Gold Indices

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Part I  -  Part II  -  Part III

Date: Fri Jan 23 1998 19:01

I feel this way also:
Do you really hold dollars?

It is important to understand that few persons or governments hold US dollars! Look at any investment portfolio and what you will find "are assets denominated in US$". This sounds simple, but it is not. You have heard the phrase, "money is moving into real estate, land, oil, stocks or bonds". It is a bad meaning, as it does not what it says.

All modern digital currencies do not go into an investment, they move THRU it. The US unit is only an exchange medium to acquire assets valued in dollars. US government bonds are the usual holding. No CB holds any currency! They hold the bonds of that currency. The major problem today, is that digital currencies have erased the currency denominations of all government/nation debt holdings! Even thou a debt is marked as DM, USA, YEN, they are in "real time" / "marked to the market" and cross valued in all currencies! No currency asset, held by CBs today are valued in the light of a single issuing country, rather "all currencies are locked together". To lose one large national currency, is to lose the entire structure as we know it!

There is an alternative. Gold! It is the only medium that currencies do not "move thru". It is the only Money that cannot be valued by currencies. It is gold that denominates currency. It is to say "gold moves thru paper currencies". Gold can be used to revalue any asset, and not be destroyed in the process!

Mr. JTF has asked: " I would be very interested in your response to my comments regarding why "paper gold" trading cannot distort the price of physical gold significantly - "

In times of plenty, people say one thing about physical gold, but in time of change they do the opposite. History has shown that when paper assets start to be revalued downward by gold ( gold rises ) , it's physical supply dries up! People and governments "HOLD" the real physical and trade the paper, even gold paper. Never before in history have we had a gold market such as today's! It has cross currents from every direction.

You have CBs that highly value gold, but need it's price in currencies to fall as a means of pricing oil.

You have merchant banks creating a huge "digitized paper gold" market for trading only.

You have other CBs holding gold in the form of "paper commitments" and calling it physical.

You have some CBs having nothing to do with any of this and buying in the off market.

And finally, we have the threat of gold becoming an "oil currency" with the risk of total nationalization by any country that is short of both oil and gold!

The Paper Gold Market today could completely destroy the physical market by shutting down all possible trading as the currencies are devalued by gold in a massive upheaval!

Date: Fri Jan 23 1998 15:44

Date: Sun Jan 18 1998 09:46
sharefin ( Worth a re- read???? ) ID#284255:

ANOTHER updated plus a couple of old ones I found.

Mr. Sharefin,
Thank you for saving these. There is much more to this.

Date: Sun Jan 18 1998 09:37
A.Goose ( ) ID#20137:

Date: Sun Jan 18 1998 06:17
Junior ( @ ANOTHER ) ID#248180:

" The baseline I see from ANOTHER's comments set the final stage for fiat currency, as we know it today. I believe that ANOTHER's thoughts spell the death of the U.S. dollar as we know it today."

Mr. A.Goose,
Thank you for all your thinking ( only part of post is above ) . It has long been a worry that the US$ and it's oil backing would some day come undone. I will post tonight between your 6:00 & 7:00 US /EST. More thoughts and replies.

Date: Sat Jan 17 1998 23:55
JTF ( Areas of General Agreement ) ID#57232:

ANOTHER: I think there is much that we can agree on. I don't just mean myself, but fellow Kitcoites.
Here's to the future!

Mr. JTF,
There is much more to your post. You always consider all things. We look to the future for change, to change is to live!

Date: Sat Jan 17 1998 18:14
JTF ( I look forward to your comments! ) ID#57232:

ANOTHER: I would be very interested in your response to my comments regarding why "paper gold" trading cannot distort the price of physical gold significantly - - although price swings might be increased or decreased somewhat depending on the trading - - but not enough to shut down the gold trading market. My sources were D.A., a commodity trader who posts

I will discuss tonight! Thank you.

Date: Sat Jan 17 1998 13:53
Lurker 777 ( Another what? ) ID#317247:

Mr. Lurker 777,
You honor me sir. I only ask that you consider my thoughts. " a truth spoken is for the benefit of many and never a gain for only the one"

"Many outcomes can grow from earth, as nations cultivate the soil differently. To understand the climate, is to make ready for storm."

Date: Thu Jan 22 1998 18:51
Cmax ( ANOTHER/GOLD/OIL ) ID#339320:

For all you "doubting Thomas':

Sir, Some think my thoughts are as "hogwash"? Several CBs use "agents" to buy gold. Some agents, small, some large, some "BIG". They buy much from $365 down, all last year. Even today, it does not show. This world, it is strange, yes? I would say "Big Trader" has little time for "washing the hog"! But you sir have a large shovel and dig very deep!

It is written, "all holes in earth lead to china"!

 Date: Sat Jan 17 1998 23:19

Date: Sat Jan 17 1998 22:40
A.Goose ( Gold for oil... ) ID#20137:

There are many who would take your gold. Read my long post of tonight and place your life in that time. You will feel the threat against your holdings. If it is taken it will be for the good of all. Perhaps it is not bad. In all things, good life is more important.

 Date: Sat Jan 17 1998 23:00

Date: Sat Jan 17 1998 21:44
Mikey ( TO ANOTHER ) ID#347332:

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

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

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

 Date: Sat Jan 17 1998 22:22

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. This would 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: Sat Jan 17 1998 20:45

For those of simple thought, such as I, gold is good to own.

But, for those of need for reason, read from one who speaks to me:

The Cornering of Gold!

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

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

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

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

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

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

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

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

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

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

Gold ( and silver ) is "on the list", so to speak.

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

Enter the world of "paper gold".

Yes, gold just like currencies has been "digitized". If you brought gasoline, made from oil sold under $20/bl, you are part of this system! For just as the "digital currencies" are created for trading only, paper gold was created for the trade of oil. In a very broad sense, it was created as an "extra" or "kicker" to allow the purchase of small amounts of cheap gold in return for a full supply of oil. In reality, this gold paper represents the future production of gold ( from the ground ) to balance the reserves of oil ( also in the ground ) . The huge amount of "paper gold" traded and outstanding today is now in excess of all the gold in existence above ground! In essence, it is of the same value as the currencies, "the thoughts of nations, blowing in the wind". The Central Banks gave value to this paper by selling and lending some of their gold stocks. But, as economies became hooked on cheap oil, and demanded more of the same, these same CBs had no choice but to use fractional reserve gold lending" to pump the gold market.

Now we approach the final act.

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

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

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

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

 Date: Sat Jan 17 1998 16:44

We will talk today. Have your coffee or tea and bring a clear mind, as we will think of oil and gold. Yes, we will think thoughts not spoken for simple persons.

Later I will post, then we will truly consider.

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

 Date: Sun Jan 11 1998 01:57

I must be away for a time. good luck

 Date: Sun Jan 11 1998 01:52

Nothing is assured! Life is a risk and subject to many changes.

I ask you, if the USA could not remove the Iraq leader when they were in full battle dress, then??? No, the US tanks are not a factor in this. The risk is to each person and how they hold their wealth. The concept of what wealth is, is going to change. Concept is but a thought and a thought of what value is, changes thru life. Time will prove all things.

 Date: Sun Jan 11 1998 01:33
ANOTHER (Thank You.) ID#60253:

I must use another to express my knowledge, as position will not allow.

"Life takes us as winds on a storm, to what end we may never know".

 Date: Sun Jan 11 1998 01:16

I can not oppose your long term view. But, I can change the contents. Oil went from appx. 1.50/bbl./+/- to $20.00/+/- and the world changed. Many 3rd world countries ( mexico, exp. ) have been using the same currencies for many years, even as they were destroyed. The people only adjusted by adding the US$ as a value/mix. The same will happen when/if oil bids for gold. All nations will use the same digital currencies for all trade, but will also add gold to the value. The world will not end, it will change! As some say "not enough gold to use as a currency", I say "gold not valued high enough to use as currency". At a high enough value ( price ) it is an excellent currency! Oil now backs the US$ as a "digital world reserve trading currency". When oil backs gold as an "additional value to digital currencies" your view will be different.

 Date: Sun Jan 11 1998 00:39

Mr. A. Goose:
The BIS is not a broker or trading house. They do not move with chart patterns or wall street directives. If gold drifts under 280 for any period of time, they must act to forstall a much worse outcome. That being; Oil will not allow Lbma to drive gold so low as to make the CBs the only suppliers. Oil will bid for gold and in doing so create an "oil currency" out of it. That outcome would make the current "currency debts" ( bonds ) next to worthless and turn the financial system upside down.

 Date: Sat Jan 10 1998 23:49

You are exactly correct! Follow your thoughts. good luck

What quantity of GOLD, paper or physical, has OIL traditionally purchased on an annual basis?

From 1991, appx. 20m/oz./yr., now it is more.

How much paper GOLD is out there ready to be squeezed?

Over 14,000 tons.

Do you think OIL will be able to collect what is owed to them?

It will come outright or thru the increase in value of metal owned after an oil for gold bid.

 Date: Sat Jan 10 1998 21:03

 Someone once said, "noone wants gold, that's why the US$ price keeps falling". Many thinking ones laugh at such foolish chatter. They know that the price of gold is dropping precisely because "too many people are buying it"! Think now, if you are a person of "great worth" is it not better for you to acquire gold over years, at better prices? If you are one of "small worth", can you not follow in the footsteps of giants? I tell you, it is an easy path to follow! An experienced guide is not needed for this trail, look around you and see. The real money is selling ALL FORMS of paper gold and buying physical! Why? Because any form of paper gold is loosing value much, much faster than metal. Some paper will disappear all together in a fire of epic proportions! The massive trading continues at LBMA, but something is now missing? The CBs are no longer lending! They will not anymore! We have reached production costs. Oil will have nothing of "gold paper" if gold must stay in the ground! And a CB values the wishes of oil far above it's return of leased gold! Hear me now, "if gold tries to go lower than US$ $280 the BIS will buy it OUTRIGHT in the OPEN for all to see"! They must! They will! I know. For no currency system could stand if "Oil" were to bid for gold!

Oil has kept "the deal" as the CBs sold paper to lower golds price! All is fair. Asia will bid for gold not as in the past. They now know that the free flow of oil has more value than the Pacific economy. But the price that was paid may be more than the world currency system can endure.

To close:
The US$ has risen on a flight of fear. That will now end as the LBMA shorts are given to wolves. If this fire burns too hot, gold will turn and it's trading halted. The price of oil will explode as gold becomes the "world oil currency"! Even now oil has locked the IMFs gold, Asia will bid against them no more. We come to extreame times.

Risk not your wealth in paper, we enter a period of truth.

 Date: Thu Jan 08 1998 09:24

Much is happening now. Governments, IMF, BIS, LBMA and many others, are very much in the middle of this fire. Very large buy orders have stopped the CBs from lending now. The BIS has been asked/told "lower gold no more"! The US$ price has stopped. I will offer many thoughts on the 10th.

 Date: Fri Dec 12 1997 23:29

I oil says "I am currency" and I will buy gold for $10,000/oz.. Then gold will be at that price. Then all the bullion reserves will ballance debt for oil states.

If Arabia says, "I will sell oil for $10US a barrel or in gold valued at $10,000" what do you think would happen?

If I had gold I would get oil very cheap!

Or if I had only US$ I would have to pay the higher price of $10.

In this day this cannot be, in that day it will look correct. This has been discussed for that time to come.

I will be gone for a time.

 Date: Fri Dec 12 1997 23:08

You will not see 80% or more of gold deals. If it was done with all to see the discount value would be lost as the world price would explode. This is not the relm of any public "wall street". At one time it belonged mostly to the Barron. Now it is large with the BIS and super rich. Wars will be fought over the lack of "visibility" of these dealings.

It is a many hard question you ask. The transactions are still working, but some are "covering the back side" with real bullion. I ask you, when your worth in the ground is equal to much of the earth, is an IOU of the same future value?

Only gold has such a history book for reference. These people do not trust foolish thoughts of value from western minds. That history book is only in the first chapter.

This game is deep and one for your "007" to play.

 Date: Fri Dec 12 1997 22:31

What is "cloak and dagger"?

 Date: Fri Dec 12 1997 21:33

If you owned an oilwell in your back yard and no-one could take control of it, then oil is the best investment. But, most people use various forms of western paper to trade oil and that paper will burn in a currency fire. Make no mistake, a currency fire is now in process and it has much fuel remaining. Even Korea will find out that oil is all that counts. Their paper will die! Gold would have helped them in a different world, but for now gold is in the background as the IMF tries to add more paper to this inferno. If one owns real gold , it will be with ease to view the world currency developments. They will be truly of biblical proportions!

 Date: Fri Dec 12 1997 21:06

Oil is only priced in US$ worldwide. Gold is only priced in US$ worldwide. It is important that this process of dollar backing continue, as it is the only thing keeping this "digital currency" alive! It is also important that all other currencies seek the US$ for backing, as they would not survive on their own. Why would not these countries just hold oil or gold for backing? Because oil is not buried in their back yard and real gold would bankrupt them in a minute. You see, a country can buy all the paper gold they want as that gold remains on deposit at the BIS controlled CBs. But, if they try to buy real gold outside the LBMA system the price would explode and the BIS would not come to rescue their currency. All real bullion outside the system must remain available at production cost prices ( in US$ ) for the cross trading of oil thru the LBMA. There are only two threats to the world fiat currency system at present. The oil states could stop buying US$ for oil and drop all paper gold for real bullion. Or, the masses could buy up all the physical

supplies thereby breaking the OIL/GOLD/US$ bond. The paper gold market controlled by the BIS/LBMA system is, alone equal to more than all the gold in existence. This market works like a hybrid currency using approximately twenty to forty percent of all CB gold in leased form as backing. The paper behind the lease is a form of CB/gold and is used as a "fractional reserve" that has built this huge market. This system has worked and does work well. You have but to look at the good value that is received when dollar debt ( digital currency ) is purchased with oil. The world works! But this system cannot continue. There is a limit to how far gold can be inflated in quantity using "fractional reserve leasing" as backing. The fatal flaw was found in the "forward sales" of unmined gold. The whole system counted on the expansion of cheap mining techniques to supply much more gold at a cheaper price far into the future. This happened to a degree for a few years but then just leveled off. Now the LBMA continues to flood the market with paper gold as if nothing has changed! But it has, we reached production cost! That wasn’t suppose to happen until the mining industry had raised supply many times what it is today.

To close:
Notice that we say "they use oil to buy gold" and "they use oil to buy dollars". You should try to think in these terms as oil is the real value here. Oil functions as the true gold for the modern world. Indeed, it was only when the world started needing oil for everything that gold was dropped as backing for the US$ and replaced with oil!

The falling price of physical gold only hurts the mining industry ( and it's stockholders ) and leveraged paper buyers. All others benefit from a lower value of gold. Look now as even the western public are buying coins. They help themselves even in the face record Dow Jones.

Will the BIS try to settle this unbalanced market by destroying LBMA? Or will they drive the CBs to lease another 20% in an effort to inflate this "paper gold currency". Just like the fiat dollar, if inflated it loses value. This is not lost to the oil states.

 Date: Sun Dec 07 1997 20:04

MoreGold and A. Goose,
We approach production costs, therefore we come to the end of this game. This is not lost to the oil states. They, along with three CBs are buying as this is written! The size of these orders could make the turn? We will see by way of a flat price over several weeks. If yes, then those with orders of a month delivery are to late. We approach unsettled times.

 Date: Sun Dec 07 1997 18:45

Will we have "Deja-vu" again?

Some people have followed the gold market from 1970. Some have followed it all their lives, depending on when you were born. Some say they were right, as the market has fallen and they held "no gold". They council from experience and a short life. But, some have traded gold from times before. Those who trade with the sun know we will never have"Deja-Vu" again. This market is unlike anything from the past. And those with a "short life" of investing will learn from this coming future as gold will show their knowledge was limited to where they stood on the mountain! Unlike the past, this market has an end. And this end will not be for those who have waited to buy! They see this bottom at $100 or $200 or $250, and they will buy at the turn as no fool should have held from $360! But, I say they will buy only paper if lucky! All should make ready and be holding metal only, as the turn will move $100+ the first day and $200 the second day as comex is closed! It will trade no more from the 3rd day on! The gold market of your youth will be no more! For those who were smart from experience not to buy at $400, will look at $600 as "the deal of a lifetime". To close, Try to live in this outcome and see how different the world will be. It will not be the end of all things, only the changing of most things in "western thought". The "Digital Currencies" will still trade, but we will value them as not before. Anyone who has sold gold they do not have will not be allowed to cover that position. Anyone who has brought gold they do not have will not be allowed to cover that position. Many will lose all they have in a world without honor! Looking back , one will ask, "how could I have thought that noone wanted gold, when more of it was being brought than existed"? Indeed, more gold than exists or will be produced in the next ten years! And some say, "only a fool would say the market was cornered". During that time, a gold stock in the hand will not trade on an open market! And the government of the country, of the land, of the mine, will no doubt speak with you of new taxes on GOLD! A year has passed as the winds of change have started to blow. Waste no more time on paper gold, you have suffered enough. Play paper games no more, as the future of your family waits a decision.

 Date: Sun Nov 30 1997 20:29

A reply,
Date: Sun Nov 30 1997 18:42

Mr. GCH,
As a large tanker takes time to turn, so will the coming change in oil values take time to see. We have seen the last of cheap oil in US$ as the oil states are no longer taking paper gold! This change in trading will have a great future impact on oil/gold/US$.

I think a large purchase of bullion was just made by them. It should have been paper. The BIS must soon take a stand!

 Date: Sun Nov 30 1997 20:03

We read and hear only one side of the story. It comes from those who can write and talk the loudest!

"They have sold massive amounts of gold for several years now." "It can only go lower and lower."

I offer another side from another place. I ask not that you believe but only that you consider, and follow this voice for a later time.

The news writers speak of great loses and missed investment opportunity by these holders of gold. I ask you, have the loses been that great? The largest buyers of the true physical sales are not traders, as the amount they gather is small by their ways. This gold they buy will outlive them and no doubt be passed on to others, be they family or country. As oil has fallen, so has gold! All is fair, all is as it should be.

But, the traders, these paper traders who have taken much of the London side, they hold nothing! Who will provide gold for them to keep? Of the many markets, more gold now trades than exists!

To close,
A choice must be made now and it is for a simple mind. Of the CBs that have a purpose to sell gold, do they sell to cover LBMA and other traders? Or do they let the paper gold market implode? Of those CBs that lend and sell, they hold only 500m+/- ozs. If they sell all they have it will not cover all and the other CBs may buy more. To date the oil states have not voiced a problem as the gold appears not to leave the CB valts! But, if they start to cover the gold debt, the accounts will show, even before additional open sales appear on the market. Now you know why I do not predict a price. For ones of simple thought, such as I " gold will be repriced once in life, and that will be much more than enough".

 Date: Sat Nov 29 1997 15:53

I have heard of this?

Something interesting happened just ago that will, in time impact the price of gold in US$. A proposal was offered to borrow in broken lots, 3.5 and 5.5 million ozs for resale. It was turned down. The owner offered to sell only, no lease. What turned heads was that someone else stepped in and took it all, at a premium!

Some say "the winds blow stronger on still nights". This gold market has yet to weather strong winds, I think we have seen the end to smooth water. Be thoughtful not to fight the last war!

I will be done for a time.

( See my last two posts )

 Date: Fri Nov 28 1997 23:29

If you had oil in the ground, that over time could be worth over one trillion US$, would you buy gold for all to see? No. If you had this much wealth, would you want others to see you as getting "rich" from oil sales? No. How could you hold and build your massive wealth over many years, but still have everyone view this people as "in debt and just making it"?

The answer comes from the distant past. Take in gold as the CBs force it to fall against all other forms of value.

But, how can 100million + ozs of gold be equal to all the oil in Arabia? It all depends on how it's valued, simple yes?

If a CB says gold is $300oz, we say he is nuts! But, if $300 or $250 gold buy $19 oil, perhaps the CB is smart! It is far better if $19/oil buys $300 gold than $100/oil buy $5,000 gold!

What if the oil states offered to buy gold with oil, OUTRIGHT? No currencies involved. " We will produce flat out, all the oil you want. And, we offer this oil as payment, per barrel, to buy ( say? ) 25US dollars or gold priced by us, at ( say? ) $10,000oz.!"

The answer is very simple, the world would sell them gold for oil. I tell you now, this almost happened!

You think long and hard on this as the outcome would have been far different from what all think.

Instead, the BIS set up a plan where gold would be slowly brought down to production price. To do this required some oil states to take the long side of much leased/forward gold deals even as they "bid for physical under a falling market". Using a small amount of in ground oil as backing they could hold huge positions without being visible. For a long time they were the only ones holding much of this paper. Then, the Asians began to compete on the physical side.

How will this all end? As the CBs never sold much of their gold, they are still locked to the deals thru the BIS. In the real world it was stocks of gold outside the governments that got traded. And that trading multiplied many times. Today, more gold is traded than exists! This paper today, has become the "gold pricing standard" without backing. There is no way out! As we have now reached production cost, we have reached, "THE END"! Without real physical to supply the oil states, they WILL bid for gold with oil! The BIS will do the only thing they can, halt all trading and declare gold a "world oil currency"! To that end, all forms of paper gold will burn. How long till this starts? I understand that the CBs are slowly winding down lending, then sales. This will, no doubt start a paper panic at some time. It could take weeks or a year, I do not know.

As for the old agreement of oil/gold ratio, it went out the window after the gulf war.

More later.

 Date: Fri Nov 28 1997 19:45

After a proof read by one from the west this is a start and should help you understand.

For a number of years many persons have tried to invest in gold using the tools of past gold encounters. Even thought the last several upswings in bullion always took the gold stocks along for a ride, this time it will be different!

Ever ask someone if they owned gold. They might say " yes, but only 5% of my capitol is in it for insurance" Was it bullion? "No, my broker is to smart for that, he put me into a good gold mutual fund." "He says, if it really looks like it's going to go up I'll also have you in some comex futures or options "

During the first bull market of the seventies we saw few mining stocks outside South Africa worth owning .

Because they were relativity new to the game most people stayed with bullion. There certainly were no mass gold options and there were even fewer gold coins around. Most just brought whatever bullion bars they could find and as their past European counterparts did, they just waited it out.

Today, the public went "whole hog" for paper gold and has paid a great price. Wall street invented this game from the previous war as a way of keeping customer "gold money " in house! The shame of it is that these tools not only would not work in this new market, but they also gave the street a way to short gold

even more effectively. In many cases the public brought little more than "long paper" from the street, with no gold at all on the other side! No one will ever have the truth on this as the falling price made most people close out without ever calling for the goods! A good deal of the numerous mining paper capitol was used to enrich the sellers while the buyers actually had no chance of seeing a profit. That's because the commodity these securities were based on was all but guaranteed to go down as forward sellers

were given a green light to sell paper gold to the limit of their financial resources.

To make a long story short, many people who would have purchased bullion years ago have now squandered much of their "safe insurance money" on wall street. It is no wonder that many WESTERN gold investors have now turned bitter on gold. If they knew the truth about this new market they would have turned their bitterness on wall street instead.


 Date: Fri Nov 28 1997 08:34

Date: Thu Nov 27 1997 09:02
Leland ( What "Another" has been speak-plain-talk ) ID#316193:

Leland, this report is very good! I will add to it tonight and add some replys.

 Date: Tue Nov 25 1997 13:38

a reply,
Date: Tue Nov 25 1997 13:04

Mr. GP,
It is as you say. However, I do not feel that the reprise of gold to lower the cost of oil was a bad thing. In reality the governments were only using real money, gold, to supplement our cost of oil. The world economy has a great benefit from this! We all have gained. The world mining industry gained much from the forward sales. The great increase in gold produced was used for our purpose. For a time the mines made profits. The great mistake by the BIS was in underestimating the Asians. Some big traders said they would buy it all below $365+/- and they did. That's what forced LBMA to go on a spree of paper selling! Now, it's a mess.

At some point the fire in Asia will drive all of them into gold. It will end at that time.

ALL: I do not offer to prove my thoughts. If what is written was easy for all to find, the information would be of no use to you. Many will take no motions to change their ways and protect worth. Such is life.

Each will chose his way and as always the future will teach the truth.

 Date: Tue Nov 25 1997 10:06

a reply,
Date: Mon Nov 24 1997 21:08
Allen ( USA ) ( @Another ( Thoughts! ) and all RE: Mercantilism ) ID#255190:

The US$ is today, backed by oil. As all other currencies are but "digital units" tied directly to the dollar, they are indirectly on the oil standard also. This world currency position is supported thru the BIS. In CB circles, it is well known that the world debt markets as we know them, can only be maintained with cheap and cheaper oil! Without cheap oil the entire system fails and reverts back to pay as you go economies. This is the central reason for "two price gold".

With gold discounted to it's production cost and below, those that have it can trade it for it's monetary value. Make no mistake, the BIS knows gold in the many thousands. The future "reset value" of gold is the key. "support the dollar with oil and the currency system works" "fail the currencies and the dollar will come off the oil standard and the BIS will reset gold to $10,000+ with many conditions"

That is why they continue to accept the dollar as a reserve. If Japan or any other COUNTRY sells US treasury debt it's all over!

 Date: Tue Nov 25 1997 08:24

Mr. Vronsky, thank you for posting the article by Markus. I, in much the same way must have "ANOTHER" post my thoughts as position will not allow open expression.

Mr. Markus Angelicus,
Checkmate is the end of a game, but in life checkmate is the beginning of freedom! I submit that all of history is full of war. From nations to single persons we all do battle over ownership of things. Some support not war but would kill to keep what is theirs! It would seem that from the day of birth our financial chaos begins. The end of our struggle is reached but for a moment in time as "checkmate" becomes "stalemate" and fortunate and free are the few who find this time in life!

Am I misleading? I submit to you that all of creation is misleading. It is only in the pages of history that we find those who thought the truth! The "facts" of the present are but a wonder to all. Only time will prove all things.

Sir, you write, "Your gold coins in your pocket will become the target of persecution and arrests and you will be forced to accept the world's standard currency. There will be no will be unable to trade with your gold because they will have long outlawed both gold and old paper currency...."

In the past many world governments and leaders, far greater than those today have embraced these thoughts. I and my fathers have done battle with such evil and won! For we have 6,000 years of history as our armor!

For those who say gold is not an asset and is dead! I offer you a fact: "Today, as you read this more gold is traded and purchased than at any time in the history of the world." This ancient, world class money from the distant past is now to be the most fought over asset of the future. In war and life, gold will be your "CHECKMATE"!

 Date: Sun Nov 23 1997 11:35

a reply,
Date: Sun Nov 23 1997 11:18
Carl ( Another, Please explain ) ID#333131:

The world has changed and the gold market has changed with it. We are going back in time much further than many will accept. A time when men, such as I, will take what is yours! If you hold your value in a public way, it will be taxed or taken for the good of all. Such are the ways of extream times!

 Date: Sun Nov 23 1997 11:21

A reply,
Date: Sun Nov 23 1997 10:59
Crystal Ball ( @Another ) ID#287367:

Surely the dollar will find some price at which an ounce of gold can be pried out from the woodwork.
If not, G-d help us all!

Mr. C.B.,
The future will look back at us with respect, as we knew not what was happening! A day will come, sir, when no paper dollar will pry gold from your hands! In that day, you will be too smart for such foolishnes

 Date: Sun Nov 23 1997 10:51

In this age of "digital currencies" it is impossible to see how fast the thoughts of people are shown as actions! Many will wait for markets to do what they have done in the past, "looking backward to see forward". Be known that most of the actions by the ultra large players is complete. When the change in direction of gold starts, it will be hyper fast! A good many will run to the US$ first, making that currency rise with gold and misleading much people. Before Christmas? I do not know.

The Pacific Rim has begun a process that will not end. Much paper value will burn before this fire is done!

Many gold stocks will rise with gold and most people will hold for gains. But they will never see then converted to value. If the gold markets lock before they reach $1,000 , all mining stocks will be consumed in the paper fire. A sad day for many.

 Date: Sun Nov 23 1997 09:40

A reply to:
Date: Wed Nov 19 1997 19:23
Qestor@Observations>Qestor@Observations ( Qestor@Observations ) ID#223146:

Tolerant1,ROR & All-The continued draw down of gold stocks at the comex are contrary to pssible expectations of those "powers that be", who may be trying to drive the gold price down. The Comex is the most visible market where one can see changes in physical stocks. Based on all the analysis that has surfaced regarding the selling of gold stocks from CBs--- Where is it? I believe that the sales have been derivitive in nature and unless we start seeing a rise in deliverable gold at the Comex the nature and reality of gold may precipitate the derivative players worst nightmare. If Another is correct in that the CBs never release their gold but only the right the write paper based on it's value then we may have the mother of all short squeezes if the longs hold the December contracts past notice day. Comments please.

Mr. Questor,
We are well past this stage now. Join me and other big traders as we watch


 Date: Sun Nov 23 1997 09:18

Many wait for the next great bull market in gold to begin before they buy. Why buy now and lose interest or stock market gains? They will miss the greatest investment ever to come in ones lifetime! The powers of this world have already begun this motion. People of simple thought have but to buy physical gold and make low as the financial wars begin! You see, gold was cornered this year. It is done. No Central Bank will sell it's 50, 100, 200 million ozs gold when 600 million is needed! I ask you, how can currency price gold? Indeed, no price will work! You think any form of "paper gold" will stand this fire? Can we do battle with lions? When oil will not take currency without gold the havenots will not sit still!

"When a thousand hungry lions fight over one scrap of food, small dogs should hide with whats in their belly".

A world waits for something to happen that is done.

Read my
Date: Sat Nov 22 1997 23:13

Date: Sat Nov 22 1997 23:32

then be very sure to read Mr. Mr. Markus Angelicus, on Gold Eagle! Then you will know!

 Date: Sat Nov 22 1997 23:32

One new day gold will begin a rise that will end it's use as a trading medium. This reevaluation will end a tradition in London. No gold house will make a market that has no sellers, official world gold trade will end for many years! And with it will go the last true value to trade for oil. Oil will skyrocket in all currencies. Those who have metal will learn it's value in oil. All things in life change, the world will not be the same.

 Date: Sat Nov 22 1997 23:13

This was written: "To find the answer to the LBMA , "Follow the connection from London, to South Africa, to the Middle East, and on to Asia"

Mr. Markus Angelicus,

I read the gold-eagle write. You have made the link between London ( LBMA ) and South Africa .

Many look to the middle east and say "they control the oil market no more". I say "you see not what is in front of your eyes"! They do not have to keep oil up in price to control it. One can gain more wealth by keeping oil down than by driving it up, much more! And what is the value of this type of manipulation?

it is measured in gold! Tell me now, what gain is there to destroy the world economy with high cost oil when they will provide you gold instead?

But what value gold? All say "it is only a commodity subject to supply and demand"! Understand me, Demand and supply is written by BIS and $15 oil can cost $250 gold or $10,000 gold, whatever is required! $250 gold and LBMA will live! $10,000 gold and LBMA is sacrificed!

But, it will never come to this. The oil "understanding" was broken by the Asians. More gold has been sold than can ever be covered! This market is not the same as the past. One day gold will start up and BIS will deal with it the only way possible!

 Date: Fri Nov 21 1997 16:44

I will write here. Our Thoughts belong to the world.

 Date: Sun Nov 16 1997 10:20

It is not only important to understand this question, but also to ask it in context!

Date: Sat Nov 15 1997 20:14
Crunch ( Question for Another ) ID#344290:

Another, a question, please: When gold is borrowed from CBs, what collateral is required by the CB to be assured the loan will be repaid in full?

If you will allow, I will add to your thinking. In todays time the CBs do not sell physical gold with a purpose to drive the price down. They sell to cover open orders to buy what cannot be filled from existing stocks. Look to the US treasury sales in the late 70s. They sold 1 million a month using open bid proposals with much fanfare. If the CBs wanted physical sales to drive the price they would sell in the same way.

The sales today are done quietly with purpose. The gold must go to the correct location. That is why these sales do not impact price as they occur, there is a waiting buyer on the other side. As all of these transactions are done thru certain merchant banks, not direct CB contact, the buy side does hold hedges.

When actual delivery takes place, months later ( and usually at the same time as the CB sale statement ) these hedges come off and affect the market price. It is important to understand that none of these CB sales of physical need to go to the open market at all! The BIS could take it all. You see, for them to take all of Canada's gold would have been as "cool water on a hot day". That small amount of currency was nothing to them. All currencies, today, are locked to the US$ for value. In a very real sense, no country can own it's gold as the BIS has ties to all of it. Canada, Australia and others say openly "what is the use"?

The BIS, instead of taking it outright, places it where it's needed!

As long as there is an open market for gold, it will not be allowed to trade above it's commodity price! It has far to much value for that to happen. You see, in much the same way that a zero coupon bond trades at a discount to face, gold is traded for it's discount of " money value to commodity price! Think that I a fool, because I trade gold for thousands US an oz.? You will think much on this in the future.

Banks do lend gold with a reason to control price. If gold rises above it's commodity price it loses value in discount trade. They admit now to lending much where they would admit nothing before! They do this now because of the trouble ahead. Does a CB have collateral to lend it's gold? Understand, they only lend their good name on paper, not the gold itself. The gold that is put on the market in these deals belongs to someone else! The question is not "Are the CBs worried for the return of gold?" but, "Has our paper been lent to the wrong people?".

The BIS will not allow the distribution of all gold to settle claims. The mines of the world will be forced to sell to the BIS at the "locked" existing commodity price of gold. This will happen over many, many years as no other "official" market outside the BIS will exist.

"You see, oil will flow but oil and gold will never flow in the same direction!"

 Date: Thu Nov 13 1997 11:59

an answer:
Date: Thu Nov 13 1997 11:30
JTF ( @Gold loans ) ID#57232:

Can you tell me if the following scenario may be some of what they are doing:

Only the small traders do what you suggest. To date they are successful. In reality they make a market as they banter about. This side show helps to hide the major long term buys. But, they will become food for lions in the future! The big players would not even talk to these people. You see, the paper traders are making "small change" and think others are fools! But such is life, as they are truly performing a roll that was written by the others!

 Date: Thu Nov 13 1997 10:08

Mr. BillD,
Who can know the thoughts of the "Big Traders" of the world? If they press the physical market, it will end tomorrow. They are by no means dumb as they sometimes show! Most would like to keep their gold at todays price and allow the economies to continue in prosperity! In time and with luck it could all be worked out. But, it is the equity/debt/currency markets in general that are a problem! If only a small, very small very few " western people" begin to buy?? Remember, the other world no ones have gold in their hand. They care not about YOUR debts, these small people have won a great deal and know it not.

 Date: Thu Nov 13 1997 09:34

It was never the intent of the CBs to sell their countries gold in massive amounts. The "understanding" that was worked out years ago was good for the economies and the world. In return for the US$ remaining the "oil reserve" currency, ( oil would be not just supplied but supplied in dollars ) large amounts of gold would be supplied far into the future. The gold, while indirectly backed by the CBs would actually come from the mines of the future. With the oil money making a ready market for gold priced at a premium ( contangoed out many years ) , the mines could make a fair profit even with spot gold priced below production. All would win! And for some time, we did! I am able to know some CBs, they are not evil, their minds are for the best that can occur. But, I THINK the world ran away from them. The paper world of gold is now a mess with no resolve! They will not sell all gold. Some that have actually have paper for future return. But, as they know now it will not, it can not work! Too many people made to much of a good thing. A sad thing, this LBMA, as it winds down with it the dollar reserve and cheap oil will also go.

some replies,
Date: Thu Nov 13 1997 06:26
Cmax ( @Playing the Contrarian's Contrarian ) ID#339320:

Let's play the contrarian to the contrarian for the moment: IF there is a gold conspiracy by the CB's to keep gold low for oil, then WHY ( HOW ) would ( could ) it be beneficial to keep driving it thru the floor?? If the price was stable at around $400, I would understand.....but it just doesn't make any sense to push it to these lows. Something just doesn't add up.

When the entire paper gold market started to be at risk, they tried to save it. Unfortunately, many large buyers saw what was happening and have brought all the physical offered as prices dropped. This gold will

never come back, nor will the market ever be the same

 Date: Wed Nov 12 1997 20:41

" a mind that can that can think, it is worth life itself"

Markus has given a great thought! If it could happen the world would gain much. But it will not.

Date: Wed Nov 12 1997 14:26
Markus ( BIS Decisions ) ID#283277:

ANOTHER: Could you please enlighten us as to the Bank of International Settlement decision you allude to in your recent post?

A BIS meeting was held and from those doors the world did change. The Bundesbank has now made clear to all what will now be policy for CBs. A crisis is at hand! All physical gold sales will stop. All gold lending will wind down. We will see the results of this as a massive scramble to cover open positions slowly unfolds. All of us will see the destruction of the gold market as we know it, LBMA will be no more!


Date: Wed Nov 12 1997 22:00
Shek ( home ) ID#287279:

Global Gold Market Deficit Is 700 Tonnes Larger Than Consensus Estimates - Aggregate Short Position Too Large To Be Covered Noted international gold market analyst Frank Veneroso said today that Bundesbank disclosure of massive gold loans ``confirms our view that the global gold market deficit is 700 tonnes larger than consensus estimates and that the aggregate short position in the gold market is too large to be covered... This is the beginning of a reappraisal of the gold market that will slowly unfold...''
Wednesday November 12, 9:37 pm Eastern Time

Date: Wed Nov 12 1997 22:38
Shek ( home ) ID#287279:

223, This goes well with what ANOTHER has been saying on this site for 4 weeks now. My guess is as good as yours. I think it has started and will come to a climax within 3 months.

I do not know Mr. Veneroso. His thinking is very close.


Date: Thu Nov 13 1997 00:19
Earl ( ) ID#227238:

HighRise: IF I understand you correctly, the threat to the monetary system ( vis a vis Another's comment ) is more a function of oil/middle east instability and oil pricing, than to a factor intrinsic to the system itself. ..... I was focussing on the system alone without regard to the aforementioned forces.

The world currency system has, for years been little more than digital credits backed by "usage demand". In the long run it was oil backing the US$ that kept it all together! It truly is strange, that in the end it was gold that backed oil! In a even more strange twist, the loss of the LBMA gold market will bring the system down!

 Date: Wed Nov 12 1997 20:41

" a mind that can think, it is worth life itself"

Markus has given a great thought! If it could happen the world would gain much. But it will not.

Date: Wed Nov 12 1997 14:26
Markus ( BIS Decisions ) ID#283277:

ANOTHER: Could you please enlighten us as to the Bank of International Settlement decision you allude to in your recent post?

A BIS meeting was held and from those doors the world did change. The Bundesbank has now made clear to all what will now be policy for CBs. A crisis is at hand! All physical gold sales will stop. All gold lending will wind down. We will see the results of this as a massive scramble to cover open positions slowly unfolds. All of us will see the destruction of the gold market as we know it, LBMA will be no more!

 Date: Wed Nov 12 1997 14:08

Some replies:
Date: Sun Nov 09 1997 21:49
Cmax ( @ANOTHER ) ID#339320:

Thanks for the reply. Due do the new "sectioning" of time intervals on Kitco, I think most people missed it. What do you think is a tentative timeframe for serious upward movement in gold ( above 450 )

A simple move above 450 is not even a thought. The billions that have found gold these few years see metal in the thousands! Someday the CBs will say, "we stop now, as value has all". In that day we will all understand "what is real and who is real"!


Date: Sun Nov 09 1997 21:58
Shek ( home ) ID#287279:

Another, 6-7 months ago, a poster ( BigTrader ) made similar predictions to yours. He even gave timeframes. His final and boldest prediction coincided with a big drop in gold prices. BigTrader vanished from this site.

Big Trader has vanished from view, but he and his gold still exist. At the time of their accumulation traders did not understand the nature of "Low gold for oil" and what would happen. Many traders have lost much in paper gold but the large physical buyers know that it's value in terms of oil has risen. Time will prove all things.


Date: Sun Nov 09 1997 22:09
KahunnaGrande ( PermainBasin,Texas ) ID#27454:

Saudi's Gold and Oil. Whatta combination. I do not see how until there is a unified european currency that the saudi's and the other oil producing countries can price their commodity in anything other than dollars.

Mr. KG,
The House of Saud will not have to reprice it's oil in dollars, the rest of the world will do it for them!


To close:
I have reply for others but time will not wait.

A person thinking of purchasing physical gold should see the Bundesbank statement as fact. They openly admit to lending in the past and no chance of selling real gold in the future. This is a clear indication that a solid decision was made at the BIS meeting ( see my post ) ! All CBs will now slowly stop all leasing operations and allow the market to size itself. The important players, the oil states, will have their paper covered without question! But, for all others, the great scramble is about to begin!

Oil now must rise if the US$ and the currency system is to survive. Japan has reached the end. They must do their best to help the dollar rise against the yen. To this end they will maintain all US bonds and use all new capital to buy gold and oil!

Any country without gold will be found in a disadvantaged state!

 Date: Sun Nov 09 1997 20:53

Some reply:
Date: Sat Nov 08 1997 17:14
jfklajf ( fjka;j ) ID#251213:

We are at a loss, however, to understand the relative tightness of supply. Whatever may be the explanation, the market may be heavily oversold at these levels. If this technical condition persists, we can envision a substantial rally triggered perhaps by further stock market declines.

STRATEGY: Stand aside"

ANOTHER I guess you have an "explanation?" Hmmmm?

If the BIS group has decided to back away from supporting London then " the relative tightness of supply" will be the least of the problems! I repost your other note as part of answer.

Date: Sat Nov 08 1997 17:20
jfkdasljf ( jfkla;j ) ID#251213:

How can things get worse for a large bank in a deflation? Ans. Have an inflation hedge, gold, go up. The banks are the ones who have been shorting gold, if they have to liquidate positions to raise cash; uh oh.


Date: Sat Nov 08 1997 18:24
A.Goose ( @pondCentral ) ID#20135:

I have often wondered, over the past 4 years, why people or institutions would buy yet to be mined gold at such heavy premiums over spot prices. It always seemed that it would be more logical, and better business to boot, to buy at spot. Well, with John K.'s and ANOTHER's posts, it makes sense. If you want to take over MAJOR positions in bullion without spooking the market and driving prices up, creating the business of forward sales would certainly do the trick. You get the bonus of not only harvesting bullion in the present at firesale prices, but also you lock in future "fire sale" prices. This mechanism also avoids upsetting countries, populations and most of all A.G. I have to say that I am definitely buying into the program. Gold can rally to new highs with no "official" sales because pricing can initially be evolved from the forward sales contracts. I do believe however that not all gold stocks will suffer. I believe that companies that have no or little forward hedges will soar as well as those that have new discoveries. Holding bullion will be very positive.

Mr. A. Goose,
You think well, sir! But also, gold stocks would do well if the world would stay the same. It will not! Question, How can you dig for gold if no official exchange will quote you a price? What is in the ground may need to rest a while.


Date: Sat Nov 08 1997 18:24
Cmax ( @ANOTHER ) ID#339320:

This seems to be a very Saudi point of view.....which brings to mind an image of a housepet that feels that HE is the owner of the house, and the lowly HUMANS exist only to clean, house and feed the pet.

If their is something I'm still missing on this gold/oil scenario, please correct me.

A good view from you, sir! A fine Arabian horse is much the same.

The battle is not over the supply of oil, the commodity but the value of oil in what terms. Oil will flow, but on what terms? I ask you, what currency will be allowed to keep this fine "pet"?


Date: Sat Nov 08 1997 19:47
MoreGold ( @ANOTHER 16:27 ) ID#348286:

How the hell will the shorts deliver the Gold if their game is finally called ?? One question, if as you contend, oil will be driven up to support the non US currencies, is it a good time to go long on ( paper ) oil?

They cannot. Paper oil? No other asset ever to exist will match the coming increase in the value of gold bullion, none.


Date: Sun Nov 09 1997 19:22
JTF ( @Home ) ID#57232:

: If gold bullion liquidity were, say, vanish tomorrow, and there was a run on gold, how high would it go up before non-central bank sources opened up? I can't imagine it will go up without limit, and gold will cease to trade. Unless there is a financial/derivatives crisis at the same time. Thanks in advance.

Mr. JTF,
You have answered your question. I add this picture:

If a bank that uses Yen has lost 90% of it's loans and holds gold and bullion has risen 500% in yen in a week, to use a western way " would it cut it's winners and let the losers run"?

 Date: Fri Nov 07 1997 22:37

1 ) Why then did Hashimoto threaten to sell US SECURITIES and buy gold?

He will do both, but not in order or in amounts supposed. The BOJ is buying gold now , much more than assumed. They will sell US debt but only after a rising oil price runs the US$ thru the roof. Even then it will be as minor currency management!

2 ) What will be the new world reserve currency once the dollar is hyper-inflated to zero or devalued? E-gold, gold itself or nuclear weapons?

I don't know, but we will all find out!

 Date: Fri Nov 07 1997 21:59

Some replies:
Reify ( ) ID#413109:
Date: Wed Nov 05 1997 20:33

To sell what I own would mean losses, and what investment at this point

Oil Stocks? Bullion? What?

It is a hard game we play, yes? Many have used the paper game to make great returns and have much to show for it. But, make no mistake, if you try to use the solid reasons for holding bullion as a purpose to trade paper gold you will not keep what is earned! I know those who have traded with the sun and gold bullion will not be sold at a loss by them. Indeed, these gains will view all forms of paper as sad returns. Divide your thoughts, give some to bullion as your will can allow. Resolve yourself to let the others go if your loses come back. Much luck to you.


Date: Wed Nov 05 1997 22:06

All paper gold will be worthless just like stocks and bonds! Am I right? If not please correct!

Mr. GCH,
You may be more right than wanted to be. For some it is a long torturous wait to go without paper gains. For ones outside the west, it is not hard. Days pass easily as a thousand years of history give backing to our investment. "For what I hold is not an empty promise. Nor is it a major thought of debt. I am now today, paid in full!"

Turn slowly now and view all directions. The wealth that was had was not real. The Pacific Rim started, now South America. Next will be Europe closely followed by the US. Remember, all currencies are the same now as they are "digital paper"! Nations will defend the system at all cost They will never sell US$ treasury debt as that debt is their currency! The dollar will soar as a final defense! As part of this defense they will allow oil to rise as oil is priced in dollars. How do you get oil to rise? Today, we stop our CBs from selling gold!

 Date: Wed Nov 05 1997 20:33

In my last post ( "Date: Sun Nov 02 1997 21:52
ANOTHER ( THOUGHTS! ) ID#60253:" )

"I said that some thing was going to change". It is changing now!

But first, some replies:
JD ( @home ) ID#253201:

I don't get it. Also if the Saudis have been trading oil for gold they lost money over 17 years.
Period. 2 and 2 is 4 not 20."

They have also held a few billion in underground oil that went from $30+ in the early 90s to the $20 range today. Would we say they lost money in oil? Yes, they owe money. Yes, they play the paper game. They also would make good poker players as they hold an ACE where noone can see! They are not like you or I, for them 2 and 2 is 40!


Date: Sun Nov 02 1997 23:06
JTF ( @Home- ANOTHER's Comments ) ID#57232:

"I think a period of inflation followed by sudden deflation would be far more likely for certain of the world's currencies. This is already happening in SE Asia. I cannot believe there will be no inflation or deflation. "

At this moment in time and space, the price of oil in US$ terms is about to roar! It will crush the Pacific Rim and South America. It will drive the US$ sky high in terms of other major currencies but the dollar will collapse in terms of gold! Short term interest rates in the USA will be driven thru the floor much the way they have been in Japan from the early 90s. This will be done to combat a imploding equity market. Long government bonds will almost stop trading as their yield soars from the oil price fears of "inflation"! Because of todays "new digital paper markets" this entire act will be played out in 30 days or less. Yes, you are right! During that time we will have inflation and deflation.


Date: Mon Nov 03 1997 07:31
Reify ( @ANOTHER ) ID#413109:

Soooo, I'm wondering, over what period of time are your predictions?
Where do you get information on about, Big Trader?

The actual buying of gold ( no other metals ) by huge players is not a prediction, it is ongoing. In 1997 it exploded! The price of the metal in currency terms will be made for all to see as it moves quickly upward for a very short period of time ( 30 days ) . After that only black market traders and third world noones will understand it's price! When is this going to happen? I have no idea. Is there anything to look for that will tell us when the problems have started? At first the US$ and gold will go up together against all other assets!

Big Trader is ( was ) from HK and is in the business.


Date: Sun Nov 02 1997 11:51
Shek ( home ) ID#287279:

Some months ago another poster ( Simple Man ) gave the same advice. Get rid of all paper assets, only physical possession will do. Gold stock certificates will be useless. Are you Simple Man or connected to him?

I do not know him, but have seen the posts.


Date: Sat Nov 01 1997 22:54
fjklaj ( jfdkla; ) ID#338126:

Another, I always like reading your posts BUT they have always been followed by a sharp drop in gold

There is no end to the amount of paper contracts that can be written and sold to drop the price of gold. The large players that I know have no problem with this. They are not traders.

"Gold will only have to be repriced once, that will be more than enough"!


To close:
The oil and gold connection looks to be changing now! After all these years we hear of an end to foolish thought. This should get very interesting.

" Knowing the future direction and price of gold will be useless for anyone who invests in paper gold! In the near future "timing" will be nothing. What you are holding will be everything!"

 Date: Sun Nov 02 1997 21:52

Western thought is still linked to gold as a commodity. That thinking is going to change! The world will witness an almost instantaneous run into this commodity the likes of we have never seen before! It will not be "a trading rally" or "a two way street". Bullion will have become a holding for "the lifetime" never to be sold. "Sell and spend everything but not gold"!

Do you think in these terms: "if gold goes up $100+ next week I'll sell my futures, gold stocks and 10 K-rands for a fat profit and laugh all the way to the bank" If the gold market was the same as in the 70s and 80s, that might be a good move. But this market is not the same. The world has changed and left most goldbugs fighting the last war! Only this time they are much smarter and have many more tools to work with. But, what if you do battle with your modern missiles pointing the wrong direction?

For us to understand what is about to happen we must pull our minds out of the paper trading world. Instead enter the world of real things! Here we will see concepts more clearly.

All currencies and most treasury debt are little more than digital units of perceived value. You don't own them, your account is "credited" with this value. Foreign governments, such as Japan are no better off than American citizens, they don't own anything either! What is really owned is "the right to offer what is credited to you, to a bidder in exchange for real things or other credits". It is a strange way to hold wealth. One might say "my net worth is the intention of others to pay me a credit from someone else". This thinking has worked well until the late 80s. It was at this time that a few wealthy and very smart people started to see the end of this. They understood that the US$ was not going to crash, it already had. It, along with all major currencies would lose all sense of value and become only trading digits of account. The treasury debts were little more than the same thing. You see, all currencies now compete with each other, not for value of wealth but for "USAGE". The game has now become "whose currency gets used the most for trading" not for value against goods! It was easy to know the currency that got used for oil would win this game. Today, all currencies are traded against the dollar for it's usage as a medium of oil exchange! Take away that link and the entire currency/ debt exchange system, as we know it will collapse! The US$ must be maintained as the "most used" if the other currencies are to have a chance to survive. Will Japan sell US treasury debt and risk taking dollars out of "usage"? Not in your life! Nor will any other CB! They will talk about it. They will sell a little. But sell a lot? It will not happen. You see oil is the key and that connection to the dollar is changing. Foreign CBs will even sell some gold to try and keep the US$ in play ( see my other posts ) . Ever wonder why the US treasury has not sold gold, it would have the opposite effect! The oil that sense the early 70s, held together the world monetary system is now causing it to slide apart! We are not going to see inflation or deflation again. What we are now seeing is the "destruction" of our paper monetary system.

Someone once asked "if the currency/ banking system breaks down, how will we know what gold is worth?". My answer, gold above ground will be worth a lot more than gold below ground, a lot MORE!

 Date: Sun Nov 02 1997 11:46

I hope to post an answer to your thoughts in the form of a "US$ and T-Bill" post tonight. It should give you more direction.

 Date: Sun Nov 02 1997 11:38

Check the "gold eagle site" under Red Barron ( LBMA ) .

Read everything and rethink your thoughts.


Mr. Cole:
Knowing the future direction and price of gold will be useless for anyone who invests in paper gold! In the near future "timing" will be nothing. What you are holding will be everything!

 Date: Sat Nov 01 1997 23:55

The act being played out now is much larger than the business of "find the gold in the ground"! In the world today there are only three assets, gold, oil and currencies. The paper currencies, so long admired and accepted are now in a war of self destruction. They will consume each other in an end battle of "I'm the last man standing but have lost all use as a unit of value". Each nation state is trying to add a "kicker" or "premium" to it's trading paper as a means of buying oil. This does not mean any country will go without oil, they will have to work with "oil priced at a value rendering them uncompetitive". National stock and bond markets do not like this kind of news!

Inflation? We are not speaking of currency price inflation here. This is currency "destruction" because my national IOUs are being devalued by cheap oil supply problems!

As was said before, the real gold market that most people invest in is gone! Any gold trading paper will evaporate in the heat of fire now starting to burn. I tell you now, when the currencies are at nuclear war, GOLD WILL NOT TRADE

 Date: Sat Nov 01 1997 22:43

Asia put an end to a sweet deal for the West! From the early 90s it was working very well. But now:

The problem with gold physical supply is very real indeed! But, there is no way that the CBs will continue to sell off an asset for it's commodity price that has many times more value as money! The talk of sales will continue for years but the real act may come to a close very soon as they try to take the LBMA off the supply hook by offering "gray paper" deals.

If they are not buying it, then: The falling markets worldwide are an early warning that the gold for oil deals are coming undone! As the big players are now heading for the exits in anticipation of exploding oil prices, the selling pressure from the CBs will quickly come off gold. The end of a parallel gold market pricing structure will leave many, many players holding nothing at all! The third world markets are the first to go as their currencies are crushed time and time again. Europe will be next, closely followed by the USA!

As for the US$ and T- bills held overseas, "they don't really exist"!

 Date: Sat Nov 01 1997 21:35

Do you think that value has been lost by holding physical gold all these years?

If the answer is yes, you are wrong! I tell you now, it's all in your perception of what is value and what is real. Gold has been increasing in value since the early 90s and doing it at a rate much higher than any other investment. Cannot see this? Hear me now, what the wealthy and powerful know: "real value does not have to always be stated or converted thruout time. It need only be priced once during the experience of life, that will be much more than enough!" Worldwide the oil business is still conducted in dollars. But, an interesting side show is now taking place that will change the way we think about gold and oil! If you wanted to devalue the US$ against other currencies what would be the best way to do it without LOWERING interest rates in the USA? Perhaps you want to cool off an over active stock market without raising rates ? Could a smart CB Chairman kill two birds with one stone ?

The US$ could be effectively lowered against most of the leading currencies by slowly taking it off the oil standard! This could be done by introducing a new concept to the world: "create a mechanism whereby a form of CB paper gold could be traded for oil as a side premium. So, instead of them taking physical gold off the market at it's now MAINTAINED commodity price, let them take "gray paper CB gold" priced at it's true value in US$ for oil." You see, this could solve the "problem of supply" that is also the problem for LBMA! We now have a "parallel market" with gold trading at it's commodity value on the physical market while being held for it's oil value by major players.

You don't think this is true? Think now, as the answer becomes clear:

Who is on the other side of the long gold deals that contango the metal far above it's current commodity price while freezing out most small private buyers? Why is gold being slowly transformed into a new kind of hybrid asset, off traded an for oil value of many thousands of dollars per oz.?

One more thing, Big trader left HK some time ago and is now in a waiting game.

No posts are from him. The post was not me on this date:

Date: Fri Oct 31 1997 16:09
ANOTHER ( thoughts ) ID#256321:

 Date: Sat Oct 25 1997 17:16

" One question, where do you get your information from ???"

A lot of my "Thoughts" are of record, just not public record. My thoughts are made free for all to read now because, as of the beginning of 97 the "cat is out of the bag". You may have read that on the Gold Eagle Site. Much of what was written about the "Big Traders" will play out in time. Thou those writings were extremely hard to relay it is written that "time will prove all things"! I will allow time to prove my Thoughts.

Why don't you clarify your thoughts to us about the coming currency crisis? Is the ECU coming to the rescue, or do you agree with George Soros? JTF, first I would like to say that I didn't intend to lead a conclusion to, 1/3 of all oil was sold using partial gold deals. Only some for now. This info will come out next year and if needed I will post it here. Also, George is not a big player. He is being worked over along with a few others. As I told MoreGold, as events unfold I will take us thru them in an ever more open response.

There is very much to tell and I don't have much time. I can answer a many questions. I think my thoughts will be of much use to many persons.

 Date: Sat Oct 25 1997 10:24

Why do the Swiss want to sell gold over many years when they could sell the entire lot in a week? Yes, the worldwide trading volume in gold could take the whole load and not drop the price below Fridays close! The reason for the "many long term selling announcements" is to keep the price down over time. The CBs would have you think that their selling would "crush the price"! The real effect would be exactly the opposite. The major world buyers would line up at the door to buy "the last sale of the century! Have you heard any CBs putting out "Proposals to Sell" for their entire stock of gold? Of course not, the response to buy would give off the absolute wrong signal and cause a revaluation of gold .

It is a far better use of a public asset when they use a small anount of it over time to ensure a reasonable price for OIL! If all gold was sold quickly, there would be no trading medium for deals! How far do you think an IOU would go if it didn't have gold in the background worth perhaps a 1,000 times it's current commodity price?

So what good is this information to the small investor? Not much if you run out and buy gold options, gold stocks, gold futures, etc.! Did you think the following quotes were good for those assets:

"That is why some "Big Traders" are holding ONLY gold as events unfold."

" One last note: No form of paper wealth will survive the financial crush once the CBs stop selling!


"The market is changing now,,, it will go up but you will not be happy with the outcome."

"What is happening now is far, far larger than the interest of a few traders or mining companies. They will be stepped on!"

Gold bullion is being accumulated and cornered on a worldwide scale not seen before!

UNDERSTAND THIS: The people who are buying do not expect the price to rise until the CBs slow their selling. They do expect the value of gold to increase in the future even as the banks sell into a rising market. This will happen as the sheer volume of trading completely overwhelms the entire worldwide market! The big buyers fully well expect gold to stop all trading as the governments enact DRACONIAN MEASURES to deal with a worldwide currency problem. The public in general will ask for these measures and to that effect, all paper connected to bullion will become "fair game"!

My projections and -----: The gold market is not the same as it was in the past, so throw your charts and TA away! Nor will the gold market be the same in the future as it is today, so don't use paper substitutes! Today, gold is much more valuable than it has ever been! During your time a straight forward investment in "bullion only ‘ will far surpass any other asset you could hold!

 Date: Sun Oct 19 1997 23:08

Mr. Cole,
The Central Banks could hold gold down for some time, even with massive buying.

Watch oil! If it rises much and gold isn't sold off then the game is over.

A reprint from an earlier post: The Deal:

We ( an oil state ) now value gold in trade far higher than currencies. We are willing to use gold as a partial payment for the future use of "all oil" and value it at $1,000 US. ( only a small amount of oil is in this deal ) And take a very small amount of gold out of circulation each month using it's present commodity price.

If the world price can be maintained in the $300s it would be a small price for the west to pay for

cheap oil and monetary stability. The battle is now between CBs trying to keep gold in the $300s and the "others" buying it up. In effect the governments are selling gold in any form to "KEEP IT" being used as ‘REAL MONEY" in oil deals! Some people know this, that is why they aren't trading it,, they are buying it.

Not all oil producers can take advantage of this deal as it is done "where noone can see". And, they know not what has happened for gold does not change in price! But I tell you, gold has been moved and it's price has changed in terms of oil! For the monthly amount to be taken off the market has changed from $10 in gold ( valued at $1,000 ) /per barrel to the current $30 in gold /per barrel still valued at $1,000!

Much of this gold was in the form of deals in London to launder it's movement. Because of some Asians, these deals are no longer being rolled over as paper!

 Date: Sat Oct 18 1997 21:04

I ask you now: " Is it hard to believe or hard to understand"?

When it comes to money it's usually both.

Know this: "gold transcends human valuations thru time and life".

Take your time on this one! Gold is now caught in a crossfire of world thought. The traders are viewing it as a commodity and trying to make money on it's moves using various paper trading vehicles. Their opinion of the market is flawed because the "real value buyers" would never deal with these people or let anyone in that circle know they are buying gold as "money"! The major buying and selling is between CBs, nations, merchant banks, "the super rich" and the hordes of small buyers in forgotten places. That is one of the small many reasons wall street hates gold, they are not part of the real action. Comex is a side show!

Let me fill in the Xs.

First a reprint; "You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold!

Today it costs $19 + XXX amount of gold! "

If you owned a commodity in the ground that had to be sold for paper currency in order to realize value what would do? Yes, the oil in the ground may last another 50+ years but will the bonds and currencies of other governments last that long? One thing you don't do is buy gold outright, it would cause it to stop trading as a commodity and start trading as money! You learned that in the late 70s. Nor do you acquire "real gold money" in any fashion that would allow a comparison of price trends ( graphs ) ! There must be a way to convert the true wealth of oil into the outright wealth of gold. We know that oil is a consumed wealth of a momentary value that is lost in the heat of fire. The stars blink and it is oil wealth no more!

It has become "the debt of nations " now owed to you. Gold on the other hand is not a commodity as many assume, as it is truly "the wealth of nations " meant to last thru the ages! A wise oil nation can strike a deal with the paper printers and in doing so come out on top. Go back a few years to the early 90s. Oil is very high, you offer to lower the US$ price in return for X amount of gold purchasing power. You don't care what the current commodity price of gold is, your future generations will keep it as real wealth to replace the oil that is lost. Before the future arrives gold will be, once again valued as money and can be truly counted on to appropriately represent all oil wealth!

The Deal:
We ( an oil state ) now value gold in trade far higher than currencies. We are willing to use gold as a partial payment for the future use of "all oil" and value it at $1,000 US. ( only a small amount of oil is in this deal ) And take a very small amount of gold out of circulation each month using it's present commodity price.

If the world price can be maintained in the $300s it would be a small price for the west to pay for cheap oil and monetary stability.

The battle is now between CBs trying to keep gold in the $300s and the "others" buying it up.

In effect the governments are selling gold in any form to "KEEP IT" being used as ‘REAL MONEY" in oil deals! Some people know this, that is why they aren't trading it,, they are buying it. Not all oil producers can take advantage of this deal as it is done "where noone can see". And, they know not what has happened for gold does not change in price! But I tell you, gold has been moved and it's price has changed in terms of oil! For the monthly amount to be taken off the market has changed from $10 in gold ( valued at $1,000 ) /per barrel to the current $30 in gold /per barrel still valued at $1,000! Much of this gold was in the form of deals in London to launder it's movement.

Because of some Asians, these deals are no longer being rolled over as paper!

What is happening now is far, far larger than the interest of a few traders or mining companies. They will be stepped on!

more on US$ and T-bills.

 Date: Sun Oct 19 1997 13:41

If you are searching for facts you will find them, but the items you find will not be true! Did you think that the high powered world of the LBMA would operate in a fishbowl for all to see? We cannot take what is on the outside as evidence for what is on the inside. To find the answer work with inside assumptions and extrapolate them to the outside!

Think now:
Would the world CBs really have kept gold this long if they only valued it at it's ongoing commodity price? Cannot only the offer of gold have some value in a deal? Can paper gold that has a commodity face value of, say $300 be traded for it's true value of many thousands? Indeed, if your worldly investments ( US stock market? ) are valued in the long run by a full supply of oil, would not future gold in a Swiss acct. make a good trade? Do the oil states think our military is there to protect them or protect oil?

Fact: If the world bids up the price of gold, all deals will be off! It would be every nation for themselves.Oil would explode in price!

 Date: Sun Oct 19 1997 09:42

There is only one oil state that counts! Only one! They have made it very clear how important gold is to them. If they had started buying outright, gold would have gone to $5,000+ in days. And only a very few million ozs. would have been purchased! The message has been for some years, "we will accumulate thru the back door, using paper deals if you keep the price at or below the cost of production". Do this and oil will remain THE driving force of the world economy!


You see, gold is not a commodity. The CBs have used every weapon to keep it's price low . Understand me, Gold is now, today, a devalued currency being used in world trade! Do you think the CBs are selling gold to keep the dollar strong? They don't have to sell to accomplish that feat! CB gold ( one billion ozs.? ) valued at it's current commodity price is only worth 300 billion, it's nothing in that price range! They know what it's US$ price is worth in terms of oil!

They are not stupid as they show.

You should not think they are dumb! Invest in gold mines, will you? Notice how quick the Australian CB hinted at taking "gold in the ground" if needed. This was said after their sale! The nature of the coming crisis will make the taking of investor property a piece of cake. You see, because gold is a commodity, you will be compensated at the commodity price of return + a fair profit, of course.

How much further can they take this? The world private stockpiles that could be sold have been. The CBs are heavy into their own stuff now and are over their heads if they had to make good on all the private deals ( read my other posts ) . The economic game is ending now and has been from the start of 1997! Watch closely as the world currencies and markets fall one by one. Watch in absolute wonder as the demand for oil plunges and it's price goes thru the roof. Yes, oil stocks will crash with the markets. And gold? You will never know it's price. It will stop all trading as it slices thru $10,000+.

Who am I? As I will not be around for long so I am noone. But, follow with me as all of this takes place in your time!

 Date: Thu Oct 16 1997 19:39

This was posted earlier. Also, I will post on Sat..

Date: Wed Oct 15 1997 21:48
ANOTHER ( REPLY? ) ID#60253:

Reprint from post:

" Now all govts. don't get gold for oil, just a few. That's all it takes. For now!"

 Date: Sun Oct 12 1997 10:42

How DO they do it?

It's more complicated than this but here is a close explanation. In the beginning the CBs didn't sell their own gold. They ( thru third party ) found someone else who had bullion. That "party" sold to a broker who sold forward for a mine or speculator or government ) . In the end the 3rd party had the backing from the broker that he had backing from the CB to supply physical if needed to put out a fire. The CB held a very private note from the broker as insurance and was paid a small fee. This process mobilized free standing bullion outside the government stockpiles. The world currency gold price was kept down as large existing physical stockpiles were replaced by notes of future delivery from the merchant banks ( and anyone else who wanted to play ) . This whole game was not lost on some very large buyers WHO WANTED GOLD BUT DIDN'T WANT IT'S MOVEMENT TO BE SEEN! Why not move a little closer to the action by offering cash directly to the broker/bank ( to be lent out ) in return for a future gold note that was indirectly backed by the CBs. That "paper gold" was just like gold in the bank. The CBs liked it because no one had to move gold and it took BIG buying power off the market that would have gunned the price! It also worked well as a vehicle to cycle oil wealth for gold as a complete paper deal.

Are you with me?

Well a funny thing happened right after the Gulf war ended. What looked like big money before turned out to be little money as some HK people, I'll call them "Big Trader" for short, moved in and started buying all the notes and physical the market offered. The rub was that they only bought low, and lower and cheaper. They never ran the price and they never ran out of money. Seeing this, some people ( middle east ) started to exchange their existing paper gold for the real stuff. From that time, early 1997 LBMA was running full speed just to stay in one spot! In other words paper volume had to increase to the physical volume on a worldwide scale, and that was going to be one hell of a jump. It could not be hidden from the news any longer. This was not far from the time that "Big Trader" said that "if gold drops below $370 the world would see trading volume like never before seen". The rest is history. Now the CBs will have to sell 1/3 to 1/2 of their gold just to cover whats out there. To use the Queens English "it ain't gona happen dude"!

Everything is now upside down and reversed. The more the CBs sell outright the more the price will rise.

It's not a bearish sign anymore. They will now sell to keep the price rising slowly.

What of those T-bonds and the US$?

More later.

 Date: Fri Oct 10 1997 17:26

Yes, we could go into details about the LBMA mess. But why? They are in way over their heads and the final outcome is on it's way. A big change in the gold market actually started last spring. You couldn't tell by the charts or news stories but it had the CB trading rooms going nuts. Up untill then they were using 3rd party transactions to sell, then the boomshell hit that the Merchant Banks were doing deals for 10 to 20 times what was offered! Well "boys will be boys" and someone is now stuck, big time! That's why "Big Trader" and his bunch closed out all paper and pulled in bullion. Don't worry about the CBs selling everything, the market is huge compared TO WHAT THEY HAVE! And Comex is nothing, if "only a silly game". Worldwide trading in gold could be cut in half and still equal all the metal in existance! The CBs will have to sell outright now even as the currency price of gold starts to run away from them!

The market is changing now,,, it will go up but you will not be happy with the outcome.

 Date: Thu Oct 09 1997 19:00

"Gold is the only money the world has ever known" Sounds like a simple thought but it isn't .

" Money is whatever people say it is" - Not true!

"Currency is whatever a government says it is" - True!

"The LBMA problem"

I can now make clear for all to see.

Background; to understand the following you must rethink your basic knowledge of money and investments. Get your aspirin ready.

Some time ago gold not only was used as money but also circulated as currency. It had always been money and people had no use for a separate currency to represent "gold money" so they stamped the gold itself and used it as circulating currency. From the start, one thing most thinkers can't quite grasp is that "money does not have to circulate"! The first "world money", gold money that is, could stay locked up and still represent value and wealth. People had but to agree on who owned it in exchange for goods and services. You have all read the articles about how paper receipts for "gold money" were later circulated and became paper currency receipts, then paper currency, then just currency. The western world today, as we know it does not use money ! They use "paper currency". To fully understand what that really means you must come to terms with this fact. " When you use paper currency you are placing a value using another persons concept of value" You are using a thought as a means of value! When an investment in stocks, bonds, bank accounts, CASH, businesses etc. is priced in US$ currency you are really holding the "intentions of providing value" locked away in the thoughts of another mind. This type of human interaction works well for a time, as the last 100 years or so proves. But, it is highly unstable to say the least. It has it's own self distruct code written inside each mind. One day ( it has already started ) a type of nuclear chain reaction will occur in the currency markets as people start "unvalueing" the thoughts of others. Little by little all debts owed will be marked down .

Now that we understand that concept let's move on:

One of the great money troubles facing the western currency system today is that many third world people are starting to put a "mind value" on real money, gold. These people don't know the true value of gold money but they know it's worth a whole lot more than the world paper currency price now placed on it. And that brings us to the next problem; how can paper currency that represents "the thoughts of a nation blowing in the wind" be used to value real money of ancient world class proportions, gold? It cannot! Any price you can think of will do, as in no price will work!

How did we come to this unworkable mess?

The best way to rework the publics mind about gold money was by changing the way it was viewed.

"It's money of course but let's also call it a "commodity! Then we can place a "paper" value on it and denominate it in all forms of future contracts. It will lose it's true value as money in peoples minds and be priced in an unrealistic paper format." And here we are today! The banks must sell all the gold they have to keep the system togeather. And once it is all sold and the financial markets implode the nations will use "whatever force is necessary" to pull the gold back in! That action in and of itself would show the true value of gold money!

What of the LBMA mess?

Gold is cornered. Plain and simple. No complicated theories, no options problems. The commodity value of gold was forced so low in paper currency terms that all of the new mined gold, going out some 10 years is spoken for. Between the third world buying physical gold and the jewelry industry ( same people buying ) there is none left for the oil states! They do value oil in terms of gold, but not IN the paper currency price of gold! How much is gold worth in terms of oil value? Just stop supplying gold to them in ultra cheep US$ terms and you will find out by watching the currency price of oil! In any event, LBMA has traded so much paper/oil/gold that any rise in the currency price of gold will implode them. The CBs must become the full primary suppliers of gold or the system as we know it is done.

One last note: No form of paper wealth will survive the financial crush once the CBs stop selling!


Date: Tue Oct 07 1997 22:37

The market is changing now,,, it will go up but you will not be happy with the outcome.

Why did LBMA go public?

Ever notice how many important middle eastern people keep a residence in London. It's not because of the climate. The most powerful banks in the world today are the ones that trade oil and gold. It is in the "city" that the deals are done by people who understand "value"! Westerners should be happy that they do because the free flow of oil and gold has allowed this economic expansion to continue this past few years.

Understand that oil is still traded for a certain number of US$ but after the deal is done a certain amount of gold is also purchased "with the future flow of oil as collateral". If the world price of gold gets to high then the oil price is falling. So long as gold stays cheap in currency terms oil will be in good supply.

Too hard to follow? If real physical gold trading dries up it's price will rise forcing down the value of oil. All this year physical gold volume kept drying up as paper short volume exploded. But,each time before a squeeze started to run the price the CBs would sell thru LBMA . You see, when paper trading ( of anything ) volume dries up it's a bearish sign but when real physical gold volume drops it's bullish! Thats because gold is being cornered on a scale never seen in history. LBMA is doing it's best to show real volume exists! The problem is, "if the CBs don't expand their roll as "primary suppliers" LBMA will implode and in the process create the greatest bull market in oil and gold the world has ever seen. That is why some "Big Traders" are holding ONLY gold as events unfold. Interesting, don't you think?

 Date: Sun Oct 05 1997 21:29

Everyone knows where we have been. Let's see where we are going!

It was once said that "gold and oil can never flow in the same direction". If the current price of oil doesn't change soon we will no doubt run out of gold. This line of thinking is very real in the world today but it is never discussed openly. You see oil flow is the key to gold flow. It is the movement of gold in the hidden background that has kept oil at these low prices. Not military might, not a strong US dollar, not political pressure, no it was real gold. In very large amounts. Oil is the only commodity in the world that was large enough forgold to hide in. Noone could make the South African / Asian connection when the question was asked, "how could LBMA do so many gold deals and not impact the price". That's because oil is being partially used to pay for gold! We are going to find out that the price of gold, in terms of real money ( oil ) has gone thru the roof over these last few years. People wondered how the physical gold market could be "cornered" when it's currency price wasn't rising and no shortages were showing up? The CBs were becoming the primary suppliers by replacing openly held gold with CB certificates. This action has helped keep gold flowing during a time that trading would have locked up. ( Gold has always been funny in that way. So many people worldwide think of it as money, it tends to dry up as the price rises. ) Westerners should not be too upset with the CBs actions, they are buying you time!

So why has this played out this way? In the real world some people know that gold is real wealth no matter what currency price is put on it. Around the world it is traded in huge volumes that never show up on bank statements, govt. stats., or trading graph paper. The Western governments needed to keep the price of gold down so it could flow where they needed it to flow. The key to free up gold was simple. The Western public will not hold an asset that going nowhere, at least in currency terms. ( if one can only see value in paper currency terms then one cannot see value at all ) The problem for the CBs was that the third world has kept the gold market "bought up" by working thru South Africa! To avoid a spiking oil price the CBs first freed up the publics gold thru the issuance of various types of "paper future gold". As that selling dried up they did the only thing they could, become primary suppliers! And here we are today. In the early 1990s oil went to $30++ for reasons we all know. What isn't known is that it's price didn't drop that much. You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold! Today it costs $19 + XXX amount of gold! Yes, gold has gone up and oil has stayed the same in most eyes. Now all govts. don't get gold for oil, just a few. That's all it takes. For now! When everyone that has exchanged gold for paper finds out it's real price, in oil terms they will try to get it back. The great scramble that "Big Trader" understood may be very, very close.

Now my friends you know where we are at and with a little thought , where we are going.

 Date: Sun Sep 14 1997 21:12
ANOTHER (an answer?):

This could be an answer directed to the "Red Baron"?

The CBs are becoming "primary suppliers" to the gold market. Understand that they are not doing this because they want to, they have to.

The words are spoken to show a need to raise capital but we knew that was a screen from long ago. You will find the answer to the LBMA problem if you follow a route that connects South Africa, The middle east, India and then into Asia!

Remember this; the western world uses paper as a real value, but oil and gold will never flow in the same direction.

Big Trader

Date: Wed Feb 25 1998 17:34
Allen(USA) (Comments on ANOTHER(THOUGHTS!) recent posts) ID#246224:

His most recent posts illuminate a perspective that sees tangibles as the only true things of wealth or value. It sees currencies as useful in short term transactions but not as wealth since they are not tangible goods or services. The comments regarding "gold, whether at US$50 or US$50,000 does not matter" is entirely accurate since it clearly highlights this perspective. ( Which would you rather have and hold 1 Million barrels of oil, or 16 Million dollars? Not talking trade here. The 16 Mln US$ is held not traded. Think about gold in this way. )

If $50 could buy a new Porche and gold was valued at $50 per ounce, then you would think that gold was 'valuable', not because of its numerical valuation in terms of a currency, but in terms of tangibles or services it could buy. If $50,000 buys the Porche and gold was $50,000 per ounce the value of the gold would be no different would it?

We are mixing things together when we ask "What is gold worth in US Dollars?" and "Will gold go up or down in 'price'?". These questions define gold's value in terms of relative and irrelavent numbers associated with currencies. The DOW/Gold ratio is the closest thing we have dealt with on this forum which speaks to this. Donald has been faithfully posting the Dow/Gold almost every day and we just think of it as an interesting ratio.

When we learn to use gold as THE denominator rather than a currency such as the US Dollar then we will be getting closer to what ANOTHER has been talking about.

Here is the problem: If you are an extremely large, very long term player what do you put your wealth into??? Do you risk putting it into currencies or economies that may degenerate drasticly? Do you even care about currencies when you have wealth that exceeds the productive output of all but the largest economies on the planet? If the whole world goes to hell in a hand basket are you so invested in its systems that you have no way of preserving your wealth or influence? You and I do not have problems of this scale. But there are a few people in this world that do have this problem. ANOTHER identified them as "the ultra rich".

Regardless of your opinion of ANOTHER's style or his ways try to shake loose from that for a minute and think about the issues he is bring to the front. His perspective addresses many of the concerns of those here who question the stability of fiat currencies and wonder what to do about it. One thing we can glean here is that we must rearrange our way of thinking. We must begin to think in terms of tangible/tangible ratios rather than tangible/currency ratios. We must begin to see currrencies as a short term means to the end of exchanging goods or services. If we do this before the rest of the world wakes up to this then we have a head start on positioning ourselves. Once the world begins to see that paper money is not the end all and be all of wealth there WILL be a re-valuation of those things which express that point of view.

It does not matter whether this change comes about through the agency of an oil power or through a rearrangement of the mentality of the entire world-wide market itself. I think the points that M. Armstrong makes about instability in world trading in the next few years because of chaos in currency markets fits this fairly closely here. If paper money becomes sinking sand then someone will start looking at an alternative point of view. They will start to think in terms of tangible/tangible trade rather than tangible/currency trade.

What tangible do think they will look at to provide the ultimate anchor? Its yellow. Its metal. And its not something a government can 'counterfit' ( print ad infinitum ) . GOLD. And when people start to think that gold offers a better alternative to trading than paper, then they will trade paper for gold until there is no more gold left. The 'paper value of gold' will not matter since paper will be seen as soft money and gold are real money. It doesn't matter what numbers you apply to its 'price'; low or high it will be the prefered tangible; the prefered denominator for all tangible transactions.

Go gold!

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