First - - Gold is a store of value hard to corrupt. Unlike paper currencies, a gold currency, or currency fixed relative to an ounce of gold as Tyler Rose has just referred to, will not inflate. With such a currency, all trading countries get in return for theire good, an asset of known value. I find it disturbing that the only remaining bank in the world that uses a non- gold currency firmly linked to gold is the BIS.

Secondly - - Oil is effectively priced in ounces of gold, because that is the only currency that holds its value indefinitely. We Kitcoites are now consciously converting our ideas of price based on this concept.

Thirdly - - You mention consuming gold, rather than trading it. Interesting concept. As Allen Greenspan said in one of his lectures ( to the Cato Institute I think - - Oct 97? ) , the gold standard did work well for a while, and countries that had a negative balance of payments had diminishing gold supplies. They were the consumers of gold. Those countries who had increasing supplies of gold had an associated positive balance of payments and were savers or as you say traders of gold.

As AG said, this gold standard method worked well, as those countries who were unable to prevent currency inflation ran out of gold, and were forced to address their financial problems if they expected to trade with the others.

Fourth - Risks of paper money: I use the term paper money rather than paper gold, as I think the problems of the future if we have a financial crisis will not be with gold - - but rather the currency currently used to price it - - the US dollar. If we have a financial crisis, and the price of gold rises rapidly, it will be because the US dollar has lost its credibility as a stable currency of value.

Your comments are always interesting, partially because of a cultural difference. Despite this cultural difference, I think the retained value of gold with time immemorial is something we all understand.

You spoke of looking up at the stars, looking for life, and not seeing it. My answer to you is that it is there, but the universe is so big we do not see it. Unless perhaps whoever and what ever it is wants us to see it. We are incredibly lucky to be alive, and intelligent enough to be able to describe to each other such experiences. And, it is my belief that those of us who are able to retain their assets through the hard times that may be coming to all ( not just to SEAsia ) - - will be the ones that will seed the world's economic system for the next major human economic cycle - - the one that will allow us to reach the stars!

Here's to the future!

http://www.pbs.org/goldrush/

If you want to buy the 1 hour doc. the number is 800.828.4PBS.

It is a most excellent portrayal of the ENTIRE WORLD exodus to California and the eventual 'rape' of the North American ( indiginous ) Indian from their land. It shows man at his best and worst of times and the strive for wealth and power. I now understand what this 'thing', this gold does to a person ( to you bugs ) and what it is that you all spend your days thinking, living, talking, breathing, etc. about. It is crazy man!!! Gold makes and breaks.......gold is good, gold is evil........gold is....well.......go gold! Buy the video....

And to Haggis ( bugger off ) ....and other detractors of the 'American way' or the way we crazy yanks are.....we are YOU!!!! You numbskull.....wake up....we are an over the top version of YOU!!!! Quit yer crap. It is soooo ooooooold. I yawn. Nuff said. Get the video. Get real, get gold.

away...from the 'Golden State'......California '49....oh my.

Éß49er

and bottoms up...life is good......aaaaaaaaah...

On that note............... Good night all. And remember, it's going to be inflation in stuff. Computers and chips deflate.... :- ) )

Another intersting indicator to look at is the TED spread. Otherwise known as the Treasury/Euro dollar spread. The wider the spread between the two, the more 'insecure' investors feel. To see that spread, look up the March, June, September, or December futures contracts for the TB and ED.

Year = 98 or '8'

H = March

M = June

U = September

Z = December

For March spread, look up TBH8 and EDH8

an extra few minutes before we can break the law & defend ourselves.

Gun control is a farce. In Victoria,I know for a fact that any criminal can procure a pistol for as little as $300.If someone decided to put out a contract on you, do you really think gun control would prevent your demise?

Date: Sat Jan 17 1998 21:44

Mikey ( TO ANOTHER ) ID#347332:

To ANOTHER;

What do you think of this new technology to convert gas to oil.

What about the vast reservoirs of natural gas in the US or anywhere else?

Mikey,

If the oil/gold trading brings on a worldwide currency crisis before oil can change the rules, the price of oil in all currencies would spike and destroy most economies and the oil market. This outcome is not wanted but may happen. In this scenario your natural gas would be of use, but your econemy would be gone. Gold would never trade again on a free market. If the oil priced in gold comes to pass, oil would be a much cheaper use than gas. Your reserves would have to wait for another day.

http://www.bom.gov.au/weather/national/satellite/gvlatest.shtml

But I must correct you on one thing. The presence of a weapon is only one of numerous factors in violence. Criminals usually have a long list of other demographic factors including having been the child of a failed marriage, using alcohol or street drugs, having a poor education et cetera. Usually in any city the police can show you on a street map exactly where are the high crime areas, with crime rates easily equal to Liberia or Rwanda, with beatings, rapes, stabbings and other nongun crimes. Other areas in the same cities have rates equal to northern Europe...nearly no crime. And for the most part the low crime areas have a higher rate of firearms ownership as well as higher rate of intact families, fathers with jobs, parents with education, parents who teach ethics and morality. ( Sadly, I wish this were just IMHO, but in my area of behavioral science expertise I must study and know such things so this is the truth and you can bet your life on it. )

Months ago I made the statement that I believe that gold is a surrogate for the possession of arms for nations.In the best of worlds individuals would have access to both for the protection of their children. But the world is not perfect so I believe that if for some reason one's access to gold and/or arms is prohibited the most powerful raw sources of protection to be education, strong church or community ties and the ability to stay in one's marriage long enough to raise the children.

Date: Sat Jan 17 1998 22:06

Schultz ( ANOTHER ) ID#288349:

Schultz, Your view is a good one. The perception of the US is one of your view from where you stand. Many do not hold America as a “taker without cause”. At a low ratio of gold per barrel, with gold priced high enough, the USA would no doubt receive oil, relative to today at perhaps $8.00. The Us gold reserve and in ground reserve would last a great while. Also, the US gold reserve value would increase a great deal!

That, your Washington would understand, VERY WELL!

Noam Chomsky has called the gulf war the most cowardly war in hitory.

As a retired member of the Cdn Air Force I was ashamed that our forces were a part of it.

At the risk of inciting Ted, I would never mention the Kennedy name in connection with this...

Consider that Voodoo ceremonies are common place in some of the larger U.S. inner city areas. Such progress in the name of 'diversity' and 'multiculturalism'. A danger sign if there ever was one...

the crushing begins in one and ½ hour....oh......my.

awayawayawayaway...someone stop me.........back to the barbie w/ t- bones

Éßgroovin

The Cornering of Gold!

The final outcome of “Too Much Oil”, “Too little Gold” and “Worldwide Digital Currencies”.

For years the governments could create currency out of nothing. But, during the last eight years, the modern currency systems have taken the final step. As digital charges in a computer, they have become but “emotional thoughts” of trading value. This is to say, “a currency unit exists only during the moment of trade”. During this time, when real things are in transit, paper currency has value as an expected “trade completion”. It exists as a human thought. Complete the transaction and the thought is gone, the currency unit dies.

Think about it? If for a time the world commerce stopped. All would live from what they had for, say a week. During this week, all currencies and the debts that back them would not exist! Without trade, modern currencies have no use, no value, no purpose.

During our modern age, a currency can be anything. Corn, lamps, cars, tables, anything could be used as a concept for a digital currency. You see, it exists in concept only. Even gold could be used as modern money. The real item is not used, only the concept of “how it would be used during the transaction of commerce”. “Real value is not needed for

modern money, as it is only used as a trading unit”!

What does all of this have to do with oil and gold? For most people, nothing. But for some people, everything! You see, some persons do not want to hold an “operating business” and the present value that represents, as their wealth. Nor do they want to hold encumbered assets or debts of others. Wealth, to these people, is not represented by a

“digital trading unit of commerce”.

History has shown how many persons, or groups of persons, have tried and failed while trying to corner a commodity. Greed was always the factor, as acquiring real wealth to pass on to family or country was never the aim. Using paper currencies ( or debts of the same ) to purchase these commodities, always brought on the undoing of the scam. During some years, even gold was used as a purchasing unit, as gold was the currency of that time.

But, today we come to a different period, with a different factor and circumstance. For during no period of history has an entity used a commodity to corner another commodity! The intent is not to “corner”, but the result will be the same. This action is coming about because of a gross, huge mismatch of the value of gold and oil! We are not talking aboutthe price of these items ( in any currency ) . We speak of the total amount of physical gold, worldwide and the total amount of oil worldwide. During the last twenty years, the world has made oil an absolute necessity for life as we know it. During the same time, gold has been degraded to a “kind of commodity that we may need sometime but, I’m not sure”. With the public, government and the business community holding these thoughts, it is easy to understand which item is needed first and which would be dumped. In this day, people would sell gold for oil, no contest!

Consider the amount of oil that is used daily. Consider the future value that this consumption places on reserves in the ground. Compare this to the amount of gold consumed daily. Notice I said “consumed daily”, not “traded daily”. Clearly, the consumption of oil compared to the consumption of gold places a much higher value on oil reserves than gold reserves. With no replacement for the use of oil ( at present to lower prices ) and no “needed” use for gold in today’s thought, we have the ingredients for a mismatch in value of epic proportions!

The supply of oil was a problem in the 70s. Several nations actually cut off the supply to make a political point. Many thought that the “embargo” was an attempt at “cornering” the oil market. We may never know the true reasons for the large increase in the price of oil, but one thing is clear. The value of oil in today’s economy is of far greater importance to maintaining present “asset values” than at any time in the past. Today, the future value of all commerce is “well bid” into every asset value! Without oil in good supply , at a currency price that allows a reasonable lifestyle, all assets would lose much relative value.

This “need” for supply is not lost to governments or their Central Banks. No single asset class or segment of the economy, by itself is more valuable than the supply of oil. This brings us back full circle, to the problem of “digital currencies” and the “mind set” of much of the simple ( and rich ) third world persons. To many of these people, wealth is the surplus of life’s work that you pass on after death. Currency is something you, spend, trade or hold for a few years. It isn’t wealth. Gold ( and silver ) is “on the list”, so to speak.

This same mindset creates a worry in the back of many a mind in the oil states. It is clear to most, that even a small amount of gold in the asset mix, makes one appear “less western” and therefore “less foolish” when the concept of value and currency are discussed. But, the problem has always been that oil is “so large” in relation to gold that any attempt to convert, even a portion of ones assets creates a distortion in the markets. Of further concern is that; everyone knows that western minds don’t like or want gold, but if they think you like it they will trade it up in price for the sake of “sticking it to you” “.

Enter the world of “paper gold”.

Yes, gold just like currencies has been “digitized”. If you brought gasoline, made from oil sold under $20/bl, you are part of this system! For just as the “digital currencies” are created for trading only, paper gold was created for the trade of oil. In a very broad sense, it was created as an “extra” or “kicker” to allow the purchase of small amounts of cheap gold in return for a full supply of oil. In reality, this gold paper represents the future production of gold ( from the ground ) to balance the reserves of oil ( also in the ground ) . The huge amount of “paper gold” traded and outstanding today is now in excess of all the

gold in existence above ground! In essence, it is of the same value as the currencies, “the thoughts of nations, blowing in the wind”. The Central Banks gave value to this paper by selling and lending some of their gold stocks. But, as economies became hooked on cheap oil, and demanded more of the same, these same CBs had no choice but to use fractional reserve gold lending” to pump the gold market.

Now we approach the final act.

There is one oil state that no one will play for a fool. The CBs will sell all of their gold or the nations will nationalize all mines and operate them at a loss. One way or another, most of the paper gold market will be honored. Why? Because oil will bid for gold if they do not! We are not talking about an oil embargo or rising oil prices. Indeed, oil will become very cheap for those that can supply physical gold. This deal will not require the agreement of all oil states. Only one can start this, the others will gladly follow.

A large oil producer, with plenty of reserves and unused capacity, can say: We now value gold at $10, $20 or $30,000/oz.. That is the rate we will use to sell oil. We will go to “full” production and offer at $10.00us/bl.. Pay us in physical gold and USD ( or EUROs ) as a 50% mix to the above rate to equal $10/bl..

It would be a deal like none other! Oil, worldwide, would drop to $10.00/bl and every economy would do very well, IF they had gold. All gold would immediately be arbitraged to the above prices thereby creating a “world oil currency” large enough to handle oil. This creating of a new “specialized currency” will be the result of the first “commodity

corner” that ever succeeded!

But what of the current currency/debt structure? We will cover that in a later article.

http://goldsheet.simplenet.com/auag.htm

http://www.geocities.com/WallStreet/Floor/7953/

Statement by:

Donnie Marshall

Chief of Domestic Operations

Drug Enforcement Administration

United States Department of Justice

Before the:

Subcommittee on General Oversight and Investigations of the Committee on Banking and Financial Services

Regarding:

U.S. Law Enforcement Response to Money Laundering Activities in Mexico

Location:

Rayburn House Office Building

Room 2128

Washington, D.C.

Date:

September 5, 1996

The Mexican Federation

A Money Laundering Assessment

As with any other illegal venture, the driving force behind drug trafficking is the profits that it allows the trafficker to enjoy. Drug trafficking is a multi- billion dollar business, and these organizations are fueled by huge profits. Without the profits, they cannot finance the manufacturing, transportation, smuggling, distribution, murder and intimidation that are essential to the drug trade. With the tremendous profit comes an absolute necessity for the trafficker to launder his funds.

A preliminary analysis of all transactions between the San Antonio Federal Reserve and area depository institutions show a currency surplus of $2.96 billion dollars in 1995, up nearly $900 million from the surplus measured in 1994. In order to satisfy a growing economic demand for cash, Federal Reserve Banks often disperse more cash to depository institutions than they receive in deposits. Thus, Federal Reserve Banks with unexplained cash surpluses are considered worthy of closer scrutiny. Mexico returns more surplus currency to the United States than any other country. Millions of dollars are being laundered by these Mexican trafficking organizations.

http://www.usdoj.gov/dea/pubs/cngrtest/ct960906.htm

Mexican Government Laundering Drug Money - Just Like Arkansas Under Clinton?

By: Mary Mostert, Editor, Michael Reagan MONTHLY MONITOR

There was an infrastructure within Mexico that includes Colombian and Mexican narcotics traffickers and high- level government officials acting in concert, and that's what we're going after, a source familiar with the investigation said. Everything was viewed as a cash cow, and everything the PRI [Mexico's ruling political party] did was viewed as an opportunity to steal money. The superstructure of what made this thing tick- that's what we're looking at.

Interesting. Sounds just like Arkansas under Bill Clinton in the 1980s and the billions of dollars worth of cocaine and other drugs being flow into Mena, Arkansas. There was even an Arkansas money laundering scheme that seemed to involve a department of State Government.

http://www.reagan.com/HotTopics.main/document- 5.12.1997.4.html

Lets keep it on that. If you are close to intelligence information than you certainly know that the only info. which makes it out, and is discussed in public, is misinformation or speculation. For that reason lets close this discussion and forget what was said ( at least that's what I am doing )

We wait like strangers at the nobleman's door, eager to discover the secrets within, but afraid to peek in lest we offend... yet the nobleman has iron shutters on his door.

Why not help us by revealing some of your information sources, as I have? I realize you have raised concerns about confidentiality on your part - - but if you refer to sources on the net unrelated to any individuals you have dealings with, is that a conflict of interest?

Technical signs indicate both oil AND gold are bottoming now. I assume you will say this is not a coincidence. End of Ramadan approaches?

I lost a little on silver options years ago & subsequently found out that it is the most manipulated of the metals. Since then I have restricted my futures speculating to currencies were I feel there is more transparency & better odds. I'll probably try to get on board the au train within the next year. Again...good luck.

who are legends in their minds. May GODS grace shine on us all.

Later I will post, then we will truly consider.

Today, I stood in the sand and looked for life in the heavens. But even the stars offer no life as a strong body and a full mind. It is a fine night for a man of small thought, for he can consider GOLD.

Thus were the agricultural people, first forcibly expropriated from the soil, driven from their homes, turned into vagabonds, and then whipped, branded, tortured by laws grotesquely terrible, into the discipline necessary for the wage system.

The constant generation of a relative surplus- population keeps the law of supply and demand of labour, and therefore keeps wages, in a rut that corresponds with the wants of capital.

The Statute of Labourers, of Edward III, 1349. The Statute was passed at the urgent instance of the House of Commons. A Tory says naively: “ Formerly the poor demanded such ‘high’ wages as to threaten industry and wealth. Next, their wages are so low as to threaten industry and wealth equally and perhaps more, but in another way” ( The Statute of Apprentices of Elizabeth, ten days’ imprisonment is decreed for him that pays the higher wages, but twenty- one days for him that receives them )

A statute of 1360 increased the penalties and authorized the masters to extort labour at the legal rate of wages by corporal punishment. All combinations, contracts, oaths, by which masons and carpenters reciprocally bound themselves, were declared null and void. Coalition of the labourers is treated as a heinous crime from the 14th century to 1825, the year of the repeal of the laws against Trades’ Unions.

**** 1825 USofA agitation for a 10 hour day begins with a great strike by 600 Boston carpenters. Master carpenters denounce the strike, warning of the “unhappy influence” of change on apprentices “by seducing them from that course of industry” and of “the .....many temptations and improvident practices” from which journeymen are safe so long as they work from sunrise to dusk “*** ( 1998 50 & 60 hour work weeks ! )

**** 1831 USofA New York has its first labour demonstrations as stone cutters riot in protest against the use of stone cut at Sing Sing prison for buildings of the new University of the City of New York.

****1833 USofA New York trade societies join to form the General Trades’ Union, trade unionism begins to supersede workingmen’s political parties, but the movement will collapse in the financial panic and economic depression of 1837.

****Many banks have deceived bank inspectors as to the amount of GOLD backing their banknotes. Employers pay workers in paper “SHINPLASTERS” of dubious value and often counterfeit, the depression reduces thousands to starvation.

****1837 USofA Congress enacts a gag law to suppress debate on the slavery issue.

****1837 USofA Congress authorizes the issue of U.S. Treasury notes not to exceed $10 million, in a move to ease the nation’s financial crisis.

In the 16th century, the condition of the labourer had, as we know, become much worse. The money wage rose, but not in proportion to the depreciation of money ** and the corresponding rise in the prices of commodities. ** Wages, therefore, in reality fell. The Justice of The Peace were empowered to fix certain wages and to modify them according to the time of the year and the price of commodities.

Finally, the act of Parliament of June 29 1871, made a pretence of removing the last traces of this class of legislation by legal recognition of Trades Unions. But an act of Parliament of the same date ( an act to amend the criminal law relating to violence, threats, and molestation ) , re- established, in point of fact, the former state of things in a new shape. By this Parliamentary escamotage the means which the labourers could use in a strike or lock- out were withdrawn from the laws common to all citizens, and placed under exceptional penal legislation, the interpretation of which fell to the masters themselves in their capacity as Justice of The Peace.

Not content with this treachery, the “Great Liberal Party” allowed the English Judges, ever complaisant in the service of the ruling classes, to dig up again the earlier laws against “CONSPIRACY,” and to apply them to coalitions of labourers. We see that only against its will and under the pressure of the masses did the English Parliament give up the laws against Strikes and Trades’ Unions.

Look Back- - - - See Forward Take Care.

In any communist country, or country with other form of dictatorship, a confiscation of guns is the first thing done by the government to suppress any potential defiance of powers. While most men are exposed to a rigorous training on handling guns while serving in military due to a mandatory draft, they never can own a gun. If you never faced a gun pointed at you by representative of powers trying to suppress your rights, you don’t know much about feeling of hopelessness. There were many pictures in the press showing Czechs going through velvet revolution, Chinese facing tanks with bare hands ( just like Czechs in 68 when East Block armies invaded Czechoslovakia to suppress their desire to be free ) . Few of my friends died that year. This was not because that’s the way they like to face things that was because the government took all necessary steps that they would not face any resistance.

Well, after I came to the US, and got my citizenship, I joined the crowd of guns owning people with thinking you will have to pray it from my dead finger. No, I am no gun touting guy, I am a law abiding guy, shoot my guns here and there on my friend’s farm, and I prefer resolving issues through negotiation, political process, and law enforcement. However, due to my past experiences, I will never face with bare hands any suppressive force trying to take away my rights. You have to experience it to know what that means.

There are many abuses of guns in the US, however, it makes me wonder how much of the freedom in the US is preserved just due to the fact that people will not go quietly to the night.

Silver- - he expects to be called as as witness to testify against 2 rogue traders in London. He claims they got together 2 bil$ & are manipulating the mkt. Says the upside is 7 but if they are forced to liquidate it could be at 3 in July. The way he put it was someone long 5 contracts could lose their house.

Gold- - he's neg for at least 6 months. If it gets below 286 it will probably retest recent lows 278- 280, sees support at 265.

Says the recent volatility can be traced to last summer when the Germans were unable to complete the sale of their long bond for the 1st time since war. Used to be 3 trillion short term money, now 30 tril. Expect extreme volatility going forward.

This guy has a pretty good record. A year ago next weekend he predicted the currency devaluations in seasia & the carnage that would ensue. Also predicted a .69 Cdn$ when the other analysts were predicting 74- 76.

I'm glad I sold 2/3 of my gold stocks yesterday. I don't have the stomach to short silver futures but on Mon I will be shorting some of the stocks.

If anyone has any thoughts on a good silver stock short candidate I'd like to know. I'm thinking about SSO because of their mines in politically unstable countries.

Any Canadians out there who are thinking about remortgaging probably should do it before March. Apparently the CB will have to rollover 15 bil of bonds then & it may not go too smoothly. Maybe Cherokee will be right & we will go down the tubes before Mexico.

Hear me now, “if gold tries to go lower than US$ $280 the BIS will buy it OUTRIGHT in the OPEN for all to see”! They must! They will! I know.

My reply:

Another has predicted without any doubt that Gold will not close lower than $280. and the bottom is in. If BIS makes a move and $280. holds I will take another look at ANOTHER. I hope he is genuine and I will vehemently await next weeks market movements.

Summation:

I feel uncomfortable posting the following but I feel it must be addressed. Another’s prediction was proven correct very decisively.

I do not believe Another is a writer trying to refine his writing style for western consumption. He does seem to have a knowledge of the gold bullion market and international trade. I have to accept him at face value and the latest prediction of $280. was bold and unforgiving if proven incorrect. Another could not post here as an insider if gold would have closed below the $280 level. Futermore, I do not see him returning to Kitco boasting about his insightful call. I believe we have ANOTHER indicator to watch.

Does BIS release bullion purchases to the public?

away...to tickle my brain

Éßong!

¡go gold~~~~~~~~~~~~ y lakers también!

U.S. manufacturing shows no Asia drag entering 1998

WASHINGTON ( Reuters ) - U.S. manufacturing businesses were accelerating as 1997 ended, boosting output solidly in December as they shook off any early impact from ailing Asia, a Federal Reserve report Friday showed.

Total industrial output climbed 0.5 percent last month after a 0.8 percent rise in November. Fourth- quarter production surged at a 7.4 percent annual rate, the strongest quarterly advance since a 7.5 percent jump in the second quarter of 1996.

Analysts said vibrant domestic demand was holding off damage from an inevitable slowdown in exports to cash- strapped Asian countries and could sustain expansion in 1998.

Once again, the data show that the U.S. economy is well- positioned to withstand the blow that will eventually come from Asia, said Philadelphia- based economist Joel Naroff of First Union Corp. in Charlotte, N.C.

But if it is a love- tap, not an uppercut, the momentum that was built up at the end of 1997 could be enough to allow the economy to continue to move forward without losing much strength, he added.

Federal Reserve officials were out in force during the past week arguing that while Asia will buy fewer American goods this year, the regional crisis was unlikely to create a major problem for the United States. It will also help keep price inflation in check.

The road ahead looks pretty good, Robert Parry, president of the San Francisco Fed, told a meeting of business leaders and economists there.

Although we can expect some slowing as many East Asian economies work through their problems, I don't expect it to knock our expansion off the rails, he said.

Factories were churning out goods at 83.4 percent of maximum capacity in December, up from 83.3 percent in November for the strongest operating rate in more than two years. The last time factories were busier was in September 1995, when they hit 83.6 percent of capacity.

It remains to be seen whether manufacturing will utlimately be hurt by the Asian situation, said Anthony Karydakis, an economist at First Chicago Capital Markets Inc. in New York. After all, it is the sector most vulnerable to the Asia crisis, since the lion's share of our exports is manufactured goods.

http://canoe2.canoe.ca/ReutersNews/ECONOMY.html

away...to buckle- up the trousers...gold will soar

Éß@someday ;- )

ted - the Heat is in tinsel- town 2- nite to get crushed....Pat will be run outta town...

away...to tip all servers

Éß

I only wagered with D.A. because he is an honorable hombre and his posts have the greatest amount of respect for his fellow kitcoite. I will not wager with others who twist words...they remind me of politicians and...well, just politicians.

Date: Fri Jan 16 1998 12:14

EB ( Before I go help old ladies 'post- cataract'........ ) ID#22956:

Spuds...

I have a good wager. I bet that I profited ( at least ) TEN times what you did last year

( '97 ) on our PM 'investment/speculations'. TEN TIMES. And my bet is TEN winks (

maple, vp, Æ, don't care ) . Sound good

Regardless of what I said yesterday or last week or last month. Regardless of how I

sqwack like a Leghorn. Regardless if I am wrong about gold making ANOTHER

bottom. File all of that. Let us make this wager. Sound good

I must rush to work now so I will read your response tomorrow ( Saturday ) ...I can't

play with you tonight ;- )

WELL!? Spuds!? You will receive no other response from me regarding this or any other wagers....please do not waste our time that we have together............uh huh...ohmy ( loving smile ) .

away...to do mounds of insurance paperwork ( the glamour of making specs )

Éßߣ

spreadsheet - Last quarter results are coming in on the

RSA mines so it will need updating. My NEW address is

jdisney@mweb.co.za.

For the SPUD - you are doing a fine job of dumping

on the tasteless and crude peasant LGB. He NEEDS this

to teach him humility and transform him into a better

person. It looks like Bfiler needs it too. I used to

do it but I got tired - My heart is with you - let the

force be with you - It looks like Karlita was consumed

by Kitco fury and force - This force will drive gold

to great heights and flatten the pedestrian dreams of

peons like bfiler -

For the False Bernatz - watch out crude one - The

true Bernatz seeks you complete with medieval cutlery.

For the ever Tolerant one - I would pick Harmony -

above all others - but Id cover on Randfontein.

away...to climb into my staight- jacket

Éßgonloony

Interesting reading, gives a Japanese perspective. From reading all the North American stuff, one would think the Japanese were stuffed. Me thinks not, question is - how do they view GOLD?

http://www.japanecho.co.jp/index.html

Got some reading to do.................

My daughter is just entering med. school, and we have a many discussions about what’s ahead for her. Well, she just loves the profession, does not care about striking it rich, and wants to be one of the family practitioners, even if it was in deep countryside. As a matter of fact, she is thinking about signing up for a few years to work for Indian Health Services.

http://www.miramarmining.com/miramar/miramar.html

Based on my experience 20+ years ago, I developed a definition of a PATRIOT which it would behoove ALL in any land, to live by.

A PATRIOT is one who LOVES COUNTRY more than He/She fears its Government!

I assure you, until one has come up against the full power and force of a tyrannical government and held fast to one's position and beliefs, one should hesitate to comment on the Patriotism of others. Chauvinism is one thing. Deepseated PATRIOTISM is definitely another!!

I personally know PATRIOTS from a few other lands, mainly south of here. I know thousands from U.S.A.!

Have met and learned from PATRIOTS of our neighbor ( brothers and sisters ) to the north.

All governments, at one time or another need to be told to get back in their holes. That's why we have a ( initiallyy thought to be ) Fail Safe device in OUR CONSTITUTION. It's generally called the Second Amendment to the Constitution.

Many poor souls on this planet have not been so blessed by FARSIGHTED POLITICAL PROGENITORS.

We speak of exporting freedom and continue to support demagogues abroad and at home. It's because we ( collectively ) have forgotten- or never learned- what FREEDOM really IS!!

Infact, he died in Hairmyers Hospital, East Kilbride in Scotland.

GOLD, it is already utilised by the Central Banks as an instrument of power, and has been for a longgggggg time. They control the price day by day, year by year. It is already a Cartel. In the majority of cases, within a given country most/all gold is purchased by a Government at market prices.

International trade can effectively only take place using gold as a standard. The key issue is to get the Japanese and Chinese onto that standard. Barter is not the way to go.

Gold exploration and mining booms still occur, but not everyone can directly participate, but most can indirectly via shares. At this point in time not alot of non- gold people want to participate.

Gold.......you still have a choice dependent upon where and how you live.

Fiat Currencies....... most people do not have a choice, and have to use them.

LkA

I cannot honestly say that I know a great deal concerning American monetary history.

What I found interesting in the said article was the accumulation of gold during and after WW II, and the ongoing apparent historical repetition of boom- bust.

The present scenario is that the US owes US$4 trillion to someone and/or groups - surely not itself - who?

The other interesting scenario is how does gold fit into this debt scenario, as it must some where?!

Any ideas?

the US as perhaps the worlds number one gold producer.

It is not !! RSA is the world's number one gold producer

as well as the number one platinum producer. The US is

far behind RSA and about on a par with Australia which

I believe will soon surpass it.

This gentleman then said something like the US had almost

free access to Canada's gold reserves. What does that mean

Then he says that the US planned well to bring this

about. I guess that he thinks that the US planned to set

itself up just a little bit South of the Canadian border.

Keep it up old bean - You have me rolling with laughter.

All sportsfans with speadsheet will see that they were

warned off Echo Bay as could not recover at almost ANY

realistic gold price.

Menger money. One is the development of the idea that a tort or wrong to another's person or property ought to

be compensated. The second is the idea that promises ( contracts ) ought to be kept and that the debt due from

a breach of promise ought to be paid. So in any society with a developed law on the subject of torts and

contracts, the law of the sovereign and the artificial concept of money are joined at the hip.

I don't think that the law of the sovereign and the arificial concept of money follow from this. Money evolves from choosing individuals as does common law. It is not a creation of the sovereign. The artificial concept of money? Why does that necessarly follow?

I can also ( I think ) quantify just how much all that derivatives trading conributes to the price of gold, and once and for all dispell any

concerns that ANOTHER may be correct that paper gold prices could decouple from physical gold resulting in a traumatic gold spike of hundreds of dollars a day - - something that would probably shut down the world's currency markets if it actually happened. Even us gold bugs would suffer from this kind of gold rally.

The reasoning goes like this: According to F.V., CB gold loans now stand at 8000 tonnes - - about four years of gold production. Total gold options on Comex and OTC total about 4000 tonnes of paper gold. FV calculated the delta of all these options to be about 1000- 2000 tonnes.

Taking the worst case of 2000 tonnes ( options delta ) , total options activity is 25% or less of this total of gold loans. In reality, physical gold trading activity is probably very significant, so the effect of options trading ( paper gold ) on the gold bullion market is probably much less than 25% - - - - QED as the mathematicians say. One comes to the inevitable conclusion that even with the current nearly 2000 tonnes/day of ( total? ) gold trading on the LBMA - - there is no way that ANOTHER could be correct that the gold markets could selfdestruct due to paper gold trading.

If the dollar self destructs that is another matter, but when the dollar finally fades away as the world's currency, it probably will fall no faster than the rates seen in the typical SEAsian currency collapse. The pound sterling fell when Britain lost currency supremacy to the US, but it did not plummet either. So - - again we find that ANOTHER may be overcalling a traumatic rise in the price of gold.

I hope I did not cause too much commotion with my posts yesterday, I truly needed to be convinced with some hard facts not just opinions - - I guess it is just my physics background.

FV's options comments during the Canarc Conference are quoted below:

Bruce Paid, Morgan Stanley:

Frank can you quantify, or at least touch on, the role of the options' activity in the gold market and is there any way of getting some kind of a handle as to what this action for position may actually be in the market?

FV: Are you on the gold trading desk?

Bruce: No, I'm not. I just manage private money.

FV: OK, well look, go to your gold trading desk and ask them about this. Once again, we've discussed this in this book. There are 100,000 put options on Comex and 350,000 call options on Comex. What does that tell us? Comex is the tip of the iceberg. The OTC market in gold is 10 times the Comex. We've taken a look at this and we've said, OK, there's a great deal of double counting in all of this. A lot of option exposure is hedged from one dealer to another or on to the Comex and then from the Comex back to the OTC market. What percentage of this grossed up market is the true net position of this market? We did a bunch of calculations and we concluded that the total net face value of these options is about 4,000 tonnes and the delta on these options is probably about 1,000 to 1,800 tonnes. Part of this option position is producer in origin, most of it is central bank in origin. This delta probably accounts for 1,000 to 1,800 tonnes of total gold borrowings which we estimate at about 8,000 tonnes. This option structure provides a certain amount of resistance to the gold price when the gold price rises, but for certain technical reasons, this resistance is only transitory. Basically what happens is that those options are short dated. They soon get re- written. When they get re- written to a higher strike price, this selling pressure that emerges on any rally abates. Options complicate the dynamics of the gold market but they don't really change it. If you talk to your dealers about it, they might agree about this. I've talked to some dealers and they think my estimate of the delta on the total option book of the market of about 1,000/1,800 tonnes is not out of the ballpark. They see their own books. They estimate what percentage of the overall market they are. Then they project from that and come up with a number that's of that magnitude.

BC: So Frank, this is Brad Cooke again. At the outset here today you said that you estimated about half of the difference between gold demand and gold supply is filled by either central bank sales or central bank lending. You also, in your research this year, talked about the slingshot effect on the downside when the shorts get hold of gold and of course on the upside when they cover. You haven't talked about short covering here today. Do you want to say something about that?

FV: Yes. I wrote a piece after we broke in July ( I guess it was around August ) . Basically I thought that the big break that occurred then was due to fund short selling and I'm sure fund short selling was a big contributor to it. The market was supported by physical demand and I believe by some Asian central bank buying. The market then built a base and rallied up to 330. At that particular point in time we had a giant short position in the market. At any other time in history, once you broke above 330 you would've exploded. We broke above 330, we had a huge amount of short covering, literally 500, 700, 800 tonnes in a very short period of time and the market was absolutely contained by central bank selling. The big central bank selling that's probably been the problem late this year hasn't occurred here, but occurred on that rally. What that did was to provide a huge amount of gold to the market that let the shorts out. Then the shorts were free to go short again once the price went down. Once that rally above 330 failed and we started down again, the funds started to go to the short side again. But the market was already saturated with all the central bank gold that was thrown into the teeth of that short selling rally. Now, I'll also say that the central bank selling has persisted, and persisted in a very uncharacteristically savage way. I mean, these guys have been beating up the dealers. This is very unusual. Central banks normally have operated through the BIS. Then selling was done with a great deal of discretion, it was done very cooperatively with dealers. We're hearing stories about dealers taking losses, getting set up by central banks, saying this is how much we're going to sell, there's no more behind it. All of a sudden all the other gold dealers get hit with a couple hundred thousand ounces and the dealer gets bagged. I must say, it's very very uncharacteristic. But, at some point, this large short position will unravel. Whether or not you get the sling shot effect, whether you get a powerful rally or not, will depend upon whether or not there's a very very large volume of central bank selling or producer selling or both into the teeth of the short covering rally. My guess is that, when these big central banks are done, yes, there'll be central banks that will sell into the teeth of that rally, but the quantities will be less. And then the short covering rally that materializes will be substantial.