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ARCHIVED DISCUSSION FROM 1/5/2004
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Goldilox (1/5/04; 23:58:32MT - usagold.com msg#: 114682)
Banks have the dumbest computer programs
I got an overdraft notice today. It seems I had transferred $550. (careful to insert decimal point) to my checking incorrectly. The daft program interpreted it as $5.50, since I omitted the trailing zeros. Don't decimal points mean anything, or are they so backward that CGI scripts freak out their formats?

They still don't use COBOL or Fortran-IV, do they?

That's the last time I saw a language that used fixed character formats instead of decimal entries.

Goldilox (1/5/04; 23:44:31MT - usagold.com msg#: 114681)
Australian PM demands agricultural concessions in Trade negotiations
cting Prime Minister John Anderson told US trade negotiators Australia needs major concessions on agriculture before a free trade agreement between the two nations can proceed.

Anderson was talking tough ahead of the meeting with eight US Republican lawmakers, telling the Australian newspaper that if agriculture is not part of the deal "then it's a free trade deal not worth doing".

After the talks he told reporters he was confident about making progress but conceded there were "tricky" areas to negotiate.

"I've made the point today that agricultural access is terribly important for Australia -- more access for beef, for dairy and certainly for sugar," he said.

Anderson also said the Pharmaceutical Benefits Scheme -- which controls the retail price of prescription medicines -- is not on the bargaining table, despite pressure from US drugs giants.

The United States has sought changes in restrictions on Australian television, radio and film, and the end of some state trading enterprises.

Anderson said negotiators hoped to have an agreement framework in place by the end of January following final talks in Washington between Trade Minister Mark Vaile and US Trade Representative Robert Zoellick.

Negotiations for the deal have already gone beyond the end of 2003 deadline originally set by US President George W. Bush and Australian Prime Minister John Howard.

Officials have indicated contentious areas may be set aside and worked on in later years in order to get in place the deal that Canberra estimates could be worthy up to four billion Australian dollars (3.0 billion US dollars to the local economy.

"A free trade agreement with the US, promptly negotiated, will integrate Australia's economy with the world's biggest economy ... it will mean more jobs, better pay and more rewarding jobs for Australians," Anderson said. "It is therefore something that will be very actively pursued.

The agreement is being presented to Australia as a pact that would ensure its farmers greater access to the US market but it it faces strong opposition from lobby groups in both Canberra and Washington.

In Australia, trade unions, churches, welfare, health groups and film producers as well as many economists remain convinced it will damage Australia's interests.

Australian film and telelvision personalities, including Oscar-winner actor Geoffrey Rush, have condemned the free trade deal, saying Australian culture will be swamped by cheap US products. US agricultural groups in turn have criticised Australian demands for greater market access

Negotiators are keen to wrap up negotiations as soon as possible to prevent the agreement becoming caught in a legislative logjam caused by elections in both Australia and the US later this year that could see it fall off the political agenda.

Goldilox:

I posted the whole article since it was retrieved from the news link of a proprietary site. My favorite part is the line that says "The United States has sought changes in restrictions on Australian television, radio and film, and the end of some state trading enterprises." . . . especially since Aussie Rupert Murdoch owns about 35% of US media.

specie-man (1/5/04; 23:22:17MT - usagold.com msg#: 114680)
Japan's Intervention
Do not be afraid of large-scale inverventions in support of the Dollar by the Bank of Japan.

My thumbnail "back-of-the-envelope" theory tells me that no matter how much the BOJ drives down the yen, the dollar will go down more than the Yen ! So when Japan indicates that it will borrow even more money for Yen intervention, that tells me there is even more downward pressure soon to be exerted on the Dollar.

The US and Japan have a secret COOPERATIVE currency devaluation scheme going. The Yen and the Dollar will decline together against most other currencies, but the dollar will fall the most ! The agreement is that the BOJ will regulate the fall to prevent both currencies from crashing.

So,

BOJ Yen intervention = declining dollar (and Yen) !

That's my theory and I'm stickin' to it.

specie-man (1/5/04; 23:09:09MT - usagold.com msg#: 114679)
@ Black Blade - cars
The '68-'70 Chargers were cool with that "Coke-bottle" body.

The Boss 429 Mustangs are definitely a hot (and expensive) item. An original one with low miles like that would be a real treasure. The more original and documented a muscle car is, the better (there are a lot of put-together "clones" out there).

My specialty is El Caminos. I've got a '68 SS-396, a '72 SS-454, and a '71 GMC Sprint SP-454 (GMC version of El Camino SS-454 - only 25 made !).

Also have a couple Buicks - a '68 GS-Colorado and a '69 SportWagon 400.

I like your analogy. The precious metals markets are definitely starting to get some traction !

PS: You ever watch "My Classic Car" with Dennis Gauge (the handlebar moustache car guy on TV) ?

Operative (1/5/04; 23:07:38MT - usagold.com msg#: 114678)
Quiet On The Eastern Front Tonight
http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y&Interval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10
Looking at the dollar chart since Japan took over the action, or in this case, inaction, it is hard to tell if the forex markets are in a state of "shell shock" or regrouping for a counter attack. Kind of strange, spooky, feeling tonight.

@ Black Blade. Sometimes I wonder how you got to be so old.
Dragg'in Cars!! Nitro to boot! Have this image of one poor, tired, crippled, bandaged, and mostly unfeathered guardian angel assigned to your case. Well, they say the good die young eh? <smile> (glad to see your taking better care of yourself this days. well, except for offering your body as a sacrifice to your MA instructor.)

@Waverider: ...There is a tide in the affairs... Ahhh, that post settles the soul a bit. I return the favor with this mental image for you. Picture a large sailing ship quietly at rest in a protected bay. Water is mirror like calm, the skies are blue, peace abounds even if a few seagulls are overhead. The caption for this image reads: "Ships are safe in the harbour, but that is not why they are built."

Off to put a pot of coffee on for any others who may be up tonight.

Black Blade (1/5/04; 23:03:37MT - usagold.com msg#: 114677)
Market Wrap Up � Puplava and King (Special Edition)
http://www.financialsense.com/Market/wrapup.htm

Snippit:

A new bull market has begun in commodities, especially gold and silver. This new bull market is a secular bull market and it coexists with a cyclical bull market in equities. It is one reason that it has gotten little attention and has gone unnoticed by the vast majority of investors. Most investors are playing the cyclical bull markets in equities believing that the good times of the 1990s have returned. Investing in commodities or commodity-like stocks is simply not on the radar screen of most investors. Everyone knows the price of the Dow or the NASDAQ, but few are even aware of what has happened to gold, silver, copper, nickel or lead. The old trend is still the most relevant trend for investors. Precious metals and precious metal equities remain ignored and under-owned.

Dow 1000 Gold $400 Syndrome

I mention the fact that precious metal equities remain under-owned because very few mutual funds or professional managers have significant ownership in the sector. Even those that do own it have traded in and out of the sector preferring to trade rather than invest. Many gold investors have done likewise trading in and out of the sector only to find themselves short when the metals take off. Today's new bull market in silver and gold reminds me of the last bull market in gold that began in 1971. Back then like today gold and silver prices were rallying along with equities. The Dow fell sharply in 1969 and throughout the first half of 1970. After dropping 35% during the bear market of 69-70 the Dow went on to rally strongly until its peak in January of 1973.

Black Blade: A good read. The financial media was all a buzz about precious metals and petroleum today even as equities surged on moderate volume (on the DOW). It was an all across the board equities rally that suggests to me simple repositioning of portfolios at the start of the New Year. Meanwhile, insiders are bailing out and with valuations out of whack with reality who can blame them? The Wall Streeters gave the usual baloney and tried to explain the rise in commodities as a prelude to a better economy in coming weeks/months, etc. Actually Fed Governor Bernanke gave many investors in hard assets reason to keep buying while Lemmings followed the equities buyers (mostly funds prevented from owning real assets). "Bubble Two" is underway for now and many will fall victim just as before. The US dollar is falling and even the massive infusion by the BOJ could not stem the fall. Many traders tonight are saying that the BOJ is at it again as they are "reloaded" with an infinite amount of Yen to sell.

Well worth reading tonight's report and hopefully will be added to our "Golden Opinion" if granted by Jim Puplava. Be sure to read this one as "the game is afoot" and just getting started.

Waverider (1/5/04; 22:59:06MT - usagold.com msg#: 114676)
Gandalf
http://www.futuresource.com/charts/micro.jsp?d=LOW&go.y=10&r=&p=D&b=line&s=TYXY&s=FVXY&s=DX1%21&s=GC1%21&go.x=12&v=
Here are more charts showing 30 & 5 year Treasury yields, USDX, and Spot all on one page, compliments of Topaz.

Black Blade (1/5/04; 22:40:32MT - usagold.com msg#: 114675)
specie-man
Ah yes, the Chrysler/Dodge Superbird did have the big stabilizer tail wing. It was a 1969 Dodge Charger (my second car) when I was younger and easy work for us "backyard mechanics". Many times some small or larger "muscle car" would yank my chain and we did a little side by side on a late night freeway (OK, my reckless youth). It would be slow on the take off but I would always run them down and when side-by-side, that little toggle switch with a last second boost of nitro usually would scare them off. One friend of mine still has his 429 boss (essentially a hemi mustang) that sits in his garage and he turns over the engine occasionally and has fewer than 9,000 original miles (only 503 ever made).

I guess my comparison is that precious metals acted the same way. A slow start and a lot of disbelief and when the metals caught up to other investments as they sputtered and then left them in the dust there were still doubters. The race is far from over and sooner or later we will see the "toggle switch" flipped on and a "nitro boost" scaring the hell outta a lot of disbelievers. There are still a lot of "gold bears" out there and can't "believe their lying eyes". Interesting that physical demand is still strong even as the prices rise but then there is a lot of room to roam as this is a multi-year secular bull market in hard assets and I would not be surprised to see gold and silver far exceed previous highs. I am just waiting for the the race to heat up and the "nitro boost". The question is only when not if that will happen. The US dollar has passed "the point of no return" as the national debt surges beyond $44 trillion (official and "off the books" - thanks to former Treasury Secretary Paul O'Neill for the revelation and a good way of getting back for being fired), there's also the soaring Federal debt (as well as soaring state, local, corporate, and personal debt), and the rocketing accumulation of year-on-year current account imbalances.

My bets are solidly on precious metals and energy. A healthy load of physical precious metals for "portfolio insurance" (and what "insurance" is has been too). I have a bit of PM and high yeilding NatGas, pipeline, etc. shares too. The bulk of the rest is in energy trusts (mostly Canadian that are high yeilding and tax is capped at 15%) and some limited partnership units. Then a smattering of "various" speculative shares. Notice that I always start off with a solid base of physical gold, silver and platinum (bullion and numismatic) to support my "wealth pyramid". Ya just gotta start with the "real deal" before going into riskier positions that get riskier the further up the "wealth pyramid" you go. Call it a firm foundation, a "golden lifeboat" or a gold anchor if you wish, but I always keep the base loaded and at least a third of my holdings. Even then I don't sell as this is purely "insurance", the rest is for "fun and games" (trading and current income) and hopefully will hold up and make gains as the "choppy seas" get wild with each passing typhoon/hurricane.

Get your house in order first and as always: get out of debt and stay out of debt, stash some emergency cash for several months expenses (or in this environment precious metals will be as good or better and always liquid), accumulate gold and silver for "portfolio insurance", and start a storage program of nonperishable food and basic necessities. I am not an "alarmist" but a realist. Anything can happen such as long term unemployment, family illness or medical problems, natural disasters, etc. - the list goes on and on. I know friends who lost their jobs (cost-cutting or as the media says "down sizing") and they got by fairly well until they steadied themselves with other work and another who went through cancer treatments and was off work for several months (fortunately he survived and today is cancer free). But preparation and "insurance" as described above saved them and their family home, etc. We insure our lives, health, homes, autos, etc., but really - how many "insure" people themselves for financial difficulty. I would bet that very few do.

- Black Blade

Waverider (1/5/04; 22:38:24MT - usagold.com msg#: 114674)
Kilo
Thanks for sharing the words of wisdom from Old George. They remind me of William Shakespeare's...

"There is a tide in the affairs of men,
Which, taken at the flood, leads to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves,
Or lose forever our ventures."

elevator guy (1/5/04; 21:38:26MT - usagold.com msg#: 114673)
Kilo!
Nice writing style! Almost sounds like a Ken Roberts book!
Ever been published?

Kilo (1/5/04; 20:46:57MT - usagold.com msg#: 114672)
Sir Aristotle.......

Alot can be read between the lines as far as one's use of wording I suppose. I'm assuming you've been at this PMs game for quite some time yourself ? Going on 40+ years for me, though I did start at a younger age than most, an interest that was planted and nurtured along by a favorite uncle during my childhood.

In later years, I met up with "George". Old George was as cantankerous as they came when he wanted to be, and most generous the next.... if he happened to take a liking to you. I guess I was one of the lucky ones.

George started on "The Boulevard" back in the 1930s, opening one of the cities first jewelry stores on a shoestring budget and all of $200 for his first stock of merchandise, trip to Chicago and all. It's been rumored that he managed to parlay that initial $200 into multi-millions with his store and other investment interests, and I have no doubt that was true. My few years of employment with him seemed to turn things in the right direction as far as my earlier understanding and "getting it" as you suggest. Suggestions that I read and study "The Richest Man In Babylon" and do my best to obtain a full understanding of how money works was more valuable than any compensation I ever earned from him in a monetary form.

More on the personal side, Old George talked on many occasions of his own investments and "how things worked". He was one of those "few" who had a grasp on things that escapes the vast majority.

Old George had had a particularly good year by Christmas eve of not so long ago, and invited me to sit and talk with him about life in general. As was usual with George, the subject eventually turned to money, and his favorite personal "items of interest", a large 36 carat cushion-cut white diamond that he carried around in his pocket to fondle when he felt "the need to remember where it all started" for him, and his favorite materials of the trade..... Gold and Silver.

"Investments and markets are a fickle thing" he told me. "Sometimes they are your best friend, and other times your worst enemy."

Not really sure that I understood what he was trying to tell me, he continued.....

"You gotta be smart" he said in his best Bronx accent, though I was never quite sure if he was originally from New York or Chicago.

"You gotta go with the flow, know when the tides are coming in and when they are going out" he said.

"We're talking about gold and silver?" I asked him.

"Damn right! Gold and silver and diamonds and everything else in this world that people buy and sell" he almost shouted back at me.

"You see, markets move like the ocean shore. We are constantly seeing ripples, waves, and tides. The ripples are the daily little insignificant ups and downs that everyone is always so giddy about. The waves are more like the weekly, monthly, or yearly moves in the markets, when prices are still going higher or lower, only over a longer time period."

I just sat there and looked at him for awhile, as he smoked one of those old sausage-sized stoggies he was so fond of. After getting a good head of smoke going, he continued.....

"Those ripples and waves don't make a tinkers damn! They are just something to keep the masses occupied in the process of the 'real' moves in the markets."

"It's the TIDES..... always the TIDES" he said between puffs of that big old cigar.

Even then, I knew there was something in what he was saying, as I had been interested in the metals for many years prior. So at that point, I pushed him for more, and just knowing I was interested gave him more pleasure than anything else he could have given or received at that time of year.

"The tides, you see, are the major moves in the markets. They take the longest time, but also provide the greatest rewards. They are also the easiest to predict, because THEY ALWAYS COME BACK. It's like this boob of a weather man that we have on this local TV station who gets 9 out of 10 forecasts dead wrong. If he had any brains, he'd just come in and make one forcast every 3 months and take the rest of the year off. And I could GUARANTEE him a 100 percent accuracy rate! Cold in the winter, warming up in the spring, hot in the summer, and cooling off in the fall. What else do we really need to know? Are we gonna stop the snow tomorrow or the rains of may? How significant are the day to day weather happenings in our lives, anyway?"

Alot of those old talks have stuck with me over the years, and make more sense to me every day. We spend so much time worrying about the "little things" that by the time the "big things" actually happen, we are either too tired, bored, or disinterested to even notice.

"The tides" Old George continued.... "They are a strange thing indeed. And not many people these days can tell you that there are two tides per day, much less WHY there are two. But those tides are not a world-wide occurance. There are rises in some parts of the world and simultaneous falls in other parts, and it is the same with the markets. The trick is figuring out which ones fall while others are rising, and visa-versa. And you always buy when the tide is at it's lowest, sell when it's at it's highest (buy low, sell high). You just gotta learn the tides, cause 'It's the TIDES, always the TIDES' you see. Don't worry about the ripples and waves...."

mikal (1/5/04; 20:43:23MT - usagold.com msg#: 114671)
@Belgium
Just to let you know that I too appreciate your erudite, invaluable posts.
In response to your question earlier, about how the equities in our country continue upwards despite exorbitant risk, debts, PE ratios and so on:
There was a post at the neighboring forum in the third week of December 2003 that I have heard little about since, that explained that equities- Dow, Nasdaq, S&P, etc.- would rise through the 2nd week of Janaury until about the 15th.
Because of the favorable tax treatment or tax deductions or perhaps exemptions. I regret that I have no particulars, but I am convinced that this has been a major motivator, alongside excess liquidity, speculation and PPT intervention.
I DO expect that January will not finish like December or November AT ALL, and as such, I am highly suspicious of the timing of the latest "authentic Bin Laden threats" and the scale of the threats on this latest audiotape.
Highest regards, Michael

Goldbug 1 (1/5/04; 20:37:04MT - usagold.com msg#: 114670)
Last day in Lhasa
Gold at $424 hasn't slowed the buying here with the Spring Festival coming up.
Can't wait to get home to get Fur Face to give his latest gold price prediction!
Tashi Delek!

Gandalf the White (1/5/04; 20:31:57MT - usagold.com msg#: 114669)
Sir Rich ! (Thanks !)
R Powell (1/5/04; 20:16:15MT - usagold.com msg#: 114667)
Another memory
===
I see nothing in my Crystal Ball that in any way causes the present TREND to be changing anytime soon !
Things are GOLDEN with a Silver lining !
The only thing that could change Silver is if everyone starts selling Grandma's sterling flatware !
<;-)

Gandalf the White (1/5/04; 20:24:35MT - usagold.com msg#: 114668)
WOWERS !!! Look at this chart and see TODAY's DOWN VOLUME !!
http://stockcharts.com/def/servlet/SC.web?c=$USB,uu[l,a]daclyyay[da][pb200][vc60][iUb14!La12,26,9]&pref=G
The ESF was VERY BUSY today in the LONG Bond market --- BUT, it was of no use !
Which do you think "throws away" the most US$ ?
The ESF or the Japanese Gov'n ?
Gold will continue to head "TO THE MOON" !
<;-)

R Powell (1/5/04; 20:16:15MT - usagold.com msg#: 114667)
Another memory
During that run up in the POS caused by Mr. Buffett I vaguely remember a $.28 up day that was immediately followed by a $.32 up day. Now, wouldn't that be nice although it might be more healthy for the POS to just rise very slowly and steadily. Gold also, slow but steady invites less risk of those huge "contraction" days. Unfortunately, my concern now must be to hedge or otherwise insure paper gains. This certainly runs contrary to the urge to increase long side risk.
Physical buying is for the long term so the danger is, I guess, that metals will cost more the longer one waits during any bull market run. Buy the dips? Of course, but how much higher do prices go before that dip? And, will the dip's bottom (if you can catch it) be lower than the current high? This almost makes one think that supernatural help is needed?
What does the wizard's crystal now show for gold and sister silver? It has been quite accurate of late.
Rich

Gandalf the White (1/5/04; 20:13:31MT - usagold.com msg#: 114666)
Sir Silver Wraith ----
Silver Wraith (1/5/04; 19:34:20MT - usagold.com msg#: 114662)
Ever hear of Bancor?
Hi. I am new to this site ----
===
Hello Sir Silver Wraith !
Your post is ALMOST totally off subject --- BUT, since it is a GOLD WATCH ---
===
Bancor WAS a Swiss Brand of 14 Kt. GOLD watches made in the era of 1940 to about 1969. They came in both men's and women's styles. Most were of the square or rectangular design and had between 7 and 17 jewels. Let me say that these watches are considered "inexpensive".
<;-)

Max Rabbitz (1/5/04; 20:12:56MT - usagold.com msg#: 114665)
Tricksy PPT
Anyone want some dollars?
I've accumulated too many. So where is that PPT when you need them? We've not had a decent gold price "correction" in a long long time and I am getting rather upset. I'm beginning to suspect they've changed the rules again. They are soooo tricksy. I want more shiny.

Gandalf the White (1/5/04; 19:53:18MT - usagold.com msg#: 114664)
A BEAUTIFUL P&F chart ! <;-)
http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PLTB[PA][DA][F!3!!]&pref=G
TWO new additions to the stack "X"'s on the ROCKET's journey "TO THE MOON" ---- A GREEN number ONE (for January 2004) and A GREEN "X" topping !
<;-)

R Powell (1/5/04; 19:51:07MT - usagold.com msg#: 114663)
Silver thoughts after a big day
I vividly remember Feb. 5th 1998 as the day that silver peaked at $7.38 (interday high) and marked the end of the price spike sparked by news of Buffett's buying. Shortly before this occured Buffett's buying became public knowledge and about this time it was disclosed that he had taken possession of 89.7 million ounces and would take another 30 million. This cleared the air somewhat with definitive numbers and an answer as to who was buying so that, the pending lawsuit against Philbro for market manipulation was dropped. I have my doubts as to whether Buffett took physical delivery of that last 30 million ounces or if he defered delivery (effectively leased back that which was not delivered) so as to let the shorts off the hook. Cynics among us may speculate that this agreement was instrumental to the dropping of the lawsuit. Philbro is the commodity trading department of Solomon Smith Barney, a company that is reportedly largely owned by Berkshire Hathaway.

After this news became public and Buffett explained that he would buy no more than the 129.7 million ounces disclosed, the price of silver fell. Interesting is the fact that he started accumulating this silver in the summer of 1997 but the market disclosure didn't come until the winter of 1997-1998. Yet many wonder who holds the large long positions shown by the non-commercial trading class in the COT reports. Who knows?

I thought of this today because the POS has once again moved through the high $5.00 to low $6.00 range in which I believe Buffett purchased the bulk of that silver. BTW, he explained that he bought to restore some "market price equilibrium" which I interpret to mean that he thought silver was undervalued. I still have not seen any news concerning supply or demand so I have to assume that the POS is trading on other concerns unlike copper which is responding to real downdraws in existing supply (massive Chinese buying) and unlike most other commodities that do constantly respond to anticipated changes in supply and demand. The market is obviously now very volatile and I sense that large moves in either direction are more likely than any long term narrow range trading.

Other thoughts?
Rich

Silver Wraith (1/5/04; 19:34:20MT - usagold.com msg#: 114662)
Ever hear of Bancor?
Hi. I am new to this site and hope that someone out there in PC land may be able to help me. I have a 14k yellow gold watch with the name "Bancor" on it. It is relatively old but it keeps accurate time. The watch is a rectangular wristwatch and fairly simple in design with a manual wind and a seconds dial in the 6 o'clock position with a sweeping second movement. It is a really nice little watch, but I know nothing about it. Someone...anyone...PLEASE!!
Thanks in advance! Silver Wraith

steady (1/5/04; 18:28:02MT - usagold.com msg#: 114661)
PING
CAPTAIN, CAPTAIN, CAPTAIN........ thaaa thaa that waassss oonn onn one big ECHO from Switzerland, sir! :+)

Aristotle (1/5/04; 18:27:56MT - usagold.com msg#: 114660)
Sir Kilo,
To reiterate your good TIDE example, and then to speak of measuring your time in MOONS... well, let's just say that was a fine touch, and you've confirmed my faith that the more you say, the better for all who listen.

Gold. Get you some. --- Ari

elevator guy (1/5/04; 17:47:15MT - usagold.com msg#: 114659)
Goldilox 114646
Thanks for the confirmation.

Back in 1999, there was much talk in here about Y2K, the end of the USD-for-oil system, the resultant $30,000 gold, the end of the world as we know it, and so on.

I never thought that these things couldn't happen, but I also saw that the Fed had at its disposal the US military, and I really didn't think they would just sit idly by and watch their ship sink. The current moves for oil are no surprise, anymore than watching the outfielder run for the ball in flight. Its just so natural!

Kilo (1/5/04; 17:11:47MT - usagold.com msg#: 114658)
Sir Aristotle......

Thanks for the complements. I think for a few of us, it's a matter of not letting our heads be turned to mush by all of the attempts at convoluting what is otherwise a pretty simple subject. Too many expect others to tell them what is coming, what the future holds, to forsee what is unseeable or to predict the unpredictable. My favorite analogy is that of the ripples, waves, and tides, where only the tides really matter in the greater scheme. I was taught that concept of investing and market cycles many moons ago, and it has always proven itself with time. Too much focusing on the shooting stars while the real wisdom of the ages rests in the fixed points of light in the background. Like my old blue jeans and T-shirts..... eventually, it all comes back into fashion or favor. (big grin)

specie-man (1/5/04; 17:08:32MT - usagold.com msg#: 114657)
@ Goldilox - rare gas guzzler
Goldilox wrote:

"I had a friend in Dallas who bought a screamer back in '74 - I can't remember the make and model, but it was bright orange with a rear tail that was higher than the roofline and a big engine. He bought it new at just over half original sticker - no-one wanted gas guzzlers at the time, and it had been on the lot for a year. Even though gas prices came down again, he still had problems getting gas because it needed aviation grade and he had to drive to the airport to get it !"

That would be a 1969 Dodge Daytona or Plymoth Superbird (basically the same thing). They were actually a Roadrunner model with a fibreglass aero front end and a huge rear wing. Available engines included a 4-bbl 440, a 6-bbl "six-pack" 440, and a 4-bbl 426 "hemi". With some proper tuning, you could run one just fine on pump gas. But to get maximum performance, you'd need to advance the timing and run higher octane. They are worth large sums of money today.

PS: I've got a big old American 400 cubic-inch V8 that gets 20mpg on the highway.

CoBra(too) (1/5/04; 16:53:29MT - usagold.com msg#: 114656)
Snippet from todays MIDAS - Coincidence?
Ferdinand Lips
December 22, 2003

Personal Letter to:
Members of the Swiss Federal Council
Members of Parliament
Supervisory Council of the Swiss National Bank
Governing Board of the Swiss National Bank
200 selected opinion leaders of Switzerland

Re: Festive Season, World Crises and the Welfare of Citizens and the State

Gentlemen:

Here is my most recent book, The Gold-Conspiracy. First of all, let me say why a retired Swiss banker took such an initiative and why you should study this book in your own interest and in the interests of our country.

Since 1968, when I was part of the management team that formed the Rothschild Bank AG, Zurich, and later in 1989, when I formed Bank Lips AG, my main endeavour was always to invest my clients� wealth prudently, to maintain safety of principal, and to achieve capital growth.

To a much greater extent, this is the task of our Nationalbank and of our politicians, because they are charged with the much bigger task of managing our nation's social security systems. They are responsible for investing the national savings for old age retirement and for safeguarding our nation's patrimony, built up over many generations, in order to transmit it to successive generations. This is an increasingly difficult task since our current fraudulent irredeemable-paper-ticket-fiat monetary system does not allow for sound politics. Workers and pensioners eventually suffer most under this regime.

An uninformed Federal Government, an uninformed Swiss parliament and either incompetent or already involved in the international gold-price-manipulation scheme, the Swiss National Bank finished the job of selling a great part of the Swiss gold reserve by investing the proceeds mainly in soon-to-be worthless U.S. "dollars." I put the word dollars in quotation marks because they are no longer in conformity with the dollars mentioned in the U.S. Constitution. What were those who must have been, or who should have been, aware of the dimension of this fatal decision thinking?

In any discussion of the future of gold, or the price of gold, the first thing that must be acknowledged is that gold is a political metal for the simple reason that gold, in its historical role as a currency, is fundamentally incompatible with the modern financial system.

Up until August 15, 1971, there was never a period when no paper currency was linked to gold. The history of money is replete with instances of currency debasement, devaluations, coin clipping, printing, debt defaults, other fraudulent practices, and bankruptcies. But in prior times, one could always escape to a currency whose gold backing remained intact.

Since 1971, when President Nixon unilaterally defaulted on the U.S. sovereign obligation to pay an ounce of gold for $35, with the exception of the Swiss franc until 1996, there is no escape because, in accordance with the 1978 modifications to the IMF's Articles of Agreement (Section 4-2-b), no currency of any member country may be linked to gold. All economic, monetary, and financial crises of the past 30 years flow from the Nixon default.

The global irredeemable-paper-ticket-token currency system is very young. Its continued functioning depends on the belief that the debt upon which it is based will, someday, be repaid and serviced along the way. The one thing, above all others, that could shake that faith, and therefore the foundations of the modern financial system is a rise (especially a sharp rise) in the U.S. dollar price of gold. This is the real reason why Switzerland was persuaded into disposing of half of its gold.

The prosperity of the Swiss banking system, the Swiss insurance industry and the Swiss economy in general was based on its currency being tied to gold. As a consequence, the Swiss franc was considered the strongest currency in the world. Concomitantly, the Swiss banking industry gained international trust and admiration. That trust is now being irresponsibly wasted by uninformed organizations.

Russia and other oil producing countries are beginning to sell their oil for euros. This is extremely negative for the dollar because it reduces demand. Furthermore, some of the world's best-informed investors, such as Sir John Templeton, Warren Buffett and George Soros, are expecting the "dollar" to lose purchasing power.

Regardless, the Swiss National Bank continues to squander Switzerland's golden treasure, which had been built up by generations of hardworking Swiss under severe privations. The proceeds of the sales are "invested" in soon-to-be worthless "dollars," which the U.S. banking system, thanks to its "exorbitant privilege," as General de Gaulle called it, is creating daily out of thin air by the billions. It is about time that our authorities realize that the best alternative, and the free-market choice, to irredeemable paper-ticket-fiat money is gold.

Even in a global world one needs reserves to be respected. For 15 years, the Swiss have experienced an estranged government that does not respect for the will of the people and which is striving to become part of the EU. Switzerland is becoming financially weakened; its social systems are beginning to tumble, and savings are declining. The country simply will not be in a position to face looming economic and financial dangers. This is only because a dishonest elite has been lulled into a false sense of security and either does not know what it is doing or is consciously doing everything to weaken and to sell out our country.

I wish that during the coming festive season you will find the leisure to read Chapter VII about Switzerland. Since I no longer have confidence in our institutions, I will make my analysis known and it will be my pleasure if I can give some inspiration to honest minds.

It may be that you are not too familiar with these thoughts or ideas, but I assure you that my friends worldwide are alarmed that central banks are exchanging gold for paper and liquidating the savings of their people in the process. This concern is probably responsible for the fact that the American version of my book, Gold Wars, is enjoying a continued high rating among professional books.

If this book finds your favour and you agree with my hypothesis as a worried citizen of our country, then you manifest this by using the enclosed deposit slip in favour of the International Red Cross. I am obviously at your disposition if you desire to discuss this topic further.

With best wishes for the coming festive season and a happy New Year for you and your family.

Sincerely yours,
Ferdinand Lips, Zurich

Enclosure: The Gold Conspiracy. See in particular Chapter VII: "The Betrayal of Switzerland", as well as Chapter VIII: "What happened to Germany's Gold?"

-END-

Nice timing Ferdi!

Ferdi also told me an Austrian aristocrat, a prince related to the Imperial Family of Habsburg, will be putting his letter on the desk and to the attention of the Austrian finance minister Dr. Strasser. Says Ferdi: "The Austrians have always been selling gold and last year they sold gold at the lowest price of the year. What a shame." - (Bill Murphy's comments).

My own? Comments - you've heard them before - and I can't even comment on the Austrian's, as I've tried to get responses from the CB (Nationalbank) Governor, a real - though, probably former, friend - doesn't and didn't answer any question relating to gold for years ... Uh, and BTW, the Austrian aristocracy has been rescinded right after 1918, Kamerad, oder comrade?

As the SNB will still retain about half of their gold holdings - a nation who is used to plebiscits for any reason at all - was not informed sufficiently about the meaning of the their gold sales. A red herring is becoming visible in the fraudulent manipulation of other country's not only gold reserves - and I'm not talking about the fraudulent IMF practises - yet!

Give me a break - I'm off to bed - dreamin' of a golden year ... cb2

Pizz (1/5/04; 16:48:08MT - usagold.com msg#: 114655)
real time gold chart - free
http://www.forex-markets.com/charts.htm
Just ran accross this over at forex. all the currency cross plus gold and silver.

Web based chart can be detatched and put in a corner of your screen. . .looks pretty good to me, says it's real time, since I don't subscribe to commodities data. . .

Besides, fun watchin when they go up. . .(smile)

Pizz

Aristotle (1/5/04; 15:35:38MT - usagold.com msg#: 114654)
Awesome post, Sir Kilo
You're one of what seems like a precious few who GET it. Now you have an obligation to your fellow man, Mister!! Spread the word, and don't be shy about speaking up more often!

Gold. Get you some. --- Ari

CoBra(too) (1/5/04; 15:22:19MT - usagold.com msg#: 114653)
Ferdi Lips @ R. Powell
Hello Rich, I've read Gold Wars and used to know Ferdi back in the 70's, when he just became founding manager of Rotschild Bank in Zurich. Have been following him rather closely since, though haven't met him personally again in recent years. - And I fully concur, a great read!

The German version - Gold-Verschw�rung - just was published a few months back and apparently has a few additional chapters. I've been referring to a chapter concerning the question how much, if any BuBank gold is left.

Great day for PM's today 420 AU seems to become the new base an as AG has even done better, I do feel we might be off to the races. In terms of AG, I've been acquiring old 2 SFR's ( 2 Swiss Franc coins minted before 1969) with a high silver content. Hard to get, alas no premium and no VAT, since its still currency, not to say legal tender. The only way to play the silver bullion game in EU without 20% VAT - at least as far as I've researched.

Are the PM's starting to outperform against all currencies and not only vis a vis the US dollar?
I guess this will be the crucial question for the further performance of gold. If yes, and I would answer "for sure", then we'll see much more participation from countries, who's currencies have risen, some even substantially as the ZAR and �. Even commodity based currencies will see the bright light of gold and some silver shining upon their path.

If that's so, we'll probably advance to the second upleg of the gold bull market during 2004. A very powerful move, whereby PM's are leaving behind the shackles of currency denominations and will start to re-value goods and services on their own "real" terms once again.

... and that's pretty much all I'd be asking for, as all else seems a given.

Cheers again - cb2

Operative (1/5/04; 15:12:16MT - usagold.com msg#: 114652)
Euro Will Be Top Currency When Asia Says So:
http://quote.bloomberg.com/apps/news?pid=10000039&sid=a.bjy2wz24yY&refer=columnist_pesek
Euro Will Be Top Currency When Asia Says So:
Snip:

Question is, when will the euro supplant the dollar as the No. 1 global currency? Answer: When Asia says so. Central banks in this region hold vast amounts of dollar assets, meaning they'll decide the dollar's fate. And monetary authorities here are still overwhelmingly invested in dollars.

What signs should investors who are wondering when Asia will buy fewer dollars be looking for? For one, the end of currency pegs in the region, which would give central banks less reason to horde dollars. Currencies officially pegged to the dollar include China's, Hong Kong's and Malaysia's; de facto ones include Japan's.

Comment: This article gives a good indication of where gold/silver are headed by discussing one of our favorite themes; the US Dollar.

Goldilox (1/5/04; 14:36:59MT - usagold.com msg#: 114651)
Trail Pit Stop
@ Shapur

You might want to review the posts from 1/1/04 and 1/2/04, as a number of posts from those days focused on reflections and predictions.

Goldilox (1/5/04; 14:28:46MT - usagold.com msg#: 114650)
401k
http://www.chron.com/cs/CDA/ssistory.mpl/business/2333865
sorry, here is the link.

Goldilox (1/5/04; 14:27:52MT - usagold.com msg#: 114649)
401k cashouts on the rise
snippit:

"Cashing out has long been most common among workers with small balances, and it remains so, the survey found. Some 87 percent of workers with accounts of less than $5,000 opted to take cash, as did nearly three-quarters of those with balances between $5,000 and $10,000. But even as balances approached $50,000 the survey found one in five workers taking the cash, and even among accounts of $80,000 to $89,000 some 10 percent of job changers cashed out.

The majority of those who did not cash out rolled their balances over into individual retirement accounts. Others left the money with their previous employer or transferred it to their new employer's plan. All of those moves avoid taxes and penalties and allow the money to continue growing tax-deferred.

The study did not look at what workers did with cash when they took it, but Stacy Schaus, a consultant with Hewitt Associates, the benefits consulting firm that did the study, said anecdotal evidence suggests most of it went for such things as living expenses and credit card debt."

Goldilox:

More bonepile economics. The rate of cashouts increased most on larger balance accounts. As these are normally the higher paid and/or longest seniority employees, it speaks volumes to the long term unemployment issues. GWB has actually enabled this behavior with lower tax rates.

Lower rates added to lower (or no) income reduce the penalties for early wthdrawal substantially. For the unemployed, conversion of IRA to Roth IRA is cheaper with lower tax rates, with expectations of NO additional taxation on earnings after five years in Roth plan.

dem bones, dem bones . . .

Shapur (1/5/04; 14:22:31MT - usagold.com msg#: 114648)
Question to anyone on the Gold Trail
With the euro up higher than ever and the dollar in a confirmed downtrend, reflexively gold and now silver in solid uptrends--the gold dinar under way--inflation in raw materials--excess governement spending--inflating currencies on a global scale--jobs exported from the west to the east--stock markets reflating--housing overdone--wars and terrorism---interest rates low on a global basis---

when will all the paper burn ????

Basically my question is: Where are we on the timeline?
It seems like a good time to get our bearings so much has developed from 2001 to the present---

A trail pitstop and mini meeting may be in order---

AND HAPPY NEW YEAR TO ALL

R Powell (1/5/04; 13:25:57MT - usagold.com msg#: 114647)
What a day !
Goldilox, Bob Pisani may have called silver the superstar of the day but did he have any explanation as to why? other than the declining US dollar. Perhaps a good reporter just accurately reports facts. Given the speed of the move, I'll guess that some floor trader will tell us that existing open buy orders were triggered immediately upon the open. Silver was up $05.5 this morning at 6:00 AM, EST. Then I had to go to work. Boy, I was one happy camper when I got home and saw the day's close!

CoBra(too), I think you will enjoy Mr. Lips's "Gold Wars" but you won't learn too much that you don't already know. Do you know Mr. Lips?

Jon, what if Barrick took the money it received from the short sales and spent that money buying other smaller mine operations and/or otherwise improving (making more cost efficient) its existing operations. Thus it may have more gold now to deliver into the forward sales. I don't know that this is true, just speculation. Also, what if the newly acquired gold is just barely profitable even when delivered into the forward sales. Now, after perhaps some years' worth of delivery of this newly acquired gold into those forward sales, finally the debt is paid. What has Barrick gained? It will still own the now paid for new mining operations. Will ABX get full price for selling that new gold? No, but a few years of less profitable delivery to pay of the bill for new or improved operations may not be the worse business move. A small profit for now but fully paid for gold to deliver in perhaps 2005 when gold is $4,032/ounce.
Food for thought?
rich

Goldilox (1/5/04; 13:09:53MT - usagold.com msg#: 114646)
$ vs euro oil
@ Elevator Guy

You wrote "Would those with the right of seniorage just abdicate their privelidged postion without firing a shot accross the bow of the Euro by controlling oil with military force?"

Given the complete lack of cooperation of the entire euro block in Iraq (due to their heavy investment in the status quo of Iraqi oil), I would say that shot has already been fired.

Libya has returned fire by capitulating to UN inspections. Smart move on their part, as US PTB must now choose between jumping into Libyan oil business "behind" the euro block or declaring WMD inspection fraud one more time as motivation for invasion and annexation.

Kilo (1/5/04; 12:50:24MT - usagold.com msg#: 114645)
Steady - It's ALL relative
Everything is valued in relation to everything else. There is just no way around it. Gold, silver, the dollar, the euro, etc. are all basicly "theories of relative value". Whatever is being presently used as the "standard" is usually what we all look to for valuation, which unfortunately in most peoples eyes is the dollar. "How much is it worth?" more often than not is a question asking the dollar value of the particular item. There can never be a truly "anchored" standard unless it is artificially instituted through government decree or "fiat", for the simple reason that all things vary in value in relation to all other things on a constant basis. It's never a matter of valuing a specific thing against itself (what is gold worth in gold terms?), but as a constantly changing ratio against all other things. There is nothing short of government edict or overall free-market agreement that will ever set one object as "THE STANDARD", and still, everything will vary in relative value to that standard, unless that additional object is also proclaimed as a relative standard, as was the silver/gold ratio of years past.

You say "gold related to silver", but which one is increasing or decreasing in value at the moment, relative to the other, if both are being used as the "standard" ? Everything in relation to everything, over time, is simply in a constant flux, and the "exchange rate" doesn't really matter until the exchange itself is consumated.

".......so gold has to be valued in something else (silver) for there to be consistency in the market otherwise gold would be in the same boat as the federal reserve note is right now where its worth and value are floating changing everytime keyboard entries are made or exchanges take place, for we do not know the value of a dollar untill that precise moment the exchange takes place......"

Your statement makes a little more sense once you understand the foregoing. Everything "IS" valued in everything else, where exchange valuations are concerned.

But this all brings us to the obvious question..... "WHICH REALLY IS THE STANDARD", the dollar or the gold? Gold, supposedly being a "non-monetary" commodity these days, sure seems to be mirroring the dollar in it's fall against other currencies. Does this make gold a currency, or perhaps more of a "standard" than TPTB would like to admit?

On the other hand, if you "fixed" the values of gold and silver relative to each other, you basicly end up with just another bi-metallic standard, nothing that hasn't been tried in the past. But the values of the two metals are then "fixed" only in relation to each other, and not necessarily everything else. The "everything else" would just continue to fluctuate in relation to the gold AND silver.

Economics is a simple balancing act where the big picture is concerned. The more of anything there is available, the less it is worth..... i.e. the dilution effect. But what if two things increase in availability in relation to each other? From a practical standpoint, what you have is basicly a wash. Then supply and demand fundamentals come into play, along with vast variations in the "standard supply". In most cases, the least fluctuating commodity make the best "standard", or best "anchor" for all other items to be compared to.

Suppose for a moment that the money (currency) supply were suddenly placed on hold, or FIXED at it's current level. For all practical purposed, inflation would stop dead in it's tracks. The money supply and the "everything else" supply would have a fixed ratio at that point, so no need for rising prices to make up for "money dilution" problems, i.e. "inflation".

Too many times I think we all fall into the trap of thinking there has to be ONE standard that all other value is judged by or compared to. That has never been the case, other than on a temporary and very artificial basis.

So, what any specific item is "worth" is simply ITSELF, and until a trade is made "out" of one item and "in" to another, relative valuations are nothing more than a constant "pricing game" that have no meaning whatsoever except at that particular moment in time that the two (or more) items are compared.

You say you nominate silver for a comparative anchored value to gold. But what does that really accomplish than to create another artificial valuation or market?

The real problem with fractional banking is that it is, out of necessity, "ever expanding". If we used a genuine and true "fixed standard" that never increased in availability (or even had a restricted increase in availability), then fractional reserve banking would be an impossibility without the overall world economy eventually hitting the wall full force. Unlimited expansion of any commodity that is restricted in nature (gold/silver) is obviously an impossibility, and that is the reason (or excuse) that fiat paper currencies were born.

If we ever were to have a true "anchor" where our money supply is concerned, THEN everything else would be fluctuating in "price" or value in relation to that standard. As production of consumer goods increased, their "prices" would come down to "balance" with the availability of the money supply used to purchase those same goods. But as the world is today, we have no fixed financial standard. That would be too much of a burden on the banksters and create a situation where they would actually have to do something constructive to increase their stranglehold on the people's finances.

Belgian (1/5/04; 12:44:59MT - usagold.com msg#: 114644)
@ Jon
Your question about ABX. Same question goes for other miners with big Gold forward sales...Cambior, Ashanti, Anglogold. These miners are still there and mining.
Your same question goes for these miners' specific bankers (BB). JP Morgan/Chase is still there and banking. Your question also goes for those CBs that supposedly lost 10 to 15,000 tonnes of goldreserves, for ever. No CB scandalitis, yet.

Are we withnessing a "gigantic" and "succesfull" cover-up of a large scale Gold drama...? Or,...are we completely in the dark about the extreme "flexibility" and real goals of those collusive entities...goldminers, BBs and CBs ???

Or is the reality something in between those extremes ?
Was there suddenly a rift between all those that kept supporting the dollar-reserve...resulting in the formation of two different camps ($-�) with opposite views on Gold ?
I do suspect strongly that this is somewhat closer to the real secret Gold story.

If and when Gold would come back as a wealth asset in a Free market, underground Gold will still needed to be mined and there is no need to let those miners eventually go broke. Gold has always been mined (5,000 years) under whatever circumstances. Central banks can print ad nauseum as to prevent bank defaulting. And the BIS (Bank for International Settlements) is still acting as a CB's watchdog and organizer of the goldreserve reshufflements.

I'm not impressed, anymore, by the rise and fall of stock-prices or stockmarket stabilizations. This disproportionate financial dogtail has become an instrument in the hands of a strong brotherhood/fraternity. I don't know how or when this story will evolve and/or end ? Look at what is happening at present. A declining dollar exchange rate and the world's biggest stock market...a way overvalued stock market, rises...RISES, as to compensate for the declining dollar-world-currency !? How does one explain such a paradox ?

A possible answer to your ABX question : How much trust do you, personally, have left in the Freedom (objectivity) of these financial markets (casino) of today ? How can you possibly "value" correctly, any enterprise under the present circumstances (Parmalat-patat) and a very uncertain-unreliable future ? Good luck to you, Jon.

elevator guy (1/5/04; 12:21:11MT - usagold.com msg#: 114643)
Mr Gresham 114604
Thnaks fo ryour reply.

"To restate your premise in its more likely form, "If additional supplies of oil to the industrialized world are guaranteed free of OPEC embargo for a decade's longer duration, ...""

Yeah, thats it, how did you know? You must have ESPN. :)

"The financial dynamics of the currency's overplayed hand, as Ari depicts, still remain."

I hear you to say that even if cheap oil (free of embargo) can prop up the US economy for a time, it will not stop the demise of the USD oil-hedgemony. So it would seem that the important thing for little folks such as myself to do is to protect earned value by moving USD's into tangible assets such as gold, and maybe diversifying into some Euros? (At least while they are appreciating against the USD)

Here is a more drastic scenario. While it is not my vision of what I'd like to see happen, it is a possibility, given the ambitious nature of those at the helm.

What if TPTB who use the US military might for their purposes were to launch a full-scale, multi-pronged attack on all known ME oil reserves? Some nations might be "managed" by toppling the government by assasination, then installing puppets, while other nations might require military intervention and defacto annexation. Nations that otherwise might rise to oppose these actions could be brought in as partners, effectively paying them off, and avoiding war on multiple fronts. The war on terrorism could provide sufficient media spin cover to keep the public in support. By whatever means, control the oil- whether political, military, subtrefuge, et al.

What's to stop them from doing so? If the powers behind the Federal Reserve are the primary benfactors of the USD reserve status, (and we know they ain't so dumb as not to see the Euro moving toward oil), then (apart from the little people) they stand the most to lose if the USD tumbles. (Unless they are printing Euros now). They have the influence to manuever the US oil industry to a position where its hedgemony could continue. Would those with the right of seniorage just abdicate their privelidged postion without firing a shot accross the bow of the Euro by controlling oil with military force? Will they just sit and watch their USD empire crumble?

Cometose (1/5/04; 12:00:25MT - usagold.com msg#: 114642)
Canadian DOllar
Just before the last turn up in the Canadian Dollar the premiums for March June and September (price differentials) became very narrow. Now that it has made a very respectable move northward .......those margins between premiums for the stated months are again very narrow....
perhaps indicating another turn (south this time)
If this type of footprint verifies , it will make this market very trackable.....
I think Tim Wood said overthe weekend that the Dollar was headed for 83...
John Templeton ...said a 40% drop is in order....
that would be appx 60......and in canadian perhaps up as much......GO Warren and keep those footprints uncovered...

elevator guy (1/5/04; 11:49:45MT - usagold.com msg#: 114641)
Ari 114601
Thanks for your reply.

If oil fuels our industrialized economy, then cheaper oil would make the US economic engine burn brighter?

So, yes, the thought did occur to me that if the US maintains a "cheap" oil supply, the negative effects of the Euro moving to oil, and the resultant correction in the USD might be mitigated. The avalanche of dumped US dollars will still come, but economic strength provided by cheap oil might generate enough prosperity to reduce the impact.

What do I know? Hey, you need an elevator in your house? I can help you with that.

Melting Pot (1/5/04; 11:48:40MT - usagold.com msg#: 114640)
Greenspan-More asset bubbles to come, can't say when
http://www.forbes.com/technology/sciences/newswire/2004/01/03/rtr1196992.html
SAN DIEGO, Jan 3 (Reuters) - More asset bubbles like the one in the late 1990s, when U.S. stock prices soared and then collapsed, will happen because they are a product of human nature, Federal Reserve Chairman Alan Greenspan said on Saturday.

Answering questions before the American Economic Association, Greenspan said such a bubble may not occur for some time because the pain of the losses that investors suffered will linger.

"We don't have to worry too much about the emergence of real bubbles again for a while because it takes a number of years for the trauma of the collapse to wear off...but at some point in the future, I don't know when, we are going to get another bubble," He said.

"The reason we are going to get another bubble is because it is built into human personality, it's the way we evaluate things and there is a tendency for us to go on irrespective of historical experiences," he added.

Greenspan said policymakers need to take note that assets like stocks and real estate are becoming an increasingly important part of people's wealth.

As a result, they will have to consider variations in asset prices as a factor in guiding policymaking and possibly consider whether the time-frame they use for setting monetary policy is appropriate.

"Now...we observe that every time we move (U.S. interest rates) or even indicate that we might move, we can see the structure of the yield curve change," Greenspan said, referring to the pattern of long- and short-term interest rates that make up a yield curve.

"That is beginning to tell us that as we start on any particular pattern of monetary policy, we have to ask ourselves where does it end and I submit to you that the time-frame that that question was answered 20, 30, 40 years ago is much shorter than it will be 10 years from today," he added.

Separately, the Fed chief said it was difficult to fully understand the current exceptionally high rates of productivity, or hourly output per worker. But he said such rates, which topped 9 percent in the third quarter, were unlikely to continue.

"In an advanced country such as the United States -- an advanced technological country on the cutting-edge of technology, we .. have never experienced productivity growth significantly in excess of 3 percent," Greenspan noted.

EOM

Greenspan never seems to address the cause of asset bubbles does he? Dollar gaining strength as we move into the COMEX close....these guys never give it a rest do they?

USAGOLD Daily Market Report (1/5/04; 11:47:20MT - usagold.com msg#: 114639)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Afternoon Gold Report by Jon H. Warner has been updated.

If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

Precious metals surge higher on a weaker US dollar and comments by Fed Governor Ben S. Bernanke this weekend. The outlook is very good on the first day of trading in 2004. There is no end in sight for the falling dollar and some predict that gold (the "anti-dollar") will move as high as $1700 an ounce while others look at the mid $400 to $500 area this year. I would not be surprised to see $650 or higher myself. The "real" data and soaring deficits suggest that the precious metals can only move higher as demand increases.

Jon H. Warner

Operative (1/5/04; 11:43:46MT - usagold.com msg#: 114638)
TOCOM Need Not Apply
Japan might as well take the night off because it looks like Tocom will be locked limit up from the start. Maybe they can spend this evening propping up the US Dollar? How about it Japan? Do you feel lucky?

Jacob Marley (1/5/04; 11:35:38MT - usagold.com msg#: 114637)
Jon - Barrick
Jon - "...seemingly very sensible comments..." -- 2 things - 1) most of us don't really know the details of Barrick's derivatives playbook. They are not plain vanilla, and are part of complex private business transactions. What we must know is that Barrick is not stupid. People make seemingly sensible comments that are sensible only when viewed in a framework that supports them. Add new variables and the other side of the equal sign changes. We don't know for real just how well or poorly Barrick has done on its hedges. But again, they are not stupid. They are also not novice. Could they have made some serious mistakes? Sure, but we don't know yet, and we don't know if they are going to be able to get help in fixing them. They are a business and they are trying to survive. Personally, I doubt they were caught with their pants down. If lilliputians like us could read the tea leaves, and anticipate a turnaround in the gold arena, it would surprise me endlessly to see a seasoned veteran like Barrick caught completely unawares.

And, 2) most funds and big money managers cannot/will not buy into smaller (less liquid) issues (at least not at the outset, where they are building the core of their holdings, if they are anticipating a bull run). They use basic thinking: gold goes up, therefore buy big senior (mostly NA) mines (safer). They will buy up your Barricks, Newmonts, Placer Domes, etc., because of their liquidity. They don't even care much about the fundamentals, since this is mostly a momentum play anyway. They need to be able to buy something that can absorb millions of shares transactions without lots of waves, and they need something that trades high volumes of options so they can hedge their bets.

Now Barrick's share price is doing Ok, but it's not by any stretch outperforming the other seniors that have less exposure to forwarded sales that are now at lower than market prices. It seems to me by casual observation that Barrick is doing about what we would expect of it - buyers are pricing into it a safety premium (established senior, liquid issue), but discounting its potential to capitalize on a rising gold price. We shall see - no?

Goldilox (1/5/04; 11:07:55MT - usagold.com msg#: 114636)
Six to be Nine Observation
@ White Rose-

The most astute observation of the day!!!

Jimi Hendrix:

So if 6 ... turned out to be 9... I don't mind... I don't mind.

(:> Goldilox

Pizz (1/5/04; 11:06:21MT - usagold.com msg#: 114635)
Most orderly free-fall in History
At this rate we'll have a 0 dollar by March 31. . .

Let's see, then gold should be ~ and silver ~/16.

Hmm, probably won't happen exactly.. . .

Pizz

White Rose (1/5/04; 11:02:12MT - usagold.com msg#: 114634)
The world turned upside down
Higher gold prices are turning things upside down. The famous 6 dollar rule has been turned upside down to become the 9 dollar rule. Nice.

Goldilox (1/5/04; 11:02:00MT - usagold.com msg#: 114633)
Resistance
Some mighty powerful resistance at $424!!!!

Open was at $414.x, so $9+ is a good day and beats the old "$6.50 limit". If we break through $424 with any "vigor", Sinclair's $431 should be the next stop.

Go for the gold!

Pizz (1/5/04; 10:26:54MT - usagold.com msg#: 114632)
Gas Guzzlers
Engineering and production were all designed a few years back with sub $25.00 oil.

Remember when the pundents used to say that no sustainable recovery could happen unless oil went back to the teens?

Well, Detroit and a few other automakers gambled on it.

We shall see. . . .

Pizz

Goldilox (1/5/04; 10:17:51MT - usagold.com msg#: 114631)
Successful Defense
http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=GLD.FX1
Looks like the second attack is failing as well. . . back above 423.

Goldilox (1/5/04; 10:05:38MT - usagold.com msg#: 114630)
gas guzzlers
@ Clink

I had a '93 vette ragtop and it tickled me to tell people I got 18-24 city/hwy MPG with 100 more HP than my pickup truck that averages 14MPG.

However, I got rear-ended in my 10 yr old Silverado this New Years' eve, and destroying the drunk's front end (a Japanese mini-truck) only disturbed a little dirt on my steel bumper. Raise my insurance rates if you must, but my Sherman tank kept me safe once again. Two soldiers dying in a battle zone make headlines, but 55,000 people killed on the "safe" highways in fuel efficient sardine cans is a yawner!

Clink! (1/5/04; 09:42:17MT - usagold.com msg#: 114629)
@ Goldilox
A couple of months ago, I posted a Bizarro cartoon where a salesman is showing a couple a HUMUNGOUS SUV in the showroom. The caption read "And the best thing is, when gas hits eight bucks a gallon, you can put it up on blocks and the whole family can live in it."

That's an advantage that the cars you mention don't have ! For me, the serious manufacturers are Honda and Toyota with their hybrids, but that's the geek in me drooling over the high-performance engine system.

Oh, you're just going on the looks ? Yeah, I may agree with you there. And they will have the additional value of rarety when the gas runs out. I had a friend in Dallas who bought a screamer back in '74 - I can't remember the make and model, but it was bright orange with a rear tail that was higher than the roofline and a big engine. He bought it new at just over half original sticker - no-one wanted gas guzzlers at the time, and it had been on the lot for a year. Even though gas prices came down again, he still had problems getting gas because it needed aviation grade and he had to drive to the airport to get it !

C!

Goldilox (1/5/04; 09:39:06MT - usagold.com msg#: 114628)
The Hammer
Au dropped to 421.3. Here comes the "hammo"; hold on tight! Whoever just sold for 421.30 is gonna be sorry. Maybe we'll let 'em back in at 425?

Jon (1/5/04; 09:32:20MT - usagold.com msg#: 114627)
Barrick potential losses on hedge
With strong run-up in gold price why is ABX also running strong? Seems to conflict w/ recent and seemingly very sensible comments on this site past couple of weeks. Would sincerely appreciate comments. Thanks.

a nation of one (1/5/04; 09:30:20MT - usagold.com msg#: 114626)
pog

In my post of (1/2/04; 20:53:53MT - usagold.com msg#: 114501), I wrote: "my charting indicates that a NEW trading range is in force right now, above a line drawn through the bottoms of April 2003 and July 2003, and under a line drawn parallel to it, through the top of May 2003. This channel is narrower and more steeply inclined than the previous one. Right now its bottom is around 377, and its top is near 417. Pog therefore is now at the top of this new trading channel, and whether it breaks out on the upside, or stays within this channel, we are soon to see."

This morning pog broke out of this channel on the upside.

steady (1/5/04; 09:29:16MT - usagold.com msg#: 114625)
how the bat was got!
how fing classic was that.
ratio is definetly a genious.

he had me quickly and quitely walk thru comics floor along the way he had me drop 4 sacagawee dollars.
he then watched who picked em up, it was funny as on one occasion the three traders did a three stoges type of boink as they rushed to bend over and pick up the fake gold coin, it was almost sad as it was funny to see em so decieved. payback is a bitch.
after that lil comedy was over on the comics floor the plan went into effect.
since ratios have become all the rage in helping to esplain whats happening in the gold silver world, ratio then had put into his 4 pockets 11 dimes in one, 3 half dollars in another 5 qtrs in the back pocket and finally 22 nickles. he almost looked like a clown walking onto the comic floor with his pockets so bulgy and the ear to ear grin across his face , pluss due to it being winter and our running thru thr fridig air to get this nobel deed done his nose was as crimson as the federal reserve notes chart has been red, and i mean very red.

see since honesty has come to the forefront of human minds recently. the dealers on comics wanted to be honest and return the coins free of charge , the right thing to do, but them errouniously thinking the coins where gold wanted something in return for them. even though honesty is at the forefront of many minds and making it into everyday vernacular where it properly belongs, the concept is not fully understood and implaneted yet on an economic basis where everyone is subjected to the same monetary fairnes. this has to trickle up from the masses for the few to understand as the weight of the masses, can out weigh the weight of the few cause they keep giving away free tokens to buy gold with. its a self perpetuating self defeating proposition either way you look at it. from the point of paying debt with debt ( dumb) or giving free tokens away to buy real money (dumber)

so when ratio went into his explanation of the ratio he woulds apply to getting his coins back and of course empting his pockets out all eyes perked up at the commotion. it was then that i got the six dollar bat and dodged my way out of there like the men of old new york, brooklyn side, use to do with the street cars, thats why the brooklyn dodgers where named dodgers as omalley wanted players nimble and quick like the men of the streets on ny.

that bat has now been successfully passed off and is on the way to the shreader in michigan!

the 6 dollar rule broken as gold smokes 420!

anyway he offered a mixture of coins all totalling a lil over 1.10 to get the dealers thinking they where getting a better where allover it, like two lovers reunited after a long absence. so anyway it cost us less than one gram of gold to let the price rise by two federal reserve notes a pretty good trade dont ya think.

hey you part time paper pushing gold slackers over at comics, who is the laugh on now!

Goldilox (1/5/04; 09:25:02MT - usagold.com msg#: 114624)
Auto show
@ Cobra(too)

Not to ignore the fine products on the east bank of the pond, Porsche unveiled the 2005 Carrera Turbo - looks a lot like the DC Viper, and really hauls butt, as we say over here!

CNBC has interviewed Auto CEO's today at the Detroit auto show.

Too many cool toys, need more Au profits!!

CoBra(too) (1/5/04; 09:16:33MT - usagold.com msg#: 114623)
Gold Wars - by Ferdi Lips
Is now available in German and goes by the title "Die Gold Verschw�rung" - The Gold Conspiracy!

I haven't read it yet - only the English version, though I was told that there are additional chapters. One of those chapters deals with the Bundebank's gold. Apparently, half of the 3.400 tons are swapped, while the rest seems gone. Can that be substantiated? I don't know?

We know, though, that 1.700 tons are possibly in deep storage at West Point - where is the rest? And why are BuBa officials keep yapping about a larger share in gold sales in any renewal of a "WA"?

Either way, as I can't complain on SPOT and SPIKE's performance today, a potentially major scandal is brewing in Germany's financial circles. It seems even "Der Spiegel" got word of it.

... and we'll be sending out "Die Goldverschw�rung" to all pertinent financial papers in the area.

Interesting times, indeed! There may be less physical left than even our pro gold group has envisioned.

Prosit - and cheers for 2004 - cb2

Goldilox (1/5/04; 09:11:56MT - usagold.com msg#: 114622)
Silver on CNBC
Hey Rich

Bob Pisani just called silver the superstar of the day at $6.25!

Goldilox (1/5/04; 09:09:36MT - usagold.com msg#: 114621)
DX & Au
@ Zhisheng

Sho'nuff. The dollar is working on DOWN 1.0%

So much for orderly decline.

Keep jumping Spot and Spike. Looking GOOD!

The last day of the Santa Claus rally is bringing you boyz dog bisquits.

Zhisheng (1/5/04; 08:56:56MT - usagold.com msg#: 114620)
Oops--that's GOLD up $7.50.
Not the dollar.

Zhisheng (1/5/04; 08:47:54MT - usagold.com msg#: 114619)
$6 rule proof (test).
http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1
The dollar is now up $7.50 on the day.

Very seldom, if at all, has gold risen much more than $6 in any given day since the birth of the present bull market. If it does today, it could indicate a change in the strategy of the major shorts.

steady (1/5/04; 08:38:39MT - usagold.com msg#: 114618)
noise
metal heads smoking thru the 420s. correction tomorrow!

Goldilox (1/5/04; 08:18:36MT - usagold.com msg#: 114617)
Auto Show
The big 3 are serious. The Crossfire, Corvette and Mustang all look great. The '05 6-liter 'vette is 5" shorter with 2" longer wheelbase and +50HP over '04. The new 'stang looks like a sleek Steve McQueen Bullitt retro from 1969.

Lots of places to spend those Au and Ag profits!!!!

Operative (1/5/04; 07:32:26MT - usagold.com msg#: 114616)
Twas A Kodak Moment
Our favorite cannine just ran past the 420 and found his morning relief, so to speak, at the 422.3. Think I will take a rest after the heart pounding run up the trail this morning. Anyone have an extra pair of clean socks? Preferably the ones with silver thread that help fight off those smelly bacteria. Looks like we have a lot of climbing to do in this New Year. Phew! Taking a rest now.

steady (1/5/04; 07:24:12MT - usagold.com msg#: 114615)
gold smoke
gold smoking 420?

hahahahahahahhahahahah

steady (1/5/04; 07:21:13MT - usagold.com msg#: 114614)
ratio
will silver be able to break into new low ground on the silver gold ratio, its as low as its been sinve i started keeping track 7 months ago, is a breakdown in the ratio price emminent or will we get a increase , depends on the pog as the pog is dragging silver higher indicating that yes indeed the market, the planet, the economic system is looking for an honest policy as honesty is the best policy in earthly econiomic matters.
silver and gold fit the bill to a tee. help spread the word, its getting easier to converse with people now.
rember 2 3 years ago when trying to esplain what was happening we where looked at like what u been smoking, or where given looks of indignation and almost even ridiculed and shuinned, well f them and the horse they rode in on. when they come back and ask it becomes easier to demonstrate whats going on.
you know it takes faith to be a gold bug but the faith one has to give out is sure alot easier than the faith one has to give to the govt for using there script, gold is way easier to trust. so do not despair when esplaning to others and u get shunned they will come around. rember its one mind at a time and every no brings the next yes that much closer.
working to change peoples mind is difficult you just have to present the info in 3 easy steps as the mind works good with three easy thuing s to rember, gold is money, gold is property and gold is no one elses liability if u get them to understand that then , well then they are on the way to discovering the secret of ecoism and that is gold accumulation is not only cool but proftable as well!

Zhisheng (1/5/04; 07:14:42MT - usagold.com msg#: 114613)
$420 cash penetrated.
A golden blizzard.

Operative (1/5/04; 07:14:19MT - usagold.com msg#: 114612)
Prepare The Colors
Ladies and Gentlemen, would the proper person(s) bring the colors forward as we prepare to mark the spot on our trail known as the 420 ridge. I am scouting a suitable site to raise the flag at this very moment. And while the land forces prevail, a smilar battle is being fought at sea:

Thanking Mr. Greenspan for his continued folly in speech and deed as evidenced over the weekend. The debtberg has just impacted the side of the great dollar ship. May the band strike up the first cords as the deck chairs are rearranged by the several new degrees of incline. Golden lifejacket anyone? Boarding in the Silver Lifeboat is now announced.

If the action holds, I may have to rethink my attitude towards that first day known as monday.

steady (1/5/04; 07:09:42MT - usagold.com msg#: 114611)
evolving revolving standing still yet moving forward
someone here said an ounce of gold is worth an ounce of gold.
i can almost agree to that concept but how can u measure somethings value or worth related to itself.
yes i know gold is worth what someone will trade for it, but its value has to be fixed or once again we are back to the question whatis an ounce of gold worth, yea iknow its worth one ounce of gold but relative to what. i say relative to 20 ounces of siver.
so gold has to be valued in something else silver for there to ber consistency in the market othewrwiae gold would be in the same boat as teh federal reserve note is right now where its worth and value are floating changing everytime keyboard entries are made or exchanges take place, for we do not know the value of a doillar untill that precise moment the exchange takes place.
same with gold that has no anchor, its unit of account also floats and changes based upon the unanchored federal reserve note, now if the 1 ounce of gold was anchored to silver its value would be fixed and all that would change are the prices not the value of gold or silver. so in my book an ounce fo gold may equal an ounce of gold always but the value has to be fixed to something else besides an unancored reserve currency that flaots> i nominate siver.

now im confused and dont know where to go to find out the answers maybe someone can help me out.
when the world was on a bi metalic standard was there fractional banking?
did the bankers pay the depositor a pportion of the intrest the earned by lending the depositors money out?

is the fractional resreve system just a way the bankers add an extra layer to the circulating script to avoid converting your money to property?
damng more questions to be figured out?
thats whats great about the gold market there always seems to be something new and exciting to study.
especially the charts and how they just keep going up.

gold and silver
honest money for
honest people!

one thing we wont see theis year is the reintroduction of the ad campaign by coors lite...... rember it coors lite the silver bullet.
nope the long tenticals of tptb will nix any ad campaign by any ,marketing company in committie as thats how deep there power extends.

last year i really thought mcdonalds would reinstitute the golden arches ad campaign but they didnt maybe this year!

Goldilox (1/5/04; 06:53:45MT - usagold.com msg#: 114609)
Silver
Since WR's post, Ag has jumped to 6.27! Au is at 419.1!

Wake up the dogs, we're in for a wild ride today!

Zhisheng (1/5/04; 06:50:31MT - usagold.com msg#: 114608)
Sharp skirmish.
http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1
The battle for $419-$420 is on.

White Rose (1/5/04; 06:48:26MT - usagold.com msg#: 114607)
Silver is taking off up 28 cents to $6.20
and gold is up $3.40 from Friday close.

Belgian (1/5/04; 02:06:47MT - usagold.com msg#: 114606)
Re:
@mabry21 : Most Eurolanders, who are financially "connected", remain rather neutral towards Gold, for the time being. European savers, sub-consciously, feel more secure with our euro now, than in the good old days of European monetary angst and disunity.
Eurolanders can leave the planet's dollar-reserve "now" and save in their own, growing and stable, euro currency. Since Gold is still widely percepted as a dollar-thing...Eurolanders concentrate on their expanding euro first and are not overly exited about Gold.

There is only a small minority that suspects something Golden in a not so distant future. The coming euro-Gold connection is still a bit too untouchable for the majority.
Most individuals rush to Gold when the "fear" factor is dramatically on the the rise. A "stable" euro and relative stable prices are not of a nature to direct one's attention to a higher than normal, Physical Gold accumulation. Jobs / job security and entrepreneurial profits have a MUCH bigger priority now !
Savings are looking less for risk (since 2000) and go into a stable (euro) currency with reasonable IR compensations.

Many European goldbugs still remain firmly hooked to goldmine speculation. But something is changing about this old habbit. Financial advizers increasingly attrackt investors' attention to a growing percentage of *Physical* in their portfolio.

The main advantage of the POG not rising in euro is that the young and expanding euro is gaining on dept and keeps the more explicit Gold connection (concept) for a later phase in the $ > � transition process.

Keep bearing in mind that NOBODY is linking the present ongoing geo-political things to *** OIL *** and the dollar/euro/Gold - relations !!!

This brings me to a reflexion on "elevator guy"'s posting.
The dollar cannot and will never be allowed to grab all the remaining oil-reserves on our planet ! Most recent example is Georgia (pipeline corridor). The newly "installed" strong-(straw)man (puppet), after the ousting of Chevernadze, is married to a Dutch and political active.

The planet's resources MUST be "shared"...or else... !!!

Mr Gresham (1/5/04; 01:28:03MT - usagold.com msg#: 114605)
G'night, Ari!
Hope you're not losing any sleep, as I get to Forum-reading after 11pm, open 8 new windows with nearly all the links given, and then start nodding off before I've looked at half of them.

yes, Belgian is a unique asset to our group. He brings and keeps before us (1) the European presence, (2) an inspired intellect that is always peering around the next corner of events, and (3) a focus on the early works given here by our mentors, which I am overdue for a re-visit to. In other words, I am ripe for some fresh insights from the years of early learning combined with recent events.

I think Belgian and I are similar in that I am a stubborn mind who will not just accept assertions made on repetition, witness the "reserve currency" doubt I've made below. If it was explained to me four years ago, it has not fully stuck, and will just have to find its way into my bag of "understandings" some other way.

Fortunately, it does not require fully understanding all these things in order to "get thee hence to a coin dealer", does it? Fortunate for me, for I am a "spoiled opportunity" type of investor if I see I've missed the bottom in something I was looking at getting.

I am glad I "got me some" and did not miss the bottom in this (although I could have used a little less bottoming -- that second one in 2001, well...)

Sleep, get us some.

Mr Gresham (1/5/04; 01:11:07MT - usagold.com msg#: 114604)
elevator guy
"But if the USA can secure enough oil for its needs, "

It always strikes me when we speak of entire nations, but then advocate the operation of an international free market, the players in which are mostly the internationalized corporations who buy and sell the commodities we use.

To restate your premise in its more likely form, "If additional supplies of oil to the industrialized world are guaranteed free of OPEC embargo for a decade's longer duration, ..."

A greater supply means a lower price, and the nations most dependent on oil will feel less pain than otherwise, but the consumers of ALL nations will bid for the oil at its market price, and these will be the Chinese and Japanese with their prodigious savings, as well as the cash-strapped Americans.

The denominating currency of trade has always baffled me in its extent of impact. For all currencies are immediately exchangeable into whatever fiat (or PM in small quantity) you wish to hold.

But, to be the oil reserve currency means that there is a greater float of your dollars "in transit" on a daily basis, just to keep the world's trading accounts liquid. I still see this at base as a one-off benefit.

I've never seen the number giving the size of this float, but of course it represents a once-spent boon to the US fiat-issuers. And any contraction in that float brings home dollars to bid up prices here. Perhaps it is the reversal of trend that is the Euro's threat, as traders try to front-run a seachange?

But the mere provision of more oil, even through the pumps of Exxon or Chevron, does not guarantee a disproportionate benefit to US consumers, only a commensurate easing of whatever price shock lies ahead. The financial dynamics of the currency's overplayed hand, as Ari depicts, still remain.

Aristotle (1/5/04; 00:58:36MT - usagold.com msg#: 114603)
G'Morning Mr Gresham
http://www.usagold.com/cpmforum/archives/420041/default.html
Yep. Good people.

On Another note, don'tcha just LOVE this guy?!!!

Belgian (1/4/04; 14:42:36MT - usagold.com msg#: 114575)

Like oxygen it is.

Gold. Get you some. --- Ari

Mr Gresham (1/5/04; 00:27:49MT - usagold.com msg#: 114602)
What might have been
"For the saddest words of tongue or pen
The saddest are these: What might have been."

"Maud Muller", John Greenleaf Whittier

Perhaps it was the little bit of romantic military bravado I picked up from tales of Saladin and Richard while growing up.

Perhaps it was the greeting and warmth I received in Cairo (right after Camp David), when Americans were welcomed with smiles and handshakes. A Cairo policeman took me by the hand to introduce to his friends, to his favorite cafes and juice bars, and to prayer.

As different as our worlds are, it has always seemed to me that these emotive, expressive, and alert Arabic people would be good folks to have and keep as friends. Certainly whatever cost to doing that would be much less than having them as enemies.

What a waste. Just like the national debt, a burden that will be paid by our children and grandchildren, who will never understand why it was foisted upon them.

Aristotle (1/5/04; 00:25:39MT - usagold.com msg#: 114601)
My off-the-cuff answer for elevator guy
EG: "So my question is, if the US finds all the oil it needs, will the USD still undergo what seems to be an inevitable and massive correction ............. Could plentiful oil stall the demise of the USD?"

Bear in mind it isn't the demise of the USDollar that's in question per se (as a monetary accounting unit) but rather its use as an international Reserve Asset.

So I'll send the question back to you for reannalysis: if the U.S. by might secures oil specifically for its own needs, what in all of that would make the rest of the world feel compelled to reward that kind of imperialism with an unending continuation of the status quo -- that status being a willingness to finance America's chronic budget and trade deficits, a willingness to roll trade surplus dollar payments into U.S. bonds to help us fund this hypothetical oil-grabbing military machine of ours?

Orrrrrrrrrrr.... are you suggesting that we'd control sooooo much oil that we'd actually become a *NET* exporter in our balance of trade? Hey, now THAT might stall the demise of the ReserveDollar because then suddenly the world would find a need for spending them rather than simply eating them.

Our destination is already laid before us, and I believe the only thing that can be changed in this journey is the roughness of the trail we use in getting there. I'm working for a smoooooooooth transition from here to there. Hoping the same for all others.

Gold. Get you some. --- Ari

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