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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...

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ARCHIVED DISCUSSION FROM 12/7/1999
All times are U.S. Mountain Time

View Yesterday's Discussion.

Simply Me (12/07/99; 23:06:59MDT - Msg ID:20560)
To Felix the Cat
I'm not saying it's a plot. I'm saying it's a strategic move...to be used when and if needed.
It doesn't matter who buys what....only who controls what.
Western governments use western businesses to political and economic advantage, too. I just think the Communist governments are more blatant about it.
Besides....would they tell you? And if you knew....would you tell me?
On a happier note...I love to learn other languages, what does "Xie xie" mean, please? And, is it pronounced "shee-shee" or "shy-shy"?
Thanks for answering,
simply me

TownCrier (12/07/99; 22:25:32MDT - Msg ID:20559)
The GOLDEN VIEW from The Tower
To begin, read MK's morning market report posted earlier today in case you've somehow managed to overlook it.

USAGOLD (12/07/99; 09:40:35MDT - Msg ID:20476)
"Today's Market Report: Market Shrugs Off Dutch Sale News"

It's a good one and furthers The Tower's earliest impression and assertion yesterday in response to the Dutch news that this has all the markings of the latest bottom in price with higher prices to follow. If something looks too good to be true (low price for rock solid gold), you had best act in your own interest lest you be caught on the outside looking in. We're happy to see the market so quickly correct its earlier error in selling on the Dutch news, bringing about this turn in which spot prices regained yesterday's $3.40 drop with a climb today of $7.30 to close at $283.00 in NY. In an early morning Bridge report it was reported that there was good physical interest in the overseas markets, though when the London market had a turn it was said that " trade remained thin over the session and some sources felt US players may press prices lower later Tuesday." Well, it looks like those sources had it wrong regarding U.S. action. It's amazing how a good night's sleep can help to clear a trader's thinking.

We are also happy to see one point of The Tower's speculation yesterday put to bed. We had offered to possibility that the first 100 tonnes of the Dutch gold had already been moved by the BIS. Word out of Amsterdam was that the Dutch central bank denied that it had sold any part of the 300 tonne offering, saying that it will sell the first 100 tonnes next year, with the remaining 200 tonnes to move over the next four.

Here's a news clip from which you can draw a conclusion and use to your advantage:
(Bridge News)Toronto--Dec 7--Canada's Black Hawk Mining Inc. reports that on Monday
the Town of Lynn Lake seized about 2,400 ounces of gold produced at the Keystone
Gold Mine in northern Manitoba. The town seized the gold as a result of claims
it is making over municipal taxes and Black Hawk has requested that the seized
gold be returned immediately.

TownCrier's bottom line: Governments (of ANY size) seem to have no qualms about laying claim to gold AT THE SOURCE. Keep that in mind as you weigh your investment decisions. When you buy mining stocks you're buying a share of a business (that has both feet nailed to an orebody within local, regional and national govt jurisdiction) which is subject to various rule changes as conditions may warrant. When you buy gold, you are buying a highly portable and independent liquid asset (you are buying true money). And as conditions may warrant, you have the flexibility to be creative, or at least can always vote with your feet.

As we said, spot setled up $7.30 in NY to $283.00. Let's call up FWN to see what went on at COMEX today where the February futures gained $7.20...

NY Precious Metals Review: Gold rebounds sharply from Monday loss
By Cristine Denver, Bridge News
New York--Dec 7--COMEX gold futures surged higher in late trade, more
than reversing Monday's losses as the market reassessed its initial
knee-jerk sell-off Monday on news that the Dutch plan to sell 100 tonnes
of gold next year and 300 tonnes in total over the next 5-years. Feb gold
settled up $7.2 at $285.40 per ounce, in part on the back of a late bout
of short-covering.
+
Strong physical demand out of Asia overnight set a firm tone coming
into US trade, giving the market a chance to re-evaluate the importance of
the Dutch news. Traders today said that Monday's sell-off, which saw Feb
gold settle down $3.90 at $278.20, was largely an overreaction to news
which doesn't alter the overall scheme for European central bank sales.
The European Central Bank, 13 EU central banks and the Swiss National
Bank released a statement in September to clarify their positions on their
gold reserves. The statement said that annual sales will not exceed
approximately 400 tonnes and that total sales over a period of 5 years
will not exceed 2,000 tonnes.
Switzerland has already said it will sell 1,300 tonnes, while the UK
sold 50 tonnes before the Washington agreement was announced and plans to
sell a further 365 tonnes. The Dutch central bank said the sales were in
accordance with the agreement of the European system of central banks,
which essentially means it will be filling in most of the gap left within
the ECB framework.
+
"Yesterday's move was overdone--that was a non-event that the
commercial side of the market knew was going to happen," said Merrill
Lynch director of futures research Bill O'Neill.
Also possibly factoring into Tuesday's short covering rally was some
book-squaring ahead of the end of the year, said Prudential Securities
senior vice president of investments, George Gero.
"We're coming up on the end of the year, and in a bear market people
will be buying back shorts," he said.
[Hey George...deteriorating global monetary conditions forced the IMF's hand to shoot that bear already when they turned to their gold holdings to tap into that goose for the golden eggs of liquidity. As gold goes ever higher, the officials have got themselves increasing access to dollars for as long as they hold onto their gold. Same applies to the citizens. Politically better than than raising taxes, eh? By the way, the 15 european central banks shot that same bear too, for all the world to see. Although the price initially jumped, it's fair to say that traders have yet to fully come to terms with those implications.]
+
Some weakness in the US stock market may have been a supportive
factor, but generally other financial markets didn't have much bearing on
the gold market Tuesday, several analysts said.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
Here's what those traders did with their derivatives over the past session. Open interest in the December futures declined by 190 yesterday to end at 2,534 contracts. Making their only connection to real gold, another 115 contracts got the nod for delivery today (Goldman Sachs taking 57, Deutsche Bank taking 43), bringing the total for December so far to 6,521 contracts. One contract-worth of gold was actually removed from the COMEX depositories, while enough to fill 161 of those contracts (16,107 oz) arrived today. Delivery deadline is December 31st.

Our hat is off to Chile today for achieving an economic turnaround. Chile posted a trade deficit for the year 1998 at $2.5167 billion, but estimated that this year will close with a trade surplus of $650 million. In other Chile news, Reuters reported from Santiago that the Central Bank announced their foreign reserves at the end of November stood at $14.4425 billion, down $121 million from October. By itself that isn't very interesting, but this is... The Bank attributed the decline to both a drop in deposits at the Central Bank and because of a weakening against the value of the dollar of the various foreign currencies held as reserves. That picture alone should help you see the inherent failing of the current system and the drive to return to gold as the supreme monetary benchmark.

While on the topic of national foreign exchange reserves, the European Central Bank's weekly financial statement revealed that the gold assets held by the eleven euro-member nations declined by �1 million...about 100 kilograms (approx 3,500 ounces.) As we know that the ECB is coordinating all gold liquidations by the euro-member nation central banks, we doubt that this was an ill-considered sale. As we've proposed following a previous small liquidation, we think that any of you with 1999 stamped Austrian Philharmic bullion coins may have become the final resting place for this gold if it went to feed the fine Austrian Mint. Gold assets of the ECB stand at an eye-popping �114.986 billion, and equate to nearly half of the current valuation of their paper currency reserves which stood at 236.8 billion euros as of Dec. 3rd.

The Central Bank of Russia is no slouch either when it comes to proportions. As of December 1 the CBR announced their foreign exchange reserves totaled $7.599 billion while their gold reserves "weighed in" at $3.906 billion...over half the current valuation of their paper.

The Bank of Italy threw their numbers at the press today too, announcing that their gold reserves were unchanged from the previous month at �22.5 billion, while its official reserves at the end of November totaled 43.3 billion euros, down �0.5 billion from the end of October. How do your own reserves stack up?

And finally on our list is the Bank of Latvia. We like to keep an eye on Latvia as the only nation to currently be on a de facto fixed gold standard. While it isn't touted as such, you be the judge. This tiny (but mighty) Baltic republic offers a pure gold coin with a 100 Lats face value. Any combination of bank deposts, small change, and currency notes totalling 100 Lats may be exchanged at will at banks for the near half-ounce coin. Well, they must be doing many things right...today's announcement revealed that the reserves of the central bank were up 17.5% from a year ago.

WALL STREET

The big question is how soon before the Nasdaq Composite overtakes the DOW? The Dow fell 118 points to 11,106 while the Nasdaq set a new record, climbing almost 41 points to 3,586 on its third-heaviest volume.

You might find this interesting. In giving the views of an analyst on this phenomenal market performancem TheStreet.com reported the analyst saying "that if the market 'continues to ramp higher without any sort of digestion,' the market could tumble on the first or second trade of 2000 as investors and traders sell on the news that the rollover into 2000 wasn't a disaster."
Well, that certainly is an interesting take on things...begging the all-important question, "What will the market do in the event that 2000 does unfold as a small disaster--sell even faster (in the dark)?" Strange days, these...

Declining stocks beat advancers by 2:1 on the NYSE with those reaching new lows for the year numbering 338 against only 86 touching new highs. And even though the Nasdaq Composite gained on the strength of its heavyweight, declining issues beat advancers 2,138 to 1,992 with new lows narrowing the gap on the new highs at 142 to 274.

OIL

Jan crude gave back half of yesterday's big gains ahead of the release of the latest U.S. crude inventory data, settling down 44� at $26.22. Brokers and analysts were expecting US crude stockpiles to have dropped 2.0-2.5 million barrels last week, but API date released after the market close revealed them to be down only 66,000 barrels. Tomorrow morning's Dept of Energy data will likely set the tone for the day's trading. Speaking of the Dept of Energy, U.S. Energy Secretary Bill Richardon's provided comments today that Mexico has floated the proposal to increase oil supply if a prolonged halt of Iraqi oil exports leads to much higher prices. As reproted by FWN, Richardson said, "We are in constant contact and we have contingency plans in place to try to deal with any problems in the oil market caused by the withdrawal of Iraq supply in the long term."

In case you're still coming up to speed on this, the previous 6-month phase of the oil-for-food program with Iraq sponsored by the UN expired in November and the parties have yet to come to agreeable terms on the next 6-month deal. Iraq has said it would not settle for a week by week extention, and then shut off exports entirely...reportedly to hold for a two-week period. Baghdad has indicated it's ready to accept a new 6-month phase, but seeks some improvements to the scheme.

FOREX (Psssst...<whispered> it means Foreign Exchange. You know...the currency market.)

"The US dollar edged lower across the board in an increasingly illiquid market." That was the disturbing first words from the Bridge currency market report. By design, the dollar is built for liquidity. Strike that down, and what do you have left? As the day played out, the dollar lost half a yen, falling to �102.40 in NY, while in early Europe trading a Swiss bank was said to have been a large Forex seller of the dollar/yen after Japan's Economic Planning Agency chief Taiichi Sakaiya said that a strong yen isn't necessarily bad for the economy.

Meanwhile, the euro held on to its big gains (2�) yesterday, gaining nearly a third of a cent today to close at $1.0255. This came with the news that Hong Kong will raise its euro-percentage of total reserves to 15% from the current 10%. The reason given for hiking the euro holdings was... cue the sinister pipe organ music... "to avoid possible problems with the US equity prices and current account deficit." The past propensity of international institutions to hold onto dollars has been its saving grace. As these dollars are repatriated for gold or euros or anything else, say goodbye to your purchasing power that we have all enjoyed for so long. Those who enjoyed using this purchasing power on such intangibles as stocks and bonds may find that they squandered a golden opportunity.

And that's the view from here...after the close.

Black Blade (12/07/99; 22:13:07MDT - Msg ID:20558)
Japan to Put 96,000 Soldiers on Millennium Alert
TOKYO (Reuters) - Japan, which has come under fire for not being prepared for major disasters, announced on Tuesday it would put tens of thousands of military personnel on alert at year-end to deal with possible millennium bug-related accidents About 96,000 Self-Defense Forces staff will be on alert across the country for two days from New Year's Eve to deal with possible emergencies triggered by the Year 2000 (Y2K) computer glitches, officials at the Defense Agency said. The agency also plans to put more than 100 aircraft, warships and special vehicles on standby, and deploy several chemical warfare units, the officials said. They stressed, however, that the agency was simply trying to be prepared for all contingencies associated with the millennium computer problem and was not going on the alert to cope with any possible military attacks. Prime Minister Keizo Obuchi recently made a nationwide television appeal for people not to worry about the millennium bug, but he will still be on hand on New Year's Eve in case a crisis breaks out. Obuchi plans to spend New Year's Eve at the prime minister's official residence in central Tokyo with some other ministers as a precaution in case of any major disruptions.
In October the government advised the public to stockpile several days' worth of food and water as a precaution, even though it said Japan was well prepared for the so-called Y2K bug. Japanese cabinets have come under heavy fire in the past for their sluggish responses to crises such as the massive Kobe earthquake in 1995 and most recently, the nation's worst nuclear accident at a uranium processing plant last September. Obuchi, whose popularity has tumbled lately due in part to ruling coalition squabbles, is keen to look ready for anything when the clock strikes midnight and the new millennium begins.
The millennium bug, or Year 2000 (Y2K) problem, could make some computers read the year 2000 as 1900, causing them to produce incorrect data or shut down. That has raised concerns over the potential for serious problems with transportation, power, communication, banking and other systems which are highly reliant on computer technology. The United States and Russia, meanwhile, are planning for defense specialists to sit together at a Colorado command center over the New Year to monitor the effect of Y2K on nuclear forces and prevent each from thinking the other has launched a strike.

BTW, My bank (that I have dealt with many years), asked that its customers have a recent statement and identification in order to conduct business on Jan. 3, 2000. Hmmmmm��

Black Blade (Toshin Kuro Kosai)

Scrappy (12/07/99; 22:09:38MDT - Msg ID:20557)
Sweet Golden Dreams to All!
YGM.
Thanks for the many contributions today-you've been busy!

Hey, Solomon! Good to see you! Beautiful thought about golden works of art. Throughout history, gold has been a medium for so many beautiful pieces, that have lasted for centuries. What's up with our modern day artists?

Farfel, please, please, eat a pound of chocolate for breakfast tomorrow! You need to do something about your stress level! (Or, fall asleep in the lotus position. Or, take control in the lucid dream state, and slay paper dragons all night. Or, doze off clutching your gold coins, or slip them under your pillow. You'll be better tomorrow)

Chris Powell (12/07/99; 22:06:13MDT - Msg ID:20556)
Link to text of GATA ad in Roll Call
http://www.egroups.com/group/gata/309.html?
Please send the link or the text
to your friends and ask your
congressmen to try to get answers
to the questions raised in the ad.

skeptic (12/07/99; 21:53:59MDT - Msg ID:20555)
9780 homestake gold options today
I'm interested to see if anyone knows who/what/when/why somebody traded almost 10,000 jan 10 calls on homestake today at 1.50. that is way above the average, and a 15 million dollar stake. the last time somebody dumped this much on homestake calls, gold shot up. any insight appreciated!
holding physical, mining shares and options for the gamble.

Solomon Weaver (12/07/99; 21:51:57MDT - Msg ID:20554)
Canuck about my handle
My handle is the name of the man who built my house in the 1840s.

The house still stands and is grand....most of the other things he created have burned or faded.

Sometimes I think of him paying about 500 gold coins to have the house built...about the same amount of $$$$ I had to borrow to "take possession"...but with a few more modern ammenities.

Thank you for the compliment...wisdom is a shared phenomena.

So, really I am not Solomon, I am not so old and not so poor...but certainly have room to grow wiser.

God Bless you and your family businesses....one fad you may think of is to stock some 5 gallon gas cans for a christmas gift to regular costomers...seems y2k is causing people to take physical delivery on gasoline.

As always...Poor old Solomon

Canuck (12/07/99; 21:41:52MDT - Msg ID:20553)
Solomon
I hope you replace your signature to:

"Wise old Solomon"

YGM (12/07/99; 21:37:58MDT - Msg ID:20552)
Background for the GATA Letter
Roll Call Magazine---58,000 Washington Insiders Will Read "The Letter"

Begin our advertising and awareness campaign with an open letter to Federal Reserve Bank Chairman, Alan Greenspan, and Treasury Secretary, Lawrence Summers.

I called all my staff director contacts in the Congress of the United States and told them what all of us wanted to accomplish and asked their advice of the best way to proceed. The answer was universal. "If you want to influence policy or make an impact on the politicos in Washington, place your FIRST add in ROLL CALL.

Here is why:

A 1998 Pew Research Center survey provides independent data that Members of Congress look to roll call more regularly for their news than to any other media source - surpassing every other print, television and radio news outlet. Survey after survey demonstrates that Roll call is the clear choice among Congressional decision-makers.

69% of the members of Congress regularly read Roll Call. According to House Minority Leader,Richard Gebhardt, "Roll Call is a critical and indispensable tool for deciphering the day-to-day maneuverings of Capital Hill. Roll Call has its finger on the pulse of Congress.

According to a Dec. 1 1996 survey, Roll Call was proved to be the top Congressional publication for Opinion Leaders involved with issues such as Energy, Telecommunications, Banking/Finance, Education, etc.

86% of the Roll Call readership read 3 out of every 4 issues. 44% of Roll Call readers are involved in banking in some way.

Roll Call's readership reaches 58,000 of Washington's most powerful insiders and is hand delivered to each office in the House and Senate. A White House courier is always sent to retrieve 400 copies for top administration officials. In addition to the politicos, corporate public affairs, lobbying firms, trade associations and members of the media are among Roll Call's 5,000 paid subscribers.

Our CENTER SPREAD and open letter to Alan Greenspan and Lawrence Summers will appear in this Thursday morning's Roll Call issue. The final copy of the add will be sent out on Wednesday to the gold websites and to the gold internet world. GATA will not ask for support for itself, but we will ask all those interested in a free trading gold market to support our request for gold market transparency and that The U. S. Federal Reserve and the U.S. Treasury answer the questions we have posed to them. We also would like all gold market followers to ask that there be a long overdue independent audit of the gold in Fort Knox.

In our correspondence to the internet on Wednesday, GATA will provide web site addresses that provide the email addresses of the Congressman and Senators of the United States. We will ask the gold camp to email their appropriate Congressmen and Senators. We should have enough of a constituency to reach all the Congressman and Senators many times over.

Here are the websites:

Congress e-mail directory:

http://www.webslingerz.com/jhoffman/congress-email.html

Senate:

http://www.earthlaw.org/Activist/senatadd.htm

Or - a web site where people can go to find the addresses and phones for their congressmen, just by typing in a zip code:

http://www.vote-smart.org

The reason for the Wednesday alert is to start a buzz going in Washington about what is coming on Thursday and to give our crowd some time to email the appropriate Congressional staffs in Washington so we make sure that our open letter to Alan Greenspan and Lawrence Summers is brought to their attention.

Now is the perfect time to make our move. Congress is not in session, therefore we can get the attention of the staffs and many others in Washington because they will not be preoccupied with pressing issues. I know this to be true as a result of my own communications with Congress this past year. My contacts in Congress also assured me that Roll Call is forwarded on to the Senators and Congressmen at their homes, so we will not lose much by them not being in Washington.

There is a big story here. We hope that the mainstream media will finally pick up on that and start doing some serious questioning on their own. This campaign is only one step towards our efforts to ending the manipulation of the gold market. With your help we can eventually win the day.

Al Fulchino (12/07/99; 21:35:16MDT - Msg ID:20551)
Solomon
More thoughts on Yahoo and the upwardly mobile tech stocks that are not yet making money. I liken them to the beanie baby and pokemon craze. My wife owns a Kinkade Gallery and gift store. We never carry the fads, we leave them to others. Why? Well not because we wouldn't make money. It is for the same reason we do not smoke or drink excessively :) it doesn't sit well with us. I have relatives that teach their children that owning a beanie baby can someday be valuable. While we stay out of that arena, many make money and maybe some people I know will sell a collectible at a profit. Good luck I say. And to those who are making a killig on these stocks, I also say best of luck. Make lots of money so you can buy gasloine from me and paintings from my wife. I make around ten percent on my gas and she is in the keystone area. I just can't look at a beanie baby and be proud that I own it. As far as the high flying stocks go, I would consider money invested in them at this time to be a gamble. I do not even play lottery tickets. Are there good stocks to own? Sure there are. I don't know if I added anything to what you wrote, but I enjoyed kibbutzing with you.

Canuck (12/07/99; 21:34:46MDT - Msg ID:20550)
Peter A.
"Re-writing code to drive pumps and refinery equipment is probably a tiny fraction of the code quantity in the Social security memory bank."

From a computer logical sense perhaps, but on a number of systems plus the variant of time plus the variant of resources etc.

Some of the oil producing countries represent not the heartbeat of technology nor financial clout.

If the US is (and I emphasize if) having troubles within its
government ranks what can one procur from 'broke' states?

Being that computer systems are merely logical, is it safe to assume that highly resourced countries are less apt to fail than poor ones?

Is this the dividing line; Russia will 'blow up' because they don't have the means to make the repairs. The USA is cool because they have the bucks? Japan is in trouble, from what I've been lead to believe, not because of know-how, but because of resources; Italy?, Iraq?, China? Venezuala?

Y2K??

ORO (12/07/99; 21:29:03MDT - Msg ID:20549)
EU Army?
http://www.latimes.com/news/nation/updates/lat_eurarmy991206.htm
From the Article:
At their Helsinki summit, European leaders also are expected to approve the establishment of standing political and military committees at the EU's Brussels headquarters, as well as a military staff to provide assistance in planning and strategy.
Such mechanisms would mark a watershed for an organization that was launched in 1958 as a borderless market for commerce but is now trying to forge and implement common foreign and security policies.

.
"We welcome this as long as it is understood that this is done within the context of having a European capability that will strengthen NATO itself," Defense Secretary William S. Cohen said after meeting his European counterparts in Brussels on Thursday. "We would not want to see the development of a separate capability which is not compatible with the NATO capability."

But enough wild cards remain in the Europeans' plan to give U.S. officials concerns.
EU officials acknowledge that their planned civilian and military bodies would duplicate those of NATO. In fact, they would constitute a carbon copy of how the Western alliance operates.
The interface between the European Union and NATO, both based in Brussels, also has to be worked out.

France, for one, has refused any subordination of the EU, where Washington has no voice, to the 19-nation Atlantic alliance, where the United States dominates. A decision has not yet been made on whether the European force would be commanded by its own headquarters or by the European deputy to NATO's supreme commander in Europe, who is a U.S. general.

YGM (12/07/99; 21:19:33MDT - Msg ID:20548)
From "Robert Service"
The Yukon Gold Rush Poet & Balladeer
SECURITY....

Young man gather Gold and gear,
They will wear you well;
You can thumb your nose at fear,
Wish the horde in hell.
With the haughty you can be
Insolent and bold:
Young man if you would be free,
Gather gear and Gold.

Mellow man of middle age,
Buy a little farm;
Then let the revolution rage,
You will take no harm.
Cold and hunger, hand in hand,
May red ruin spread;
With your little bit of land
You'll be warm and fed.

Old man, seek the smiling sun,
Wall yourself away;
Dream aloof from everyone
In a garden gay.
Let no grieving mar your mood,
Have no truck with tears;
Greet each day with gratitude-
Glean a hundred years.

Solomon Weaver (12/07/99; 21:19:18MDT - Msg ID:20547)
To Al Fulchino with thoughts of Yahoo to boot.
What I might also add to the conviction of owning gold!!!

When you buy a few ounces of gold today...you are getting it at a price which is almost the cost of production (at least for some mining companies). If the gold market were anywhere near as volatile as Yahoo stock, there would be major collapses of banks and hedge funds....

I own a little bit of Newmont Mining...when I bought they were not hedged and said they never would...well, they got a little bit burned...but not too bad. Newmont produces about 4 million ounces of gold each year....so about $1.2 billion. Yahoo, on the other hand can issue a few $billion worth of new shares to "purchase" a "small" company and the world cheers as they build a dynasty...even large companies are allowed to create fractional reserve shares.

Al Fulchino (12/07/99; 21:11:40MDT - Msg ID:20546)
YGM just saw this..others may like
Date: Tue Dec 07 1999 22:45
Selby (Hi Guys. Had to post this) ID#286230:
Copyright � 1999 Selby/Kitco Inc. All rights reserved
For all the Y2K panickers --guess what?? you're in agreement with the liberal Gov of the Great White North.

December 7, 1999

Sweeping Y2K powers

Feds make secret plans for a crisis

By MARK DUNN -- Ottawa Bureau

OTTAWA -- Prime Minister Jean Chretien's
government will be on full Y2K alert New
Year's Eve and ready to invoke an updated
War Measures Act if needed, sources have
told The Toronto Sun.

The new law gives cabinet sweeping powers
to issue whatever orders or regulations it
believes are necessary to deal with
emergencies such as major power outages
caused by computer glitches or civil
insurrections, major riots and prison revolts.

Depending on the emergency -- such as a
nuclear accident -- manpower, vehicles,
equipment, food and clothing could be
mobilized.

People can be arrested, including those who
hoard supplies. It can also restrict travel.
Failure to comply could lead to fines and
prison terms of up to five years.

Chretien has ordered eight key cabinet
ministers to be in Ottawa at midnight Dec. 31
to handle any crisis that could hit.

Cabinet has the power to invoke the
Emergencies Act, which was passed in 1988
to replace the War Measures Act -- used by
Pierre Trudeau in 1970 to quell the FLQ
terrorist crisis.

"They can't arrest you just for something they
think you've done, but they can arrest you for
not obeying the ( emergency ) regulations
they've made," a government insider said.

Senior officials say Canada is nearly fully
compliant to respond to Y2K problems.

They are even more reluctant to discuss the
potential for terrorist threats, mass suicides
and crackpots looking to enter the afterlife in a
blaze of glory.

"We don't respond to hypothetical situations,"
said Valerie de Montigny of the Privy Council
Office.

Gov. Gen. Adrienne Clarkson has
responsibility for invoking the act -- which
sets in motion a chain of events, including the
recall of Parliament.

At least 10 MPs and 15 senators would have
to be in attendance to approve the emergency
law. Four key ministers -- Treasury Board's
Lucienne Robillard, Foreign Affairs Minister
Lloyd Axworthy, Industry's John Manley and
Defence Minister Art Eggleton -- will run the
show. Others in town that night will include
Transport's David Collenette, Health Minister
Allan Rock, Natural Resources Minister Ralph
Goodale and Justice Minister Anne McLellan.

Public Works Minister Alfonso Gagliano will
be in Montreal Dec. 31, but has been told to be
on standby to return to Parliament.

Sources say senators were alerted and
besides the 10 or so in the Ottawa area, others
in Toronto and Montreal have been warned to
be prepared to go to Ottawa.

Guy McKenzie, spokesman for a federal
group responsible for millennium contingency
planning, was reluctant to discuss doomsday
scenarios. "We don't have anything to make us
believe that we need to work through
scenarios at this point. We have ministers in
town to basically craft decisions if needed
because they are the ultimate decision-making
power."

Return to Kitco Homepage
--------------------------------------------------------------------------------

Solomon Weaver (12/07/99; 21:06:42MDT - Msg ID:20545)
Right on Canuck!!
Speculation is really not a dirty word....nor is it a bad habit.

The difference between an investor and a speculator is that the speculator understands the value of a loss and the sweet taste of a gain.

Poor old Solomon

Canuck (12/07/99; 20:59:46MDT - Msg ID:20544)
Solomon Weaver
"Anything more than 10% is speculation. Why do I say this in the face of the recent banter over speculation vs. investment??? Investments are made in something which one uses...like a home, some land, or a wife and children (not that I imply we "use" our families). Whenever we place our money into a "value holder" for asset protection or asset value growth, we are in essence making a speculation. A coin collector who buys gold coins (instead of copper coins) may love collecting, and may plan to own the coins for a long time, but he is still speculating that those coins could be inherited by his grandchildren and be valuable."

Had to cut and paste your 'definition' of investment and speculation; it is indeed parallel to mine.

I will 'invest' some time, go back to school and learn the circles of economics. Afterwhich, given the precarious state
of global fiat systems, I will 'speculate' that gold will rise whilst currencies will fall. To this end, I will become stinking rich. Have a nice day.

Al Fulchino (12/07/99; 20:59:43MDT - Msg ID:20543)
Up and Down. The POG? No your emotions!
Why did you buy gold? Who is pressuring you for upward results in the metals? Your wife, husband, peers? Do you worry that your children think you have lost it? If, so sell it now if you are not relaxed in your purchase. For if things get bad enough for rises such as FOA sees, then you are better off with some good real estate, food and other day to day items. Take the pressure off of yourself. You are not ready. And you need to look inward as to why. Yes you may miss out on a price rise, but at least you will have your sanity. If your emotions go up and down based on an inanimate objects comings and goings then your emotions are not your own. They belong to those who influence you. All of us need to see that. When you are not emotional and can see clearly why you should or should not own anything you should stay away from it until you are self motivated to do so.

Now if you can see what I just tried to explain you are blessed. And as with most lay people who do have common sense you can see that in times of uncertainty, it is wise to be prepared. That should simply be enough. And come hell or highwater you will be able to withstand any peer pressure. And if you feel that way...buy some PM's and don't look back. And if it is going nowhere fast as Farfel feels then what have you lost? Maybe some money. Heck you *lose* money to the insurance companies everytime your house doesn't burn or you don't get into an accident with your car, if that is how you look at it. Do you regret not owning insurance policies? Of course not. And if anyone puts pressure on you to not protect yourself then they are not your friends. Simple as that.

Cavan Man (12/07/99; 20:58:01MDT - Msg ID:20542)
Farfel
For such a witty, charismatic guy, you're much too cynical. What's your secret (and don't say Yale)?

YGM (12/07/99; 20:48:30MDT - Msg ID:20541)
GATAs' First Strike
It's More Than The Whiners are Accomplishing.......

AN OPEN LETTER TO
ALAN GREENSPAN
Chairman, Federal Reserve System
AND
LAWRENCE SUMMERS
Secretary of the Treasury

What Are You Doing With America's Gold?

Dear Chairman Greenspan and Secretary Summers:

On July 24, 1998, before the House Banking Committee, and six days later before the Senate Agricultural Committee, Chairman Greenspan made the following statement: "Central banks stand ready to lease gold in increasing quantities should the price rise."

Ever since that comment was made, there has been a growing controversy about whether the Federal Reserve and the Treasury Department have been actively involved in the gold market. There has been speculation that the U.S. government, through your agencies, has been seeking to lower the gold price to rescue certain financial interests, much as the Fed orchestrated the rescue of Long-Term Capital Management last year. Aggressive bullion dealers, hedge funds doing the gold "carry trade," and unwise price speculation disguised as hedging by gold mining companies are most frequently cited as the beneficiaries of this government intervention in the gold price. As with LTCM, there is concern about severe risk to the world financial system, this time because of irresponsible gold lending policies of central banks.

The gold controversy reached the floor of the British Parliament last June 16, after the Bank of England announced plans to sell 415 tons of its gold:

"We cannot allow these rumors to grow, because they are extremely dangerous to public confidence. It has been suggested that the market is very short of gold, that the short positions may be a substantial multiple of the total amount of gold currently held by the Bank of England, and that the bank's real motive is to save the bacon of firms that are running those short positions. If such a suggestion is being made seriously, it must be dealt with authoritatively and definitively, and we want an answer from the government now. � Quentin Davies, Member of Parliament"

The Bank of England's announcement collapsed the price of gold from $290 to $252 per ounce. But when, on September 26, fifteen European central banks announced that they would restrict their gold sales and gold lending for the next five years, the gold price soared to $337. Word spread that the bullion banks were panicking again.

As if right on cue but in uncharacteristic fashion, the government of Kuwait then announced it was depositing its 79 tons of gold with the Bank of England for lending purposes. There was speculation that the New York Federal Reserve Bank was using all means at its disposal to push the gold price down to accommodate the financial interests that were short gold.

The Question Demands An Answer: Is the government of the United States intervening in the gold market and, if so, why? Chairman Greenspan, we will take you at your own word that you are intervening in the gold market as you said you would if the price rose.

The Federal Reserve Bank's Open Market Committee may have the authority to deal in gold coin and bullion, but all purchases and sales, according to 12 USC 263-359, "shall be governed with a view to accommodating commerce and business."

If, rather, the Federal Reserve Bank or the Treasury Department is depressing the gold price in order to help various and numerous gold short sellers, it is a clear and illegal violation of the bank's purpose clause. The government's intervening to help one side over another in a private contract is illegal, fraudulent and unconstitutional. For the U.S. central bank to use its powers to benefit one class of citizens to the harm of another class of Americans is a gross violation of the Constitution's equal protection clause.

If the Federal Reserve intervened in the gold market after the October price rise as you said you were prepared to do, it was not to accommodate commerce and business, but to accommodate one half of the parties to a private contract who had shorted gold. The other half of the parties to this same contract who bought gold were cheated and deprived of a fair market price, denied the equal protection of the law and cheated of profit potential. It would be an illegal and fraudulent act that was perpetrated by bankers who are unelected bureaucrats reigning like tyrants without legal or political supervision.

The manipulation of the gold market has caused irreparable harm to gold owners, gold companies and gold miners as well as all Americans. It destroyed a free market, depressed the fair value for an important financial asset, distorted the value of gold companies on the New York and American Stock Exchanges and decreased the value of its own and America's gold assets. The Fed's price fixing action should be investigated by the Securities and Exchange Commission and the Commodity Futures Trading Commission. Indeed, the SEC should be concerned that both the gold market and the stock market generally may be constantly manipulated now by surreptitious government intervention. Whatever the policy and practices of the Fed and the Treasury Department are in these respects, this is a matter of the most profound public policy and it should be a matter of public record.

TO CLEAR UP THIS MATTER, THE GOLD ANTI-TRUST ACTION COMMITTEE WANTS THE ANSWERS TO THE FOLLOWING QUESTIONS:

1. Does the Federal Reserve or the Treasury Department, either on their own behalf or on behalf of others, including other government agencies, such as the Exchange Stabilization Fund, lend gold or silver, facilitate the lending of gold and silver, or trade in any securities, such as futures contracts and call and put options, involving gold and silver?

2. If the Fed or the Treasury Department do lend these precious metals, do they do so only on a swap or repurchase arrangement basis, or do they also lend unsecured?

3. What are the credit criteria that a potential borrower needs to establish with the Fed or the Treasury?

4. What credit limits are applied to borrowers? How do they vary between secured/swap lending and unsecured lending?

5. How often are counterparty positions marked to market in these transactions?

6. What happens if market price movements cause the credit limits to be exceeded?

7. Does the Fed or the Treasury have any counterparty credit utilizations in excess of 90 percent of the limit?

8. Have any precious metal-related credit limits been amended other than in credit limit reviews in the normal course of business?

9. Do the Fed or the Treasury Department or any other government agency ever own or deal in derivatives that are connected with precious metals? Do any of these agencies write call options against the Treasury's or Federal Reserve's gold holdings, or write naked call options?

10. Do the above-mentioned credit limits and mark-to-market provisions apply to derivatives as well?

11. Have the Fed, the Treasury, or any other government agency, either directly or through their management of foreign custody accounts, collaborated with the Bank for International Settlements, the Bank of England, or any other central bank with a view to managing, smoothing, or otherwise affecting the market price of gold?

There is also great concern that U.S. gold reserves have been lent or sold. Those gold reserves are a great national financial asset, yet they have not been audited officially since the Eisenhower Administration. So in addition to answering the above questions, we ask you to arrange an independent audit so that the country may be assured that its gold remains in public hands.

Bill Murphy
CHAIRMAN
LePatron@LeMetropoleCafe.com

Chris Powell
SECRETARY/TREASURER
GATAComm@aol.com

Ethan B. Stroud
Attorney at law, formerly Justice
Department, Treasury Department

John R. Feather
Attorney at law, formerly legal staff,
Federal Reserve Bank

GOLD ANTI-TRUST ACTION COMMITTEE, INC.
Suite 1203, 4718 Cole Avenue,
Dallas, Texas 75205
www.gata.org

Solomon Weaver (12/07/99; 20:48:06MDT - Msg ID:20540)
A funny place to meet a fellow eastern philosopher
Hey Mr. G

Methinks you and I thinks much alike...what about the 8-fold path to gold enlightenment???

Between 10% and 100% is an individual choice...I just think that the first 10% is a core holding...the rest is play money. A pearl of great price, sold today, is as if cast before swine. Since it is getting into the wee hours of the night, I can dare to post a little dream of mine...to a fellow philosopher...

RETURN TO THE GLORY OF GOLD IN ART (by Mr. Solomon Weaver)

One other suggestion which I might add. Massive physical amounts of gold are locked underground. If digital currency, backed 100% by silver and gold is the way of the future, this still means large stores of gold and silver sitting somewhere. We should consider having the nations of the world bring their gold and silver up out of the vaults and use it to create beautiful massive sculptures, each weighing in at a couple tons. These could be life sized replicas of Michelangelo's beautiful marble sculptures (for example), as well as brand new art (for example some Pokeman statues). We could have massive golden geometrics displayed in the center of those fountains we have in shopping malls. If ATT wants to impress the world with their balance sheet (which in a gold and silver based world corresponds to hundreds or thousands of tons of gold) why not have them display 2 or 3 dozen beautiful sculptures weighing several tons each in a grand lobby at a corporate headquarters? Obviously, these sculptures would have to be guarded in some way, but being so massive, and placed primarily in public places with video cameras and motion detectors should prevent them from being stolen. Imagine landing at JFK airport and in the lobby of the customs hall there is a massive replica of the statue of liberty weighing in at 80 tons. How much more would you trust the ability of America to pay? (Unless you knew that title to the statue was now held in Japan but the physical location stayed in America to prevent international embarrassment).

Gold is meant to be beautiful. Gold is meant to remind the alchemist in us that there is an eternal aspect to each of us, a spirit that soars and dances. As humanity joins in large collective efforts to create a mega-economy and a global village, is it not proper that the best of our artists and the richest of our nations transform gold back to where she belongs�free her from the dark dungeons where she sits with numbers blazened onto her breasts�? Bring her out into the sunlight, back unto the eyes of the creatures who refined her, where she may once again awaken awe and inspiration.

Cavan Man (12/07/99; 20:47:57MDT - Msg ID:20539)
EU Military Plans
Sorry for the bad link--from today's edition(iht.com) I believe if antyone interested.

Peter Asher (12/07/99; 20:46:41MDT - Msg ID:20538)
Farfel (12/07/99; 19:54:46MDT - Msg ID:20529) 倒
>>>>To claim otherwise is to act as a blind man. <<<<

Justice is a blind lady, but she holds a balance scale that works without her seeing it.

Ultimately, this bubble market will be balanced by the final reckoning of the something for nothing equation. When all the available wealth is transferred from the producers to the gleaners, the teeter totter will reverse. This see-saw is so high on one side, the other side might just step off! -- Remember that one???

Re- #20498 � Some clever writing there, I even got a good laugh over some of it. But, I'd prefer that kind of language at a stag gathering, not on this illustrious Forum. Please see Leigh about a bar of soap to wash your mouth out with.

Cavan Man (12/07/99; 20:42:29MDT - Msg ID:20537)
EU Military Plans
http://www.iht.com/TODAY/TUE/IN/eu.2.html
From the International Herald Tribune.

Peter Asher (12/07/99; 20:26:00MDT - Msg ID:20536)
Canuck
Re-writing code to drive pumps and refinery equipment is probably a tiny fraction of the code quantity in the Social security memory bank.

FOA (12/07/99; 20:24:19MDT - Msg ID:20535)
Reply
Bill (12/7/99; 0:04:55MDT - Msg ID:20460)
Question to FOA and/or ANYONE ELSE
QUESTION TO FOA and/or ANYONE ELSE

----------------Hannibals have managed to press the POG down to nearly what it was before the announcement. By now, anyone in his right mind has to know the POG is manipulated. The natural price pressure would seem to be up. -----------

Bill, the problem begins because you (and most everyone else) associate the price pressures on the supply and demand of physical with price pressures on the supply and demand of (comex) futures. For discussion we will leave out all the other paper gold items.
Today, we look to the last contract traded to tell us what the price of gold is sold for. Even though the demand / supply for physical may indicate "up", the demand / supply of comex paper can be altered to force the last trade "down". Truly, if most of the players don't take delivery, and I have an unlimited fractional reserve bank account, I can print contract supply well over demand. As this natural demand / supply function works it's magic, the price falls until discouraged longs fall away.
So, the natural price we refer to must be clearly understood.

------The ability to force the POG down much further doesn't seem likely. -----------

It all depends on how much cash reserves I have to create long or short contract positions. I, as a market mover am in control as long as the other market for physical can be satisfied with metal at the paper gold settlement price. Too date, this is something the system has been able to do in spite of the supply deficit.

---------Any call options that were sold before Sep could be bought back now cheaper. If you were part of this manipulation. Would you not now liquidate your upside risk and reverse your position???? (now collecting profits on the way up). ------------------

Bill, the question here is our perception of risk. For the past many years, I (as the manipulator) have contained all risk thru price direction. I don't liquidate because the other side does not want gold, they only want to hedge against price. As long as I direct price through my paper supply, you hold the risk and must fold first. I don't reverse position because I hold this franchise as long as I
can direct prices in a "political direction". To date that has been down.

-------Unless the huge short positions have already been covered and from the constant manipulation, that doesn't seem likely. It would seem that a huge short covering rally could be gained as players don't want to be caught in the same position as Oct.------

Yes, the game has changed from the Washington Agreement. But, this short position constitutes the paper marketplace as we know it. As long as it remains, the gold market does "price discovery" through the paper auction method. Cover the position through offsetting cash (or gold) settlements
and the entire marketplace is destroyed from equety reserve loses to the members. Then we revert back to a physical only arena. In other words. No body is going to cover anything because it's like shooting yourself. Therefore, this system will have to be destroyed from a competing physical arena
that conflicts in price settlement. In other words, physical priced higher than futures. Get my drift?

Thanks FOA

Be back tomorrow.

Peter Asher (12/07/99; 20:22:18MDT - Msg ID:20534)
Mr. G #20525
Those retiement finds are worth whatever stock bids are out there the day the investors cash them in.

It's that simple

Mr Gresham (12/07/99; 20:22:10MDT - Msg ID:20533)
Mssr. Weaver
I'm sure we're well on the road to the "Four Noble Truths" of gold investing somewhere between us, but I'm gonna have to read you a few more times, I guess. For now, all I'm getting is Sunyata "Emptiness" -- I guess there's a little Nagarjuna in each of us.

When I asked myself that question -- about 10%, or 100%, or just where in between -- I couldn't come up with a logical answer. Just some old phrase from somewhere about a "pearl of great price." Anyone catch me that one for my ailing memory?

Solomon Weaver (12/07/99; 20:09:29MDT - Msg ID:20532)
Three deeper fundamentals for Monseur Gresham
Buddah, who may be considered one of the greatest psychologists of all time and all men (he founded a school of deep psychology which was the basis of a religion and the teachings of which have lasted 2500 years) had also discovered 3 fundamentals of human nature...or rather human mind.

1. No state of mind can be held constant.
2. The most natural state of the HUMAN mind is dissatisfaction (unsatisfactoriness). (as contrasted to the enlightend mind)
3. The individual SELF, which the mind believes in, is an illusion - a "self" deception - a hall of mirrors.

We disagree with all three fundamentals, and therefore we suffer. We are tormented in our minds.

All passion creates an equal amount of pain (upon the loss of the object or state of passion).

But on to Mr.G's 3 lesser Influences....

FUNDAMENTALS: Great Bane of American Business is Stock Options...When executives of companies begin to behave like venture capitalists...meaning the have an exit strategy.

PSYCHOLOGY: When the Government realizes that it is not taxes on brokers commissions that will balance the budget but rather taxes on capital gains made by the average Joe...and why not liberalize the capital gains laws on home ownership...to free up profits which will flow into the markets where people are less afraid of capital gains...see, capital gains on a home is equity...capital gains in the market can be made even if shareholder equity is falling.

MONETARY CLIMATE: The FED allowed the creation of over $700 billion of new money last year. No wonder so many people feel richer.

In normal times, having about 10% of your net worth in physical gold would be considered good advice....because in very rough times, it gives you something to start over with.

Anything more than 10% is speculation. Why do I say this in the face of the recent banter over speculation vs. investment??? Investments are made in something which one uses...like a home, some land, or a wife and children (not that I imply we "use" our families). Whenever we place our money into a "value holder" for asset protection or asset value growth, we are in essence making a speculation. A coin collector who buys gold coins (instead of copper coins) may love collecting, and may plan to own the coins for a long time, but he is still speculating that those coins could be inherited by his grandchildren and be valuable.

The take home message is that at some point above the 10% of net worth level, one should remember to allow oneself to divest some gold to buy another depressed asset like stocks.

Canuck (12/07/99; 20:05:13MDT - Msg ID:20531)
YGM
The one that interests/worries me.
20. If Venezuela, one of our nation's chief suppliers of imported oil, was 100% non-compliant in March, how can it be 100% Y2K-compliant today? How did this small nation apparently accomplish in ten months what has taken the Social Security Administration ten years to achieve? What will happen to our economy if Venezuela cannot export oil for thirty days?

Scrappy (12/07/99; 19:55:38MDT - Msg ID:20530)
"Gold and Black Gold as per Harry Schultz"
http://www.gold-eagle.com/gold_digest_99/schultz120899.html
More read. If I may say so, Mr. Schultz sounds like he could use a little chocolate.

Farfel (12/07/99; 19:54:46MDT - Msg ID:20529)
FOA, interesting thesis but....NOT!
Your ideas are no more than a castle in the air.

Now, if you want a little reality, here it is:

Gold -- nothing more than a deadcat bounce today, it will continue to drop for the rest of the month as Clinton government will pull out all stops to propagandize it into the toilet...and fearful wimpy gold investors will run for their mommies' skirts every time a bullion bank yells "BOO!"
No change in goldbug psychology, they are hopeless. The gold producers are all graduates of the Forest Gump Center for Deficient Smarts.

Stocks -- Up, up, up and away. Clear sailing to 13,000 into 00. The mania is in full force with not a sign of easing up and every piece of BS spouted by Wall Street gurus is as revered as the Holy Scriptures. To claim otherwise is to act as a blind man.

Forget what the technicians tell you, forget the fundamentals, just go visit an asylum and you will learn the basis of today's markets. The trends will not reverse this year and that's as certain as the sun setting in the West. It's the dominant insane mass psychology of America. Get used to it.

There is a New Paradigm after all, God Help America.

Thanks

F*

Canuck (12/07/99; 19:48:18MDT - Msg ID:20528)
Farfel
Why do you keep refering to Northern Ontario? What is your
reoccuring slander related to?

Barrick, Placer and Kinross, if I understand correctly, are all heavily forwarded and/or hedged. You have dismissed Barrick not to be "ass-for-brains" stupid and therefore Placer so who are you so pissed about? The rest of Northern Ontario, in terms of gold, amounts to a hill of beans (outside of Barrick, Placer and Kinross) so why don't you tell me about it or alternatively , 'cash in'
your posting priviledges.

FOA (12/07/99; 19:34:40MDT - Msg ID:20527)
Comment
PH, ORO, ALL:

A day hike off the main trail:

When I read the posts of Farfel, to me they represent the honest feelings of many gold bugs. Many of whom are caught up in a trading environment that is not playing out to match it's past format. But why did so many investors fully expect it to "play it again, sam"? It starts in the mind.

I think much of the frustration comes from accepting the "Western view" of gold values, in that "it can't rise in price that much"! Everywhere we turn conservative people consider the return of price inflation, oil shocks, economic slowdown and money security as evidence of needs to "hedge
their bets". Yet, of the many who use gold as this hedge, probably 99% hold the view that gold will only rise into the $500 to $600+ range, at best. This acceptance of such a mediocre performance is what drives the gold leverage game! Hell, if I thought that all of my assets were to be protected by something that only runs up 100% in an environment of wealth disorder, I wouldn't buy it either.

Again, through out all the endless discussion about gold's prospects, we always hear this same finite price position expressed. That being: " " "During an inflation of the dollar we can expect gold to move into it's safety value range of $600+/-. This price represents it's true commodity / money hedge demand fundamentals as detailed in industry research reports. Of course it could go into the $2,000 range but that would be the end of life on earth as we know it" " " There it is again. The whole hearted promotion of a limited rise. Anything higher and you are in the hard-core camp that sees world war.

This "play it again, sam" scenario is wholly supported by not only the "official anti gold" government groups, it's also pushed by the mining industry in general, to sell their stock product. I submit that this conditions investors to stay out of "gold bullion" and into leveraged forms of "paper gold". After all, if I can "time" my entry into futures, options or gold stocks, why hedge my wealth with something that can't move over %80 or so? In other words, "buy the price, not the gold" or expressed better "invest in the price move and you won't need gold". Indeed, all we are doing anyway, is trying to match dollar loses on our other wealth with dollar gains on these hedges.

Here, inside this mindset we can clearly see this magnificent evolution of "Western perception". Once a people that held great distrust of anything that wasn't real wealth, they now equate personal economic safety to anything that keeps their bookkeeping entries in balance. This is the modern feelings of life within the dollar world. Life on the inside looking out.

Further:

Ever have a neighbour that brought goods from someone in a truck, at night, on a side road? They purchased tools, TVs, stereos, anything that seemed good for them. Of course, when asked they noted that the guy selling the stuff seemed OK and he assured them he got it "wholesale" Later, this same neighbour shows up at the town hall meetings and goes on and on about all the stealing that's occurring in their fair city. (((I'm sure all of you get my drift)))

And here we have the investor that goes on and on about the unlawful writing of "paper gold" by the BBs and brokerage houses. He say's, "These guys are stealing from us by writing obviously "unbacked gold paper! They offer options, futures and all sorts of derivatives! It's got to stop!" Then, in broad daylight, in front of everyone, he runs to the truck in the alley and buys some of those "obviously illegal unbacked gold calls and futures". He even buy's into the mining companies that use these same "paper promoters". Turning a blind eye to the reality of his actions.

You see, in this context gold bugs support and nourish the very industry that is dragging them down. The modern marketplace that sets the price for gold, exists because "Western Investors" seek bookkeeping hedges, not physical wealth hedges. They not only support the false price
discovery of this gold marketplace, they are the reason it exists. Further, it exists because they believe real gold will not work for their purpose of hedging.

As distillers produced alcohol "against the law" to supply a demand during the American prohibition, so too do the "paper gold brokers" give the investing public what they want. It's that simple.

Onward:

It's true that the physical gold market is dwarfed by the paper gold market. Yet, the physical market is so thin in relation to total assets outstanding, even a small shift into it play's havoc with the supply and the price. Still, paper contracts, using fractional banking methods can be created to meet any demand. The key to changing the negative dynamic created from paper gold, is for investors to move from investing in all forms of paper gold and the mining industry that utilizes it the most. Encourage companies to challenge tradition and circumvent the bullion banking world by marketing their product directly into fabricators and end users. Instead of promoting their shares, educate investors as to the real valuations possible for gold using a true physical hedge marketplace. In addition, encourage investors to invest mostly in gold first, then gold stocks. Undertaken together, all of these moves would break the present "dollar lock" on gold employed by this same faction.

Unfortunately, the educated understanding of this current generation will not change without major loses incurred to their paper gold portfolios. With the ECB /BIS having all but guaranteed a "quick to the point" wholesale destruction of the dollar gold price making market. Investor
education and evolution will tread far behind the fact. Until that time comes we will continue to follow the play as bewildered "paper gold" followers bemoan these days because
"Sam, won't play it again"

Thanks for reading FOA

Bill, your post is in the works.

Canuck (12/07/99; 19:14:00MDT - Msg ID:20526)
Sorry to all
I have been cranky lately, all over the map. I wish to apologize to anyone and everyone who has thought of my recent posts as non-linear.

Got burnt on the 2 recent downturns (gold stock). The wife is very cranky re: Y2K. Sorry to hear of your situation Mr. Gresham. I've been changing my view of gold nearly as often
as changing underwear.

I/We must be more objective, must be more focused, we know gold will prevail, it is our destiny; it is obvious, Nasdaq will not and cannot go forever, it is mathematically impossible. An exponential curve cannot survive; this market will max. out.

I will try to be more focused with my time and yours.

P.S. : Happy Birthday Sir Scot; belated as the POG is, but
sure to come.

Mr Gresham (12/07/99; 18:42:39MDT - Msg ID:20525)
Runaway markets: 3 influences, 3 propaganda tools

I should also mention that as a former contrarian very smalltime market player, I have felt the regret at not having anticipated the role that psychology has played in market mania, as people like Farfel would probably wish us to acknowledge. I stepped out before AG's "irrational exuberance" in 1996 and lost on a few S&P puts per year afterward, maybe 10k total.

The market has been composed of at least three factors: fundamentals, psychology, and monetary climate. In the realm of psychology, an unusual combination of fear and greed has driven prices up. Usually, fear operates to drive them down, and greed upward. At the top of the market, fear of missing out on future gains does pull in the last sheep for the shearing, as now. But in the early stages, fear usually operates to keep people from flocking to the market at its most promising moment.

This time, a rare injection of retirement anxiety hit the boomers in the early 90s, fueled by nagging magazines like Money and Kiplingers prating on how Social Security would not be enough, if available at all. Boomers got it, and guiltily decided to save. Fear of missing out on maintaining their standard of living, and getting to "retire early."

Two other tools, besides the propaganda magazines, worked on them: Quicken-type software with its projections into the future of savings, growth of savings, and spendable retirement incomes therefrom. "You MUST make 11.8% annually to achieve your chosen level of retirement income. Bonds/savings accounts will not achieve this, etc. etc." It was so easy to calculate; it must be correspondingly easy to achieve!

And newspaper/mag (NYTimes, WSJ, Money, etc.) financial section ads showing the returns on mutual funds, once these had passed the double digit mark. Math- (or economics-)-challenged savers (despite the "past performance�" disclaimers at the bottom) were unable to distinguish a "12.7% annualized return" on a mutual fund's past 5 years, from a bank's CD guaranteeing as a debt obligation a 5.5% return. Those two numbers laid side by side just made the stock market irresistible, and thus became self-fulfilling expectation for the late 1990s. Those ads must read quite differently in years to come, but for now the drumbeat goes on. Risk/reward is just REAL hard to get at, even for the most practical and experienced and contrarian investor, when psychology is at an extreme. Living in interesting times.

Thoughts, anyone?

SteveH (12/07/99; 18:37:20MDT - Msg ID:20524)
on forward sales
www.kitco.com
repost:

Date: Tue Dec 07 1999 13:08
kitkat (Kinross speaks) ID#90280:
from today's Financial Post....
"You can't make any investment decisions," said Bob Buchan, chief executive of Kinross Gold Corp. "The environment is such that many investors...would hang you and cut you into little pieces if you did a forward sale."

( I wonder what was between the dots? )

SteveH (12/07/99; 18:31:47MDT - Msg ID:20523)
on gold and MS
http://www.billparish.com/msftfraudfacts.html
One about gold:

Date: Tue Dec 07 1999 14:43
Preacher (GATA's Revenge) ID#225273:
As I see it, the statement by the Kinross man about mining companies being unable to sell forward now is a testament to the good work of Bill Murphy and GATA.

The Preacher

and the above link about MS pyramid scheme

SteveH (12/07/99; 18:28:10MDT - Msg ID:20522)
Gun post from Gold site, imagine: (again)
www.kitco.com
Go figure...all this great material...

repost:

Date: Tue Dec 07 1999 14:44
Cobra (@ Bullion.....) ID#34459:
Copyright � 1999 Cobra /Kitco Inc. All rights reserved

Sir, The simple fact to the matter with me is, I
no longer trust the US Government. Or the persons
in charge of it. I don't believe the FBI and I don't
trust Janet Reno. I believe in the Constitution and
the Bill of Rights. It's a mind set thing. With me
it goes back 40 years to the 50's. American's have
always been armed......it's only in recent years have
the nut's come out into the open and run rampant.
When we had LESS restrictions, we had Fewer gun
incidents. I grew up in Colorado and worked on a ranch
as a teenager.....Guns are an extension of my wardrobe
and always will be. You can turn yours in, I never will.

SteveH (12/07/99; 18:23:57MDT - Msg ID:20521)
Gun post from Gold site, imagine:
www.kitco.com
Date: Tue Dec 07 1999 17:46
Olympian (Feel unsafe without my rifle......guns were banned couple of years ago in Australia) ID#236135:
Copyright � 1999 Olympian/Kitco Inc. All rights reserved
and we all had to hand ours in. Had a Ruger .22 semi automatic which I used to take with me on remote bush trips. It sat next to my bed unloaded but with cartridge nearby. Drug related crime is on the increase here and you can get killed by some kid looking for a few bucks to support his habbit. Banning guns here hasnt deterred crime, it has just made the innocent more helpless to defend themselves. Reckon real reason they took away our guns was with y2k in mind. Can imagine how a government can feel edgy if they cant control the masses, especially if those masses are armed. There is also a drive here to expand our military forces. You have to wonder about hidden agendas. Easy to see how you can lose faith in a government. About my personal protection, have replaced the missing gun by my bedside with a machete. Thats Ok IF the intruder doesnt have a gun. Most unlikely that he wouldnt. Believe our private rights are being violated by this push to disarm. Sorry I spoke about guns but I think it is important to realise there is a world conspiracy it seems to remove our ability to defend ourselves and you have to ask the reason WHY !

SteveH (12/07/99; 18:22:21MDT - Msg ID:20520)
Learning from history
www.kitco.com
repost --

Date: Tue Dec 07 1999 17:57
Digdeep (Guns) ID#267276:
I remember a few years ago when they were observing the 50th anniversary of the holocost on T.V. They ( it might have been Bill Moyers, not sure ) were interviewing a suvivor of the Warsaw Ghetto and one of the death camps. The man was asked why they did not fight back, He replied, "WE LET THEM TAKE AWAY OUR WEAPONS AND HAD NOTHING TO FIGHT WITH." The people of the United States must never give up their arms.

Scrappy (12/07/99; 18:11:02MDT - Msg ID:20519)
confession!
I lifted that link from another poster
at another site. (Caper at kitco.) Sheepish me.

YGM (12/07/99; 17:57:32MDT - Msg ID:20518)
Scrappy and All....
I posted entire article....from Scrappys Website...
YGM..Note..........Toronto Sun is as credible as any other newspaper in Canada...IMO...
December 7, 1999

Sweeping Y2K powers

Feds make secret plans for a crisis

By MARK DUNN -- Ottawa Bureau

� OTTAWA -- Prime Minister Jean Chretien's government will be on full Y2K alert New Year's Eve and ready to invoke an updated War Measures Act if needed, sources have told The Toronto Sun.

�The new law gives cabinet sweeping powers to issue whatever orders or regulations it believes are necessary to deal with emergencies such as major power outages caused by computer glitches or civil insurrections, major riots and prison revolts.

�Depending on the emergency -- such as a nuclear accident -- manpower, vehicles, equipment, food and clothing could be mobilized.

�People can be arrested, including those who hoard supplies. It can also restrict travel. Failure to comply could lead to fines and prison terms of up to five years.

�Chretien has ordered eight key cabinet ministers to be in Ottawa at midnight Dec. 31 to handle any crisis that could hit.

�Cabinet has the power to invoke the Emergencies Act, which was passed in 1988 to replace the War Measures Act -- used by Pierre Trudeau in 1970 to quell the FLQ terrorist crisis.

�"They can't arrest you just for something they think you've done, but they can arrest you for not obeying the (emergency) regulations they've made," a government insider said.

�Senior officials say Canada is nearly fully compliant to respond to Y2K problems.

�They are even more reluctant to discuss the potential for terrorist threats, mass suicides and crackpots looking to enter the afterlife in a blaze of glory.

�"We don't respond to hypothetical situations," said Valerie de Montigny of the Privy Council Office.

�Gov. Gen. Adrienne Clarkson has responsibility for invoking the act -- which sets in motion a chain of events, including the recall of Parliament.

�At least 10 MPs and 15 senators would have to be in attendance to approve the emergency law. Four key ministers -- Treasury Board's Lucienne Robillard, Foreign Affairs Minister Lloyd Axworthy, Industry's John Manley and Defence Minister Art Eggleton -- will run the show. Others in town that night will include Transport's David Collenette, Health Minister Allan Rock, Natural Resources Minister Ralph Goodale and Justice Minister Anne McLellan.

�Public Works Minister Alfonso Gagliano will be in Montreal Dec. 31, but has been told to be on standby to return to Parliament.

�Sources say senators were alerted and besides the 10 or so in the Ottawa area, others in Toronto and Montreal have been warned to be prepared to go to Ottawa.

�Guy McKenzie, spokesman for a federal group responsible for millennium contingency planning, was reluctant to discuss doomsday scenarios. "We don't have anything to make us believe that we need to work through scenarios at this point. We have ministers in town to basically craft decisions if needed because they are the ultimate decision-making power."

� City brass to hole up
� Be prepared
� Defence generates Y2K plan

dadpen (12/07/99; 17:53:30MDT - Msg ID:20517)
Fort Knox
Hi all,new poster.The wife and I stopped by Ft.Knox A few months ago and asked the guard if we could see "our"gold. you know the answer.I asked him if he had ever seen the gold and he said he was not allowed into the building.He said he did not know if there was any in there or not.Strange!Keep up the good work,I have learned A lot

RossL (12/07/99; 17:46:44MDT - Msg ID:20516)
YAHOO!!!

Apparently, my earlier post about Yahoo is in error. CBS Marketwatch lists YHOO market cap as 91.6 billion dollars. With gold now at about 9.2 million dollars per metric ton, that makes Yahoo worth 9956 tons of gold. Much bigger than Fort Knox already. Sorry

Scrappy (12/07/99; 17:45:21MDT - Msg ID:20515)
Canada
What I don't know is
How reliable is this newspaper? No real quotes, just unidentified 'source' information.

Scrappy (12/07/99; 17:40:42MDT - Msg ID:20514)
Canada
http://www.canoe.com/TorontoSun/front1.html
Read here.

YGM (12/07/99; 17:17:40MDT - Msg ID:20513)
Al
Word of Mouth Stuff...
I didn't catch the newsclip, but I'm told that he's already talking martial law from Dec. 27th to Mar. 15th and now supposed to be considering the War Measures Act. I don't know what that entails other than shooting looters and possibly hoarders :-))....What Next?.................YGM.

Al Fulchino (12/07/99; 17:12:41MDT - Msg ID:20512)
YGM re 20489
Any link to see the speech with some quotes by the PM of Canada re martial law etc?
Thanks

YGM (12/07/99; 17:00:28MDT - Msg ID:20511)
Golden Sextant Latest

<Picture>What's New

CURRENT MPEG COMMENTARY

December 7, 1999. P A N I C !

Western central banks are in panic mode. No other interpretation can be put on the announcement yesterday of further Dutch gold sales of 300 metric tons. European central bankers should have spent last weekend preparing to announce gold purchases and a Euro truly independent of the dollar. Instead, they used the time to cobble together another bailout for the Fed, the Bank of England and the mostly Anglo-American bullion banks sinking, or so it would appear, into ever deeper trouble.

The Dutch announcement basically uses up all the slack left in the Washington Agreement, which provided for central bank gold sales of 2000 tons over the next five years, including 1300 tons by the Swiss and the 365 tons then remaining in the planned British disposals of 415 tons, leaving only 335 tons of possible additional sales. That gap has now been almost entirely filled by the Dutch.

The gold banking crisis that unfolded rapidly in the wake the Washington Agreement on September 26, 1999, has resulted in some rather unusual gold disposals. First, Kuwait announced publicly that it was making its entire official reserves of 79 tons available for lease through the BOE. Not long afterwards, it was revealed that Jordan had sold 10 tons from its official reserves of 26 tons. This depletion of long held official gold reserves by two Middle Eastern nations easily subjected to Anglo-American pressure pretty much speaks for itself, particularly when followed by disclosure of additional U.S. military spending for Kuwait. What is more, a rumor -- quickly denied -- of a possible reduction or halt in British gold sales caused an immediate almost $10 spike in the gold price.

The Dutch announcement itself is notable in three respects: (1) the sales will be arranged through the BIS, no public auctions for the Dutch; (2) nevertheless, the sales were publicly announced in advance, not a smart way to get the best price especially on the first year's planned sales of 100 tons; and (3) the Dutch emphasized that even after the sale "the Netherlands will remain a significant gold holding country with a gold stock of more than 700 tons."

In fact, the Dutch gold sales may be no more than an advance on the proposed Swiss sales. The Swiss have been slow to complete all necessary preparations for their sales, which were probably intended, inter alia, to provide the European safety valve on the gold market. Certainly the Netherlands could repurchase whatever gold it sells now from Switzerland later, and it may well have already received some assurances on this point. For that matter, maybe most of the 100 tons that the Dutch plan to sell in the first year is necessary to repay Kuwait's loan to the BOE, a loan that reportedly has been the subject of much criticism in Kuwait.

The World Gold Council's press release on the Dutch sale is yet another example of that organization's unfortunate tendency to serve as apologist for the central banks instead of advocate for the gold industry. Admitting that "the timing of the announcement...may have caused a ripple in the market," the WGC then accepts uncritically a reported private assertion by the Dutch central bank that the decision to sell was made in July, but delayed to participate in the Washington Agreement. Why, then, wasn't the proposed Dutch sale included in the agreement? Why didn't the Dutch sell on the price rally after announcement of the agreement? Was there any connection between the timing of the Dutch announcement and the continuing problems of the bullion banks, the Kuwaiti gold loan, and the Jordanian sale? Apparently these are all questions that the WGC neglected to ask in its private discussions with the Dutch central bank. Speaking only for myself, and it pains me to say it, Ms. Haruko Fukuda, the new chief excecutive of the WGC, is rapidly losing both her halo and her credibility.

Central bankers are generally a clubby and prudent sort, not given to unnecessary risk taking. Given the uncertainties of the Y2K changeover, Anglo-American and European central bankers may have arrived at an informal truce or agreement designed to push resolution of the gold banking crisis into the new year. In this connection, it would not be surprising to see Anglo-American intervention in support of the Euro should it threaten to break below parity. Indeed, if the European central bankers did not obtain a commitment of this sort as a condition of the Dutch gold sale, they should all be fired. Yesterday's surge in the Euro may not be solely attributable to the good German factory report.

But make no mistake: the day of reckoning is rapidly drawing near for both the Euro and the bullion banks. The EMU and the ECB cannot provide further gold to the market without not just destroying their own credibility, but also undermining the whole notion of the Euro as a truly independent currency and alternative to the dollar. As for the bullion banks and their protectors at the Fed and the BOE, they must know that they cannot count on others to bail them out forever. Ultimately there can be no lender of last resort in a gold banking crisis.

Citizens of the Euro Area should be asking themselves tonight whether their central bankers have merely gone the last mile to help the British and the Americans with their gold banking crisis, or whether the ECB and its allied central banks and finance ministers are about to, as a former British prime minister once put it, "go wobbly."

YGM (12/07/99; 16:52:27MDT - Msg ID:20510)
Europe Gold
Quoteline
$285.25

Mr Gresham (12/07/99; 16:47:15MDT - Msg ID:20509)
Anecdotal thoughts on where all the money's going
Just back from Walmart. Salesgirl said "People have lots of money this year, and they're spending it."

Reminds me of the Zing! realization that hit me in the K-Mart parking lot a few months ago. A factory-worker-looking-type (gradual layoffs happening locally) Dad pulls his three tow-headed kids out of a big-wheeled brand-new shiny red pickup ($28,000?) next to me, and hauls them all in to Kmart to (probably) run up his credit card limit. Zing! "THAT�S where all my Yuppie friends' IRAs are going! He's spending them." There is NO real saving going on, just a sinkhole of spending. A basketfull of IOUs.

Purely anecdotal, and probably ORO could hit the mark better out of his data mines, but I would venture the assertion that:

"Never has so much wealth (hard-earned savings) been invested so badly."

First, in a topsy stock market. And, second, for those more "conservative" types who are trusting banks and American Express/GMAC/insurance co. type financial orgs, how much of their RETIREMENT money has been securitized and sold off into the credit card markets? Lower and lower quality debt.

Not invested in any productive enterprise, but lent to consumers who are saving nothing and spending all they can immediately, secured only by their jobs and credit reports. First recession, that all goes in the toilet.

Thinking also of the supposed $10 trillion "wealth transfer" that is supposed to take place between generations over the next umpteen years. That will probably be chopped in half in nominal value and again by inflation, and those upper-middle-class boomers will get hit badly, at least to the benefit of the borrowing classes. Quite a few of their now well-off retired independent parents will get chopped badly, as well, and end up living with them. Fun, fun!

lamprey_65 (12/07/99; 16:25:20MDT - Msg ID:20508)
ORO: Ref SteveH - US responses
I very much enjoyed and agree with your post. Replacing the income tax with sales and property taxes would force us into cutting government spending. Unfortunately, I believe we will not be able to fix our problems until the entire system comes crashing down...alas, is this not human nature?

Lamprey

Scrappy (12/07/99; 16:18:10MDT - Msg ID:20507)
YGM
How're things in Canada?
PM and banks still atizzy?

Hi, Leigh! Good to see you!

YGM (12/07/99; 16:15:22MDT - Msg ID:20506)
39 Unanswered Questions...On Y2K...
http://www.sightings.com/politics5/2kq.htm
#23......... If the world's oil production is not at all threatened by Y2K, why has the International Energy Agency (IEA) drawn up plans for global rationing of oil reserves? Source: Reuters (London), November 30, 1999.

Leigh (12/07/99; 16:15:14MDT - Msg ID:20505)
megatron
Well, you said something to me, so I wanted to answer, but I needed to understand what you were saying first. I'll go away again -- I promise!

RossL (12/07/99; 16:12:30MDT - Msg ID:20504)
Yahoo

As of today, the market capitalization of Yahoo is equal to about 7915 metric tons of gold. That's just less than all the gold (allegedly) in Fort Knox. By tomorrow YHOO could be worth MORE than all the gold in Fort Knox. Will Yahoo produce goods or services equal to that in a hundred years? I think not. F*, you're raving about the wrong guys.

TownCrier (12/07/99; 16:12:09MDT - Msg ID:20503)
Hear ye! Hear ye! There is an update to "This Week in Gold"
http://www.usagold.com/wgc.html
Click the link above to be magically transported to another hall in the Castle where you may read the latest weekly gold market commentary shared with USAGOLD courtesy of the fine staff at the World Gold Council. A notable excerpt from the latest offering (Nov. 29 - Dec. 3) follows. That's exactly what those folks have needed in a country where they can't trust the value of their currency beyond the end of the day. The disincentive is now being removed from the more timid to embark upon a program of meaningful, lasting savings. (Heck, a 20% tax may even have even put off some of the more bold.)

"In Russia the State Duma approved a bill removing the 20% value added tax on transactions in gold silver and platinum coins. Plans to start minting gold coins as an investment alternative to the dollar were announced in October last year, but have been on hold until the obstacle of value added tax is removed. The bill must now be approved by the Federation Council and signed by the president to become law."

Mr Gresham (12/07/99; 15:59:08MDT - Msg ID:20502)
Return of Spike?
Hel-lo, Spike! (OK, Little Spike. 283.) Been so long, we've missed you.

Can Spot be far behind? Time to learn some new tricks?

megatron (12/07/99; 15:57:24MDT - Msg ID:20501)
leigh
I thought you were in self-imposed exile? What happened?

ORO (12/07/99; 15:30:42MDT - Msg ID:20500)
YHOO enters SP
Softbank's young creature, Yahoo has "matured" into an SP company. Its price rose 25% since some realized that it will be the next entrant into the SP.

At current market cap of 70 $B, it is demonstrating the significance of automatic dumb money driven by incorrect market models first developed by Sharpe, and later tuned by Markowitz, Merton, Black and Scholes. Their theories rely have been incorporated into the structure of the markets so that a piddling company such as Yahoo may progress in value through its introduction into a greater number of ever narrower market indices that will make its market price less and less dependent on investor perception, and more dependent on automatic investment plans, and thus increasingly a function of financial flows.
SP based portfolio rebalancing is the ultimate in purely mechanical moves, and shows the effect of the implementation of the theories of the academics mentioned above. The stock of YAHOO has an insider ownership of 60%, so that the automated purchase of the stock ends up producing an inordinate increase in its value, particularly when institutiona buyers holding another 21% are counted. The private individual buying the stock has a 5 fold leverage because of the fixed holdings of insiders and institutions. The portfolio rebalancing on a 90 $B stock would cause a 0.9% flow of funds out of the rest of the automatic portfolio market and into YHOO stock. The total move becomes 40 $B of net demand for the stock. Amplified in effect on price by the tiny free trading portion of stock at 20% of capitalization, one gets the picture. Tomorrow will probably see a further rise as the buy on close orders of today will have changed the company's weighting in the index. Insider and non-automatic institutional selling is probably occurring as the price rises, 50% so far - since Dec 2. The stock traded only 20 $B in volume today, there is much more to go, the question is just how eager the sellers are. Softbank is reducing its holdings by 1-1.5 mil shares per month, and have reduced their position by 30% over last year. The incorporation of AOL into the SP took 4 weeks last year, and saw the stock substantially more than double.

The company itself produces fake growth by the use of circular advertzing deals, whereby a barter trade of web advertizing with other sites is booked as revenue for both corporations, though no net funds ever moved. It grows, as did Microsoft, through the acquisition of technology using its stock as currency for payment. The bulk of its revenue growth of the past 2 years, now comes from the purchase of revenues of other companies. As long as the purchase is made at a price to sales ratio significantly smaller than that of YHOO itself. The company increased stock outstanding by 45%. 10% increase for ESOP, 35% for purchase of new business (i.e. revenue). Its ESOP contibution stands at 1/3 of cash flow and 150% of net earnings from tax credits and had a total benefit for the corporation (NOT its stock holders) of 75% of REVENUE, 550% of cash flow, 2100% of earnings. Terrible company, great investment.

Leigh (12/07/99; 15:24:01MDT - Msg ID:20499)
megatron
Dear megatron: I can't figure your last message out! Will you please explain? (P.S. You probably think I hate you but I really don't; I have a smart-aleck mouth too, which I've learned from hard experience to keep shut!)

Farfel (12/07/99; 15:18:33MDT - Msg ID:20498)
PH in LA, You're Having Wet Dreams About Gold Again...
Once again you misunderstand me.

When I speak of private gold investors, I am not talking merely about Ma and Pa Kettle. I include the various speculative gold funds, and they are worst culprits.

Every time a CB announces a gold sale, they run to their mommies' skirts, wailing in great fear, dumping their gold along the way.

Until that reaction changes, then gold is defeated, plain and simple. Until the gold funds completely ignore the after-sale/pre-sale CB announcements...until they treat such desperation announcements as reasons to accelerate their gold purchases rather than abandon them...then gold investors will remain the timid, fearful, pussy-whipped, gutless, pansies they have become.

The gold gang needs to develop the same kind of self-assured convictions that the Wall Street bulls now have. It is that self-assurance that is the foundation of a sustainable bull.

Finally, when you state that the CB's are well on their way to manipulating the POG upward and declare this as some kind of incontrovertible fact (since guru-in-chief FOA declares it so), then I think you are completely off in left field. Is Kuwait manipulating the gold price upward? And Jordan? And Canada? Etc., etc. Doesn't look like it, does it?

The answer is plainly obvious: those CB's that are either friendly to US dollar hegemony or are simply hostage to US domination will co-operate as best as possible to hold the gold price down. And FOA's plethora of unsubstantiated delusions do nothing to change that fact.

Finally, I can never state this fact enough: the worst enemy of a rising gold price remains the gold producers themselves. Why should gold funds and gold investors believe in gold's upward rise when the producers constantly sell into every rise? Until the collective managements of the extant producers are summarily replaced, sooner than later, there is little to no hope of change there.

Don't expect these gold producer managements to "evolve" into sharper individuals like their much more brilliant, savvy Wall Street bullion bank partners who have so egregiously conned and stupefied them!

After all, where gold producer managements are concerned, with the exception of Barrick, these guys are so completely ass-for-brains stupid that they couldn't win a spelling bee even if all the words provided came out of a Dr. Seuss book...they are so blatantly dimwitted that if they farted, they would call up the gas company and complain about a leak...they're the types of mental midgets who would probably call up Ford Motors in order to figure out how to from a gold producers CARtel.

What a useless collection of toothless, drunken, backwoods village idiots from the slimepits of Northern Ontario!

Thanks

F*

TownCrier (12/07/99; 14:41:53MDT - Msg ID:20497)
A quick thanks to Lady Leigh
Thank you for your rave review of the Turkish gold story given from The Tower late last Friday (Dec. 3.) Sometimes a tale just HAS to be told...and heard.

Tanglewild (12/07/99; 14:39:32MDT - Msg ID:20496)
Mundell on the Euro - today
http://ap.tbo.com/ap/breaking/MGI7N7BVX1C.html
FYI
A small quote from the article:

Hong Kong's decision to stock up on the euro saved the European Central Bank from having to intervene, Mundell said, adding that it should have done so had the slip continued.

"I think the long-run risk for the euro is that the euro is going to be too strong," he said. "Europe will have to intervene in the upward direction. But if they don't intervene in the downward direction they will lack the moral authority to intervene when they need to intervene."

TownCrier (12/07/99; 14:37:16MDT - Msg ID:20495)
More details on The ABCs of Gold Investing as a gift idea
http://www.usagold.com/abcpage.html
I haven't talked to MK about this (it was something that occurred spur of the moment while I was pondering various gift ideas for my own family,) but I'm certain he would be both able and quite happy to sign the books at your request. If you give someone a gold coin, it has been my experience that they like it and are quite honored to have it, but they can't quite sink their teeth into it if you know what I mean. Give your coin recipients this book too, and they will gain a whole new appreciation for their special gift of gold. And if you're on a tight budget, give them this book alone, and let 'em get their own gold! Maybe they'll become the one to give YOU a coin next year.

"Whether you own some gold or are just toying with the idea, you must have this book." --The Conservative Book Club

"Gold will play a critically important role in American investment portfolios in the years to come. This book provides investors a basic education on private gold ownership from one of the nation's top experts." --Rep. Ron Paul, Texas, U.S. House of Representatives

"If you are looking for thorough guidelines for making good decisions about private gold ownership, The ABCs of Gold Investing has all the answers." --Money World Magazine

TownCrier (12/07/99; 14:09:57MDT - Msg ID:20494)
Brazil to sell $500 mln more in year-end dollar repos due to Y2K demand
http://biz.yahoo.com/rf/991207/cv.html
Reuters reports that the central bank of Brazil will be selling an additional $500 million in dollar repo contracts for year-end delivery (on top of the $800 million we reported on a week ago) in order to soothe Y2K fears by temporarily satisfying the U.S. currency market.

The CB said the contracts would be sold this Friday for dollar-delivery on December 29th, the dollars to be bought back on January 10th.

It turns out that when the $800 million worth of similar were sold last Friday the demand has now been seen to reach $1.4 billion. Hold on to your socks. Stong dollar due to demand now...weak dollar after January?? Become your own central bank and hold an ample supply of a world-class indestructible and highly liquid independent currency...gold. Be sure to have it before you need it. And what better time to make your move than with dollars still at strong levels of purchasing power built on the back of recent collapse of the asian economies, on the euphoric U.S. equities markets, and also apparently on Y2K demand for dollars by international institutions such as we see in Brazil. These are three supports to the dollar's platform that won't be around forever, and when it falls, you'll be glad you became a nation unto yourself.

"There can be no other criterion, no other standard, than gold. Yes, gold, which never changes, which can be shaped into ingots, bars, coins, which has no nationality and which is eternally and universaly accepted as the unalterable fiduciary par excellence." --Charles de Gaulle (1890-1970)

"Water is best, but gold shines like fire blazing in the night, supreme of lordly wealth." --Pindar (522-443 B.C.)

"Like liberty, gold never stays where it is undervalued." --J.S. Morill (1810-1898)

"Even during the period when Rome lost much of her ancient prestige, an Indian traveler observed that trade all over the world was operated with the aid of Roman gold coins which were accepted and admired everywhere." --Paul Einzig

Quotes were taken from my autographed copy of Michael Kosares' "The ABCs of Gold Investing." Hey! Here's a great last-minute Christmas gift idea...you could give your loved-ones a copy of this great book, and maybe even a small gold coin to get them started. If you order the book from Mike directly, I'm sure he'd be happy to sign it in whichever manner you might request. Otherwise, if time is short, you could pick it up as such places as Barnes and Noble bookstores.

gidsek (12/07/99; 14:04:01MDT - Msg ID:20493)
SteveH
"SteveH (12/7/99; 2:00:03MDT - Msg ID:20468)
Can't confirm yet...but did you hear?
www.kitco.com
partial repost: Date: Tue Dec 07 1999 01:06
kiwi (Hong Kong Monetary Authority announces $30 billion euro position) ID#206358:"

The way in which that news was worded indicates there is a long way to go! Now ... when they starting talking about 30 billion euro DOLLAR postions, that will mark a sea change. :)

gidsek

beesting (12/07/99; 13:49:32MDT - Msg ID:20492)
Lets cut to the bottom line--Why is the equities market in perpetual expansion?
Scrappy #20481 good post! It prompted me to think about this:

How many times do we hear in one day from everyone,how great it is to make money investing in securities? Why do we hear this so much?Why do the stockmarkets have so much action and so much interest?

Here are the 3 answers that seem plausible to me;

Commission! commission! commission!

Every time a security is bought or sold a commission is payed. If you were a stock broker in these days of little or no conscience,wouldn't you advise clients to buy and sell as much as possible. You get paid every time!The more a client spends, the more commission is made.
Folks,we have 50,000 or more ex-used car salesman in the U.S. who now work for brokerage firms hawking their products(securities)in a frenzied way to stir and keep would be investors at a fever pitch.
Hence every one wants a piece of the action.They have all the media involved,because the media own securities too!
They have all members of Government involved,because they own securities too!Even unborn babies are getting securities bought for them too!
The only ones that don't own securities are the homeless,and I saw a broker out there on the street hawking them too!

Now, you ask why doesn't physical Gold perform in the same way as securities?

Here's why,totally different type of marketing,there are a small number of bullion dealers nation wide,compared to securities dealers, who pay for all marketing and advertising out of their own pocket.Bullion dealers profits are added into the total cost of sale.No commissions!Bullion dealers have ALL media opposing them in investment opinions.Bullion dealers have many Government leaders opposing them on investment opinions.Bullion dealers prices are set by a "spot" price of Gold that many here think does not represent a true value of Gold in dollars.We the Goldhearts are lucky there are any bullion dealers around at all.Should I go on?
Those in the know.....buy Gold.....beesting.

YGM (12/07/99; 13:37:34MDT - Msg ID:20491)
Changing Landscape??
Little by Little......(one of the Dominoes)
Hong Kong Fears State of US Stock Market

Buys up euros.

Hong Kong, one of the world's largest holders of foreign exchange, has become a buyer of euros for its reserves despite the currency's slide in foreign exchange markets.

Joseph Yam, head of the territory's monetary authority, said the euro's weighting in the reserves would rise to 15 per cent from 10 per cent because of worries about the US balance of payments deficit and stretched equity values on Wall Street.

"I'm afraid more and more people are focusing on the vulnerability of the US market and will start moving out," Mr Yam said in an interview with the Financial Times.

The disclosure came as the euro, which last week dipped below parity with the US dollar, staged a rally of more than two cents on Monday to close in Europe at $1.023. Traders who had sold the currency were forced to buy it back to cover their positions after an unexpectedly strong 3.2 per cent month-on-month rise in German manufacturing orders in October.

Economists said there might be more encouraging figures from Europe today when Germany releases unemployment data for November and gross domestic product for the third quarter. Hong Kong's move contrasts with previous reluctance by central banks to hold the euro in their reserves.

Mr Yam said some of the HKMA's reservations had eased. "I'm less concerned about the liquidity of the euro market than I was at the beginning of the year." He was also unperturbed by Germany's rescue of the Holzmann construction group, which was seen as too interventionist by some dealers.

Financial markets will closely watch today's opening session of a congress of Germany's ruling Social Democrats to see if Chancellor Gerhard Schr�der comes under more pressure from the party's left wing to pursue less market-oriented policies.

"I don't think there's any change in the underlying policies of the EU," Mr Yam said. Hong Kong's shift would simply restore the weighting of the euro in the reserves to neutral.

It would only affect the portion equivalent to some $30bn of reserves which the authority manages directly, implying total purchases of around $1.5bn of euros. Outside investment advisers, who manage a further $30bn in reserves on a discretionary basis for Hong Kong, remained underweight in euros, while Hong Kong also has to set aside an additional portion of its total $90bn in reserves in dollars as backing for its currency.

Mr Yam said Asia was looking at ways of monetary collaboration that would help protect smaller open economies like that of Hong Kong from unwanted currency flows. But the prospect of monetary union was a "political non-starter".

Instead, one way of dealing with the problem would be to denominate more financial market transactions, such as trading of mainland Chinese shares in Hong Kong, in US dollars or other currencies, he suggested.

This would shield smaller currencies but it would also require more investment in market infrastructure such as settlement systems. Mr Yam added that the Asian economic crisis had convinced him there was "no alternative" to Hong Kong's currency peg. "If anything it has strengthened our resolve."

The Financial Times, December 7, 1999

TownCrier (12/07/99; 13:18:35MDT - Msg ID:20490)
Fed's Moskow urges public not to overreact to Y2K
http://biz.yahoo.com/rf/991207/vi.html
Federal Reserve Bank of Chicago President Michael Moskow today gave a speech for a news conference on Y2K, saying the Fed was confident there would be no disruptions and that the Fed would be able to meet the needs of banks (and the government) through the 2000 rollover.

Apparantly it's not all peaches and cream, however, and real life is a dynamic, not a static thing. While it would be preposterous for the ChiFedPres to urge the public not to react (at all), he did say the Fed would "encourage the public not to overreact." Here, at least is their recognition of life's dynamic nature...Moskow said, "There is still concern that popular misconceptions about Y2K could lead some people to withdraw large sums of money from their bank accounts."
Hmmmmmmmmm, now let's see... Is it reasonable for a person to sit back and be unconcerned by something over which the Fed has a concern? The Tower agrees, don't OVERreact. However, it would only be responsible to take measures to bolster yourself against such potentialities that raise the Fed's concern. If there were to become a national difficulty, the Fed's (and govt's) first action would not be to reach down and provide direct supoort to you and your family specifically. The goal is always to save the nation at the expense of the individual...just look at war for an easy and clear example.

YGM (12/07/99; 13:11:07MDT - Msg ID:20489)
Hold Those Convictions
The Landscape is Rapidly About to change.....
Canadian PM on TV...threatening Martial Law in Y2K...Says Hoarders will lose all to confiscation....Austrailia w/ new confiscation laws....Royal Bank of Canada, restricting cash withdrawls....Many businessmen right here in this small northern community withdrawing ALL the bank cash....(the same guys who laughed at my y2k prognosis 6 wks ago)....Canadian Banks already suffering small denomination bill shortages....the list of changes will grow rapidly from here on in....AND so will the swings in Gold Prices.....IMO..... ever to the upside after each assault!!!

Scrappy....nice to read words spoken from the heart.....You are living proof that Goldbugs are neither hopeless nor heartless....I also wish lurkers would continue to post personal thoughts and feelings, newfound sites of info etc..........YGM.

Scrappy (12/07/99; 12:48:40MDT - Msg ID:20488)
One more thought.
From what I've read,
I do not think the times ahead are going to be good ones, whether one is holding gold or not. (Although I do believe the gold-holder will be far better off than the non-holder)

Therefore, I've taken the angle that I always take when times are getting tough. Learn, share, learn, give, learn, love, learn, live, and learn some more.
(And of course, when I get low in heart, eat chocolate.)

Gold has, and will continue to have, value. It's value will likely increase greatly as the times become more challenging. (In fact, I think the only other thing that I can say that about, is chocolate.)

Other than these two substances, all we have of real value, is ourselves, and each other. Love IS the Word. Giving is the message. At the top of the mountain, all paths meet.

That said, I would ask all those engaged in 'self-imposed exile' to please reconsider your positions. You are missed.
You have so much more to give, than your silence ever could.

TownCrier (12/07/99; 12:43:36MDT - Msg ID:20487)
Fed adds $915 million via coupon pass, $3.60 billion through overnight repos
http://biz.yahoo.com/rf/991207/s0.html
In earlier anticipation of the Fed's action, Carol Stone, senior economist at Nomura Securities International said, "In years past, currency has slowed down somewhat after Thanksgiving, and maybe it's doing that even with this year-end extra currency need we've seen. But the only reason why I could see them coming in today is this four-day (fixed-system repo operation from Friday) is running off." You can see what action the Fed took from the "headline" above...more money. No surprise there.

ORO (12/07/99; 12:32:09MDT - Msg ID:20486)
Oil - Domestic production
http://www.economagic.com/pdf/38_27_180_166132036.pdf
History of oil as FOA Aragorn III and Aristotle have presented it.
Production in the US peaked in 1968-1972 and dropped off steeply since. The price rose steeply in $ as the US failed to export enough of anything (but dollars) to trade for oil during the transition to importation of oil required to run the economy.

By the way, I get much of my data from this site. It offers a set of tools for production of graphics and simple calculations.

Scrappy (12/07/99; 12:20:18MDT - Msg ID:20485)
It's kind of fun,
whether it lasts or not.
It does my attitude almost as much good as choclate. :}

Scrappy (12/07/99; 12:12:32MDT - Msg ID:20484)
schippi
Good thing you didn't procrastinate.
Anyone here watching the pog soar today?

megatron (12/07/99; 11:46:12MDT - Msg ID:20483)
steveH/leigh
SteveH/Thanks for your reply. Check out the pivot points on the aforementioned futures It's incredible. Mirror imaged. To the day. If possilbe, could you expand on the explanation for the action at that point?
Leigh/ I thought 'forgivness' would help get me back in the 'flock'. I can't win.

phaedrus (12/07/99; 11:44:47MDT - Msg ID:20482)
seven bucks
when's the last time we've seen gold up seven bucks intraday... it ain't hallelujah, but maybe it's a sign that the shorties are pressing their luck

a note at Farfel: people on this site are hatin' ya because you are saying what their gut is saying, and they don't like to hear it out loud

that said, we are STILL ripe for a blowup here...the worms are far from almighty

P

Scrappy (12/07/99; 11:23:27MDT - Msg ID:20481)
Good read
http://www.escapeartist.com/efam8/Dollar_Storm.html
Hi all. To those of ill, isolationist, or depressed temper these days, please eat some chocolate and be nice! LIfe is but a series of challenges and lessons. No need to be rude or elitist when we have a ground where we can meet and be thinking, learning humans together. If we are mean to each other, or withhold our contributions, we are interfering with growth of all. Love, Scrappy. (who still isn't clear enough on all of this to feel like I'd be a help-'cept sometime I do okay on the emotional issues. Peace, happiness, and healthy growth are but another form of gold.)

Felix the Cat (12/07/99; 11:12:27MDT - Msg ID:20480)
To Simple Me
You are so funny!
Well, IF you were right at before, that should be a "BIG and GLOBAL plot" because as I know that HWL also is the biggest shareholder of Mannesmann. And NTT(Nippon Telefone and Telegram)just bought his stock (30%+ in his Telecom services) at last week.

Xie Xie

F. C

PH in LA (12/07/99; 10:02:55MDT - Msg ID:20479)
Dear Farfel:
Here it is, Farfel.

On a silver platter!

ORO's post (Msg ID:20471) could hardly be any clearer. As a student of economics, graduated complete with gilt-edged diploma from the Ivy League, you, of all people, should be able to grasp this...

"...the picture that FOA puts forward - and is completely justified by the facts available...is that the natives will control price to their advantage...they are banks and they feel completely at ease in issuing the appropriate debt to meet demand. Investor demand and investor physical buying are like drops in the bucket."

Goldbugs and gold investors do bear the responsibility you would burden them with!

What we should all be taking notice of here is that, yes, the POG is manipulated and controlled by the CBs. Any fool can see that. But those who recognize this fact of life do still have a tiny advantage over the run-of-the-mill investors presently so enamored of the DOWzdak. Because, as ANOTHER, FOA, ORO, SteveH, Reginald Howe, and so many others have taken so many pains to spell out lately: The CBs are well along into the process of maniupulating the POG upwards. Probably way upwards. In fact, as ANOTHER told us so long ago: "It has already happened...the financial world is not as before." The majority of investors will jump on the bandwagon soon enough. Just as soon as prices start up again, of that you can be sure.

So, in the meantime, you can stop fixating on them already. Your time and breath is wasted calling them names, etc. And while you're at it, you can also leave off beating your own drum for a moment about "what you have been telling this forum for months..." The truth is that FOA and Company have been here telling it here like it is much longer than that. Get with their program! You; and your children; and your children's children will someday be very glad you did!

beesting (12/07/99; 09:53:02MDT - Msg ID:20478)
U.S. Mint close to 60 tonnes of Gold sold in 1999.
http://www.usmint.gov/bullion/annualsales/sales1999.cfm
Todays figures on 1999 Gold sales from U.S. Mint:
1,892,000 ounces. I would say thats a healthy number,the Gold industry doesn't look dead to me.
@ $300.00 per ounce represents; 567,600,000 dollars.
Those in the know.....Buy Gold......beesting.

schippi (12/07/99; 09:52:44MDT - Msg ID:20477)
Current XAU and HUI Chart
http://www.SelectSectors.com/xauhui.gif
Did my Gold Xmas shopping this AM.

USAGOLD (12/07/99; 09:40:35MDT - Msg ID:20476)
Today's Market Report: Market Shrugs Off Dutch Sale News
MARKET REPORT(12/7/99): Gold began its recovery from the Dutch
attempted assault as soon as the U.S. market closed yesterday and
trading opened in Australia. In Asia, physical demand drove prices
higher, particularly in Japan which is beginning to experience another
wave of the economic doldrums. Concerns about the banking structure
there along with the equities market could create an unexpected
reservoir of gold demand. Reuters characterized the Tokyo action as a
"flurry" of activity. By the time the London market opened, the upswing
was firmly in place and traders there began covering their short
positions.

Yesterday we offered the opinion that "the Dutch announcement is
unlikely to have a lasting effect." We also said that the 100 ton sale
in year 2000 might be viewed as a positive once gold players got out
their calculators and ran the supply/demand numbers. Using Gold Fields
Mineral Services (GFMS) numbers, the current shortfall between mine
production and fabrication demand is a little over 1000 tons. The 100
ton Dutch offering hardly puts a dent in that deficit. This morning the
mainstream financial press is catching up on the story. Bridge quoted
Rhona O'Connel of THoare seconding our view: "after the knee-jerk
reactions in both London and New York gold markets in response to the
Dutch announcement,the market latterly took a more measured view,
accepted that this is nothing really new as there was a 300t hole due to
be filled by someone(in the ECG gold sales agreement), and life returned
more or less to normal and short covering developed once prices had
shown relative stability above $275."

Let me add a little icing to the cake: When you take a good look at the
GFMS numbers which you will find graphed on page 3 of the December News
& Views, you will note that this gap has existed for the decade, though
now it is substantially larger than at any time previously in the
decade. That gap has been made up by official sector operations -- both
leasing and sales. With the Washington agreement, that source has been
largely shut off, hence the scrambling by the bullion banks to find gold
wherever they can -- Kuwait, Jordan, etc., all small players on a list
that grows shorter by the day.

The one factor that is substantially different in 1999 is the large drop
in that total supply figure to create the biggest gap graphed. In other
words, the Washington Agreement was signed at a time when the supply
situation was already in retrograde -- the traders instinctively
understood this and that is why they drove the metal through the roof in
a few days period of time. In her landmark study, "The New Millennium
Gold Rush: The Bull Market Is Just Beginning", Smith Barney's Leann
Baker says "With the official sector retreating from center stage, we
believe the key to gold's price is how, on what terms, and over what
period of time the market will return to equilibrium. It is clear that a
massive readjustment process has just begun."

The World Gold Council has dubbed this a New Gold Market and from our
perspective, it is a new gold market for the reasons Ms. Baker points
out. Analysts can say that the fundamentals don't matter, and in the
case of paper assets involved in a mania, the trend is all that matters
-- that is, until common sense and prudence begin to outweigh blind
faith and the day of reckoning dawns. Then it will be a mad scramble to
keep from going over the cliff with the market. But for gold, a physical
reality with a high cost of production, once available sources dry up
(which appears to be where we are headed, if not already there) higher
prices are the only recourse. The reaction to yesterday's Dutch
announcement could be a turning point. The market is essentially talking
and it is saying that the 100 tons are not enough. We'll see what
happens next.

In the meanwhile, we continue to advise buying on these politically
inspired dips while we wait for gold's day of reckoning as well. Have a
good day, my fellow goldmeisters. See you back here tomorrow.

Please call 800-869-5115 (Ask for Mary Conway) if you have an
interest in receiving a trial subscription to our widely read
newsletter, News & Views: Forecasts, Commentary and Analysis on
the Economy and Precious Metals. Or you can go to our ORDER FORM
and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.

Al Fulchino (12/07/99; 08:11:34MDT - Msg ID:20475)
tedw re 20641
email me we probably have some non gold topics to chat about fulchinos@prodigy.net

Black Blade (12/07/99; 04:54:45MDT - Msg ID:20474)
POG up $5.30 at $281.00 wiping out yesterdays down-draft!
Maybe Au will get back on track today. Yesterday's announcement by the Dutch CB was overblown for a known event.

From the Mining Journal, London, Nov. 19, we learn that Johnson Matthey expects platinum demand to increase to a record high of 5.59 Moz, up from 5.39 Moz in 1998. China is about to introduce autocatalysts for passenger cars. All new cars in China will have to comply with emission standards equivalent to European Stage 1 standards beginning July 2000, and are likely to have to comply with Euro II legislation by 2004. JM expects platinum price to remain strong over the next six months and to trade in a range of US$370-440/oz range (Eat your heart out S. Kaplan).

Black Blade (12/07/99; 04:41:07MDT - Msg ID:20473)
Y2K, the "super Bowl of computer viruses"
Virus Trackers Report Bug Aimed at Y2K

SAN FRANCISCO (Reuters) - The computer world's mischief makers struck this week with the first in what is expected to be a wave of viruses set to go off Jan. 1, 2000, computer experts said on Friday. A virus was discovered in computer systems of a number of companies, set to go off at New Year's and erase data from users' hard drives, security experts reported.

``This is the first Y2K virus we've seen that has really infected a number of people,'' said Sal Viveros, of Network Associates Inc. (Nasdaq NM:NETA - news), the largest computer security firm in the world. Anti-virus firm Symantec Corp.(NasdaqNM:SYMC - news) director of research Vincent Weafer said, ``This is the kickoff for the Y2k -- which is going to be like the Super Bowl for virus writers.''

The new virus, called W32/Mypics.worm, is set to disable computers as people try to start them up Jan. 1. The virus writer apparently is hoping to mislead users into thinking they've been hit by the much-publicized Y2K software bug, which is caused by computers' inability to read the ``00'' of year 2000.

The virus is sent by e-mail with no subject line to a target user. Inside the e-mail is a message saying ``Here's some pictures for you!'' Clicking on the picture launches the damaging virus, or worm, a kind of virus that does damage but doesn't continue to propagate itself inside the host computer. Like the earlier Melissa ``worm,'' the new infection uses the target computer's Microsoft Outlook mailing list to send itself to 50 people via e-mail. It can be detected ahead of the Jan. 1 ``payload date'' through use of an anti-virus software, or by noting a suspicious switch in the default page of the user's Web browser.

Computer security firm Symantech, the company that first sounded the alarm about the Y2K bug, said it has found five different Y2K viruses in recent days, but none reaching the level of the W32/Mypics.worm, which it classed as a ``medium to high-risk virus.''

Simon Perry, Computer Associate International Inc.'s (NYSE:CA - news) eTrust Business Manager said, ``As the year 2000 quickly approaches, we are starting to see an increased
frequency of dangerous viruses.''
The year has already been marked by a wave of destructive infections, including the CIH, or Chernobyl Virus, which wiped out data on thousands of hard disk drives, and Melissa, which was one of the most widespread infections ever, though not as damaging to individual computers. A concerted effort to sound the alarm by computer protection services has tended to dampen the spread of the viruses, though some see their alarms as self-serving, since most
recommend a dose of their medicine, anti-virus software, as the cure. ``Once a virus is in the wild, and it's on everyone's detection lists, it tends to chill a bit. But
that doesn't mean it's not still a threat,'' said David Perry, security firm Trend Micro Inc. (NasdaqSC:TIMC - news) pubic information director. The most basic advice the security experts give is to avoid opening unsolicited e-mails. "Don't take candy from strangers,'' said Perry, ``and don't open suspicious e-mails on your computer.''

Black Blade (12/07/99; 04:27:57MDT - Msg ID:20472)
JCI to trade in N. America
South African mining group JCI (JCG:JSE)(Johannesburg) says it will consolidate its far-flung assets and create the world's ninth largest gold producer with an annual output of more than 1.3 million ounces of gold and attributable reserves of 36.0 million ounces, reported the Reuters news agency. The new company, which will be named JCI Ltd., will hold gold mining interests in southern and western Africa and seek a primary listing on the TSE by next September. The company says it will be based in Toronto, giving it better access to capital markets and an improved share rating.

ORO (12/07/99; 04:09:08MDT - Msg ID:20471)
SteveH - What they do
FOA pretty much spelled out what is happening.

Contrary to one of my contentions of possible decisions made regarding the LBMA, there was no such decision made. The LBMA is not being saved by the EU. The Saudi kitty, though, and the Kuwaiti one as well seem to be moving forward with some support for positions that backfired.

As far as the actions of the LBMA members themselves, the picture that FOA puts forward - and is completely justified by the facts available, most notably the trading volumes reported by the LBMA - is that the natives will control price to their advantage - till the limits of executing arbitrage are met and liquidity at spot creates great differentials between the pricing of paper and the delivered physical metal. They are banks and they feel completely at ease in issuing the appropriate debt to meet demand. Investor demand and investor physical buying are like drops in the bucket.
Within the walls of the market it is only the members that make the difference. At the market's gilt main entrance paper flows in and out. At the small back door to the vaults in the dungeon, the stuff of financial life, the gold, enters and exits in minimal quantities - 1% of settlement volume. 10-12 tons a day. Needless to say, this is the bottleneck of the market. The blocking of supplies at this door disconnects the paper universe from reality. What it means is that the trade in gold occurs outside the walls of the market when the little door is blocked.

The Fed may or may not participate, FOA thinks they are not participating themselves, however, the control it can excercise is limited. Even in setting interest rates, the Fed is limited because the Eurodollar market is the size of the US market. Hedge proportion calculations on treasuries and mortgage backeds show that the 5.4 $t in Eurodollar contracts outstanding in New York provide hedges for 80 $t in paired transactions, indicating 40 $t in outstanding positions and that about half the position trades against the rest of the world's currencies. My growth model comes up with 21-24 $t in straight Eurodollars outstanding. Anything beyond that was created in financial la-la land by the foreign bankers themselves, and did not evolve out of the US currency export trade (the biggest business the world has ever known). Some of it comes to possibly cover the 10 $t in foreign owned US paper (The Fed reports 5.4 $t - which does not include growth through interest comounding). To stay alive, the combined US and Eurodollar market needs to supply new currency at a gross rate of nearly 4 $t per annum. This is achieved by the creation of new loans, and by the growth of the global economy. How could it have gotten so out of hand? The reason is that it was started. The only way the system could remain viable was if it grew continuously. The new Euro credit market is taking away the debt growth from the dollar credit markets, hence the decline in Eurodollar liquidity and the higher TED spread. This will drive liquidity from the internal US markets to the Eurodollar market and raises the costs of borrowing $ relative to Euro even beyond the 2.5% spread between the two short term rates.

What the Fed controls is liquidity and short term interest rates. Raising rates while providing liquidity is the only possible way for the Fed to do its job on both fronts, to prevent the dollar from sliding while preventing the credit markets and banks from ceasing up. They are using this tool combo to great effect. Nevertheless, the liquidity add needs are growing, and the outgoing interest payments from the US to the world grow with every rise in the discount and Fed Funds rates.

In the gold arena, the media silence, and sunny side up reporting continue as the regulators look away from the markets so that their field of vision is shorn of evil.

SteveH (12/7/99; 2:13:04MDT - Msg ID:20470)
That is what they should do, but what are they doing instead?
Oro,

Thoughts?

Steve

SteveH (12/7/99; 2:03:49MDT - Msg ID:20469)
Euro
http://www.the-times.co.uk/news/pages/Times/frontpage.html?999
ORO, thanks for taking up the challenge. Looks like neither of us can sleep (with all the excitement and all). BRAVO.

Euro surges as Germany sees recovery

BY LEA PATERSON, ECONOMICS CORRESPONDENT

THE euro staged a remarkable turnaround on the foreign exchanges yesterday, gaining more than two cents against the dollar after stronger-than-expected German manufacturing data.
The fledgeling currency retested parity early in the trading day, but then surged as high as $1.0243 after figures showed that German manufacturing orders rose 3.2 per cent in October. This rise was more than three times larger than expectations, and followed a 4.3 per cent drop in September.

Investor confidence was also buoyed by news that the European jobless rate had dipped below 10 per cent for the first time in seven years, falling 0.1 points to 9.9 per cent in October.

The recovery in the euro helped boost sterling, which closed in London up almost 2 cents against the dollar at $1.6175. It weakened 0.7p against the euro to 63.2p.

Uncertainty surrounding this week's Bank of England interest rate decision also helped the pound, with analysts refusing to rule out the possibility of another rate rise.

New UK data suggested continued economic expansion, with growth in both the retail and manufacturing sectors.

The British Retail Consortium (BRC) said total sales in November 1999 were 4.6 per cent higher than in November 1998. Like-for-like sales were up 1.5 per cent, although the BRC said retailers had yet to see a pre-Christmas rush.

Separately, official figures showed a modest 0.1 per cent expansion in manufacturing output in October. Although the data were weaker than expected, analysts were encouraged by upward revisions to growth in earlier months.

The National Institute of Economic and Social Research estimated that the economy grew by 0.8 per cent in the three months to November.

SteveH (12/7/99; 2:00:03MDT - Msg ID:20468)
Can't confirm yet...but did you hear?
www.kitco.com
partial repost: Date: Tue Dec 07 1999 01:06
kiwi (Hong Kong Monetary Authority announces $30 billion euro position) ID#206358:

ORO (12/7/99; 1:53:39MDT - Msg ID:20467)
SteveH - US responses
--->A challenge for ORO. From a pure excercise of the mind, if you knew that a currency was formed to remove the dollar from the world's reserve status and in that move certain concessions would be lost to the holders of dollars, what top actions would you take as the protector of that dollar?

Two issues:
1. It is NOT in the long term interest of the US to bear the weight of the reserve currency, nor is it in the best interest of the "great leaders" (da@#% my tongue got stuck in my cheek) and the banko-corporate elite that install them to continue.
They will lose all control if the financial waters are allowed to rise any further in this dam. The natural breaking point of the system is there, right in front of us. All manner of tricks and media manipulation will not suffice to rid their faces of the deep red flash of embarassment and guilt.
The result will be a civil war and a complete revision of the common view of history would ensue. The utter and complete failure of the system on its own accord will not allow any an escape.
If I were interested in something beyond extending the drunken spree, I would plan a quick monetizaiton of government guaranteed debt (yr 1-3), and set gold as a transitional backing for the dollar till the dollar (name and character) is discontinued. I would immediately start sending 75-90% of the Federal government to seek their fortune in the marketplace with a generous severance package (15%+ per yr -yr 1-6). I would eliminate the income tax completely (yrs 2-3) and institute a property and sales tax. Once the outstanding debts are payed in scrip, I would end the existence of the Federal Reserve (yr 3) concurrent with the termination of the dollar and change banking laws to reverse the 1875(? exact year) banking law that allows banks to lend nothing and still call it money - they would need to refer to balance in any fractional accounts as Net Asset Value or balance owed, not call it by name of currency and disallow the claim of redeemability on demand.
Would this be disruptful and disasterous? Very much so.
So why? Because we face this disaster on a greater scale if we don't do it, and do it quickly. The intended consequences are to throw into the markets all the leveraged real assets, and push the financial universe over the cliff. The intention is to stop the current misallocation of resources and to get people back to natural markets. The transition is painful but will happen more peacefully and in a more organized fashion if it were done immediately and under controlled conditions, than if it were done during the collapse of the dam and the rush of government obligations behind it come due within a few months. The concept is plain.
The economy is composed of a transport and distribution system for other nation's goods and services with a financial system that recycles the funds received in payment. The economy we have is only there because there was no choice for the world till 1992 but to do so. The damage done to the US economy will take decades to undo. The longer the transition time to reality, the longer the nation's resources will be diverted from their most productive uses, resulting in a loss for all involved.
Is this extreme? Very.
Is it better than defending the status quo? Yes. Because the status quo is a baloon full of holes that needs constant patching and consistent increases in air pressure (total debt) to prevent it from collapsing. As the air pressure is raised, more and more of the old patches come flying off and have to be glued back on. More and more of the world's resources are needed to keep the balloon going.
Is it better than a decade long transiiton? Yes.
Is it better than trying to see how long it can go on? Yes.
Is a disaster bound to happen? Yes.

2. If I were Clinti and company, and don't give a hoot, I would try to get the current system to remain stable through the election year, and make sure someone from the other party gets elected, so that my own does not get tarred when this falls apart. I would not attempt to "grow the economy", just keep it from keeling over.

The combination of OPEC and creditor nations refusal to continue with the current system because they can no longer shift its costs to the developing world means that we are going to face reality sooner or later. If they had their way, we would undergo a slow and agonizing collapse spanning a generation. If the Arab oil countries were to excercize their power to price oil in anything other than currecy (gold) then the game is over anyway. If the EU does the trick, it would still be with an eye to capture the productivity of Americans over the next few years.

SteveH (12/7/99; 1:34:21MDT - Msg ID:20466)
Dec gold now...
$281.00 up $2.80.

SteveH (12/7/99; 1:32:59MDT - Msg ID:20465)
I liked it because he mentions rights to protect oneself
www.kitco.com
Mozel --

Date: Tue Dec 07 1999 02:52
mozel (@The Torch of Freedom) ID#153110:
Copyright � 1999 mozel/Kitco Inc. All rights reserved
Some decide to pass the torch of freedom on or take a pass on it; some hold on to it. Yes, freedom was fought for in England for a thousand years and the American nation was born out of that history. But, we severed ourselves from it, politically, and in that is all the difference.
The united States of America which won independence are inhabited by a nation of western civilization not by a new civilization. That nation severed its political connection with Great Britain. Congress restored by treaty commercial intercourse between those colony corporations and Great Britain. Now, that nation is engaged in a great struggle against abridgements, infringements, denials, and disparagements of its political liberties by claimants of commercial rights with origins in the original mercantile colony corporation charters and in treaties with foreign sovereigns. Now, as then, it is with the King's attornies that this struggle is first joined. Our childen shall live as subjects of corporations or as free men and women. On the outcome of this issue depends the political, civil liberties of not merely this nation, but of people in nations around the globe. There is but one statue of liberty on the face of the earth today. There is but one nation conceived in liberty. I would there were ten or a thousand. The Rights of Man are denied by every King and were denied by the English Parliament vigorously and continuously in the years prior to our severing all political connection with Great Britain. Those rights are claimed, declared, they are won; they are not granted. What is granted may be withdrawn, amended, redefined. Where men have not claimed and won the Rights of Man, they live with such as are granted by the leave of their betters in the board rooms and privy councils of this world. There were once rights in common-law which were by tradition immune from Parliaments. Where are they now ? Where is the right to self-preservation in Australia or Canada now ? Where is the right to speak freely there now ? Is a man's home still his castle there or is it merely the place where the governor sends his tax bill and his searching officers ? What has become of the common-law right to use the king's highway freely, the right to travel, to migrate, or locomote ? The answer is they were not ever rights, but merely privileges granted by the King's leave which the local Parliament has revoked.
In America, our struggle is less with the law in which each of us are joint tenants in sovereignty as Sovereigns without subjects, than with the BAR lawyers of a would be ruling elite and with courts which show themselves as courts constituted to the public but whose judges admit in decisions that they are mere creatures of Congress or the State Legislature. The struggle to live in the Light of Liberty is not one merely with the darkness of brutal force, but with the darkness of ignorance and the darkness of evil spirit.

Farfel (12/7/99; 0:44:27MDT - Msg ID:20464)
PH in LA...Your analysis is extremely astute.
When you say that the nature of central bank sales has changed, you are absolutely correct.

They are no longer announcing sales AFTER the fact, instead announcing them before the fact in order to suppress/drop the price of gold. BOE's gold auction is designed to award gold to the LOWEST bidder, no doubt about that.

I do NOT disagree with you on that matter.

When I say,"Same old, Same old," I refer mostly to the now familiar fearful reactions of gold investors to these Central Bank manipulations. There is simply NO reason to panic; instead the reactions should be completely total indifference, immediately followed by phone calls to brokers to BUY, BUY, BUY as much gold as possible.

But that is not the case. Gold investors continue to tremble at these desperate CB measures. Until I see the gold price JUMP up strongly when the next CB preannounces a gold sale, I will not believe that gold investor psychology has shifted, from men who cower and tremble at the slightest sound of anti-gold rant to men who are strong and fearless no matter how loud the media shouts, "GOLD IS DEAD!". On that day, I too will be diving back into the gold market since I will then finally accept that the gold men are the strong ones, not all these hi tech baby brats who have zero knowledge of economics, history, finance, etc....who in fact should be the ones most nervous about the current conditions of this obvious equitiews bubble market but in fact are completely fearless.

Thanks

F*

Netking (12/7/99; 0:24:42MDT - Msg ID:20463)
Bill(20457) & Peter Asher(20454)
Bill - Open interest at Comex is/has been declining, not a good sign for a new move up or downward. Downside potential from $275 though must be very minimal, going long at $275 would not be stupid. Some gold mining co's have still been covering their interests with freash hedging showing a lack of confidence (on their part) in market led prices V's say that of Harmony etc. Watch vital statistics at Comex to show new intentions per specific groups of players.

Peter - Looks like a 'bungy' graph & I think we'll get more of the same for a while. Great traders conditions though.

ORO (12/7/99; 0:19:05MDT - Msg ID:20462)
FOA - Thanks
Many thanks for the efforts.
I would expect current conditions would keep you quite busy.

I appreciate your posts in answer to my questions and those of so many others. Very enlightening. I am sorry that I had not the time to put together more questions. My plans for the weekend did not allow for changes. Quite unfortunate.

tedw (12/7/99; 0:10:36MDT - Msg ID:20461)
y2K
HTTP://WWW.USAGOLD.COM

Al Fuchino:

Yes, the quote from the LAPD officer regarding Y2k was
out of the Foundaton of Human Understanding Newsletter. I
should have credited my source.

And that makes it extremely credible.

Bill (12/7/99; 0:04:55MDT - Msg ID:20460)
Question to FOA and/or ANYONE ELSE
QUESTION TO FOA and/or ANYONE ELSE

Hannibals have managed to press the POG down to nearly what it was before the announcement. By now, anyone in his right mind has to know the POG is manipulated. The natural price pressure would seem to be up. The ability to force the POG down much further doesn't seem likely. Any call options that were sold before Sep could be bought back now cheaper. If you were part of this manipulation. Would you not now liquidate your upside risk and reverse your position???? (now collecting profits on the way up). Unless the huge short positions have already been covered and from the constant manipulation, that doesn't seem likely. It would seem that a huge short covering rally could be gained as players don't want to be caught in the same position as Oct.

Thanks for your comments.

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