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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...

The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

ARCHIVED DISCUSSION FROM 5/5/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Sierra Madre (05/05/02; 23:46:30MT - usagold.com msg#: 74978)
Sierra Madre reporting from Norwegian Majesty, mid Atlantic...

Had a very interesting conversation with a prominent Peruvian lawyer from Lima this evening, on this cruise ship sailing to Bermuda.

This lawyer was strongly impressed with the argument for a silver currency for Peru - one of the largest producers of silver in the world. It was fascinating to see how the idea took hold.

The I.M.F. is seen, in Peru, as a vindictive institution that imposes policies completely detrimental to Peru. For instance, absolutely no assistance to agriculture is to be allowed; this, while the U.S. passes legislation in favor of $180 billion in agricultural assistance to U.S. farmers over a 10 year period!

There is only ONE way to achieve some sort of national independence with regard to policies which favor the nations of Latin America, and that is through a monetary system that is not parasitical on the U.S. dollar - a money that has its own intrinsic value, and thus does not have to rely on reserves of U.S. dollars. Otherwise, Latin America will be forever dancing to the U.S. dollar tune.

Once ideas begin to germinate, there is no telling what the consequences will be.

The President of Peru may soon be hearing about silver, and as he is struggling to retain popularity, and has no clear program for his country, he just MIGHT take up the flag of monetary reform based on silver.
......

So much material on usagold this evening! Hard to read it all! Exciting times; this intellectual ferment heralds BIG changes ahead. Is it too far-fetched to compare with the ideas that were being discussed in the Colonies in 1775? Look at what happened in '76.

The Revolutionary Patriots in America had their "Committees of Correspondence" to exchange views. This the internet provides today.

"Don't tread on me"

Sierra


Black Blade (05/05/02; 23:24:02MT - usagold.com msg#: 74977)
Why gold regained its glory
http://www.sundaytimes.co.za/2002/05/05/business/news/news01.asp

Snippit:

Gold Fields president and chief operating officer-designate Ian Cockerill put it this way at the Paydirt Conference in Perth in March: "As they say in the movies, if it walks like a bull, and talks like a bull, then a bull it is."

Anglogold's chief executive Bobby Godsell is positive gold will hold onto its current prices - Friday's $312 per ounce was a 26-month high - and the group is reducing its hedge book dramatically. (Miners hedge or sell forward output to lock in prices as a protection against price falls. They lose out, however, if prices rise above those that have been contracted.)

Gold and the US dollar, the saying goes, enjoy a counter-cyclical relation: dollar strong, gold down; dollar weak, gold up. But it is perhaps simplistic to attribute gold's good fortune only to the plight of the US dollar - which has lost clout over other currencies.

The big question, though, remains: How long can it last? "You may as well ask, 'How long is a piece of string?'," says Cockerill. Vague answer and probably a stupid question - but then he did suggest the dollar's recovery was still a long way off. "There was a time when people spoke of gold as a barbarous relic, that its time was over."

That was just two decades ago, but, as he points out, gold has been viewed as a safe haven, an insurance asset, if not the only insurance asset, for two millennia. "Two thousand years of history is not wiped out within two decades." And despite the fact that demand outstrips new mine supply by more than 1 000 tons a year, the market is comfortable that supply deficit can be serviced from new mine supplies, supplemented by Central Bank sales and producer hedging. Cockerill points out that there has been very little investment in reserve replenishment or exploration since 1997. But a higher gold price, on a steady fixed course, could address that.


Black Blade: The situation is that world Gold supply will continue to decline in the face of declining mine reserves and virtually no new exploration. There will be no supply from Central Banks (never was) as they only trade among themselves for the most part. With a weakening US Dollar, tensions in the ME, declining stock markets, insolvent banking systems from Argentina to Japan to Russia to (insert name here), unwinding of hedge books, etc. The POG is more than likely to move to much higher levels over the next several months.


Black Blade (05/05/02; 21:55:04MT - usagold.com msg#: 74976)
Natural-Gas Prices Rebound After Falling Most of Last Year
http://biz.yahoo.com/djus/020505/200205052245000118_2.html

After falling most of last year, natural-gas prices have rebounded strongly, confounding experts who had expected healthy inventories and lackluster demand to keep prices in check this spring.

The higher prices are starting to translate into higher electricity bills in some parts of the country. They have also set the stage for steeper gas-price increases later this year, should demand from power plants and industrial users pick up.

Spot natural gas was trading at about $3.65 per million British thermal units late Friday. That is still down from about $4.45 per million BTUs a year earlier, but up more than 80% from late January, when prices appeared to have bottomed out from a long, steady decline following an extraordinary price shock in late 2000.


Black Blade: These higher energy costs will eat into consumers wallets and drop to the corporate bottom line. What many analysts don't understand about the rising natural gas price is that drilling activity has fallen off sharply and without the replacement of these dwindling reserves we are looking at the very minimum of a replay of last year's energy crisis and probably an energy crisis of epic proportions. The analysts are quick to point out that NG inventory is very high. That may be true, but without a growing injection that supply will be drawn off just as quick. Not to mention that several new storage facilities have been built in order to feed the growing number of natural gas-fired power plants. What may be developing is a looming energy crisis that could hit hard when least desired (late winter-early spring). Rabid environmentalism has resulted in the loss of Alaskan energy reserves from ANWR and now the focus of environmental extremists is on the Rocky Mountain reserves from Montana to New Mexico (a major source of energy for the Rockies and California). In short, the long touted US economic recovery is very much in doubt.


IGWA (05/05/02; 21:27:01MT - usagold.com msg#: 74975)
Slingshot
Yep. And it's hard to hide 20,000 gals of water.....

Black Blade (05/05/02; 21:26:17MT - usagold.com msg#: 74974)
How Corrupt Is Wall Street?
http://www.businessweek.com/magazine/content/02_19/b3782001.htm

New revelations have investors baying for blood, and the scandal is widening

Snippit:

When Debases Kanjilal, a Queens (N.Y.) pediatrician, picked up his phone in early 2001 to call lawyer Jacob H. Zamansky, he had no idea he would whip up a full-fledged hurricane on Wall Street. Kanjilal claimed he lost $500,000 investing in Infospace Inc. (INSP), an Internet stock he says his Merrill Lynch & Co. (MER) broker urged him not to sell when it was trading at $60 a share. By the time he sold, it was down to $11. Zamansky filed a novel arbitration claim against Merrill in March, 2001, in which he argued that its star Net analyst, Henry Blodget, had misled investors by fraudulently promoting the stocks of companies with which the firm had investment banking relationships. That lawsuit led directly to an investigation by New York State Attorney General Eliot Spitzer, who stunned Merrill and its Wall Street brethren three weeks ago when he made public some shocking e-mail exchanges between Merrill analysts and bankers.

Black Blade: A lot of heads are gonna roll. The likes of Henry Blodgett and Mary Meeker have left a lot of destruction in their wake and now brokerages across the land will be fines, sanctioned, and buried under an avalanche of lawsuits. This is just the beginning, wait until the telecom losses bring out the next wave of angry investors seeking retribution. And remember the day-trader a couple of years ago that killed his family and then went on a rampage killing day-traders and employees? "Interesting Times"



slingshot (05/05/02; 20:24:23MT - usagold.com msg#: 74973)
IGWA Msg# 74971
Think Again
Watch out for those anti-hoarding laws IGWA. They'll getcha.
Slingshot-------------<>

slingshot (05/05/02; 20:11:45MT - usagold.com msg#: 74972)
CavanMan Msg#74970
POG
Just Buy Gold!
Slingshot-----------------<>

IGWA (05/05/02; 19:51:18MT - usagold.com msg#: 74971)
Survival! Now We're Getting Down To It!!
Good to see the site evolving - never mind about gold, water and food is what you'll need.

When the World Council bans gold, they may come looking for your water & food too. To share with those who didn't plan ahead. Sounds fair to me.

Cheers!

igwa "Always looking on the bright side"

Cavan Man (05/05/02; 19:39:10MT - usagold.com msg#: 74970)
POG
In the medium term, the valuation of one ounce of pure gold has nothing to do with the Palestinians and Arabs; nothing to do with natural disasters; nothing to do with US equities and nothing to do with charts and graphs and stars and soothsayers. The reason to buy and hold gold now is purely monetary. Yes, I know many were saying same twenty years ago and yes, it is different this time.

Don't hope for bad news in the headlines. Buy gold.

Golden Bear (05/05/02; 19:38:33MT - usagold.com msg#: 74969)
Mr Gresham (msg#: 74958)
Ah yes, the confidence game... what a fantastic game of chess we are all involved in.

Japanese politicians, having pulled out nearly every trick in the bag over the last 10 years to convince its people that all is OK are now seeing that everything in this universe is cyclical...push the pendulum too far to the right, and it will eventually swing back to the left. They are in the process of running out of force to keep that pendulum suspended on one side.

Might not the Fed soon be in a similar position?

Fascinating...

Gauntlet-Runner2("GR2") (05/05/02; 19:34:21MT - usagold.com msg#: 74968)
Golden Calf


I saw the charts. Looks like a technical bounce is about due a little lower. Still it is coming off a 3 mtn. top and the whole six month pattern is a high handle. Major resistance is at 10400. OK so say it bounces up and heads back up. Who is going to show up for $22 Billion of 5-year bond sales in late June? Have you ever tried refinancing your house with bad credit and no job. That's OK too because they can just raise the debt ceiling above 6 TRILLION doll hairs. With a 1 to 1 conversion ratio of doll hairs to dollars, which side of the trade would you want. Our currency is redeamable in Chinese made goods, plain and simple. Without the China trade the prices of goods would skyrocket. We export inflation and import deflation. US dollars used to be redeamable in hot tech stocks. Now these companies have no earnings and European blue chips will be catching a free ride as the dollar falls.

Off of this one year "leg up" of the dollar, which way will it go next? Cycles happen. The Clintoons had it all rigged so well. Bush isn't that slick of a liar. He doesn't look like JFK nor does he talk like Elvis. The past cycle cannot be repeated. We are in a depression and at best it will end up in stagflation. It could take between 5-10 years for it to recover after all the bad credit is wiped out. You'll see clothing styles change over the time period. M-3 dollars are "suspended" in derivative casinos. If they unwind the derivatives market it brings all that money back out looking for a home. If China ever gets tired of holding our bonds then how can we sell more? Bond sales are keeping the dollar up, leveraged faith. They got China to buy Japan's bonds. So the shell and the nut game goes on. Greenspan already admitted they cannot measure M-3. So the FED policy revolves around data collected domestically. The house has to be surrounded by sandbags to keep this M-3 out like a flood. That is why they invented derivatives to soak up excess M-3. It's larger than life. Our minds cannot grasp the meaning of a $16 Trillion net short position in gold derivatives. They could just close all the banks and issue new funny money. One currency backed by gold for foreign exchange and worthless scrip for those stuck on this big island. That is basically happened after 29. The foreign banks raced after all the gold certificates they could get and then they redeamed them at the treasury. FDR was forced to confiscate gold to redeam the bearer notes. China functions with a currency no one else wants. What makes you think the US won't one day end up the same way. You tell me of the fall of Rome, I'll tell you of the fall of Pompeii, the fall of Sodom was before that, and a giant flood that made the grand canyon came before that.

A weak culture will always be superceded be a stronger one.

Golden Bear (05/05/02; 19:27:36MT - usagold.com msg#: 74967)
Golden Calf (msg#: 74959)
You are right, the dollar's current fall is only a beginning trend on the shorter time frame. All it takes is the trend to continue in the shorter time frame to become a longer term trend with a substantial price movement.

Time will reveal all...

Cheers.

Black Blade (05/05/02; 19:23:50MT - usagold.com msg#: 74966)
Petroleum and PMs Lower
http://www.mrci.com/qpnight.asp

The POO is lower on news of a deal being struck between the Israelis and Palestinians over the Church of the Nativity standoff in Bethlehem. Meanwhile tensions are still high after Israeli forces killed a Palestinian mother and her two children. It appears that there may be some deal in the works and so the POO is falling in response. Natural Gas has fallen in sympathy.

Gold is off slightly, though this too may be a muted reaction to the Middle East situation as well as sllight gains in the USD Index. If anyone is interested - the platinum lease rates are still rather high (in the 8% range). There is growing concern that the Russians may be unable to deliver PGMs from declining production at Norilsk. The only reason that PGMs haven't rocketed lately is due to the deepening Global Recession.

Wall Street will still be mired under relentless scandals, growing unemployment and declining corporate earnings. There just isn't any capital expenditures from US businesses to keep this house of cards standing much longer. In a word - "GRIM"

- Black Blade

Golden Bear (05/05/02; 19:21:33MT - usagold.com msg#: 74965)
mikal (msg#: 74955)
Sir,

I agree, and let us not forget that the Fed is a private corporation. Who do they serve and if they have control of the bullion, who knows what kind of deals have been done under the table...

Cheers.

YGM (05/05/02; 19:04:48MT - usagold.com msg#: 74964)
Food Storage...............Helpful Tip!
http://www.google.ca/search?q=Vacuum+Sealer&hl=en&btnG=Google+Search&meta=
Vacuum sealing foods in Mason Jars is the absolute best way and also the least expensive....You buy flour, beans, rice etc etc in bulk w/o the preservatives found in freeze dried stuff....Anything dry can be stored for eternity this way.....Seeds for gardening have an endless mortality rate.....Ammunition stays moisture proof.....Sealing in Bags is OK for shorter periods of time but Jars are cheap and stack well in basement pantry.....Onion seed normally is only viable from one year to the next and beyond that won't germinate well.....Tests have been done with Vacuum sealed onion seed after 10 yrs, and better than 90% sprouted.....Any survival minded folk should have this unit if only to keep your Gold from tarnishing or oxidizing :>))

Hope this info is useful to some......YGM.

PS: Medicines (pills etc) store for years this way. Air is definately a deterrent to longevity of many things we take for granted on store shelves.....Heck if Boy Scouts can "Be Prepared" what's wrong with grown folks with responsibilities of family life doing the same......HUH!

slingshot (05/05/02; 19:02:47MT - usagold.com msg#: 74963)
Mr Gresham Msg#74958
Helping others
I do agree with you sir. We can only hope there is enough of us with the necessary skills to go around to accomplish what you stated in your last paragraph.
slingshot--------------------<>

Rock (05/05/02; 18:51:29MT - usagold.com msg#: 74962)
Interstate --- Food Storage
Your right about needing extra water to use with those dehydrated foods. Water has about a year shelf life and even longer if you add a little clorex. I picked up six 50 gallon blue plastic FDA barrels right on the internet. Assuming one has the place to store them ( basement ) they arn't expensive at all and well worth it if you have the space.

I also picked up about 8 of the 15 gallon FDA barrels as well and I wish i had gone with all 15 gallon barrels in stead of the 50 galloners because the smaller barrels are easier to change the water than the big boys but bottom line is water is the most important resourse you can have when it comes to survival.

I have canned goods also and they have a good two or three year shelf life so that works good also. Juices I found go bad after about a year and you can drink them before they go bad but water is easy to change every year with less cost. And your right about a gallon a day per person "miminal" to use, for drinking 2 quarts, cooking, tea, coffee another quart and a half) and washing yourself down with a wash cloth, brushing teeth ect can go into even more, bottom line under two gallons per adult should be suffice.

Thanks for your imput and your right if you don't have the room for water storage then suppliment with juices and bottled water is the next best thing. But keep some drinking water on hand thats for sure. Thanks for your imput, we all need to know the pluses and minuses as we consider the options and unique circumstances each of us have.

Cheers, looking forwared to a big day tomorrow at the NYSE go gold.

Rock

Rock

Gauntlet-Runner2("GR2") (05/05/02; 18:41:19MT - usagold.com msg#: 74961)
ramblings
So how many sunken Spanish Galleons do they have to find to replenish the gold that is supposed to be in Fort Knox? If they can walk on the moon, can they walk around under the great depths of the sea. At $1000 or $2000 per ounce gold everybody and his brother will be fitting on tanks and playing with metal detectors. Out west there won't be any unemployment either. Just stand upwind of the dust. So gold has all its own industries associated with it. There are tons and tons of treasure out there but the cost of recovery and the risk of finding nothing are still too great. Mel Fisher will be passing out free donuts soon enough. That's what I think will happen. The price will fly upwards and bring capitalism forces into play and then "supply" will somehow arrive. The lag time though is going to prevent any breaking of this pending rally. It was 20 years ago when this scenario set up like it has. It is still not believed. It's going to knock paper-man off his chair. Then millenium-gold man will take his chair and drive his car and live in his house, and walking quietly to the mailbox sipping cappachino slow. ...................-GR2

"For a nation is no greater than that nation's womens ability to raise good children" -Iroquois Indian proverb

So let the Espaniolistas cross or borders, no one wants to dig potatoes or hang drywall anyway. Yes, open immigration for Tiawan and Korea and whoever else wants to work for a living so we can tax something. We could beat Japanese industry with Chinese industry seeing as they both hate each other so much. America could use about 40 million gold stashing oriental women too, complete with rice cookers. Then the slack out there "runnin witda bruthas" gets replaced. OK I'll stop there. Back to gold: It seems to be doing quick reactions to the dollar's fall. I think it was arbitrage dealing that made the POG rally on Friday. Gold didn't go up the whole US economy fell down by 5 bucks (the devaluation has already started).

Cavan Man (05/05/02; 18:37:01MT - usagold.com msg#: 74960)
@Aristotle
A retreat, hastily beaten, might take 3-4 years in our ancient, favorite market. Recently, I read a general chastisement of the US current account imbalance by Mr Prodi. The term, "political will" was used. Where have we heard that before?



Gold is political dynamite. Understanding the politics is step one in an education to last a lifetime.

Golden Calf (05/05/02; 18:30:11MT - usagold.com msg#: 74959)
The US$, Gold, and conventional thinking
Much of what's been written, said, and perceived
is what can be expected rhetoric, in any market
climate.
I've found it helpful to take the longer view
point, which often shows that a short term trend
may be just that, and may often confuse and confound
those that look at, and study it.

The dollar sure looks like it is about to plunge,
right?
Take a look at the index both weekly and monthly
and see if you might not change your mind.
http://209.130.50.65/cstrad/chart.htm#indices

The opposite might be true for gold.

Mr Gresham (05/05/02; 18:27:08MT - usagold.com msg#: 74958)
Golden Bear, slingshot
Nice to have a poster from Oz here (have we lost a few?)

Of course they MUST assume they can control the meltdown -- they're the Fed and it's their job, their reason for existence. They might fail, but they have to pick their best shot, whatever the likelihood.

What they need to do is pick the point of inflection, both timewise, and dollar implosion-wise, where the first level of collapse has exhausted itself a bit. What they trade on is ===== CONFIDENCE ===== and the desire to believe. If people during the collapse are afraid their world is ending, and the Fed (with media help) steps in to "restore confidence", that desire can be rounded up to sandbag the levee one more time. There are probably studies of how a collapse has been "sandbagged" in other countries (Russia '98?) and a recovery core preserved for favored players.

Slingshot -- helping people. Of course we will, but the task will be so large, it's like trying to pick up Titanic survivors in a rowboat -- they'll swamp you in minutes.

Better to use what we've LEARNED here, about money and its use in exchange systems. Local barter-type moneys sprung up during the Depression, and experiments in recent years (LETS, Ithaca NY) have touched on alternatives to centrally-printed dollars.

Helping people identify the source of their impoverishment, and how to isolate and cut off the economic leakages out of their communities in time to maintain some living standards, by using the local resources and skills at maximum efficiency, and keeping the benefits close to home...



mikal (05/05/02; 18:22:41MT - usagold.com msg#: 74957)
@Waverider
Those are both good ideas. I have seen them both. You may wish to call around your town, to the coin shops. I have purchased used sovereigns, a small panda, and other coins in 14kt bezels that way. Never paid much over melt. Some of them get a little "sweater rub" on the back or suffer from polishing, so they sell as used/circulated coins. Kind of like "wearing your colors". Definitely a worthy and subtle fashion statement or accent. The US Mint has featured gold -bezeled Eagles in their catalog, for a price (soon to be value ;))

slingshot (05/05/02; 18:17:33MT - usagold.com msg#: 74956)
Seige Engine
Gold above $300.00 and climbing
It has been many days and nights that the castle has been under attack. Each day Sir Howe and his men move closer.
The Lord of the Castle has not slept well for stone by stone has entered his courtyard, his main hall, knights barracks and stores. Each day he waits the Goldbugs and their machine become more accurate. He must do something but what? Should he mount an attack with heavy horses? It is a long way across the field to their lines.As he gives thought to his battle plan he is again called to the wall.
The stones are now striking at the base of the tall tower.
Why would they be doing that when they could easily bring down the front gate. It becomes apparent as he watches the debris fall into the moat. First bring down the tower into the moat and make a second crossing. Then bring down the main gate. He would have to split his men to defend the castle. Divide and conquer.

mikal (05/05/02; 17:57:59MT - usagold.com msg#: 74955)
@Golden Bear
If the USA gold reserves are ever auditted and found to be the 8000+ tons claimed by some- Who owns it? Its been said the Federal Reserve took ownership and custody from the US Treasury Dept. If this is so, wouldn't that make it easier to swap physical under the various scenarios discussed here today? After all, birds of feather flock together, even the scavengers.

Interstate (05/05/02; 17:57:05MT - usagold.com msg#: 74954)
Food Storage

Reading this forum everyday is like getting a huge dose of knowledge. I thank each of you.

I noticed that food storage was mentioned a few times today. Good. But, I have one suggestion. Don't rely heavily on dried foods because of the water that is needed to rehydrate them. Buy plenty of juices and other ready to drink liquids. Someone (Rock, I think) mentioned hurricanes. Living in Florida, I have been through several and the water supply either cannot be pumped through the municipal pipes because there is no electricity or the water supply gets polluted. It is almost unbelievable how much water a family uses in one day. The first storm, we had 50 gallons of stored water. Electricity was off for 6 days. We were very frugal with our water and still, we were using our last gallon when the power came on. One gallon per person per day.....is NOT enough.

What we are preparing for will probably last longer than 6 days. Food? Yes. Medicines? yes. And lots and lots of water (drinking, baths, brushing teeth, washing dishesand clothes, cooking, etc.) Most of us know this but as was mentioned, constant reminders are good.

For the summer, several battery operated fans. Of course, there are hundreds of survival books and info on the web. Just use the info in them.

Later, Interstate

Golden Bear (05/05/02; 17:47:01MT - usagold.com msg#: 74953)
ax (msg#: 74947)
It is not possible IMHO for the USA to accumulate bullion in sufficient quantities to offset the exploding printing and flooding of fiat into the system. The scarcity of gold and its use in a gold backed monetary system has its main function of limiting this printing of confetti, and is one reason Nixon severed the last remaining link between the two.

As for the USA gold reserves, the assumption is that no other country has a claim to what is in its vaults, and who knows what will happen if the USA defaults on these claims if in fact they do exist...

Cheers.

Waverider (05/05/02; 17:44:45MT - usagold.com msg#: 74952)
Leigh
Thanks for the tip. I'll try it as a screen saver at the office and see what the responses are. I wasn't thinking of loose coins, but a Gold coin made into a pendant...it would be visible and relatively safe. I'm trying to think of some creative ways to engage people in discussion about Gold...stimulate their curiosity as it were so they're motivated to learn more. Thanks again for the tip, always appreciate your thoughts and contributions. Cheers!
Waverider

Golden Bear (05/05/02; 17:32:40MT - usagold.com msg#: 74951)
@Rock, @Mr Gresham,
Rock,

Thank you for the words of support and information. Regarding the 4 G's, Australians are banned from owning any handguns and semi automatic rifles. Hunters with permits can own single or double barrel shotguns, but that's about it. It will have to do...

Mr Gresham,

thanks for the laugh - I was 14 when Dr Zhivago came out and my Dad being a history buff took us to see it at the drive in. Damn 3 1/2 hr movie nearly killed my brother and I from sheer boredom (11 and 14 year olds don't have the same sense of history as we older and wiser folk), I do believe it would have quite a different impact on me seeing it now.

As for the government allowing a controlled failure of some institutions, the assumption is that they can control it at all. Like a nuclear reaction, once you get to a certain critical level of cascading fission run amuck, it is impossible to stop. Will this time be the financial Chernobyl that scorches the whole financial landscape leaving those with their golden antiradiation suits left standing? Are we seeing this fission reaction beginning now in gold's upward move, ready to go parabolic? Only time will tell....

Thanks for the reposting of Bill Parish's link. Will read with interest.

Regards,

GB.



Cavan Man (05/05/02; 17:17:14MT - usagold.com msg#: 74950)
@Aristotle
The path is so clear.

goldquest (05/05/02; 16:50:40MT - usagold.com msg#: 74949)
@ ax Ref: Gold Reserves
My guess is that the U S has more gold accumulated than most of us care to realize. When the time is right, gold will again play a major role in world finances. The U S will not be caught short in the world game of monetary chess. All the more reason to be in the gold game now, through physical and gold stocks.

Leigh (05/05/02; 16:44:26MT - usagold.com msg#: 74948)
Waverider
http://www.usmint.gov/about_the_mint/index.cfm?action=screensavers
This link to the U.S. Mint screensavers will allow you to download Eagle Program (gold, silver, plat) screensavers for your office computer. Your screensaver will be the talk of the office, and you should get lots of inquiries about gold! It's a lot safer than taking coins in to work!

ax (05/05/02; 16:29:46MT - usagold.com msg#: 74947)
U.S. SECURITY DEMANDS MORE U.S. GOLD RESERVES

U.S. SECURITY DEMANDS MORE U.S. GOLD RESERVES


Citizens of the United States should be concerned foremost with
the absolute gold tonnage held by the U.S. Treasury to back the
U.S. Dollar.


The U.S. Dollar is the world's reserve currency. It is the reference currency by which all other currencies are measured. It makes no
sense for the United States to hold foreign exchange reserves of other
countries since its own currency, the USD, is the primary currency.


What the United States must do, for its own security , is to hold as much
gold in its treasury as possible to back its own U.S. Dollar.


The U.S. Treasury must buy more gold either on the market or off market (private
placement from Swiss/German CFB etc. ) at every opportunity.


U.S. Gold reserves have the highest percentage of gold in their reserve
composition compared to foreign currencies but this is only a relative indicator.
Foreign countries must include substantial percentages of foreign currencies in their
reserve composition, particularly the USD, since the USD is the world's primary
currency.


Since the US dollar is considered to be the world's reserve currency, there is no natural
limit to the amount of gold that should be in the US Treasury to back
this world reserve currency.


This last point is the key :

THERE IS NO NATURAL LIMIT TO THE AMOUNT OF GOLD
THAT SHOULD BE IN THE U.S. TREASURY TO BACK THIS WORLD RESERVE
CURRENCY ( THE U.S. DOLLAR)


The only rational way to " pump money into the system"
is to greatly expand the money supply and back it with
substantially higher gold reserves. This offsets the
concommitant devaluation of the U.S. Dollar and inflation
that ensues from such monetary expansion.


AX



USAGOLD (05/05/02; 15:07:55MT - usagold.com msg#: 74946)
Speaking of gardening. . . .and simple thoughts. . .
How many have seen the movie Being There? I had the opportunity to see it again for the first time in many years on one of the local television channels -- an extraordinary movie based on the book by Jerzy Kozinski. Peter Sellers plays the role of the simple (simpleton) gardener who casually states gardening principles and they are taken as incredible insights by those around him -- to the point that he becomes an confidant to one of America's wealthiest men and and advisor to the President of the United States. The concept works well because gardening is a metaphor for life, and because Sellers of course intends nothing by any of his allusions. He is simply talking about the only thing he knows -- gardening. We come to find out in the movie that the country is indeed run by a conspiracy, and in the end the simpleton -- who could care less about the direction of the country -- walks (Chaplinesque) on water testing the depth with his umbrella which he is using as a walking stick. None of this has anything to do with the subject at hand except as a side bar to Belgian's garden -- long may it grow, my friend. Life is full of double meanings, hidden growth, realized and unrealized potential. Sometimes we yearn for things that are fully within our grasp and we don't even know it.

slingshot (05/05/02; 14:42:29MT - usagold.com msg#: 74945)
Rock msg# 74931
Taking Precautions
Again we approach the Hurricane and Fire Season in Florida.
Again I will see the very limited preparation taken by the general public to ease the effects of these natural disasters. We live on a dynamic planet constantly changing
with tornados, earthquakes,mudslides, blizzards,floods and volcanic eruptions. If these natural disasters are not enough,
the man made ones only compound the need to take precautions. Living near a oil refinery,nuclear power plant,or chemical plant, and the threat of terrorism could be a nightmare. Each event although having simular effects will have its own particular precautions to be taken. Depending on where you live, you may be subject to one or more of these possible problems. For sometime, we here at this forum, have been sounding the alarm for a disaster on the horizon, that will touch everyone on this planet.
It is a prediction with a sound basis and one we have time to prepare. The coming collapse of the worlds financial
markets. In the past, as well as in the future, we will try to warn others. Only to be laughed at and ridiculed because they either can not see or refuse to see our point of veiw.
We Goldbugs,(Chicken Littles), are a rare bunch consisting of doctors, teachers,real estate agents,oil rig workers'surfers,wrench turners and those who deal in Gold.
We are from the USA, China,Australia,Canada, Belgium and other points of the world.
In the furture we will have to make a decision as to whether or not to help those who laughed and ridiculed us in the past. Despite all the tough talk,(here and at other sites)
we in the end will take on the extra burden of helping others. Thats just the way we are. Truly a rare quality in todays world.
In conclusion, we must stay on the trail and try to enlighten others for if we do not, who will?

Thanks to MK, R, and all those at USAGOLD.

Slingshot---------------------------<>


USAGOLD (05/05/02; 14:23:16MT - usagold.com msg#: 74944)
Belgian. . .Aristotle. . . .A Simple Thought. . . .
As you say, we are in a time of transition in this fiat economy and it seems to me that when we look at the performance of various economies in times of transition, gold more often than becomes the most practical and reliable arbiter between the "old" and "new" economies -- no matter where you happen to live. Another analogy would be to say that it even serves as a bridge between the eras for those with the wisdom to use this transition tool to his or her advantage. In 1933, in the United States and in Europe -- gold served its owners well. In 1971 as well. In 1997 in Asia -- gold again did its job. And in Argentina in 2002 -- what would any Argentinian rather have owned?

Argentina, Russia AND the United States (should it become similarly afflicted) will not cease to exist and function as countries. Nor will their economies disappear -- though their currencies very well could (if they haven't already), if not in name at least in functionality. The system carefully constructed to support that currency could very well -- and probably will -- crumble as well. Cycles -- despite what the New Economy mavens -- would have had us believe are the only consistently present reality on this planet. Heeding that. . .one would be well advised to assume that a transition is inevitable and take the necessary precautions while one can, especially when one sees nothing but warning signs all around.

When one takes the sum of problems and corruptions at loose in the Amerian economy today -- from the sewage of derivatives accounting as Mr. Munger so inelegantly but forcefully put it yesterday to the rolling scandals on Wall Street of which the atatvistic analysts are just the most recent -- one must conclude we are observing symptoms of something deeper and more sinister at work than a few loose cannons. Who among us is willing to risk his or her hard won wealth on a bet that such symptoms DO NOT represent fatal, if not immobilizing, disease? Messrs. Buffet and Munger certainly do not appreciate the "smell" emanating from Wall Street these days. For the individual who does not know the form this transition will take, gold is a convenient parking place until things get sorted out. Traditionally, those who have make the Golden Choice tend to weather the storm and emerge on the other side prepared to take advantage of whatever opportunities might present themselves. Rubles, pesos, dollars and yen may dry up and fly with the wind, but hard metal -- detached from any politics, any system, any quid pro quo -- anchors wealth. Real wealth as you call it. Free gold as you foresee . . .in a Time of Troubles.

Sierra Madre made the interesting point several days ago that great pieces of real estate, antiques and art are available in Argentina for those with the assets to buy. And what is required to buy? Hard money. Something the recipient (seller) can utilize for his or her own purposes.

Aristotle: It's great to have you back.

Belgian: I wish you much success in tending that garden. It has already been an interesting spring.

Aristotle (05/05/02; 13:50:24MT - usagold.com msg#: 74943)
Belgian -- "FREE GOLD WILL IMPOSE ITSELF !"
Elegant in its accurate simplicy. I bow to you, good Sir!

Gold. Get you some. --- Aristotle

Aristotle (05/05/02; 13:39:12MT - usagold.com msg#: 74942)
Max Rabbitz (05/05/02 msg#: 74928) and the Chinese
Thanks for sharing the numbers. When people read your comment (you said, "I figure 10% of $700bn is equal to 7056 tons of gold at $310 per ounce. How long will they wait?")
I hope people will also pause to remember my post from last week. The one about the conversation between two friends, one who bought a quantity of Gold, and one who merely wanted to exchange a quantity of notional money for Gold. As we'll recall, the latter of these two distinct objects can be the much easier to do.

With that said, maybe the Chinese are willing to wait until the full $700 billion can be converted into a convenient little lump of Gold the size of a teapot. Just think of the expenses they'll be spared in building their vault! On the other hand, as a nation we were foolish to get our Gold so early while it was inconveniently heavy for the price. We ended up with so very much Gold (for the price paid), that we had to spend a fortune on the design and construction of of massive vaults at Ft. Knox. Sheeeeeeeesh! Looks like the Chinese may have outwitted us. <wink>

But I'm sure it will be as FOA suggested. The U.S. will find its overall financial position and well-being best preserved by parting with a measure of our National Treasure. Ballast is rendered no less important simply because it must at time as these be offered unto the storm. After all, what good is "Money" if it can't be spent at times of dire need? Whether ours or another's, I expect the Chinese will make off with significantly more than a teapot-sized lump of Gold in exchange for their generous holdings of our debt securities.

There was a time when the political leaders of the "Free Peoples" of the earth, in rebuilding a war-shattered financial system, didn't want to let the value of Gold run because it would have provided a windfall boon to their adversarial counterparts in Africa and Soviet Union who were leading miners of the fresh metal.

So we got what we got, and have come to where we now are, one step at a time as economic and sociopolitical developments have allowed. Free markets will prevail in the end, of that I'm sure. The rest is just details for others as they seek to achieve the smoothest, most politically acceptable transition. But of course, nothing ever goes as smoothly as planned, and like two electrically charged ends being brought carefully closer to contact, an arc will suddenly complete the circuit ahead of "schedule" ... a variation of deliverance for Aragorn III's "lightening in the night" scenario.

Gold. Get you some ...there's electricity in the air. --- Aristotle

Belgian (05/05/02; 13:02:50MT - usagold.com msg#: 74941)
The monetary feast (Aristotle # 74909)
Allow me some reflextions on your latest post.
The US as "banker of the world" is running a trade deficit
(1 billion $) to the equivalent of * 100 * metric tonnes of Gold PER DAY ! Ten times, daily Gold uptake ! This to have a better idea of what 1 billion dollars a day means in relation to the *Value* of 100 tonnes of Gold.

Dear Sir Aristotle, Gold was set Free and had a premature and aborted run in 1971 (to 1980) ! But suddenly the "central bankers" decided that they still had a chance / possibility to postpone the inevitable day of reckoning. They gathered all their concerting forces (worldwide) to lower the Interest Rates with almost zero as a target ! WHY ? Simply the only way left of declining the "automatic" DEBT GROWTH and give a desinflating economy the (futile) chance to catch up with debt and a degree of repayment (rotation/liquidity). And oh wonder...they succeeded in lowering those abysmal rates and artificial oxygenation of economic activity ! And here we are, at the end and emptyness of the tool-box. The consequential, building (irreversible) trade deficit and now increasing unemployment (6% and rising).

Those central bankers (brightest minds) were/are and will always be, political puppets on that used string. They delayed (aborted) the '71/'80 Gold rush and must FACE this *solution*, again, only 20 years later. It is in this context that your explanation/interpretation of the WA ('99) is *Very* plausible and very close to reality.
The cleariest of signals that the extension-time of intervention has run its cause and is already in over-time.

The coming Free Gold Market will be more frightening than the 1971/1980 attempt ! The illusion of being capable to domnesticate debt, will slowly but surely fade with a global economy not being able to expand on this monetary mismatch. Every possible relance will be a false one and doomed to fail, faster and faster. FREE GOLD WILL IMPOSE ITSELF !

Analog to what will happen this summer : The US/ISRAEL/ME/EUROLAND/RUSSIA, meeting to *IMPOSE* peace in the ME. Note the participation of Russia !

Gold was always ment to be Free and the banking system only denies this temporary. This past 20 years of "denial" will play a capital role in the evolvement of the Gold Revaluation. It will *not* be a halve job, imbedded in all sorts of compromises (crisis management). No Sir, it will be a Plain Vanilla FREE GOLD MARKET and nothing less !
Those who lost sight/touch of Gold will soon join the stampede/rush. Those who never understood it, will learn on the way to Gold's proper place and function within the monetary matters. The Jhonny come latelies will have to pay the big ticket at full price, sorry VALUE !

Nice and peacefull end of the week to you and all other forumers.

GoldnSilver2002 (05/05/02; 12:26:06MT - usagold.com msg#: 74940)
Holy CR@p,JPM a scapegoat?
To my understanding JPM has a position in the tens of trillions in the derivatives market,the failure of JPM will not be a pleasant day.The gdp of the usa is 6 trillion ,give or take a trillion for accounting.To simply lose years of a countries wages is bad for everyone.As of now,americans,perhaps the most gun lovin'shoot em up and haller bunch of them all,has been acting very sanely.The american people have probably shown up their middle eastern brothers....so far.

I would like to see what happens when Bush declares,"it is illegal to own gold in the u.s.a!"If JPM were to collapse,it would be almost pointless to have money(fiat) in the bank,just ask the argentinians.Even if one had gold,would it be prudent to lug 1 to 10 kg bars around?No,i believe something'some form of batering/accounting will arise but the paper experiment(fiat) will be over soon.The house of cards isnt collapsing,it just on fire at several key points.On the one hand they wipe out wealth,on the other, debt also, because everybody in the chain including the government is broke.If no one pays no one, then you can have all the debt you want because hey,"how do you get blood out of a stone?"

What the hell is my point?At this point this site isnt just a place to herald the forthcoming rise of gold,but what to do when that happens?Which banks will stay intact?Will banking around the world collapse?What forms of gold should one hold?And why silver(the average joes money) is a highly valid alternative to gold.Will the stock market survive as it did in 1929 or will all wealth be eliminated in one quick day?Please do tell,ive got a ton o gold n silver,the problem is what now?

USAGOLD (05/05/02; 12:25:05MT - usagold.com msg#: 74939)
CM. . . .
Christos Aneste! My friend. . . .May you and your family have the best of Easters.

Waverider (05/05/02; 11:49:16MT - usagold.com msg#: 74938)
Black Blade
WOWWZZERS....Thank You! :)

I certainly have my reading cut out for awhile with these fabulous books. Yes...learning keeps the mind optimally fit as exercise keeps the body fit. Cheers!

Waverider

Cavan Man (05/05/02; 11:48:49MT - usagold.com msg#: 74937)
@USAGOLD
Christos Aneste!

mikal (05/05/02; 10:42:52MT - usagold.com msg#: 74936)
Economy in Balance on Mideast Conflict
http://www.reuters.com_article.jhtml?type=businessnews&StoryID=919...
 
May 05, 2002 11:17 AM   By Jon Herskovitz
NEW YORK (Reuters) - It may be hard to look at the bloodshed in the Middle East through the dispassionate eye of economics, with Israeli tanks rolling through Palestinian streets and suicide bombers setting off blasts that kill and maim dozens at Israeli markets.
But shock-waves from the conflict have not only pushed up prices at the gas pump, they have also hit investor confidence, dampening stocks, and added a few pennies to the cost of some products due to higher fuel and transportation charges..............
......Economists reckon that each rise of $1 a barrel in oil prices causes U.S. gross domestic product to shrink by about 0.05 percentage points. It is also like a tax on consumers as it raises prices and cuts into their buying power.
Federal Reserve Chairman Alan Greenspan said in April that energy prices had not yet risen to a point that would sap spending but warned a lasting surge in the cost of oil could have "far-reaching" consequences.
............"This is the kind of situation that is so fluid that there isn't a single story that everybody can bite into," he said. .....click link for more or visit the USAGOLD Live News page


Mr Gresham (05/05/02; 10:28:25MT - usagold.com msg#: 74935)
Golden Bear
http://www.billparish.com/citigrouppyramidintro.html
With regard to the toppling of "big brothers", I've wanted for awhile to mention one of my most strongly remembered scenes from the movie "Dr. Zhivago".

The czarist officer is trying to rally the fleeing Russian troops (WWI) to go back and fight the Germans. He steps up on a barrel, standing on the lid, and waves his sword while he yells at them. They ignore him. Then the lid tilts or caves in, and he is plunged waist-deep into the barrel of water. He raises himself back up, sputtering, and bemoaning the spoiling of his fine uniform.

A passing veteran seargeant laughs, raises his rifle, and shoots him.

In the end, tyrants look ridiculous. They always overstay their loss of credibility.

Eastern European regimes (Ceaucescu for one) fell with about as much regard, once the crowds in the street saw that they were unified, and the soldiers were sympathetic.

Regarding banking, my guess would be that Robert Rubin at Citicorp has migrated to the designated strong rallying point. JPM is the sacrificial or scape-goat, with the derivs heaped high on its back, to be driven out of town.

When they had the Continental Illinois electronic bank run, the Fed backed anyone's deposits at all amounts, and the gov took over ownership.

In a modern run, circling the wagons, the Fed would let it be known it was bankrolling Citicorp and a few other strong regionals (politically-connected?) and you would be allowed to transfer your deposits there, in fact the Fed would do it for you, minus a "haircut" fee.

The money supply would reduce in one swift crunch -- but it would be the shaky flaky fringe money getting lopped off fast, like a cancer surgery, and leave the "strong" core money secure, at least for a business cycle longer. (If the Fed exists for ANYTHING, it is to create -- AND DEFINE -- the "what is money" question for our society.

The removal of worry over the middleground of financial institutions collapsing would be the smartest thing they could do to "sauve qui peut" -- save what they can for another day's profit.

Had another thought rattling around somewhere, but -- hey, when the coffee cup's on empty, and the baby's been screaming for a diaper change (just kidding) for half an hour, time to go...

(BTW, it's time for a re-linking to Bill Parish's site -- I read the essay here way-y-y back, so I'm not thinking of it's content in terms of this post, but it's probably close to relevant.)

Mr Gresham (05/05/02; 10:02:58MT - usagold.com msg#: 74934)
New Jersey post office renamed for passenger on hijacked plane who uttered words 'Let's roll'
http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020504/ap_wo_en_ge/us_attacks_post_office_2
Todd Beamer: "Let's roll"

(To be in the history books with "Don't fire until..." and "Damn the torpedoes..."?)

When it's time to get up out of your seat...

sector (05/05/02; 09:54:32MT - usagold.com msg#: 74933)
Gold and the Mainstream Financial Press...It's Radioactive
Why the WSJ will never write about the Gold Bull.
It is a very simple premise. The Wall Street mainstream financial press is an extension of the Federal Reserve System. The Fed's mouth-piece.

The self appointed journalists of the Wall Street Journal are as biased against gold as the networks are against anti-liberal viewpoints. They can hardly be otherwise when they crave the favors of the moneyed princes of the Fed. The cocktail parties, the chauffeured limousines, the awards banquets...how could they possibly kiss all that off? To protect and defend journalistic integrity? What does integrity have to do with it?

The only investment class that is clearly moving upward these last few quarters is gold equities...not to mention the metal's move from $285 to $312 [10%] in just a few months.

Has the WSJ written about this new "Growth area"? No. Will they? No. To do so would constitute an insult to the Federal Reserve System and would cost the paper dearly. So there will be no report on gold unless it's negative in the main.

Several top reporters have been given deep details of the gold scandal and have sat on the story like heavy Buddha. Hypocrisy at work.

They failed to expose Enron when anyone remotely curious had the facts of corruption...the offshore connections were after all old hat because of the Hamanaka/Sumitomo copper fraud perpetrated by JPM.

I personally can attest to the pervasive influence of the JPM goons. I spoke directly with a lead attorney in the plaintiff's Sumitomo/JPM case. He was interested in data I created and whether it applied to copper. It didn't but I offered that JPM would be hurt by the gold market implications. "Your gold stuff will hurt JPM?" "Badly", was my answer. The attorney hung up so fast I thought his handset must have been burning him. Even adversarial plaintiffs are afraid of JPM and the Fed.

A corrupt press goes hand-in-hand with a corrupt Fed.

The brokerage scandal gets coverage because it doesn't threaten to unmask the fiat currency charade. Brokerages come and go as long as they push paper…why should the Fed care?

But writing about gold and its recent successful inroads threatens the continued dominance of unsupported paper currency and therefore the entire United States and world operational platform.

If the US currency fails the US fails. The story about gold is therefore radioactive…it must be killed.


Max Rabbitz (05/05/02; 09:02:39MT - usagold.com msg#: 74932)
Econoclast, Your are absolutely right.
The Chinese will have a hard time getting that gold. However, in the meanwhile they may have something even more valuable.

They must be aware of their ability to blackmail the dollar system with threats of massive gold purchases. I wonder what benefits, in addition to gaining World Trade Organization membership, they have been able to extract. Remember the stories of Chinese obtaining U.S. nuclear and missile designs during the Clinton years, and delays and interference by that administration in the investigations. I remember one undercover investigation was leaked to the NY Times prematurely, as FBI director Louis Freeh refused to ask for a delay in publishing. Also, there were stories of classified documents at Los Alamos given to visiting Chinese scientists by the Secretary of Energy Hazel O'leary. Then there were technology export regulations that were removed from State Department overview to that of the Commerce Department, with an apparent Chinese agent given a top spot in that department.

Is Taiwan the next payoff? Or perhaps a transfer of U.S. gold to China under the table at sales prices.

I for one do not wish to stand in the gold line behind the Chinese……in addition to the Japanese. There can't be much time left.


Rock (05/05/02; 08:30:44MT - usagold.com msg#: 74931)
Golden Bear
Taking Black Blades Advise on Food Storage
Starting a food storage program makes practical sense. I remember when hurricane Andrew hit South Florida as I have family that lived through it to tell the story. They were left without food staples and fresh water for well over a week depending on where you were located. I also remember seeing TV footage of those long food lines during the great depressoin of 1929.

Why is it that we don't learn from history? So many of us have never been without in fact we have only experienced the abundance of the good times yet we look around us and see all the uncertainity in the world yet we still don't take heed.

I started my food storage porgram at the onset of Y2K and believe me when I tell you I was called every name in the book when I tried to direct others to buy gold and start a food storage program.

I have never been influenced by the majority because in my brief existence on this great planet I have learned that the majority is usually wrong.

One good place to consider for some ideas concerning an emergency food program is places like Eastern Mountain Sports. They have a large line of dehydraded foods in vacumed packs which have a shelf life of 5 to 10 years. All you need is water and presto, your eating lazayna, or beef stew or a variety of different food choices.

Pick up a small fuel stove that can be hooked up to either propane, white gas or kerosene. Think about this for a minute, we pay large insurance premiums on our vehicles and rarely see any of that money come back to us in tangable form yet when you pay for your food storage program you have the same security that you have when you pay your insurance premiums but at least you have something tangable to account for your money, its the same principle as owning gold in some ways.

And needless to say the peace of mind you have for doing it.
Always remember the 4 G's : God, Grub, Gold, Guns.
Have a great day.

Rock





Econoclast (05/05/02; 07:59:19MT - usagold.com msg#: 74930)
Max--I think they'll be waiting a loooong time...
If they want physical gold, it is not to be found in anything remotely approaching thousands of tonnes at these prices. There is already a supply/demand deficit when only a few hundred tonnes per year are being accumulated for investment. They will only be able to get that gold through DRASTICALLY higher prices, war(s), or a radical realignment deal in the CB world (with US gold obviously playing a major part).
The British auctions, which were heralded as being sooo important were only 25 tonnes each, and there was twice as many buyers as could be filled! The Chinese want 7000 tonnes--Good luck!
I imagine they do have a lot of dollars though.....

Golden Bear (05/05/02; 07:19:20MT - usagold.com msg#: 74929)
Black Blade (msg#: 74927)
I have been contemplating your regular final words for quite a time, and am now beginning to research the process of food storage, as I see things deteriorating steadily just like yourself...

Thanks again for being persistent with this message as it helps keep it at the forefront of our minds so that we do not lapse into forgetfullness and distraction.

On that note, I bid you goodnight from the land of Oz.


Max Rabbitz (05/05/02; 07:13:08MT - usagold.com msg#: 74928)
A wee bit from Scotland this Sunday Morning
http://www.business.scotsman.com/index.cfm?id=481962002
From YOUR MONEY: Weak equity market sees investors making a new gold rush by Ian Williams.

"China's central bank is the most interesting example. China has exchange reserves of $700bn, of which about 2% is in gold. Last year, the Chinese declared their intention to increase this to between 10% and 15% of total reserves but were "persuaded" by the Americans to keep their reserves in dollars and treasury bills in return for American support for China's application to join the World Trade Organisation. Now that China is a member, it can change its reserve mix to whatever it wants."

Max: I figure 10% of $700bn is equal to 7056 tons of gold at $310 per ounce. How long will they wait?


Black Blade (05/05/02; 06:40:52MT - usagold.com msg#: 74927)
Golden Bear

Indeed, however, even with second chances most people never learn (sigh). It's human nature to only think positive. Unfortunately the "Grasshopper" mentality is prevalent in all societies. When things go bad - they can go bad very fast when people least expect.

In the US we had the energy crisis last year, and yet no one has learned. In California they have shelved plans for extensive transmission grid upgrades and power plant contruction. We are headed into another energy crisis because of false hopes that there is excess supply (which is a mirage due to new storage, higher demand, less drilling, etc.).

When the inevitable happens in the west as the economic recession deepens, we may find ourselves just like the Argentines. The country sold off their official gold. The people were not able to withdraw depreciating pesos and they rioted for food. Some lucky few here at the forum were able to accumulate some Gold Argentine pesos.

As always, get out of debt, get Gold and Silver portfolio insurance, get enough cash on hand for several months expenses, and start a nonperishable food and basic necessities storage program. I had been saying this long before the Argentine mess, and how well off they would have been if they were following such advice. Hopefully we here will not experience such things, however, we did in the 1930's (The Great Depression).

Cheers!

- Black Blade

Golden Bear (05/05/02; 06:23:35MT - usagold.com msg#: 74926)
Black Blade (msg#: 74925) Argentina
Greetings Sir,

I totally agree, however, did not Argentinians suffer rapid inflation due to a devaluing currency a decade ago? A wake up call that was not heeded.

It was too late when the SHTF, but they had a decade to get smarter....

Regards,

GB.

Black Blade (05/05/02; 06:18:10MT - usagold.com msg#: 74925)
Golden Bear - Argentina

The Argentine economy and banking system collapsed so fast that most Argentines were caught flat-footed. There simply was no time to exchange "confetti" for precious metal. Of course there were some who were buying Gold jewelry with fast depreciating pesos in a last ditch effort to get something of value. Also, if you were a bullion dealer and you saw the excessive rampant inflation would you exchange your value-gaining bullion for fast depreciating "confetti" or high-tail it with your bullion? I know what I would do. The time for buying Gold and Silver is past. The Ants survive while the Grasshoppers starve.

The economic disaster is starting to have effects in Brazil, Uruguay, and now Chile from what I hear. I also heard that large numbers of professionals are applying for visas to leave Argentina. Also, Argentine farmers are only selling produce for export. It looks to get more "grim" as this situation progresses.

Cheers!

- Black Blade


Golden Bear (05/05/02; 06:05:06MT - usagold.com msg#: 74924)
Mr Gresham (msg#: 74920)
your excellent conclusion to a very probable playout of the future:

"Revolution against such a system will require one part learning mathematics, two parts education in economic fundamentals (such as Austrian), and two parts sheer orneriness at being lied to one's entire lifetime."

Include here the dissemination of profound words by those who have positions of authority and favour justice and liberty for all - eg Ron Paul and Reg Howe et al.

My only concern is that a large proportion of the population do not want to take that level of responsibility for their own lives and want to be nurtured by Big Brother - oops I mean the government. Look at Argentina - the masses refused too educate themselves after all the turmoil they had suffered in the past, and still were on the receiving end of this current default and devalution of their currency - and want the government to fix it so that it's the way it was before and they can then go on their merry way in fantasy land.

Through all this chaos, I have not heard one story of Argentinians accumulating gold bullion, instead they are substituting one form of confetti with another thinking they will be safe next time. Old habits die hard, just like their owners...

Boilermaker (05/05/02; 05:31:00MT - usagold.com msg#: 74923)
Business Week Cover Story
MAY 13, 2002

COVER STORY

How Corrupt Is Wall Street?

New revelations have investors baying for blood, and the scandal is widening

When Debases Kanjilal, a Queens (N.Y.) pediatrician, picked up his phone in early 2001 to call lawyer Jacob H. Zamansky, he had no idea he would whip up a full-fledged hurricane on Wall Street. Kanjilal claimed he lost $500,000 investing in Infospace Inc. (INSP ), an Internet stock he says his Merrill Lynch & Co. (MER ) broker urged him not to sell when it was trading at $60 a share. By the time he sold, it was down to $11. Zamansky filed a novel arbitration claim against Merrill in March, 2001, in which he argued that its star Net analyst, Henry Blodget, had misled investors by fraudulently promoting the stocks of companies with which the firm had investment banking relationships. That lawsuit led directly to an investigation by New York State Attorney General Eliot Spitzer, who stunned Merrill and its Wall Street brethren three weeks ago when he made public some shocking e-mail exchanges between Merrill analysts and bankers.

That was just the start. Now, Spitzer is investigating Salomon Smith Barney, Morgan Stanley Dean Witter (MWD ), and at least three others. The Securities & Exchange Commission has launched a probe into practices at 10 firms, while the Justice Dept. is pondering an inquiry of its own. And plaintiffs' lawyers are advertising for clients and filing new suits daily.

The widening scandal has plunged Wall Street into crisis. The resulting furor is more thunderous than the one unleashed by Michael R. Milken's junk-bond schemes in the 1980s, the Prudential Securities limited-partnership debacle in the early '90s, or price-fixing on the Nasdaq later in the decade. In part, that's because many more individuals lost money in the recent market collapse than on earlier scandals.

But uproar over the relationships between analysts and their investment banking colleagues has also grown because it comes on the heels of several other scandals that raise big questions about how Wall Street operates. Already, probes are under way into Wall Street's shady initial public offering allocation practices, as well as its crucial role in setting up and selling the partnerships that led to Enron Corp.'s collapse. Worse, execs at many firms may have made a bundle investing in the partnerships, even as those same firms advised clients to hold Enron stock virtually until it went bankrupt. It all makes Wall Street seem rigged for the benefit of insiders as never before.

The damage goes way beyond the tattered reputations of the firms and their beleaguered analysts. The entire economy depends on the financial system to raise and allocate capital. And that financial system, in turn, is built on the integrity of its information. Should investors lose confidence in that information, it could deepen and prolong the bear market, as wary investors hesitate to put money into stocks. And it could easily put a damper on the economy if companies are less willing--or less able--to raise capital on Wall Street. "One of the precious things we have is the integrity of the financial markets. If that changes it could have dramatic repercussions on the dollar, on domestic inflation, on the economy," says Felix G. Rohatyn, former managing director of Lazard Freres & Co.

Wall Street has always struggled with conflicts of interest. Indeed, an investment bank is a business built on them. The same institution serves two masters: the companies for which it sells stock, issues bonds, or executes mergers; and the investors whom it advises. While companies want high prices for their newly issued stocks and low interest rates on their bonds, investors want low prices and high rates. In between, the bank gets fees from both and trades stocks and bonds on its own behalf as well, potentially putting its own interests at odds with those of all its customers.

But in recent years, those inherent conflicts have grown worse, as the sums to be made by overlooking them have grown enormous. That's because since the repeal of Depression-era banking laws, megabanks such as Citigroup (C ) and J.P. Morgan Chase (JPM ) are allowed to do everything from trading stocks to lending money and managing pension funds.

Chinese walls--jargon for the strict separation of the different lines of business conducted under the same roof--were supposed to keep the bankers honest and free from corruption. But a series of scandals since the early 1980s has eaten away at those foundations. The final blow, however, was the tide of money that flooded over Wall Street during the great tech bubble. Between the last quarter of 1998 and the first quarter of 2000, the tech-heavy Nasdaq market index soared from 1,500 to more than 5,000. Many investors made out like bandits. So did the investment banks. During the same period, according to Thomson Financial/First Call, Wall Street earned $10 billion in fees by raising nearly $245 billion for 1,300 companies, many of them profitless tech outfits that later blew up. The bubble burst in the spring of 2000, wiping out more than $4 trillion in investor wealth. "The fact is that a bubble market allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them," wrote famed investor Warren E. Buffett in his annual report to Berkshire Hathaway (BRK.A ) shareholders last year.

Staking their claim in the gold rush, Wall Street firms ramped up in the late '90s, hiring hordes of analysts, many of them inexperienced. New investment bankers were hired as well. A feeding frenzy set in as rivals fought to grab a big share of the market to bring companies public. At the same time, a new cult of equities came to life, as individuals invested in stocks as never before. True, many investors ignored common sense. Still, as analysts applauded stocks, trumpeting their picks on CNBC and other media, investors bought. "Investors took everything at face value, which was understandable. There wasn't a lot of information, and it was of varying quality," says Michael E. Kenneally, co-chairman and chief investment officer at Bank of America Capital Management Inc.

Only now are the ugly details of the conflicts at play being laid bare. In some of the e-mail turned up by Spitzer, analysts disparage stocks as "crap" and "junk" that they were pushing at the time. The e-mails are so incendiary that they threaten to thrust Wall Street into the sort of public-relations nightmare that Philip Morris (MO ), Ford (F ), Firestone, and Arthur Andersen have endured in recent years. All the ingredients are present: publicity-hungry attorneys general, packs of plaintiffs' lawyers, and potential congressional hearings. "The last thing the industry wants is...the drip-drip-drip of new stories every week," says Howard Schiffman, a former SEC Enforcement Div. lawyer now practicing privately in Washington.

More explosive documents may be on the way. Both Spitzer and the SEC are seeking from more than a dozen firms papers and e-mail related to analysts' recommendations and their potential conflicts of interest. While nobody knows what evidence will emerge, other firms will have their own smoking guns. And analyst pay is likely to emerge as a hot-button issue. Zamansky, for instance, claims that he has seen contracts from investment banks promising analysts 3% to 7% of all the investment banking revenues that they help to generate.

That would be clear proof that analysts were being paid to help the firms' banking clients, often at the expense of investors who expected objective advice.

The financial implications of this mess are enormous. Based on the evidence that has already emerged, Merrill is facing potential fraud claims by every retail investor who purchased any stock that Blodget & Co. may have insincerely recommended. If analysts covering other industries at the firm harbored similar doubts about the companies they hawked, the number of claimants will expand exponentially. Should other financial firms have similarly embarrassing documents in their files, Wall Street could easily be facing billions in potential liability. In a report released on Apr. 24, as the fiasco was unfolding, Prudential Financial analyst David Trone estimated the issue could cost Merrill alone $2 billion.

Heads could roll, too. If prosecutors conclude that firms are guilty of systemic fraud--rather than harboring a small group of rogues--research directors and other high-ranking execs could be vulnerable. That's why the way analysts were paid is such an explosive issue. In egregious cases, criminal prosecutions are possible. Although regulators have never thrown an analyst in jail for fraudulently recommending a stock, experts say that could happen if public outrage flames high enough. Spitzer, whose tough New York securities statutes give him unusually broad power to file criminal suits, says he won't stop short of structural reform. "I'm continuing to negotiate [with Merrill]," he told BusinessWeek on May 1. "They've been fruitful discussions, but negotiations can break down over a range of things. At this moment, we have significant issues that have not been resolved."

Over the long run, a risk bigger than legal penalties could be new restrictions that Spitzer or others place on the way investment banks do business. On May 8, the SEC is scheduled to approve new rules forcing analysts to limit and disclose contacts with investment banker colleagues. But there's good reason to question whether these steps will be enough to satisfy the industry's critics--some of whom seek a separation between investment banking and analysis. At the moment, such radical change is a long shot. But if the Democrat-controlled Senate latches on to the analyst issue, it could trigger embarrassing hearings or proposals for more stringent rules. "Other shoes will drop," says one securities-industry lobbyist. "If [Salomon's Jack] Grubman or [Morgan Stanley's] Mary Meeker turns up [in similar evidence], the sky is the limit" for this issue. "It has big legs."

It was never much of a secret that analysts who work at investment banks often work against investors. Sell ratings now make up less than 2% of analysts' recommendations, up from around 1% during the bull market, according to First Call. Analysts are under pressure from the companies they cover, as well as from big institutional clients who may own the stock, to give positive ratings. Michael Mayo, senior bank analyst at Prudential Financial, recently told the Senate Banking Committee that he had been exhorted to stay bullish throughout his career, from both his former employers and the companies he covers. Otherwise, he said, he doesn't get the same access that others do, which gives him a harder time making nuanced stock calls. "It's like playing basketball with one hand tied behind your back," says Mayo. Analysts also need to shine in surveys such as Institutional Investor's annual rankings, in which money managers vote for their favorite stockpickers, so they spend too much time lobbying clients rather than crunching numbers. "Analysts get focused on saying what they think the client wants to hear to win the vote," says Henry J. Herrmann, chief investment officer at Waddell & Reed Inc., a money manager.

The biggest factor now contaminating the system is compensation. To an ever-increasing degree, analysts' pay is tied to how much investment banking business they bring in. According to a Merrill memo released by Spitzer, Blodget detailed how he and his team had been involved in 52 investment banking transactions from December, 1999, to November, 2000, earning $115 million for the firm. Shortly thereafter, Blodget's pay package shot up from $3 million to $12 million. Charles L. Hill, First Call's director of research, says that when he was a retail analyst 20 years ago, if he helped investment bankers with a new client, he would get a small reward at year's end: "But it was the frosting on the cake. Now, it is the cake."

It would be an exaggeration to say analysts alone are to blame for Wall Street's woes. There's a much deeper problem involving everyone from credulous investors to deal-happy investment bankers and execs looking to fatten their wallets. "It's finally dawning on people that this incentive system we've given managers based on the value of stock options has encouraged management to puff up their companies a lot," says Robert J. Shiller, an economics professor at Yale University and author of the 2000 best-seller Irrational Exuberance.

Even so, experts say a lot of the corruption oozing from Wall Street has to do with an erosion in investment banking ethics and practices. It goes clear back to 1975, when fixed trading commissions were ended. Until then, investment banks had been able to make big bucks off pricey trading commissions. Slashed commissions meant the firms were forced to derive more revenues from investment banking business. "There's a real sense of sadness over what has happened in investment banking. It's not about what's right for a client, it's all about jamming a deal down a client's throat," says an ex-analyst who recently joined a hedge fund.

Consider Enron, which has paid $323 million to Wall Street in underwriting fees since 1986, according to Thomson. Goldman, Sachs & Co. (GS ) pocketed $69 million of that, while Salomon made off with $61 million, and Credit Suisse First Boston took $64 million. Indeed, two of CSFB's investment bankers, after helping to design Enron's off-the-books partnerships, sat on one of the partnerships' boards. According to a complaint filed in Houston Federal Court on Apr. 8, investment bankers generated megaprofits from secretly investing in Enron's hidden partnerships. Meanwhile, many analysts continued recommending the stock to the bitter end: 11 out of 16 analysts who follow Enron had buys or strong buys less than a month before the company's bankruptcy filing.

Enron may be an extreme example. Still, in the past, tradition and ethics played a large role in keeping investment bankers loyal to their corporate clients. Indeed, Wall Street itself used to have much more of an interest in guarding its reputation. Says Jay Ritter, a finance professor at the University of Florida: "These days, bankers are far more focused on short-term profits than on their long-term reputations."

That's likely to get worse as investment banking business continues to dry up. The amount being raised in initial public offerings is way off its 2000 highs. Now there are far fewer mergers and follow-on offerings taking place. Because of this, it's unlikely that Wall Street, after all its hiring during the tech bubble, can sustain its profitability. Goldman Sachs estimates that five of the top investment banks on Wall Street will have to get by on $2 billion less than the $16 billion in net revenues they racked up in 1999. If investment banks roll back to 1999 staffing levels, Putnam Lovell Securities estimates that banks will have to shrink their payrolls by 5%--putting over 13,000 out of work.

But no matter how much Wall Street shrinks, its credibility must grow again. Firms have already taken some steps, such as eliminating direct reporting by analysts to investment bankers. But the Street and the SEC still must hammer out a solid, enforceable code of conduct. And if strong reforms in how analysts are compensated aren't pursued, focusing on increased disclosure will do little to end the abuses. Beyond that, regulators may need to go after the firms' top brass--the folks who set the procedural as well as ethical tone. And the Street should take great pains to monitor itself in an effort to restore investors' confidence. "If Wall Street knows what is good for it and what is good for this country, it will very definitely clean up its act," says Rohatyn. Adds George H. Boyd III, head of equities at New York's Weiss, Peck & Greer: "This is an industry of trust; it's one of its key assets. If [Wall Street] loses it, it is going to have to invest in getting [that trust] back and putting in the controls to rebuild it. Without that trust, there's nothing."

Merrill Lynch apparently knows this. At its annual shareholder meeting on Apr. 26, Chairman and CEO David H. Komansky took an unprecedented stand on the analyst debacle, saying: "We have failed to live up to the high standards that are our tradition, and I want to take this opportunity to publicly apologize to our clients, our shareholders, and our employees." Other apologies may follow, as firms desperately try to assuage potentially litigious investors and unyielding regulators. But for Wall Street, just saying sorry at this stage may prove to be too little, too late.


By Marcia Vickers and Mike France, with Emily Thornton, David Henry, and Heather Timmons in New York and Mike McNamee in Washington

Boilermaker comment: Corruption borne of greed will do more to damage the US than any foreign enemy or terrorist campaign could have ever hoped to accomplish. Government regulators and institutions, ie., SEC, Treasury Dept. and the Federal Reserve, have aided and abetted the process.

At least the "Mainstream Media" is finally taking the blinders off. That's a first step in correcting a problem that will cause many years of pain.

Black Blade (05/05/02; 04:00:54MT - usagold.com msg#: 74922)
Gold Standard
http://www.technicalindicators.com/gold.htm

So....that's where S J Kaplan went (snicker). I guess he will be just as successful there as on his old site. How pathetic. Relying solely on COT as an indicator for POG direction. How bizarre. let's see here, didn't SJ Kaplan go "significantly Bearish" just as when the current Gold rally began and then go long the QQQ? Hmmm...

Just because these guys are losing their shirts they decide that they must trash anything that is moving higher - particularly Gold. They are in for a very big surprise (so far they have been creamed).

- Black Blade

Gold Standard (05/05/02; 03:44:48MT - usagold.com msg#: 74921)
Just for a laugh!
http://www.technicalindicators.com/gold.htm

Have any of you Lords and Ladies of the Realm of Gold stumbled across the above site?

It is full-on propaganda from the Cabal to you:

Snip>
The threat of a financial crisis does not yet seem close enough to warrant a run out of the U.S. Dollar, particularly since the present U.S. administration seems to favor a strong dollar.

There has been a lot of talk about some mining companies planning not to hedge as much as they have in the past. We are surprised at how many people take this talk seriously, which we regard as somewhere between foolish and ridiculous. The futures market exists for the benefit of miners to take advantage of high prices when they occur in the futures market. A miner can lock in a good profit in the futures market when prices are right.

If a mining company passes up the opportunity to lock up a good profit, he will then be speculating instead. Sometimes he will be right and other times he will be wrong. The subject of hedging has been discussed for centuries and there are many different attitudes toward it. However, most businessmen agree that if you can lock up a profit rather than speculate, you should do so.

Those miners who decide to speculate rather than hedge at a profit put their companies at risk if the price goes the wrong way. For an ongoing business not to hedge in a good profit, would be considered irresponsible or just plain greedy by some. Solid, long lasting companies are usually not based on speculation.

So far, in spite of reports of hedging cutbacks, we are unable to see the affect of any cutbacks as the industry remains hedged at high levels.

<End Snip

Well worth a look and a laugh, especially when cracking the champagne after Monday's trade.

Cheers and Golden dreams, all!

Mr Gresham (05/05/02; 01:20:33MT - usagold.com msg#: 74920)
Golden Bear -- House of cards
http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=11330
I was going to select that same Noland passage:

"Greenspan: "New financial products have enabled risk to be dispersed more effectively to those willing, and presumably able, to bear it. Shocks to the overall economic system are accordingly less likely to create cascading credit failure."

Noland:" We take the exact opposite view: Derivatives and "financial engineering" generally isolate, extract, and specifically "Bundle" risk (interest rate, Credit, currency, equity, gold, etc.). And this is not some arcane intellectual debate, as it is our view that this "Bundling" has now set the stage for precisely the types of "cascading credit failure" and inevitable "shock to the overall economic system" that Greenspan apparently believes are "less likely."

G: Reading the two opposing views of derivative risk just now over at Noland's site put me back to a few hours ago when my daughter was reciting to me in full detail the story of The Emperor's New Clothes, which she has just learned to read.

Greenspan and his "wise" advisors are obviously the smartest people in the land and certainly could not be found to be walking through the city buck nekkid now, could they?

I actually had some thoughts yesterday for a "bell curve" of mathematical precision in finance, which I get every time I read the list of "Greeks" in options, and when I hear about delta hedging. The pioneers in financial mathematics (and computer modeling) got an edge over some others in the trade, but it has led to a computerized "arms race" in competitive modeling, till no one has any useful edge now, compared with the systemic risk overall.

These people are so enamored of their precise formulae, they can't get over it, and they can't admit that all their competitors are using the same formulae. The edge now cannot be in getting a slightly finer-tuned formula to beat them by a tiny margin; the edge must be to get the hell out of the game before it implodes. What! -- and give up my paychecks and commission bonuses!

I still imagine that Greenspan's disaster recovery scenario is to triage the strongest of the "wounded" firms with Fed cash, close the worst ones by merging into selected survivors, which will take "haircuts" on their portfolios and hope to continue. The public will be measured for its remaining confidence in The System, and an appropriate image of the financial industry will be supplied to meet that remaining credulity. "Bad" banks etc will be exposed in the media and despatched publicly, and good ones will be lauded for "stepping in to save the public's hard-earned savings". 'Twill be a PR campaign they'll view with awe ages hence!

The Federal Reserve and FDIC created a fiat money system in which all banks could partake as franchises ("McFed"?) staying within certain industry-supplied rules, and competing only in approved ways. That system will morph itself as necessary and possible to conform to a new financial landscape, presenting whatever faces and names it believes will bring in the greatest overall cash depository result.

That Antal Fekete essay recently about the Fed deepening the 30's Depression by liquefying the banking system through T-bonds while starving the manufacturing sector, comes to mind as an example of the sway of the financial sector over all others, at whatever cost in human suffering.

Banking and its machinations have been such a big part of our U.S. history in EACH century; it is really hard for me to hear paeans about this "wonderful country of ours" (I know which parts of it _I_ think are wonderful) without thinking of the blindness of its inhabitants to the financial control mechanisms ruling their lives.

Blind patriotism seems to me almost a pugnacious, pathetic denialism by those who are trying to fight their way out of the paper bag of their own forgiveable ignorance, constructed out of media propaganda, economic mis-education, and mathematical innumeracy. A product attacking its fellow products.

Revolution against such a system will require one part learning mathematics, two parts education in economic fundamentals (such as Austrian), and two parts sheer orneriness at being lied to one's entire lifetime.

Black Blade (05/05/02; 00:58:09MT - usagold.com msg#: 74919)
Re: Waverider – Books

The following books are listed along with author and a short description by reviewers and myself:

1. "The Prize: The Epic Quest For Oil, Money, and Power" By Daniel Yergin, 1993. The book furthers ones understanding of the United States' place in this history which, in turn, helps us to understand why oil is a vital national interest to the most powerful nation on earth. With this in mind, the book helps one to understand not only the influence people like the Samuel brothers, the Rothschilds, and the Rockefellers had on the development and growth of the industry, but most importantly how and why this industry has such influence on the direction of U.S. foreign policy.

2. "Hubbert's Peak: The Impending Oil Shortage" By Kenneth S. Deffeyes, 2001. This book has been on the top 10 list and is one of the books recently seen carried by George Dubya. Kenneth S. Deffeyes was a protégé of M.King Hubbert at Shell and is currently a professor of Geology at Princeton University. He delivers a sobering message: the 100-year petroleum era is nearly over. Global oil production will peak sometime between 2004 and 2008, and the world's production of crude oil "will fall, never to rise again." If Deffeyes is right--and if nothing is done to reduce the increasing global thirst for oil--energy prices will soar and economies will be plunged into recession as they desperately search for alternatives. It is no wonder then that Oil Men like George "Dubya" Bush and Dick Cheney have read this book.

3. "Geodestinies: The Inevitable Control of Earth Resources Over Nations And Individuals" By Walter Lewellyn Youngquist, 1997. GeoDestinies helps to identify the forces that will determine our future. Some of these include the exponential population explosion, the ever-increasing demand and use of fossil fuels and other non-renewable resources, the degradation of our soils and groundwater, the truths and misinformation concerning alternative energy sources, and the relationships between natural resources and politics, economics, and our culture as a whole.

4. "The Coming Oil Crisis" By Colin J.Campbell, 1997. During 1997, an academic debate of immense significance for the future of civilization began to surface in a remarkably diverse array of media. The debate concerns the question, is there enough crude oil left in the world to get us to 2010 without a historically unprecedented discontinuity. The whole character of society in the 20th Century, and of its history, economics and politics is more a product of oil than of any other factor. The crucial question which Campbell addresses in his book is how much oil remains to be found and for how long global oil resources can continue to support the expected growth in demand. Having access to Petroconsultants' extensive database, he has carried out a detailed and comprehensive analysis of historical production data and of the Earth's ultimate oil potential. His estimate of the ultimate oil reserves is 1800 billion barrels of which 1600 billion barrels have been discovered, and he predicts that there are only a further 200 billion barrels yet to be found. His most crucial pronouncement however, is that once the global mid-point of depletion has been reached, production rate will decline.

5. "Green Monday" (out of print – Financial Thriller) By Michael Thomas, 1981. Financial Thriller – I believe about Gold, Oil and the Middle East – I haven't read it. Though I remember that Randy (our Admin guy) mentioned it once in passing. It sounds interesting enough that I just ordered a used copy tonight from an online book retailer.

6. "The Skeptical Enivornmentalist: Measuring the Real State of the World" By Bjorn Lomborg (Academic and former Greenpeace activist), 2001. Lomborg than correctly pointed out that incentive structure for the career environmental scientist/activist tilt them to communicate bad, or even alarmist, scenarios. Basically, it is money (donations and government grants) and livelihood (career and fame.) Similarly, the media is incented to communicate "news" that attracts a large viewership - the only real news is bad news. He merely points out that if we use scientific methods (rather than faith) and make claims responsibly (rather than based on self-interest), the populace will have a better understanding of the true state of the environment, and resources can be directed to the areas that are truly a source of concern. But of course that might well mean that less governmental money, and less environmental research jobs. Lomborg did not make many friends of the environmental stripe by publishing this book

7. "The ABCs of Gold Investing : Protecting Your Wealth Through Private Gold Ownership" By Michael J. Kosares, John Ritland (Illustrator), Rod Colvin (Editor), 1997. Of course our Host's book is listed as a recommended listing along with the previous literature. Now for the first time under one cover, novice investors will find thorough guidelines for making good decisions about private gold ownership. In The ABCs Of Gold Investing, gold investment expert Michael J. Kosares (with 25 years experience in the field) emphasizes the asset preservation qualities of gold at a time when investor uncertainty about the economy has led many to seek asset diversification. The ABCs Of Gold Investing covers a range of topics, from understanding gold's role in combatting inflation and deflation to how to select a gold firm. Kosares also examines reasons why gold has become an essential in many American portfolio and why that trend is likely to continue. – Midwest Book Review. Heck, if you ask I am sure he will even sign the book for you. (You can even buy thye book here online from the Castle, as well as "In the Footsteps of Giants" - introduced to me by a friend).

8. "The Power of Gold : The History of an Obsession" By Peter L. Bernstein, 2001. Though I don't necessarily agree with all of Peter's conclusions, he does put together an interesting (and gory) picture of the history of the "barbarous relic". Peter Bernstein quotes the immortal words of King Ferdinand of Spain, who once declared: "Get gold, humanely if possible, but at all hazards--get gold." As ensuing chapters reveal, man's obsession with finding, keeping, selling, and evaluating gold has rarely been a humane adventure and has always been a hazardous one. If anything, the book does describe events through history concerning Gold that we know have influenced the course of history for over 6,000 years. Although he doesn't cover it, the earliest evidence of Gold influence in World culture is perhaps as early as 4,000 B.C. as evidenced by unearthed Thracian treasures. Other than the historical view presented I think that he tends to miss the point of Gold ownership in today's world and the necessity of having Gold as part of a diversification strategy. For that I would recomment MK's book.

Aside from "Green Monday", which I haven't read yet, I would recommend the other books as a good start to understanding the approaching financial crises as our critical economically extractable resources become depleted and how to prepare for the ensuing financial meltdown. Actually, I have yet to read the entire "Hubbert's Peak" and "The Skeptical Environmentalist". Anyway, so much good literature and so little time, but that is what life is – a lifetime of learning and accumulated knowledge. Cheers and happy reading!

- Black Blade





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