Thoughts from ANOTHER - part II

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Date: Wed Mar 25 1998 21:55
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Date: Wed Mar 25 1998 14:31, PH in LA ,

Part of the problem for last night was on my end. Two of my post held at one computer and were sent to europe. I will no longer try to "converse" on a "quick basis" as the thought is lost over time. Will address individual posts as able. Some writers offer much thought, but I am unable to speak of each. The "Peat" does do much!

Date: Tue Mar 24 1998 21:23 Thomas ( Doubts ) ID#372400:

"I would agree that the idea of oil-exporters demands to provide gold as payment for oil is not impossible, provided that Another is right on a major assumption -- that oil-exporters have the control to dictate oil prices. he game looks rather plausible -- oil-exporters keep prices low to make stronger the future shock of huge price increases. "

Sir, Producers do not create the price for oil, the world economy does. Producers can and do "controll" one thing, "full production"! They hold the controll to offer "all out supply" and the $4.00 price that would bring! THAT "controll" is all that is needed to create "correct" political and economic conditions. What creates your "future shock of huge price increases"? A currency system "that no longer values real things" on equal basis to preceived value of "economic trade"!

Also, you write,
"If some "very simple minded" people in oil-exporting countries decide to blackmail West with oil -- what would be the outcome?"

Sir, I offer you my posts of past, if this is "blackmail", I should think your army would be sent to enforce such!

Date: Sat Jan 17 1998 22:22 ANOTHER ( THOUGHTS! ) ID#60253:
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!

Date: Sat Jan 17 1998 22:07

Date: Sat Jan 17 1998 21:35
Tyler Rose ( ANOTHER ) ID#373164:

If, as you say, a major oil producer were to say that they value oil at $x per barrel, and we will take payment 1/2 in dollars or eurodollars and 1/2 in gold, then it would be to the benefit of that oil producer to "value" gold aslow as possible, in order that they would receive more gold for the 1/2 of the payment in gold.

Tyler Rose:
At this point of time the drive would be to make a usable currency. Thiswould require a high value for gold. For gold to trade with oil on a physical basis would also require perhaps a small fraction of gold/bl.

All would gain from this. The intent is not to destroy the oil market.

Date: Tue Mar 24 1998 21:53
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Allen ( USA ) ,
Your thoughts, they are true American. I ask a honest question; Do you feel the future is at risk if you must use another currency for trade? If yes, why? I ask this for others, in lands apart from yours. They use your US$ and feel that "it works", and the future is not at risk.

Also: Your question?
"The Persian Gulf war part has me a bit confused"?

Yes, it did bring a different outcome from what was expected. I will write of this next time.

I will make commits to other questions, later.

Thank you

Date: Tue Mar 24 1998 20:46
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Allen ( USA ) ,
Many have thought that oil is in short supply/reserve and someday we run out. In that time the price will rise due to shortage. This is not true for your lifetime. There is a great deal of energy/oil, for a very long time. The shortages will not come true, look even to the past important reports that say oil run out in 1989! As the crude oil will be fueling your economy for many years, one should look to the "market for oil" not the supply. It will be the "change of this century" as oil finds a new "medium of exchange". Even the SDR_er looks for producers to cut back:

"Perhaps you refer to a price that is sufficiently high to compel conservation on the part of the consumer? Thus restricting sales of the producers? " "But would this not allow the producers to produce at a moderate level over a longer period of time? What am I not considering?

Oil does not look to cut back, but to supply more! What is now found, is a currency that will allow full supply without loss of wealth.

Mr. Allen, do you see the EURO as a help in this area? Would you use EUROs as a currency in your land, side by side with the US$?

Date: Tue Mar 24 1998 20:01
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Allen ( USA ) ,
I will pickup from my last post ( Date: Sat Mar 21 1998 15:59 ) , but must add this. I did find humor in the post from SDR_er, "that the resulting high price of oil was an "unintended consequence"! This was of the early OPEC, yes, it was truly that way. Some thoughts on this later.

Mr. Allen, the "Beirut Resolution" was real. In that time, the threat was to price oil in all currencies, not just US$! When the US$ went off the gold standard, the problem was not that oil would buy gold. The gold "free"market was very small for oil. In the back rooms, all talk was "how to keep oil prices and "settled" in US$! As the dollar was the reserve for all countries, a move from oil in dollars would have destroyed it and the financial systems of most large economies. With the US$ just off the gold system, it was very susceptible to any loss of usage.

The price rise of oil was much more than many thought would hold ( SDR_er ) . We found that it was the fear of "oil not priced in US$s" that kept the price rise in tact. As the resulting price of oil in dollars, after it's removal as "oil reserve currency" was the true reflection of pricing in the, then current market. Not the oil supply cutbacks. All knew that high price from cutbacks, "alone" would have never held!

To hold a dollar backed oil system, the governments agreed to create a liquid "free" gold market. They did this by selling much gold over years and allowing it to rise to $200 US. Then, as now, free dollar reserves could go into gold. As the US treasury did no longer back US$ with gold, it hurt not the currency. In a very real way, the dollar went onto a

"oil standard" to replace the old "gold standard". As $180/$200 was to be the limit, for gold ( the BIS set at $180 then ) , in 1978 the US did bomb the gold when it went to $250. The market went out of control and rest is history.

For many years, gold was kept high for the price of "oil standard", after gulf war this system fell apart. But, I am ahead of self, questions / comments?

my post take much time to transmit, apologize.

Date: Tue Mar 24 1998 06:37

Allen ( USA ) ,
I will continue some at 19:00cst. Will address some others thoughts/questions from past posts with this write. Also, questions for you.

thank you

Date: Sat Mar 21 1998 16:07

I ask also, if we may "pickup" where we leave this? I have questions for you in addition to answering yours.

Thank you

Date: Sat Mar 21 1998 15:59
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Mr. Allen,
Many view oil and gold with basic "commodity eyes". But, I ask you, does supply and demand create the price of these items? On the surface, it does, just as any item. However, look under the cover of public reporting, and we find that, what is being traded is not the actual commodity, but a paper proxy, contracts usually expressed and settled as "various currencies" not the item itself! I offer this consideration to all, would oil or gold hold the same currency price if no paper future market existed? Think long and hard on this, if oil and gold were bought and sold "marked to the market" physical for cash, would the USD price stay the same in todays economy?

Oil is managed from the standpoint of "supply" not demand, as demand is infinite for this now indispensable substance. The world economic need for oil has build our modern financial structure as an upside down pyramid, on oil! Every business, asset, debt, currency and army is "priced in currency terms" that reflect a "full supply of cheap oil"!

But, what is cheap oil? It is defined in two terms, a currency price that allows a country to operate it's economy in a competitive way, and, in another real commodity price that allows producers to value their product as an asset, not subject to the valuations of the world economy, gold.

From this standpoint, one can see the value of managing both oil and gold. For the oil field owner, operating in a "oil consuming" country, there is no value in this form of management! But, from an "oil producing" country, holding world class reserves, a low USD price offeres all the advantages. It produces an ever "dependent" economic system, that, "in real terms of need" "upvalues all inground reserves" with a far higher "future need". That "future need", as expressed in a drive "to maintain current asset values ( dow jones ) " creates the political drive to manage oil prices!

( there is more to this point, do I continue, or do you wish to add/debate/discuss, now? )

I must stop here. We can continue another day, yes?

Thank You.

Date: Sat Mar 21 1998 14:33
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Do I learn from persons at Kitco? Yes. Will persons learn from these discussions? I do not know. As Mr. Kitner is the judge, I ask for "latitude" in this discussion. My intent is to bring the "reality of gold" into a better focus, thru oil.

Mr. Allen,
I ask for your time and personal thoughts on this "now to be", ongoing discussion of gold. In my world, " To understand gold, one must start with oil"! Let us go back in time, to the early 70's. Many did view the oil market as an attempt at a "cartel" to keep the price high in USD terms. My view, from the where I stand, did show a "cartel" for public image. However, the oil market was never controlled to move the price higher! It was controlled to keep the price down! Even "back then", oil was managed in much the same way as gold is today. Yes, oil became "gold" from an economic viewpoint, "black gold" if you will! In that time, as today, oil and gold had to be managed to keep their true value, in terms of currencies from destroying the free market financial system based on low prices for both. Politically, there is much more to gain, by producing countries, by "managing" it's price down, than by "allowing" it's price to rise thru freemarket use!

( there is more to this point, do I continue, or do you wish to add/debate/discuss, now? )

Date: Fri Mar 20 1998 22:12
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

I hope all persons could see the "new" true nature of the Central Banks this week. I call it "The change that did happen"! If you read the post of Sat. Mar 07 1998 13:08 Another, that was written for me, it speaks of it all. The banks do want gold to rise now, and they will pull in physical gold to replace leases, even if they must "pay high on the market". They do not rollover these loans now.

It was never the intent, for gold to fall from $320 / $360 range. The fall happened as the paper gold market is "out of control"! As physical is brought back into this range, much will be done to hold LBMA together. We watch togeather, yes?

Also, see the post of Fri. Jan 23 1998 18:03 Another. There was offered the intent of crude oil going to $12.00 US range. That price was found "this week". Hear me, twelve dollar oil does not want or need gold under $320, I know!

Also, I am shown how many persons did understand my last post. These same may not agree, but they do understand the "intent" of THOUGHTS. I do understand the ways of ones who are "hot against" my writings. This is good, as "proof is never found in the agreement of all persons", and it is so, that this justice is found not only in my home but my country!

I will offer a post on Sat. 21 if possible. I wish to converse on Kitco with Mr. Allen ( USA ) and Mr. Markus sometime in the future, if I may. It would be as thinking for "all".

thank you

Date: Mon Mar 09 1998 07:55

The purchase of large physical stocks of gold in Nov. did send a message to the CBs. They did begin slowdown of sales/easing. The "management tool of gold in the 90s" ( see Date: Sat Mar 07 1998 13:08 ANOTHER ( THOUGHTS! ) ID#60253 ) is now to go into reverse! A large purchase, now, is sending another message, "bring gold back into $320 to $360 US$ range. We should see this in five to ten days. This will be a hard thing, as it may create a crush to cover. Let us watch this "new gold market", as it is not as before.

I will post later in march!

Date: Sun Mar 08 1998 00:39
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Date: Sun Mar 08 1998 00:17
Lurker 777 ( ANOTHER ) ID#317247:

Sir, a day will come, when those who have sold gold they do not own, will be forced to buy it back. It is the nature of men, to once in life do a foolish deed for gain. Some walk away, with understanding. Some stay to long and are made to walk low without wealth. Today, our world is fat with stolen profits in a paper world, even as poor ones starve.

In that day, men such as I, will take from those who make simple ones hide! You will find not the lies of paper in my house.

thank you

I will be gone for a size of time.

Date: Sun Mar 08 1998 00:11
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Date: Sat Mar 07 1998 23:43
Logical ( Oil getting out at the top? ) ID#320219:

Yes, this journey will be as one never traveled, for many! Indeed, a fit body and strong mind will be needed to carry gold down this economic mountain! The weight of gold will cause some to fall, even as others find this load helps to place the foot firmly on ground.

Traders say, "gold go to $250 or $200", if yes, then they are right and I an wrong! But, when gold turns as in a storm, I will "own them" for all of their days! Time will prove all things!

Date: Sat Mar 07 1998 23:45
Date: Sat Mar 07 1998 23:41

Neophyte ( Another ) ID#390249:

My mistake! Will not use the Mr. or Ms. in the future.

Date: Sat Mar 07 1998 23:37
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Date: Sat Mar 07 1998 22:16
mozel ( @ANOTHER ) ID#153102:

The benefits are plain to see.

But, it is not clear that gold mines would lose value. Oil wells will not, so why should gold mines ?

Mr. Mozel,
The USA placed a special "windfall profits" tax on domestic oil during the last major rise in prices. I do think the oil stocks would have shown a greated value had this tax not been in place. Because gold will soon become a currency, mines will be taxed in a much greater way. Also, domestic mines will be asked to sell directly to the treasury at the "preceived commodity value" value of gold, plus an opperating margin. As no private company will be allowed do your treasury job, "produce money". Gold in the hands of the public will be thought of as a good thing, as citizens are asked to "pull own weight" as the government is much under.

Are you of this mind?

Date: Sat Mar 07 1998 23:16
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Date: Sat Mar 07 1998 20:01
Neophyte ( Another - ECB gold holdings? ) ID#390249:

Do you know how much gold the ECB will hold as part of its reserves?

Mr. Neophyte,
I do not know. I have knowledge of some discussion for 15% with a individual country holding that is very high. If this is as a final outcome, many CBs will be forced to call in lent gold and buy. I have reason to find this to be as fact!

Date: Sat Mar 07 1998 20:02
BillD ( ANOTHER...PERHAPS an unimportant question...but ) ID#261269:

What do you foresee for silver ???

Mr. BillD,
It will not be purchased as a currency replacement. But, in the minds of persons with private holdings, it will be as a currency in time of change. I think it will gain much, but only after a trading halt by gold. Percentage wise, it will not equal gold as many expect.

Date: Sat Mar 07 1998 20:17
Psilver Psyched ( @Another ) ID#216217:

The USA has been openly courting Venezuelan oil?

Mr. Psyched,
Please reread the most recent posts from Another. Your question should be: Why would the USA buy most of it's oil from Venezuelan when it would be far cheaper to buy it from the ME using gold? It is possible that the new oil bid will come about with the introduction of the EURO and give that currency the oil backing!

All: If the EURO is backed with gold in a large way, oil may be purchased with EUROs and even a smaller amount of gold!

Date: Sat Mar 07 1998 20:55
Lurker 777 ( Another ) ID#317247:

Mr. Lurker,
As a person learns, so to does he act! As in all things of life, it is more safe to follow a well walked trail. Truly, many have walked this path of gold. But, as no two men can take the same step, each must gather wealth as his experience will allow.

There is no standard percentage of gold for all persons.

Also, the CBs may start to call back their leases. Together, we will read this new book of gold.

Date: Sat Mar 07 1998 21:03
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Date: Sat Mar 07 1998 18:19
WetGold ( @ANOTHER ) ID#243180:

What do you know of the Dinar comments posted from the Islamic Mint ?

Mr. WetGold,
I understand it. I do think of it as the beginning of a change in the perception of value by all persons.

Date: Sat Mar 07 1998 19:22
SWP1 ( @ANOTHER ) ID#233199:

Mr. SWP1,
Please study the history of wealth as it has moved thru time and change. What your perceptions of value are now? Follow in the footsteps of times past, trace it's steps in the minds of others. You will find the value for your future lie in gold today!

Date: Sat Mar 07 1998 19:30
Snowball ( @ANOTHER ) ID#234218:

Mr. Snowball,
Please read the: Date: Sat Mar 07 1998 15:10 ANOTHER ( THOUGHTS! ) ID#60253:

Gold will become a currency "of choice" by all, for the benefit of all. Those of "lost paper wealth" will not remove coins from the world. They will use this deep currency as a building tool. Coins are good!

Date: Sat Mar 07 1998 20:30
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Date: Sat Mar 07 1998 15:47
Delphi ( @ANOTHER ) ID#258129:

What will happened with oil price in long term, when reserves of it will be mostly consumed?

Mr. Delphi,
A good thought, sir! Perhaps, oil will be replaced in 20 or 30 years? Oil has a very short history when compared to gold! I would say, my oil should be replaced with gold for that time to come!

Date: Sat Mar 07 1998 16:32
chas ( Another re "gold in the ground" ) ID#342282:

Mr. Chas,
During the time that must come, all forms of paper ownership of things will come into question. Many persons have accepted the "wall street/gold stock" way as a true holding of gold, it is not the right holding for our new future! This new gold market is not as before and will bring much confusion of the "perceived values" that mines represent. Indeed, a mine may hold the value of $1.00 as all other things fall to $0.00, but it offers no safety of worth, if you purchased it at $20.00. It will be a bitter lesson for gold investors with a short history of life. good luck

Date: Sat Mar 07 1998 17:11
Jack ( MR. ANOTHER ) ID#252127:

Is my reasoning correct?

Mr. Jack,
The outline you have given, will no doubt, only be the beginning. I must ask anyone, if gold went to even $10,000/ current purchasing value, would that not be enough? History has shown that persons that hold gold during times of change, do always find a better life. Think now, if you lived in 1975, would a 8,500 Dow not have looked as "not a real expectation", but thinking and perception of value does change!

Date: Sat Mar 07 1998 19:57
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Date: Sat Mar 07 1998 15:18
OLD GOLD ( Paper Gold ) ID#238295:

What do you see as the likely trigger for this anticipated golden earthquake?

Mr. Old Gold,
The US$ price of gold is, now held between several extremes. In Nov. of last year, a understanding was reached that the "paper gold" market was out of control. The private market was using this medium in a way not intended. Gold was to be taken and held in the $320 to $360 range. This was good for all. As the down trend was not seen in price yet, it was known that trading was in place to drop the price. Perhaps, even below The BIS capital level! Several very large physical buys were made in the off market ( see Date: Sat Nov 29 1997 15:53 ANOTHER ( THOUGHTS! ) ID#60253: ) as a warning. At that time the CBs started a slowdown in lending and sales. The market came close to a major resolution. In Jan. the BIS was close to a large open move, it would have caused a paper panic.

Oil will not accept the position, as is. Gold must come back into range as oil falls no further. Any loss of perceived control by the CBs will trigger a bid by oil. It would be better for time to pass and allow a natural change to the new oil currency ( perhaps 1 1/2 years ) . However, it is now my view that the CBs have lost control! I expect a break above $360 to create an allout run to infinity, before year end. Physical gold should be purchased for a lifetime holding, not a trade.

thank you

Date: Sat Mar 07 1998 15:25

Mr. Old Gold, I have many thoughts for your reason, but must make connections from far. Prehaps, 19:00?

thank you

Date: Sat Mar 07 1998 15:22

I must be gone for a short time. Please return for discussion at appx. 19:00 CST/USA. A good amount of time will be for this talk!

Date: Sat Mar 07 1998 15:10
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

Date: Sat Mar 07 1998 13:58
Carl ( Another ) ID#341189:

In your scenario as I understand it, gold would only buy oil, nothing else, because the physical gold market would be shut down.

Mr. Carl, This is a misunderstanding. See the words from "The Management of Gold, A Simple Tool for the 90s ". They show how the price for metal is now made by the paper gold market. It is this "paper gold" market that will be destroyed, first!

As Mr. Mozel has shown in his post of :

Date: Mon Feb 16 1998 17:55 mozel ( The United States Empire ) ID#153102.

"The second threat is, I believe, more out of sight, but more serious. This is the threat from derivatives, the $100 Trillion crazy aunt in the attic. "

Please reread his write. When a "world oil currency" is formed, it will bring forth a great turmoil. Even physical gold will not trade for some time! But, as paper loses are resolved, the governments will form some kind of real gold market. Perhaps, the BIS will make the market for the world, in much the same way as the LBMA. Understand, the new gold physical market will be not as a commodity, but as a free currency!

Date: Sat Mar 07 1998 14:10
mozel ( @Another ) ID#153102:

If this thing were to come to pass, it will not end with contracts for oil only in gold.

Mozel, you have a good grasp for the currency issue. I ask you, can you see the benefits?

Date: Sat Mar 07 1998 14:20
Delphi ( ANOTHER - a long-term question ) ID#258129:

Mr. Delphi, In the time from where you speak, gold will have become as, common use for all! No country or entity will not use it for all trade. Do you not agree, it is good for our families and children?

Date: Sat Mar 07 1998 13:25
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

I would like to start with a post from a gentleman from the Kitco forum as it sets the tone for this article:

Date: Fri Jan 23 1998 22:57
Junior ( @ ANOTHER & Change ) ID#248180:

I am reminded by ANOTHER'S comments regarding "Change" of a profound statement by a spokesman from the Middle East Oil Producers during the mid seventy's ( approx.1975 ) He said: "My Grandfather rode a camel, my Father rode in a Mercedes, I have numerous Jet Aircraft, my Son will ride a Camel."

It provokes thoughts that the countries of the Middle East and China are not as nervous about change as the consuming and material minded nations of the West.

Mr., Junior, thank you for that deep thought!
During the span of ones life we must consider weather we really do experience changes or are we just experiencing a rebirth of old values from the past, repackaged for this modern world. In times past, real money did not earn interest unless it was lent out. Yet, it retained value relative to all things. Today, paper currency, also does not earn interest unless it is lent out. However, it does lose value against real things, over time. In this light one must also grasp that a currency unit, in hand, is "lent out already"! It is a credit, to be paid in the future. Truly, cash, outside the banking system is a receipt for "lent out money" that just doesn't earn interest!

Much of the discussion of today, evolves around; How does one recognize real money? My answer is, find the largest store of financial units, held by banks, that is not lent out and does not earn interest. It is by far, gold! There is no other unit, in the world today,that meets this criteria. Even with the current mobilization of bank gold, it is still the number one holding of "non paper credits" that is not lent for return! Some would point to it's price in US$ and say, it does not hold value relative to real things. That would be true, but gold, while allowed to be "freely convertible" into any currency, is not allowed to trade "freely". It's price is managed. It is "The" "political metal"!

We can find one entity in this modern world that firmly holds that gold is "the real money amoungst moneys". That entity is the BIS. They are the only bank in the world that can buy physical gold and become financially "stronger" with this act. They are "The Bank" and their central holding is "The Money" of today. Other CBs buy gold and show it's value as a liability as it is not marked to the market. Yet, they can hold capital of the BIS and it is as a 100% asset!

In this modern financial world, a person of little business knowledge, can make an investment of "world class" proportions! He may, if you will, "walk in Anothers footsteps" and in doing so receive a value for a lifetime of work. The coming change in perception of money will reward courageous buyers with a return unseen in these times!

To use a sophisticated paraphrase from the Kitco Forum, "go gold"!

thank you

Date: Sat Mar 07 1998 13:19
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

A Noble Purpose, This Oil For Gold
When one considers the merits of a specialized world oil currency, the thought usually turns immediately to "send in the military and stop them". I must ask, why? If an oil currency is born before or out of the shambles of an financial meltdown, and it offers great benefit to all, again I ask, why stop it? Look at the merits of such a move:

In a very real "currency sense", oil will be devalued in terms of gold. As one makes a currency weaker by increasing the money units per ounce of gold. Oil will become very cheap in gold, as the amount of gold paid per barrel will fall dramatically as compared to today's ratio. There will be much more than enough gold worldwide to quantify a "world oil currency". To that end, the world paper "reserve currency" at use in that time, will continue to be traded for oil at an extremely low price relative to today. The only change will be the addition of a "unit of real value" added to each trade, a "world oil currency", gold! However, in terms of today's currencies, gold will be "upvalued" to perhaps $10,000 to $30,000 an ounce. So as not to rewrite what is already an excellent piece on this coming readjustment, I will repost part of Mr. Allen ( USA ) 's perfect article on the subject along with his requested changes per his :

Date: Mon Dec 15 1997 11:06 Allen ( USA ) ID#246224:
Date: Sun Dec 14 1997 18:59 Allen ( USA ) ( More ruminations re: ANOTHER's recent posts ) ID#255190:

Last one on this topic until more ANOTHER posts. I'm not sure that it would be necessary to have that large a cabul in on the "offer" of oil for gold. Given the rather small market in gold in comparison to oil/currencies it would only take one or two well endowed oil states to pull this off. Here's why.

Let's say the Saudi's have been accumulating gold through the back door ( approx. 5,000 tonnes ) . They sell say 20 Mln Bbl oil a day. Close enough. At one ounce of gold per thousand Bbl oil that's 10,000 ounces of physical gold per day. That's a lot of physical gold.

The first few moments after the Saudi's proposal to trade oil for gold at a very steep discount of 1000 Bbl/oz ( approx. 1.5% of current US$ price ) there would be roars of laughter. One fast thinker after another would think "Hey. I buy some gold at $300/oz, trade for oil to receive 1 Mln Bbl, then sell the 1 Mln Bbl for US$ 10 Mln. Net profit is

$10,000,000-$300,000=$9,700,000. Easy money." .

Everyone at once turns to the gold market to buy, which promptly shuts down. Now no one is laughing. Because everyone realizes that gold is now worth at least $10,000 per ounce and no one is prepared for that revaluation. Whoever has gold now has 66.67 times the purchasing power in that stockpile. What appeared to be a stupid offer has now become a complete revaluation of all gold stockpiles vs all currencies.

Who has the gold?
( per corrections :Date: Mon Dec 15 1997 11:06 Allen ( USA ) ID#246224: )

Saudi stockpile guest-imate 5,000 metric tonnes = 5,000,000,000 GRAMS not ounces. Gold now at US$9.65 per gram revalued by multiple of 66.67 = US$643.37 per gram x 5 Bln grams = US$3.2 Tln.

Germany 2900 metric tonnes = 2.9 Bln grams, revalued to US$1.8 Tln.

USA 8,085 metric tonnes = 8.1 Bln grams, revalued to US$5.2 Tln.

Is this plausible??? How is it possible by making one little change in oil dealings could this ever happen? It is simply the very intelligent use of the scarcity of gold and the necessity of oil. It is the desire of one party, who is big enough to swamp the gold market, to make it the preferred vehicle for buying oil. In fact if not one ounce of gold is ever transacted for oil, but the offer is continued intact, then gold will be revalued simply by the possibility of trading. Those who are in a bad way in their currency situation can always get oil with their gold.

What would the impact of this revaluation of gold and currencies do? It would instantly shift economic and financial power into the hands of those who own large amounts of gold: CB's, Saudi's, Roths et al. It would mean that gold/oil would be THE CENTRAL POINTS OF ECONOMIC REFERENCE. It would mean that currencies would be devalued by a factor of 1000 in relationship to the new standard of gold ( as a proxy for oil wealth ) It would upset an awful lot of people. There would be no TARGET to shoot at or take over, however, because all other oil producers would immediately jump on this band wagon. Its a simple matter of what an interested party is willing to receive for their goods. Venezuela, with gold and oil reserves and production capacity, would be one of the wealthiest nations on earth. The world would be turned upside down geopolitically, wouldn't it. Literally "..the 'have-not's of the world will become the 'have's.."

Mr. Allen ( USA ) , Another thanks you for this thinking. It should be read by everyone with an interest in this area. It should also be studied by students wishing to learn of market dynamics. We also offer this piece as an addumnum to the above, also by the same author.

Date: Mon Dec 15 1997 10:49
Allen ( USA ) ( Quick Note to JTF re: 23:05 post - US$ oil float ) ID#246224:

US$ price of oil is floating. The "proposal" to offer oil for gold at say 1000 Bbl/oz is far below the present float price in US$. The gold market is SO SMALL that if the oil nation that made this proposal was pumping enough oil the gold market would be swamped by oil buyers who were looking to make a few ( !! ) US$ on the discrepancy in price. In effect this would revalue gold by inserting an entire different group of buyers into the gold market who have ALOT of money.

Why is it the oil nation would not just buy at market? Same as above. Their effect in the open market would basically shut down the market thereby frustrating their efforts to buy gold. Conversely, why would they then make the "proposal"? Because either they have enough gold to buy the world at the new price, there is a crisis in which they feel it is to their advantage to do this ( such as a US$ crisis ) or they might have a geopolitical rational. In the new valuation the US$ would still be intact. But its monopoly role would be altered. Its not that currencies would become worthless but that gold would become worth much more in relationship to paper currencies.

To answer the "military" question, asked at the begining of this article, I say:

The massive increase in the "reserve currency" price of gold would, no doubt be ushered into the USA house of congress as a godsend answer to Americas debt problems. With the "full production" of oil, now viewed as a sure thing, The world may well see the USA send the military into the Middle East just to ensure that this "deal" is not disturbed. After all, it is oil that will be massively devalued by gold.

Thank you

Date: Sat Mar 07 1998 13:08
Copyright © 1998 ANOTHER/Kitco Inc. All rights reserved

The Management of Gold, A Simple Tool for the 90s
For any currency to maintain a "reserve" status, it must be, in some fashion, convertible into gold! In the past, the US$ was freely exchanged for a "fixed" amount of gold. $20 dollars was equal to one ounce. If the country wanted to make it's money stronger, it would lower the amount of currency units fixed to one ounce. $10 dollars per ounce made the currency more valuable in the market and it would buy more things. Also, a country could decrease the value of it's currency by raising the number of units to the ounce of gold, say $40. The problem with the "fixed" gold system is found in matching the amount of gold in the treasury to the "fix"! To make the money stronger, one had to bring in gold, as it took twice as many ounces to back a currency "in circulation" at $10 as it did at $20! The reverse is true when lowering the money value to $40. Then, one half the treasury gold backing had to be removed as only half was now needed to back the dollar.

You have probably not read this "slant" on the past gold standard because it was never quoted in quite that way, nor looked at in that fashion. If you allow your mind to perceive the above, one will clearly see that it was gold that gave the currency value. In that time one did not look to see how many dollars gold was valued with, rather, how much gold was bid for each unit in circulation!

Today, the world reserve currency is not on a "fixed" gold standard, it is on a "freely convertible" gold standard. One may, anywhere in the world, convert US$s into gold. This new "freely convertible" standard does still allow the dollar to be backed by gold for those who still demand a gold "fixing". That requirement is enforced by a certain commodity, oil. Yet, there is a price for the benefit of having all oil sales settled in US$. Yes, even in this modern era, for the US$ to remain on an "oil standard" it must be on some form of "gold standard"! Regain the perception in the top paragraph. Then understand that for oil to back the dollar, the dollar must find value in gold. And the dollar finds more value if it is fixed by the "freely convertible" gold standard, to buy more gold!

This convertible gold market is old from the mid 70s but is new from the early 90s. It is old by the 70s because it is "freely convertible", but it is new by the 90s as it "is not" "freely tradable"! The US$ price of physical gold is no longer "fixed" from supply and demand, rather it is "created" through the market action of "paper gold". Truly, it is the US$ has become the "item traded" in the "paper gold" market, not physical gold. Participants have yet to realize that the gold futures, gold options and gold forward markets, worldwide, have become little more than currency trading arenas. The percentage of gold delivered against these markets has grown so small as to be nonexistence when compared to actual metal settled at closing. Physical gold does still move, and in size, but this is little or nothing compared to the "paper gold" traded.

We are brought to this point for a purpose, but how did we get here? The largest producers of gold were introduced to the use of large scale "forward contracts" by the Bullion Banks. Once the process started, good business required it to expand. Shareholders want maximum profits at all price levels and "forward deals" were good at any price of gold. Once hooked on "hedge profits" during the good times of a high gold price, the mines now "must have at all cost" "forward deals", just to survive. Some say the mines will not forward sell at these, break even prices. However, the shareholders say it's better to hedge now, for a lower price will bring doom! With the US$ price of gold holding at just above average break even levels, and the ensuing virtual bankruptcy of several well known companies, it appears that the mine owners are correct.

Understand, that many entities lend gold, but it is the CBs that started and do most of it. Their purpose was to create a "paper gold" market that would allow them to manage the "freely convertible" price of gold. The CB lends the gold to a bank that sells it on the open market.

( Usually, the gold is placed privately as it must go to the correct destination. ) Then the bank holds the money and draws interest as incremental payments are made to the mine for new gold delivered against the contract. Over the long period that a mine takes to produce and repay the gold, this money grows. To grasp the fact that the CBs had a plan, is to know that they lend the gold for only 1% or 2% while the proceeds set in a Bullion Bank and grow with interest for the benefit of the BB and the mine! And further, the lenders allow the return of the gold to be extended out for many years, as in "spot deferred". The CBs allow public opinion to think of this as "typical government stupid", it's not!

Now that the gold price in US$ is around production cost, most mines must use "paper gold" to survive. The gold industry is coming under world bank domination, without signing away any sovereignty! Slowly, the CBs are gaining the ability to manage production and price with this simple tool.

"If they want new mine supply on the market, they roll over the contract to the BB. If they want new supply off the market, they allow the BB to pay for and take delivery of the gold and return it to the CB vault." "Also, by offering ( or withholding ) vault gold from lease, they affect the lease rate and thereby control private lending as well"

Understand that the second sentence action is used because gold lending is done by many different entities. Many times a mine isn't even involved. Sometimes, gold isn't even involved, just paper. But, it's still based on the gold price! The paper price, that is.

thank you

Date: Sat Mar 07 1998 12:58

With this post of:
Date: Sat Feb 28 1998 16:33

I offered, that these thoughts would be as "morning sun thru the fog of night". Today, this sun does shine. Kitco does offer a public right, for all to see. We step forward and make this "right" as day. Please read the post that soon follow:

The Management of Gold, A Simple Tool for the 90s

A Noble Purpose, This Oil For Gold


At appx. 19:00 USA /CST I will offer a post for "Price".

thank you

Date: Sat Feb 28 1998 16:33

A question from the far past by Mr. JTF: " what is ANOTHER really alluding to?

JTF, I have tried to offer these thoughts as a way for many to understand why this modern gold market is not as before. Most of these letters apply to investors at the far two ends of the market ( see my last post by another ) . Many, from other places, do understand these "expressions" as given. For many here, I resist the replies to questions that offer results for "gold traders". The intents and reasons are for persons to "consider" and "see" this market in a true light for today. Not for paper trades that will lead to certain loss for the future. I now believe, that by way of other posters, these thoughts are "in grasp" by many traders of "western thought". One may not "accept" the conclusions, but they can, "mentally experience the outcome" of the future. For this end I will now offer real direction. That of Why, When and How Much! I do this for those of "Family and Country", and persons of Honor. Those that live to help, not take, in times of change! Some say this knowledge should not be in a "public way", but I say secrets are for fools.

The next post will show some letters by Mr. Allen ( USA ) and M. Mozel. These best expound my way for your reason. It will be as "the end" of past thinking. For the time in the future, directly ahead, all will receive thoughts of Now and Tomorrow! For those of simple thought, such as I, the knowledge of the past, when brought forward into the future, will be, "worth your time and consideration"!

I will be gone for a time,

Thank You

Date: Tue Feb 24 1998 22:46

Date: Tue Feb 24 1998 22:28
Isure ( @ Another & All ) ID#368244:

My gold is for my family and country and my thoughts, are as free like the wind.

Date: Tue Feb 24 1998 22:38

Some Replies:
I will answer as seen, as time is short.

Neophyte, Lending slowed the end of last year. Some sales still ongoing. CBs wanted gold to stop in the low $300s as that priced $12 to $15 oil. The paper market is now out of control. The BIS will step in at below $280. They have currency as "trees in the forest without limit". But, the gulf problem may change things. This is ongoing?

Silverbaron , you know what to do. Physical gold will serve all, very well.

WetGold, each person must sail their own ship. My allocation, is not your allocation, plan as your thoughts will allow.

Date: Tue Feb 24 1998 21:46

One of my favorite sayings comes from Another, "this thing of life, it is a hard game we play, yes?". It does seem to cover all the emotions, I use it often.

But, this game of gold, it is not only hard, but will cost anyone dearly if they try it without all the facts! Do we have the facts, or is this really just a game? I think, for many investors, the precious metals have become a game of such, even "a gamble that they never intended to take". Conservative persons, trying to protect a life's savings entered

this arena with a clear direction, that of protecting their assets from uncertainty. Far too few made it to this end. They read the numerous gold books and newsletters from the last 20 years and came to a solid conviction that, "I can make a fortune at this" or "at least a small killing"!

The gold market is made up of a very broad spectrum of investors. At the very farthest ends of this spectrum lie the persons with the largest influence on the physical bullion. The super wealthy at one end and the "third world no ones" at the other. The middle is occupied, mostly, by the "investors with western thought". The far ends buy bullion. And they don't buy it as a gamble or a game! It is a way of life that has worked, through thick and thin, even before the West was "The West".

Now, on the other hand, this "modern day middle of the spectrum"! Well, they have read why we need gold, but they have never "Experienced" the need for gold! Until that day, when they gain "Experience", most of them will make "A Gamble That They Never Intended To Take". Yes, they do invest in all forms of paper and or leveraged gold and all the while, expounding from the roof tops the coming currency crashes and stock market declines. Even looking for bank closures and bank runs, as they cling dearly to comex options and gold stocks!

Anyone, from the outside looking in can clearly see that "westerners" do lack "experience". What does this have to do with the current market? Let's move on.

As Another has said, "this market is like none before". That is so, very, true. There is a "flaw" in this modern market that many do not quite grasp. In time, they will! There have always been people and companies that make a living dealing in gold. It is an ages old business. Today, we see a phenomenon that is "as none before". It is mostly done by the investors at the middle of the spectrum. The "trading of gold" has grown to a level never seen in history! You read every day, that no one wants or needs gold! In a way those statements are very correct! No investor wants to hold gold, but everyone and his brother ( and sister ) want to trade it! The volume of paper trading, worldwide, on and off market is beyond belief! It has created a type of "Parallel Paper Gold Universe", existing side by side with the physical. The major "flaw" in this system is found in the makeup of the "traders" of this "paper gold universe". Without fail, the majority is made up by those in the "middle of the spectrum", those without "loss of currency "Experience" ". Mostly, they are of "western thought".

Without the experience of " the destruction of currency" as a mental control, the "paper gold universe" will expand! I will not begin to list the types of paper gold available for trade, but from comex gold options to huge corporate derivatives, the overriding motive with gold is clear. "I will trade gold, up or down and make currency on it"!

Ladies and gentlemen, today, the paper gold market is larger than available, tradable physical gold, by a factor of three! This market will continue to expand until we reach a massive gold derivatives failure. This will come about as those, who had no wish to gamble, but traded paper gold anyway, make a mad rush to dump paper and buy gold. Very, very few of them will succeed! You see, the largest bulk of the tradable physical gold will never come back into the market, "in terms of currency"! It will return as a trade for "another commodity"! OIL!

What do we look for to see the coming end of this present overleveraged economic system? The complete and total destruction of the world gold trading system!

From Another: " the destruction of the present currency system will be preceded by the total unlinking of all gold for currency trading" "gold may find a price of $50US/oz or $50,000us/oz, but the truth will not be known as an open market" " yet gold will find an increase of value of biblical proportions"

Thank You

Date: Tue Feb 24 1998 19:14

Many ask, "why does gold act in this way"? I say, "it is not the gold market of your past"! Tonight, I will have one bring you "the ways" of my thoughts. It be in a clear tongue for you.

For most of you, your time is very expensive, but still, I ask you to read this as "it may be worth your time"! I say this now in light of posts from JTF 13:14, ALLEN 13:00 AND SDR 12:10.

If not to transmit, then the next day. Tonight, if yes!

Date: Sun Feb 22 1998 20:38

Date: Sun Feb 22 1998 20:29
Heavy Hitter ( ANOTHER ) ID#403159:

Mr. Hitter,
I must wait to answer all questions! I will save and reply, as much is in "progress" as we speak!

Thank you

Date: Sun Feb 22 1998 20:13

It is written that "A voice that is true has many minds for reproof, but one tongue can never be as the same thought with all men ". I say, "draw from these words what you have not and make use as your past will allow".

How can one know value in currency, when paper does not lie still? It moves at night, where noone can see, and this we hold to prove out worth? Real things know not this paper value, for they hold tight in the earth. In this time, we do stand firm with value and watch as "thoughts of others change in the wind"!

The modern currency price of oil and gold does not show the "risk" of a paper storm. It offers "no sign" for the weather ahead! Today, some see the value of oil as true, thru gold. But "risk" comes not in currency inflation by price of things, but in currency destruction thru "choice of use"! Find "one nation for gold" and "all thoughts will move as one". For as persons need real things for life, they do "want" and "reach" for a "real measure for worth". Not one by concept, but as "true from the past".

All persons hold wealth as never before, but search in vain for "this measure", one that "blows not in the wind of thought". For the good of all, this search does end, but brings with it the storm of change! The trust of old values will break in this new wind. Hold your worth firm on the ground as no storm will move a true value with weight, a weight for the winds of this season, gold!

It is a poor reason and purpose, that a CB lends gold for 2%! A simple farmer is better not to plant, as a harvest of grain for 2% is as a wage below life itself! Know they do this for a higher reach, as the gain is not for the return of metal, but it's use in trade. As in all things, the world does change and this purpose of CBs is now of the past. A "Desert

Storm" offered birth for this new "paper oil currency" and a "currency storm" will now bring it's change. As a "currency of gold" springs from this wind, western trading in this metal will end. The "terms" of all currencies will change as the "use" of these moneys is changed. Many will now know true worth as the "terms" of every asset does find a "real

price" and a "real value" in the "true world of things". For the future of most, "the wealth that was shown in paper" will be seen as clouds in the sky!

Thank You

Date: Sat Feb 21 1998 23:47

A CB lends gold at 2% to a producer for a better purpose than make money on idle asset. This gold loan is now the gold asset with a mine behind it! Such assets are traded and create solid paper for oil. If reason for good return was real, it would look like below. Read ABX page and consider, please.

There is much with this question!

Why doesn't a CB enter into a "reverse spot deferred gold contract" from the same Bullion Banks it lends gold to? Conditions:

1. CB lends gold at 2% to the Bullion Bank.

2. The Bullion Bank sells the gold at $300US.

3. The BB earns interest on the proceeds.

4. One year later, if gold is below $300, the BB buys in the gold and the CB gets it's gold back plus the contango.

5. OR, if gold is above $300, the CB invokes the "spot deferred" clause and lends more gold at $300+ to the BB. The first deal is deferred until another time as intrest builds.

6. In this process the CB will bypass the gold companies and gain more return.

Read the ABX hedging page, we discuss at another time!

Date: Mon Feb 16 1998 20:51

Date: Mon Feb 16 1998 20:19
mozel ( @ Silverbaron ) ID#153102:

Mr. Mozel,
Thru these "thoughts" I have made effort for many months, in haste, to make clear. My words are plain, but hard, and others have presented this truth in a western way. But, you sir, have made the best of it!

"make your path through the darkness, despair not, for one with direction and purpose, will read the map and complete the journey"

I make clear for you to lead!

thank you

Date: Mon Feb 16 1998 19:39

Date: Mon Feb 16 1998 18:09
STUDIO.R ( @Obsidian.... ) ID#93232:

I believe that the estimate should have read 10,000 Tons=sold position.

Thank you,

My good friend did not place three 0s. My thoughts come thru one computer, but move far thru time and ones in line. I will return.

Date: Mon Feb 16 1998 14:40

We will have a "change of events", please read,

"The Time Is Right For A CHANGE OF EVENTS"!

They traveled a long road to get here. Back in the early 70's they ran out of gold after printing too many dollar commitments. If they couldn't use gold anymore, what else could be used? You know and I know that the buck would have been dumped real fast without something behind it! All the talk back then and now, "everybody's gona hold the greenback because of the USA economy and it's military might", yea, right. Didn't see any coverage on the TV, showing the behind the door financial rooms. Truth was, everybody was going to move straight to the hard currencies and gold! Dam the effects on the world economy, figure that out later.

But, look here, the oil states said, "we will settle all oil payments in US$" ! Buy the oil in any currency and rate, but when you make the check, dollars please. The US agreed to float gold up to $250 if they went along. At that time, oil agreed because they held a hunk of gold in the NY fed bank valts. Looking at it back then, 250 looked to cover anything! Well , anything happened and the Carter had to slam gold in 78 when it crossed 250! Guess the US thought oil would just stop buying gold with excess cash, per the "agreement back in 71". Anyway, the rest is history through the 80's. Everybody learned to "love the dollar and hate the Russians"!

Everything changed in a hurry during Desert Storm. Remember how gold got hammered, big time! War in the oil fields and gold down? Looked good on the TV news, "America is winning, the dollar is good" Gold? No need! Here's what really happened.

In a very real way, the US dollar was inflated so much that even oil couldn't back it! Yes! The US ran through the gold backing in the 70's then went to a much larger oil backing in the 80's. But, even oil couldn't contain the huge expansion of dollar commitments that were created by the early 90's. Back to the drawing board. This time the US had to add gold to the oil backing mix, if the dollar was to remain on top!

A little political thought first, then we continue.:

Do you really think the US is the only country that will stand a military in the oil fields? What if they told the US, NO, we want someone else to defend us? You think there are no other takers? The truth is, everyone is lined up to offer defense. The price of "oil backing the defenders currency" is worth almost anything! All the deficit spending you want, goes to the defender! Even Russia, if you can believe it! As my friend would say, "you think long and hard on this"!

Now, back to gold. The deal: you may stand your army for us, in return, " oil will back the dollar, if the dollar is made strong by gold" "in as much as our people may replace the lost value of oil with gold" "in as much as we will produce oil in amounts to equate a gold/oil/dollar ratio close to that which existed at out previous agreement in the 70's" And, pray tell, how does the USA make the dollar strong in gold ? The BIS leads the creation of a paper gold market that will lower the world price of gold to the extent that it remains above "production costs".

Guess what, it worked! Contrary to all expectations of oil shortages, inflation, debt collapse and what have you, It Worked! But, there is one small problem?

The BIS and other various governments that developed this trade ( notice I didn't use conspiracy as it was good business, as the world gained a lot ) , thought that the paper gold forward market would have allowed the gold industry to expand production some five times over! Don't ask where they got this, as they are the same people that bring us government finance and such. But, without a major increase in gold supply, the paper created by this "gold control operation" will either be paid by, 1. new supply. 2. the central banks. 3. rollover existing. 4. cash? 5. or total default! As the Asians started buying up everything last year ( 97 ) , number 5 and 5 started looking like the answer! When the CBs started selling into this black hole of demand, the discussion of #5 started in their rooms also.

What is really interesting is how gold is being viewed and traded in some areas. Some people are using it's future "reset price, in terms of oil" as a value discount. In other words, they use paper gold to buy things based on the new oil/gold relationship perceived as a given in two years or less! It is assumed that this proportion of paper gold held by oil, will be converted, no matter what? We are talking, many thousands an ounce here!

So where are we now? I'm' not sure! How much gold paper is out there? If you look at the comex ratio of average daily volume to open interest, it's sometimes around 8. Funny thing that ratio is close to the gold commitments traded in London. Multiply, say 40 million ozs by the ratio of 8 and we get 320,000,000 ozs. of gold. Now, the money is in this gold paper, paid up. Just no gold yet, I think? That's about 10 tons, I'll be dam! That's a lot of IOU gold, don't you think? Add to this, that between the IMF and what CBs could sell, only about 1/3 of it is available at a much higher price, if at all! Then again, I'm not in any position to know this, am I?

Wonder if anybody else knows or thinks this? Sure could mess up a sweet deal for the world economy. Does anybody have a plan, a currency plan, if things change? But, then again, just like in the early 70s, nothing changes. Does it?

Date: Sat Feb 14 1998 22:51

Date: Sat Feb 14 1998 21:22
Goldhawk ( Another Excuse my brashness ) ID#433286:

" Just curious"?

Mr. Goldhawk,
Your life and times, it would fill a book I would read with much thought and intent! My book would be thin as compared to this history of gold. Together, we will read this book of gold and live it's modern life. It is the truth of this life of gold that pulls our minds to gain knowledge, not my life.

Mr. Pete, another time, thank you

I will be gone for a time.

Date: Sat Feb 14 1998 22:29

Date: Sat Feb 14 1998 21:21
WetGold ( ANOTHER ) ID#243180:

" How do Muslims in the Middle East and around the world reconcile this in their pursuit of GOLD with the "New Paradigm" ?

Sir, I do not know.

Date: Sat Feb 14 1998 22:22

Date: Sat Feb 14 1998 21:01
Preacher ( ANOTHER & Interest rates ) ID#225273:

"Thank you for that answer. Perhaps I'm dense, but I'm still not clear on how driving the gold from the HK traders collapsed the Pacific economies" ?

These Pacific economies were "on the edge" for some time, that is why many peoples there were buying gold. As the financial systems approached resolution, " the OPPORTUNITY was observed" to allow the currencies to plunge, without help! Much gold ( not all ) was driven from the Pacific rim, and the buying has slowed much. Many underestimate the need to keep gold in the low $300US.

" Also, you are looking for lower short-term interest rates, but skyrocketing long-term rates along with a higher US$"?


In an effort to maintain the dollar/oil bond. It is well to know that oil holds not long term US debt as backing for it's currency. In the end the CBs will let the long bond plunge in price. That is why most of the US debt is not "long", this change is for that time.

Date: Sat Feb 14 1998 21:32

Date: Sat Feb 14 1998 20:00
WetGold ( ANOTHER ) ID#243180:

This appears to be a monumental world crisis much worse than the

depression of the early 20th century. Could U expand further ?

Mr. WetGold,
In the past, nations and states have lost all as " the world changed" and these entities lost the ability to trade, at a profit. It is as history, and happened many times. Today, it is not the same. The "wealth of nations" are held as "thoughts of value" not real value! And even these thoughts are "in debt" as they are owed to other nations. As it has always been, time moves the minds of people to change, and with this, the thoughts of value also change. In this day, as not in the past, the loss of paper value as a concept will destroy the very foundation of wealth that this economic system is built on. This drama has started and is well underway!

There are nations that will try to "resource a new currency" as the old financial system implodes. Oil or gold or both may be used. If it is done at the correct time, much will be gained by all! Fail this Attempt, and gold will never trade on an open exchange again, in our lifetime! We will see this end in our time.

thank you.

Date: Sat Feb 14 1998 20:50

Date: Sat Feb 14 1998 19:58
Heavy Hitter ( ANOTHER ) ID#403159:

"but maybe you have a hunch?"

Mr. Hitter,
The price of "hunch" is very to high for investment! It is the reason so many paper gold buyers take on appearance of " to much sun"! I offer this, do not use the solid reasons for owning physical gold, as a purpose to trade it. Your profits from such trade, will, on the last day, in the heat of fire, burn as paper does! Sir, the world is going to change, and the rules of engagement will also change. Gold will be repriced, once! It will be enough for your time of life.

Date: Sat Feb 14 1998 20:18

Date: Sat Feb 14 1998 19:34
Preacher ( ANOTHER; A Question ) ID#225273:

"free flow of oil is more important than the Pacific economies. Could you explain your view on that more clearly? "

Mr. Preacher,
A time ago, the Asians were buying great amounts of gold thru South Africa. This alone was enough to drive the price of physical very high. As cheap oil required low gold, this action was, not good. In addition, during this time, a person in Hong Kong was moving many wealths into much "paper gold" in London. The amount "leveraged" was so large, in physical terms, that delivery would not happen, as no CB would sell that much. This gold paper was purchased from $365 down with intent to buy all at production cost ( below $300US ) . Much of this paper was converted, but London had to sell so much new volume that it changed the paper market, forever! That is why the CB had been seen as selling to honor this paper. The BIS stopped the CB sales and drove physical gold from Asia as a last resort! Oil has locked the CB and IMF gold from sales of significance. What metal that trades worldwide, is all there is.

Perhaps, this has answered your first question, also. WW3? Wars are fought over oil, not gold!

thank you.

Date: Sat Feb 14 1998 19:10

I would say, you are thinking well with this thought:

Date: Mon Feb 09 1998 18:20
SDRer__A ID#288156:

"derivatives EXIST because the system is broken"

To this I would add:
" a broken system EXIST because oil still backs the US$"

It is good, this system, for the world economy is strong from the easy flow of oil. But, the economy is as living persons, and subject to the stress of real life! We do now reach high production of goods and service worldwide. But, in terms of our financial system, the ability to trade these goods, has reached it's limit! Even as a mountain climber, humans have limits, as we can move only "so high" and "so fast" at this altitude. Today, the derivatives start to fail because the world trading system is slowing down, even as products are produced faster and cheaper. The economy has reached "the top of the mountain" and noone can see this. As you read this, persons buy companies thru your Dow Jones at values that reflect "the supply of cheap oil" and it's good effects for business in general. What they do not see is the undoing of the currency world that "good business" must have to operate. The "oil standard" created and held this currency world intact, thru much abuse. Today, the "derivatives", that require a long future of "good business", are being "devalued"! Look far and wide as you are, now , at the top of this hill! The world will head down this slope because it is not a machine and is subject to "thin air". History has shown that as persons slip from a high stance, they grasp for items that are known to be secure! They do reach for real things! Derivatives offer not a solid hold. It is well known that the modern gold market is fat with contracts derived from "intentions to supply". It is also known that the US$ continues on the "oil standard" because of this paper. No doubt, oil will continue to flow, but what currency will take this supply as we "walk down the mountain"?

In that day, "good money" will become "bad money" and "derivatives" will be paid to the holders of "derivatives"! In that day, a gold mine will also be paid in "derivatives", for it's gold will be for the benefit of all.

This is the way for you to see this modern gold market:

"Today, the paper gold market only affects the physical as the price is pushed down! It is the physical market that destroys the paper gold as price rises. In a falling market, paper can be settled in physical gold or cash! In a limit up market, paper can only be settled in more paper or cash!"

It is of this knowledge that wealthy ones and some CBs are taking in physical gold.

Look to LBMA, for currency looking for gold! Compare the Comex average open interest with it's average daily trading volume. Now use average daily trading volume at LBMA and convert to open interest in London, using comex ratio. Here you will find "real currency" in "paid for" gold derivatives ( not futures ) ! This money is now looking to convert to physical! It is caught in this paper with no way out! Know that this amount covers not CB gold moved by big trader! That wealth is safe, as it is for the good of all in those countries!

Mr. Bart,
Your fee, it is a good thing. I would be more open and bring the thoughts of others for all to see. " all persons live for as one world and secrets are for the fools"

Date: Sun Feb 08 1998 11:01

I will be gone for some time.

Date: Sun Feb 08 1998 10:45

Date: Sun Feb 08 1998 10:24
WetGold ( ANOTHER ) ID#243180:

Since Arabia will be protected AND the U.S. has a strong allie in Arabia ---

Will the relationship sour or will be united with a common goal ?

Please see Another's post from yesterday AM and on. You and all western minds must weight this offer as it is heavy for your side! A great many losses will be for the holders of debt and paper things, but the gains are for a better life. There will be many for NO! Time will prove all things!

Date: Sun Feb 08 1998 10:31

Date: Sat Feb 07 1998 21:28
refer ( ANOTHER @ THOUGHTS ) ID#41229:

Is your warnings to us of something that may happen?, something you feel

will happen?, or something that is in progress and you know will happen?

Mr. refer,
I submit to you that, thruout time the progress of men does proceed at many speeds. I do offer my thoughts on a direction that is taken for a chosen time. But, who can know the minds of builders? Of my life and times, I do say, this structure will be completed of the well being of all! For this new system to fail, it will be as Mr. Donald has said, with much destruction of commerce.

Date: Sun Feb 08 1998 10:17

Date: Sun Feb 08 1998 09:42
Forklift ( CJS1__A ) ID#156161:

"it is also something of great value which they cannot defend"

Mr. Forklift,
You must place yourself in that time! Nations with gold and armies will stand for Arabia! $8.00us/bl oil is indeed a resource to fight for!

Date: Sun Feb 08 1998 09:51

Date: Sun Feb 08 1998 08:50
CJS1__A ( Replies ) ID#329157:

I would say you have chosen well! Over many seasons, the currencies have come to bid in this race and all were found as "low bid". The time for "full production" is at hand. No currency is large enough for this race, so a new one will arrive from the past!

This you say: An alligator is, they say, "all mouth and no ears".

This is good, I show a great smile!

Mr. Pete,
I have written of this. See the list from Mr. Fin. Try using $30,000/gold, the value is better for all!

Date: Sat Feb 07 1998 23:22

Date: Sat Feb 07 1998 20:00
Forklift ( Another ) ID#156161:

What country would have the brilliant wisdom and daring to make gold it's currency and thus own the world? What new regional entity, yet to form, could accomplish this?

Mr. Forklift,
Your eyes are, no doubt more clear than mine. Stand here with me as we view this race of two! As in all things, it is a game for some and to others it be life and death. I would say, stop this effort, but it is late in history. So, make ready, as we will be here for the finish!

Date: Sat Feb 07 1998 20:51

In addition to this "What is the catalyst for the coming event and when will it happen ?"

Mr. WetGold,
One fine day, life in your world will change. The newspaper will show what has happened. In that day the price of oil will rise to, prehaps well over $100/bl if purchased with US$ alone. It will cost , perhaps $8.00/bl if purchased with an additional, tiny amount of gold. Perhaps, in a time before 2000, a new oil currency will be born! In that day, debts will burn and currencies will war, and you sir will, with honor, raise your standard of living with Gold!

Date: Sat Feb 07 1998 18:45

Some see metals from a view of only "supply and demand". Supply must be put for use and real demand must consume to produce a product. It is not this way with all things! If a person holds gold, must that holding is viewed with the one purpose, to sell some day for profit or loss. It is for some minds that gold in both hands can have no use? Such a mind can only see value in paper terms. For such thought finds gold as wealth, only if it is someday turned back to paper! Paper, indeed! A dangerous position to hold for the future in our lives!

Brokers and traders will show you, "turn your gold into wealth", "put it to productive use, Trade It"! "Sell your gold and buy it again, many times". "Do this and find the value lost from your youth"!

But I say, spend your time in the company of truly wealthy ones, see how they make gold lie very still! Know this now, the world will again, in your time, feel value in gold as never before. And that value will be as the "productive use of holding wealth thru the fire of change". "Yes, you can also walk in the footsteps of giants".

Think now in light of the real world around us. Hold your assets in the sun of day, what do we see? A government bond denominated in a currency? Now, remove the currency from the bond, show what is in your hand? Hear me now, we see nothing of "productive use"! Yes, there is supply of the currency, and we have demand for the currency, but the end product is as the space between stars! Even in this "light of day" a trader/ government will tell you, "hold not that commodity, gold, for it is as a dead, unproductive asset". I say, run from these lies, for they see not deep in the future!

Is this not true? I an slow, but many think for me. Read please:

"Noone can see the value of a real asset when knowing how many currency units it is denominated in. Value is only known when holding one real asset next to another real asset and comparing the currency unit valuations of both. Use as an example, a $75,000 $US Mercedes and a small apartment, also $75,000. They can be traded using the currency as a temporary holding until the transaction is complete. The car and apartment are viewed as having productive use of equal value. However, it is the items that have the value, not the currency unit! The currency is of but momentary value expressed as "the intention of a trade completion". Complete the trade and "poof" the units hold no future value. At this point in time, everything in the world is "denominated" in currencies that have no use, except to complete the trade! Trillions upon trillions of digitized currency are currently being held for the "completion of commerce", extending out into other lifetimes! Of course we are speaking of any form of currency denominated debt, be it government or private.

The major threat to this collection of wealth holdings would be the introduction of any real asset currency. Any country that could "resource a currency" of use the world over does pose a threat to the wealth of nations greater then war! It is in the realm of possibilities, that a gold or oil based system would bring a resolution to the present structure as equal to " a nuclear war of currencies". Our concept of value, would indeed have to start over. "

Mr. Cjs1, To say "this is good" or "your view is a good one" in my world, is to say "I agree" in your world. "good thoughts flow as cool water for a thirsty mind"

Date: Thu Feb 05 1998 00:01
JTF ( Peter Munk, ABX, and LBMA ) ID#57232:

Another: Could you tell us more about what Peter Munk may have done?

Mr. JTF,
ABX is in debt for gold. They owe not currency but gold. They are a paper company operating in a paper world. No government will allow any entity to sell gold for thousands an ounce when debts by that country go unpaid. Especially when the paper that represents the gold that is owed by a miner, is held by some who gain thru the loss to the all. In that time, gold will have a far better use. Remember, "gold and oil will ever flow in the same direction"

Date: Wed Feb 04 1998 23:52
WetGold ( ANOTHER ) ID#243180:

Without speaking in parable ?
Buy physical gold and hold it close. Real wealth can not know time, it is good for all seasons. It will buy you honor during a time without truth!

I will return in a time.

Date: Thu Feb 05 1998 00:16

WetGold and JTF,
I will reply on the 07th .

Date: Thu Feb 05 1998 00:09

Mr. Aurator,
As in my 23:23 post, I cannot comment on this.

167 tonnes ?

Date: Wed Feb 04 1998 23:39


Mr. A. Goose,

Davos ? Watch what Mr. Munk of ABX does with his paper gold. A move to copy WB, but buying physical gold for his personal account would not be of supprise! The CBs have stopped selling/leasing and that has put the entire world of LBMA "at risk". ABX is of that world.

Date: Wed Feb 04 1998 23:23


Mr. Studio. R.,
Will several ( or many ) bullion banks fail?

"when one cannot repay a loan, it is done" !

Are the bullion banks bonded?...

In the real national/ world there is no such thing as "bonded".

Look to Korea for proof!

Mr. Sweat,
If oil or the BIS bid for gold, you will know it ! In your terms,

" up front and personal"??

RBA's 167 tonnes ? No comment.

Mr. Kuston,
Please understand, that wealth will move into all forms of real assets as the destruction of our debt/ digitial currency system continues. When the currencies move to a final resolution, it will be the "marketplace for precious metals" that will die first! It is well known that gold will hold it's value above everything. All other metals could lose much of the value they gained prior to this meltdown! Remember, "when the currencies go to nuclear war, all paper and paper markets will burn"! Many hard assets will lose in the public mind as confusion will rule. In the thoughts of many, gold will perform!

Date: Wed Feb 04 1998 21:02

Mr. Kiwi,
Will the paper market ever represent the physical?...

You will see it in out time!

Will a total collapse be necessary first?

Perhaps a "almost total"??

It seems the vested interests in the paper game are powerful enough to

keep the physical down indefinitely?

In a very real sence, games can go on forever. The question here is;

Can those powerful thru "paper wealth" go on indefinitely? History has shown that they end suddenly, with great puzzlement as to the loss of importance without wealth.

Date: Wed Feb 04 1998 19:37

Mr. H. Hitter,
Timing? Most of the very large buyers completed much of their conversion all of last year. When we speak of these entities one must know that they purchase much larger amounts than Berkshire. Most cannot understand that it is difficult to take five or ten million oz./gold in physical in a month or less. Note that Mr. Buffett has taken six months and only purchased about half of his silver! Even here we speak of only $300m for the amount taken. At this time the market is very, very tight for large money to go into physical. Paper, yes! I could move five billion US into paper metal very fast, but not physical.

Is silver being played to ignite ? Only the small paper movers are trying for the "fast buck squeeze". Most of them get eaten when the lions come for food. The big wealth is only trying to convert! Silver is good, but always to small. Perhaps at $150us it would work? Most are looking for a "currency/wealth" holding with history! They, ( this includes some

CBs ) want a holding that is spread far and wide, and very deep! Gold is good.

Date: Wed Feb 04 1998 18:47

Consider, can they all buy silver?

The most important thing to observe is that Mr. Buffett did NOT use any form of paper to represent his silver. No options on silver, no futures, no options on silver futures, no silver mining stocks, no leased silver deals from mining stocks and no MARGIN! Most of the large buyers of metals are buying the physical, outright. Mr. Buffett had Berkshire

Hathaway purchase silver as part of it's long term "economic investment outlook". Not to be confused with a leveraged, quick profits bet. Understand, that Berkshire plays within the "world paper economy parameters", they are not looking for a currency replacement. What is not seen, are the personal holdings of Mr. Buffett, Mr. Soros and countless other "world wealthy". In those accounts you will indeed find silver, but also, much more gold!

Note, that he was buying thru much of last year. So were a number of others. The one common thought from them all is that, "the real wealth will be held in PHYSICAL form"!

"you may also follow in the footsteps of giants"

Date: Fri Jan 23 1998 20:38

Date: Fri Jan 23 1998 20:17
oris ( ANOTHER ) ID#238422:

Thank you for your reply.

The world oil market is very, very hard to understand.

If I could speak in a future time on this? I must be gone now for some time. Know this, my knowledge of gold is for the simple ones, of small thought, such as I. Resist the traders mind, hold your wealth close. There are those that will take your worth at the very time you need it most. Most will not see the time or place, few are allowed!

thank you

Date: Fri Jan 23 1998 20:16

Date: Fri Jan 23 1998 19:35
A.Goose ( ) ID#20137:

Date: Fri Jan 23 1998 19:26

Mr. A.Goose, In our present system, all currencies are backed by the US$. As long as the US$ is on an "oil standard" of backing, no other country can change. The BIS would destroy their economy in a second of storm. Many think that a country may sell or cut it's CB/US debt backing at will! They cannot, they will not! Oil will not accept another system as long as the oil/gold bond works and the world currency system is somewhat in order. If a crisis erupts and gold breaks the bond with oil, then a change must take place!

We will no doubt see a mass run of CBs into gold at ANY price! This I know! As for now, each person must protect worth, as the nation/state is locked from change.

Date: Fri Jan 23 1998 19:46

Date: Fri Jan 23 1998 19:19
aurator ( & c. ) ID#255284:

Mr. Aurator,
Silver will always be part of "gold money". But, is far too small a market for large, modern economies. Silver will do far better than any paper asset, only it will serve better as a "personal holding" than as a major money. If it is of your way to balance wealth, then silver will show value.

Metals have not shown their true worth for many years as the world has done very well. This is very good. But, all things do change! As it is our time and place to live this change, our thoughts must view the future as it must be. Who can know the minds of men and countries as paper burns?

Date: Fri Jan 23 1998 19:26

Date: Fri Jan 23 1998 18:03
oris ( ANOTHER ) ID#238422:

Would you please explain today's action when gold went up $9.00 and oil dropped $0.30.

According to your scenario gold and oil should move in one direction.

Mr. Oris,
Oil is by far a much larger market than gold.

Many times over. Oil may be taken to $12/US, but this is not a trading move. Only business. $12 oil did not require gold to drop below $320 or so, as gold must stay above perceived production cost. The drive to $280 was by the paper market outside. The intent is for long term asset balance not destruction! However, the currency market is close to taking extreme moves. That will over ride intended results.

Go gold!

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