got over it?

away.......to chant and breath................oooooooooooooooooooohhhhhmmmmmm.............

��lovingallthingslivingandnotevenhaggisesochaye

This is another good essay. I like the part about derivatives.......

The truth is that the old rules no longer apply. Once the sheet anchor of gold has been

removed, the character of the game has changed beyond recognition. Previously gold acted as

the policeman keeping speculators in line. Because of the presence of gold in the system, the

speculators could gang up in order to bid up commodity prices, or to drive down foreign

exchange rates and bond values, only at their own peril. Their bidding would immediately be

confronted with relentless arbitrage, exacting a heavy penalty for reckless bidding.

Arbitrageurs could count on gold, the policeman of the system, in resisting recklessness in

speculation.

But with the policeman fired and no replacement commissioned, speculators can gang up with

impunity, induce and ride price trends unilaterally, until they are ready to make a killing.

Speculation has become malignant. Speculators ran up the price of sugar to 75 cents a pound

and that of crude oil to $42 a barrel-and made money all the way up. They drove down the

price of a $1,000 Treasury bond to$500 and the yen-price of the U.S. dollar to 78 and made

money all the way down. And they made a killing when they sold sugar at 75cents, crude oil at

$42; and when they bought Treasury bonds at $500, the U.S. dollars at 78 yens.

During these episodes arbitrageurs have been conspicuous only by their absence. They are

intimidated in the absence of the police, and are gradually withdrawing their services. When

the last arbitrageur abandons the market, the speculators will have a field day. They will

bid commodity prices up to the sky, and drive currencies and bonds to the ground. Without the

guarantees of the gold standard, no arbitrageur will be able to oppose the speculators when

the bull-run in commodities and the bear-run in securities start in earnest.

I like the last part of the article to long to post..it is about interest rates and credit

collapse......

Under the regime of irredeemable currency interest is merely bribe-money, trying to persuade reluctant holders of irredeemable promises to hang on awhile longer. The maturity structure of the U.S. public debt is contracting. Clearly this process cannot continue indefinitely. The size of the bribe expected increases with the amount of the fast-maturing debt.....

an enjoyable and truthful read.

go golf ( ing ) ........ ( ! ) ....

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Another thought is: if the Euro should strengthen relative to the dollar and the ratio of their gold reserves to currency reserves is elevated above 15% can the ECB buy more currency to add to reserves and issue more euros while maintaining the 15% criteria. The other possibility is that the euro will progrees to a gold standard by virtue of the decay in value of the reserve currency value. Presto a gold standard, with an orderly transistion.

On another topic I did like this paper though. It is interesting in light of the euro launch. It may be predictive, even though it is ten years old. http://www.fame.org/research/library/hh-003.frame.htm

Anyone know why the Brazil situation has reversed so quickly? Has the IMF capitulated already? Has the IMF promised to bail out Mexico one more time? Is Ecuador no longer in a state of financial emergency?

It does look like the US rally is not over yet. Someday the glowing employment reports will not match the public announcements of layoffs. Probably this report is rigged already. Just wait until the 'premium' - or whatever you want to call it -- of the official vs real employment rate gets really out of kilter, and everyone knows they have been lied to.

I find it hilarious that Corporations are not allowed to publically testify about their earnings reports, even after they have told Wall Street. That sounds like insider trading on a wholesale scale. I guess anything is ok, as long as the markets stay up.

The current market behavior reminds me of the cartoon character who runs off the top of a thirty story building. All is fine until he looks down and sees nothing below him. Then he falls.

Just wait till the American public finally realizes that they are being lied to about the markets ( and other things ) . That will precipitate a very highly nonlinear event. Too bad 'the powers that be' do not realize this. Or perhaps they do, and they are trying to get 'one last bank' before they retire.

Business and Finance - Europe

Russian Palladium Exports Leap, Forcing Prices Down to '98 Lows

By NEIL BEHRMANN Special to THE WALL STREET JOURNAL

LONDON -- A Russian palladium drought has become a flood. Exports, virtually zero in the summer, now are soaring, say dealers in London, Japan and the U.S. Russian sales are placing pressure on palladium prices, which are at 1998 lows, explains a dealer at a Japanese trading house. If car makers and other consumers of the metal weren't stocking up ahead of the new year, prices would be even lower, a London dealer says.

The price is also underpinned by a temporary decline in flows of recycled palladium and platinum, says Ashok Kumar, a director at A-1 specialized Services & Supplies Inc. in Croydon, Pennsylvania. The collapse in steel prices has discouraged merchants from scrapping cars. So there are fewer scrap auto catalytic converters for conversion into metal, he says.

Spot palladium closed in London at $273 an ounce, unchanged on Thursday, but 35% lower than the May peak of $417, say dealers.

Supplies Are Expected to Grow

The Russians are boosting sales in December because new export quotas come into force in the New Year, says Kamal Naqvi, a precious-metals analyst at Macquarie Bank, an Australian bank. He and several dealers expect that consumer stock-building will end in the next two weeks. The Russians are behind in fulfilling their annual 1998 export quotas, so supplies are likely to exceed demand in the remaining days of this year, dealers say.

Russia, the biggest palladium producer in the world and the second-largest miner of platinum after South Africa, has caused havoc in the markets during the past two years, dealers say. In the first half of both 1997 and 1998, bureaucratic delays caused a delay in both palladium and platinum exports, driving prices higher. When the quotas were agreed in late summer, the country began to supply metal again, but in recent

days, Russia has been selling more than 30,000 ounces of palladium a day, an unusually large amount of metal for the market, dealers say.

Palladium, platinum and rhodium are essential raw materials for auto catalytic converters, which convert noxious fumes from exhaust pipes into clean air. Palladium is also a vital metal in the electronics industry, analysts say. Wary that the Russians will again delay exports in 1999, U.S. and European motor companies and other consumers have been actively

purchasing metal, dealers say.

Consumers Are 'Well-Stocked'

Traders estimate that industrial users hold sufficient stocks to meet production requirements for at least a year. Once demand tails off, quotes could slip by a further 10% by the end of the year, a London dealer predicts.

Moreover, since consumers are now well-stocked, the market shouldn't blandly assume that any renewal of Russian export delays will cause a price surge in the first few months of the year, a Japanese dealer says.

A sizable proportion of the estimated 4.6 million ounces of annual Russian palladium supplies comes from a stockpile, according to refiner Johnson Matthey PLC. So in the long term, a consistent shortfall could occur in Russian supplies. But any mine shortfall of both platinum and palladium will eventually be met by a marked increase in production of recycled metal, says Mr. Kumar of A-1. As U.S. and European cars age, the amount of recycled metal, currently about 7% of total supplies, will double and triple in the next two decades, he says.

Once in my life I woke up to news on the radio that the Congress had been dissolved, and the White House was in flames after being shelled by the military.

And it was true. Can anyone tell me how that could be?