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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 5/9/2000
All times are U.S. Mountain Time

(Yesterday's Discussion.)

THC (05/09/00; 23:55:34MT - usagold.com msg#: 30224)
Oro - How much longer?
Ahh, yes. Oro, you've "got the right stuff"!

It is true that OTC transactions are probably much larger than those in the open markets. And while the OTC market is completely opaque for those outside of the loop, I would imagine that the situation must parallel that in the open markets (deep backwardation, high lease rates).

Now, to be completely honest, it is clear from the Tocom prices that those who have been rolling short positions (Engelhard short 5000 contracts for past year) are bleeding heavily, with their money being transferred into the accounts of the longs (GRIN***).

BUT, Engelhard is slowly buying back it's shorts, and I would imagine others are getting tired of this.......

How much longer can it go on?

As far as I am concerned, they can continue it forever, because it is easy to play.........but will it last??? I can't imagine this free money machine will stay in existence forever.

Perhaps I should take delivery of a few bars and hold the warehouse receipts (ala Ted Butler)?

Thanks again,

THC


ORO (05/09/00; 23:42:09MT - usagold.com msg#: 30223)
THC - profit motive and outstanding positions
I will say that OTC contracts normally outdo exchange contracts by a 10:1 ratio in financial instruments. Furthermore, a precious metal of any liquidity would have a banking system behind it. This would mean that the trading on the exchanges by large players may be protective in nature. When possible, it is nice to have a profit from exchange trading, but the purpose of participation is to protect the natural short position inherent in the nature of bullion banking from exposure to price risk - and more importantly, loss of confidence in the bank.

By their nature, bullion banks are leveraged and illiquid. If enough of their customers ask for physical delivery of metal in their accounts the bank simply goes under and is liquidated. If their bullion borrowers are insolvent because of a price move against them, then the bank will have suffered a default and not have a metal debt owed it to balance out the metal it owes. The bank would be insolvent in terms of the particular metal. Thus all assets of the bank would be at risk to be traded for metal to satisfy withdrawing clients.

So, the purpose of the action we speak of here is not to make a profit on the exchange from the price swing itself, though that is a nice kicker. The purpose is to prevent a bank run through the insolvency of particular borrowers, particularly the bank's trading subsidiaries and large leveraged clients that are short.

Whatever payment can be made in currency or financial instruments is something the bank can cover through interbank loans or from its CB. PMs are not supplied in quantity by any CB, and the interbank PM lending system seems nearly tapped out after decades of operating in a supply deficit. Thus fear of delivery requests far outweighs direct profit motives.

In a way it can be called the survival motive.

Elwood (05/09/00; 23:01:57MT - usagold.com msg#: 30222)
Trail Guide
I think it just hit me. I've been assuming that the gold price will run in both Euros and Dollars. I forgot what I read in the archives that both the gold price and the Euro price will run against the dollar. That's where I missed it. The private Euro Zone banks must be converting their dollar gold loans to Euro gold loans as we speak. When they cash settle, the private banks won't be ruined, maybe just roughed up a little. That still leaves the national banks out their gold. Will they just write it off?

THC (05/09/00; 22:58:31MT - usagold.com msg#: 30221)
Oro - Tocom Reference Info
Oro, for your reference here are the latest plat prices for each Tocom contract.

http://www.tocom.or.jp/souba/souba_e.html

I would imagine that anyone shorting the far out futures and buying back the near futures would incur serious losses due to the backwardation (just like those going long far out and selling near futures for gold/silver on the Comex have lost money for most of this decade, due to the contango).

Thanks,



THC (05/09/00; 22:51:07MT - usagold.com msg#: 30220)
Oro - Continued Discussion re Tocom Plat
Oro,

Thank you for the quick response.

I feel a bit like the "three blind men each touching part of the elephant, and trying to describe it." We see the same phenomenon, yet our interpretations are significantly different.

Let me respond to a few of your thoughts:

1. "Surely no one seeking delivery of physical platinum will find reason to buy a TOCOM futures contract. That leaves futures buyers of only two varieties: The uninformed speculator, and the short squeeze engineer."

I think we need to keep in mind that probably 98% of those who buy/sell futures have no intention of taking/making delivery. The futures market allows them to control risk, lock in prices, speculate, and make/take delivery, depending on their situation.

The delivery mechanism is not of *immediate* importance to most futures users, but it is essential to insure the pricing tie with the physical markets, and to allow for delivery when deemed necessary.

And to date it has been possible to take delivery of Pt. 70 contracts were delivered at the expiry of the last contract.

BUT – should a big player try to take delivery, the game is over. This is exactly as you and TG, TC, etc. have pointed out.

2. "As TC has indicated before, the trick is to prevent profitable excercise of options and futures of the deliverable month by making it appear better to buy a future month. This is done by selling futures agressively, below market, and selling underpriced futures call options for the non-deliverable month."

Oro, I would like to request that you reconsider the above statement in light of the open interest in each contract (http://www.tocom.or.jp/kan_toku/kan_toku_pt_e.html). The open interest of the December 2000 contract is about 6 times that of the June 2000 contract. Shorting futures would have a diluted effect due to the high volume/OI, but trying to buy back would have a strong upward effect on prices due to the low volume/OI.

In this sort of market, anyone trying to short the far out months and buy back (they MUST either buy back or deliver) the close months would suffer massive losses.

Is this a likely strategy of a major player? If you think it is likely, could you show me a specific example of how one could do it with Tocom plat without incurring massive losses and exposing oneself to a destructive squeeze?

Thanks again for sharing your thoughts.

THC

TheStranger (05/09/00; 22:41:13MT - usagold.com msg#: 30219)
Newmont and The Dead Cat
I don't usually comment on day to day market activity because I know there is no quicker way to make a fool of myself. Still, it should not go unnoticed that Newmont closed near 27 today. It is now up fully 100% from its 1998 low. This is the first time, since that low, the stock has done so unassisted by such bullish events as last September's Washington Agreement. To get an idea of what an achievement that is, consider that bullion will not achieve the same benchmark until it closes above $500. I believe the whole XAU would have better reflected the strength in Newmont had it not been for the short-sighted hedging policies so prevalent in the gold mining industry. And were the XAU higher, so, undoubtedly, would be the price of bullion itself.

Also - I think it is clear now that the dead cat bounce in the Nasdaq is over. This is, after all, a bear market. Volume on the OTC is now running at less than half of what it was just a month or so ago. The low volume is one clear indication that the average Joe has decided not to capitulate but rather to grit his teeth and bear it out. This is a naive decision many may regret for years to come. Rising volume would indicate the kind of wholesale surrender which is common at important bottoms. As volumes diminish day by day, what we have instead is merely a bear market-variety buyer's strike. As inflation further establishes itself, I am afraid, so will interest rates continue to rise. As interest rates continue to rise, so will demand for high PE stocks continue to wane. Thus spake a Stranger.

ORO (05/09/00; 22:12:13MT - usagold.com msg#: 30218)
THC - TOCOM Plat Paper
You are pointing out that TOCOM has not significant Pt to deliver.

You point out the backwardation.

Surely no one seeking delivery of physical platinum will find reason to buy a TOCOM futures contract.

That leaves futures buyers of only two varieties: The uninformed speculator, and the short squeeze engineer. The latter would be naive to think that there there is a chance that TOCOM would allow the price to spike so high that the stranded TOCOM principals would suffer substancial losses. TOCOM would suspend delivery rights that much more quickly than it did with Pd, before the major price spike can fully develop.

If a major holder of current month futures asks for delivery he will be coaxed and threatened out of the position, else the exchange will suspend delivery before the music stops.

As TC has indicated before, the trick is to prevent profitable excercise of options and futures of the deliverable month by making it appear better to buy a future month. This is done by selling futures agressively, below market, and selling underpriced futures call options for the non-deliverable month. So long as there is any Pt store available for lending, it will be used to arbitrage the contract price from the current month to the spot month.

Under these circumstances, it is not the supply and demand balance on current and future Pt for delivery that dictates price, it is the availability of Pt inventory for borrowing.

Any future month can be more aggressively sold than the one being bought when a financial firm with unlimited credit is trading. The price will be arbitraged into the spot month so long as SOME interest rate (payable in currency) is more attractive to Pt holders than the holding of the Pt itself.



Elwood (05/09/00; 22:09:57MT - usagold.com msg#: 30217)
Trail Guide (5/9/2000; 5:40:58MT - usagold.com msg#: 30157)
You state:
"I know The Golden Sextant is following that line of Swiss gold filling Euro loans. The problem is that it's not. They
feel comfortable letting the dollar faction figure it out themselves. Euro Zone banks know that the entire Gold arena
will shut down once this US supply line is cut off. They are
not so dumb as to fill their paper with physical when the rest of the world is force settling in cash. They will not "
blanket" cover all loans. Just the important ones vital to oil supply. This is the real leverage that will bring on Oil
for Euros! Get the picture!"

I reply:
Ah! But at what price? If the private Euro Zone banks know this is coming wouldn't they want to cash settle at current prices? Could the Swiss sales allow them to do this? I understand they would never let their gold be used by the dollar forces to deliver against their paper, but what will the SNB say to their people when the gold price runs, and they find no one willing or able to deliver the 300+ tonnes they've loaned? Could the Swiss sales be a way for the Euro forces to allow their own banks to cash settle with the BIS/ECB system today much like the British are trying to do with their BOE physical? Doing it this way would let the private Swiss/Euro banks off the hook when the price runs while ensuring the public institutions a minimum of defaults from Euro Zone borrowers. It's a sticking point, I admit, but it's coming from a man trying to break free of his "western thinking" shackles. As such it's hard for me to understand the BIS/ECB forces will leave their respective private banks twisting in the gale of a running gold price.

You continue:
Elwood, I agree that everyone is still trying to milk whatever gold out of the system they can get. This was a driving factor for allowing the US to "save some face" by forcing oil prices down some. Onec the gold flow stops (and it may be right now) oil ril rise fast and furious!

I reply:
Very intriguing statement! This makes me wonder what a graph of oil imports plotted against gold exports would look like. Hmmm. I am at the mercy of this government data which, unfortunately, is not very timely.
Elwood

Black Blade (05/09/00; 22:07:08MT - usagold.com msg#: 30216)
Bonedaddy, ss of nep, and elevator guy
You guys sure have had an interesting discussion today. It make one think. perhaps, a comparison could be made between the "Rise and Fall of the Roman Empire" and the History of the USA. Somehow, and for some reason I tend to compare Billy Clinton to Caligula. Hmmmmm................

TheStranger (05/09/00; 22:00:06MT - usagold.com msg#: 30215)
ORO #30194
ORO - thanks for reviewing your ideas on productivity. More than any other element to the inflation picture, I think a misplaced confidence in productivity growth accounts for why inflation has caught so many by surprise. Amazingly, as late as just a few months ago, I would say a majority even in this gold forum were arguing AGAINST inflation (imagine, in a GOLD forum). Your insight in this area has been helpful in exploring this question.

"What is the marginal value of gains in productivity?", you ask. Evidently, Alan Greenspan has decided that, thanks to the wealth effect, there is none. From an article on the subject in yesterday's Wall Street Journal:

"Mr. Greenspan mixed and matched statistics to discern wealth effect
patterns. His research indicated to him that, even if it were wholly rational,
the bull market was hauling the U.S. economy into warp speed by
generating greater spending.

"Indeed, the more he and his colleagues believed that the New Economy
and the stock market made sense, the more they worried that the economy
was veering out of control. At policymaking sessions through late 1999 and
early 2000, intense debates broke out as officials grappled with the ways
that changing productivity affects the economy. It was a question the
central bank hadn't confronted for four decades. Fed Vice Chairman
Roger Ferguson literally dusted off his old macroeconomics textbook from
college.

"Fed officials were concluding that, contrary to popular belief, soaring
productivity did not necessarily mean the central bank could afford to keep
interest rates low. In debates, the more aggressive anti-inflation hawks,
Fed governor Laurence Meyer and Richmond Fed President Alfred
Broaddus in particular, argued that higher productivity could actually
require higher rates. That's because the supply created by accelerating
productivity takes time to build, but a stock market soaring in anticipation
of that higher growth creates instant demand."





Black Blade (05/09/00; 21:54:36MT - usagold.com msg#: 30214)
Leland and msg #30184
Generally have to agree about nuclear power, however, politically not likely to become a primary power source. Solar and wind power are prohibitively expensive and usually sold to wealthy tree-huggers during this transition to deregulated power. Natural gas is relatively clean, however, regulatory agencies are slow to act and building NG power generating plants take time. As far as electric vehicles becoming comon place in the near future (3 or 4 years), I wouldn't count on it. It would be a tremendous power drain. The contruction of such vehicles usually require more energy (and pollution for that matter) than the conventional internal conbustion engine. The viability of clean electric cars in the near future is truly a pipe-dream. Besides, one would have to be able to find a wall socket at every stop, or have one veeeerrryyy long extension cord ;-)

schippi (05/09/00; 21:27:23MT - usagold.com msg#: 30213)
Select Gold Hourly Chart
http://www.SelectSectors.com/agpm70.gif
FSAGX moving Up!


SHIFTY (05/09/00; 21:05:17MT - usagold.com msg#: 30212)
RossL/Simply Me
The coins I heard about were not proof coins. From what I heard some were just found, and were overlooked because they were just a bullion coin. I don't know how long ago they were found, but I was under the impression that it was a recent discovery.

Canuck (05/09/00; 20:13:20MT - usagold.com msg#: 30211)
Debt
The Public Debt To the Penny
Current
05/08/2000 $5,662,693,356,964.51

CURRENT
MONTH AMOUNT

05/05/2000 $5,662,392,522,569.88
05/04/2000 $5,661,532,699,593.02
05/03/2000 $5,658,066,936,728.56
05/02/2000 $5,669,550,992,339.00
05/01/2000 $5,660,725,641,994.27


Canuck (05/09/00; 20:10:44MT - usagold.com msg#: 30210)
CRB
Bridge/CRB Current Quotes
Other Futures Markets

Bridge/CRB Index


Page snapshot Tue 09 May 2000 16:37 ET
Description Last Change Percent Change
Bridge CRB Futures Price Index 217.75 +2.05 +0.95 %
Bridge CRB Index 217.13 +1.42 +0.66 %
Energies

Description Last Change Percent Change
Natural Gas 3.18 -0.003 -0.09 %
Crude Oil 28.5 -0.15 -0.52 %
Unleaded Gasoline 0.9455 -0.0051 -0.54 %
------------------------------------------------------

CRB at 217.75; Crude well over $28



THC (05/09/00; 19:59:03MT - usagold.com msg#: 30209)
Good evening, ORO!
Msg. # 30207 was excellent, thank you!!!!

Now, should you have time for a few words, I would be interested in hearing about your reasons for feeling that "Tocom Plat Paper is being sold into the ground," if you seen other evidence/sings of such other than the backwardation.

As I noted below, the world's biggest Plat futures contract (Tocom) is linked to the physical world by just 10,000 ounces of inventory!!!!!!!

The potential for a squeeze is significant.

Cheers,

THC (05/09/00; 19:47:44MT - usagold.com msg#: 30208)
Powerful Thought for the Day
It is almost certain that aboveground stockpiles of gold bullion exceed those of silver bullion.......

In addition, most silver is not produced by primary silver mines. As a result, production volume is not very price elastic.

Should serious money ever begin to flow into the precious metals, silver will fly!!

However, the true shortage before our eyes is platinum......
so that is where my money is.

Open interest on the Tocom is over 1M oz for Plat......this is supported by only 10,000 oz of inventory!!!!

THC

ORO (05/09/00; 19:43:37MT - usagold.com msg#: 30207)
Perplexed - WWII and the Empire
The items you refer to are true, but your interpretation is incorrect.

While lending to those under duress may seem like doing them a great favor, in reality, had their favor would have been greater had the US simply let them be and allowed US corporations and European corporations to compete on their own.

The purpose of the Marshal plan was exactly like that of the World Bank and the European Bank of Reconstruction and Development: Create a debt trap in which Europe would forever pay for the Italian French and German defeat (France was a property of Germany, as was Italy when the US won the war). The purpose, though it included the well being of Europe, was to put the people and governments of these countries into perpetual debt service. It was the same thing done to every distressed country on earth.

That Europe may seem ungrateful for the prolonged attempt at turning it into a perpetual vasaal of America and Britain should come as no surprise.

"Good intentions" of the generous left were joined with the profit motive of the banks and some corporations to turn a gesture of magnificense into a source of perpetual ill will.

This, like most other examples of American and transnational "help", was no more than another step towards America and Britain's empire by debt service. The New World Order is on its death bed and will soon self destruct. It will have died of old age. The debt at its heart suffering a stroke of default after many angioplasty bailouts, IMF structural impoverishment loan packages, and years of nitro pills.

The road to hell is paved with good intentions.

After Empire come chaos and servitude. Why? because only when the return on Imperial violence is gone does the Empire fall. When the return is gone, so is the benefit of Empire. When that is gone, so is the economy that built itself on distribution of the stream of goods coming into the land.

Perplexed, the undoing of our local industry is an inevitable side effect of taking the proceeds that are the benefits of our Empire, soon to be lost. If discounted goods and services from abroad are the payoff of Empire, how could you complain of the loss of the need to make the goods locally? How do you think an Anglo house became triple in size relative to the average dwelling in the West? It is because of there being no need to make the other stuff of life, the booty of Empire, that labor is available for the construction of greater and greater houses, shopping malls and two ton cars.

That the tools of empire make the people of the Empire's core subservient to the colonies to supply their needs is the price they pay. When the next generation comes after the loss of empire, it will be unprepared for the results. Watch as it unfolds. Thank your grandparents for providing you with all the liabilities generated by their benefit. Thank your parents for trying to get their own piece of the pie. Finally, slap your own shoulder for selliing out to the system that will soon eat you.

You will soon face the choice between paying them or being bankrupt.



elevator guy (05/09/00; 19:38:53MT - usagold.com msg#: 30206)
@ Bonedaddy, and ss of nep
Thank you for your responses.

Bonedaddy- It would seem we are at the eve of moral decay, which proceeds the disintegration of our nation. Do you ever get the feeling that the public is getting "dumbed down", unitl we are no more than worker ants, who drool at the thought of a weekend party? MTV rules, you know. Deception and public preception is the game of government and media. We the sheeple are kept in the dark, and fed BS until we cant tell the difference between truth and spin.

SS of Nep- I think gold will always have value, just like real estate.


Elwood (05/09/00; 19:31:12MT - usagold.com msg#: 30205)
SALMON (05/09/00; 18:40:24MT - usagold.com msg#: 30203)

S,
The main problem I see in your plan is that when you lease the gold, you are agreeing to repay the loan in gold. If the price runs it is not you who reaps the reward, but the person or bank who loaned it to you(if they can collect). This is something that the "rich" are about to learn the hard way.

Given that, why lease when you can still exchange your dollars for gold today at such bargain exchange rates. Give MK a call, and you'll see what I mean. The physical owner is truly the rich one. The world has merely yet to recognize them as such.
Elwood

RossL (05/09/00; 19:07:42MT - usagold.com msg#: 30204)
Clinton: Testimony 'not legally false'
http://www.washingtonpost.com/wp-dyn/politics/A30124-2000May8.html

Matthew J. Glavin, president of the Southeastern Legal Foundation, said the disbarment case against Clinton is clear-cut because "the president lied under oath and obstructed justice," violating "the most basic rules required of those who hold law licenses."


SALMON (05/09/00; 18:40:24MT - usagold.com msg#: 30203)
To All interested in a fair and stable gold price



After reading the recent news on GATA and their efforts towards fair and stable gold prices, and to allow a free gold market, I realize that leasing gold at 1%, selling it, and reinvesting the proceeds is a game for the rich, privileged and powerful. It is a game created by them, for their benefit only.
Here is my question: Has anyone tried to lease, lets say 100 OZ of gold from any source?
Is it possible for a small investor to do this? If a small investor could lease small increments of gold at 1% then why isn't this option being promoted at the same level that Micron Electronics or other investments are being promoted.
JUST imagine one million investors from around the world leasing 100 OZ of gold at 1% and putting it safely away in their safety deposit box at a cost let's say of $300/year (tax deductible). Wouldn't that cause havoc. And, just imagine what that would do to your overall gold holdings!! 100 million ounces taken out of circulation would cause those speculators to run for the hills. It is the only counter defence measure. Can it be implemented? Any comments or thoughts on this?


Thanks

S+

Elwood (05/09/00; 17:56:04MT - usagold.com msg#: 30202)
Topaz (5/9/2000; 3:44:29MT - usagold.com msg#: 30151)

"Perhaps you can identify an historical example where such a strongly "perceived" currency did the proverbial "Swan-Dive" as is predicted by the Good souls here!"

Sir, I cannot. The fact that a widely-accepted paper-based reserve has never died places our time in its own historical perspective. We could say that it is just as novel that the world ever got into a condition of accepting something that is backed by nothing but perception.

The perception of a thing's trustworthiness always builds slower than the perception of panic that accompanies the unwinding of such trust. Thus, the readjustment of other's perception of the dollar vs. gold will graphically be the same image as that of those 1997 Asian currencies against the dollar.
Elwood

Bonedaddy (05/09/00; 17:54:18MT - usagold.com msg#: 30201)
elevator guy
Your perception of events impresses me. You wrote, "Perhaps our brains have been massaged by the dollar driven media, until we think that breaking our chains of dollar fiscal slavery will result in our hanging for sure." Consider the following. Our children shoot each other in school. We dishonor the wise ones (elderly) publicly in TV commercials. We have a negative savings rate. We have felons in Congress. We accept a lying, drug addicted, sexual pervert as our Commander in Chief. Mothers and fathers combined work 100 hour weeks and let strangers raise the kids. We practice government financed genocide on the generation of infants that should care for us in our old age. Perhaps we are already hanging from these paper chains you speak of?

Simply Me (05/09/00; 17:49:32MT - usagold.com msg#: 30200)
1999 W Gold Eagle
The W mint mark comes from the West Point Mint. They sometimes make special edition proof coins. Whether it will be a valuable coin in the future or not (aside from the gold content) depends on the number minted.
For instance, the '95 W Proof Silver Eagle was thrown in as a freebie with Gold Eagle Sets they were selling. Not many were sold, so very few '95 W Proof Silver Eagles were minted. They're going for over $1200.00 now.

simply me

RossL (05/09/00; 17:44:06MT - usagold.com msg#: 30199)
Shifty

The gold bullion proof coins minted since 1994 have the W mint mark. There is a premium for the higher quality strike. The mint has not made a large quantity of them due to lack of demand. They are not rare.


SHIFTY (05/09/00; 17:12:16MT - usagold.com msg#: 30198)
1999 Gold Eagle 1/10 oz.
I heard today that there were some 1999 1/10 oz gold eagle coins that have a W mint mark. Said to be rare. Does anyone how true this is.

SHIFTY (05/09/00; 17:08:26MT - usagold.com msg#: 30197)
Ponzi
Nasdaq 3585.01 + Dow 10 536.75 = 14121.76 divide by 2 + 7060.00 Ponzi
Down 75.62 Ponzi Points

YGM (05/09/00; 16:50:18MT - usagold.com msg#: 30196)
Left Wondering.....China/WTO/Gold Reserves....
China....Deputy Director, Gold Bureau ....Comments Sept/99

What is the relationship between Clinton continually pushing for Chinas membership (WTO) and these old comments made by Cheng.....Were they a veiled threat of Gold acquisition if not favored for acceptance into WTO?.....possibly another piece of the over-all picture in the Great Gold Heist of the 20th century.......Now we have Clinton, Carter, Gore and others again trying to fast track
Chineese acceptance into the fold..........(See Drudge News) ....... Questions,questions...........YGM.


(Reference to Cheng Comments)

From Reg Howe/Goldensextant.com

September 9, 1999. Chinese Comments on Gold: Threat or Faux Pas?

Last week Ai Dang Cheng, deputy director of the Gold Bureau under the State Economic and Trade Commission, told Bridge News that China's gold reserves of 394 tons were too low relative to its foreign exchange reserves of US$146 billion and population of 1.3 billion, and that they could rise to 1000 tons. (At US$260/oz., China's gold reserves equal about $3.3 billion, or less than 2.3% of its total reserves.) The next day AFX Europe reported that the People's Bank of China had disclaimed any intention to increase its gold reserves. What was going on?

I don't know. Perhaps Mr. Ai, although his point appears well-taken, innocently misspoke. On the other hand, with critical negotiations about China's entry into the World Trade Organization at hand, perhaps the Chinese are delivering a subtle reminder of the strength with which they could enter the gold market should they choose to do so. In any event, it seems unlikely that China would announce to the world in advance plans for the imminent purchase of 600 tons of gold. Stupid traders they are not. Bank of England take note.

Hill Billy Mitchell (05/09/00; 16:28:56MT - usagold.com msg#: 30195)
Official release
http://www.bog.frb.us/releases/H15/update/

Official: Federal Reserve Statistical Release

Release Date: May 9, 2000

Rates for Monday, May 8, 2000

Federal funds 6.01

Treasury constant maturities:
3-month 6.19
10-year 6.57
20-year 6.69
30-year 6.25

right-side up spread FF vs long bond = +.24%



ORO (05/09/00; 14:40:45MT - usagold.com msg#: 30194)
Pondering productivity
Reading through some of my posts and web pages on productivity, a question hit me: what is the marginal value of gains in productivity?

I have argued before that the gains in official productivity statistics were between total falsehood to mostly fabricated. I had shown (to my satisfaction - at least) that the apparent productivity comes completely from other factors aliasing into the numbers:
1. The intentional practice by the BLS of adjusting growth in computer power relative to price rather than adjusting unit numbers to price being one major source of inflated productivity estimates.
2. I also claimed that the marginal value of new computing power was declining rapidly, perhaps more so than the price, such that the use of equal computing power for running a chemical plant and displaying "Barbie Cam" snapshots on the net are treated as having the same marginal value in the official statistics.
3. I pointed out that the major source of productivity in the global economy was the transition of people in Emerging Economies from Iron Age production to 21st century production and computer technology complete with semiconductors and internet software (see the Phillipinos who are accused of writing the "Love Bug").
4. I pointed out that a strong dollar relative to the currencies of these Emerging Economies was causing the import of their productivity into the US to appear as if US productivity is growing. I pointed out that the dollar was strong because of a series of debt traps into which the Emerging Economy corporations and governments were "cheated" into.
5. I showed that the bulk of the actual productivity improving technologies were applied between 40 and 10 years ago, and that current applications are not used to lower cost, since cost is not a valuable advantage to business. The technologies are used mostly for the purpose of changing the character of inventory - its composition - rather than its quantity. Furthermore, I claimed that the new technologies' effects in reducing retailing and distribution costs will result in increasing the volume of both service and goods demand, which would later reach the resource origin of production and service: labor and raw material. When these would be reached, pricing of both would start to climb to the point of reversing productivity savings in costs - leading to price rises following price declines. Later, corporations would start seeing their inventory as a source for capital gains and this would drive them to reverse the 20 year trend to reduce inventories. The added demand for inventory build up would undo some or all of the inventory and distribution technology improvements in costs delivered by information technology today and in the next 3 years.

The question now is whether the productivity improvements had a marginal value of any magnitude. I claim that they have, but that the bulk of the contribution is in the consumer's time savings, access to a much greater selection of products and services. Also, there is a completely new consumer-to-consumer marketplace which is threatening to remove the few remaining economies of scale that corporations enjoy, while increasing the level of compensation necessary to remove people from these profitable activities and into additional corporate work. Though living conditions may improve for a great many, none of this would impact directly on apparent official statistics.

Many corporations will see cost savings in their supply chain as they move forward to reduce idle inventory, purchasing order processing costs, distribution inefficiencies and marketing costs. However, these savings of 5% to 20% over the next 2-3 years will be more than absorbed by material and labor costs. This leads to the conclusion that the marginal value of applying these technologies were not even close to the expectations raw numbers give rise to.

Thoughts?

Aristotle (05/09/00; 13:58:16MT - usagold.com msg#: 30193)
Henri, your thoughts on sustainable development are on target.
Gold. Get you some. ---Aristotle

Topaz (05/09/00; 13:53:00MT - usagold.com msg#: 30192)
Laura (5/9/2000; 11:00:13MT - usagold.com msg#: 30185)

First:- Neanderthal Man
Second:- cro-Magnon(sp)Man
Now:- "Hydrocarbon Man"......

That cracks me up!!

YGM (5/9/2000; 11:37:21MT - usagold.com msg#: 30191)
Hey Dollar Bill...
C'mon Back & Discuss Your Point...
Sorry if I was rude in my last response to you......But you got me going...(not hard to do these days)
Please read this from my old friend at GE Forum (curious)
.........................................................................

"The germ of destruction of our nation is in the power of the
judiciary, an irresponsible body -- working like gravity by night and
by day, gaining a little today and a little tomorrow, and advancing
its noiseless step like a thief over the field of jurisdiction, until
all shall render powerless the checks of one branch over the other and
will become as venal and oppressive as the government from which we
separated." --Thomas Jefferson

...................................................

Does the US have politicians and citizens who still believe
in the truth seeing the light of day... I believe so and probably you, yourself are in that category......Join in the truth finding mission well underway here......Regards: YGM.

Leland (5/9/2000; 11:33:24MT - usagold.com msg#: 30190)
"Oil World: 1973 Compared to 2000", Link Posted by Ted Butler
http://www.simmonsco-intl.com/web/downloads/whitepaper.pdf
Please note, Pdf, Acrobat Reader required...

elevator guy (5/9/2000; 11:33:02MT - usagold.com msg#: 30189)
@Christopher
Very nice indeed!

YGM (5/9/2000; 11:16:38MT - usagold.com msg#: 30188)
GATA NEWS........
http://www.gata.org
10p EDT Monday, May 8, 2000

Dear Friend of GATA and Gold:

The Battle of Washington is about to commence.

A little more than a year ago the Gold Anti-Trust
Action Committee developed a strategy to win the day
against the manipulators of the gold market. Our
strategy was based on the "enveloping horn" tactic of
the great South African Zulu chieftain, Shaka.

That strategy is working for us as it worked for him.

To defeat his opponents, Shaka had his warriors form a
diamond formation that unfurled into a horn-like form
as both sides suddenly flared out to surround his foes.

The point of GATA's formation is our law firm,
Philadelphia's highly regarded Berger & Montague. While
we have not yet brought legal action, our law firm has
kept our adversaries off-guard.

The right flank of the "horn" has done its job well.
Our plan was to get the gold producers behind us, to
inform the investing public of the dangers of excess
hedging, and to support those companies that did not
hedge or started to reduce their forward sale
positions.

To date GATA has raised $206,498. Five major gold
companies have supported us, many juniors have chipped
in as well, and so have many individuals from around
the world. Though the price of gold has gone down, many
non-hedgers are outperforming the big hedgers like
Barrick Gold. It is such a surprising development that
The New York Times journalist just published an article
headlined , "Gold Believers Put Rationality to Test."
Randall Oliphant, president of Barrick Gold, was quoted
in the article as saying he found it difficult to
understand. "It doesn't make sense to us and I can't
explain it," Oliphant said.

The task of GATA's left flank was to get the Internet
behind us and to take our case to the politicians in
Washington to expose the manipulation and to ask them
to take action. We are making our move tomorrow.

The GATA team -- Chris Powell, Reginald Howe, Frank
Veneroso, and me -- are meeting to go over our strategy
for the next day. And on Wednesday we will be
presenting our "Gold Derivative Banking Crisis"
document to members of Congress and their staffs. Our
report is 90 pages. There is no way that any fair-
minded person can come read this document and conclude
other than that the gold market IS manipulated and that
a derivative crisis is on the horizon unless immediate
steps are taken to avoid it.

The gold price must be allowed to rise, and sharply, to
slow down gold demand.

On Thursday GATA will deliver a personalized bound copy
of our document to every Senate and House banking
committee member. Material from Frank Veneroso,
Reginald Howe, and www.LeMetropleCafe.com's
"Chronological Commentary on the Manipulation of the
Gold Market" from Sept. 9, 1998, through Feb. 15,
2000, has been included.

Next week a color center-spread open letter, addressed
to the banking committee members, will appear in Roll
Call, the weekly newspaper that covers Congress. All
Washington will know that if Congress does not
investigate this serious matter and the banking crisis
develops, they will have no one to blame but
themselves.

Early next week GATA will issue a press release on our
operation. In addition, the "Gold Derivative Banking
Crisis" document will be sent to all the gold producers
and to the press. (That includes CNBC.)

GATA will also send a copy to Gold Fields Mineral
Services and challenge it to debate us on our findings.

The manipulation crowd has power and money. We have the
truth and the Internet. We will win. Wish us well.

BILL MURPHY, Chairman
Gold Anti-Trust Action Committee Inc.





Christopher (5/9/2000; 11:11:01MT - usagold.com msg#: 30187)
Elevator Guy msg#30179
"One of my wishes is that those dark trees
So old and firm they scarcely show the breeze
Were not as 'twere the merest mask of gloom.
But stretched away unto the edge of doom.

I should not be withheld but that someday
Into their vastness I should slip away.
Fearless of ever finding open land,
Or highway where the slow wheel pours the sand.

I do not see why I should ere turn back,
Or those should not set forth upon my track
To overtake me, who should miss me here,
And long to know if still I held them dear.

They would not find me changed from him they knew,
Only more sure of all I thought was true."

Robert Frost


YGM (5/9/2000; 11:02:01MT - usagold.com msg#: 30186)
CALL TO ARMS......GATA/Washington.
No matter which discussion board you frequent........
Dr. Vronsky says it all here.........



  GATA EQUIVALENT OF THE US NAVY SEALS  
(vronsky)May 09, 12:37 The GATA equivalent of the US Navy Seals will be hitting the 'beaches of Washington' soon. For their operation to be successful, GATA will need the bombardment of our 'Big-gun' support. GATA needs that all GOLD-EAGLE's readership 'bombard' Congressional Members of the US Senate and the US House of Representatives.

Not only US Citizens should voice their opinion about the Gold Cabal's Anti-Trust machinations in the manipulation of the gold price, ALL GOLD-EAGLE readers should take advantage of their right to be heard. PRICE-FIXING is materially injurious to everyone…anywhere.

Speak your piece…exercise your God-given right to be heard. Assert your opinion.

Following are the email addresses of all US Congressmen and Congresswomen.

http://www.webslingerz.com/jhoffman/congress-email.html
http://www.visi.com/juan/congress/
http://www.capweb.net/classic/Index.morph?pagename=senalpha

GATA is about to 'invade' Washington on OUR BEHALF- it needs our 'bombardment' support...NOW...Bear arms in the form of your words.

Laura (5/9/2000; 11:00:13MT - usagold.com msg#: 30185)
Interconnectedness
http://www.hubbertpeak.com/campbell/commons.htm
Practically no one is aware.

The coming Global Super-Crisis is on the horizon. Full speed ahead.


Gold, Get You Some!


Leland (5/9/2000; 10:58:03MT - usagold.com msg#: 30184)
Verrry Off Topic...I've Been Watching Some Excitement
There appears to be a big uranium strike, Saskachewan...
Here's a chat site comment on STOCKHOUSE:

"Of course JNN is going ballistic! You're looking at what could be the next Uranium mine there at Moore
Lake.
How do you think society is going to power the internet age? Dirty coal burning power plants? Nope. The
answer is nuclear power. It's much more effient and cleaner.
Heck, the first commercial electric car is on the market right now. Maybe you've seen the ads on TV. In
3 or 4 years there will be many electric cars driving down the roads... no need for gasoline, however,
there will be a greater demand for electric power!
Uranium is the key! Saskatchewan is the Uranium capitol of the world. It already have 3 or 4 Uranium
mines in full production up in the north. Won't be long before huge electrical demand makes another
Uranium mine viable!"

If anyone is interested, post a query, I'll give some links.

Henri (5/9/2000; 10:45:12MT - usagold.com msg#: 30183)
get you some
Gold
Get you at least your own fair share (3 sovereigns)
then buy more for your families share
then buy at least ten times more to trade in the future for what you need.

Remember, it is only a tool, not the end in itself. Much like a squirrel stores nuts for the winter to come. Get some, store it, use it when times get rough, survive, get some more when good times return.

YGM (5/9/2000; 10:33:17MT - usagold.com msg#: 30182)
IF ONLY THIS "IS"TRUE.......Soros & Gold.
http://www.minesite.com/index.htm
News Link...http://www.minesite.com/news2.htm

GEORGE SOROS LAYS DOWN CHALLENGE TO BROWN BY BUYING GOLD.

Word has it that George Soros, the Hungarian genius, is buying gold. OK, Everyone knows that when such news gets around it is usually because he is poised to sell to those who think they can make money by riding on his back. In the case of gold, which has performed abysmally for a long time apart from the brief spike when the central banks made their announcement last September, such a ploy is unlikely.

Only last week Soros announced that he was withdrawing from aggressive hedge fund management because markets are now "too volatile." This could reasonably be translated as saying that the equity, bond and currency markets in which he has made so much money are now too transparent. In other words it has become ever easier for his operations to be tracked and this means, in turn, that he can no longer remain one jump ahead.

The man is no longer a hungry fighter and as his book, The Crisis of Global Capitalism" shows he is happy to give more of his time to philosophising. He has argued that the ideals of tolerant democracies can be threatened by those with an absolutist faith in the free market to the extent that market mechanism is allowed to assume a position of overriding importance.

Once a man gets wrapped up in philosophy his thoughts turn to the longer term. The dollar, as Soros knows better than most, is in a high risk area. The US economy has been pumped up on the strength of a private sector credit bubble, and the dollar depends on huge capital inflows. There is also a head of political pressure building up to persuade the Federal Reserve to raise interest rates, slow down the US economy and take the pressure off the euro.

To the new long termist Soros this must provide an ideal opportunity. He can pick up gold easily enough from politicians and central bankers who have never made a trading profit in their lives. Such buying would be difficult to detect, so he would be under no pressure. And when the moment eventually comes, as come it must, when the dollar falls he will pull off the coup of a lifetime.

Gold went up US$4 last week despite the news that the Swiss were going to put 120 tonnes on the market by September. Brown will continue with his gold sales. All Soros has to do is sign cheques and sell off loose holdings in his Quantum portfolio. Gives him plenty of time for philosophy in the long summer months.

8 May 2000

ss of nep (5/9/2000; 10:16:32MT - usagold.com msg#: 30181)
If the UN wins
http://www.americanpolicy.org/prop/sustainabledevelopment.htm



No gold will save me.





ss of nep (5/9/2000; 10:13:51MT - usagold.com msg#: 30180)
my vote

I go for Rocking the Boat.



The Status Quo sucks.


Will gold be of value ?
Tuff question.



elevator guy (5/9/2000; 10:09:52MT - usagold.com msg#: 30179)
Need advise
Which is better-

To take what you can get from this life as we know it, under the present dollar reign, and maintain the status quo?

Or to rock the boat, and help to collapse the dollar house of cards by exposing the paper gold foundation?

On the one hand, my life will not be interrupted.

On the other, I may have to hack out a new path in the jungle, for survival.

Or maybe the answer is not necessarily all one option or the other. Perhaps our brains have been massaged by the dollar driven media, until we think that breaking our chains of dollar fiscal slavery will result in our hanging for sure. Maybe a better life awaits those who rebel.

Your thoughts?

As a last note, I was thinking about what a funny joke being a millionaire would be, if the dollar was to become devalued. Owning a million dollars could become as worthless as owning a million grains of sand. Best to store value in gold, or see it all wash away.

Henri (5/9/2000; 9:48:10MT - usagold.com msg#: 30178)
This is what provoked my foray into sustainable development.
Sorry for posting out-of-context

Clipped from the "radioliberty" link referenced below in post # 30159 by ss of nep

SNIP
"...The message of the American Stonehenge also foreshadowed the current drive for Sustainable Development. Any time you hear the phrase "Sustainable Development" used, you should substitute the term "socialism" to be able to understand what is intended."
UNSNIP

ss of nep (5/9/2000; 9:42:11MT - usagold.com msg#: 30177)
On Land Rights
http://www.oneworld.org/news/world/landrights.html




RossL (5/9/2000; 9:27:52MT - usagold.com msg#: 30176)
Henri,Steve H, RE:Convergence

The question
-- J.P. Morgan assuming much of the paper-gold responsibilities. Why?

Too big to fail?


Henri (5/9/2000; 9:19:36MT - usagold.com msg#: 30175)
On sustainable development
For what its worth, I disagree that believing in a policy of sustainable development need necessarily bear a "socialist" stigma.

The reason some areas of the world get beyond their "carrying capacity" is due to the re-allocation of resources and subsequent development that causes dependence on those outside resources.

If carried by fair trade of some other good or service the development is not necessarily unsustainable. It is only when the resources are allocated without the underlying fundamental economic balance (an offsetting asset goods or service)that the development becomes unsustainable.

It is unsustainable since it is dependent on the continued "goodwill" of other economic regions or on the "forced" reallocation of global resources by some global force majeur (a necessarily "socialist" organization)

So here I see "socialist" ideas being the source of the problem. Not the progenitors of the solution.

Given time as we know it in terms of growing seasons lack-o-drought etc. The "time" it takes to transport temporary and humanitarian relief. The carrying capacity of a region can withstand temporary setbacks. When powerful people get the contracts for arranging the "temporary relief", the temporary relief may become more permanent than is justifiable. "Capitalism" then is demonized as well...but is this true capitalism when the profit obtained originates from a humanitarian motive. This is not true capitalism, it is profiting from the misfortune of others.

We must make a distinction (eventually) as in the case of somalia/ethiopia/eritrea, as to whether the fundamental nature of the region has changed from garden to desert temporarily or permanently. The sands of the sahara move ever so slowly but move they do.

We must (eventually) decide which regions have no offsetting goods or services to offer that justify their stage of development and must therefore be allowed to equilibrate (recess) to their intrinsic carrying capacity.

I am certainly not against the outpouring of temporary humanitarian aide as long as that is what it is. No one should "profit" from it. The cost should be born by those willing to give. It should not be expropriated from the unwilling. When such a circumstance is allowed to exist, then the people say...I already gave...my part is done...they are absolved of any guilt and hence lose all that is to be gained in the act of giving.

USAGOLD (5/9/2000; 9:07:28MT - usagold.com msg#: 30174)
Today's Report: All Quiet Ahead of PPI Numbers and Upcoming Fed Conclave
http://www.usagold.com/Order_Form.html
5/9/00 Indications
 Current
 Change
Gold June Comex
277.40
-0.20
Silver July Comex
5.10
+3.00
30 Yr TBond June CBOT
93~06
+0~10
Dollar Index June NYBOT
111.12
-0.20

Market Report (5/9/00): Gold drifted sideways in the early going after a quiet night overseas.
Asian trading was characterized by light physical buying. Trade in New York was very light
yesterday with low volumes and too little movement in either direction to inspire traders. Things
might take a more critical tone towards the end of the week when we get producer price numbers
on Thursday and speculation about the next week's Fed meeting and interest rates take center
stage.

The May News & Views is now on its way and should be hitting your mail boxes over the next
few days. We think you are going to like this issue written during the weekend after the April 14
Wall Street Meltdown.

If you are looking for a pro-gold view of the various financial markets as well as a summary of the
events affecting the yellow metal, our monthly newsletter might be of interest. News & Views
-- Forecasts, Commentary & Analysis on the Economy and Precious Metals has
been characterized as witty, urbane, intelligent and down-to-earth. Not to mention it's Free of
Charge If you want to keep up with gold, this is the way a large segment of the gold owning
public does it, and has done it for over a decade.

Just click on link above and make the appropriate entries.

Perplexed (5/9/2000; 8:59:23MT - usagold.com msg#: 30173)
Empire
Holtzman #29923

Thank you for the desertation on Empire. I too believe that government, as we know it,will become superfluous, beginning in the not too distant future, say 10 years or less. But the United States empire? Hardly. Most of our people had strongly opposed getting involved in another European war, and at its end could not wait to get on with our lives. From our beginning, neither our people nor our leaders have ever desired Empire. After World War II , had we been so inclined, it was ours for the taking. We were the only nation to come out of the war stronger than when we went into it. We had a finely honed manufacturing industry, an abundance of oil, every raw material needed for self
sufficiency, some of the best land and climate in the world, the strongest military machine the world had ever seen, and sole possession of a doomday weapon, yet we virtually disarmed. Had the politicians not prevailed, all our troups would have returned from Europe immediately. Not only had we lost many sons and fathers fighting a war on
foreign soil, but had furnished many weapons, much equipment, and financing in the form of loans. The American citizens, thru taxation, continued to furnish financing for the post war recovery, some in the form of additonal loans, and more in foreign aid. We paid rent on the facilities, and hired local civilians to fill many jobs, and still do. The United States soldiers, although an occupying army, while associating with the local population purported themselves with dignity and honor, the G.I was liked rather than feared, and spent millions of dollars per year in the local economy. We opened our markets to world trade, invariably on terms detrimental to our own industry and farmers. We used our economic and military might not to enslave but to free, not to keep foreign economies down, but to build them up. Did we benefit? Immensly, along with the rest of the world. Given the foregoing circumstances, in 1971, when the run was made on our gold reserves and the gold window was closed, although twenty-five 25 years had transpired, none of these European nations had paid even the interest on the debt. Many American citizens, my father included, considered this blatant profiteering the ultimate insult, and Charles De Gauls popularity plummeted. The debts were eventually written off.
I was stationed in Germany in the mid 50s, and I, like many Americans just took the freedom into which I was born for granted. An American soldier in uniform traveling on the railroads, and watching as peoples luggage was searched when we crossed from the border of one nation to the next while I was exempted, really opened my eyes. If I was a sleep I wasn't even awakened. Just like traveling in the USA
Today I still stand in awe and thanksgiving that I was privileged to have been born in the nation which has changed the course of the world for the better, in the time frame of my adult life.

webtex

Leigh (5/9/2000; 8:57:03MT - usagold.com msg#: 30172)
Henri, ss of nep
I actually don't care which list I'm on. Life is short, and there's a better world than this one. I'll die smiling, knowing they'll never, never find my gold!

Henri (5/9/2000; 8:51:05MT - usagold.com msg#: 30171)
Which list?
I hope I'm not on the green list!

hmmm. Although being there would not be so bad as a cover if you knew you were not enslaved in fact.

How much gold did the Swiss say they had from people who believed having it in a safe place was a good idea?

In this case "Better red than dead" doesn't carry much weight.

Henri (5/9/2000; 8:45:52MT - usagold.com msg#: 30170)
Steve H RE:Convergence
The question
-- J.P. Morgan assuming much of the paper-gold responsibilities. Why?

What I think to be the answer

They drew the short straw?




ss of nep (5/9/2000; 7:00:20MT - usagold.com msg#: 30169)
Always keep smiling.





ss of nep (5/9/2000; 6:59:28MT - usagold.com msg#: 30168)
dispoded should be disposed





JavaMan (5/9/2000; 6:58:35MT - usagold.com msg#: 30167)
Leigh...
Perhaps Sir ss should have put a "(smile)" at the end of his last post.

ss of nep (5/9/2000; 6:58:32MT - usagold.com msg#: 30166)
Color codes

Green - you can be Re-Educated, to serve in your new position as slave.

Red - you are beyond Re-education and will be done away with, but offer no current threat.

Blue - you are beyond Re-education and will be dispoded of immediately.


( I may have the Reds and the Blues backward ).




Leigh (5/9/2000; 6:46:44MT - usagold.com msg#: 30165)
ss of nep
What do the colors mean? How can you know which list you're on?

ss of nep (5/9/2000; 6:27:01MT - usagold.com msg#: 30164)
? which of us are scheduled to live and which are scheduled to die ?


Well, I think it depends weather your on the Green, Red or Blue list.



JavaMan (5/9/2000; 6:14:57MT - usagold.com msg#: 30163)
(No Subject)
ET, on your msg# 30142...my thoughts exactly!

Lamprey, your msg# 30143...good point. One would think / hope these noble efforts by GATA would close the back door. It will serve as an interesting object lesson for all of us to see what follows "when the s*** hits the fan, they won't be able to say they didn't know of the problem." I can see it now...in true Clintonese "what do you mean by s*** ?"

JA, your msg# 30147...yes, that is not an uncommon perception. The history of the company and its following is quite interesting. The company got its first boost after the war when the air force pilots, experiencing "cold turkey withdraw" from the freedom and exhilaration of combat flying found that riding the motorcycle was the next best thing. The fashion of leather clothes started with the flight jackets the pilots had. Some of these guys were "bad boys" and slowly it evolved into the perception that only gangsters rode Harleys. This image was reinforced by the movies. While it is true that there are some less savory types that ride, the current reality is that the bikes are simply too expensive for low income people, so HD has targeted and markets to the professional. Ironically, some of these professionals who have always (mostly) lived the straight and narrow life of responsibility occasionally wondering what it would have been like to "take the other road" see the HD as a means to live out their fantasy vicariously. The best of both worlds! (smile) After placing the add in the paper, I got phone calls from an oral surgeon, and a gentleman who owned a successful home inspection business.

Simply Me, your msg# 30148...you said "What truly sets man apart from the beasts?" Too often the answer is "nothing". But the Existentialist school of thought in psychology is directly opposed to Skinner and maintains that we are NOT products of our reinforcement history, i.e. man is free to choose at any time, no, MUST choose, in order to be authentic and there are documented cases of incredible success stories they have had curing very sick people to support their approach. I think the term "Authentic" applies nicely to gold and is, somehow, synonymous with it.


SteveH (5/9/2000; 6:13:08MT - usagold.com msg#: 30162)
Convergence
Let's step back and look at the big picture for a moment, shall we?

-- Gata going to Washington with big ad ready to roll next week telling Congress..."you have been told, if you choose to do nothing, it will be there for all to see you knew but failed to act."

-- Elections arriving in November. Dems. seriously want to maintain best-case economy through election. Bush-Gore neck and neck, but Rep. have ace-in-hole to push economy into recession prior to November -- the gold-shortages and manipulation debacle.

-- J.P. Morgan assuming much of the paper-gold responsibilities. Why?

-- Suisse Gold sales through BIS.

-- XAU ready for launch with serious accumulation in major unhedged golds. Same with JGOL.

-- DOW/NASDAQ in preliminary and initial stages of serious bear market, where buying the dip will finally burn the majority who used this seemingly faultless tactic.

-- Continuing positive news quips on gold and gold stocks as an inflation hedge.

-- The highest unemployment in 30 years. 2000 minus 30 = 1970. Equivalent of being with a year of closing the dollar gold window by Nixon, which set off the gold rally in the 70's over a 10 year period.

-- Fears of inflation continue to plague the US.

-- Dollar at a stronger than normal high.

-- Trade deficit at an all-time high and mounting daily.

-- Interest rate hike fears to the tune of 50 basis points, which sets an expectation that if it is less, the markets will rally, if it is 50 basis points it will trade sideways.

-- Cisco credibility knocked yesterday by major media article discussing accounting and other peculiarities.

-- Microsoft profitability in question due to not having stock option profits in near to medium term. The longer this happens,the quicker the spiral.

-- Physical gold in its highest demand, paper gold in its lowest.

-- Record stock-market volitility with large swings making it impracticle to use margin debt for fear of margin calls.

-- Continued reliance of high tech majors as the recommendation to do well in the markets into the futures. These stocks' PE's are all out-of-line with historical standards.

-- Euro unwillingness to intervene in FOREX markets, allowing their currency to float freely.

-- Bond market acting in ways that are contrary to logic and a continuing propensity to rising yields and reverse yield curves.

Events are unfolding at an ever increasing rate, which spells trouble for the dollar and soon.

Leigh (5/9/2000; 6:11:54MT - usagold.com msg#: 30161)
Black Blade
Thank you for your Morning Wakeup Calls! I really missed SteveH's early-morning spot gold postings, and you've filled the void beautifully.

Leigh (5/9/2000; 6:04:28MT - usagold.com msg#: 30160)
Trail Guide, Elwood, SteveH
Wow! Great questions, Elwood! I kept waking up last night and logging on just to see if Trail Guide had answered yet. Right now I have the weirdest feeling -- economic doomsday is right at our doorstep, yet everything is going on as usual, gold is still readily available at a cheap price, and not one person in five hundred would believe it.

Is anyone else besides me having trouble getting onto Kitco?

ss: The "Georgia Stonehedge" ain't going to be one of our vacation stops this summer, I can assure you! I always wonder, when I read about social planners who want to reduce the world's population so drastically, which of us are scheduled to live and which are scheduled to die.

ss of nep (5/9/2000; 5:42:25MT - usagold.com msg#: 30159)
Georgia; USA : Has an interesting monument ?
http://www.radioliberty.com/stones.htm


Buying gold all the way down




Black Blade (5/9/2000; 5:41:17MT - usagold.com msg#: 30158)
Morning Wakeup Call!
Source: Bridge News
Asia Precious Metals Review: Physical buying underpins gold

Tokyo--May 9--Spot gold was underpinned by light buying from physical dealers in sluggish Asian trade Tuesday, dealers said. Platinum edged firmer from overnight late U.S. market levels while players were hesitant to open positions on lack of fresh incentives, they said. (Story .2200)

Black Blade: Not much happening overnight. The calm before the storm?


Trail Guide (5/9/2000; 5:40:58MT - usagold.com msg#: 30157)
Comment
Elwood (05/08/00; 20:22:08MT - usagold.com msg#: 30140)
Trail Guide (05/08/00; 18:58:00MT - usagold.com msg#: 30138)
Elwood (05/08/00; 21:58:37MT - usagold.com msg#: 30145)
SteveH (05/08/00; 21:02:33MT - usagold.com msg#: 30141)
SteveH (05/08/00; 21:02:33MT - usagold.com msg#: 30141)


Elwood, SteveH,

Hello, both of you.

This placement of Swiss gold was the first "real obvious" indication to the markets of what the WA is all about. Because these sales are the bulk of physical entering the markets during the next 5 years, something has to give as it is diverted into BIS accounts. Remember, I touched on this point on the Trail (when?): the WA did not address any means of covering existing contracts while still endorsing and maintaining their gross level outstanding! Most everyone completely missed the fact that this places "physical coverage" squarely on the back of the US if the paper markets are to be maintained. No one saw this as an issue because they assumed the Swiss gold was for coverage.
It's not!

I know The Golden Sextant is following that line of Swiss gold filling Euro loans. The problem is that it's not. They feel comfortable letting the dollar faction figure it out themselves. Euro Zone banks know that the entire Gold arena will shut down once this US supply line is cut off. They are
not so dumb as to fill their paper with physical when the rest of the world is force settling in cash. They will not " blanket" cover all loans. Just the important ones vital to oil supply. This is the real leverage that will bring on Oil for Euros! Get the picture!

Elwood, I agree that everyone is still trying to milk whatever gold out of the system they can get. This was a driving factor for allowing the US to "save some face" by forcing oil prices down some. Onec the gold flow stops (and it may be right now) oil ril rise fast and furious!

SteveH's repost of my "weeks" timeline is on track. Untapped official gold is running out and unless someone rolls over a huge paper commitment the game begins "real soon". We watch!

Trail Guide




Simply Me (5/9/2000; 5:30:37MT - usagold.com msg#: 30156)
Town Crier's Exercise
I wish I could put little emoticons in these posts! Thanks, TC. I see I've been confused about a very fundamental point. I thought a put was the sell side of a futures contract! I'm still fuzzy about the difference, so I'll go back and re-read your posts this morning.
Glad I stayed up late (early) enough to see your answer.
G'nite all!
Pleasant day,
simply me

Henri (5/9/2000; 5:17:39MT - usagold.com msg#: 30155)
Why does BIS mark the dollar price of gold at $208
The gold payments defaulted on in 1970's were valued at $42/troy. That gold is still "owed" them. $208/troy is the price they feel gold should be available to them. Hmmm..$208 +$42=$250/troy...the bottom of the dollar price discovery structure. Coincidence?

If it were marked higher than market, it would undermine the credibility of BIS. Long a pariah of the western accounting (imagine...thinking debt accounts should actually have offsetting assets to "balance" them)the BIS has often taken criticism for its gold backed "agenda".

Since its inception, BIS has now accumulated enough assets in its own account to settle the outstanding 75% gold value of its shareholders. Will it? Not likely. Will it now,at this point in time ever need to make a call out for the remaining 75% to validate its credibility. Not likely. It now seems to be making its move to assert itself. Coincidence?

Canuck (5/9/2000; 5:09:57MT - usagold.com msg#: 30154)
@ T.C.
Thanks for noticing my post on Sunday (30098); I am beginning to see the picture.


Thanks to you and other 'guns' I hope to escape the wrath of the dollar through accumulation of 'VALUE' assets.

My Canadian 'loonie' has dropped a couple cents on the US$ over the last week or so. Gold has therefore shot up in terms of CDN$. It is amazing to see the currency/gold relationship when it's happening in your backyard.

I hope our friends (US & CDN) are ready for the currency war
when it arrives on our respective doorsteps. It is easy for the 'market mongers' to slander gold when the dollar is on it's way up. What will they do when the dollar is in the way down?

Canuck

Gold ....Currency hedge #1

Henri (5/9/2000; 4:46:07MT - usagold.com msg#: 30153)
Footsteps of paper giants /TC Exercise/Simply Me
An inexhaustable supply of currency but no direct access to gold. Hmmm.

OK the the futures markets are the obvious starting place, but you cannot sell gold that you can't deliver for very long before you lose your credibility and your accounts are closed. For the kind of volume in futures needed to pull off the depression of gold long term you need one thing. Credibility.

So first you have to have unlimited credit for the commodity you seek to sell and what better way to do that then to own a bullion bank. There on deposit you have "OPG's" (Other peoples gold) which you pay a fee to lease or borrow at the going rate (you don't really care what that rate is as long as it is in currency and not in gold...unless of course you had no intention of ever buying back the gold you leased even at lower prices...then you wouldn't care if the lease payments were in gold or not as long as they were not due "up front"). Then you have to buy the international media and spread anti-gold propaganda throughout the world. Create the illusion that there is SO much gold sloshing around out there that its price (in currency) surely should not be as high as it is today. Then you must corner the supply of new gold so that it can be made "larger than life". That is get all the future production of all mines and sell it now before the price falls further. The miners jump on your ship because you are saving them.

Then when you have credibility and the press in your pocket, you drive down the price of the futures in the way that TC has pointed out. By selling futures contracts which drive the physical price of gold down. Down down down, as the game advances you extend your leases or borrowing by continuing to pay leasing fees and keeping your "letters of credit" current. Buy back the sold positions at profit roll the profit into leasing or borrowing more gold to build the illusion of an avalaching slide in gold price (more and more gold being sold). Get the press to point out how overvalued gold is in todays world and panic big holders of gold who's eyes are focused on "investments" that create more currency in the form of "interest". They see that their gold just sits there doing nothing and falling in price toward where they "purchased" it plus holding (security) "costs" and they are convinced that they should take "profits" before it falls further in price. The profits they are told, can be used to fund more "growing investments". The foolish begin to unload real gold which you have to buy to cover the leases that won't renew.

Soon you need really big leases to maintain the reality that gold currency price is falling. You and the big players that are lending know that you are playing right into their hands. Now you know that there is not enough gold in the world to ever pay back all the leases you have and so you become even more aggressive in trying to shake loose some more gold.

One way to reduce your carrying costs in selling futures is to buy calls that "hedge" your position. This reduces your callable margin and limits your exposure to any sudden upside moves in the price of gold. So the "footsteps of the paper giants are written in the purchase of calls. You convince the miners that they can make more currency by writing calls (which you buy from them) using the proceeds to buy puts. This helps them because they see that with falling prices they get not only the "high" price you paid for future production, but also a bonus profit as the POG falls when they cash in their puts for more currency than they paid for them. The calls always expire worthless so its free money they use to buy the puts. Why not sell two calls for every put you buy and make even more money? The miers think wow who are the idiots who think the price of gold is going to go up? They tell their friends how they are making more money playing the bullion bankers game than they are mining gold. Their friends start playing the game to. What fun lots of calls on the market the price gets really cheap to buy them.

Ught Oh, the guys you are into for all the leased/borrowed gold start to get antsy about ever getting their gold back. They are using your currency now to buy the cheaper gold futures contracts and Argh!!! taking delivery!

So you paid them to let you borrow their gold they lent it to you for so long that they can now buy it with your money at the cheaper price. They have their gold back at your expense ...AND THEY STILL THINK THAT YOU OWE THEM THE GOLD!
HOW RUDE! It'll be a cold day in hell before they see any gold returned from you. Besdies there is not enough gold in the world to cover their lendings and they should have known that. It will be easy to convince any court of contract law that the day they bought their own gold back, they were obviously aware that there was not enough gold out there to cover the borrowings. They must have "colluded" to pinch the borrower. knowing full well that he could not repay. Then they raise the lease rates. Why this is extortion. The borrowers should be compensated handsomely for having been so used. Those gnomes should pay us IN GOLD for having allowed them to profit so greatly in our currency.

:-)


TownCrier (5/9/2000; 4:03:30MT - usagold.com msg#: 30152)
An important((?) you decide) repost...because Friday evening was probably a poor time period to submit this
(Not exactly prime-time for traffic)
It seems to us here in The Tower that someone might surely want to take this commentary for a test drive, and kick the tires a time or two...especially in light of the various insightful and helpful commentaries offered over the weekend by the likes of FOA/Trail Guide, ORO, Canuck, among others. (Splendid on confirming the breakthrough in March, ORO. Thanks for your reply.)

Is anyone else gaining the sense that no single internationally identifiable entity will step such that they may be perceived as THE ONE that pulled the trigger on what looks to be an inevitable event? There seems to be very little reason to buy time for any productive purpse now that we have reached this point in time. Such things are best left to "nameless and blameless" market forces in due time.

With that, Friday's evening comments now follow...(along with this belated thanks to Sir Trail Guide/FOA for introducing us all a great many weeks ago to the suitable term "free gold", as I have made liberal use of it in this post).

TownCrier (5/5/2000; 21:00:38MT - usagold.com msg#: 30028)
Picking up on two brief comments we made yesterday from The Tower
From <<TownCrier (05/04/00; 16:49:42MT - usagold.com msg#: 29942)>>:
<<Germany's FinMin Eichel remarked: "The debate about the euro, is hysterical, not rational. In Europe, far too many people are commenting on the single currency, sometimes without understanding what they are talking about. I have one thing to say: All fundamental economic data in Europe is better today than 16 months ago when the single currency was introduced. We must go on the offensive to make this clear."
+
As we suggested days ago, don't look for forex intervention from the ECB, unless it is their only "politically correct" avenue to rid themselves delicately of unwanted foreign currency assets. To this Crier's eyes, when you have gold reserves being regularly marked to market in a "free gold" climate, there is simply no reason to maintain foreign currency assets beyond what is convenient for the purpose of short-term international settlements with those specific nations.>>

Additional note that I should have stated at the time of this original post: Evidence points to these days as the infancy of a "free gold" climate, with obvious incentives in place for the ECB (among others) to see it through. Gold will truly be set free to shine when it breaks the shackles of the derivatives markets and when the metal is also made immune to the effects of artificial supply inflation at the hands of the banking sector's lending operations. Such lending seemingly puts the "funds" into two hands at once (the owner of the original deposit who is earning interest on the deal, and the borrower). This "supply inflation" depresses the value of gold in the same fundamental manner as lending also inflates the dollar (or other currency) and erodes its value over time. Evidence of the turnaround and birth of "free gold", you ask? The Washington agreement, and the IMF gold revaluations.

<<And if the ECB wanted another way to send a "politically correct" message about the nature of assets, the very next news release on the status of the Swiss gold operation would reveal that the ENTIRE 120 tonne quota allowed for this year had already been succesfully allocated through the BIS during this first week of May. If you can conceive of how this all works, there truly seems little reason to piecemeal it...except for maintaining the illusion.>>

Additional note: as stated before, the UK auctions were surely in reaction to stress in the bullion banking business...an imminent run on the banks, in all likelihood, by the owners of the multiple pockets holding claim on the same gold (as described above). Why do I suggest the Swiss gold could be "sold" (allocated) in one fell swoop? Because all euroland gold "sales" within the Washinton Agreement are very likely a disguise for "lender of last resort" operations to mollify those many nervous "pockets" who are sharing the same small gold on account. Essentially, that entire quantity of gold is already "spoken for." Alternatively, this WA supply of gold out of euroland could also in part be seen as a regulating operation...similar to when the treasury buys back in its bonds prior to maturity.
+
It is perhaps like this, in either case. The reason the same small gold is in multiple pockets is because it has been put on deposit for interest, and lent out to borrowers for the purpose of earning interest. As in normal banking operations with cash, how many times can you imagine the same gold to be put on deposit by its new owner, only to be lent out again, and again? These gold loans are the assets of the bullion banks. Back to that in a moment.
+
Under current market forces, gold today is perceived to have a low value, near 300 in either euros or dollars. Let there be no doubt that gold is held by strong hands not for its "value" today, but for its value "tomorrow". I hope by now all of you have come up to speed on the Fed's operations to add reserves to the banking system through such things as repurchase agreements or coupon passes. Through repurchase agreements, the Fed provides a loan of funds to the underlings of the banking system against the collateral of these banks' assets. Through coupon passes, the Fed provides permanent funds through the outright purchase of these banks' assets (i.e., U.S. Treasuries.) But do not worry overmuch for the "poor Fed" who "sold" (allocated) its "precious funds" (i.e. dollars) to the banking system in exchange for these assets. As these assets (interest bearing loans, bonds, etc.) reach maturity, the Fed will thereby regain these "precious funds" that it originally parted company with, plus the "extra value" of interest. And why is the Fed adding these reserves? Partly because those with funds on deposit are pulling them out.

Must I now complete the parallel to the Fed's operations in terms of the Euroland gold allocations via the Washington Agreement? I hope it is already growing clear. Wouldn't you agree that it is rather fatuous to think that the euroland central banks would be so dull-witted as to part with gold in exchange for nothing more than the dollar-equivalent as the market currently perceives? Would you be more comfortable thinking that the central banks are getting in return for this gold...a simple cash payment, or ownership of the loan asset that will theoretically upon maturity repay the gold, plus interest? Again, strong hands hold gold not for today's value, but for tomorrow's value.

Please think back to the Dutch sales. Regardless of the market price at the time or the tonnage allocated through the Bank for International Settlements, the book value reported by the ECB's weekly balance sheet was always based upon the ECB's official gold valuation for that quarter. When you are holding an asset that is a gold-denominated loan, how else would you show it's value on your books?

Quick review: Current perceptions of gold's value is low. "Free gold" is in its infancy. Strong hands hold gold for "tomorrow". Can you now imagine the central banks who are supporting the tenets of "free gold" would keep themselves in a position for the return of their gold assets at some point "tomorrow"? As the many nervous "pockets" sharing the same small gold account sees it, the central banks will have much better luck dictating the eventual repayment of these gold loans in time than they would as "lowly bullion bank depositors" at the mercy of the bullion banks' future viability as "supply deflation" sets in from the eventual phaseout of gold lending. Time is on the Central Banks side, not to mention the ability to tap into national legislative power to apply heavy mineral taxes to gold mines. And ultimately, should a number of the gold loan assets now held by the CB's in place of their physical gold assets actuall fall into default, just imagine what an enhancement that is to the currency value of "free gold". Where these gold-denominated assets may be forced to settle in cash, you can imagine what a huge return will be realized at that time, compared to the rather meagre cash value they "appear" to be getting with their "sales" today. Truly, if all gold doesn't return, it would nonetheless be as though they sold at the top. And better still for the future of "free gold", this same gold would then remain in private hands.

And lastly, here is a brief look again a part from the earlier discussion of gold market pricing where futures are involved:
<<TownCrier (05/04/00; 23:09:31MT - usagold.com msg#: 29967)>>:
<<TownCrier's bottom line: the point of all of this is simply that looking to the prices of contracts on COMEX futures markets will not likely give the adequate warning that the physical market is about to break away from demand [which is] greatly exceeding supply at these prices. It is a reasonable assumption that for every ounce of gold you have in your possession, there is someone else who provided the gold via deposit in an interest bearing account. Picture, if you will, a run on the bullion banks.
*snap* it's all over.
Enough said.>>
Indeed. Enough said.
------------------------------
Should events bear out this scenario, what would be the personal reactions/emotions at that time of the many individual thinkers who gather here; and further, what would you each expect to be the socio-political fallout on both the domestic and international scene?

Topaz (5/9/2000; 3:44:29MT - usagold.com msg#: 30151)
Trail Guide- Elwood.

T.G:
Message received ---- Understanding some way off, but I'm getting there.
Thank you once again.

Elwood:
The glaring difference ($US / pretty well anything else) is that others are NOT the accepted form of reserve currency for the Planet.
Not only is the Dollar held in high esteem in its country of origin but all over the world. (some would say higher)
Ok- you may say it's only perception but that same perception is backed with a lot of clout. Perhaps you can identify an historical example where such a strongly "perceived" currency did the proverbial "Swan-Dive" as is predicted by the Good souls here!

(Just reading the above- sounds a bit abrasive. I assure you Sir, it's not meant to…….. Simply curious!!)


TownCrier (5/9/2000; 3:15:25MT - usagold.com msg#: 30150)
Simply Me, thanks for the follow up to last week's challenge
We had asked the forum how one might go about depressing the price of gold if they had ample quantities of currency but absolutely no direct or indirect access to gold.

Let me try to "think out loud" regarding the strategy you proposed.

The way I see it, buying a large quantity of June put options at a $240 strike price would have an immediate effect of causing upward pressure the market price for these same puts.

To be sure that everyone is clear on the ins and outs of these put options being discussed, the payment of a premium to buy one such put gives the buyer the right, but not the obligation, to sell an underlying futures contract at $240.

Because these puts do not directly involve the buying or selling of futures contracts, the only way the contract price of gold will move is then if the participants in the contract market (futures, not options) are inclined to think that these put buyers know something that nobody else knows, and are thereby inspired to sell futures contracts themselves. I am skeptical that such a position would foster a "reasonable expectation" that the price of gold was truly heading lower, as you've suggested with your hamburger example. There is certainly a chance that the futures players would look at this large put option position and simply scratch their heads at the curiosity, but would not respond with futures sales.

Given your quantity of cash, wouldn't it be more of a "sure thing" to affect the gold price by aggressively taking the sell side (short) of the June futures contracts? After all, the quoted price of June gold is based upon the market forces of supply and demand among the buyers and sellers of these contracts. With your supply of cash, you can easily afford to offer two contracts to sell for every one COMEX market offer to buy. The price would surely fall from your own effort.

Having no access to gold (as stated in our premise), your requirement would be to close out these positions through the purchase of offsetting contracts at any point prior to the arrival of the June contract delivery window on the last day of May. You might be inclined to agree that since you have effectively taken the longs into losing positions through lower prices, the market sentiment would be low enough to make it relatively easy for you to buy the offsetting contracts without much fear of jacking the price back to your starting levels.

And further, at this point you agressively begin to sell August into the ground. As I suggested last week, because August would then take over as the most active month, any arbitrage activity between the expiring June month and August would be weighted toward the lower August prices.

Such determined action by "big money" shorts could ensure that the COMEX prices continue to fall, and futher, that their short positions would actually be generating currency revenue for them (assuming no broker fees).

Knowing that these prices are an abomination, and that the futures price can be driven down while giving no warning signs of concurrent physical market exhaustion as overseas physical demand for the real metal continues to rise with their strengthening economies and better prices, we here in The Tower continue to aggressively acquire real gold with our available private funds. There may simply be no advanced warning when the significant break is about to occur. And even as real gold comes under explosive demand due to foreseeable market conditions, still, there is no limit to the number of futures contracts that could continue to be sold into oblivion faster than counterparties are willing to take long postions in these dubious or discredited abundant paper contracts in the face of scarce metal supply reaching the real market and rising real gold prices.

As to WHY various entities may be inspired to engage in such activities, you have certainly identied two of several good reasons or incentives.

Bottom line: continue to take advantage of access to this world-class wealth asset at these fire-sale prices. All things considered, the slow burn could go "nuclear" at any unforseeable moment in time. Such is the nature of gold in a world of hyper-responsive cybernetic mega-currencies.

Simply Me (5/9/2000; 1:44:00MT - usagold.com msg#: 30149)
TC...Unfinished sentence
Sorry. That "Indeed, if hamburger is going down to $1/lb." was a piece of a tangential thought that I meant to delete.
From any point in this discussion, it's so easy to fly off in a hundred directions!
Thanks for your sharing your knowledge. Your insights and interpretations have, more than once, helped lead me to the light when I got stuck in one of Oro's cavernous thoughts or in Greenspan's twists and turns.

simply me

Simply Me (5/9/2000; 1:28:42MT - usagold.com msg#: 30148)
Town Crier's Exercise; and Java Man
To Town Crier----
RE: TC's Exercise.
I can see where buying the June "puts" at approx. $240 is like saying, "There'll be a big bargain basement sale on gold in June."...thereby putting downward pressure on today's physical gold prices. Who would buy hamburger today at $3/lb when they have a reasonable expectation that it will go on sale for $1/lb next week. Indeed, if hamburger is going down to $1/lb. But since one must pay for the "puts", one loses one's money when it's rollover time, right?...and spend even more money when buying those August "puts".

There're only two reasons to throw that money away. One reason might be that you are buying bargain basement priced
physical gold with both hands while you've got the price depressed because you know that once you take the pressure
off, you will not only recoup your losses but make a huge profit.

The second reason might be that your money has an inverse value to the price of gold. The cheaper the gold, the more
valuable your money is. Therefore throwing a portion of it away to keep the price of gold down, makes the money you
have left that much more valuable.

Thanks for your time and thought.

To Java Man----
From JavaMan (05/06/00; 21:54:02MT - usagold.com msg#: 30073)
"B.F. Skinner discovered that reinforcement of a behavior "randomly" was a much more powerful form of behavioral
conditioning and, consequently, much more difficult to extinguish. So we come full circle to gambling which is random reinforcement at its finest and I give you the stock market which, today, is gambling at its finest.

This gives a whole new insight into the "buy on the dip" mentality. Based on the information above, I wouldn't be
surprised to see people buying into this market all the way to the bottom...looking, hoping, knowing, there is another
sugar pellet on the next press of the lever."

From simply me: So you see it, too! Skinner's Intermittant Reinforcement produces a learned behavior that will
keep repeating itself LONG after the reinforcement is gone. Yep, I think today's stock buyers are thoroughly trained.
It will be interesting to see how long the training lasts. What truly sets man apart from the beasts?

Do you also see the "Monkey Trap" in today's stock market? In the Monkey Trap, some tastey fruit is put in a hole in
a tree. The hole is big enough for the monkey to put his empty hand in, but not to pull his closed fist full of fruit
out. The monkey who succumbs to the temptation will not let go of the fruit, even when it can clearly see the hunter
coming up to grab it. An apt description of buy-and-hold investors who've been watching what they think of as a
savings account grow for years and won't get out even when they see the Bear market coming to wipe it out. There are
buy-and-hold investment counselors who think that all a Bear market means is that it'll take a little longer for the
DOW to hit 20000! So many people think they cannot loose if they hold their stocks long enough.

Now I ask myself: Now that I've got this shiny gold stuff in my hand, will I be smart enough to know when it's time
to let go of some? Guess I'm just as greedy as the next monkey.

simply me



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