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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 10/9/1999
All times are U.S. Mountain Time

View Yesterday's Discussion.

elevator guy (10/09/99; 23:47:36MDT - Msg ID:15958)
Thanks for your response, ET !
I appreciate the opportunity to bounce ideas around in this forum, and you have honored me with your response.

Thanks for sharing your thoughts!

And what directions are you taking to survive, and to thrive?

ET (10/09/99; 23:37:42MDT - Msg ID:15957)
e man

Hey e man - how ya doing? Great thoughts you just expressed!

"If you invest in un-hedged mining companies, you pay a price denominated in dollars, yes?

"As the economic power structure of the world shifts towards gold and the Euro, in the FOA/Another insight, the
dollar will be undergoing a vicious devaluation.

"And when you hopefully sell that mining stock, you are paid in dollars. But the value of that dollar is not the
same as when you purchased the stock."

Yes, the operative word is 'hopefully'. Hopefully you can sell your stock and hopefully the dollar will still buy something.

"So how do you tell if you have stored earned value and wealth, or how do you tell if you have increased your
wealth? If you spend "x" amount of dollars to buy, and the stock's value increases, you get paid back, e.g.; "2x".
That sounds great, because it is two times the numerical value of dollars you spent to buy. But meanwhile,
rampant dollar devaluation have been hammering on the door, as the world dumps dollars in favor of the new
one world currency, (which, by the way, was prophesied some 2000 years ago, in the Book of Revelation)"

It seems the world has decided gold is that currency, yes? Any currency can only find value in it's acceptance by the public. No other way. I could quote you some Mises here on that subject but I'll leave it for another time. At any rate, the much prophesized 'One World Currency' will only be accepted if 'people' consider it valuable, not governments. The Euro, a hopeful proxy for gold, may end up being the currency of choice supplanting the dollar as the 'One World Currency' (aka - reserve currency).

"To tell if you have gained anything, as the dollar becomes devalued, you need a constant measure of value with
which to evaluate your position. Unless your leverage is great enough to overcome the devaluation that looms
over the horizon, there is no point in investing in gold stocks, un-hedged as they might be. FOA has said tonight
that there might not even be those 400 tonnes of yearly sales in the ECB agreement."

Yes, we must understand that dollars are also a promise to pay and it is unlikely that when you sell those stocks there is some small print in your contract allowing you to choose the method of payment. The buying and selling of any of these stocks traded in the US are dollar contracts first and foremost. Indeed you may get your dollars but the purchasing power (objective value) of those dollars may be disappointing.

"Those who have manned the wheel of our monetary ship have at least a little insight, colored by greed as it may
be. And its reasonable to assume that they have by now come to grips with the fact that the ship is in serious
trouble. It seems likely, then, that the USA might do something drastic to support the dollar, and the dominant
paradigm of imperialistic tyranny that has been foistered on the world's economic stage. And what action could
they take, to avoid going "out of business" War?"

As FOA has pointed out, it is a war. It seems they have lost but are unwilling to admit it, especially publically. You will never be told about the war or it's outcome. You will 'see' it however. I don't remember the government telling me about the last currency war. <g>

"And so it may be that the ECB has decide not to "control the burn" of the dollar, with small credibility/liquidity
injections of the 400 tonnes per year. Perhaps they are playing hardball, in an effort too decisively win the
battle for the title of the "heavyweight reserve currency champion of the world"."

Yes - so it would seem if FOA's info is correct. Perhaps other deadlines have cropped up necessitating a faster timetable to have things in place.

"Now our lives are burning faster, and there is little time to do anything but brace for the future. (With real
physical gold, that is)
But I still have one foot in the leveraged derivatives of our economy, and still have an interest in diversifying
into unhedged gold stocks, silver, as well as physical gold."

Remember the old trading axiom - only invest money you can afford to lose! <g>

"If the dollar doesn't disappear entirely off the face of the earth, and the extant financial systems survive the
re-alignment, then our investments become a numbers game, where we try to race against horrific inflation, with
highly leveraged paper this or paper that."

I don't think leveraged paper will last any time at all. I do anticipate hyperinflation as dollars return home and the Fed attempts to maintain some liquidity. It will be interesting to see the US awash in dollars but at the same time money will be hard to come by. A paradox few can imagine, but the likely outcome of the situation.

"Gold stocks should perform better and faster upwards, than the dollar slides downwards, do you think?
More and more, as I read the Thoughts of Another, and FOA, I am amazed at the long range insight we have
been blessed with. The rest of the world occupies itself with the more mundane affairs of life, and may not give
more than a passing notice to the price of gold, thinking that everything will stay the same in a linear fashion.
But life is full of non-lineararities, such as floods, earthquakes, wars, conquests, et al. We now seem to be in a
once-in-a lifetime, sea change of events, as the world gels into alignment with Biblical phophecy."

Prophecy aside, the average Joe never has any idea what is going on around him because he has been taught to trust his government to implement his security. He will get burned again like he has throughout history. He has sacrificed his self-reliance for his perceived security, the goal of any socialist program. Once again, average Joe has bought into the idea that free markets and socialism can somehow co-exist.

Thanks for your thoughts e man.

ET


Golden Truth (10/09/99; 22:57:09MDT - Msg ID:15956)
TO F.O.A
Hello F.O.A those last to posts really lit my fire!
May the battle be a victorious one! You have my full 110% backing in spirit and in strength.
Let us combine our minds as one and annhilate all quickly and forcefully!
May you live long F.O.A to see the Glorious Victory at hand and may God bless you to the highest!!!

Thankyou as always, your "brother in arms" G.T :-)

elevator guy (10/09/99; 22:54:00MDT - Msg ID:15955)
Treading water?
If you invest in un-hedged mining companies, you pay a price denominated in dollars, yes?

As the economic power structure of the world shifts towards gold and the Euro, in the FOA/Another insight, the dollar will be undergoing a vicious devaluation.

And when you hopefully sell that mining stock, you are paid in dollars. But the value of that dollar is not the same as when you purchased the stock.

So how do you tell if you have stored earned value and wealth, or how do you tell if you have increased your wealth? If you spend "x" amount of dollars to buy, and the stock's value increases, you get paid back, e.g.; "2x". That sounds great, because it is two times the numerical value of dollars you spent to buy. But meanwhile, rampant dollar devaluation have been hammering on the door, as the world dumps dollars in favor of the new one world currency, (which, by the way, was prophesied some 2000 years ago, in the Book of Revelation)
To tell if you have gained anything, as the dollar becomes devalued, you need a constant measure of value with which to evaluate your position. Unless your leverage is great enough to overcome the devaluation that looms over the horizon, there is no point in investing in gold stocks, un-hedged as they might be. FOA has said tonight that there might not even be those 400 tonnes of yearly sales in the ECB agreement.
Those who have manned the wheel of our monetary ship have at least a little insight, colored by greed as it may be. And its reasonable to assume that they have by now come to grips with the fact that the ship is in serious trouble. It seems likely, then, that the USA might do something drastic to support the dollar, and the dominant paradigm of imperialistic tyranny that has been foistered on the world's economic stage. And what action could they take, to avoid going "out of business" War?
And so it may be that the ECB has decide not to "control the burn" of the dollar, with small credibility/liquidity injections of the 400 tonnes per year. Perhaps they are playing hardball, in an effort too decisively win the battle for the title of the "heavyweight reserve currency champion of the world".
Now our lives are burning faster, and there is little time to do anything but brace for the future. (With real physical gold, that is)
But I still have one foot in the leveraged derivatives of our economy, and still have an interest in diversifying into unhedged gold stocks, silver, as well as physical gold.
If the dollar doesn't disappear entirely off the face of the earth, and the extant financial systems survive the re-alignment, then our investments become a numbers game, where we try to race against horrific inflation, with highly leveraged paper this or paper that.
Gold stocks should perform better and faster upwards, than the dollar slides downwards, do you think?
More and more, as I read the Thoughts of Another, and FOA, I am amazed at the long range insight we have been blessed with. The rest of the world occupies itself with the more mundane affairs of life, and may not give more than a passing notice to the price of gold, thinking that everything will stay the same in a linear fashion. But life is full of non-lineararities, such as floods, earthquakes, wars, conquests, et al. We now seem to be in a once-in-a lifetime, sea change of events, as the world gels into alignment with Biblical phophecy.

flierdude (10/09/99; 22:50:05MDT - Msg ID:15954)
Black Blade
Thanks for your input. I fly ultra-lights only. Its a hobby. I just finished a FP-606 kit from Fisher Flying. Its a one seat replica of a Cessna 152.

Mike

Black Blade (10/09/99; 22:29:07MDT - Msg ID:15953)
Flierdude......You fly? single or twin, etc?
I tend to like BMG, though their Fortitude deposit is about played out, the Pheonix deposit (nearby and part of the same system) has potential (Battle Mountain, NV), especially in a rising Au market. They also have some good prospects with their Bolivian properties (low cost). There has been some profit taking lately, but I like them though I don't have any of their shares.

As far as DROOY is concerned, I don't know. They are one of the "hedge-lites". I don't know how their hedges are structured, but apparently they have about 25% of their current production hedged at anywhere from $290 to $320. I was about to scoop up a few thousand shares last month and then the introduced a secondary offering of shares. I thought that this would dilute things a bit and went with HMGCY instead. I think that DROOY still has some superb leverage potential though. If you are interested in HMGCY, you could buy shares through their direct stock purchase program through B. of NY. Check out http://www.netstock.com and enroll (it's free) and search for HMGCY. You can buy the shares for less than through a broker and request certificates if you like (probably not a bad idea with Y2K). Also a few (very few) other Au shares listed. Overall I think that DROOY can overcome these hedge concerns because if AU rises, they can ramp up production rather quickly, though short term there can be some pain. Good luck!

flierdude (10/09/99; 22:07:15MDT - Msg ID:15952)
Black Blade
What is your take on Durbin Deep (DROOY) and Battle Mountain Gold (BMG).

Thank You.

Mike

Black Blade (10/09/99; 21:46:38MDT - Msg ID:15951)
AREM and all
I don't know if gold mutual funds would invest exclusively in hedged miners. I would look at the last annual report to see where the funds allocate among gold mining companies. If FOA and others are right in their assumptions, then the massive rise to come would favor unhedged miners to such a degree that some of the unhedged miners could go out of business, yet the unhedged miners would more than compensate for the losses of the hedged miners. I have 2 gold mutual funds as well as a silver fund. I also have holdings in individual mining stocks. I am not worried about the recent calamities that have and will befall hedged miners. It would also depend on how those hedges are structured. Not all hedges are structured the same. In fact some are quite beneficial whereas others can be quite devastating such as those involving Ashanti (ASL). I have stated before that many gold companies are headed by "bean counters" who have no business in the gold industry. This business is unique in that those with experience elsewhere are like children lost in a world of predatory sharks. Therefore I have concetrated lately into companies such as Harmony (HGMCY) and Stillwater Mining (SWC). Do the research and invest accordingly, we are approaching "interesting times" possibly even perilous times. Meanwhile the Black Blade will slash through the clutter of financial reports. BTW, you can't go wrong with physical, through you may lose out on leverage. The world is getting crazier all the time isn't it?

Peter Asher (10/09/99; 21:12:48MDT - Msg ID:15950)
Margin
Increases in margin are basically a common event when there is a dramatic surge in volatility. The potential for prices to move faster and further than margin calls can cover, requires a higher percentage up front to prevent outright loss to the market makers.

This would not inhibit shorts from covering, as they are closing out open positions. New shorts however need more cash per trade as do new longs. The empirical effect is that more money is now required for each transaction and therefore fuel for the speculative fires is reduced in both directions.

This is not a bad thing. Gold will get to where it is going to go in any event, just in a (relatively) more orderly fashion. --- "Time wounds all heels"

AREM (10/09/99; 21:10:46MDT - Msg ID:15949)
To All

As I read the posting on this forum, I feel like a kindergarten student would feel when sitting in on a graduate course in rocket science. I am bombarded by the unbelievable complexity of the seemingly unlimited ways of formulating investments. It is all Greek to me.

I have understood just enough to realize that gold is the way to go in this phony fiat money world. Consequently, thirteen months ago, I put all of my investment capital into the Fidelity Gold mutual fund. Recently, I was convinced that gold was pretty much at the low end of its range, so I bought some gold coins. That turned out to be very good timing.

As of right now, my gold mutual fund is up almost 43% from where I bought in. It was up almost 56% a few days go, but then it fell back.

What worries me is all the talk about "hedged" mining companies and how they are going to be hurt by these actions. I simply just don't understand enough about this business to make an informed judgment about what is going to happen to my gold mutual fund as gold continues to rise. My original simplistic concept was that as gold rises, mining companies should make more money and their stock should rise accordingly. I don't feel very confident in that concept anymore.

I would really appreciate the opinions of you more sophisticated members of this highly esteemed round table. Should I sell my fund now and take a profit, or just hang in there. Your thoughts will be greatly appreciated.

AREM

The Scot (10/09/99; 21:04:11MDT - Msg ID:15948)
LEIGH
Hi, I'm here. Been very busy this weekend. The wife decided to have a giant estate sale and raise more money for Gold.
Our living room looks like a skating rink. She has finally come around to our thinking. I sure hope we have not misguided her. I won't enjoy sleeping in the yard.
The Scot

Leigh (10/09/99; 20:53:52MDT - Msg ID:15947)
Goldspoon
I think FOA's title "Where gold is now going, no other investment can follow!" means that Golden Sun's about to overtake you. You and your platinum horse will get sent back to the mines in Siberia. (Just kidding, Goldspoon! Good night!)

FOA (10/09/99; 20:04:37MDT - Msg ID:15946)
Comment
Hello Cassius,
The Comex margins increase will hurt the shorts as bad as the longs. It is different this time. Most of the big trade houses are going to be carrying a ton of defaulted gold paper. In this new environment they can't cover their commitments with real bullion either. Because there isn't enough around at "any" price or lease rate, period! So, they need the Comex speculators now more than ever as these BBs will also be buying long to at least "paper hedge" the bookkeeping side of their position. This is why the option OI and the futures OI are about to go ballistic (at least until they shut down the market). Some people hear me say this and they think a $100 or $200 move won't close anything. I agree, but that is far from what is coming. Like this:

"HK opens up $35. London AM fix +$97. Comex opens lock/limit +$75 on far out months and trades only front month. London PM +168. Comex front month trades "one contract" +$223 then no floor person will move. The exchange closes for the day. HK opens +354, on about 1,000 ounces and closes. Next day, London doesn't open at all, no fix possible. Indications +1,500.""

Now, my friend, do you really think anyone will be settled? This is the type of market that is coming. After a few months to a year or so, somewhere a gold market will reopen. All the while, "street gold" will work at (use your best imagination)?

Can't happen you say? It already has. The markets just don't reflect the corner in place. They will!

thanks for writing FOA




FOA (10/09/99; 19:21:08MDT - Msg ID:15945)
Where gold is now going, no other investment can follow!
http://www.decisionpoint.com/DailyCharts/00goldDXY.html
Tomorrow, this trail will begin an incline that few of us will make. After we make camp, consider this before the sun rises on our worst expectations:

Leigh and ALL,
I just had a glass of wine to quiet my apprehension of what is to come. It is my belief that the "Gold wars" are about to begin. Please consider this "a very open viewpoint".

I think it's now to late for the dollar to "initially" surge with gold during this crisis. As an old, indebted currency, the dollar will have to share any flight to quality with the Euro. I say this in the same light that Michael stated in his: USAGOLD (10/07/99; 15:18:27MDT - Msg ID:15788) The Monetary Triangle.

------------From reading your most recent thinking as summarized in Msg#15713, I get the distinct impression that you believe that the Europeans have mandated their version of closing the gold window, thus making gold dear for any purpose, the settlement of gold carry trades being the most
severely affected. Some have said that this event of September 26th by the European central banks ranks in the annals of monetary economics with Nixon's closing of the gold window in 1973 and letting yellow metal seek a free market price. Following the Nixon decision, we had ten years of dollar devaluation. On the other hand, the European closing of the gold window could lead to ten years of euro appreciation against the dollar -- the exact opposite of the 1970s U.S. experience.-------------

The ECB/BIS declaration was little less than an announcement that the dollar will now have to stand on it's own. The implications of this are awesome for all of us! Look at the link above and look slowly at the charts. I expect a type of currency war to now begin. No, not one of competitive devaluation's or tit for tat interest rate changes, rather a war about "long term viability " and "ability to weather the coming storm". The rules of engagement have changed and now include "real reserve values" in the battle. Truly the race to increase the value of gold has started. Review the words of Mr. Greenspan as given in PH in LA's 15926: (Note: There was rumour in Washington in the spring that the major powers were rethinking gold. I think PH's quote was made in that time!)

----------Greenspan told Congress then: "We should hold our gold. Gold still represents the ultimate form of payment in the world. Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody. Gold is always accepted..."--------

If one stands high upon a hill and views the future battle scene, we wonder how in the world the hapless gold shorts could have wondered into the middle of this. Couldn't the entire gold industry see that this could not end without an asset war? They will be cut to shreds in the early attacks. Not unlike this first shot fired. Mines, the finance houses that support them, dealers that must cover their risk,,,, all of them must feel the rumble of heavy CB armour as it approaches. Make no mistake, the valves that control the flow of lent gold "guarantees" are being closed. In addition, from what I have just understood, I now fully well expect we will not see the 2,000 tonnes of gold sold into this coming crisis. In an earlier post I felt they would at least stay with the spirit of the agreement and
sell some of it. The hard line I hear now is "damn the implications"!

The thousands and thousands of contract derivatives that now are outstanding today, cannot possibly be covered now with delivered gold at any price. This situation is going to "seriously" escalate.

When people say that they will gladly sell gold at $5,000, I counter that they must have never experienced war, "up front and personal". Remember, battles don't become "HOT" because everyone is "gladly" selling their "now in demand weapons" to the highest bidder! Gold will cross
$1,000 because everyone is buying it at $1,000 and asking for more. Trust me, when your neighbours are buying 1/32 ounce wafers with whatever money is in the house, you won't be unloading bars to buy a new house. Nor will any strong spirit trader be selling short a ten lot on comex !
Believe it!

This same dynamic is not lost on the human controllers at the CBs. Yes, they breath and feel the same media vibrations you take in. During the events directly before us, any and all contracts will be swept along on this raging river of economic turmoil. Be they contracts for, gold, currencies, bonds, stocks or commerce, all of them will lose credibility as the worlds massive trade settlements shifts from one medium to the next. Just as in Greenspan's line of thinking, when the armies invade the grab the rare coins, art work and gold. Forget the currency!

As these events progress real assets don't devalue. No, just your ability to profit from their ownership comes into question. Like this: If a forest fire suggests that all forest owners may be at risk, then any gold miner will share the risk of his "rooted gold" being burned also. The currency that is at risk of change today is the dollar. Therefore we can be assured that any company that owns what has become a "currency war weapon" (gold) will own "questionable assets", especially US assets. With England now running into Euroland, the Anglo/Euro mines in South Africa may be less in play? The risk of a plunging American stock market is enough for US mines without the influence of the "gold money" issues that now impacts the dollar. Outside of the "Gold Fields" play for bullion being in the best interest of all bullion owners, I feel all world mines are at risk. However, for ones that must hold a portion in these asset areas, consider what I have said. Choose your
holdings well!

All of this sounds a bit extreme, yet what I see directly ahead is extreme. Look again at the above chart and follow the gold lines. Unless the Dollar/IMF forces place several billion dollars of margin at risk to sell tens of thousands of contracts, gold just may run off that chart in the next week or two. Or less! Truly, the world has changed and I believe most of the gold industry is now caught
up in this financial change. A realignment of epic proportions. As of today, I see the money for rescue is not coming. This market is about to be fed to the lions because this battle involves something much larger and important than the industry. The new gold valuations alone will negate
the need for fresh supply and therefore lower the strategic need to maintain the owners value in these assets.

In addition, the two engines of wealth that were so long the saving force in the American economy are about to react to this major change of world value perceptions. Watch the chart above as the US stock markets parallels a failing currency. The next month or so may indeed make history. We shall see.

PH, you are right, in time perceptions of real events overcome a persons fear to react.

In time,
"""all true journeys eventually converge onto the same curve as they approach their destination"".

Rest well my friends, soon we will run like the wind blows! FOA



SteveH (10/09/99; 18:53:39MDT - Msg ID:15944)
Inflation dragon looks serious
www.gold-eagle.com
repost from above site. Looks like my daughters exponential math problems.

Inflation dragon is breathing on the FED's neck
(goArmy) Oct 09, 18:45

Max broke out of his barn at the worst time for the FED.
Go to these statistics and you will see how bad it is.
If you are not in gold – you will not catch Max any more.

Go to the link below, Click on Non-Manufacturing and then on Manufacturing Business Activity icons on the left and read all the indicators below. Almost all are rated "Increasing Faster" or "Growing Faster".

http://www.napm.org/

Also go to Economic Calendar and Forecasts and see what is coming soon to the theater near you.

http://cbs.marketwatch.com/news/current/econ_calendar.htx

Also go to Economic Data for 1999 to see the developing pattern.

http://cbs.marketwatch.com/news/current/econ_data.htx?source=htx/http2_mw

Pay attention to NAPM prices paid: NAPM is the FEDs favorite i.e MAPM is the: Diffusion index of companies paying higher prices, monthly, from National Association of Purchasing Management.

NAPM numbers for 99 are
Jan..32.5
Feb..35.9
Mar..43.2
Apr..49.9
May..52.2
Jun..53.5
Jul..54.7
Aug..59.8
Sep..67.6

Do you see what I see? I see classical inflation pattern. Go get em Max!




SteveH (10/09/99; 18:51:03MDT - Msg ID:15943)
Too much going on to be handled, imo...
http://www.vny.com/cf/News/upidetail.cfm?QID=118228
The Prez is considering selling Oil reserves. FYI.

Leigh (10/09/99; 18:27:56MDT - Msg ID:15942)
Goldspoon
Goldspoon, that horsie of yours has been taking it easy on the racetrack (down 8.3 yesterday). What are you saying -- that he's going to make a big spurt forward soon? Do you have a time frame? Will Golden Sun and Silver Moon overtake him, or will he stay $100 ahead forever? Glad you're back!!

Where is The Scot? We haven't heard from him in a few days. Cavan Man, are you all right? Is Mrs. CM well again?

Leigh (10/09/99; 18:16:54MDT - Msg ID:15941)
Bonedaddy
Dear Bonedaddy: You are an AMAZING writer with incredible wit and insight! We are HONORED to have you writing your observations here so we can read them. Thank you -- and please post more of your essays and poems.

Goldspoon (10/09/99; 18:13:47MDT - Msg ID:15940)
****Speculation news flash*****
****After going through the desert on a Horse with no Name...i heard this from his mouth.... Platinum is being set up as a tool to push gold to the $400+ level and kill the shorts at $390 DEC....How? by first locking the back door on platinum (raising the lease rates to 75%) while at the same time selling into the spot market on platinum to hold the price down. Now that the platinum shorts are trapped inside the house, set it on fire by buying platinum heavily....WHY?? Platinum is a thin market and can be easily manipulated in this way...Why?? to cash in on the Gold Market...Say What?? ... A huge price run in platinum would stampeed the whole herd... Thus set fire to the tender dry brush of gold and force the shorts of DEC $390 to cover.....CLEVER NO? ....The Platinum end game Gambit brought to you by those clever Swiss Gnomes...and European alies.....Think now... remember how platinum acted before gold began to move...and how gold moved just before the big anouncement??? Why has the platinum lease rate skyrocketed while the prices of Gold, Platinum, Silver has tracked sideways??.......

Just Remember Where.. you first read this....

jinx44 (10/09/99; 18:03:14MDT - Msg ID:15939)
Cassius first...........then Hathaway
Cassius,
I will be very interested to see how the FED will manage the COMEX to maintain an "orderly market". This is one of those rare times that a Big Player like Soros can rake a market. Look how he played the Sterling market in 1992?. When governments take a side in a market-particularly a thin one like gold it can offer great opportunities to a smart and savvy manipulator. Maybe Georgie will pull his tricks again in the market. It worked in London for about a billion. Hope the USTreasury gets slammed.

and the Hathaway...................

Simple Math & Common Sense:
A $66 Billion Problem
Don't be confused by self-serving outcries from various parties trapped in the gold short squeeze. I am amazed to hear reports that so-and-so has restructured their hedge book or that this or that group has covered its short position in gold. Such statements are misleading, if not false. What is happening is that the self-made victims of the growing gold short squeeze are passing the hot potato back and forth among themselves in a desperate attempt to wriggle free. This activity amounts to little more than frenetic paper shuffling. The gold market is in the throes of a spreading credit crisis.
The short squeeze will be over when, and only when, there has been a full repayment of the bullion deposits owed by dealers to the central banks. These deposits are the foundation of the Golden Pyramid described in our recent Themes Express article. Ex repayment of central bank gold, the massive short squeeze we forecast when gold was trading around $250/oz a few weeks ago will continue even if distribution of risk among various players changes slightly with their desperate maneuvers.
Let's do the simple math. At 6000 tons, a conservative estimate based on the usual reputable sources, the mark to market value of the short interest in gold at $330/oz is approximately $66 billion. That doesn't sound like a very big number in today's financial markets with flows several multiples of this amount, until you consider how concentrated the exposure is relative to the thin financial resources of the participants.
For example, a 1% increase in the cost of carry equals $660mm. When most of this business was put on the books, the cost of carry was around 1% per year. Based on current lease rates, there has been a negative swing of $2.6 billion. By the way, as the price of gold moves higher, so does the interest burden. A $10/oz increase in gold equals $1.9 billion. In the last two weeks since the ECB announcement that lending would be capped, the $60 adverse swing has added over $11 billion to the shorts' obligation to repay. Who's paying the price?
What is the equity of the gold mining industry, hedge funds and bullion desks involved in this position? The world gold mining industry's equity on a very rough basis is only $20 to $25 billion. The equity of the ten or so major bullion traders is very likely less than $1 billion, even though the resources of the institutions that stand behind them is far larger. The depleted equity of the hedge fund community may stand at $30-$50 billion. Only the bullion desks are committed to trading gold. Hedge funds of course have no generic interest other than to make a profit. Even the mining companies have other things to do with their capital than trade bullion.
For example, Chase Manhattan reports gold derivative notes outstanding of $20 billion. These are "structured" notes where the obligation of the issuer varies, possibly quite dramatically, with the spot price of gold. Chase was among the most aggressive of the bullion banks, doubling its gold derivative position over the last 18 months, at the same time gold prices were plummeting. The book value of Chase was $23 billion as of 6/30/99. One of their clients, Ashanti Goldfields, is suffering severe margin calls on their gold hedge, which stands at 10mm ounces. Each $10 increase in the gold price costs Ashanti and/or its bankers an additional $100mm of pain. Ashanti's stock has declined by more than 50% in recent trading, despite the sharp run up in gold prices. Ashanti seems likely to disappear as a freestanding entity, and their shareholder equity could easily vaporize despite valuable, world-class assets.
Ashanti is not alone. Several other companies suffer from hedge book troubles at current prices. A further $100 run up in the gold price would raise questions on even more. Since the liquidity and financial resources of the gold mining industry are limited, the financial exposure to higher gold prices will inevitably pass through to the bullion dealers that were so eager to put this business on the books in the first place.
In a conference call, Ashanti management characterized the relationship with their 17 bullion banks as "orderly and stable," yet another misleading statement emanating from the current mess. In reality, the only step that will spare Ashanti and its bankers further misery is a 10mm oz buyback and delivery of physical gold to satisfy the credit. Of course, a $3.2 billion purchase order for physical gold cannot be filled for the time being. More likely, Ashanti will be carved up and its credit subsumed by that of Barrick, Anglo, the government of Ghana, or some other better balance sheet. The price of a rescue will be high both to the existing Ashanti shareholders and the bullion dealers. The risk profile of the bullion desks will then deteriorate in return for the appearance of "business as usual," awaiting the next disaster. As the gold price rises, the credit position of the bullion dealers and producer hedge books will deteriorate further. The process could well accelerate, and possibly culminate in a divine intervention by the central banks in yet another spectacle of "too big to fail." By then, the good name of gold should be restored.
Expect to see a retreat of capital from gold hedging and short selling in the coming months. Within the gold mining industry, a witch-hunt mentality towards hedge book risks is certain to commence. Pressure for buybacks will grow. The speculative blood lust for shorting gold among the hedge funds is a thing of the past. If anything, hedge funds are likely to line up on the buy side to attack the short position. We doubt whether risk managers of financial institutions will favor additional allocations of capital to the trading of paper claims based on gold in the bullion trade. Essentially, credit has seized up in the paper gold market.
Once the initial shock has been absorbed, the paper gold market should enter a protracted workout mode in which producers buy back hedges and speculators steer clear of the short side. Issuance of equity shares to fund hedge book buybacks, in other words, outright purchases of gold, would not be surprising. There is just one problem. If the gold producers all act simultaneously, as they did in herd-like fashion on the way down, the gold price will skyrocket. Reason: there is no physical gold to buy, other than from the central banks, and the only if they choose to sell or lend additional quantities.
This short squeeze has the potential to send gold hundreds of dollars higher. It took years of stupid collective actions by many very clever people to set this trap. A miscalculation of this magnitude is unlikely to be rectified in a few short weeks or with just a proportionally small change in the gold price. We have a long way to go before the market is correctly balanced. In the meantime, the squeeze has the potential to threaten the health of some major financial institutions. It certainly has the potential to disrupt the earnings and finances of mining companies who have hedged excessively or foolishly. The degree of "excessive" hedging will rise with the gold price. Even those companies that will soon be proudly proclaiming their "hedge lite" position stand to be shocked at the degree of risk they have undertaken. Officers and directors should understand the potential for shareholder suits from investors who bought shares as a play on higher gold prices. Without hedging and short selling over the last several years, the gold price would be several hundred dollars higher based on the short fall of mine production relative to consumer demand. Panic short covering could drive the gold price well above any theoretical equilibrium.
The existing and potential exposure of this massive trade gone wrong must be frightening to those trapped in it. Still many others have no grasp of what is happening and regard themselves as secure. Time will tell who's holding the bag on basis risk and lease rate exposure. For now, it is safe to say that nobody knows or is telling the truth.
John Hathaway
October 9, 1999
Mr. Hathaway is a Senior Portfolio Manager at Tocqueville Asset Management L.P. and portfolio manager of The Tocqueville Gold Fund.
http://www.tocqueville.com/funds/tgold.htm


Leigh (10/09/99; 17:56:35MDT - Msg ID:15938)
Cassius
As I read your post, I remembered another quote of FOA's (I remember a lot of his stuff, because I have to think about it for a long time before I understand it). He said that he had been given a view of the approaching storm, and even he (FOA) could not move that fast. So perhaps something is going to happen to upset this nice, orderly transition that COMEX cannot control. It would certainly serve those sniveling shorts right. But if the unwinding of their greedy, reckless speculation causes harm to any innocent person...well, there is NO punishment harsh enough for them.

Cassius (10/09/99; 17:29:37MDT - Msg ID:15937)
@ORO and/or FOA or anyone who wants to take a shot at this
The following is a post at the G-E Forum, and I've been thinking about it since I saw it, and I need some help in interpreting its message. Your opinions on the author's conclusions, please.
I've been an active viewer of this forum for over 18 months, but haven't felt sufficiently erudite to post. All of you do help me a great deal in determining my "pro-gold position, and to all of you I offer my sincere thanks.
The post I mentioned above is....."Possible and feasible reason for Gold Margin Increase"
(GOLD.com) Oct 08, 14:01

We all know many bullion banks and gold mining companies have taken years to
build up their SHORT POSTIONS. Numerous expert sources have estimated the
short position in the neighborhood of 14,000 to 20,000 tonnes. One must put
this great amount into perspective.

The entire world's annual gold production is about 2,600 tonnes.
Consequently, the short position is equivalent to 5-8 years of total annual
world mine production. Logically, what took years to build will demand time
to unwind. By NO STRETCH of the imagination can anyone believe many shorts
were covered in the last couple weeks of trading, where the POG rose
dramatically by 25%. Indeed, only the nimble Spec Traders were able to
frantically cover their SHORT butts. The vast majority of institutional
SHORTS are still outstanding. This fact has been voiced and CONFIRMED by
several gold experts on CNBC - including John Hathaway (portfolio manager of
the Tocqueville Gold Fund), Bill O'Neill (Merrill Lynch's Senior Precious
Metals Analyst) and the $1 billion Precious Metals Investment Trust Manager
in London (belonging to Merrill Lynch International), among others.

In short, the shorts remain outstanding.

It is reasonable and logical to believe the Fed and the COMEX are very
cognizant of this fact. It is also known, sooner of later ALL SHORTS must
cover before the Gold Bull rips their financial guts out - which would cause
financial panic worldwide in a domino-like institutional failure... one
after another. And whereas the Fed last year was able to save the $5 billion
LTCM from bankruptcy (due to gold shorting), it will be totally helpless to
aid a slew of bullion banks and gold producers going belly-up if gold goes
orbital due to panic buying.

THEREFORE, in a preemptive move the COMEX (with the support of the Fed)
decided to put a "governor" on wild speculation - with a goal to slow down
the unbridled advance in the POG.

This is both bad news and good news for goldbugs. The bad is that the POG
will not advance 25% every two weeks - like it did recently. But increase it
will. The good news is that the Equilibrium Price to clear all the
outstanding shorts will inevitably be much greater with the higher margin
requirement.

For long-term gold investors, higher COMEX margins is recognition of A NEW
GOLD BULL MARKET, and 'insurance' of a more orederly market - albeit much
higher gold prices in the future.
(end)
Your reactions, please. Cassius








Bonedaddy (10/09/99; 17:10:58MDT - Msg ID:15936)
Saw this at Gary North, what a riot!
http://www.garynorth.com/y2k/detail_.cfm/6436
Hope the link works.

SteveH (10/09/99; 15:44:28MDT - Msg ID:15935)
repost
www.gold-eagle.com
To GoldenArt re COT
(noula) Oct 09, 14:54

I've been getting this info from www.goldminingoutlook.com (great site!)although it is published and available from the CFTC at their site.

Basically, every 2 weeks the CFTC does a survey of the positions of the participants in the various futures markets. These are broken down into Hedgers, Speculators and Small Speculators. The CFTC then produces statistics on the total long and short positions for every market.

I believe these are important stats as they give the contrarian types (like myself) a guide as to level of speculative emotions in a given market as reflected by the various participants. Tyically, at major turning points in a market, speculators have large positions that are the opposite of the equally large positions of the hedgers. Usually, the hedgers will always win out as their net long or short position better reflects the demand for a given commodity.

Gold IMHO, has been a heavily manipulated market. The COT for gold remained extremely bullish during its decline from the $290 level to the bottom at $252. In other words, Hedgers were heavily net long, while speculators were heavily net short. Eventually, the hedgers won out as would be expected, it just took an awful long (and frustrating) amount of time.

In a big rally, the hedgers will be net sellers and the specs are forced to cover. Afetr a $65 move, one would expect the hedgers to be net short and the specs net long. Friday's report is so very very bullish because after a $65 move in gold, the hedgers are still considerably net long and the large specs bet short.

This reflects the following probable situation:
1. the Hedgers are seeing real demand for gold and continue to buy or sell less than would be expected.
2. The specs are trapped and many have yet to cover
3. A great bulk of the buying of futures has been to delta hedge the option market makers books (make them delat neutral).

In other words, very few had a chance to react to the gold price rally.

In addition, I believe there is gonna be a delivery squeeze on the December contract. Open interest in Dec is balooning and word is out on the street that there is no physical gold to make a massive delivery of the physical in late December.

This combined with the high lease rates (shortage of supply), an impending stock market crash (should start this coming week) and bullion dealer, hedge fund and producer hedge books in disaster all add up to sharply higher prices in the near future.

$500 by Christmas - I've been saying this all year.

noula abu dahhab



SteveH (10/09/99; 15:33:04MDT - Msg ID:15934)
Dabchick
www.kitco.com
Date: Sat Oct 09 1999 10:31
Dabchick (Sharefin........A weekly candlestick of my gold index index) ID#258195:
Copyright © 1999 Dabchick/Kitco Inc. All rights reserved
Thanks for your 12:56 last Saturday 02 Oct. Regarding candlestick charts, I see them as essentially short-term. The recent action shows up particularly well in a weekly candlestick of the index. It shows a pronounced Key Weekly Reversal for the week ending 24th Sept, heralding the sharp rise in the index. The subsequent rise, ( which was sparked by the ECB announcement on Sunday 26th ) shows up as two spectacular Breakaways this week and the one before.
If the US dollar is going down the tubes, as some think, then a weekly indicator of the index could provide a useful picture of Gold's shorter-term movements independent of the dollar.
If a weekly candlestick chart could be produced with a time base of about 12 months, I think it could be a help at major turning points .............i.e. turning points which might not show up on a chart of gold expressed in US$ at a time when the dollar itself was falling sharply.

If you feel able to use them, here are the data of the index weekly high-low-close back to 1st January 99.
Jan 99
High- | 67.08 | 66.78 | 66.50 | 67.07 |
Low--| 65.53 | 65.46 | 65.86 | 65.77 |
Close | 66.82 | 66.11 | 66.28 | 66.88 |

Feb 99
High- | 67.58 | 67.48 | 68.23 | 68.94 |
Low--| 66.14 | 66.51 | 66.96 | 68.21 |
Close | 66.91 | 67.35 | 68.14 | 68.37 |

Mar 99
High- | 70.04 | 70.92 | 69.63 | 68 23 | 67.68 |
Low--| 68.00 | 68.57 | 67.22 | 67.24 | 66.60 |
Close | 69.62 | 69.96 | 67.37 | 67.40 | 67.25 |

Apr 99
High- | 67.99 | 68.12 | 68.46 | 68 84 |
Low--| 66.55 | 67.40 | 67.83 | 67.36 |
Close | 67.97 | 67.85 | 67.92 | 68.59 |

May 99
High- | 68.91 | 66.68 | 66.75 | 66.17 |
Low--| 66.62 | 65.93 | 65.92 | 65.01 |
Close | 67.21 | 66.31 | 66.18 | 65.34 |

June 99
High- | 65.16 | 65.10 | 63.91 | 63.71 | 64.32 |
Low--| 64.23 | 61.95 | 62.48 | 62.90 | 62.69 |
Close | 64.56 | 62.23 | 62.88 | 63.07 | 64.25 |

July 99
High- | 64.40 | 63.33 | 62 22 | 61 15 |
Low--| 62.59 | 61.77 | 61.00 | 60.36 |
Close | 63.03 | 62.20 | 61.46 | 60.67 |

Aug 99
High- | 61.06 | 62.26 | 62.22 | 60.93 |
Low--| 60.10 | 60.78 | 60.51 | 59.81 |
Close | 60.60 | 62 18 | 60.80 | 60.29 |

Sep 99
High- | 60.22 | 60.36 | 59.92 | 62.57 | 70.90 |
Low--| 59.19 | 59.76 | 59.23 | 58.73 | 65.08 |
Close | 59.74 | 60.02 | 59.46 | 62.18 | 70.37 |

Oct 99
High- | 78.61 |
Low--| 71.28 |
Close | 75.09 |

Best wishes to you Sharefin, and thanks again for all your good work.
Regards.........Dabchick


Date: Sat Oct 09 1999 10:28
Dabchick (Valuing gold independent of fiat currencies) ID#258195:
Copyright © 1999 Dabchick/Kitco Inc. All rights reserved
Here are the Dabchick Gold Index figures for the past week ( calculated from the London Bullion Market figures published in the F.T. ) . All figures refer to the London close.
These figures are intended to show changes in the True Value of Gold relative to its value in January 1982. Because these values are independent of debased fiat paper currencies, they are also independent of the inflation caused to all other prices by governments that indulge in fiat currency debasement.
Date... | Close | . High. | .. Low .. |
04 Oct | 72.43 | 72.66 | 71.28 |
05 Oct | 76.07 | 78.61 | 74.46 |
06 Oct | 74.65 | 75.69 | 72.46 |
07 Oct | 74.72 | 74.88 | 72.88 |
08 Oct | 75.09 | 75.32 | 73.36 |
( Basis : Jan 1982 = 100 ) .
The further dramatic up-move in the index this week confirmed the evidence of the previous week's signals that the long bear market is in its death-throes.
The hesitation 10 days ago at the 70 level turned out to be a useful bottom step from which to reach this weeks next step up at the 72-73 level.
Regards.............Dabchick


Leigh (10/09/99; 14:48:46MDT - Msg ID:15933)
To Anyone
Does anyone remember something that either Another or FOA said once (I think) about the price of gold and the dollar rising at the same time? Right now the price of gold is rising, but the stock market is chugging along just fine. Is this what they were referring to? Am I actually remembering this correctly?

Leigh (10/09/99; 14:48:43MDT - Msg ID:15932)
To Anyone
Does anyone remember something that either Another or FOA said once (I think) about the price of gold and the dollar rising at the same time? Right now the price of gold is rising, but the stock market is chugging along just fine. Is this what they were referring to? Am I actually remembering this correctly?

YGM (10/09/99; 14:05:23MDT - Msg ID:15931)
Bonedaddy
You along w/ Goldfly (16 tons) share a touch of artistic talent. Well done! ---YGM (a kindrid spirit)

Jon (10/09/99; 13:19:45MDT - Msg ID:15930)
Msg # 9224 dated 7/19/99
The present status of the gold market reminded me of a message I saw some time ago predicting a huge rise in POG and a corresponding correction of the stock market. You may want to check it out. Any comments?

Bonedaddy (10/09/99; 13:16:28MDT - Msg ID:15929)
An ode to Kindred Spirits

The Appraisal


If I had to brave a raging flood,
And grasped my bag to hold,
Which would pan out in the mud,
The paper or the gold?
If I were tossed out in a fray,
where none but angels would be bold,
which would I see blown away,
the paper or the gold?
If fate should deal me war and fire,
and I wake up tired and old,
which will have lasted on the pyre,
the paper or the gold?
If I draw breath a hundred years
and my story then is told,
what shall they have left, my heirs,
the paper or the gold?


Bd



canamami (10/09/99; 12:55:04MDT - Msg ID:15928)
Reply to Twice Discipled - Gold Clauses
Twice Discipled,

Thank you for the reference.

The Stranger (where are you?) first brought the case you cited to the Forum's attention, and he and I had a discussion concerning the case. However, your post brought the information up to date, and I believe the article and subject matter is very important.

If I recall, the judgement to which the Stranger referred us dated from 1996. The Federal Appeals Court remitted the matter back to the trial court, to determine if the quality and fineness of the gold coin payments referred back to 1917 gold coins, or 1990 (or 1993?) gold coins. Obviously, that judgement was subsequently rendered (I'd like to know what year was chosen), and appealed, and leave to appeal was denied by the Supreme Court.

The judgment posted by the Stranger set out a good history of gold clauses, and the rendering illegal of gold clauses in the 1930's ,
and their subsequent re-legalization by Congress in 1977.

The legal framework permitting the use of gold coin in commercial contracts is in place. All that is needed now is pressure on the government to mint coins of such nature, quantity and quality to make this option viable. Also, commercial men must be made aware of the benefits of using gold clauses as anti-inflation protection. For example, current anti-inflation clauses are generally tied to the government's inflation, cost-of-living statistics. The accuracy or veracity of the Clinton administration's statistics have been challenged, and those figures also do not take into account asset inflation. Thus, gold clauses are an old but new tool to protect parties to long-term contracts from inflation. Here, the payments have increased from $23,000 per month to over $300,000 per month, but the lessee will continue to keep the property - thus, I infer the property is still profitable to the lessee at $300,000 per month. Here, the gold clause played its role as a form of inflation protection.

If gold advocates persuaded the business to start using gold clauses again (and the government to mint sufficient coin), such clauses could indirectly impose discipline on the government to suppress inflation - both asset and price inflation. There probably isn't enough gold extant to effect a return to the gold standard, but gold could exercise indirect discipline through such gold clauses, if they were used.

This one contract could impact slightly on the price of gold. A one-time need to purchase 8000 ounces (4 tonnes) of gold, plus the monthly gold payments.

If gold clauses are legal and enforeceable, could the Comex impose cash settlement on a party who wished gold settlement? Perhaps the spectre of Comex-imposed cash settlement is merely a bogeyman.

Twice Discipled (10/09/99; 11:08:21MDT - Msg ID:15927)
US Supreme Court upholds Gold payments for lease
http://www.dmregister.com/news/stories/c4788998/9227830.html
Hope I am not repeating this, but I saw this in the paper this morning.
Have a wonderful weekend.

PH in LA (10/09/99; 10:04:30MDT - Msg ID:15926)
LaRouche: What the central banks' gold move means
http://www.eirna.com/cgi-local/alert.pl
"...The Bretton Woods system, as opposed to the 19th Century-type gold standard represents a base-line of common sense, institutionally, among the central bankers. They know as the disintegration of the speculative, paper-based bubble proceeds, they have to have a certain base-line position through monetary gold, or, forget everything.

The European central bankers, led by the Bank of France and the Bundesbank, worked behind the scenes, in close coordination with the US Federal Reserve chairman Alan Greenspan, to prepare the dramatic gold reversal of last week. The fact that Greenspan is clearly, if silently, so far, backing the European central bankers is manifest from comments he made back in May, when Britain announced its policy of selling off central bank gold. Greenspan told Congress then: "We should hold our gold. Gold still represents the ultimate form of payment in the world. Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody. Gold is always accepted..."

ALL:
LaRouche, while not breaking much new ground on this subject for readers of this forum, does demonstrate that he is travelling on the same curve. Too bad we can't get him (or someone from his camp) to join us here. FOA: Is he tuned in to the same people you are? Or is it just that all true journeys eventually converge onto the same curve as they approach their destination?

Canuck (10/09/99; 07:16:05MDT - Msg ID:15925)
Employment report
http://cnnfn.com/1999/10/08/markets/bonds3p/
Part of above report:


NEW YORK (CNNfn) - Treasury bond prices ended mixed Friday after a government report on September employment painted a puzzling inflation picture.
The Labor Department said Americans' average hourly earnings, a key inflation gauge, rose at a faster-than-expected rate last month. But the nation unexpectedly shed jobs in September, signaling a possible slowdown in the sizzling job market.
The news confused the bond market, which moved erratically for much of the day as analysts offered differing takes on the data's significance.
"Even Clint Eastwood could not have written a better script that would pit the bulls and the bears against each other over the meaning of today's payroll report," said Tony Crescenzi, bond strategist at Miller Tabak & Co. "The winner, however, may not be known for a while longer since the data is sufficiently murky."
In the end, the price of the benchmark 30-year Treasury bond fell 7/32 to 99 during a shortened, pre-Columbus Day trading session. The bond's yield, which moves inversely to the price, rose to 6.19 percent from 6.18 percent Thursday. Shorter-dated Treasuries finished higher.
Ahead, the Bond Market Association recommends a complete market close Monday.
In the week's most closely watched economic indicator, the nation's unemployment rate held steady at 4.2 percent in September, a 29-year low. But the economy shed 8,000 jobs, the first loss since January 1996. Average hourly earnings rose 0.5 percent, higher than expected and their biggest jump in 16 years........
-------------------------------------------------------

Re: The last paragraph.

I'd like to know how a 'biggest jump in 16 years' translates to no inflation and why the markets went up yesterday?

I'd like to know how many jobs shed, and in last months case many jobs added, translate to the same unemployment rate? (4.2%)

These reports and even moreso, the intepretations of them get more bizarre by the day. The 29 year record unemployment which has been going on for many months IS causing a tight labour market. After years of high unemployment whereby the employer can choose an employee from a large pool at his price, the shoe is now on the other foot. A jobseeker now has a choice of employers and can seek his price. Companies are beginning to have an increased payroll, this will trickle down to the consumer very soon. I am anxiously awaiting the PPI number this month, it could be a barn-burner.

We got our 'good' news (re:gold) Sept. 21 and Sept. 26. Gold responded extremely well and has settled in the 315-325 range. Now we need the 'bad' news, PPI / CPI. I will
go out on a limb today and in doing so invite a guessing game for all.

Sept. PPI: 0.6%
CPI: 0.5%

Cheers, have a nice week-end.

Canuck.

Leigh (10/09/99; 06:53:13MDT - Msg ID:15924)
MidEastGold
Dear MidEastGold: Thank you for the warning! I believe what you're saying. Do you know how monitoring is done, and by whom? Thanks!

MidEastGold (10/09/99; 05:44:28MDT - Msg ID:15923)
Transparancy Does Not Always Include Secrecy
I have not been a contributor to this forum, but I enjoy ALL of the posts that are posted. One word of caution to those who boast of holding physical, internet activity can is often monitored. I am not one who is into conspiracy theories, but I know about internet "traces" from first hand experience. So, be careful about even admitting to holding phyiscal on line.

Leigh (10/09/99; 05:39:33MDT - Msg ID:15922)
Peter Asher
Peter, what a great story!! The gold manipulators shaking with fear over a meeting of the Pacific Northwest Goldhearts! It sounds as though you had a beautiful time, and the rest of us really missed out. I hope someone will take the initiative to have another get-together very soon! We nouveau riche goldbugs can fly there in our private planes and complain about the difficulty of spending all of our money once gold is $3,000+/oz. Ah, life will be tough!

Black Blade (10/09/99; 05:31:34MDT - Msg ID:15921)
Tiger Fund and Normandy Mine hedging link?
Just a thought to carry into the weekend. If Tiger Fund is short a significant amount of Au as some believe, then that is bad enough. Tiger Fund also holds a fairly large position in Normandy Mining as well. I am not sure of their hedge position, but I thought that it is roughly 11 million ounces. If this is true, and depending on how the hedge is structured, it appears that Tiger Fund could be hammered "coming and going". If they believe that their position in Normandy is offsetting any Au short position, they may be setting themselves up for further financial disaster. Considering the margin calls and hedge position problems over the last few days concerning other miners such as Ashanti, Cambior, Lonmin, and possibly Sons of Gwalia, these next few days/weeks could be interesting. Comments?

The Invisible Hand (10/09/99; 01:42:10MDT - Msg ID:15920)
*** ALARM *** Tues Oct. 06, 1999: $ 362.25 ***
http://www.tijd.be
I don't believe my eyes but former BBL-guru Roland Leuschel is writing today (Saturday, October 09, 1999) in Belgium's De Financieel Economische Tijd that gold reached $ 362.25 (three six two point two five) on Tuesday October 06 in London.
I don't think this is a typo because, he's writing that it's an increase of 45 % vis-a-vis three weeks ago..
Looks like the invisible hand is working since gold has been set free by the Duisenberg gang.
There we go, there we go, there we go!



Black Blade (10/09/99; 01:28:19MDT - Msg ID:15919)
Journeyman and ET
Others LP names: Milton Friedman (nobel economist), Andre Marou (LP Pres. candidate) who as Alaskan legislator shamed demopublicans or is it republicrats into oil dollars to the people, and David Bergland (LP Pres. candidate) who is Au bug and respected free marketeer. Remember Ed Clark (LP Pres. candidate) who gained about 5% of the popular vote? Since then, election night results are posted on television only for the demopublican party. Actually I've been libertarian since 1972 (the beginning). It is no wonder the message from the current social and political regime "gold bad, FRN good" is accepted since the other side is rarely heard.

The third-party message of free-market economics and self determination is usually drowned out by "...and in this corner Jesse Ventura", or "...tonight from the Mirage Donald trump". The sheeple want entertainment, not good government. The demopublican candidate Al Gore looks to be in trouble because a former basketball player (Bill Bradley) wants the nod! Geo. Bush, the other demopublican candidate may get the nod since there no celebrities running against him. It is all about entertainment ....that's it!

Sorry about the ranting, but the gold message will fall on deaf ears as well.....so prepare yourselves and your families. Get your Au/Ag insurance while you can. If Y2K really hits hard, then hunker down and watch the carnage.

Boy, I really need to cut back on my brew consumption!

Peter Asher (10/09/99; 01:12:08MDT - Msg ID:15918)
Now working normal again
!!

Peter Asher (10/09/99; 01:10:31MDT - Msg ID:15917)
Access
Got in via Archive to yesterday, the clicked on "todays post"

Peter Asher (10/09/99; 01:04:29MDT - Msg ID:15916)
test
??

Peter Asher (10/09/99; 01:02:10MDT - Msg ID:15915)
All's Quiet on the Western Front

Two weeks ago Sunday, just moments before the World entered the New Gold Paradigm, I received this message from Leigh. >>> Hey, Peter, have your guests gone home? Did you guys have fun? What did you talk about? Do they live far away? <<<<<

Well the First Assault Wave has taken the beachhead with only 20 points casualties after a firm entrenchment in the 315/320 strike zone. The battlefield is quiet for the moment.

In these past two weeks much has been said around the globe about the cause of the sudden outbreak of Gold. It is an absolute fact that the decision of the Central Banks was the Force Majeure. However, WHY the CB's did this is still occluded data. Here now is the truth.

When the CB agent in charge of monitoring all Gold communication on the Internet, discovered that the USA Gold Forum People were MEETING IN PERSON, the CB's realized that the jig was up! As Michael had cleverly ordained that all communication regarding this event was to be kept on private lines, the CB's were not aware that only a few of us were actually gathering. They presumed, due to the incredible morale and fortitude of this elite group, that a massive conference was underway here at "Hidden Falls Retreat" and expected a momentous onslaught of truth on Monday morning. Believing they had no choice, they made their peremptory announcement Sunday night. Nevertheless, we here on this site know the extent that our Golden Diogenes Lantern has brought light to the world and helped launch the Long Range Artillery CB assault that enabled gold to establish this solid foothold on enemy territory.

At this point, the enemy are fully occupied with setting up bullion hospitals to treat the wounded, they are burying their dead, imprisoning their incompetents and they are scrambling everywhere to find fiat medicinal supplies. But, even the Fed may have been reluctant to help them with this. Contrary to mainstream opinion, there is no cure for fiduciary gangrene. We shall soon see what amputations will have to be performed.
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Now that we are again gathering for a 'normal' weekend of communication, I can finally answer Leigh's questions.

Did we have fun? Well, if a stranger had dropped by, he would have assumed he was witnessing a gathering of friends who had known each other for at least half a lifetime. And why not? Not only would most of us get along famously in person, but it is also natural that our wives (and husbands) would share similar interest in truth, justice, health, children and all the other 'real' things in life.

What did we talk about? Oh, some of the time we talked about Forum subjects. Some of the time we talked about forum people! We talked about our work, our home towns, our homes and herbal medicine. I heard a lot of recipe talk in the kitchen and I would like to publicly thank Richard and Gandalf's wives for all the help in that area.

We hiked around the property, searched for scarce ripe blackberries, and when everyone left Sunday afternoon, we parted, I believe, as permanent friends.

And, no Leigh, not far. One five hours away, and one under two.

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Does anyone know of any other Internet site that has built as much friendship, commonalty of thought and purpose, and comradery as this one?

Thanks again to Michael, for bringing this all about. ---- Peter A.




Journeyman (10/09/99; 00:04:25MDT - Msg ID:15914)
BLACK BLADE: Libertarians & Gold
Is there a relationship between the Libertarian Party and gold? You better believe it. Highly regarded Austrian Economist Murray Rothbard ("For A New Liberty," etc.) was on the LP National Committee for years, and a strong Austrian hard money strain runs clear through the whole organization. Check out their platform! Regards, Journeyman



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Thursday February 9
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