currency strengthened Wednesday to its highest level against the dollar after the central bank began allowing banks a greater role in setting the yuan's value.The People's Bank of China, the country's central bank, on Wednesday began a new policy of calculating the yuan's value against the dollar using a weighted average of the prices given by major banks.Giving banks a role in setting the new daily benchmark, called the central parity rate, is seen as a sign the central bank is willing to allow market forces a greater role in daily trading.Since its July 21 revaluation to 8.11 yuan to the dollar, the Chinese currency has gained about 0.5 percent against the dollar.Throughout the morning, the yuan traded between 8.0681 and 8.0709 to the dollar. That's less than 0.1 percent, but a relatively broad range compared to its usual fluctuation. But according to rules announced at the July revaluation, China allows the yuan to trade only in a band of 0.3 percent above and below its opening level against the dollar and 3 percent versus other currencies.^----(from url)---^Relatively speaking, depending on how you look at it, is the yuan being allowed to float (like a hot air balloon), or rather is the dollar being cut loose and allowed to float (like a sandbag ballast)?The days ahead call for gold.R. TownCrier (1/4/06; 14:36:49MT - usagold.com msg#: 140072) Dubai ruler dies on Gold Coast http://news.ninemsn.com.au/article.aspx?id=79926 Thursday Jan 5 -- The ruler of Dubai, United Arab Emirates Deputy President Sheikh Maktoum bin Rashed al-Maktoum, died on Wednesday on Queensland's Gold Coast.The UAE's official WAM news agency confirmed his death in Australia.He died on the Gold Coast at the Palazzo Versace resort from a suspected heart attack."The UAE has today lost a historical leader who dedicated his life to building the nation and doing good for its people," said a statement from the UAE's presidency.Dubai's main stock market halted trading after the news. The UAE has declared 40 days of mourning and government institutions will be closed for a week."We recognise the cultural urgency in terms of getting his body back to his homeland for burial."^---(from url)---^From Dubai, the "City of Gold", to the Gold Coast, and back again. Certainly no-one is eager to pass on, but when your time comes, I think you could look back at that particular road and conclude that you must surely have lived a charmed life.R. USAGOLD / Centennial Precious Metals, Inc. (1/4/06; 13:26:06MT - usagold.com msg#: 140071) New to gold? Assets and information to help get you started on the right foot! http://www.usagold.com/gold/special/starter.html Goldilox (1/4/06; 12:43:58MT - usagold.com msg#: 140070) Waterfall or Freefall? http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y&Interval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10 @ Gandalf,The Web bot (and others) predictions of "running out of the dollar" are starting to materialize.What's the 2006 score now? Down 2% in two days? Ouch! Smeagol (1/4/06; 11:40:08MT - usagold.com msg#: 140069) Ssir Belgian: "Do you really think that the ECB is in the "making money" business with its gold-wealth-concept !?"We never ssaid they were making money, precious...sss... but they are not in the business for nothing, yess? All we wondered was if the euros in circulation are to be adjussted in any way with the MTM. But upon reflection we ssee that is not necessary. They may keep more of It than "sstrictly" needed."How is it possible that you keep projecting this attitude on an institution that has a whole new set of ambitions !?" We doesn't know what they has in the deepest recesses of their mind, precious. All we sees is what they allow to be ssen. We do not trusst them. That is why we are here, to learn."What facts are you still waiting for?"A timeline? A complete list of central banks that are pro/con/neutral the MTM concept? Anything... not that it will change much...we are merely very curious! (grin)"Are you going to take goldmetal into possession at a certain (much higher) price level that you have in mind ?"Going to? Sss...we don't trade paper, precious... we buy hard yellow as we can... and no, we've hardly been waiting for a higher price of It, either! (cackle) But as currencies fall away from It, and debt NOT associated with poor Smeagol is absorbed by It, It will soon become impossible for us, and a lot of others of modesst means, to buy. Then we musst do with what little we has.S. 968 (1/4/06; 11:35:41MT - usagold.com msg#: 140068) @ Flaccus "Just think where they'd be if they had kept their gold. Nominal fiat gains do not always translate to real gains."Can you elaborate this please ? What is the gain for the US Treasury, who hasn't sold an ounce ?If there aren't fiat gains, you have a monetary vacuüm (emptyness). Still no gains... Druid (1/4/06; 10:57:19MT - usagold.com msg#: 140067) 968 (1/4/06; 08:36:05MT - usagold.com msg#: 140059) Druid: While the subtlety of those numbers might not be understood at first glance, they strongly suggest that, a new paradigm is taking shape concerning how certain CB's are valuing their gold reserves by way of a free floating mark-to-market pricing mechanism as opposed to a fixed price decree of other CB's. This is highly suggestive that a new monetary architecture is slowly being crafted in such a way that gold bullion will be allowed to do the heavy lifting as a CB's primary wealth reserve asset in lieu of all those bond and dollar reserves that seem to have no end. A reclassification of sorts. Flaccus (1/4/06; 10:42:23MT - usagold.com msg#: 140066) 968 Just think where they'd be if they had kept their gold. Nominal fiat gains do not always translate to real gains. Goldilox (1/4/06; 10:21:21MT - usagold.com msg#: 140065) Waiting For? @ Belgian,Don't assume I am waiting for anything. My gold decisions were implemented in 2003.I was just making a facetious remark about the "historical" essence of their MTM being worth more than their currency reserves.Must have gotten lost in the translation. Knallgold (1/4/06; 09:39:09MT - usagold.com msg#: 140064) 968 Doesen't look good for fiat euros,to put it cynically.Was that their goal?Well,and I have more Gold than euros (or any other papercurrency) probably longer than them :-) Belgian (1/4/06; 09:33:46MT - usagold.com msg#: 140063) @smeagold and goldilox Do you really think that the ECB is in the "making money" business with its gold-wealth-concept !? How is it possible that you keep projecting this attitude on an institution that has a whole new set of ambitions !? What facts are you still waiting for ? Are you going to take goldmetal into possession at a certain (much higher) price level that you have in mind ? Belgian (1/4/06; 09:26:22MT - usagold.com msg#: 140062) @986 The "real" historical moment was a bit earlier...when the ECB started with the MTM-concept of the CB's gold-reserves ! But I do agree, that it is nice to see how one's gold-reserves are rising in price with the purpose of having all those accumulated gold-reserves completely "revalued" and finally express real "wealth", universally agreed upon. This in sharp contrast with another CB that prefers the helicopter concept... Smeagol (1/4/06; 09:25:15MT - usagold.com msg#: 140061) Euro MTM goals? Is, there a goal, precious... a target percentage? Are they trying for a certain ratio... or shooting for 100%?And if the markets "overshoot"...and they have more of It than they "need"...will they sell more or...sss... print (or hold back) Euros to keep It at 100%?S. Goldilox (1/4/06; 09:19:52MT - usagold.com msg#: 140060) ECB gold reserves @968,They just can't sell IT fast enough to keep up? Kinda makes the "bugger-thy-neighbor's currency" game a little tougher on them. 968 (1/4/06; 08:36:05MT - usagold.com msg#: 140059) ECB's weekly financial statement ---- historical moment ! http://www.ecb.int/press/pr/wfs/2006/html/fs060104.en.html Gold : 163881 million euros.Forex : 163100 million euros.So, for the moment, despite all the ECB-goldsale blabla, the ECB's gold position EXCEEDS their foreign exchange reserves position !!!!!Does the forum has any thoughts on this historic event ? TownCrier (1/4/06; 04:30:03MT - usagold.com msg#: 140058) Gold May Extend Gains for Sixth Year as Hedge Funds Diversify http://www.bloomberg.com/apps/news?pid=10000087&sid=amhsfVpQx2Ro&refer=top_world_news Jan. 4 (Bloomberg) -- Gold prices may extend gains for a sixth year in 2006 as hedge funds buy the precious metal to diversify from stocks, bonds and currencies.``It's all about fund diversification. That's the bottom- line,'' said Peter Hillyard, head of commodities sales in London at ANZ Banking Group.Investors have been ``heavily dependent on equities, bonds and currencies.''BETTER GAINSInvestors are buying gold because it's outperforming stocks and bonds. Gold rose 90 percent in the five years to the end of 2005, while the Standard & Poor's 500 Index returned 2.7 percent with dividends reinvested.An index of Treasuries maturing in two years or more returned about 30 percent including interest reinvested, Merrill Lynch & Co. indexes show. CB's SLOW FLOAT PROGRAM GAINS MOMENTUMA sixth year of gains would be the longest winning streak since central banks allowed the price of gold to find its own level in the free market in 1968.Bullion is a ``top trading pick'' for 2006, Goldman Sachs Group Inc., the third-biggest securities company, said in a Dec. 19 report, citing concern over inflation, currency values and the U.S. trade deficit.HIGHER PRICESPrices of the precious metal may climb to $600 this year, Marty McNeill, a trader at R.F. Lafferty & Co. in New York, said. ``It's a long-term thing,'' said McNeill, 63, who witnessed gold's last bull market as a trader, when the metal peaked at $873 in 1980.Gold may rise as high as $850 an ounce within 18 months as a weakening dollar boosts the metal's appeal as an alternative investment to U.S. assets, Paul Walker, chief executive of London-based research group GFMS Ltd., said in an interview. RESERVESBuying by central banks could push gold up to as much as $560 this year, said Graham Birch, who helps manage $8.5 billion in mining assets for Merrill Lynch Investment Managers Ltd., the world's biggest investor in gold stocks. ``Countries with big trade surpluses, such as China and some in the Middle East, have too many dollars. They may think about gold as a reserve diversifier,'' he said. Russia's central bank said in November it may double its gold reserves. Central banks in South Africa and Argentina have also said they may increase their gold holdings. Central banks, mainly in the U.S. and Europe, hold almost 20 percent of the world's gold supply as a reserve asset.^---(from url)---^This Bloomberg article is good basic crash course for beginners -- enough to whet your appetite, a springboard to get in and begin to learn more about the why's and wherefor's.R. contrarian (1/4/06; 04:18:16MT - usagold.com msg#: 140057) Humpty Dumpty When it falls, I'll bet it'll all fall together...stocks, bonds, dollars, paper, etc. It's an interconnected chain teetering on the brink of collapse. Stock market alone is a rotting, mad cow-infected carcass tottering on one leg. And who knows, per Sinclair, gold may even be the trigger to unleash the derivatives monster and every foul paper creation along with it, upon the world. Goldilox (1/4/06; 02:36:05MT - usagold.com msg#: 140056) Gold and Dollar Market Summary http://www.jsmineset.com/ snip:What an interesting difference a day can make. One CIGA asked me today: "Now that the $530 mark has been hit, what will gold do?"The answer is "just what it did today."Forget for a moment the truths you already know about the gold price. Gold, as I see it, is headed to $682 and then through $750. All the rest is drama.It doesn't matter if it happens now or later this year. No one can be absolutely sure of the timing because there is a hidden hand in the market equation called over-the-counter derivatives which supersedes the US Dollar/Gold relationship, the price of oil, the Fed minutes or any other potential motivator.What is most critical today is what the media refuses to discuss in print or on business television. The code of silence being applied to OTC derivatives is not happening without a good reason.-GoldiloxSpeaking of DRAMA, JS just hates to be right, doesn't he! Goldilox (1/4/06; 02:30:58MT - usagold.com msg#: 140055) FIAT Failure @ Liberty Head,No complaints with your analogy from me, but you'll probably hear it from the "never attribute to malice that which can be explained by stupidity" apologists. Of course, the problem here is that the perpetrators aren't the ones apologizing. They're enjoying a free pass from the blind suckers.The reason I agree with you, is that there has never been a recorded case of reparations for FIAT destruction once the "stupidity" has run its course.No remorse = No repentanceThe banksters and their government lackies are ALWAYS ready to "give it another go", and the first thing they institute is their own "golden parachutes". Belgian (1/4/06; 00:57:49MT - usagold.com msg#: 140054) @spotlight One does not need to be a fundamentalist/purist to realise that the financial industry succeeded in having misformed "the markets" into a mutant where paper instruments (positions) enjoy the unprecedented privilege of "HUGE" leverage on top of the (minimalized) underlyings. >>> DERIVATIZATION ! And this did not happen exclusively to goldmine or any other gold paper. It was organized (!!!) for all papers (stocks-bonds-currencies).Yes, the motivations behind this organized phenomenon (not a conondrum) are "political". This is exactly what divides us here into the 2 camps (purists-non purists). Let us watch the race without argumenting about the betting on the horses, anymore. Because the very fundamentals are of a pure political nature. Henri (1/4/06; 00:29:35MT - usagold.com msg#: 140053) CB2 This is a sad day indeed witnessing the departure of a friend. I will miss your witty rhymes. You were a welcome messenger from afar. For my own part, I believe the forum benefits enormously from your input. I sense that for you the discussions have grown stale and the table round has become suddenly less noble. Farewell Sir, and I hope that we shall meet someday at a gold conference. Liberty Head (1/4/06; 00:13:45MT - usagold.com msg#: 140052) On Fiat Currencies I suggest we stop declaring that fiat currencies always fail. It sends the wrong message. It makes the gov't seem stupid rather than fraudulent.Fiat currencies have always been successful for their respective gov't. The fiat schemes just don't last forever.Fiat currencies are like syringes for drawing blood. Sooner or later the syringe gets thrown out, but only after the blood has been extracted.To paraphrase an old saying; You can't bleed a bar of gold.Get you some!Best Wishes ViewYesterday's Discussion.
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