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ARCHIVED DISCUSSION FROM 9/5/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) schippi (09/05/00; 23:22:24MT - usagold.com msg#: 36096) Gold starts to perk Up http://www.stockcharts.com/commentary/arthur/arthur20000905.html Charts and commentary form stockcharts.com Topaz (09/05/00; 22:15:15MT - usagold.com msg#: 36095) Leigh et al: Chris Powell Leigh:<The Commerce Ministry said in the circular obtained by Reuters yesterday that the Saudi Arabian Monetary Agency, or central bank, would start using the euro ($0.891) from September 13 in all its foreign currency accounts instead of the individual currencies of the 11 countries in the euro zone.> end quote.That says to me they're JUST ratifying the use of the Euro instead of the 11 Eurozone currencies.Chris:Disturbing news via E-mail last night (LeMetropole). Don't allow BM to become this Centuries Arch-Duke Ferdinand. LeSin (09/05/00; 22:05:59MT - usagold.com msg#: 36094) Regects "IMF" Apologies for error - IMP? should be IMF LeSin (09/05/00; 22:02:40MT - usagold.com msg#: 36093) "Political Will" - Manifests into ACTION / INACTION (depends on what side) Malaysia Rejects IMP - Currency Maker / Breaker - Robbers This guy has my admiration for his stance and protection of his country's currency. The world and many countries within it have been duped into allowing their respective currencies (fiat-Money) to be traded and manipulated by the IMF dominated US$/Gov. and their agent-robbers "S"TUESDAY, SEPTEMBER 5, 2000 IMF should ban currency trading: Dr Mahathir KUALA LUMPUR, Malaysia ( AP ) - Prime Minister Datuk Seri Dr Mahathir Mohamad has said the ban on trading of Malaysia's currency will only be lifted if the International Monetary Fund halts currency trade, the national news agency reported Monday. Dr Mahathir told a gathering of Malaysians in Chicago on Sunday that currency was not a commodity and hence should not be traded. "It is not like coffee, tea, sugar, rubber or tin," Bernama news agency quoted him as saying. Dr Mahathir is in Chicago on a three-day visit. "And why we should lift the ban on the trading of the Ringgit? We will lift the ban when they stop people from trading the currency," he said. Dr Mahathir has railed against currency trading since the 1997 Asian financial crisis. He blames the turmoil on currency traders, accusing them of weakening Asian currencies to make quick profits. When the crisis unfolded, Dr Mahathir spurned IMF advice that he should float the Ringgit and accept IMF funds to help combat currency weakness. Instead, he implemented a series of capital controls - which have since mostly been rolled back - to halt capital flight and protect the Ringgit, which was pegged at 3.8 to one US dollar. The IMF has urged Malaysia to move away from a fixed exchange rate. But Dr Mahathir and his finance minister, Tun Daim Zainuddin, have said repeatedly there was no compelling cause for Malaysia to alter or remove the peg, which has fueled the country's export growth. Malaysia's real gross domestic product, led by exports, recorded a 5.5 per cent growth in 1999 and has maintained its momentum so far this year. Analysts expect the economy to grow by more than 7 per cent this year, before slowing down a bit in 2001. oldgold (09/05/00; 21:23:42MT - usagold.com msg#: 36092) Town Crier Re: The Washington Agreement. The Europeans only agreed not to increase gold lease volume which had reached a very high level. If they really wanted a higher gold trading range they could have reduced lease volume. in fact one could argue that the Europenas are more responsible for gold's problem's than the Fed and the Treasury. The Europeans are the ones selling gold for greenbacks -- not the US. And the Europeans are the biggest providers of gold to the lease market -- not the US.As I said before the Europeans could set the gold market on fire in the twinkling of an eye if they really wanted to. The sad fact is that they don't. At least not at this time. Chris Powell (09/05/00; 20:47:39MT - usagold.com msg#: 36091) GATA challenges gold council consultant to debate http://www.egroups.com/message/gata/521 Her report on gold loans doesn't matchours.To subscribe to GATA's dispatches by email and get them immediately so you don't have to go look for them, send an email to:gata-subscribe@eGroups.com Al Fulchino (09/05/00; 20:25:59MT - usagold.com msg#: 36090) ET ET (09/05/00; 19:44:53MT - usagold.com msg#: 36086)Journeyman, Shifty, AlInteresting segment, while I am in agreement that the IMF is no role model for anyone, I disagree that all "Western Thought" regarding free trade is misguided. I get worried when the "West" and its ideas are unilaterally trashed <I am not saying that you espouse this idea, but others do>. I would still rather be sitting on our side of the fence, all in all. Best to you! Al Fulchino (09/05/00; 20:25:49MT - usagold.com msg#: 36089) ET ET (09/05/00; 19:44:53MT - usagold.com msg#: 36086)Journeyman, Shifty, AlInteresting segment, while I am in agreement that the IMF is no role model for anyone, I disagree that all "Western Thought" regarding free trade is misguided. I get worried when the "West" and its ideas are unilaterally trashed <I am not saying that you espouse this idea, but others do>. I would still rather be sitting on our side of the fence, all in all. Best to you! schippi (09/05/00; 20:00:01MT - usagold.com msg#: 36088) Select Gold Wavelet & POG charts http://www.SelectSectors.com/pog.gif POG Chart with 5 day forecast FSAGX Wavelet Chart: http://www.SelectSectors.com/wavelet.gif Both Charts are pointing Up USAGOLD (09/05/00; 19:46:32MT - usagold.com msg#: 36087) Comment: "Key European Politicial Welcomes Plunging Euro" The Bloomberg article does not point out anything we didn't already know. It emphasizes, though, a view we've expressed before on these pages: Those who believe that the central banks are involved in some kind of a conspiracy to control European and American society through the banking system must come to grips with the inclination of these same central banks to accomodate the political sector -- left or right. In America, Greenspan accomodates the Clinton administration with easy money; and, the ECB accomodates the essentially leftist governments of Europe by keeping the euro cheaper than the dollar. Hence the favorable comments from the Shroeder government on the weak euro, and the Gore campaign basking in an economy fueled by policies of a Republican central banker named Alan Greenspan.Nothing in modern economic life happens in a vacuum -- not even monetary policy despite the claims of those who would like to see our central banks as separate from politics.An even more critic al decision has to do with how the central banks and the political sector will deal with hedge funds and bank trading departments who through the use of cheap derivatives virtually have the ability to print money on a par with the central bankers -- an interesting quandary for the central banks, but a threat to their ability to institute an effective monetary policy. P.S. One must not lose sight of the one thing that determines the views of a bureaucrat whether in the financial or political branches -- Job Security. That is both a blessing and a curse, and I'll leave it to you to decide which from your individual point of view. ET (09/05/00; 19:44:53MT - usagold.com msg#: 36086) Journeyman, Shifty, Al http://216.46.231.211/international.htm Hey fellows - hope this finds all of you well. I'd like to contribute this article to the discussion of free trade. This article questions the results of the 'free trade' model expoused by the IMF/US. Unfortunately, the author doesn't seem to recognize that the one thing that needs to be free for all other things to be free is the medium of exchange, or money. He hints at the cause of the problem with this last paragraph. It is easy to understand why so much confusion surrounds the issue when the idea of 'free trade' is couched in terms of so-called 'Western Thought'. I think you guys will find the article interesting."Simply asserting something does not make it true. The US Central Intelligence Agency may claim that the reforms in New Zealand have boosted growth and moved incomes towards the levels of the big Western European economies, but the statistics it provides in its 1999 Factbook show the opposite. Malaysia's economy recorded double-digit growth during the first half of this year, despite its pointed refusal to adopt textbook IMF proposals. Even today, the country is not given any credit for the policies enacted to reverse the tide of deflation which afflicted the whole region during 1998. The varied experiences of the countries cited above suggest that a headlong determination to subjugate everything blindly to a preconceived model risks promoting a backlash that ultimately can engender something as mutually destructive as trade protectionism. However appropriate and successful the neo-liberal model has been in the United States historically, Western policy makers must recognise that the attempt to impose a one-size-fits-all model all around the globe exacerbates conflicts between the world's economic powers, and engenders suspicion and dread in countries as diverse as France to Korea. It triggers attempts to break away from institutions that are perceived to be excessively in the clutch of the "Washington consensus", such as the IMF, with organisations that are thought to be more amenable to pre-existing social and cultural mores. This is one factor which continues to underlie the drive by the Asian nations (now including China) to form an Asian Monetary Fund. And at a time when the United States is showing a dangerously high degree of dependence of foreign inflows to sustain its growth and, indeed, its very economic system's success, does it make sense to burn bridges with the rest of the world through a one-sided advocacy of a single self-regulating global market model?" SHIFTY (09/05/00; 19:37:18MT - usagold.com msg#: 36085) French petrol rationed as blockades bite http://www.telegraph.co.uk/et?ac=000114832908976&rtmo=fqwlqass&atmo=ggggg3JK&pg=/et/00/9/6/wfra06.html By Patrick Bishop in ParisFrom a link at DRUDGE$hifty SHIFTY (09/05/00; 19:33:48MT - usagold.com msg#: 36084) Journeyman I look foward to reading more.$hifty:) Journeyman (09/05/00; 19:30:24MT - usagold.com msg#: 36083) Well, how about tomorrow about the same time? @Shifty Is good??Regards, J. SHIFTY (09/05/00; 19:04:45MT - usagold.com msg#: 36082) Journeyman When do we get part two?$hifty:) SteveH (09/05/00; 18:36:18MT - usagold.com msg#: 36081) I third the nomination for HOF of the post of acronyms by AUSPEC.That makes it official, eh? CoBra(too) (09/05/00; 17:37:51MT - usagold.com msg#: 36080) TC - Be assured if the Fanfare doesn't work ... ... We'll be prepared to sound the Alphorn - even waking the deaf - Though still cross with Jessica's dross - cb2 TownCrier (09/05/00; 17:27:59MT - usagold.com msg#: 36079) Sir CoBra(too), I have thus far spared myself the 196-page commitment of time... http://www.usagold.com/announcement/europeantelegram.html ...more due to shortage constraints than personal choice. I would like to give it the once-over in order to fairly access the quality of Dr. Cross' findings and conclusions, but alas, until that chance arrives, I had to settle for providing the link to the rest of the fine minds here along with some selected excerpts from the executive summary.Regarding this issue of time...the link above hints at one of the latest projects that we've been busy with here in The Tower on behalf of the good folks at Centennial. Now that MK has cleared the administrative, logistical, and paperwork hurdles for providing direct gold delivery within the European Union, it's time to..."Wake the kids and phone the neighbors!" TownCrier (09/05/00; 17:11:05MT - usagold.com msg#: 36078) Thanks for sharing the assorted news today, Sir oldgold I offer both a question (two, actually), and a comment.In one post you said:"Key European Politicial Welcomes Plunging EuroA reality check. If they want the Euro to go down, they can hardly be in favor of higher gold prices."In what regard to you see higher gold prices acting at cross-purposes with either a weaker euro or with euroland's best interest? It comes to my mind that the purchasing strength of a currency is not built upon the value of the issuing bank's reserves, but rather upon the monetary policy and use of that currency. Only when offered for currency redemption or employed through foreign exchange operations (which the ECB has a distinct policy preference to avoid doing) would total reserve valuations affect the external strngth of the currency.To see this another way, we note that the ECB also has, unavoidably, dollars held in reserves; yet we do not hear anyone suggesting that the rising value of the dollar would also cause the euro to be strengthened in parallel.In another post, you said:"Never forget the old adage -- "watch what they do, not what they say." To date there is no solid evidence the Europeans really want higher gold prices. They are lending their gold to the bullion banks for next to nothing."If we are to watch what they do, then what is to be drawn from the Washington Agreement that has been done? And having brought it up, given the general purpose behind interest rates, what do you feel to be the proper rate for the gold leasing that remains underway?Here's a comment from our Central Banking Insider that elaborates a bit on your posted piece on the Federal Reserve. Your article stated:"Speaking at the Federal Reserve's annual Jackson Hole conference on August 25, Chairman Alan Greenspan noted "considerable unease" among some citizens "about the way markets distribute wealth." Nevertheless, Greenspan and his colleagues have been served very well by these distributional mechanisms. According to the attached Financial Markets Center analysis of recently released financial disclosure statements, the five members of the Fed's Board of Governors saw their aggregate net worth jump by 17 to 20 percent during the course of 1999."I thought it might be of interest to pass this additional info along regarding the nature of the Fed Chairman's investment position from our August report:---According to a financial disclosure report, the value of Alan Greenspan's investments in 1999 totalled between $3.4m and $7m, up from $2.5m to $6.4m in 1998. To avoid conflict of interest, Greenspan holds neither equities nor longer-term bonds, both of which can be affected by interest rate decision which he makes as chairman of the Fed. His largest assets are four Treasury bills valued at between $500,000 and $1m.Greenspan, 74, who earned $136,700 last year, is comparatively one of the less well-paid central bankers. Last year, the Economist magazine reported that Bank of Italy governor Antonio Fazio was the highest paid central banker in the world, with a reported salary of $600,000.--- CoBra(too) (09/05/00; 16:50:06MT - usagold.com msg#: 36077) RE: TC - latest post - required 196 pages ... ... of reading Dr. Jessica Cross of "Virtual Metals Research" on gold derivatives - TC- as I'm aware you're not the cynic I'm becoming (though I still hope you didn't have to cope with all the 196 pages of total misinformation), I have to admit I'm becoming a bit irritated by the funders of this kind of (mis-) information. It does remind me of the tombstone, stating - " here rests the rest of the gold industry"-RIP -(Rip off In Pieces) - your friend - alas sorry - cb2 Journeyman (09/05/00; 15:23:08MT - usagold.com msg#: 36076) Free-trade I: The Bad @ALL Hi folks!I realize this little thing I've written on free trade is a daylate, ah, actually three weeks or so late - - - - but I don'tthink you'll find it a dollar short! I could be wrong. If so,object! This "post" is three weeks late mostly because it'staken me that long to put it together. So, what I'm gonna do tospare your eyesight is to post one section every day or so forawhile. Comments and particularly criticisms or objections aremost welcome.By the way, our hero (and heroine, gold, plays a central role - - -but doesn't make an entrance till later.OK. Heeere we go! Free trade is a hot-button issue. Everywhere. And it always hasbeen. Buchanan billed himself as "next to Ronald Reagan, thestrongest free-trader in the White House," -- but he changed hismind. So what gives? Is free-trade in free markets really socontroversial? If so, why? Who _really_ benefits from freetrade -- and who is hurt by it?Consider the following: "(h) *The countryside was cut out of trade in the Middle Ages*. 'Up to and during the course of the fifteenth century the towns were the sole centers of commerce and industry to such an extent that none of it was allowed to escape into the open country' (Pirenne, _Economic and Social History_, p.169). 'The struggle against rural trading and against rural handicrafts lasted at least seven or eight hundred years' (Heckscher, _Mercantilism_, 1935, Vol. I, p. 129). '*The severity of these measures increased with the growth of 'democratic government*' . . . . 'All through the fourteenth century regular armed expeditions were sent out against all the villages in the neighborhood and looms or fulling-vats [in which cloth was dyed] were broken or carried away.' (Pirenne, _op.cit_., p. 211)." -Karl Polanyi, _The Great Transformation_. (Boston: Beacon Press 1957), p. 277Seven or eight centuries of "struggle against rural trading," notto mention a century of loom-stealing and vat-smashing does seemto indicate free-trading was rather a hot-button issue even inmedeival times, don't you think? Inherent in the idea that whole villages opposed free tradingamongst the rural folks is that for some reason _theestablishment_ particularly doesn't like free trading. Andcontrary to the common perception of some free-trade advocates,businessmen are in the lead of the establishment which doesn'tlike free trade in free markets. My first clue to [Ayn] Rand's greatest mistake, though I failed to understand it at the time, came as a friend of mine (Larry) and I gave a talk to the Las Vegas Junior Chamber of Commerce (the "JCs"). We presented two libertarian issues; heroin decriminalization to demonstrate civil liberties and free trade in free markets to demonstrate economic freedom. Since JCs are business folks, we figured we'd get static on decriminalization, but if we addressed the free-trade issues last, we would leave them with a positive impression. + Sure enough, immediately after the decriminalization presentation one JC stood up, and in a very agitated manner let us know that we were crazy to propose such a thing. Before we could answer, another JC said, "Sit down Bob. They're right." There was a murmur of assent from the rest of the thirty or so in the audience. Larry and I looked at each other amazed. We figured we were over the hump. + After our _free market_ presentation, however, there was dead silence. We felt a chill. Someone murmured something like "You can't have _that_ sort of thing going on." This audience of business people, which had accepted decriminalization, figuratively turned it's collective back on us. We had violated some hallowed but unstated rule. It was as if actually mentioning free markets, acknowledging they even existed, was unacceptably foul manners. What was going on here? -L. Reichard White, "Ayn Rand's Greatest Mistake, Why Almost Everyone Hates Free-Trade, and Where Totalitarianism Comes From"Thus whole villages, tradesmen, and workers of all kinds --including business persons -- dislike (to put it mildly) thecompetiton they have to deal with when free-trade is possible. Here's why: The consumers do not care about the investments made with regard to past market conditions and do not bother about the vested interests of entrepreneurs, capitalists, land-owners, and workers, who may be hurt by changes in the structure of prices. Such sentiments play no role in the formation of prices (It is precisely the fact that the market does not respect vested interests that makes the people concerned ask for government interference.) -Ludwig von Mises, Human Action A Treatise on Economics, Third Revised Edition (Chicago, Illinois: Contemporary Books, Inc. 1966), pg. 337 [available also from http://www.mises.org/humanaction.asp]Notice I didn't include _governments_ in with those groups whodon't like free trade. Mises above provides the key as to whygovernments may even "like" free-trade when he observed, "thepeople concerned ask for government interference." Free tradegives governments a big opportunity to make money - - - byinterfering with it on behalf of "the people (vested interests)concerned." What's clear is that large numbers of people have historicallyperceived problems with free trade. Since we're having thisdiscussion here at USAGOLD, it's clear this perception ofproblems with free trade persists to this day.Comming next: Free-trade II: The Good _So who DOES like freetrade?_Regards,Journeyman CoBra(too) (09/05/00; 15:17:22MT - usagold.com msg#: 36075) Re: oldgold - Schroeder wellcomes low euro! Hello - oldgold - please don't take me too seriously tonight- though the last "Schroder" who's made some sense was "Peanuts" - and I am a fan - of nuts - and as I'm trying to get to grips with this new currency in the making - it is, isn't it - in the making? Or is it in the un-making - thanks to petty socialist squabbles, hegemony and political influence in a more than ever fragile community - held together by economic needs and necessities by all, dependent on the whims of few more powerful - or better more equal? - Let's wait for Denmark's euro referendum later this month! - - and even if the Saudi's are regaling their banks to do business in the euro solely, within the EU - it only tells me they've had it with the $! I'm not the renegade you'll suspect from above - no - more like a burnt moth getting too close to the candle - though I'm a fan of open fire places too - cb2 Usul (09/05/00; 14:38:40MT - usagold.com msg#: 36074) Largest Qoran will require 12 kilograms of gold powder http://www.salamiran.org/Media/TehranTimes/990602.html#HLN34 Hmmm... wonder how they're getting on... finish in 2005? Usul (09/05/00; 14:28:02MT - usagold.com msg#: 36073) Saudi Arabia- You won't recognise it any more... http://www.metro-press.com/SAUDIARABIA/saudi.html What oil has become. Published - 23rd September 99"Saudi Arabia's oil boom days are over, Crown Prince Abdullah said earlier this year. And everything in the country is changing because of it..." oldgold (09/05/00; 14:18:53MT - usagold.com msg#: 36072) Key European Politicial Welcomes Plunging Euro A reality check. If they want the Euro to go down, they can hardly be in favor of higher gold prices. Euro Falls to Record vs Yen on Remarks From Germany's Schroeder By Mark Tannenbaum New York, Sept. 5 (Bloomberg) -- The euro fell to a new low against the yen as German Chancellor Gerhard Schroeder said he welcomed the currency's decline, sparking concern the views of euro-zone politicians may be at odds with the European Central Bank. The 11-nation currency touched a record against the yen for the second day in three, after Thursday's drop on concern an interest-rate boost by the ECB will crimp economic growth. Analysts say Schroeder's remarks yesterday contrast with those of European Central Bank officials, who have been trying to bolster the currency and say it is undervalued. ``People think when there's conflict between politicians and a central bank it doesn't do a currency any good,'' as it calls into question the bank's ability to conduct monetary policy independently, said Marc Chandler, chief currency strategist at Mellon Financial Corp. Investors ``are still looking for new lows in the euro'' in coming days, he said. Europe's common currency dropped to 94.070 yen, from 94.935 yesterday, and earlier sank to a record low of 93.765. The previous low, reached Thursday, was 94 yen. The euro fell to 88.85 U.S. cents, from 89.74 yesterday, after falling as low as 88.50 cents earlier. That's not far above its record low of 88.37, set Thursday. Two straight days of declines for the euro have more than erased the gains the currency staged Friday, after a report showed the U.S. jobless rate unexpectedly rose in August. The statistics boosted expectations the U.S. economy is slowing more quickly than previously expected, which could start to raise the relative appeal of euro-zone assets. `Reason to be Happy' Still, some economists said it's too early to say the U.S. is cooling off enough to lead investors to shift more aggressively toward Europe. The dollar is benefiting as investors think the U.S. is in a ``best of all possible worlds'' scenario, in which the Fed stops raising rates while still allowing the economy to grow robustly, said Ram Bhagavatula, chief economist at Royal Bank of Scotland Financial Markets. Other analysts said concern persists that euro-zone growth will be choked off by the ECB's move Thursday to raise its benchmark rate by a quarter-point, to 4.5 percent, to stem inflation from surging oil prices and the euro's decline. Still, the Schroeder comments helped sour the mood on the currency at the start of the week. ``The current euro-dollar rate is more of a reason to be happy than concerned,'' Schroeder said in a speech yesterday at a conference on doing business in Eastern Germany. `Statement of Fact' His remarks came the same day as Bank of France Governor Jean- Claude Trichet, who's on the ECB's 17-member governing council, said ``the euro is clearly very undervalued by most market participants.'' He spoke on radio station RTL. While the Schroeder comments contributed to euro declines, ``we view this as a statement of fact rather than any policy dispute with the ECB,'' Bob Sinche, Citibank's chief currency strategist, wrote in a comment today. He added that he expects the bout of euro strength seen last week to re-emerge in coming weeks. The yen was little changed against the dollar, at 105.86 per dollar, from 105.81 yesterday. It earlier fell as low as 106.55, on speculation Moody's Investors Service will downgrade Japan's credit rating soon, analysts said. Such speculation has continued to surface among traders and investors as Moody's has been reviewing Japan's ``Aa1'' credit rating for a downgrade since Feb. 17. It cut Japan's top-notch ``AAA'' standing in November 1998, saying the government was spending too much. A decision may come as early as this month, traders said. A Moody's spokesman declined to comment. TownCrier (09/05/00; 13:47:53MT - usagold.com msg#: 36071) WGC PRESS RELEASE: Gold derivatives growth unsustainable? http://www.gold.org/Gra/Pr/GoldDeriva.htm (excerpts)LONDON: Monday, 4 September 2000 - The rapid growth of the gold derivatives market in recent years is likely to slow in future. Limitations on gold lending by central banks and a slow-down in producer hedging will both contribute to a reduction in derivative market activities. This is one of several important conclusions arising from a detailed study of the gold market commissioned by the World Gold Council and published today.Lack of transparency and the different behavioural characteristics of the gold market to other commodity markets have hindered understanding of the market and the way it operates, and led in 1999 to the Council sponsoring a major research project into gold derivatives to obtain a better assessment of the market's size, scope, operation and effect.Among the main findings of the study are:--At end-1999, total gold liquidity (the amount of gold lent or on swaps) was 5,230 tonnes, slightly down from a peak of 5,500 tonnes in the immediate aftermath of the Washington Agreement at end-September 1999. Of this, 4,710 tonnes - some 90% - was supplied from central banks and other official institutions. Official sector gold liquidity more than doubled between 1990 (900 tonnes) and 1995 (2,100 tonnes) and doubled again between 1995 and 1999.--Central banks not covered by, or associated with, the Washington Agreement on Gold (WAG) have lent, overall, a far higher proportion of their gold reserves than central banks covered by the WAG. Prior to the Agreement the gold market assumed that potentially substantial quantities of gold could if required come onto the lending market from Washington Agreement signatories. However for the duration of the Washington Agreement (until September 2004), those central banks covered by WAG, and others informally associated with it, have agreed not to increase the amount of gold they lend to the market. There are therefore limited quantities of official sector gold - probably a maximum of 1,000 tonnes in practice - available to fuel growth in the lending market until 2004. This contrasts with estimated growth of 2,600 tonnes between 1995 and 1999. --On average, the official sector lends 14% of its declared gold holdings. However the proportion varies substantially from country to country. If the USA, Japan, IMF and major European countries that do not lend are excluded the proportion rises to 25%.--The bullion-banking industry has been subject to extensive restructuring in recent years. This has had a substantial effect on available credit. Banks' trading limits have declined in recent years and are currently collectively likely to total some 2.5-3.5m oz (75 to 110 tonnes) of combined short-term net exposure.--The mining industry is thus the greatest user of lent gold. Short speculative positions exist but appear to be of lesser size. The growth of derivatives has played its part in price discovery but cannot be isolated as the dominant factor.--Mining companies themselves are also facing several hedging-related challenges and a number of factors suggest that the peak of hedging is over. The Washington Agreement precipitated a review of hedging practices by both miners and bullion banks and there is a move away from the use of the more complex derivative products. The decline in exploration activity will affect future production and hence limit the scope and demand for hedging. Finally the introduction of the FAS133 accounting standard will also affect the choice of product.--No evidence was found of any collusive behaviour on the part of market participants to manipulate the price.[The full 196 page report is accessible from the link given above] OverHerd (09/05/00; 12:02:39MT - usagold.com msg#: 36070) Peter Asher (09/05/00; 11:47:27MT - usagold.com msg#: 36068) Hi Peter,Thanks for clarifying that thought, I guess I read it differently.Joe oldgold (09/05/00; 11:52:28MT - usagold.com msg#: 36069) Lease Rates If the Europeans really want to hike gold prices they can easily do so by cutting the supply of cheap bullion to the lease market. One year lease rates now are down to 1.3% -- about as low as they have ever been. A big gold rally is out of the question unless lease rates move up considerably.Never forget the old adage -- "watch what they do, not what they say." To date there is no solid evidence the Europeans really want higher gold prices. They are lending their gold to the bullion banks for next to nothing. Peter Asher (09/05/00; 11:47:27MT - usagold.com msg#: 36068) OverHerd (09/05/00; 11:23:56MT - usagold.com msg#: 36064) Read carefully >>> "Conceptually, it doesn't seem muchdifferent from using paper money instead of gold coins." <<<< She is not saying that conceptually, paper money is synchronized with gold coins.She is saying that electronic money is no different than paper money when used *instead* of gold coins.We agree with that! She does not, however, enlighten her readers as to the significance of that "Instead" oldgold (09/05/00; 11:45:02MT - usagold.com msg#: 36067) Fed secrets revealed UNCIVIL SERVICE: THE FEDERAL RESERVE AS A WORKPLACEOver the past two decades, America's private pension system has massivelyshifted investment risk to workers as employers embraced 401(k) plans andother defined contribution pension programs that let the whims of themarket - or the acumen of plan participants - determine an individual'sretirement benefit. Like the rest of the federal government, however, theFederal Reserve continues to provide its employees the security of aguaranteed benefit after retirement.Unlike the rest of the federal government, the central bank's definedbenefit pension plan has realized bountiful returns on its stock-richportfolio during the long bull market of the 1980s and 1990s. Because theself-financing Fed sets pay grades that far exceed the federal norm - andbecause employees' pension benefit can equal as much as 80 percent oftheiraverage salary during peak earning years - these heady portfolio returnshave helped fund some of the public sector's more comfortable retirements.So why are scores of the Board of Governors' longest-tenured employeessuingthe Fed over the management of their pension plan? And why, at aninstitution famed for its sternly hierarchical folkways and internalresolve, does this group of dissident plaintiffs include some of thecentralbank's most senior managers?...for the rest of FMC's new report, go to:www.fmcenter.org/fmc_superpage.asp?ID=408MILLIONAIRES MAKING POLICY:Speaking at the Federal Reserve's annual Jackson Hole conference on August25, Chairman Alan Greenspan noted "considerable unease" among somecitizens"about the way markets distribute wealth." Nevertheless, Greenspan andhiscolleagues have been served very well by these distributional mechanisms.According to the attached Financial Markets Center analysis of recentlyreleased financial disclosure statements, the five members of the Fed'sBoard of Governors saw their aggregate net worth jump by 17 to 20 percentduring the course of 1999....for the rest of an analysis of the governors new financial disclosures,go to:www.fmcenter.org/fmc_superpage.asp?ID=409...for the only online access to key portions of Fed officials' actualfinancial disclosure statements, go to:www.fmcenter.org/fmc_superpage.asp?ID=240 MarkeTalk (09/05/00; 11:37:57MT - usagold.com msg#: 36066) Knallgold Sorry, I can't answer your question about TG with a definite yes or no. But from what is happening with the euro sliding against the Dollar and on top of that rising crude oil prices (in Dollars), Europeans cannot be very happy with the current state of affairs. I smell intervention of some type. My confidential sources tell me that a showdown between America and Europe over the gold price will occur very soon. And it will correct what should have been done last September/October when gold spiked $80/ounce. Another sharp rise in gold would surely help the euro at this juncture. Knallgold (09/05/00; 11:28:35MT - usagold.com msg#: 36065) Here is TG post Trail Guide (09/03/00; 22:13:19MT - usagold.com msg#: 35971)(No Subject)Simply Me (09/03/00; 21:54:04MT - usagold.com msg#: 35967)Hello Simply Me,It just could be that it's being discussed with Mr. Clinton this week. I have to go now. Trail Guide OverHerd (09/05/00; 11:23:56MT - usagold.com msg#: 36064) Chances to bring the gold debate mainstream and discuss it with a genius. Chances to bring the gold debate mainstream and discuss it with a genius.People of the forum I've been reading posts here for a few years now and hold all poster opinions in high regard. I believe that it is time to take the debate to Main Street and start educating the people on the principles of sound money and explain how their economy has been highjacked. This may be one way of doing that.In the September 3, 2000 issue of Parade Magazine, the "Ask Marilyn" section. Marilyn Vos Savant is asked the following question "What do you think of the idea of electronic money and of living in a cashless society?"… Her reply in part is "Conceptually, it doesn't seem much different from using paper money instead of gold coins." Conceptually could be the key word here because we do not live in a conceptual world. If that were the case conceptually the paper gold market would always be synchronized with the physical gold market.Would anybody like to debate MS. Vos Savant on this matter? It's out of my league. She can be reached at:Ask Marilyn, Parade, 711 third Ave., New York, N.Y. 10017OrBy E-mail at marilyn@parade.com(Please include name, city and state)PS. Strad Master, that was an excellent performance the other night and I posted so about 15 minutes after it finished, I would love to hear more of your music if it is possible.Thanks,Joe Knallgold (09/05/00; 11:23:34MT - usagold.com msg#: 36063) @Marke Talk Uhh,didn't TG say "tomorrow,it (euro pricing) will be presented to Clinton"? MarkeTalk (09/05/00; 11:19:52MT - usagold.com msg#: 36062) Washington Politics to Meet Saudi Oil Reuters newswire just carried a story that President Clinton will meet with Saudi Crown Prince Abdullah tomorrow evening in New York for a discussion about increasing oil production. This meeting comes just four days before OPEC meets in Vienna to discuss increasing oil production. It is interesting that Crown Prince is the Saudi spokesman while King Fahd is in failing health. Once King Fahd dies, then the Crown Prince is the heir apparent. For anyone who has followed politics in the Saudi kingdom, all of the other princes were educated in the West--either at Harvard, Stanford or Oxford/Cambridge. And hence they are sympathetic to the concerns and demands of the West. Crown Prince Abdullah is the only prince who sports "Bedouin"-type thinking and who is openly hostile to the West. He is, in essence, an Arab nationalist who wants higher oil prices indefinitely. We shall see if Slick Willie's charisma can charm this gruff character. Maybe a veiled threat of letting Bad Boy Saddam loose on the region might convince him. How would you like to be a fly on the wall at this meeting?? beesting (09/05/00; 11:02:09MT - usagold.com msg#: 36061) (No Subject) Top Financial News Tue, 05 Sep 2000, 12:35pm EDTNational Grid to Acquire Niagara Mohawk for $8.9 Bln (Update5) By Catarina Aleix London, Sept. 5 (Bloomberg) -- National Grid Group Plc, owner of the power-transmission network in England and Wales, agreed to buy Niagara Mohawk Holdings Inc. for $8.9 billion in cash, stock and assumed debt,continuing an expansion into the U.S. that it began almost two years ago. National Grid bought New England Electric of Westborough, Massachusetts, in March for $4.7 billion in cash and assumed debt, and Eastern Utilities Associates of Boston for $1.03 billion in cash and assumed debt in April. National Grid owns and operates the overhead lines and underground cables that transmit electricity across England and Wales. It was formed in 1990 as part of the U.K. government's plans to sell the electricity industry to the public. Niagara Mohawk is selling its power plants to concentrate on the business of delivering electricity over its 24,000-square-mile power network, the largest in New York state. National Grid is being advised by N.M. Rothschild & Sons and Donaldson, Lufkin & Jenrette is advising Niagara Mohawk. wolavka (09/05/00; 11:00:55MT - usagold.com msg#: 36060) run up before close holding dec run up before close. SHIFTY (09/05/00; 10:57:35MT - usagold.com msg#: 36059) GOLD FIELDS http://www.goldfields.co.za/ GOLD FIELDS AND OUTOKUMPU ANNOUNCE 2.9 MILLION OUNCE PGE RESOURCE AT ARCTIC PLATINUM PARTNERSHIP IN FINLAND$hifty SHIFTY (09/05/00; 10:40:45MT - usagold.com msg#: 36058) Eight die in Australia ghost plane crash http://www.sjmercury.com/world/worldwire/docs/367690l.htm BRISBANE (Reuters) - Eight people were killed on Tuesday when a light plane crashed in Australia's remote northeast after flying 3,000 km (1,900 miles) across the continent on apparent autopilot.The plane set out with seven miners on a short flight from Perth to the gold mining town of Leonora, both in Western Australia, but authorities believe the plane depressurized, leaving the pilot and miners unconscious.Two aircraft tracked the Beechcraft King Air 200 twin-engine turboprop from near Alice Springs in central Australia before it crashed at about 2:10 a.m. (1510 GMT) on a property near Bourketown, in far northern Queensland state, authorities said.The plane did not respond to radio contact and traveled northeast across the vast outback, flying virtually in a straight line across three states before running out of fuel and crashing.Sons of Gwalia Ltd, one of Australia's largest gold producers, said seven of its employees who worked at Leonora were on the charter flight.``It has been confirmed that there were no survivors,'' company chairman Peter Lalor said in a statement.Initial local media reports said the Beechcraft was in the air for five to seven hours.``It would appear as though the airplane was on autopilot, certainly on heading hold and it would have maintained a constant heading until the aircraft ran out of fuel, at least on one engine anyway,'' said Barry Sargeant from the Australian Transport Safety Bureau.``It's consistent with some sort of a problem with the cabin pressurization system or oxygen system, (but) that's yet to be determined of course,'' he told Australian Broadcasting Corp (ABC) radio.A Queensland police spokesman said fog had prevented investigators from getting near the remote crash site during the morning.``A helicopter was going to be used to ferry people into the crash site but due to the weather... it appears we may not be able to use that now,'' police spokesman Brian Swift told ABC.Pilot Steve Patrick of the Royal Flying Doctor Service, who tracked the wayward Beechcraft over the outback for more than an hour until it crashed, said it was flying at 25,000 feet with no life evident on board.``The plane was slowly descending the whole way and then it descended into the ground,'' he told the ABC. ``There was an explosion on impact, then there was a fire straight after.''Australian officials likened the tragedy to the jet crash which killed golf champion Payne Stewart in the United States in October last year.Stewart and five others died after their Lear 35 twin-engine jet flew for hours across the U.S. with no one at the controls, finally crashing in South Dakota after running out of fuel. beesting (09/05/00; 10:24:12MT - usagold.com msg#: 36057) Sharefin # 36045. Great Post Mate!So Glad to see you here!!!beesting. oldgold (09/05/00; 10:21:32MT - usagold.com msg#: 36056) Sharefin The World Gold Council has got to be the most incompetent and ineffective trade group of all time. They are like sheep being led to the slaughter. wolavka (09/05/00; 10:21:29MT - usagold.com msg#: 36055) Texas burns up Move to Maui. House of sun and Gold. wolavka (09/05/00; 09:38:22MT - usagold.com msg#: 36054) can't hold it down forever No way they can hold gold back, it's gonna go, wake up call.Time has come to hold someone responsible. Al Fulchino (09/05/00; 09:35:52MT - usagold.com msg#: 36053) For you Black Blade hope it pastes well: MSNBC NEWS SERVICES PARIS, Sept. 5 — Petrol shortages crippled service stations around France on Tuesday as truck owners protesting against rising fuel prices tightened their grip on supplies and urgent high-level negotiations failed to find a compromise. CAR DRIVERS queued bumper-to-bumper at stations selling petrol — some under strict quotas imposed by local authorities — or cruised around town searching for more supplies. Late-night talks between Transport Minister Jean-Claude Gayssot and the truck owners broke up without agreement, with the protesters demanding cuts in fuel taxes of about 20 percent. Gayssot was only ready to offer about half that amount. "We didn't reach agreement because the gap separating us on the indispensable cut in fuel tax is still too wide," Rene Petit, head of the Federation of Road Hauliers (FNTR), told reporters when the talks broke up after midnight. Interviewed on France Inter radio on Tuesday morning, Gayssot said, "I hope things will unblocked soon." GROWING SUPPORT FOR PROTEST The truckers’ protest, which has been joined by farmers, ambulance drivers and other workers groaning under rising fuel prices, started on Monday on the heels of a fishermen's blockade of ports which stranded thousands of British tourists last week. That movement ended when the government agreed to compensate fishermen for a 75 percent rise in the cost of untaxed fuel. The protesters, who simply have to park their trucks outside the entrances to refineries and fuel depots to cut off supplies, have blocked almost all wholesale fuel sources in France, oil industry associations and truckers groups said. Many filling stations have run dry, especially in cities in the east and south-east such as Lyon, Marseille and Grenoble. By Monday evening, thousands of vehicles had joined the protest that affected 80 facilities throughout France, she said. In the area surrounding the southern port city of Marseille, 30 to 40 percent of gas stations had run dry, the regional police headquarters said. In eastern France, many drivers headed to neighboring countries to buy gasoline. EMERGENCY SUPPLIES ONLY The prefect (government representative) in Lyon ordered 12 petrol stations to turn back motorists and supply only doctors, hospitals, emergency services and firefighters. Prime Minister Lionel Jospin promised at the weekend to study ways of easing the impact of soaring fuel costs on truckers who pay diesel fuel between 4.50 francs ($0.61) and five francs a liter. • MSNBC Cable coverageWatch MSNBC Cable for coverage of this and other stories Among the crippled installations were major refineries in Feyzin near Lyon, Donges near Nantes in the west, Reichstett near Strasbourg, Fos near Marseille and Gonfreville and Grand Couronne in Normandy. The protesters were also blocking river oil terminals in Strasbourg and Lyon, and stopping trucks delivering fuel to the airports of Mulhouse-Basel and the Riviera capital Nice. The Associated Press and Reuters contributed to this report. wolavka (09/05/00; 09:11:25MT - usagold.com msg#: 36052) watch grains fill gap stuff a dollar in your mouth, tastes good. goldfan (09/05/00; 09:02:58MT - usagold.com msg#: 36051) dollars for oil Question: As the US$ Price of oil rises, other countries have to increase their prices for goods sold to the US to get more $ to pay for oil, n'est ce pas? What is the logical outcome of this recursive cycle, as the POL inflates, everything inflates??Thanks for any commentsGoldfan USAGOLD (09/05/00; 09:02:48MT - usagold.com msg#: 36050) Euro Crisis Looming? http://www.usagold.com/Order_Form.html DAILY COMMENTARY (9/5/00) www.USAGOLD.com . . .Gold weakened overnight as the euro plummeted and oil soared. Though such incongruities might befuddle the reader at first glance, one should keep in mind that Europe must buy the dollar first, then oil -- a situation which translates to the citizens of the EU depressing their own currency in order to buy crude. Forex speculators understand all too well the direct line relationship between oil prices and euro value, play the hand dealt them, and exacerbate the euro tumble on nearly a daily basis. The Europeans do not find this comforting, and the way things are going we wouldn't be surprised to see the EU slip into a crisis mode if things don't improve. To be sure, over the long Labor Day weekend in the United States, the French central bank, in the person of governor Jean-Claude Trichet, blasted "speculators", according to a weekend Reuters report, and accusing them of "flagrant underestimation" of the euro's value. This euro weakness, along with weakness in the yen and Swiss franc against the dollar, is being blamed by analysts for gold's weakness this morning. The European and Asian gold markets were quiet this morning though under the circumstances one can only wonder why. It will be a light report week with Productivity on Wednesday being the most important. We also have Consumer Credit on Friday. That's it for today. We'll see you here tomorrow. Had it with the tired, one-sided anti-gold financial press mentality? If you want a fresh view of the gold market go to the link above for an information packet on gold ownership which includes our widely read newsletter, News & Views: Forecasts, Commentary & Analysis on the Economy and Precious Metals. We offer solid commentary in a rapid fire, no-nonsense, bullet format designed for busy people who want gold related news and opinion without the unnecessary fluff. And stay tuned here for our Daily Commentary. Please call Marie at 1-800-869-5115 or click above to request News & Views as well as our helpful introductory information packet for gold investors. CoBra(too) (09/05/00; 08:55:49MT - usagold.com msg#: 36049) My typo's are getting out of hand - "my take" ... sorry ... So is the $-Index - up again to almost new records - +0,95 and the euro - close to all time low 88,35 - only the POO is slowly gaining ground, while POG is pounded, or is it "'ounced" in these days of "virtual" supply? cb2 714 (09/05/00; 08:51:01MT - usagold.com msg#: 36048) Aristotle. you asked... "Please consider what it is that underlies this fiduciary media we call the dollar, and then accordingly, how is it that the fiduciary dollars will be "devalued" against this same underlying element--whatever it is?"Psychology underlies the creation, and destruction, of all money, yes? In some parts of the world, in a different age, men found seashells desirable as a medium of exchange. Here in America, some natives took beads and trickets to be money. And when the United States was in the process of being founded, the "continental" was created by the government as a medium of exchange, but failed when people no longer believed in it and what it promised, leading to America's first financial crisis. The continental is, indeed, an interesting study. The crisis led to the creation of a stable US currency. Money is a game of confidence.And so it is with gold and the US$. Gold has a very long history as money. Thousands of years. And this is its strength. The US dollar, once based on gold, began to be separated from it by the Gold Reserve Act and the subsequent administrative regulations. The GRA was part of a larger movement around the world to weaken the gold standard and eventually do away with it. Why? The gold standard limited the creation of money (there's only so much gold, yes) and inhibited the growth of credit. Note that the European powers went off the gold standard temporarily when WWI began, because it limited their ability to wage war by limiting their credit. So the GRA took gold out of circulation in America, thus ending its role as a currency, but gold still retained its monetary qualities by virtue of its being held in the CBs as a reserve asset. And the US$ evolved, through a series of agreements (and its isolation from the ravages of WWII), into what we have today...the world's reserve currency. And CBs came to realize the by holding US$'s, they could utilize interest-bearing instruments to earn an income on that reserve asset that was not possible for their gold reserves until the rise of derivatives in the last 20 years. But by then it was too late for gold. The US$ carried far more weight in the world's monetary reserves, and more importantly, in world trade, than gold ever could. The upshot of all this is that ALL money, including gold, is a commodity. That is, it is something useful (see dictionary). And in a credit economy as we live in now, the US$ and paper is far more useful than gold. But like any commodity, it value fluctuates on supply and demand, as we saw in the early 70's with the US$'s devaluation, which was highlighted by oil prices. But it was not caused by oil prices, or the oil-for-gold trade (which is very small). It was caused by a LOSS OF FAITH in its value. Nothing more, nothing less. The dilemna of CBs who want out now is that they are married to the dollar, by virtue of their holdings, and it would be a very expensive divorce. As for fiduciary gold contracts, they are NOT gold contracts. They are dollar contracts. The gold business today is like this: take one part gold, ten (or twenty, or fifty) parts dollars, throw them into a big pot, like Comex, stir well, at a constant valuation, and, voila, you have the paper gold trade. All that it takes to keep this trade going is a relatively constant valuation between gold and the US$, and some physical to cover the interest on these contracts. It can go indefinitely, as these contracts can generally be rolled over. Let the valuation between the dollar and gold change, and the short-covering will be massive, lending itself to a rapid rise in POG, a hint of which we saw last September. And with the world's CBs continuing to sell off the gold reserves and a real lack of interest in gold on investors part, I cannot see POG rising before the US$ is devalued.Why do I think the US$ will be devalued at some point? Look at the US trade deficit. One can only promise the moon for so long before there is a loss of faith, a loss of confidence. And that is the downside to a credit economy.***************************************************A friend of gold is a friend of mine.... CoBra(too) (09/05/00; 08:28:50MT - usagold.com msg#: 36047) Re - Sharefin's tace on Jessica Cross - re gold derivatives Sir Sharefin, I can't agree more with your latest post and thank you for posting it here as well, I guess. The numbers add up to stunning levels of shorts, if you take Reg's count on BB gold derivatives into account. So, even if it's only leased - meaning still carried on the books of CB's- the nature of these derivative instruments means that somebody in the chain - CB(leased)-BB-Hedge Fund or other sold physical into market, leveraged the proceeds to higher yielding financial "assets"- a word, which may become obsolete in the future- and the BB's still hold the obligation to deliver the physical back to CB's. Physical gold, a hard asset not multiplying at the whim of anybody's "creative" credit creation schemes - and according to the above - has "virtually", or is it in hard reality owed to CB's, which can never hope to retrieve it. ... So far for AG's counterparty risk statement, that CB's stand ready to fill any void, or kill any rally in gold ... and since you're from the land of Oz you'll understand the last lines of a WWII song from emanating from your great country: " As we stand a'loof They can't sh.t at on the roof The only place clean In our latrine!" As I've been following your posts for a couple of years as of lately I didn't find time to scroll Kitco for the bones. Though I've been perusing your website quite often - what great work of putting it together - Thank you and best to you -cb2@ MK - Always a pace ahead of the pack - great to have direct (delivery!)access over on the old continent to some of your outstanding offers! Tku and all the success, which is due to you - cb2 wolavka (09/05/00; 08:08:22MT - usagold.com msg#: 36046) buy back in dec gold 278-279 Sharefin (09/05/00; 07:13:48MT - usagold.com msg#: 36045) The Financial Gold Storm http://www.sharelynx.net/Markets/Master.htm Gold derivatives market growth to declinehttp://business.iafrica.com/news/sabusinessnews/60168.htmIn derivatives you're either long or short.Yet Jessica states "The derivative market in gold by end-1999 was represented by a total of some 5 230 tons of metal," Cross told industry experts gathered for a presentation of her research. Of this, 387 tons were implied short positions, compared with 393 tons out of a lesser total 4 904 tons at end-June last year."----What about the other 4,500 tons?---"One factor that distinguishes gold from other commodities is that there is a large stock of metal above ground - much of it in central bank vaults - with no natural buyers. This surplus has become the basis for a large and sophisticated derivatives trade."-- How many times over-subscribed were the London auctions?Continually time after time.With even miners stepping up to buy cheap gold.How come if there's no "Natural Buyers" that we're seeing one after another country selling off their reserves?Never a mention of the buyer but always the sellers are loudly announced.For every seller there's a buyer and obviously they're happy to take it up at these prices.How many tons this year sold by this method?If the buyer's weren't there the price would plummet or no sale would take place.------"The gold derivatives market, which has doubled in size twice in the past decade and reached a peak of 5,500 tonnes late last year,"--Perusing the Derivatives report from the OCChttp://www.occ.treas.gov/deriv/deriv.htmFirst quarter 2000 -- 184 KB PDFhttp://www.occ.treas.gov/ftp/deriv/dq100.pdf---Taking one ton of gold to be worth approx $10,000,000, we can see that it's presumed that the total derivative markets on gold are in the vicinity of $55,200,000,000 or 55 billion.Yet from the OCC derivatives sheet they total up the derivatives on gold as being the following from page 16:96Q1 - 63.3 billion96Q2 - 59.3 billion96Q3 - 69 billion96Q4 - 61.8 billion97Q1 - 62.6 billion97Q2 - 56.6 billion97Q3 - 66.1 billion97Q4 - 68.8 billion98Q1 - 70.5 billion98Q2 - 75.6 billion98Q3 - 79.7 billion98Q4 - 73.6 billion99Q1 - 72.8 billion99Q2 - 67.4 billion99Q3 - 91.3 billion99Q4 - 92.5 billion00Q1 - 99.5 billionSo from following through these numbers we can see that it's only in the last year that the amount of derivatives have expanded considerably, with the latest numbers showing no slowdown.With the greatest increases showing in under 1 year contracts and then 1 to 5 year contracts.Using our rate of $10,000,000 per ton these figures would account for almost 10,000 tons.Please note:*Note: Figures above exclude foreign exchange contracts with an original maturity of 14 days or less, futures contracts, written options,basis swaps, and any other contracts not subject to risk-based capital requirements.*Note: Currently, the Call Report does not include maturity breakouts for credit derivatives. Credit derivatives have been excluded here.Now if we have a look at the three biggest banks holding gold derivatives we see that: page 26MORGAN GUARANTY holds approx $36,300,000,000 (1/5 of it's entire asset base)CHASE MANHATTAN BANK holds approx $31,500,000,000 (1/10 of it's entire asset base)CITIBANK holds approx $11,800,000,000 (1/33 of it's entire asset base)For a total of $79,700,000,000 in gold derivatives.With a total for all US banks at $95,542,000,000 Which adds up close to my earlier guess.Almost double what is being claimed And this is only in the US.We then peruse Reginald Howe's excellent money trail and see on this page - about 3/4 way downhttp://www.goldensextant.com/commentary12.htmlDeutsche Bank holding $51,200,000,000 or 4934 tonnesDresdner Bank holding $15,300,000,000 or 1472 tonnes UBS OTC holding $74,100,000,000 or 7151 tonnesCredit Suisse holding $18,000,000,000 or 1736 tonnes The total of the above US & European banks comes out to a massive 28,243 tonnes.Almost five fold what is being claimed and all the data shows that these numbers are on the increase (up to 1Q 2000) What about the English gold haters???-------------The fact that gold loan rates are normally well below other interest rates has encouraged miners to hedge ( sell future production through forwards and options ) because they can receive more than by selling on the spot market. ----We can see in the below lease rates that leading up to the POG breakout lease rates where rising considerably.http://www.cairns.net.au/~sharefin/Charts/GoldLeasemt.gifPresumably the rising rates were a product of traders reviewing their positions and readjusting their positions.Now we see a benign lease rate which seems to indicate that few are doing little with their positions and there's little interest in leasing more gold.(If they can't entice people to lease their gold then they've got to drop their rates to become more attractive.)-----In the first half of last year, as the gold price was tumbling, some gold enthusiasts spoke of an international conspiracy to depress prices. But as Ms Cross states: "No evidence was found of any collusive behavior on the part of market participants to manipulate the price." ----The above statement is as much bunk as the above assertions.It's well know amongst the industry that many of GATA's suppositions are in fact correct.One only need to watch the POG on opening and to observe the traders doing the bidding.Also observing the massive build-up in derivatives one can sense that an awful lot of money and effort has been put into holding the price of gold down.----Most derivatives trading ( 60 per cent ) was by the miners themselves. ---The above numbers released by the banks seem to make the above statement ludicrous.Does she infer that miners are carrying 30,000 plus tonnes of derivatives???----With a few notorious exceptions, hedging has been so beneficial to miners' profits that it has allowed them to defer the full consequences of falling prices. ---It appears that there has been a definitive attempt to force the price of gold lower.I would hazard a guess that miners have been forced into hedging because of the price falling.Had not the price been pushed downwards then there would have been little need for hedging so extensively.So the miners have been forced into hedging just to stay alive.----Ms Cross suggests this has "more than likely delayed mine closures, probably delayed mergers and the restructuring of the industry and . . . encouraged expansion of the reserve base". ---I would suggest that goldmines forced to run on low gold prices have been forced into closing mines earlier, high grading and agreeing to unscrupulous deals being forced upon them by the banks.With little surplus cash to run on there's been little exploration in compression to the earlier years around 1994 - 1996 when the gold price was rising and every miner was drilling and buying up as many prospective tenements as they could.We can well see in the last few years how many miners have been forced out of gold mining and to seek more lucrative returns by turning to internet services.Many miners have been beaten back to such levels that they cannot raise the necessary capital to explore and develop potential mines.Back in 1996 there were dozens of small to medium size mines opening for production.Now in 2000 only the big cashed up companies can afford such luxuries.Now we're looking at a mining base where many of the smaller companies have folded or moved on.Resources have been picked over by high-grading so that some companies will be faced trying to extract profits from poorer grade ore with rising costs.Having to contend with rising inflation and over priced fuel.Many companies have been discounted (due to abysmal performance) to such an extent that their reserves & cash assets are worth far more than their scripts.Takeovers are now on the increase as the few monster capitalized companies are moving around and picking up what's left of many fine companies for cents in the dollar.The industry has basically been wrecked - global production is currently fallingAnd all that will be left of many small functional companies will be taken up by the remaining behemoths.I intrigues me how the World Gold Council can release such bunk with incorrect facts contained if not for the purpose of covering up what is happening within these markets.I feel that they should be taken to task for this and the real truth should be released.Many small third world countries have suffered and will continue to suffer due to the negligent actions of the industry in looking after itself.And in the long run the few companies that will weather this financial gold storm well will be the biggest US Gold companies.Swallowing up all and every cheapened asset that has been forced in price down to the bedrock.It almost appears like an American conspiracy!!!!! Christopher (09/05/00; 07:03:06MT - usagold.com msg#: 36044) Saudi to Euros! Even those of us who are situated at the back of this classroom can not help but notice that this seems to be of great importance, an ominous death knell of the mighty Dollar. Is the end so soon upon us?Trail Guide, which way do we go?Christopher Black Blade (09/05/00; 06:49:10MT - usagold.com msg#: 36043) "Morning Wakeup Call - On the Road" Sources: Financial Times and theminingweb Gold miners still hedging betsBy Gillian O'ConnorPublished: September 5 2000 02:41GMT | Last Updated: September 5 2000 06:19GMTThe rapid growth in the gold derivatives market, in which miners Ashanti and Cambior ran up heavy paper losses last year, has peaked and derivative contracts, used by mining companies to protect and improve revenues, are becoming less complex. But miners are likely to continue hedging, despite the wave of anti-hedging sentiment that followed last year's price spike. These are some of the conclusions of a study by Jessica Cross of consultants Virtual Metals, published on Monday by the World Gold Council, a marketing organisation founded and funded by some of the largest gold mining companies. One factor that distinguishes gold from other commodities is that there is a large stock of metal above ground - much of it in central bank vaults - with no natural buyers. This surplus has become the basis for a large and sophisticated derivatives trade. The gold derivatives market, which has doubled in size twice in the past decade and reached a peak of 5,500 tonnes late last year, has thrived because central banks are willing to lend metal cheaply to earn at least some interest on this part of their reserves. If they could not do this, more might be tempted to sell, given that central bankers are increasingly questioning gold's role in reserves. The fact that gold loan rates are normally well below other interest rates has encouraged miners to hedge (sell future production through forwards and options) because they can receive more than by selling on the spot market. Hedging has become a way to supplement miners' profits, not merely protect them. This accelerated selling has helped depress spot prices, while low gold interest rates have encouraged hedge funds and others to borrow gold cheaply and invest in higher yielding assets. In the first half of last year, as the gold price was tumbling, some gold enthusiasts spoke of an international conspiracy to depress prices. But as Ms Cross states: "No evidence was found of any collusive behaviour on the part of market participants to manipulate the price." Most derivatives trading (60 per cent) was by the miners themselves. With a few notorious exceptions, hedging has been so beneficial to miners' profits that it has allowed them to defer the full consequences of falling prices. Ms Cross suggests this has "more than likely delayed mine closures, probably delayed mergers and the restructuring of the industry and . . . encouraged expansion of the reserve base". After last year's price spike, which followed the Washington agreement in September by European central banks to limit gold sales and loans, sentiment turned against hedging - particularly some of the high risk- high return "exotic" products, blamed for aggravating problems at Ashanti and Cambior. In February, several producers foreswore new hedging, which produced another price spike. Ms Cross says the switch towards "plain vanilla" products looks set to remain, but will pose problems for both miners and bullion bankers. Miners cannot afford to give up hedging, but their profits subsidy will shrink. Meanwhile, those with low credit ratings may find premiums loaded against them - assuming the banks are unable to impose margin limits more generally. Gold Derivatives, by Jessica Cross. Available from the World Gold Council, +44 (0)207-766-2709.Black Blade: If a Au company must sell forward to exist, then they have no reason to be in the business. I only bet on unhedged, profitable, largely debt-free and growing Au companies like Harmony (HGMCY), Franco-Nevada (FN), and Goldfields (GOLD). The most profitable Au companies are all unhedged with perhaps the exception of AngloGold (AU). I think that these companies that forward sell (short) their product have no confidence in their product. If they have no confidence in their product, why should anyone else? They should take a very close look as to why they are in business and reread the fine-print in those derivative contracts. Yeah, forward sales were a stellar success for Ashanti and Cambior! If you got Au companies that are hedged, then tread on at your own peril. I'm only going with the unhedged companies above and physical. If investors bailed out of the forward sold companies, then they would hopefully get the message that investors want a profit, not just tread water without gains from a future rising POG. Gold producer hedging is set to contractGold producer hedging could well contract in the next few years, according to a study on the gold derivatives market for the World Gold Council. The trend change, which is the first in fifteen years, indicates that exploration and the mining of new gold projects could slow down markedly unless the spot price of gold rises substantially. But since there are still huge above ground central bank and private inventories of gold, the contraction in hedging will not be sufficient to boost the gold price, according to the study. Both jewellery and investment demand must grow to achieve this aim. Jessica Jacks head of precious metals consultants, Virtual Gold and an authority on gold derivatives, conducted the study on behalf of the council. She calculates that the amount of gold in the lending and swaps market i.e. total liquidity in the gold derivatives markets, at the end of December 1999 was 5 230 tons and 90% of the supply came from central banks. The gold derivatives market has doubled every five years, but growth is likely to decline in coming years, mainly because mines will cut back on hedging, contends Jacks. At the end of last year, the nominal hedge book of the mines totalled 4,038 tonnes or 158% of total 1999 output. This compares with 3 908 tons in June 1999 and 3,048 tons in December 1998. But net hedging, as a result of reducing and reinstating hedge positions within a contract period, was a much smaller 3,021 tonnes at the end of 1999. North America represented one third of the hedge book, followed by Australia nearly 30% and South Africa almost 25%. Jacks concludes that speculative bear sales or purchases in the derivatives market could accentuate volatility and upward or downward movements, but do little to alter trends. She estimates that the net short positions of banks, hedge funds and other speculators fell to 394 tons or 7.5% of the total derivatives position at the end of December last year. In June last year, net bear positions were a much higher 647 tons or 13% of the total. That contributed to higher volatility and the sharp short covering third quarter rally, but the greater proportion came from mines covering hedge positions. Certainly, that small percentage is insufficient to drive down gold for long periods and cannot be the cause for the miserable performance of gold in the past decade. Her research findings suggest that a "number of fundamental factors are likely to precipitate a change in the international gold hedge book". First, the average realized price on hedged gold of marginal producers in North America and Australia are not covering costs of production. Thus producers will be discouraged from borrowing gold from central banks and using the proceeds to finance projects. Second, the sudden surge in prices in September and early this year are also discouraging producers to sell production forward i.e. hedge via exotic derivative instruments. This limits the mines from selling forward to finance future projects. Margin calls are a major disincentive. Third, the introduction of the new FAS133 (US Financial Accounting Standards Board Statement 133) accounting system is another deterrent against off balance sheet hedge transactions.Jacks says that the huge above ground inventories and dearth of investment demand has created a tendency where the gold derivatives market favors the short (bear) side of the market. Had investment demand been higher, derivatives participants would have traded on the "long" i.e. bull side of the market. In short, the tail isn't wagging the dog. By: Neil Behrmann Black Blade: A slightly different take on the same study. As the hedgers drop like flies as the cost of production remains high and the companies high-grade their deposits, the profitable unhedged companies can pick over their carcasses for the best assets and the bullion banks are left holding the bag for the forward sold hedges (remember Dakota Mining?). One can also wonder that if Au drops, then why wouldn't some companies buy physical cheap and unwind some of the hedge-book for a quick and easy profit (much like AU and GOLD did last year at one of the BOE auctions)? Meanwhile, I'm still long the best companies and physical Au, Ag, Pt, and some numismatics. Meanwhile, before I head out, NY Crude Oil is up +$0.62 at $34.00/bbl on its way to $40.00/bbl and beyond! Distillates are also looking strong! Au is off $1.40, Ag off 2 cents, Pd (why do I bother? It's a dead market) is down -$8.00, and Pt is up +$2.00 and continues to bounce around $600.00. Markets look about neutral at the start. I'm on the road, and will try to keep up with all the excellent posts for the next few days.Leigh (#36039): I saw that last night. I wasn't sure if this is the prelude to a switch from the dollar to Euro for oil that has been alluded to by FOA and Another. Could get interesting, yes? Maybe FOA/TG or even Another could tackle this in more detail if they get an inside look. Cavan Man (09/05/00; 06:44:47MT - usagold.com msg#: 36042) Rams 41/Broncos 36 MK-The Broncos will definitely be a contender this year and I thought Griese looked teriffic!However, since a tie is like, "kissing your sister", as we used to say in the neighborhood, I look forward to our next meeting and cup of coffee. Kind regards....CM nickel62 (09/05/00; 06:25:30MT - usagold.com msg#: 36041) THE REAL REASON THE END OF THE GOLD MANIPULATION IS COMING!!!!!!! The political flexibility of Rubin/Goldman Sachs et all to manipulate the US dollar higher by pounding the base it is measured in down(gold spot price)is going to get harder to maintain as the awareness of the political heat growing on the damage being done to US manufacturers and the labor that works in manufacturing focuses attention on the manipulation of the US dollar and gold. See story below for simple understanding of why they are manipulating gold.It is that most of the supporters of the Democrats benefitted from a strong dollar policy. Wall Street bubble beneficiaries and Hollywood moguls and Dot com/High technology manufacturers whose ability to raise billions through stock option and share issusance scemes overcame the negatives of higher US prices, especially since their costs were largely from manufacturing in China and Taiwan. THe largely republican US based manufacturers were sacreficed in the name of the Clinton/Rubin good times floated on a sea of paper money and a tightly manipulated gold price that gave "value" to the US dollar by comparison. Top Financial News Tue, 05 Sep 2000, 7:57am EDTU.S. Economy: Some Companies Pay For Strong Dollar, EconomyBy Tammy WilliamsonWashington, Sept. 5 (Bloomberg) -- The euro's 12 percent drop against the dollar since January 3 has beaten up on shoemaker Reebok International Ltd. along with other U.S. companies selling auto parts, chemicals and just about everything else in Europe. The decline in the European currency, which traded at a record low of 88.37 cents last week compared with $1.03 on January 11, means a pair of training shoes selling for 87 euros in Germany this year was worth anywhere from $77 to $90. The cost in exchanging euros for dollars eroded Reebok's sales by more than $10 million in the quarter that ended June 30 compared with a year earlier. Reebok's example underscores a paradox of the record economic expansion that has kept the dollar rising and made U.S. investments attractive to overseas investors. Even as the dollar's strength has helped keep inflation in check by holding down the cost of imports, dozens of companies across a range of industries are paying a price through diminished earnings. ``Despite the economy slowing a bit this year, it's still healthy and vibrant and we still have a strong U.S. dollar,'' said Jake Dollarhide, vice president and portfolio manager of Fredric Russell Investment Management Co. in Tulsa, Oklahoma. ``U.S. companies whose sales are dependent upon European countries -- their profits will continue to be reduced or hurt by the weak euro.'' Goodyear Tire & Rubber Co. received less for tires than it would have without the slump; Whirlpool Corp., less on its appliances; and Hercules Inc., less on its paper-making chemicals. Reebok's rival, Nike Inc., also had to sell more cheaply. In all, 206 companies in the Standard & Poor's 500 index did business in Europe last year, according to S&P CompuStat, a database. Reebok and Nike Reebok, based in Canton, Massachusetts, reported July 25 that its worldwide sales of the Reebok brand in this year's second quarter were $559.6 million, down 1.8 percent from $570.1 million in the second quarter ended June 30, 1999. The company said sales would have grown by $1.6 million without currency fluctuations. Nike reported that its European revenue would have grown 23 percent in the quarter ended May 31 without the change in the euro. Instead, revenue grew 8 percent. U.S. athletic shoe companies are competing for a rising European market and against Germany's Adidas-Salomon AG. The strong dollar may be spelling deeper trouble for U.S. companies. Since the end of June 1995, the dollar has gained as much as 24 percent against the currencies of its trading partners and most recently was 21 percent higher. Manufacturing Weak ``The U.S. is losing market share because the dollar's high,'' said Robert Mellman, an economist with J.P. Morgan Securities in New York, in an interview. ``You can see that in the auto industry, where imports are rising. You also see it with producers of steel and commodity chemicals.'' The growing strength of the dollar has aggravated the decline of U.S. traditional manufacturing at the same time U.S. production of chips, communications equipment and computers has expanded, Mellman said in a recent analysis. The last Federal Reserve report on industrial production showed that excluding the manufacture of computers, semiconductors and communications equipment, output rose 0.1 percent in July, compared with 0.4 percent overall. ``Whether high-tech manufacturing can remain immune to the effects of an elevated dollar is an obvious and important issue,'' Mellman said in his report. Consumer Spending U.S. spending on consumer goods has grown between three times and four times as fast as production since the mid-1990s, the study says. Overseas companies are filling the gap. While part of this reflects the underlying trend of moving mills and factories to lower-cost sources overseas, the appreciation of the dollar has played a role -- especially in the rising import share of foreign- made autos and parts, Mellman said. Volkswagen AG, Europe's largest automaker, is among the overseas companies gaining a larger share of the U.S. market. The company reported Friday that U.S. sales of VW-brand autos rose 5.8 percent in August, compared with a year earlier, on record sales of Jettas and Passats. Sales by the Audi luxury unit gained 10.7 percent. Audi is having its best-ever year in the U.S., with sales up almost 33 percent in the first eight months of 2000. A reason for the attractiveness of the dollar is the record U.S. expansion combined with the Fed's target lending rate for overnight loans between banks of 6.5 percent -- the highest central bank benchmark rate among the Group of Seven large industrial nations. European central bankers last week raised the main refinancing rate a quarter point to 4.5 percent to keep inflation in check. The Outlook The euro gained against the dollar on Friday because reports showed U.S. unemployment rose and U.S. manufacturing declined in August -- both signs of cooling. Traders nonetheless expect the euro's rise to be short-lived because investors are still more confident about economic growth in the U.S. than in the 11-country euro region. ``European investors will be attracted to the U.S. companies, possibly leading to more funds flow from Europe to the U.S.,'' said Shigeru Hashimoto, foreign exchange manager at Sanwa Bank Ltd. In Tokyo. While currency problems aren't new, the decline in the euro - - introduced in January 1999 and originally trading at $1.17 per euro -- caught many companies off guard. ``Most investment houses had expected the euro to strengthen last year and this year,'' said Marc Chandler, chief currency strategist at Mellon Bank in New York. Hedging Didn't Work That's a reason fewer companies benefited from such hedging activities as buying Eurodollar futures or entering into custom- made derivatives contracts. Global companies do get benefits from financing business or purchasing goods and services in local currencies. McDonald's Corp. buys most of its cheese slices for European burgers from Golden Vale Plc, based in Ireland, which uses the euro as its currency. McDonald's also reported in July that a stronger Japanese yen ``partly offset'' the damage from the weaker euro, Australian dollar and British pound. The difficulties for U.S. companies could ease, analysts say. The growth differential between the U.S. and its trading partners should disappear in 2002, according to analysis in August by Chase Securities Inc. If cooler economic growth in the U.S. keeps interest rates from rising, foreign currencies could strengthen. ``At that point, U.S. minivans, SUV's, and trucks become more attractive abroad,'' said Chandler. ©2000 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks. LeSin (09/05/00; 06:19:13MT - usagold.com msg#: 36040) Euro Use @ Leigh Leigh Thank you for the reminder. The announcement of the use of a single European Currency 'Euro' instead of the 11 individual currencies was known. However as you so stated - IT IS UPON US. Imagine, soon every Country in the World will be making similar announcements as did the Saudia Arabians. They have a need to lead because of Oil Settlements and to get their houses & Gold Stores in order quickly. FOA/TG & Another, I trust, can comment so much better than I on this matter? Please Sirs? I am certain that we will here more from them about this subject soon and at an ever increasing frequencies. "S"Note: The wild Conversion Rate Swings this morning EURO v US$ v Yen. Swings making Precious Metals look increasingly STABLE, yes. "S" Leigh (09/05/00; 05:39:51MT - usagold.com msg#: 36039) Saudis To Use Euro Currency http:www.kitcomm.com/cgi-bin/comments/gold/display_short.cgi I'm surprised no one has remarked on Caper's article from last night:Caper (Makin Da Switch) ID#277242:Riyadh set to switch to euroRiyadh (Reuters) - Saudi Arabia has issued a circular to all chambers of commerce in the kingdom directing them to stop using various European currencies and to switch instead to using the single European currency, the euro.The Commerce Ministry said in the circular obtained by Reuters yesterday that the Saudi Arabian Monetary Agency, or central bank, would start using the euro ($0.891) from September 13 in all its foreign currency accounts instead of the individual currencies of the 11 countries in the euro zone."We hope that you will notify all chambers of commerce and industry members...to stop using the currencies indicated in all payment orders...and to use the European currency, the euro, instead," the circular said.The Saudi Arabian riyal is pegged to the dollar. The euro was launched at the start of 1999, but euro coins and notes will not enter into circulation until 2002._______They can't exactly demand euros for oil until they actually are up and using euros! Also, isn't September 13 supposed to be an eventual day Mid-East-wise? Could this switch to euros be part of that? wolavka (09/05/00; 05:21:33MT - usagold.com msg#: 36038) Gold set Dec gold , breakout points282 284 289Commodities set to move higher, gold will respond. Aristotle (09/05/00; 04:57:52MT - usagold.com msg#: 36037) Motivations Cavan Man, you make an excellent point. In offering the view that if this market were populated by participants operating with full awareness that the market positions had no obligation for physical settlement--even if for no other reason than the participants' own agreements to enter and exit their positions with cash settlement (like betting on the Super Bowl)--you suggest that the participants would be inclined to carry onward with "business as usual," caring not a whit for the underlying disassociation of metal realities as compared with the pricing "realities" that they "define" (or "discover") themselves through their own paper trading arena.(OK, let me stand back and try to absorb what I've just written. It's horribly constructed, but the best I could do in one breath.)Perhaps the key here is for us to take a very close look at what "business as usual" is, exactly. In consideration of this, you suggested ----"if gold market traders are content with the paper game to settle their "bets", won't it take a large BELIEVER(s) in the metal to create a marketplace more to their liking? If not, why not?"----Part of our assessment of "business as usual" would require that we understand the motivations that drive each the buying side and the selling side to place their bets in the first place--assuming, per your request, that they they harbor no notions that metallic settlement will be sought or attempted, irregardless of its impossibility.Obviously, the typical to large player who seeks Gold does it directly and for immediate delivery through the likes of our host here at USAGOLD, whereas the really big players capable of moving markets would likely make less direct arrangements. In neither typical case is the acquisition of Gold pursued through the futures market. Now if we pause here for a minute, doesn't it strike us as odd that the some of the futures players are seemingly placing leveraged bets to profit based on whether this metallic demand driving prices higher or lower--and yet it is their placement of bets (and the subsequent trading thereof) that currently dictates this price level under speculation? With futures operating under such an unattached-to-physical-settlement / business-as-usual sentiment, we can maybe agree on two things--1.) that the trading action of these futures is driven by the traders' own expectations of futures price movement and has nothing to do with the quantity of physical Gold movement occuring concurrently and as a result in the "real world," and2.) because traders are seeking leveraged profits with their margin money based on the price movements of these futures contracts, the actual price LEVEL is irrelevant to them--except that at lower prices, the same small price swing translates into a higher percentage payout versus the number of contract positions that could be held against any fixed quantity of margin money with which to participate in the speculation.Due to its universal acceptibility and stability, Gold functions as nearly the ultimate end in the pursuit of wealth, whereas dollars are only the transitionary means as a "necessary evil" toward gaining these ends--and "big/smart/old money" knows this. They are not likely to pass up gaining Gold at these prices in favor of paying up the margin on a host of contracts. We could say that these physical buyers have already "walked away" from the futures markets.So who's left as the participants in the paper market providing this currently accepted method of price discovery, and what are their motivations? In light of the big picture, the participating longs are relatively and collectively a "babe in the woods" against those willing and motivated to participate as shorts in this environment. Beyond the selection of industrial or institutional longs that likely have legitimate interest in short term price hedgeing, the balance of the longs would be an assortment of uninitiated Goldbugs not particulary well-versed in monetary history who are unwisely throwing themselves on the mercy of a market meant to serve a purpose other than to provide for their enrichment through rising Gold prices. On the contrary, these paper-Gold markets were instrumental in propping up the valuation of the dollar at the expense of Gold when convertibility failed finally in 1971. Just consider this--the dollar convertibility didn't fail because big players were clamoring for ways to turn their dollar holdings into yet more dollars; they were pressuring to absorb any available Gold as preferable to holding dollars due to the ongoing U.S. trade deficit and swelling Eurodollar accounts. Some of the biggest players are still holding the bag, and it would be only the naive and uninitiated who might believe Gold has fallen out of favor while the dollar has somehow been miraculously cured of its ills in spite of the last 30 years of swelling trade deficits.As the remaining naive long participants come up to speed, they too will see themselves to have been duly distracted and chasing goals that never could fulfill the goals of building wealth, leading them in turn to walk away from attempting to buy Gold's price (derivative), and to focus on buying Gold's weath (metal).As for a "large BELIEVER" that you mention, any among a number of central banks that have been stuck with large dollar holdings (and very little hope of converting them for anything of value) will fit your description. While the illusion of the value of their dollar holdings will surely be lost in any attempt to dishoard their dollar accounts, their goal must necessarily now focus on allowing an appreciation of their current Gold assets to compensate them for their lost value that the dollar policy has handed them over the decades.Gold. Get you some. ---Aristotle Simply Me (09/05/00; 03:02:28MT - usagold.com msg#: 36036) RE:Strad Master's Concert RE: Thankyou, Trail Guide. Hello, Strad Master. I tried to listen to your performance on my Real Player. Was able to link up to the radio station, but no sound came through. Can't explain the problem. Sorry,I was unable to listen. Took violin lessons in 4th grade on an inherited old Kopf. I was awful. I was really looking forward to hearing a master making a Stradivarius sing!Hello, Trail Guide. Thanks for the heads up! I'll be scanning the news for clues this week. I don't imagine the American press will be giving anything away in the headlines.Thoroughly enjoying the news and discussions here. simply me SHIFTY (09/05/00; 00:51:55MT - usagold.com msg#: 36035) Asia/Pacific http://finance.yahoo.com/m2?u Lots of red ink in Asia/Pacific markets tonight!$hifty Strad Master (09/05/00; 00:47:54MT - usagold.com msg#: 36034) Thanks PH (!) and a question for Trail Guide... Thanks so much, PH, for the public acknowlegement!! Much appreciated. Hope others here got to hear the concert, as well. I'm certainly very curious if the internet link worked or not.Trail Guide, you write: "Truly, rising oil will bring the bid for physical gold and Euros and it will be a worldwide based demand. It will "initially" have nothing to do with perceived (by officials outside)US price inflation and everything to do with our ongoing US dollar inflation." It certainly seems like your astute predictions are starting to come to pass. Do you have any thoughts on the societal impact of the monumental changes you describe? I know that's probably not your field of interest, but still you must have some inkling of what the world might look like a few bends down the trail. Any comment would be most appreciated. PS: It is wonderful to have you back and to be reading you once again. Makes me feel like I have an inside / ringside seat, watching as one of the most important events in modern history unfolds. Thanks so much for your ongoing commentary. Black Blade (09/05/00; 00:02:57MT - usagold.com msg#: 36033) Strange happenings tonight. I see that Crude is up tonight +$0.43 to $33.81/bbl, pushing toward $40.00/bbl. Heating oil is also higher on supply concerns. Also Pt is now over $11.00 to $604.00, possibly headed to another limit-up session in Tokyo. Just dropped in for a quick peek while on the road. Spending the night and tomorrow in Spokane, WA., then to Vancouver, CA., and finish up in Salt Lake City, UT. Looks like maybe this week could be interesting in the markets. We shall see. A friend of mine that works for a small independent oil and gas producer in Alberta tells me that after the last couple of years of depression and concern in his corporate office, the mood is very upbeat and that the consensus is that business is going to be much better going forward. BTW, had a meal at a restaurant called "Chapter 11", I hope that was just a fluke ;-) ViewYesterday's Discussion.
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