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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 10/7/2000
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Zenidea (10/07/00; 23:41:21MT - usagold.com msg#: 38535)
Divide and conquer :)
Just curious ? . As some of you may know Australia has introduced a GST ( Goods and Services Tax ).
Apon frequenting a local mint lately , I was asked to sign a form apon purchase that in essence stipulated that I would not charge the said people of whom the said bullion was purchased from a GST should I decide to sell the same back to them ?.
I remember an icecream on sale that had lollies in it, and of which my two then young daughters would squabble over each accusing/complaining that the other was taking out the royalty thereof.
So to serttle matters one would divide out two bowls and the other would have first pick.
All things being equal I wonder no suspect for no apparent reason whatsoever ... Why is his so ?. Loopholes anybody ?. regards.

Zenidea (10/07/00; 23:15:48MT - usagold.com msg#: 38534)
Aussie. Democrats call for summit on A$
9.45 (AEDT Democrats leader Meg lees has called for a round table economic summit to look at issues relating to the collapsing dollar.
She also called for Government to stop cutting funding to pay off government debt and to provide funding for education and research and development.
" I would call on this government to actually get togeather a national economic summit to look at the issues
relating to our dollar" Senator Lees told channel seven.
She said the economic rationalist policies pursued in Australia in the past had not worked for Australia in the past.
" weve been there before and done that, the Labor government before this government went through the process of reducing tarriffs , privatisation." . " This Government's gone further down the road, reform the tax system, looked at workplace relations and the list goes on and on basically leaving it to the market.
" that isnt working , I think it is about time we really did sit down and do some planning beyond the next 18 months or so in the electoral cycle, but actually some long term planning as to where we want Australia to head".
She suggested a new look at household savings through superanuation , research and development investment and spending on education.
The current budget surplus should be put towards investment in the future rather than paying off debt.
"Our party room has discussed these issues over the last week or so and I think it is getting to the point where we do need something done at a federal level to drive this.

JLV (10/07/00; 22:44:40MT - usagold.com msg#: 38533)
TG
"Needless to say, gold will have to jump a great deal to do this.It will."

------------------------------------------------------------

Actually Gold won't jump at all.

Everything else will just move toward their real value.

Are my Western eyes changing?

Trail Guide (10/07/00; 22:26:10MT - usagold.com msg#: 38532)
Last post.

ET,

Your question about oil and it's continued use in this unfolding drama is a whole chapter's worth of replies. Oil will some day be priced very cheaply and this will make an end run around fuel cell technology and what have you. It's not the supply of oil that's been a problem, rather how we pay for it in real money.

Thanks all
Until the next time on the Gold Trail

Trail Guide

megatron (10/07/00; 22:23:36MT - usagold.com msg#: 38531)
justamerebear
One possible scenario/playbook was a book called 'The Great Reckoning' by Davidson and Rees-Moog. Very logical well thoughtout. If your here you've probably read it. I love refering to it. It's truly a work of art. But not pro-gold, although not anti-gold either.

Marius (10/07/00; 22:15:19MT - usagold.com msg#: 38530)
Oro: Price stability
Oro,

Thanks for your thoughts on the undesirability of price stability. I recalled, from my reading of Mises, Hayek, Rothbard, et al years ago, that the seeds of our economic destruction lay in government pursuit of the contradictory goals of full employment and price stability. In particular, price stability is only desired by:

a.) consumers who are ignorant of economics

b.) politicians who pander to them

Government enforced price stability is a sure formula for crisis.

M

Trail Guide (10/07/00; 22:10:49MT - usagold.com msg#: 38529)
Reply

beesting (10/07/00; 19:25:14MT - usagold.com msg#: 38504)

It seems since Sept. 22,2000 the up and down movements of the paper Gold markets close-ly follow the up and down movements of the Euro value on the FOREX markets. Is this movement a coincidence or is there some sort of correlation going on between the (perceived) price of Gold and the value of the Euro?

Hello beasting,

I know that somewhere,,,,,, out there,,,,,,, some smart brains are starting to put a relative value on the Euro using it's relationship to gold. It's only just starting, but it's almost like using Euros in place of what Gold stocks used to be. Indeed, if the Euro becomes established as the premier settlement currency and fully allows gold to price out to whatever level,,,,,, then in dollar terms Euros will return an awful lot. Just look at it like a native holding dollars during one of the Asian meltdowns?

As time goes by gold and Euros will most likely run together. Again, we shall see.

Thanks
Trail Guide

Usul (10/07/00; 21:57:01MT - usagold.com msg#: 38528)
To conclude
Equities are being decimated.

There is a good chance that the dollar is in for a spell of depreciation. The UK pound is usually on its coat-tails. The euro? Who knows...

Time to review the age-old reasons why gold holds its value in a crisis...

Usul (10/07/00; 21:53:38MT - usagold.com msg#: 38527)
For Tech Stocks, It's a Slippery Slope
http://www.iht.com/IHT/TODAY/SAT/FIN/techstox.2.html
"Popular stocks such as Intel Corp. and Apple Computer Corp. are ''being taken out and shot one at a time''"

Americans have been putting their money in stocks, savings have disappeared, and all kinds of credit sources have been drawn upon. How many people are now looking upon the savaging of popular (formerly) high flying stocks with horror?

Alan Newman comments on current stock market participation at
http://www.cross-currents.net/charts.htm:

"... participants are trading at a clip more than 4.4 times as high as in 1968, just about the peak of the broadest advance of the prior secular bull market and in precise alignment with the prior peak in investor exposure to stocks. At that time, approximately 45% of household assets had made their way into equities, a record that stood until only recently. Household assets in equities are now 50%. The increase in participant's exposure is highlighted most dramatically in the margin debt numbers, showing an acceptance of risk on an unparalleled scale since perhaps 1929. Measured in this manner, risk is four times as high as in 1987, when the stock market crashed. However, given the ready availability of home equity loans and second mortgages, we can easily make the case that much more borrowed money has found its way into the stock market. Worst case: 1929 all over again..."

Trail Guide (10/07/00; 21:53:36MT - usagold.com msg#: 38526)
Reply

JavaMan (10/07/00; 19:13:20MT - usagold.com msg#: 38503)

Now THAT doesn't sound good. Please, Trail Guide, for the common man, would you care to expand on "the US fed will see to it it's downhill from here on out"?

JavaMan, Hello!
Well, the US economy is going full blast now even as the dollar is at it's peak. In the past, at this stage the dollar would have already rolled over from the effects of fed / treasury / government intervention to slow the boom. In fact, contrary to everything we read and hear, they have been trying to slow this thing down for some time. We only hear it as; "it's the new computer, highly productive, new wave, next economy that's driving all the money into the US and their markets"! But, in reality something was out there driving the dollar higher even as the brakes were being
applied.

Now the government is in a box it's never been in before. It they raise rates or slow reserve creation this will just drive the dollar ever higher while at the top of a boom phase. The explosion in deficit trade balances would at some point cause a crack up from where there is no escape
(deflation?). They can only play the intervention card to lower the dollar and that (because we are the dollar creating entity) will cause an inflationary run. Further, in conjunction with intervention, they could also lower rates. This will have the same effect in this overheated marketplace. Either way, the dollar is going to drop to the level of the Euro.

Note: again, I ask how are we going to know that? It will spin as "the Euro finally rose to dollar par"!

Then and only then will we all have a look at our respective US and European financial structures on a relative even basis. I expect to see the Euro Zone taking off with some price inflation and a declining trade surplus heading toward deficit. All the while the US goes hyper with mountains of
dollars coming home. And I don't mean coming home for investment. I mean coming home to exercise delivery against real US produced goods. I expect that before this is over, we (US) might be forced to use our gold card to help devalue the dollar. That would involve a forced restructuring of. the gold markets so as to make gold rise. A few political heads would roll if this takes place. Believe it!

So, will this all begin before the elections? The fuel certainly is in place. We shall see.

Trail Guide

JavaMan (10/07/00; 21:45:42MT - usagold.com msg#: 38525)
Sir miner49er...

Thanks miner, after re-reading your post I see that you did, sheesh, I even quoted it. I guess I just have a tough time believing Clinton sees us as "people to be guarded."

dragonfly (10/07/00; 21:36:33MT - usagold.com msg#: 38524)
Trail Guide
The mention of your friend in Texas made me smile and recall something his brother in the restaurant business once said -

"Anybody could make a million in Houston, it takes a genius to make a living in Galveston."

How true it was at the time.

Thanks for all your insights.

Usul (10/07/00; 21:35:46MT - usagold.com msg#: 38523)
Is the US Trade Deficit Sustainable?
http://207.238.152.36/PRESS/mannpr.htm
"One possible response in the short run is a decline of perhaps 25 percent in the value of the dollar. Such a decline could be readily absorbed, by both the United States and the world economy, if it occurs gradually in a context of faster economic growth in Europe and Japan. It could cause severe disruptions, however, if it were to transpire precipitously under present economic conditions: inflationary pressures would be generated and interest rates would be pushed up in the United States, and the nascent recovery abroad would be significantly retarded..."

September 14, 1999 - Institute for International Economics

Recent weakness in the euro area, and continuing weakness in the economies of East Asia, suggests that the likely path for the dollar is weighted towards the more pessimistic of the scenarios outlined by the above. And there is also the inflationary pressure from oil, whose price has risen considerably since the above was written.

Usul (10/07/00; 21:22:18MT - usagold.com msg#: 38522)
Dollar vs. Trade Deficit
http://www.cdc-marches.fr/fmr/gb/resume/res151.htm
Patrick Artus, in a resum� of a CDC March�s private paper:

"What accounts for the external deficit of the United States?

Drawing on a detailed and econometric analysis, we show that the US trade deficit depends on the household savings rate, the dollar's trade-weighted exchange rate and, to a lesser extent, the cyclical position of the US economy in relation to rest of the world. This implies that the deficit can be cut via a real depreciation of the dollar or by a rise in US savings. A return to more homogenous global growth would have a smaller impact."

Well, the US savings rate chart looks like it just fell off a cliff (negative savings rate), many people are in debt up to their eyeballs, and the trade deficit is huge. If the paper markets collapse in bear mode, those who thought their worth was safe in equities and thought nothing of saving cash, will have no way of recreating savings. Indeed, I would expect the savings habit to return only after a long period of economic hardship has re-taught lessons such as were learned in the 1930s. Therefore, and bearing in mind the above summary analysis, we can expect on balance of probabilities a "real depreciation of the dollar".

miner49er (10/07/00; 21:19:31MT - usagold.com msg#: 38521)
Replies
JavaMan - Perhaps he will consider what condition the game is in, before getting up� who can say anymore? And actually I was specifically referring to the American citizen when I referred to the "people to be guarded."

John Doe - thanks�

Aristotle, re: Simple thought - simply put, simply excellent�

Aristotle (10/07/00; 21:13:42MT - usagold.com msg#: 38520)
The problem with Giacinto Auriti's simec or Lincoln's Greenbacks
If you were the owner or producer of real wealth--such as shoes or food--would you part with your wealth in exchange for paper that the government were freely distributing to the people, and even creating for its very own use?

Why part with your wealth to obtain this free and easy (no-interest) paper when you could just as easily (and more prudently) keep your wealth for yourself, and simply stand in line for your own handout of this paper?

Gotta run. JavaMan, ET, thanks for the comments.

Trail Guide, you're the best. Must be something in the wind tonight. Truly enjoyed your walk down the Gold Trail today. Excellent delivery!

Gold. Get you some. ---Aristotle

elevator guy (10/07/00; 21:13:11MT - usagold.com msg#: 38519)
War breaking out in Israel?
Just continuing Black Blades' post-

It seems that full blown war is looming on the horizon, as Palestinians, Hezbollas, and Israelis square off. A very sad situation to be sure, and I am regretful of it.

What will this do TPOG? Oil?

What to do? Go long?

ET (10/07/00; 20:53:44MT - usagold.com msg#: 38518)
Money
http://www.FreeRepublic.com/forum/a39de203b1d5f.htm

From the article;

"From her perch below a poster that depicts a miracle of Christian faith,
Sandra Iannamico is performing a little wonder of her own. She is doubling people's money.

"One by one, each of the half-dozen clients lined up at her table in the courtyard of a 15th-century
palazzo steps up and surrenders a handful of Italian lire. In return, Ms. Iannamico gives them a
multicolored sheaf of a new currency called the simec, at an exchange rate of 1-to-1.

"In most places, the simec wouldn't be worth the paper it's printed on. But in the bustling shoe store
next door, and at about 40 other merchants in this mountaintop town of 12,000 overlooking Italy's
Adriatic coast, one simec can buy two lire's worth of goods.

"A simec

"The simec, whose name is the Italian acronym for "econometric symbol of inducted value," is the
brainchild of Giacinto Auriti, a wealthy local academic. This past summer, the 76-year-old retired
law professor spent much of his fortune to finance the simec in an effort to prove his eccentric
theory about money and a vast banking conspiracy. So far, his experiment has produced a frenzy of
consumption in Guardiagrele, a rupture in the local business community, a rebuke from the Bank of
Italy and a legal victory for Prof. Auriti, who hopes to convince the world that central bankers are
the biggest con artists in modern history.

"His main thesis: For centuries, central banks have been robbing the common man by the way they
put new money in circulation. Rather than divide the new cash among the people, they lend it
through the banking system, at interest. This practice, he argues, makes the central banks the
money's owners and makes everyone else their debtors. He goes on to conclude that this debt-based
money has roughly half the purchasing power it would have if it were issued directly to the populace,
free.

"Initially, Prof. Auriti tried to challenge his own nation's monetary policy through the courts. But
Italian judges have thwarted his efforts to sue both Bank of Italy Gov. Antonio Fazio and former
Gov. Carlo Azeglio Ciampi for alleged fraud and a slew of other offenses, including incitement to
suicide. So, Prof. Auriti conceived another way to make his case."

Trail Guide (10/07/00; 20:46:57MT - usagold.com msg#: 38517)
Comment

SteveH, what can I say, you have written so much recently I have a hard time covering it all. Because my system comes on in auto mode and copies the forum at random times,,,,, or someone does it for me,,,,, I don't always catch all the imput. So, I'll try to comment on some of your thrust.

Just looking at 714's post #38448 today one can see that oil prices in gold go way back. It's no secret that in a broad term of valuations 1 gram brought a barrel of oil. We mentioned something to that effect long ago. Truth be told that is where Bunker Hunt got the angle when silver was in the $20 range in the late 70s. Then silver was hitting the old dollar gold targets that gave 1 gram gold for a barrel. He went on and on how one ounce of silver was equal to a barrel of oil.

Well, so much for then. Some producers are striving for a pricing gauge that can peg the value of oil in a modern society. A gauge that is not corrupted by currency inflation (I'm talking about the expansion of currencies not the general price levels such an expansion produces).

If someone is going to print some derivative,,,,, hand it to you in exchange for a finite commodity,,,,,, that's fine as long as you immediately lend it back to them or spend it for something. The problem today is that lending derivatives only brings in more derivatives and that process is made irreversible if the nation you deal with runs a permanent trade deficit. That's because the remedy to said trade deficit, when it is eventually deployed destroys the actual derivative (paper money) you are lending. It doesn't take a nuclear scientist to understand how this will end and how
it will affect your long term wealth. On the other hand, spending the money on something has it's limits when you are trying to build a self-sustaining economy. One that allows your citizens to market their abilities to the world. Neither can you trade your paper dollar wealth for gold wealth if the rest of the world gets wind of it?

In the end you are left to selling some portion of your oil for gold. No it doesn't happen the way our trader boys delight in degrading it; "some truck loaded with gold backs up and dumps bullion bars on the ground as the main man tells his worker bee to turn the valve"! No the oil is turned into bookkeeping currency digits in some bank's computer. Then those digits are traded for the ownership or rights to gold. When someone posted what Another said the figures were, I think that that 20 million of actual bullion in retention represented the tally over some ten years (and was growing).

You see, gold like any currency is also spent. Even Cavan Man (smile) can add up all his pay receipts over ten years and that doesn't equal his savings. That would be nice CMan but it doesn't work that way, does it? The main reason they don't take gold outright, 1 gm per barrel is that "noone" wants to bust the digital system completely. As much as everyone thinks our paper money is all bad, it really works fairly well. I think oil producers are like everyone else and only want a more fair control on the print press. As it is right now, the dollar is done and we are just witnessing
the management of it's transition away from reserve status.

To that end, oil has played the gold paper game with the best of them. No, they don't expect all their paper to return physical gold. But they do expect the gold they now have and a portion that will be sent to them (settling paper) to take over any lost wealth that occurs as the dollar grinds down. Needless to say, gold will have to jump a great deal to do this. It will. In doing this gold's
dollar value will represent all the incoming domestic US price inflation on the horizon plus all the currency inflation left over after the dollar hype's out. Again, that will be a lot. Much, much higher than anyone with Western eyes can now see.

But selling (inflating) paper gold to keep the price down (so oil can flow) had it's draw backs for the dollar system. Yes, it creates a two tier paper market that will send gold to the most favored first (in case of failure). But the left over contracts (held by hedgers both large and small) will have a huge disproportionate impact on the financial structure. Not only will no gold be delivered because
enough doesn't exist, but the price rise of physical against such paper will drain the books of many major financial houses. And at the price levels we are talking about, official intervention will be an absolute. At least until the wipe out is done, then gold will come to the forefront. Further, in today's world of molecular speed trading, all of this initial crisis will happen in a heartbeat. Blink,,,, it's done!

--------------

Steve, like I offered in an earlier post today, what perception of value is true? With all the dollars and their derivatives that are around today (80 trillion??) how can we know where the worth of oil is to our modern society? The continuos printing of dollar derivatives and gold derivatives makes the whole question a joke. Even supply and demand cannot answer the question when our supply and demand use dollars to create both sides of the equation. This is where physical gold comes in. It's the only denominator that is money in and of itself and no one can inflate it. We say, OK, one gram per barrel is where we are going. What currency price per barrel will that be? Who can tell? Will that much gold flow in to cover all the barrels produced? Of course not, all of us have bills. But some small portion will be retained and it's that portion that has become the ticking time bomb for the paper gold world!

This is the reason Another said they would eventually burn the paper markets. His implication was if the Euro failed at birth and later if the Euro succeeded. Once the Europeans began their withdrawal in 1999, it would be left to the US to act in it's own best interest. Just as they did in 71,
they will print paper gold currency until it's trading market values it at zero. Going back in time, I remember when the pre 71 dollar was being sold (inter CB trade) for 1/10 it's gold backing because everyone began to expect that no gold would be delivered to settle international trade
balances. I suspect that our present gold markets will do the same thing.

The Europeans have tried to structure their new currency to be prominently displayed as all this unfolds. Any breakdown in the dollar paper gold system will drive people away from dollars and into Euros and physical gold. Because the ECB / BIS is committed to a FreeGold market, the sky will be the limit in dollar terms. I fully expect the ECB to begin it's assault now because as Mr. D has said, our Euro is now mature and can walk into battle. We shall see!

thanks SteveH

Trail Guide

Aristotle (10/07/00; 20:40:36MT - usagold.com msg#: 38516)
Also unsaid, but it similarly follows from my msg #38513
Just as a declining dollar valuation could effectively mask a stock market downturn as a purely numerical exercise, so also could an declining valuation of paper Gold equivalents effectively mask an UPTURN in the underlying fundamental value of physical Gold. Think about it.

However, it must be said that whereas a weaker dollar could forever conceal, numerically speaking, a stock market collapse, the production of excess and devalued paper Gold only results in a temporary masking at best, as it further aggravates and propels an inevitable run on the bullion banks.

Gold. Get you some. ---Aristotle

ET (10/07/00; 20:34:05MT - usagold.com msg#: 38515)
Aristotle

Hey Aristotle - nice sentiments. You wrote in part;

"I would call that an invisible crash, and it is probably the version that the government and monetary
officials would favor because the banking system at least would have a prayer of surviving. But
"bye-bye" to the value of cash savings and bond holdings."

I happened to be in a home improvement place here in Lawrence today and was stunned by the huge inventory reduction. The store literally seemed to have half as much stuff as last March (including employees). Considering this store has always been well-stocked it has been quite a sudden change. I'd say they are victims of the invisible crash as you describe it.

JavaMan (10/07/00; 20:28:51MT - usagold.com msg#: 38514)
Aristotle, this may be my only chance to correct you...
so I am going to jump on it...you...Sir...are no simple thinker.

You said "I just wanted to express one reason that a person should think over their strategy IF they happen to be waiting for signs of a stock market downturn (as expressed throught the indices, for example) as their cue to start buying Gold."

You do have a gift for understatement. When Intel dumped to 49, I called my friend who I know to be in the markets and he said "it's a buying opportunity" and he bought more. Now INTC is struggling at 40.

Your preaching to the choir, but I say bring it on brother!

Keep it up.

Aristotle (10/07/00; 20:22:25MT - usagold.com msg#: 38513)
Unsaid, but it follows from my msg #38511
Given the dollar's position as the key currency, "bye-bye" to the value of the dollar and bond holdings (as expressed in that post) would translate into "bye-bye to bullion banking" in the resulting scramble for Gold.

Because the Dollar System has a symbiotic relationship with the bullion banking system such that, as long as the dollar appears strong, and Gold appears weak, both systems will survive and support the other. But if either side of this delicate balance were to get rattled...

The fact that the Euro System has built a symbiotic relationship with a Free Market Gold System should send you a clear message as to which currency system (dollar or euro) is fundamentally built for longterm survival and harmonious existence with the ways of human nature.

Gold. Get you some. ---Aristotle

Aristotle (10/07/00; 20:13:10MT - usagold.com msg#: 38512)
JavaMan, I think the operative part of the phrase was *from here on out*
By the way (for Black Blade) --Three Kings-- I enjoyed it well enough to buy it on DVD. It conveys a very positive message about the power of Gold when all is said and done.

Gold. Get you some. ---Aristotle

Aristotle (10/07/00; 20:08:05MT - usagold.com msg#: 38511)
A simple thought from a simple thinker
I just wanted to express one reason that a person should think over their strategy IF they happen to be waiting for signs of a stock market downturn (as expressed throught the indices, for example) as their cue to start buying Gold.

Picture, if you can, a generic but suitable valuation for such corporations as Cisco or IBM. Got it? OK, our example is almost over. Now, try to picture what appropriate dollar price should be quoted for these stocks if the dollar's perceived value starts to slide as fast or faster than the generally perceived valuation of these companies.

I would call that an invisible crash, and it is probably the version that the government and monetary officials would favor because the banking system at least would have a prayer of surviving. But "bye-bye" to the value of cash savings and bond holdings.

Gold. Get you some. ---Aristotle

JavaMan (10/07/00; 20:05:56MT - usagold.com msg#: 38510)
Sir HBM...

Just as we may not have a stock market crash, it could be a slow grinding bear market that takes years to complete. But on the other hand, things "currency" might be behave differently.

JavaMan (10/07/00; 19:58:04MT - usagold.com msg#: 38509)
Sir Aristotle...

Based on what TG says Usal's chart should be headin' south. I''m skiin' off into the woods...Yeahhh!.

What say you, TG?

Hill Billy Mitchell (10/07/00; 19:55:17MT - usagold.com msg#: 38508)
"Downhill of the Dollar"
I wonder if by "the Downhill", he meant "downfall". If not, "downhill" could only be referring to the fall of the dollar against other currencies. No more strong dollar in other words but instead an ever weaking dollar. I would prefer a slow fall. Would that be possible? I think not.

hbm

JLV (10/07/00; 19:35:14MT - usagold.com msg#: 38507)
Black Blade ---- Three Kings
Don't bother. It's total crap.

Aristotle (10/07/00; 19:33:32MT - usagold.com msg#: 38506)
Skiing for JavaMan--
What do you want to bet that Trail Guide's "downhill" comment was in reference to the dollar's exchange rate? That's my take on it. Contrast this with the sense of "uphill" that you might currently get when you look at the chart from Usul's post and link earlier today (10/07/00; 14:38:15MT - usagold.com msg#: 38476).

Gold. Get you some. ---Aristotle

ET (10/07/00; 19:28:09MT - usagold.com msg#: 38505)
FOA

Hey FOA - thanks for all you bring to this board. I'll bet you are a fine storyteller when the grandchildren are about!

I have a question regarding how you and your friends see this hyperinflation manifesting itself. Do you see more or less a slow degradation similar to the 1970's or more of a credit collapse without the benefit of a 'lender of last resort'? The so-called 'stagflation' scenario seems to make the most sense to me but would require at least some competitiveness on the dollar's part versus the Euro. I'm having an increasingly difficult time believing the dollar is capable of this. Given the severe overhang and trade position the entire American economy appears poorly structured to weather this collapse in credit.

If I remember correctly, Another addressed the problem of getting this change completed without unduly softening demand for oil or slowing the world economy dramatically. Since the US uses a significant percentage of world output, are the players involved attempting to what I'll call 'keep the show rolling' while at the same time wresting control from the US?

Once again thanks for you and your friend's time.

beesting (10/07/00; 19:25:14MT - usagold.com msg#: 38504)
Hello, Sir Trail Guide.........Question?
It seems since Sept. 22,2000 the up and down movements of the paper Gold markets close-ly follow the up and down movements of the Euro value on the FOREX markets. Is this movement a coincidence or is there some sort of correlation going on between the(perceived) price of Gold and the value of the Euro?

Thank You in Advance, and for all your postings and time spent here......beesting.

JavaMan (10/07/00; 19:13:20MT - usagold.com msg#: 38503)
Hello Trail Guide, You said...
"The dollar has hit it's final timeline top and the US fed will see to it it's downhill from here on out."

Now THAT doesn't sound good. Please, Trail Guide, for the common man, would you care to expand on "the US fed will see to it it's downhill from here on out"?

JavaMan (10/07/00; 18:42:03MT - usagold.com msg#: 38502)
justamereBear RE: The smart @ssed answer is human nature, People like sex.

Yes...that is a smart @ssed answer. But don't blame this disaster on human nature. People have liked sex from the beginning of time. The correct answer is some people are perverted and like perverted sex. And something recently has been introduced that makes this a behavior with major consequences. And poor souls like Arthur Asher, to name just one, are victims of it. But we are clearly off topic.

Trail Guide (10/07/00; 18:05:08MT - usagold.com msg#: 38501)
Reply

ORO (10/6/2000; 14:54:46MT - usagold.com msg#: 38403)
Trail Guide - ECB rate hike
I take it that the WAR is going out into the open. Is that so?

Hello ORO and thank you for your time here. Your ongoing breakdown of economics is to say the least, expansive! (smile)

Yes, the war is heating up now. There is simply no time left for negotiations. Officials are definitely beginning to play their cards before the betting even comes around. Don't be surprised if the US strongly stomps on the dollar at the same time they lower rates. This will smash the carry markets and probably crunch the dow. Whether they can wait until after the election is now very iffy??

All the posturing in the ME for accepting Euros for oil is having an effect and the higher the oil price goes the greater this effect is becoming. I said in the spring that $45 a barrel was coming and now $30 looks like the bottom. If we allow such a settlement proposition to go by without some action against the dollar to head it off, the eventual drop in dollar strength could be incredible. Let's face it,
the only difference between the dollar and Euros right now is world settlement support for all goods. With our trade deficit where it is, selling dollars for even third tier currencies would crash it.

-----------
your post:

Some mention has been made that Eddie is dumping Euro and that the hedgies got a green light to resume shorting the Euro from the Anglo camp. Does this mean the UK has finally decided to go with the dollar camp after Labour stating for years that the EMU membership is "inevitable"? Was this presumed turn of events the cause for the escalation?

No possible way, ORO! That's another example of trader posturing. These guys have been shorting the Euro and Yen from the get go and don't know what's waiting for them. You said it all later in your post "Euro carry has had the door slammed in its face"! Their positions makes good talk, but in reality they are just providing hedge material (making a deep market) for legitimate trade financing in Euros. The shorts are in it for a trade while the big finance is done for many years. If you finance in Euros your risk is in a rising currency, so these shorts create the derivative for you to throw off to them, your risk. Once the perception changes, these billions in shorts will not have a market to cover in. The big international positions will just keep the shorts capitol and then some!

UK is sliding right into EMU whether they like it or not. How can they not? The dollar has hit it's final timeline top and the US fed will see to it it's downhill from here on out. The only escape for the UK is to jump into the relatively closed trading markets in the Euro zone. The EMU group trades with themselves a lot more than with anyone else so being within them during a free for all in the
dollar will prove irresistible. I sold my pounds a long time ago and know they will belong to me once again in the form of Euros. (smile)

-------------------

Further to comment to your post:

I think we have only begun to hear this talk about Euro oil settlement. Some of it is shifting right now and not saying anything about it. The Russians are selling so little of anything they are a non event right now. But wait, they will follow the leader, especially as we see more of an active stance from the US bringing down the dollar.

Now, for Steve (smile).

thanks
Trail Guide

RANGER (10/07/00; 18:02:07MT - usagold.com msg#: 38500)
Confiscation
Would someone settle a discussion as to whether Canada confiscated gold at any time in the past as was done in the U.S. If possible where would I find documentation of same.
Thanks in advance
Ranger

justamereBear (10/07/00; 18:01:11MT - usagold.com msg#: 38499)
Java man

The smart @ssed answer is human nature, People like sex.

Actually I have a population based story but it is lengthy, and I am expecting company so it will have to wait for tomorrow

Regards

Cavan Man (10/07/00; 17:35:58MT - usagold.com msg#: 38498)
Black Blade
Simmons is a recognized authority with a excellent professional pedigree. Although my timing was poor in following his suggestions due to '98 Asian crisis, log term, I think he's on the mark.

Buy gold and hold. That's a better long term plan.

Black Blade (10/07/00; 17:31:57MT - usagold.com msg#: 38497)
Three Kings
The film "Three Kings" is on HBO tonight and since I have access to HBO tonight, I think I'll watch it It seems that MK recommended this movie when it came out. Going for the gold during the Desert Storm event. Should be interesting oil, gold and Middle-East theme - how appropriate and timely.

JavaMan (10/07/00; 17:30:08MT - usagold.com msg#: 38496)
Sir justamereBear...

You have done a yeoman's effort in gathering facts regarding the AIDs epidemic and it is, no doubt, certainly an issue to be addressed. What would you say is the most significant reason for its epidemic proportions?

Black Blade (10/07/00; 17:19:46MT - usagold.com msg#: 38495)
RE: Trail Guide
It would not surprise me. It seems that condensates are also very desirable and easy to refine. I was told that some condesates could go directly into the tank of an auto without refining (though not recommended) ;-)

Black Blade (10/07/00; 17:14:49MT - usagold.com msg#: 38494)
The Oil World: 1973 Compared to 2000
http://www.worldoil.com/WO_RESEARCH/Research/whitepaper.pdf
If you read anything about the coming energy crisis - read this one. It's a large file (pdf) so better if you print it, read it study it, then it will become clear. It is well worth the read. I strongly urge all to read this paper. Hydro-Carbon Man is in for a world of hurt. The author Matthew Simmons lays it all out in an easy to understand format. Go For It!

Trail Guide (10/07/00; 17:09:35MT - usagold.com msg#: 38493)
Comment

Black Blade,

As a point of trivia: did you know that back in the early to mid 70s a Mcf of top tier (that's heavy) natural gas sold as high as $9.50!! That's when an old friend of mine that owned the Woodlands (in Houston) started cracking it into liquids. FWIW

Black Blade (10/07/00; 17:02:49MT - usagold.com msg#: 38492)
Oil and the Coming Global Economic Slowdown
http://www.stratfor.com/SERVICES/archive/WEEKLY.ASP
A differrent take on the comparison to 1973

justamereBear (10/07/00; 17:02:34MT - usagold.com msg#: 38491)
To ALL Oilman 38382 GiovanniDioro 38404 Hi-Hat

To ALL , Oilman 383452 Giovanni Dioro 38404 & 437 Hi-Hat 38404

Hi-Hat re www.dieoff.org Shees, and I thought I was negative!

Giovanni Dioro
38404; Thanks, I will follow up.
38437; Re weak Euro. (and conspiracy) (IMHO) while there is a downside, generally I would suggest that the Europeans want a lower Euro because it strengthens the trade position. But politically they have to appear to be doing the opposite. The US has other motivations; They are terrified that a weakening dollar will unravel all that confidence that keeps their borrowing and power so strong. Politically, they to, have to "support" the weakening Euro, but behind the scenes ??? No formal conspiracy, but the effect is there.

Oilman 38382
Ageis.com, Aidsline, and Dr Alan Whiteside, are much more in the direction that I want to go. (I would suspect your thinking is along the lines that I want to go.) I suppose one might label it "behavioral science" or possibly "the ripple effect". (as follows)

TO ALL (comment invited)
It is fine to be a goldbug, and I agree by being one, BUT, while I believe gold has a definite place, stopping at that, I believe, is shortsighted.

I will start by posing an old French riddle, which I posted someplace. (but not here, as I recall.)

There is a lilypond , and on day one there is one lilypad in that pond.
On day 2 there are 2 lilypads in the pond, and on day 3, there are 4 lilypads in the pond. And so it goes, with the number of lilypads doubling each day, until on the 30th day the pond is full.
Question- On which day is the pond exactly half full?

The point is, that on the 26th day, when the pond is 1/16 full it is not easy to see that it will be full in the very short time of 4 more days. Only on the 28th day when it is � full, or on the 29th day, when it is � full, is it easier to see that it will be full soon.

This is a geometric progression.

Worldwide, the opinion as to the starting date of AIDs, varies somewhat. Generally there is agreement by everyone I have seen, that there was no possibility it may have started before 1975. Many stories I have heard put the date when the first human was infected as being in the early 80's but generally not later than 1984. I have arbitrarily picked a date of 1982. (and I must apologize for using HIV infection, and the term AIDs somewhat interchangeably because the infection of others seems to be possible in either state.)

Recently, I read that, I think it was for 1998, the estimated HIV positive population of the world was either 85 or 185 million. Not that it matters much when you consider the lily pond and that this started initially with one person. THIS IS A GEOMETRIC PROGRESSION. Without all the rocket science math, it appears to me that about 1/6 or 1/7 of the HIV infected population dies each year. That means that upon infection the average life expectancy is 6 or 7 years. It also appears that each infected person infects, on average, slightly more than 2 other people each year. Each HIV/AIDs infected person is probably infecting more than 15 others in his lifetime, who are each in turn infecting 15 others during their lifetime, (15X15) who each in turn�.. You do the math. Theoretically, when does the entire population of the earth become infected?

Happily, theory will not be strictly equal to practice, because some people will, for example, be monogamous. Also happily about 3% of the HIV positive population seems to be AIDs immune. Unfortunately, it appears that well in excess of 50% of the North American population is now infected with one or another of the STD's. (implications re morality) Most commonly, with human papilloma (sp) which is fairly benign, since it only has an implied connection with cervical cancer. Also unfortunately, the highest incidence appears to be in the younger, child bearing agegroup.

Leaving AIDs for a moment and skipping nimbly over to behavioral science with an example using oil.

Behavioral science teaches that humans, when faced with a major negative, go through several phases which include; Denial, Anger, Acceptance of the fact. (and roughly, I concur)

In the early 70's, peoples noses were rubbed in the fact that we had a FINITE supply of hydrocarbons. The price went up. California produced emission standards. New horizontal drilling and injection methods, etc were developed. 10, 20 or maybe even more years were added to the recoverable oil reserves. In a world that is concentrating on nano and femto seconds, 20 years is forever. It is not. But, mankind had collectively decided that mankind had always muddled through, and always would, and so, collectively they shrugged and went on to other things such as phosphorous in soap and Y2K. They were concerned. Oh Yeah. They were also in denial about oil.

In the denial phase, mankind started to proudly measure the state of societies advancement by how much energy was consumed. More advanced societies consumed more. The trend to lesser use of energy was derailed by the fashionable growth of such things as the gas guzzling "offroad" SUV. I will wager that 90% of the offroad vehicles in use today have never been on a dirt road, never mind no road. The use of hydrocarbons as throw away plastic packaging and other items grew like topsy. Conspicuous consumption was the norm.

Suddenly oil is on the radar screens again. And we have a great deal less of it. Much of North Americas lifestyle and society is built predicated on the consumption of energy. What do you think will happen, what IS happening, when Joe six pack is denied or limited in his "right" to climb in his gas guzzler and hit the road for the wide open spaces, for no other reason than he wants to.

Anger phase time.

This situation, and this phase was totally predictable, probably back in the seventies, and certainly in the 80's. I know. I predicted it, and was concerned.

Why are goldbugs so up in arms? They are, in my mind, are accurately predicting an event, and nobody will listen to them. Neither did anyone listen to me and my oil or other predictions. (and mostly they still don't)

Like in a game of chess, the guy who does not predict the next move is going to lose to the guy who does. The guy who sees the game several moves out is going to win over the guy who sees only one move out. I want to think about more than 1 move out. I would like to look at ALL the forces that will produce the next event, determine what forces that that event will produce, and thereby predict the event after the next one. I think that many goldbugs are narrowly focused on only one part of the picture, and as the AIDs example hopefully shows, there are other, major forces at work in our society today.

So in this row of dominoes, and I say row of dominoes, because, if the population starts to fall, where will government get the tax money to throw at an AIDs cure, and if AIDs is not cured, the population, and therefore the tax base, WILL fall. I see the major forces as being A)A probable implosion of the financial system, B)Disease, C)Population, D)The carrying capacity of the earth, E)Pollution, F)Naturally occurring cycles(such as weather) G)Mental attitude eg the unpreparedness of the North American population for negative change. H)Technology. I)Reliance on finite, but diminishing resources such as oil. J)Diminishing arable land. K)Specialization. L)Communications.

Not all of these items are negative, and some such as communications, are a two edged sword. They have potential to do very much good, but for example, they could erroneously spread fear.

However, the thrust of this missive is to look toward a method of predicting, and to attempt to garner ideas which will allow us to be better prepared for eventualities.

Let us assume that we do have a fiat currency crisis. What is going to be the possible reactions of government? Well, they are likely to be fighting desperately to save the treasury, since in the world as it exists today, from the treasury flows all power. He who pays the piper calls the tune. One thing they have always run to is a cooling off period. So that means a bank holiday.

Now take Joe six pack, teamster. How might he react to the closing of the banks? Well for starters, nobody is going to get a paycheck, no credit cards can be used, no bank machines because the banks are closed by law. The teamsters have learned that they need only tie up traffic, or at most, go on strike, and government will cave. How will Joe react if he finds his will no longer take this pretty toilet tissue in exchange for food?

If Joe sixpack ceases to carry goods, what is Mrs. 12 pack going to do when there is no milk coming into the city for her baby?

Anybody out there with an theory or prediction as to how this might unfold, or some forces I have not thought of, or any comments of any kind?

Trail Guide (10/07/00; 16:53:08MT - usagold.com msg#: 38490)
Comment

Hell everyone,

I wasn't going to add anything to the trail today, but we decided it was time to begin placing things in clear terms. It looks like our political posturing is leaving the "let's talk about this behind the door stage" and entering the "show us your cards stage". This is not just predicated on the recent ECB rate hike alone. Some other things are in the works and with this new climate, it won't be long before we see it on the news.

Certainly, we must talk about SteveH's recent posts. He has made a real effort in trying to unravel the gold value question. In addition ORO has some good reasoning that must be addressed. So before I begin:

Hello Hermit Club, and welcome!

I fully well know just how hard it is to see the prospects of US dollar price inflation right now. Unless one has been following this trail for a long time the present economic momentum seems like an object in motion that must stay in motion. But as I tried to present in the Showtime post, the US domestic price structure is already primed to show it's price inflation dynamic. For the first time we have placed ourselves in an unretractable situation. The dollar is terribly strong from this currency competition that it was forced into. If the Federal reserve tries to raise rates to slow our runaway expansion the dollar will only get more overvalued. That process alone will drive our deficit to the
moon. They will not are not going to allow this much longer. Yet, the fed has little choice but to stand pat or even lower rates in the face of any perceived slowdown. With the current debt and derivative stress built into the dollar system, their only card is currency exchange intervention to
lower the dollar. But we will always hear this as supporting some other currency.

As Giovanni Dioro said in #38437, " but judge them not by their words, but by their actions".

Hello GD, we do judge them by their actions. Just because the Western press, official press releases and various traders say the recent intervention is for the Euro doesn't mean it's true! On one side of the equator the drain water swirls one way while on the other side it goes the other, no? So if the Euro is up the dollar is down? Or is it if the Euro is down the dollar is up? Which perception is right?

We watch the actual local buying power relative to the local currencies to judge which way the water flows. Not only is Euro purchasing power relatively stable, it's basic across the board interest rates are lower than the US. The ECB could just as easily raise their rates to par with the US and the Euro would spike well above the dollar without any intervention at all. But making the Euro "as strong as the dollar right now is not their plan. The dynamic is to lower our over stressed dollar back to a "strong Euro level"! Now that's a different picture when one sees the Euro where it is with it's low financing rates. Rates that are building a solid foundation under their markets. In time here is where we will see who has the power!

But Euro weakness is not and never was the problem. The ball is squarely in the US court for them to lower the dollar to save their economy busting trade deficit from blowing them sky high. That will require the US to buy Euros or lower their rates and both those actions will greatly expose the
current built in weakness within the US structure. Yes, indeed, everyone is following the Euro weakness ball, but we are watching the entire dollar game. And that tells us that the recent action is part of a larger gameplan to unseat the dollar.

So, take the strong dollar position if you will, but doing so will place your bet in the right direction, but on the wrong horse. Just like trying to leverage a gold market position using a paper dynamic; good bet, wrong horse.

More

Trail Guide

Cavan Man (10/07/00; 16:32:24MT - usagold.com msg#: 38489)
Hello Trail Guide
How did you hit them today?

From your last hike: "We do not expect the world to fail...". What if you're wrong; shrug like Atlas? That's not terribly comforting from my small timer perspective.

Having read and re-read so much of what you have written and, having reflected for many hours upon your themes so well expostulated; theoretically, this very average person is in complete agreement with your analyses. So, "showtime" is it? Very well. As Francis Bacon was heard to say before the ax fell upon his frail neck, "What are you waiting for? Strike man strike!" We've all been in tougher spots before (well, many of us have anyway).

As you are an American, myself being an American; I must ask you how you feel about this whole business. I mean, how do you really feel? Know what I mean?

I bear you no malice or ill will rather, just simple thanks for all of your tireless efforts here these many months.

May you live a hundred years....CM

Black Blade (10/07/00; 16:15:17MT - usagold.com msg#: 38488)
Shades of 1973
The Middle-East is heating up again. Ariel Sharon and several soldiers went into Nabulah in an effort to stir up passions between the Jews and Palestinians and to scuttle the peace process. It looks as if he may have succeeded. So far several Palestinians have died, mostly those caught in the cross-fire. Today three Israeli soldiers were captured by Hezbollah forces in Southern Lebanon in response to the killing of a child by Israeli forces (their words). PM Barak says that he is holding Syria and Lebanon responsible for their safety. Today PM Barak of Israel gave an ultimatum to Chairman Yasser Arafat to end the violence within 48 hours or the peace accords are dead. This situation is rapidly deteriorating and the Middle-East powder keg is set to explode. Now Iran and Iraq are saber rattling over this issue as well. Iraq has recently been accusing Kuwait of sniping oil from across the border, and the Kuwaitis are now making similar claims against Iraq. Saudi is trying to develop better relations with Iran and with semi-incapacitated King Fahd likely having to yield power to his half brother Crown Prince Abdullah who sides with Iraq the situation looks even more grim. And all of this at a time when a steady supply of cheap oil is in doubt and the New economy (and Old Economy) is under severe pressure. What pray tell is a US President to do? Side with the oil or secure Hillary the Jewish vote in her bid for the senate in New York? All this started with the idiot Ariel Sharon's antics. It couldn't have happened at a worse time as the Western nations are facing an energy crisis. Shades of 1973 all over again? Perhaps. Bubba is likely to side with Israel and that will put more pressure on the Middle-Eastern OPEC nations to respond in a way to "punish America", maybe by using oil as a weapon, just like 1973. We do live in interesting times.

John Doe (10/07/00; 15:56:35MT - usagold.com msg#: 38487)
Oro, miner49er

Oro:

Perhaps that book should be titled, "The Rise and Fall of the Nation StateS", or "The Rise of the Global State and the Fall of the Nation States".

The demise of the nation-state will not necessarily bring the world to greater freedom and economic well-being. The destruction of the nation-state is a prerequisite of the global state. And, as I've opined previously, the concept and implementation of a global state monopoly is pretty much a recipe for disaster, for a host of reasons.

If I were part of a group assigned the task of implementing global government, I'd do everything possible to discredit, economically entangle, and generally hamstring every nation-state on the planet. I'd start with the smaller nations first, then the middle tier, and conclude with the G7. I'd hasten the implementation of any technology that would help achieve these ends and I'd foster any economic regime that would hurtle the concept of local, sustainable economic autonomy onto the dust heap.

Rees-mogg and Davidson can be read in two ways: as socioeconomic-techno-visionaries or as globalist toadies. One of tha two authors reeks much more of toadyism than the other, but I can't recall which. Their teaming seems to be for the purpose of helping to balance and soften their overt views and (possibly) covert agenda.

miner49er:

From one analogy junkie to another, that is one GREAT analogy. But I see WJC as just the latest (and worstest) opposition player in a long-running game, going back at least to the Wilson Administration.

Trail Guide (10/07/00; 15:51:46MT - usagold.com msg#: 38486)
test
online

JavaMan (10/07/00; 15:44:18MT - usagold.com msg#: 38485)
Lady Leigh, relax...
Which is taking longer..."redecorating the house" or "things getting nasty"?

Check out the second half of my post to Rasbora, in JavaMan (10/05/00; 18:48:22MT - usagold.com msg#: 38355) to miner49er.

Hermit Club (10/07/00; 15:25:40MT - usagold.com msg#: 38484)
Trail Guide,, Enlightening!
Thanks for the last update, one of the best definitions of the dollar "scheme" I've heard.

How much is the dollar to be inflated?I am canadian so I expect the same or worse here. How can a situation as this be repaired? I read through ANOTHER'S THOUGHTS today, and he mentioned "draconian measures", but I just can't envision this "hyperinflation". I've tried to research countries that went through it, but none can be compared to the west as it is today!
What a wake up call this will be!

Leigh (10/07/00; 15:20:10MT - usagold.com msg#: 38483)
JavaMan
If Trail Guide were speaking in Biblical terms, he would mean the collapse will happen a few thousand years from now, since "one day is like unto a thousand years." Somehow I don't think he's using Biblical terms!

Spent this week packing the freezer and buying firewood. I had hoped to have the house redecorated before things got nasty, but that's taking much longer than we ever thought. (Even a financial collapse is doable with a clean, redecorated house, right?)

RossL (10/07/00; 15:15:10MT - usagold.com msg#: 38482)
Ponzi
http://home.columbus.rr.com/rossl/gold.htm

My reservations on the Ponzi index are just these two main points.

First, the Dow is weighted much higher in percentage terms than the Nasdaq index. This means a big decline in the Nasdaq can be offset by a fair gain in one Dow stock.

Second, as I alluded to before, the manipulators of these indices remove the losers and bring in hot prospects at frequent intervals. This is somewhat how a free market works, but not exactly.

wolavka (10/07/00; 15:10:52MT - usagold.com msg#: 38481)
I'm gonna keep score
I hold physical gold
I hold gold stocks
And I hold alot of paper contracts (long)

I will let you know the result on 1-1-2001.

JavaMan (10/07/00; 15:09:42MT - usagold.com msg#: 38480)
Lady Leigh...

Hold your ground. When "the people in this family" grow up, they will know!

Hill Billy Mitchell (10/07/00; 15:00:54MT - usagold.com msg#: 38479)
@ RossL # 38475
@ RossL # 38475

The Ponzi is no joke to me. I used to watch the directional changes in the Dow and Long Bond to get a glimpse of rotation from stocks to bonds and vice versa.

I have felt that we get a similar type of reading when we watch the Ponzi, ie when money flows from the Dow to the Nasdaq or from the Nasdaz to the Dow, we have a good idea not only as to the direction of money flows but also the extent of the flows. In other words when the Ponzi moves low enough and the 30 yr rate moves high enough we will have a good notion that money flows have moved out of both areas. When this happens if the money is not in cash (ORO will probably let us know if this happens)then we will have confirmation in the fact that both the dollar will be falling and PM's will be on the rise. So being a lame brain, technically, I watch the ponzi, the yield curve, the US$, the Euro/German mark/Yen and of course PM's diligently.

I depend on ORO mainly for technical information and various others on the forum for wisdom and interpretation. What you said, "The Ponzi is only for fun", I will give this considerable thought, as I have a high regard for your opinion; however I am slow to move when my gut tells me I have something which seems to be logical.

Any further thoughts from you or anyone else on this would be greatly appreciated as I do not want to waste my time watching erroneous stuff.

Regards,

HBM

Leigh (10/07/00; 14:59:06MT - usagold.com msg#: 38478)
JavaMan
Thanks for the compliment! I'm laughing in a grateful way! Nobody in this family thinks Mom is especially profound, so it's nice to come here, write two sentences, and get nominated for the HOF!

JavaMan (10/07/00; 14:39:17MT - usagold.com msg#: 38477)
Hello Lady Leigh...

I've been wondering where you have been but I see you are as sharp as ever. Congratulations are in order as I missed that completely and I think your observation is as succinct and profound a post with the greatest of implications as I have seen in a long time! Well done. While our Trail Guide may be speaking in biblical terms... none the less, I enthusiastically nominate your post for the HOF.

Usul (10/07/00; 14:38:15MT - usagold.com msg#: 38476)
The Dollar
http://www.decisionpoint.com/DailyCharts/DXY.html
Another's words weigh on my mind:

"Soon, gold will rise "with the dollar", then the maker of your money will force this currency down in a effort to stop it from coming home" - 6/29/98 ANOTHER (THOUGHTS!)

RossL (10/07/00; 14:35:07MT - usagold.com msg#: 38475)
Ponzi
http://home.columbus.rr.com/rossl/gold.htm
Sir HBM - Ponzi

Please remember - the Ponzi index gets its name from fraud and manipulation. The underlying indexes will always be changed in order to scam more dollars from uninformed persons. Loser stocks in the index will be discarded for the latest hot stock.

Everyone, please remember, the Ponzi index is all in fun to mock the Wall Street CNBC MSNBC types.

Leigh (10/07/00; 14:14:03MT - usagold.com msg#: 38474)
Trail Guide
"In the days ahead...." Trail Guide, is it that close?

Hill Billy Mitchell (10/07/00; 14:05:13MT - usagold.com msg#: 38473)
@ RossL and Shifty (Ponzi Index)
http://home.columbus.rr.com/rossl/gold.htm
I was surprised to see that the Ponzi Index is not at its lowest point since Shifty first presented us with it. Just had this feeling (uncomfirmed by the facts)that the latest losses had brought on a new low.

Just goes to show that we need the facts, always.

HBM

JavaMan (10/07/00; 14:00:22MT - usagold.com msg#: 38472)
Miner49er, end game indeed...or just a gambit?

A fine analogy, to be sure, but what if the time clock that the players punch is not representative of the time Clinton is in office but, rather, the time he has as a player in general? If this is the case, then all which is going on now is just a gambit in a bigger game.

You said "As I profiled in an earlier post, Clinton is intelligent and ruthless, and above all he hates losing. Bill Clinton is out for Bill Clinton. As such, where the President should view the game board and see the people to be guarded as the King, and our resources, treasures, and liberties treated as our second row pieces, all have instead become pawns, and the man playing the game has vested himself as King."

You left out American citizens...they, too, would be considered as pawns.

Does this sound like someone who would be content to resign his position "at the board" to another telling himself that he has played the game well only to fade away into obscurity? I say, not if he is, in fact, who you profile.

You also said "I mentioned also that one of the strategems he uses is surprise, as manifest in his unscrupulous ruthlessness. He allows himself to be capable of anything, and hopefully catches his opponents off-guard as they say, "Surely he wouldn't do THAT...""

This thought may turn out to have far-reaching implications as the "pawns" in this country who expect/hope for him to go away quietly will assume that "Surely he wouldn't do THAT..."

Turnaround (10/07/00; 12:48:30MT - usagold.com msg#: 38471)
monetary police
http://www.futurenet.org/2Money/Lietaer.html

ORO (10/7/2000; 4:47:01MT - usagold.com msg#: 38454)
SteveH and ET - monetary gold
"I will start with a simple statement of opposition to a gold standard. I don't believe government's
central planning is any more efficacious in choosing the monetary metal than in running a
McDonalds. A no-government-standard monetary system is my choice. Gold based? if that turns
out to be the preferred market choice, with silver and PGMs? just the same. With stock and bond
baskets? OK. Bank notes redeemable in more bank notes? fine. Just that the markets have a chance
to make the choices."

An apropos, short interview, excerpted below, with a lot of fascinating historical details:

"Few people have worked in and on the money system in as many different capacities as Bernard
Lietaer. He spent five years at the Central Bank in Belgium, where his first project was the design
and implementation of the single European currency system.", etc.

BERNARD: "�While economic textbooks claim that people and corporations are
competing for markets and resources, I claim that in reality they are competing for money -
using markets and resources to do so. So designing new money systems really amounts to
redesigning the target that orients much human effort.
Furthermore, I believe that greed and competition are not a result of immutable human
temperament; I have come to the conclusion that greed and fear of scarcity are in fact being
continuously created and amplified as a direct result of the kind of money we are using.
For example, we can produce more than enough food to feed everybody, and there is
definitely enough work for everybody in the world, but there is clearly not enough money to pay
for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create
and maintain that currency scarcity. The direct consequence is that we have to fight with each
other in order to survive�."

SARAH: So some people have to lose in order for others to win? Some have to default on their
loan in order for others to get the money needed to pay off that interest?

BERNARD: That's right. All the banks are doing the same thing when they lend money into
existence. That is why the decisions made by central banks, like the Federal Reserve in the US,
are so important - increased interest costs automatically determine a larger proportion of
necessary bankruptcies.
So when the bank verifies your "creditworthiness," it is really checking whether you are
capable of competing and winning against other players - able to extract the second $100,000
that was never created. And if you fail in that game, you lose your house or whatever other
collateral you had to put up."

BERNARD: For one thing, power has shifted irrevocably away from governments toward the
financial markets. When a government does something not to the liking of the market - like the
British in '91, the French in '94 or the Mexicans in '95 - nobody sits down at the table and says
"you shouldn't do this." A monetary crisis simply manifests in that currency. So a few hundred
people, who are not elected by anybody and have no collective responsibility whatsoever,
decide what your pension fund is worth - among other things.
�

BERNARD: Yes, I see it now as about a 50/50 chance over the next five or 10 years [writing in 1997].
Many people say it's 100 percent, and with a much shorter time horizon. George Soros, who's made
part of his living doing what I used to do - speculating in currencies - concluded, "Instability is
cumulative, so that eventual breakdown of freely floating exchanges is virtually assured."
Joel Kurtzman, ex-editor at the Harvard Business Review, entitles his latest book: The
Death of Money and forecasts an imminent collapse due to speculative frenzy.
Just to see how this could happen: all the OECD Central Banks' reserves together represent
about $640 billion. So in a crisis situation, if all the Central Banks were to agree to work
together (which they never do) and if they were to use all their reserves (which is another thing
that never happens) they have the funds to control only half the volume of a normal day of
trading. In a crisis day, that volume could easily double or triple, and the total Central Bank
reserves would last two or three hours.

SARAH: And the outcome would be?

BERNARD: If that happens, we would suddenly be in a very different world. In 1929, the
stock market crashed, but the gold standard held. The monetary system held. Here, we are
dealing with something that's more fundamental. The only precedent I know of is the Roman
Empire collapse, which ended Roman currency. That was, of course, at a time when it took
about a century and a half for the breakdown to spread through the empire; now it would take a
few hours.

�
BERNARD: The biggest issues that I believe humanity faces today are sustainability and the
inequalities and breakdown in community, which create tensions that result in violence and wars.
We can address both these issues with the same tool, by consciously creating currency systems
that will enhance community and sustainability.
�
I propose that we choose to develop money systems that will enable us to attain sustainability
and community healing on a local and global scale. These objectives are in our grasp within less
than one generation's time. Whether we materialize them or not will depend on our capacity to
cooperate with each other to consciously reinvent our money."
****

ORO: "�The idea that government should have a "policy" regarding money and banking at all is
wrong. It should not be subject to centralized judgement on any grounds, whether of popular will
or pressures of "special interests"."

Perhaps, in a few hours, monetary policy will go the way of the Roman Empire.

Gold Trail Update (10/07/00; 12:29:11MDT - Msg ID:38470)
The Gold Trail Discussion has been Updated
The Gold Trail Discussion has been updated. Click on the link to read the latest updates.

RossL (10/07/00; 12:18:16MT - usagold.com msg#: 38469)
Updated charts
http://home.columbus.rr.com/rossl/gold.htm

eom

Clint H (10/07/00; 11:53:45MT - usagold.com msg#: 38468)
Test
Test

Giovanni Dioro (10/07/00; 09:26:20MT - usagold.com msg#: 38467)
Euro Intervention to offset Danish Nej vote
The main reason we have seen joint intervention and a �-point ECB rate hike was to prevent the Euro from free-falling in face of the no-vote in Denmark's referendum to decide whether or not to join the Euro. The euro is designed to create a federal europe, and a socialist one at that.

If there hadn't been intervention, the euro could have easily lost 10% last week. This would be a big embarrassment to euro-pushers like England Prime Minister Tony Blair who is desperately trying to lock England into the federal Europe by adopting the euro. Also a 10% drop would give certain confirmation to the Danes that they were right.

Moreover, Germany and other nations seeing the Danes have the freedom to vote themselves out of the euro, would pressure their politicians to opt out. Surely the Germans and the French must wonder with disgust why they have never been offered a referendum to decide their fate.

miner49er (10/07/00; 08:47:11MT - usagold.com msg#: 38466)
End game
First I stand corrected in my analysis that suggested the ECB would probably not raise rates. My thinking was that this would create an unnecessary psychological link between the Euro and USD in the forex. I also felt that the ensuing contraction would be harmful. If I understand what TG is insinuating from his IHT posting (38379), raising rates is an offensive move. From that perspective it seems that the increase does a few things:

1) It pressures us to raise rates. This may be both a move of force and mercy. Force in that any rate rise here will certainly send the markets hurtling. Mercy, in that it is medicine we should have taken years ago, but no one was in a position to compel us.

2) It reduces the spread on the Euro carry, subsequently directing more money for European capital formation, rather than USD speculation.

3) It does indeed cause a contraction in the Euro money supply, that while I questioned this wisdom, I see now that cheaper oil through imminent Euro settlement in economic proportions will more than offset this.

Second, my other suggestion that the 30 million barrel SPR release might never actually see the light of day, looks to be wrong. The thinking was that there was no need to actually "play" this move and glut the markets when the desired political goal was already achieved. How foolish of me to not have considered the profit motive: this oil will find its way to higher bidders overseas, and the conduits for these transactions will be entities who are owed something, or entities from which this President wishes to procure future favors.

I love the game of Chess but am an atrociously lousy player. It does seem to me as we look on here that the development of this one has matured to end game. This is why I have gone on about the sophistication of the U.S. perspective on an oil-as-de-facto-reserve-currency link. It is certainly not the most important thing, but it is another window in which we can look and analyze the strategy, and mindset of the players.

If such were deliberate, and hence systematic, there would be a constituency of kibbitzers with big bets on the game, who would be giving some arm-twisting advice. Absent such, the kibbitzing would be more a raucous crowd, each with his own interests, but little cohesion, hence leverage to apply to the player.

If such were deliberate, there would be a thread of cohesion in the play of the game, and whether the game was well played or no, there would at least be method. Otherwise, the play is likely to be haphazard at best, and reckless at worst.

This is where the current U.S. player's personal make-up is important. As I profiled in an earlier post, Clinton is intelligent and ruthless, and above all he hates losing. Bill Clinton is out for Bill Clinton. As such, where the President should view the game board and see the people to be guarded as the King, and our resources, treasures, and liberties treated as our second row pieces, all have instead become pawns, and the man playing the game has vested himself as King.

I mentioned also that one of the strategems he uses is surprise, as manifest in his unscrupulous ruthlessness. He allows himself to be capable of anything, and hopefully catches his opponents off-guard as they say, "Surely he wouldn't do THAT..."

Chess being as much a game of mathematical calculation, as it is the more subjective arts, surprise tactics do not work well in the long run, and especially in the end game. With few pieces left, there become only so many possible moves to make. Surprise is no longer... surprising.

I fear that when the next player takes his seat at the board in January, there will be little left for him to do except run the King around the board until the sinking thud of, "checkmate!" utters forth from the mouth of his opponent.

Let the game proceed.

Hipplebeck (10/07/00; 08:20:29MT - usagold.com msg#: 38465)
link from invisible hand
I read the article. I can't see how digging up all that earth can be cheaper than drilling a well, can you?

wolavka (10/07/00; 07:20:59MT - usagold.com msg#: 38464)
Here's one for you
How would you like to know before the end of the trading day, where a market would have to close to continue its' trend?

They know.

Black Blade (10/07/00; 06:48:48MT - usagold.com msg#: 38463)
September Editorial from World Oil with an interesting political twist
Look out for soaring gas prices

In Houston, as this was written, temperatures were reaching past 100�F, which is completely normal. But prices for natural gas were equally high, reaching $4.50 per Mcf on several occasions, which is completely unusual. At the same time, most Americans are blissfully unaware that the winter just around the corner could hold some major surprises.

In fact, a recent Financial Times (FT) website article noted that the term "energy crisis" has been resurrected by U.S. natural gas company executives, and that there is mounting evidence that the country's energy supply system could have problems meeting demand this winter. At about the same time, API reported that petroleum stocks had fallen to their lowest level in 24 years. This caused world crude oil prices to again zoom past $30 a bbl.

Compounding the bullish outlook for oil was an apparent OPEC view that high oil prices should be maintained despite Saudi Arabia's announcement that it would raise output to moderate prices. Then there was the trip to Iraq last month by President Hugo Chavez of Venezuela, during which Chavez and Saddam Hussein defended current oil price levels. According to the FT, U.S. Energy Secretary Bill Richardson condemned the visit, saying, "It is unhelpful that governments are trying to talk up the price of oil in ways that would harm economic growth." Finally, the International Energy Agency has questioned whether U.S. refining profit margins are sufficient to encourage the heating oil production necessary to meet winter demand.

But we digress - it was the price of natural gas that prompted this discussion. And with lower-than-normal natural gas storage levels, plus a return to a normal winter (the last three have been among the warmest on record), the U.S. natural gas system could be stressed beyond breaking. At a recent meeting in Houston, a representative of an eastern utility cited current, unusually high gas prices, then predicted that they could easily reach $6 per Mcf this winter. In the FT article, Ronald Barone, a natural gas analyst with PaineWebber, said there should be enough gas to go around, assuming a normal winter. But he added that, because of the tight supply situation, "you will see some businesses having to switch to other fuels and you will see some businesses closed." This means business and industrial customers that have interruptible gas supply contracts could see their supplies curtailed if cold weather boosts demand for these limited supplies.

In the Financial Times report, Mr. Barone estimated that natural gas in storage will total 2.6 Tcf on November 1, compared to a "comfort" level of about 3 Tcf. And it is this low storage level that worries analysts, who say there are few possibilities in the short term to boost natural gas deliveries. Like the utility spokesman above, the publication predicts that gas prices could reach $6 per Mcf on the spot market on especially cold days.

Another factor that could significantly impact gas prices in the short run is hurricane season in the Gulf of Mexico. Obviously, a storm entering the Gulf would prompt the shut-in of offshore oil and gas production platforms, which account for a large part of U.S. production. And any hiccups during this critical period, in which storage should be undergoing replenishment, could cause major disruptions later.

Just say no, Al. Because of their respective backgrounds as an independent oil producer and the head of an oilfield service company, we obviously expected candidates George W. Bush and Dick Cheney to be labeled "oily" by the general media. However, what surprised us is the amount of negative attention Ozone Al Gore, the darling of the environmental movement, is getting lately.

In case you missed it, hundreds of protesters marched to the site of the Democratic National Convention and chanted slogans against Occidental Petroleum and the Gore family's investment in the company. They want Occidental to abandon its plans to drill on lands belonging to U'Wa Indians in Colombia. Gore's father served on Occidental's board, owned stock in the company and served as chief executive of a subsidiary before his death. His stock holdings passed to his family.

Vice President Al Gore now controls at estimated $500,000 worth of Occidental stock. The stock came from Armand Hammer, a deceased oilman with communist ties who served for decades as financial benefactor to Mr. Gore and his father, Sen. Albert Gore, Sr. Mr. Hammer was said to have bragged that he kept the elder Gore "in my back pocket."

Since becoming vice president, Mr. Gore appears to have gone out of his way to help Occidental. Between 1995 and 1997, he helped engineer the sale of publicly owned Elk Hills Naval Petroleum Reserve in Bakersfield, Calif., to Occidental. Since 1912, the Navy had zealously guarded Elk Hills as a strategic resource. Congress resisted privatization attempts by Presidents Nixon and Reagan, but relented when President Clinton pushed it through as one of Mr. Gore's "reinventing government" reforms. Bill Sammon of the Washington Times notes that, "The sale of Elk Hills to Occidental was a dramatic departure for an administration that has walled off huge expanses of private land for public preserves."

In addition, Occidental has been paying the vice president $20,000 a year for decades for mineral rights to zinc-rich land the Gore family holds near Carthage, Tenn. Reports say the firm continues to make payments, even though it has never mined the land.

The convention protesters are upset about Occidental's plan to drill on the sacred ancestral Indian land because the tribe is threatening mass suicide if drilling goes forward. Thus far, Mr. Gore has refused to divest from Occidental or use his leverage to block the planned drilling. We certainly agree with him, but likely for different reasons.

Cavan Man (10/7/2000; 6:36:32MT - usagold.com msg#: 38462)
Stranger
Hello! You struck a small nerve when you asked if I could see the Gateway Arch from where I live. Had to get this out before taking the girls to Irish dance.

No, I cannot see the Arch from here but, for many years, there was a building code in the city which preserved the absolutely unique feature (the Arch) of the St. Louis skyline. The Arch stands at about 630 feet or so and no building was permitted to be taller. Also, no new construction (and there was plenty) was permitted to obscure the Arch. Well, guess what? A new Federal Building was completed at great expense which is an architectural monstrosity and it blocks a view of the arch that prevailed here in St louis for over thirty years. To add insult to injury, it is called the "Thomas Eagleton Federal Building". You remember that great American leader TF Eagleton don't you? His family made a fortune selling plumbing parts etc.

Thanks for the explanation.

ORO (10/7/2000; 6:14:31MT - usagold.com msg#: 38461)
Giovanni Dioro - Euro rates and targets
The target for the Euro rate rise is the treasury yield curve at about 5.9% +/- 0.1%. Which leaves little excess yield. The other myrriad of target rates is substantially higher. Particularly the "marginal" lending rate of 5.75%.

The Euribor rate is 5.1%, leaving a small - but significant margin to LIBOR of 6.75% or so.

The specs are back at hacking at the Euro, but the potential rewards from playing the spreads have fallen substantially. The risk has increased.

tedw (10/7/2000; 6:11:42MT - usagold.com msg#: 38460)
BLAIR: ''EU should be Superpower"
http://www.usagold.com

Article at www.worldnetdaily

Blair has said his 2 cents about there being a European Superpower.

It seems to me that powerful forces are at work to make Europe one country, and that they are determined to succeed. That being the case, all their considerable resources will support the EURO. Europe being such a conglomeration of peoples, languages,and customs it seems to me that the EURO is needed as the mortar to hold all the bricks together. So whatever it takes to have the Euro sucede is what they will do. More interventions even if the US fails to go along.

Black Blade (10/7/2000; 6:10:39MT - usagold.com msg#: 38459)
Distillates Poised to Rocket, Then Gold - Maybe
Think hard about this! Natural gas prices paid by consumers will average $8.58 per thousand cubic feet (mcf) this winter, up more than 29 percent from last year, the EIA said. Heating oil will cost an average $1.37 per gallon, compared to $1.18 per gallon last winter, the agency said. And propane, a fuel used by mostly rural American households, will average $1.16 per gallon, up from $1.02 last year. "In contrast to those of previous winters, fuel market supplies cannot be described as adequate to ensure a high probability of supplies meeting the demands of a very cold winter without difficulty," the EIA said.

On Monday the commodities markets are closed in NY, but the equities markets are open. What will happen? The shares of Natural Gas producers, refiners, pipelines, marketers, drillers and services will probably rocket higher. This is big news as many thought that NG at $6.00Mbtu would be the highest the price of NG would go. The majority of earnings warnings this quarter have been attributed to higher energy costs, closely followed By Euro weakness. Unless the "Working Groups on Financial Markets" (PPT) can pull another rabbit out of their hat, Wall Street will look very ugly next week. The PPT if it really is in the markets, is losing it's grip. With the employment numbers looking strong (wage inflation) and the need to keep foreign investment in dollars, I suspect that Cheeta (or Mr., Magoo - your choice) and his henchmen will begin a series of rate hikes after the election. The announced Japanese release of 6 million barrels of heating oil from their reserves is destined for Asian markets, but look for the financial media drones to play it up big time. At some point, Gold will play it's traditional role as a safe haven. In the meantime, PMs are a screamin� bargain.

Matthew Simmons, of Simmons International, gave a speech to the Energy Institute of the Americas in Oklahoma City this past Monday. He said: "I feared we would face an oil shock. I was wrong. We are now facing a true Energy Crisis��" He went on to say, "Let me be clear. The world has not run out of oil and North America has not run out of natural gas�.. What we have run short of is any way to grow supply of each."

He commented on the increasing decline rates, limited numbers of drill rigs, lack of refinery capacity, lack of tanker capacity, limited pipeline capacity, etc. In effect there are choke points everywhere we look.

Next week could be interesting - Black Blade

The Invisible Hand (10/7/2000; 6:09:49MT - usagold.com msg#: 38458)
There we go!
http://www.worldnetdaily.com/bluesky_dougherty/20001007_xnjdo_research_p.shtml

Research promises $5/barrel oil��

Black Blade (10/7/2000; 5:20:03MT - usagold.com msg#: 38457)
RE: justamerebear
Sorry, that was Handy and Harmon not Engelhard. That was a few months ago and there was a scandel about some missing gold at one of it's S. American refineries. Oh well it's late and my memory is foggy after a few cold ones ;-)

Black Blade (10/7/2000; 4:48:56MT - usagold.com msg#: 38456)
Price of heat to rise

A 25% leap in heating oil and natural gas prices is expected this winter
October 6, 2000: 1:09 p.m. ET

WASHINGTON (Reuters) - American consumers should brace for at least a 25 percent jump in heating oil and natural gas prices this winter, with an even bigger leap in store if temperatures are colder than usual, the U.S. government said on Friday. The new predictions for the coming winter fuel season were issued two days after the Clinton administration finalized plans to loan 30 million barrels of the government's own stockpiled crude to energy companies. Release of the crude oil from the Strategic Petroleum Reserve is aimed at helping U.S. refiners replenish their inventories and inject more supplies into the market. Republicans have criticized the move as an attempt to influence voters in next month's presidential election.

The White House action will add between three and five million barrels of heating oil stocks to the market, the U.S. Energy Information Administration said in its latest supply estimates. The amount is relatively small compared to total winter demand for heating oil, but it does "improve the buffer" against any demand increases, the EIA said. U.S. government energy experts warned consumers that prices will be higher regardless of what fuel they use to heat their homes.

Natural gas prices paid by consumers will average $8.58 per thousand cubic feet (mcf) this winter, up more than 29 percent from last year, the EIA said. Heating oil will cost an average $1.37 per gallon, compared to $1.18 per gallon last winter, the agency said. And propane, a fuel used by mostly rural American households, will average $1.16 per gallon, up from $1.02 last year. "In contrast to those of previous winters, fuel market supplies cannot be described as adequate to ensure a high probability of supplies meeting the demands of a very cold winter without difficulty," the EIA said.

If winter temperatures are colder than normal, there is "enhanced risk of significant upward price shocks" due to low inventories of heating oil and natural gas, the government said. The government also said it expects U.S. crude oil prices to remain above $28 a barrel for the rest of the year, easing to an average of $25 a barrel in 2001. If achieved next year, that price is squarely in the middle of the range that the Clinton administration and Republican lawmakers have said is a good balance for producing and consuming nations.

U.S. crude prices soared to a 10-year peak of nearly $38 a barrel in late September before the White House announced it would tap the Strategic Petroleum Reserve. Since then, prices have fallen sharply and were trading at about $30.85 a barrel on Friday morning. The stockpile holds a total of 570 million barrels of crude oil, and was created by Congress in the mid-1970s after the first Arab oil embargo.

justamereBear (10/7/2000; 4:48:12MT - usagold.com msg#: 38455)
Black Blade 38442 Oro 38452

Black Blade 38442
Bankrupt Englehardt refinery?? Hadn't heard of that one. Do you have any details? This is getting scary. Frightening but a type of development that was probable.

Oro 38452
Thanks for the post. Sounds very much like a treatment I have been looking for.

ORO (10/7/2000; 4:47:01MT - usagold.com msg#: 38454)
SteveH and ET - monetary gold
I will start with a simple statement of opposition to a gold standard. I don't believe government's central planning is any more eficacious in chosing the monetary metal than in running a McDonalds. A no-government-standard monetary system is my choice. Gold based? if that turns out to be the prefered market choice, with silver and PGMs? just the same. With stock and bond baskets? OK. Bank notes redeemable in more bank notes? fine. Just that the markets have a chance to make the choices.

The main thrust of popular support for the gold standard being price stability is not a positive. Prices tend to decline in a government imposed gold standard. Prices are more stable in a bimetalic system, though still tend to decline and can be even more stable with free banking on a bimetalic or multimetalic system. In the free banking model, the banks and other actors including corporations, non-profits, municipalities and individuals etc. issue monetary notes or account credits that are discounted at varying rates either at the banks or the shops.

There is no reason to believe that price stability is desirable. Quite the contrary - one would expect prices to vary greatly between different markets and different products at different times. Even general price levels would be expected to jump around as various surplusses and shortages occur. Particularly with the ebb and flow of energy booms and busts which permeate the pricing of everything much more so than was the case during any gold standard period. Oil, NG, Electric, coal and coal derived fuels routinely suffer equal boom and bust cycles that should affect general prices. If in the famine period after a "feast" the energy sectors have suffered from lack of investment, then it would be appropriate to see the prices of all goods and services rise with these since the savings accumulated during the period of no-investment in energy supply must be able to buy less energy and less of everything else with an energy component. Though long term price stability would arise (what fiat money has never provided), some years would be expected to see general price rises and some would be expected to produce declines (which is where fiat does smooth things out some so that prices just rise all the time or remain rather stable from year to year, but not over periods of decades).

The idea that government should have a "policy" regarding money and banking at all is wrong. It should not be subject to centralized judgement on any grounds, whether of popular will or pressures of "special interests".

SteveH (10/7/2000; 4:37:41MT - usagold.com msg#: 38453)
Let's analyze this...
http://news.ft.com/ft/gx.cgi/ftc?GXHC_gx_session_id_FutureTenseContentServer=859ab165db179252&pagename=View&c=Article&cid=FT3A16H50EC&true=true
repost:

Date: Sat Oct 07 2000 06:10
Crmblr (In the golden sunset) ID#291250:
Copyright � 2000 Crmblr/Kitco Inc. All rights reserved
Rationalists argue that the demonetisation of gold is approaching a climax. Some 33,000 tonnes of the stuff remain locked away in the vaults of central banks and institutions such as the International Monetary Fund. But can they justify holding an illiquid asset which earns almost nothing, except when it is lent out to borrowers who assume it will fall further in price?

The British Treasury has embarked on a high-profile disposal programme. If many more governments do the same the price at some point must collapse.

Gold bugs see it differently. These days, curiously, their declining numbers are concentrated in the US.

*** Interesting post as it shows the author hasn't read anything at this site and likely nothing at the site it was posted at (Kitco). Yet, there it is, disinforomation. We know the reason for record sales, we know why the CB's aren't selling their gold, OPG (other peoples' gold) is being sold to buyers who quickly stash it away. Where this person sees demonitization we see nothing but a dual-role of gold and one is monetization. We say at some point the price must sky rocket. Same set of facts, opposite conclusions. Is the glass half-empty or half-full? Go figure.

ORO (10/7/2000; 4:06:51MT - usagold.com msg#: 38452)
Great book, along the lines of Rees-Mogg and Davidson
http://www.amazon.com/exec/obidos/ASIN/052165629X/ludwigvonmisesinst/103-8436518-7271057
Read this one a few months ago.

Meyer article reminded me of it.

The Rise and Decline of the State
by Martin Van Creveld
$cheap

Editorial Reviews
Book Description
The state, which since the middle of the seventeenth century has been the most important of all modern institutions, is in decline. From Western Europe to Africa, many existing states are either combining into larger communities or falling apart. In the future, Martin van Creveld argues, their functions are likely to be taken over by other organizations. This unique volume traces the history of the state from its beginnings to the present day. It will be invaluable to all who would understand the history of government, and its future.

SteveH (10/7/2000; 3:44:34MT - usagold.com msg#: 38451)
ET
You know, it almost seems the reason it disappeared is because they implemented it without telling anybody and this is what is suppressing the price of gold. Anyway, it shows the US was considering manipulating or controlling commodity prices back then. So who is doing it now?

your comments from previous post: "The purpose of a gold standard is not to turn every dollar bill into a warehouse receipt for an equivalent amount of gold, but to provide the central bank with an operating rule that will facilitate the maintenance of a stable price level." (Wall Street Journal, Oct. 13, 1981). Gold could be one of many commodities in a basket index, or even be excluded; one reason the price rule proposal was not welcomed by Austrians. Nor was it adopted by many Republican politicians in the 1980s; the idea quietly disappeared from public view.

714 (10/7/2000; 3:41:14MT - usagold.com msg#: 38450)
Oro, that jibes with this:
http://www.cato.org/pubs/pas/pa046.html
" In 1977 the United States received an average of 28 percent of its oil imports from Persian Gulf countries. Today less than 10 percent comes from those countries (see table below). Most U.S. oil imports come from Mexico, Canada, Venezuela, Great Britain, and Indonesia. The domestic production picture has changed too."

This is from a report written in 1985 by Sheldon Richman. But even this statistic can be misleading as Venezuela and Indonesia are OPEC members. Furthermore, can we look at US oil policy (or monetary policy, for that matter) in isolation, because the oil market is a true world market, yes?

Thanks again, though...always enjoy your posts.

ORO (10/7/2000; 3:35:10MT - usagold.com msg#: 38449)
714 - as % of refinery input
Arab OPEC oil as % of refinery input

1973 6%

1974 during embargo, 1%
After embargo, 9%

1974-1976 rising slowly to 20%

1976-1980 20%-24%, normally 21%

1981-1983 falling steadilly to under 5%

1983-4 5-6% steady

1985 bottoming out at 1-2%

1986-1988 rising slowly back to 11-12%

1989-1997 11-12% steady

1998-2000 rising slowly to 15%-16%

714 (10/7/2000; 3:17:15MT - usagold.com msg#: 38448)
Speaking of corrections...
....I stated the other day that in the 1940's, an ounce of gold bought 159.1 barrels of Saudi oil. In reviewing my sources, I realize I was wrong. An ounce of gold paid the royalties on that much oil, which typically ran about 20% of the price. This would indeed put a gold-for-oil price right in FOA's range of 32 barrels per ounce of gold. I find no evidence that gold ever traded for oil, though. Only royalties were paid in gold, or as often as not, gold's exchange rate in US$'s.

I hope to have some of these documents uploaded to a website later this week.

p.s.--thanks, Oro.

ORO (10/7/2000; 3:05:03MT - usagold.com msg#: 38447)
714 - oil imports from OPEC
OK, so it wasn't quite 0. But it was an order of magnitude lower.

from U.S. Dept of Energy:

1973 01 1566
1973 02 1705
1973 03 1913
1973 04 1757
1973 05 2065
1973 06 2093
1973 07 2423
1973 08 2429
1973 09 2369
1973 10 2560
1973 11 2331
1973 12 1895
1974 01 1418
1974 02 1371
1974 03 1597
1974 04 2172
1974 05 2777
1974 06 3031
1974 07 3196
1974 08 3002
1974 09 2892
1974 10 2957
1974 11 3093
1974 12 2900
1975 01 3140
1975 02 2997
1975 03 2951
1975 04 2611
1975 05 2750
1975 06 3004
1975 07 3240
1975 08 3604
1975 09 3681
1975 10 3365
1975 11 3645
1975 12 3530
1976 01 3845
1976 02 3579
1976 03 3967
1976 04 4024
1976 05 3899
1976 06 4803
1976 07 5098
1976 08 4844
1976 09 5146
1976 10 4857
1976 11 5222
1976 12 5231
1977 01 5491
1977 02 5612
1977 03 5777
1977 04 5944
1977 05 5838
1977 06 6147
1977 07 6184
1977 08 5441
1977 09 5398
1977 10 5409
1977 11 5234
1977 12 5248
1978 01 5147
1978 02 4724
1978 03 5134
1978 04 4496
1978 05 4706
1978 06 5278
1978 07 5210
1978 08 5201
1978 09 5679
1978 10 5282
1978 11 5649
1978 12 5670
1979 01 5454
1979 02 5061
1979 03 4969
1979 04 5001
1979 05 4957
1979 06 5127
1979 07 5195
1979 08 5594
1979 09 5019
1979 10 5309
1979 11 4831
1979 12 4807
1980 01 4759
1980 02 4563
1980 03 4263
1980 04 4037
1980 05 3675
1980 06 4054
1980 07 3658
1980 08 3398
1980 09 3290
1980 10 3399
1980 11 3423
1980 12 3870
1981 01 3600
1981 02 3406
1981 03 3118
1981 04 3042
1981 05 2909
1981 06 2657
1981 07 2775
1981 08 2565
1981 09 2900
1981 10 2788
1981 11 2659
1981 12 2682
1982 01 2380
1982 02 1858
1982 03 1635
1982 04 1466
1982 05 1391
1982 06 1773
1982 07 2289
1982 08 1859
1982 09 1453
1982 10 1577
1982 11 1749
1982 12 1371
1983 01 1107
1983 02 743
1983 03 699
1983 04 999
1983 05 1334
1983 06 1599
1983 07 1857
1983 08 2236
1983 09 2185
1983 10 1794
1983 11 1534
1983 12 1577
1984 01 1371
1984 02 1388
1984 03 1454
1984 04 1410
1984 05 2097
1984 06 1620
1984 07 1740
1984 08 1472
1984 09 1275
1984 10 1566
1984 11 1414
1984 12 1318
1985 01 943
1985 02 733
1985 03 1059
1985 04 1395
1985 05 1461
1985 06 1303
1985 07 1358
1985 08 1265
1985 09 1153
1985 10 1387
1985 11 1830
1985 12 1818
1986 01 1627
1986 02 1308
1986 03 1477
1986 04 1892
1986 05 2029
1986 06 2205
1986 07 2462
1986 08 2501
1986 09 2697
1986 10 2556
1986 11 2369
1986 12 2176
1987 01 2236
1987 02 2012
1987 03 1689
1987 04 1803
1987 05 2031
1987 06 2423
1987 07 2813
1987 08 3121
1987 09 2830
1987 10 2901
1987 11 2558
1987 12 2346
1988 01 2234
1988 02 2507
1988 03 2381
1988 04 2575
1988 05 2800
1988 06 2904
1988 07 2812
1988 08 2784
1988 09 2832
1988 10 2905
1988 11 2628
1988 12 2980
1989 01 3361
1989 02 3015
1989 03 2856
1989 04 3115
1989 05 3303
1989 06 3500
1989 07 3746
1989 08 3784
1989 09 3510
1989 10 3390
1989 11 3565
1989 12 3338
1990 01 3813
1990 02 3717
1990 03 3648
1990 04 3465
1990 05 3781
1990 06 3653
1990 07 4246
1990 08 4046
1990 09 3277
1990 10 2921
1990 11 2912
1990 12 2678
1991 01 3101
1991 02 3264
1991 03 3033
1991 04 3059
1991 05 3839
1991 06 3747
1991 07 3525
1991 08 3946
1991 09 3204
1991 10 3343
1991 11 3328
1991 12 3116
1992 01 3554
1992 02 2895
1992 03 2941
1992 04 3334
1992 05 3428
1992 06 3430
1992 07 3772
1992 08 3473
1992 09 3531
1992 10 3732
1992 11 3376
1992 12 3381
1993 01 3620
1993 02 3685
1993 03 3570
1993 04 3934
1993 05 3630
1993 06 3746
1993 07 3715
1993 08 3431
1993 09 3408
1993 10 3484
1993 11 3563
1993 12 3540
1994 01 2892
1994 02 3237
1994 03 3006
1994 04 3728
1994 05 3771
1994 06 3838
1994 07 3861
1994 08 3861
1994 09 3725
1994 10 3693
1994 11 3488
1994 12 3840
1995 01 3108
1995 02 3168
1995 03 3595
1995 04 3144
1995 05 3281
1995 06 3476
1995 07 3325
1995 08 3225
1995 09 3753
1995 10 3340
1995 11 3424
1995 12 3245
1996 01 3371
1996 02 3133
1996 03 3427
1996 04 3245
1996 05 3697
1996 06 3432
1996 07 3718
1996 08 3865
1996 09 3463
1996 10 3504
1996 11 3199
1996 12 3166
1997 01 3237
1997 02 3341
1997 03 3410
1997 04 3818
1997 05 4073
1997 06 4128
1997 07 3662
1997 08 4030
1997 09 4168
1997 10 4134
1997 11 3845
1997 12 3444
1998 01 3703
1998 02 3657
1998 03 4126
1998 04 4205
1998 05 4278
1998 06 4261
1998 07 4716
1998 08 4569
1998 09 4057
1998 10 4376
1998 11 4161
1998 12 3868
1999 01 4051
1999 02 4334
1999 03 4358
1999 04 4968
1999 05 4374
1999 06 4243
1999 07 4216
1999 08 4427
1999 09 4044
1999 10 4020
1999 11 3843
1999 12 3878
2000 01 3470
2000 02 4064
2000 03 4353
2000 04 4477
2000 05 4146
2000 06 4883
2000 07 4584

Crude Oil Imports from Arab OPEC Countries; Mb/d

1973 1 713
1973 2 719
1973 3 893
1973 4 672
1973 5 796
1973 6 787
1973 7 1026
1973 8 1047
1973 9 1067
1973 10 1175
1973 11 950
1973 12 205
1974 1 30
1974 2 58
1974 3 89
1974 4 180
1974 5 878
1974 6 1176
1974 7 1036
1974 8 1000
1974 9 917
1974 10 1127
1974 11 972
1974 12 1043
1975 1 1241
1975 2 1192
1975 3 1228
1975 4 829
1975 5 1006
1975 6 1067
1975 7 1260
1975 8 1702
1975 9 1649
1975 10 1480
1975 11 1531
1975 12 1748
1976 1 2007
1976 2 1872
1976 3 2011
1976 4 2014
1976 5 2102
1976 6 2434
1976 7 2680
1976 8 2550
1976 9 2709
1976 10 2526
1976 11 2710
1976 12 2902
1977 1 2943
1977 2 3103
1977 3 2984
1977 4 3336
1977 5 3373
1977 6 3327
1977 7 3206
1977 8 3030
1977 9 3179
1977 10 3105
1977 11 3136
1977 12 2925
1978 1 2935
1978 2 2793
1978 3 2873
1978 4 2777
1978 5 2411
1978 6 3012
1978 7 2783
1978 8 2908
1978 9 3139
1978 10 2980
1978 11 3266
1978 12 3282
1979 1 3377
1979 2 3288
1979 3 2875
1979 4 3298
1979 5 2987
1979 6 3145
1979 7 3013
1979 8 2961
1979 9 2821
1979 10 3034
1979 11 2549
1979 12 2703
1980 1 2989
1980 2 2998
1980 3 2843
1980 4 2823
1980 5 2292
1980 6 2579
1980 7 2381
1980 8 2146
1980 9 2138
1980 10 2144
1980 11 2300
1980 12 2427
1981 1 2188
1981 2 1976
1981 3 1873
1981 4 1841
1981 5 1743
1981 6 1624
1981 7 1672
1981 8 1685
1981 9 1960
1981 10 1704
1981 11 1635
1981 12 1402
1982 1 1293
1982 2 974
1982 3 766
1982 4 647
1982 5 785
1982 6 745
1982 7 789
1982 8 723
1982 9 499
1982 10 622
1982 11 657
1982 12 343
1983 1 432
1983 2 301
1983 3 134
1983 4 338
1983 5 312
1983 6 429
1983 7 524
1983 8 748
1983 9 908
1983 10 834
1983 11 692
1983 12 732
1984 1 663
1984 2 545
1984 3 570
1984 4 579
1984 5 921
1984 6 646
1984 7 775
1984 8 784
1984 9 450
1984 10 629
1984 11 456
1984 12 568
1985 1 185
1985 2 187
1985 3 281
1985 4 354
1985 5 370
1985 6 201
1985 7 158
1985 8 184
1985 9 154
1985 10 288
1985 11 543
1985 12 687
1986 1 752
1986 2 594
1986 3 612
1986 4 831
1986 5 703
1986 6 947
1986 7 887
1986 8 888
1986 9 1050
1986 10 1120
1986 11 952
1986 12 899
1987 1 1065
1987 2 871
1987 3 553
1987 4 534
1987 5 543
1987 6 875
1987 7 887
1987 8 1295
1987 9 1276
1987 10 1478
1987 11 1163
1987 12 1029
1988 1 1228
1988 2 1444
1988 3 1162
1988 4 1167
1988 5 1277
1988 6 1217
1988 7 1433
1988 8 1545
1988 9 1649
1988 10 1604
1988 11 1477
1988 12 1769
1989 1 1863
1989 2 1765
1989 3 1490
1989 4 1689
1989 5 1617
1989 6 1881
1989 7 1982
1989 8 2101
1989 9 1874
1989 10 1819
1989 11 1891
1989 12 1561
1990 1 2060
1990 2 2065
1990 3 1805
1990 4 1693
1990 5 1963
1990 6 1916
1990 7 2478
1990 8 2305
1990 9 1588
1990 10 1488
1990 11 1477
1990 12 1523
1991 1 1830
1991 2 1559
1991 3 1691
1991 4 1776
1991 5 2124
1991 6 1832
1991 7 1670
1991 8 1980
1991 9 1615
1991 10 1649
1991 11 1684
1991 12 1620
1992 1 1937
1992 2 1745
1992 3 1605
1992 4 1543
1992 5 1591
1992 6 1621
1992 7 1659
1992 8 1551
1992 9 1529
1992 10 1599
1992 11 1657
1992 12 1882
1993 1 1728
1993 2 1709
1993 3 1655
1993 4 1837
1993 5 1646
1993 6 1746
1993 7 1538
1993 8 1515
1993 9 1612
1993 10 1574
1993 11 1673
1993 12 1713
1994 1 1492
1994 2 1467
1994 3 1531
1994 4 1696
1994 5 1757
1994 6 1535
1994 7 1745
1994 8 1615
1994 9 1786
1994 10 1709
1994 11 1617
1994 12 1669
1995 1 1391
1995 2 1535
1995 3 1681
1995 4 1516
1995 5 1477
1995 6 1520
1995 7 1371
1995 8 1505
1995 9 1559
1995 10 1464
1995 11 1574
1995 12 1478
1996 1 1517
1996 2 1285
1996 3 1484
1996 4 1403
1996 5 1643
1996 6 1433
1996 7 1642
1996 8 1599
1996 9 1491
1996 10 1486
1996 11 1432
1996 12 1511
1997 1 1462
1997 2 1421
1997 3 1506
1997 4 1720
1997 5 1564
1997 6 1650
1997 7 1607
1997 8 1750
1997 9 1839
1997 10 1812
1997 11 1704
1997 12 1649
1998 1 1726
1998 2 1716
1998 3 1920
1998 4 1933
1998 5 1815
1998 6 2132
1998 7 2315
1998 8 2453
1998 9 2308
1998 10 2113
1998 11 2111
1998 12 2071
1999 1 2047
1999 2 2309
1999 3 2704
1999 4 2606
1999 5 2491
1999 6 2477
1999 7 2335
1999 8 2392
1999 9 2337
1999 10 2378
1999 11 2285
1999 12 2260
2000 1 1958
2000 2 2210
2000 3 2104
2000 4 2329
2000 5 2115
2000 6 2493
2000 7 2519

714 (10/7/2000; 2:45:56MT - usagold.com msg#: 38446)
More on the history of OPEC imports
http://www.eia.doe.gov/emeu/aer/eh1999/eh1999.html
"To meet demand, crude oil and petroleum products were imported at the rate of 10.5 million barrels per day in 1999, while exports measured 0.9 million barrels per day. Between 1985 (when net imports fell to a post-embargo low) and 1999, net imports of crude oil and petroleum products more than doubled from 4.3 million barrels per day to 9.6 million barrels per day. The share of U.S. net imports that came from OPEC nations reached 72 percent in 1977, subsided to 42 percent in 1985, and climbed back to 50 percent in 1999. Total net imports as a share of petroleum consumption reached a record high of 52 percent in 1998 before declining to 50 percent the following year. The five leading suppliers of petroleum to the United States in 1999 were Saudi Arabia, Venezuela, Canada, Mexico, and Nigeria."

***************************************************************

42% of oil imports came from OPEC in '85, a post embargo low.

714 (10/7/2000; 2:36:07MT - usagold.com msg#: 38445)
Oro #38371
You say, "By 1986 US oil imports from OPEC were at 0."

Huh? Where do you get this info? Are you saying that by 1986, the US was not importing any oil from Saudi Arabia, Iran, Libya, Venezuala, or any other OPEC member? I'd really like to see your source for that figure!

LOLOL.

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