Welcome to the USAGOLD Gold Discussion Archives. Looking to buy gold coins and bullion? The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets. To join the debate request a discussion password here.
The opinions posted by all guests at this forum are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of this forum shall therefore not be construed as equivalent to endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.
ARCHIVED DISCUSSION FROM 3/6/2004 All times are U.S. Mountain Time (Yesterday's Discussion.) Goldilox (03/06/04; 22:59:58MT - usagold.com msg#: 118159) Total borrowing in U.S. skyrockets http://www.chron.com/cs/CDA/ssistory.mpl/business/2434194 snippet:"The Federal Reserve reported Thursday that the nation's debt, including both household and government borrowing, grew last year at a pace not seen since the late 1980s.According to the quarterly federal funds report, the total national debt, excluding the obligations of banks and other financial institutions, grew by 8.1 percent last year, its fastest pace since 1988.Households threw caution to the wind, mortgaging and re-mortgaging their homes and expanding their debt by 10.4 percent, the biggest percentage gain since 1987.Federal government borrowing expanded by 10.9 percent, the fastest rate since 1992.Only businesses pulled back. Still hobbled by credit overhangs from the investment boom of the late 1990s, corporate borrowing inched ahead by 3 percent.Overall, the nation's debt grew by some $1.7 trillion last year to $22.4 trillion, the Fed said. The federal government accounted for about 18 percent of the total, local governments for roughly 7 percent, households for 42 percent and businesses for 33 percent.Creditors abroad financed about a third of the year's borrowing, equivalent to 5 percent of the nation's total output of products and services."Goldilox:More detail of a subject toched on in Puplava's FSN. Goldilox (03/06/04; 22:46:37MT - usagold.com msg#: 118158) Benanke S- H. Parker Willis Lecture Mar. 2, 2004 http://urbansurvival.com/week.htm snippet:"By allowing persistent declines in the money supply and in the price level, the Federal Reserve of the late 1920s and 1930s greatly destabilized the U.S. economy and, through the workings of the gold standard, the economies of many other nations as well." -BernankeGoldilox:George Ure copies and annotates Bernanke's speech for the H. Parker Willis lecture at Washington and Lee University on Mar 2, 2004.Well worth the read, as "Chopper Ben" blames the gold standard and monetary restraints for the Great Depression of the 1930's. George's comments make an interesting rebuttal. Goldilox (03/06/04; 21:55:30MT - usagold.com msg#: 118157) Berkshire The most interesting thing to me is that Buffett is dealing in currencies at all. His history has been to prefer "brick and mortar" companies for his investments.I guess it really shows that except for his play on the Alaska gas pipeline and gas-fired electric plants, he really doesn't see much of interest in corporate "opportunities". R Powell (03/06/04; 21:23:54MT - usagold.com msg#: 118156) Townie...thanks for the report "By the end of 2003, Buffett's Berkshire held foreign exchange contracts valued at $12 billion that were spread among five unspecified currencies...." What do you suppose Buffett's definition of a currency is? We know he bought silver in 1997-8. Do you suppose he thinks of a world currency or, for his stated purpose here, of a world equivalent of a currency that will retain value against a dollar decline? I just wish he'd finish buying silver first. Rumors are that there's not too much left. It probably wouldn't cost Berkshire too much. Warren isn't one to leave things half done, is he? Rich R Powell (03/06/04; 21:09:50MT - usagold.com msg#: 118155) Shapur // excellent Headline reads...Tragic accident.. "Fed. chairman run down by truck loaded with gold." Perhaps when the time comes, Sir Alan might think that a fitting way to exit this world. Maybe, also, reported struck while bending over to retrive a dropped $100.00 greenback while on his way home after a congressional meeting on Capital Hill in which he assured our leaders that the monetary system will be cared for as long as he lives. It's late here. Good night all. Happy weekend! TownCrier (03/06/04; 21:09:33MT - usagold.com msg#: 118154) How's THIS for a finger in the wind? HEADLINE: Buffett's Berkshire bets $12 blN against dollar http://biz.yahoo.com/rf/040306/financial_buffet_dollar_1.html NEW YORK, March 6 (Reuters) - Warren Buffett, the world's second-richest person, has a $12 billion bet against the United States.Buffett said on Saturday in an annual letter to shareholders of his Berkshire Hathaway Inc. holding company that he began investing in foreign currency for the first time in 2002 and expanded his positions in 2003.By the end of 2003, Buffett's Berkshire held foreign exchange contracts valued at $12 billion that were spread among five unspecified currencies...."As an American, I hope there is a benign ending to this problem," Buffett wrote, referring of the trade deficit and weaker dollar. He said, however, the impact could reach "well beyond currency markets."One Berkshire shareholder said the move was an about-face for Buffett."I've attended the annual meeting for well over the past 15 years and every year until this year when asked about the dollar or foreign currency, Berkshire's basically said, 'You don't make money betting against the United States of America,'" said Tom Russo, a partner at Gardner, Russo & Gardner, which owns about 1,000 Berkshire shares. "Something must have really scared him."------(from url)----"Something must have really scared him."Why be scared? There's nothing quite like a solid holding in physical gold to help you sleep well at night while folks beyond your control are on the prowl speculating against your government's largesse.R. R Powell (03/06/04; 20:57:29MT - usagold.com msg#: 118153) Puplava interview...more reports?? Goldendome, from your report on Puplava's interview.... "This is true, say they, because the physical Silver market is GONE. You can not control a market that has real demand when there is no physical supply when you want it in quantity. Say they, look for dollar a day jumps in spot silver in the not to distant future!!! Hyperbole? I don't know" Not so very long ago I remember seeing silver trade between 604 on the low side to a 649 high in a day. Soybeans have been the same. The volatility or price range will only get wilder especially if the market is truely driven by a physical shortage. It may eventually approach a mania stage. There may well be days when silver trades both up and down a dollar or more from its opening price. The bull market does not like to give rides to too many. It will shake off as many as possible so hang on tight! Thanks again for the report. I knew they were talking but I could not hear. Let us know if more of interest is said! Rich Shapur (03/06/04; 20:48:46MT - usagold.com msg#: 118152) Ok, MK --I will bend your way on this Instead of Greenspan meeting his ironic tragic death under the wheels of a Federal Reserve money wagon in a freak accident--lets change it to a Brinks truck loaded with USA Gold inventory headed to the wise investors of this great nation. R Powell (03/06/04; 20:37:17MT - usagold.com msg#: 118151) MK and all I don't know if Greenspan has restricted the monetary growth. I think he'll restrict and/or expand as he deems fit. I believe he understood, before he took on his job, that all fiat monies must expand as they are essentially born from debt. He may also know that the limitations (mostly on those who need it most..government largesse) of an honest monetary system are too long gone from this economy to be re-instated and may only be born again from the aftermath of a financial choas. Even if disaster if unavoidable but not immediately imminent, men will strive to delay it for as long as possible. Do all governments and financial systems have within them, at their creation, the seeds of their own demise? I know I'm mortal but I have tried and will continue to try to stay healthy and live for as long as I reasonably can even though I was born into a body that contains the genetics of decay. Hey, whoever said life is fair? Viewed in this ironic perspective, I do not see it improbable that Greenspan is trying to prolong the present monetary situation. He even greatly inflates the supply when he thinks it prudent to do so. Why not? What are the alternatives? Is not inflation (and price inflation of goods) inherent in this system? Can he not be proficient at this while still believing that all fiat systems are doomed? And, having seen the danger, why should we not defend ourselves? Procure fiat to offset fiat debt and needs, and store extra wealth safely against future needs. Being a poor boy, I store mine in silver coins and bars. More weight for the buck! Rich Shapur (03/06/04; 20:27:35MT - usagold.com msg#: 118150) greenspan thrice MK, look at any money supply chart--its out of control. The fiat fires roar. Sir Dr. Greenspan admitted in front of congress that he couldn't define the money supply and that he didn't know how to really control it. I simply do not share your opinion of Greenspan as some impotent tragic hero, and when you cast the Shakespearian royal coat upon his frail body I felt compelled to resist that effort. Judge him by his actions. As Cool Hand Luke said to the boss before he was locked up in the box, "calling it your job, boss, still don't make it right". Greenspan is doing a great job of locking this country into a fiat prison, only this time after the door is locked, gasoline is going to be poured on and lit! R Powell (03/06/04; 20:01:24MT - usagold.com msg#: 118149) Hey Smoochie !!! If you haven't any sources to give for the silver opinions, fine, but say as much. Or is the whole idea to spread some propaganda on internet forums, and nothing more? I read an opinion yesterday on another forum. It said, "Soybeans are going to $13.00." That was it, no ifs, whys, hows or whens. Many of us asked for some rational or more information. It was not forthcoming. Opinions are like....and are often given backed by "official figures". Okay, which official? Imnsho, Pump and dump posting is even lower on the list than spam. How about some "short squeeze" rumors too, or are they for next week? Rich MK (03/06/04; 19:58:58MT - usagold.com msg#: 118148) Rich That is precisely the point.If someone were to tell me tomorrow we were back on the gold standard, I, and I am sure, many others could produce, if they wanted to, a dozen reasons why it might usher in a complete and total economic collapse. Those who believe that the gold standard would introduce a golden age are living in a dream world. We live in an imperfect world. The economy cycles no matter how we define our money. And those screaming for restraint now might be screaming for excess instead. No system works without flaw or concern, and that's why every individual should be a gold owner. On one side you have failing banks and equity markets in the extreme and on the other you have hyperinflation and the destruction of purchasing power. And the extreme, as history shows us, is only a blind away.Shapur, as Rich just illustrated, there are as many commentators out there who believe that Greenspan has restricted the flow of money as those who believe he's tromped on the accelerator. Which is it? If it were proven to you that the money supply was contracting would you credit Greenspan for it? Or would you still want him to step in front of armored car carrying peach colored $20 bills?Randy, you were right on the money, I believe, with respect to AG. I believe he wants to go out as he came in -- warning of what's to come. No one, that I've seen, can fill his shoes. There's no doubt a Democrat would attempt to appoint Rubin, but Kerry is so far left that he would be happier subduing the Clinton element. Who would the Republicans pull out of the hat? I think if the Repubicans win they'll try to get AG to stay. Age is not an obstacle. He's been a good Republican even with his warnings. The big point is that he hasn't tried to raise interest rates. R Powell (03/06/04; 19:50:06MT - usagold.com msg#: 118147) Goldendome Thanks for the Puplava summary. Please keep them coming! My computer does not talk and I've failed to find written texts of his interviews. What you reported them talking about on silver has been the basis of my seven year belief that the price of silver must go up ...bigtime, to find a supply/demand equilibrium. I've never been able to disprove Butler's early contentions that supply was growing critical in an environment that consumes more (yearly) than is produced. It's that simple. That huge supply, built up over centuries is gone. Now add to the puzzle technical traders, who determine price, who have never even considered that silver supply is unlimited...they've never questioned that there even COULD be a shortage... and why should they, there never has been!!! Copper storage numbers have been declining at an alarming rate, same with soybeans but ...where are the silver storage numbers? There are none for industrial useage which does not flow through Comex! Hey, halalua!! Maybe it's time at last. $10.00/ounce silver will pay ALL my debts and leave me free to study economics for the rest of my days. If so, I promise I'll try not to be a nuisance. $30.00/ounce silver and maybe I'll be able to financially back some good in this world. Summer camp for poor innercity kids and a warmer winter-time climate for the misses' bad back and my cold old bones! Thanks for the report!! Rich R Powell (03/06/04; 19:28:16MT - usagold.com msg#: 118146) MK...Greenspan's choice You said... "The choice is to stop the process and let the country sink back into the Great Depression." Expediency, especially to avoid disaster, always supercedes long term objectives, no matter how noble. The poor man is no more in complete control of the situation than I am controling the sun's rising and setting. We both just observe and do what we can. Rich R Powell (03/06/04; 19:15:08MT - usagold.com msg#: 118145) Payment of debt Attention Adam Hamilton Two weeks ago the weekly offering by Hamilton was titled "Stalling Monetary Growth". In it, he states that the growth of the money supply has been declining, actually turning negative for a brief period last year, but mostly just declining for a while...the rate of growth that is, not the money supply. Hamilton says... "...this stalling monetary growth inevitably spawns discussions on the Fed. Since the Fed is responsible for growing the US money supplies, many people including me wonder if the Fed has purposely engineered this monetary disinflation of if forces beyond its control are dragging money-supply growth rates lower contrary to its will." He continues on to wonder ..."what could be causing the rapid reduction in US monetary growth rates?" I'm not an expert on monetary matters but do believe that if debt creation increases the monetary (credit) supply then the reduction of debt should decrease the same, no? If this assumption has merit then perhaps Bonner has provided an answer in "Financial Reckoning Day" when he talks of demographics and the aging of the baby boomers.... "Older people downscale their lives, cut back on their spending, pay down their debts and add to their savings." Being part of that generation I can add that I've felt the same urge in recent years to get out of debt, simplify life, divorce myself from complex situations requiring time and effort to resolve or control and, once and for good, get rid of never used (but still usable) possessions. I'm too old to ever need that tree climbing gear hanging in the cellar. I'll soon be too old to carry credit card debt. I'm tired of it all and will make one final effort (physical work) to rid myself of it. I've started paying it off already. Have I been decreasing the growth of the monetary supply by terminating debt? If so, and given that my generation is still a sizeable percentage of the population, might this be part of the answer to Adam Hamilton's question?? After all, what has Black Blade been advocating about debt for so long? How will decreased spending and cancelation of large amounts of debt effect the monetary supply?? Thoughts? Rich Goldendome (03/06/04; 19:01:38MT - usagold.com msg#: 118144) Puplava's 2nd hour http://www.netcastdaily.com/fsnewshour.htm I'm somewhat surprised, that before now, no one has raised our attention to (particularily) the 2nd. hour of the Puplava discussion today with Bill Murphy and Eric King.Smootchy: Murphey states that China has already spoken for 100 % of World silver production for 2005. Your points on Chineese demand for all of these metals, not only Silver, is well placed. Also, the fact that perhaps the Chineese will look for Gold and Silver to assure their dotage where they have no SSI. Both Murphey and King say that the game is running out on control of the Silver market faster than control is running out on Gold control.This is true, say they, because the physical Silver market is GONE. You can not control a market that has real demand when there is no physical supply when you want it in quantity. Say they, look for dollar a day jumps in spot silver in the not to distant future!!! Hyperbole? I don't know. But, they also feel that the Silver market may now begin to drive the Gold market, as the Gold shorts see the writing on the silver wall, and relate that to their eventual fate in the Gold control market, as demand there also picks up more, and they are again unable to control the price. TownCrier (03/06/04; 18:50:34MT - usagold.com msg#: 118143) Speaking of Chairman Greenspan, young Alan turned 78 today! http://www.usagold.com/centralbank/current.html A week ago I provided coverage of the Fed Chairman's remarkable outpouring, specifically of his stint of three speeches in three days, not one of which was the standard grist from the Fed mill. Early this past week MK and I spoke about this prolific output of unusually candid remarks, both of use musing over the likely cause.It seems we were not the only ones so taken with the Chairman's behavior, because on Wednesday the fine folks at Central Banking Publications Ltd included that topic as a portion of the latest report, and frankly, as I sifted through the text for republication at our 'Central Bank Insider' page, I was pleasantly surprised to discover my thoughts on the matter were fairly well represented in their article.If you overlooked the update announcement and excerpts March 3rd, you can access the 'CB Insider' through the url above. Scroll to the third heading, "Happy Birthday Alan!"R. Shapur (03/06/04; 18:49:47MT - usagold.com msg#: 118142) Greenspan redux a 2. Emeril Live is a cooking show--watch him when you get a chance, he is one of the best chefs in the world right now. Its shown on the food network. a 1. To be candide you have to ask yourself what has Greenspan done for the U.S.A.? I know Greenspan's 1966 piece on Gold and I know his Randian root. I also know that he was a director for J.P. Morgan and Co. To be blunt, Alan Greenspan is a Banker who is paid to command the fiat money monster that is destroying this country. I read about this everyday at USA Gold. He knows exactly what he is doing. The Federal Reserve Cartel run with Government sanction is a system that does not serve the people of the United States, but robs the citizens of their wealth. Read Ron Paul, one of the few in congress who actually challenges Greenspan. Read Bill Fleckenstein or James Grant or Richard Russell. Alan Greenspan has been fed chief since 1987---and now our Country is on the verge of the biggest finacial breakdowns in history. Should he not be blamed for his complicity? Or do you want to see him as a hero who's hands are tied; a financial Pontious Pilate, who washed his hands and let the politicians run up the debts?Alan Greenspan has pumped the money beyond belief. That coupled with the political spending has been a potent poison to our financial future. I blame Greenspan for creating the bubbles and then papering over the mess that is left on the rug. Greenspan helped repeal Glass/Steagle which helped the bubble grow, he gets our eyes off the ball with the productivity number spin, and then opposes congress when they want to consider the regulation of derivatives. I could go on and on. I do not think the "meastro" has lived up the stated objectives of the Federal Reserve. Our currency is not stable--it was purposefully managed up in a strong dollar -- weak gold policy and then taken down as the fiat monster swallows the wealth of this nation.You may know the man to be some sort of gold friendly chap, and that may be true. But I see his hand on the tiller of the-good-ship-usa-its-not-my-fault-we-are-going-down-protect-my-legacy-I-told-you-so-mumble-mumble-serve-my-masters-blah. MK (03/06/04; 18:45:26MT - usagold.com msg#: 118141) RPowell Thanks for that. Another example of the Shakespearian dimension Greenspan embodies.The great figures of tragedy in literature are bound to a terrible fate over which they have no control. Greenspan attempted to control a situation he knew was out of control and when you look at the record, and the final history is written, it will be said that he attempted to hold it together, but the attempt failed. He'll be criticized for it, and even held responsible, but he is no more responsible for this than any one of the 12 Caesars singly were responsible for the fall of Rome. They, and he, were [are] part of an inevitable historical process. Yes, "he created more unbacked paper money than any man in history" but that could be said of every post 1945 Fed chairman from William McChesney Martin forward (at any stop along the way). The choice is to stop the process and let the country sink back into the Great Depression. R Powell (03/06/04; 18:26:58MT - usagold.com msg#: 118140) Alan Greenspan's current view on gold?? Bill Bonner's book, "Financial Reckoning Day" (page 159) gives an account of a meeting between Rep. Ron Paul of Texas and Greenspan... ...."Handing him a copy of 'Gold and Economic Freedom', an essay Greenspan had written for Rand's "Objectivist" in 1966, the gist of which was that money not backed by gold was a sort of fraud on the public, Paul posed the question: 'Would you like to add a disclaimer?' 'No,' said the man who had created more unbacked paper money than any man in history, 'I reread this article recently---and I wouldn't change a single word.'" MK (03/06/04; 18:25:26MT - usagold.com msg#: 118139) Shapur Let me ask you a couple of questions:1. Do you believe Alan Greenspan created the paper money system and, as a result, is therefore responsible for it? Is that why you would like to see him throw himself in front of an armored truck carrying peach-colored $20 bills?2. What is Emeril Live? Sorry I don't watch much television. Scottish historian, Alexander Tyler:"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasure. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship. The average age of the world's great civilizations has been two hundred years. These nations have progressed through the following sequence: from bondage to spiritual faith, from spiritual faith to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency from complacency to apathy, from apathy to dependency, from dependency back to bondage." Or to put it another way:"We have met the enemy and he is us."Blame Greenspan if you wish.........It won't get us out of the mess we created for ourselves in this country. Admittedly I have always had a soft spot for AG ever since he used to speak at our conferences and extol the virtues of the gold standard and gold ownership. He has been one of the most eloquent spokesmen for gold that we have had in this country over the past 20 or 30 years, if you actually go back and look at the record. I believe that Greenspan sees himself as a Randian figure, thrown to Fate - if we can't have a gold standard, he will through his force of will attempt to do what the gold standard would have done if given the opportunity. By and large, I believe the attempt failed, and that is the tragedy, not just for Greenspan but for the nation. I believe that even he could not stop the tide consequent of policies begun a long while ago, and politics he cannot influence - as pointed out by Alexander Tyler above - who by the way was talking about Ancient Athens. I pity the task of the next Fed chairman, who will likely be in the Bernanke mold (which is akin to the Arthur F. Burns mold) , if not Bernanke himself. Greenspan is telling people things they don't want to hear, but he's talking about processes, not policies, and trying to give us a glimpse what history has in store. . . . . . . The Invisible Hand (03/06/04; 18:14:14MT - usagold.com msg#: 118138) Banking crisis, you said http://observer.guardian.co.uk/business/story/0,6903,1163599,00.html SNIPConflicts at the heart of the EIB Brussels is trying to spike a damaging report on the world's biggest bank, says Giles Tremlett Sunday March 7, 2004The Observer The European Investment Bank is the world's biggest international public lending institution. But, in the post-Enron world, it still fails to observe basic rules of corporate governance and transparency, according to a controversial report by a member of the European Parliament. R Powell (03/06/04; 18:05:03MT - usagold.com msg#: 118137) Smoochie // silver Thanks for the silver opinions. But, may I ask for a source of the "Official figures" you refer to in reference to silver use in China?? In fact, please post any sources that you can. TIA You also mentioned Bill Murphy's statement that 70% of 2005's silver production has already been "booked in advance". Correct me if I'm wrong but I believe he is refering to futures contracts, is he not? There are now and have been futures "liens" or derivative contracts totaling more silver than is apparently available for a good long time. Although I'm most likely in the minority for thinking so, I see nothing illegal or wrong with this situation. But, be that as it may, it should be pointed out that Murphy is refering to futures contracts...not orders more likely to result in delivery. If he were refering to definitive deliveries, the price of silver would be skyrocketing upward to find some supply/demand equilibrium, much as the price of copper and soybeans are now. I, myself, hold derivatives in silver on both the long and short side, streaching out beyond this calendar year and totalling many, many thousands of ounces. I could NOT financially take delivery on even the smallest percentage of this holding at the present prices. I hold these positions on margin. My goal is outrageous fiat profit. Real physical removal and use of silver will be the catalyst that drives the future price of silver...probably not the casino derivatives game (unless speculation preceeds physical shortage). But, imho, physical needs will be reflected in the casino pricing process! Again, I believe Murphy was refering to futures derivatives, not physical takeoff. In this regard, he was somewhat vague. The last figure I have seen for photographic silver use is from the 2003 Silver Survey which refers to calander year 2002. In that, photographic use was down year over year by 4%. This was attributed to a slower global economy (less tourism). With recycling of old silver back into supply for film use, only 60 million additional ounces were used for film. Again, this number comes from the Silver Survey and my questionable memory. Have you any other sources!!!! I'll certainly agree that film using cameras will probably increase in number in spite of the growing numbers of digital cameras. Also, film using camera use will probably grow much faster than digital use. Silver paper is still needed for lasting, good quality prints, even from digitals. The digital question has been vastly overblow. Can you give any sources for these or any infomation on silver? How about that "official figure"? However, please observe forum decorum. I'm already familar with Morgan and Butler. Thanks ! Rich Smoochie (03/06/04; 17:09:17MT - usagold.com msg#: 118135) SILVER DEMAND IN CHINA Official figures would have us believe that China's annual silver demand is currently increasing at 20 million ounces per annum .Thus we are expected to believe that 1.3 billion Chinese who are currently having the biggest industrialboom of all time,who are mass- producing electrical gadgets and other silver using products (e.g. batteries,jewelry etc.)for the whole world, who have exploding demand for traditional silver photography -- are now using an extra piddling 20 million ounces per annum !!!!!And then what about silver investment demand in China ? The truth is that just 100 of China's newly richmulti-millionaires could snap up 20 million ounces of silver in a few seconds without blinking.And then what about the build up of silver inventories due to worries about a rising silver price.And then is your average Chinese going to buy a platinum ring or a silver ring (130 silver rings for theprice of one platinum ring). And then you realize that there is no real pension system in China and so everybody whether old or young would love to have a small hoard of gold and silver.And then you learn that the Chinese banking system is corrupt and technically bankrupt...............!!!The point is this : in view of the above it is almost certain that Chinese silver demand is increasing by at least 100 million ounces per annum or 18% of world supply. Give me proof I hear you say. Well, look at theprice of silver in spite of an enormous Crimex short position.And Bill Murphy is telling us that 70% of 2005 silver production has already been booked in advance.Can you guess by who?In Europe its almost impossible to find any decent quantity of physical silver(I know because I tried recently).Next point: the arrival of digital photography is inceasing the use of silver in photography. That's rightINCREASING!! And not one single silver investor has realized this obvious fact.Not even one!!!Let me explain: since the arrival of digital the amountof silver in traditional silver -halide photography has fallen only very slightly.This is because a large increasein third-world use of traditional photography (they can't afford digital) has nearly offset the reduction in use in the developed economies. At the same time the introduction of digital has lead to a large total increasein the number of prints made on silver paper (non recyclable).And on top of this they are now producing hundreds of million of digital cameras and associated equipment all of which contain a small amount of silver.Digital cameras eat up a vast quantity of batteries (contain silver),far more than traditional silver cameras.So now we have two uses for silver whereas before there was only one where most of the silver used was recycled.It appears that practically none of silver used in digital can be recycled.The point is this: digital photography creates a substantial increase in industrial silver use which more than offsets the small reduction in traditional photography use.Conclusion: the current price of silver in no way integrates the above two pieces of information whichare extremely bullish for silver.Rather shockingly the price of silver should never have fallen to 4USD onmisinformation about the effect of digital.The misinformation about Chinese demand for silveris so ridiculous that its not even funny.I think that we can all guess where it came from.For these reasons and the other reasons which are more widely known I believe that the price of silver is going rapidly to 20 USD and then slowly much higher.Kindly spread this information all over the net. Shapur (03/06/04; 16:19:04MT - usagold.com msg#: 118134) @MK, re: Greenspan and a Shakespearean twist You said, "It is an interesting conflict of Shakespearean proportions.........We had a dose of the latter over the last several weeks and its induced some interesting commentary."If Greenspan would throw himself in front of a subway car or jump from an office window, then and only then, could I begin to believe that this character was in an internal struggle within himself over some scrap of principle or code. However, I think it would be more ironic if he was run over by a federal reserve armored car chock full of peach 20's as he ran across the street with his black briefcase--then I could appreciate the true tragedy of fate in his demise.I would ponder over it for a brief instant and change the channel back to Emeril Live. MK (3/6/04; 13:15:41MT - usagold.com msg#: 118133) The Denmark 20 kronor -- 'Golden Mermaids' http://www.usagold.com/buy-gold-coins.html Just a short note to draw your attention to the new Historic Gold Coin offer at the link above.These are the Denmark Mermaid coins so popular both here and in Europe. They don't come along very often in high grade, and we were lucky enough to find about 200 of the item in choice uncirculated -- something special. I think you will find the offer interesting to read if nothing else, and the booklet offer at the bottom of the page is well-worth exploring. It is a good introduction to collecting this sort of thing for fun and profit over the long run. Our 'Golden Mermaids' will go fast, like the Friederick Longbeard coins did a few weeks ago. (We sold out in less than a week.)'Internet buyers will have a leg up. We won't be sending an e-mail out on the item until Monday sometime.Also you have to wonder if the price of gold isn't about to go into one of its upturns as well. I was asked the other day what I thought might fuel the next move up in gold. I'm going to say the pervasive move in metals, oil, farm commodities, et al - making a big push on the inflation rate, and all related to overproduction of the dollar at the core. I also think that the mining companies and hedge funds short gold are de-hedging whenever gold drops putting a floor under this market - and a rising floor if you understand what I mean by that. Also, the hedge funds have discovered gold and hence the volatility we are seeing - volatility that shouldn't scare us as physical owners. The overall trend is up though I think the volatility will put a scare in us every once in a while. Hold what you've got, and buy more if you haven't reached your max. We are witnessing a 1970s deja vu.........P.S. I also found AG's warnings to be an attempt at building some kind of legacy. I don't think he ever left his roots. Those who have a hard time with AG fail to realize that he has two sides: one the central bank bureacrat tasked with making the monetary system work, the other the economic philosopher who feels compelled to address the nation's economic disarray.It is an interesting conflict of Shakespearean proportions.........We had a dose of the latter over the last several weeks and its induced some interesting commentary.Have a good weekend, all, but do visit the link above if you have a moment, and scroll down for the March Buyers' Group.As we used to say around here.......Go Gold!! Mr Gresham (3/6/04; 12:21:50MT - usagold.com msg#: 118132) Gene Both tongues, planted firmly, in both cheeks...(Something my friend, Ten Bears, always envied my Wasichu ability to do.) Gene (3/6/04; 12:14:33MT - usagold.com msg#: 118131) (No Subject) Sorry, make that Gresham. Gene (3/6/04; 12:12:49MT - usagold.com msg#: 118130) Mr. Resham--#118128 Are you being serious or was that just tongue in cheek? Mr Gresham (3/6/04; 11:30:39MT - usagold.com msg#: 118129) Humility In other words, people are idiots.And there's enough overlap between them and my behavior that I know I'm in the thick of it, too. Anduril really nailed it earlier -- that one's going up on my wall, seeing as how I've been taken for quite a few "dances".That old saying about people using only about 5% of their brain capacity. (Or is it down to about 3 or 4% these days?)I feel like, on a good day, with a cup of coffee and some good company (like here), and a touch of inspiration from that spark of the divine within us all (can we still drink Negra Modelo on St. Patty's Day?), I may get up to 6 or 7%.Now we all know about outrunning the bear, and how unlikely that is. It's outrunning the other guy we've been about most of our time here. (But what if that bear has an eye for you, and you alone? Ooooops!)What if it's not a bear, but a tidal wave? Then it's not about outrunning anyone, but about getting to higher ground.People keep on learnin’Soldiers keep on warrin’World keep on turnin’Cause it won't be too longPowers keep on lyin’While your people keep on dyin’World keep on turnin’Cause it won't be too longI'm so darn glad he let me try it againCause my last time on earth I lived a whole world of sinI'm so glad that I know more than I knew thenGonna keep on tryin’Till I reach the highest ground...Don't you let nobody bring you down (they'll sho ’nuff try)God is gonna show you higher groundHe's the only friend you have around.--- Stevie Wonder(The blind see more?...so when they speak, I listen.) Mr Gresham (3/6/04; 11:14:18MT - usagold.com msg#: 118128) Derivatives Counterparty Located! CURTAINS FOR COMEX?[Rooters: March 6, 2004] NEW YORK: Investigators searching for evidence in the Martha Stewart insider trading case have located a sealed closet hidden within Ms. Stewart's home containing commodities futures and options contracts on the Comex and other exchanges.The contracts are largely on gold and silver futures and all of the contracts seem to be holding "short" positions against an increase of the metals' prices.Although curiosity has ranged among the speculating community and in Internet chatrooms for many years as to what large institutions could possibly be placing their shareholders' capital at risk in such large and increasing derivative holdings, the mystery appears now to be near solution. No one quite expected this outcome, however.When asked by reporters how one individual could be permitted to take up tens of thousands of speculative contracts, representing millions of ounces of metal valued at over $10 billion, Comex officials declined to respond. CFTC officials could not be reached for comment.Ms. Stewart's attorneys also declined to answer specific questions, except to mention a "carry trade" apparently recommended by an investment broker named "Gibson", as yet to be reached.With Ms. Stewart's conviction yesterday, investors are abuzz about the likely fate of her large derivative positions, and her ability to make good the obligations to her counterparties, should gold and silver prices remain at decade-high levels as the settlement dates of these contracts approach."She won't be offering them one-year extensions to their 'Martha Stewart Home' subscriptions as compensation for their losses," opined one unidentified floor trader."Maybe live telethons from her cell could score a few bucks, but that's about it," offered a broker with HBSC Securities.Martha Stewart (NYSE:MSO) tumbled from an all-time high of $17 to $10.86 in record trading on Friday. The once high-flying stock still boasts a market cap of more than a half-billion dollars, twice annual revenues, and losses in the last quarter and fiscal year. Druid (3/6/04; 10:54:22MT - usagold.com msg#: 118127) Jacob Marley (3/5/04; 06:40:10MT - usagold.com msg#: 118062) "That is the caveat that I must not have made clear the other day, as to why the mark-to-market attribute of the ECB is potentially a liability. It becomes a liability, if the ECB blinks, and capitulates. What was leverage for strength, by providing a natural hedge in its reserve base through a cooperative relationship, then gets turned on its head. Now the mark-to-market property would leverage weakness, by forcing the reintroduction of a competitive relationship to the reserves. Since in capitulation they would have let go of their chief supporting "asset" -- to promote credibility in the currency -- the credibility of their word." ************************************************************Druid: This is an interesting part of the sword on which to walk on. I view this mark-to-market as an "ace in the hole or club if you will" that will help foster cooperation during this delicate transition period and keep our "words" for what their worth intact. In the interim, trade deals and everything else under the sun that can create havoc on a managed currency will move forward and affect the "word" of said currencies as this absurdity plays out. Jacob Marley, you have put out much to contemplate and I thank you very much for your very provacative reasoning. Mr Gresham (3/6/04; 10:41:24MT - usagold.com msg#: 118126) Anduril! That is a KEEPER. You have really pulled one up from the depths of what we all try to express here.HOF NOMINATION! Seconds? USAGOLD / Centennial Precious Metals, Inc. (3/6/04; 10:22:14MT - usagold.com msg#: 118125) Peace of mind, 24/seven. (Check out the latest Buyers' Group Special offer!) http://www.usagold.com/gold/special/Mermaid.html Andúril (3/6/04; 09:05:58MT - usagold.com msg#: 118124) The dance This waltz we all do.Work, earn, spend /Earn, lend. Expect /Borrow, spend. Owe /Work, earn, pay /Work, earn, spend /Borrow or lend /Owe or expect /Trading always /Now for then /Then for now /I O U /You owe me /Trust. Trust. Trust /Trust. Trip. Trust /Trip. Trip. Trip.How well do you know this partner with whom you dance? You sit to take rest, she dances on, always on with others. Alone you must go to your bed, while still she dances with many strange men through the night. Money is her name. She may be your dancing mistress, she cannot be your wife. Money is dancing always. You cannot tame her; you choose only by tune when to whirl with her in the ballroom. If you choose well she may let you think you are leading! Soon your legs grow weary and your head spins, your belly turns and your wallet floats away, leave and you may find comfort through the night; it is gold that awaits you at home with forgiveness. Cometose (3/6/04; 09:05:09MT - usagold.com msg#: 118123) CLAY FEET Houston ! WE HAVE A PROBLEM !!!!!SILVER THE WEAK LINK IN THE CONTROL MANIPULATIONS OF THE CABAL IN IT'S PYRAMID PONZI SCHEME TO BRING SOCIAL ENGINEERED UTOPIA TO THE GLOBAL ECONOMY AND THE MARKETS!!!THE IMPLICATIONS ARE DIRE AND MOST WELCOME to anyone who invests in REAL ASSETS....SEE all of this and more in FINANICIALSENSE.com Financial NEWS HOUR today .....BILL MURPHY THERE DISCUSSING DEEP POCKET / HEDGE FUNDS looking for a place to buy silver in QUANTITY? It's not anywhere to be found....CHINA LOCKED up 75% of 2005 SILVER PRODUCTION....Daniel 2:31Thou, O king, sawest, and behold a great image. This great image, whose brightness was wxcellent, stood before thee; and the form thereof was terrible.V32 This image's head was of fine gold , his breast and his arms of silver, his belly and hi thighs of brass, v33 His legs of iron, his feet part of iron and part of clay.v34 Thou sawest till that a stone was cut our without hands, which smote the image upon his feet that were of iron and clay , and brake them to pieces.v 40 And the fourth kingdom shall be stron as iron; forasmuch as iron breaketh in pieces and subdueth all things; and as iron that breaketh all these, shall it break in pieces and bruise.v41 And whereas thou sawest the feet and toes , part of potter's clay, and prt of iron, the kindom shall be divided; but there shall be in it of the strength of the iron , forasmuch as thou sawest the iron mixed with miry clay .v42 And as th toes of the feet wre par of iron , and par of clay, so the kindom whall be parly stron and partly broken.v45 Froasmuch as thou sawest that the stone was cut out of the mountain without hands, and that i brake in peieces the iron, the brass , the calay , the silver , and the gold; the great God hath make known to the king what shall come to pass herafter; and the dream is certain, and the interpretation therof sure. Boilermaker (3/6/04; 08:35:20MT - usagold.com msg#: 118122) Shell-Money http://3.1911encyclopedia.org/S/SH/SHELL_MONEY.htm snipIn north Australia different shells were used, one tribes shell being often absolutely valueless in the eyes of another tribe. In the islands north of New Guinea the shells are broken into flakes. Holes are bored through these flakes, which are then valued by length, as in the case of the American tuskshell, the measuring, however, being done between the nipples of the breasts instead of by the finger-joints. Two shells are used by these Pacific islanders, one a cowry found on the New Guinea coast, and the other the common pearl shell broken into flakes. As late as 1882 local trade in the Solomon Islands was carried on by means of a coinage of shell beads, small shells laboriously ground down to the required size by the women. No more than were actually needed were made, and as the process was difficult, the value of the coinage was satisfactorily maintained. The custom of breaking or flaking shells was common among some of the American Indian tribes, but the shells so manipulated were of the ponderous Pachyderma crassatelloides species, while in the South Pacific Islands the Oliva carneola was used.commentVery interesting. "No more than were actually needed were made, and as the process was difficult, the value of the coinage was satisfactorily maintained." Poor devils didn't have a printing press to revolutionize the making of money. JavaMan (3/6/04; 07:11:57MT - usagold.com msg#: 118121) Druid and GAB, Some excellent insights from both of you! It's no secret that the Federal Government, or any Central Government for that matter, can do little, if anything, as good as or better than private industry. Why should banking be considered any different?I find it interesting that given the history of fiat currency as one of eventual devaluation to zero, we are expected to accept that "this time it's different". Actually, the success of the dollar over the years is quite remarkable given the US confiscation of gold money in 1933 making it illegal to own followed by the immediate revaluation from $20 to $35 per ounce and then the US reneging on redeemability of the dollar for gold in 1971 to the rest of the world. The expression "full faith and credit of the US of America" just kinda’ rings a little hollow to me.GAB, your usagold.com msg#: 118115 is "Hall of Fame" material because it clearly conveys the reality of the situation.In matters of money, faith just doesn't get it.javaman Druid (3/6/04; 01:41:55MT - usagold.com msg#: 118120) Jacob Marley (3/5/04; 06:40:10MT - usagold.com msg#: 118062) "The dollar gets away with whatever it wants, so long as the benchmarks are stable, and markets can feel secure in this. IF the euro tries to play this game, i.e., succumbs to political pressure and makes policy on that basis, it yields its one designated "asset" to uphold credibility -- faithful adherence to its word. It has nothing else to tether against ideally because of its reserve marking structure. It did this by design, because in order to promote the best environment for the users of the currency (liquidity, solvency, predictability), it needed the greatest degree of flexibility. The dollar, and its forerunners always had to deal with artificial constraints that had nothing to do with the economy they served. The economy may have demanded expansion, but physical gold limitations prevented it. Asia screams to expand, but they are like inflating a tire with a slow leak, the harder they pump the more air escapes through THEIR self-imposed but inescapable constraint of competitive devaluation of THEIR primary reserve holding: dollars. The euro chose to be as abstract an entity as possible -- and it is hard to get more abstract in this physical world of ours other than to have nothing standing behind your issue except your word. That is why years of true trial and tribulation were needed to mature the currency issue. And years are needed to convince potential users in all cultures and walks of life that the currency WILL be supported by its issuers according to their word (charter), AND that the issuers (through proving) have the means (power) to support their currency. THIS is its only tether. Not gold, not forex. These, in a market-marking framework, provide no secure anchor. IF the euro becomes an untethered entity, it will have great trouble -- architecturally -- providing an environment of price stability. It would be relegated to second tier status. It would effectively become "just another currency" -- a regional currency for the EU, used chiefly for convenience and by law -- not the primary global currency for reserves and settlement. It would hence forego all the prestige and power that go with this "exorbitant privilege." ************************************************************Druid: This is an extremely tall order. I would have difficulty taking the "word" of a central banker because by design central banks are political institutions operating under the illusion of economic entities. To date, it appears that the ECB is maintaining its "arms length" distance from the politicians but this game is heating up and it will be interesting to see how much pain the Euro and all fiat currencies can stand. The entire concept of managing a currency is fraught with peril as there are just to many variables in play that can degrade it. De-centralize banking and let the real markets work to create and destroy. Andúril (3/6/04; 01:27:28MT - usagold.com msg#: 118119) Albino Bat "money is money and must be a tangible thing" No sun reaches the depth of your dark cave. The burden is on you to seek it out the light of day. Caradoc (3/6/04; 01:17:13MT - usagold.com msg#: 118118) GAB: A compromise with Marley? GAB: Could be there's a sliver of common ground between your position and Marley's which could be arrived at by taking "what matters in a currency..." to mean "what would be nice about a currency...." In short, it would indeed be a good thing if managing a currency could arrive at worthy goals and "a stable macro-economic environment" does qualify a a disideratum. Druid (3/6/04; 01:00:23MT - usagold.com msg#: 118117) Metrics and Quality.... Druid: The book that dispelled a lot of myths for yours truly concerning quality and quantity was Robert Pirsig's "Zen And The Art Of Motorcycle Maintenance." Great Albino Bat (3/6/04; 00:48:43MT - usagold.com msg#: 118116) Goldilox: you are touching a basic problem of our civilization Quantity as more significant that Quality.Do get yourself a copy of "The Reign of Quantity and the Signs of the Times" by René Guenon.A difficult book, but extremely rewarding.The GAB Great Albino Bat (3/6/04; 00:41:56MT - usagold.com msg#: 118115) Jacob Marley: About your recent post... You speak as an authority, and no doubt you are a perceptive and highly trained observer in the politico-economic field. However, I can also detect from your words and the thinking they express, that you are a "macro-economist" of the type produced by, say, the London School of Economics, or any of the Ivy League Colleges in the U.S., or Stanford in California, or other prestigious schools around the world.You are ignoring, Sir, the central problem of our age: how politicians can handle increasing numbers of individuals, who expect from their governments, progressively better economic conditions, by "managing their currencies" and their interest rates to produce "growth" and employment.You wrote: "Once more THIS is what matters in a currency -- not its reserves as such, but its ability to promote a stable macro-economic environment."In this statement there is some truth, and some error. The truth is, that for all currencies in the world, at present, reserves matter not one bit. I have pointed this out to Belgian, some time ago. The dollar reserves do not matter, except as a window dressing to inspire credibility, because if credibility vanishes or threatens to vanish, the currency will inevitably fall in value, brought to its knees by speculators. (e.g. Britain in 1982.) The gold reserves also do not matter, because the ECB is certainly never going to redeem the Euros it issues, for gold upon demand. They too, are window-dressing and nothing more.Where there is error in your statement is "the ability (of the currency) to promote a stable macro-economic environment" No country in the world, as it is today, has, or can possibly have, "a stable macro-economic environment" as you call it, for the simple reason that ALL policy around the world, is oriented to policies that will placate the voting masses, through credit expansion, which produces as night follows day, the tendency in the markets (markets DO exist) to correct the malinvestment produced by credit expansion beyond real savings, by means of collapse of bad credit and liquidation of malinvestment. And when I say "no country in the world", I include in that statement, the European Union as a whole with their ECB and Euro.So what this all comes down to, is, what country (or bloc of countries, as the E.Union) is the most clever liar and deceiver with a policy that is inevitably bound to break down eventually through its own internal malinvestment.Perhaps that is the way the world has to work: the cleverest liar wins. That may be so, but here at this Forum, we should be very clear about it.Nothing lasting, nothing that will protect the ignorant and trusting individual - the mass of humanity - is in place and working. There can be no REAL stability, only an imagined stability that is bound to come to grief and shatter the lives of numberless millions.The fact and the truth: money is money and must be a tangible thing, and all human experience tells us, it must be gold, the king of metals, or silver, the queen of metals. Money cannot be "managed", the dear illusion taught to thousands upon thousands of graduates, post-graduates and doctors in Economics courses the world over. "Managed money" is a contradiction in terms. Money is a means of exchange, and "managing money" means, in the final analysis, fraud for the benefit of politicians who promise the Moon - or Mars.That gold or silver are not regarded as money, or allowed to be money in our age, does not tell us something about gold and silver; it does tell us about the illusions of our age, and shows us that our time is built upon the greatest fraud ever perpetrated upon the human race. From which our civilization will not escape unscathed, as Reality turns upon us to destroy our current myth of prosperity for all, through lies.The GAB Goldilox (3/6/04; 00:20:47MT - usagold.com msg#: 118114) More hedonics Expanding the previous thought leads me to FOA's path - the divergence of the "price" of gold from the "value" of gold as wealth.POG in $ (or any currency) is essentially a hedonic snapshot (very temporary) measurement of its value, completely disregarding the bigger picture!Got gold! Goldilox (3/6/04; 00:08:51MT - usagold.com msg#: 118113) Hedonics @ Solomon:I like your explanation of hedonics. I used to argue similarly as a Professional Quality Engineer that we often spent too much effort on "quantity engineering" and too little on "quality engineering".Metrics have overtaken creative energy in almost every field from engineering to medicine to psychology. No one wants to admit that a major component of "quality" is often a subjective, unmeasurable entity, as it fogs up their simplified measurement of success. Instead, they invent "new" terms like "human interface engineer", or "ergonomics engineer" and quantize them to death, as well.It's all part of the "Let's digitize the universe" malarky, which endeavors to leave behind the human touch as completely as possible. ViewYesterday's Discussion.
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.