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

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ARCHIVED DISCUSSION FROM 9/7/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Paper Avalanche (9/7/02; 23:34:13MT - usagold.com msg#: 84587)
Inflation, Deflation and Einstein
Greetings good friends of the round table. I come to you with much beer (in me). I believe that I have mentioned before but feel the need to again postulate the idea of simultaneous inflation and deflation. All assets, real and financial, are in a constant state of flux. I tend to digress to the simplistic, yet brilliant, concepts espoused and articluated by Albert Einstin regarding relativity. It is my humble opinion that inflation and deflation have, and will continue, to co-exist. To that extent, I do not embrace the rantings of the super-inflationists or the super-deflationists. Rather, I seek to determine where the value of certain assets may find themselves relative to the value of other assets. The arguments of both sides are equally compelling and can both be equally substantiated with historical data. However, I am of the belief that we are entering a period of time where market forces (yes, they do exist despite the best efforts of the central banks and their control of the paid for media) will evidence once again simultaneous inflation and deflation forces. Specifically I believe that those asstes, mainly financial, that have attendant debt and debt service requirements (real estate, bonds) will depreciate while those assets or commodities that exist and are desired or required by the public at large (food, energy, precious metals) will appreciate. To that end as commodity prices continue to spiral upward (CRB index greater than 224 as of Friday) and the dollar price of financial assets plummets, one can easily make the case for both arguments. The key in analyzing each argument is not to determine whether one or the other exists. They both exist. They have always existed relative to a specific benchmark (US dollars). The real key is to determine the net impact of the trend of each (financial vs. commodity) relative to the existing benchmark. One might be inclined to hold dollars in a savings account if he thought that real estate prices would decrease 10% over 12 months, but might also benefit to a greater extent if over the same 12 month period the value of the dollar relative to gold lost 25%. So the name of the game is to determine not only if financial assets are going down, but also if commidity assets are going up. It quickly becomes a game of relativity.

IMHO, based on the what I have gleaned from this fine forum and other research, we will have deflation. Car and home prices will go down. However, the cost of food, energy and precious metals will increase exponentially given that the total amount of dollars created during the inflation period for financial assets was not only not reflected in commodity prices, but was surreptisously surpressed. Given my limited ability to assimilate what information I do have access to and my ability to assume certain things about the financial chicanery to which I only have interpretive logic to guide me, I believe that the following may very well be the state of things at the end of the year:

POO $45
POG $500
POS $13
DJIA 5,500
CRB 265
USDX 90

Real estate prices will plummet before the end of the year. The stock market will succumb to the pressures of dis-investment. The dollar will be repudiated internationally. The cost of food will increase by at least 25%.

I may be wrong. I am wrong more often than I am correct. This is just my opnion. I believe that the paper avalanche has begun.

PA

DOWNUNDER (9/7/02; 23:11:16MT - usagold.com msg#: 84586)
@SILVERCOLLECTOR - - YOUR REDNECK OPINIONS !
You have had MULTIPLE posts now that demonstrate exactly how brainwashed & loopy you really are. Frankly I am hoping that the regulators on this site are taking notice. You've told us exactly how you feel before/ period so no need to repeat!


I believe you have gone TOO far. I don't believe YOU represent the American peoples view & anyway you've ALREADY said your hate filled brainless message multiple times. I object! EG:
-------------------
"Contrary to some posters on this forum who claim responsibility of 911 is sketchy, I believe America should of 'evaporated' Afghanistan the next day."
-------------------
It is tiny brain thinking not to realise that there is a very large deficit in US Govt policy. However it has ALL been said before so no point in repeating. Orchestrated S11 propaganda is being whipped up all over the world --it is a really sick thing to have to watch & listen to it repeated ad-nauseam every time you switch on a radio or TV –even here in Australia. Especially so far in front of the REAL anniversary day! It's NO accident. NCWBEI



sector (9/7/02; 21:40:03MT - usagold.com msg#: 84585)
@a nation of one...Ahhhhhh! ...Your Secret is out!
It's the New Yorker Effect!
No wonder you make some sense in almost all your thoughts...you actually read the New Yorker and don't just double over laughing at the cartoons.

But there is one more noticable New Yorker style trait that gives you away...the absense of paragraphs.

Loved the snobbery and herring mix. It's perfect.

Now the Prez has stuck his foreign policy neck way out and hasn't really said why.

Does he have a black mail video or letter from Al Qaeda? Do they have a bomb in place? If the bad guys blow up a big city the Admin can't just re-bounce the Afgani rubble now can he, so what's a mad CIC to do? How does he win with another big city attacked?

He takes Iraq, smack between an untakeable Iran and an untakeable Saudi Arabia and also complete with oil pipelines already flowing to Jordan AND it's practlically contiguous with Israel. At least he gets some revenue.

The big picture. At least on paper. Perhaps the big picture, paper war is what the generals have seen and so far rejected. 200,000 men? The Admin planners have been smoking their own divots. Even Turkey is opposed.

But IF the bad guys do another 9/11, opposition will pretty much evaporate and the Prez will get his approval numbers going back up...at least until the battles bog down. That's the problem when suits take over from uniforms.

Gandalf the White (9/7/02; 21:25:22MT - usagold.com msg#: 84584)
REPOST of Happy Birthday (#1) Essay Contest Results
FROM the "Archives" is a repost of the WINNERS in the First Year "Happy Birthday Essay Contest !
======
TownCrier (09/23/99; 21:52:21MDT - Msg ID:14238)
Hear ye! Hear ye! Gather around Good Ladies and Knights, for gold and silver is on the Table!
Behold! The master of the Castle has ordered that this precious metal be brought up from the guarded depths of the Castle's rich vaults, a treasury maintained to meet the needs of all who come to these doors looking for a better way through life. Stir up the fire, and let us have more light! Look upon this table and you will see the rewards awaiting their bestowment upon those who earned them with stirring words. Words that remind us of our good fortune had through the companionship of all persons that meet in this place, for without all that gather here, this "place" would remain little more than a misty undefined space among the wider world. In this eerie location, barren throughout the ages, our good host raised a flag pole one year ago, and it is you, Good Knights and Ladies, who have labored to raise the walls of this edifice that you so edify in time and space.

I have been asked to deliver this information on behalf of the master of the Castle, though he insists he feels himself to be nothing more than a privileged tenent.

The grand prize of one half ounce gold Eagle is awarded to the soft spoken Lady Leigh, who inspired the most comments from her fellows with words that rang with truth and hope:

"...each moment is touched with a sense of magic. We who entered the Hall as strangers have become the very dearest of friends. Throughout the past year, we have shared each other's concerns, suffered together, helped one another in our quest for knowledge. Daily we learn more about each other. We admire strengths and have compassion on weakness. Tonight we have much to celebrate, and it is to our USAGOLD Forum fellows that we instinctively turn. The lure of the mighty Table Round is overwhelming. It keeps us up late at night, and it beckons us in our sleep. We happily obey its call, knowing that our Forum friends are always glad to hear from us. May there be many, many more years of comraderie for us all at the Oaken Table of Yore!"

The first runner-up prize of one quarter ounce gold Eagle is awarded to Sir Goldspoon who painted a rich picture seemingly too good to be possible outside of the legends of yore:

"...a hint of the members gathered here... The faces were in shadows hidden by your guilded armored helmets. As my eyes became adjusted to the golden glow here and my ears adjusted to the softspoken words of encouragement and of golden truth, i realized that i was in the company of bravehearts. Hearts tempered by battle and minds of refined wisdom..Unselfish souls willing to share the timeless knowledge of the true Golden Ages. A time stolen from us that i did not even know was missing.... i soon learned that even i had something to add (meeger as it may be) to this Golden Quest, almost as if i were drawn here of purpose... Excuse me for some of my past posts dear Knights of the Round Table... for i did not then realize how tall the trees in this forest were... nor how firmly rooted their convictions, nay even of the rich soil of truth and justice from which they feed.....makes one feel small... but proud of one's place...."

The second runner-up prize of one tenth ounce gold Eagle is awarded to Sir Twice Discipled who wove a rich tapestry that served double duty as a magic carpet to carry us to distant lands, a reminder that our Table is truly here, there, and everywhere:

"I have traveled from a dry and barren land where the word of your wisdom and knowledge is spread with whispers in attempts to conceal the truth you have to share. Tales of your generosity to share your wealth have not even begun to compare to the riches that you lay at the feet of all who will enter into your Court.
+
This Court is an oasis of knowledge and wisdom in the desert of mirages. In this desert the rulers so cleverly have create a mirage of everlasting prosperity wherein those under their spell pay homage to those with who show the way. But wide is this path and many who enter in are moving in the path of destruction. These followers have convinced themselves in their own minds that their teachers have their best interest at heart, but nay they heap to themselves teachers who will tickle their ears – "Oh, look at how our fiat money and strategies makes you so rich!" This Round Table is indeed a group who have dared to stand and say "I dare say your fiat money will make you poor". But alas, you have opened the door of knowledge to enable each and every person to take their destiny in their own hands if they will only gather the courage to do that which they have always been told is foolish. Gather until yourself those things that are rare and cannot be made by man -- that which has lasted for centuries."

As these kindest words were received, they touched us deeply, and alas, we found that our heart and awards had been committed when a final delivery of words quite golden caught us in a quandary...what is to be done with Sir Aristotle and his warming words?:

"...a glimmer of hope, like a castaway on a small island at sea who commits a message in a bottle to the endless waves as a small plea to anyone "out there" who might find it and somehow make a difference while we are powerless to do so. And if the currents be against us and the bottle be not found for an age, at least it will one day be known by someone that there once was a forlorn soul who's life nonetheless burned as bright as ever has under the sun. ... "We gather here." That says enough when you consider who exactly "we" are. Some of us will never know the extent of who is who. It matters not. Know thyself, and you'll know that your own presence here is worth the riches of kings, and as a complement to the group, the compliment is expressed. We gather here to live our lives better, and with hope of being that helpful BEACON to any others lost in the night. That says it all, my dear friends. WE gather HERE."

Indeed, we do, Good Sir, and as your words compelled the reopening of the treasury doors, a guardsman said, "For Sir Aristotle? He travels here so very often to reward himself for the riches of his own labor in the world, I feel as though I know him well. He comes always for only gold, and I have not known him to have any thing else. A reward? The Sun shines all the brighter if you have also seen the Moon. Provide him with the Moon, and thereby brighten his Sun." And so it shall be...one silver Eagle to serve that noble purpose.

And while inside the doors of the Treasury, standing at the base of the silver stockpile, it seemed just as well to leave with three as with one, so two honorable mentions we have to add.

A silver Eagle is awarded to Sir Peter Asher for a poetic roll call, and for reminding us where a roof may always be found:

O Mighty Oaken Table of Yore,
Witness to enchanted lore,
Told by wondrous Knights of old,
Of quests renown by deeds so bold.

You've become our Forum standard,
"Knights of Gold" our host commanded.
Drawn by history's shining moments,
Now we stand as Gold's proponents.

First a band, a loyal few,
Inspired ranks which swiftly grew
Into this group we see tonight,
Linked by bonds of truth wove tight.
...
"When from this castle far you Roam;
O'er towering peaks or seas of foam.
If for your friends you have a yen,
Just go online — your home again."

And finally, a silver Eagle is awarded to Sir canamami for the education, and the suggestion that assembled in thought we as solid as our history:

"Thus, my compliment to the Table Round is to compare it to the Order of Good Cheer. Just as the OGC's membership was open only to the "gentlemen" of the colony, the members of the Table Round is comprised of the Knights - those whose worldview draws them to gold; a worldview which is marked by a desire for hard money, hard money being a pre-requisite for a clear-eyed assessment of economic realities. Such a clear-eyed assessment is necessary for the production of an abundance of goods and services, to meet the needs of family, friends and, hopefully and eventually, the entirety of humanity. (To steal from Preston Manning, the Knights are hard-headed people with soft hearts). Thus, the Forum is like the OGC, which tried to meet the needs of its members and guests, both other colonists and the local aboriginals. Perhaps more important, the Knights value gold as hard money because it provides for true savings, which require a true store of value, to enable us to survive the various "harsh winters" which history teaches can arise, just as the stored wine may have helped the colonists survive the winter. The Forum has provided us with intellectual and emotional sustenance, and sometimes entertainment, to ward off any periods of despair during the POG's long winter. And, with the fellow Knights of the Forum, we celebrate our final vindication as the snow melts and the ice breaks, and the buds of the POG's spring appear."
===
The Hobbits are looking forward to see what SIR MK is planning for this FOURTH BIRTHDAY. PERHAPS, something similar to the first year celebration ? We shall see shortly after the HAPPY BIRTHDAY GOLD PRICE SETTLEMENT CONTEST winners are announced on FRIDAY the 13th of September !
<;-)


Buena Fe (9/7/02; 20:59:48MT - usagold.com msg#: 84583)
ramblings
1930's depression and DEFLATION. why deflation (defined as the us$ gaining purchasing power)? IMHO what happened in the 30's was that GOLD's purchasing power began to climb (especially internationally), the cabal (yes it existed back then) realized that gold was on a trip to the moon after the 29 crash, SO they arranged for the us$ to be chained to gold by gov decree (confiscation) and to all it looked like the us$'s purchasing power was increasing just as fast as gold (in fact it was, as gold (the rocket) was removed from sight as it gave the us$ a FREE ride), so we had DEFLATION against quais-us fiat.

Today the us$ will NOT be chained to gold (international players say no way no way "w"), so as "gold the rocket" blasts to the moon, us$ HYPERINFLATION will manifest because the $ has "no ticket to ride" (i suspect the euro has though).

I ALSO suspect that the adjectives (depression, etc.) to describe the next 5-15yrs (economically) have not been "coined" yet.

kasperjack (9/7/02; 20:31:50MT - usagold.com msg#: 84582)
Silver Collecter
We don't want their oil. Iraq was producing 3 million barrels of oil per day just prior to our last invasion. We imposed limitations on their ability to export oil. We limited them to shipping approximately 1 million barrels of oil per day. The proceeds were to be used for strictly humanitarian purposes. Iraq would turn up the taps immediately if we let them. However some of the proceeds from that oil would be spent on rebuilding Iraqs military. Ergo the Western conquerors veto on oil shipments. We must be careful what we wish for vis a vis Iraq. The arabs can withdraw the $750 billion or so in capital they have invested in the United States. If we humiliate Iraq the whole arab world could stop shipping us oil(no cheering over the devestation of the daisy cutters folks), demand payment in Euros or gold for that matter, and boycott our businesses and exports. The mid East is flaring up not because of oil or in Iraqs case innvolvment with Al Quad but because the strategic balance between Israel and the Arab world is being altered by the introduction of accurate and long range missle technology that can be used to carry weapons of mass destruction. MAD or mutually assured destruction is coming to the Middle Eastern theater... This political development has tremendous implications for precious metals. And my reading of the politcos says there is no end game. i.e. we will continue rolling over the axis of evil and their associates until we either bog down or finish the task. Gold is good insurance in times of uncertainty and chaos(?)

silvercollector (9/7/02; 19:56:06MT - usagold.com msg#: 84581)
Canada's Globe and Mail has a 20 page 'special' on the anniversary of 911......
I surmise the large networks will carry enormus reviews one year after the fact.

The Globe's lead article compares 1942 (Pearl Harbour) with New York (911). According to the author America has lost it's stealth. America should have come out on 9/12 with guns ablazing.

Contrary to some posters on this forum who claim responsibility of 911 is sketchy, I believe America should of 'evaporated' Afganistan the next day.

If the CBS article posted this week (Rumsfeld ordered plans on Iraq 5 hours after that fateful morning) has any credence, I believe a 'superior' party to al-Queida is behind 911. A collection of 'mountain-goat farmers' turned militia in Afganistan does not and will never convince me that they were the perpertrators of 911.

The US, for better or worse, needs to 'whack' the vile offenders, let the chips fall.

Mr. Bush, immediately after 911 promised action and a year later is stalling.

From the Globe article;

Seven months ago....Mr. Bush made an eloquent case......."In a single instant", he said, "we realized that this will be a decisive decade in the history of liberty, that we've been called to a unique role in human events."

"...in the year since terror changed America, the US has lost sight of its perceived role in changing the world....it's allies have slinked away from a shared purpose, perhaps feeling they never will have a true partnership with the US....this time, they are alone and confused....the Pearl Harbor moment has passed......"


It seems to me that Mr. Bush is caught between 'retribution'
(as the author suggests) and whether oil is to be secured or lost. It appears to me that Mr. Bush now fears the 'axis of oil' as much as the 'axis of evil'.

Put this statement in your pipe and smoke it, "....if Mr. Bush did not fear ramifications of oil supply disruption he would have 'whacked' the 911 perpetrators a long, long time ago.....the allies now understand the 911 attack was solely directed at the US.....wish not to aggravate the situation further...."

OBL's brazen statement of $144US/barrel oil stands alone. Forget all other statements, implications and accusations of this internationally wanted criminal. The statement, in it's context alone, warrants a larger view. The Arab states who have warned "....that an attack on an Arab state will be conceived as an attack of all Arab states" have sent this bandit to carry out the '$144' message.

The US now faces the challenge of its history. An attack of Iraq will come with huge consequences. The attack in 1990/1991 was 'justified' and it brought 'oil stability'. This attack has far, far larger implications. Is it 911 retribution? Is it for oil supply security? The reason for attack is irrelevant, it will be contrived as the situation warrants.

The debate on this forum regarding REASONS to attack Iraq is pointless.

The question is whether the attack procedes as the media sometimes leads us to believe. My opinion is that there is no attack. If Bush wanted it, it would have happened long ago. Now the dilema for the poor soul. Bush is testing waters and this must go in the next 1-6 months. If we see the attack expect ANYTHING. If the attack does not go down America will have succumbed to the tragedy of 911. Confidence in the US (dollar) will fall off a cliff, gold will soar. The American 'monetary' promise will be shambles.


All the nay-sayers, weak-minded and weak-wristed will be shocked with this post, to them I say sorry. Unfortunately, the time has come to 'call the Arab bluff' or submit. The Arab world, now united, has the upper hand, as witnessed by the submission of Europe, notably Germany. Europe and Asia will pay, as Ari kindly notes, for oil at market rate, be it $30 OR $144/bbl.

The term "....we need the oil therefore we will take it.." is on the mind of Mr. Bush and has been for months, does he dare?

The US, very soon will decide. Fortunately for gold holders it is a win-win scenario. Unfortunately for humans it is a time of grave concern.










Golden Bear (9/7/02; 19:17:13MT - usagold.com msg#: 84580)
More fron James Turk interview... Gold's role in any environment.
link below
"... Q: Talk about China's role in the gold dynamic.
A: The Chinese impact on gold will be extremely profound. The Chinese- language character for gold is the same as the one for money. As far as the Chinese are concerned, gold is money. The Chinese central bank reported an increase in their gold holdings to the International Monetary Fund last year. But the number is still small, about 500 tons compared with 395 previously reported. The general market view, though, is that the Chinese central bank has been accumulating gold and not reporting all their holdings to the IMF.

Q: Somebody must be selling it to them.
A: Now you are getting into the whole issue of who is selling the gold and who is shorting gold. There is a point of view that, in addition to some mining companies, banks and other financial institutions have been borrowing gold to fund dollar assets and earn a spread similar to that of the yen carry trade of a few years ago. People were borrowing yen at 0.5% to fund dollar assets and making 5% on the spread until the yen started to appreciate. Now, gold is being borrowed from the central banks and sold into the market in exchange for dollars. That's fine in a declining gold-price environment, but in a rising gold environment it can kill you. We know the central banks loan the gold, but it's unclear which ones are doing it and how much they are loaning out.

There is evidence to suggest the Exchange Stabilization Fund, a quasi- government agency under the direct control of the U.S. Treasury secretary and the president, has been active in the gold market. If the gold price were to rise, the multinational banks who are the big shorts in the gold market wouldn't be able to cover their shorts and would take big hits. That's why the ESF is involved to help manage the price of gold. It isn't unprecedented that gold is loaned or flows into the market. What's unprecedented is the lack of disclosure. My sense of it is that there's more than 10,000 tons loaned into the market by central banks. If that's true, that's four times annual production. Can you imagine if people were short four times wheat production in one year? There is systemic risk here.

Q: Are you recommending people buy gold bullion, or should they buy gold stocks?
A: People make a mistake thinking bullion is an investment. Mining stocks fall into the investment category, but bullion is cash. It isn't an investment. You buy bullion for liquidity purposes. You buy bullion for safety purposes, because there is no return to bullion unless you lend it out. It's clear, though, that people see gold as an increasingly important component of their cash and liquidity holdings..."
----------------------------------------------
GB: The Chinese character for gold means money!,.... compare that to the average Joe Six Pack of the western world, who being the poor uninformed soul that he is, does not have any mechanism to be enlightened to the real value of gold in his wealth accumulation and preservation strategies....

Golden Bear (9/7/02; 19:05:53MT - usagold.com msg#: 84579)
LeMet Cafe article of James Turk interviewed by Barron's
http://www.lemetropolecafe.com/hemingway_table.cfm?cfid=254712&cftoken=27755987&pid=2476
Snippit:

"... Q: But if you're looking at gold reserves as a percentage of M3,doesn't flooding the system with liquidity skew the result?
A: All I'm doing is taking the year-to-year growth in M3 at the end of each month and plotting it on a chart. Back in the 1970s, we had double-digit inflation rates because we had double-digit rates of growth in M3. Then, former Fed chairman Paul Volcker's mandate was to reduce inflation, and he did it by reducing the growth rate of M3. Fed Chairman Greenspan continued those disinflationary policies when he came into office in 1987. In 1992 we had a short period of deflation when M3 declined from the previous year's level. This 1992 period is significant, because it marks the blowup in the exchange-rate mechanism. But the Volcker-Greenspan policies became so painful to European countries, Italy and Great Britain specifically, that they chose to break from the exchange-rate mechanism and pursue their own course. That was a message for reinflation in the 'Nineties and we've had massive growth in M3 since then. The early part of this reinflation led to the 1993-1994 bull market in gold and gold stocks. And the reinflation has continued.

Now we're headed to the next stage, which isn't supply-driven, but rather a demand-driven issue. When you talk about inflation or deflation, you're talking about the quantity of dollars and therefore the supply of dollars. Yet we need to focus on demand for dollars rather than the supply of dollars, because we assume demand remains constant though it doesn't work that way in the real world. The demand for the Argentine peso disappeared overnight. I am not saying that's going to happen with the dollar, but the dollar nevertheless has fallen in the foreign-exchange markets, which suggests that the Fed isn't contracting the growth of M3 fast enough to maintain the dollar's strength relative to other currencies of the world.

Q: So are we heading into a deflationary period?
A: I don't think so. I wouldn't call it inflationary; I wouldn't call it deflationary. We will see rising prices, not because of the dramatic increase in supply of dollars, but because of dramatic decreases in demand for dollars. The supply of dollars may remain the same, but if demand declines, the dollar purchases less, which expressed in terms of prices means that prices will be rising...."
-------------------------

GB: Interesting perspective on our inflation/deflation discussion...

misetich (9/7/02; 18:28:35MT - usagold.com msg#: 84578)
Analyst's '99 E-Mail Details IPO Rewards -
http://www.washingtonpost.com/wp-dyn/articles/A48172-2002Sep6.html
Snip:

By Ben White
Washington Post Staff Writer
Saturday, September 7, 2002; Page E01


NEW YORK, Sept. 6 -- In a 1999 e-mail, a Credit Suisse First Boston analyst said shares in hot initial public offerings are often reserved for executives at companies that spend millions on investment banking, describing in detail a practice that has angered small investors and sparked investigations.

In the e-mail, Credit Suisse analyst Lise Buyer attempted to explain, apparently to an outsider, how Wall Street firms distribute valuable shares in companies they help take public. Some of the shares, she wrote, "are reserved not for friends of the company, but for friends of the investment bank," amounting to "something of an 'if you scratch my back I will scratch yours' " situation.
********
Misetich
Investment bankers - and corporate insiders -
Whilst they "if you scratch my back I will scratch yours'" investors get robbed - The bushel is full of rotten apples -

Got gold?



silvercollector (9/7/02; 18:13:53MT - usagold.com msg#: 84577)
Wow! For followers of Mr. Greenspan this is a must read.....
http://www.gold-eagle.com/gold_digest_02/bonner090902.html
Bill Bonner with the gloves on!!!!!

Belgian (9/7/02; 17:23:48MT - usagold.com msg#: 84576)
Stocks / B onds / Cash / Real Estate
20 years of rising stockprices and bondprices (lower interest rates), regardless of any zigzag cross switches.
20 years of declining Goldprices and 20 years of money (confetti) growth . 20 years of rising real estate/land prices. All these trends have come or are coming to a halt/stop and are reversing or in the process of reversing.
Regardless of any zigzag cross switches.
Stocks decline, bonds are reaching zero interest rates, real estate prices are topping, Goldprice is bottoming and reversing, and more confetti is added to the piles.
Will these past 20 years be mirrored with an opposite picture for the coming 20 years ? No it wan't take 20 years to erase and neutralize what happened during the past 20 years.

What went up must come down and inversely.

IRs up, stocks/bonds down, Gold up and added confetti will be destroyed/devaluated, proportionate to the previous over-valuation. As day and night, growth and decay, birth and dead, take off and landing, high and low tide.

Everything in between was a gift !
Thanks.

sangrelli (9/7/02; 16:43:48MT - usagold.com msg#: 84575)
my guess
$$$$$ 325.1 $$$$$
I am a former stockbroker and became intrested in gold stocks in year 2000. It was right at the top of the bubble.
I have been consumed by gold and silver ever since. I feel it is the best thing I have ever done. I sold my house in 8/2001 and took place in a private placement and purchased exclusively Ag and Au investments,(including physical).The reason I feel Ag and Au will do so well is because of fiat money will slowly be exposed for the LIE that it is.When the currency devalues and inflation starts the realization will slowly sink in for the masses and they will bid up the price. I feel gold will eventualy exceed $1000 and silver will hit $100 in perhaps 5-8 years. I am gartefull to all the posters that connect me to any bearish info. We truely live in an information vacuum the PTB do not want the people to know the truth.
cheers
gs

R Powell (9/7/02; 16:32:00MT - usagold.com msg#: 84574)
Tenbeers
Regarding that loaf of silver, if it can be bought at spot or thereabouts, it would seem that its value would hold to the future spot price of silver at the least. Whether or not it has any added value as an historical piece or as an unusual item, I don't know. Actually, I know very little about unusual pieces of metal but our host might. Oftentimes, obtaining top dollar for an item requires knowing how to present that item to those most interested in and able to pay the most.
Rich

a nation of one (9/7/02; 15:06:39MT - usagold.com msg#: 84573)
an obvious forecast

I read The New Yorker sometimes because I don't know better, and in this issue they have a spread of several pages on what fashions will look good when their readers run out of money. It's revealing. The people in the know in New York clearly understand that the DOW is headed in the direction of at least the low four digits, and perhaps even for the three digit numbers.

a nation of one (9/7/02; 14:56:14MT - usagold.com msg#: 84572)
a small local scandal

An old friend I encountered in the grocery store yesterday said he thought a 'war on terrorism' was kind of like a 'war on snobbery,' or a war on 'pickled herring.' Nothing I said would convince him otherwise. He insisted that snobbery and terrorism are alike, because either can be engaged in without being detected until it is too late. And anyone can pickel a herring, all they need is a herring. I replied that herrings could easily be outlawed. I am sure Congress would go for it. He said that proved his point, because herrings could be caught by anyone with a boat. Then I graciously pointed out to the ignorant buffoon that all we would have to do is give up our boats, and then herrings would not be catchable or pickleable. "Some people would not give up their boats," he said, "they would hide them." He's probably right, the lousy freak. There are always a few traitors. And snobbery is more difficult, I agree. Anyone can practice snobbery surreptitously, and the government can't prevent it, can't even detect it dependably. It's hard to prove too. But I told him, "That doesn't make snobbery legal." I had him there. Though he missed the point. The wretched boob (who I know doesn't have much income, the poor soul, and he probably comes from inferior stock as well) merely replied by saying goodbye and turning and leaving. What he was doing in that expensive store I will never know. Probably stole a few dollars somewhere. He certainly can't truly afford it. But I do know this: Such people, who think for themselves, are dangerous. They don't fit in. And who knows what they might do? Next thing you know they will be quoting the Constitution, or saying laws ought to be applied to everyone. To me it seems only logical we ought to put these people away, frighten them first maybe, with some horrific examples, by putting a few of their fellow thinkers in prison and making a big deal about it in the press. And if they don't cooperate threaten to give them a good shock of about 300,000 volts. That'll put the fear of death into their hearts. Then America will be safe for the rest of us. And we can go on bombing our wicked enemies. Such as Iraq, Egypt, Japan, and Norway, and all the others who don't agree with us.

Gold is going up, did you notice? Looks to me like the stop orders have been cleaned out for quite a distance on the up side.

harryo (9/7/02; 14:38:25MT - usagold.com msg#: 84571)
Gold Contest
$$$316.8$$$
The powers that drive gold down will manage to do it again. Not as low as before though. I am a long time lurker. Invested in gold stocks at the wrong time but will hold until the right time. I cannot understand why with the balance of payments deficit, the loss of capital experienced by the NASDAQ crowd, the inflation that exists (in spite of the govt's stats otherwise), the potential for the over produced dollar to decline, and the lack of "safe" investments why gold and gold stocks have not soared. Those who invest in any market now must be unaware of the potential for a greater fall from current values.(Bear Market continues.) Bonds will have to lose value as interest rates increase. Gold and gold stocks seem the safest place to be. I believe that I am right but my timing has been definitely wrong.

sector (9/7/02; 14:36:34MT - usagold.com msg#: 84570)
@Topaz One can Easily Prevent the Inflation's "Tornado's Touchdown"
All one needs to do is...
...stop using petrol, stop eating foods bought from the grocery, medically treat one's self, deeply reduce one's consumption of kilowatts as the UTES raise their rates, avoid using fresh water as the municipalities will surely raise those rates to offsey losses from a plunging tax base, and ...most of all ...divest one's self of all paper currency that is on a moonshot to 25% inflation and who knows where after that.

Bill Gross of Pimco [Mr. Bond guy] thinks bonds will win. I've got news for him:

The bonds of major companies are already worthless because their balance sheets are as fake as cotton candy and some of them are sitting ducks for a litigative lethal assault [Ford].

++++++++++++++++++++++++

BTW there are folks here who imagine that gold will pull back later this week or next. These folks may even plan to "Sell the rallys" or "Take profits".

News FLASH...In a few weeks, those who "Sell the rallys" or "Take profits" will be very sorry they did so.

SWEET 16 (9/7/02; 13:02:34MT - usagold.com msg#: 84569)
September 13 POG


$$332.90$$

Buying gold now is a cool way to pay for college in 2005.

SWEET 16

Cometose (9/7/02; 12:27:49MT - usagold.com msg#: 84568)
Misetech Post 84457
Just opened a monthly newsletter this morning....
which had for its main course .... the subject of Pension fund obligations and how some very prominent firms have been using a standard "projection" of 10% increase in pension fund value per year to add in to their income statement after reaching the bottom line....I guess this would be the amended bottom line ..... They add this whether their actual performance is in line with their standard 10% projected increaseor not.... This is a another widespread accounting fraud being perpetrated on stockholders. GM is 12 billion behind on its Pension Fund obligations....To make up the balance, these obligations will have to come out of earnings...
This is going to put a lot of companies out of business; the others , which survive this pension fund shortfall that has to be paid back , will after the coming crash, be stuck in the gutter for years to come....

There's another ornament to put on the tree (OF SHAME).......
The lights will be coming on soon , what an illumination it will be ......(90% down days , capitulation, ctc.)

THe bond market is at its high...or will be soon in that yeilds can not go much lower....I really believe that the dollar is a proxie for bonds and vice versa...
Is the dollar slide a precursor to the bond market..
If we now add a cup of CRASH to the mix .....then the
HUMBLE PIE will be ready to bake....... and while it is baking....money will begin its (perhaps unabbridged) flight to ...... QQQQQQQQQQQQQQUUUUUUUUAAAAAAALLLLLLLLLLIIIIIIIITTTTTTTYYYYYY

Humble pie is not a suitable well balanced dessert
unless served with a heaping portion of GOLD.......

unless served with a heaping portion of GOLD.......

unless served with a heaping portion of GOLD.......

unless served with a heaping portion of GOLD...........

unless served with a heaping portion of GOLD..............

unless served with a heaping portion of GOLD...............

All the information available to us on this forum is now also available to anyone who has access to this forum which is anyone who has a computer........
As the global economic scenario plays out ...is it possible that we are all in a game of musical chairs with regard to the (vanishing )supply of GOLD as has been indicated by ANOTHER and FOA.....????????

DON'T GET CAUGHT WHEN THE MUSIC STOPS, WITHOUT YOUR CHAIR (G0LD) FIRMLY PLANTED UNDER YOUR ASSETS

Topaz (9/7/02; 12:26:50MT - usagold.com msg#: 84567)
R(ich), sector.
Tsunami??....more like a Tornado...as long as it (inflation)is prevented from "touching down" we can evade it's destructive influence.
A deflationary collapse of the system seems more plausable looking forward imho...

Go Lleyton!

Tenbeers (9/7/02; 11:07:35MT - usagold.com msg#: 84566)
Silver investment
Hello from a long time lurker. I have a question about silver investing. Would it be wise to purchase silver in a large ingot. I can buy a 682 troy oz (57 lbs) of .999 silver @ spot price. Its about the size of a loaf of bread.
It was from the old mining days here in Juneau. It has the
stamps from the refinery, and some old bank stamps on it.
Can I verify if its real, and would a ingot the large be
liquid. Thank-you.


Gandalf the White (9/7/02; 10:20:10MT - usagold.com msg#: 84565)
"The Happy Birthday GOLD PRICE SETTLEMENT CONTEST"
UPDATE #8 (as of Saturday at 10:10 Denver time 9/7/02)
===

FYI ------HIGH, Low and Settlement Price of GC2Z on:
9/3/02 $315.9 $314.1 $315.0s
9/4/02 $317.1 $313.8 $316.5s Change + $1.5
9/5/02 $320.8 $318.1 $319.8s Change + $3.3
9/6/02 $322.9 $319.8 $321.5s Change + $1.7

===

$$$$ 398.6 $$$$ Believer (09/04/02; 18:22:46MT - msg#: 84358)

$$$$ 375.0 $$$$ Henri (09/04/02; 10:58:18MT - msg#: 84326)

$$$$ 362.3 $$$$ NEMO me impune lacessit (09/04/02; 05:21:24MT - msg#: 84304)

$$$$ 354.4 $$$$ perform (09/04/02; 07:34:49MT - msg#: 84313)

$$$$ 353.4 $$$$ darkhorse (09/03/02; 20:56:04MT - msg#: 84280)

$$$$ 349.2 $$$$ mdgc (09/05/02; 15:45:42MT - msg#: 84427)

$$$$ 345.0 $$$$ Socrates964 (09/04/02; 16:11:50MT - msg#: 84344)

$$$$ 343.0 $$$$ ji (09/04/02; 21:38:27MT - msg#: 84381)

$$$$ 342.5 $$$$ gvc (09/03/02; 17:08:12MT - msg#: 84255)

$$$$ 341.7 $$$$ old gold (09/04/02; 11:40:02MT - msg#: 84330)

$$$$ 339.0 $$$$ rsjacksr (09/03/02; 22:36:21MT - msg#: 84289)

$$$$ 335.4 $$$$ Roger The Shrubber (09/05/02; 08:18:47MT - msg#: 84404)

$$$$ 334.7 $$$$ GoldCoaster (09/05/02; 21:29:56MT - msg#: 84455)

$$$$ 333.7 $$$$ Speedy (09/04/02; 19:15:01MT - msg#: 84366)

$$$$ 333.4 $$$$ Slowman (09/04/02; 20:10:11MT - msg#: 84370)

$$$$ 332.2 $$$$ BlackBart (9/6/02; 23:09:00MT - msg#: 84544)

$$$$ 332.0 $$$$ DOWNUNDER (9/7/02; 02:35:37MT - msg#: 84550)

$$$$ 330.0 $$$$ HOOSIER GOLDBUG (09/04/02; 19:11:32MT - msg#: 84365)

$$$$ 331.3 $$$$ misetich (09/04/02; 05:28:30MT - msg#: 84307)
$$$$ 331.2 $$$$ Pippin (09/04/02; 12:50:09MT - msg#: 84335)

$$$$ 329.8 $$$$ goldenpeace (09/04/02; 11:36:15MT - msg#: 84329)

$$$$ 329.3 $$$$ mikal (09/04/02; 17:08:29MT - msg#: 84349)
$$$$ 329.2 $$$$ The Hoople (09/04/02; 12:04:30MT - msg#: 84332)

$$$$ 328.5 $$$$ steady (09/03/02; 20:14:41MT - msg#: 84272)

$$$$ 328.1 $$$$ ha_tey_o (09/04/02; 11:15:13MT - msg#: 84327)

$$$$ 327.9 $$$$ Trapper (09/03/02; 20:12:26MT - msg#: 84271)

$$$$ 327.6 $$$$ mudr (9/6/02; 22:47:45MT - msg#: 84543)

$$$$ 327.3 $$$$ luckypierre (09/03/02; 15:20:51MT - msg#: 84244)

$$$$ 326.5 $$$$ turkey hunter (09/03/02; 18:33:51MT - msg#: 84261)

$$$$ 326.0 $$$$ White Rose (09/06/02; 08:23:51MT - msg#: 84503)

$$$$ 325.5 $$$$ Galerider (09/03/02; 20:53:27MT - msg#: 84279)

$$$$ 325.2 $$$$ The CoinGuy (09/04/02; 13:00:07MT - msg#: 84338)

$$$$ 324.5 $$$$ Rock (09/04/02; 12:19:18MT - msg#: 84334)

$$$$ 324.1 $$$$ Gold Standard (09/04/02; 05:02:31MT - msg#: 84302)

$$$$ 323.7 $$$$ Boxman (9/4/02; 04:27:17MT - msg#: 84301)

$$$$ 323.2 $$$$ a nation of one (09/03/02; 13:55:53MT - msg#: 84229)

$$$$ 322.2 $$$$ Tommy P (09/03/02; 14:33:23MT - msg#: 84233)

$$$$ 321.9 $$$$ MoonHowler (09/04/02; 21:59:49MT - msg#: 84382)

$$$$ 321.4 $$$$ balzac (09/04/02; 17:22:15MT - msg#: 84353)

$$$$ 321.1 $$$$ The Knife (09/04/02; 16:30:43MT - msg#: 84345)
$$$$ 321.0 $$$$ Gandalf the White (09/03/02; 12:29:20MT - msg#: 84221)

$$$$ 320.2 $$$$ 18K (09/03/02; 13:18:00MT - msg#: 84226)

$$$$ 320.0 $$$$ Zhisheng (09/03/02; 15:06:26MT - msg#: 84240)

$$$$ 319.8 $$$$ Bound Spirit (09/03/02; 17:20:54MT - msg#: 84257)
$$$$ 319.7 $$$$ slingshot (09/03/02; 16:57:17MT - msg#: 84254)
$$$$ 319.6 $$$$ NTgeo (9/6/02; 01:56:11MT - usagold.com msg#: 84477)
$$$$ 319.5 $$$$ davefinger (09/03/02; 14:52:14MT - msg#: 84235)
$$$$ 319.4 $$$$ koala bear (9/4/02; 04:08:54MT - msg#: 84299)

$$$$ 319.2 $$$$ Bulldog (09/03/02; 21:53:40MT - msg#: 84288)

$$$$ 318.6 $$$$ Kodie (09/03/02; 12:41:26MT - msg#: 84222)

$$$$ 317.9 $$$$ VanRip (09/05/02; 12:20:50MT - msg#: 84415)

$$$$ 317.2 $$$$ Artie Farkle (09/04/02; 20:02:53MT - msg#: 84369)

$$$$ 316.0 $$$$ Tevye (09/04/02; 08:02:40MT - msg#: 84316)

$$$$ 315.5 $$$$ Christian (9/6/02; 00:11:42MT - msg#: 84471)

$$$$ 314.9 $$$$ MO VER MEG (09/04/02; 07:34:44MT - msg#: 84312)

$$$$ 314.5 $$$$ Frosty (09/03/02; 18:59:09MT - msg#: 84265)

$$$$ 314.0 $$$$ Flatlander (9/7/02; 07:30:20MT - msg#: 84555)

$$$$ 313.3 $$$$ Woodie (09/03/02; 23:41:11MT - msg#: 84291)

$$$$ 312.5 $$$$ SilverHoard (09/04/02; 17:01:10MT - msg#: 84347)

$$$$ 311.4 $$$$ De Ronin (09/04/02; 12:16:42MT - msg#: 84333)

$$$$ 309.7 $$$$ HopeingII (9/6/02; 21:14:33MT - msg#: 84542)

$$$$ 308.6 $$$$ Noble1 (09/04/02; 20:25:58MT - msg#: 84371)

$$$$ 308,0 $$$$ Trurl (09/05/02; 09:33:57MT - msg#: 84408)

$$$$ 295.5 $$$$ Topaz (9/5/02; 01:41:33MT - msg#: 84389)

===
THE RULES --
1) THIS Contest consists of TWO Portions --- A Price Prognostication and a Discussion Statement !
2) The Winner is the Price Guess closest to the Settlement price of the COMEX (most active) December 2002 Contract (GC2Z) on the date of Friday the 13th of September. (NOTE the LUCKY date !)
3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $543.2)
4) "Guesses" shall be SHOWN in the SUBJECT location AND enclosed in markers of "Dollar Signs"
so as to be OFFICIAL ! Such as $$$$ 543.2 $$$$
5) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".
6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes HIGH NOON on Thursday, September 12th.
7) AND MOST IMPORTANTLY -- A short discussion paragraph of "Why gold is important to THAT PERSON as an investor/owner." This part of their entry MUST accompany their Price prognostication, OR the entry WILL NOT BE CONSIDERED!
----
THE PRIZES !!
To the person with the exact or closest "Guess" to the December ‘02 (GC2Z) SETTLEMENT price on Friday September 13th ----- an one-half ounce PURE GOLD Canadian Maple Leaf as the winning prize, with an one-tenth ounce PURE GOLD Austrian Philharmonic to BOTH the next closest guesses (runners up).
===
WELCOME all you new POSTERS !
Thanks for joining us on the USAGOLD Forum.
<;-)


tedw (9/7/02; 10:11:20MT - usagold.com msg#: 84564)
Justice Fields and Gold
Julliard vs Greenman 110 US 421

And when the Constitutional Convention came to the prohibition upon the States, the historian says that the clause ,"No State shall make anything but gold and silver a tender in payment of debts" was accepted without a dessentient State:

"So the adopton of the Constitution," he adds,"is to be the end forever of paper money, whether issued by the several states or by the United States,if the Constitution shall be rightly interpreted and honestly obeyed."

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

Wake Up: the federal courts are corrupt and our entire money sysem contrary to our basic and supreme law.

misetich (9/7/02; 09:51:17MT - usagold.com msg#: 84563)
Efforts to Restrict Retirement Funds Lose Steam-Indignation Wanes as Congress Considers Limits on Company Stock Holdings
http://www.washingtonpost.com/wp-dyn/articles/A48036-2002Sep6.html
Snip:

By Jonathan Weisman
Washington Post Staff Writer
Saturday, September 7, 2002; Page A01

Congress has all but abandoned legislative proposals to ensure that employee retirement funds are not concentrated in their employers' stock, after hearing from businesses that vigorously oppose such restrictions.

The recently devastated retirement accounts of employees from Enron Corp. and WorldCom Inc. initially fueled a wave of indignation among lawmakers in Washington and solemn vows to protect their investments. But the anger that pushed tough new accounting standards past corporate opponents this summer has already faded, lawmakers and lobbyists say, allowing businesses to regain their strength on Capitol Hill.
...........
Consumer-rights groups, unions and retiree advocates, which were confident that the human wreckage of this year's huge bankruptcies would force real change to the rules, expressed outrage.

"I think it is appalling, and I think the American people would be appalled if they knew," said Karen Friedman, director of policy strategies at the Pension Rights Center, an advocacy group that supports such mandates. "It's time for Congress to have some backbone."
...........
*********
Misetich

Corporate lobby groups are too powerful - politicos are a puppet on a string - Public outrage will soar - as their 401k is kissed goodbye - as the Big Bad Bear continues - PE multiples are too high and sooner than later will bet back to their mean -

Got gold?


sector (9/7/02; 09:37:48MT - usagold.com msg#: 84562)
@R(ich)Powell The ECRI's Future Inflation Gauge is 18.8%
http://www.businesscycle.com/showstory.asp?storyID=393
If anyone still has doubts about the tsunami of inflation headed our way just drop by the ECRI's FIG page (above).

It is not only screaming, it is in a rocket launch from well below zero to where it is now at 18.8%.

The Fed uses this data so they know all too well what is coming (Perhaps they will be compelled to "release" gold?).

The gauge measures at 9 months out so there won't be any relief for at least 9 months. Moreover, judging by the almost vertical trajectory of the FIG there's no telling how high it will go.

In addition, the recent FIG volatility [Extreme swings above and below zero] suggest that there are large economic structural failures in process.


ECRI-FIG Growth %
Aug-99 2.4
Sep-99 7.0
Oct-99 9.3
Nov-99 10.8
Dec-99 16.6
Jan-00 15.5
Feb-00 13.3
Mar-00 13.4
Apr-00 14.0
May-00 8.7
Jun-00 6.6
Jul-00 3.3
Aug-00 1.9
Sep-00 -2.9
Oct-00 -6.8
Nov-00 -9.8
Dec-00 -8.9
Jan-01 -11.2
Feb-01 -12.6
Mar-01 -14.4
Apr-01 -17.2
May-01 -17.1
Jun-01 -16.5
Jul-01 -17.7
Aug-01 -18.0
Sep-01 -16.0
Oct-01 -17.7
Nov-01 -15.4
Dec-01 -14.6
Jan-02 -13.6
Feb-02 -7.0
Mar-02 -5.4
Apr-02 -2.2
May-02 0.6
Jun-02 8.5
Jul-02 15.7
Aug-02 18.8

R Powell (9/7/02; 09:29:27MT - usagold.com msg#: 84561)
Ask Mr. Hamilton?
Why not, I thought. So, I just did.

R Powell (9/7/02; 09:07:57MT - usagold.com msg#: 84560)
Topaz // price inflation trigger
I've just finished reading Hamilton's weekly article which asks, indirectly, the same question about seeing the price increase effects of monetary inflation that I think you just asked.
Hamilton was looking at the rate of return from bonds and decided that money flow out of stocks into bonds has inflated bonds thus lowering yields. This force, he opines, is stronger than the threat of inflation which should raise yields. After finishing, I wondered about asking him what might stop or interrupt this stocks-to-bonds and bonds-to-stocks money flow. I'm interested as he seems to think that this closed money flow system may be channeling money in such a way as to mask, negate or postpone the inflation of prices (and long bond yields) that we might otherwise see.
He claims this flow is blocking the trigger that we seek. He very correctly (imho) sees this as one result of the concept among big money managers that investments are limited to stocks or bonds. There is nothing else. We all know what a miniscule amount of that money flow, invested in gold or silver would do to prices. I'm hoping that these blind fools will not be able to overlook the CRB index which is screaming of coming commodity price increases or price of goods and raw materials inflation.
They never saw the stock price bubble, they don't see this. POG will have to conform to their preconcieved trend and chart notions before they notice. They will (imho) not start the upturn (fundamental conditions will) but they will turn the upside into a bubble. They'll probably take POG and POS from whatever is fair dollar valuation and raise it to the moon. Let's hope so.
Mr. Hamilton, what will break the transfer cycle of bonds-to-stocks and stocks-to-bonds??
Thoughts?
Happy weekend
Rich



misetich (9/7/02; 08:28:48MT - usagold.com msg#: 84559)
Airline Forecasts Further Cost Cuts
http://www.nytimes.com/2002/09/07/business/07AMER.html
Snip:
By THE ASSOCIATED PRESS

ALLAS, Sept. 6 (AP) — American Airlines needs to cut its permanent cost structure by at least $3 billion a year, or more than 15 percent, over the next several years, its chairman and chief executive, Donald J. Carty, said today.
********
Misetich

Lets not forget the effect of higher fuel costs -ouch!

Got gold?





mikal (9/7/02; 08:19:54MT - usagold.com msg#: 84558)
Japan's equities situation a trigger or a victim or both?
Thanks Misetich for that story. If the ruling Liberal Democratic Party idea for pension funds is funnelled into stocks, it would have to be part of a much grander scheme to achieve stability of any kind. A few of the obstacles: the temptation to finally bail out as stocks react upwards, rising energy and basic input prices, poor cash flow, credit downgrades, shifts into hard assets!

misetich (9/7/02; 08:19:03MT - usagold.com msg#: 84557)
Report Sees Gloomy Side to the Boom in Car Sales
http://www.nytimes.com/2002/09/07/business/07AUTO.html
Snip:

By DANNY HAKIM

DETROIT, Sept. 6 — A new report by Goldman Sachs is sharply pessimistic about the robustness of auto sales and the underlying health of the Big Three.

The report contends that two main factors that have propped up sales in the short term — huge incentives and extra consumer cash coming from a boom in home mortgage refinancing — cannot be sustained.

The report, titled "After the Automotive Boom," suggests that if auto sales remain strong, the financing operations of the Big Three will have difficulty generating enough equity to continue to support deals like zero percent financing.
"The boom depends on access to capital," according to the report, because more generous loans cannot be extended to car buyers without it. "The Big Three cannot continue to support the boom indefinitely," the report added. It was written by Gary R. Lapidus, an auto analyst, and Jan Hatzius, an economist.

On the other hand, if financing deals are cut back, or consumers tire of them — and home mortgage refinancing falls off, as expected — auto sales, and corporate earnings, could fall sharply. Such an economic environment could also lead to lower-than-forecast returns in the companies' huge pension funds and a cash squeeze.

..........

If the Big Three were unconstrained by labor contracts, they would close several plants and lay off workers in an effort to become more efficient and to compete better with much more profitable rivals like Toyota and Honda, the manager said. Such actions would help the companies restructure and free more capital to spend on product development, but their labor contracts prevent them from doing so.

The money manager said that because he thought labor concessions would be highly unlikely and that the companies would eventually have difficulty raising money, he was selling shares of G.M. and Ford short, meaning he is betting that their stock price will decrease.

"The bond markets will eventually figure this out," he said. "You can't just keep pouring money into this thing."

**********
Misetich

Housing and automotive industry are carrying the US economy - Boom and busts are part of the cycle -

Got gold?



misetich (9/7/02; 07:49:22MT - usagold.com msg#: 84556)
Japan's Plan to Shore Up Stock Market May Fail, Investors Say
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APXm9sxUpSmFwYW4n
Snip:

By Tomoko Yamazaki


Tokyo, Sept. 7 (Bloomberg) -- Japan's latest plan to revive its economy, including the use of public pension funds to shore up the stock market, may not be enough to fix a decade-long slump, investors said.

The ruling Liberal Democratic Party wants to use pension money to buy exchange-traded funds, which represent groups of stocks. Purchases may total 3 trillion yen ($25 billion), the Nihon Keizai newspaper reported today, without citing anyone.

``The amount is quite significant if it is indeed carried out,'' said Dai Nishiyama, a senior fund manager at SG Yamaichi Asset Management Co., which has $22 billion in investments. ``Still, none of the plans being talked about seem to be aggressive enough to change the situation.''

********
Misetich

Government spending, bailouts, deficits is growing - lets call it big governments bull market

Got gold?






Flatlander (9/7/02; 07:30:20MT - usagold.com msg#: 84555)
$$$$$314.00$$$$$$
Gold represents true value over the ages. All else is an illusion.

Golden Bear (9/7/02; 06:44:05MT - usagold.com msg#: 84554)
Citibank and JPM litigation liabilities too large to overcome?
http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=15165
"... None of the foregoing is arguing that Citigroup, JPMorgan or anyone else will be rendered insolvent by these issues, merely that there is potential for very material liability. As JPMorgan itself states in its 10Q, "[we] cannot state with confidence what the eventual outcome of [the] pending matters will be, or predict with confidence what the eventual loss . . . will be". One can reasonably conclude that the possibility of insolvency, although remote, is real. Most of the companies that filed for bankruptcy due to asbestos litigation insisted until near the date of filing that their exposure to the litigation was manageable and not material to their financial health. However these companies, after losing a few key cases, were inundated with claims and realized the only answer was to seek the protection of bankruptcy court. It is possible that a similar situation could unfold with respect to the banks. Particularly if there is a key court ruling that interprets the law in favor of the plaintiffs. Of course national banks cannot file for bankruptcy. If Citigroup or JPMorgan were faced with insolvency, it would be taken over by the FDIC, which would operate it in receivership.

This leads to a discussion of the "too big to fail" doctrine with respect to these potential legal issues. The prevailing opinion is that Citigroup and JPMorgan in particular are too crucial to the financial system for the "authorities" to let the worst-case scenario described above occur. This may be true, but the question is how and at what point can they do anything to prevent it? There are and will be a variety of legal proceedings occurring in bankruptcy court, different federal courts and different state courts. As mentioned earlier, the plaintiffs’ law firms are powerful organizations that will have different goals and agendas depending on who their client is, whom they are suing, what the facts of the particular case are and where the litigation is taking place. The plaintiffs are diverse parties from individual shareholders and bondholders to public pension funds and bankruptcy court creditors committees. In many cases, the plaintiffs’ are likely to believe they have a fiduciary duty to pursue the banks on behalf of their principals. The notion that all this could be shut down by a regulator outside of insolvency proceedings without an act of Congress is fanciful. While an act of Congress could do the trick, given the prevailing climate, a bill to save the banks and brokers from liability for the equity bubble is not likely to be politically feasible.

Where does this leave us? As noted by Doug Noland repeatedly on these pages, the United States economy is at great risk due to the past two decades of dramatic credit expansion. Due to the central role Citigroup, JPMorgan and others play in that system, the economy is at further risk from the other dramatic expansion that occurred over the past few decades – the expansion of the plaintiffs’ bar and the vulnerability of defendants to it..."

Golden Bear (9/7/02; 06:20:43MT - usagold.com msg#: 84553)
Big Numbers...
http://www.prudentbear.com/archive_comm_article.asp?category=Market+Summary&content_idx=15170
"... In a report issued by the U.S. comptroller of the currency, the total amount of derivatives in U.S. insured commercial bank portfolios rose by $3.8 trillion in the second quarter, to $50.1 trillion...."

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

GB: These numbers are incredible...

Black Blade (9/7/02; 04:28:25MT - usagold.com msg#: 84552)
The New Depression - Unemployment - Government Workfare
http://www.bls.gov/news.release/empsit.nr0.htm

I have been trying to sort out this mess concerning the Bureau of Labor statistics concerning the "seasonally" adjusted employment numbers. The BLS makes the claim that the jobless rate fell from 5.9% to 5.7% with the addition of 39,000 jobs. Many expected to see a slight increase to 6% (even with the "Seasonal" adjustment fudge factor). It still did not make sense until a closer inspection revealed some curious facts that also beg the question: Is the government starting a "Depression" era style jobs program? We are expected to accept at face value that 39,000 new jobs were created last month.

Manufacturing jobs fell by 68,000 while revisions increased the July non-farm payroll number from 6,000 to 67,000. That's one hell of an oversight. Also there was a loss of 55,000 retail jobs that were partially offset by 34,000 new construction jobs (real estate bubble?). So how and where did the increase in jobs come from? Well get this - the government added 41,000 new jobs in August. Government employment rose by 41,000 over the month. The federal government added 20,000 jobs, mostly reflecting an increase in the number of federal security personnel at airports.

Perhaps this is a somewhat covert attempt to create "busy work" jobs for unemployed Americans similar to what President Franklin D. Roosevelt put into action in 1933. For example the Civilian Conservation Corps (C.C.C.) was established in March of 1933 by President Franklin D. Roosevelt for the purpose of performing emergency conservation work, and helping to preserve the nation's heritage. This opportunity also offered employment to thousands of unemployed young men during the Great Depression. In short, a government sponsored workfare program. There were many other programs as well that included several public works projects such as the Hoover Dam.

Whatever the type of work and for whatever reason, the drop in the unemployment rate was in large measure due to jobs created by the government and not the private sector. This means that the unemployment picture has not really changed much at all. If anything it has actually deteriorated some when the newly created workfare jobs are accounted for.

About 1.4 million persons (not seasonally adjusted) were marginally attached to the labor force in August, essentially the same as a year earlier. These individuals reported that they wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they had not actively searched for work in the 4 weeks preceding the survey. The number of discouraged workers was 372,000 in August. Discouraged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them. Obviously the unemployment rate is much greater than the government lets on.

- Black Blade



Topaz (9/7/02; 04:00:07MT - usagold.com msg#: 84551)
Anduril
May I say what a pleasant turn of phrase you bring to the Table Sir, balm for the Eyes.
The inflation argument continues to be refuted day after day as, against all expectations, the US$ holds it's preminent position atop the Global Fiat mountain.
Justified or otherwise Warmongering - $ positive.
Oil price increases - $ positive.
Big Float not coming ashore any time soon - ditto.
Teasuries inflation - ditto.
What (at this point in time) can you identify as a price INflationary trigger when all I see/hear are examples to the contrary?

Thanks for your input.

DOWNUNDER (9/7/02; 02:35:37MT - usagold.com msg#: 84550)
$$$$$ 332.00 $$$$$
Gold is important to me because it now represents 50+ % of my investment/asset portfolio.While it is extremely painful to follow on a day to day basis I feel secure with the placing of this bet. Buy low --- sell high --not very often does an opportunity like this come up--where all the marbles are stacked in our favour! Supply/ price/ economic meltdown/ etc.

Black Blade (9/7/02; 00:52:25MT - usagold.com msg#: 84549)
War and Terrorism


A collection of a few recent reports:

German police said on Friday they had arrested a 24-year-old Turkish national and his 23-year-old German-American girlfriend in possession of explosives, and a newspaper reported he was suspected of planning an attack on U.S. installations. "We cannot rule out that sleeper agents live even here in Germany or in Europe or elsewhere," Ulrich Kersten, the head of Germany's Federal Crime Agency, said this week. "What we know for sure is that in Europe and in Germany there are people who are ready to commit violence in a jihad."

In Britain, the head of Scotland Yard's anti-terrorist unit also warned of possible attacks, saying lone bombers and gunmen unconnected to Al Qaeda could use Wednesday's anniversary as a world stage for their causes and strike in Britain. "We shouldn't underestimate these individuals. An individual is not incapable of causing serious impact and that is something we are alert to. Our intention is to enhance the deterrent," said Scotland Yard's David Veness.

In Paris, Roland Jacquard, director of the International Observatory on Terrorism and a consultant to the French government, estimated it would take between a year and 16 months after the Sept. 11 attacks for Al Qaeda to prepare for another operation. "It's likely the organization will be ready to make an attack at the end of the year or the beginning of next year," said Jacquard, who has written a biography of bin Laden.

Intelligence on Iraq that the Bush administration will present to Congress includes information on how dangerously close Saddam Hussein has come to developing a nuclear weapon. There is also new information indicating that Iraq has developed new methods of chemical- and biological-weapon delivery, and also of contact between Baghdad and Al Qaeda before and after the Sept. 11 terror attacks.


Black Blade: The pressure is on as the US gears up for war and unleashes aircraft for air strikes in Iraq to soften up targets before invasion. Meanwhile terrorists are intercepted and explosives are found.


Black Blade (9/7/02; 00:28:40MT - usagold.com msg#: 84548)
New US power projects curbed
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1031119106484&p=1012571727207


Snippit:

The number of new power generation projects that have been tabled or cancelled in the US during the past two years has risen dramatically. According to data compiled by Platts NEWGen database group, 90,000MW have been tabled and 86,000MW cancelled from the beginning of 2000 to the end of July 2002. In 2001 alone, 60,405MW were tabled and 44,457MW were cancelled. "Companies are rethinking new generation strategies as power prices drop, financing becomes more difficult to nail down and debt ratings are slashed," said the company.


Black Blade: Utes and power generators can't get financing to build power plants as their debt ratings get trashed. In the end, as long as the US remains in an economic depression and the weather remains moderate there won't be much of a problem. If the weather turns cold, the US emerges from economic depression, or worse – both, then those shelved plans for new power plants will come back to haunt America in spades.





Black Blade (9/7/02; 00:15:07MT - usagold.com msg#: 84547)
Divorce duel reveals Welch's perks
http://money.cnn.com/2002/09/06/news/companies/welch_ge/index.htm


Court filings made by Jane Welch describe benefits GE continues to provide for its former CEO.

Snippit:

NEW YORK (CNN/Money) - Divorce papers filed by the wife of Jack Welch Jr., the former CEO of General Electric, allege that GE covered living costs for the couple while he was working for the company and will continue to cover him for the rest of his life -- disclosures the firm never alluded to, an attorney for Jane Welch confirmed with CNNfn on Friday. The divorce papers filed by Jane Welch detail her husband's use of an $80,000 per month Manhattan apartment owned by the company, court-side seats to the New York Knicks and U.S. Open, seating at Wimbledon, box seats at Red Sox and Yankees baseball games, country club fees, security services and restaurant bills, according to the Times. In her filing, Jane Welch describes $126,820 per month in living costs, but states she is unable to put a value on the items covered by the GE perks or how much Jack Welch may contribute to those, the Times reported. For an example, she provided an assessment of the use of GE's Boeing 737 jet, which is valued at $291,869 per month, or $3.5 million a year, according to the Times.


Black Blade: Pretty good scam. I notice that this was not found in an SEC filing but shareholders had to find out through a divorce court filings. Old Jack musta had some good damaging dirt on the GE board members to blackmail them for this deal. It appears that there is a lot of "pillage and plunder" going on at GE. Hmmm…



Black Blade (9/7/02; 00:13:30MT - usagold.com msg#: 84546)
Gross predicts Dow 5,000
http://money.cnn.com/2002/09/06/markets/pimco/index.htm


Influential Pimco bond manager sees stocks moving lower before recovery begins.

Snippit:

NEW YORK (CNN/Money) - The manager of the world's biggest bond mutual fund predicts the Dow Jones industrial average could fall another 40 percent to 5,000 because the stock market remains stubbornly expensive despite a more than two-year decline. "The market needs to yield close to 3.5 percent before it approaches fair value, and that means Dow 5,000," Gross wrote in his monthly commentary. "Companies have been diluting your equity via stock options claiming that management needs incentives of millions of dollars just to get up in the morning and come in to work," Gross wrote. "Then they pick you off by trading on insider information, selling shares before the bad news hits and you have a chance to get out."


Black Blade: The stock market is grossly overvalued and all indications are that it will get worse. Companies stopped paying dividends as their executives claimed that they could do more with the payout than the shareholder. At least dividends can't be faked like corporate balance sheets.





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