KITCO GOLD FORUM
1997-1999

index
Date: Thu Aug 20 1998 21:21
farfel (Yes, I'm Back...) ID#17077:
Bart reminded me that he is the policeman on this forum K-2...the ONLY policeman.

Golly...for a second, I thought Multiple Personality ruled this place.

Whew! Now I'm relieved.

Thanks.

F*

Date: Thu Aug 20 1998 21:02
TYoung (F*...the flight to safety comment was a plant....I mean really...pure spin) ID#317193:
Tom

Date: Thu Aug 20 1998 20:57
farfel (Everybody's Parsing the President's Speech SOOOO....) ID#17077:
Copyright © 1998 farfel/Kitco Inc. All rights reserved
...now it's time to parse today's CRB report.

NY Precious Metals Review: Up on dlr dip, US military strikes

By Melanie Lovatt, Bridge News
New York--Aug 20--COMEX Dec gold futures settled up $1.80 at $289 per
ounce today, helped by a dip in the dollar against the yen.

( Really means: the media is conspiring along with Wall Street hedge funds to link the value of gold to the dollar/yen relationship. Why? Because most Wall Street pundits expect Yen weakness to continue for several years, ergo the yen-gold link should guarantee that gold will remain in its 20 year malaise. Is there any compelling rationale behind this arbitrary link? No. Tomorrow, upon the spin of a dime, one single country ( e.g. China ) could become a massive buyer of gold and more than make up for any volume drop in Japanese gold purchases ) .

It was also boosted towards the end of the session when US President Bill Clinton announced that there had been US military strikes in Afghanistan and the Sudan.

( Really means: Upon the announcement, Wall Street chose to pour investment monies into three areas: oil stock purchases, airline ( transport ) equities shorts, US Dollar purchases ( Look how Strong America is, Ma! ) , and gold stock purchases. Of the three, gold received the smallest funds inflows, ergo the smallest boost )

However, some traders said that gold's slight spike up on the news
was anemic, given that it is supposed to be a safe haven during times of
political as well as economic crisis.

( Really means: gold shorts want American investors to believe that gold is NO longer a safe haven...and NEVER will be again. However, upon the President's announcement, one would normally expect the Street to focus upon oil investments and transport index shorts. Moreover, the Street spun the intervention as a pro- US Dollar action ) .
* * *
It rallied briefly...It was a disappointing, anemic response, said
one trader. Another suggested that it had hardly fulfilled its role as a
flight-to-quality asset during times of trouble, but that it may be
boosted higher if the situation escalates.

( Really means: gold shorts want investors to keep buying US Dollars and US bonds as the ONLY flights to safety ) .

Clinton ordered the US military strikes this morning against terrorist groups operating in Afghanistan and Sudan who were suspected of carrying out the recent bombings of US embassies in Kenya and Tanzania.

( Really Means: Clinton, who has established a regime based upon general non-intervention in both global conflicts and economic levers ( such as a rise in interest rates ) is desperately trying to turn the American public's attention away from his penis. In doing so, he has attacked Islamic fundamentalists who subscribe to the concept of blood feud, i.e., eye for an eye revenge ad infinitum. In doing so, he
has succeeded in killing overseas airline traffic for the next several months and guaranteeing an upspike in oil prices over the remainder of the year...so much for that ZERO inflation rate we keep hearing about ) .

Gold could see a rally at some point if it heats up, said the trader, but he noted that many of the larger financial players, such as funds, have recently not been active in precious metals.

( So who just removed $30 million of gold from the COMEX inventory...and who just purchased two weeks aggregate volume of XAU Calls? Duh...Ma and Pa Kettle? ) .

He said that as a result, some do not even have direct access to precious metals brokers and are thus slow to react to such news. Some don't even have a line to the floor, he said.

( Really means: Me and all my Gold Short buddies are just praying the phone lines go down when the SH*T hits the fan and gold purchase orders come pouring in to the floor. Thanks God the margin requirements on our gold shorts have been reduced to help stall the inevitable!! )

Furthermore, the news, coming at the end of the session, did not give
many players time to digest it, said one trader, pointing out that most of today's gains were more a product of the dollar's pullback against the yen than the military strikes.

( Really Means: the gold shorts received a triple whammy today...a huge COMEX gold drawdown, an institutional purchase of a boatload of XAU calls, and the Presidential military strikes. They had just finished lunch and were having a hard time digesting it all, mostly because they were puking up all over their shoes ) .

Thanks.

F*

Date: Thu Aug 20 1998 20:13
TYoung (F*...BTW...how much of the draw down was eligible?) ID#317193:
Tom

Date: Thu Aug 20 1998 20:12
TYoung (F*) ID#317193:
The calls tell me the bet is on the rise being late this year and early '99. Tis one reason I'm holding back. We watch. Yes?

Tom

Date: Thu Aug 20 1998 20:05
henryd__A (Hey Bart!!! - Someone turned the K2 switch ON ... Quick, shut it down before the K1) ID#34857:
witch-hunters catch on and smother it.


Date: Thu Aug 20 1998 20:02
farfel (@TOM...thanks for the good words...) ID#17077:
...take a look at today's COMEX gold drawdown ( why didn't the omniscient Multiple Personality predict that one? ) .

...take a look at today's institutional purchase of a massive quantity of XAU calls.

...then KNOW in your heart that you have properly analyzed the situation.

Feel at peace with yourself.

Thanks.

F*

Date: Thu Aug 20 1998 19:59
henryd__A (test) ID#34857:
.

Date: Thu Aug 20 1998 18:45
TYoung (F*) ID#317193:
Copyright © 1998 TYoung/Kitco Inc. All rights reserved
Hope you are well. Pleased to see that multiple personality has not run you off. It seems to me that currencies are all at risk. The US$ is THE peg in the system. At such time as it fails gold and, perhaps silver too, will be the only alternative. Sounds like ANOTHER. Yes?

The problem, as I see it, is one of timing. The US$ could be strong for years to come or collapse within the week. Events could happen so quickly that gold ( and silver ) could not be purchased to protect ones assets. Living in a paper world requires playing the paper game. As such a gold hedge is required. How much and when are the questions. I pulled out of the stock market in January and then in and out. Keeping my gold physical hedge in place and have some mining shares.

Now, it seems, I am at a loss ( literally on some mining shares ) to act to accumulate more physical and mining shares. I have a sense of great unease about gold. This psychological barrier hopefully will not cloud my convictions but I must admit to a degree of consternation not felt previously.

In any case, give me a pep talk. He who hesitates is lost...Yes? We watch this ne...never mind...at least at the present. Keep posting. PMSP

Tom


Date: Thu Aug 20 1998 17:06
HenryD (Test) ID#36156:
.

Date: Thu Aug 20 1998 16:40
farfel (The Deception of the Gold Short.) ID#17077:
Copyright © 1998 farfel/Kitco Inc. All rights reserved
A common attack upon gold is the notion that, since most Americans do not use the metal in daily affairs, therefore lack of familiarity, availability, etc. dooms the metal to the trashbin of history.

Paper currency and digital money are pandemic, the gold short declares, ergo the American public could NEVER transact in gold again. The public does not know what it is or how to use it or where to find it.

Unfortunately, this argument is both specious and nonsensical.

On a micro level, gold may have little value in America. However, on a macro level amongst nations, gold retains significant value. It is the only international currency today containing historic, intrinsic value ( as opposed to value based upon the good faith of a go*ernment ) .

I well remember a trip I took to a country one time whose paper currency experienced regular and radical shifts of value. In that particular country, the unofficial transactional currency was the American Dollar. The majority of citizens did NOT hold American currency. Rather, they held bushels of their own country's volatile currency. A small black market existed in which American Dollars were king. Any citizen of the country who wished to obtain real, vital goods for reasonable prices was compelled to learn about the US Dollar, enter the Black Market, transact in American Dollars, and discover how to obtain the American currency...otherwise, the unfortunate citizens who did not rapidly acquaint themselves with the US Dollar were left to suffer great dearth owing to the pathetic purchasing power of their native currency.

Analogously, the day the American Dollar develops a crisis in Faith and ceases to maintain its tremendous purchasing power will be the day that the citizens will seek out another currency or transactional medium to enable them to obtain real, vital goods. Whatever this new transactional medium is, Americans will be compelled to learn what it is, how to use it, and where to obtain it. Most Americans cannot conceive of such a radical New World. In a country renowned for notably dismal, parochial education in international matters...where most citizens know only one language...where most citizens would be hard pressed to name the capital cities of more than one or two foreign countries...where most citizens are still nonconversant with the near universal usage of the Metric System...then naturally, the average American cannot conceive of a world in which he is COMPELLED to learn something new and foreign -- specifically, a whole new currency!!

The odds favor that, even if gold does not end up becoming the new global currency of choice, nevertheless, it will likely serve ( at the very least ) as an invaluable bridge to the creation of a new global reserve currency and/or currencies.

The reason: With the dissipation of American Dollar hegemony, naturally, we will witness tremendous upheaval. Gold always thrived in chaos and there is little reason to expect otherwise during the next storm.


Thanks.

F*

Date: Thu Aug 20 1998 15:18
farfel (Loss of Faith in Clinton is Final Nail in the Coffin.) ID#17077:
Copyright © 1998 farfel/Kitco Inc. All rights reserved
Over the past year, I wrote often about the THREE imperative factors that would precipitate a major upswing in the price of GOLD.

1 ) Equities Bear Market.
2 ) Bonds Bear Market.
3 ) US Dollar Bear Market.

Many times, I stressed that all points of the preceding triangle must occur simultaneously in order to trigger a major GOLD bull. The reason: the US Dollar had supplanted GOLD this decade as kind of new, ersatz gold.

Although, occasionally we have witnessed the phenomenon of weak equities markets occurring along with weak bond markets, nevertheless, we have yet to really see a notable, substantive weakening in the US Dollar.

The US Dollar has remained unusually strong over the past few years.

But people should note: the US Dollar is ultimately a paper debt instrument backed by THE GOOD FAITH OF THE AMERICAN GOVERNMENT.

Now, with the revelations of blatant lying and deception on the part of the American president, the good faith of the American government has devolved into a kind of oxymoron.

As long as Clinton remains in power, the good faith of the American government will be questioned by the majority of its trading partners...not to mention its enemies!

Unfortunately, the odds favor that the new direction of the American Dollar will be a slowly escalating downward spiral. Yes, it's true that America has been a beneficiary of foreign flight capital to date. However, this flight has been based on the unequivocal belief that America is a safe, secure, country...a good place to do business...where America's politicians and business leaders can ALWAYS be trusted -- especially relative to other countries leaders..

When the Chief Executive of the USA proves himself to unworthy of trust...when rampant cynicism spreads like a wildfire across both America and the globe, then all hell may break loose in the extant global financial order.

Unfortunately, it may already be too late to repair the damage done via the installation of a new President.

What is the consequence for Gold?

The Gold rocket is on the launch pad...it's engines are beginning to roar. The countdown can be delayed for a while but the Law of Perpetual Motion favors the rocket will be launched at any moment.

Thanks.

F*

Date: Thu Aug 20 1998 02:26
farfel (Loss of Faith in Clinton is the Final Nail in the Coffin.) ID#17077:
Copyright © 1998 farfel/Kitco Inc. All rights reserved
Over the past year, I wrote often about the THREE imperative factors that would precipitate a major upswing in the price of GOLD.

1 ) Equities Bear Market.
2 ) Bonds Bear Market.
3 ) US Dollar Bear Market.

Many times, I stressed that all points of the preceding triangle must occur simultaneously in order to trigger a major GOLD bull. The reason: the US Dollar had supplanted GOLD this decade as kind of new, ersatz gold.

Although, occasionally we have witnessed the phenomenon of weak equities markets occurring along with weak bond markets, nevertheless, we have yet to really see a notable, substantive weakening in the US Dollar.

The US Dollar has remained unusually strong over the past few years.

But people should note: the US Dollar is ultimately a paper debt instrument backed by THE GOOD FAITH OF THE AMERICAN GOVERNMENT.

Now, with the revelations of blatant lying and deception on the part of the American president, the good faith of the American government has devolved into a kind of oxymoron.

As long as Clinton remains in power, the good faith of the American government will be questioned by the majority of its trading partners...not to mention its enemies!

Unfortunately, the odds favor that the new direction of the American Dollar will be a slowly escalating downward spiral. Yes, it's true that America has been a beneficiary of foreign flight capital to date. However, this flight has been based on the unequivocal belief that America is a safe, secure, country...a good place to do business...where America's politicians and business leaders can ALWAYS be trusted -- especially relative to other countries leaders..

When the Chief Executive of the USA proves himself to unworthy of trust...when rampant cynicism spreads like a wildfire across both America and the globe, then all hell may break loose in the extant global financial order.

Unfortunately, it may already be too late to repair the damage done via the installation of a new President.

What is the consequence for Gold?

The Gold rocket is on the launch pad...it's engines are beginning to roar. The countdown can be delayed for a while but the Law of Perpetual Motion favors the rocket will be launched at any moment.

Thanks.

F*

Date: Thu Aug 20 1998 01:54
farfel (The Deception of the Gold Short.) ID#17077:
Copyright © 1998 farfel/Kitco Inc. All rights reserved
A common attack upon gold is the notion that, since most Americans do not use the metal in daily affairs, therefore lack of familiarity, availability, etc. dooms the metal to the trashbin of history.

Paper currency and digital money are pandemic, the gold short declares, ergo the American public could NEVER transact in gold again. The public does not know what it is or how to use it or where to find it.

Unfortunately, this argument is both specious and nonsensical.

On a micro level, gold may have little value in America. However, on a macro level amongst nations, gold retains significant value. It is the only international currency today containing historic, intrinsic value ( as opposed to value based upon the good faith of a go*ernment ) .

I well remember a trip I took to a country one time whose paper currency experienced regular and radical shifts of value. In that particular country, the unofficial transactional currency was the American Dollar.
The majority of citizens did NOT hold American currency. Rather, they held bushels of their own country's volatile currency. A small black market existed in which American Dollars were king. Any citizen of the country who wished to obtain real, vital goods for reasonable prices was compelled to learn about the US Dollar, enter the Black Market, transact in American Dollars, and discover how to obtain the American currency...otherwise, the unfortunate citizens who did not rapidly acquaint themselves with the US Dollar were left to suffer great dearth owing to the pathetic purchasing power of their native currency.

Analogously, the day the American Dollar develops a crisis in Faith and ceases to maintain its tremendous purchasing power will be the day that the citizens will seek out another currency or transactional medium to enable them to obtain real, vital goods. Whatever this new transactional medium is, Americans will be compelled to learn what it is, how to use it, and where to obtain it. Most Americans cannot conceive of such a radical New World. In a country renowned for notably dismal, parochial education in international matters...where most citizens know only one language...where most citizens would be hard pressed to name the capital cities of more than one or two foreign countries...where most citizens are still nonconversant with the near universal usage of the Metric System...then naturally, the average American cannot conceive of a world in which he is COMPELLED to learn something new and foreign -- specifically, a whole new currency!!

The odds favor that, even if gold does not end up becoming the new global currency of choice, nevertheless, it will likely serve ( at the very least ) as an invaluable bridge to the creation of a new global reserve currency and/or currencies.

The reason: With the dissipation of American Dollar hegemony, naturally, we will witness tremendous upheaval. Gold always thrived in chaos and there is little reason to expect otherwise during the next storm.

Thanks.

F*

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