I find it hard to believe that only the LBMA is now capable of trading gold as currency, and so therefore is the key to our current problems. I think the more serious matter is the process, not the location. Has the process of trading gold as currency been corrupted where only 'gold certificates' are being traded -- and they are no longer being backed 100% by gold? If so the US dollar would carry the brunt of a gold liuidity panic.

Personally, I don't think the worst case scenario where the US dollar abruptly melts down would ever happen, even what we suspect is true is really true. Reading from the pages of history, I would expect a repeat of the US dollar action in the 70's when the price of gold rose signficicantly, or the early thirties when the world went off the 'Pound Sterling standard'. Regardless, even this would not be pleasant.

Date: Sat Apr 18 1998 21:55

Donald__A ( @Another ) ID#26793:

Copyright © 1998 Donald__A/Kitco Inc. All rights reserved

Lesser countries with currencies of many zeroes do not operate well. If there are no citizens who will save those currencies then there can be no capital to construct factories, plant crops or build housing for a comfortable life. They will remain beggars forever. Worthless paper currencies are now used in every country of the world. There is no safe place to save. Thus there can be no capital and no capitalism. It is only a matter of time. What will there be available to use the trade receipts for? Who will need oil in such a world? Governments must return to gold or they will perish. It is only a matter of time.

Mr. Donald_A,

I have seen your view often. In this present world, it is a correct thought! But, perceptions of capital and what represents capital do change. Today, you use paper as a real value, and this debt currency is used to denominate the worth of your assets for your future. It is to say, my savings, they equal the debt of my currency! On this foundation, your production of goods and services are built. I submit, that without change, this economy will bring beggars into your family! We will not find this fate, gold will become new money and this money will buy much, with confidence. Yes, It is a matter of time.

Thank You

The BIS:

http://www.bis.org/

Thus -- I would guess that if you are right about an imminent crisis where the dollar is revalued in thousands of US dollars -- many countries would confiscate gold.

By the way, do you have any knowledge of gold certificates traded as gold by the BIS? By other central banks? Who verifies that the gold is where the banks and gold bullion houses say it is? And, if gold certificates are traded as physical gold, who makes sure that each one ounce gold certificate is backed by one ounce of gold? These questions are very important, as they may answer the true value of the US dollar in ounces of gold.

How is gold more likely to be traded as currency? As physical gold, or a paper certificate claimed to be as good as gold? My guess is that even the Rothschilds use gold certificates for much of their trading. It seems the inevitable outcome of the relatively difficult transportability of gold. So have all the 'goldsmiths' been honest and only issue certificates when they have gold in their banks, or have they been doing some padding?

Frank Veneroso thinks that the gold spot price is only about 25% or so higher than the physical gold price, due to 'paper' derivatives market trading. But -- could he be wrong, and the available physical gold is really being represented by gold certificates of some kind, instead?

What if some group has 'cooked' the books, and even FV has been bamboozled into thinking there is much more gold than there really is available? I am concerned about this, partially because the COMEX physical gold situation seems far less liquid than it should be. It is as if the COMEX gold stores have little at all to do with physical gold trading. Are they just for show?

Again I post the question I posted many months ago. Do we know who inspects the LBMA, the gold bullion houses, and the central banks to make sure that every gold ounce certificate in circulation as gold is backed by a physical ounce of gold? If there is an international inspection team, when did they last check the claimed gold reserves of the CB's and bullion houses? Or -- anywhere else large quantities of gold are claimed to be stored.

The question I raised is a very important one to all of us. If the physical gold is there to meet all of the stated paper claims, then Frank Veneroso is right. But -- what if ANOTHER is correct -- and one of those 'goldsmiths' have made more gold 'certificates' than there is physical gold to go around? Then -- who knows what the US dollar is really worth?

This is very much like the question -- just how much gold really is in Fort Knox? There are two good reasons to guard Fort Knox very heavily -- either because there is alot of gold to be protected, or because there is none, and someone doesn't want anyone else to know.

One counterpoint to the above is the answer: It does not matter, because the gold is 'somewhere' and it will come out during a crisis. Unfortunately it does matter if there are enough unmatched gold certificates being falsely traded as physical gold. And, that is the holders of the gold might not be willing to 'bail out' those unfortunate 'goldsmiths' until the price of gold ( in dollars ) is much higher than it is right now. It is really simply a matter of who has the gold. It it where we are told it is?

Where for you find out about this gold tax? Interesting!

Date: Sat Apr 18 1998 21:04

Carl ( @Another ) ID#341189:

Questions: Do you have a belief about whether the euro will be attractive to oil producers as an oil currency? If the price of gold in dollars begins to rise and the dollar also strengthens against other currencies, as you suggest, will not this accurate the purchase of gold by holders of other currencies?

Mr. Carl,

The partial backing of the Euro with gold is a resent thing. It was to be only 5% with the understanding that most European oil buys would be settled in Euro. The oil alone would give the Euro reserve status. Now the BIS has worked to bring a possible 80% of all world buys settled in Euro if 15% to 30% gold is held. This will bring the end of US$ holdings to act as reserves! In this way, the dollar price of gold would go to no end! This would further allow the Euro to become top gun as the US would even be forced to buy Euros to buy oil!

Many other currencies would come off the dollar standard as gold rises in their terms.

Make no mistake, all this will bring much pressure to gold mine operators. Mr. Carl, if you hold mine stock, you will stand behind many others when time to sell!

In a dual, it is best to move two steps to right, before one does turn and fire, yes?

thank you

Potentially: The Euro and a new Asian currency split the currency play into three thus forcing the issues of a new medium of valuation, that being GOLD.

No one can predict a disaster, so I presume that whatever action you speak of is in the cards.. that is, the forces are now at work to make this happen. That probably implies political action and it seems to be able only to come from one of three areas... Asia, the Mid East, or Europe with the EURO just on the horizon.

The comment 'where no one can see' is pretty ominious. Hope it catches the attention of a few others.

Date: Sat Apr 18 1998 19:51

GOLDEN CHEESEHEAD

then the true inflation of the US dollar over the last 20 years, since the last oil shock, would be clearly revealed?

Mr. GCH,

Today, digital currencies are not to hold value, but to use for trade only. I do wonder why many were so worried for price inflation, as it cannot destroy value of a currency that holds not worth as paper? The dollar of your youth is not the same item. This modern paper is but a receipt in commerce! If a person holds a paper trade receipt as a savings for life, how can wealth be gained? Look to many lesser countries with currencies of many zeros, this paper is still in use. Gold has gained much in these hands and the economy still continues.

Many look to the Dow Jones, and see large gains! But, I say, gains in terms of what? World paper currencies? These gains are not of real things, nor can they ever be totally traded for real things! And, these gains, they come with great risk, yes? For my children, I hold no risk with gold!

Look now, as the CB money makers do now change the rules of engagement! Many zeros will be added to the present world reserve currency in big rush as the great digital gains of these past few years become as dreams on a desert night!

Thank you

Is this not the problem with gold? More paper gold than actual phsyical?

What is the difference between $1.00 per barrel oil, and $100 per barrel oil?

The difference can only be in the method of exchange. What we are really doing when we buy gold is stating that we believe it won't be devalued. Since its supplies are finite, it makes better sense as a stable method of exchange.

In dollar terms, we must add zeros because the huge amount of transactions can no longer be handled in millons, but must now be trillons.

I believe that we are entering the age of digital currencies. Zeros are no problem for a computer. Those who understand this change over will likely have many more digital units than those who do not. If gold is the physical unit backing this change over, then I have no problem in believing $6000 or $50,000 an ounce gold. But, the times they are a changing my friend. There are many traps and pit falls that await the small investor in the year 2000--and beyond. I would appreciate other thoughts on this subject.

The current paper gold market is not a physical gold trading arena, as many here have observed and discussed. Truly, in every sense, it is a currency market as contracts are settled in the prevailing currency values of gold. It is through this process, that gold is purchased as a stated value in currency terms, not in physical terms. It is known, that a switch to trading of gold to physical terms of the same volume as today, would not only bring a huge revaluation in price, it would also destroy the market. The large dealers of today, could not raise the reserves needed to trade a physical market of many thousands an ounce! It is this possible switch to physical trading that would drastically devalue all currencies, including oil, that much worries the CBs.

The US$ is soon to become a regular paper currency! To this end, holders of US dollars and US$ assets, must make a decision that will impact all assets, worldwide! To this end, assets will move to physical gold and cash dollars first, driving up the dollar against all currencies. Then the dollar will be sold as it is deployed into real things.

This change will occur before 2000, as it is beginning now, where no one can see!

As Another would say, we watch this new gold market, together, yes, Yes!

Please read these words and consider:

What Is The Real Price Of Gold IN The Central Bank World?

If we look back thru the writings of Another, we find an old post that says something to this effect, You think I am a fool because I trade gold for thousands US$ an ounce. It was a strange statement, but stranger still that no one asked about this. In the very beginning of these THOUGHTS, the point was offered that gold had increased dramatically in value these past few years! This thinking was offered, even as it's currency price was falling to new many year lows. I ask about it today, especially in light of the post of :

Date: Fri Apr 17 1998 17:11 Aragorn III ( Some thoughts for A.Goose in regard to COMEX and G*O*L*D ) ID#212323

It is indeed, a paper game Mr. Aragorn, but it is a game of some advantage, if one can see clearly. The one that posts using SDRer, has shown many times how Gold Value is used in international trade. What cannot be seen is the value of gold in the INTERBANK world. Here is the realm of true valuations in paper currency terms. It is a real shocker for lesser eyes.

In this modern world, the current value of every asset is formed by a relationship of gold/currencies/oil. This cross relationship is the very basis of our modern world banking system!

Through this basis, all currencies are given value as the local government treasuries hold US$ as reserves. The US$ is given backing as it's government is guaranteed, that all crude oil, worldwide, will be settled in dollars. An oil reserve backing, if you will. And, the value that the future supply of currency traded oil imparts to the world economy, is guaranteed by an INTERBANK paper gold MARKET that values physical bullion in the Thousands!

I'll let Another explain:

But, how can this be, you ask? It is done, right before your eyes and we see it not! I ask you, if you have one ounce of gold, and sell it on the market for $300, it is worth $300, yes? Now, what if CB hold one ounce of gold, and sell it twenty times, that one ounce is now worth $6,000, no? The difference between you and CB? The persons that hold interbank IOU for gold, value it at the multiple of leases/sales made against reserves. This leverage, it is held for performance on bank part. The BIS, it force performance, on any economy! You ask Korea about gold, yes?

This is why oil can take a small amount of physical gold out of world supply, at current freely traded, managed prices, and hold it at a many times valuation. That is what gives this new world gold market much value in trade at high levels. Look even at your Comex, and divide the daily volume by the eligible stocks for delivery. That number ( perhaps three million ounces divided by 150,000 stocks, deliverable, times the spot close gives close, real world price of physical, $6,000. It follows close to paper trade on LBMA.

You see, physical gold is of much greater value than public traders can move it for! In your world, this cannot be, but it is, and will show for all to see in your time.

Gold is now being managed back to the $320 - $360 range. But, this few dollars of value is of little use, as forces are at work that will break $360! The CBs are loosing control. I write again in hour or so. We talk then, please.

Thank you

Maybe it's just me, but I was particularly impressed w/ that move.

The gold markets are not going to reverse 'on a dime' coming out of a 2 year bear -- we will have our bottom for some time, with a gradual rise, until significant bullish news surfaces. So -- keep your powder dry! I think the slow 'buy on dips' approach is the best way -- for now. As I recall this is what Old Gold has been saying - am I right, Old Gold? I locked in 10% short term gold stock profits, and am awaiting the next dip with about 15% of liquid assets in gold/gold stocks.

One piece of good news is that our short/intermediate term gold/gold stock rally is about 4 months duration now. This is longer than any rally of this type for nearly two years. I will be very pleased if we do not dip below this point. Another piece of good news is the Silver 'clash of the Titans' reported by D.A. Given that silver sales of nearly 100 million ounces could not crush the silver price, I can't imagine our silver bear will last much longer. If silver rallies strongly, gold may be pulled along as well.

We must still be on the lookout for bearish news that might knock gold back down to its lows -- a Japanese, South American ( or Indian? ) market meltdown. Fortunately Venezuela can't do any damage -- I'm pretty sure they sold all of their gold. The Japanese government might sell gold if things got really bad and they had dumped all of their dollars already. The Japanese people won't sell unless they are coerced. By this point the average Japanese is probably as distrustful of their government as the average Kitcoite. Personally I doubt that the Japanese leaders would move that close to the brink of oblivion. But -- the problem with brinksmanship is that you don't know when you have gone out too far on that limb, and the limb falls off.

Old Gold: You said some time you were looking for the new Veneroso teleconference post -- did you find it?

By the way, I think commodity prices are bottoming. Will be interesting to see what the El Nino does to the food prices this year. The tornado season has started in the MidWest with a big bang this year. The last really bad Tornado season in the MidWest was in the early 80's, about the time of another big El Nino. Don't remember whether food prices took off, and how long it took after the ElNino took hold.

I live in Canada, a country with a weak currency and it has sold most of its gold reserve. Perhaps the thinking of those in power is that if Canada had to nationalize the gold industry, it could do so to get the gold needed to maintain a strong currency ( this is a socialist country if you look closely ) . But at the same time, my understanding is that Germany for example has a substantial Gold reserve, and the DM is weakening as we speak ( at least relative to the US$ ) ! If Gold is so necessary to maintain a strong currency, why the same outcome from two very different models?

Why has it taken so long for the Europeans, Mid East oil suppliers and the Asians to react to the abusive practices of the US$? Could it be that the lure of their goods flowing into the US too difficult to give up, which would happen if monetary equality were to be achieved? I sense that is the case in Canada. Constantly one hears the argument that our cheap $ allows us to sell goods at an advantage to American suppliers, and that the low dollar is actually an advantage that should be retained!

Greenspan in his early life was a strong proponent of a gold backed currency. What happened?

The Gold Industry seems to be short sighted and poorly organized as an industry. En example of this is the forward selling to meet the current need for stockholder returns. But for an industry that has gold at its heart and around which stability and long term thinking should be the hallmark, why such a poor, or at least ill defined long term strategy?

On this forum there is a large variance in what is believed to be the future of gold, in price and strategic value. Much of it is wishful thinking, much is positional based upon the comment coming from a short or long seller ( you can pick them out, and the biases are sometimes poorly disguised ) . But just within the last week, the predictions for the price of gold in the short term are as low as $295, and as high as $450 or more for this year. Last fall the commentaries were that Gold in 1998 would reach even $3000!! Very large discrepancies indeed.

Éßcopperßü££

I will be gone for a time....Yes ( ! ) .

Tol#1....you kill me man. ;- ) Side splittin, killin-me, rof. Yes.

bart...am off to fed-ex to get me mountie....thanx for a great site. Hope my 'contribution' helped.

There is no doubt I will be bombarded with Grammarians blasting the apparent

redundancy of my title. Frankly, don't give a damn, because it is used for emphasis

to continue to harp and carp the assertion that in gold's next bull market, the South

African golds will far out glitter the North-American and Australian precious metals

stocks -- as they so often have done in the past.

Following is yet more proof of my statement - the venerable source is the

December 1994 issue of the Gold Newsletter, known internationally as procurer of

reliable and timely information on gold stocks. The numbers speak loudly and

clearly that South African golds have historically demonstrated more intrinsic value

than their international brethren across the 'Big Pond.' Here are the data from the

1994Gold Newsletter.

R E G I O N…………..Market Cap/………..Price/Earnings…………Dividend

......................................Reserve Oz…………….Ratio…………………Yield

North-America…………$241…………………. 52X………..…..…0.6%

Australia…......………. $367……………………43X………………..1.0%

South Africa…..…..….. $26…………………….18X…………....…42.0%

South African Golds Results vs the XAU in the 1993 Bull Market -

Data from Gold Newsletter:

XAU appreciated about 118%

In South Africa 28 of 43 gold stocks were up more than 200%

In South Africa 6 of 43 gold stocks were up more than 500%

In South Africa 3 of 43 gold stocks were up more than 1,000%

In South Africa Western Areas was up 3,417%

In South Africa Linden was up 6,482%

…and in 1998?

R E G I O N…………..Market Cap/

...................................Reserve Oz

North-America…………$138

Australia….......………. $172

South Africa…..….....….. $12

ERGO… Return of the Echo from Johannesburg

GOLD RESERVES play an important role in determining the long-term market appreciation of gold mining shares. Following is a brief comparison of SOUTH AFRICAN ( SA ) gold reserves versus those of their counterparts in NORTH-AMERCIA ( N/A ) and AUSTRALIA ( AUS ) .

In the study posted at G-o-l-d-E-a-g-l-e ( GLOBAL GOLD COMPARATIVE ANALYSIS ) , we analyzed COMPARABLE cross-sections of the three gold producing areas: North-America, Australia and South-Africa. Following are the stated results regarding reserves.

· Annual Gold Production - Average per company

…….N/A produces 1.210 million ounces - ( 12 major producers )

…….Aus produces 0.462 million ounces - ( 10 major producers )

…….SA produces 0.870 million ounces - ( 13 major producers )

· Gold Reserves - Average per company

…….N/A has 19.7 million ounces - ( 12 major producers )

…….Aus has 4.6 million ounces - ( 10 major producers )

…….SA has 38.8 million ounces - ( 1 3 major producers )

· Annual Production as a Per Cent of Reserves

…….N/A production is equivalent to 6.1% of its total reserves

…….Aus production is equivalent to 10.0% of its total reserves

…….SA production is equivalent to 2.2% of its total reserves

The numbers here simply mean that South African companies possess vastly more gold reserves as its competitors across the Big-Pond. Moreover, a lower annual production rate is INDEED A VERY POSITIVE FACTOR FOR THE LONG-TERM INVESTOR. The rationale for this assertion is the following.

For the sake of argument let's assume all areas continue to produce at the same annual rates, and that NO NEW RESERVES ARE ADDED. It is then rather evident that the South African mines will continue to produce gold, long after its brethren have shut-down their mines for lack of reserves.

-..N/A at 6.1% annual production of total reserves will exhaust deposits in 16.4 years

-..Aus at 10.0% annual production of total reserves will exhaust deposits in 10.0 years

-..SA at 2.2% annual production of total reserves will exhaust deposits in 45.4 years

South African production will far outlast its counterparts who have CONSIDERABLY LESS RESERVES. For N/A mining companies to prolong their gold producing lives, they must necessarily acquire through acquisition and/or merger the SA mines, LITERALLY PREGNANT WITH GOLD RESERVES

Consequently, QUANTITY OF RESERVES is a cardinal facto in a comparative analysis of similar companies in each area -- and therefore of paramount concern to a prudent investor, especially institutional investors who are necessarily long-term oriented - and who are always seeking intrinsic value ( like a Warren Buffett ) .

QUANITY OF GOLD RESERVES IS PARAMOUNT IN LONG-TERM VALUATION OF GOLD STOCKS!

They say Hell hath no furry like a woman scorned. WRONG.

A “gold bug” that has been told that gold might go down, would

make her look like Mary Poppins.

The Oldman took some heat on his initial posts, until he proved

his abilities. Take heed, and do likewise.

A test of the lows at 280 is not beyond reasonable expectations!

http://interactive.wsj.com/edition/current/articles/SB8928554407876000.htm or wait for the printed hardcopy at the newsstand.

Five years ago, in 1993, it was a bullish Barrons article interviewing Richard Pomboy that really got the gold stock rally cooking. We are, in the week of April 20, now hitting a special time favorable for a gold rally according to Dan Ascani's forecast last fall ( 5 year cycle ) , Cyclist's postings here, and Mike Sheller's astrological excitement time for gold this week. Nothing is certain, but we have at least a good wind behind us this week to lend smoother sailing toward a gold recovery.

http://home.navisoft.com/jordanf/portchester3.html

http://www.livjm.ac.uk/fish/html/lyrics/boston.htm

http://www.ilt.columbia.edu/k12/history/DQ/dq4.html

http://www.canoe.ca/TravelCanada/yukon.html

If the Secret Service officers are allowed to testify, I think at least one will say they say BC with someone other than Hillary. There may be a showdown between K Starr and Janet Reno. I must admit I am rather dismayed that Janet Reno is not being more supportive of Starr.

http://www.cbs.com/prd1/now/template.display?p_story=38320&p_who=network

Just how did CBS get access to a 'sealed motion' from K Starr?

have you been to the grain train yet? It may be time to board the bean coach...for she may be leaving the station.....er....maybe ;- )

BART! I received notice that some Fed-Ex guy was at my door this a.m. with said package of goldage. Have made arrangements for delivery tomorrow..........what a great day!! The north-north-east-western-wing was finished yesterday. Not a day too soon....yahoo ( ! ) . Yu Da Man ( . )

Anyone want to go water skiing tomorrow? Meet me at Lake Nacimiento- Heritage Ranch......6:00pm PST...dockside. Glass-Off! Let us touch elbows in the water.....uh huh. go glass...go GOLDen sunset.

away...to break out the stick

ÉßouyBound