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"Think now, if you are a person of "great worth" is it not better to acquire gold over years, at better prices? If you are one of "small worth", can you not follow in the footsteps of giants? I tell you, it is an easy path to follow!" --ANOTHER (THOUGHTS!) 1/10/98 [View early writings of ANOTHER and FOA at USAGOLD (5/1/98 - 9/3/98)] |
WELCOME to the Scenic Overview...the Third Archive for "Walking the Gold Trail"
USAGOLD is pleased to offer these special pages of unfolding commentary that are sure to challenge conventional perceptions of the gold market and international monetary affairs. Content for these Gold Trail pages is in the hands our two anonymous authors, "ANOTHER" and "Friend of ANOTHER" (FOA); and based on our past association with these popular commentators, we are confident that the message will continue to be as fascinating and as worthy of careful study as anything you will find on the web today.
Through these special pages we can now "Walk the Gold Trail" of current events; anticipating the road ahead while leaving this easy-to-follow trail of commentary behind.
We encourage you to follow along (or to catch up), and then to join your friends at the USAGOLD Forum to share in the discussion. It should be noted that we do not edit or seek to alter ANOTHER and FOA's presentations; they appear here as submitted by the authors. With that, we have finished lacing on our own hiking boots, and stand ready to enter the yellow wood, taking the path less traveled by...
(Archive I) The
Trail Head -- Start
here for earliest archived Gold Trail posts from February 2000 - June
2000
(Archive II) The
Long and Winding Road
-- Gold Trail posts from June 2000 - January 2001
January 2001 to April 2001 (Archive III) This archived commentary has been re-arranged and presented in chronological order so that you may begin reading, naturally, at the top. However, you may click here (Scroll To Bottom of Text) for the later commentary.
FOA (1/25/2001; 10:00:13MT - usagold.com msg#55)
A Comment, then The Gold
Of Troy
Hello Randy!
I thought this would be a good time to take a break from the trail.
Here, at my place on the Trail Head, we can consume the luxury
of a more relaxed, liberal conversation. Some day, I hope Michael,
yourself or others may physically join (actual posting) in talks.
I know MK is very busy (talking to friends / clients and counting
his / their gold (smile)) so his being here, in spirit only, is
enough for today.
For you, Randy, I'm afraid that the times ahead may make yourself
one of only a few that will talk to me. You see, attitudes in
this gold market are going to become very hard, almost stone like.
Some of this will be reflected in a widening "valley between
paper gold owners and physical gold owners",,,,, that is
a subjuec I have, in the past, referred to. Unless one has the
reasoning powers to see the future in physical gold, as I know
you do, the possibilities of overcoming and / or regaining ongoing
and future losses of wealth will congeal many a person's feelings
. So, for now, engage your free spirit and have a glass of my
best wine. I hope you enjoy this red, there were only 500 cases
of it made in the whole world and I got the last one (smile).
All the best, my friend.
---------------
(after a sip and a moment to reflect)
You know, in a little bit, in the next post, I'm going into a
whole discussion about ancient gold,,,,,, carrying the thought
right to the present. But before doing that:
I think it's a real shame, the way our Western / American investment
culture has changed the private persons perceptions of gold,,,,,
indeed, a change in their perceptions of all wealth. It seems
that almost every form of asset holding must be in some form of
leveraged and / or non real ownership. Paper this,,,,,, paper
that,,,,, ten to one gains,,,,odds are on your side,,,, and so
on and so on. And, the problem is not just gold,,,, it's visible
in everything.
I guess this is what happens when decades of currency inflation
leads to almost free money flow for any imaginable use,,,, and
that unlimited ability to borrow and spend comes on top of little
or no price inflation! The dollar's reserve function and the lack
of significant price rises such a world financial structure creates,,,,,,
has developed a frozen value perception in our currency's image.
A frozen value image that our society absolutely knows is their
net worth's purchasing power for real things. Collectively, it
isn't and never has been.
We have a whole generation,,,, even several generations,,, perhaps,
yourself included,,,,, that do not perceive their standings as
being high up upon the hill. Many, if not most, of the voting
public see their economic location at the bottom or only partially
up said economic mountain,,,,, and they see that any fallback
in the economy will drive them into negative territory. In reality,
we are, and have been on easy street. With such a conflict, is
it any wonder that Alan Greenspan must inflate further? No different
from the past,,,,,, but still inflate, regardless of the world's
new currency environment? In addition, following such a public
political directive, our fed's inflation can casually respond
to the changed nature of our derivative economy and not seem out
of place while doing it.
With this almost national perception of a false "net worth
purchasing power" and with our ability to borrow more into
said net worth, our perception's impact,,,,,,, as a whole,,, on
society's money culture cannot be resisted. Yet, all this proceeds
as our fiat values, in reality, are transitory and always have
been. It's just not understood as a natural process. We see it
in all our conversations, at home, at work, at play and on the
internet. With such a well grounded belief:
----People are reduced to playing a game with their wealth, instead of employing it to create a better standard of life. A better standard based more upon the security of ownership, now, than upon some quantity of purchasing power who's future value conversion is unknown.------
----------------
(another pause and a sip)
You know -------- some readers think I'm being disingenuous when
I write,(and I am using that word with Samuel Johnson's 1755 definition)
but it takes that much and more to impact the diverse minds that
come here. When saying diverse, I mean intentions as well as educational
and cultural backgrounds.
I know there are "real asset" people, like yourself,
here. Physical gold advocates that are, in no rime or reason,
gloom and doom gold bugs. Like you, Randy, they applied their
mental faculties using a lot of hard work and grew to understand
the real world and where it's going. Not just following the Western
investment crowd.
But, we also engage no less than a small hoard of "western
style" paper gold bugs on this venue,,, as over the years
they have become and represent the majority of hard money thought
regarding gold. Using the thoughts and perceptions I just outlined
earlier (above),,,,,, these people,,,,,, mostly Americans and
foreign natives using American trends as a guide,,,,,,, are employing
their assets into this hard money arena,,,,, and doing it using
historic realities, not future realities. That's fine if we relive
the past! However, today, the evolution of our currencies lifeline
trend has deformed these investment methods into little more than
gambling. And it's the exact same gambling dynamic they vocally
deplore and are trying to escape from in other areas. In case
any readers are drifting off, here, I'm directly referring to
paper hard money investments in today's world. Not only are these
perceived hard money vehicles "not the same as before",,,,,,,,,,,
like the currency, too ,,,,, their station in life is moving on.
Out away from what their past precidents.
(another pause)
When gold is discussed on public forums and at investment conferences,
many true physical gold advocated don't perceive the motivation
behind the oratory from today's paper gold bugs. Their interest
in physical gold is real, but their actual intent is to gain "a"
security by profiting from a gold dynamic created by other's buying
actions. Never to gain "the" actual security by entering
into the gold dynamic themselves. Many of them don't have a clue
of what all that means. Yet, such an understanding would delinenate
the huge difference within this concept. Especially today,,,,,
and in the future as said difference may make or break the financial
worth of many. Here is an example of such thinking:
----- Two guys are talking about shoes:
"Hey, did you notice how few people have shoes today? I know we have them and their use is obvious. It balances our overall physical appearance and gives a long-lasting foundation for our feet and for our human structure. In turn, shoes support all the other investment clothes we own and use during our life."
While these fellas are talking several other "Americans" overhear the conversation and join in:
"Shoes,,,,, shoes,,,, what's this about shoes? You say there is a demand for them,,,, a deficit in supply? Oh yes, we completely understand the concept and fully embrace it. Without shoes, none of us could economically stand up straight. The whole world is woefully shy of them and will someday be forced,,,,, if not by foresight, by need, to own them. There is no way any of us could transverse a hard rocky economic road without gold,,,, weeeee mean shoes! Man alive,,,,, I'm going to buy a shoe factory and make some money from all this new demand."
But, the first two guys observed and asked:
"But, wait a minute,,,,,, aren't you going to follow your own keen concept and buy some shoes for yourself and your family first? You know, that public shoe company does not and will not,,,, by government tax laws and regulations,,,,,, sell it's product directly to it's owners. They can only give paper profits to their owners. During all the big rush, you will be in with all the other "shoeless buyers"
Oh yeah,,,,,, we will later buy them,,, said the traders,,,,, besides, I got a 1/4 shoe now,,,, that's a start. And, by holding these tiny shoe laces, we can stand here and fit in with all you well heeled players (grinning like Texas Westerner on an oil well ). Look, I'm in this to make money,,,,, it's just a concept like all the others I follow. I do the same thing when I'm with other "conceptors" of the same ilk,,,,,, I talk their talk to understand their concept. But, I really don't need your gold as long as I got my paper profits.
OK, said the two guys with shoes. We don't mind your talking with us, so long as your perceptions don't distort our end purpose of having good shoes,,,,,,, and just don't complain when your company's value can't equal the worth of good shoes on the hard road before us.
------------------
Further to consider,
I think many players degrade our reasoning because it just suites
their confrontational nature. Their constant replay of the same
past failed positions clouds the view, even as it does make everyone
think harder. Some may have to drop more wealth before they learn,
I don't know? In addition, some paper players, caught up in the
paper game our currency inflation creates, mentally cannot let
go. To do so places them outside their social strata even if it
saves them much heart ache and money. They feel that only the
leverage is in the leverage of some gold substitute, never gold
itself as the means to an end. Own silver, mine stocks, erivatives,
etc.,,,,,, and that position will restore their already considerable
loses, they hope.
It's a: "there just has to be a way I can play this game
using some paper system",,,,,," even another more leveraged
metal if need be". I, myself, know the feeling and over a
lifetime have evolved through it. Problem is I doubt others will
have that same luxury of so much time.
So, Randy, let's go back in time and space to build a gold perception
the physical gold advocates have understood from the beginning.
I'll post in a few hours (if the power stays on at the Trail Head)
(smile)
TrailGuide
FOA (1/25/2001; 16:28:50MT - usagold.com msg#56)
The Gold Of Troy!
Hello again Randy,
Let me read something to you that will set the tone of this ongoing
discussion:
---- Was There a Real Trojan War? ----
Until the 19th century it was widely believed that Troy and the Trojan war were imaginary. Then, in 1871, an American named Heinrich Schliemann began excavating an ancient city in Turkey. To the amazement of many, this retired businessman had discovered the lost city of Troy.
Nine cities have been found at the site, one on top of the other. The seventh city was destroyed around 1250 BC and appears to be the Troy of legend. You can still see the ruins of its towers and its walls, which were sixteen feet thick.
Schliemann identified Troy's location through clues he found in the Iliad, the epic attributed to the Greek poet Homer. Little is known about Homer except that he was blind. In ancient times it was believed that he had lived during the Trojan War, but most modern scholars think that he lived in the 8th or 9th century B.C. His poems weren't written down when they were first composed, but were transmitted orally for many years. Some people suspect that the poems were actually the work of successive generations of poets, and that Homer didn't exist. Of course, the same thing was once said about Troy.
All thanks to the work of Heinrich Schilemann. Without him we might still regard the Trojan War as nothing more than myth. What started the Trojan War? It has been suggested that the Greeks may have been fighting to gain control of the Dardanelles, a water passage between the Mediterranean and Black seas, near Troy. Or perhaps the war truly was fought over a woman named Helen. The truth is lost in the past.---------------------------------
Well, Randy, that Mr. Schilemann
(1822 - 1890) was quite an explorer. His work helped uncover a
mountain of knowledge about ancient life. Not to mention it helped
us conceive how these people viewed their "wealth of Ages".
Thank goodness for California gold. too! Yes, I said that right,
as that is what financed his work if you can believe it?. Here
is more, then I'll begin:
------
Heinrich Schliemann was a bold dreamer and a prolific liar. Despite those credentials, it wasn't politics that brought him to Gold Rush Sacramento in 1851. Instead, it was the death of his brother Ludwig, from typhus. Schliemann, a German-born merchant had been living in St. Petersburg, Russia.
He planned to make sure his brother was properly buried, claim what he believed to be a sizable estate, and get back to Europe. What he found, however, was that his brother had been buried without a tombstone, and his brother's business partner had made off with the loot. So Schliemann paid $50 for a marble headstone, and set himself up in business as a gold broker. In addition to making up outrageous stories in his diary, Schliemann was more than a little paranoid. Afraid of fire, his office was located in Sacramento's only brick-and-stone building, at Front and J streets. He wrote that he often slept on top of the gold, with pistols across his chest.
Despite two bouts of yellow fever, Schliemann persevered, and in nine months he made more than $400,000, some of it legitimately. He returned to St. Petersburg in1852, using his Gold Rush fortune to make an even greater fortune in the Crimean War. And his money allowed Schliemann to indulge his real passion in rchaeology -- and preserve himself a place in history.
In 1871, Schliemann, using Homer's "Iliad" as a guide, began digging in what is now Turkey, and found the lost city of Troy. A German merchant with a penchant for prevarication spurred the growth of modern archaeology and found the gold of an ancient era -- using the gold of California.
-------------------------------------
Oh boy, what a life, what a story?
Yes, on that small mound, about 5 miles from the coast, they found
layer after layer of ancient cities. One of them was indeed, Troy.
The treasures were many and quite a few made of gold. Hair - rings
and small fluted beakers, vessel covers and sauceboats, even a
spectacular large diadem (head dress) with pendants. These treasures
are, in fact housed in some 50 museums around the world. Later,
around our time (1994) it's been certified that a lower level
of excavations did, indeed belong in the Bronze age, 2600 - 2300
BC. This places these golden remains around the same periods and
datebacks as in the Thebes works.
-------The studies in Egypt.
One current project called The Theban Mapping Project, is giving
us a better and better idea of how life was during these early
civilizations, and this is but one of several "modern"
evaluation of ancient life.
In that area of the world, researchers are probing a lot of ancient
lifestyles. From around 3000 BC, through the Old Kingdom (2700
- 2100 BC), during the Middle Kingdom (1700 - 1200 BC), passing
the New Kingdom (1500 - 1000), into the Graeco - Roman Period
(300BC to 400 AD),,, this is truly some record of life. It, along
with many others, uncovers and exposes so much history it's astounding.
----------------
Our reasons for following these old lifestyles is, for us of course,
to gain a better perception of how humans understood and used
their wealth, back then. What is coming to light, for for gold
advocates, is an ongoing evaluation of how we, as a modern people,
have lost so much of our connection and understanding to what
wealth is, how much it's worth and how to use it. This is, of
course, in contrast to the ways wealth, including gold was seen
and valued then.
---------------
Concerning "gold as money", One of the first things
we established about the Troy collection was that there were very
few, if any coins found. At least allowing for the size of the
find. Nine + levels were dug, representing a hugh section of antiquity
and no coins remained with the find. Here was a mass of civilization
leaving treasure after treasure of fantastic gold artwork, yet,
no coins to speak of. We cannot conclude that the coins were taken
and melted down, because the art was just as valuable, yet it
didn't get taken. And these treasures were laid down in several
cities and generations, over time.
Researching further, many of the other great finds from the BC
and early AD period were from tombs and lesser burial sights.
Places where people of "excessive worth" took their
excesses with them. But regular cities with regular people had
relatively few coins. So what is the point? Let's go further.
----------
Some of the earliest coins were stamped with a detailed press,
struck with a blow that indented the heated metal. The Alyattes
from Lydia (610-561 BC) was one of the earliest. It and a whole
host of later coins were marked this way. We know that some of
the most rare were natural forming in stream beds, because they
were electrum (natural combination of gold and silver). They would
not have been man made that way, at that time. Mostly because
the silver gold combinations, in natural forming metal, were never
equal in amounts. Giving the coins different values. Were they
this particular about content and weight? You bet. The first coins
were called staters, meaning "weighters" and were used
as the norm for weights in other coins.
So, with the Athens, Macedon, Tarentum and Antiochus to name a
few, began the worlds first coins. Gold coins? Yes they were,
but money as we know it? Our view of how these people viewed and
used this gold money is, we believe, far different from what gold
scholars teach. And it's impact on estimates of existing modern
gold supply and use is enormous.
-----------------
Randy,
walk up to any citizen living during 335BC, in the latest town
where Troy once was, show them a "Head of Zeus" (Saracuse
3 stater) coin. Then show him a vessel of oil and ask which he
would take in equal trade for anything? Odd are, even though your
two items were of equal value, he would take the vessel. Why?
All throughout these early times, prior to BC and into some AD,
people didn't see these gold coins as we think of money today.
These various gold coins had tremendous value, but they were just
gold pieces. They were wealth for trade like everything else was..
That's simple logic, I know, but the vessel of oil, for instance
was just as tradable as a gold coin. In fact, within most of the
medium sizes city states of that era, barter of like goods was
just as good or better than gold coin. One's life was better if
he owned wealth he used.
Humans of that period didn't live all that long a time span. Even
though some accounts prove otherwise, the majority of life went
by rather quickly. If you were a regular part of society in general,
your wealth was what you had and consumed during those short days.
There were no banks or investment houses and the average person's
return on a wealth unit was his length of use and it's quality
of life enhancement. More to the point, this logic made these
guys spenders of gold, rather than savers! If you had gained gold
in trade, for your services or goods supplied, you had no reason
to save it. There was no other money that needed to be hedged
against value loss.
It's becoming more and more apparent that average people of that
time quickly traded (spent) their gold for something useful of
value, for both them and their family. They didn't have the excess
we know today. In modern nomenclature; this logic dictates that
a much smaller amount of gold money circulated and circulated
faster than many supposed. All forms of jewlery and art objects
were in the same situation.
For longer savings, even for those of above average means that
had all they wanted, people tended to spend their most valuable
gold coins first, while saving the least valuable (bronze, silver,
iron) for emergencies and later use. To us, today this sounds
strange, but place yourself in that time. It was better to build
your most useful and needed store of things while times were good.
Therefore, you traded the gold, which brought the most equal trade,
first. If things got so bad that one had to dig up the stash,
you were trading for last ditch things anyway. Kind of like wrapping
up and burying beef jerky to get you thru a pinch. This use of
lower metal is suported. Remember, lots of things served as money
objects them. Even much later, AD, it was common in Roam to trad
big iron bricks that were forged as a bull. It's use was in trade
for "one bull" or something of that animal's value.
This tends to explain why so many hordes of lesser quality, non
gold coins are always being found today. Roman silver, bronze,
iron, copper coins are very common. The classic belief is that
all the gold was found, melted down and recast. But that action
just didn't fit the whole profile of life's need back then. The
majority of gold in average and even upper hands was always on
the move, in trade or payment for service. Each succession of
ruler, simply reused the old coins or melted them down and restruck
with a new image. And new gold was minted only if it was easy
to find. Especially stolen jewlery. Mined gold was a very last
resort.
Remember, real useful goods crowded a rich ruler's house, too
and these were just as valuable and tradable as gold. Besides,
far too many finds have come up with jewelry and no coins to suggest
some robbery by thieves sold the coins to new rulers with melting
pots. The gold would have been taken whether coin or art.
Taxes were paid in goods, service or coin (preferably gold) and
regular people knew it. Far better to trade your gold and save
your wealth in a bulky form so the tax man's take at least has
a chance of taking less than enough. To store your wealth in gold
and risk him finding and taking it all was just not acceptable.
The great gold stores we have found almost always point to their
being the reserves of a rich ruling class. Just like modern billionaires,
after too much comes excess and gold was the only alternative
for someone with guards and regular army.
On the Road
More and more evidence is mounting that the largest portion of
gold, during this early period was, "On The Road"! The
perception that every person had some portion of gold as savings
is blunted by their lack of need for such wealth. Gold was needed
and used to spend "On The Road" more so than in local
domains. Whether for armies or traveling merchants, gold moved
more than it was saved. Even gold in the form of art was "fair
game" for the regular people to use as a tradable medium.
In fact it was just as likely used as money "on The Road"
as coins. This further explains the findings of small amounts
of jewelry in most of the locations where small towns were located.
In the reasoning of Troy, the lack of coinage supports the movement
of gold more than the saving of it.
We find gold more in the "upper status" burial places
of great cities than in the areas where common man traded, lived
and kept his personal worth. We further conclude that gold was
much harder to find and utilize, back then than many supposed.
Yes, great amounts were around, but the reality was that these
amounts were perhaps 1/2 or less than many others conclude. Simply
because finding or producing gold meant displacing labor that
could be making barter able goods of equal value. Besides, gold
that was in trade, was valuable enough that what existed mostly
covered it's need in long distance commerce. This further points
to a much greater value for a much lesser amount of gold while
it was used during this period.
When evaluating lifestyle wealth, back them, many often find themselves
comparing things in a relative mode with today's perspective.
In this position we think the mark has been far missed for gold
worth. It's possible that gold payment, in these early times amounted
to a hugh premium compared to today. The various goods and lifestyle
conditions in existence, indicate a much higher relative worth
for their goods of daily life. Thereby giving gold a much greater
relative worth within one's life also. If a one stater Darius
of gold, from Cyrus of Persia was worth a very valuable vessel
of oil, why utilize the effort to find gold just to trade for
some oil. Better to skip the gold production and make the oil.
This was the norm for thinking by people not trading on the road,
living "within local" city states. Indeed, outside the
need to pay armies, a much smaller amount of gold did the job
much better than us modern thinkers thought was necessary. Further,
the use of oversea warefare and trade perhaps lost more gold into
the ocean than we will ever know.
Consider these possibilities well. In that gold today is in a
much lesser existence, compared to modern goods supply and lifestyle
enhancements, when comparing it to it's value in life in the past.
It's true worth as a wealth medium could be a 1,000 times higher!
For it to return to it's ancient position of true asset wealth,
for trade outside the modern currency relm, we can see where it's
European benefactors have once again placed it "On The Road"
to much higher fiat currency prices.
Next: Gold from the Roman era forward.
Thanks Randy and ALL
TrailGuide
FOA (01/29/01; 14:39:33MT - usagold.com msg#57)
Getting some fresh air.
I put on my boots, backpack, gloves, binoculars and went out walking
the trail today. A fella came up and asked, "after yesterday,
how ya doing"? I said follow me.
We went down to a stream and filled my bucket of water. I took
off one glove and stuck a finger into the pail of water.
The water quickly started steaming and my friend jumped back with
an expression like he couldn't believe what he just saw.
I said, "it's ok,,,,, this is a good sign because the water
isn't boiling,,,,,, it means I'm cooling off!
(partial smile)
I asked him to thank everyone for me and excuse my human nature,
until I do the same in person. But, just the same, I'll stay over
here a while longer and send letters for all to read from the
Trail.
TrailGuide
FOA (02/01/01; 13:47:10MT - usagold.com msg#58)
Troy and Beyond, Even
to Rome!
http://www.grifterrec.com/coins/timeline/timeline.html
Once again Randy, Hello and thank you for your efforts as the
technical manager of this path! (smile)
Hello also, to all the others that have come to our hikes, walks
and talks. We started this recent discussion, "going back
into the beginnings of gold", right after our hike #54 "The
Curve". There was good reasoning for stopping and camping
here, because it was time to understand gold as few have ever
understood it in our time. Taking a few days to overlook the valley
from this spot will enhance our perceptions and prepare us for
the next leg ahead.
So, grab your coffee and tea and lean back,,,,, the stars are
out to light the night so our Thoughts alone may travel ----------
"The Gold Trail"!------
-----------------
Going back over #56 "The Gold of Troy":
You noticed that I structured that discussion in a way that makes
the independent mind wonder about. Let's pull those thoughts together
and move along.
We found that history had left us with some conclusions that were,
it seems, never concluded. Archaeology had never been approached
by someone like us, with a different hard money perspective. Yes,
all the records were there, but most every paper written on the
subject appeared carbon copy. They all projected our modern sense
of money into the economic structures as they existed, back then.
"Of course, we are today more complicated", our history
papers said,,,, so,,,,,, allowing for that difference "the
ancients still operated back then the same as us now". How
neat!
Yes, our teachers "called our perception of money, their
money and our perception of goods, their goods" in the same
context we can use now. They said "hey, they were using hard
money to buy and sell from each other, just like we once did"
Again,,,,, how neat"!
---------------
The Treasures of Troy, all 259 items, were hidden away since 1945
because of various war and political problems. The significance
of the find was tainted with scandal until only recently. Around
1994 (or 1995?+/-) the entire lot resurfaced in a museum in Moscow
and several well respected scholars were finally able to examine
and evaluate the exhibit and the actual site. Their conclusions?
Using modern tools of the trade showed that while Schliemann did
indeed find several lost cities stacked upon each other, his find
went back further in time than anyone thought.
A recent book "The Gold of Troy" (April 1996) gives
even further clarification.
From the author's works comes evidence that Troy was a ------
"leading center for gold jewelry making in western Asia Minor
and the Aegean" --- " Thus the largest of the Trojan
Treasures were Industrial in Nature and refute the supposition
that they were objects in burial sights".-----
My research into many more papers and books, like the above and
other written works, further shows that the sight was more of
a grand market. With numbers of craftsmen in separate offices
and work sites turning out some of the very finest gold metal
works one could imagine. Even by today's standards. There were
metal molds and crucibles found that were used for various metal
working projects. We also conclude that the city was rebuilt several
times over an extremely long slice of antiquity,,,, each time
performing the same function of a trading town. All done during
a slice of time that said gold coins did not trade as well as
the other metal ones. Gold was saved, not traded.
Once again, returning to the theme of #56, there were virtually
no coins found among the priceless gold art objects. Being a big
gold trading town, worked over hundreds of years, certainly some
gold coins would be around? Especially if gold and other metal
coins were saved and used as money. But, none were around.
------------
Jumping back to:
The object of our viewpoint from #54 "The Curve", was
to point out that gold today, has no currency price. Yet we are
asked to value it on a gold for goods basis established by modern
currency exchange rates. We wondered if the ratios in value between
gold and goods, today could be the same as they were in ancient
times and middle ages. If this ratio could be matched, we are
told that the value yesterday and today would be much the same
as our modern money says it is. I do wonder?
We buy and sell gold today, based upon the supply and demand of
printing press contracts created on established exchanges around
the world. In our present time, there is no trading price for
gold based on the independent trading of physical gold alone.
Or on the actual trading of gold goods, outright. All currency
pricing and therefore modern accepted values for this metal is
established on the paper derivatives markets.
To better grasp what we are really doing when buying real gold,,,
close your eyes and imagine:
----- Today, we are simply "paying a fiat currency commission
for the advantage of holding and owning physical gold metal"!
------ People that trade this paper system, exclusively, are simply
betting on what that commission will be, not the eventual gold
value. ------
----For actual gold obtainers, this function, that our exchange
paper pricing mechanism is doing, is giving us metal for an unknown
real price and value.------
I say "commission" in the above, because the total quoted
price a coin dealer sells to you at, is little more than the world
gold trading market's guess of the risk it is taking in supplying
customers with the metal,,,,,, without a real market to establish
it's currency price. It's that simple.(smile)
None of them and none of us know what the real value or price
gold today is. I use the phrase; "our advantage of owning
the metal", because buying physical gold for today's currency,,,,,,,is
like buying a lifetime wealth option that never expires. The commission
one pays for this gold coin position, in the for of what we call
today's price,,,,,,, may one day go to almost zero as our paper
market structure fails from the discovery of real price.
All happening because these physical gold options, we call real
gold, return to actually trading for a value based on their worth
in our world. It's the Physical Gold Advocate's "advantage",
because while he is waiting for the real value to emerge, the
real value that we know existed in antiquity has never gone away!
It just doesn't have a marketplace to show it. It will.
All the while paper gold players are playing for scraps,,,, giving
up their commissions,,,,, betting on the changing price of said
"commission". Indeed, one that cannot go too far up
without killing the entire system. And thinking it's the real
price for gold they are betting on all the while.
"You think long and hard on that one? (smile)
For us, as hard money "Physical Gold Advocates", to
understand the value of gold, we must remove ourselves from present
time thought and think of gold as the Ancients did. Not as money
but as little tradable hunks of metal. Gold for goods, straight
up, as the citizens of Troy did!
-------------
Troy and Beyond, Even to Rome!
Back then, there was no other currency. No paper moneys or banks.
One had no need to save gold as a hedge or savings account. Your
wealth was in the useful things contained in the world around
you. Those little hunks of metal were just that, little hunks
of gold that everyone knew had trading value. They were not money,
not the way we think of money today. They were just a beautiful
metal, gold.
In fact, that is why you carried them, to use that gold if it
brought the best deal in a trade. That was worth considering because
they didn't always bring the best trade. Unless most of the time
you were on the road. Within local communities, at least, goods
for goods exchange always traded better than goods for gold. But
over distance, the town next door or the seaport across the Aegean,
those gold hunks could usually do better than the flask of oil
you took with you. One made the best use of gold by using it,
not saving it.
Unlike today, the laws of money were turned on end from our perception.
Gold was for spending (trading) and spend it people did, especially
"away from home". There were many non-gold coins around
then, silver, electrum, bronze, iron, copper and they did something
we cannot comprehend;
----"this bad money drove good money into circulation"
---- (smile).
Yes, the little metal chunk that carried the highest trading return
was spent first! But why? Because the average person's wealth
and savings accounts were denominated in the real useful things
you owned and consumed during your short life. (See my #56 again
to get the mind working) This, my friends is the reason the vast
majority of physical gold stayed "on the road" of commerce
while all the other metal coins were saved for later use. Gold
traded best, so it traded first.
The common repeated ratio that during most of the Greek times
a 1 to 10 value existed between silver and gold was official dogma
and sounded about as right then as it does today. But, like today,
it was seldom tested on an established exchange. That's because
the coins had no denominations and were much less traded between
themselves, not to mention there was no exchange! Anyone holding
gold would be a fool to trade it for silver or any other metal
because a trade for goods or services would surely bring a much
higher return. The same was true for silver because it was better
to risk a trade for goods than be taken in a trade for gold.
Back then, gold chunks were, by far, more rare and tradable than
most any other coin produced. If it wasn't traveling by night
or stayed too long in a trading town, it was quickly melted into
the next generation of national coinage and sent packing again.
Or it temporally became the object of a Troy metal craftsman's
hand. You see, those little chunks of gold, I point out again,
had no denomination of currency unit on them. They were fair game
to become tradable gold in any form, be it bar, coin, chain or
chip. The same rare gold made the circle between coin and "use
object" many times over.
All of this is supported because aside the finds of major treasures,
the finds in "working towns and homes" did have tiny
gold objects of wealth but rarely did they have gold coins. The
presents of these other tiny pieces of gold wealth in medium size
homes indicates that they would have had the resources or incomes
to use gold coins as trading vehicles,,,,,,, but they did not
have the resources to tie up that much wealth by saving coins
of gold! That same "logic train" negates the premise
that these same working people couldn't afford gold and therefore
used lesser metals as coinage in equal value or in a 1 to 10 ratio
of gold! They did use these other coins, but used them less. Gold
finds, relative to other coins are rare because it was always
spent. Place yourself in their times?
Again, people "did" often have and save "other"
metal coins. So many, in fact that great numbers of these bronze,
silver, etc. coins keep being found at dig sites today, all across
Europe and Asia minor. Many of them found right in the same "regular"
backyard saving accounts we ourselves sometimes use. Planted long
ago as the next best trading item one could store and not lose
too much "use wealth" during the wait. Indeed, these
lesser items could afford to be put away.
But, you thought silver was more in style as a coinage then, because
so much of it survived? If that were the case, those metal items
would have made the exact same trip gold did. They would have
been melted down and reused into jewelry and coins, never laying
down for rest in such great numbers. (good logic, yes?)
------------
(My thanks to The Smithsonian Institution, Doug Smith and many,
many others that have, with the advent of the internet, placed
so much of this research in public view. Also thanks to all those
that have educated me over all these years)
-----------
I'll read several partials from these written pieces:
PARTHIA:
-------Some of the most interesting ancient coins were neither 'Greek' or 'Roman'. In fact, the coin producing civilizations of the ancient world spread far across Asia including people and places rarely mentioned in beginning World History classes. One of the most well known of these were the rulers of much of what is today Iran, Iraq and surrounding regions: the Parthians.----------
--------The land areas of ancient Parthia lay between the Caspian Sea and the Persian Gulf, and its boundaries included all of modern Iran and contained portions of what are now modern Iraq, Turkey, Armenia, Azarbaijan, Turkmenistan, Afghanistan and Pakistan---------
--------(it) roughly corresponds to modern Iran, was approximately 648,000 square miles, about equal to the areas of Great Britain, France, Germany and Spain together ----
----------The Parthians created an empire which, at its height, presented Rome with a serious challenge for the control of the Middle East west of the Euphrates river. They were the only civilized power to withstand the might of Rome at its height- the same Romans who had conquered Carthage, Macedon, the Seleucids, and the Gauls. So, who were these Parthians, whose empire stretched from the Hindu Kush to Mesopotamia? ----- (They) created an empire which lasted for almost 500 years (and) have been so nearly forgotten ----------
---------The Parthian kingdom began with the election of Arsaces I to the kingship of the Parni in 247 BC.--------- In 238 BC, Arsaces I succeeded in defeating the Seleucid governor of Parthia and establishing the Parthian kingdom. With his accession, ***** the coinage of Parthia begins, and would continue, with only a short break, for the next 500 years. This coinage has proven extremely important for Parthian history for several reasons; primarily because of the scarcity of written records - the Parthians themselves did not leave behind any written legacy---------------- For the majority of Parthian history we have to rely on a combination of fragmentary literary sources and references, archaeology, and the coinage itself to create a coherent, though incomplete, story.****
------------- *** Their coinage formed the medium through which western, in particular Greek, ideas of coin design were transmitted, and transmuted, in the Middle East from the Euphrates to the Indus and beyond. The Parthians developed one of the first recognizably feudal systems on record- which was transmitted to the Sassanians, and thence to the Arabs. **** The Persian epic history is now thought to include lengthy portions from the Parthian era - the Parthians had a great oral tradition, in keeping with their nomadic background, and greatly valued BARDS and story-telling. The Parthians also left a legacy in art and architecture, creating a style that mixed Hellenism with native Persian influences, particularly in ornamental metal work. There is even a small literary legacy with the "Parthian shot" - a phrase taken from Parthian horse-archer tactics in which the archer would feign flight, and, while riding away, fire over the back of their horse -----------
---------Their economy and success was based on taxes paid by traders using the 'Silk Road' that connected Rome and the West with China and the East. Parthian finances depended greatly on Rome's failure to make direct contact with China until the late second century AD. Parthians were known for being men of their word and their coins continued to be issued with fair weight of good silver long after Roman silver coins were being debased.------------------
--------------------------------
Well;
here we find a major civilization that existed during most of
the early BC Greek periods and crossed well into AD Roman period.
We have found that their coinage tells set the pace for much of
that time.
Most of the coinage, we have dug up today, from that period and
part of the world was in the lesser metals of silver, bronze,
etc.. Even the Persian, preceding the Parthia, had most of their
coins in silver form. This, no doubt, lead to our present hard
money education that silver was as good or better than gold, back
then. The fact is, as we are concluding, that gold and gold coins
were made back then and circulated more widely because of their
value. The mere existence of gold coins (those little hunks of
tradable gold) supports this concept of their use. Indeed, their
rarity today indicates their value, back then as most of them
were recoined. Leaving only lesser coins behind.
The Persian king, Darius The Great, did issue gold Darics right
along with silver Sigloi and did so as early as 500 - 490 BC.
This we all know and agree. But so few of them survived, modern
thought created the view that gold was far too scarce to be much
used as a complete tradable unit back then. But this view takes
on the same arguments we hear today, always leaving out the possibility
that gold value was much higher. Carrying a larger share of wealth
with less metal. It was scarce, but that isn't what erased their
record of existence. Gold was used so well and needed so much
that it was always "in trade" and "on the road".
If it wasn't, it was melted into Another countries wealth.
However, it was the recent discovery of Parthian gold coins that
best supports a change in concept for hard money followers. It
was thought that gold was not used in that land and trade from
Greek nations was always done in the lesser Parthian metals.
In 1982, in an archaeological dig at Tillya-tepe, a real Parthian
gold coin was found (a Gotarzes I (95-90 B.C.). Later in 1991,
several Vonones I (A.D. 8-12) were found as authentic! While the
archeological significance of these coins is still hotly debated,
I am aware that there is a supporting passage in an Ashmolean
Museum piece, where around 94 BC the process of working gold is
mentioned in Parthia. The existence today, of known gold working
and trading, in this era, opens up the entire hard money proposition
about the evolution of gold as wealth. If gold was traded, there
was enough for coinage trade too. The Parthian find completes
our supposition that gold moved freely between nation states then.
Indeed, the workings of gold at Troy, a stop off on a major trade
route between these cultures, adds to this. The fact that Greek
coinage, in gold, was also widely used, even as it was rare in
that nation's borders, means that Greek gold and coins had to
have also come mostly from supplies "on the road" as
they passed through the region. This concept demonstrates that
gold moved and during that movement was coined, often.
In fact the earliest Greek gold coins (The Head of Zeus) came
from their colonies on Sicily and in Tarentum on the Italian mainland.
Not on their local soil.
The same argument was applied to gold use pertaining to the Greeks.
Because gold was indeed hard to find around their local area,
many concluded that the few Greek coins produced in this early
time were done so from necessity and as a last resort. As we pointed
out before, Troy changed that perception because gold is now known
to have been a long established trade item, subject to the craftsman's
hand. In fact, several examples of gold coins with holes in them
indicate they may have been hung as jewelry in chain. Gold was
rare and was melted if it held still too long. But, it carried
a higher value in trade than any other coin across all of middle
asia.
For a "Timeline" view of these cultures - link above.
-
At that site, we can see how the Parthians walked right along
side the Roman development even as they passed through Troy along
the way. All during the same era. Their timeline use of gold coins
now offers an counter concept against accepted hard money thought
based solely upon Greek and Roman history alone.
----------------------
Further:
Following the death of Philip II of Macedon, his son Alexander
The Great spent the last 13 of his 33 years life changing the
world. The gold coin of "Macedon, named Alexander the Great,
stater, (336 - 323 BC) became "The Coin" and standard
of the world for some time. He set the precedent of "recoinage"
by melting down the gold of other nations into his stater piece.
It is in our view that his practice had more of an impact on perceived
known gold stores than most everyone accepts. His people did work
the mines for gold, but produced far less of it than imagined.
Rather, his mints were ordered to melt and restamp any and all
gold that passed their way. Most of it was "gold on the move"
as was the custom of his time and before. Rather than adding greatly
to the existing gold supply, he just better identified what was
already being used in commerce.
That practice was something the early Roman era planers would
not understand until after most of their Roman Republic years
had passed. Truly, Roman stamped gold during the Republic years,
would be very rare (as it is today). At first relying greatly
on other's gold coinage as a tradable unit. Only later did their
armies melt captured gold for government storage. Following in
the "Footsteps" of a process that continues to convert
existing gold into identifiable gold. Even into our day.
It wasn't until the era of Roman dominance that they recognized
the need for Roman tradable gold. Gold in their name for use away
from home by their armies. During this time the first Roman "aureus"
were struck by their armies. Coins created from "taken"
gold, already in use, was formed into the very best trading chunks
a soldier could have. The coin "Lucius Manius" (82-81BC)
aureus, was one of the many created after the Roman Senate allowed
their generals to coin "taken" gold as trading money.
Thus begins one of the greatest gatherings and usage of gold known
at that time. Some of it the very same gold we use today.
If one read my posts during the Washington Agreement period, you
will recognize the phrase "On the Road"! Beyond the
obvious political reasoning we often present here, the case for
"to little gold today" has been behind our motivations
for some time. The gold in our world is not as great as so many
suppose it is. I hope to demonstrate why this gold "on the
road" concept will further influence our political currency
situation as it evolves.
Let's stop now and continue later.
Thank you all for your support and kind words.
TrailGuide
FOA (02/09/01; 14:24:03MT - usagold.com msg#59)
Current background
http://www.usagold.com/dailyquotes.html
Hello everyone!
I was going to post this on the Main Gold Forum page because I
didn't want to break the chain of thought here. But, because it's
so long,,, I'll post here and reference this item on the trail
later.
If a gold advocate reads Michael's wonderful piece (see link above),
all the reasons for buying gold should be clear. His sound purpose
is certainly clear to me. But, far too many savers have been lost
in the blizzard of conflicting stories about gold. With all the
changes that are taking place now, many have just backed away.
After giving my talk about "the curve" (along with other
talks), I hope that at least a firm perception is in place as
to why our current gold prices are little more than a facade.
A currency price based mostly on the trading of contracts, not
gold itself. Most of you grasp this, yet wonder why the "facade
price keeps falling?
I'll use some things from the Carl H post the other day (Carl H (02/07/01; 20:05:56MT - usagold.com msg#: 47727)
Hi Carl, I'll comment first them start into your post:
-------
From where I sit:
There were two distinct parts to our (Another and my words as
added) commentary over the last several years. Political history
buffs would have recognized it right off and spotted where we
were going with it. For the most part, all of this discussion
was centered around the decades old combat between the Old World
and our Western World. I'm talking about the combat for economic
domination.
For those of you too young or not versed in recent history, during
the last 30 years, most of Europe has been trying to work itself
out from under American financial influence. This has shown itself
so often it would take an entire documentary to reproduce or explain.
Perhaps, larger than History of the world vol 1 thru 17 (smile).
For us, though, the most important aspect of this has been in
the slow formation of European economic unity. In fits and starts
they have worked their way through various currency blocks that
embarked on all sorts of fixed exchange rates and trade agreements.
The metamorphosis of their most recent 20 year struggle resulted
in today's Euro and the expanding zone of financial structure
it represents. This is only the most recent example of an effort
that started somewhere back before our time. Perhaps the European
Economic Unit (ECU) could pinpoint the modern beginnings of this
struggle. Again, this represents the most recent 20 year segment.
The world's economic timeline will no doubt look back and mark
this period in a way that we mark ancient history. I think most
scholars will use the BC / AD reference as a way to describe it.
Perhaps BE / AD, meaning "Before EMU" and After (dead)
Dollars. The currency birth and political movement we have just
witnessed will indeed have just such an impact on our Western
lives and truly require a time stamp to reference it.
---------------
In the BE period, gold was the only other world currency. Yes,
this dethroned metal currency and wealth asset was still used
the world over as a last resort. A last resort against a failing
dollar, that is. Gold values, BE, went through many convulsions
as the dollar's use and stability ebbed and flowed. All the while,
the world held gold "just in case".
As the political motivations to create a "Euro system and
currency" grew, many nation states found themselves at economic
risk. They hedged their economy between dollars and gold, but
wanted the new possibilities another economic zone could offer.
It was a new way to break the total economic control of our dollar
reserve system. Everyone, it seems were watching and maneuvering
as EMU approached.
The problem for many wealthy states was: how to continue within
world economic trade, save your currency exchange wealth in reserve
and not be killed if this new Euro system became a huge success?
For some, gold was the main conduit to hold your excess reserves
in, that way you were between currencies. But there were several
problems.
----------------
The dollar had already approached it's useful life several times.
By the early 90s, it was a basket debt case of super currency
expansion. Ready to fail, right then and there! It was kept alive
through CB participation, because it remained "the"
world reserve and we could not operate without it. As the modern
world evolved, digital currencies of fiat nature were and will
remain the number one way to do trade. No matter the costs or
problems entailed in their use, or how often these worthless papers
come and go, humanity uses and demands their presence. We have
but to go no further than into several of today's currency inflating
nations to see where the locals still use paper money. My point
here is to not expect a return to hard money. Hard wealth as savings,
yes. But hard money? Never again. See my other posts for further
explanation.
Make no mistake, CB support for our US unit is the only reason
it's exchange rate didn't plunge, throwing us into a massive,
local price inflation. And, because most other countries held
dollars as a reserve, they would have inflated also. All this
support was done in order to stop a complete economic trade breakdown
before EMU. A decades long wait.
The trick for the CBs was to keep holding dollars and even expanding
those holdings as needed to balance US trade deficits. Deficits,
by the way that have not only been negative for a long time, but
have grown explosively during the 90s and right up and thru EMU.
This dollar support made sense because holding reserves in a failing
currency, while building a new one offered little loss potential.
Yes, once the new system began to function, your dollar holding's
value would eventually be reduced almost to nothing. But those
reserves only represented support for the system itself, not actual
buying power in the native currency's land, USA. You see, once
a permanent trade deficit becomes structural to the function of
the currency's economy, those dollars,,,,,, those units of reserve
buying power,,, can never return for the purchase of anything!
Without killing the exchange rates and native economic structure
first. Yes, in the case of what comes first (chicken or egg),
you cannot send dollars home to buy useful goods at a reasonable
price if the whole trade structure fails. In the US's example,
used here, local inflation would drive the dollar prices of everything
we export through the roof, long before all the goods were brought.
Completely, negating any and all exchange gains from a falling
dollar exchange rate.
So,,,,, once the Euro was functioning and morphing into it's new
reserve roll, the ECB would,,,, like in the US's present roll,,,,,
have no need for excess foreign cash reserves. However, some wealth
structure would have to be present in the asset reserve category
to replace those lost dollar values as they failed. That structure
would be gold. More problems.
Prior to and just after EMU, many oil producers and a whole host
of other wealthy nations / individuals, were not going to buy
into the Euro first off. What if it failed? Or worse, because
the dollar was on it's last legs of support already, any failure
of the Euro system package would also lead to a total break away
of continued support for the dollar. In this dynamic, even dollar
holdings could dissolve! This was the background from where Another's
Thoughts were being broadcast. During the BE period, about five
years before, there was indeed a near failure to proceed with
EMU! After some 20+ years of effort, such a failure would have
sent us back to the gold standard (and worse) of days gone by.
Many of you can remember this during the 1995 area. The effort
seemed to be falling from political bickering. It was critical
to oil wealth producers and many others that the Euro be born.
If it didn't, an all out bid for real gold by everyone would ensue
and I mean everyone. More problems.
Part of the support package for continued use of dollars revolved
around oil. If for any reason, oil prices rose prior to EMU, it
would break what little economic life that remained. It was well
known that the entire local US structure depended and was built
on reasonable priced oil. Later, this position and it's pricing
dynamic would begin the movement of commerce settlement away from
dollars. But, not yet. Actually, in the years prior to EMU, oil
needed to plunge in dollar value in order to prop up the system.
It did, boy did it,,,,, but not for free as so many thought.
It was well known that gold could buy oil, or better said,,,,,
a cheap gold market price would buy cheap oil! But forcing down
the gold price for the benefit of private sales would be some
effort as long as people were buying in mass prior to EMU. That
mass buying process would feed on itself from the fear of a dollar
/ Euro transition. Thereby, negating the whole cheap gold for
oil game. Yet, the ECB (and the BIS) already knew this gold market
of ours and knew it well. You see, our dollar gold market has
evolved over many years. Long before the 90s, it was well on it's
way to becoming a virtual paper market place. An easy trading
market that basically held "it's paper gold price" well
within the commodity use function of gold. Around $400 to $600
was considered about right. With Western views sliding into complacency
as our world dominance grew, we as investors grew to see "trading
gold" as the best use of our wealth. If we wanted to engage
hard money thought at all, we just traded the price, not own the
gold. In this atmosphere the mine industry exploded with easy
capital. See my post about Mr. Parks great article below. So we
as private gold owners unloaded tonnes of gold many started down
the road of owning leveraged gold securities instead.
In this backdrop, new mine supply was more than what the world
needed, at least the Western world. All the CBs, both American
and Old World, began a policy of discounting gold. All for the
purpose of supporting the dollar reserve system. Yes, the US played
this game, knowing full well the currency reasons behind the Old
World purpose; to hold the dollar steady until Euro birth (EMU).
You see, we (USA) thought this was great because we gave the chance
of EMU a one in 100 shot! This truly backfired and now the BIS
/ ECB have the US fed in an inflation trap.
So, the dollar got support from CB's holding more of it as a reserve,,,,,,
the dollar got support from a falling gold price,,,,,, the dollar
and the economy behind it got support from crashing oil prices.
All of this leading up to a huge change. A change that to this
day is still mostly behind the screens.
The next part of the play came as world paper gold traders starting
making use of a good thing,, falling dollar gold prices! Never
mind that the real gold movement behind the paper market was becoming
a tiny fraction of this paper trading. Never mind that the dollar
would eventually step back from world reserve status,,,, changing
the settlement function of our paper gold market overnight and
killing everyone's paper holdings. They said:
----"Why,,,, we know why gold prices are falling, the CBs of the world want it down,,,,,, but we don't believe all this talk of Euro success",,, "there are a hoard of other reasons", "besides, we are making tons of money playing this paper game"!-------
------------
Now, I'll pause to introduce some items from Mr. Carl H's post.
-----
Section 1 -- Bullion Banks Establish the Gold Carry Trade
From what I have read, it seems that a few years ago a number of Bullion Banks started borrowing gold at interest rates of around 1% from Central banks. This gold was immediately sold on the spot market and the money and invested it in higher yielding investments. This type of operation is referred to as a carry trade. This practice went unchecked and has reached a point where at least 6000 tons and probably as much as 10000tons of gold are owed to the central banks. To put these numbers in perspective, annual world wide mine production is estimated to be about 2500 tons.
-------------
Thank You Carl.
Yes, they did introduce the gold carry trade then and the timing
was no accident. I also have to point out that Another was the
very first to mention (post) a gold lending number anywhere near
that level. He said it was around 14,000 many years ago or would
soon approach that level. Everyone, except those that knew the
game, said it was NUTS! Now, the 10,000 figure is on every desk
in the world.
Central Bank lending of gold for low rates made absolutely no
sense. A fact almost every hard money writer expresses. But, they
fail to bridge the conclusion. If a low gold price was wanted,
and they did indeed want it, the CBs could have sold the gold
outright, driving it down. Then brought it back later. With the
growing public perception, so well outlined in Mr. Parks article,
no one would have minded it as the stock markets were all the
rage. Why buy into a diving market and hoard all this excess gold
for long.
Further, in a different light, the CBs could have simply used
the mining industry strategy and apply the interest gained on
the cash sale proceeds to buy the gold back later at higher prices.
Indeed, this is exactly what the mines are doing now.
Further: They didn't need to lend it, just sell it. Later, they
could have just printed new money, that is, create near money
securities for their own account and apply them to long term contracts
from the industry,,,,, buying new mined gold to replace the sold
gold. No need for the lending equation at all. But, you see, there
was a need.
So,,,, the only reasonable, legal reason for the banks to create
a world wide gold lending structure was to grow a paper facade
that the real gold buying, Another spoke of, could hide in. All
perfectly legal, but very political. Again, I point to Another's
long ago post that said; "the reason gold prices are falling
is because so many people are buying it". Ha! Ha! That one
was greeted with total disbelief and ridicule. But, boy a lot
of money was lost by people that turned from that message.
Now, back to my post:
-----------
In the middle of all this new paper trading environment, people
didn't notice what was happening. Way back when CB lending was
just beginning, some smart people starting taking just a little
bit of the action. Besides being big buyers of CB gold sold outright,
they were also buying some of the borrowed gold. The same gold
that was lent into the market by the CBs and other big players.
You know, the gold that's borrowed, sold to create a pot of money.
Then that money draws interest until it's used to buy the new
mined gold and replace the loaned stuff. The same process that
also makes the gold carry trade in our currency markets.
Well, that real gold off take, done by these major gold advocates,
was not all they they took (smile).
Now,,,, a lot of these people started thinking. "We already
have a lot of gold and our demands in the decade prior to EMU
may drive the market way up. So, why not help the CB's purpose
(and ours) by always bidding low at outright sales. And because
our money is tied up in gold, drawing no interest, why not play
the CB game for them? We'll take some of our buying money and
use it to create the cash pot for the BBs,,,, for use in their
gold lending deals. They can skip the borrowing and sale of gold
part and just commit our money to pay for the new mined gold.
Drawing the standard few percent in return. The mines don't need
to know that no gold was sold. Further, the BBs will need to hedge
a fall in price to protect themselves in the deal. In doing so
the public will see the derivatives price of gold fall, just as
if some was sold.
Note: The BBs (in this small niche of deals) must only protect
their interest from a falling market because that is the only
function that would threaten the mine's future repayment of gold,,,,,
a to low gold price. If their collective actions did drive the
paper trading of gold to the floor, killing 90% of the industry's
ability to continue operation, their profits from their paper
hedge could at least cover the liability. Yet, conversely, any
rise in price would be no threat to this particular deal structure.
So,,,,,,in the middle of all the gold carry trade, naked shorting,
gold sales from regular investors and, in general, a blizzard
of paper gold trading,,,,,, some major players were building real
gold buys and not driving the markets as they did it. The success
of this operation created the dynamic that allowed physical gold
to be purchased off the radar screen and the flow of oil to continue.
Once again, no manipulation outside our standard paper arena!
As Another was oh so fond of saying: "gold and oil will never
flow in the same direction". (smile) Now, more from Mr. Carl
H:
----------------------------------------
Section 2 -- Lining up the Gold to Unwind the Carry Trade
I consider the above paragraph to be fairly well established information. Now, I will speculate for a moment. If I were the bullion bankers and was in this situation, I would want to get my hands on a tremendous amount of physical gold at cheap prices. As far as I know, only the central banks and mining companies have large amounts of physical gold. In the case of the mining companies, it is still in the ground. I will assume here that the central banks would be very reluctant to let the bullion banks default. It would show how stupid or corrupt the central bankers are and it might be a big enough scandal to change the outcome of some elections. Ok, so this means that I have to convince the mining companies to sell me all the gold they produce for the next several years at prices close to what they are currently. So, how would one go about convincing the mining companies to sell their future production? Youíd either have to convince them that the price of gold was going to stay low for the period of time for which you wanted them to sell you the production or you would have to coerce them into selling future production. To accomplish this, you would have to convince them that there was a large supply of gold that was going to be dumped on the market. As stated above, the only other large holder of gold is the central banks. So, you have to convince the central banks to drive down the price of gold and act like they are ready to dump much more gold.
So, the question then is how to separate a central banker and his gold. Simple, create a potential crisis of a magnitude that it will force him to sell gold to prevent it. This is easily done by simply writing a huge gold call options (or surrogates thereof). Then, if the price of gold rises, the Bullion banks will fail and probably take the financial system with them. This compels the central banks to cap the price of gold at a level that less than the cost of production for many mines. This forces those mines to hedge or go bankrupt. The Bullion Banks can then acquire the forward production at prices near the cost of production, or to acquire the bankrupt mine. What is even better is that hedging will help hold down the price and force other mining companies to hedge.
--------------------
OK,,,,,,,,,, again thanks Carl.
Your view above is very clear. But it is based on several lines
of thought that don't exist.
(First), the BBs are not really at risk. Yes, in my macro view,
if the gold system was to default out of sequence, world trade
flows would indeed, break most of the BB, but do it from the regular
economic side of their structure. However:
It's the function of the marketplace, itself, along with the entire
gold marketplace that's at risk. In the event of a total run on
gold, induced by a huge surge in gold demand, the banks would
force their clients, on the short side, to post so much collateral
that it would force them into bankruptcy, on the spot. Most of
you may not know it but all the mines and even gold industrial
players have margin thresholds that, when reached, go up like
a rocket. Even ABX has a $600 point that requires massive additional
collateral beyond that level. Any short run in the paper gold
markets would be almost overnight and go thru $2,000 like butter.
In that event, even ABX would not have the collateral to cover
it. Remember, below ground valuations are not deliverable in a
gold run that demands three day delivery!
The bank's short positions are, as our good poster ORO once pointed
out, always hedged in paper positions. If the market ran away,
the bank's demands for performance on those positions would crater
every arena they function in. Once, again, the banks play the
market forces against each other. If, in the course of operation
the whole realm of forces are played to zero, the banks just stand
aside. I know, of course, that they would be impaired, but the
bulk of the blast would be endured by everyone that plays in this
marketplace.
The point of my presenting this is that the whole object of the
paper gold dynamic is and always was to function for industry
hedging habits, not so much to deliver gold to the public. Yet,
because this maze was encouraged by the CBs to grow so super large,
it's goal was so that political gold could be moved. One day,
this entire structure will have served it's useful purpose and
then it will be allowed to fail. That day is approaching.
To bring us up to present:
To date, that purpose has been served largely because it succeeded
in keeping dollar supporting oil prices down, extending our US
economy,,,,, until EMU. As evidence to the process, notice how
oil prices began their dollar rise only 6 months into post EMU.
Clearly, there was no longer a need to support our dollar economy
once the Euro was established. Indeed, just like a turning supertanker
takes time, so too does the higher energy prices take time to
work their will. Make no mistake, the world has seen the very
last of cheap dollar oil. The next dynamic of that process in
the transition of oil settlement support into Euro denominations.
Notwithstanding Iraq's move as a convenient trial balloon, the
mass of this transition will not begin until the US has clearly
embarked on a slowdown. And that slowdown, energy induced as it
is, will, this time, force the fed to fight it with a super inflationary
buyout of anything and everything that defaults. Right down to
your shoe laces. This, my friends is the inflation dynamic unleashed
once a currency is removed from reserve status.
Further; its no mistake of identification in understanding the
ECB / BIS roll in all of this. That the ECB has started cashing
in all it's interest on dollar reserves points to a new direction
in currency warfare. Our own Randy@ The Tower has documented this
for some time. In addition, their marking gold to market is a
prerequisite to following the Fed's new inflation stance by scoring
the dollar against the Euro gold price once the paper gold markets
fail.
FOA (02/09/01; 14:29:38MT - usagold.com msg#60)
Background part 2
Further; its no mistake of identification in understanding the
ECB / BIS roll in all of this. That the ECB has started cashing
in all it's interest on dollar reserves points to a new direction
in currency warfare. Our own Randy@ The Tower has documented this
for some time. In addition, their marking gold to market is a
prerequisite to following the Fed's new inflation stance by scoring
the dollar against the Euro gold price once the paper gold markets
fail.
To the point:
However, there were still outstanding gold deliveries on all sides
that needed to be addressed, even after EMU. So,,,, around early
1999, the BIS decided to allow the erosion of the paper gold markets
to continue to conclusion without fighting it with outright buys.
LeSin's post today (# 47852) about someone noting a BIS offer
to take England's gold is to the point. (Hi LeSin, how is your
French Sorrel growing? (smile)) That was the last offer before
a changed position. They would not do it today. Look at your charts
and see where this market the time where gold was finally allowed
to drop below $280. It is indeed strange that it hasn't fallen
much further.
Where once they stood ready to buy gold outright, in order to
stop the wholesale reproduction of contract gold from driving
the traded price too low, and degrading the very asset that gave
oil producers reason to support the dollar,,,,,,, the market itself
would now be allowed to kill itself. All so the final gold contracts
could be delivered. That process was evident in the Washington
Agreement and the years it would take to complete that workout.
(see my Macro below for further explanation)
Where I had seen the WA as a breaking event, Another had long
before seen it as an extension of the process that would eventually
drive paper gold credibility to Zero. Indeed, he said (posted)
that well before WA. As an aside, he always said that all paper
would burn. In retrospect, prior to EMU, if it didn't happen,
all paper assets were subject to destruction and now I see his
point. Post EMU, just gold paper is now in the hearth. He does
think EuroLand is the future and I respect that position, greatly!
In my Macro view told in a slightly different way:
We all thought that one day the whole gold system would explode
in some huge short covering rally. Indeed, if the Euro failed,,,,
producing no EMU, the sudden demand for gold would have driven
the paper market sky high until it too broke from financial failure.
Making million airs the world over of countless gold owners,,,,,
and billionaires of any leveraged player that brought mines, futures
or options. Well, maybe billionaires for those that cashed in
while the shorts still had money to pay. But,,,,,,,,,,, it never
happened. Thank the EMU folks for that.
Now we entered the AD era,,,,, the European Monetary Union (EMU)
was a success,,,,, the Euro was formed. This was a political sea
(for me also) change regarding gold. It was around spring 1999
(that time again), was when Another made a point I will never
forget. It was posted here on the USAGOLD forum. Now that we were
in the AD era, the decision was made to let the dollar paper gold
market kill itself. We all posted endlessly as to why it could
/could not and would /would not happen, but there was one other
aspect left out at that time.
As I mentioned above; most of the major gold buyers,,,, the physical
gold advocates,,,,,, those that want it as a wealth reserve,,,,,,
were gathering physical gold all prior to EMU. Even after EMU,
as we worked our way into the early Euro era, gold ownership is
intended to bridge the transition away from dollar reserve use.
For these nation states and individuals just want gold,,,, not
for trading now,,,, nor for use now,,,, and they don't care about
it's dollar price now.
We thought that after EMU, dollar paper gold prices would slowly
climb as physical demand impacted the paper marketplace. But the
problem with that is that such a climb will destroy the ability
of the BBs to function and complete that portion of contracts
that require delivery. Remember, we now have countless major Euro
players waiting for gold deliveries from mines and other contracted
sources. Overall a small portion yet, all within the trading noise
of this huge arena. Yet, this gold is a major part of the Euro
system of the future as it will be a replacement asset for nation
states that stand outside the Zone but will trade within it. (as
a contrast to Britain that will join)
From the time of the Washington Agreement until it's end (three
years left out of four+/-),,,,, the dollar paper gold world will
be allowed to do the equivalent of a currency inflation. No nation
or government CB will now stand in the way. You see, the only
way the physical deliveries can be completed is for the market
place to have it's way. In doing so, by continuing to short the
market in a piling on stance, liquidity will remain for delivery.
Remember, the gold recipients do not care what the dollar paper
price is at delivery, only that their gold buys can be completed.
And for that to happen, the BBs must have an ever lower price.
Hence the contradictory nature of the major ECB bank, regarding
gold.
Yet, the real message must not be lost. Between now and then (perhaps
tomorrow or in a year or so), physical gold will embark upon it's
own road. A GoldTrail if you will. A drama seldom witnessed ever,
much less seen in our time. I state flatly and for the record
that the premium paid on the purchase of physical gold will climb
through the roof in the days, weeks, months and years ahead. Between
us Physical Gold Advocates, we will know it's but a reflection
of the free market to come and a true account of where it's value
really stands. For the paper trader, it will become the curse
of lost wealth.
This, my friends is the face of a failing paper gold market. A
market that evolved far beyond what it originally was used for.
A "New Gold Market" built for the support of a currency's
ending timeline and allowed to die of it's own misconception.
From here we can see the "advantage" of physical purchased
for an unknown value. Gold held as the ancients held it.
No denomination necessary until it is allowed to trade,,,, "Free"
once again!
Then our journey will be done. Then our wealth will be complete.
"We watch this new gold market together, yes?"
Thank you all for your time
TrailGuide
FOA (3/10/2001; 20:58:11MT - usagold.com msg#61)
On the road!
Hello everyone!
Well,,,,,,, things are not as before,,,, are they? (smile)
In my last post USAGOLD Forum post (#48858) we noted that the
paper gold game was reaching it's limits. The BOE was almost asking
"what do you want us to do"? The answer came as plain
as day as the paper price was driven a little lower in return
for a gold sale reduction. Yes, clear as a mountain stream,,,,
the unwinding has begun! It will continue until the big event
when the gold rules are officially changed. Not much different
than when the dollar hit it's credibility limit in 1971. As Randy
has often pointed out; the US printed gold contracts back then
until they (dollars on the gold exchange standard) lost their
mathematical ability to be converted into gold.
Everyone that is expecting some huge paper short covering rally
has got to ask themselves one question; "do ya feel lucky"?
(smile) It's important to consider this because today's paper
gold contract market is in the same credibility position as the
dollar in 71. There is simply no way the Bullion Banking markets
are going to allow our current marketplace to adjust to this mismatch
by marking "This New (paper) Gold Market" to market
against any true "delivered" physical gold value. Forget
it! It's never going to happen during the dollar reserve era.
Just as in 71, this modern fiat gold market will be disconnected
from the real gold market. Back then the dollar remained at $42
/ ounce +/- as a somewhat free physical market exploded into the
hundreds. Today, considering the magnitude of the mismatch we
have attained, the paper market will probably never pass $360,
even in the worst possible short crush. The dollar forces will
call $360 the right level just as they called $42 correct??? All
the while physical gold will slowly gravitate completely away
from any connection to the real demands for delivery.
Even such a rise toward $360 would occur only after the BBs decided
not to sell into the paper market any further. It all depends
on how the rules are changed later. We shall see.
What's coming in 200?:
Let's see, spot gold is at $358 plus the physical premium of $2,200,,,
so that equals $2,558 per K rand. Oh,,, you say that's crazy???
You will just demand delivery of your contracts at at $358? Or
call your gold accounts for full allocation? But wait, didn't
they just declare position limits, cash liquidation only for all
out months, a $4,000/oz premium for spot conversion because of
the shortage and forced customer reserve requirements triple the
actual physical value for all converted BB physical accounts?
And you wonder how or why anyone in their right mind today could
pay in the future a $2,200 premium to a coin dealer? Ha! Ha! That's
just the warm up, my friends.
What's in process now??:
The Washington Agreement placed in context where the Euro system
is going with gold. That pronouncement drove home the fact that
our Dollar gold pricing system was going to die with the dollar
reserve function. The WA placed us "on the road" to
high priced physical gold and low priced contract gold. It could
have been the end of the LBMA pricing structure, right then and
there, except that it would have clocked the global financial
structure too fast.
Indeed, our Euro friends helped the system out by giving it some
more of the same poison, more paper gold inflation. Yes, all the
while since the WA, people have been falling all over each other
trying to explain why so much new European gold has entered the
market through lending. Yet, all that was mostly lent was more
paper credits built upon a failing dollar gold pricing system.
You see, they left the maintaining of system credibility to the
dollar faction. Kind of strange how gold keeps showing up as part
of the US trade deficit? Even is it's only a trickle.
Gold bugs cry that the paper market is not free because government
endorsed inflation in this arena is killing it's price structure.
Almost as if they want fiat gold that less inflated? Well, that's
great if your "gold" money is in our modern gold producing
industry and that's hip deep in committing it's product to satisfy
these same paper contracts. Yes, this mistake of "hard money"
allocation by western savers, is the result of ignoring history
and how currency systems evolve. Gold industry investments work
if the current fiat system is remaining "in use", but
showing price inflation. However, when currency systems fall "out
of use" while moving into super price inflation,,,,, the
next competing system will side with physical gold! It doesn't
happen often, but when it does real wealth in one's hand becomes
worth many times investments in "almost gold". Truly,
the dollar price of physical gold is going higher than anyone
expects.
To make this clear:
It makes no difference if the current paper gold price bottoms
here or is sold into the dirt. Just as soon as the dollar paper
gold system begins to lose credibility in matching physical gold
value,,,,,, gold bullion and gold bullion alone will out perform
every possible hard money competitor. That includes all the other
metals! "Noone" will need to teach this dynamic to the
public then. All we will have to do is watch it all unfold. Believe
it!
-------------------
It's coming time for our next talk about gold in antiquity. Walking
the GoldTrail becomes all the easier when we understand just how
little of it is truly out there. Far, far less than the paper
pushers would have us think.
Until then;
"We watch this new gold market together, yes?" (smile)
TrailGuide
FOA (4/12/2001; 5:54:42MT - usagold.com msg#62)
sample
test
FOA (4/14/2001; 14:10:14MT - usagold.com msg#63)
The Journey
Thoughts are a river as it runs upon the land
they begin with a purpose and nourish us as sand
we walk a path by this water so near
and our vision must know this trail will prove dear
so trust in your heart that this way is the birthright
and the sun will light in the darkest of night
these Thoughts make us dream a truth that is whole and
"as this river runs through it, may it strengthens our sole"
----------------
Few things in life remain the same. Always near, yet sometimes
far, the future is before us and will remain so for ever more.
Look back for understanding, look back to know how we once thought,
look back to confirm your own feelings, but don't look back to
know the path ahead! That future, my friends is the water that
flows from us today.
No one changes the world by their own actions. But the future
can be shaped by our understanding and how we, as a people react
to new perceptions. Yes, in our living of life, this very dynamic
makes the world tomorrow. Better said, we are the future we seek
to know! Understand us and where we are going and one can plot
a course that points the future.
---------------------
With time on my hands, recently, I did a research project. I ask
all the Gold bugs in the world to stand in a straight line. Then
asked all the physical gold advocates to make a parallel straight
line next to them. Boy, that was some long line (smile). For days
on end, I talked with many of them as I walked between the rows.
I was struck to make several observations:
All the gold bugs seemed to be talking nervously. Always looking
up and down the row to see what the next fella was doing. With
cell phones, laptop computers, private radios and every form of
communication, they were all trying to do the very same thing;
trying to make more currency. Almost the same thing that people
who trade the stock markets are doing. Strange, I thought. The
gold bugs hated this unbacked fiat currency as a wealth trading
unit or a wealth holding unit, but still wanted to own more of
it than the real wealth of gold. All of their actions were aimed
at protecting themselves against any loss of currency function
by making more of the same failing currency. Keeping ahead of
the coming loss by having more of the deteriorating wealth item
added to them? Kind of like a French farmer's logic reply to the
knowledge that Paris is about to fall; " I'm not worried,
got my wealth in cash in the bank of paris and I know the government
will add to my holdings enough to cover any failures of ruler
ship". So I ask myself what is the farmer and gold bug gaining
here?
Standing back across the row, I asked a physical gold advocate
what he made of all this? It's all very clear to me he said:
"""""""You know, fiat is a good thing in this day and time and we all could not do without it. These gold bugs would have you think just the opposite, even while they try to make more cash wealth for themselves. Yes, it's true, the current major world fiat is breaking down as it folds it's hand. But the current gold market, these bugs trade in, is run by the same guys that don't want their fiat use to end yet. So when they change the rules of the market, look at how many gold bugs leave? Almost none of them.
The rules of play, using Casino Chips instead of real gold, are all right out in the open just as the gold market we used to know becomes little more than a shell game. A Dollar Gold Casino, if you will, and the gold bugs don't want to leave it. If they can't use "near gold" to play with, they won't play at all. So, their whole advocating of the gold story is just talk. They stay right with trading fiat assets instead of gold even as their market slowly fails their purpose.
It's almost as if they didn't really want gold wealth in the first place. I see it as if they want everyone else to make physical gold worth more so their fiat based assets can grow? God awful logic for a gold advocate, but then again, they aren't gold Advocates? These are the new breed, aren't they? Fiatgold bugs? Well, I write it all off as the Gold Bugs can't see the difference anymore and still crave playing in the same house, using the same house rules. Most of them would rather the government keep the fiat going at the expense of just a little higher gold price. Say $500? Just enough to make their fiat grow. Instead of advocating holding bullion wealth and a freegold market to crash the old system. Ha! Ha!, These guys even want those in charge to change the rules back into the players favor, bankrupting the house in the process! There is no chance in hell of any casino doing that to themselves. It'll only happen when the casino's credit is taken away. And that process is in the works, don't we know! That's why I am a physical gold advocate. My time will come as the fiatgold bugs go broke with the casino. I guess it's the nature of life that we go down with the ship we sail."""""
---------------------------
Will it all pass as this gentleman presents it? I sure do think
so.
Tell me, how many of you are watching supply and demand, CBOT
positions, Comex OI, trading volume, gold share directions and
chart TI? And for how long have these items told you nothing about
the direction of currency gold prices? You see, the future of
the world value of gold is now waiting on the outcome of a political
currency war. A process that's been in the works for more than
a few years now,,,,,, And the longer this stretches out, the more
the outstanding supply of "almost gold" securities is
built up. Making the whole Fiatgold Bug arena ready to fail in
a mighty fall.. All done in an effort to keep the dollar system
going. We have been presenting this picture for some time now
and the end comes closer.
Every time the ECB doesn't "blink", ANOTHER economic
nation block looks closer at the EuroZone as the backing economy
for a new reserve currency. As each day passes with the EuroZone
showing even marginal growth without the benefit of an American
style trade deficit, the internal economic dynamics of the USA
builds against it's dollar management policy. Eventually forcing
the US into a full blown super inflation that has no limits.
Every day that the ECB marks gold to the market, it says that;
"when the market for gold is free of the forces of dollar
management, it's value will be marked to the market ----- whatever
that value may be and independent of the Euro currency's use and
position in the world"! Indeed, by inference, the value of
oil also be marked to market through gold. Slowly, the world shifts
on it's axis, my friends. We must not be blind to this change.
It is as we pointed to; the different nature of the EuroZone economies,
diverse social management and attitudes towards gold values, will
eventually support that nation block in the mists of a crushing
US downfall. Within the total dynamic of this economic transition,
physical gold values will return to a level where they will once
again represent the "wealth of nations".
For us, "the wealth of mankind".
--------------------
So let the water flow clear as the sun in our day
this time is for us, as we push on for the bay
mind you this stream can speak words quiet and fair
this river of "Thoughts that are free as the air"
Ladies and gentlemen, friends and readers,
later today I will begin on the main USAGOLD FORUM the next series
of:
"The Thoughts of Another"
thank all
TrailGuide
[Editor Note: The following post by ANOTHER was provided at the Discussion Forum]
ANOTHER (THOUGHTS!) (04/14/01; 18:08:54MT - usagold.com msg#: 51887)
Thoughts!
To this USAGOLD Forum and Mr. Kosares, good evening.
Thank you FOA for your time and work.
We talk once again my friends. This forum, it grows strong for all ages and nature of peoples. Read they do, from all places on earth. I read and see the knowledge as written, but it be the knowledge we still must see that speaks with greater strength.
Walk the gold trails of my good friend, do I. On my feet are "strong sole" of thick leather, purchased with much knowledge of physical gold. These shoes not go bare before our journey is done. On trail I see your "thin sole" gold investments cast aside and scavenged by beasts. Their owners walk no more as these investments took not this hard road of dollar transition. Many more will wear paper gold wealth thin before this walk be done. Only physical gold will see sun after this storm.
Some say dollar strong and holds much value still. It bends not and is strong and worthy. I say their vision is limited to see only post supporting roof. Not what on roof already or what must be placed on roof. When new Euro currency is done, full weight of dollars will return as your wet snow. In that day, we check curve of this good post, not before.
Some say dollar buys much gold and is strong in metal. I say, paper gold be not metal! We have more dollars than gold in world. As long as your system works, you sell gold to gain real dollars and we sell dollars to gain real gold. All be well in your world and mine, yes? Soon, dollar return in bank and Euro return in bank be equal, no? More later, dollar return become even less than Euro. Tell me about your paper gold value then, my friend. Perhaps, dollar then seen strong in this lesser gold only. You think long and hard on this before end of year?
I think Euro buy much more oil then. We shall see. I will return often now. Discuss our future then.
We watch this new gold market together, yes?
Thank You
Another
[Editor Note: The following post by ANOTHER was provided at the Discussion Forum]
ANOTHER (THOUGHTS!) (04/15/01; 18:58:39MT - usagold.com msg#: 51943)
Mr Gresham (04/14/01; 18:44:54MT - usagold.com msg#: 51889)
Welcome Mr. Gresham. We talk for a time, yes?
You write:"We who read here generally buy the coins, one ounce and less. The "Giants" you speak of are usually buying the large bars (100 ounce?), yes?"
I ask you, how many of your bars in tonne? This is the small purchase size.
"Is there a limited supply for them to get, and only through the large brokers with their "private wealth management" programs?"
I would say the BIS is best broker, always. It best to sell dollars for gold when gold is offered.
"I am trying to understand why this knowledge you bring is not being acted upon by some others with "deep pockets", such that the markets would be moved, or shortages occur, even before the dollar is seen in weakness."
My friend, you see the gold with "Western eyes". In mind, it be always, "how much currency does my gold bring". In this world of much paper gold, it bring not much dollars yes. In such matter, your currency makers do make your wealth lay low. This dream of much dollar currency for gold is the illusion in the "Western Mind". Your men of "deep pockets" do probe for shortages, however, their wish for low supply is not to be found. Their pockets are full with "credit gold" and sad are they at currency price this brings. It is the fools game to corner paper gold printing press, no? Sir, I stand with no fools!
Days and nights do pass and one morning will bring a dollar price for gold you have never known. In that day, I will cast this currency down and walk with real wealth. In this day, the gold will trade in Euros and no bribe of credit gold will be needed to mark this new money.
Today, I my world it be how much gold does dollar currency bring. A difference in understanding from yours, I think. Today, amount of bullion available for dollars no longer the reflection of bullion dollar exchange, it be now the most terrible bribe for world dollar use. An acceptable deal in most of world, such is real world outside your laws, no?
But, it is here, in act of making extra credit gold, where the "shortage" you speak of, is measured my friend. A good man with one eye does see this time as of but few years and short days. Aside from our Euro political changes, history alone does show all great currencies end with this overselling of credit gold as last of era. This paper gold credit is always for the fools first and last. It value is later reduced to same as currency, along with holders of no gold.
It be our good fortune (and yours) that bullion is offered still. For the simple man, such as I, this wealth is that for kings but more so for his people. For all peoples, gold will be again the wealth of ages.
In this day, at end of dollar era, all do see real bullion sold for sake of market credibility, only. Perhaps too, bank credibility, I think. In this world, the lower this dollar paper price, the more bullion becomes available for credibility sake. It is the good thing for men of "small pockets" and the curse against traders and fools.
I bid you the good fortune of "small pockets" with much physical gold! We watch this new gold market together, yes?
Thank You
Another
[Editor Note: The following two posts by ANOTHER were provided at the Discussion Forum]
ANOTHER (THOUGHTS!) (04/18/01; 06:19:54MT - usagold.com msg#: 52086)
ReplyUSAGOLD (04/16/01; 19:15:36MT - usagold.com msg#: 51997)
----- I would also like to take this opportunity to welcome Another back to this Table. The circle is now joined in continuity again -- all around. Already I have added to my own file of vintage "Another (Thoughts!)" with this shrewd observation:"This dream of much dollar currency for gold is the illusion in the "Western Mind". Your men of "deep pockets" do probe for shortages, however, their wish for low supply is not to be found. Their pockets are full with "credit gold" and sad are they at currency price this brings. It is the fools game to corner paper gold printing press, no? Sir, I stand with no fools!"
The smile of recognition returns to my face as this point is made in these few, short sentences better than I have seen it made in entire articles on the subject. Welcome back, my friend. --------Mr. Kosares,
Thank you for your welcome and acknowledgment. I add that within this circle many feet have walked and the prints of the Kosares show most lasting impression. I see the stature of this man as American, however no Western mind is found within him. One day all will rush and follow your path before strong tide washes the deepest heal mark from sand.
It be true, my friend, in history no man does corner printing press. Many have take this path before. Even declare themselves "leaders" of "financial knowledge" and "sophistication", do they. The Gresham does make wonder about such things and asks for reason noone does claim gold from printer?
Such demand be as 100 men with contract asking Spanish farmer for 100 basket of olives where clear examination in field display only 10 basket. Such good reasoning have these men, demand delivery and illusion of wealth to others be none! None ask full collection for fear of illusion to become reality, no? Perhaps, take what offered and wait next year. Better, sell claims for olives to Western investors with little eyes and clean shoes? Perhaps financial knowledge and sophistication of these paper sellers is more considerable than average fool. In the days that come,
"better one olive in house than six blooms on tree"!
We watch this new gold market together, yes?
Thank You
AnotherANOTHER (THOUGHTS!) (04/18/01; 06:41:33MT - usagold.com msg#: 52088)
ReplyMr Gresham (04/17/01; 10:33:51MT - usagold.com msg#: 52041)
ANOTHER: WA, BIS
Was the Washington Agreement the most significant event in gold since you were last posting in 1998? Do you have any reflections on those events?Mr. Gresham,
One must weigh the mind of this Randy. It be heavy, yes? Do read the thoughts of the BIS for these same are printed review as #52046. Hold a mirror to these events for reflection. Such descriptions I discuss come next day.
Thank You
Another
FOA (04/18/01; 20:20:06MT - usagold.com msg#64)
Lombards, Normans and
Franks
Hello again, everyone! (big smile)
I'm glad to see you are wearing the big wilderness bags today.
You got my message that it's time for a serious hike. Alright!
After years and months of talking about gold, I have talked to
friends about switching my delivery. During all this time, I did
my best to emulate Another's style of presenting information and
observations. Mostly here on USAGOLD, while he stood aside for
a period. If you have read any bit of his works you know that
style. He points to things, inserts thoughts, then drops names,
ideas, political intrigues and suppositions. All in his good way
of making people think and form perceptions on their own. While
he has sometimes talked "through" a forum venue, in
the process reaching others he knows, this endeavor was always
for the citizen and never started as a shallow ploy to influence
traders. It was more for the simple person that those "Thoughts"
were meant. Truly, in the middle of all the gold rhetoric, his
one plain comment remained intact and has never changed; buy physical
gold!
During this period, I worked at breaking up my delivery. Even
in clarifying, my replies were mostly partial answers. I have
to admit, this has been a larger challenge than expected (smile).
Now, I want to talk to you as I have plainly conveyed perception
to others in the past. Using a human dynamic to make my points,
as is my usual mode. So, I'll continue to employ a down home,
on the trail tone. Please remember, I'm restoring a world of lost
disk data while doing this. At first, most of this will be right
out of the old brain.
You have read the varied items in Gold Of Troy #56 and Troy and
Beyond, Even to Rome # 58, so lets get going.
-----------------------------
Onward the trail!
Look at this grand view.
It seems like forever, doesn't it? I'm actually speaking about
this never ending struggle we have had understanding gold. Well,
don't feel bad, mankind has been at war with gold for as long
as he has gained an educated opinion about money. (grin)
Pity us. From the very beginning the good earth gave humans the
perfect vehicle for commerce and trade, but we have bastardized
it at every turn. No wonder so many modern people are lost to
seize the day when it comes to keeping something of lasting value.
They have been so influenced by today's convenient lifestyles
that they lost the meanings of real structure in savings and savings
with enduring historic stability! Content to trade their life's
personal financial security, that these meanings would have provided,
in exchange for some other perceived grander returns! Returns
that only modern risk securities can provide. All the while placing
an ever larger portion of their work's returns in long term peril.
Assets from hard efforts they may never get to use!
It seems the whole of Western thought has some bit of concept
about gold. They know it's good in crisis and will admit to making
a quick shift into bullion at peril's first sign. Even Gold Bugs
consider the point of timing when they will run for the cover
of those big bars. Using their mine share profits to make a score!
It's the same for investors in lesser metals; they just want to
hit that quick ten times gain over gold before their split second
switch to the yellow bullion occurs. Truly, it will never happen
because gold will not hold still long enough for their purpose.
Hard money investors, to the man, point to a shortage of gold
and the ongoing paper manipulation that's making it so cheap.
Yet, in the mist of all their planning and strategic understanding
the logic completely escapes them as to "from who" and
"from where" they will all buy this bullion so quickly?
As if each and every one of them has the secret timing and will
beat out all the other Gold Bugs when conversion day comes. And
still, somehow, someway the world bullion price will accommodate
their gathered profits from playing these other "near gold"
securities?
My friends, it was Another that always said "this gold market
it be not as before". Perhaps this is the hidden perception
that so scares Gold Bugs. The possibility that our physical gold
market could jump well into the many thousands before their waited
purchase. A jump in dollar value that never reverses. A jump that
stops the contract function of this market in it's tracks! Frozen
because the other side cannot supply the gold or the cash to cover
their bet against you.
Then there is the Euro question. Many American Gold Bugs say it's
just another fiat currency. But, in the same context I ask them
"if that's so important to you , how did you just pay to
fill up your car"? Others ask how I can trust the Euro. Well,
I don't trust it any more than the dollar, or any other major
world fiat. I just use it for the life function we all enjoy.
Further, I ask back, how can you not trust the fiat you use?
The whole Another thrust about the EMU was to delineate the political
shift that had been in progress for some 20 years. And how this
ongoing shift would effect the currency valuations of everything
we use. The price inflations that are coming that no one has ever
deemed possible!
This shift revolved around the major world political players and
their use of international trade vehicles to forward their own
agenda. The very vehicles that impacted economies, and therefore
our lives the most. Dollars, oil, gold the EMU, etc.. The discussion
was much deeper and long-term in nature than many could grasp.
It's focus was especially attuned to the coming change in the
value of gold. A change so real, so profound that it's dynamic
just couldn't be believed. We will indeed have to see it to believe
it!
Even more so, it's all about the illusion of wealth that manifests
itself so well at the very end times of major currency failures.
Perhaps this is also a fear hidden in the Euro skeptics. The possibility
that they will one day lose the wealth and lifestyle their dollar
valuations afford them. Once again, the simple are warned from
wise words, "your wealth, it not what your dollar say it
be"!
Onward!
-------------
It wasn't always this way.
Gold, that wonderful metal that has all the unique qualities to
function as our one and only wealth medium, and we just can't
use it without altering it's purpose. You know, the Lydians had
it right, back around 430 BC. They didn't struggle with the concepts
of money, like we do today. They just stamped whatever pieces
of gold they found laying around and kept it for trade. There
was no need to clarify for certain that their gold money needed
properties of "utility", store of value, medium of exchange,
etc. etc.. They didn't need to identify these qualities were in
gold before they stopped questioning if it was safe to use gold
as savings. Gold was owned and the knowledge that people owned
it and carried it for trade was alone enough to make it "worth
it's weight as wealth".
-------------
Why then and not now?
You see, back in antiquity there existed another property that
could override our need for modern definitions of tradable wealth.
That property was found in the one identifying mark of wealth
that transcended all ages; real possession!(smile) This factor
and this one factor alone had the ability to activate all the
other modern attributes of money properties, even when the knowledge
of these attributes was unknown in the ancient era. Come now,
Alexander the Great didn't know about "utility" did
he? (grin)
--------------
Wealth.
As a means of example; think about art work for a moment? That
fine painting that graces your main prominent wall. It's tradable
for something, isn't it? Perhaps that Renoir for the acreage down
the street. That use would cover some of the medium angle, right?
A little bulky, but the large value makes it no more or less cumbersome
than five gold bricks.(smile) Utility? Just watch your friends
stare at it for hours. Store of value? A Renoir? We don't even
need to discuss this .
But, one more thing, is it wealth? Of course it is. You see, it
is wealth because you possess it, and the very knowledge that
you possess it is held by others. One, a few or perhaps many equate
your value for that painting by your possession of it. That understanding
starts a need / d
