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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

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ARCHIVED DISCUSSION FROM 1/6/2005
All times are U.S. Mountain Time

(Yesterday's Discussion.)

timbervision (1/6/05; 23:52:39MT - usagold.com msg#: 127992)
Belgian
Dear sir,
I just want you to know that when my time is limited I scan through the days postings looking specifically for yours and those of Aristotle's. I will continue to look forward to your insights and hope that you are not seriously considering a hiatus.





Goldendome (1/6/05; 22:47:58MT - usagold.com msg#: 127991)
@ Gonlyold

Interesting article you post. Someone mess to much with the water in Eastern Washington and someone may have a riot in the office! You recall a few years ago, shortly before Bushdom, that proposals were kited to breach (do away with) the four lower dams on the Snake River that empties into the Columbia River. Those dams are Lower Granite, Lower Monumental, Ice Harbor, and McNary. Well, one day there were a few thousand "mad as hell, I'm not taking it anymore" folks showed up at McNary--Washingtonians on one side Oregonians on the other, some were armed, all asserted any assault on those dams would be considered an attack on the citizens. Very quickly, the politicians in the area got the message--the issue disappeared.
These water issues on rivers are largley a Federally controlled issue; I doubt things go too far down this road before someone slaps them down.

If pressed though, this issue might be similar to the dam breaching issue. Eastern Washington has marginal rainfall--but, tremendous river resources, with the Snake and Columbia being the largest. Farming, transportation, and hydo-power, all depend on them. In Eastern Washington, the farmers support the local communities and the communities realize that without the farmers, many towns do not exist. It will be a battle royal if water restrictions are pursued. The legislature is nearly evenly split between the parties.

Gonlyold (1/6/05; 22:14:03MT - usagold.com msg#: 127990)
Got Water?
http://www.eco.freedom.org/el/20050101/buchal.shtml
Meant to include some excerpts from this article...


"If the new law is adopted, no additional water may be withdrawn from the Columbia River (or the virtually limitless areas deemed to be in hydraulic continuity with it) at all. Anyone who needs water must obtain it by extinguishing rights held by others...But, the long-term effects of the proposal go far beyond "rural cleansing."

For the enemies of Eastern Washington, it is not enough merely to cap water consumption, and thus, economic growth.

Thus, under the proposed legislation, the hapless farmer who does reach upstream to buy water rights suffers an immediate tax of 50 percent on those water rights "to benefit streamflows." "



Goldendome (1/6/05; 22:09:57MT - usagold.com msg#: 127989)
Filling the Void!
We seem to have some time to fill, as Sir Aristotle has yet to come forth from his study--and ascend the podium, in effort to futher enlighten we--the assembled masses--on Gold, one way or another.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


In this interlude while waiting...and between "refreshments" on the web-site: I have begun reading Pete Peterson's recently released book, Running on Empty (How the Democratic and Republican Parties are Bankrupting our Future and What Americans Can Do about it.)
Released in year 2004. Peterson is a former cabinet secretary under Pres. Nixon; a former chairman of the Federal Reserve Bank of New York; and has many more diverse laurels hung on his walls.

To save the money that I might need for gold, I requested this book from my local library. They did not have it at the time, but decided that since there was interest in it, they went out and bought it. Now we all can read it--locally anyway.

Obviously, very contemporary in it's information. I find Peterson's writing style easy to follow, extremely to the point, witty, and filled with interesting quotes and observations. Though early on in the book, I will share a few below:

"With faith-driven catechisms that are largely impervious to analysis or evidence, and that seem removed from any kind of serious political morality, both political parties have formed an unholy alliance--an undeclared war on the future. An undeclared war, that is, on our children. From neither party do we hear anything about sacrificing today for a better tomorrow. In some ways, our most formidable challenge may be our leaders' baffling indifference to our fiscal metastasis. As former Treasury Secretary Larry Summers put it, "the only thing we have to fear is the lack of fear itself." ...

further on:

"I've only met George W. Bush twice, before he was President, and found him charming, friendly, and straightforward. He seemed to know I was concerned about the viability of our entitlement programs and asked what I thought about the issue. I told him entitlement reform was both a philosophical and moral issue. "What do you mean by that?' he asked. I told him that I thought the philosophical issue was whether a modern, media-driven democracy that only focuses on immediate crises could respond effectively to a very different kind of threat--a silent, slow-motion, long-term crisis like entitlements. He enthusiastically agreed that America could, and that reforming Social Security would be one of his highest priorities. I believed him at the time. He himself probably believed it.

He then asked what I meant about Social Security and other entitlements being a moral issue. I took him through the official numbers on the huge payroll taxes and the huge debt that we would be passing on to our children. I told him if looking out for our children's future was a definitive test of our morality, then long-term tax cuts, particularly for us fat cats in the room, should wait until entitlement reforms had been completed. He visibly stiffened, as though hit in the gut. "I don't think tax cuts are immoral." "Governor," I said, "I didn't say long-term tax cuts were immoral. I said they were immoral until we have taken care of our long-term obligations to our children."...

further on:

"Either way, Republican or Democratic, it's astonishing how we can congratulate ourselves on our own civic virtue when we give ourselves bigger presents and send bigger bills to our kids. In today's Washington, a "courageous" politician is one who takes money from the next generation and passes it out to friends; a "selfish" politician is one who does the reverse.

Gonlyold (1/6/05; 20:56:18MT - usagold.com msg#: 127988)
Got Food and Water?
I saw an interesting picture in the Cleveland Plain Dealer newspaper this last week end. It showed a group of Indian women with out stretched arms and worried looks on their faces. apparently they were trying to get food and water in the aftermath of the tsunami. One indian woman had a gold bracelet on her arm and two pairs of gold earings. Next to her was a woman with an out stretched arm which had a simple wood(?) plastic(?) bracelet on it. Couldn't help but note how disasters equalize things and that gold is not a life sustaining commodity. Gold is valuable for sure and everyone should have some, but like Black Blade keeps bringing up, got food and water? Perhaps we should worry more about confiscation of food and water. Time will tell.

Noble1 (1/6/05; 19:56:15MT - usagold.com msg#: 127987)
@ Ari

The "'average' giants" have been in charge of the gold market for decades and we know what they have done. The "giant" gold holders are not on our side. The "raw population" is awakening to the notions that we have been discussing here for the past several years. The greater the education and participation from the "raws" the better for gold. It will take the rejection of fiat from the masses to elevate gold to it's rightful place.

As Hannibal Lector said " People(?) covet what they see". At this point, the "raw population" (people) doesn't prize having a few gold coins at home. They "see" a very liquid and familiar market in the NYSE. They "see" a way to participate in gold ownership, albeit through a custodian, in a manner in which they are accustomed. As long as the gold remains allocated and audited, that's great. As they take a position in gold, they will be more inclined to include a position in handheld physical or be willing to trade in it as they now will be more familiar with it's value. And for those that are unwilling or unable to establish a holding of physical, GLD will tie up physical for them.

Granted, physical gold in possesion provides much comfort. Consider that allocated gold in auditable storage may be the only alternative for many and it may be the next best thing.

Aristotle (1/6/05; 18:03:25MT - usagold.com msg#: 127986)
Sorry for the delay
I had a winter emergency to attend to.

Give me a moment to get this typed up.

Gold. Get you some. --- Ari

TownCrier (1/6/05; 17:13:26MT - usagold.com msg#: 127985)
Federal_Reserves,
No, you're not being technically accurate when you say that.

Technically the Fed CAN actively drain through reverse-repos. That is what is implied in your wording, but that is not what occurred. You may want to exercise more care with respect to active RR draining versus the passive "maturity" draining that you are referring to on NET. You missed my post to you the previous day regarding this distinction?

The Fed's open market operations today indeed ADDED $14 billion, without which the NET effect of maturations of previous policy operations upon banking reserves would have been $14 billion less than it was.

Please be aware that it is NET balance of past and present Fed operations that YOU are referring to, whereas MY posts are focused upon each singular day's ACTIVE operations in which I try to emphasize the context of the rate of actual actions taken in light of FOMC policy. The emerging picture is invariably one of ease.

You may wish to score a hit upon me by saying that I should further be offering the context of NET repo operations plus maturities, but I happily leave that to others as I see no benefit in it, for, in case you did not know, the Fed's repo-based contribution to the overall reserve level is but a singlar fraction amid a larger sum. And unless one commits oneself to tracking the whole, there is little to be gained from the one part you have fixated on. Hence my attempt to bring forth the above-stated focus upon context discernable within the daily operations that I announce with a degree of regularity. I can cease even that if you insist, though I would but first ask to know the agenda behind your protest.

R.

Federal_Reserves (1/6/05; 16:19:33MT - usagold.com msg#: 127984)
TOWN> Actually the FED drained 10b in
excess holiday repo's today.

Note the big decline in the repo balance.....
http://www.bullandbearwise.com/FOMOOutChart.asp



YGM (1/6/05; 16:02:03MT - usagold.com msg#: 127983)
Aristotle....Where'd you go for that Coke?
This is not news to me.....
Furthermore, people with uncommonly good sense, when they are buying Gold, do not, I repeat *NOT* turn to the New York Stock Exchange for their Gold.

I can show you as you're well aware "Private Sales" on Hundreds of Kilos of Gold, Dory Bars Refined to 99.5, Raw Gold to refine etc in the Tonnes....People don't believe it but it is true AND at present there is "NO" shortage of Physical Gold Bullion...Coins I don't know about...Not to say this couldn't change in a heartbeat....Gold is Gold is Gold if one refines it...I used to make my own Bars quite easily...Even Teddy Bear Molds w/ approx 3 oz p/Bear :-))
Some private sales obviously are scams but many take place in the Zurich Free Trade Zone under armed supervision...FWIW....YGM

Gene (1/6/05; 15:53:26MT - usagold.com msg#: 127982)
@ Aristotle
Please stop talking in riddles. Say it in plain, easy to understand English so a dumb cluck like me can get it. I want to understand what's going on.Thanks.

Buongiorno! (1/6/05; 15:49:22MT - usagold.com msg#: 127981)
confiscation


@YGM, thanks for your encouragement on my haiku poetry--glad you got a few laughs. But, I wasn't a-laughin, a-while I was a-writin'--pilgrim! (But I'm a-smiling now!)
Buongiorno!

TownCrier (1/6/05; 15:28:02MT - usagold.com msg#: 127980)
The stilts and props of an aged an infirm Bretton Woods
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh83723_2005-01-06_21-32-27_nat001277_newsml
HEADLINE: Foreign cenbanks buy yet more U.S. debt, Fed says

NEW YORK, Jan 6 (Reuters) - Foreign central banks increased their already massive holdings of U.S. Treasuries in the latest week, Federal Reserve data showed on Thursday.

The central bank said its overall holdings of Treasury and agency debt kept for overseas central banks rose by $6.832 billion to $1.347 trillion in the week ending Jan. 5.

...Custody holdings of Treasuries are up about $205 billion in the past year and in total account for over a quarter of all U.S. government debt in private hands. However, the pace of accumulation has slowed somewhat in recent months.

---(from url)---

That which internationally rankled in the 1960's, and given a public face by de Gaulle, surely still rankles today. Namely, the phenomenon of the "exorbitant privilege" to run "deficits without tears".

When changing carriages mid-route, it is necessarily best to keep the wheels on, at whatever cost, until the transition is successfully made. Only when the big picture is viewed through a political prism (with respect to the eurosystem architecture vs. Bretton Woods architecture) can reasonable sense be made of the seemingly frustrating maneuvers of the gold market.

It comes down to the buying to time. Time can be bought in many ways, and is ever cleverly done so -- the buying of time against an inevitable political stipulation: that gold is tangible whereas debt and credit are not; and further, that truly universal reserve assets require the credibility of tangibility which is not present in national sovereign pledges of delivery and bonds.

Position your portfolio today for that sociopolitical economic eventuality.

R.

TownCrier (1/6/05; 14:29:09MT - usagold.com msg#: 127979)
Fed adds $14 billion, bulk more cheaply than FOMC target
Although the open market in fed funds was showing no need of assistance, the Fed trading desk boosted bank reserve liquidity by $5 billion via overnight repos as low as 2.16 percent (averaging 2.167%) and by a further $9 billion via 14-day repurchase agreements, accepting Treasury collateral at just 2.17 percent. The FOMC target at this time is a firmer 2.25%.

When money comes too easy, choose gold.

R.

USAGOLD Daily Market Report (1/6/05; 14:19:44MT - usagold.com msg#: 127978)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has been updated.

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

Thursday market excerpts

Pressured by a recovery in the dollar ahead of this week's U.S. employment data, gold futures prices dropped Thursday, tallying a four-session loss of nearly 4 percent and closing at their lowest level since mid-October. U.S. nonfarm payrolls, due out Friday morning, "remains the main event on the horizon," said John Reade, an analyst at UBS in London.

The data has the potential to push the dollar higher, according to James Moore, an analyst at TheBullionDesk.com, and in turn, gold could drop back to lows around $418. But Peter Grandich, editor of The Grandich Letter, believes the economic data is "likely to be the watershed event to bring the correction [in gold prices] to its end."

"The number will either be less than forecasted (thereby causing a sell-off in the U.S. dollar), or can lead to a big wash-out by a further sharp drop," he said. "In either case, the end appears near."

Comex February gold closed at $421.60, down $5.70, or 1.3 percent.

The contract tallied a loss of $16.80, or 3.8 percent, for the past four sessions and ended Thursday at its lowest closing level since Oct. 18.

Looking beyond the week, "the prospect for gold is still positive with continued violence in Iraq ahead of its presidential elections at the end of the month, the G7 summit, President Bush's State of the Union address, and U.S. deficits all increasing the 'safe-haven' argument for gold," said Moore.

As of Jan. 5, the streetTRACKS gold ETF's holdings in bullion stood at 109.14 tonnes for the second straight day -- about 6 tonnes above the peak immediately after the November 18 launch, when investors were juicing gold prices to 16-year highs. [Randy's note: the ETF bullion holdings have in fact recently climbed by 17.39 tonnes since the pre-New Year's level when the price downdraft began.] COMEX gold futures peaked at $458.70 on Dec. 2.

----(see url for full news, 24-hr international newswire)----

HEADLINES

BOJ's Fukui says monitoring currency mkts closely -- Reuters - Bonds News

Atlanta Fed dollar index at 1997 low -- interactive investor

Gold futures closes near three-month low -- interactive investor

Dollar Keeps Up Its Rally Against Euro -- ABC News

Aristotle (1/6/05; 13:23:14MT - usagold.com msg#: 127977)
<Between mouthfulls> I'll start with a bite-sized insight
Your average Gold buyer/owner has uncommonly good sense.

(And by "average" I don't mean the raw population of four out of every five buyers who buy Gold, but rather I mean the weighted average of buyers; those giant few who buy the four Ounces out of every five Ounces actually bought.)

Furthermore, people with uncommonly good sense, when they are buying Gold, do not, I repeat *NOT* turn to the New York Stock Exchange for their Gold.

The wind blows, and O! how it swirls. . . . . . . .! ! !

Check your old barometers at the door.

More after a Coke.

Gold. Get you some. --- Ari

doco (1/6/05; 13:09:32MT - usagold.com msg#: 127976)
Ohio Vote Challenged
http://www.house.gov/judiciary_democrats/ohiostatusrept1505.pdf

http://www.freepress.org/departments/display/19/2005/1066

Noble1 (1/6/05; 12:59:55MT - usagold.com msg#: 127975)
@ Aristotle

Stupid Noble1-Doesn't yet get it.

How about:

1) More entities/individuals see the long term value in gold and are adding to their GLD holdings and averaging down.

2) New investors that have been waiting for a pullback are now coming on board making their initial purchase of GLD shares.

Both resulting in increased holdings at the ETF.

YGM (1/6/05; 12:53:32MT - usagold.com msg#: 127974)
Ari...OK BUB!..Lunch is over...
Time to get to work and get my mind in gear :>)) over this eff'n ETF thing....I really "would" like more understanding although my barometer post was made 'Tongue in Cheek'...No $10.00 words either, I only made gr 12...OK?
...I'll be back later on, thanks...YGM

2023 (1/6/05; 12:36:12MT - usagold.com msg#: 127973)
@Aristotle
Can you please explain your response to YGM as I would like to make sense of what is happening also. Is it as FOA said on the Trail... that the price of Au is low because Au is being purchased by 'those in the know'?

You said:
"There's a trick behind this weather pattern that I sense you're not yet seeing. Otherwise, rather than predicting higher prices, it shouldn't surprise you that physical Gold's "spot price" is now lower than it's ever been since the launch of the ETF, and that it "just so happens" that it correlates with the ETF's Gold allocation reaching its highest level. Superficially counter-intuitive, yes. Coincidence? Definitely not."

Thanks for all of your posts.

Aristotle (1/6/05; 12:02:42MT - usagold.com msg#: 127971)
YGM -- your barometer
YOU SAID:
"My POG Barometer Says Gold Soon to Trend Upward.... Yes GLD has bought another 14+ T so we know where the POG is headed...BTW...GLD is now at highest level of supposed Physical Bullion..."


There's a trick behind this weather pattern that I sense you're not yet seeing. Otherwise, rather than predicting higher prices, it shouldn't surprise you that physical Gold's "spot price" is now lower than it's ever been since the launch of the ETF, and that it "just so happens" that it correlates with the ETF's Gold allocation reaching its highest level. Superficially counter-intuitive, yes. Coincidence? Definitely not.

Belgian gets it. Townie gets it. Miner gets it. Boilermaker's very nearly got it. And you'll be getting it, too. Howzabout I track down an ellusive sandwich first, then we'll talk.

Gold. Get you some. --- Aristotle

PS. Belgian, you ain't goin nowhere, because I need you here.

2023 (1/6/05; 12:00:25MT - usagold.com msg#: 127970)
@ Druid / @ Belgian
http://www.musespace.com/musings/quotes/goethe.html
Great posts from both of you. Much appreciated on a daily basis - keep them coming.

Quote from Wolfgang van Goethe found on the web:

"There is nothing more odious than the majority; for it consists of a few powerful leaders, a certain number of accommodating scoundrels and subservient weaklings, and a mass of men who trudge after them without in the least knowing their own minds."



ge (1/6/05; 11:18:30MT - usagold.com msg#: 127969)
Doug Casey arrives at the $30,000/oz number of FOA
http://www.321gold.com/editorials/daughty/daughty010605.html
according to Mogambo Guru.

YGM (1/6/05; 09:55:43MT - usagold.com msg#: 127968)
My POG Barometer Says Gold Soon to Trend Upward....
http://streettracksgoldshares.com/us/value/gb_value_usa.php
Yes GLD has bought another 14+ T so we know where the POG is headed...BTW...GLD is now at highest level of supposed Physical Bullion....(that for me will still need to be proven as to who controls the allocation and storage)

Druid (1/6/05; 09:54:03MT - usagold.com msg#: 127967)
@Belgian

Druid: Ditto Miner's thank you.

History is replete with the concept and story of "Freegold". There was a time in our great country when you could work very hard accumulate real tangible wealth or capital and actually own it tax free. Man! Imagine that? Also, you could trade gold for something of lessor value e.g. land, machinery, home, etc to actually increase your overall wealth by acquiring real capital for future wealth generating activities which would allow you to acquire more wealth along the way.

The complete ownership of real property used to be an inherit feature of our common law legal system. You know that system that was designed around individual liberties and freedom. However, I guess the turnover (volume) rate of productivity inherit in that system wasn't fast enough to enrich the bankers of yore so to hell with that garbage and in with this new modern progressive system designed around fiat. Aaah, those were the good old days and most people haven't the foggiest about that time period or those different concepts.

Yes Sir Belgian a different system indeed. In today's new paradigm, you get up go to work and try to accumulate as many of those FRN's as you can put it in a bank and while doing so, you forage another link in your own chain. Over a long time of repeating this process all you have really done is increase the length of the chain only to fool yourself into believing you're free, can "own" something of value, and have done a good job along the way. We live in a renter's paradise and pretty much the only things you can own outright (so far) is gold and silver bullion.

I don't know, maybe this is one giant IQ test and we lab rats have found the cheese and need to just keep getting while the getting is good and see what our grade is after the test? INCREDIBLE!

Yes Sir, I'm talking about real progress here.

Belgian, there was some cool cat named Van Goethe from yesteryear who did some interesting things in his life time and came up with some pretty interesting quotes and I believe there was one about having an "original thought".

Please good Sir keep them coming.




USAGOLD / Centennial Precious Metals, Inc. (1/6/05; 09:37:59MT - usagold.com msg#: 127966)
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