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ARCHIVED DISCUSSION FROM 4/6/2001 All times are U.S. Mountain Time (Yesterday's Discussion.) ET (4/6/2001; 22:15:46MT - usagold.com msg#: 51518) Randy Hey Randy - I hope you don't mind if I say something here.I've much enjoyed our debate the last few weeks. I sincerely hope we can continue as I believe the only way we will arrive at the truth is through conversation. My intent has never been anything other than a complete examination of the arguments put forth over the last couple of years or so.It seems I have offended you and if that is the case I couldn't be more sorry and it certainly hasn't been my intent. My intent has been to engage you in an effort in examining the future of gold and money from all points of view. I hold deeply-held beliefs about money and society and I've attempted to convey some of these beliefs to you and others that read here. I can see I have been unsuccessful in these attempts and perhaps we can give it another go and hopefully solicit additional points of view. Above all, I hope you know my intent has been to further understanding however clumsy these efforts might appear. justamereBear (4/6/2001; 22:06:09MT - usagold.com msg#: 51517) R Powell 51508 That GE financial question you raised has interesting ramifications. Why is it that some of the vulture funds specialize in buying up bonds of bankrupt companies at 10 cents on the dollar? Sometimes even over 50 cents. There can be good pickings if you are a major creditor. There are some really interesting power plays that go on in a major bankrupcy. I see 2 very wild cards in this one. (both, to some extent, being reliant on the perceptions of the parties involved) Eminent domain being the first. Since this matter is now before the courts, this aspect is now diminished. I would think the state will be treated with the same regard as any white knight with bags of money, and the special effect of possible future regulation. If the vulture boyz think they can get the state into their back pocket, and they are good at designing contracts that take advantage of something the government has overlooked, or sees as unimportant, then they will see rich pickings. Governments tend to look to where the heat is, and ignore long term pain for short term political gain. I would think the state is available for somebodies back pocket. Unless, of course, the political view is that it is expedient to have a state owned power supply.There are a lot of very high priced lawyers who are not going to get a lot of sleep this weekend.The second is what the perception of the vulture boyz is vis a vis the common perception here on the forum. The economy may have run off a cliff, a la wiley coyote. One of the big factors considered in any of these kind of deals is, "What is our exit strategy? How do we get our money out?" These are inherently long term investments, i.e. it is going to be at least a couple of years and probably much more, before exit is possible. The vulture boyz start with the premise that they want a minimum of at least a risk adjusted 25% per annum return on any investment. If they see the situation deteriorating they will have to pass on this one, because there will be more, and better ones, and keeping your powder dry will be paramount.I wish I had more time to watch the action in the senior debt next week. That would give me a much better read on what the serious money is thinking about the economy in general. However, one will still have to factor out the arbitrage action. If my guess is correct, there will be some minor positioning, sort of a fee to learn, and be an insider, with only one, or perhaps 2, serious accumulators of senior debt. I would think much of the action would be arbitrage related.I see I have used an expression that apparently some do not know: keeping your powder dry. In the old flintlock weapons, if your powder was not dry, you could not shoot.j'Bear Elwood (4/6/2001; 22:04:52MT - usagold.com msg#: 51516) Hello, MK. Another contest? How many California legislators does it take to change a light bulb? RAP (4/6/2001; 21:18:05MT - usagold.com msg#: 51515) Another possible problem for the power system. http://www.spaceweather.com/index.html SUPERFLARE: The most powerful solar flare in at least 25 years erupted near the giant sunspot 9393 on April 2nd. Fortunately, the bulk of the "X20-class" blast was directed away from Earth. On April 4th an interplanetary shock wave generated by the explosion struck our planet's magnetosphere, but it did little more than spark a modest geomagnetic storm. See also: SHIFTY (4/6/2001; 21:05:42MT - usagold.com msg#: 51514) JMB / The Partys Over Nat King Cole Tune The party's overIt's time to call it a dayThey've burst your pretty balloonAnd taken the moon awayIt's time to wind up the masqueradeJust make your mind up the piper must be paidThe party's overThe candles flicker and dimYou danced and dreamed through the nightIt seemed to be right just being with himNow you must wake up, all dreams must endTake off your makeup, the party's overIt's all over, my friendThe party's overIt's time to call it a dayNow you must wake up, all dreams must endTake off your makeup, the party's overIt's all over, my friendIt's all over, my friend ET (4/6/2001; 21:03:01MT - usagold.com msg#: 51513) BB, MK, RP Hey guys - concerning this PG&E bankruptcy; I suspect in the end that energy demand in California is going to have to fall dramatically. It seems to me that unless the Feds intervene, no electricity or gas will flow into California for fear of not being paid. I figure any bond float by the state will be a bust forcing consumers to ante up. Prices should rise to the point where demand is curtailed to meet the available supply. It appears to be over for the collectivists in California as they now lack any leverage outside of what they can convince Washington to provide. Unless Washington caves, the market will force prices high enough to the consumer of power in California to either curtail demand via conservation or via business failure or both. It's certainly ironic that the largest "server farm" ever is about to go online in NoCal using another 150,000 homes' worth of electricity!got candles? Journeyman (4/6/2001; 20:47:52MT - usagold.com msg#: 51512) Clearly, another government-school graduate! @ALL http://biz.yahoo.com/rb/010406/business_pge_bankruptcy_dc_7.html The article at the link above, originally posted by Black Blade -- - of course, includes the following:"Democratic California Senator Dianne Feinstein said thebankruptcy filing marked a ``sad day for California,'' and vowedto introduce legislation to force federally mandated PRICE CAPSfor the entire Western region in order to prevent more chaos ..."-Andrew Quinn, Bankruptcy Filing Deepens Calif. Crisis, Reuters,Friday April 6, 6:38 pm Eastern Time [Caps emphasis added. -j.]Also according to the article, "... the utility said it owedclose to $9 billion because of California's flawed 1996 powerderegulation, which BLOCKED UTILITIES FROM PASSING ALONGSKYROCKETING WHOLESALE POWER COSTS to consumers." [Translation:the legislation included price caps. -j.]Let's see. The bankruptcy of PG&E - - - and in fact the wholeCalifornia energy debacle - - - was precipitated by - - - ah,price caps. - - - And Diane Einstein proposes to fix the problemwith, ta-da, PRICE CAPS!Clearly another government-school graduate!Regards,Journeyman canamami (4/6/2001; 19:39:08MT - usagold.com msg#: 51511) What's more valuable.... (a) PG&E bonds purchased in, let's say, 1996;(b) PG&E shares bought in 1996;(c) The quantum of physical gold one could have purchased with the currency used to purchase the above, per 1996 prices?Resolving the above could be an interesting intellectual exercise, depending on the variables chosen, etc. Presumably one could factor in interest or dividends paid over the period, any carrying costs (if any), taxes, possible partial recovery through the bankruptcy process, and the decline in the value of physical gold (regardless of the reasons for which it has occurred). One undeniable advantage of physical gold, however, is that it has held at least some value, has not gone bankrupt, and still possesses the possibility of increasing in value. Although not evident in the past few years, there is an advantage to being impervious to credit risk. megatron (4/6/2001; 19:38:10MT - usagold.com msg#: 51510) R Powell Yesterdays stock index ramp up was the most grossly obvious heavy handed manipulation I have yet witnessed. How can the 'invisible hand' know one day ahead that 1; PG+E was going to declare bankrupcy the next day and 2; the unemployment report due was going to show double the amount of layoffs predicted. HOW HOW HOW???????????????? Who gave this info to who and said 'you better ramp this thing today or else!'Somebody has got to fry for this crap!!!! It's getting so OBVIOUS Greenspan is either a liar or a moron. There can be no other alternatives. PERIOD. Get that idiot from behind the wheel. Yeah sure, yesterday thousands of independent 'investors' decided to rally and today this comes out?? This is crazy!!!!!!!! Where are the idiots living that believe this is any different than Japan? Black Blade (4/6/2001; 18:34:00MT - usagold.com msg#: 51509) RE: R. Powell You probably already know this but GE is the largest manufacturer of NG-fired turbines and there's a 3 year backlog as power providers and power plant builders have shifted into high gear. I wouldn't be too surprised to learn that they have helped to finance some of these purchases. I am going out to partake of some good brew with a couple of friends in the NG production business tonight and I will try to get their take on this recent development. I imagine that they will look on it as job security. I guess I'm buying though. Back later - Cheers!Black Blade R Powell (4/6/2001; 18:20:33MT - usagold.com msg#: 51508) PG+E According to the peoples financial TV channel, we can add GE Financial Group to that list of lenders to PG+E. GE Financial Group has been actively (aggressively) loaning for some time. Maybe too much so? Rich Black Blade (4/6/2001; 18:16:48MT - usagold.com msg#: 51507) PG&E bankrupcty seen hurting small power generators http://biz.yahoo.com/rf/010406/n06703791.html Snippit:SAN FRANCISCO, April 6 (Reuters) - Pacific Gas & Electric's filing on Friday for bankruptcy protection threatens to drag dozens of California's small, independent power plants down the same path, putting the energy-starved state just that much closer to rolling blackouts, analysts said.Black Blade: As I posted the smaller players will likely get hurt and suffer the same fate. Black Blade (4/6/2001; 18:11:08MT - usagold.com msg#: 51506) Bankruptcy Filing Deepens Calif. Crisis http://biz.yahoo.com/rb/010406/business_pge_bankruptcy_dc_7.html Snippit:SAN FRANCISCO (Reuters) - California's energy emergency lurched into a new and dangerous phase on Friday as Pacific Gas & Electric, the state's largest utility, suddenly declared bankruptcy and accused Gov. Gray Davis of woefully mismanaging the crisis. While officials assured Californians that the bankruptcy would have no immediate impact on power service to some 13 million people Pacific Gas & Electric supplies, it put a new question mark over the state's ability to get through the summer without more powerblackouts. This law, combined with soaring demand and a lack of new power generation plants, has created a disastrous energy crunch in California and already caused four days of rolling blackouts across the state. More blackouts are feared this summer as higher temperatures lead to increased energy demand.Black Blade: This article alludes to the ugly picture being painted regarding the PG&E bankruptcy filing. Personally I think this is somewhat "optimistic." It will likely be worse. Black Blade (4/6/2001; 18:00:32MT - usagold.com msg#: 51505) RE: USAGOLD - A Quick Cursory Assessment of the California Power Crisis Question: Black Blade, a question, good sir and resident energy expert: What are the possibilities of rolling bankruptcies in California utilities? What's the story on that? I know you've probably posted on that in the past but can you give it to us again in light of the PG&E story?Black Blade (My Take): I just stepped in and caught an interview with Robert Glynn, Chairman of PG&E, on CNNfn. He said that "Californians should brace themselves for service interruptions and rolling blackouts." Intuitively I would expect that So. Cal. Edison will follow in PG&E's footsteps on this with their own bankruptcy filing. They are not in much better shape. Curiously, no one has really mentioned the hit on the financiers of the ute debt picture as many major banks have over $8.5 billion at risk. Normally in the case of bankruptcy the creditors would get paid first, then the bond holders, and then lastly the shareholders. However, there have only been 2 utility bankruptcies since the Great Depression. This also brings into question how the political forces will react as they may force the utilities into a situation where the state may seize the assets under Gov. Gray Davis's eminent domain threat. In that case the financiers may just have to "eat" over $8.5 billion in debt. I wonder how the bankers such as B of A, Wells Fargo, Bank of New York, etc will react on Monday and how they will treated on Wall Street. I suggest that it will get very ugly. Then there is the possibility of a Federal bailout much like former President George H.W. Bush accomplished with he Savings and Loan fiasco a few years ago. This energy crisis could very well carry over into utility support services and leak into the rest of the economy as well, especially the energy intensive industries resulting in additional bankruptcy filings and facility closures.Energy is critical to the economy and just today Larry Kudlow on CNBC said that no one seems to have realized how important energy is to the economy. Quite a change in sentiment huh? As I see it, there is no easy answer. Yesterday I noticed that NG prices for So. Cal. Contracts were over $15.30/mmbtu. These prices are higher for California because of the risk factor associated with sales to troubled utilities and the growing risk that providers won't get paid. There have been several lawsuits filed against both PG&E and Edison by smaller power generators who haven't been paid by California's utes. Now with this bankruptcy filing they will have no choice but to get in line with all the others. The result will likely be that NG prices for So. Cal. NG contracts will rise significantly. Amazingly I talked to a colleague in California and the sentiment among most people in California is that this is all a ploy by "Robber Baron" utilities to "jack up" prices. They are living in "Fantasy Land." Add to this picture how skittish the Canadian and Northwest Hydro power producers view this mess. Hydro power this summer is going to be in very short supply as water flow and snowpack levels are at extremely low precarious levels. Virtually all new power generation is NG-fired and we are drilling at record rates and yet we are falling behind. Storage levels are very low and with summer demand expected to be very high, the prospect of summer related problems such as rolling blackouts also remain very high. Worse yet is the prospect for power and NG prices coming this next winter. These problems are sweeping across the Western states as well not to mention the growing concern for New York and New England in general. Energy Secretary Spencer Abraham and Vice President Dick Cheney have expressed concern that New York could face rolling blackouts as early as this summer. Dick Cheney is heading an energy research coalition but the energy crisis is now out of control. After several years of no energy policy and rabid environmentalism, the US will now have to face the music. Anyway, that's my take on the current developments regarding the energy crisis. I sit and wait for the other shoe to drop as it were.- Black Blade USAGOLD (4/6/2001; 17:02:22MT - usagold.com msg#: 51504) Thanks, Ross. . . .and question for Black Blade Just talked to GC at the office. He points out that we don't know the extent of the fall out yet, ie, Bank America, Wells Fargo, et al. Also, raises a question about other California utilities.Black Blade, a question, good sir and resident energy expert: What are the possibilities of rolling bankruptcies in California utilities? What's the story on that? I know you've probably posted on that in the past but can you give it to us again in light of the PG&E story?Ross L. . .Hard to believe there was any downside left in that stock given the situation out there. From the looks of your graph, this was not the day for a utility fund manager to step out for lunch. It all started it seems around lunch time in NY. RossL (4/6/2001; 16:48:08MT - usagold.com msg#: 51503) PGE http://finance.yahoo.com/q?s=PCG&d=1d It looks like trading resumed just after 3PM Eastern with the stock down 36%. RossL (4/6/2001; 16:42:40MT - usagold.com msg#: 51502) PGE MK - I saw the news on the internet at Yahoo sometime before 4:00 EDT when the market closed. USAGOLD (4/6/2001; 15:47:59MT - usagold.com msg#: 51501) Black Blade Sorry BB. . . .Didn't know you posted the PG&E story. Should have known you'd be on top of that one.Systemic risk everywhere you look. . .Japan, California, a stack of third world currency debacles, the derivatives problem. Not to mention what damage Wall Street is doing to balance sheets. I smell a big rate cut in this wind blowing in from the left coast. And I smell deterioration in financial sector stocks that will act as a throttle on this stock market. We'll see where it goes. . . .Monday chould be interesting. And one more systemic risk. . . .the gold bullion banking crisis now in its infancy. If a hedge is covering (and I have no reason to doubt Reuters), it's not hard to see why."This Bear has some sharp claws." USAGOLD (4/6/2001; 15:36:43MT - usagold.com msg#: 51500) PG&E Bankruptcy Bombshell. . . . "SAN FRANCISCO (Reuters) - California's energy crisis lurched into a new and potentially dangerous phase on Friday as Pacific Gas & Electric, the state's largest utility, suddenly and unexpectedly declared bankruptcy. . . Analysts said the filing for Chapter 11 protection marked the biggest utility bankruptcy in U.S. history . . . ." Note: This Reuters story was logged 5:04 EDT after the stock market closed, but I heard the first report on KOA-Denver about 2pm MDT. Don't know if the announcement was generally known while the market was open. Randy (@ The Tower) (4/6/2001; 15:29:46MT - usagold.com msg#: 51499) R Powell's inquiry This has been made clear to me...the less I offer in these matters, the better. R Powell (4/6/2001; 15:16:11MT - usagold.com msg#: 51498) VanRip and Randy Mr. Van Rip, congrats. Obviously you have the Midas touch of prediction. The oracle at Delphia has positions available for those with your gift! Randy (51492) said, "Talk circulated that a major fund was said to be buying bullion, but further details were hard to come by." Can you provide any more? Any links to the sourse of this quote or knowledge of which fund? Funds buy and sell daily so to be newsworthy this must have been an unusally large amount of buying. Substantiation of any such rumor would lead to great fun, no? TIA for any word. Rich Black Blade (4/6/2001; 15:05:48MT - usagold.com msg#: 51497) Gold producers seek catalysts to boost demand for metal http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3MFKKQ6LC&live=true&tagid=YYY9BSINKTM&useoverridetemplate=IXLZHNNP94C Snippit:New research on the metal's catalytic properties shows that gold has interesting industrial prospects, which could increase world consumption by up to 400 tonnes a year within the next decade.Black Blade: a drawdown of 400 tons a year. Hmmm… BTW, I heard from a couple of sources in Nevada that there have been high level talks at 2 of North America's largest gold producers concerning the high cost of energy. Some corporate execs have been visiting their companies mines and probably to give out the bad news. Also, there is not going to be any meaningful exploration and that means lower output over the next few years. It looks as if there may be more distress in Gold Country as there may be more layoffs and reduced gold production. Randy (@ The Tower) (4/6/2001; 14:59:21MT - usagold.com msg#: 51496) The last of the German gold coins http://www.usagold.com/onlinestore/special.html MK called me earlier to report that he had secured additional Kaiser Wilhelm II gold coins to support the excess demand for current online offer, however, these additonal supplies are now down to the final 100 coins.If you have an interest in these popular coins, you are advised to call Centennial promptly during the remaining business hours today...or place your order online. R Powell (4/6/2001; 14:56:33MT - usagold.com msg#: 51495) Continue I should add to clarify that Jessie Livermore used the same method years ago but was manipulating the price of individual stocks, not index numbers. He was using telegraph and state of the art communications like telephones. Telephones were part of the "new technology" that was changing the economic cycles so that the bull market of the 1920's was never going to end. Sound familar? R Powell (4/6/2001; 14:47:59MT - usagold.com msg#: 51494) Steve H (51473) I've listened to many opinions, mostly at the gold-eagle castle, that the government plunge protection team uses the index numbers to influence investors perception of which way the markets are heading. The index numbers, Dow, Duck, and S+P, are all traded as futures with a bid and ask price. Buying (going long) the index with an offer above the "ask" price (and thus also above the bid price) immediately raises the index number that millions of people watch constantly. There are posters at G-E who claim to have access to watch massive amounts of money ramp up the index numbers as it happens.With the right real-time quotes this should be possible. If true, it would be the quickest, least expensive means to influence investors' outlook on stock price direction. A poster named genebaby watches this at G-E. He claims there are different accounts using numerous brokers to pull it off. Jessie Livermore used the same method to outfox the bucket shops who were also using the same methods to scam the general public. Livermore caught them unaware and had the resourses to do it. These index numbers are traded on the Globex and are active 24 hours a day so are easily manipulated overnight in thin trading. Perhaps Cage Rattler or other traders can offer more. I believe your entirely right and this is occuring especially on very big down days. Rich Black Blade (4/6/2001; 14:45:05MT - usagold.com msg#: 51493) Pacific Gas & Electric Seeks Bankruptcy http://dailynews.yahoo.com/h/nm/20010406/bs/pge_bankruptcy_dc_1.html Snippit:NEW YORK (Reuters) - Pacific Gas & Electric Co., which is California's largest investor-owned utility and has been struggling with that state's power crisis, said on Friday it filed a voluntary petition for bankruptcy protection with the U.S. Bankruptcy Court for the Northern District California. Trading was halted in PG&E shares on the New York Stock Exchange before the filing. They last traded at $11.36, down 2 cents.Black Blade: No one should be surprised as this has been discussed here over the last couple of months. It's going to be a long hot summer in the People's Republik of Kalifornia. Randy (@ The Tower) (4/6/2001; 14:44:05MT - usagold.com msg#: 51492) Unofficial results... Congratulations to VanRip! Unless overturned by overlooked evidence to the contrary, it looks like VanRip has won the gold tenth ounce Austrian Philharmonic for his closest prediction to today's closing price on the COMEX June gold contract. Posted below for your review is an excerpt of pertinent news from Rueters at the close of the market, followed by a compilation of the contest entries. (The panel of judges will require more time for the Fifth Horseman contest).And once again thanks is extended, as always, to the fine folks at Centennial Precious Metals for sponsoring these events.---------------------NEW YORK, April 6 (Reuters) - COMEX gold settled Friday near the top of its trading range, riding trade and producer hedge lifting with sentiment buoyed by the firmer tone of the euro and the Australian unit against the U.S. dollar.Some steady physical demand from industrial users and the Far East likewise provided a lift for bullion futures, brokers said.June gold went out $1.80 higher to end at $260.90 an ounce, ranging between $258.40 and $261.10.Lease rates have ranged far away from the 1.0 percent or below figure seen last February, in a sign consumers and forward sellers must compete for a smaller supply of gold for loan... Talk circulated that a major fund was said to be buying bullion, but further details were hard to come by.------------------------Stocks, Lies, and Ticker Tape (03/29/01; 13:17:58MT - usagold.com msg#: 51011)+++++ $238 +++++IronHead (04/01/01; 21:37:46MT - usagold.com msg#: 51208)+++++++$251.725+++++++Golden Truth (03/30/01; 12:09:00MT - usagold.com msg#: 51078)No Subject++++++++ 251.80 ++++++++EagleOne (4/1/2001; 9:48:47MT - usagold.com msg#: 51177)+++++++ 252.50 +++++++Seeker of the Grail (04/02/01; 06:25:13MT - usagold.com msg#: 51237)++++++++++++++++(253.755)++++++++++++++++RossL (04/02/01; 13:30:02MT - usagold.com msg#: 51264)+++++ $254.90 +++++kosher (04/01/01; 23:30:14MT - usagold.com msg#: 51215)+++++ $255.15 +++++ausome (03/30/01; 05:43:46MT - usagold.com msg#: 51055)+++++255.60++++Broken Tee (03/30/01; 10:20:38MT - usagold.com msg#: 51073)+++++++ $255.75 ++++++++FluorideCommie (03/30/01; 11:44:10MT - usagold.com msg#: 51077)+++++ (256.25) +++++Tannehill (04/02/01; 02:58:51MT - usagold.com msg#: 51229)+++++($256.60)+++++Genoo (04/02/01; 13:57:14MT - usagold.com msg#: 51269)*****256.60*****Simply Me (04/02/01; 16:04:22MT - usagold.com msg#: 51287)+++++ $256.80 +++++Max Rabbitz (04/02/01; 09:52:27MT - usagold.com msg#: 51248)++++++257.10++++++R Powell (3/31/2001; 14:13:39MT - usagold.com msg#: 51134)+++++++257.40++++++Journeyman (04/02/01; 13:42:39MT - usagold.com msg#: 51266)+++++ $257.55 +++++canamami (04/02/01; 15:47:41MT - usagold.com msg#: 51283)+++++++++258.00++++++++++Canuck Gold (04/02/01; 15:09:34MT - usagold.com msg#: 51278)+++++ $258.5 +++++Black Blade (4/1/2001; 4:17:36MT - usagold.com msg#: 51174)+++++$259.30+++++SEER (04/02/01; 08:43:16MT - usagold.com msg#: 51244)++++++259.40++++++VanRip (04/02/01; 09:22:23MT - usagold.com msg#: 51246)++++++260.20++++++The Hoople (04/01/01; 20:27:36MT - usagold.com msg#: 51204)+++++ $262.70 +++++CoBra(too) (3/31/2001; 16:07:09MT - usagold.com msg#: 51142)++++ 263.50 +++++ 24Wortel (04/02/01; 13:08:45MT - usagold.com msg#: 51262)Price Guess+++++ (263.70) +++++ Peter Asher (04/02/01; 15:52:03MT - usagold.com msg#: 51285)+++++$264.40+++++justamereBear (04/02/01; 16:26:34MT - usagold.com msg#: 51290)*******266.00******Gandalf the White (03/30/01; 12:58:55MT - usagold.com msg#: 51080)++++++++++++++266.6+++++++++++++++Orville Goldenbacher (03/30/01; 15:30:17MT - usagold.com msg#: 51090)++++++++++$268.60++++++++++Topaz (03/30/01; 05:34:10MT - usagold.com msg#: 51054)+++++++++++$272+++++++++++JMB (04/02/01; 13:44:23MT - usagold.com msg#: 51267)+++++++++++++++++$285.00+++++++++++++++working-kirk (3/31/2001; 0:33:19MT - usagold.com msg#: 51110)++++++++++++++315.00++++++++++++++The Invisible Hand (3/31/2001; 2:50:04MT - usagold.com msg#: 51115)+++++ $ 32,452.80 +++++ R Powell (4/6/2001; 14:27:15MT - usagold.com msg#: 51491) Hat trick day POG, the XAU index and lease rates all up today. The gold mining index was barely positive to offset yesterday's barely negative number. Most encouraging IMHO is the good up move in lease rates. The libor is not changing much at all, it's the gold forward rate that is constricting. This, along with the higher rates is usually interpreted as an indication of short supply, at least in the immediate time frame but perhaps also long term. This has been an ongoing condition since before the BOE auction. Any thoughts or news concerning supply problems?? Rich CoBra(too) (4/6/2001; 14:04:31MT - usagold.com msg#: 51490) Odds or End(s)? Hello Auspec and not just a spec of au, What a great and well reasoned essay, back at the more serious side of the eco-equation - though I always appreciate the lighter side, as well. I couldn't agree more with your reasoning and as always your message is presented with the flair of the conaisseur. Thank you for sharing -cb2 Max Rabbitz (4/6/2001; 13:58:44MT - usagold.com msg#: 51489) Great Idea Sir Limitup!!! But can we not tell MK about it just yet. I need to accumulate some more. LimitUp (4/6/2001; 13:15:35MT - usagold.com msg#: 51488) Lets Get Proactive Can anyone explain to me why we tolerate a bunch of banksters "fixing" the price of gold each day? Why don't we gold bugs "fix" and sell our gold for $1000 per oz. This should start a run on gold buying by the sheeple at the bankster price. Belgian (4/6/2001; 13:15:14MT - usagold.com msg#: 51487) Au(re)spec(full) Sir, your dollar and mine(s):Russia (Le Sin) article : Russians, very strong Europ minded, come in with dollars in the pocket. This is a good illustration what dollar-supremacy, really means. It is purely perceptionnal. If, tomorrow, your are forced, to leave your home and country by emergency, and destination unknown... you take "automatically", dollar-notes with you ! The ones who were still taking Deutsche Mark, will also shift to US$. This is something that will definitely not change overnight ! Bad habits die slowly. That is the definition of the dollar-strenght that has been building up for years now. Impossible to explain these occasionnal dollar buyers that this green piece of printed paper is dramatically DEBT-LOADED ! They will all stare at you as from outer space. Thus the NADA for the dollar is absolutely not yet for tomorrow.But all this same was true for the Britisch Pound, some 30 years ago. And this emperial pound was eroding at different speeds. As did the empire.Things are going to change more rapidly within 300 days from now. You can put Euro-Paper in your pocket and all Russians (East Bockers) will come with Euros to buy their Volkswagen and other stuff. The sudden emergence of all this Euros at the same moment in say 20/30 countries, is a break through. I even suspect that parity with US$ is desired and managed up until 1/1/2002. This to make the transition from dollar-mind to Euro, much more acceptable ...hey, they have exactly the same value. Leave your calculator home...1 dollar=1 Euro.Do you feel how sweet and softly the Euro will strangle the dollar-boa-non-constrictor ? When I listen to the news...these kind of remarks about currency stability and parity prognosisess are catching my attention to back this possible strategy. It is this subtle process of "CONFIDENCE" building that must explain a lot of what happens, included gold. That is why I repeat that the Dollar-warriors, were very imprudent by storming at the Euro, right from the beginning. Everybody had a laugh with Wimpie Duisenberg. Big mistake, gentlemen. He couldn't yell that the dollar is a lousy peace of paper and proving it with a few (Clintoon) charts. Europ was not explicitly saying that the Euro seemed weak because of dollar hyper valuation. No they kept quit and sticked to their strategy.Put gold (and its price-range)again in this context.Parity and stability :temporarely mutual interest, slowly proceeding to conflic of interest. And finally straight out currency war ! Again, attach POG behaviour on this strategy that is discretely deployed.Is there some logic in this vieuw ? Can you interpret the different currency statements as evidence for such possible deroulement.?Lamprey : SM and Gold :Quo Vadis (going where) SM ? 1/ Psychologic Index supports are broken. 2/ Goldmines diverge right out positive. 3/ YSTB-30 yrs on the brink of breaking LT resistance line. 4/ Stagflation is official now. 5/ Signal function of POG is probably in the make (from TA standpoint).Yep, Sir...1929 or not ? I'll explain later about the only thing that is bothering me : the A/D situation.Shall a SM-crash, alter the scenario of Dollar/Euro parity...into straigth currency warfare, skipping the soft approach ?The dollar, pseudo strenghth was suggesting otherwise.Will a dollarcrash be the appropiate manner to write-off the DEBT collossus ? Here the unforeseen accident possibility pops up. A perfect plan for robbing the bank can turn into a disaster, when the timing elements are not according to plan. We are touching 260$ resistance now.POO and CRB are strong. Dow fluctuations are in sync with POG. I smell something different. Something like "acceptance". A prelude to PANIC. That is exactely what you and I are staring at, second by second. All passengers on the Titanic didn't jump at the same time, didn't they !Dollar...Euro...Oil...SM...Gold : are very closely related.We are desperately searching for the reasons why they are out of synchronisation. Difficult job. Until suddenly, they all do align, unexpectly. I feel very un-attached with physical gold and not one single share in my pocket. With one major exception : Gold Fields !Auspec : your infla/defla/stagfla lalala.The last 21 years, these 3 lalas, were pushed aside (overshadowed) by only one major evolution : DEBTUAL CURRENCY EROSION ! Please, allow the Gravity of this World- Debt-Drama, overwhelm you completely. Japanese even want to print money to buy stock !!!!!!!!!! There was already a BANK-RUN, style '29 in Japan ('95). Human queus were angrily waiting for the money-trucks to arrive for unloading fiat at closed banks. It is not only POG that is manipulated : ALMOST EVERYTHING IS SYNTHETIC AND UNNATURAL ! Speculatitis pandomy.We impossibly can time the end, but we know and must remember always, the final outcome. **** That's why we are carrying gold ! *** I don't know if 8,3% rise in an overvalued NASDAQ is a sign of touching the limits ? But are we waiting for 20% oscillations in a matter of minutes, before starting to realise that something is a bit exaggerated ?Relax ! Over to you. Old Yeller (4/6/2001; 12:52:36MT - usagold.com msg#: 51486) Mind the gap! http://investdb.theglobeandmail.com/invest/investSQL/gx.show_chart?pl_comp_id=0&pl_errmsg=&pl_primary_listing=comp-i&iaction=Chart&pl_period=6D&pl_chart_type=+&pl_additional_listing=+fn-t+g-t&pl_sh_movement=50&pl_long_movement=0 Today's pretty chart.Starting to resemble a big croc's mouth.I wonder when dinner is? SHIFTY (4/6/2001; 12:39:37MT - usagold.com msg#: 51485) Gandalf the White You have me confused with someone else. I have only seen them in the store (dried) for $6.00 per oz. Never have ate one .....Yet. Hope to try them as soon as they show up at the store. :-)$hifty ge (4/6/2001; 12:27:41MT - usagold.com msg#: 51484) A dollar of dangerous strength http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3S56FE5LC&live=true "For years, most economists assumed that when US share prices fell, the dollar would come down with them. But though the dollar's main prop is being chipped away week by week, the currency has taken on a life of its own. Its continuing strength could not only make global economic imbalances worse but also mean any eventual correction is sharper and more damaging. "The US last year needed a net inflow of more than $400bn - equal to 4.4 per cent of gross domestic product - to fund its current account deficit. Such giant flows of capital, it was almost universally believed, would continue only if equity markets continued to rise and US bonds offered greater returns than assets elsewhere. Without capital flows propping it up, the dollar would surely slide. "But for the moment, the currency is defying gravity. The S&P 500 has fallen 16 per cent since the beginning of the year, compared with a 13 per cent fall in the FTSE Eurotop 300 and a small rise in Japanese stocks. Meanwhile the difference between yields on US and euro-zone two-year bonds - US yields were more than 1 percentage point bigger late last year - has disappeared. "By contrast, other currencies with yawning current accounts to support, such as the Australian and New Zealand dollars, have fallen sharply. The US dollar's recent rise against the yen is understandable, given the Bank of Japan's commitment to monetary easing. But convincing explanations for its strength against other currencies, especially the euro, are becoming harder to find. ... Gandalf the White (4/6/2001; 11:05:48MT - usagold.com msg#: 51483) < ; - )>> Lots of things popping ! Wonder what yesterdays "dipsters" think of that big iron trap on their pocketbooks today ? NICE Bear Trap -- Ay?Shifty -- looking good, but like yours and I decided to let them grow some more before harvest. Gold is awaking also. SteveH, this is what ORO and I have discussed before. I do also believe that you are correct! Perhaps ORO can discuss this arrangement, when he returns.<;-) turkey hunter (4/6/2001; 11:03:25MT - usagold.com msg#: 51482) Russia values gold at $300 oz Russian central bank gold stocks up on April 1 MOSCOW, April 6 (Reuters) - The value of gold reserves held by Russia's central bank rose by $13 million to $3.767 billion on April 1 from $3.754 billion on March 1, the central bank said in a statement on its Internet site on Friday. The central bank officially values its gold reserves at $300 per troy ounce. The bank's website (www.cbr.ru) said total gold and foreign exchange reserves rose to $29.709 billion on April 1 from $28.345 billion on March 1. The central bank's reserves include gold, foreign currency and Special Drawing Rights, an international reserve asset that is essentially a currency of the International Monetary Fund. Old Yeller (4/6/2001; 10:00:40MT - usagold.com msg#: 51481) auspec;#51479 Wow,great post.Let's see if the big fish rises to the bait. Old Yeller (4/6/2001; 9:48:28MT - usagold.com msg#: 51480) Implications of Kyoto opt-out http://www.futuresource.com/cfnews.asp?c=26&aid=41603&cid=4339&pd= This is sheer speculation on my part,but has anyone else noticed the USDX made a peak right around the annoucement of the opt-out by Bush.The Europeans take this issue very seriously and if the US isn't going to play ball,there are other ways to reduce emissions.Steady selling of US dollar reserves may have the desired effect of conservation throughprice pressure.Check out the technical comments on gold,as well,looks encouraging.Thanks to bugbear at prubear forum for the link. auspec (4/6/2001; 9:39:53MT - usagold.com msg#: 51479) Trail Guide/All/In Defense of the Dollar Odds or End? Hello Trail Guide and ALL, this is your humble correspondent, trying to make sense of our rapidly changing currency world. Please bear with me as explanations for the "end game" scenario are sought. Am I really going to defend the US Dollar? Only relatively speaking, because I can't see the hyperinflation script coming to pass that we so readily toss about on this Forum. No problem whatsoever in visioning the rise of the Euro, just in what degree of demise of the dollar.FOA, your 3-10-01 piece, "On the Road", is classic excellence so I would like to take excerpts from it as this "Defense of the Dollar" takes format. My questions/comments are surrounded by *'s.<Well,,,,,,, things are not as before,,,, are they? (smile)In my last post USAGOLD Forum post (#48858) we noted that the paper gold game was reaching it's limits. The BOE was almost asking "what do you want us to do"? The answer came as plain as day as the paper price was driven a little lower in return for a gold sale reduction. Yes, clear as a mountain stream,,,, the unwinding has begun! It will continue until the big event when the gold rules are officially changed. Not much different than when the dollar hit it's credibility limit in 1971. As Randy has often pointed out; the US printed gold contracts back then until they (dollars on the gold exchange standard) lost their mathematical ability to be converted into gold.>*If the dollar's status is now so similar to what it was in 1971, why would we see the Brazil type hyperinflation now as opposed to the simple ongoing degredation of fiat that we have all come to know and hate? Why the extreme portrayal of the dollar? It's clear the dollar is an old toad and there are young stallions waiting in the wings, but it's hard to see this as an all-or-none issue where the dollar {banana} goes from being the world's reserve currency to being "nada". Where's the middle ground with dual and competing reserve currencies in common use?* <What's in process now??:The Washington Agreement placed in context where the Euro system is going with gold. That pronouncement drove home the fact that our Dollar gold pricing system was going to die with the dollar reserve function. The WA placed us "on the road" to high priced physical gold and low priced contract gold. It could have been the end of the LBMA pricing structure, right then and there, except that it would have clocked the global financial structure too fast. Indeed, our Euro friends helped the system out by giving it some more of the same poison, more paper gold inflation. Yes, all the while since the WA, people have been falling all over each other trying to explain why so much new European gold has entered the market through lending. Yet, all that was mostly lent was more paper credits built upon a failing dollar gold pricing system. You see, they left the maintaining of system credibility to the dollar faction. Kind of strange how gold keeps showing up as part of the US trade deficit? Even is it's only a trickle.Gold bugs cry that the paper market is not free because government endorsed inflation in this arena is killing it's price structure. Almost as if they want fiat gold that less inflated? Well, that's great if your "gold" money is in our modern gold producing industry and that's hip deep in committing it's product to satisfy these same paper contracts. Yes, this mistake of "hard money" allocation by western savers, is the result of ignoring history and how currency systems evolve. Gold industry investments work if the current fiat system is remaining "in use", but showing price inflation. However, when currency systems fall "out of use" while moving into super price inflation,,,,, the next competing system will side with physical gold! It doesn't happen often, but when it does real wealth in one's hand becomes worth many times investments in "almost gold". Truly, the dollar price of physical gold is going higher than anyone expects.>*Comments: Again it is easy to see the dollar as losing a large piece of the action, but hard to see its total demise or its falling out of use. The US as the largest military force in the world certainly has its overriding benefits. Let's look forward to the next 5 years and place probabilities on what is likely to happen as far as the dollar/euro is concerned. I will rank these various scenarios in what I see as their most likely odds of happening:1}Ongoing MODERATE debasement of US Dollar.2}Gold and/or Oil breaks away from the dollar.3}Dual and competing reserve currencies.4}Status quo.5}All out war that distracts/rescues the dollar and extends its life.6}Dollar merged with euro/backed by euro.7}Brazillian style hyperinflation of the $, the Big Banana.Another question comes to mind: What advantage would it be to the Power Elite to destroy the dollar. Yes, a one world government and currency would suffice as a legitimate reason, but the old guy likely has many deeds yet to perform.<Gold bugs cry that the paper market is not free because government endorsed inflation in this arena is killing its price structure. Almost as if they want fiat gold that less inflated? Well, that's great if your "gold" money is in our modern gold pricing industry and that's hip deep in committing its product to satisfy those same paper contracts. Yes, this mistake of "hard money" allocation by western savers, is the result of ignoring history and how currency systems evolve. Gold industry investments work if the current fiat system is remaining "in use", but showing price inflation. However, when currency systems fall "out of use" while moving into super price inflation,,,,,the next competing system will side with physical gold! It doesn't happen often, but when it does real wealth in one's hand becomes worth many times investments in "almost gold". Truly, the dollar price of physical gold is going higher than anyone expects.>*Questions: The dollar has defaulted twice to date, yet chugs along. What "history lessons" best show us the endline that awaits the dollar? By "super price inflation" are you referring to something much worse than the US in the 1970's? You must be, as that fiasco was "successfully" negotiated. Are we looking for a low probability event that has only happened a few times in history, or a high probability event that has happened every time in history as a currency reserve ages?As per gold "industry" investments, they will do just fine at your $360 POG from todays level. The Romanian deposit that contains 8-10 million ounces should fare well regardless of what currency is "reserve". You stated: "Gold industry investments work if the current fiat system is remaining "in use", but showing price inflation." Are you talking all or none with the dollar as reserve currency of the world or reserve currency of none? The dollar will remain in use, IMHO, until there is a one world currency, even Brazil "uses" their currency of old. So we have the dollar and we have the inflation, and we get gold stock appreciation. Please don't misunderstand me, as I have a greater current appreciation for physical than stocks, but just can't see this as 'all or none'.Maybe a lesson is needed in "how currency systems evolve". The waiter replies: "Sorry sir, we're out of the hyperinflation, but there is always plenty of inflation available in the kitchen." Thanks, Trail Guide, for your many and fine efforts. I remain, on the trail.*A mere spec of au USAGOLD (4/6/2001; 9:11:16MT - usagold.com msg#: 51478) Today's Commentary and Review: Some Thoughts on the Austrian Sale -- So what does a central bank take for collateral on a gold loan? http://www.usagold.com/Order_Form.html Note: I would like to take this opportunity to thank all who participated in our Fifth Horseman contest. I was expecting a strong competition and I don't think any of us were disappointed. We are now sorting through all the entries attempting to make the difficult decision on a winner. --------------------- 4/6/01. . . . www.usagold.com . . . . Some stock market analysts wondered aloud yesterday whether or not the 400 point rise in the Dow was for real or another one day wonder. This morning it's looking like the latter after both the Dow and Nasdaq plunged on a weak employment report and more bad news on profits (or the lack thereof) from America's corporations. The looming specter of recession has put a damper on stock investor expectations and sent portfolio managers and investors alike in search of alternatives. (See "Portfolio Managers Turing to Gold, right --Commentary & Review Page). As one veteran stock market analyst puts it: "This Bear has some very sharp claws." Gold was up marginally in early trading shrugging off yesterday's news of the Austrian 30-ton forward sale. In a Dow Jones report, Rhona O'Connell from Cannacord commented this morning that the gold was sold forward due to the Austrian central bank's need to collect leased gold in order to complete the sale -- an interesting twist to the transaction that might raise an eyebrow or two. If nothing else, this might mean that another 30-tons of gold has left the rapidly shrinking lease pool. . . . (But there may be more to it than that. . .) We Invite you to join us at COMMENTARY & REVIEW for the Rest of the Story. . . . .Also some updated gold snippets and interesting links. . . . . . Registration required. Go to link above. Includes free trial access to Commentary & Review, a free information packet on gold ownership, News & Views -- our popular newsletter, and our Client Intro to Centennial Precious Metals/USAGOLD (by mail). JMB (4/6/2001; 8:22:24MT - usagold.com msg#: 51477) SWIFTY You've been known to post a lyric or two, would you happen to have the lyrics for "The Party's Over"?We might have to break out that tune re the Buck before long. Henri (04/06/01; 07:03:20MT - usagold.com msg#: 51476) origins of gold http://antwrp.gsfc.nasa.gov/apod/ap010405.html etherial thoughts lamprey_65 (04/06/01; 06:12:34MT - usagold.com msg#: 51475) A find... http://home.flash.net/~rhmjr/index.html I found this site in my wanderings this morning...thought it important enough to share. Take a few minutes to go through the entire site -- won't take too long, but it is interesting.How does it relate to gold?Well, people could be about to learn the meaning of "safe-haven".Lamprey LeSin (04/06/01; 04:57:43MT - usagold.com msg#: 51474) RUSSKIES TALKING UP THE EURO http://russia.strana.ru/economics/finance/2001/04/05/986477657.html My comment - One would think they would be advised to carry the Ruble - "S"Now the article:Russians advised to carry euro rather than dollars in their pockets 05.04.01. 17:35 According to Mikhail Delyagin, Director of the Institute of Globalization Problems, Russia needs to support the euro and oust the dollar by replacing dollar reserves with it. This, he said, would also encourage the population to orient themselves toward the euro instead of the dollar. He was speaking at the Euro-2001 conference. Dollars account for 80% of the cash Russians take with them when going abroad but only two percent of them go to countries of the dollar zone. Delyagin pointed out that the European Union has decided to raise the fee levied on exchanges of cash dollars for the euro and it is close to a decision to cut the period allowing the dollar and the euro in circulation after the introduction of the cash euro down to two months. Although European currencies are weaker than the dollar, Russians have European cash, primarily German marks. According to Alexander Khandruyev, Vice President of the Reforma Foundation and former deputy chairman of the Bank of Russia, in the coming two to three years the euro's exchange rate to the dollar will show no significant change. But he expects the euro to show growth trends in the medium- and long term. Among other things, the process will be assisted by a narrower gap between interest rates in the United States, Japan and Europe. Besides, experts expect the rate of inflation in Europe to be lower than in the United States. (1.7% and 2.1% respectively). The cash euro will have a growing impact on the economies of EU countries and grow stronger in the process as it becomes more attractive than the dollar SteveH (04/06/01; 04:35:44MT - usagold.com msg#: 51473) Question and comment Comment:Yesterday the DOW spiked high right at the open. Intuitively (meaning I can't explain the exact mechanism) I saw that as a result of the DOW futures having been so high at open. The actual hour-to-hour rise was not earth shattering. In other words, what ever energy there was in the market was front loaded by the DOW futures before opening.I assume that it takes much less money to make futures go up than the actual market, would this sharp pre-open future spike in the DOW yesterday have been an attempt by a house or houses to get a short-cover rally going to sell into and perhaps see how much money was sitting on the side? In other words...Question: What is correlation and mechanism whereby this happened and does anybody see a different angle?Steve Zenidea (04/06/01; 03:55:08MT - usagold.com msg#: 51472) And re: Gold China is quite likely the Good Charioteer for Gold-bugs for whom else has the clout to crack that chest-nut? at will?. Black Blade (04/06/01; 03:52:13MT - usagold.com msg#: 51471) Budget Surplus? I left the room for a moment and while listening to the TV I thought that the channel had somehow been changed to the cartoon channel as I thought that I was listening to Fog Horn Leg Horn. When I returned to the room I saw that it was Sen. Earnest Hollings (D. South Carolina). He did however say something interesting. He admitted that there is no budget surplus and that there hasn't been any budget surplus. Of course we already knew that since off-budget funds such as Social Security and Medicare are routinely transferred to the General Accounting Office and are then magically entered into the alleged budget surplus column. The funds that are removed form SS and Medicare are replaced by debt instruments such as Treasuries and other government bonds (IOU's). Good scam though. Golden dreams All!- Black Blade Zenidea (04/06/01; 03:17:28MT - usagold.com msg#: 51470) Who'll shuffle whose cards ? Some may have grave reservations given the (not to be underestimated) implications if America steps on China's toes. I wouldnt want to see another flogging as per Vietnam.The best way to get a friend is to be a friend isnt it?.Moderating the language in the media is my first tip. Black Blade (04/06/01; 03:08:59MT - usagold.com msg#: 51469) Futures Lower and Unemployment Numbers Due Out http://www.mrci.com/qpnight.htm Stock indices futures are currently lower and much lower when "fair value" is factored in. Look for selling into the rally to take over. The only number to come out today is the unemployment number. It is expected that the number may be higher. This morning's Wall Street open looks to be a bear (pun intended) or should I say "Interesting."- Black Blade Black Blade (04/06/01; 02:57:20MT - usagold.com msg#: 51468) Study: Risk of Energy Shutoffs Across U.S. http://dailynews.yahoo.com/h/abc/20010405/bs/energy010405_1.html Snippit:As many as 3.6 million families in 18 states and the District of Columbia risk having their energy cut off because of the rise in energy costs, a study says.Black Blade: And I suggest that many more middle class folks will also feel the pinch. Black Blade (04/06/01; 02:51:52MT - usagold.com msg#: 51467) Governor Uses Televised Speech To Pitch Rate Increase, Energy Plan http://dailynews.yahoo.com/h/sddt/20010405/lo/governor_uses_televised_speech_to_pitch_rate_increase_energy_plan_1.html Gov. Gray Davis announced his plan to deal with the energy crisis during a televised speech Thursday night, calling for an average electricity rate increase of 26.5 percent, intense conservation efforts, new power plant construction and a comprehensive approach to saving the state's cash-strapped utilities. "The only long-term solution is to build more power plants. We must also cut back on consumption and stabilize the utilities. But prices won't fall and supply won't be truly reliable until we generate more power than we consume," he said.Black Blade: Lots of PO'd Grasshoppers today. Higher rates and conservation in Kalifornia? I'll believe it when I see it. However, it looks as if the Kommissar is finally looking square into reality for a change. Black Blade (04/06/01; 02:44:08MT - usagold.com msg#: 51466) Natural Gas Exploration Falls Flat, Markets Tank and PMs Set to Rise Natural gas exploration proceeds with gusto and yet the increased exploration and production is falling behind. This translates into much higher natural prices going forward. These higher prices also mean that electric utility rates are destined to go higher. These cost will be passed along to the consumer and that in itself means inflation. A recent study by Simmon & Co. Intl. Has determined that US natural gas production has fallen 2.7% in the fourth quarter. This is on top of 2.4% decline in production in 2000 compared to 1999. There are serious problems in infrastructure as well. There are not enough drill rigs or crews to expand exploration and production. The last price bust led most of the industry's experienced people, from geologists to drill crews to leave the industry. Another potential problem is if oil prices increase, then more drill rigs will likely shift to oil exploration and that will put further pressure on natural gas exploration, and therefore electrical rates will rise proportionately.There are also environmental concerns that create political opposition as well. When it comes to power plants of any type, the NIMBY syndrome takes effect. People in many communities want electrical power, but they don't want to make the necessary sacrifices. The aging electrical grid is in serious decay and there simply isn't enough transmission capacity, much of which is attributable to the "New Economy." There are continuing difficulties in getting approval for natural gas pipelines. Contrast this to the expected and planned increases in natural gas fired power plants. Security analysts at Dan Rauscher Wessels Inc. project that more than 275 new natural gas-fired power plants are planned to begin operation by 2006 and consume about 8.5 TCF/year. A very BIG question is "where is this additional Natural Gas going to come from? Some say that Canadian producers will fill this void. Not likely as the Canadian industry has increased supply and has come close to its limits. Canadian producers have to struggle to get enough gas at the wellhead to feed into the pipelines. The gas business constantly is racing to replace wells that play out. The industry must find the equivalent of 8 billion to 8.5 billion cubic feet of gas per day just to stay even, according to a study by Anadarko Petroleum Corp. of Houston. The study by Simmons & Company International show that many wells with limited potential are being drilled and these new wells produce less on a daily basis, and they hold smaller reserves than those of the past. Data suggests that well quality has been deteriorating for five to 10 years, says the Simmons study. During that period, long spells of depressed prices led many companies to look for high-percentage, low-cost prospects. Anadarko's study indicates that short-term gas production growth will be limited to 1 to 2 percent. This will not suffice and with the addition of new power plants, virtually of which are natural gas fired, the US is in for a World of hurt. The only likely areas of exploration left will come from the Gulf of Mexico deepwater fields, the Rocky Mountains, Canada and the Arctic. There is a push for liquefied natural gas imports, however, with only 20 specialized tankers for this purpose, the import of LNG is somewhat limited to about 2% of US natural gas stores and the price is relatively high. In light of the gleeful outbursts from the CNBC talking heads such as Ron Insana and Joe Kernan, over a minor blip of rising stock indices on 4/5/00, the fundamentals still look horrible for the stock market. Earnings warnings continue to attribute losses to rising energy costs. Energy costs are set to rise this spring through fall and the markets are primed for more downside pressure. Fuel costs are also predicted to rise as we head into summer. This translates into higher transportation costs for goods and services. In order for the Bureau of Labor Statistics to continue the farce of low inflation data, they will have to hire David Copperfield to perform some tremendous feat of illusion as the public will no longer buy into the mantra of "benign inflation." I would expect that investor will soon tire of the Wall Street game and begin to move solidly into hard assets such as precious metals and real estate. Many have been whip-sawed by the markets as they have followed the advice of self-serving brokers, financial planners, and the investment bankers. Gold has been inching higher over the last few days in response to the decaying equities markets. This could be a minor precursor of what is to come in the coming months as a massive shift in investor sentiment takes hold. As gold is in effect money, many will consider this investment as portfolio insurance and one of very few safe harbors for what is to come. As a wealth preservation vehicle, gold is not only a liquid asset that will carry the wary investor across these dangerous waters, it could also be a wealth enhancing investment as the gold proxy Homestake Gold Mine (MH) was during the Great Depression of the early 1930's with gains of over 740%. Every postwar recession has been preceded by an energy crisis, and this time will be no different. Gold has generally done quite well in times of economic uncertainty and will continue to do so. This is not usually the case with currency.- Black Blade Black Blade (04/06/01; 01:28:36MT - usagold.com msg#: 51465) Minister Dismisses OPEC Injunction http://biz.yahoo.com/apf/010404/venezuela_opec.html Snippit:CARACAS, Venezuela (AP) -- Venezuelan Oil Minister Alvaro Silva assailed a U.S. judge's order that OPEC stop abiding by its production agreements. ``It's an action that makes no sense, and absolutely contrary to law,'' Silva told reporters Wednesday. ``Neither international organizations nor sovereign states can be played with, according to what North American courts have long maintained.''Black Blade: This little follow up to last nights post. Oil price manipulation, what a novel concept. Hmmm… SHIFTY (04/06/01; 01:03:27MT - usagold.com msg#: 51464) Gandalf the White Morels How has the hunt been going?$hifty tg (04/06/01; 00:54:38MT - usagold.com msg#: 51463) (No Subject) Good idea tedw, boycott all chinese products so that the only thing they can sell is US debt paper. That will solve the problems in the US. After the dollar collapses and the markets are in strife we can demand an apology.How dare the chinese stop us from spying.Maybe this is just a masterplan by the gold industry to send the price of gold soaring. Lets bomb the bastards. Naaah, wont happen GolmanSachs will apologize on behalf of the president.We cant let gold rise SHIFTY (04/06/01; 00:51:22MT - usagold.com msg#: 51462) tedw BOYCOTT CHINESE GOODS. I have been doing that since 1992. Its not easy nowadays.I must admit I do own a few Gold Panda coins. I try to buy made in the USA stuff even if the cost is much higher. We don't make much here anymore. The only time I buy something made out of the USA is if I NEED something and I cant get one made in the US. I even own and drive a US Army truck daily. :-)$hifty tedw (04/06/01; 00:07:55MT - usagold.com msg#: 51461) China http://www.usagold.com BOYCOTT CHINESE GOODS. SPREAD THE WORD EVERYWHERE. Gandalf the White (04/06/01; 00:07:27MT - usagold.com msg#: 51460) < ; - )>> WOWSERS !!! Leave one day to scout Morels and while I am gone the PPT builds the biggest BEAR TRAP that has been attempted in many a year. Note where the S&P Futures started today? Can you spell "manipulation" ? Grab all the YELLOW that you can as the time bomb has started to tick FASTER.<;-) ViewYesterday's Discussion.
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