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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...

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ARCHIVED DISCUSSION FROM 1/5/2003
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Sierra Madre (01/05/03; 22:50:47MT - usagold.com msg#: 93528)
Thinking of the swift decline of the USA
Historians and philosophers will deal with the subject of "The United States of America and The American People" for centuries to come.

The democracy of Athens lasted only a few short decades.

Shakespeare's "Midsummer Night's Dream" Act 1, Sc 1, comes to mind:

"Swift as a shadow, short as any dream;
Brief as the lightning in the collied night,
That in a spleen unfolds both heaven and earth,
And ere a man hath power to say, "Behold!"
The jaws of darkness do devour it up:
So quick bright things come to confusion."

The USA, as framed by its Founders, was indeed a "bright thing"!

But, the granite truths upon which they built, thanks to their excellent classical education, have been forgotten and long ago discarded. And the bright thing has come to confusion, indeed.

Centuries of debate will follow.

****

Thanks Cavan Man, for posting "Recessional" in its splendid entirety. And more thanks still, for referring to me as your friend. I reciprocate the feeling heartily!

Sierra

LimitUp (01/05/03; 22:49:37MT - usagold.com msg#: 93527)
Old Gold Bug
Sierra Madre, I can't beat 1941 but when I was an 8 year old in 1950 I would get hung up passing the coin display counter at Bambergers Dept. Store in Newark,NJ. The coins were beautiful and only $50. Then my mom would come back and drag me away. Got Gold?

physicalman (01/05/03; 22:26:54MT - usagold.com msg#: 93526)
gold longevity contest
Ya got me beat bud!! I'm 44 and got my 2 1/2 dollar indian when i was nine. When you got yours i wasn't even a twinkle in my daddy's eye.

techbull.... (01/05/03; 22:20:00MT - usagold.com msg#: 93525)
Media
I had a look through my local newspaper today, and in it was a full page story on why not to buy gold. The clown they were quoting from CIBC Wood Gundy actually had the nerve to say that gold was a bad investment, because it doesn't pay a dividend like mutual funds or stocks can. It is almost unbelievable that these same idiots who during the tech boom wouldn't have recommended a dividend stock if there lives depended on it, now seem to think a dividend is a necessity. Obviously a lot more people are beginning to inquire about gold, or these investment guys wouldn't be in such a panic to defame it.

Sierra Madre (01/05/03; 22:07:43MT - usagold.com msg#: 93524)
CyteK - I don't want to alarm you (too much) but

Your niece's husband might well consider a crash course in making tamales and peddling them house to house.

He better get busy with something! The longer he waits the more dire his plight will be.

A great many people are in the same boat now, and the sooner they realize that things are not going to go on as usual, the better for them.

Sorry to be so drastically pesimistic, but it does no good to ignore the facts.

Sierra

VanRip (01/05/03; 22:07:39MT - usagold.com msg#: 93523)
Saddam to Speak Shortly-CNN
http://www.cnn.com/2003/WORLD/meast/01/05/sproject.irq.inspections/index.html
Looks as if Saddam will be speaking just before the London markets open. Interesting.

(snip)

Iraqi President Saddam Hussein will deliver a televised speech on Army Day Monday, the Iraqi News Agency (INA) reported.

"The President will deliver a pan-Arab and historic speech tomorrow at 11:00 local time (0800 GMT) to the people of Iraq and members of our brave armed forces on the 82nd anniversary of the Iraqi Army," the agency said on Sunday.

Al-Iraq newspaper said the civilian militia of Saddam's Baath Party carried out the war game Saturday in Babil province. Militiamen practiced deceiving an attacking enemy and fighting in urban and rural areas, the paper said.

Sierra Madre (01/05/03; 21:58:54MT - usagold.com msg#: 93522)
Been in gold "a long time"?

How long is "long"?

How about since 1941? That's when I got my first little gold coins.

Can anyone at this Forum beat that?

Sierra

Hipplebeck (01/05/03; 21:33:42MT - usagold.com msg#: 93521)
I just watched a tv show about Enron
It was well done.
I liked the part where Brian Dennehey (sp?) says "there are thousands of Enrons out there."
The truth of the matter is The United States of America is one big Enron, and they are trying to make the whole world into one big Enron.
The sooner it all comes crumbling down the better.
I just hope we don't destroy the world in the process.
I am hammering at the feet of clay every day.

balzac (01/05/03; 21:31:04MT - usagold.com msg#: 93520)
MALFEASANCE AND GREED
@ Farfellow
Farfel you are my hero!!

How about an email campaign to the various regulatory bodies,

including the White House and Congress.

We had well over 100 bugs in the last contest , they should be gratefull enough to send a few emails each.

Besides most of us old birds dont have much to do anyway.

Balzac

cyberbat (01/05/03; 19:49:17MT - usagold.com msg#: 93519)
@Farfel
Farfel,
When I see and hear about gold warriors like yourself, a favorite poem of mine comes to mind about you. It will forever remain in my mind but only spoken to a favorite few.

" He that is thy friend indeed, he will help thee in thy need. If thou sorrow, he will weep;If thou wake he cannot sleep. Thus of EVERY GRIEF in heart, he will share with thee a part.
These are certain signs to show, faithful friends from faulting foe." Richard Barnfield
We all know at this oaken table where you are coming from and are with you every step of the way. May God bless you always.
Your friend,
Cyberbat

Cavan Man (01/05/03; 19:35:27MT - usagold.com msg#: 93518)
and, for Farfel
May you always have work for your hands to do.
May your pockets hold always a coin or two.
May the sun shine bright on your windowpane.
May the rainbow be certain to follow each rain.
May the hand of a friend always be near you.
And may God fill your heart with gladness to cheer you

(a reputed "Irish Blessing")Cheers...CM

Cavan Man (01/05/03; 19:29:47MT - usagold.com msg#: 93517)
An Irish Blessing for all USAGOLDERS
May those who love us love us.
And those that don't love us,
May God turn their hearts.
And if He doesn't turn their hearts,
May he turn their ankles,
So we'll know them by their limping.

R Powell (01/05/03; 19:20:14MT - usagold.com msg#: 93516)
Farfel
M. K. said it beautifully. Ditto from me and the Mouser.

Farfel (01/05/03; 19:12:05MT - usagold.com msg#: 93515)
Attention Enron Investors: Let Brothers in Arms Unite!
Exclusive for USA Gold.......................

With his usual brilliant analysis, James Turk recently challenged the Securities Exchange Commission (SEC) to investigate the gold loan exposure of JP Morgan Chase. However, unfortunately, I am not particularly optimistic that Turk's efforts will inspire the SEC to conduct a proper due diligence examination of JP Morgan and its apparently labyrinthine gold derivatives structure.

First, the SEC has a miserable track record of proactive strategies to preclude malfeasance in the markets. Where was Arthur Levitt's SEC during the height of internet mania? Why did the agency sit upon its hands whilst the most egregious financial scams in American history were perpetrated upon the American investing public? One can only surmise that there were some very powerful vested interests on The Street who have influence over the SEC....and they were far too busy promoting hot air financial vehicles and accumulating windfall profits to allow the SEC to spoil the party. For example, do you think Goldman Sachs wanted the party to end any time soon when it could provide EBAY honcho, Meg Whitman, stock in some 100 high tech IPO's in exchange for her company's business? Even to this day, the SEC has failed to take appropriate sanctions against Ms. Whitman. Yet, utilizing her corporate position for her own personal financial gain without any revelation of her profiteering nor distribution of her profits, she effectively "robbed" her own shareholders ...and her corporate malfeasance makes Martha Stewart's one time incident of insider trading appear to be no more than a schoolgirl prank, by comparison. Of course, as a now former director of Goldman Sachs, Meg Whitman is keenly aware of what gold investors have known for some time: it sure helps to have friends at Goldman when it comes to operating outside the boundaries of proper acceptable conduct in the marketplace.

Secondly, since the revelation of the Enron fraud, what has the SEC done with respect to Enron's major executive culprits, Mr. Skilling and Mr. Lay? Why is the entire Enron investigation relegated to the back pages of the financial newspapers, if it is even mentioned at all anymore? Why hasn't the SEC intervened to examine the settlement reached privately by JP Morgan and the insurers of its offshore "disguised loans" in order to determine whether such a settlement is really in the best interests of Enron's shareholders?

Thirdly, with the appointment of long time Wall Street veteran, William Donaldson, to head the "new" SEC, are we really to believe that the agency will mount a voluntary and vigorous investigation into Street goliath, JP Morgan Chase? How can a man with personal and business relationships formed all over The Street be the right person to conduct a truly unrelenting, hard core examination of the investment bank, JP Morgan...especially given that JP Morgan's many counterparties consist of a Who's Who of Wall Street firms and given that JP Morgan happens to be a principal of the US Federal Reserve? Excuse me if I do not believe Mr. Donaldson is sufficiently independent of Street influences to scrutinze properly the gold derivatives book of JP Morgan.

Fourthly, since JP Morgan utilized offshore vehicles in its various scam trades with Enron, then just how effective can the SEC be in terms of examining the investment firm's activities outside the jurisdiction of the United States? When JP Morgan states that it has no real exposure to gold loans, is that simply another "Clintonian" word game, where "it all depends upon what the definition of "has" is? Is it conceivable that JP Morgan has hidden most of its gold loan activity through offshore shell corporations in much the same manner that it hid its oil and gas trades with Enron? Is it not reasonable to assume that if a corporation utilized a particular strategy (offshore trading) for a lengthy period of time with some success then it would continue to utilize that same strategy with respect to ALL its various business activities? If the SEC is to probe the JP Morgan gold book, it MUST demand to see a schematic of all related offshore entities. Then, the SEC must pour over the books of each and every offshore vehicle in order to determine JP Morgan's "real" exposure to the gold market.

I applaud Mr. Turk and GATA for launching a counterattack against JP Morgan and its allegations of
unfounded negative rumors concerning its exposure to gold derivatives. However, I humbly suggest that the methodology is wrong and that a grass roots approach would be much more effective.

The people who most likely desire a full revelation of the JP Morgan gold book are those who have been hurt by it the most. Those constituent members fall into two camps: gold investors and ENRON investors. Both groups share one thing in common...they are both victims of covert, nefarious actions by Establishment cronies who conspired to self-enrich at the expense of
small investors who remained outside the loop. In effect, although most ENRON investors would likely describe themselves as stock market and US dollar bulls, the reality is that ENRON investors and gold investors are "brothers in arms," linked by their victimization at the hands of the powerful Street interests who defrauded them. In the case of gold investors, the covert gold carry trade was the primary vehicle utilized to steal their monies over the past several years...while ENRON investors were robbed of their monies by offshore specious trading aided and abetted by two of the major bullion banks responsible for that very same gold carry trade.

It seems the most effective (albeit costly) approach needed to impel an investigation into JP Morgan's gold book is a direct appeal to ENRON investors and the politicians who represent them (virtually every politician in America, since ENRON common stock ownership was very broad-based). If at all possible, I would suggest the implementation of full page ads in major newspapers, financial and dailies, across the United States, with copy that paraphrases Mr. Turk's letter to the SEC, plus prefatory comments addressed to ENRON shareholders. In those comments, it should be noted that exploitation of gold investors by Wall Street firms led directly to the exploitation of ENRON investors by those very same investment firms. The ads should request ENRON investors demand an independent, non-SEC investigation into JP Morgan's gold book (possibly by an Elliot Spitzer-type, not as the co-opted Establishment man he is today but as the regulatory maverick he once used to be). The ads should demand an independent, non-SEC investigation into the settlement reached by JP Morgan and the insurance companies in order to determine whether coercion was applied to those insurance companies by Wall Street goliath JP Morgan in order to prevent the ENRON investigation from developing into a more thorough examination of JP Morgan's derivatives exposure. Ideally, the ads should be financed by the gold industry itself (although I would not hold my breath).

In other words, there is no more effective way to liberate the gold market from the conspiratorial shackles of its long time price riggers than by creating a common purpose with the multitude of harmed bull market shareholders (best exemplified by ENRON shareholders) who ultimately were wiped out by the very same gang of Wall Street thieves. It is one thing for "lunatic" goldbugs to demand inquiries into Wall Street; it is a much more compelling thing when 401K investors, bull market funds, and mainstream institutions demand the very same inquiry.

As ironic as it seems, who would have ever thought that there would come a day when a gold investor's best friend might turn out to be a shareholder in one of America's once largest corporations? Whether they know it or not, ENRON shareholders share more in common with goldbugs than they could ever imagine.

They should learn this little bit of news as soon as possible.

Farfel

MK (01/05/03; 19:09:32MT - usagold.com msg#: 93514)
Farfel. . .
May I be among the many who have publicly thanked you for the courageous effort you have made in behalf of gold, its advocates and owners. Many times you have been an inspiration to me and countless others. You are a good man, Farfel, and you never shrunk from the din of battle. I salute you, my friend. May God bless and keep you, and as the Irish say, "May the good Lord hold you in the palm of his hand."

Cytek (01/05/03; 19:08:41MT - usagold.com msg#: 93513)
JPM to cover their Short Position
A friend of mine heard from a Broker in NY that the Fed is loaning JPM federal gold to cover their short position. However, it is just a rumor, nothing confirmed yet. The question is, is it enough to cover their entire position.As they say, JPM is too big to fail. Still, it would mean the banks would be covering and not trying to short gold down anymore if they have to get bailed out.

If the rumor is true then it is a partial bailout, enough to contend with the crisis at hand. The question is, how high with the covering push the POG up. Barrick's hedgebook has got to be underwater about now. I believe some crisis news about hedgebooks will be coming out soon at $354 gold. Next week should be interesting, there could be the start of some panic buying of both bullion and Mining stocks. Mergers are going to happen, their "back door" covering strategy. Tuesday will also be interesting with Pres Bush's tax plan, this could rally the markets short term and then i think re-test September lows. How about March Gold at $400 and Silver at $8.

Cytek

Farfel (01/05/03; 19:02:02MT - usagold.com msg#: 93512)
Thank you.......
Although I have not been feeling well lately, I wish to thank the many posters on USA Gold plus other gold forums for the good wishes they sent my way.

It is difficult to keep "a gold dog" down, so I am adding another weapon today to the growing arsenal necessary to liberate gold investments from the artificial suppression of its conspiratorial antagonists.

Thank you again.

silvercollector (01/05/03; 19:01:21MT - usagold.com msg#: 93511)
Second crack at 354 tonight....
For anyone keeping count of the cracks at 330 here's a look from historical graphs of spot (Kitco)

May 29,2002 327.30 8:05am (eastern)

May 31,2002 329.20 7:50am

June 4, 2002 329.90 2:00am, 5:00am

These few days saw multiple assaults at 325/328/330. Exciting days.

June 24, 2002 327.20 4:00am

July 21, 2002 326.60 8:00pm

Sept. 9, 2002 324.80 9:30am

Sept. 24, 2002 327.80 9:30am

Nov. 13, 2002 324.50 8:30am

Gold began its last assault on 325/328/330 on Dec. 5

Dec. 6, 2002 328.60 9:30am

Dec. 12, liftoff from 326.60 10:15 to 333 @ high noon.

Dec. 13 saw intra-day high of 335.50

Dec. 16 saw 339.10

Dec. 17 saw 341.50

Dec. 18 first crack at 354/355.

Jan. 5 second crack at 354/355

I am posting this to illustrate the several attempts to break resistance of the 325/328/330 level. It took 6 months.

This in no ways means that 354/355 will behave the same.

Good luck!!

cyberbat (01/05/03; 18:26:19MT - usagold.com msg#: 93510)
@Godquest
I agree. I've been snookered and false alarmed now myself since 1986. I do have my mind on a 53' corvette reproduction. Seriously though, I am worried about my friends, neighbors, and relatives that just don't want to listen to me anymore about the subject of gold. They accuse me of "crying wolf" to many years and now I can't seem to make any penetration into their uncommon sense. I guess I don't blame them, but I still intend to try and help them when the "Sinclair Storms" arrive. I really worry about them, but what can one do. I'm so paranoid now that I'm almost afraid to leave my money in the banks now.
I'm positioned now with physicals and mutual gold funds (Fidelity and Vanguard) and want more. If I hadn't been stung so many times I would buy 50'000.00 of physicals right now. Guess I'll have to be satisfied with what I have. Just hope it goes far enough for me and the others I care about!

Gimli_ (01/05/03; 18:25:48MT - usagold.com msg#: 93509)
Precious Metals used in Integrated Circuits
http://www.digitimes.com/NewsShow/Article2.asp?datePublish=2002/12/27&pages=06&seq=25
Ferro claims breakthrough in MLCC material costs
Hans Wu, Taipei; Jane Wang, DigiTimes.com

Ferro, the world's largest MLCC (multi-layer ceramic capacitor) powder materials supplier, said in 2003 it will be able to provide a pure silver powder that can replace palladium and reduce two-thirds of costs for NPO products.

To make 100 kilograms of NPO MLCC products requires 90 kilograms of ceramic dielectric powder, nine kilograms of silver powder and one kilogram of palladium. The palladium would cost US$9,000, by far outweighing the costs of the other materials, at US$2,250 for the ceramic dielectric powder and US$1,350 for the silver powder. The US-based powder materials supplier claimed its pure silver powder would eliminate the US$9,000 for palladium and only nudge up the cost of silver powder to US$1,500, saving total costs for 100 kilograms of NPO MLCC products by two-thirds.

Carl H (01/05/03; 18:25:35MT - usagold.com msg#: 93508)
R Powell: Cotton
I wanted to respond to your comment on cotton. About 2 years ago I started wondering if there was more to the strong dollar policy than just gold shenanigans. Hence, I asked myself the question, how would I implement a strong dollar policy if I were TPTB. The suppression of commodity prices and currency exchange rates were what I concluded would be needed. So I started examining a number of commodities. My examination consisted first of thinking about the nature of the commodity, particularly supply/demand curves, availability of new production, and stockpiles. For crops my conclusion was that a dose of subsidies that is modest compared to the worth of the crop produced can cause an over supply which keeps the commodity priced around the cost of production rather than what it is worth to the consumer. Incidentally, in the late Clinton years there was a large increase in farm subsidies (~2X, if memory serves me).

As far as why no cotton farmers are complaining � it is a case of each one of them feeling good for getting their little subsidy check from the government. What they don't realize is that they collectively would make more if they were weaned off the subsidies.

Incidentally, generally, I am a proponent of free markets � however, in the case of food crops, I believe that forcing an oversupply might be a good thing since undersupply is a really bad thing and cannot be very quickly corrected. (Takes time for the stuff to grow.)

Finally, you commented: "Market forces are stronger than any manipulation over a long enough period of time " Unfortunately this is not necessarily true. Market forces are neutral -- they neither inherently support or inherently resist manipulation. In fact, the most successful way to manipulate a market is to work with the market forces. Subsidies do exactly that. Gold is another matter. In the case of gold they are working against the market forces. I believe they will fail, but keep in mind that they have kept it up for probably about 20 years. As you say, long enough.

goldquest (01/05/03; 18:14:53MT - usagold.com msg#: 93507)
@cyberbat message #93505
No Kidding Allowed! I feel it is our turn for a change. Many of us have played and suffered the PMs game for a long time. In my case, since about 1986! Talk about getting in early! Seriously, I wish the very best and riches for all of us that believe in the GOLDEN dream! Besides, I would like to buy my Beech Baron this spring! Best wishes, goldquest

Cavan Man (01/05/03; 18:03:48MT - usagold.com msg#: 93506)
For my friend Sierra (he of the Madre)
Recessional
God of our fathers, known of old--
Lord of our far-flung battle line
Beneath whose awful hand we hold
Dominion over palm and pine--
Lord God of Hosts, be with us yet,
Lest we forget - lest we forget!

The tumult and the shouting dies;
The captains and the kings depart:
Still stands Thine ancient sacrifice,
An humble and a contrite heart.
Lord God of Hosts, be with us yet,
Lest we forget - lest we forget!

Far-called, our navies melt away;
On dune and headland sinks the fire:
Lo, all our pomp of yesterday
Is one with Nineveh and Tyre!
Judge of the Nations, spare us yet,
Lest we forget - lest we forget!

If, drunk with sight of power, we loose
Wild tongues that have not Thee in awe--
Such boasting as the Gentiles use
Or lesser breeds without the law--
Lord God of Hosts, be with us yet,
Lest we forget - lest we forget!

For heathen heart that puts her trust
In reeking tube and iron shard--
All valiant dust that builds on dust,
And guarding, calls not Thee to guard--
For frantic boast and foolish word,
Thy mercy on Thy people, Lord!

Rudyard Kipling

cyberbat (01/05/03; 17:49:16MT - usagold.com msg#: 93505)
Spotacus
At 353.30 and getting frisky again. We're all going to be rich beyond our wildest dreams!! Heh, heh; just kidding.

Sundeck (01/05/03; 17:32:04MT - usagold.com msg#: 93504)
Spot
http://www.kitco.com/charts/livegold.html
Spot leaping and howling...$354 looks likely

Carl H (01/05/03; 17:31:12MT - usagold.com msg#: 93503)
Spot
GO SPOT GO!!!

Cytek (01/05/03; 16:57:40MT - usagold.com msg#: 93502)
Unemployment - As BlackBlade would say "Looking pretty Grim"
Just spent the afternoon with my niece, her husband has been unemployed for 9 weeks now. He applied for unemployment and calls an automated voice system every two weeks but hasn't gotten a penny from the State of Michigan. After talking to several unemployed people at an M.E.S.C. office he found people that haven't seen their first check, some for 19 weeks. He has now called the Senator in Michigan and has meet with him personally two weeks ago and still nothing. The Senator claims they are closing offices due to budget cuts and are trying to automate the system. My question is these people have paid into the system for years, in my nieces husbands case 13years without a layoff and can't collect a thing. Looks like something is definately up with the State. Wonder if were going to start hearing more stories in other States?

Cytek

Arcticfox (01/05/03; 16:53:14MT - usagold.com msg#: 93501)
Savoie on Silver..
http://www.silver-investor.com/yearend.htm
Snip..
The long anticipated rise in silver prices, like planting an acorn and waiting for the resulting tree to become tall and big enough to build a tree house in, appears very close to happening. CFTC Commissioner Thomas Erickson resigned effective December 1; Harvey Pitt of the Securities Exchange Commission left office under fire, and on December 6, Treasury Secretary Paul O� Neill announced his resignation. Perhaps these departures have to do with desire on their part to distance themselves from the nearing firestorm in financial and commodities markets.

Shapur (01/05/03; 16:41:09MT - usagold.com msg#: 93500)
silver
I once heard an interesting musing:

"If one knew into the future and could forsee that on Friday at precisely 3:00pm New York time that the stockmarket would fall a 1000 points and told this to a wall street trader he would buy stock until 2:59 pm!"

When the last ounce of silver is sold and the barrel is empty, then and only then will silver make its move. Silver is not a problem until silver is a problem.

R Powell (01/05/03; 16:36:33MT - usagold.com msg#: 93499)
And the winner is
Last Feb. Keith Barron interviewed some well-known names about the gold market. He ended by asking each for a year end prediction of the POG...The article is titled "The Gold Rush is Here!!"

"Gentlemen, your predictions for the price of gold for December 31, 2002:

Bob Chapman: $300 per ounce by the end of the month. If it breaks $340 it will go to $525.

Robert McEwen: $350 US

Ian Gordon: $500 US

David Tice: $400 US

Bob Bishop: $360 US

Trapper (01/05/03; 16:33:50MT - usagold.com msg#: 93498)
Sir Old Yeller
Your idea that the US is only at the leaders position because we some how took it by cheating the rest of the planet. Well who really should have been in the leadership position? I have the globe out and as I look at each nation I ask Oh hows about this one...no, Oh how about this one...no not them. You might have an arguement if you fore go history as when our forefathers carved this nation out it was Britian who ruled the waves and the sun never set upon her empire. But that was about to change with a letter signed by some pretty scared men sent to the King in 1776. Will we say at this place perhaps, perhaps not, that remains to be seen. But to say we are at this place only because we the US dollar has been the reserve currency since 1971 is to negate history itself.
Black Blade has actually explained things very well in his reporting on the oil men of Venezulea. There are teaching the world a very important lesson on "Who is John Gault". Much like the copper mining baron in Rand's book D'Acona I think was the name, who wrecked his entire empire rather that let the socialist squander it on the non producing people. Can the US keep the place it now holds, with the scoialist grabbing at us at ever turn one would wonder. Live small my friends.

Christian (01/05/03; 16:16:26MT - usagold.com msg#: 93497)
Caspian Sea + Central Asian Oil Reserves
Chevron, Texaco, Exon Mobile, British Petroleum, Conoco and a number of others want out of their Caspian Sea and Central Asian holdings if they could find a buyer. The estimated 200 billion barrel reserves are now estimated at 20 billion barrels of which half is of poor quality (high sulfer content). The Afghanistan pipeline construction has been junked and replaced for a pipeline through Turkey, Iran and the Kurdish part of IRAQ. This route is favorable because the route taken would hook up a number of oil fields along the way. The present Iraq wants in on the new pipeline to move some of their oil. Looks like to me Jordan, Kuwait, Kurds, Iran and Turkey are all about to get more land to occupy while U.S. troops will guard the major oil fields from being destroyed. The idea is to cut Saddam of from oil. Looks like to me the Iraqi people can choose the place to flee to.

silvercollector (01/05/03; 16:15:25MT - usagold.com msg#: 93496)
Bomb blasts in Tel Aviv and freak flying plane in Frankfurt....
...might lift gold at the open.

But then again we have been watching the terror business on that side of the planet for a long time.

Now put the terror on this side of the planet and we will see a different 'gold' story.

R Powell (01/05/03; 16:11:02MT - usagold.com msg#: 93495)
Gandalf
Birthday!
And you weren't going to tell us, were you?

Thanks Waverider....Happy birthday to you, happy birthday to you, happy birthday to Gandalf...
Did the Hobbits get you anything shiney and preciousss?

R Powell (01/05/03; 16:06:33MT - usagold.com msg#: 93494)
Carl H
Thanks for the thoughts (93455).
I learned the hard way that you are indeed correct in thinking that external happenings can and do affect commodities prices. The strong dollar policy which helped support the stock market mania of the late 1990s was probably as big if not a bigger factor in the price of most commodites (and gold) than was the supply and demand part of the equation, other than extreme variations of the equation. Whether this effect should be called a consequence of monetary policy or called intentional control and manipulation of the POS is questionable.
This same strong dollar forced world demand to buy cotton anywhere except the USA and caused the majority of many commodity suppluses to end up in that country which tried to sell at the highest price (due to currency exchange rates)- again the USA. But, to date, I haven't heard any cotton farmers complain of a conspiracy to lower cotton prices. They fell from over $0.70 to $0.30 per pound with about $0.50 being the cost of production. This occured in years where production often fell and carryover did not increase.
The POG was probably targeted because it is a highly regarded indicator of inflation. I don't believe silver is seen as such but more of an industrial metal (although a monetary link with gold remains. However much tomfoolery with managing prices there was will probably come to light (thanks GATA) and will eventually fail, hopefully freeing the POG. Market forces are stronger than any manipulation over a long enough period of time (and it's been long enough!).The Fed.'s fear of deflation and the fate of the dollar changes everything.

All my derivatives games are through Comex. I do not worry about the possibility of default that you mentioned as the futures market requires margin and maintenance to assure payment. This "downpayment" is constantly on the plus side, checked daily and positions are offset immediately if funds needed are not wired (same day!). The funds are not held by either party or any broker but by independent clearinghouses. All transactions are cleared every day. Comex is an Exchange but they too do not hold the money. The game, for me, is settled in fiat. OTC deals are a horse of another color and I have no knowledge whatsoever on which to judge their safety. I gave the example of one simple position to explain why the notional value of derivatives does not bother me. It involved two futures and one long option all of which boils down to the one-time cost of the option. Notional value? It cost me about $700 plus the margin which is low for a spread position. I'm not trying to promote commodity trading which is maybe the riskiest of games. Aristotle need not get his blood pressure up; I'll be the first to recommend physical holding over stocks, certificates of gold or any trading schemes. However, I will speak out to clear misunderstandings of how these markets work.
As for Ted Butler's complaint of more short positions than there is supply, should the next buyer of silver be told she can not buy because there are too many shorts already? She can not buy unless someone sells. And if too many longs called for delivery? Of course there is not enough physical, it would cause the grandaddy of squeezes (wouldn't we love to see that!) and result in fiat settlement. If you want physical, call M.K., not your broker but don't berate the markets for functioning as they do. They work fine.
I've been wondering about the production of silver eagles which, up until this year, have been produced with government silver valued (am I correct here?) at $1.29/ounce. The cheap silver is gone, what will the eagles made from $4.00-$5.00 (or higher) silver cost?
Buy Cheap, Buy Now, Buy Often
Thoughts?
Rich

Sierra Madre (01/05/03; 15:16:38MT - usagold.com msg#: 93493)
GratefulForGold: your post 93481
"Who now makes the rules?"

That is precisely what we are about to find out, with this coming war in the Middle East.

The US says, "We've got the destructive power, we make the rules."

Islam replies: "God is Great. You want a hundred years of war? You'll get them."

Fragments of Kipling's "Recessional" come to mind...

"If drunk with sight of power we loose
Wild tongues that have not Thee in awe;
Such boasting as the Gentiles use
Or lesser breeds without the Law

Lord God of Hosts, be with us yet,
Lest we forget, lest we forget"

Sierra Madre (01/05/03; 14:55:17MT - usagold.com msg#: 93492)
Your are quite right, Christian

The secret of the beginning of a transition from paper, to real money, lies in precious metal coins with NO NOMINAL VALUE.

I can tell you from experience that people who should know better, have a very difficult time coming to grips with the idea of a coin with no nominal value. (It has to do with the cyclic decline of humanity towards the Reign of Quantity (q.v.)) Even supposedly knowledgeable individuals find it hard to visualize a coin in use, which DOES NOT HAVE A NUMBER STAMPED ON IT. - We, humanity, are no longer interested in the the Quality of a Coin, but in the Number it bears. Doubtful that this trend can be reversed, but the attempt must be made!

One way that this proposed ECB gold coin can be helped along into common use, either for payments as a last resort, or preferably as an item to be saved, is for the coin to be given a widely quoted exchange value by say, the ECB. This value, to fluctuate day to day, according to circumstances. This helps teach people the value of the coin, until they get used to it.

Sierra

Waverider (01/05/03; 13:52:32MT - usagold.com msg#: 93491)
Happy Birthday Sir Gandalf
A little hobbit told me so...yes? A very Happy Birthday to you this weekend as you celebrate another year and grow even wiser...is that possible? Your Health and Prosperity were toasted last night at La Tropicana in Havana - hopefully you received the good tiding personally via mental-telepathy, pray without the sudden onset of a migraine!

Spot 'n Spike got a little rambunctious on Friday - nicely done! I just have opportunity at the moment to skim and catch the DMR - a Godsend. And yes BB, trails are both happy and extremely interesting thus far, but oh tears Leagh, oportunity for a visit doesn't present at the moment. Take care All, Cheers,

Waverider

Belgian (01/05/03; 13:51:26MT - usagold.com msg#: 93490)
Mr Bill # 93480
You > ...allowing the goldprice to double, twice as many euro can be printed...
Precisely Sir !
How much would POG be today if the same "gimmick" were used for all those printed Bernanke-dollars OF THE PAST 30 YEARS ALONE ? Thanks for having confirmed the beginning of the free goldmarket. Cheers brother.

Belgian (01/05/03; 13:24:07MT - usagold.com msg#: 93489)
Sir Kosares # 93478
Two different currency blocks + two different CBs (FED-IMF/ECB-BIS) + two different amounts of Official Gold exchange reserves (8,000 - 15,000 tonnes - $/�) + millions of different private Physical Gold holdings in proportion to confetti. Quite a variable Gold-palet.

I wish to know what will happen to my Goldcoins within 10...20...30 years from now. The past 20 years, Physical Gold has not showed (given evidence) of being a (practical) conclusion of wealth, permitting us in mobilizing this wealth, at any given time, for other purposes than idle storage of that wealth, falsely priced when needed. In other words, GOLD was/is UNFREE ! Unfree in providing you the right amount of confetti when needed (emergency sale). CBs kept Gold unfree and aborted/paralysed Gold's purchasing power for the $-confetti's sake. I want to know if this will end and I want to know "how" it will end. We are all free (since 1975) to buy Physical Gold but with no guarantee that the storage of that Physical wealth will serve us, pricewise, as it is supposed to serve when desired by the private holder. CBs certainly have NOT this problem with their INTERBANK Gold-dealings. This is UNFREE Gold for the people !

I am not bringing the euro up for discussion in its capacity of another currency, but in its possibility that it has a plan with Gold...the Goldmarket.
I don't expect anything from the dollar side. See how the dollar devaluated since 1945 and check Gold's purchasing power, today, in proportion. Gold is definitely at a loss.

If the euro can only succeed in bringing the dollar further down from here and Gold is only compensating this continued dollar-decline...we can't talk about a "perfect" conclusion of wealth in the sense that it is un-practical since one has to wait for the unknown revaluation-time/moment for Physical Gold to be exchanged for workable confetti.

It is to *change* the past Gold-Suppression (unfreeness) that a Free Market of Physical Gold is needed. One's conclusion of wealth must be freely exchangable for confetti and vice versa. Not only the privilege of central bankers but for all individuals, great and small, as well.

And here we land by the euro. How ambitious is the euro now and how ambitious will the euro become later ? Will the euro mark its territory with pure economical backing or has it a monetary Golden card ?

Is it the dollar that will keep on "pricing" Gold or is it the euro that will "value" Gold with setting it free ?
A very, very big difference to me ! POG exchangable for 600$ at a possible unfortunate moment (opportunity loss) or FREE GOLD evolving in a Free Physical only Market, constantly mirroring monetary management/confidence in one (new) currency in particular. Be it a new dollar or the evolving euro !? I don't care.

Is it an euro free physical Gold market or another variant of the dollar goldstandard ? It is those CBs that decide on this as long as their present/future Gold exchange reserves remain forcefull enough against concerted action of Gold Giants, getting unpatient.

Has any currency ($/�) and its CB a plan with a certain Gold Giant or not ? And if it is the euro that might trigger a free goldmarket...than the euro must be a succesful currency at its start in order to be able to become more succesful with Gold or making an alliance possible with a dollar-averse Gold Giant.

Thanks Sir Kosares for letting some euro-steam going free.

Cavan Man (01/05/03; 13:04:19MT - usagold.com msg#: 93488)
Christian
Because.....we are trapped by history and precedent. I view the Euro monetary model (which I beleive the US will adopt out of necessity) as a bridge to a pure standard. You cannot turn an aircraft carrier on a dime.

IMHO, it would be wholly impractical make the quantum leap from pure fiat to pur gold and/or silver.

Hipplebeck (01/05/03; 13:02:08MT - usagold.com msg#: 93487)
dollar is an adjective
not a noun

Old Yeller (01/05/03; 12:57:59MT - usagold.com msg#: 93486)
Trapper

The real reason the US is the economic superpower is that
they own the printing press(at present)and they employ
their $360 billion plus military machine to enforce their
monetary hegemony.

All the rest is just noise.

Christian (01/05/03; 12:44:04MT - usagold.com msg#: 93485)
production of a gold coin worth 100 Euros
The Euro framers have a plan to produce a gold coin worth 100 Euros when it enters circulation to float along the side of the Dinar. The idea then is to let this gold coin float and let the coin value be determined by the people who use it. No amount will be stamped on it. Date for circulation as of now is the later part of 2004. The coin will be usable for payment of debt at whatever the market price gold trades at. By that I mean a person can go to WalMart in a Euro country, buy a 10 Euro item with the coin and get change back in Euros for whatever the gold is worth on that day. The framers feel it will mostly be in circulation in the Middle East and be convertible to Euro's for those people who want Euros. They also feel that Russian citizen's will also use it. I feel good about it, but seeing is believing. Why can't we do the same thing and not print a value on it for less then it is worth in metal? I would like to see a gold dollar coin worth $100 for the little people to use. Why have it written in the Constitution that gold and silver is money and then not even provide a coin usable for paying of trade? Don't stamp a number on it. Here in God we Trust would make sense.

Trapper (01/05/03; 12:43:12MT - usagold.com msg#: 93484)
Sir Hippleback
Hip I must agree with you ( for the most part ) on your views on the euro. I see a scam operation that is supposed to be the greatest new fiat since sliced bread. I saw the the photo for an ad for the euro, here is a fellow standing in front of an opened vault door and behind him is stacks of gold bars. This would lead one to belive that the euro is backed by gold and a euro holder could get gold in exchange. Big lie. Most people belive that US money is directly backed by gold too. They have gold we have gold so what. It really won't make a difference if the euro is marked to maket every minute of the day unless the holder can CONVERT. We can't they can't. If Euroland grows from 300 million to 500 million someone is going to have to BUY a bunch of gold, do you really think that is going to happen.
The US is the world super power for one reason FREEDOM for its people. We are as a people the most productive, inventive. and Determined people on this planet. Only because we are the mosy free, but as our freedom is being eroded we will lose that place in direct proportion. Our distinct culture is being eroded by the multiculturialist. If we will keep our ideals and idenity by maintaining our freedoms then surley no weapon formed against us will prosper. That weapon can be bombs, missiles, guns, or even a new fiat. I do buy gold and use all the time in my commerce, you can get one of my muzzleloaders for paper money or at a good discount for using gold or silver to pay me with. Live small.

Cavan Man (01/05/03; 12:29:49MT - usagold.com msg#: 93483)
On topic....
"The 19th century gold standard was the highest monetary
achievement of the civilized world. The gold standard was
neither conceived at a monetary conference, nor was
it the brainchild of some genius. It was the result of
centuries of experience."

Ferdinand Lips
at the Humanitarianism at the Crossroads Congress

Hipplebeck (01/05/03; 12:14:04MT - usagold.com msg#: 93482)
gold backed currency =
a reciept for a certain amount of gold, exchangable at any time.
Just like the dollar was until 30 years ago and why it became the world reserve currency before the greatest theft in history.
First they ripped off US citizens, then the rest of the world. Who? Banksters and politicians. The club of thieves
The theft goes on. That is why the euro exists, to try to keep the US faction from stealing it all. Yes, even criminal banksters and politicians have factions that battle in gang warfare. Never forget, banking and government is organized crime. The supreme accomplishment of ideal dreams of honest money and government laid down in the US constitution has been usurped by thieves and criminals.
When the gold dinar or whatever comes into existence we will once again have an honest economic system with which to trade in. credit is not money. Gold is money

GratefulForGold (01/05/03; 11:49:21MT - usagold.com msg#: 93481)
Hipplebeck (and others) re Euro/US$

I agree with you that fiat is fiat, period.

In my simplistic understanding, I have favored the Euro only because it is offering the world a choice of fiat to use in its transactions. To me, this is transitionary...it is the beginning of the break of the US$'s strangleghold (a devalued US$) � which allows for or enhances the rising POG (or, for gold to start to attain its true value by the world's standard).

Of course, the banks who trade in Euro fiat will benefit the same as the banks who have dealt in US$ fiat, and will attempt to continue same. It seems to me that the ME situation may throw a wrench in the European bankers� long range global plans, if the Islamic peoples exert a coordinated stand and challenge the Western/European powers. If the ME (and Asia ) hold a major portion of the world's oil AND gold (via quiet accumulation), who now makes the rules?

Am I being overly simplistic?

Mr. Bill (01/05/03; 11:33:51MT - usagold.com msg#: 93480)
Belgian msg#: 93477 � revolutionary?
SNIP
You are right indeed that the euro is an unproven currency...but on what basis do you conclude it is an ordinary copy of the dollar ? Is the US$ marking its Gold-exchange-reserves to market, every quarter ? The euro does ! Seems quite revolutionary to me, Sir.
ENDSNIP

Nothing more than another con game. But a game that was designed many years ago. At that point in time, when it was known the US dollar would die, the euro was envisioned as a replacement. But it was also known that conditions would not permit a pure fiat currency to survive. A gimmick was needed to pull it off.

And that gimmick was the mark to market of gold reserves. Now, by allowing the gold price to double, twice as many euros can be printed. And still the reserve ratio looks good. But someone just got stuck with those extra euros. And they still get to keep the gold. This is what will drive the gold price. It is just a question of how many euros they will need.

This is just more of the same old, same old. Only presented in a different flavor. But I guess that they do not need new tricks. After all, people never learn.

Belgian (01/05/03; 11:14:26MT - usagold.com msg#: 93479)
Dearest Wise Gresham....
Boy, am I glad you added that final euro-touch in such elegant wording. Thanks mate.
BB could you give us a sign of your smile with the flying "Bernanke" kamikaze-humour of Gressy ? I surely had LOL.
BB : Do you really think the ECB/BIS = FED/IMF ? TIA and your opinion is much appreciated.

MK (01/05/03; 11:01:29MT - usagold.com msg#: 93478)
Knotacare, Hipplebeck. . .Eurothought
It doesn't really matter whether or not the euro is "successful" in any ultimate sense, in that currencies are rarely successful beyond their marginal utility domestically as units of account, savings and commerce -- and then (in the modern era post 1971) always in terms of their strength against goods and services. The dollar and pound have been rare exceptions to simple domesticity and there are those in both countries of origin who would argue the distinction of reserve currency should be seen more a nuisance than a blessing. So the dreams of the EU could very well fall into the "be careful what you wish for" category. What you gain on one side of the ledger -- economic hegemony, you lose on the other -- the cost of maintaining that hegemony. If one were to quantify the price of empire going back to the Athenian owl and working forward, dreams of currency domination would be found to ultimately figure large in that empire's demise. For the amateur historian and investor both sides of the ledger need be entertained in order to understand the significance of this sort of thing to the portfolio.

On the international front, as opposed to domestic utility, I can only get this far in my thinking: The euro's effectiveness -- in terms of what it means to you and I as individual investors -- is only important with respect to the inroads it makes against its primary competitor, the dollar on the international front. Discussions about whether or not the euro is a better currency than the dollar, or vice versa to me equate discussing whether one should use tylenol or aspirin for a fever. They both work, so for me its six of one, half-dozen of the other. To the tylenol or aspirin manufacturer however there's a world of difference in my choice. And the more tylenol I use, the worse it is for the aspirin people.

I don't think that Another/FOA, Belgian or Aristotle would disagree with me that with respect to the euro's effect on the price of gold, the real debate is not whether or not the euro stretches beyond being another fiat currency, but to what degree it's viable enough to drain investment capital away from the dollar -- at whatever level of the financial world you would like to consider, i.e., individuals, commercial banks and investment houses, central banks........whatever. Then it becomes important -- practically speaking. Over this first week of January, we have been treated to dozens of analysts and pundits telling us that gold's fate is directly and inversely tied to that of the dollar. So if the euro makes the inroads, just for the sake of discussion, the dollar is thusly diminished. And gold rises in dollar terms proportionately.

The real world less than subtly imposes itself. . . .and that unless I'm missing something is the heart of the euro argument with respect to gold.

Belgian (01/05/03; 10:50:00MT - usagold.com msg#: 93477)
Hipplebeck and knotakare....en garde gentlemens !
knotakare: you > The only thing I am convinced of is that the dollar is going down...
Down against "what" Sir ? Answer : Against oil + gold + euro (and a few other currencies)! The dollar is already going down for the past 70 YEARS now ! No wonder you are convinced it is "still" going down. How can you be evenly convinced about the euro-currency's future, when it only circulates since 2 little years ?

You > They (euro-block) are surrounded by predators...
Who is threathening Euroland and with what ?

You > Swiss/Britons have been selling off their Gold...
How much of their Gold-exchange reserve is left and do you know where the sold Gold went to (BIS...euro-allies) ?

You > Their largest trading partner (US)...
Euroland is expanding from 300 million to 500 million Eurolanders. Internal expansion/growth.

You > DAX is almost wiped out...
NASDAQ 5,000 to....?

You are right indeed that the euro is an unproven currency...but on what basis do you conclude it is an ordinary copy of the dollar ? Is the US$ marking its Gold-exchange-reserves to market, every quarter ? The euro does ! Seems quite revolutionary to me, Sir.

Hipplebeck : Yes Gold is FREE for you , me and all other lilliputans ! And do you know how small in numbers and real buying power we are ? We are financial droplets in the oceans. PHYSICAL Gold is UNFREE for all Giants of any kind who wish to conclude their wealth !!! Yep, it took me quite some time to understand it myself. Want an example of such Giants ? Saudi Arabia (10 million souls) sells how many barrils of oil per day at what kind of profits...
Any idea about Chinese Giants moving from Hong Kong to Los Angeles ? They represent the third biggest GDP on this blue planet, Sir ! They have quite some excess confetti that desires to conclude their wealth also without putting them any drier for business/investment purposes.

What do you mean by : We'll see how your precious euro (thanks) does when someone brings a gold backed currency into existence ? Do you mean the good old greenback(ed) by (standard)gold ?

Present and a lot of past condos have been build with..."debt" upon debt! Who wants to pay for a condo with a lifetime of 30 years with Gold-Wealth for ever ?

In 2004, 25 countries (500 million people) will have thrown away their old currency for one single euro-fiat. Is this similar to the past dollar hegemony ? No Sir, the dollar destroyed all other currencies without replacement or compensation.

The euro promises nothing...the euro expands on an equal basis with those who wish to join !

But it is not the euro that is important overhere, but Gold.
Understanding where the euro is heading can only help in making one's own Gold-price-projections in time. So don't let your sleep for this other currency on the other side of the Atlantic, heading east anyway.
Thanks for responding and cheers to both of you.

Mr Gresham (01/05/03; 10:35:03MT - usagold.com msg#: 93476)
Belgian: Euro vs. "inflatable doll"
You ARE percolatin' lately, mon! That vacation sure did you some good.

We would not be discussing Euro if it were not for A/FOA, and I don't think they ever said it was a great investment in itself. Always said gold was it, and Euro was the trigger for the "re-pricing".

Euro is just something you'll write your checks in, not save your retirement in.

Why the trigger? Dollar now has competition. That's all it takes to shake a badly-run monopoly. Doesn't have to be perfectly run itself, or have booming economies behind it. Just has to be something OTHER than the Dollar, and able to penetrate world economy as its transaction currency.

I don't know how much that franchise is worth, or how much it's worth (in seignorage, effectively) to be the Reserve currency, either. Looks like another set of banks will get a chance to run with that.

And, sure, if it goes down in 30 years or so -- so what? Philosophically we all know the way things ought to be, and if people were wisely educated, they would insist on it. And we can keep promoting that education. But FOA was just telling us what was ahead just over the next hill.

And even at that, his timing was a few years early. I grant him that lapse because I was equally alarmed by LTCM/Asia/Russia in 1998, and believed things were this bad back then. The story of how they kept it all together will be a thriller. But it also stacks up more dominoes for POG's eventual launch. If they keep doubling down their losing bets, and the casino stays open, then they'll just have to pay off more in the end.

They've already bet the ranch, long ago. We're just having to wait a little bit longer to move in...

Thanks Belgian. Christian, you've been hot, too, lately.

Cleaning up "real world" problems now. POG is giving me a break, so I'm giving it a rest. Pardners for life...

Max Rabbitz (01/05/03; 10:23:21MT - usagold.com msg#: 93475)
Fed Governor Gramlich Says Inflation Overstated by 2 Percent!
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APhcoThVJR3JhbWxp
From the above Bloomberg article:

The U.S. Federal Reserve is one of the few central banks in a large economy that does not announce an explicit goal for inflation. Gramlich said that it is fairly easy to deduce that the Fed's inflation target is around zero, subtracting for a measurement bias in the inflation index it watches most.

The Fed has said it ``regards the price index for core personal consumption expenditures as the most realistic indicator of actual inflation,'' Gramlich said. That indicator shows that inflation has averaged 1.7 percent per year over the past seven years; subtracting the measurement bias implies ``a true inflation rate close to zero,'' Gramlich said. Fed officials have said that price indexes can overstate inflation by as much as 2 percentage points.

Max: A measurement bias of 2%!? I don't understand. What prices haven't they hedonically adjusted to reflect their idea of added value or available alternatives?

The core inflation rate that the FED targets excludes food and energy costs. With the exception of housing costs (rents kept low by housing bubble) much of the rest is imported, even some services (billing, records, sales) come from India and elsewhere via the internet. The inflation in medical, education, and insurance these last years has been out of control. The days of cheap imports with an ever stronger dollar are over. What will they do? Perhaps a depression with hedonically adjusted unemployment numbers (i.e., a higher quality of unemployment) or more changes in the inflation equations. There must be lots of Anderson/Enron people looking for work and willing to help out. Where's Jeff Skilling?

Mr Gresham (01/05/03; 10:07:14MT - usagold.com msg#: 93474)
BB: "Man with a plan" (or plane)
NEWS FLASH!!!!

Hijacker threatening to crash plane into ECB HQ revealed to be ..........

BEN BERNANKE!

Christian (01/05/03; 10:07:09MT - usagold.com msg#: 93473)
(No Subject)
What is a debt slave to do??
As long as banks can continually "loan" themselves digital money, based on a quantity of paper gold (nothing) and turn the loans into assets for making fractional reserve loans which itself become assets for more loans, commodity gold holding for long term capital gain is a poor investment. So what can a debt slave do? As I see it, he or she can 1- Buy nothing on margin or on debt. 2- Pay off your mortgage one way or the other, (a) pay it with funds available, (b) sell it, then pay it off, (c) Refinance to take out new equity, then sell it to bank for money owed, after you took the new equity out and purchased gold with it. 3- Become your own banker. Write your own loan by using your made up paper gold (nothing) and make it payable to yourself. It is easy. Stock traders borrow money against a counterfeit stock certificate every day and banks borrow against paper gold (nothing every day. That is how J.P.Morgan does it, and they are a high society bank. But we can't fractional reserve commodity gold into credit creation gold like the banks can. In the years to come home owners with home mortgages will find that they are no more than renters or indentured servants to the banks. Why not find a best way to use the very tricks they use on us. J.P.Morgan since its inception has used legalized counterfeiting by issuing fake warehouse receipts on gold that does not exist. Sure they have a gold short position backstopped by the Treasury. But the Treasury is using them as a way to create a gold short position IOU to the BIS to settle trade deficit account because there is no other recourse left. Paper gold is a way to legalize counterfeiting by issuing a fake warehouse receipt on paper gold that does not excist in paper form.

Chris Powell (01/05/03; 10:03:03MT - usagold.com msg#: 93472)
Was Morgan Chase financing Enron with borrowed gold?
http://groups.yahoo.com/group/gata/message/1371
Was Morgan Chase financing Enron with borrowed
gold? GATA consultant James Turk lays out the
evidence and asks the U.S. Securities and
Exchange Commission to investigate:

http://groups.yahoo.com/group/gata/message/1371

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@yahoogroups.com

Genoo (01/05/03; 09:52:35MT - usagold.com msg#: 93471)
Turk accepts the invitation and tips JPM into the tank
In the early days of January 2003, JPM management stated that "...we don't have any real exposure to gold..." The sec was then asked to investigate this "rumor"

IMHO this was seen as tres bullish for gold and suicidal behaviour on the part of JPM.

In letter #317 of this morning, in what may well prove to be the most important piece he has ever written, Turk reveals that he too has written the SEC requesting " ....whether these rumors have any basis in fact...{and if so}... to also ask for your determination whether the statements... {of JPM management}...are false or misleading."

Comment: No matter what JPM might do now..they have been hung out to twist in the wind..and largely by their own hand. Spot 380 plus here we come.

Black Blade (01/05/03; 09:16:15MT - usagold.com msg#: 93469)
Plane over Frankfurt threatens to crash into ECB

FRANKFURT, Jan 5 (Reuters) - An armed man hijacked a light plane and circled Germany's financial capital Frankfurt on Sunday while threatening to crash into the tower of the European Central Bank, the fire brigade said. A spokesman for air traffic control said they saw no terrorist link to the hijacking of the aircraft, while Germany's NTV television said the man had told them he did not want to kill anybody but himself. A spokesman for air traffic control said the armed man forced a pilot to take off from Frankfurt's Babenhausen airfield at 2:55 p.m. (1355 GMT) and had taken up contact with the Frankfurt airport tower, demanding to speak to CNN television. CNN said it was a single-engine Cessna plane.

Black Blade: Just stumbled across this. This guy hijacks a plane with a pilot. Makes a loony demand and says that he only wants to kill himself. Uh huh, the world is full of budding rocket scientists. At least he is "a man with a plan". The ECB eh? Hmmm�

Gotta set some hooks!

Black Blade (01/05/03; 09:01:47MT - usagold.com msg#: 93468)
The Dollar: Soggy and Still Sliding
http://www.businessweek.com:/print/bwdaily/dnflash/jan2003/nf2003013_6876.htm?gl
The Dollar: Soggy and Still Sliding

Snippit:

The greenback is weighed down by the trade deficit, low interest rates, and terror jitters America, accustomed to being the world's economic powerhouse, isn't laughing about a feeble euro anymore. The European currency, which fell to 87 cents in March, is back above a buck. At yearend, it hit nearly $1.05 -- a 17% loss of value for the dollar. Since late November alone, the greenback has slipped 6% against its European rival and now is at a three-year low. "America certainly doesn't have the attraction [for investors] it did in the second half of the 1990s," says Volker Dosch, head of U.S. equities at DWS Investment, a unit of Deutsche Bank and Germany's largest fund manager. A one-time jolt due to global jitters over the fallout from a war with Iraq? Hardly. An array of other pressures ranging from the huge trade deficit and low U.S. interest rates to the narrowing advantage in economic growth are also weighing on the greenback. Many currency traders figure the slide against Europe's common currency could be just the start of a broad decline. "The dollar needs to correct lower," says Ashraf Laidi, chief currency analyst at MG Financial Group in New York. Many believe that the euro could rise to $1.07 in coming months. Moreover, the dollar, which has lost 5% against the yen since early December, could sink below 115 Japanese yen from its current 118. A modest further drop in the dollar probably would be good for the faltering U.S. economy on the whole. It clearly would benefit domestic manufacturers who export or who compete with imports. The combination of a high dollar and tough competition from countries with low-cost production has cost the manufacturing sector 2 million jobs since 2000. By lowering the prices of their goods in terms of euros, yen, and other foreign currencies, a lower dollar would let producers regain market share and maybe even raise prices a bit. "We are gratified to see that the dollar has been easing down. We think it has further to go before it reaches what we think is a fair level," says Hank Cox, assistant vice-president of the National Association of Manufacturers.

Black Blade: I agree that the US dollar is going to sink and that war fears over Iraq has little to do with it. The US economy is in a shambles and in spite of all the drivel from Wall Street hacks, the fact is the dollar is grossly over valued and the crushing debt in the US is taking a toll. Foreign investors are beginning to pull in their horns along with US investors and Wall Street is going to have a very rough time pumping and dumping with fewer Lemmings in the mix. The coming "energy crisis" will rip the US economy a new one if you get my drift. Equities markets have made fools of Wall Street strategists for three years running and will likely do so again. There will be few winners but precious metals will be near the top as investors far and wide panic and search for safe havens. These will prove to be very "Interesting Times".

Off to slay some fish before the weather rolls in!

knotakare (01/05/03; 08:19:02MT - usagold.com msg#: 93467)
Hipplebeck; I agree
That the Euro is an umproven currency and subject to the same inflation as the dollar. I don't see what is revolutionary about it at all. I think the currency for smart money at this time in history is a mix of gold and silver bullion and coins.

I think the Europeans and Japan/Taiwan are in a very vulnerable position. They are surrounded by preditors; a new US War Empire, Islamic extremists and a rising Soviet military machine. They rely on the US War Empire for protection. Relying on promises that can easily be broken. The Swiss and British have been selling off their gold, not exactly the right steps to insure stability.

And probably their number one problem is that their largest trading partner (US) has now embarked on the slippery slope of totally destroying their own currency and economy. There goes their largest customer.

The DAX in Germany is almost wiped out. These people are building castles in the sky.

This is just my opinion. I appreciate Belgian's analysis and enthusiasm, and I wish that he were right, that the world would have a new currency based on stablity and reason. But I'm not convinced at all. The only thing I am convinced of is that the dollar is going down, and probably sooner than latter.

knotakare

Cavan Man (01/05/03; 07:59:34MT - usagold.com msg#: 93466)
Hipplebeck
I completely agree with your assessment(s). Gold and silver were given to us to be used as real money. The unnatural velocity of fiat based economies fueled in large measure by greed will be our undoing. However, the next monetary paradigm will work or not work at least in the short to medium term like the Euro project. Perhaps a pure and honest gold standard will reign someday. In the interim, prepare for the Euro and others like it to dominate the monetary landscape. "That dog will hunt".

Hipplebeck (01/05/03; 07:12:56MT - usagold.com msg#: 93465)
Christian
You're right.
We have to start very small.
The beast is very great, but it has clay feet.
We break the feet down here on the individual level.
What does the store owner do?
Walk away.
Unless a man give up his life he cannot gain it.

Christian (01/05/03; 07:00:31MT - usagold.com msg#: 93464)
Gold is money - get you some and USE IT
Easier said then done. I can't pay my property taxes with gold, nor go to a food store and buy food. As long as banks create credit by purchasing an asset like gold from a non bank, and pay it with a claim on itself, by issuing a loan agreement to a new buyer they have the power to turn $350 commodity gold into $10,500 credit creation gold with the fractional reserve system. USA can back the $ with $35,000 priced credit creation gold made possible with $1,167 commodity gold price. The problem is how to enforce it. There will always be people who find a way to cheat. What is a home mortgage?????? Read the fine print. BANKS CREATE CREDIT by PURCHASING AN ASSET (your home) from a non bank (YOU) and PAY IT WITH a CLAIM on ITSELF (your house they own) by ISSUING a LOAN AGREEMENT to the BUYER (you). In this process no money is created at all. Just debt. And that debt has to paid from a money supply that is only a fraction of total outstanding debt. Suppose you have $50.00 and $500,000 due NOW. You have no other assets that have equity meaning everything you own is not worth the claims against it. What are you going to do??? I am using a real situation of a store owner in that situation as of this day. The only way out I can see for him is if he can increase the price of the items he has for sale and be able to sell it. He can't sell it even though it is discounted. He can't even sell it at a loss. What to do????

Hipplebeck (01/05/03; 06:20:03MT - usagold.com msg#: 93463)
Aristotle
Do you really think derivative players are going to quit writing contracts on gold just because they have to change the dollar symbol into a euro symbol?
Don't make me laugh. The euro isn't going to free up anything. Gold is already free. I can trade dollars for gold coins right now. The price fluctuates because of the perception of supply and demand. Euro symbol is going to change none of that.
The euro is a con job dressed up to look like something new and revolutionary. It is no different than the dollar.
We'll see just how your precious euro does when someone brings a gold backed currency into existence.
Someone will eventually, and it will become the new world standard. The gold standard.
Don't delude yourself into thinking the gold standard is outdated. It is outdated like honesty and truth are outdated.
Natural growth of above ground gold and silver (about 2%) is what builds a house that lasts for generations. Accelerated growth is what builds a condo that maybe lasts 30 years.
Men want to accelerate natural growth and remove natural cycles because of greed. Fiat money is just a way for one person to steal from another person.
gold is money
get you some and use it

Hipplebeck (01/05/03; 05:30:39MT - usagold.com msg#: 93462)
Greenspan and "netting out"
Greenspan has pushed in congressional testimony for a law that requires netting out of derivatives in any kind of crises.
Why?
I'll tell you why. It's because when the big crunch comes, he wants a law that allows bankers to get away with crimes.
In a crises, a player who has leased gold (meaning he owes it back), to cover the selling of gold options (meaning he owes it if called) is in the position of owing twice the amount of gold he has under his control. When the crunch comes, the people who bought those calls are going to want real gold, not paper confetti which can be printed at no cost. They are going to want physical. They have been sold someones promise to deliver and they are going to want it delivered. Now derivatize it a little further, and you have another party in who sells insurance backing the other party. Now there are three parties demanding someone deliver what they promised.
Greenspan sees what's coming, and wants a law that allows the criminals to slide out from under their contracts.
Greenspan (and his fellow bankster criminals) is afraid of somone having a legal claim to his gold.

Hipplebeck (01/05/03; 05:11:28MT - usagold.com msg#: 93461)
Belgian
What seems to you a complicated euro, is quite simply the exact same thing as the dollar.
When you speak of the new euro concept and how it will revolutionize gold blah blah blah, is nothing more than the world begins to price gold and oil in euros instead of dollars. There already is a free gold. I can buy gold coins with dollars now. The price fluctuates, it is not controlled by anything more than futures, options, and the perception of supply and demand. The big change you speak of is when I buy gold priced in euros. The derivative players will tie up gold in contracts in euros instead of dollars. Big deal.
The Euro is basing it's whole strength on the PROMISE of stability. Well, when it comes to human nature, need I say more?
The Europeans are jealous and naturally so, they want the world to price everything in their currency so they can have all the advantages that the US has had all this time. And they are going to get their wish because the dollar has ponzied out, and it's time for a new ponzi to begin, but it is still a currency based on a PROMISE of stability and not tied to anything stable. The Euro banksters are of course saying "Just give me the power and I will be much more responsible than those Americans", but human nature is human nature, and they will in time take advantage of that power.
gold is money.
not the dollar and not the euro

davefinger (01/05/03; 04:30:20MT - usagold.com msg#: 93460)
I like this guys outlook much better
Best part, to me anyway:

Among the metal's fans are Mr. Ing of Maison Placements, who argues that gold's most important recent move was to climb above $330 last month.

"Was $350 a breakout? The answer is no," he said. "Really, the $330 was the breakout. We have a near-term target of $375, but that's not the high; I think the high this year will be $510, so we've only just begun this bull market in gold."

davefinger (01/05/03; 04:14:50MT - usagold.com msg#: 93459)
Short but mildly interesting interview
http://www.newsday.com/business/printedition/ny-bzwall3074307jan05,0,9408.story?coll=ny-business-print
At least the word is getting out, even if it's a little tepid. Highlights:

"...managing director of CPM Group, a New York City-based research and consulting firm specializing in precious metals and commodities. The firm is a 1986 spin-off of the commodities research arm of Goldman, Sachs & Co., in which he served as vice president from 1981 to 1986."

"Gold has probably made the bulk of its upward move, unless we see further catastrophic developments in the world. This year, gold is likely to trade in a range of between $305 and $360 an ounce, with an average price of $330."

"I like silver more than gold. Oil has had its run. But silver is interesting because its price is still undervalued, and there are indications that inventories are getting low. Silver is probably close to the point in which its continued use in photography, electronics and other applications will push its price higher. Silver's price today is $4.50 per ounce. Over the next two years, I could see silver reaching $6 per ounce."

"I don't like precious metals mutual funds. ... They're not good long-term investments because the precious metals markets typically rise for about two years and fall for six. The better ways for private investors to get involved are to buy the shares of publicly traded companies in that field or to buy bullion."

----

Seems like his views are predicated on a lack of any serious USD value/status volatility or other fundamental economic shifts. Still, he recommends bullion so he can't be all bad! :)

Belgian (01/05/03; 03:55:55MT - usagold.com msg#: 93458)
Sivercollector,Ari,CM,BB,Bill,Leigh....ALL
It is *Impossible* to take the "euro" out of the Gold-equation, anymore. Whatever setback it (the euro) may encounter. I'll repeat only one seemingly innocent recent anecdote : Our ex-central banker, F.Verplaetse, was lured on tele (once) in an innocent show, together with his prime minister. Verplaetse, immediately and without any suggestion towards the subject, talked about our national GOLD ! He eagerly wanted to anticipate any possible Gold-questions wich weren't on the agenda anyhow. I have some other very good arguments...simple and straithforward...but a bit compromising.

This to communicate that Euroland AND the euro in particular is Gold-Anchored (Leigh). Ari describes the present "bridging"-situation at its best. Yes Ari...I surely think I understood you very well.

May I recommend all to reread Randy's compilations/archives on CB's statements and policy outlines. There is one euro-constant : A will to obtain "STABILITY" !!!
This obstinent will is challenged, today, even within Euroland (BB) for shortsighted economic reasons, wich is ridicule. This weekend a Belgian CB-candidate did it again (liberal politician-P. De Grauwe). But this self proclaiming academic is an intellectual dwarf and therefore excellent for the political circus.

Henry C K Liu (atimes.com-Global economy) : Part 3d: The lessons of the US experience. A treasure on insights.
Very helpfull in understanding *why* we (the world) need another-anchored-reserve-currency...NOW !

The present core group of Euroland central bankers are getting the blame for the contracting economy. Politicians are shooting at the messengers and refuse to tackle "structural reforms". Liu, illustrates very well in his Banking Bunkum series of articles, where we stand now.
But Liu is afraid/reluctant of facing the possible *total* solution of the euro-concept.
The policies of the ECB and the FED are diverging more and more out of their former sync. Evidence that the new euro-concept, differs from the old dollar-concept (centered around oil/gold).

Impatient goldbugs are theory-averse and demand the long expected price-explosion of their different Gold-Holdings. Gold-Advocates watch patiently the bridge building with Physical Wealth in Possession.

Today I pay my bills in euro (notes) from the Indian Ocean over China/Australia to Hong Kong. For me as an Eurolander...the US$ is history.

In 2004, the euro will serve an additional amount of 200 million Eurolanders. A gigantic leap forward. This very risky jump would be "impossible" if the euro wasn't build on a "waterproof" concept !!! Do you understand now, why the euro is confusing friend and foo ? The ECB/BIS ivory (sorry, golden) towers "know" what they are doing !

Yes the euro is another fiat-currency, but soon sleeping with an emancipated, FREE, Golden woman. The dollar remains in bed with the inflatable doll.

Gold, the exchange-reserve, is wildly reschuffling around, from CB to CB as it did in the past 70 years. Gold is replacing former paper-dollar exchange reserves. This renewed action is taking place because of the very existance of the euro. Gold is taken *in* because dollars will go *out*. The rising Gold-Tide will lift the euro-ship and sink the dollar-vessel.

Central Banks prepare for a full blown "digital"-currency world. The dollar and euro differ totally in that preparation. That is exactly what is so confusing to all of us. Evidence for all this is difficult to detect and when it is presented...difficult to consider as such because of its pluri-interpretable aspects. I simply refer to the wide range of interpretations of the Washington Agreement amongst many other aspects !

The coming war(s) and their aftermath(s) might affect POG, relatively little. External events simply move the paper-price of Gold up and down. It is the underlying purpose for and with Gold that is of constant importance ! Gold the commodity will somehow play a little for some little time to come. But Gold the ultimate exchange reserve is building under the skin as a growing reserve. Remember A/FOA story about the chap having sticked his diamont under his skin.

It was A/FOA who unveiled the euro-Gold association. His interpretations of historical events are correctly projected into a *very possible* future outcome for Gold...Oil and currencies. And that's what it is all about...GOLD, OIL AND CURRENCIES desperately needed for structural reforms to be made possible with new monetary policies, worldwide! The *drama* has a globalized, International dimension, NOW ! Evidence abunded for this !?

Pippin (01/05/03; 03:09:34MT - usagold.com msg#: 93457)
Topaz
Many thanks.

Christian (01/05/03; 00:51:59MT - usagold.com msg#: 93456)
(No Subject)
2003 average commodity gold price will be $467 which prices credit creation gold at $14,000. At $14,000 the credit creation gold can keep the mortgage refinancings and home equity lending going. Mortgage refinancings and home equity lending is built on financial leverage made possible by derivatives. Note that the $14,000 credit creation price of gold is made possible by the workings of the fractional reserve banking. Instead of using depositors money banks of all sizes now "loan" themselves digital money, based on "paper gold" which is legalized counterfeiting of warehouse receipts on gold that does not exist, deposit it on their account, and then loan it out. That loan becomes an asset which then becomes an asset for another loan, which becomes another asset for another loan and on and on it goes. J.P.Morgan entire loan portfolio is built on paper gold they loaned to themselves from mostly offshore accounts they created. J.P.Morgan created the BRE-X scam in order to profit from the demise of the gold stocks. They profited enormously from shorting gold stocks. I do agree that J.P.Morgan has no exposure on their gold short position because it is backstopped by the Treasury. The Treasury does not wish to start a gold short position themselves just to cover or settle its account of the trade deficit with BIS. The U.S.Treasury owes a lot of deep storage gold to the Bank of International Settlements to cover the trade deficit. The J.P.Morgan paper gold short position is just that a paper gold short position used to make loans to themselves. ALL BANKS DO IT.....GOLD IS A Credit Creation Vehicle. So is silver. The only difference is gold has an above ground supply and silver does not. I can proof that then J.P.Morgan - used legalized counterfeiting - issuing fake warehouse receipts on gold that does not exist. They do it because they have insufficient real deposits to make loans with. This is a nation wide problem that is getting worse because they pay less and less interest to depositors. Greenspan has long lost control of credit creation. Even WalMart uses paper gold to fund its credit card. When the user of that card signs the slip (receipt) he or she acknowledges the the credit creation process. The problem is the money needed to pay off that charge is never brought into existence. Nobody is printing dollar bills be it in paper form or coins or placing dollars into your checkbook to pay that bill off. The real money supply to pay debts with is falling while credit debt creation is going up. WalMart is not using their credit card to loan you money. They are exchanging their product sold to you in exchange for a future payment. To me this is still honest. But J.P.Morgan loans out money they created by issuing fake warehouse receipts on gold that does not exist. Enron did it with oil and gas trade receipts. With banking you can sell anything to make a deposit, even a fake warehouse receipt on gold or silver that does not exist. If I had a brain I would do it myself. But I am so stupid that I find slaving for the counterfeit U.S.$ in my interest. "Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people."

Carl H (01/05/03; 00:35:46MT - usagold.com msg#: 93455)
R Powell: Re: 93229 Devil's Advocate

Rich,

First, I really like the way you phrased it: "The game is ever afoot!" That sentence says a lot. It is indeed a game � the ultimate game. The prize is the resources and labor of the world. The only rules are those that someone can't find a way to break. We are fortunate to know that there is a game and have at least half a clue what is going on! (Thank you Bill, Chris, Reg, Mike, etc.) It keeps life interesting!

First, I will, respectfully, disagree regarding whether the POS is "actively managed". I believe it is because:
1. The Strong Dollar Policy exists and appears to mean strong against all currencies and all commodities.
2. The US government coerced Warren Buffett out of his first corner on the silver market.
3. The ~1BOz in the DLA stockpile was sold off.
4. Ted Butler has been relentless in contacting the authorities about the short position in the silver market. Yet all he gets back is static.
5. There is precedence that TPTB manipulate other commodities:
A. Short Term Treasuries (via the Fed)
B. Oil (via the SPR)
C. Many agricultural products (by forcing over-supply via subsidies)
D. Gold

Second, I believe that the analysis of Butler and Morgan are correct given the information we have. This begs the question: "Do we have all the important information?" The fake silver jewelry issue comes to mine. I think there is a big question mark there.

Third, I half agree, half disagree with you on the derivatives point. I agree that the notional value is a fairly useless number. However, I believe that significant derivative positions exist in gold. I have seen them in annual reports of several mining companies. I believe it is likely that bullion banks that were "in the know" about the suppression may also have written calls. Some of these calls will become more and more painful as the POG rises. There is the potential for a melt up if, for example, someone cracks under a margin call. However � I believe that we will never see this because the TPTB can probably handle such a situation behind the scenes. Hence, I think that POG rise will be relatively controlled.

If I read your specific situation right you are:
1. Long Dec Silver
2. Short March Silver
3. Hold a March 450 Call

Suppose silver goes to $50/Oz. What happens if the counter parties of your long and call default? I suspect that you would want out of your short position really bad.

Ok, now consider a bullion bank that has supposedly offsetting positions. One of those positions is a long where a mining company is the counter party. What happens to the bullion bank position if the mining company defaults on the position. It leaves the bullion bank in a bad position � one they might be anxious to cover.

Regarding the threat of digital photography � I think that one has to be very careful interpreting the data. The data set I have is from the World Silver Survey 2000 p55. I would like to point out several things:
1. The consumption numbers do not tell you what percentage of silver halide photography has been replaced by digital. All it tells you is if the total silver halide use is rising or falling. My personal observation has been that a majority of our friends are now using digital cameras. (Probably a somewhat skewed sample.)
2. The large majority of the silver for photographic use is used in US, Japan, Belgium, UK & Ireland, and France. They probably account for 80% of the usage. In these countries, many people already have computers, so affording a computer is not a problem.
3. The price of both cameras and printers have fallen a lot in the last year. The cameras are so cheap ($39) we got one for my 4 year old to play with.
4. Acceptance of a technology usually follows an "S-Curve". I believe we are approaching the "tipping point" for digital cameras. (I suggest the book titled "The Tipping Point" � it is quite good.)
5. Cameras are now being integrated into cel phones. (Hot item in the far east.)
6. There are now digital X-Ray machines. (I saw my dentist using one and I got to discuss the technology with him � it is actually quite simple and quite clever how they did it. Speaking as a solid state device engineer, a direct solid state X-Ray imaging device would probably be impossible to build. What they have done is use an indirect imaging technique that is very clever and cost effective. I suspect this is a technology that is early in it's S-Curve.

Thoughts anyone? (Anyone want to sell me their silver after reading this? :-)

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