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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 2/9/2001
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Gandalf the White (2/9/2001; 22:59:31MT - usagold.com msg#: 47923)
Still learning !
<;-)

Gandalf the White (2/9/2001; 22:58:35MT - usagold.com msg#: 47922)
Heavy on the GOLD SWAPS !
http://www.gold.org/Gra/Pr/CIORStats.htm
WORLD GOLD COUNCIL
Changes in official reserves statistics (Feb)
LONDON: 6 February 2001 - Each month the World Gold Council attempts to explain movements in published data on gold reserve statistics. The table is based primarily on data published by the International Monetary Fund in International Financial Statistics but is at times supplemented by additional or more timely information that is available. The latest few months are shown below; a longer table showing changes since July 1999, and including notes on individual countries, is available for download in Microsoft Excel format.
----
Changes in IFS over the last three months (tonnes)
Month/Alltonnes)/Sales/Purch/ Swaps//////////Trading
----------
Dec.**-8.9***Switzerland(1)-15**Russia+5.7**Zimbabwe+0.5
-----
Nov.**-38.1**Switzerland-17.5**Brazil-3.6
***********UK(1)-25.1*******Russia+4.4
**************************S.Africa+1.6
**************************Venezuela-0.6**Mongolia+1.5
************************************Zimbabwe+1.4
-----
Oct.**-2.2***Switzerland-17.5**Brazil+1.9*****Mongolia+0.5
**************************Russia+5.9*****Zimbabwe+1.2
**************************S.Africa+2.8***Philip's+4.3
**************************Venezuela-0.9
+++++++++++
December Notes

Note (1) Switzerland has a pre-announced programme to sell part of it's gold holdings. The Swiss National Bank is one of the 15 European central banks that signed the Washington Agreement on Gold limiting their collective sales to 400 tonnes a year over the five years from September 1999.

General Notes

There are a number of reasons why the reported levels of a country's gold reserves can change. Some of the more common are as follows:

Outright sale or purchase of gold with the intention of decreasing/adding to gold reserves. Note that when gold has been sold (or purchased) on a forward basis the transaction will not show up in reserves figures until delivery occurs.
A change in the amount of gold out on swap. Here countries' accounting treatment varies. Some include gold out on swap in which case a change in swaps makes no difference to the reported level. Some do not in which case the reported level of reserves varies with the extent of gold swaps. The Special Data Dissemination Standard (SDSS) on reserves data established under the auspices of the IMF and BIS specifies that gold out on swap should be included; countries who currently do not follow this practice can be expected to change when they adopt the Standard.
Borrowing and loans. South Africa announced in June 2000 that it had arranged to borrow $500m worth of gold to boost its reserves. When this loan was drawn down (mainly between July and August) the gold was added to South Africa's reserves. On repayment it will be deducted. Note that when a gold-holder lends gold there is no change to the country's reserves statistics since the country still owns the gold.
Central banks of some gold producing countries act as marketing channels for newly mined gold. Some will include such gold in their formal reserves. In that case reserves will fluctuate as gold is acquired and, later, sold. A number of central banks in these countries have a policy of gradually increasing their gold reserves. Some will also engage in swaps. It is impossible to distinguish which movements are due to which reason and changes in reserves held by these central banks are all allocated to the "trading" column in this table.
Some changes are due to accounting and other adjustments. Periodic fluctuations in the amount of gold held by the USA, for example, are due to arrangements for purchasing and then supplying gold to the US mint for the manufacture of bullion coins. (Gold from the reserve is normally used for commemorative coins.)
Gold interest. Central banks who lend gold to the market sometimes receive the interest due in gold. In general such increases are too small to be separately identified in this table which attempts to allocate only changes of one tonne or more.
In many cases the reason for the movement in a country's gold reserves is known or suspected. But in others it is not. Allocations in this table will at times be tentative and the final column will include a number of instances where the reason for the change is not known. The World Gold Council would welcome any information that enables us to improve the accuracy of the table. Such comments should be sent to matthew.turner@wgclon.gold.org
====
<;-) I sure hope that this is READABLE !





Gandalf the White (2/9/2001; 22:51:36MT - usagold.com msg#: 47921)
Heavy on the GOLD SWAPS !
http://www.gold.org/Gra/Pr/CIORStats.htm
WORLD GOLD COUNCIL
Changes in official reserves statistics (Feb)
LONDON: 6 February 2001 - Each month the World Gold Council attempts to explain movements in published data on gold reserve statistics. The table is based primarily on data published by the International Monetary Fund in International Financial Statistics but is at times supplemented by additional or more timely information that is available. The latest few months are shown below; a longer table showing changes since July 1999, and including notes on individual countries, is available for download in Microsoft Excel format.
----
Changes in IFS over the last three months (tonnes)
Month/Alltonnes)/Sales/Purch/ Swaps//////////Trading
----------
Dec.**-8.9***Switzerland(1)-15**Russia+5.7**Zimbabwe+0.5
-----
Nov.**-38.1**Switzerland-17.5**Brazil-3.6
*************UK(1)-25.1********Russia+4.4
*******************************S.Africa+1.6
*******************************Venezuela-0.6**Mongolia+1.5
**********************************************Zimbabwe+1.4
-----
Oct.**-2.2***Switzerland-17.5**Brazil+1.9*****Mongolia+0.5
*******************************Russia+5.9*****Zimbabwe+1.2
*******************************S.Africa+2.8***Philip's+4.3
*******************************Venezuela-0.9
+++++++++++
December Notes

Note (1) Switzerland has a pre-announced programme to sell part of it's gold holdings. The Swiss National Bank is one of the 15 European central banks that signed the Washington Agreement on Gold limiting their collective sales to 400 tonnes a year over the five years from September 1999.

General Notes

There are a number of reasons why the reported levels of a country's gold reserves can change. Some of the more common are as follows:

Outright sale or purchase of gold with the intention of decreasing/adding to gold reserves. Note that when gold has been sold (or purchased) on a forward basis the transaction will not show up in reserves figures until delivery occurs.
A change in the amount of gold out on swap. Here countries' accounting treatment varies. Some include gold out on swap in which case a change in swaps makes no difference to the reported level. Some do not in which case the reported level of reserves varies with the extent of gold swaps. The Special Data Dissemination Standard (SDSS) on reserves data established under the auspices of the IMF and BIS specifies that gold out on swap should be included; countries who currently do not follow this practice can be expected to change when they adopt the Standard.
Borrowing and loans. South Africa announced in June 2000 that it had arranged to borrow $500m worth of gold to boost its reserves. When this loan was drawn down (mainly between July and August) the gold was added to South Africa's reserves. On repayment it will be deducted. Note that when a gold-holder lends gold there is no change to the country's reserves statistics since the country still owns the gold.
Central banks of some gold producing countries act as marketing channels for newly mined gold. Some will include such gold in their formal reserves. In that case reserves will fluctuate as gold is acquired and, later, sold. A number of central banks in these countries have a policy of gradually increasing their gold reserves. Some will also engage in swaps. It is impossible to distinguish which movements are due to which reason and changes in reserves held by these central banks are all allocated to the "trading" column in this table.
Some changes are due to accounting and other adjustments. Periodic fluctuations in the amount of gold held by the USA, for example, are due to arrangements for purchasing and then supplying gold to the US mint for the manufacture of bullion coins. (Gold from the reserve is normally used for commemorative coins.)
Gold interest. Central banks who lend gold to the market sometimes receive the interest due in gold. In general such increases are too small to be separately identified in this table which attempts to allocate only changes of one tonne or more.
In many cases the reason for the movement in a country's gold reserves is known or suspected. But in others it is not. Allocations in this table will at times be tentative and the final column will include a number of instances where the reason for the change is not known. The World Gold Council would welcome any information that enables us to improve the accuracy of the table. Such comments should be sent to matthew.turner@wgclon.gold.org
====
<;-) I sure hope that this is READABLE !





Curious (2/9/2001; 22:07:30MT - usagold.com msg#: 47920)
Randy's Hall of Fame Nomination of ORO's Post # 47834
Gosh my very first post resulted in a Hall of Fame nomination by Randy@The Tower in message 47889 (grin). The nomination was for ORO's response to my questions in post # 47821 and I hereby second the nomination of ORO's response to the Hall of Fame. There were several excellent responses and I thank you all.

Although the responses were on topic, I don't recall that anyone specifically discussed the probabilities of major discoveries of natural gas (and oil) in Mexico and South America which would confirm or rebut the premise that oil production will peak and start declining between 2005 and 2010. This future production or lack of production could substantially impact natural gas supplies and prices in California and the United States and the general economic outlook, value of the dollar, price of gold, unemployment and numerous other issues. Are there any petroleum geologists on this forum who are familiar with the situation in Mexico or persons who can supply links to exploration efforts in Mexico? It would not be a good idea to construct numerous electric generating plants using natural gas as fuel and then have the cost of natural gas skyrocket due to a lack of supply. The prices would rise all over the country and not only in California.


Curious (2/9/2001; 22:06:35MT - usagold.com msg#: 47919)
Randy's Hall of Fame Nomination of ORO's Post # 47834
Gosh my very first post resulted in a Hall of Fame nomination by Randy@The Tower in message 47889 (grin). The nomination was for ORO's response to my questions in post # 47821 and I hereby second the nomination of ORO's response to the Hall of Fame. There were several excellent responses and I thank you all.

Although the responses were on topic, I don't recall that anyone specifically discussed the probabilities of major discoveries of natural gas (and oil) in Mexico and South America which would confirm or rebut the premise that oil production will peak and start declining between 2005 and 2010. This future production or lack of production could substantially impact natural gas supplies and prices in California and the United States and the general economic outlook, value of the dollar, price of gold, unemployment and numerous other issues. Are there any petroleum geologists on this forum who are familiar with the situation in Mexico or persons who can supply links to exploration efforts in Mexico? It would not be a good idea to construct numerous electric generating plants using natural gas as fuel and then have the cost of natural gas skyrocket due to a lack of supply. The prices would rise all over the country and not only in California.


Zenidea (2/9/2001; 21:09:18MT - usagold.com msg#: 47918)
Oro :) 47849
The booty sits quietly in a bank box in an underground vault in HK along with the loot from my other little treasure expeditions as yet unvalued and unweighed, but the bracelet came back. The entirety of the cash story is one I cant exactly "declare" right now ; ( to mischievious ) and still looking for an alibi, hehe . In short to answer your question Oro, just run of the mill. :)








beesting (02/09/01; 20:36:43MT - usagold.com msg#: 47917)
Correction on last post.
Should be Journeyman # 47914!

Again RIGHT ON BROTHER!!!!beesting.

beesting (02/09/01; 20:33:37MT - usagold.com msg#: 47916)
Sir Journeyman # 47911
THANX
That one deserves at least 3 more postings!
RIGHT ON BROTHER!!!....beesting.

beesting (02/09/01; 20:23:03MT - usagold.com msg#: 47915)
The day The Rothschilds got burned by Andrew Jackson.
http://www.treas.gov/opc/opc0034.html#quest15
Question and answer from U.S. Dept of the Treasury above link:


I have a $1,000 currency note from the Bank
of the United States. It is dated December 15,
1840 and has the serial number "8894." Can
you tell me what it is worth now and where
I can cash it in?


Answer:
This currency note from the Bank of the United States is something that we have seen in
the past. Our office receives many inquiries concerning the authenticity of these notes.

It is important to note, first, that the Treasury Department did not issue notes intended
for circulation as currency until 1862. This being the case, these notes are not obligations of the United States Government. You may be interested in a brief history of the Bank of the United States. Our research
has shown that the "first" Bank of the United States was founded in 1791 and existed
until 1811; the "second" bank operated from 1816-1836. The United States Government
held 20 percent of the Bank stock, named five of the 25 trustees, and granted the charter to the Bank.

In 1836, however, President Andrew Jackson vetoed a bill to renew the Bank's charter,
withdrew United States Treasury funds from the Bank, and ceased all United States
Government involvement in the Bank's operations. In 1837, the trustees of the Bank
secured a charter from the State of Pennsylvania. Then, they paid the United States
Government for its outstanding interest and swapped old stock for new stock on a
one-to-one share basis. The Bank's name changed to the Bank of the United States of
Pennsylvania.

After 1837, the history of the Bank was very rocky. On February 4, 1841, the Bank
closed its doors. This action left many creditors, including the London Merchant Bank,
Baring Brothers, and the Rothschild family, with over $25 million in claims. They were lucky to receive one-third value for their claims.

Because the Treasury Department did not issue these notes, we have no way of verifying
their authenticity or figuring out their value. It is likely, though, that the is part of a series
of antiqued reproductions issued in various denominations and forms for use in
advertising campaigns. The most popular of these bear the serial number 8894. These
notes are so widespread that they were the subject of an August 5, 1970, article in COIN WORLD.



Journeyman (02/09/01; 20:12:12MT - usagold.com msg#: 47914)
Thanx!! @SHIFTY 02/09/01; 19:43:48MT - usagold.com msg#: 47911

Hi Sancho!

You suggested:

"I need to pay slighly more providing it is wisely allocated." -Sancho

Well, first in that message, I merely quoted former FED governor Wayne Angell. The only thing I added was the "title" of the message.

And as far as "wisely allocated," you can be almost 100% sure whatever you give to government will NOT be wisely allocated, at least not by your standards.

The simple reason this is so is that government isn't disciplined by any significant market forces, and therefore is virtually uncontrolled by it's customer-citizens. Thus the answer to "Why does the government do that?" is nearly always "Because they can," not because it is "right," moral, logical, efficient, etc.

If you want your money allocated wisely, the last place you want to send it is to a government.

As a result of substituting _political_ processes for direct,
economic control (including passive customer/citizen "boycott")
-- and other related factors -- government solutions to anything
in general: 1. are invariably a compromise -- with moneyed
interests getting things shaded heavily in their direction, 2.
government solutions, in order to be "just" and conform to "equal
protection under the law," must be monolithic, one-size-fits-all
in nature (even towns in New Jersey without any elevators are
required by law to have an elevator inspector for example), 3.
Even though such compromises may be poor and mono-lithic
solutions, it's difficult to get them implemented for many
reasons, bureaucratic lethargy and organized opposition (often
due to the monolithic nature of the solutions) being main ones,
4. government solutions are inherently inflexible -- once
implemented in law, they are almost impossible to update, change
or eliminate even though new information, research and/or
circumstances suggest they should be, and 5. Government solutions
regularly supplant and displace NG (Non-Government) solutions
which are less likely to be compromises, are easier to implement,
are usually multi-lithic, and are flexible in response to
changing information, research or circumstances.

And because unlike secular organizations, governments kill wholesale - - - 200 million men, women and children in the 20th century alone - - - if you hold good will toward man, I would suggest it is your DUTY to keep as much of your money as possible out of the hands of governments.

Regards,
Journeyman


Journeyman (02/09/01; 20:06:41MT - usagold.com msg#: 47913)
Taxes & wise allocation @Sancho

Hi Sancho!

You suggested:

"I need to pay slighly more providing it is wisely allocated." -Sancho

Well, first in that message, I merely quoted former FED governor Wayne Angell. The only thing I added was the "title" of the message.

And as far as "wisely allocated," you can be almost 100% sure whatever you give to government will NOT be wisely allocated, at least not by your standards.

The simple reason this is so is that government isn't disciplined by any significant market forces, and therefore is virtually uncontrolled by it's customer-citizens. Thus the answer to "Why does the government do that?" is nearly always "Because they can," not because it is "right," moral, logical, efficient, etc.

If you want your money allocated wisely, the last place you want to send it is to a government.

As a result of substituting _political_ processes for direct,
economic control (including passive customer/citizen "boycott")
-- and other related factors -- government solutions to anything
in general: 1. are invariably a compromise -- with moneyed
interests getting things shaded heavily in their direction, 2.
government solutions, in order to be "just" and conform to "equal
protection under the law," must be monolithic, one-size-fits-all
in nature (even towns in New Jersey without any elevators are
required by law to have an elevator inspector for example), 3.
Even though such compromises may be poor and mono-lithic
solutions, it's difficult to get them implemented for many
reasons, bureaucratic lethargy and organized opposition (often
due to the monolithic nature of the solutions) being main ones,
4. government solutions are inherently inflexible -- once
implemented in law, they are almost impossible to update, change
or eliminate even though new information, research and/or
circumstances suggest they should be, and 5. Government solutions
regularly supplant and displace NG (Non-Government) solutions
which are less likely to be compromises, are easier to implement,
are usually multi-lithic, and are flexible in response to
changing information, research or circumstances.

And because unlike secular organizations, governments kill wholesale - - - 200 million men, women and children in the 20th century alone - - - if you hold good will toward man, I would suggest it is your DUTY to keep as much of your money as possible out of the hands of governments.

Regards,
Journeyman


Tree in the Forest (02/09/01; 19:45:12MT - usagold.com msg#: 47912)
Fascinating gold hypothesis from longwaves
http://csf.colorado.edu/forums/longwaves/2001/msg00282.html
From Longwaves: a very interesting gold hypothesis for those interested in TA. Could LBMA's bogus paper price discovery collapse to $188 before the bull market? Take a look at the chart. Cool!

Is gold about to collapse?
by Jayanth Rajan
09 February 2001 07:47 UTC

I have not traded gold stocks since I lost a bundle when gold collapsed in 1996. I received some promotional literature in e-mail today from Glenn Neely's Advisory Service that gold was about to collapse. That got me thinking whether gold was really about to collapse one last time before embarking on a new bull market. So, I updated my spreadsheet with the monthly gold prices and charted it. The source for London Gold prices is http://www.kitco.com.

The attached chart shows a logarithmic spiral overlaid on monthly Cash London Gold prices. I constructed the logarithmic spiral using proprietary formulae entered in a Microsoft Excel spreadsheet. My initial research into logarithmic spirals was prompted by some ideas presented in a book return by one Robert Fisher as well as the
knowledge that the log spiral is the most likely trajectory of a non-linear dynamic system in equilibrium subject to an unexpected shock. For those who are not mathematically challenged, I suggest you find an advanced book on the topic of non-linear partial differential equations. There you will find a good treatment of limit circles and non-linear dynamic systems.......

The first two long duration cycles are 102 months and 97 months respectively. The average is 99.5 months. The next cycle low can be therefore be expected between 4/30/2001 and 9/30/2001. London Gold closed today at 262.95. The target is roughly $188. That is a drop of 29% in a few months. Maybe, Neely is onto something! .......



SHIFTY (02/09/01; 19:43:48MT - usagold.com msg#: 47911)
Journeyman your request
its a long link
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B2852569ED006D2714?OpenDocument

You can also go to:

http://www.mips1.net/422567CB004DBB8F/Current?OpenView

and the first story is "Friday, 9 February 2001
Low gold price shouts for Greenspan's attention"

Hope it is helpful

$hifty


Sancho (02/09/01; 18:57:29MT - usagold.com msg#: 47910)
(No Subject)
Journeyman, re your post 47892. Admittedly, I am not on the same page in understanding as most on this forum and I learn something new alost every day. It is sort of a race between a couple hundred grand invested in metals and the hope of solvency and/or a very beneficial return from one's best efforts or in the alternative a continued slide into oblivion of one's few assets left. However, I am not sure the country needs a tax cut as you infer. It sounds great.Paying taxes is an odious task for most of us each April and other times as well but in the ensuing recession which perhaps is looming the government coffers deplete very suddenly resulting in cutbacks all over the place, which feeds on iteself and makes things worse. It is better to have the wastrels who cannot manage their money go broke and get it over with, and the rest of us keep the government humming, although they do waste a lot of what we give them. People need to learn to be responsible for their actions and inactions even if it leads to more unemployment and such. It is sort of an enforced spiritual development thing... Yes the taxes are atrocious but are still less than most industrialized countries. A society may be selfish, not for pursuing their own individual ends, but for neglecting too much their fellow man. We reallyAmi I need to pay slighly more providing it is wisely allocated. Am I wrong?

Gandalf the White (02/09/01; 18:38:32MT - usagold.com msg#: 47909)
Randy @ The Tower's Question !
Randy (@ The Tower) (02/09/01; 13:28:36MT - usagold.com msg#: 47889)
High-grading again from yesterday's forum
Guys, what is the deal here? ORO has a track record of earning regular enshrinement in the Hall of Fame, and yet, we see him met with complete silence upon posting his masterpiece "ORO (02/08/01; 22:45:10MT - usagold.com msg#: 47834)".
===
Sir Randy @ The Tower, I hereby propose that to solve this small problemo that we just put SIR ORO in the Hall of Fame as the resident and permanent Bard of the HoF !
<;-)

Randy (@ The Tower) (02/09/01; 18:30:41MT - usagold.com msg#: 47908)
JMB (msg#: 47891) Question about ORO's post
http://www.usagold.com/goldtrail/default.html
I think you will find an answer that fills your appetite within FOA's latest (#59 and 60) Gold Trail offering.

John Doe (02/09/01; 18:05:23MT - usagold.com msg#: 47907)
@ Trail Guide
I have to take issue with Mr. Parks's #3:

"(3) gold is a good diversifier since it is inversely correlated with the equity market. (Flushing money
down the toilet as the S&P goes up is also inversely correlated with the equity market, but who
would do that?); "

Gold is inversely correlated with the equity market in this manner only if the toilet were also to suddenly emit money as the S&P goes down. :O)

Randy (@ The Tower) (02/09/01; 17:04:31MT - usagold.com msg#: 47906)
Mr. Gresham, Pandagold, and Antal E. Fekete's "Whither Gold?" masterpiece
http://www.usagold.com/WhitherGold.html
I am partial to this particular version (Click URL above) ...complete with an index and highlights!

CoBra(too) (02/09/01; 16:57:39MT - usagold.com msg#: 47905)
Panda - Bear with me -
... Being an Austrian, while not one of the great economists, I have to say, Sir, please keep to your own
proven "proverbs" - your last one is actually in vain - as it is a real Mark Twain - betcha! ... teacha?! don't think
you wanna more proof ... cb2

Pandagold (02/09/01; 16:35:12MT - usagold.com msg#: 47904)
Mr Gresham

You might have warned me I was about to scroll down something akin to the length of the "Seven Pillars of Wisdom"

I offer you the following - short,and sweet

"Government is the only agency that can take a useful commodity like paper, slap some ink on it, and make it totally worthless."
Ludwig von Mises

Mr Gresham (02/09/01; 15:59:05MT - usagold.com msg#: 47903)
Trail Guide
I don't think I've ever seen the entire story put so clearly before (including the evolution of your own thinking). Thank you.

Mr Gresham (02/09/01; 15:43:41MT - usagold.com msg#: 47902)
Pandagold (taking FOA breather)
http://www.fame.org/HTM/Fekete_Anatal_Whither_Gold_AF-001-B.HTM
Chinch, chinch.

Clink, clink.

Pandagold (02/09/01; 15:43:12MT - usagold.com msg#: 47901)
Goin' home to momma?
www.scmp.com

(From South China Morning Post)

Hong Kong may relinquish currency peg in favour of yuan as economic ties strengthen
Hong Kong could relinquish its currency peg with the United States dollar and become aligned with the yuan over the long term as the economic relationship between the mainland and the SAR strengthens.

pandagold

JMB (02/09/01; 15:35:18MT - usagold.com msg#: 47900)
SALMON
Hi, please go to R POWELL (2/08/01) 15:22 msg#47813

Start there and work back. In short, STOPPERS are those who are long futures and receive a delivery notice. When Goldman Sachs does this, ie, takes delivery of Gold, some of us get excited.

Pandagold (02/09/01; 15:21:40MT - usagold.com msg#: 47899)
Bugs

When I lived in Florida some years ago, maintaining a lush green lawn, involved a battle with the sun which demanded you have an efficient sprinkler system and water supply, and a pesky little insect called a chinch bug for which fresh green lawns appeared its staple diet.

The problem with the chinch bug required the local administration to send a cart round the street with a noxious spray.

This apparently did the trick for a number of years, then, after wiping out much of the cinch bug population, green lawns started to be less of an oddity.

BUT! — there's that sneaky little word again 'but', after a while, back came a stronger breed of bug immune to the existing spray. That is nature — survival of the fittest to produce a stronger breed.

OK, I am coming to the point. They have thrown everything in the book at the goldbug, almost wiped them all out. But I detect from this forum that there is a stronger breed maturing that will form the nucleus of a hardy variety fast becoming immune to all the toxic verbal gas they are sprayed with daily.

That is nature in action, survival of the fittest.


SALMON (02/09/01; 14:56:22MT - usagold.com msg#: 47898)
@JMB or anyone else out there

Could you kindly explain the mechanics of Comex Gold Delivery Intentions.
Who are the Stoppers?


beesting (02/09/01; 14:32:04MT - usagold.com msg#: 47897)
Continuing to Show my Ignorance, for the World to see,,,Smile.
I've been following the major worlds currency exchanges for the last few months. The normal pattern is, when one(or more) currency's go down in value in relation to each other,another currency(or a few others) will go up in value.

This seems consistant with a short discussion I had about currency's and currency valuation with Sir Paul van Eeden, here at USAGOLD, a while ago.

The currency (FOREX) traders or CB's buy huge amounts of currency and exchange it into another currency, explaining why one currency goes up in value while the other currency loses value, or if everybody in the world needs dollars to buy oil the demand for dollars drives the value of the dollar up.

But today so far has been different! All the major currencies seemed to be losing value, Gold went down, or no gain, oil went down a little, and many stocks are going down. In short it appears everybody's selling everything.

Well lets try to figure this out!
If money is coming out of stocks, on a sell off, and going into currency, that would lower the value of the currency,(supply & demand) putting more currency into circulation but lowering the value....right? That may be what's happening today.

But lets look at this like Mr. Greenspan might.
He knows the stocks are way over valued, but he also knows there are too many U.S. dollars in circulation, so if stocks are sold and the proceeds go into any other form of dollars the dollar money supply will remain the same. I think Mr. Greenspan desperately wants to "Contract" or deflate the supply of dollars. How could he do this without the public knowing what's going on, as it could cause a panic sell off situation.

Mr. Greenspan, Fed Chairman, has the "Power" to retire U.S. dollar debt. That means paying off loans. If a loan is payed off, the dollar amount of that loan is taken out of circulation. Lets say the "FED" thru the Plunge Protection Team is "selling" stocks at one counter, using some of the proceeds to retire debt, and at the same time buying more U.S. Treasury debt(as Sir Randy pointed out) because "NO-ONE" in the world(no buyers) wants to hold U.S. debt at this point in time.Could this be happening? We watch together.
Only some more weird thoughts. Gold...Get You Some!

Sir Ironhead to Okasama, my Japanese English dictionary was written in 1904 and last revision was 1942.(it may be worth something to a collector), but it is so outdated the Japanese characters are all in "Kon-gi"(the old alphabet).I think it was written before the use of Kata-ga-na.Thanks for correcting me....beesting.





Mr Gresham (02/09/01; 14:30:06MT - usagold.com msg#: 47896)
TommyBear's goodbye: deflation?
http://www.bearforum.com/cgi-bin/bbs.pl?read=110545
Gold Trail Update! (There goes the afternoon's work... -- many smiles)

Thought on below: If it's deflation from money implosion (M's 1,2,3 down), but the resulting defaults weigh in favor of gold, I'm picturing an UP escalator and a DOWN, side by side (but not equal), and changing over time.

"Meanwhile, copper and lumber are testing recent lows (in the case of lumber a five year low), and gold and gold stocks are once again moving to the downside as the U.S. dollar tries to find some footing.

"What does all this spell? Well, in my opinion, it spells ENORMOUS deflationary pressures which, unfortunately, are being inflicted upon an economy having a debt bubble of historic proportions. The very last thing this economy needs is for the value of its real and financial assets to drop, while its debt levels remain the same or rise even higher. Do you know how nervous banks and other creditors are getting watching the value of their collateral decline while desperate borrowers begin to draw down on all those lines of credit and other credit facilities? As the borrowers and other debtors always win that race, the lenders and other creditors are going to be mighty angry when they are left holding the bag. Lenders better pray to God that the secondary market for their securitized loans doesn't freeze up. If it does, the financial system WILL begin a melt down as these lenders will have no choice but to squeeze the borrowers by liquidating loans. "



Gold Trail Update (02/09/01; 14:29:39MDT - Msg ID:47895)
The Gold Trail Discussion has been Updated
The Gold Trail Discussion has been updated. Click on the link to read the latest updates.

Gold Trail Update (02/09/01; 14:24:04MDT - Msg ID:47894)
The Gold Trail Discussion has been Updated
The Gold Trail Discussion has been updated. Click on the link to read the latest updates.

Journeyman (02/09/01; 14:10:36MT - usagold.com msg#: 47893)
REQUEST! @Shifty msg#: 47887

Hi Shifty!

Could you post the link, just as text if it won't fit in the URL box?

Regards & TIA,
Journeyman



Journeyman (02/09/01; 14:02:24MT - usagold.com msg#: 47892)
The company store OR who gets to spend your money? @ALL
~"We need a tax cut. Disposable income is now in negative territory. Taxes
are rising twice as fast as income. The only way that could be sustained
would be if the stock market zoomed, fueling the wealth effect." -Former
FED Governor Wayne Angell, CNBC, February 9, 2001 ~3:53PM EST

Regards, j.


JMB (02/09/01; 13:47:03MT - usagold.com msg#: 47891)
RANDY & ORO's LATEST
The 6th paragraph interests me. Can we get someone to say it a different way, or add to it, or even disagree with it?

The 6th starts with, "As a result of this,..."

I was going to wait until after the close or maybe even tomorrow. Randy, I don't do Cut 'n Paste, sorry.

Stocks, Lies, and Ticker Tape (02/09/01; 13:33:16MT - usagold.com msg#: 47890)
Is the Euro just a less worthy attempt at the 20 Fr pieces of the 19th & early 20th centuries?
There are so many different 0.1867 oz gold coins from european states of the same size. Were these valued across national lines equally? Was there an agreement between the nations to mint an equivalent gold coin for european commerce?

Why are so many of the 20 Fr pieces to be had in such great condition? Is this just from banks and individuals running away from gold? Some of these are restrikes, were they restruck for collectors or for commerce?

Randy (@ The Tower) (02/09/01; 13:28:36MT - usagold.com msg#: 47889)
High-grading again from yesterday's forum
Guys, what is the deal here? ORO has a track record of earning regular enshrinement in the Hall of Fame, and yet, we see him met with complete silence upon posting his masterpiece "ORO (02/08/01; 22:45:10MT - usagold.com msg#: 47834)". In this post we see ORO delivering his finest commentary as directly related to the topic of this particular forum. In delivering this message suitable for readers of all levels, ORO has also managed to capture in an amazingly small block of text a thorough yet tight encapsulation and recapitulation of the important insight he has tried to deliver over time along with several others of us at this forum.

I assure you, if you study this, you will better understand the nature of the pricing of the current gold market along with that portion of FOA/TrailGuide's commentary that projects the inevitable separate price performance for paper gold and for physical gold.

This, my friends, is HoF material; and upon the strength of endorsements by my helpers here in The Tower, so it shall be. Enjoy it again as if for the first time. (Excellent work, Sir ORO!)
---------------------
ORO (02/08/01; 22:45:10MT - usagold.com msg#: 47834)
Curious - Wanninski's error
Wanninski is correct in his uderstanding of gold serving as the price guide for real goods and services on the international markets. The problems he does not address are those of disproportionate international debt and interest rate allocations on the one hand, and of the paper gold inflation and deflation cycles.

Thus, while dollar debt in America is serviceable by dollars created through fresh borrowing and by Fed "printing" liquidity, dollars are available abroad only from exports to the US and countries with a net positive financial dollar cash flow (holders of US and other dollar assets) and by creation of fresh dollar credit. There is no "printer of last resort" to replace dead dollars while dollar debt is paid down.

While he is right that the gold price is indicating a strong deflationary aspect of the dollar sector in the internaitonal monetary scene, he does not see the other side of the picture, that of a paper gold inflation ongoing since the dollar went off the gold standard in the progression 1968, 1971 and 1973. Which dates mark the following events, respectively, gold pool closes, dollar debased to 42 per oz instead of 35 and the exchange window closes, and finally, the dollar goes off the gold standard altogether.

Additionally, he does not see that the paper gold inflation is the result of the operation of central banks and is similar to the dollar inflation preceding the crack up of Bretton Woods - the "floating" of the dollar when no further dollars could be issued without a drain of gold reserves that would eliminate the reserves quickly and completely. Just as the gold pool operation drawing down gold reserves was hidden for over a decade, thus the draw down of bank's (and central bank's) reserves ongoing since 1980 is not being addressed by any of Wanninski's papers.

He does not see the artificial low gold lease rate set by central bankers as causing a gold lending expansion greater than that of the 1920s, and that the gold credit bubble it created - where paper gold assets (both official and "black") have expanded to the point of setting a gold market price devoid of supply and demand effects for the metal itself. A system where dollar-gold contracts have expanded and displaced gold assets held by the global public with paper gold.

As a result of this, he does not see that the paper gold world is undergoing the initial stage of a bank run, where gold reserves are being spent quickly to supply gold for redemption of paper. This while fresh paper gold is still issued for liquidity purposes.

While real world pricing is adjusting to the gold price induced by paper gold inflation, there is a concurrent dollar deflation outside the US, which was strongly exacerbated by the initial Euro expansion displacing the normal dollar expansion, and the inability of the US consumer to absorb the product of new export production capacity in SE Asia, S America, and E Europe at the prices prevailing when the contracts to build this capacity were negotiated, financed (in dollars) and signed.

The main stumbling block to Wanninski's vision is the past paper gold inflation that is below his radar. Had central banks not caused it by supplying gold liquidity to support it, the paper gold bubble would have never occurred, and gold prices could have reflected the actual overall inflation of the dollar as it happened.

Another and FOA, join Murphy and Veneroso in warning that the paper gold banking system has become unstable, and we are all awaiting the event of the gold bank run, the day when the last available gold in reserve is tapped and remaining reserves are locked up. When the event happens, no amount of tightening by the Fed will have an effect on the dollar-gold exchange rate, and with gold prices reflecting actual supply and demand at a time when demand for gold to replace defaulted gold paper is higher and supply is limited by low grading practices in the mines, the shock to general prices will be horrendous. Not only in dollar terms.
--------------

Randy (@ The Tower) (02/09/01; 12:11:04MT - usagold.com msg#: 47888)
Fed adds permanent reserves this time
http://biz.yahoo.com/rf/010209/nat017545.html
When daily infusions of temporary money via repurchase agreements show no sign of abating, it becomes time to retool. Today the Fed acted to add $495 million in permanent reserves through the outright purchase of Treasury coupons (August 2023 - November 2028) for delivery on Monday.

Fed funds this morning were trading 1/16th under the Fed's target rate.

SHIFTY (2/9/2001; 11:24:29MT - usagold.com msg#: 47887)
from the miningweb.com
link will not work ( too long)
Low gold price shouts for Greenspan's attention

NEW YORK -- Is it my imagination, or is there a resurgence of interest in
the gold standard? I'm not talking about theories of a conspiracy to make
gold about as valuable as tin, but earnest debate about the need to
stabilize the international financial system by fixing it to a neutral
commodity.

Gold couldn't be neutral in the 1970s and 1980s because it would have
rewarded the Soviet Union and South Africa - the world's primary gold
producers at the time - for unacceptable behaviour. Both systems have since
been reformed and there is no obvious argument for continuing to rely on the
US Federal Reserve to keep the dollar honest.

The dollar's honesty is at the heart of the debate. Its fortunes are a
function of American political activity whereas gold has relative
independence. It's a commercial bridge between nations without treading on
their sovereignty. At the same time it is immune from the stupidity of
governments and imposes external discipline. For example, had the dollar
remained as good as gold, the US would not have been able to finance the
Vietnam War and shift the burden to the rest of the world.

The stop-and-go gyrations of the last few years where successive Asian
crises paralleled an unprecedented speculative bubble on Wall Street, seems
to be driving dissatisfaction with the dollar as numeraire. Also, don't
underestimate the impact of the Nobel Prize for economics awarded to
Canadian economist Robert Mundell in 1999.

When the US disconnected the dollar from gold in the late 1960s, Mundell was
a lone voice warning of the danger of floating exchange rates. He predicted,
in the face of considerable ridicule, that the world would eventually shift
back to a gold standard by 1980. He was dead wrong on that account, but his
work on gold as an independent monetary marker is remarkably prescient.

Jude Wanniski, one-time editor of the Wall Street Journal and advisor to
Ronald Reagan who coined the term "supply side economics" underscored the
importance of Mundell's work this week in a note he circulated to
subscribers to his Polyconomics site.

Mundell identifies gold as an exact price level indicator independent of the
real economy. A declining price can mean only one thing - deflation. Even
though gold is no longer a unit of official exchange, Wanniski shows that it
still retains its price function.

For example, the change in the gold price from $35 in 1950 to $350 an ounce
into the 80s matched precisely a tenfold increase in US national debt.
Similarly, homes that cost $10,000 in 1950 increased to $100,000 over the
same period. Gold's decline to less than $300 an ounce since 1996 has been
matched by rising US budget surpluses.

Wanniski warns that if the US government tolerates gold drifting below $270
an ounce, then we can expect: "a series of declines in corporate earnings,
bankruptcies, layoffs, unemployment, until the whole economy is adjusted to
the lower gold price. Unless the problem is fixed, it could drag the
administration down with it."

In other words, if Greenspan paid attention to gold, he would have realized
that excess liquidity was not the problem over the last two years, but quite
the reverse. The Fed has been supplying the markets with the wrong medicine
because its diagnostic tools are wrong. It was intent on fighting inflation
when it was already deceased.

Wanniski argues that interest rates were cut unnecessarily since the
inverted yield curve on US Treasuries was already doing its job. By cutting
rates, Greenspan caused a contraction on top of deflation which is going to
take a mighty effort to undo.

"The contraction part can be overcome by lowering short-term interest rates
or cutting marginal income-tax rates and capital-gains taxation. The
deflation part of the problem can only be rectified by having the Fed add
sufficient liquidity to cause gold to climb back over $300. Otherwise, there
will be an slow, grinding, downward adjustment of all dollar prices -- the
mirror image of the slow, grinding upward adjustment of all dollar prices
that we knew as
the inflation of the 1970s."

Wanniski says the problem can be corrected quickly by stabilizing "the
dollar value of international gold reserves (in Fort Knox) at perhaps $300
or $320."

This is not quite a return to the gold standard, which even Mundell now
thinks is unachievable in an official sense, but it would be a significant
step closer. By the way, Mundell believes gold can "become a
non-governmental unit of account and means of payment for ordinary
transactions and the Internet. It would then serve as a check on
inflationary governments."

Wanniski's wish is unlikely to ever get a serious hearing since Milton
Friedman still has such a grip on official economic thinking. He despises
gold in the modern context where governments play such a central role in the
economy and has advocated the sale of all gold reserves over five years.

"No major country would tolerate the discipline of a real, effective gold
standard," Friedman said last year in an interview with Canada's National
Post. Indeed, but that just reinforces the point that it is politically
undesirable when it may in fact be financially necessary.






megatron (2/9/2001; 11:23:44MT - usagold.com msg#: 47886)
ORO/Black Blade
The latest financials from Eldorado Gold(ELD:TSE) make for interesting reading. They are heavily indebted, long term, to NM Rothchilds, and have 100% of production now hedged. That is 5 YEARS TOTAL OUTPUT! 500,000 ounces a year. These people are either A. complete morons or B. know something we don't. It looks to me that the bank is calling the shots on this company.

Lafisrap (2/9/2001; 10:33:52MT - usagold.com msg#: 47885)
Randy: Fed repos, further explanation

It seems there may be a very important aspet to Fed repos that I did not include in my suggested short explanation. It is either not part of your suggested reading (from your Hall of Fame article explaining Fed repos), or it is included in a way that entirely escaped me. However, it does help to understand why they are called "repos."

This important point came from Horatio in msg#: 47840. We need to include it in the short explanation of what a Fed repo is, and also, perhaps, make a revision to your Hall of Fame article on repos so that the point Horatio points out is made clear. That article expends most of its text describing how fractional banking works, not really explaining what a Fed repo is.

Here is the point Horatio makes in msg#: 47840.

***
"I believe the intent of repos is to force the banks to make loans by ropo-sessing the interest bearing securities and forceing cash on the banks. The problem with this is it does nothing for demand, it lowers the cost of borrowing and encourages more debt on the consumer."
***

Since we are on the subject of Hall of Fame Articles, what of the qualifying article by ORO, message number 45600, that had so much support for the Hall of Fame? Have you rejected it, but not yet openly stated your reasons? Perhaps now would be a good time for that?

Thanks,

Lafisrap


IronHead (2/9/2001; 10:27:46MT - usagold.com msg#: 47884)
Clarification
Excuse the spelling and syntax previous post, as the [flu] grog has me in its grip. Not tipped over the keyboard with the other grog.

Old Yeller (2/9/2001; 10:18:51MT - usagold.com msg#: 47883)
ORO,#47847

ORO,in previous posts ,you have refered to Barrick as the bankers mine.What about Anglogold,where do they belong in this category?Could this recent hedging annoucement have something to do with the DeBeers takeover.

Farfel,#47841; well said,you're great when you get fired up.

Christian (2/9/2001; 10:17:38MT - usagold.com msg#: 47882)
Gold as a price level indicator
Gold IS-IS-IS a hedge against infltion. Real gold used for credit creation is selling for $3,000+ or - $250. Gold is a proven asset. Central Banks are taking $45 gold lease it out for 1% and getting $265 back. That is a $220 profit. With that profit they buy back the $265 gold for $260 and reprice it for $3000 for credit creation for a $2740 profit. Gold makes possible for the soverign individuals to empower themselves yet we are so stupid we let the central banks do it for themselves and in the process enslave us in our own stupidity. The greed machine is truly awesome in its utter ruthlessness to supress the free market price. The only free market price for gold is the one they use between themselves. Gold is an exact price indicator.The FED has a lot of room for credit creation with $3000 gold. The problem is the interest on those loans is taking all income produced. In Japan interest on money had to be reduced in order to allow enough income to allow principal payments. Same is happening here. When money is created through credit creation out of the $3000 gold there is an exchange of nothing for production not supported by production not funded. Increase in consumption must be diverted from wealth generating activities. In short, inflation caused by the rise in the money supply creates economic impoverishment. A spent out economy like what Japan has where interest rates will have to go negative in order help out its impoverished population make principal payments on its debt. What is needed is debt write down which is not good for banks balance sheet. What will happen to your favorite bankstock if it has to write down the loans on the books by 50%.

DaveC (2/9/2001; 10:12:46MT - usagold.com msg#: 47881)
More Plain Talk From A Government Official
http://dailynews.yahoo.com/h/ap/20010209/pl/bush_taxes_18.html
New Treasury Sec O'Neill is like a breath of fresh air. Stands up to the "class warfare" crowd .

There is hope.

Friday February 9 11:34 AM ET
O'Neill: Dems Don't Know Economy


WASHINGTON (AP) - Treasury Secretary Paul O'Neill said Friday that Democratic leaders who criticize President Bush (news - web sites)'s proposed tax cuts because most of the money would go to higher-income people do not understand how the economy works.

``The idea that higher-income people are going to buy another car (with their tax cut) is just lunacy,'' O'Neill said on ABC's ``Good Morning America.''

He was reacting to Democratic congressional leaders' argument that Bush's plan would give a person with a $1 million income a $46,000 tax cut, more than enough to buy a new luxury car, while a typical wage-earner would get about $227 - just enough, the Democrats say, to buy a muffler for a used car.

``The idea that somehow people are going to buy a Lexus if they have a substantial reflow of money they sent in (as taxes) just seems to me to indicate a lack of understanding of how they economy works,'' O'Neill, a former Alcoa chief executive, told CBS' ``The Early Show.''

``People who have substantial amounts of money are going to take any tax break they get and reinvest in America's economy,'' he said.

Bush's proposal, whose outlines were sent to Congress Thursday, would gradually reduce each of the five individual tax brackets, double the $500-per-child credit, eliminate the ``marriage penalty'' that requires many two-earner couples to pay more tax than if they were single, and repeal the estate and gift tax.

By most estimates, more than half the total $1.6 trillion 10-year total of the tax cut would go to those whose with the highest 5 percent of incomes, who pay most of the taxes.

O'Neill agreed with the assessment of Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) that the economy has slowed to the point of virtually no growth. The treasury secretary said the tax cut will help revitalize growth.

``From the data I see, real growth is some place in a band between -0.5 percent and plus 0.5 percent, which is to say about break-even basis, and putting the money back into the hands of people now can have a useful effect in allowing lower-income people to pay off their credit card debt and get ready for the next consumer-led expansion,'' O'Neill said.



IronHead (2/9/2001; 10:10:20MT - usagold.com msg#: 47880)
Trail Guide and Beesting - Japanese Spelling Lesson
Hello Good Sirs - A little slow to respond due to a bought with the grog; but a talk with with the looks and brains in the IronHead clan (hey, stop giggling other half, we're just crazy Westerner's) indicates that your translation Sir Beesting, applies very well to 'infalating' a ball or making bread rise, although the Kwabun has no meaning, and in Japanese K and W never go together.

Fortunately for us Westerner's, Japanese use a form of letters to describe a foreign word or concept, called Katakana, which takes our spelling and almost directly translates it, with only a change in dialect as a result.

Hyper inflation in Japanese would be pronounced something like "high pa infleh shown", or "high pa infleh", possibly "cho infleh."

Interesting that hyper-inflation has no history in traditional Japanese language, yet is of a universal nature now - and who says we don't export anything?
Hope this helps at the sushi bar tonight.

Salutations
IronHead

Pandagold (2/9/2001; 10:02:08MT - usagold.com msg#: 47879)
A cunning plan

We have a character in a Brit comedy series-"BlackAdder" called Baldrick, he is the 'side kick' to the main character played by Rowan Atkinson (Mr Bean). Whenever they were faced with a problem, or what appears hopeless situation, Baldrick would always come up with — "I have a cunning plan".

So where is this leading?

There seems to be a feeling held by some that the economic situation that is developing is something that is unexpected and is causing certain people, in particular Greenspan, great concern, and that he is unprepared for what is coming to pass.

Rest assured - there is 'a cunning plan'.

Like a highly professional chess game, all the moves have been well thought out in advance and there will be 'cunning plans' ready for which ever way the cat jumps - or to keep to the metaphor - a piece is moved.

And, to change the metaphor

As mentioned in a previous post - the choreographers are professionals of the highest calibre. Shakespeare was not only a great playwright — he was a great psychologist. He hit it right on the nose when he said "All the world's a stage ............"

But a play must have a producer and stage director - I wonder who they are?


Trail Guide (2/9/2001; 9:26:46MT - usagold.com msg#: 47878)
Comment
http://www.gold-eagle.com:3128/cgi-bin/gn/get/forum.html?date=2001%3A02%3A06%3A07%3A00%3A00

Yes BuenaFe, the fuse is indeed lit! (smile)

---------

Over on the Gold Eagle Forum an excellent piece was written by Mr. Lawrence Parks. See link above. We should read the entire article and after reading it, please consider my position. I want to reproduce parts of it here and then comment:

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

It's Not Your Daddy's Gold Anymore --- by Lawrence Parks

As recently as 30 years ago, some people bought and held gold not because they thought it was a "store of value," a concept that is intellectually defective and empirically indefensible, but because they had historical memory that gold is money. Today, as the older generation passes on, the new generation is tragically getting rid of inherited gold just as the reasons to hold it are becoming more imperative. ---------------

-------Indeed, all around the world, in Mexico, South Korea, Malaysia, the Philippines, Russia and else where paper-ticket fiat monies are collapsing. While Europe is well on its way to adopting a single currency, the Euro, and there are mutterings about a single Asian currency, there is not yet a call for gold.---------

----In contrast with the older generation who understood the role of gold, the reasons some folks hold gold today are almost all fallacious. They include mistaken notions such as:

(1) gold is a hedge against inflation. (This has not been true for the last eighteen years.);

(2) gold is a proven asset. (In fact, for the last eighteen years, the opportunity cost of investing in
gold has been staggering!);

(3) gold is a good diversifier since it is inversely correlated with the equity market. (Flushing money
down the toilet as the S&P goes up is also inversely correlated with the equity market, but who
would do that?);

(4) gold is cheap compared to its history. (This says nothing about why it is cheap. It is cheap
because there is just too much of it for the purposes for which it is being used.); and,

(5) there is a shortage of gold production compared to that used in jewelry fabrication. (But this is meaningless because there is more than a fifty-year supply above ground. No other commodity except silver, which has also played a monetary role has even a one-year supply above ground.)
------------

------- There's more to this, but you get the point. Since these perceptions are wrong and people are recognizing that they are wrong, as the older generation passes, inheritors are getting rid of their gold. Gold will have its day when the fiat dollar collapses and people once again demand
gold-as-money. Then, and only then, will there be a reason to guarantee future payment to save and store gold. The payback to people who have the foresight to have held gold will be astonishing. -------------------------

Dr. Lawrence Parks is Executive Director of FAME, the Foundation for the Advancement of Monetary Education, and a member of Workers' Education Local 189, CWA, AFL-CIO.

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

Thank you Mr. Parks for your fine thoughts to the gold advocate public.

I also perceive the market in exactly the same light, as do most Western children of gold owning parents. However this view does not address the total evolution of gold, only one small timeline portion. On the USAGOLD GoldTrails page we are in the beginnings of going all the way back, in an effort to demonstrate what gold was then and how it will return to those values tomorrow.

One of the great problems with gold advocates today, has been in their failure to recognize whether the current world currency price of gold represents the real trading value for actual physical gold. This facade has been the source of much of the mis-perception you outlined over the last 18 year timeframe. As we have demonstrated so many times, the trading of gold has morphed (good word, uh? Perhaps metamorphosis?) into the trading of contracts. These paper markets have served to drain away and replace physical gold demand. If an actual physical traded market existed, based in total on actual movement of bullion, the real value and real dollar price for gold would be known. Therefore, the paper prices today are, as I pointed out before, little more than a commission paid to cover the physical delivery risk in this morphed gold marketplace.

Look back and place yourself in France, around 1965. One could have had gold for around $35 or $40+/- US dollars. What would you have thought if someone told you that by 1980, that gold price you paid in 1965 was equal to the commission on some bullion coin trades at the new high
prices? "Nuts", would have been the reply.

Today, as the ECB / BIS begins to once again morph the marketplace, our dollar price in gold will once again be headed towards becomming the commission price. Of course, my analogy is in a different scope and context, but the precedent of such an actual percentage move is already priced into physical stores of gold. The inflation of dollar currency has already been measured in gold. We and the children, just cannot see it because we are looking at an illusion.

More




JMB (2/9/2001; 9:26:31MT - usagold.com msg#: 47877)
Goldman Sachs
http://207.96.251.155/scripts/news/search.pl?headline=comex+delivery
Comex Gold Delivery Intentions for 9Feb01


aunuggets (2/9/2001; 9:23:04MT - usagold.com msg#: 47876)
Here and There.....Bits and Pieces
.
Excuse my ignorance if I have missed this throughout the forum, but has anyone ever compiled world-wide average production cost figures on AU ? Would be interesting to know just how close to "book value" we really are at these levels.

----------

A nearby pawn shop operator says you'd be amazed at some of the people wanting to sell him their new "Gold Dollars" for gold melt value.....(grin)

----------

The Mrs. is still not convinced that falling AU prices are a good thing. I tell her that as long as we're accumulating, falling prices = more accumulated bullion = greater future profits on a rise. "But what if it keeps dropping ?" she asks. Down limit vs. upward potential just keeps looking better and better......

----------

Notice an (unnamed) major bullion dealer touting more and more "slabbed generic - high grade - common bullion coins". Reminds me of the Franklin Mint, U.S. proof set, Hot wheels, Beanie Babies, and Statehood Quarter crazes. You can buy all you want......at this price......while Krugerrands can be had in many areas at spot.

----------

Speaking of which; Generic numismatic markets just never quite seem to recover from the "Good Old Days" (meaning the 1989 top I suppose). Still, every major numismatic dealer uses the '89 market top as a selling point. Sorta reminds me of Mall location jewelry stores marking up their wares by 800 percent just so they can "mark it down" by 50 percent. MS-65 Morgan Dollars can be "had" these days well under $100 apiece. We bought MS-67 and MS-68 pieces (todays grading) in the mid-70s for $10 and $12 each.

----------

"VALUE".........it's all relative.

----------

end

Black Blade (2/9/2001; 8:45:44MT - usagold.com msg#: 47875)
$3.00/gal gasoline
http://pub38.ezboard.com/fdownstreamventurespetroleummarkets.showMessage?topicID=2398.topic
Oil executives are apparently planning for $3.00/gal gasoline prices this summer. We're heading for "Interesting Times." Meanwhile, markets are tanking on higher energy costs, and Fed judge orders NG producers to continue supply to Kalifornia. George Dubya reiterates that the US is in a downturn (read recession) in a speech concerning his tax cut proposal. Yet gold is hammered down below $260.00 oz. Hmmm...

Buena Fe (2/9/2001; 8:44:20MT - usagold.com msg#: 47874)
US banking stocks
Watch the PHLX banking index BKX.X I suspect its about to get whacked!

Buena Fe (2/9/2001; 8:28:26MT - usagold.com msg#: 47873)
mystery
Trail Guide.........the smoldering fire of the behind the scenes money war appears ready to break out into the open again? doesn't it!
Keep Well!

Trail Guide (2/9/2001; 8:21:30MT - usagold.com msg#: 47872)
Comment
http://www.usagold.com/DailyQuotes.html

Part of Michaels full message on his news line: -------2/8/01 www.usagold.com. . . . Over the past
several years, a series of recurrent financial shocks has stressed the world economy and sent central bankers and finance ministry officials scrambling for solutions---------

MKs full post is sending a strong message to everyone to buy physical gold. It's a good message and very compelling. Especially today! We are only now starting down the path that will impact every investor's assets if they are not prepared. Here is another ominous sign from IHT
(http://www.iht.com/articles/10152.htm):

Bush Charts a New U.S. Course on Global
Financial Crises
Brian Knowlton International Herald Tribune
Friday, February 9, 2001

WASHINGTON The administration of President George W. Bush appears to be moving away sharply from Bill Clinton's strategy of strong U.S. intervention in times of international financial crisis.-------------- In recent weeks, signs of such a shift have accumulated in the pronouncements of the new Treasury secretary and in the policy views of top Treasury appointees under
consideration. ------- A top candidate for a key Treasury Department position, for example, called two years ago for the abolition of the International Monetary Fund. Such views are now adding to fears among some analysts and economists that the new U.S. administration might move too slowly
and do too little in the event of future financial crises abroad.-----------

--------

For myself; our gold story has been one of an unfolding drama between two long time forces in our world. The USA and The Old World,,,,, Europe. The entire play can been seen best through the eyes of gold,,,,, it's evolution,,,,, it's use as a political medium,,,,, and it's eventual impact on the failing dollar system. Never before in our history has physical gold been used as such an article of political change. Indeed, not since the ancient times will it have shown such a value in human affairs. Tomorrow, the future wealth of many will be stored in just such a medium and the impact of such stored wealth will never be greater in our lives.

more.

ORO (2/9/2001; 8:05:49MT - usagold.com msg#: 47871)
Clawar notices that reliable patterns are traded against
http://www.gold-eagle.com/editorials_01/clawar020201.html
Clawar notes in his latest study that the volatility of the gold trade has fallen while the pattern increased in intensity on the NY side. As the gold flow out of NY is a fixed portion of the trade for over a year now, it is obvious that prices in NY, where gold is being sold would be higher than abroad, where gold is being bought.

The trade, with its obvious steady timing of sales in NY lowering prices by 75c followed by purchase abroad raising prices by 74c (medians) over the first half has brought some to play the reverse of the pattern, which offers a median spread of 1.50 per day, selling abroad before the NY open and buying towards the NY close. The result has been a drop in the spread in the second half to 1.16. The timing and speed of NY sales, however, has improved, with the daily NY "bundle" delivered at now varying times so as to confuse the players of the spread. Since the buyers are "natural" and the sellers are "political" with the goal of lower gold prices, then the obvious result would be a lower rise in the foreign market with about the same draw down in the NY market.


It is interesting to note that the BIS coordinated sales according to the WA at 400 tonnes per year seem to total about the same amount as reported in the US trade accounts for net gold exports. Is the rest of the European gold in the NY Fed vaults going back home? Is that what is used to hold POG down in the spot market?

Buena Fe (2/9/2001; 8:00:48MT - usagold.com msg#: 47870)
the clock is ticking!
http://www.iht.com/articles/10152.html
Here it is folks..........the fuse! Way to go GWB!

Bush Charts a New U.S. Course on Global Financial Crises
Brian Knowlton International Herald Tribune Friday, February 9, 2001

WASHINGTON The administration of President George W. Bush appears to be moving away sharply from Bill Clinton's strategy of strong U.S. intervention in times of international financial crisis. In recent weeks, signs of such a shift have accumulated in the pronouncements of the new Treasury secretary and in the policy views of top Treasury appointees under consideration.
.
A top candidate for a key Treasury Department position, for example, called two years ago for the abolition of the International Monetary Fund. Such views are now adding to fears among some analysts and economists that the new U.S. administration might move too slowly and do too little in the event of future financial crises abroad. rhetorical...........





Trail Guide (2/9/2001; 7:58:39MT - usagold.com msg#: 47869)
News item
http://www.usagold.com/DailyQuotes.html

Taken from the USAGOLD news link above:

Japan's Central Bank Cuts Rates As Economy Sputters!

Friday, February 9, 2001 9:32AM EST

TOKYO -- The Bank of Japan sliced its official discount rate to 0.35% from 0.5% in the face of immense political pressure to boost the sputtering economy. ---- The cut, the first for the discount rate since September 1995 ------ the bank will resume outright purchase oftreasury bills for the first time since April. The announcement came after a one-day meeting of the BOJ Policy Board held amid pressure from the government and the ruling coalition to ease monetary policy.
--------- see likn below

http://dowjones.work.com/index.asp?layout=story_news_main&doc_id=34388

---------

Thank you beesting (usagold.com msg#: 47794)

Now we can all say: hyperinflation in Japanese;
-----Kwabun fukurasu koto-----

More

Pandagold (2/9/2001; 7:35:03MT - usagold.com msg#: 47868)
All comes to he(she) who waits. Keep the faith
www.Kitco.com Bear Market Bottom
We prefer, however, to look for the dramatic bottom, the price wash-out. It would be a lot more fun. What often happens after a long bear market, is a final push down in price. This is the kind of price action that takes out the last of the die-hards. Everyone throws up his hands in disgust. Chaos reigns. Panic ensues.

The following is a section of the full article, which, however unpalatable on the surface it may seem, I feel has some merit. Why?

Because markets just don't turn around. Bull markets have a big run up just before they fall to clean out the weak bears, and consequently bear markets have a final dive to clean out the die hard bulls. And we know from this forum, ther are still a few diehards left.

I think this is what we are seeing now. BUT! and there is always a but, there will be some volatility that will allow you to pick up some bread and butter - which I am doing in a small way while I wait for the turn around.

To give you some idea that money can be made even in this lack-lustre ( I'm getting sick of that phrase) market. You could have made 75% on your money on one North American Amex quoted gold mining stock in just one week. That's no chicken feed.

Happy days are just around the corner. All I ask is volatility, I can wait for the blast off.



"................From a technical standpoint, Gold might drop at the rate of 86 to 88 degrees. This would fit our rules of Entropy, and an ideal Entropy Bottom could take place.

If Gold does, finally, drop to the 217-220 area anytime in the March-April-May time period, we would view it as a grand opportunity, and we would probably see it as the final price bottom in a grand Gold bear market........."

David Marantette

February 9, 2001



SALMON (2/9/2001; 7:29:56MT - usagold.com msg#: 47867)
Repost - do not be intimidated, this was expected
Gold Business - plain and simple


Gold is below $260, again. I am expecting that there would not be too many buyers around these levels, except for some
value investors. That always seems to be the case.
The best, biggest, most successful gold producers proudly announced that they are able to produce gold below $200 / oz on
a cash basis.
o Now, we have to add to the cash cost:
o Cost of finding and developing the mine
o Depletion, depreciation and amortization
o Reclamation expenditures
o Deferred taxes
o Interest expenses
o Selling expenses
o Write-downs and other unusual charges
o Expectation for reasonable profit
Based on my "plain and simple" calculation there is not much room to show a profit. I believe the last time gold traded below
this level it did so for only two weeks.

As Farfel mentioned, it is time to put pressure on these guys. They have been getting away with poor management for far too
long. The bullion banks are benefiting, central banks are benefiting, mining executives are benefiting, miners are benefiting and
shareholders get the short end.

Pandagold (2/9/2001; 7:15:24MT - usagold.com msg#: 47866)
Not worth a 'plugged' dollar

I know I posted this before from another source. But why do they keep plugging it as a 'GOLD' coin. Are some people really fooled into believing it is? And why do they keep plugging this Safeway connection - how much have Safeway paid for this 'advertising'?

Safeway to offer Gold Dollar
Pleasanton-based Safeway Inc. says it's going to offer the new Golden Dollar coin as an option when making change for its customers in its 1,500 supermarkets. The company says it will make the coins available on an ongoing basis to meet consumer demand.

I haven't posted a link because you are all familiar with
the news.

Pandagold (2/9/2001; 7:09:28MT - usagold.com msg#: 47865)
Let us pray

And give thanks
Wow! Gold up 10 cents in New York. I must break open a bottle of bubbly, and reach for a cigar. But, no, I sweat, - Will it hold, I grip my chair nervously..............
Isn't life exciting?



The Invisible Hand (2/9/2001; 7:08:50MT - usagold.com msg#: 47864)
.Extreme low interest rates are the main cause of the depression
http://www.5555.co.jp/mistake.htm
The BOJ yesterday decided to slash its official discount -to 0.35 percent from 0.5 percent. Here's an article about the effect of low interest rates. Unfortunately, the article is not dated. My apologies, if it has been posted before. Does the article mean that although depression is coming in North America, Europe, which leaves rates unchanged, will flourish? BTW, can anybody explain whether rates are determined by bond yields or by CBs?


DaveC (2/9/2001; 6:30:53MT - usagold.com msg#: 47863)
Let's All Hold Hands and Buy CELL PHONES!
http://biz.yahoo.com/rf/010209/l0164958_3.html
Rare metal key to making smaller mobile phones
By Paul de Bendern

HELSINKI, Feb 9 (Reuters) - Only a few years ago the mobile phone was a brick-like, unreliable and expensive device targeted at the few with deep, reinforced pockets.

Today, it's a small, light, everyday, inexpensive product used by more than 700 million people, or about 12 percent of the world's population.

What led to this dramatic change?

One important factor was the use of certain metals, such as copper, nickel, palladium, gold and tantalum, to help reduce the size of a cellular phone.

Industry experts say that all the technology now packed into a mobile phone, such as batteries, flash memory chips, microprocessors, and liquid crystal displays (LCDs), could have filled a whole office floor less than 30 years ago.

Take for example the silver-grey precious metal tantalum, which is largely mined in Australia and Central Africa.

Tantalum, a powder compacted for use in producing passive capacitors, has been a key factor in reducing the size of the mobile phone in recent years.

The expensive and rare powder is used to build these capacitors that regulate voltage at high temperatures.

Demand for this tiny but sophisticated component from the likes of mobile phone giants Nokia and Motorola (NYSE:MOT - news) has pushed the price of the precious metal around 600 percent higher in less than three years, traders say.

Tantalum highlights the importance ``old'' economy precious metals have in the make-up of ``new'' economy products, not just in mobile phones but also in portable computers, game consoles and other electronic devices where size is king.

Around one third of the world's tantalum is mined by Australian company Sons of Gwalia (Australia:SGW.AX - news) alone.

PRECIOUS METAL HELPS RUN HEART OF CELLPHONE

A mobile phone is one of the most intricate devices that people use on a daily basis, but many don't know that it's really a radio -- an extremely sophisticated radio that sends and receives signals and works under very low power.

If you dissect a phone you will find it holds a battery, a small microphone, a tiny speaker, a liquid crystal display, a keyboard not unlike a TV remote control, an antenna -- used for receiving and transmitting signals -- and a circuit board.

But it is the printed fibre glass circuit board and the content that sits on top of it that make the phone tick. Gold plating covers the surfaces of circuit boards and connectors.

While the cellular phone is mostly made out of plastics, it is run by several powerful computer chips.

Some of the key parts are the microprocessor, the digital signal processor (DSP), the read-only-memory (ROM), connectors, the radio frequency (RF) power sector and flash memory chips.

But the tantalum capacitor and other passive capacitors are also crucial. About 35 percent of them are made for mobile phone makers, according to industry experts.

They are used as storage vessels, storing energy, ready for use when there is a big surge of energy to a cellular phone.

These components help supply that extra kick of energy for the phone which the battery cannot provide on its own.

They are also used as an ingredient of superalloys, principally for use in aircraft engines and spacecraft.

DEMAND OUTSTRIPPING SUPPLY

The unexpected surge in demand from mobile phone and computer makers in recent years has boosted the price of tantalum on the metals market, forcing makers of tantalum capacitors, such as American companies AVX Corp (NYSE:AVX - news) and Kemet Corp (NYSE:KEM - news) to pass on some of the cost to their clients.

Last year more than 400 million phones were sold globally, a 45 percent increase on the previous year. In 2001 mobile phone leaders expect over 500 million units to be sold worldwide.

Because cellular phones are not yet recyclable, manufacturers cannot reuse the rare metals for future phones. But plans are underway to allow for limited recycling.

Tantalum prices have also stayed high because demand is outstripping supply and the only replacement to tantalum capacitors -- ceramic capacitors -- cannot yet be made small enough to fit the dimensions of tiny cellular phones.

``There's no substitute for tantalum that would meet the requirements of mobile phones,'' said Jim McCombie, managing director of A&M Minerals and Metals Ltd, which trades tantalum.

Last year annual usage of tantalum stood at around five million pounds (lbs), up from three million in 1997 and yearly demand is rising by around 15 percent, tantalum traders say.

The rise in demand is also due to a rise in non-mobile phone electronics, especially from makers of small electronic devices.

Prices for tantalum jumped to around $350 per pound last month, up from $40 in 1997, traders said. In the early 1990s the metal traded at around $20 per pound.

But one trader said the price range was now off its highs as financial markets digested news that the mobile phone market would not grow as fast as expected in coming years.

``We may now be past the big peak in tantalum, but demand is still outstripping supply and will do so for the foreseeable future,'' said one tantalum trader. ``At least until scientists have found a viable replacement.''

Even if the consumer appetite for mobile phones cools it will still be a big market and tantalum traders expect to see increased demand from Asian manufacturers of electronic gadgets that are also constrained by size.

``Tantalum may not be the flavour of the month, but it's still in fashion,'' said London-based McCombie.


DaveC (2/9/2001; 6:23:09MT - usagold.com msg#: 47862)
Pandagold - Rubin and Easy AL
Rubin was the real genius wasn't he?
Gets out early. Gets his GS IPO. Now at Citi. He's got it coming in boatloads.


barnacle bill (2/9/2001; 6:19:15MT - usagold.com msg#: 47861)
Re: Soybeans Msg#47860
Message 47860 was scrambled by e-mail software. What the message was to say was buy July beans on 2/12 and exit on 4/1. This trade has a win% of 93. 14 win years and one loss year. Average profit is $1,184, and average daily profit is $24.67.

barnacle bill (2/9/2001; 6:15:16MT - usagold.com msg#: 47860)
Soybeans
I was going through some old Futures Magazine articles and I noticed the following seasonal trade for soybeans.

FUTURE ENTRY EXIT WIN WIN LOSS TOTAL AVG AVG
DATE DATE % YEARS YEARS YEARS PROFIT Daily
Buy
July 2/12 4/1 93 14 1 15 $1184 $24

The article was titled "Bean Stalking" by Nick A. Colley and Jerry Toepke. It was in the April 1998 Futures Magazine.


The Invisible Hand (2/9/2001; 6:04:46MT - usagold.com msg#: 47859)
British police looking for the yellow
http://news.bbc.co.uk/hi/english/uk/newsid_1161000/1161700.stm
instructions from BOE?

Canuck (2/9/2001; 5:10:47MT - usagold.com msg#: 47858)
@ Farfel
Thanks for the advice buddy.

I have been communicating with several producers albeit with limited results. It was (is) my hope to bring about awareness that the producers are losing this game. I am sure that there is plenty of heat currently directed at them presently (not to say that they don't deserve more).

I feel the newest development with AU and HGMCY pretty much seals the fate of producers and frankly is it an admission of failure on their part. IMHO, it now seems quite clear what the game plan is of the Masters and that of the huge hedgers; a game of survival, a massive bet placed by both parties.

The spike, soon to be delivered IHMO, will swallow many companies and it is clear Anglo is fighting this tooth and nail, preparing for the fight of their 'life'. Share price is very immaterial (to them) at this junctor.

So now that we know, the producers (the 'cobblee's') know, and the Masters (the 'cobbler's') know, what is the plan?

As per FOA, Another, Aristotle and many others I think the answer is crystal clear.

SALMON (2/9/2001; 4:40:44MT - usagold.com msg#: 47857)
Gold Business - plain and simple


Gold is below $260, again. I am expecting that there would not be too many buyers around these levels, except for some value investors. That always seems to be the case.
The best, biggest, most successful gold producers proudly announced that they are able to produce gold below $200 / oz on a cash basis.
o Now, we have to add to the cash cost:
o Cost of finding and developing the mine
o Depletion, depreciation and amortization
o Reclamation expenditures
o Deferred taxes
o Interest expenses
o Selling expenses
o Write-downs and other unusual charges
o Expectation for reasonable profit
Based on my "plain and simple" calculation there is not much room to show a profit. I believe the last time gold traded below this level it did so for only two weeks.

As Farfel mentioned, it is time to put pressure on these guys. They have been getting away with poor management for far too long. The bullion banks are benefiting, central banks are benefiting, mining executives are benefiting, miners are benefiting and shareholders get the short end.



Black Blade (2/9/2001; 4:17:51MT - usagold.com msg#: 47856)
Pd Quotes Look Funny!
If you hurry, you can see that Kitco has Palladium ask at $10, and bid at $1050. What a spread ;-)

Black Blade (2/9/2001; 4:14:43MT - usagold.com msg#: 47855)
Sunshine Silver - Rising From the Ashes?
http://biz.yahoo.com/bw/010208/tx_sunshin.html
Sunshine Silver emerges from bankruptcy just in time to take advantage of the rapidly fally silver price ;-) I note that they are now going to abandon their corporate offices in the north for the sunny climes of Dallas, TX. Better yet, why go to Bahamas, or Cayman's? They got decent golf courses, snorkeling, etc. Everything the executive of a troubled silver mining company freshly emerged from bankruptcy could ever want.

Black Blade (2/9/2001; 4:05:30MT - usagold.com msg#: 47854)
PGMs lower on Russkies Dubious Claims
http://biz.yahoo.com/rf/010208/l08243202.html
The Russkies are at it again and the gullible market investors are sucking it up. We've heard that the Russians were going to deliver PGMs en mass to the markets for over 5 years, and every time the gullible (usually the Japanese) tend to believe them and they get royally burned every time. It's like stealing candy from a baby. The report is that Putin may sign off on "quotas." He has in the past and will in the future, right? The problem is that there are usually no corresponding deliveries. Can't deliver what doesn't exist after all. The only mining of PGMs by the Russians, is the mining of PGM investors. It's really quite funny how supposedly intelligent people fall for the same scam over and over. Besides, the quotas are meaningless without "export licenses." However, the prices of PGMs have taken a hit over the last few days, but will likely rebound when reality sets in. The recent NYMEX default on palladium (they call it raising margins) had little short term effect. This PGM market is quite entertaining to say the least as party and counter party work endlessly to put the screws to each other.

- Black Blade

ORO (2/9/2001; 4:00:21MT - usagold.com msg#: 47853)
More on distress of the gold shorts
The announcement of the hedges and the paper avalanche that followed came as gold was scraping against the $270 mark. Obviously the bankers are sensitive to POG rising beyond that, otherwise, they would have pressed Hamoney for more that buying 1 mil oz. puts. But they were pressed in time to release the news in order to drive prices back outside the reach of $270. Other slight signs are in the very tight congestion of the short term lease rates to 6 mo. near 1%. Negotiations were probably ongoing as POG was heading back to $280 and hedges performed just below that.

Note that the XAU and HUI are saying "we don't believe you". They are rising against bullion, and have not fallen below key support despite POG being lower than it was when both indices were at 40 (both are over 45 now). Granted that much of this is from Freeport McMoran (up 80%) which is a copper producer (remember that copper is the junior to silver).



LeSin (2/9/2001; 3:36:40MT - usagold.com msg#: 47852)
Thoughts from the Far Side - Provokes Much Thought
Trail Guide, Oro, Randy & ALL - What say you?


Date: Thu Feb 08 2001 22:52
Tyrant (Washington Agreement II) ID#374254:
Copyright © 2000 Tyrant/Kitco Inc. All rights reserved
Well now that the Washington Agreement has basically given the United States a year and a quarter of "prolonged" fiat security.......I bet we will hear an announcement ( which has already been drawn up...I am certain ) once gold challenges the $252 area again.

Interest rates up, interest rates down, dollar up, dollar down...NONE of it mattered...GOLD is DE-Monetized and the central banks possess ALL of it.

It is in the interest of the central banks to announce something in the very near future sooner rather than later. Also, don't forget commercials ( central banks, miners ) are certainly on the phone bitching to "do something".

Besides there is plenty of room for a move up to the $300 an oz. area w/o any systemic risk. The risk now is a panic plunge which I am sure the worlds largest holder ( The United States ) just can't risk.

Washington Agreement II - This weekend?


Date: Thu Feb 08 2001 16:32
Tyrant (Central Banks - To Limit Gold Sales) ID#374254:
Washington Agreement II -
Central Banks - To Limit Gold Sales to 10 tons a month.

Date: Fri Feb 09 2001 00:03
sharefin (DA - are you being straight with us......) ID#284255:
Date: Thu Feb 08 2001 23:07
D.A. ( shades of ANOTHER ) ID#7579:
I heard an amazing thing tonight from someone whom I completely trust in the metals markets. This person, related to me that he had good info that back when the Bank of England announced its planned sale of gold the BIS went to them and offered to buy the entire lot at $275. The BOE declined.

If this is true, then it would appear that GATA is actually right, and ANOTHER was not far off.




Usul (2/9/2001; 3:32:23MT - usagold.com msg#: 47851)
Natural Gas in the North Sea (and that's where it's staying?)
http://www.thisislondon.co.uk/dynamic/news/business_story.html?in_review_id=359907&in_review_text_id=304713
"...The North Sea is regulated by the Department of Trade and Industry and it will neither engineer a regime to encourage companies to drill for more gas nor say where the stuff is likely to come ashore, so Lattice is in the dark. Meanwhile, Lattice's regulator, Ofgem, is refusing to take account of the possible £1 billion extra spend, nor even at this stage agree to revisit the price regime.

It is even worse than that. The regulator proposes to allocate the discount on assets that existed at privatisation exclusively to assets in the regulated part of the company. This would massively reduce the value of the assets on which the company was allowed to make a return, make further investment hopelessly uneconomic and make most of the existing spend look like a horrible mistake.

You cannot run a coherent energy policy on the basis of knocking 50p off the customer's gas bill. What matters is security of supply, not short-term profit. In a sensible world, the onshore carrier and the offshore driller would be part of one energy regime, dedicated to guaranteeing security of supply for the next 20 years. Instead, our fragmented, short-term approach is more likely to engineer a gas shortage - no mean achievement when there is so much of it just a few miles offshore but where, of course, it is no good to anyone if it is not worth drilling for and the pipelines do not exist to bring it to market..."

Can anybody hear- GRASSHOPPERS??


ORO (2/9/2001; 2:52:48MT - usagold.com msg#: 47850)
Black Blade - Abbey Jo' - what she don' say
The venerable market bull (cow? fem for bull?) is not telling you the price effects of the monetary expansion that would raise SPoos and DOWs that far would make prices go up in proportion.

ORO (2/9/2001; 2:48:20MT - usagold.com msg#: 47849)
Zeneida - good haul
Nice collection you hauled back with you.

Me' 'at's off to ya'.

Get good prices?

Zenidea (2/9/2001; 2:29:34MT - usagold.com msg#: 47848)
Last Paragraph Oro 47847
... yes

ORO (2/9/2001; 2:23:56MT - usagold.com msg#: 47847)
Black Blade and Farfel - Anglo hedging
Remember that the consortiums that fund the expansions of miners nearly always contain Chase, Morgan, and Citi, often with HSBC, Deutche, or UBS. Thus the other side of the transaction, the one that sells the miners downside protection, is taking on a downside POG risk and an upside POG protection.

The "overhang" the Anglo prez speaks of is a non-existent one. It is the imaginary thought that CBs would let go further what uncommitted gold they have (if any outside the ECB members). If the bankers actually thought there was such a downside, they would not have sold the puts and bought the calls and forwards contracts (that provide the banks with upside protection.

So the bullion bankers will use the remaining physical hoard from BB/CB reserves to supply the gold market with physical, which will lower prices a little further, and then let prices go up till Anglo can't post margin - unless Anglo got a margin free arrangement like Barrick's. The main point is that this is a repeat of the PDG and NEM hedges that they put on just before the WA. It is just another scam to (1) cover the BB's from price rises, (2)displace gold from current holders by replacing it with gold miner paper (which is still regarded as good), (3) supply the spot market with the gold before the seasonal demand kicks in.

With 70% of 5 year production hedged, Anglo are providing cover for the sale of 25 mil oz./750 tonnes of gold from the banker's customers (or reserves - if any are left).

By the way, the favored bullion bank customer will buy physical and sell an at the money call followed by the purchase of a partial put out of the money, and a far out of the money call, leaving him with no noticeable opportunity risk in having missed the best gold price, and a rather narrow window for losses. The call sale will be repeated up to 4 times a year. Thus for each bullion oz. purchased, there would be a 2-4 oz supply of paper through the year.

In short, I would tend to believe that another gold spike is in the making, which is why the bankers are pushing the miners to hedge. Not to protect the miners, but to protect the bankers.





Pandagold (2/9/2001; 2:21:28MT - usagold.com msg#: 47846)
Dave C Greenspan

On this we agree. However, to the masters who's interest he really serves, he will be a hero, because from the financial worldwide turmoil,that will ensue, they will once again, emerge the winners, and will have made one more giant step towards their ultimate goal.

Remember, he is a very old man, so hasn't that long to 'suffer the slings and arrows of outrageous fortune' (Shakespeare).

Rubin, a much younger man got out long before the sh*t hits the fan.

Black Blade (2/9/2001; 2:18:51MT - usagold.com msg#: 47845)
Abby Jo Say's "Don't Worry, Be Happy!"
http://biz.yahoo.com/rb/010208/c6.html
Goldman Sachs trotted out the old girl to tell everyone thta the economy is just wonderful and the sun shines, and the birds, chirp, etc. Just last week the old crow said that she still expected S&P at 1650 by year end and DOW well over 12500. Hmmm...

Zenidea (2/9/2001; 2:08:47MT - usagold.com msg#: 47844)
Hi you precious lot !
Back in Aussie !... didnt catch up with Tree of life :(.
Found 6 ladies platinum rings, 5 containing diamonds the best being .46 carat IF G and three ladies gold bands.
22 silver and 2000.00 in coinage. Raged on in Macau as well.
Not a major money making venture , but as usual darn soul satisfying. Fobbed off more Ag than I can carry ( havnt the patience ) in exchange for currency swaps etc and picked up the cat from the cattery :). BUT ! scored a 7.6 oz mens Au 99.9 Bracelet!. Au Du-pont pen and a number of watches.
Having said that and heaven only knows why the finds blew the laws of averages re Pt, Au, Ag trinkets clear out of the water. Went looking for that 25 legendendary tons od Au that the Japanese alledgedly left behind in ww2 for 2 days and gave up ( too cold in the hills and to many itchy critters),
next time as always .
Oh and found a few nice clients in HK.

Immmmmmmm havnt pre read a thing , My spontainious thoughts.
China lining up a few crackers off Taiwan could spell trouble within a year.
The Israeli election result could complicate matters indeed
The interest rate cuts were abit of a fizzer for the stock market. AND I MISSED YOU :) hehe



Black Blade (2/9/2001; 1:21:07MT - usagold.com msg#: 47843)
RE: Canuck and Farfel (What Timing)
I can sympathize with ya. I find it somewhat strange that AngloGold would forward sell 70% or more of their gold production for the next five years without having some inside knowledge about a coming "Gold Wreck." Now the gold market is tanking again. This is an "interesting" development right after the Anglo announcement. They can't make it under current market conditions. They even bought gold in the BoE gold auctions to deliver into their hedge books. Now they recently sold 3 marginal mines and forward sold an additional 50% of the next five years production on top of a 20% forward sold position. They are obviously building a "War Chest" to acquire other assets. They don't want to acquire hedged producers since the price is already built in, there is no accretive value whatsoever, and there is no sense in acquiring gold producers that have "dead gold" (forward sold gold). That leaves these predators with their eyes focused on Goldfields (GOLD) or some other profitable unhedged producer. There is even rumor that they or Barrick might even be drooling over Meridian Gold (MDG). Even Homestake (HM) and Newmont (NEM) have been rumored targets. It has even been mentioned in recent months that an Anglo-Barrick merger would be possible. A lot of M&A activity seems to be in the works as it is crunch time and it is either merge-acquire other assets or perish.

I do some work for the gold producers, and recently one client announced that they now want to wrap things up on one project as they might even close some operations, and another client company has hinted that they will pull the plug on another project I have been working on due to budgetary constraints. It looks as if the gold business is about to collapse for these guys and they're scared. I am in negotiations to put a project together in an overseas oil patch and could be gone out of the country again for some time. As far as the gold producers are concerned, they have only themselves for the current mess that they themselves helped to create. I'm glad that I took profits and closed out several positions in my portfolio. I have gone mostly to cash and some defensive issues as it looks to get ugly for the US economy as the recession heats up. I will just watch the POG do its thing and will grab some physical over time at cheap (maybe cheaper) prices and get back into real estate perhaps.

The best comedy on TV these days is the news. I saw a bunch of Kalifornian politicians point fingers at each other and try to place blame over the energy crisis. What a bunch of Buffoons! Yet others still bleat on – "What Energy Crisis?" These people are just like sheep lead to the slaughter they bleat over and over again – "What Problem?" – right until they enter the "Kill Floor" at the slaughterhouse, but then it's too late.

- Black Blade


ORO (2/9/2001; 1:19:41MT - usagold.com msg#: 47842)
Curious - A real Economy follow up to Wanninski post
I talked to someone from a cell phone technology supplier to the phone companies. We reached the conclusion that cel rates - now down to 7c/min per additional minute, exclusive of long distance charges, are going to hit 2c, and I suggested that as we approach this, it will pay for wireless companies to start doing unlimited use contracts, which will cause people to replace ground lines – bye-bye baby bells.

Obviously, the investment of some $140 per person per operator, and at a 20% penetration rate (0.8 cell phones per household) one has an investment of $700 per customer per company - which requires at 2c a min some 600-700 hrs per phone in order to recover the investment, about 200 hours at 7c. This brings out the question of debt, that at the initial 10% rate requires $70 of margin per client - or 20 hrs, at current rates, to 70 hrs at the future 2c rate. Granted some will talk 70 hrs per phone per year at 2c, but that will only be enough for 100% margins, which people do not pay. When one considers that most metro areas have 3-5 major suppliers at the $700 per customer range, then the losses that are inevitable become obvious. Even if penetration reaches 40% - at 1.5 phones per household, then the cost to all companies combined is still $1200-1500 per customer for the industry. It is only for the best companies that there would be any payoff. Most will just lose their investment.

Their lenders will lose part of their assets. But more significantly, the economy lost the capital investments in slow growing energy and basic industry that could have been made if the lenders and the cellular companies were not swept by the notion of endless expansion of the cellular customer base and intensity of use.

The slow growing industries have another interesting quality. That while they expand capacity, they employ a greater proportion of their existing capacity. Thus in order to get the effect of expanding by one oil rig, the capacity of say 0.2 oil rigs needs to be used to find the oil and produce the steel, concrete, etc. needed to get the rig in place and producing. Thus the initial result of an energy shortage due to a lack of prior investment is a more extreme energy shortage as exploration proceeds and rigs are built transported and deployed that consume a greater part of the existing output. Thus the malinvestment which created the surplus of cell phone capacity, created the shortage of energy. The result is that households will spend more on energy that they are used to using, while having less to buy cell phone service with. This is true of the rest of the computer and computer services industry, of retail, etc.. Furthermore, while these tech industries suffer loss of sales because their clients are spending (much) more funds on the same energy requirement, and can't raise their prices because of households facing the same problem, the tech companies face higher energy costs as well.

No changes in liquidity will ever have an effect on this structural problem resulting from the monetary system having no limits on liquidity in the past. Now, after the bad investments were made, liquidity is missing. But supplying the liquidity just maintains the weak players in the tech business afloat, not allowing the release of their people and energy consumption for use by the energy business that needs them to find oil, build power plants, build a natural gas pipeline etc.. The credit expansion led GE to become a banking institution instead of investing in capacity for producing electric generation equipment.

Wanninski provides little comment about this problem, as he provides little comment on the massive dollar debt funded export capacity expansion in the emerging markets since the 70s being the main real economy culprit in producing the gold drag downwards (before combining with the financial economy's dollar drag and paper gold explosion).

Wanninski does not see the Bretton Woods system as providing the impetus to the gold exchange fiasco through the full Triffin's dilemma effect (that of exporting currency being a structural requirement for the system to function at all, and that reserve currency interest rates must be higher abroad than at home). Nor does he see that prices in a pure gold money system decline - not stay stable - nor that additional non-gold monies (paper and other metals as well as products and rarities – like Audubon prints) are added or left out of the market as its liquidity requirements change without synchronized changes in gold production - or in short, that the gold standard is just as artificial as the gold-exchange and floating systems that replace it, that bimetallism allows just enough flexibility to keep prices and financial holdings in sync so long as there is no fixed silver/gold exchange rate.

Wanninski still endorses the idea of a monetary authority and government mint – both of which create leeway for arbitrary decision-making that would naturally lead to trade in privilege.

Wanninski actually went so far in his belief in technocratic planning as to state outright that central planning Soviets could actually have beaten the US had they had a stable gold money instead of gluing the Ruble to the Dollar. He did not see the pitfalls inherent in central planning as late as 1995 – even when compared with a fiat money regime. That central planning is devoid of a mechanism to motivate quality production, and has only military goals as motives for innovation, which motives are eliminated in the rest of the economy, and therefore prevent the bulk of innovation from occurring – both in the military and outside it.




Farfel (2/9/2001; 0:46:20MT - usagold.com msg#: 47841)
@Canuck re: taking a shot at ANGLOGOLD
Listen my friend, with all due respect, I think you and other concerned gold investors ought to leave the cozy comfort of these gold forums and address your issues directly to the owners/execs of the gold producers/WGC/bullion banks, etc.
In other words, pick up the phone or write an e-mail or whatever, and confront these jokers who have so happily misled and impoverished gold investors with a plethora of pro-gold lies and deceit.

It is pointless to leave messages on these parochial gold forums in the hopes that some senior official from the gold industry will visit and change his anti-gold philosophies.

THEY DON'T HANG OUT HERE WITH THE GOLDBUG WEIRDOS, TRUST ME!

And that is exactly how they feel about their own investors, NOT one scintilla of respect for the "idiots" and "oddballs" who erroneously believe that gold has any role or higher value in this world...and who are stupid and masochistic enough to invest in their own gold companies and get raped and fleeced over and over again.

SO call up the relevant officials at ANGLOGOLD or CHASE or GOLDMAN or DEUTSCHE etc, and give them heat, if you really want them to get the message. If you feel they aren't willing to listen or change their anti-gold policies, then SELL their stocks immediately or move your bank accounts, etc. and invest in pork bellies, amway products, or anything, anything, anything other than gold stocks...and encourage others to stay away from them, now and forever.

Otherwise your posts on these gold forums are little more than sermons to the choir and what good does that do? Or in the case of forums like KITCO, where most of the gold bears happily reside, you are sermonizing to abject village idiots (e.g. Skinny, Goldbuger, Disney, etc) who speak rapturously and admiringly of the "gold hedge banks" whose shares they own, despite their ever decreasing value.

Thanks

F*


Horatio (2/9/2001; 0:19:51MT - usagold.com msg#: 47840)
repos
I believe the intent of repos is to force the banks to make loans by ropo-sessing the interest bearing securities and forceing cash on the banks.The problem with this is it does nothing for demand ,it lowers the cost of borrowing and encourages more debt on the consumer.Just witness the 4 applications for credit cards I received TODAY!I am pre-approved to go into debt!How comforting to know the Fed has my interest at heart.For those that won't take the Feds bait ,"the Fed is pushing on a string".



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