1-800-869-5115 We welcome your inquiry.

Home How to Buy Gold Live Gold Price Daily Market Report Gold IRA Charts Stats Essays Trading & Storage High Net Worth Gold Coin Prices Gold Primer Q&A Breaking Gold News Mobile Gold Price Gold Coin Catalog About Us-Contact Search Video Round Tables

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.

FORUM ARCHIVES

Select date of the archive you wish to view Month 1 2 3 4 5 6 7 8 9 10 11 12 Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Archives date back to September 22, 1998

WELCOME TO THE ARCHIVES!

ARCHIVED DISCUSSION FROM 11/9/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Sierra Madre (11/09/02; 23:56:10MT - usagold.com msg#: 89183)
Idle to compare M1, M2, and M3 with gold stocks...

Or to talk of regaining stability once more, with a "return to gold".

It is not going to happen. Things have gone much too far.

The world's productive structure and debt structure are beyond salvation.

What will have to happen, is a tremendous overhaul which will leave the world in, to us who live these days, a completely unrecognizable form.

Gold will be extremely important in the period ahead, but it will not figure in the plans devised by nations or their governments. It will be vitally important to individuals, you and me...

The forest has been chopped down, there is nothing to be done but wait, until it grows again - if it ever does. And we won't see the day when the forest flourishes once more.
In the history of mankind, Institutions are never re-established. "You can't go home again." We shall not live to see the day when any currency is gold and any bills are redeemable in gold. Not even the Euro.

Not only is it a question of productive structures and debt; it is a question of morality that has disappeared. And also, a question of populations that want something for nothing, and will not have it any other way. That precludes real money.

Populations used to be ruled by their morality (by and large). Today, they are ruled by offering them - paper money. What other means of ruling is there, today, except by bribing the masses? After paper money cannot be used any further, the masses will be ruled by the whip and the firing squad.

The circle has gone around, and we are back to pre-Hammurabi times. Even 5,000 years ago, people and rulers were never godless atheists, not even the cruelest despots ignored Divinity. Our world is in a situation worse than any in history, for vast numbers of population and rulers are atheistic, something never seen before in human history.

You think the "Dark Ages" are in the past? We are IN the dark ages, far darker than those of the IV to the XV centuries. Technology - yes; but it will evaporate in the intellectual, moral and religious darkness stifling the world.

Gold: get some, and if you can, hang on to it.

Sierra


mudr (11/09/02; 23:28:41MT - usagold.com msg#: 89182)
To Gandalf the White
Sir, I am sorry rhat my contest entry did not answer the question in rule # 7. Please amend my post, although NOT my guess. I would add these first lines to my origional:
Buying GOLD now may very well be like buying GOLD in the $60's at $35 an ounce. But two things to remember are that it took time and included correction along the way.

(Then continue with my origional post)

There's my guess. Having been shook out of my favorite gold mine stock by its ups and downs, I am firmly convinced that the best way to be in this GOLD bull market is to buy at a reasonable point and hold on. The POG may fluctuate and the same old "fear talk" may be posted on the boards that was posted when GOLD was trying to break $300, but today the price is well over that amount. The POG will zigzag it's way across the time line, but it's overall trend is UP. Buy now, wait a year or two, don't worry to much in between the times. Our fundamental reasons for joining the GOLD bull market has not changed nor will it change with the daily fluctuations. Hold on tight. Good luck to all and thanks for all your postings.

(My origional price guess was: $$$$ 320.50 $$$$ )

Thanks.



Gandalf the White (11/09/02; 23:23:15MT - usagold.com msg#: 89181)
WELCOME Sir ManAurum !!!
ManAurum (11/09/02; 22:03:13MT - usagold.com msg#: 89177)
===
Great to have you aboard ! Now, don't be a STRANGER.
<;-)

OZ (11/09/02; 22:43:58MT - usagold.com msg#: 89180)
From Jim Sinclair
To my
Friends, the Gold community:



This is the singular most informed article ever written about derivatives by a respected media publication. I respectfully and earnestly request that each member of this community do everything in their power to get this article on as many web sites, chat sites, editors of major business publications and to investigative media. The author this article has been clearly, correctly and professionally informed. We all want our major gold producers to survive this threat and not to be burdened by it. I also respectfully suggest that you send this article to every gold and silver company you are invested in, trade in or simply follow. Both majors and juniors with new projects being developed by majors with a derivative book have a derivative problem. The recent BIS figures suggest strongly that some producers now claiming to be non-hedgers have just increased the size of their hedge books by buying more of this sewage paper but only in an offsetting specific performance obligations. They are therefore still exposed the counter party risk but only in a greater way. These items must be expunged from their balance sheets for their own best interest. I have not asked much of my friends but for gold, for the gold industry, for me and for yourself please make a major effort to see this article gets the distribution is deserves.
Thank you.
Your Fox Hole Buddy in the Gold War.
Jim

Saturday � November 9 � 2002


The rumour that won't die
Investors keep worrying about J.P. Morgan's gold hedging exposure

Steve Maich
Financial Post

Friday, November 08, 2002

Suzanne Plunkett, The Associated Press
Wall Street investment bank J.P. Morgan headquarters in New York. J.P. Morgan has denied repeated allegations that a rising gold price will trigger losses in its huge position in gold derivatives.



The rumour that J.P. Morgan Chase & Co. is facing massive losses on gold derivative exposure is the market conspiracy theory that will not die.

J.P. Morgan insisted yet again yesterday that its derivative exposure remains minimal, calling the latest rumours "false and irresponsible." But that didn't stop investors from driving the shares (JPM/NYSE) down 6.6% yesterday.

Despite the denials, thousands of investors and analysts suspect J.P. Morgan has more on the line than it's letting on. Just as they did when Barrick Gold Corp. and Placer Dome Inc. slipped last summer on concerns about their extensive hedging strategies, investors are complaining about a lack of transparency in derivatives trading, and a general distrust of complex financial structures.

One former brokerage credit officer, now working as an independent analyst, said the market has very little faith in assurances about risk exposure when they aren't backed up by hard data.

"To see what some of these companies have as real exposure and then hear their public statements, it just boggles the mind sometimes," he said. "You just don't know, and that's the point."

J.P. Morgan became heavily involved in forward gold contracts in the 1990s when the commodity price was in a slow decline. Market watchers at the time said gold was going nowhere in the new global economic environment, and the derivatives market allowed banks like J.P. Morgan to extract profits from a marooned asset class.

As far as most analysts are concerned, J.P. Morgan's massive derivatives program amounted to a short position on the price of gold. And with gold prices up 17.5% in the past year, speculation is swirling that the bank is now taking a serious pounding.

How big the losses are, is a matter of endless debate.

David Hendler, a bond analyst at Creditsights Inc., an independent research firm in New York, discussed the gold question in a Sept. 23 report to clients. He concluded that there is not enough public information released by the bank to precisely determine the risks, but there are a few clues that suggest reasons for concern.

First and foremost is J.P. Morgan's extensive participation in the derivatives market, he said. In all, the bank holds about US$26-trillion in futures and options contracts, or roughly 50% of the overall market. That's more than twice the size of the entire annual U.S. gross domestic product.

J.P. Morgan has reduced its gold contracts over the past year, but it is still relatively overexposed compared to other major banks, Mr. Hendler said. At the end of the second quarter Morgan's gold contracts were worth US$45-billion on a notional basis. Citigroup, the largest financial services company with about 50% more total assets than J.P. Morgan, has just US$12-billion in gold derivatives.

Notional value isn't a true reflection of the bank's risk, because it refers to the potential maximum value of a contract. But even a writeoff of 5% of its total gold contract would represent a loss in excess of US$2-billion, greater than the bank's total net income in 2001.

Like all banks, J.P. Morgan has stress-tested its portfolio and insists that even in its worst-case "value at risk" scenario, its gold contracts would cut just US1� per share from its 2003 earnings. But, like all banks, it refuses to go into the specifics of trading strategies, or how they arrive at their risk models, as these are proprietary secrets.

If the denials are starting to ring hollow, it's because J.P. Morgan has had to issue so many of them in recent months.

The bank is trying to recover US$965-million in losses from doomed derivatives transactions with Enron Corp. The insurance companies involved maintain the deals were tantamount to fraud and they've refused to pay. The bank also faces a variety of lawsuits arising from its role as financier to Enron and WorldCom Inc. The bank has denied all allegations of wrongdoing, and so far hasn't taken a provision for the potential losses, insisting that they'll be vindicated.

Back in July, Kathy Shanley, an analyst at Gimme Credit, an independent bond research firm, said "there is no way to responsibly quantify the ultimate financial impact of the current investigations."

J.P. Morgan is also at the centre of a Securities and Exchange Commission investigation into allegations that the bank forced clients to buy more shares of bank-led IPOs in the after market to ensure new issues surged in their first few days of trading. Again, executives have denied the charges, but investors are well aware that Credit Suisse First Boston paid US$100-million last year to settle similar charges.

For a bank that saw third-quarter profits plunge 91% thanks to a slew of credit writeoffs, all the outstanding questions are creating an unappealing picture.

In an environment like this, whispers about multi-billion dollar derivatives losses are finding fertile ground among nervous shareholders.

smaich@nationalpost.com


� Copyright 2002 National Post








ax (11/09/02; 22:29:07MT - usagold.com msg#: 89179)
@MIKAL

Mikal -

1.

in line with your idea of a currency linkage I
think it would help us all to stop relating gold to its
price in various currencies and do the opposite - always
relate a currency in terms of its value in gold -
the " absolute" currency.

for instance:

Fri 11-08-02 the USD = 96.89 mg of gold

the Yuan Renminbi = 11.71 mg of gold

the Euro = 98.15 mg og gold

and so forth.

2.

I think your thought of adding m1 plus m2 and m3 to see
how much of that sum is currently covered by gold reserves
is an interesting one. Do you have any current figures
for these aggregates?

3. I would also be interested to know the total current valuation of all residential homes in the U.S. as
another comparative figure. Do you have any idea?

ax (11/09/02; 22:08:14MT - usagold.com msg#: 89178)
@MIKAL

Mikal, I think you are correct that currencies could be
linked. However, the need for a gold "stabilizer" ie
larger tonnages of gold reserves for each of the
participating countries in such a linkage, would even more
necessary than it is now. This is because there would be
a greater need to smoothe out fluctuations in the economic
stability factors within each country so participating.
For instance, when a currency such as the USD , now the
world's reference currency, weakens because of the multiple
factors such as are now weakening it, the need for a greater
tonnage of an "absolute" gold reference within the treasury
increases in importance. It is now important for the USD
to be so stabilized, but would, in a future linked currency
set up,be important for that component of the linked
currency which was represented by the USD component.

Basically, the more weight of "absolute" gold reference
within each of the major central banks, particularly that
of the United States, the better it would be for future world currency stability, leading to world economic
stability, led by stability within the United States.



ManAurum (11/09/02; 22:03:13MT - usagold.com msg#: 89177)
$$$$322.40$$$$
Is buying gold now like buying it at $35 an ounce in the late 1960's?

The opportunity to gain from a purchase of gold in the late 60's was bigger imho. Today, the potential price rise in gold may be smaller than in the late 60's, but our ability to capitalize it is greater.

By the late 60's, the price of gold had been set at $35 for approximately 35 years. For the vast majority, $35 gold must have been like a fact of nature and taken for granted. Only the more astute and shrewd investors could have predicted that the US would go off the gold standard, which then led to the dramatic rise in gold in the 70's and beyond. Only the very few saw the eventual price rise, and they took the lion's share of the investment gain. The average investor was probably kept out of a good part of the rally by the restrictions in gold ownership by the US government.

Today, there are quite a few people who predict a dramatic rise in the gold price (although we are still very much the minority). The gain we experience may be smaller. Gold would have to rise to approximately $7,800 to reach the same percentage gain as when gold went from $35 to $850. $7,800 gold might happen, but I predict not. Nevertheless, with all the gold products available today (eagles, maple leafs, pandas, krugs, etc.) and with gold ownership legal, we have a greater ability to capitalize on the price gain and to protect our wealth.

P.S. This seemed like the perfect day to submit my first post. I received my first order from USAGold today: 3 St. Gaudens. Thank you to USAgold for the services you provide and thank you to all the knowledgeable and wise posters I have read over the last year of lurking.

(By the way, if the US continues to relentlessly depreciate its currency, we could see $7,800 gold. Hang on for the ride!)



seagull (11/09/02; 21:47:22MT - usagold.com msg#: 89176)
$$$$ 320.7 $$$$
As already mentioned by others, the POG has inflated from the late �60s to the present by a factor of about 10, but as this inflation is seen in all goods and services, the relative price of gold has remained stable.

But it is the backdrop that is different.

Back in the 60's:
1.public interest in the financial markets and certainly the gold market was miniscule compared with the present, and in some countries, gold ownership was illegal

2.there was general public consensus about the intrinsic value of gold as the pinnacle of absolute value, whereas currently TPTB do all in their power to denigrate gold as a �barbarous relic�.

3.There was probably manipulation of markets, but it wasn't as blatant or as desperate as in the present
�
4.The social and economic fabric of developed countries was considerably more stable
�
5.The currency of those nations was backed by something a little more substantial than is the case today

So, while the POG has remained relatively constant, its absolute value has escalated by a factor of 10, and TPTB are doing all they can to obscure this from a more-informed public (well, some are!) in a vain effort to hold onto the reins. Gold has been the absolute store of value for thousands of years, and there is absolutely nothing to replace its position or its historical significance.


Tacitus (11/09/02; 21:38:08MT - usagold.com msg#: 89175)
Bravo Kludge
Dear Kludge,

Thanks for putting in a good word for the Commander-in-Chief.

I'll keep an eye open for your postings. But for now I'm crashing.

By the way, what does "Kludge" stand for?

Over and out.
Tacitus

mikal (11/09/02; 21:12:58MT - usagold.com msg#: 89174)
@ax
As the US dollar will need to be devalued to pay off the external trade deficit and inflate away the budget deficit, will this lay the groundwork for a new linked currency coordinated with the Euro, Yen, Remnibi, Pound, Franc and Dinar? Perhaps invoking the gold cover clause, which is still on the books, to provide a partial backing to the US$, using gold in the Central Bank reserves. The Euro, as you know, is 15% "backed" by gold, whereby the large gold reserves in the European Central Bank (ECB) are revalued periodically (currently every 3 months, this is flexible), called mark to market, (ie- marked to the market price) the current London gold fix. As I write, the Euro is above parity with the US dollar and near a historic high which will soon be left far behind. As gold revalues, the Euro reserve's value increases, strengthening their currency, credit standing and clout internationally, Attracting more and more foreign investment in official(gov't) and private(corporate) bonds, currency, real estate, factories, banks, and more. A nominal percentage Au backing would guarantee the fiscal discipline needed to restore a measure of confidence to currency markets and begin to heal the US and world's economic systems.



Golden Bear (11/09/02; 21:10:13MT - usagold.com msg#: 89173)
James Grant on Inflation and Greenspan's fears...
http://www.nbr.com/
"...KANGAS: Do you believe Wednesday's half percent cut in the Fed funds rate marked the end of the down trend for interest rates? And, in any event, why would the Fed cut so aggressively while at the same time elevating its view of the economy from weak to neutral?

GRANT: Well, central bankers, no more than diplomats, are held to the literal truth in our society. And I think what the Chairman of the Fed meant to say is I am really scared. I'm cutting the rate by one half of one percent, but I'm going to say I'm not scared.

KANGAS: Do you think the Fed sees the threat of deflation?

GRANT: Interestingly, the Fed is worried about the threat of no inflation. And think about what that means. It means that the powers that be want the currency in which our savings is denominated, they want that currency to depreciate. Inflation is a part of the institutional structure of American finance and the absence of inflation is a very worrisome thing to the Federal Reserve system. So levered, that is to say, so indebted is the economy that the absence of inflation presents, paradoxically, a big problem. And I think that we all ought to reflect on what that means. What it means is that the dollar is meant to depreciate. That is the public policy of the United States government and we ought to take, I think, the proper steps to offset that..."

mikal (11/09/02; 20:59:50MT - usagold.com msg#: 89172)
@ax
I like your reasoning! I have seen estimates based on a gold cover for M3 money supply as well as M1 money supply for varied results. But concluding, like you, the US would need to somehow purchase a large gold cache. Why not, for fun base an estimate on covering M1+ M2+ M3? There are many possibilities, and many individual perspectives that could establish something closer to definitive than we have already seen.

Gandalf the White (11/09/02; 20:27:20MT - usagold.com msg#: 89171)
TA TA TAAA, TA TA TAAA, TA TA TAAAAAAAAAAAAAAAAAAAAAAAAAAA !!!
The Dec '02 POG Settlement Guessing CONTEST !
TENTH UPDATE <;-)
as of 20:10 Denver time 11/09/02
A total of 54 Prognostications to date !
Get your Number soon as the rush will be on MONDAY !
(As my Crystal Ball says that the total will be 150+ !!!!!) TA TA TAAA, TA TA TAAA, TA TA TAAAAAAAAAAAAAAAAAAAAAAAAAAA !!!

TENTH UPDATE <;-)
as of 20:10 Denver time 11/09/02
A total of 54 Prognostications to date !
Get your Number soon as the rush will be on MONDAY ! <;-)

The December 2002 COMEX Gold Contract SETTLEMENT Price on :

11/04/02 was $318.7 with a High = $319.3 and Low = $317.5
11/05/02 was $318.6 - $0.1 High = $320.2 and Low = $318.3
11/06/02 was $317.9 - $0.7 High = $318.3 and Low = $317.2
11/07/02 was $320.9 +$3.0 High = $321.5 and Low = $319.3
11/08/02 was $321.7 +$0.8 High = $323.3 and Low = $320.6

(looks as if Sir 18K is "KING of the HILL", at this point !) <;-)
---
THE RULES --
1) THIS Contest consists of TWO Portions --- A Price Prognostication and a Discussion Statement !

2) The Winner is the Price Guess closest to the Settlement price of the COMEX (most active) December 2002 Gold Contract (GC2Z) on the date of (revised) TUESDAY the 12th of November.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $543.2)

4) "Guesses" shall be SHOWN in the SUBJECT location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL ! Such as $$$$ 543.2 $$$$

5) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes HIGH NOON on (revised) MONDAY, November 11th.

7) AND MOST IMPORTANTLY, ****** as this part MUST accompany the Price prognostication, OR the price entry SHALL NOT BE CONSIDERED!
-- A short discussion (at least a thirty word paragraph) about the QUESTION --

"Is buying gold now, like buying it at $35. an ounce in the very late 1960's ?"

----
THE PRIZES !!
To the person with the exact or closest "Guess" to the December �02 (GC2Z) SETTLEMENT price on (revised) TUESDAY, November 12th ----- an ANTIQUE PRIZE of a German 20 Mark GOLD coin containing 0.2304 ounces of GOLD !!!
Look at one of these at this LINK supplied by The Town Crier --

http://www.usagold.com/onlinestore/special.html

ALSO, the "Runners-up" shall each receive a U.S. SILVER EAGLE containing one ounce of PURE SILVER ! (Rich, Did you see that ?)

ENTRIES sorted in order of DECREASING Values !

$$$$8,752.0$$$$ The Invisible Hand (11/5/02; 01:02:05MT - msg#: 88788

$$$$3,231.2$$$$ Clint H (11/04/02; 14:04:30MT - msg#: 88732

$$$$ 543.2 $$$$ Gandalf the White (11/04/02; 12:41:44MT - msg#: 88729

$$$$ 399.8 $$$$ Believer (11/4/02; 17:28:40MT - msg#: 88752

$$$$ 372.5 $$$$ techbull.... (11/05/02; 06:58:01MT - msg#: 88799

$$$$ 346.2 $$$$ drawmax (11/06/02; 07:57:48MT - msg#: 88893

$$$$ 345.0 $$$$ Sundeck (11/4/02; 20:36:14MT - msg#: 88768

$$$$ 340.0 $$$$ GoldnSilver2002 (11/05/02; 02:17:40MT - msg#: 88793

$$$$ 339.0 $$$$ rsjacksr (11/05/02; 05:01:21MT - msg#: 88797

$$$$ 338.4 $$$$ gvc (11/04/02; 15:15:16MT - msg#: 88739

$$$$ 336.8 $$$$ PCV1 (11/04/02; 22:06:09MT - msg#: 88776

$$$$ 333.7 $$$$ auenboy (11/06/02; 22:37:19MT - msg#: 88950

$$$$ 332.2 $$$$ BlackBart (11/04/02; 14:46:04MT - msg#: 88734

$$$$ 331.4 $$$$ Hipplebeck (11/07/02; 05:25:08MT - msg#: 88973

$$$$ 330.0 $$$$ Zhisheng (11/04/02; 21:02:31MT - msg#: 88769

$$$$ 329.0 $$$$ Rock (11/05/02; 15:57:42MT - msg#: 88837

$$$$ 327.6 $$$$ Kodie (11/04/02; 15:18:14MT - msg#: 88740
$$$$ 327.5 $$$$ sangrelli (11/05/02; 07:36:17MT - msg#: 88800

$$$$ 326.6 $$$$ silvergolong (11/05/02; 16:29:06MT - msg#: 88841
$$$$ 326.5 $$$$ Beach (11/04/02; 15:56:34MT - msg#: 88743

$$$$ 325.1 $$$$ Humble Pie (11/05/02; 19:09:24MT - msg#: 88853
$$$$ 325.0 $$$$ Lothar of the Hill People (11/05/02; 13:13:06MT - msg#: 88828

$$$$ 324.8 $$$$ goldenpeace (11/8/02; 08:59:57MT - msg#: 89063

$$$$ 324.6 $$$$ Cytek (11/04/02; 21:48:36MT - msg#: 88774

$$$$ 324.2 $$$$ Shermag (11/09/02; 19:13:41MT - msg#: 89168

$$$$ 323.7 $$$$ slingshot (11/5/02; 00:39:55MT - msg#: 88787

$$$$ 323.4 $$$$ J-Bullion (11/04/02; 12:57:35MT - msg#: 88730

$$$$ 323.2 $$$$ Blurrmoon (11/06/02; 12:30:20MT - msg#: 88908

$$$$ 322.9 $$$$ GratefulForGold (11/4/02; 19:31:21MT - msg#: 88764

$$$$ 322.7 $$$$ Max Rabbitz (11/08/02; 11:54:33MT - msg#: 89073

$$$$ 322.5 $$$$ NTgeo (11/07/02; 18:25:59MT - msg#: 89020

$$$$ 322.2 $$$$ Mountain Top (11/05/02; 09:40:22MT - msg#: 88808
$$$$ 322.1 $$$$ Liberty Head (11/4/02; 20:25:50MT - msg#: 88767

$$$$ 321.7 $$$$ 18K (11/04/02; 15:08:52MT - msg#: 88738
$$$$ 321.6 $$$$ Noble1 (11/05/02; 18:43:59MT - msg#: 88851

$$$$ 321.4 $$$$ a nation of one (11/07/02; 14:52:32MT - msg#: 88999

$$$$ 321.2 $$$$ kludge (11/4/02; 18:41:45MT - msg#: 88763

$$$$ 321.0 $$$$ Tevye (11/07/02; 16:28:05MT - msg#: 89012
$$$$ 320.9 $$$$ MoonHowler (11/08/02; 10:42:45MT - msg#: 89069
$$$$ 320.8 $$$$ Basil (11/06/02; 07:36:14MT - msg#: 88892

?*?* 320.5 Rule 7 mudr (11/08/02; 09:59:11MT - msg#: 89067

$$$$ 320.2 $$$$ NEMO me impune lacessit (11/06/02; 12:17:07MT - msg#: 88906

$$$$ 320.0 $$$$ Bound Spirit (11/06/02; 23:58:53MT - msg#: 88957
$$$$ 319.9 $$$$ Trapper (11/05/02; 09:30:05MT - msg#: 88806
$$$$ 319.8 $$$$ barnaclebob (11/04/02; 14:49:06MT - msg#: 88735

$$$$ 319.5 $$$$ Nibelung (11/06/02; 15:33:42MT - msg#: 88926
$$$$ 319.4 $$$$ SilverHoard (11/05/02; 16:07:31MT - msg#: 88839

$$$$ 319.2 $$$$ steady (11/04/02; 16:50:45MT - msg#: 88748

$$$$ 318.4 $$$$ VanRip (11/05/02; 11:34:35MT - msg#: 88820

$$$$ 318.2 $$$$ Frosty (11/05/02; 18:03:57MT - msg#: 88848

$$$$ 317.0 $$$$ Albatros (11/05/02; 08:38:52MT - msg#: 88803

?*?* 316.7 Rule 7 nickel62 (11/06/02; 09:04:02MT - msg#: 88896

$$$$ 316.4 $$$$ HOOSIER GOLDBUG (11/05/02; 16:51:51MT - msg#: 88843

$$$$ 307.5 $$$$ Topaz (11/06/02; 02:55:05MT - msg#: 88883

===

Your Attention Please ! The Master of the Castle, SIR MK is pleased to announce that there shall be a new "PRICE OF GOLD GUESSING CONTEST".

ALL Goldhearts present are invited to enter. The ONLY requirement is that, One must be able to POST to the Forum in order to enter. LURKERS, therefore must obtain a required FREE "Password" by visiting the webpage at:

http://www.usagold.com/cpmforum/tools/guideandsignup.html

and reading the Guidelines and Prohibitions sections, and then completing the REGISTRATION form and submitting. (Rather painless too.)

===
<;-)



ax (11/09/02; 19:23:55MT - usagold.com msg#: 89170)
How much does U.S. Gold Cover?

reference: mas (11/09/02; 18:55:40MT - usagold.com msg#: 89167)
"... government debt of well over 6 TRILLION"

Assuming the figure quoted by MAS of a " 6 trillion dollar
debt" is approximately correct, how much of this is covered
by U.S. Treasury Gold?

6 trillion dollars = 6000 billion dollars

Assuming there are 8000 tons of gold in the U.S. Treasury
and the price is roughly $321/ounce, my calculations
indicate ( please correct me if this is inaccurate ):

$ 82,524,383,000 or 82.524383 billion dollars are
covered by U.S. Treasury Gold.


82.524383/6000 = .0137540 = 1.37548 %


Only 1.37548 % of the 6 billion dollars is covered by
U.S. Treasury Gold.

Is there any doubt that either :

1. The price of gold must rise significantly to increase
the dollar value of the U.S. Treasury gold stock

or

2. The U.S Treasury must substantially increase the
gold tonnage it owns


Either way, it will require massive increases in either
1 or 2 to cover the 6 billion dollar figure more than
a very slight 1.37548 %.

Any corrections to these figures are welcomed.

ax

Golden Bear (11/09/02; 19:21:43MT - usagold.com msg#: 89169)
Max Rabbitz (msg#: 89165)
Hey Max,

No I don't think it is. I did a search and could find no direct affiliation. It's a website offering alternative views on global events, some articles being from Larouche and his staff...

I agree with your comments, I posted the link more for the anecdotal comments from various sources regarding Bush.

Larouche's website is at: http://www.larouchepub.com/eiw/

Cheers.

Shermag (11/09/02; 19:13:41MT - usagold.com msg#: 89168)
$$$$ 324.2 $$$$
"Is buying gold now, like buying it at $35. an ounce in the very late 1960's ?"

Yes and no. Although today's environment bears many of the characteristics of that era, there exist important differences that further support a gold price explosion.

First the important similarities:

1. The world again finds itself awash in U.S. dollars. The breakdown of the Bretton Woods accord and Nixon's closing of the gold window were the consequences of the dollar excesses at that time. We again find that the U.S. has overplayed its privileged reserve currency hand as evidenced by the enormity of the "big float" and the massive current account deficit. At the moment, geopolitical and economic incentives for individuals and nations to hold their dollars seem to be eroding away. Machinations of the Treasury, IMF, and assorted central banks not withstanding, the U.S. dollar is due for a hard adjustment.

2. It's all about oil. In the early seventies, the U.S. oil production peaked. That caused a shift in capital flows and wealth that was partially offset by inflating the currency. The entire world now seems poised to round out its Hubbert peak, with inevitable inflationary reactions to mitigate the pain.

3. It's guns and butter all over again. The U.S. once again finds itself embroiled in external military engagements. The war on terror, as was the war on communism, threatens to be costly, and escalating, with no foreseeable end. Meanwhile, the cradle to grave social promises remain intact. There is again to be no sacrificing of lifestyle to support the war effort, with attendant federal budget deficits as far as the eye can see.

Now the important differences:

1. Its the debt, stupid. The U.S. was then a net creditor nation, supported by a productive capital base built over more than a century. It was a nation of savers. We now see the U.S. bloated with debt at government, corporate and personal levels seemingly beyond what can ever be repaid. Productive capital investment is displaced by consumptive excesses.

Although an extreme in magnitude, the U.S. is far from alone in its debt excesses. National governments around the globe, from first to third world status, are pushing the debt envelope. Argentina is only one of the first to succumb. Personal debt levels, most notably in the Anglo nations, is also at unprecedented levels. Germany's corporate strains of late are just a few examples of corporate excesses around the world.

2. Tottering banks. A fed funds rate at 1.25%, rocketing loan loss provisions, runaway bankruptcy at corporate, national and personal levels, decimated share prices, earnings under pressure, abysmal transparency, and notional derivative exposures beyond $90 trillion. These are not the hallmarks of a healthy sector. Japans banks are on the verge of falling below the minimal capital adequacy requirements to be able operate internationally. The banks of the seventies were models of fiscal probity compared to those of today.

3. Demographics. We are an aging globe, with the populations of western nations about to place some hefty demands on the remaining productive sectors. In Canada, for example, within 20 years each retiree will have only 2.5 working age people to support them, in contrast to the present 6 workers. Pay as you go pension promises will be broken with alarming frequency in years to come.

4. Bubbles galore. We have just witnessed the bursting of what has been described as the largest stock market bubble ever. A U.S. housing bubble is arguably about to burst. The bond markets are looking bubblish of late. The Japanese have yet to come to terms with their massive twin bubbles in stocks and real estate. Add these to the above described debt, balance of payments, and U.S dollar bubbles and we get a not so pretty picture of what monetary excesses can do.

5. The call-the-lawyers syndrome. Although less tangible, there is non-the-less an increased tendency in our society to find someone else to pay for our mistakes or misfortunes. Litigation is a first recourse in many circumstances. This goes hand in hand with an erosion of personal responsibility and self sufficiency.

6. Inflate your problems away. If all you have in your toolbox is a hammer, every problem resembles a nail. The fed's response to all financial problems it encounters is to smack it with its inflation hammer. And hammer hard they do. The nail-like threat of deflation will be no different.

7. Price suppression. Today's price does not closely reflect the supply and demand fundamentals in the gold market. When this over-corrects, as all economic pendulums eventually do, the upside in dollar terms will be breathtaking.

In short, there is a now much more compelling case for preservation of personal wealth with gold than that of the late 60's era.

mas (11/09/02; 18:55:40MT - usagold.com msg#: 89167)
Comment's from The-Privateer
While we are on the subject, something of interest.

We have asked variations of this question before, but in the wake of the Fed's decision of November 6, it is highly appropriate to ask it again. What would you expect would be the fate of the currency of a nation which:

* Had by far the world's largest net external debt
* Was running an annual current account deficit of (+/-) 500 Billion
* Had not run a GENUINE budget surplus for nearly 40 years
* Was spending more than its six largest "competitors" combined on armaments
* Had a citizenry which had no savings whatsoever
* Had a stock market in a bear with prices still around 40-50 times earnings
* Had a government debt of well over 6 TRILLION
* Had a Central Bank "controlling" interest rate of 1.25%


You would expect the currency of such a nation to be losing exchange value against other currencies, would you not? Of course, the nation is the US, the currency is the US Dollar, and the US Dollar IS losing value against other currencies. On Friday, November 8, the US Dollar index closed at 104.68 - down 0.45 points on the day and only 0.26 points above its 2002 low close of 104.42 set on July 19.


The Invisible Hand (11/09/02; 18:53:02MT - usagold.com msg#: 89166)
BoE is model for 'new' ECB
http://www.observer.co.uk/business/story/0,6903,836761,00.html

Faisal Islam, economics correspondent
Sunday November 10, 2002
The Observer

The path towards Britain's possible entry into the euro will be made much easier by a radical French plan for the European Central Bank to be reformed in the image of the Bank of England.
French Prime Minister Jean Pierre Raffarin's Council of Economic Advisers recommends that the ECB adopts three major reforms to its monetary policy arrangements. If adopted, they would allay most of Gordon Brown's concerns about the institutional structure of the Frankfurt-based bank, and make his 'five tests' far easier to pass.
The council's study, by economists Charles Wyplosz and Patrick Artus, was received warmly by the French PM. The reforms would replace the ECB's confusing 'two-pillar' target with an inflation target of between 1 and 4 per cent, entirely consistent with the Britain's target of 2.5 per cent.
It argues that an enlarged eurozone should abandon its unwieldy 18-member decision-making committee, in favour of an executive committee of economists, like the Bank of England's Monetary Policy Committee.
France's position is important. It is almost certain that ECB President Wim Duisenberg will be replaced by a Frenchman in July. The favourite, Banque de France Governor Jean-Claude Trichet, is politically close to Raffarin.
==
What does this mean for gold? Only the inner circle of the executive committee of economists will hold decision power. Is this Trail Guide's hand, mind, idea or system?

Max Rabbitz (11/09/02; 18:32:12MT - usagold.com msg#: 89165)
Golden Bear@ 89161
Is that a Lyndon Larouche web site? It's OK if it is. Doug Noland has even referenced him. It's just that he should be up front about it. Although interesting I am still uncertain how stable/reliable he is. He does not reference anything and so much seems hidden.

kludge (11/09/02; 18:23:41MT - usagold.com msg#: 89164)
Tacitus, et al
My list for the Four Horsemen of the Apocalypse are:

1) Y2K
2) The asian contagion
3) The falling US dollar...

Oops, sorry - been reading the archives too much and they rest heavy on my thoughts. How DID we survive against, what seemed at the time, these insurmountable challenges???

To answer your earlier question Tacitus, I guess if I had a BS from Yale and an MBA from Harvard (as our President does) - I would still surround myself with the best advisors I could find, experts in their fields, and listen closely to their advice first.

I also found interesting the posts of late on the new UN resolution on Iraq. I'd only like to point out that the 1991 war has NOT ended, we're in a cease-fire as long as Saddam adheres to the resolution he agreed to then. A quick read of UN Res. 687 will show without a doubt that he is NOT living up to the terms of the cease-fire. Some mention clandestine oil contracts, arms sales, and diverting the American citizens minds from the economy as the cause for renewed aggression with Iraq - OK, maybe - but don't forget firstly that Iraq is in breach of a cease-fire agreement!

To the weakness of the new UN resolution, Paragraph 5 states, in part:

"as well as immediate, unimpeded, unrestricted and private access to all officials and other persons"
[...]
"further decides that UNMOVIC and the IAEA may at their discretion conduct interviews inside or outside of Iraq, facilitate the travel of those interviewed and family members outside of Iraq, and that such interviews shall occur without the presence of observers from the Iraqi government"
[...]
Wonder what those "officials and other persons" will have to say once they and their families are safe?

Lastly, on what appears to me as posts from the "guilty American conscience" for having it so good when others may not; our gov't has the responsibility to see to our "Safety and Happiness" and to "insure domestic Tranquility" - considering our standard of living vs. the rest of the world, have they not succeeded? Do we not assist others when disaster strikes their country? Do they help us? I haven't heard of any "IslamCares" crates of food/blankets arriving to help our victims of disaster.

What's any of this have to do with gold? Maybe nothing, except that if the only adjoining device you can envison is a nail, then every problem might like the back-end of a claw hammer.

Tacitus (11/09/02; 18:13:53MT - usagold.com msg#: 89163)
Thanks for the Responses and now Another Question
Gentlemen,

Thanks for the insights. If you have more insights to share so that when I take over I can get things straightened out, please let me know. I'll make you my advisors if you come up with some good ones.

These past two days in the Forum, there was quite a bit of talk about what has happened in Japan thanks to their government tampering with interest rates. Could any of you get me in touch with a history or monograph or essay on this topic. In might help me find out what to expect in the US of A.

And by the way, for all of you lovers and haters of George W. Bush, check out the new documentary called, Journey's with George, produced and written by Alexandra Pelosi (daughter of Nancy Pelosi, soon to be Democratic minority leader in the House of Rep.) It can be partially viewed at HBO.com under documentaries.

Salve,
Tacitus

Max Rabbitz (11/09/02; 17:26:21MT - usagold.com msg#: 89162)
End of Goldman Sachs Gold Desk
Could the reason be that the miners are no longer willing to play the paper hedging game? GS is frustrated that miners refuse to do what they're advised/told. Without forward selling, what's in it for GS? They can't make money on analysts fees alone. Who listens to them anyway? Remember the rape of Ashanti? Are they having losses on their gold carry trade book? So they drop coverage and pretend gold is nothing and going nowhere, and get free media propaganda. I'll bet "Analyst" McConvey gets a good recommendation and greener pastures soon. He did his job.

Golden Bear (11/09/02; 15:36:26MT - usagold.com msg#: 89161)
Tacitus (msg#: 89139)
Greetings Tacitus,

no need to apologize, this is only healthy debate, which stimulates the mind...

As for...

"...I wish we could avoid the temptation to villianize the Bushes and Gores of the world. I think the vast majority of politicians have good motives. They want to find and impliment the right policies for our financial world. They just have different proposals of how to realize these common goals. Civil discourse is the key to working together to put this country on the right path, whether that be morally speaking or fiscally speaking. Otherwise we may one day degenerate into another Palestine/Israel scenario...."

Bush holding civil discourse? Ya gotta be kidding! Take a read of this and see how Bush responds to ideas foreign to his own...

http://www.bankindex.com/read.asp?ID=1425

Cheers.

Golden Bear (11/09/02; 15:03:19MT - usagold.com msg#: 89160)
Belgian (msg#: 89140, msg#: 89128)
GS nonesense
Sir Belgian,

excellent analysis and revelation of the situation, as always. Thank you.

"The problem with $500 gold is there's so much scrap in the world that any price above $350 would probably lead investors to sell some of their holdings rather than buy more, he said."

Scrap!?!? Reminds me of the story of John Law, the biggest confetti pusher in the history of finance (until Greenspan), and while trying to flee the devastation his scheme created, was supposedly caught with a hoard of bullion.

Cheers.

Belgian (11/09/02; 14:49:01MT - usagold.com msg#: 89159)
@ Tacitus
First of all Sir Tacitus, I do agree with Sierra Madre that the major part of the economical/social house has already been burned and that the remaining parts are on fire.
There is not much left as we can do or do not.
Strong trends went already too far and are therefore irreversable. Economic hyperconcentration, monopolism, regulation and intervention are in full swing. Economics of scale and exploitation/domination are un-balancing and preventing an harmonious development. Debt proliferation and competitive falsifications are murderous...etc...etc !

How would you expect to set all this back on track as to ensure peaceful prosperity for the majority, within an honest meritocraty. I'm making my considerations on a global scale and not only for one continent in particular.
But to be honest with you, I do prefer things going the Euroland way. A nice mixture of sufficient free enterprise and complimentary social engagement without falling into extremes.

But in an effort to answer your question, I would like to suggest the following :

- Decrease economic/monetary intervention drastically.
- Stop all measures that make the economy grow faster than its natural pace. No to unproductive debt and yes to default.
- Stop all forms of blind nationalism and infantilization/de-responsibilization, of the masses.
- Start a crusade to rehabilitate lost values on all domains. Stop wars and put an hold on ambitions to dominate with evil, exploitational, intentions. Live and let live !
- Guarantee genuine justice for all.

PPPfffftttt, what a question, Sir Tacitus...

But I only see extremes, building upon extremes and feel somewhat hopeless with such a naive answer.

As our mentor-host, Sir M. Kosares, talks to a wide variety of his clients about all different economic/financial options, at the stage where we presently are...one must surely find a high dosis of econ./fin., "stablity" in the possession of physical Gold. When the environment is very visibly, overheating, one feels relative comfortable with sufficient water (Gold).

All those economical/financial authorities, never come up with any straithforward strategies to avoid further detoriation or any change of course ! Have you already noticed this ? What good is it to lower 12 times IRs when nothing seems to change and when Japan is a clear to see example ? Why is there so much selectiveness in the defaults (bail outs) ? Why is intervention of all kinds, so omnipotent ? Because having reached extremes can only invite to search for more extremes !

I do realize, this is a somewhat weekend, amateur, philosophy...or an elegant effort for not having to answer your question because I have no, GENERAL, answer/solution to it. That's why I landed on this Gold University here and most probably stickt to it as long as things don't change for the better. Accidently born in 1949 at the start of the Kondratief cycle...I have that nasty feeling that I'll have to live it through the winter period of this entire cycle.
Give me a comforting smile as sign of understanding. Thanks Tacitus for letting me express myself.








Liberty Head (11/09/02; 14:22:41MT - usagold.com msg#: 89158)
Tacitus
If I had the power:
1. I would reinstall the Constitution and Bill of Rights as the supreme law of the land. This would be retroactive and all inclusive.
2. I would stop all government sponsored meddling in the internal affairs of other countries.
3. Our military would be 100% devoted to defending our country and training citizens to defend themselves.
4. All peaceful private business and mediums of exchange would be conducted at the mercy of a complete and total free-market.
5. Representation would be proportional as opposed to winner take all.


Cavan Man (11/09/02; 14:16:22MT - usagold.com msg#: 89157)
Cheers Sierra
Few see the world as it actually is. Surely there's
a solution in a political platform or a new slogan?

"What shadows we chase. What shadows we've become!"


Yukon (11/09/02; 14:01:45MT - usagold.com msg#: 89156)
Tacitus
www.nesara.org
I agree with Sierra's message below, i.e. you need more than a 10 point program to fix an entire monetary system that affects virtually every aspect of our lives.

To answer your question though, if it is true solutions to this beast that has been thrust upon us that we seek, then I believe that there is an answer. However, even with both houses of Congress on the same page, what I refer to will probably never become reality because most of our elected reps. have a vested interest in keeping the system going at all costs. Would you want to be a politician and admit that you had a hand in perpetrating great lies and knew that the government to which you were elected was operating outside its constitutional boundaries and you did nothing to stop it or call it into question? (I belive Rep. Ron Paul is the only exception here)

The answer to our problems lies in a little known piece of legislation called the National Economic Stabilization and Recovery Act (N.E.S.A.R.A.). I have studied this act in detail and believe it to be the most comprehensive and total package for providing for the following:

1. Elimination of the private Federal Reserve System and returning monetary control back to Congress where it Constitutionally belongs; which thereby provides for the U.S. Treasury to issue paper currency of two types; first that which is backed by precious metal and second that which is backed by the credit of the U.S. government

2. Restoring gold and silver coin as mandated by the Constitution, though ignored by every state in this republic

3. Providing a means to eliminate all interest on debt

I hope everyone has at least taken a cursory look at what this Bill could accomplish. I would love to hear all the great minds at this forum come out in favor of this potential legislation. I would also love to hear any criticisms of it. For as I stated earlier, I know of no other solution or idea that even comes close to tackling all three problems listed above.

Viva Liberty!

Yukon


mikal (11/09/02; 13:42:53MT - usagold.com msg#: 89155)
@Tacitus
Gloomy? What led you to that conclusion, unless you're speaking for yourself. Why don't you take your own bait and tell us just how the "chief exucutive" will wrest control from his handlers without taking a bullet like Reagan, Kennedy and their hapless forbears. Once accomplished, then give us your cheery assessment of this "recovery" and how to spread American "prosperity". Maybe a start would be to give the country's foremost scholars, scientists and statesman a strong voice in the selection of candidates who run for gov't positions. There are many qualified candidates that have been stymied in the past. Another needed reform is control over electronic ballot boxes that have illegal "back doors". And it goes without saying that most people do not even know why they vote as they do- the winner is usually the one spending the most money to make his name known.

GratefulForGold (11/09/02; 13:34:49MT - usagold.com msg#: 89154)
The virtual door opens a crack...
She first scans the room, alert for signals. Hearing no alarms, she sheepishly enters, feeling a comparable "morning after" chagrin. "Did I really say that?" she ventures. "Yes, dear, you did!"

Thank you, Mr. Gresham, for your continued acceptance. I truly appreciate it.
Thank you, Tacitus, for your gentlemanly response.
And you, too, Cometose! But don't encourage me because one of these days I'll say what I Really feel! ho.

You guys here are great and I appreciate all of you and your wisdom.

GratefulForGold (and GratefulForUSAGOLD!)

Sierra Madre (11/09/02; 13:28:51MT - usagold.com msg#: 89153)
Tacitus, your request for a ten point program, "What to do?"

Tacitus, I think you really have not grasped the problem facing the US, and also the rest of the world.

There has been an enormous malinvestment, a mistaken use of scarce resources in the US, and ALSO all over the world, mainly driven by credit-creation in the US, producing dollars for the rest of the world through trade deficits.

Malinvestment means, for instance, that you built a boat that cannot float in your farm pond. The boat is too big, not enough water depth. That's malinvestment.

Another mistaken use of capital, is burning your house down, to keep warm.

Your questions are rather like, "Propose a ten point program to fix the problem of the burnt-down house."

The house is gone, it burnt down. It is no more. There can be no solution to the problem, no financial alternative to remedy the fact that the house is gone.

All that is left, is to begin rebuilding again, with painful savings, lower standard of living for a long while, and lots of sweaty labor.

People find it hard to understand that finance cannot work magic. When the house has burnt down, it is gone; that is a fact and no amount of number-juggling is going to change the fact.

The world is going to have to go through a terrible, terrible period, and perhaps that is why Mr. Bush is in such a hurry to get a war going: to be able to attribute the decline in living standards, which will be great, to the "war effort" and rally patriotism to cover up the gigantic mess, facing the US principally; but, the whole world is in for very, very difficult times.

There are no solutions. Only work and savings, and a mass psychology more oriented to facts and away from consumerist lunacy.

Sierra

Sierra Madre (11/09/02; 13:14:04MT - usagold.com msg#: 89152)
From "The Thirties" by Malcolm Muggeridge
So MUCH entusiasm in the US about going to war!!!
"It is one of the illusions of Liberalism and all its many offshoots and affiliations, that the way to men's hearts is to offer them material benefits. If this were indeed the case, the triumph of pacifism would be assured, since there is no material benefit more precious than life, no material catastrophe more awful than death. If however, men want to live, they also want to die; and their longing for death is usually the more ardent and more easily played upon of the two, because more rarely indulged. It accumulates through monotonous, disappointing years, a reservoir of death-longing, ready to be tapped, and when tapped, producing wars, revolutions, and other upheavals. Between the two longings to live and to die, men fluctuate, making civilizations and destroying them, formulating beliefs and demolishing them, bringing order out of disorder and then disorder out of order, weaving the pattern of their history."

USAGOLD / Centennial Precious Metals, Inc. (11/09/02; 13:02:48MT - usagold.com msg#: 89151)
Your understanding of gold may well be your North Star as you navigate the future
http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing "Gold will play a critically important role in American investment portfolios in the years to come. This book provides investors a basic education on private gold ownership from one of the nation's top experts." --Rep. Ron Paul, Texas, U.S. House of Representatives Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.

Thursday May 24
website support: sitemaster@usagold.com
Site Map - Privacy- Disclaimer
The USAGOLD logo and stylized gold coin pile are trademarks of Michael J. Kosares.
© 1997-2012 Michael J. Kosares / USAGOLD All Rights Reserved