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ARCHIVED DISCUSSION FROM 10/5/1999
All times are U.S. Mountain Time
View Yesterday's Discussion.
Jason Hommel
(10/05/99; 23:47:57MDT - Msg ID:15620)
guessing/predicting...
How about another high one...
Gold at $348/oz. by comex close tomorrow.
Peter Asher
(10/05/99; 23:43:49MDT - Msg ID:15619)
Bonedaddy
Men first observed the world was round in the early days of tall sailing ships. In clear weather, when a ship could be seen many miles out to sea, only the upper rigging was visible. They soon figured out that the lower part of the ship was hidden by the curve of the Earth.
I once experienced a perfect example of this, when out on Long Island Sound on a clear day, 40 miles from NYC. I was in a 12' boat very close to the water and rising above the horizon, seemingly out of the water, were the upper halves of the Empire State, and Chrysler buildings along with the tops of a few others. (Circa 1952-3)
Peter Asher
(10/05/99; 23:33:32MDT - Msg ID:15618)
Price Guess
Now that the panic has subsided, the floor traders have changed to clean, dry cloths and careful accumulation will resume.
I'll call for a small rise to $30.80
TEX
(10/05/99; 23:17:13MDT - Msg ID:15617)
Goldspoon: COMEX Close
I've been lurking out there since I first visited the CPM bunker in February. This is my first post and why not start out with a winning hand......place my bet at $332.25.
Also, just got my bank statement today. I had a nice letter asking me to please inform my banker with three days notice if I intend to remove more than $10,000 from my account(s)
anytime between Nov. 1 and December 31. Hmmmmmm......I'm taking it all out tomorrow.
Last but not least.......Three Kings, see it.
Goldfly
(10/05/99; 23:15:00MDT - Msg ID:15616)
Ross, Goldspoon.....
You guys are very close-
Tomorrow's close $332.00
GF
Chris Powell
(10/05/99; 23:07:57MDT - Msg ID:15615)
Corrected link for Murphy interview
http://www.egroups.com/group/gata/236.html?
Sorry 'bout that.
Chris Powell
(10/05/99; 23:06:36MDT - Msg ID:15614)
Text of Murphy interview on South African radio
http://www.egroups.com/group/gata/235.html?
Tuesday's "Moneyweb" program
with GATA chairman.
Black Blade
(10/05/99; 22:51:40MDT - Msg ID:15613)
Chris Powell and GATA
Hey, you guys are good! I had to deduce some of this stuff and you guys had some very interesting info. It looks like the hedgers are in deep. I keep a running profile on share prices for several Mining companies, and noticed something was amiss. Keep up the good work guys! Hopefully these companies will see the error of their ways.
Tomcat
(10/05/99; 22:49:31MDT - Msg ID:15612)
Journeyman, Black Blade, flierdude.
Journeyman: It appears that a large portion of mankind gets to the point where their mind is filled with ideas which become fixed in place. Once set, it is very uncomfortable for people to change these somewhat hardened stale points of view. Oddly enough, your friend with many banks accounts probably still has the same losers because changing his ideas might be more difficult than losing money. This aspect of history repeats with every generation.
BB: Nice mix you have there. Too bad we aren't close. We could trade.
flierdude: Greetings. I follow your posts over at Kitco. In fact, I believe I have seen some of your posts at TB 2000. Nice that you drop in for a spell.
jaydeevee
(10/05/99; 22:48:15MDT - Msg ID:15611)
My guess @ tonight's price
http://www.usagold.com
Looks as if this column is short on BEARS........so I'll come out of my cave and try $318-50. Hope those rabid dogs SPOT & SPIKE see me and beat the living s@##> out of me!
HopeingII
(10/05/99; 22:41:13MDT - Msg ID:15610)
TC - A Question
First of all, a thank you for all your effort on this forum.
Next, a question.
When "delivery intention" is given, can it be changed ?
To be more specific can one cancel the intention or
alter the date (if in fact a date is given in the original intention) ? Perhaps in your answer you could elaborate
on the details of issueing "delivery intention". I hope my
question is clear to you, if not, please ask for clarification.
Thanks in advance and thanks again for all you do.....
Simply Me
(10/05/99; 22:41:02MDT - Msg ID:15609)
Guessing Comex Gold Close
Hi, Goldspoon. If you're still recording "guesses" this time of night...please put me down for $330.50.
Bonedaddy
(10/05/99; 22:36:14MDT - Msg ID:15608)
(No Subject)
Driving from Cheyenne to Denver you wouldn't know the world was round. You probably couldn't tell it by driving from Anchorage to Mexico City either. Fact is when motoring along the highway, the rear view pretty much resembles the view out the front windshield. How is it then that we know the world is round? Is it faith? No, probably not. I think it's just plain old education. Yeah, education, just steadily beating back the forests of ignorance that engulf the planet. Why, not so many years ago, old Nick Copernicus discovered that the world, was indeed, quite round. He didn't need a space shuttle to figure it out either. He came to the conclusion with a humble telescope. Of course he couldn't tell many people, he was smart enough to know they would get mad. Don't cast pearls before swine, you know. Later, after his death, when word got out of his "theory" the leaders dug up his bones and burned them... Heretic! (We'll show him!)
So the dollar, she looks mighty strong....been that way for over fifty years. Nothin' will ever be sounder than the dollar. Look at them fools buying that gold. Pass me some more of that dot com, if you please.
Tomcat
(10/05/99; 22:34:27MDT - Msg ID:15607)
All the shorts have to do is wait a while.
http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001Wf6
I picked this up on the Yourdon site.
BERN, Switzerland (AP) — Swiss lawmakers Tuesday approved legislation that will enable the country's central bank to begin sales of 1,300 tons of gold reserves starting next spring.
The 151-0 vote by parliament's lower house clears the way for the upper house to take up the bill in December. It will then go to the ruling coalition Cabinet around April.
The sell-off would represent half of the National Bank's 2,600-ton reserve. The other half will be kept to underpin the Swiss franc.
"It is in our interest that the gold sales begin as fast as possible,'' Finance Minister Kaspar Villiger told lawmakers.
The central banks of Switzerland and 14 other countries last month announced that they would limit their combined sales of bullion to 400 tons per year for a total of five years.
"From Switzerland's point of view, the pact is exceedingly advantageous,'' Villiger said, noting the rally in the gold price that followed the announcement.
Villiger repeated Switzerland's long-standing pledge that the gold will be sold in careful doses over a period of years.
In a referendum last April, Swiss voters approved a constitution which ended the traditional requirement for the Swiss franc to be backed by gold.
Black Blade
(10/05/99; 22:27:16MDT - Msg ID:15606)
Jaydeevee
Thanks, I guess since they don't trade in the US I didn't have a lot of background on those. I also pick a few Canadians such as Euro-nevada and franco-Nevada (sister companies) which have merged. Great since they are primarily Au royalty companies with no debt, and with a high grade underground mine (Ken Snyder Mine) at Midas, Nevada. I've kind of shyed away from Aussie miners, probably due to Normandy. Good luck to ya mate!
flierdude
(10/05/99; 22:26:43MDT - Msg ID:15605)
Comex Close
Goldspoon,
Right me down @ $316.00 Comex close. Hello all.
Journeyman
(10/05/99; 22:24:29MDT - Msg ID:15604)
Bringing Up Baby
Several posts have pointed out that today's Americans just don't
get it about gold. Ah, yep.
Convincing otherwise intelligent people that gold is better than
paper, at least for some things, is, well, difficult. A friend
of mine has a degree in bio-engineering and another in economics.
He holds many accounts in Asian currencies. I warned him about
three years ago he should watch his won accounts (Korea),
Philippean pesos and the Malaysian ringitt. We got in a bit of
an argument, whereupon I stupidly mentioned that gold protects
people from the necessity of playing musical chairs to avoid
losses with paper of all sorts. He ended up telling me that it
was more likely that a large gold asteroid would land on earth
and destroy the value of gold by ballooning the supply than that
the dollar would drop because the Fed increased the money supply
too much. I believe he kept all three foreign accounts -- and
I'm sure he has dollar accounts now. Oh well.
Another friend who prides himself on being a Mensa member (the
high I.Q. club) took a similar attitude. He has an MBA from
UCLA. I finally "got him" with two questions. 1. "What is the
lowest price a $100 bill could theoretically reach?" (He admitted
it COULD become worthless.) I then asked him, 2. "What is the
lowest price an ounce of gold could reach?" After much stammering
and delay, he said he didn't really know, but it obviously wasn't
zero. (At least he's honest.) He doesn't talk to me much anymore.
Oh well.
Maybe it's just the economically "educated" who have this chronic
a problem?
Regards,
Journeyman
Marius
(10/05/99; 22:21:17MDT - Msg ID:15603)
Wed POG guess
Oh, alright. I'll play too! $338 at COMEX close on Wed. All this interest rate stuff is (those of you with more delicate sensibilities had best cover your ears) a mere fart in a windstorm when compared to short covering and Asian buying. Also, I think the Dow bulls will delude themselves a while longer before (belately) fleeing. Short the dollar, short the Dow; ride that gold bull, AND HOW!
jaydeevee
(10/05/99; 22:18:42MDT - Msg ID:15602)
Reply to Black Blade: Blue chip Aussie gold miners with 'small' hedge books.
To my knowledge in Australia Accacia Resources & Newcrest mining are the pick of the stocks with small hedge books.
Both companies have traded profitably at the recent low gold prices. Accacia Resources has the lowest cost of production
of the major producers. I think it is the pick of the stocks.
sstins
(10/05/99; 22:10:06MDT - Msg ID:15601)
Tomorrow's gold close will be...
$362.5 at close upon which time I will be wishing that I would have purchased just one more gold eagle.
Oh... so much potential. Thanks to all those short sellers for all the years of manipulating the market and providing us with this exceptional oportunity. Let's do it again in about 15 years
BTW still waiting for 1 silver eagle.
Also BTW my local coin dealer is now asking $10 for silver eagles. Two weeks ago it was $8. They are to hard to find, he says. No big deal as I took home some of the heavier stuff.
Time to give silver a lift???
Steve
Black Blade
(10/05/99; 22:09:05MDT - Msg ID:15600)
jaydeevee
good day mate! I didn't know there were any unhedged Aussie producers left. Normandy among others seem to be excessively hedged. Maybe there are a few unhedged miners that got caught in the whirlpool today. BTW, which Aussie producers are unhedged if you don't mind?
jaydeevee
(10/05/99; 22:05:32MDT - Msg ID:15599)
Gandalf the White's Reply to JDV's Question....
http://www.usagold.com
Many thanks Reverend!
Black Blade
(10/05/99; 22:04:00MDT - Msg ID:15598)
Gandolf and Goldspoon and yet another POG change
OK Gandy, I'll cut you some slack, I'll go $323.50. You got me.
Black Blade
(10/05/99; 22:01:30MDT - Msg ID:15597)
Goldspoon and POG change
OK, so I'm dislexic....POG at $321 at close. So it was a little deja vu? No, just a few bottles of Negra Modelo!
Tubac's ears
(10/05/99; 22:00:19MDT - Msg ID:15596)
SILVER!!!!!!!!!!!!!!!!!!!!!!!!!
Pleeeeeeeze sweet Jeeeeezus, breathe some life into the pile of scrapmetal SH*T hidden under my bed!!!!!!
Why hast thou forsaken meeeeeeeee????!!!!!
Black Blade
(10/05/99; 21:59:02MDT - Msg ID:15595)
TomCat
I collect Liberties ($20, $10, and $5) and a few Indians, some mexican pesos (the gold ones with the Mayan calender and pres. Morales(?)), and Morgan Silver dollars. My bullion is mostly mapleleafs in Au and Siver rounds. Much bullion is also what I have bought from miners which were distributed as company awards, thereby avoiding the premium. Damn, I love this gold business!
Gandalf the White
(10/05/99; 21:57:38MDT - Msg ID:15594)
JDV's question
FAITH, JDV !
<;-)
Gandalf the White
(10/05/99; 21:54:24MDT - Msg ID:15593)
What did you mean BB ?
Did you mean $321 ?
IF so you beat me by a few seconds !
<;-)
jaydeevee
(10/05/99; 21:52:13MDT - Msg ID:15592)
Tonight's closing POG
http://www.usagold.com
Hi from Australia! Today, with a $6.70 rise in POG last night, and with SPOT currently down $1.50; my blue-chip, unhedged Australian gold shares (and most others) are currently down 8.25% and look like falling further. I would have thought with a tightening bias last night ( the worst possible decision for stocks and bonds worldwide!) that POG would have rallied more than it did. What a strange, unique experience these last few days have been. How great it's been to have been reading this forum for a few months, so as to have been part of this great move forward to truth! I'v been reading estimates in this forum of how high gold will go tonight. I'll be happy if the price holds! Today, here in OZ, the unreasonable bearishness with quality gold shares suggests a fall in POG tonight. Can someone out there tell me why they they are confident the price will hold.
Gandalf the White
(10/05/99; 21:51:36MDT - Msg ID:15591)
Goldspoon's contest !
$321.0
<;-)
Black Blade
(10/05/99; 21:51:31MDT - Msg ID:15590)
Those GD hedgers with no confidence in their own product!
Oh....OK, I'll play...gold at $231 at close.
When I saw the oil price drop at first I thought that POG would respond to that, but the XAU dropped while POG rose. Well it appears that the drop in the XAU was attributed to hedged miners. My unhedged such as Harmony (HGMCY) did quite well, while Barrick (ABX) and other dropped. I would suspect that the hedge being priced in will cap the XAU to some degree, while unhegded (those that did not short gold) will continue to rise as long as Au rises. It appears that hedged miners do not have confidence in their own product, so why invest in those those companies? Although I do have shares in some, I wonder about how difficult it would be to unwind these positions. I see that Ashanti (ASL) has had margin calls on their short position in Au.....serves them right. Also Barrick's price has been constrained as well, and the rumor is that they have had similar problems. When mining companies short gold they do their shareholders a dis-service! It appears that Newmont (NEM) and Placer Dome (PDG) have had their prices held under due to the same concerns. OK, so I ranted and got that off my chest.
Chris Powell
(10/05/99; 21:41:51MDT - Msg ID:15589)
Short squeeze is only beginning
http://www.egroups.com/group/gata/235.html?
GATA's Bill "Midas" Murphy
tells of the panic backstage.
CoinGuy
(10/05/99; 21:41:25MDT - Msg ID:15588)
Goldspoon...
Put me down for $334.75. GO SPOT GO!!!
Hill Billy Mitchell
(10/05/99; 21:36:16MDT - Msg ID:15587)
Tomarrow's close
****$309.50
Tomarrow's COMEX close. Look out for the spike on Monday,
Oct. 11
TownCrier
(10/05/99; 21:34:55MDT - Msg ID:15586)
Three Kings
Hello Leigh
If you happen to be one of the handful that burden themselves each evening to read the ramblings of the GOLDEN VIEW, you will without doubt discover the reason for the TownCrier's absence since Friday...the staff at The Tower wanted to meet the good master of the Castle in a real world setting, not one "confined" by cyberspace, so to speak. If you haven't already met Michael, you are really missing out. In person he is even more gracious than he seems through the many wonders of modern substitutes...those being phone, fax, or internet. We're safely back at our Tower outpost, better for the experience, and eager to return as time allows.
Turning to the subject matter of your other inquiry...
Three Kings. Consensus among The Tower is that of a first rate movie, but not for the overly sensitive. This is near-war, after all, with the expected complement of soldierly language and actions. HOWEVER...there is the gold, which plays a MAJOR role, and is treated with the respect it deserves. Without giving away the movie, those same who had respect for gold acheived more easily than the others the proper balance and respect for human life in the end.
The director did an artful job of mixing reality with the surreal without sacrificing credibility and the importance of things that are important. Flying bullets, for example. Nearly each and every bullet fired took you along for the ride, and you knew how each pull of the trigger changed life for either the sender or receiver, or both.
And then there's the gold. You will see expressions on faces that portray wonderment beyond the ability of paper to inspire. You will also learn the difference between common thievery, and noble endeavors.
I'm sure we'll be taking others to see it.
TownCrier's bottom line: this is a perfect movie to help usher in America's improved gold-awareness on the social scene while gold also makes its popular return on the financial scene.
Bill
(10/05/99; 21:33:25MDT - Msg ID:15585)
Goldspoon: Comex close tomorrow
Hope I'm wrong .. $318.50
Then again, we can just get more.
ORO
(10/05/99; 21:28:11MDT - Msg ID:15584)
Tomcat
The priority is to save banks from default/insolvency. The way this is done, the CB borrows or buys the banks' assets and in return deposits cash (electronic or paper) at the bank. If the asset is held to maturity, there will be more money in the system until that point is reached. It is therefore inflationary. If the asset is in default, the cash sent to the bank is permanently in the economy and it is highly inflationary.
That is why the Fed does "temporary" borrowings under reposession agreements rather than straight purchases. But the repos are more probably going to turn into outright purchases because the cash withdrawals will not come back (negative US savings rate and cash withdrawals for Y2K, most significant are Yen withdrawals).
When the Japanese withdraws funds from the US bank and converts them to Yen, those deposits are replaced by either Fed repos or by the bank selling loans on the free market, or simply not rolling over old loans that come due. Looking at the US banks, the loss of deposits from abroad will cause them to drop their own assets abroad, hence the severe tumble of the Eurodollar and rise in interest rates. When this happens, the $ obligations of foreigners are diminished, while the $ obligations of US entities remain the same. The $ dumped into the market by the Japanese withdrawal are sopped up by the US banks not rolling over old debt or selling/refinancing assets into Euro based or Yen based hands.
So the math makes every repo by the Fed a net injection of $ into the international economy now. While each unreplaced or sold foreign $ loan removes future $ demand from the world outside the US. The rest of it ends up in the US markets where the sale of assets causes rates to rise.
The Fed action weekens the dollar now, the bank response weakens the $ later or the bond market now.
The "tightening" by the Fed means that the $ will fall later instead of now. In the long run the result is the same.
The effect of raising interest rates in a debtor nation undergoing an exodus of foreign funds is inflationary and weakens the currency as the increased rates increase outgoing payments more than they do incoming payments. Therefore $ supply to the world increases. If enough $ are recycled back into the US system because of higher rates, then the $ may stay strong a while longer, but the future supply of $ would increase.
Last year, the $ income from the teeny debt owed to US creditors was smaller than the $ payments made by the US to foreigners. This acts as a trigger for a vicious circle-
1. if interest rates are low, there will be an unwinding of foreign owned debt, and $ will fall
2. if interest rates are high, US interest payments will grow, and the US economy will see both higher prices as a result of higher interest costs and on top of this the economy would slow. The slower economy makes investing in US operations unattractive and the incoming money seeking high returns is balanced by outgoing money rebuffed by low economic returns from the slow economy.
3. If Money supply is restricted (as Kudlow suggests), then the severely undercapitalized banking system collapses and investors panic, selling off everything quickly.
4. Prices of foreign supplied commodities rise as $ falls, and more $ are supplied.
The $ would fall until the $ needed for repayment of interest abroad or for importing US products and their proxy (still oil and gold - and most other commodities) are no longer less than the $ supplied by net US interest payments and imports into the US as well as outgoing investment money. At this point, the $ index (DX) value at which this balance is achieved is at the 40 to 60 range vs 98 today.
canamami
(10/05/99; 21:25:46MDT - Msg ID:15583)
****$321.23*****
My guess on tomorrow's COMEX close. (It's so volatile, who knows, but it may be a day for retrenchment). I hope I'm wrong: I really want it to spike out of control.
Tomcat
(10/05/99; 21:05:49MDT - Msg ID:15582)
TC, Cmax
TC: Great upate.
Cmax: Yes, I agree. I was also alluding to the fact the if one percent of the population just woke up regarding how sheeplized they have become; how the press is bought off, how our Constitutions is no longer ours, etc. then perhaps, through the internet, there would be a ray of hope. Even now, as we speak, a transformation in freedom might be occuring. It might be a grass roots movement but it must be growing, even if small.
Goldspoon
(10/05/99; 20:56:52MDT - Msg ID:15581)
***Comex Close Tomorrow**
Here's what i have so far...(oh yeah..no changing guesses)
apdcheif-$399
Canuck- $343
Granny- $357
RossL- $332.30
onlychild$336.50
Tanglewild$318.80 (like your handle)
Silvertongue$313.90
Goldspoon$343.73 (can't stand this guy..such a knowit all)
Tomcat $325 (keep it up you'll go places)
SteveH ??
Leigh ??
Others ??
Tomcat
(10/05/99; 20:52:03MDT - Msg ID:15580)
PH, Cavan Man
PH: You said "Just part of the process of assessing whether we have become all that we might think we have..." Very well put. Now you have me wonderin! Thanks for all you posts. I follow all your stuff.
Cavan Man: I agree. They are certainly positioned with unique perspective.Hard to believe it is not on the inside. BTW, I think you asked yesterday or Sunday what I buy. For gold its almost all pre-1899 uncirculated fifth ounces pieces like angles and roosters. One pays a small premium over Eagles for these. Cheap insurance as far as I am concerned. For silver it is all bags of pre-65 dimes and halves which I am told is the most popular for of silver.
TownCrier
(10/05/99; 20:47:35MDT - Msg ID:15579)
After the Close: the GOLDEN VIEW from The Tower
The most-watched financial news of the day was whether the Federal Reserve Board's FOMC meeting would result in either a change in lending rates, or an altered bias at the least. The decision was announced today at 2:15 EDT that they voted to leave rates as is (federal funds rate target at 5.25% and discount rate at 4.75%), but that they adopted a policy directive biased toward raising interest rates in the future. Stocks and bonds immediately turned sharply south, and gold, which had always been in positive territory, rebounded from a sag in its earlier highs during its brief remaining trading period.
As reported by TheStreet.com, Dennis Gartman, publisher of The Gartman Letter, suggested that the FOMC members might have gotten a preview the Labor Department's September employment report, (to be released Friday) and if strong it would explain the tightening bias. This seems credible in light of the Fed's press release regarding the FOMC decision in which they say "Nonetheless, the growth of demand has continued to outpace that of supply, as evidenced by a decreasing pool of available workers willing to take jobs." Gartman suggests that scrutiny must now shift to the September PPI and CPI (released mid-October) and to the October jobs report (released November 5) in advance of the FOMC's next meeting on November 16. In an interesting additional note, Gartman says, "But for Y2K, there's no question they would have moved to tighten. They are praying for some slowdown in the numbers that will allow them not to tighten before the end of the year."
At Wall Street's closing bell, the DOW and Nasdaq regained ground from the post-FOMC selloff to finish essentially even on the day, although NYSE decliners outnumbered advancers nearly 4-3, and 145 issues set new 52-week lows while only 54 reached new highs.
The 30-year Bond was the day's biggest basketcase, losing 1-6/32 in price (6.168%), plumbing the depths near its lowest price of the year.
In currencies, the dollar also weakened after the Federal Open Market Committee announcement, probably in reaction to the decline in bonds and stocks. Dollar/yen settled down from an earlier 5-day high of 107.14 to close at ¥106.52 per dollar. The euro/yen reached nearly a month high on the Fed decision as dealers covered shorts and corporate customers bought the euro/dollar. Also a factor is the expectation for a possible euro-rate tightening as the European Central Bank counterpart to the FOMC meets Thursday. The euro settled up at ¥114.41 per euro.
Bridge News gives another thorough report today with comments from traders and dealers on life in the futures pits, so we'll cut away to them shortly. But first, we'll quickly catch you up on spot gold price movement in NY from our last GOLDEN VIEW on Friday. (For those wondering, our absence was due to a long-overdue visit to the Castle (Centennial Precious Metals). We hitched the horses to the wagon and made the long trip from The Tower (which is frankly little more than our humble news outpost here in the endless wilderness of the internet). Believe this meek TownCrier when he says the Castle (CPM) is even more impressive in person than it is over the Net. Thanks go out to Michael for his hospitality while we were in Denver and within his Halls.) Spot prices were last quoted in NY today at $324, up $6.70 over Monday's close of $317.30--which was up $13.30 over Friday's $304 close (which in turn was up $6.30 from Thursday, etc).
NY Precious Metals Review: Dec gold up 2.5%; trims early rally
By Darcy Keith, Bridge News
New York--Oct 5--COMEX Dec gold futures settled up $8.0, or 2.52%, at
$326.0 per ounce, trimming more than half of its early morning gains that
brought Dec to a 2-year high of $339.00. Gold saw fierce gains today in
overnight ACCESS trading, but could not sustain the lofty levels for long
as profit-taking set in during regular COMEX trade.
While most of gold's retracement off its highs came amid the first
hour of trading, further selling pressure emerged following the US Fed's
announcement that it has left interest rates unchanged.
Although most analysts believed the Fed would keep rates unchanged,
there were still some thoughts that they might hike, and such a scenario
could have sent stock markets tumbling and investors fleeing to the safe
haven of gold.
[On the other hand, such nonchalance by the Fed in regard to inflation should send PROACTIVE investors toward gold--to seek its safety while the Fed demonstrates such trivial inflation-fighting stamina. If the Fed were more actively "doing something," these same investors might conceivably shun gold in deference to the Fed; however, that same action by the Fed would surely send both stocks and bonds lower, leaving gold as the only place to be by both proactive AND reactive investors at large. So, where gold temporarily had a huge day in early trading, it settled for simply a "big" day.]
While the Fed kept interest rates unchanged, it also announced that it
had adopted a tightening bias, which may have limited the downward
reaction in the gold market.
According to a number of sources, a large gold transaction took place
in ACCESS trading late Monday above the market price at that time, and
this helped to spur further buying interest in Asia and Europe overnight.
One dealer said some 10 tonnes of gold, or 3,500 contracts, was offered at
$321, when spot gold was hovering close to $315. A buyer--rumored to be in
desperate need of short-covering--was found, the sources said.
Others said the sudden move in gold prices overnight was related to
options plays, as well as many rumors making the rounds, including talk
that a major gold producer has started to embark on programs of hedge
restructuring or buy-backs.
The only confirmed development, however, was that Ashanti Goldfields
has been left with an obligation to pay margin calls to its gold-hedging
counterparties because of the recent huge rise in the gold price. Ashanti
said it has entered an arrangement with its hedging partners for
continuing support.
Some players said, however, it was a sudden rush of short-covering in
an otherwise illiquid market helping gold to post its overnight gains.
"TOCOM must be suffering some type of short squeeze as COMEX has
seen," commented one broker. "Their liquidity is pretty thin too."
"We're seeing the reemergence of the Asian consumer as a buyer, and
Korean buying is way up now," the broker added.
More of this short-covering and options activity in gold--both
overseas and in the US--is seen continuing.
"I still think there's a whole lot of shorts," said Leonard Kaplan,
chief bullion dealer with LFG Bullion Services. "Now that we're moving
higher and higher, it is delta hedging of the options that's driving the
marketplace."
Vanessa Motto, analyst with CPM Group, said the rally is primarily
being driven by short-covering, rather than a lot of fresh long positions
being put on. "A lot of people are waiting to see
how this all shakes out before taking fresh positions," she said.
Continuing to lend support, added Kaplan, are firm lease rates. This
morning, 1-month lease rates were seen around 4.60%, which is down
slightly from 5.00-5.50% Monday, but still far above lease rates of just 1
month ago.
[currently the gold lease rates are:
1-month 4.4220%
2-month 4.5000%
3-month 4.8800%
6-month 5.0660%
12-mnth 5.1210%....]
Doris Hildebrandt, gold dealer with Toronto Dominion Bank in Toronto,
said that spot gold jumped very quickly overnight from about $320 to $330.
"That's got to be because of a big option play. There's clearly some huge
option plays going on; people are getting killed," she said.
Hildebrandt suggested that gold quickly ran out of upward momentum
when New York trading opened this morning because there were feelings the
overnight rally was overdone. "Whatever was forcing it up overnight in
Asia and Europe, New York traders don't necessarily see that as a buying
opportunity," she said.
Hildebrandt also noted that $340 is a major resistance level for spot
gold, and it was not surprising that prices backed off those levels when
New York trading began. However, should gold be able to break above that
resistance level and stay there, gold could have much further to climb,
she said.
The break through $340 in 1993--thanks to positions taken by George
Soros and Sir James Goldsmith--led to a major bull market.
On the downside good support should come in a $320-325, Hildebrandt
said.
David Meger, senior metals analyst with Alaron Trading, also cited the
covering of large lease positions that had been accumulated over the last
few months as a key driving force behind gold's rally.
"This just reeks of further lease covering, which is effectively
putting more buying into the marketplace," said Meger. The big US banks
are believed to be behind much of the lease covering, he added.
Meger also added that gold has reached levels where the locals will
"step in front of some of these rallies."
[******Here comes the best paragraph of the whole affair, and had it not been said here, we'd have surely said it elsewhere. (In fact, we alluded to it in an earlier post when we said "Always remember, if nothing else, that it's a much wider world out there than the perspective typically taken by many derivative traders at COMEX.") One small official proclamation here or there and *POW*...it's a totally different market than your see-thru plastic rulers and graph paper said it was.********]
Most market players agree that it is not technicals driving the
market, but fundamentals, following last week's shock announcement that
several key European banks have agreed to limit gold sales and lending.
"The psychology has totally reversed here," said a broker. "Without
the central banks selling and lending into the market, we have a shortfall
of supplies, as they have been up until now making up the difference
between supply and demand."
In the news today, the Australian National Bank said it has no plans
to sell gold for the foreseeable future. Also, Canada said it sold
136,000 ounces of gold in September.
[Here, we think our lovely Bridge reporter meant to say Austrian (not Australian) National Bank. Another Bridge report gives details that ANB board member Peter Zoellner was commenting on the 15 European central banks reaching their now famous decision at the September IMF meeting, and further elaborating that the ANB currently holds 407 tonnes gold. Australia now holds only about 80 tonnes (they are not expected to sell either, by the way.)]
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
In other gold news from Bridge, The New York Mercantile Exchange indicated it is additional gold options strike prices for trading outside the parameters of those normally listed, effective Wednesday. Volatility or expectations of yet more to come must have surely played into that decision.
Now that Andy Smith's anti-gold rhetoric has faded somewhat, apparently the latest bear to go crashing through the china shop is Ted Arnold, analyst at Pru-Bache. According to his report, this current state of robust health in the gold market is merely a reprieve from an ultimately oversupplied market, and Arnold further argues that the central banks who were signatories on last week's gold sales moratorium will remain "very overweight gold" and will "eventually cheat" on the agreement. What would they have to gain by cheating except paper? With the future of the "strong dollar" in grave doubt, and a yen that would like to be jawboned into the grave along side, gold reserves seem the only way to go...especially when you consider how the Europeans are going about it. Watch this, as reported earlier today...
In their third such quarterly revaluation of gold reserves to market following the initial valuation of gold reserves at market values with the introduction of the euro based on December 31 values, this latest gold revaluation increased the ECB' reserves by €13.234 billion over the previous quarter. The official valuation of
European Central Bank gold reserves at which the gold will be booked until December 31st now stands at €128.222 billion, up from last quarter's mark of €114.988 billion (for the same gold.)
Take note, Mr. Arnold... whereas foreign bonds held as assets grow (from their yield) in currency terms, a devaluation of that currency can easily erase those gains and much more besides. So, what's wrong with gold now, Mr. Arnold? Wake up and smell the paper burning, my friend.
Follow along with this one if you can...
You may recall from our last report (on Friday) that the day began with open interest in 612 October contracts, with 120 receiving delivery intentions that morning. Monday stats reveal that by end-of-day Friday, Open Interest (October) dropped by 152 to 460 contracts. New delivery intentions on Monday were received for 18 contracts (bringing the total for Oct. to 1,621), and Tuesday stats reveal that by end-of-Monday, open interest had changed by a net drop of 13, leaving 447 contracts in open interest.
+
This is where it gets interesting, because this morning's delivery intentions exceeded--by almost double--yesterday's remaining open interest in the October gold contract. Unless our read on this is mistaken, because the turnaround was immediate, this clearly appears to be new contracts entered into for the sole purpose of acquiring gold. Though we don't know whether there was a brief period of backwardation since yesterday's close, it almost looks as though this were an arbitrage opportunity during which spot prices were higher than future prices...otherwise, why wasn't this same delivery sought on the spot market to begin with? From First Notice Day for Delivery Intentions on September 30th, October contacts in open interest totaled only 2,114. In the ensuing four days, delivery intentions have been announced on 2,437 contracts so far for October. Either way you slice it, the final interpretation remains the same...the physical market is TIGHT.
There was no change in COMEX gold depositories both Monday and Tuesday. Inventory stands at 839,029 Registered ounces and 88,591 Eligible ounces for a total of 927,620 ounces housed within vaults at ScotiaMocatta and Republic National.
In the oil market, traders said they were concerned about the outcome of a meeting to be held in late November between oil ministers of Mexico, Venezuela and Saudi Arabia. Their concern is that these ministers could discuss whether to keep their output cut agreement past March, and when a market is going well, any news that could disrupt things is always of concern. Venezuela Energy Minister Ali Rodriguez said the discussion would be about output levels, oil demand and world inventories.
On the topic of inventories, the United Arab Emirates Oil Minister Obaid al-Nassiri said that despite this rise in oil prices, "figures indicate that [world oil] inventories are still high compared to ordinary levels," and that OPEC's decision in September to maintain the production cuts through March 31, 2000 "would lead to
the stability of the oil market." Nassiri was speaking at an oil conference in Abu Dhabi Monday.
In NYMEX crude futures trading today, prices hit a 1-month low ahead of weekly inventory data that were generally expected to show crude stockpiles as flat or up last week. November crude ended down 28c at
$23.48 before the subsequent API report confirmed that US crude stockpiles rose 1.004 million barrels last
week, which was actually more than double what most brokers had expected (flat to up only 400,000 barrels.) In overnight Access trading, contracts for November WTI had lost an additional 14c.
And that's the view from here...after the close.
Cmax
(10/05/99; 20:41:20MDT - Msg ID:15578)
Tomcat
Tomcat
With the few living brain cells that are still functioning, my basic math tells me that if physical gold to paper gold ratio is 100:1.....and if as you say only 1 percent of the population was elevated to the awareness to act, then the 1 percent of the perceptive population should then hold 100% of the physical gold, no? (smiley thing)
Cavan Man
(10/05/99; 20:40:14MDT - Msg ID:15577)
PH in LA 15575
Yes, indeed!
Cavan Man
(10/05/99; 20:37:59MDT - Msg ID:15576)
Tomcat (PH)
I believe Mr. PH espoused a belief in FOA/Another endeavoring to encourage PM ownership earlier today. Am I correct? I don't want to scroll back. If that is so, I ask; what is their motivation? Everyone posting and lurking here who would buy 1000 OZ. would affect the POG in a very small way. Why then? I have a hunch. These two gentlemen are the penultimate insiders. I am playing my hunch.
PH in LA
(10/05/99; 20:36:53MDT - Msg ID:15575)
Being all that we can be!
Tomcat:
Just part of the process of assessing whether we have become all that we might think we have... You know, just tryin' to get closer and closer to reality. It's a process that never ends!
The Believer
(10/05/99; 20:30:52MDT - Msg ID:15574)
YGM
YGM...So what is this comment?
onlychild
(10/05/99; 20:30:23MDT - Msg ID:15573)
Expert says don't buy stocks for six weeks
http://moneycentral.msn.com/articles/invest/jubak/4749.asp?special=msnnip
This "expert" suggests building a cash position for the next six weeks. He tells us how shaky the market is and outlines the losers. OK so far, but he goes on to state that there is nothing on the rise right now. Has he been in a cave or what?
Cavan Man
(10/05/99; 20:28:41MDT - Msg ID:15572)
SteveH
I exchanged some FRN for Irish Punts today. My first thought was, my, this money really looks funny. Just thinking about it; there is no difference between the two really. Question; why is the Irish pound and the British Pound so "dear" in dollar value?
Here's a point--I've been looking at the US dollar for so very long, I actually think it should be worth more than an Irish Punt or, anything else for that matter. I remember the first time I went to Ireland. I wondered why I gave them 500 and got back 250. Anyway, my point is that a mountain will need to be moved to get people weaned even a little bit off the $ and into some hard assets beholden to none. This thought is from your last post. A friend of mine considers gold ownership a "hobby". Once John Q. Public begins to move in the direction of AU, "Katy bar the door".
Tomcat
(10/05/99; 20:25:52MDT - Msg ID:15571)
Cmax, YGM, PH in LA
My call for tomorrow is $325.
Cmax: If "the rougher times to come" elevated the awareness and action level of just one percent of the population who then spread the word on the internet then we would have a new and more honest world. During the depression statistics showed that people spent more time at the theater. If we have a depression perhaps more will have time for the internet! The internet can spread more truth and expose more lies faster than any medium in history.
YGM: Like your stuff. Could you post your Gold-Eagle posts over here when you feel it is appropriate?
PH in LA: You might be right about the motives of ANOTHER and FOA. However, rather than focus on who ANOTHER and FOA might be, should we not reflect on who we have become because of them?
Leigh
(10/05/99; 20:25:07MDT - Msg ID:15570)
Cavan Man
Dear Cavan Man: Thank you for asking about me! I'm actually sicker, so I'm just quietly lurking and reading what you guys write. Hope Mrs. Cavan is feeling better soon.
Town Crier has been very quiet for a couple of days; I hope he's all right. He promised to fill us in on "Three Kings." TC, what was the movie like?
Cmax
(10/05/99; 20:23:05MDT - Msg ID:15569)
An old, but significant post
Sometimes when one is entering uncharted waters (such as where we are now), it helps to review where you have been. For me, my whole perception of the economic world collapsed in the last days of January 1997, when the LBMA broke silence and made a press release disclosing their daily gold volumes. The following day it was published, I posted the following on Kitco, which was the beginning of a personal odessey and discovery as to the real nature of the world's money system. Now in hindsight, it may seem a little funny, but believe me, it wasn't at the time. We have all come a long way since this day.
Kitco January 31, 1997
HOW HOW WOW....., is this "enlightened" age of information, exist something SO large as loco London?? It has been hidden all this time not by government mandate...but by private enterprise. Selby gives a number of 241,000
tons per year moved through this market; that is 660 TONS PER DAY! And we have been blaming news releases on the Dutch for their little 300 ton sale (during the year) as a major contributing factor in the slump of gold? No way. The "discovery" of loco London, economically, is akin to the discovery of the New World by Columbus. 30 million ounces traded in ONE day (Jan 29)? These are not COMEX numbers....these are numbers of a GOLDEN ALTERNATE CURRENCY, here and NOW. I don't think the world has yet REALLY assimilated what this really means. Goldbugs have been putting the excuse of their plight on old "management" by Central Banks. With these numbers flowing in the previously occulted London Exchange, Central Bank's could not possibly manipulate. Gold then must be acting NOW as a commodity, supply and demand. And the price that we have now, is it's commodity price (rather than manipulated price). And as any commodity, it is subject to the market's perception. Popular economists refer to gold as a dead horse....these are not numbers of an inactive currency. WHEN the masses translate this loco London information, the perception of gold must change dramatically.
After all, this information was only released what....3 days ago? The Central Bank directors must be squirming when they see these numbers. With such incredibly high volume, and great fundamentals, do you REALLY think that this large of a market can allow gold to drop much further? I don't see how. However, we do have a paradox:
Since gold as an alternative currency DOES exist, why is it SO cheap? I remember Ann Rand saying somewhere
that in nature, paradoxes cannot exist......one must recheck their premises. Our PREMISES definitely need some
rechecking now; OR the general market needs to recheck their's. Gold, with this volume (and new information), is
behaving paranormally. Next question is:
What ever prompted the "perfectly" occulted London gold market to go public??
This is against the very nature of it's participants. And against the interests of the Central Bank's and governments.
This London market is no little news...what are their intentions with this release? First thing that comes to mind, is that if I wanted to undermine the very root of fiat currencies, this is exactly the information I would release.
SteveH
(10/05/99; 20:15:01MDT - Msg ID:15568)
TA
YGM, you deserve the credit. Good piece.
Gold now up (dec that is) $1.00. She is turning. This is the day against night again.
TA shows upper bollinger on 60-minute chart at 334.50. That means if she hits $338 or higher she may track up. Last night it hit $337 or so and reversed (just like a good technical). There appears to be nothing technical about this trading yet, except to define some underlying forces of which we probably can't begin to grasp, not yet anyway.
Onwards.
SteveH
(10/05/99; 20:07:04MDT - Msg ID:15567)
report
I visited my coin dealer friend. His thoughts (remember he went through the 79'-80' run in gold and silver) were that the public hasn't even become involved in this.
I asked him what would happen when it did.
He said there would be no gold available for a while.
He said there was a ways to go with this one yet, because the public weren't buyers yet, not like in the late 70's.
That's what he said.
Cavan Man
(10/05/99; 20:05:39MDT - Msg ID:15566)
Leigh
Hope you're feelin' better. Mother CM is down tonight. You know the old saying? "A house without a Mother is like a ship without a rudder; a house without a Father is no bother."
Cavan Man
(10/05/99; 20:02:28MDT - Msg ID:15565)
SPOG
Now $328.
Goldspoon
(10/05/99; 20:01:39MDT - Msg ID:15564)
*Goldspoon's guess.....*******
Well said Cmax.....
Ross....my contrarrian indicator......(Ok, sorry Ross, love ya man) Platinum up big tomorrow....remember if platinum has a slow day gold ain't goin nowhere much....The big boys telegraph what they are thinkin with the price of platinum...(study this and read em like a book)....hence if Platinum is up big, gold is turned loose to break the 330 resistance level..(OK,..OK...im' gettin to it..sheesh..)
Comex Close, Gold tomorrow...$343.73.....
SteveH
(10/05/99; 20:01:15MDT - Msg ID:15563)
War
The technical prowess of this gold battle is astonishing. By rights that 4.5 drop should have clobbered this but it bounced back with vengeance. Sides!
apdchief
(10/05/99; 19:59:53MDT - Msg ID:15562)
Golden View
PLEASE....not two nights in a row without TC's wisdom!!!!!
Tomcat
(10/05/99; 19:52:12MDT - Msg ID:15561)
ORO
In your post on Kudlow you stated:
"(c) The claimed temporary nature of the monetization is causing US banks to liquidate US owned foreign assets is driving down the ammount of high interest $ denominated debt not owed by the US, while increasing the amount of Euro and Yen denominated debt - killing future demand for $. (d)
Increasing interest rates would quickly flood the world with $ because of the high US debt, again weakening the $."
Could you explain (c)? I just didn't get it.
Regarding (d), how does increasing interest rates flood the world with dollars? Does the loss in liquidity cause the redemtion of bonds and notes etc.? I thought tightening (raising rates) lessened liquidity and this meant less, not more, dollars.
Still reviewing your post re Mozel. Good stuff.
Silver Tongue
(10/05/99; 19:44:30MDT - Msg ID:15560)
Tomorrow's closing price
Sorry to be a pessimist but I predict that tomorrow's closing Comex gold price will be $313.90.
Cmax
(10/05/99; 19:28:45MDT - Msg ID:15559)
Voyager (10/04/99; 23:42:28MDT - Msg ID:15467
Yes Voyager, it seems that we ARE presently witnessing the flushing of your mentioned toilet. Counter attacks? If 10 tons was snatched up on COMEX only 30 seconds after the offer, it would seem that any such tactic would only prove futile and a gross waste of wealth by any organization that attempted. And even then, it was probably only to cover the short.
Thoughts? The parameters of the world gold market have changed (Eurobank announcement).....different rules now....it's a brave new world and we're sailing into uncharted waters (at least in the modern sense). This coupled with Y2K, an immovable deadline breathing down our necks, and you have an event without precedent. I myself look forward to the economic cleansing to come (unfortunately I still have a very large economic interest in the status quo), just as an old forrest NEEDS a brushfire, only this time, I think that this will be the catalyst of worldwide tax reduction, hence worldwide goverment reduction, and ultimately greater liberties. Our internet has given us an unprecedented view and power as individuals, that did not exist but a decade ago. The game is different, just very few people have opened their minds wide enough to see it. All major paradigm changes in history, (of lesser calibur than mentioned above), have all resulted in immediate and violent change of hands of power and wealth. It is in each of our rational best interest to recognize this change, and act accordingly.
YGM
(10/05/99; 19:26:41MDT - Msg ID:15558)
Cavan Man
I'm not sure what you don't understand? Possibly I lost you by mentioning that my comments were made at Gold-Eagle forum? Have you been there? If not I will post the link if you
wish.--YGM
PS: I like BOTH sites equally well and used to post here
quite often but it's hard to have two ongoing group relationships at once so I read here daily and post at Gold-Eagle. Hope this helps.-----YGM.
Tanglewild
(10/05/99; 19:17:58MDT - Msg ID:15557)
Canuck
Oh, just in case....sept's dates were the 10th and the 15th
The Believer
(10/05/99; 19:16:35MDT - Msg ID:15556)
Here we go....?
So...the "money" runs to gold.
We have waited for this a long time...
But will the long awaited move for gold mean
the end for the U.S. dollar?
It is with a cold lump in my belly that I see my faith
in gold being rewarded.
Another is proving to be quite astute...no?
The U.S.A. may be a "changed" place soon enough...
Tanglewild
(10/05/99; 19:13:26MDT - Msg ID:15555)
Canuck-PPI_CPI-
I think you may have been asking about October's dates which are PPI on Friday the 15th and the CPI on Monday the 19th.
My guess for tomorrow...a little backing and filling before the next leg up...318.80 at the close.
Cavan Man
(10/05/99; 19:00:16MDT - Msg ID:15554)
YGM
Hello. I do not understand the meaning of your last post. Could you clarify please? Thanks.
Goldspoon
(10/05/99; 18:55:43MDT - Msg ID:15553)
@RossL...
That's OK Ross..... anybody can make a mistake...bbbBBAAWWWWHHHA!! .....oops...i new i couldn't say that with a straight face..;>}
Goldspoon
(10/05/99; 18:48:40MDT - Msg ID:15552)
**** i wonder...?...***
Think someone here can out guess that bunch over at KittyCO?
i don't have postin' rights over there....never felt it was worth it....but if someone wants to copy my posts over, well..... it would make thins a bit more interesting wouldn't it???
onlychild
(10/05/99; 18:46:17MDT - Msg ID:15551)
***Comex close***
I'm in: $336.50
YGM
(10/05/99; 18:42:01MDT - Msg ID:15550)
FOA & Another and SteveH
I've felt compelled for some time to make a comment or two on the thoughts of these two fine gentlemen and as I post here from time to time I felt it prudent to espouse from my regular chair at the Gold-Eagle forum, and have just done so. Tit for tat for site recomendations.
SteveH--I've also wanted to say I'm very flattered that you felt some of my personal thoughts there were worthy of re-posting here. It helps make the time taken to read & write
personal views more worthwhile. Thanks--YGM
RossL
(10/05/99; 18:38:42MDT - Msg ID:15549)
Goldspoon: Comex close on Wed.
OK! I was hit by a spell of irrational exuberance this morning. Tomorrow close is $332.30
granny
(10/05/99; 18:31:10MDT - Msg ID:15548)
Goldspoon: Comex close
Me too ..... $357
Canuck
(10/05/99; 18:27:58MDT - Msg ID:15547)
Goldspoon: Comex close
$343.00
apdchief
(10/05/99; 18:26:43MDT - Msg ID:15546)
@Goldspoon
OK...I'll Play. Tomorrow's the day...limit up...$399.00.
granny
(10/05/99; 18:24:57MDT - Msg ID:15545)
Canuck ..Identities
Howdy All,
Must be a coincidence. Please don't make any more of it than it is ... there is enough excitement and mystery to worry about. Granny doesn't know the'ol Sage you are probably referring to. "Sage" is a common but not too often used word in Granny's vocabulary (rare the human who can qualify). Be well, granny
Back to assemblin storage shelves for you know what ... don't we all wish we could say we needed this much storage for Go*d!!?? ... come to think of it ... this T-paper and green coffee beans might be worth their weight in Go*d in a few months!!)
Goldspoon
(10/05/99; 18:15:40MDT - Msg ID:15544)
***Fun and Games..."Place your Guess!!"***** MUST PLAY!!!
Want to have some fun? Guess what tomorrow's Comex closing price is.... as posted by Townie or USAGOLD... entries must be posted here before this site rolls over to tomorrow...the winner is the person who gets closest to the posted price (over or under is OK, Just be the closest)...
The winner gets the title of "USAGOLD ORICLE FOR A DAY" (braggin rights)..... Good Luck!! but you'll have to beat me..(i'm preety good ya know... handsome and modest too)...
RossL and i played the game this morning just before the Comex opened.... the winner was...well, i don't want to embareass Ross.....
Canuck
(10/05/99; 17:52:00MDT - Msg ID:15543)
Inflation numbers
Does anyone have Sept. PPI and CPI release dates?
I anticipate week of 12th. Please confirm.
Canuck
(10/05/99; 17:48:55MDT - Msg ID:15542)
ET .... Employment numbers
ET,
Remember the '13th of the month theory', to be released first Wednesday of the month, tomorrow.
Thoughts?
Canuck
(10/05/99; 17:46:12MDT - Msg ID:15541)
Identities
Often wondered about FOA and Another; even MK and Another.
How does Granny know of 'ol Sage? (15531)
And definitely, Farfel is Stranger!
TownCrier
(10/05/99; 15:50:05MDT - Msg ID:15540)
Timeline of Official Sector gold sales vs gold price
http://www.gold.org/Gra/Statistics/Osgchart.htm
This is a helpful chart for those who think they've missed their gold-buying opportunity. Although the chart shows only recent years, gold is still near 20 year lows, and in truth, the buying opportunity remains for as long as sellers may be found...but at what price? Always remember, if nothing else, that it's a much wider world out there than the perspective typically taken by many derivative traders at COMEX.
TownCrier
(10/05/99; 15:20:41MDT - Msg ID:15539)
Hear ye! Hear ye! There is an update to the pages of USAGOLD!
http://www.usagold.com/wgc.html
THIS WEEK IN GOLD has now been updated with the latest weekly gold market commentary, hot off the press by the World Gold Council. Their staff recounts the events of September 27 - October 1, the exciting and volatile week following the european announcement curbing future gold sales and leasing operations. In the WGC's words, "This agreement marks an unprecedented level of co-ordination among governments about gold reserves and changes the entire market background."
Also in this week's commentary:
"By this time a serious shortage of physical metal was emerging. Gold lease rates, which had been strengthening for the previous two months, suddenly rocketed with the one-month rate soaring above 10% on Wednesday, pushing the market into backwardation (spot prices higher than forward prices)."
Grab your torch to get there at the link above, though you won't need it when you arrive at this well-lit room.
We'll see you when you get back.
TownCrier
(10/05/99; 14:53:36MDT - Msg ID:15538)
Prospects dim for return to record-low US bond yield
http://biz.yahoo.com/rf/991005/44.html
It was exactly a year ago that U.S. Treasury 30-year bond's reached an all-time low yield of 4.69 percent.
Analysts said it had more to do with flight-to-safety capital flows following a global crisis--including the Russian debt default--than it had to do with economic fundamentals. One analyst said those rates were not sustainable from the very start, and were "artificially low."
Current U.S. 30-year bond rates are 6.168%. By contrast, a recent auction of Brazillian treasuries occurred with a yield of over 22%.
TownCrier
(10/05/99; 14:37:32MDT - Msg ID:15537)
U.S. congressional study slams IMF accounting
http://biz.yahoo.com/rf/991005/1b.html
A congressionally commissioned report by the General Accounting Office was released this week. It accused the International Monetary Fund of understating its lending capacity through the deduction of $19 billion in liquid reserves to a reserve fund that hasn't been used in over 20 years. It also claimed the IMF may be unprepared for the millennium date change.
This report will surely add fuel to the fire as Congress debates in the coming weeks whether to impose its veto authority in regard to the IMF's intention to revalue a portion of its gold reserves in a scheme to provide debt relief to the world's poorest countries.
Neo
(10/05/99; 13:52:23MDT - Msg ID:15536)
GATA on South African Radio
http://196.36.119.130/BusToday.nsf/Current/422567D900452FF842256801006240D7?OpenDocument
Looks like Bill Murphy and GATA are finally gaining the recognition they deserve. Appeared on South Africa's most popular financial news show, Moneyweb. Would recommend this site to anyone seeking REAL information on what is transpiring in SA's financial markets.
ORO
(10/05/99; 13:37:46MDT - Msg ID:15535)
DD
I would like to second Peter Asher
>>>We the sheeple hold these lies to be self evident. <<<
Wins the medal of honor for saying of the day, phrase of the week......
Goldfly
(10/05/99; 13:37:20MDT - Msg ID:15534)
Well, Spot and Spike came in about an hour ago....
They were out all night and boy- they look dog-tired.
Rrrrrrrrrr....
Oh, sorry Spike, no offence.
They seem, however, to be quite happy, and after devouring their bowls, have settled themselves for a nap by the computer to await the Town Criers report.
I too cannot wait to see this one....
GF
DD
(10/05/99; 13:33:52MDT - Msg ID:15533)
ORO - Fear = Just Prior to the Significant Emotional Event??
ORO - It's amazing, isn't it? We go merrily along filtering out anything that doesn't fit with present perceptions/beliefs and WHOOPS! Reality begins to catch up with mind-set. For anyone who has faced significant adversity or change, I think it's natural that fear is the first responce. We actually have to get to fear before we go into denial, a likely next step. However, as reality pounds on the old coconut, we move more toward acceptance and finally action. Acceptance and action take the fear away...at least most of it. We'll probably go through these steps as individuals and as a culture if things come as unglued as is currently indicated. Keep a close eye on Y2k. 00 may be the final bale of straw on an already flattened camel. Best, DD
Gandalf the White
(10/05/99; 13:27:42MDT - Msg ID:15532)
OK -- Spot -- Time to wakeup again !
RUN and JUMP Spot !
<;-)
granny
(10/05/99; 13:23:19MDT - Msg ID:15531)
The Scot --Another is with us
"...Maybe he has revisited us with a new "Handle". We have so many new participants anyone of them could be him. I think it is "Granny"....... come-on Granny fess up...."
Granny can only dream that she will any time soon have the knowledge possessed by our 'ol Sages!!!! (Not that she isn't a quick study.)She loves walking with GIANTS but can only offer questions, at this time. Hopefully some of her questions will stimulate answers for those who are too meek to ask.
Buena Fe
(10/05/99; 13:10:32MDT - Msg ID:15530)
two down, two to go!
Gold= breakout (#1) accomplished
Bonds= breakdown!!!!!!(#2) underway
S&P 500= correction/crash (#3) soon to follow
$= meltdown (#4) any moment
I take no joy in the pain that the readjustments in the worlds financial scales is causing. But I do look forward to a short (1-3year period) of greater freedom!
Keep Well!
TownCrier
(10/05/99; 13:00:47MDT - Msg ID:15529)
Fed leaves rates unchanged, adopts tightening bias
http://biz.yahoo.com/rf/991005/2p.html
Text of FOMC's statement from Reuters.
The Scot
(10/05/99; 13:00:18MDT - Msg ID:15528)
Another is with us
I suspect that "ANOTHER" has not abandoned us but is monitoring us closely. With many of his predictions coming true it's time for a little "rest & relaxation".
Maybe he has revisited us with a new "Handle". We have so many new participants anyone of them could be him. I think it is "Granny"....... come-on Granny fess up.
Just kidding (Smile)
Sincerely, The Scot
ORO
(10/05/99; 12:58:08MDT - Msg ID:15527)
DD - mindsets
The shock of some people I talked to before over the sudden rise in $ POG was something else, for the first time they were truly thinking through what I said. The fear on the phone was palpable. The questions that were asked show that they are now completely lost.
granny
(10/05/99; 12:56:55MDT - Msg ID:15526)
PH in LA Msg ID:15522--Gold Cetificates
Thanks Bunches.
Granny does have a segregated (identified) account and feels somewhat less stressed but won't feel really comfortable until that pretty stuff is right here weighing down the pockets of her apron. Granny doesn't mind, in these times, paying a litte extra for storage and insurance.
......"There are also gold certificate programs in which the gold is held in allocated, segregated or identified accounts, in which event title to the gold rests with the customer, the relationship created is a bailment, and the gold is neither carried on the bank's balance sheet nor available for leasing. These accounts offer the customer greater security but also typically incur higher storage and insurance charges and of course do not pay any interest...(snip).....Private depositors, on the other hand, worry principally about themselves. Should they begin to doubt the soundness of their bullion bankers, they could start an old-fashioned bank panic in the blink of an eye."
Now for those people who do not have segregated (or identified) accounts .... ideas on if they should demand delivery very soon??
More info welcome. Be well.
Peter Asher
(10/05/99; 12:56:25MDT - Msg ID:15525)
DD
>>>We the sheeple hold these lies to be self evident. <<<
I love it. Print up some bumper stickers!!
ORO
(10/05/99; 12:43:12MDT - Msg ID:15524)
Kudlow
Had just seen the Kudlow CNBC commentary.
Looks scared.
Points: (1) Fed should stop being wishy washy, and just say what it needs to say: "we'll keep on fighting for the $". (2) CNBC: mantra, "no inflation". (3) Kudlow Unsaid: CPI is a cooked stew, the tough meat has been softened. (4) Kudlow on Inflationary Reality-also see Pesek article on Volcker- oil prices, commodity indexes, gold, dollar index say $ is not what it used to be. (5) Kudlo time to choose a strong $ (Unsaid that it means weak banks) or a weak dollar and inflation. He preffers the strong $, and suggests the Fed tighten the money supply.
What Kudlow does not seem to understand is that there are no more doors open, all are clogged with $ debt.
1. The tightening of the money supply. The banks are in a liquidity squeeze due to the unwinding of Japanese and Euro deposits, and domestic Y2K withdrawals. The Fed prints money to bail them out. (a) The slightest tightening would destroy the banks and the resulting US recession would kill the $ anyway. It would also increase the number of EM defaults that kill off the future demand for $. (b) Continuing the current policy of "temporary" monetization of bonds and tassled loafers will kill the $. (c) The claimed temporary nature of the monetization is causing US banks to liquidate US owned foreign assets is driving down the ammount of high interest $ denominated debt not owed by the US, while increasing the amount of Euro and Yen denominated debt - killing future demand for $. (d) Increasing interest rates would quickly flood the world with $ because of the high US debt, again weakening the $. (e) A moratorium on imports can prevent further $ deterioration, but that would cause horrible inflation as the US tries to replace imports.
DD
(10/05/99; 12:37:53MDT - Msg ID:15523)
ORO - Mindsets
ORO - So true about thinking in the US. But I think it goes even deeper. Our beliefs as a country/culture have become our prison. We don't see how we resist any new thought/belief that counters the status quo. America, the land of the free? Hardly. We the sheeple hold these lies to be self evident.
However, the human mind, which creates our experience, is naturally resistant to change. We (our minds) don't change unless emotionally motivated to do so. Literally, the amount of change is directly related to the emotional content of the experience. That's why big life changes are always accompanied by significant emotional (life-changing) events. At the core of the changes we are about to experience is the changing of the mind-sets of a great many people about "how things are". With considerable "luck" we might even transform from "what's in it for me" thinking to something more sustainable for all.
Changing is the most difficult thing humans must do. Many of us would rather die than change. This does not bode well for a smooth transition. It will probably be the hardest lesson of this century for the sheeple. Reality may come knocking in a big way. It will probably be a big shock (significant emotional event) when the sheeple's paper falls or the digits disappear into the cyber pit of Y2k. We, I believe, are in the end game of a western mind-set that is about to be turned up side down. Keep up the great work. Best, DD
PH in LA
(10/05/99; 12:26:14MDT - Msg ID:15522)
Gold Certificates
http://www.goldensextant.com/commentary.html#anchor71256
Granny:
Your question about "pool" gold is commented on at the above link.
Golden Truth
(10/05/99; 12:23:30MDT - Msg ID:15521)
MARKETS SWOON DOWN IN MINUTES!!!!!!
BONDS fall, S&P futures down,and the DOW lost 100 points instantly as groans from the trading floor could be heard at the N.Y stock exchange.
Gee really breaks my GOLDENHEART. ;-)
TownCrier
(10/05/99; 12:21:55MDT - Msg ID:15520)
Gold reserves: ECB's quarterly revaluation increases gold by €13.234 billion
With the end of the third quarter, the European Central Bank remarked their gold reserves to market value, the value at which the gold will be booked until December 31st. The official valuation of ECB gold reserves increased from last quarter's mark of €114.988 billion to this quarter's value (for the same gold) at €128.222 billion.
It would seem that the central banks have finally found a stable fashion in which to do business. Whereas foreign bonds held as assets grow (from their yield) in currency terms, a devaluation of that foreign currency can with much greater speed wipe out those yield-gains and much additional value besides.
Peter Asher
(10/05/99; 12:20:41MDT - Msg ID:15519)
Sell on news !!
Down 100 pts. in three minutes, now rebounding. Imagine if they had raised the interest rate
Golden Truth
(10/05/99; 12:14:26MDT - Msg ID:15518)
FED INTEREST RATES!
The FED will not raise interest, COWARDS! Whats the matter afraid of "Crashing" the markets A.G?
Go GOLD go,now is the time to crush the U.S dollar.
GO EURO!!!GO.
They have adopted a bias of tighting which will leave a dark cloud over the markets. Ha Ha Ha Ha Ha !!!!!!!!!!
ORO
(10/05/99; 12:08:28MDT - Msg ID:15517)
Cavan Man
Yes, a boring midwestern X engineer. But it is an adopted identity, chosen rather than born into.
TownCrier
(10/05/99; 11:48:47MDT - Msg ID:15516)
The new "golden dollar"...close, but no cigar (manganese brass, copper)
US Mint's new dollar coin to contain manganese brass, copper
By Bridge News
Washington--Oct 5--The US Mint announced today that the alloy for itsnew dollar coin will be a 3-layer clad system of manganese brass and copper. A Mint spokesman could not immediately say when the Mint would be issuing a solicitation to procure manganese brass and copper for the new coin, which will replace the Susan B. Anthony coin in early 2000.
The core of the new dollar will contain copper and the outer layer will be manganese brass, the Mint spokesman said. At a press conference in New York, Mint director Philip Diehl said the new alloy has been designed to produce an attractive coin that is golden in color and that matches the electro-magnetic signature and physical specifications (size and weight) of the Susan B. Anthony coin. He said the new coin is expected to be accepted immediately by the thousands of vending and mass transit machines that currently accept the Susan B. Anthony coins.
The "golden dollar" is easily distinguished by sight and touch from both the quarter and the Susan B. Anthony coin. It is gold in color and bears a smooth edge, similar to the nickel, Diehl said. Both the quarter and the Susan B. Anthony coin have ribbed edges. The coin is also distinguishable by its extra-wide border. Diehl added that the one key indication of the future success of the new dollar coin is the growing demand for the Susan B. Anthony. The Mint is now shipping more than 5 million Susan B. Anthony coins every month and the current supply will be depleted before the new golden dollar becomes available in early 2000. To bridge this gap, Diehl said the 1999 Susan B. Anthony are being minted to ensure that consumers who currently use the dollar coins will be able to continue to do so before the golden dollar is launched, said Diehl.
---
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
Does anyone perceived that the surging demand for the previously scorned "Susan B" might be fueled by Y2K?
ORO
(10/05/99; 11:40:59MDT - Msg ID:15515)
Ph in LA
No, I am not Mozel.
Mozel continued working out his understanding of economic reality as presented by Mises and Hayek, and sought more and new evidence for the foibles of government in the monetary and political world. I abandoned this pursuit for nearly twenty years. I have come back to it over the last few years but have alot of reading to do to refresh my memory and stimulate further thinking.
Mozel is in this daily. It is an old occupation for him.
Cavan Man
(10/05/99; 11:40:58MDT - Msg ID:15514)
ORO
We live here in a very sick culture. This is not the same country I have read so much about in the history books.
Cavan Man
(10/05/99; 11:33:26MDT - Msg ID:15513)
ORO
From one "average, boring, midwestern guy" to (perhaps) another........thanks for your presence here.
ORO
(10/05/99; 11:33:03MDT - Msg ID:15512)
Another FOA motivations
Judging from the stares of incredulity I got when recounting this story and reviewing its implications with knowledgeable people who are involved in the financial markets, I would say they needed to have a place to send people to look at the picture in some detail without telling the whole story. They needed a place to find out how people would react.
The anger I found when Americans were plopped into ANOTHER's world of hard reality in mystic images as would be given by the old sage, was no short of amazing. "Nuke 'em" was not a rare response, it was the first response. Americans would rather kill en masse rather than live on the same plane with the rest of the world. Americans seemed to be more enamored of the illusion of the $ than of the actual lives of people in other lands.
After a while, the anger subsides and people start thinking differently, they suspect everything floated by the government. The thinking in terms of dollars remains, but the certainty is gone. They need a new way of thinking, because these ideas created a void and there was no acceptable replacement.
Leigh
(10/05/99; 11:31:06MDT - Msg ID:15511)
PH, Phos
Dear PH and Phos: Remember what FOA said as he signed off on Friday night:
PH, Everybody,
I have more to say than could possibly write now. When I get back we will have an awful lot to cover. We'll all understand later.
Cavan Man
(10/05/99; 11:28:09MDT - Msg ID:15510)
PH in LA
With so much tumult in the gold markets , I would surmise that at this particular juncture, FOA and Another et al are probably very involved with the responsibilities of their respective careers. I do not believe they are gone for good.
MK is Another? Ha. I have met him personally. While it is difficult to trust anyone these days, I would and do trust him. He is a very successful man with no good reason to ruin his name by perpetuating fraud here or anywhere for that matter. I don't know him well but this I can tell you; he is an honorable man.
Good thoughts from you sir. Could it be that these two gentlemen (FOA/Another) are motivated simply by good works and intentions? Hard to believe in this day and age!
The analysis corroborating by ORO is very compelling. We shall see.
If you owned vast amounts of precious resources in a mostly uninhabitable part of the world, would you trade for "promises" or, if you had a choice, would you monetize gold to a certain extent vis a vis the Euro and in the process.
That's the question to be asked.
PH in LA
(10/05/99; 11:25:56MDT - Msg ID:15509)
Reply to Phos
Phos:
With events moving at a faster pace now they are undoubtedly very busy with more time than ever spent on the internet (keeping a finger on the pulse, as it were).
I, too, hope they will return at their earliest opportunity.
PH in LA
(10/05/99; 11:21:27MDT - Msg ID:15508)
Identity Crisis
ORO:
Are you and Mozel the same person? Or would that be a personal question?
Phos
(10/05/99; 11:19:39MDT - Msg ID:15507)
PH in LA
I am sure you are right in saying FOA/Another have been here to stimulate gold buying. But I believe their motives are altruistic. They see a major decline in the US fiat money system on the horizon and have been warning people here to be ready for it. The best way is to return to the historic store of wealth, gold. Paper is paper, regardless of whose face is on it and the more you print the less valuable it becomes. The US has exported its debt for many years now to the benefit of its own citizens. 30 trillion US IOUs out there now, I think I read.
I hope FOA/Another have not left us but I suspect with events moving at a faster pace now they are probably very busy with little or no time to devote to the internet.
ORO
(10/05/99; 10:46:01MDT - Msg ID:15506)
Conviction with oil/gold
Not MY insecurity.
I am looking at the making of a convincing argument for others.
The shadow of the oil for gold deals is found in the data. and is enough for me. The evidence you need to convince people about this is tantamount to a baseball bat to the head. People may accept the idea that the $ may one day in the future be considered worthless. That it has been so for 30 years and was completely skirted in the last 10 is something else.
PH in LA
(10/05/99; 10:34:12MDT - Msg ID:15505)
Another's Disappearance
ORO:
Do I detect a tiny insecurity in your writings on the question of Another's "oil for gold" thesis? You brought it up again with Mozel today and have mentioned it several other times without total conviction.
I recall my own interpretation of the concept when Another offered it long ago. It seemed then more like reference to a general policy of cheap oil in a financial climate that included cheap gold rather than a signed document with definite numerical agreed price/quantity ratios written formally in stone, as it was taken by critics anxious to find flaws in the story to discredit it. It seemed at the time that Another was referring to the economic system as a whole rather than to a formal agreement. Of course, it could be that my own understanding of these concepts, built as they are on very general terms, sought naturally to frame the question (and answer) in these terms. I do recall an instance when FOA referred to the oil for gold idea as one that was never implemented; rather like a threat that had been overhanging the system for some time (even one not necessarily even communicated directly to the West... rather just a theoretical possibility not intended to be lost on the Western powers). Although I commented on it at the time, I did not see an adequate clarification from FOA. It seemed like almost a mental slip on his part.
Are you convinced about Another/FOA being here at USAGold on some sort of mission that seems to have been accomplished, as you implied in your post to Mozel? One of my very first impressions of Another was that his intention was to stimulate the purchase of physical gold. I soon ruled that out in my own mind because I could not see beyond a coin shop owner trying to sell a few more ounces. Even though Michael Kosares had jumped on his writings by publishing "In the Footsteps of Giants" there seemed to be no connection between Another and MK, especially when I compared their respective writing styles. (MK was always very explicit both in public and in private that he was not Another.)
Looking at this question through your writings I still suspect that Another's motive was indeed to stimulate demand for physical. He, as much as anyone, would understand that the stalemate of short sales driving the POG ever lower would be vulnerable at the point that actual physical gold became removed from the game by physical holders. (But it always jsut seemed like a few spooky postings on the internet could hardly hope to accomplish much in the broader scope of things.) In fact, wasn't his claim of huge short overhangs made even before Frank Veneroso's work became public? Another also seemed to understand the situation of the LBMA long before it was common knowledge. He knew about the huge volumes of trading there before the bombshell announcement acknowledging it was released. And I remember him musing long ago to the effect that, "It is a sad thing, this LBMA... It will cease to exist before the coming storm in this new gold market subsides".
In any case, there is little question in my mind that Another/FOA know too much for their participation in this forum to be without purpose. That they do so in order to stimulate their own interest and knowledge seems like a very weak explanation as they contribute far more than they could ever hope to receive back.
Comments and replies: ph@ProdigitalRecords.com•
GFD? Any thoughts either public or private?
granny
(10/05/99; 10:25:47MDT - Msg ID:15504)
Gold Pool Safety (Question)
Howdy all. Does Granny feel fortunate she "discovered" this stable of BRILLIANCE???? You bet!!! Thank you for being.
Hope you don't mind her making so much use of your wisdom. Just know that you are helping to protect her(and many other's) fanny(s). AND she is very appreciative!!!!!(Although she may be "master" in some areas she is very "novice" in this area. Know that she is passing on this extended kindness even more these days.)
QUESTION: Granny has a considerable amount (for Granny) of physical gold located in a "pool" with a large, well known, Financial Management Corporation. It is part of her Self-Employed Pension Profit Sharing Fund and she cannot touch it until after October 15th, 1999. She had few choices in terms of type of gold that would qualify for non-taxable funds; "pool" was fast, easy, and qualified. (Being in the highest tax bracket, a maximum allowed contribution to this fund keeps a significant amount of $'s out of Uncle Sam's hands and in Granny's pocket-book!! AND Granny is above the age where penalty is assessed for withdrawal of funds.)
Is Granny's "gold" safe for a few more days??? (This is a very reputable organization.) Any advice on how to take personal possession, as soon as she can?
Granny has been caught, as many others have, with a sudden need to be more educated than she is, and little time left to do so. BTW…. Last night's posts were so SURREALISTIC!!!! Granny was wondering if she had slipped over the edge or if it was the other way around.
Be kind to yourself and others.
Hogs and Kusses,
Granny
TownCrier
(10/05/99; 10:14:22MDT - Msg ID:15503)
Predictions of the FOMC actions today
http://biz.yahoo.com/rf/991005/xf.html
Analysts expect the Fed to hold steady on rates but to adopt a tightening bias. After today, Nov. 16 and Dec. 21 are the two remaining opportunities this year for the FOMC to adjust monetary policy at regularly scheduled meetings.
AEL
(10/05/99; 10:03:02MDT - Msg ID:15502)
Gold, Thoughts from a retired Metals trader
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001WUU
interesting tutorial and thread on the TB2000 site
Golden Calf
(10/05/99; 10:02:46MDT - Msg ID:15501)
gold passing PL
Dear Mr. Scot......
It's not impossible, but it's highly unlikely.
Whenever they came close there was a sudden
beakout and platinum far outpaced gold.
Unless something basically has changed, I would
expect the same thing to occur in the near future.
It is an intersting market though.....no?
I'm expecting a correction in this fast runup.
then in November back to going to new highs....
Gold that is, and of course pl as well
TownCrier
(10/05/99; 10:00:11MDT - Msg ID:15500)
Robert Rubin tells investors they must bear risks
http://biz.yahoo.com/rf/991004/bcv.html
Often, there is great truths hidden in humor. In a lighter moment during a speech last night to the Bond Market Association, ex-SecTreas Robert Rubin said he has enjoyed taking some time off, and found a major benefit to private life, saying "While I would argue my points in Washington, in the private sector I could just go short." The audience laughed, but my friends, that is SOOO true. As a public official in that position you jawbone positives because its your job...the truthful signals you send when you know the reality is at odds with the administration's desires must be done subtly. Such as the infamous statement of Rubin and Summmers, "a strong dollar remains in the best interest of the United States." That's may be true enough, but you'll notice it contains no promise that the dollar can be kept that way.
TownCrier
(10/05/99; 09:42:51MDT - Msg ID:15499)
Fed hopes Y2K won't get in way of monetary policy
http://biz.yahoo.com/rf/991004/1h.html
The Fed says they don't anticipate Y2K to affect monetary policy in any way, though as we reported a few weeks ago, Fed Governor Edward Kelley said, "The Federal Reserve will remain prepared at all times, as it has in the past, to do whatever it deems to be necessary to have in place the best possible monetary policy."
The three-month London Interbank Offered Rate (LIBOR) was raised by 57 basis points last week (near 6.08 percent) in what was seen as a nod to Y2K anxiety. Due to Y2K anxiety, Richard Berner, chief economist at Morgan Stanley Dean Witter said, "People are willing to pay up for liquidity."
Journeyman
(10/05/99; 09:19:11MDT - Msg ID:15498)
Debt Relief
Clinton & Tony Blair both signed on to third world, espec.
African "debt relief." What's the REAL reason behind this?
Journeyman
TownCrier
(10/05/99; 09:13:58MDT - Msg ID:15497)
Lessons from Recent Global Financial Crises--Future financial system prone to crises
http://www.kc.frb.org/spch&bio/finanreg.htm
Thomas M. Hoenig, President of Federal Reserve Bank of Kansas City, presented a speech to the Chicago Fed's conference on "Lessons from Recent Global Financial Crises"
Some highlights:
"Over the past two decades, we have seen an increased incidence of financial crises, both in industrialized countries and in emerging market economies. These crises have not only disrupted the financial systems in affected countries but also have had severe effects on economic activity. Appropriately, much of the focus of this conference is on understanding the causes of these crises and on developing appropriate public policy responses. ... I think it is clear that we cannot return to, and probably do not want to return to, the highly regulated and segmented financial systems of the past. We do want to give greater scope to the market to guide the evolution of the financial system. ...
Moreover, as we proceed, we need to recognize the new realities of the financial landscape. Financial institutions will continue to increase in size, traditional boundaries between intermediaries will continue to disappear, new and more complex financial products will be developed, and cross-border linkages will increase. ... In this environment, it is clear that a redesign of regulatory policies will center on two questions: how can we make greater use of market discipline, and how can we adapt regulation and supervisory procedures to the new realities? In the final analysis, the financial system of the future is likely to be more vibrant and efficient but, also, more prone to occasional crises.
Over the past two decades, a large number of countries have experienced a serious financial crisis that has weakened the banking system, reduced credit availability, and slowed economic growth. ... many of these crises have spilled over to other countries through currency and asset markets and through disruption of trade. ... In many instances, a crisis was preceded by a rapid expansion in credit availability that was in turn associated with a prior effort to liberalize the financial system.
We recognize that there is no going back to a framework of segmented financial markets and tight regulatory control over deposit rates, bank expansion, and banking activities. And, we acknowledge the need to give greater scope to market forces in guiding the evolution of the financial system.
The difficulty with all this, however, is that we now operate in an environment with larger and more complex financial institutions whose potential failure threatens the solvency of existing insurance funds and may pose risks to the payments system. Moreover, in today's freewheeling financial markets, herd mentality may apply market discipline abruptly and at inconvenient times, punishing institutions and individual consumers rather than controlling their risk taking. Thus, while we wish to enjoy the benefits of a market-driven financial system, we may not be comfortable with the consequences when markets are disrupted or when financial institutions seem likely to fail. Few supervisory authorities will want to be responsible for the type of economic disruption recently seen in Southeast Asia and even fewer will want to risk starting a global financial crisis.
Market discipline is clearly necessary if our financial system is to have the appropriate incentives, and disincentives, guiding its evolution and development.
We should also recognize, though, that our continued reliance on public safety nets and "too big to fail" policies will necessarily temper the use of market discipline. In fact, it will be difficult to escape these limitations, given the externalities that exist in banking. Public protection may also be needed because of the learning curve that market participants and regulators will face in our rapidly changing financial environment. Therefore, the critical question is not whether we should move toward greater market discipline, to which the answer is yes. Instead, we must ask ourselves how we can make market discipline more effective within the context of public safety nets. ...
As we reestablish this equilibrium [between market and regulatory discipline], the number of crises should diminish. However, since the new equilibrium will likely place more emphasis on allowing market forces to guide the development of the financial system, realistically, we are likely to experience somewhat more crises than the historical norm. This is simply the result of allowing markets to play a larger role in the financial system."
---
Do yo get the sense that times are changing? Whatever the endgame may be, gold will always get you comfortably through the transition.
USAGOLD
(10/05/99; 08:57:17MDT - Msg ID:15496)
Today's Gold Report: The Short & Sweet of Day Seven of the Big Breakout
MARKET REPORT (10/5/99): Day Seven of the Big Breakout....Gold up $8.50 at
$325 after hitting $333 in Asian and European trading overnight, and $339 in an early
morning blitz in Manhattan ........... "TOCOM must be suffering some type of short
squeeze as COMEX has seen," commented one broker to FWN. "Their liquidity is pretty
thin too."We're seeing the reemergence of the Asian consumer as a buyer, and Korean
buying is way up now," the broker added.*...............Since the overnight short-covering
blitzkrieg, the price has settled a bit. In a late day conversation with LFGs Leonard Kaplan,
he mentioned to me that someone offered ten tons of gold late yesterday and it was swept
up by a single buyer "about 30 seconds after it was offered."..........The buyer was
believed to be covering a short position. I wouldn't think that the fate of those ten tons
marks an end to the driving needs in the gold market. And then there's the fate of the all
those unhedged calls we talked about yesterday adding uncertainly to an already volatile
situation.**.............. Robert Rubin returned to Wall Street yesterday to say: "Just as they
reap the benefits of their decisions, private creditors and investors must also bear the risk of
failure,'' Rubin told members of the Bond Market Association at a gala dinner. "Financial
markets have fluctuated between extremes and this should be a sobering warning,'' he
added.............While most of Wall Street is thinking "no interest rate increase
announcement" after today's FOMC meeting; they also have to know that the market is
taking interest rates higher whether the Fed wants to or not. The counter-party risks
associated with the run-up in gold has to have the Fed worried. They won't make a public
issue of raising rates now for that reason; they'll let the market take them up so the Federal
Reserve can escape shouldering the blame. The net result though will still be an equities
market correction................ "Option market traders," says Helen McCaffrey of N.M.
Rothschild & Son, "continue to stare in disbelief at volatilities which have spiked to
extraordinary levels over the past week.'' She went on to say that "people" are a "little bit
concerned" that we might see further short covering from producers a la Ashanti's 80%
hedge book unwinding last week.............Gold lease rates are coming down but the return
to the 4% level hasn't seemed to cool the gold market. We think lease rates might bottom
here the evidence of which would send a new shockwave through the bullion bank
community...............XAU closed yesterday at 88.81 up 5.90. Gold stocks are regaining
their shine. I've done well with my Gold Fields.................Of the 2000 tons to be sold
by European banks over the next five years it appears that 1300 of it will be Swiss. Bridge
News quotes Swiss National Bank spokesman Werner Abegg as saying: "The SNB will
sell the 1,300 tonnes as part of the common European central bank sales agreement," he
said. Presumably that "agreement" is the one referred to in the bombshell announcement of
September 26, 1999 -- now known as Gold Sunday..............Heard on the Internet: The
cry of the bulls -- "See you at $400!".............That's it for today, my fellow goldmeisters.
Happy Trails until we meet again. We'll leave up the Big Breakout links for awhile (See
below) for all the newcomers. Welcome aboard to all those trying to find out what in the
world is happening in the gold market! Please also see the offer for a free sample copy of
our newsletter News & Views below............MK
* Those of you who regularly visit this page know that we have predicted the return of the Asian buyer (a
singularly important ingredient to the long term gold mix) since the days of the Asian contagion last year.
All you have to do is look at the price of gold in any of those currencies to know the reason why. Asians
will buy gold to protect themselves against any future manifestations of the contagion. They have been
converted to goldmeister status for life. Will Americans follow suit? Let's hope that any lessons learned are
before, not after, the fact.
**Those of you enamored with Elliott analysis might take an interest in a thumbnail Elliott sketch we ran
in the office yesterday complete with some Fibonacci ratio application. I mentioned to George Cooper, our
resident techie, that he could now take his gold charts out again because with a relatively free market now in
place -- thanks to the European central bankers -- technical analysis in gold will regain its uses. It seems
that wave one has taken us from $255 to $329. Then we had the wave two correction down to $301 area
(.38 of upmove) which matched beautifully with the Golden section retracement predicted by Prechter in his
early book, now we are in a three wave -- the long wave both in duration and price escalation. It is not
surprising that many technical analysts are putting strong support at $301. One waves are erratic, often
unpredictable, fast and furious; two's the same. Threes are longer, more stable in character and that's what we
think we are now in. I'm sure those of you who follow the Elliott model will have your own version of
this, but that's the way we see it. Any of you who have done the Wave three math work that would lead you
to a top end prediction are encouraged to offer it either at the FORUM or by e-mail and we will take a look
at it.
That's it for now, fellow goldmeisters. Have a good day.
The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........
Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.
CoinGuy
(10/05/99; 08:04:00MDT - Msg ID:15495)
fed rate...
I'm going out on a limb here, the fed raises rates .25 to curb the market. Otherwise, it's another bout of irrational exuberance. I think AG tries to put a curb on market activity, without pricking the bubble. Spot jumps to 336.50, just my .02.
coinguy
The Scot
(10/05/99; 07:34:46MDT - Msg ID:15494)
Gold VS Platinum
All, have any of you given thought to Gold passing Platinum and what that might mean. Seems a real possibility to me.
The Scot
scp
(10/05/99; 07:12:59MDT - Msg ID:15493)
Manipulation prior to Fed Announcement
They must crush gold and support the dollar prior to announcing that rates remain unchanged. I think they will switch the bias towards tightening. We may get a pull-back here.
leonard
(10/05/99; 06:28:38MDT - Msg ID:15492)
don cox's latest call
http://webevents.broadcast.com/accutel/jonesheward/ very interasting
RossL
(10/05/99; 06:25:20MDT - Msg ID:15491)
Change my guess
I want to change my guess to $365.50
leonard
(10/05/99; 06:24:03MDT - Msg ID:15490)
(No Subject)
Click here: Listen To Don Coxe latest call, very interasting
Black Blade
(10/05/99; 06:22:47MDT - Msg ID:15489)
Fun and games at Kitco
Hey all, check out platinum at Kitco! $3.00/ounce, down $403! It's a fire sale! What other strange goofs are going to occur at that site next? I know, it's the anti-platinum cabal! This is going to be one very weird day I'm afraid. Go gold!
Goldspoon
(10/05/99; 06:18:57MDT - Msg ID:15488)
AREM
Try this it works for me... thanks Gandalf!!
Gandalf the White (10/04/99; 19:08:05MDT - Msg ID:15416)
CoinGuy's Question
www.forex.freeservers.com/main2.html
Spot the Dog is the fictious "present" price of Gold! There are many reporting boards and in many values other that US$! --- the best one that I have found is at the forex board which is setup for currancy exchange quotes.
BUT if you click GLD= and change the time to MIN and click "request" -- WALLA WALLA bing bang !!
<;-)
ss of nep
(10/05/99; 06:17:53MDT - Msg ID:15487)
Chart
http://www.quote.com/livechartscom/livechart?symbols=gc99z
AREM
(10/05/99; 06:10:49MDT - Msg ID:15486)
HELP
http://www.kitco.com/gold.graph.html
The 24 hour spot gold chart of Kitco at the above link is stalled. Is there some other source of this information?
SteveH
(10/05/99; 05:50:37MDT - Msg ID:15485)
Dec gold a whopping ...
$338.0000000000!!!!!!!!!!!!!!!!!!! Up $20.00!!!!!!!!!!
(...some NY folks are going to have a fit)
Goldspoon
(10/05/99; 05:39:19MDT - Msg ID:15484)
Spot Colse...
Spot now at 336....who'll guess 350???
Mr Gresham
(10/05/99; 05:35:12MDT - Msg ID:15483)
Oro/Mozel
ORO --
You have richly rewarded my insomnia -- thanks!
How the mighty are fallen!
Martin Luther King, Jr.: "The arc of the moral universe bends long, but it bends toward justice." Let us see some justice in our lifetimes, I pray.
When the printer's done, off to bed with "Reposts and the Great Mozel". But I won't sleep. 30+ years of Economics, and it feels like this year -- no, this WEEK -- I'm just starting to get "this picture." (Ah, SIX beautiful pages to read...)
(Has Oliver Stone bought the movie rights yet? Will Donald Sutherland play ANOTHER? Gene Hackman FOA? Stay tuned...)
THX-1138
(10/05/99; 05:35:05MDT - Msg ID:15482)
Guess on COMEX spot close
$342
Goldspoon
(10/05/99; 05:20:44MDT - Msg ID:15481)
Spot ...jumped to 334 moments ago from 324....
Good Dog!
Goldfly, you've trained him well.....
Goldspoon
(10/05/99; 05:15:07MDT - Msg ID:15480)
USA Counter Measures..... my guess
Secret stockpiling of Gold and Silver by the USA as prices were falling.... a planned return to a gold backed dollar....it's new value.... $50 to the ounce of Gold, the face value of Gold Eagles and one Dollar to the ounce of Silver, the face value of Silver Eagles......any other wild ideas??
leonard
(10/05/99; 05:00:26MDT - Msg ID:15479)
the us dol.
can a doller devaluation be close.
Goldspoon
(10/05/99; 04:59:59MDT - Msg ID:15478)
@ORO
What are the chances this was all kept seceret from the FED? i would think if the Russians knew it The USA would have been aware also?
The old money ties of the UK to the US is well known. Has the actions of the Fed also been a well scripted part in this play? If so what is the twist in the final act of this conspiracy of nations?
If the US is not a willing partner in this, LOOK for a counter measure.....After all it takes soooo long for this to unfold a defence surely was prepared..... any ideas as to what it might be??
RossL
(10/05/99; 04:37:11MDT - Msg ID:15477)
Time for Some Fun!!
Goldspoon, I'll say $335.50
ORO
(10/05/99; 04:33:50MDT - Msg ID:15476)
Reposts and the great MOZEL
Date: Tue Oct 05 1999 06:32
ORO (@Mozel - Currency war) ID#71231:
Copyright © 1999 ORO All rights reserved
Mozel - Excellent thinking in Mozelland, how does one gain entry to Mozelland?
1. Saving the LBMA was something that the Europeans seemed to be willing to forgo ( see ANOTHER commentary ) . Considering that UK was in hock to the EU, has it been the joining of the UK with the EU action that allowed it to keep the LBMA? Was the EU also interested in the use of UKs large $ reserves?
2. The sudden disappearance of ANOTHER, FOA and most heavy thinkers save SteveH from USAGOLD through this turmoil seems to indicate that a job has been finished there. Alternatively, it could be that there is some great business and policy work to be finished - regarding the change of circumstances with the UK changing allegiance. If these are truly wired in, is this the reason?
3. Thinking through the issues that must have been dealt with in assembling the EU, it becomes obvious what it is that national currencies and their associated bank debt can do to distort economic relationships. In putting themselves in one salad bowl, the EU members were obviously made aware of the degree of US segniorage and the fact that goods are traded with the US in return for obligations that ammount to an assumption that Americans will decide to honor when Europeans or Japanese try to cash in - when in the past these were never honored. This obviously would be tolerated only as long as the US is offering something sufficiently valuable in return - i.e. defense.
A few things changed since the cold war ended, or even before. ( 1 ) The US, UK, Australia and Canada have lost the mission which allowed them to print their way into prosperity. ( 2 ) The world at large is so much more developed that the US is just too small in relation to be able to provide the currency of trade without heavy trade deficits that plunder the world, while impoverishing everyone. ( 3 ) The web of debt the US created in the 70s to enslave the emerging economies of the world had come to the point of deflationary collapse that made default impossible to escape. With their default would have come the end of subservience of Africa, South America and Asia, and of the international value of the $ and the reserves of the EU members. By the end of 98 Emerging market debt had fallen by more than 1/4, probably 1/3. The Emerging market debt trap fell appart, and EU and Japan could just plain wipe out this debt in order to eliminate $ demand and the source of the US' prosperity. Do you think this was it?
4. The elimination of the power of $ debt must have been the key to eliminating the $ tax on international trade. This must have been the reasoning for lowering the interest rates on the key currencies outside the EU ( including gold ) to near 0 soon after the Maastricht treaty. This put the US itself in a debt trap identical to the one it put the emerging markets in, no?
5. Relating to the political thinking of the EU - you put up the issue of gold as a tool of national and individual sovereignty. Is it the control of one's currency being the key? or is it the issue of Europe coming to the conclusion that national currencies are means of escaping economic consequences of trade imbalances? Particularly when through perpetuation of debt, the currency of the US allowed it preferrential pricing for commodities that Europe and Japan could not obtain gratis - in return for printing $. ANOTHER made a big deal of this issue.
( Much of the Purchasing Power Parity discrepancy between the US and the EU/Japan can be explained by this fact, and the fact that they are $ creditors, only a portion is actually related to the inefficiencies of their markets )
6. Have the "powers that be" relized that some control must be given up anyway, because of the internet? As the issue of the sovereignty of the individual transcending all borders and the yoke of national currencies was just a question of time?
Finally - what do you think of the oil for gold deals and the participation of the oil countries in the scheme?
I suspect that Russia's stopping the sales of gold after its spy at the LBMA was outed was no coincidence. Nor their doing energy deals with Europe in Euro. I think the ability to collapse the LBMA and thereby stop the supply of oil to the US and its banker allies was a crucial issue.
Thank you.
PS Thoughts of South African complicity with Europe. Might one say that the SAf had found out through us here and at USAGOLD, what a farce the economic miracle of the US really was, and most significantly - that the US was trading SAf gold for Arab oil and through this were obtaining all other commodities and Asia's manufactured goods? Could the understanding of this be behind the recent spate of political killings in SAf ( particularly the attempt on the Mines Minister?
Date: Tue Oct 05 1999 05:15
mozel (@Cap'n Kirk @Midas @What's It all About, Alphie ?) ID#153110:
Copyright © 1999 mozel/Kitco Inc. All rights reserved
@Capn' Kirk Unsolicited advice: Let the nearby ignorant and their mentors, like sleeping dogs, lie.
@Midas "Do you think that world wide things have changed because of the efforts of western ( USA ) governments to dethrone gold as a store of real value?" Hm. Well, USG sponsored a couple of generations of "future leaders" to be "eddicated" in the renowned indoctrination camps of the Ivy League and copy cat "institutions of hirer learning". This dumbdown by degree program and bribes and UN postings and other inducements enabled USG to bring into bondage a great portion of South America and parts of Asia and Africa by means of debt obligations denominated in greenbacks. The amount of worldwide debt is a big change from past times. Human and Mother Nature have not changed.
Question 2: Why the sudden about turn by the Central banks of Europe? Is it really based on a contest of currencies?" What sudden about turn ? What is the unit of account in the EU ?
@Alphie As Ah have sayed befoah, gold is the sine qua non of Sovereignty. Central Banks are the instrumentalities of government. The EU Bankspeak on gold was proxy for the Sovereigns' speaking themselves.
Gold's apolitical empowerment of Sovereighty constitutes its national and individual utility. There is no political independence without monetary independence. What nations want today, people within nations will want tomorrow.
The United States fought its War of Independence mostly on bills of credit. In the aftermath "not worth a Continental" became a byword. The United States fought the Cold War of bills of credit. We are in the aftermath. The difference between then and now is that supposedly the United States has 8,000 tons of gold with which to re-establish its credit. The similarity between then and now is that the domestic holders of continental greenbacks are holding nothing but printed paper.
Date: Tue Oct 05 1999 02:13
Midas (Mozel) ID#165282:
Copyright © 1999 Midas/Kitco Inc. All rights reserved
"The culturlal memory of what is money has been erased."
This seems to be the case in North America, where, although there are firm believers here at Kitco, I don't believe there is anywhere near the culteral depth of confidence in gold as there is in most older cultures.
Do you think that world wide things have changed because of the efforts of western ( USA ) governments to dethrone gold as a store of real value?
Question 2: Why the sudden about turn by the Central banks of Europe? Is it really based on a contest of currencies?
Very interested in your thoughts on these questions.
Date: Tue Oct 05 1999 01:55
mozel (@Thoughts From Mozelland) ID#153110:
Copyright © 1999 mozel/Kitco Inc. All rights reserved
The international exchange rate for gold is the LBMA rate. UK is pivot for gold. BOE "auctions" enough gold to cure LBMA or, in other words, to prevent LBMA failure in a gold rush. This also makes Uncle across the pond happy for the temporary relief provided. UK can now let gold run.
The Europeans announced sales of no more than X tons per year for the next five years. This gold is already in the market as leased gold. Over the next five years the existing European gold leases will be refused rollover. Very orderly.
Somebody forgot to tell the Paki's. Karachi was crushed.
Is Hong Kong in trouble ?
Are the African miners in trouble ? Or part of the great European gold ambuscade ? Who will be buying defaulting miners ?
The only entity which can save the Comex is the Federal Reserve. It has the authority, the paper, and the gold to do it.
But, even if Comex goes the way of Karachi, it matters not except to the US banking system.
What matters is that LBMA stays open. The UK have to keep LBMA open if they wish to be the gold center for Europe. Default in London will come from default of forward sold mine contracts, contracts sold by those small to medium US mines which the US banks are openly discussing foreclosing upon. How many of those contracts were sold in London and whether or not the Federal Reserve will order the banks not to foreclose on mines under water in the US and Canada will determine whether or not LBMA will stay open. The unhedged strong shall devour the weak.
The news smudgeout on the gold market is a demonstration of the power of the government over the broadcasters and of the mind control power of the broadcasters over the masses. Notice who is solicited for comment. The nature of their comments identify people in the know who have consented to participate in concealment. It may mean gold can be revalued without shaking the confidence of people. Because the cultural memory of what is money has been erased.
You say this much concealment is not possible. I tell you look into the secrets being kept by the lawyers, attorneys, and judges as a condition of their practice of law. Those who grant the permission to practice, control the practice, the speech, and even the thought of the practitioners. The same control exists over bankers and brokers and even broadcasters.
Whos will come step up to the gold line of truth or consequences first, the Japanese or the Americans ?
Goldspoon
(10/05/99; 04:30:21MDT - Msg ID:15475)
Time for Some Fun!!
Let's start a guessing pool for Comex spot close as posted by USAGOLD.....Me first...$332.27.... Closest guess get's bragin rites.....Guesses must be posted before the Comex opens to count.....
Canuck
(10/05/99; 04:23:44MDT - Msg ID:15474)
Nervous?
I just read last nights posts and links, is this ever getting messy.
I've got to think CB's are going to hold gold now, EU consortium, IMHO, is holding because ot their belief that gold will be the final reserve holding when the dust settles. Who and why would anyone dump gold now to bring down the price?
Goldspoon
(10/05/99; 04:19:38MDT - Msg ID:15473)
@Canuck
My Op.. Greenspan is in a box... He must raise rates now or risk capital flight that supports the debt into Gold. Add the need to make it more costly to pull cash out for 2kay.
A good ole October correction (not crash) is really what the market needs at this point.
As my Mom would say when i was a kid and i got to antsy...Son, what you need is a good workin'. She then proceeded to fill my mouth with casteroil....sure took the fight out of me...Even "If" you didn't have this gold thing... somebody needs to throw some cold water on the market to get them to sober up before they fly to close to the sun and the wax melts.......
But i'm not Greenspan......
Goldspoon
(10/05/99; 04:05:44MDT - Msg ID:15472)
Limit Up!
Let me seee..... you limited up in Tokeo last night..Good Dog Spot! Now for London..... Jump, Boy Jump!!!
Canuck
(10/05/99; 03:51:20MDT - Msg ID:15471)
To Peter A. and all
So if A.G. does not raise rates and only hints of that what impact does this have on the POG?
I see spot at 328 this am, perhaps there is enough momentum now that A.G. nor the good Lord can't stop it now.
Should be a tough day for 'shorts' today.
Thoughts?
ORO
(10/05/99; 01:44:59MDT - Msg ID:15470)
Good article
http://www.egroups.com/group/gata/231.html?
Highlights:
The rapid growth of these fractional reserve accounts
in recent years has had the effect of expanding the
supply of gold traded in spot markets much faster than
can be accounted for by new mine production and
mobilization of central bank reserves. Unlike non-
monetary commodities, the injection of new physical
supplies of gold into the market is subjected to a
multiplier effect, where each ounce of gold stored in
London creates several ounces worth of claims against
gold by successive deposits and loans. Undoubtedly this
leveraging of leased central bank gold via bullion
banking has been a major factor in depressing gold
prices.
The mere existence of market conditions such as we are
observing today may prompt the ordinary members of the
LBMA to lose confidence in the LBMA's market makers and
clearing members and demand redemption. If that
happens, the issuers of "paper gold" could be facing
ruin, and the unbacked "paper gold" itself will vanish.
Peter Asher
(10/05/99; 00:42:26MDT - Msg ID:15469)
Speak Softly, But Carry a Big Stick!
I think AG is taking a cue from Teddy Roosevelt and doing just that to keep a lid on things.
To put the brakes on "Irrational exuberance" by raising interest rates would crash the economy. The solution is to apply the brakes by hinting, threatening or "Taking a bias towards" raising interest rates. This way, he keeps a lid on the Market without pulling the plug on liquidity.
The action by the Euro CB's joined by Japan could be a deliberate attempt to back Greenspan (And the Dollar) into a corner. The breakout in Gold makes it all the more disastrous if he were to raise rates.
Click Here to view yesterday's discussion.
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.
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