If true it is phenomenal and could explain rise in gold. Could anyone check

the math on the 99.6 billion Euro = to 30% reserves

http://talk.techstocks.com/~wsapi/investor/reply-7203311

According to the opening financial statement of the Eurosystem

on 1 January 1999, the most important single item on the asset side

of the Eurosystem's balance sheet was external assets. The net

position in foreign currency... amounted to EUR 227.4

billion,whereby assets of EUR 237.0 billion were opposed to

liabilities of EUR 9.6 billion. These figures refer to non-euro area

currencies, since euro area currency denominated foreign exchange

positions held on 31 December 1998 were transformed

automatically into domestic positions through the transition to

Stage Three... In addition, the stock of gold ( asset item 1 ) of the

Eurosystem amounted to EUR 99.6 billion.

The consolidated opening financial statement of the Eurosystem

reflects the initial valuation of the assets and liabilities of the

Eurosystem. According to the harmonised accounting rules for the

Eurosystem, gold, foreign exchange, security holdings and

financial instruments of the Eurosystem will be revalued at market

rates and prices at the end of each quarter.

Though it will take awhile for analysts, commentators, traders and

investors to sort out the full implications of this press release, there are

certain policy statements inferred in the financial statement that literally

jump off the page. Prior to this statement by ECB, few understood that

reserves would be presented as a consolidated balance sheet of all the

respective national central banks. This symbolically signals a uniformity

and centrality in the economic structure and policy making that comes as

a surprise. Prior to the release of this ECB statement, the best work I

had seen done on how reserves, particularly gold reserves were to be

handled, was published by the World Gold Council. In that they

assumed a gold allocation of 784 tons and said that that would be the

15% allocation frequently discussed. Now we find that because of the

consolidation, the ECB has upped the component to over 12,000 tons

and that it comprises 30.45% of a very large overall number. The Wall

Street Journal reported this morning a figure of 15% but this is incorrect,

and they totally missed what appears to be the most important aspect of

the ECB's action, i.e., they have included all national reserves in ECB

reserves including all the gold in Europe. Beyond the numbers, as I infer,

as investors we must also consider the implications of the sheer size of

this reserve and what message Europe is trying to deliver in presenting

their financial position in this way.

We will leave that for further consideration as the euro process moves

ahead. Suffice it to say, that this blows a hole in the theory that Europe

will be divided over gold and that the national central banks can

somehow undermine the gold price. Policy clearly resides with the

central bank and the central bank has been very clear about is opposition

to gold sales despite what those on the short of the market are telling us.

Though I doubt the mainstream press will give up on this idea in the

months and weeks ahead, my view is that is that the ECB announcement

is a very strong opening volley in the upcoming monetary wars and

perhaps yesterday's strong move was the first indication how

Euro-policies could affect the gold market. To put the matter in terms of

physics, the Europeans have converted the weak force to a strong force

binding those countries. We should not underestimate what that might

mean to our portfolios.

Comments? Major crisis, or minor crisis?

Delphi ?

Anyone have any info on what is happening? Sounds pretty big if these 20 commisioners who are about to be fired are the keepers of the fledgling EURO. What I don't understand is the timing. Would have expected a honey moon period of some kind with the EURO before trouble.

If my suspicions are accurate, something really big is about to surface in Europe.

Can anyone dig up anything else? Could be we are about to repeat the events of 1993 when gold equities doubled in a few months -- also due to a European currency crisis. We must be very careful, however, and figure out what kind of crisis is brewing. A gold up crisis -- or a gold down crisis?

-------

EU Parliament wants to sack commission

Monday, 11 January 1999 15:59 ( GMT )

( UPI Focus )

EU Parliament wants to sack commission

STRASBOURG, France, Jan. 11 ( UPI ) - European Commission President

Jacques Santer is trying to persuade the European Parliament to

reconsider a scheduled censure motion that would effectively dump all 20

European Commissioners.

At issue are the mounting charges of corruption, financial

mismanagement and cronyism - particularly on the part of the French and

Spanish commissioners - that have the European Parliament locked in

heated pre-vote debate over the scandal.

Members of parliament have already demanded that key individual

commissioners acknowledge the corruption problems within their own

departments and resign.

The commission runs EU policy day to day and with an official censure

vote set for Thursday, the stakes are high.

The push for censure was triggered after parliament voted last month

against signing off the EU's 1996 accounts.

That vote effectively questioned the Commission's financial

competence amid broadening mismanagement and fraud allegations in EU

programs.

All 20 commissioners will sit before parliament in a pre-vote debate

in Strasbourg tonight, after rushing from meeting the German government

in Bonn.

Spanish Commission Vice-President Manuel Marin, and his French

colleague, Edith Cresson, who is charge of EU research funding, have

been singled out in the scandal.

Among the charges being leveled against the EC officials are

allegations that millions of dollars in humanitarian aid were assigned

to nonexistent projects.

There are also charges that commission members directed financial

favors toward friends and that financial records were destroyed.

The entire commission is at risk because the European Parliament has

only the power to sack the entire commission - not individual

commissioners.

At this time, Parliamentary leaders are asking Santer to force Marin

and Cresson to resign.

But Santer admits only that management of the EU'sc executive body is

flawed, and has resisted calls to force individuals to go.

--

Copyright 1999 by United Press International

All rights reserved

-------------

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mozel ( @Irrationality ) ID#153110:

Copyright © 1998 mozel/Kitco Inc. All rights reserved

Am I mistaken or are we in an era now when the predictive value of fundamentals has become unreliable? What I perceive is that across the board intervention and participation by governments in markets by regulatory and financial means is much more pervasive than is commonly admitted. ... The possibility that markets are no longer free enough to behave like free markets is simply too awful to face.

And so the myth of an exhuberant bubble is substituted instead. A mania of human action is a kind of irrationality we can cope with. The kind of irrationality which government management of economies produces is not.

I'll tell you what I think, Mozel. That is deep down, we *know* that these institutions are run by people, and that people are not as yet perfect. And it is our innate understanding of the human condition that allows us to lend less-than-omnipotent status to our institutions. I guess it all depends on the time frame. Long term might be greater than my lifetime. Since ideas can live longer than humans, they are important to pay attention to.

You appear to be throwing in the towel, intimating that the power of the government to control the financial affairs of the world is complete. It may be, and your thought about denial is well asked. Are you merely becoming a realist?

Cage Rattler ( Y2K and the Euro conversion success ) ID#33182:

Given that the Euro conversion process is commonly acknowledged to have been about 5 times larger ( approx 6 times larger budget ) than Y2K,...

Wow, I was not aware of that at all. It certainly is not either my acknowlegement or experience. Can you cite some sources for this common acknowlegement? Perhaps you mean, what has been spent IN EUROPE has been 5 times greater than what has been budgeted ( or spent ) SO FAR IN EUROPE for Y2k? That I could believe. But Worldwide effect? Euro 5 times Y2k? I have my doubts, but since Euro conversion costs are in and counted, then we can see in approx 511,200 minutes how much Y2k will weigh in at.

Personally, we have not had to convert our software at all for Euro, since, today, all Petroleum trades in USD, but have about 2.5 man years in on Y2K, and ours is easier than most! Should all of a sudden, we need to change the base currency to be in EURO, the total cost would be ( drumroll ) probably less than one man month. But this is only one system, and not representative of the world-at-large.

I really hope that I am wrong on Y2k and that it is a short term problem. I have bought 40% silver coin so that in the event that there is a downturn post Y2k in the event of a non-event, that I cannot lose more than the face value. I enjoy reading your posts.