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The Gold Trail: ANOTHER (THOUGHTS!)

The complete archive of ANOTHER's online commentary, October 1997 - September 1998, as originally posted at the Kitco and USAGOLD forums and preserved in the USAGOLD Gold Trail archives. Republished here word for word, in the order the "THOUGHTS!" were posted. No attempt has been made to correct typographical errors, misspellings, punctuation, grammatical and/or textual errors as originally submitted.

Original source: USAGOLD Gold Trail Archives, Page One (Oct '97 - Nov '97) · Page Two (Dec '97 - Feb '98) · Page Three (Mar '98 - Apr '98) · Page Four (May '98 - Sep '98), via the Internet Archive Wayback Machine. All credit to ANOTHER, Friend of ANOTHER (FOA), and USAGOLD (Michael J. Kosares).

Table of Contents

Page One - Oct '97 - Nov '97
Page Two - Dec '97 - Feb '98
Page Three - Mar '98 - Apr '98
Page Four - May '98 - Sep '98

Page One - Oct '97 - Nov '97

"Think now, if you are a person of "great worth" is it not better 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!" --ANOTHER (THOUGHTS!) 1/10/98

[Follow contemporary writings of "ANOTHER" and "Friend of ANOTHER" at the Gold Trail]

"If ANOTHER's claims are true -- that a consortium of oil states has cornered the gold market (and given the impressive circumstantial evidence, this could very well be the case) -- these "footsteps of giants" become the most salient and persuasive case for gold ownership I have seen in the past decade, if not the full twenty-eight years I have been in the gold business." -- Michael J. Kosares, president of Centennial Precious Metals, Inc.; author of The ABCs of Gold Investing

Foreword

When the once highly secretive London Bullion Market Association (LBMA) -- its venerable membership comprising the world's largest gold dealers -- published its daily clearing volume for the first time in January 1997, it rocked the tight-knit world of international gold traders and analysts.

According to this first of many subsequent LBMA press releases, thirteen hundred tonnes of gold (representing more than 50% of the world's annual mine production) changed hands daily in this fog-shrouded center of the global gold market. This figure represented over $10 billion per day and $4 trillion per year in bullion banking activity!

The gold market had always stood in austere, quiet contrast to the highly charged, mega-volume world of stocks and bonds. Now this first LBMA report forced analysts, investors, and brokers to reassess their understandings of the gold market. While some revelled in the glow of the large LBMA numbers, others began to raise some very important and rather unsettling questions. First, Why was this much gold on the move? Second, Where was all this gold going? And third, Where was all this gold coming from?

Then, in October of 1997 at the internet's only gold discussion forum of the day (hosted by Kitco), a series of remarkable postings began appearing under the pseudonym "ANOTHER", offering plausible answers to those questions. What followed in a seemingly incongruous stream of thought over many months was, in the fullness of time, seen to blend into a logical whole by many astute readers following the complete text. If you are not similarly moved to at least reassess your own view of the international financial scene after reading what's revealed below, then you are either firmly entrenched in your world view, or you've been numbed by too many hours of Wall Street's cheerleader (CNBC) and too many Friday nights with Louis Ruykeyser.

What matters most to us here at USAGOLD is ANOTHER's educational value to all who would take the time to read and think through his (at times) arcane and cryptic commentary of international economic dealings behind-the-scenes. ANOTHER demonstrates a feel for and understanding of the gold and oil markets that indicates connections at the highest echelons of international finance, yet for reasons having to do with his "position," as he has indicated, he wishes to remain anonymous. If his "THOUGHTS!" are theory; they are good theory. If they are speculation; they are reasonable speculation. If they are supposition; they are well-grounded supposition.

In the final analysis, ANOTHER offers one of the more plausible hypotheses for why the financial markets have acted as they have in the past few years, and therein lies his immense value to the reader, no matter who he is. Again, knowledge as is conveyed in his series of "THOUGHTS!" is rarely to be found outside the highest levels of international finance, and is seldom to be seen bandied about on the front pages of The Wall Street Journal or your favorite financial newsletter.

As explained by ANOTHER, an opportunistic arrangement for massive physical gold acquisition among important petroleum producing and exporting nations could be comfortably facilitated within these astronomical trading volumes now being publicly revealed via the LBMA. For the oil states this meant receiving real money (as opposed to government-sponsored paper) in payment for their depleting oil reserves. For the industrialized countries, this meant a continuing supply of cheap oil to fuel the economic boom already in progress. These transactions were to be cleared through the bustling London gold market. Up until late 1996, the volumes were a tightly kept secret so "the deal" proceeded without the knowledge of the general public.

When the LBMA went public with its figures, it raised the shroud off "the deal." But by then, according to ANOTHER, it no longer mattered. The oil states had already (almost inadvertently) cornered the gold market. As implied by ANOTHER's own words, his motivation for these postings was the discovery by "big traders" in the Far East of this opportune facility to buy gold at ever lower prices. Their subsequent heavy purchases of physical gold upset the delicate balance. Now there was no longer a reason to keep it secret, and hence, the revelation of this extraordinary tale.

His choice to use an Internet forum to tell his story is surely a "story" in itself. Many who have read ANOTHER's "THOUGHTS!" speculate why he would choose this particular venue for his revelations. Why not a magazine article? Or a book? Rather than turning this Foreword into a treatise on the merits of the Internet, let it suffice to say that if ANOTHER and his motives are as implied, then there is probably no better venue than the Internet; allowing his "THOUGHTS!" to be disseminated rapidly, anonymously, and without editing by intermediaries. In addition, they could be efficiently targeted to go directly to the core market audience -- the gold analysts, brokers and investors who frequent such Internet sites as this, devoted strictly to the yellow metal. And after all, as a utility, isn't this capacity for specialization and instant communication what the Internet is all about?

We encourage you to find time to read and consider these remarkable postings of ANOTHER with an open mind. In the field of gold and international economics, these posts are sure to remain as fascinating and worthy of careful study as anything you will find on the web today.

A note on the text: No attempt has been made to correct typographical errors, misspellings, punctuation, grammatical and/or textual errors as originally submitted. This archive of ANOTHER's online commentary is presented here in its unedited entirety in the order his "THOUGHTS!" were posted via the Internet -- beginning at the Kitco website (from October 1997 to April 1998) then proudly hosted here at our expanded USAGOLD website (from May 1998 onward) through mutual agreement and cooperation with ANOTHER.

Date: Sun Oct 05 1997 21:29
ANOTHER ( THOUGHTS! ) ID#60253:

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: Tue Oct 07 1997 22:37
ANOTHER (THOUGHTS!) ID#60253:

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: Thu Oct 09 1997 19:00
ANOTHER ( THOUGHTS! ) ID#60253:

"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!

NOTHING!

Date: Fri Oct 10 1997 17:26
ANOTHER (THOUGHTS!) ID#60253:

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: Sun Oct 12 1997 10:42
ANOTHER (THOUGHTS!) ID#60253:

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: 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: Thu Oct 16 1997 19:39
ANOTHER (THOUGHTS!) ID#60253:

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: Sat Oct 18 1997 21:04
ANOTHER (THOUGHTS!) ID#60253:

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!

Page Two - Dec '97 - Feb '98

Date: Sun Dec 07 1997 18:45
ANOTHER (THOUGHTS!) ID#60253:

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 Dec 07 1997 20:04
ANOTHER (THOUGHTS!) ID#60253:

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: Fri Dec 12 1997 21:06
ANOTHER (THOUGHTS!) ID#60253:

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: Fri Dec 12 1997 21:33
ANOTHER (THOUGHTS!) ID#60253:

STUDIO.R & WDL:
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 22:31
ANOTHER (THOUGHTS!) ID#60253:

SW,
What is "cloak and dagger"?

Date: Fri Dec 12 1997 22:45
ANOTHER (THOUGHTS!) ID#60253:

SCHULTZ,
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 23:08
ANOTHER (THOUGHTS!) ID#60253:

SWEAT:
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.

Date: Fri Dec 12 1997 23:29
ANOTHER (THOUGHTS!) ID#60253:

DONALD;
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: Tue Dec 16 1997 07:07
ANOTHER (THOUGHTS!) ID#60253:

Mr. Allen ( USA ) :
Thank you for your thinking thru of my posts. I am told that you are "on target". Understand that using oil to back gold instead of the US$ is but one of several outcomes affecting the gold market at this time. This will be the final move as the currencies are destroyed. Gold at a much higher dollar price, as a result of oil/backing, will allow most paper economies to continue in operation. Gold will, in fact, become a "world oil currency" and be of national importance to all countries. In the same way that all oil in the middle east ( and most other major producing countries ) is nationally owned for the good of all, gold in the ground will be deemed a "currency reserve" for the good of all. During this time all other metals ( and paper investments ) will fail to hold value. Access to oil and gold will be next in line of importance behind food.

CB leasing/ lending is winding down as thoughts are changing. With the oil states going more to physical there is no point in maintaining the paper gold market. UBS was the first to be cut free. If you do not have physical yet, it will cost perhaps 100% more after the turn, if available at all. If the paper fire in ASIA burns too hot, at some point gold will not be supplied even before the turn!

Date: Thu Jan 08 1998 09:24
ANOTHER (THOUGHTS!) ID#60253:

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: Sat Jan 10 1998 21:03
ANOTHER (THOUGHTS!) ID#60253:

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: Sat Jan 10 1998 23:49
ANOTHER (THOUGHTS!) ID#60253:

CMAX:
You are exactly correct! Follow your thoughts. good luck

SWEAT:
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: Sun Jan 11 1998 00:39
ANOTHER (THOUGHTS!) ID#60253:

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: Sun Jan 11 1998 01:16
ANOTHER (THOUGHTS!) ID#60253:

CMAX:
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 01:33
ANOTHER (Thank You.) ID#60253:

Cmax:
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 01:52
ANOTHER (THOUGHTS!) ID#60253:

A.GOOSE:
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 01:57
ANOTHER (THOUGHTS!) ID#60253:

CMAX & ALL:
I must be away for a time. good luck

Date: Sat Jan 17 1998 16:44
ANOTHER (THOUGHTS!) ID#60253:

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: Sat Jan 17 1998 20:45
ANOTHER (THOUGHTS!) ID#60253:

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 22:07
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

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 22:22
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

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 23:00
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

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

Mikey,
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 23:19
ANOTHER (THOUGHTS!) ID#60253:

REPLY,

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: Fri Jan 23 1998 15:44
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sun Jan 18 1998 09:46
sharefin ( Worth a re- read???? ) ID#284255:
http://www.kitcomm.com/pub/discussion/another3.html
ANOTHER updated plus a couple of old ones I found.

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

REPLY:

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.
_________

REPLY:

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!
_______

REPLY:

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

JTF:
I will discuss tonight! Thank you.
______

REPLY:

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."
___

REPLY:

Date: Thu Jan 22 1998 18:51
Cmax ( ANOTHER/GOLD/OIL ) ID#339320:
For all you "doubting Thomas':

Mr.Cmax:
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: Fri Jan 23 1998 19:01
ANOTHER (THOUGHTS!) ID#60253:

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 - "

Reply:

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 19:26
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Fri Jan 23 1998 18:03
oris ( ANOTHER ) ID#238422:
Would you please explain today's action when gold went up $9.00 and oil dropped $0.30.

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

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

Date: Fri Jan 23 1998 19:46
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

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

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

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

Date: Fri Jan 23 1998 20:16
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Fri Jan 23 1998 19:35
A.Goose ( ) ID#20137:
Date: Fri Jan 23 1998 19:26
ANOTHER ( THOUGHTS! ) ID#60253:

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

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

Date: Fri Jan 23 1998 20:38
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Fri Jan 23 1998 20:17
oris ( ANOTHER ) ID#238422:
Thank you for your reply.

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

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

thank you

Date: Wed Feb 04 1998 18:47
ANOTHER (THOUGHTS!) ID#60253:

Consider, can they all buy silver?

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

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

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

"you may also follow in the footsteps of giants"

Date: Wed Feb 04 1998 19:37
ANOTHER (THOUGHTS!) ID#60253:

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

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

Date: Wed Feb 04 1998 20:24
ANOTHER (THOUGHTS!) ID#60253:

What are your "THOUGHTS" regarding the major currencies being backed by PM's?

Mr. Junior,
Any nation/state can put it's economy/currency on a gold standard. They only have two requirements. Own a stockpile of gold and raise the price very high!

In the past, when currencies were gold, a nation could not lower the amount of gold backing it's currency ( raise the price of gold ) because it lowered the currency unit worldwide and created payment imbalances. Today, no nation/currency is on a gold standard. The first country that starts will own the rest for some time.

Find me a country with many needed resources, little debt in relation to the assets and a national pride to lead? Let them price gold at many thousands not only in their currency but also in their resources! The world would buy from them, cheaply in gold but dearly in all other unbacked currencies. The markets would do the rest!

The large modern currencies, of today have only debt ridden economies to back them. They cannot change as debt blocks their path. "To change is to live and to live, some debts must die". The owners of much of this debt must lose if change is to occur. Even the new EURO will not be backed by gold! It will HOLD gold only as insurance against the worst outcome, war.

Yes, an oil state comes to mind! It could even be China!

Date: Wed Feb 04 1998 21:02
ANOTHER (THOUGHTS!) ID#60253:

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

You will see it in out time!

Will a total collapse be necessary first?

Perhaps a "almost total"??

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

keep the physical down indefinitely?

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

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

Date: Wed Feb 04 1998 23:23
ANOTHER (THOUGHTS!) ID#60254:

REPLYS:

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

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

Are the bullion banks bonded?...

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

Look to Korea for proof!

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

" up front and personal"??

RBA's 167 tonnes ? No comment.

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

Date: Wed Feb 04 1998 23:39
ANOTHER (THOUGHTS!) ID#60254:

Mr. A. Goose,

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

Date: Thu Feb 05 1998 00:09
ANOTHER (THOUGHTS!) ID#60254:

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

167 tonnes ?

Date: Thu Feb 05 1998 00:16
ANOTHER (THOUGHTS!) ID#60254:

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

Date: Sat Feb 07 1998 18:45
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

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

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

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

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

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

Reply,

Date: Thu Feb 05 1998 00:01
JTF ( Peter Munk, ABX, and LBMA ) ID#57232:
Another: Could you tell us more about what Peter Munk may have done?

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

Reply,

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

Without speaking in parable ?

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

I will return in a time.

Date: Sat Feb 07 1998 20:51
ANOTHER (THOUGHTS!) ID#60253:

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

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

Date: Sat Feb 07 1998 23:22
ANOTHER (THOUGHTS!) ID#60253:

REPLY,

Date: Sat Feb 07 1998 20:00
Forklift ( Another ) ID#156161:
What country would have the brilliant wisdom and daring to make gold it's currency and thus own the world? What new regional entity, yet to form, could accomplish this?

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

Date: Sun Feb 08 1998 09:51
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

This is good, I show a great smile!

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

Date: Sun Feb 08 1998 10:17
ANOTHER (THOUGHTS!) ID#60253:

Reply,

Date: Sun Feb 08 1998 09:42
Forklift ( CJS1__A ) ID#156161:
"it is also something of great value which they cannot defend"

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

Date: Sun Feb 08 1998 10:31
ANOTHER (THOUGHTS!) ID#60253:

Date: Sat Feb 07 1998 21:28
refer ( ANOTHER @ THOUGHTS ) ID#41229:
Is your warnings to us of something that may happen?, something you feel will happen?, or something that is in progress and you know will happen?

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

Date: Sun Feb 08 1998 10:45
ANOTHER (THOUGHTS!) ID#60253:

Reply,

Date: Sun Feb 08 1998 10:24
WetGold ( ANOTHER ) ID#243180:
Since Arabia will be protected AND the U.S. has a strong allie in Arabia ---
Will the relationship sour or will be united with a common goal ?

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

Date: Sun Feb 08 1998 11:01
ANOTHER (THOUGHTS!) ID#60253:

I will be gone for some time.

Date: Sat Feb 14 1998 19:10
ANOTHER (THOUGHTS!) ID#60253:

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

Date: Mon Feb 09 1998 18:20
SDRer__A ID#288156:
"derivatives EXIST because the system is broken"

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

It is good, this system, for the world economy is strong from the easy flow of oil. But, the economy is as living persons, and subject to the stress of real life! We do now reach high production of goods and service worldwide. But, in terms of our financial system, the ability to trade these goods, has reached it's limit! Even as a mountain climber, humans have limits, as we can move only "so high" and "so fast" at this altitude. Today, the derivatives start to fail because the world trading system is slowing down, even as products are produced faster and cheaper. The economy has reached "the top of the mountain" and noone can see this.

As you read this, persons buy companies thru your Dow Jones at values that reflect "the supply of cheap oil" and it's good effects for business in general. What they do not see is the undoing of the currency world that "good business" must have to operate. The "oil standard" created and held this currency world intact, thru much abuse. Today, the "derivatives", that require a long future of "good business", are being "devalued"! Look far and wide as you are, now , at the top of this hill! The world will head down this slope because it is not a machine and is subject to "thin air".

History has shown that as persons slip from a high stance, they grasp for items that are known to be secure! They do reach for real things! Derivatives offer not a solid hold. It is well known that the modern gold market is fat with contracts derived from "intentions to supply". It is also known that the US$ continues on the "oil standard" because of this paper. No doubt, oil will continue to flow, but what currency will take this supply as we "walk down the mountain"?

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

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

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

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

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

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

Date: Sat Feb 14 1998 20:18
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Feb 14 1998 19:34
Preacher ( ANOTHER; A Question ) ID#225273:
"free flow of oil is more important than the Pacific economies. Could you explain your view on that more clearly? "

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

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

thank you.

Date: Sat Feb 14 1998 20:50
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Feb 14 1998 19:58
Heavy Hitter ( ANOTHER ) ID#403159:
"but maybe you have a hunch?"

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

Date: Sat Feb 14 1998 21:32
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Feb 14 1998 20:00
WetGold ( ANOTHER ) ID#243180:
This appears to be a monumental world crisis much worse than the depression of the early 20th century. Could U expand further ?

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

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

thank you.

Date: Sat Feb 14 1998 22:22
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Feb 14 1998 21:01
Preacher ( ANOTHER & Interest rates ) ID#225273:
"Thank you for that answer. Perhaps I'm dense, but I'm still not clear on how driving the gold from the HK traders collapsed the Pacific economies" ?

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

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

Yes,

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

Date: Sat Feb 14 1998 22:29
ANOTHER (THOUGHTS!) ID#60253:

Date: Sat Feb 14 1998 21:21
WetGold ( ANOTHER ) ID#243180:
" How do Muslims in the Middle East and around the world reconcile this in their pursuit of GOLD with the "New Paradigm" ?

Sir, I do not know.

Date: Sat Feb 14 1998 22:51
ANOTHER (THOUGHTS!) ID#60253:

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

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

Mr. Pete, another time, thank you

I will be gone for a time.

Date: Mon Feb 16 1998 14:40
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

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

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

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

A little political thought first, then we continue.:

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

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

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

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

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

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

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

Date: Mon Feb 16 1998 19:39
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Mon Feb 16 1998 18:09
STUDIO.R ( @Obsidian.... ) ID#93232:
I believe that the estimate should have read 10,000 Tons=sold position.

Thank you,

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

Date: Mon Feb 16 1998 20:51
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

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

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

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

I make clear for you to lead!

thank you

Date: Sat Feb 21 1998 23:47
ANOTHER (THOUGHTS!) ID#60253:

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

There is much with this question!

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

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

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

3. The BB earns interest on the proceeds.

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

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

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

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

www.barrick.com/f-hedge.htm

Date: Sun Feb 22 1998 20:13
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

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

All:
It is a poor reason and purpose, that a CB lends gold for 2%! A simple farmer is better not to plant, as a harvest of grain for 2% is as a wage below life itself! Know they do this for a higher reach, as the gain is not for the return of metal, but it's use in trade. As in all things, the world does change and this purpose of CBs is now of the past. A "Desert Storm" offered birth for this new "paper oil currency" and a "currency storm" will now bring it's change. As a "currency of gold" springs from this wind, western trading in this metal will end. The "terms" of all currencies will change as the "use" of these moneys is changed. Many will now know true worth as the "terms" of every asset does find a "real price" and a "real value" in the "true world of things". For the future of most, "the wealth that was shown in paper" will be seen as clouds in the sky!

Thank You

Date: Sun Feb 22 1998 20:38
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

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

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

Thank you

Date: Tue Feb 24 1998 19:14
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

Date: Tue Feb 24 1998 21:46
ANOTHER (THOUGHTS!) ID#60253:

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

But, this game of gold, it is not only hard, but will cost anyone dearly if they try it without all the facts! Do we have the facts, or is this really just a game? I think, for many investors, the precious metals have become a game of such, even "a gamble that they never intended to take". Conservative persons, trying to protect a life's savings entered this arena with a clear direction, that of protecting their assets from uncertainty. Far too few made it to this end. They read the numerous gold books and newsletters from the last 20 years and came to a solid conviction that, "I can make a fortune at this" or "at least a small killing"!

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

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

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

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

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

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

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

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

Thank You

Date: Tue Feb 24 1998 22:38
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

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

Date: Tue Feb 24 1998 22:46
ANOTHER (THOUGHTS!) ID#60253:

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

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

Date: Sat Feb 28 1998 16:33
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

I will be gone for a time,

Thank You

Page Three - Mar '98 - Apr '98

Date: Sat Mar 07 1998 12:58
ANOTHER (THOUGHTS!) ID#60253:

With this post of:

Date: Sat Feb 28 1998 16:33
ANOTHER ( THOUGHTS! ) ID#60253:

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

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

A Noble Purpose, This Oil For Gold

Change

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

thank you

Date: Sat Mar 07 1998 13:08
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

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

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

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

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

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

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

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

thank you

Date: Sat Mar 07 1998 13:19
ANOTHER (THOUGHTS!) ID#60253:

A Noble Purpose, This Oil For Gold

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

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

Date: Mon Dec 15 1997 11:06
Allen ( USA ) ID#246224:
Date: Sun Dec 14 1997 18:59
Allen ( USA ) ( More ruminations re: ANOTHER's recent posts ) ID#255190:
Last one on this topic until more ANOTHER posts. I'm not sure that it would be necessary to have that large a cabul in on the "offer" of oil for gold. Given the rather small market in gold in comparison to oil/currencies it would only take one or two well endowed oil states to pull this off. Here's why.

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

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

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

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

Who has the gold?

( per corrections :Date: Mon Dec 15 1997 11:06 Allen ( USA ) ID#246224: )

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

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

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

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

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

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

Date: Mon Dec 15 1997 10:49
Allen ( USA ) ( Quick Note to JTF re: 23:05 post - US$ oil float ) ID#246224:
US$ price of oil is floating. The "proposal" to offer oil for gold at say 1000 Bbl/oz is far below the present float price in US$. The gold market is SO SMALL that if the oil nation that made this proposal was pumping enough oil the gold market would be swamped by oil buyers who were looking to make a few ( !! ) US$ on the discrepancy in price. In effect this would revalue gold by inserting an entire different group of buyers into the gold market who have ALOT of money.

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

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

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

Thank you

Date: Sat Mar 07 1998 13:25
ANOTHER (THOUGHTS!) ID#60253:

Change

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

Date: Fri Jan 23 1998 22:57
Junior ( @ ANOTHER & Change ) ID#248180:
I am reminded by ANOTHER'S comments regarding "Change" of a profound statement by a spokesman from the Middle East Oil Producers during the mid seventy's ( approx.1975 ) He said: "My Grandfather rode a camel, my Father rode in a Mercedes, I have numerous Jet Aircraft, my Son will ride a Camel." It provokes thoughts that the countries of the Middle East and China are not as nervous about change as the consuming and material minded nations of the West.

Mr., Junior, thank you for that deep thought!

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

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

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

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

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

thank you

Date: Sat Mar 07 1998 15:10
ANOTHER (THOUGHTS!) ID#60253:

REPLY TO:

Date: Sat Mar 07 1998 13:58
Carl ( Another ) ID#341189:
In your scenario as I understand it, gold would only buy oil, nothing else, because the physical gold market would be shut down.

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

As Mr. Mozel has shown in his post of :

Date: Mon Feb 16 1998 17:55
mozel ( The United States Empire ) ID#153102.
"The second threat is, I believe, more out of sight, but more serious. This is the threat from derivatives, the $100 Trillion crazy aunt in the attic. "

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

Date: Sat Mar 07 1998 14:10
mozel ( @Another ) ID#153102:
If this thing were to come to pass, it will not end with contracts for oil only in gold.

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

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

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

Date: Sat Mar 07 1998 15:22
ANOTHER (THOUGHTS!) ID#60253:

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

Date: Sat Mar 07 1998 15:25
ANOTHER (THOUGHTS!) ID#60253:

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

thank you

Date: Sat Mar 07 1998 19:57
ANOTHER (THOUGHTS!) ID#60253:

REPLY TO:

Date: Sat Mar 07 1998 15:18
OLD GOLD ( Paper Gold ) ID#238295:
What do you see as the likely trigger for this anticipated golden earthquake?

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

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

thank you

Date: Sat Mar 07 1998 20:30
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Mar 07 1998 15:47
Delphi ( @ANOTHER ) ID#258129:
What will happened with oil price in long term, when reserves of it will be mostly consumed?

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

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

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

Date: Sat Mar 07 1998 17:11
Jack ( MR. ANOTHER ) ID#252127:
Is my reasoning correct?

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

Date: Sat Mar 07 1998 21:03
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Mar 07 1998 18:19
WetGold ( @ANOTHER ) ID#243180:
What do you know of the Dinar comments posted from the Islamic Mint ?

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

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

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

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

Mr. Snowball,
Please read the:

Date: Sat Mar 07 1998 15:10
ANOTHER ( THOUGHTS! ) ID#60253:

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

Date: Sat Mar 07 1998 23:16
ANOTHER (THOUGHTS!) ID#60253:

Date: Sat Mar 07 1998 20:01
Neophyte ( Another - ECB gold holdings? ) ID#390249:
Do you know how much gold the ECB will hold as part of its reserves?

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

Date: Sat Mar 07 1998 20:02
BillD ( ANOTHER...PERHAPS an unimportant question...but ) ID#261269:
What do you foresee for silver ???

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

Date: Sat Mar 07 1998 20:17
Psilver Psyched ( @Another ) ID#216217:
The USA has been openly courting Venezuelan oil?

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

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

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

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

There is no standard percentage of gold for all persons.

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

Date: Sat Mar 07 1998 23:37
ANOTHER (THOUGHTS!) ID#60253:

Date: Sat Mar 07 1998 22:16
mozel ( @ANOTHER ) ID#153102:
The benefits are plain to see.
But, it is not clear that gold mines would lose value. Oil wells will not, so why should gold mines ?

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

Are you of this mind?

Date: Sat Mar 07 1998 23:45
ANOTHER (THOUGHTS!) ID#60253:

Date: Sat Mar 07 1998 23:41
Neophyte ( Another ) ID#390249:

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

Date: Sun Mar 08 1998 00:11
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

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

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

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

Date: Sun Mar 08 1998 00:39
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

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

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

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

thank you

I will be gone for a size of time.

Date: Mon Mar 09 1998 07:55
ANOTHER (THOUGHTS!) ID#60253:

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

I will post later in march!

Date: Fri Mar 20 1998 22:12
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

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

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

thank you

Date: Sat Mar 21 1998 13:55
ANOTHER (THOUGHTS!) ID#60253:

ALLEN ( USA )

Date: Sat Mar 21 1998 14:33
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

Date: Sat Mar 21 1998 15:59
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

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

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

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

Thank You.

Date: Sat Mar 21 1998 16:07
ANOTHER (THOUGHTS!) ID#60253:

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

Thank you

Date: Tue Mar 24 1998 06:37
ANOTHER (THOUGHTS!) ID#60253:

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

thank you

Date: Tue Mar 24 1998 19:13
ANOTHER (THOUGHTS!) ID#60253:

Allen ( usa ) ?

Date: Tue Mar 24 1998 20:01
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

To hold a dollar backed oil system, the governments agreed to create a liquid "free" gold market. They did this by selling much gold over years and allowing it to rise to $200 US. Then, as now, free dollar reserves could go into gold. As the US treasury did no longer back US$ with gold, it hurt not the currency. In a very real way, the dollar went onto a "oil standard" to replace the old "gold standard". As $180/$200 was to be the limit, for gold ( the BIS set at $180 then ) , in 1978 the US did bomb the gold when it went to $250. The market went out of control and rest is history.

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

my post take much time to transmit, apologize.

Date: Tue Mar 24 1998 20:46
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

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

Date: Tue Mar 24 1998 21:53
ANOTHER (THOUGHTS!) ID#60253:

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

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

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

I will make commits to other questions, later.

Thank you

Date: Wed Mar 25 1998 21:55
ANOTHER (THOUGHTS!) ID#60253:

REPLY,

Date: Wed Mar 25 1998 14:31,

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

Date: Tue Mar 24 1998 21:23
Thomas ( Doubts ) ID#372400:
"I would agree that the idea of oil-exporters demands to provide gold as payment for oil is not impossible, provided that Another is right on a major assumption -- that oil-exporters have the control to dictate oil prices. he game looks rather plausible -- oil-exporters keep prices low to make stronger the future shock of huge price increases. "

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

Also, you write,

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

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

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

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
ANOTHER ( THOUGHTS! ) ID#60253:
REPLY:

Date: Sat Jan 17 1998 21:35
Tyler Rose ( ANOTHER ) ID#373164:
If, as you say, a major oil producer were to say that they value oil at $x per barrel, and we will take payment 1/2 in dollars or eurodollars and 1/2 in gold, then it would be to the benefit of that oil producer to "value" gold aslow as possible, in order that they would receive more gold for the 1/2 of the payment in gold.

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

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

Date: Wed Mar 25 1998 22:35
ANOTHER (THOUGHTS!) ID#60253:

REPLY,

Date: Tue Mar 24 1998 20:58
Logical ( ANOTHER ) ID#320219:
" Your proposing an upheaval in international currency- is that why the EMU will be backed by so much gold or do we look else where for the future international currency? Your earlier posts had a much more urgent tone has oils plans been pushed to the right or is the increased gold backing of the EMU a workable solution for the interim? "

Sir,
The large gold backing for the Euro and the "much greater" gold reserves for the individual countries of the Euro, is a direct result from observations of gold buying by oil! If it is well known by the BIS that a move by oil to bring crude to $10.00 US, is a precursor to an "new world oil currency", then it is well known to the Euro makers! Gold will be managed back to a range of $320/$360 with much hope for participation of Euro as "the" "currency/gold" payment for oil. My knowledge is that the new range will bring a breakup to the London operation, with the ensuing run by gold to infinity. We will watch this, together, yes? I offer my past thought:

Date: Sat Mar 07 1998 23:16
ANOTHER ( THOUGHTS! ) ID#60253:

Neophyte ( Another - ECB gold holdings? ) ID#390249:
Do you know how much gold the ECB will hold as part of its reserves?

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

Date: Sat Mar 07 1998 20:01

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

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

Date: Wed Mar 25 1998 23:12
ANOTHER (THOUGHTS!) ID#60253:

REPLY,

Date: Wed Mar 25 1998 10:53
jonesy ( Re. Escapism / ANOTHER / Dow Bulls / Euro / Titanic / Sluts Endeared / Violins ) ID#251166:

Sir,
Your post was of much interest for me. The new country, "America" was also a fantastic dream for many. However, for some, this "dream of a great nation" did come true! For all you find to look down on her, she is still held as the "best of the best". I find this to be a true feeling for myself, also. The greatest changes in history were always found with much confusion and anguish by the very persons that made "just history",

"great history"!

"find our new world the same from before, as history will look back to see when men changed the perception of value"

thank you

Date: Wed Mar 25 1998 23:31
ANOTHER (THOUGHTS!) ID#60253:

REPLY;

Date: Wed Mar 25 1998 22:44
clone ( Another - a different view... ) ID#269245:

Sir,
I respect your view as it makes much right. But, I ask you, what if? In response to a world wide currency crisis and possible depression, Oil offers to sell it's reserves for a much lower price than today. For your eyes, I will say, they "drastically devalue oil, using gold"! One producer offers to accept a currency price of $8.00US and a tiny fraction/oz. gold. With all CBs holding much gold, the market dynamics would raise the reserves of many nations several thousand %. Would this not be a welcome to a cash strapped world?

All:
I ask you, why did the world go off the gold standard in the early 70s? You have an answer, yes? For all the problems this created, could the countries not just revalue gold upward, to say $300 ( back then ) ? What was the real reason the world entered a period of "freely traded" "managed gold"?

Thank You

Date: Wed Mar 25 1998 23:58
ANOTHER (THOUGHTS!) ID#60253:

REPLY;

Date: Wed Mar 25 1998 23:13
Junior ( ANOTHER @ ) ID#248180:
Copyright © 1998 Junior/Kitco Inc. All rights reserved
It appears to me that the strongest position of Oil Exporter Nations outside of the USA is the "Threat" or actually the "Move" to full production resulting in very cheap oil for an extended time period. Does this equal the "Change" or trigger the "change"?

I do not understand?

You state: "The USA/IMF and its' Hegemoney currency could not withstand cheap oil prices."

Mr. Junior,
Be very sure to understand this: They can "stand cheap oil prices". But, it is the loss of having the US$ removed as the "world reserve currency" that makes them "fight" a lower oil price, and the new "world oil currency" that it would bring!

Bring this thought into focus and you will inderstand why Iran and Iraq did fight so long. And why Iraq invaded. The warships are an attempt to keep prices from "falling"! You think long and hard on this!

Date: Thu Mar 26 1998 00:10
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Wed Mar 25 1998 23:44
Myrmidon ( @ Another ) ID#345268:
"Sir, Those countries whose CB's do not hold much gold, how are they going to survive in the event of a significant upvaluation of gold?"

They will work and produce as all do. See the Japans, they own no oil? Yet, somehow they make much wealth. We must clear our minds of gold as a commodity, it is a money, and money is used to BUY! The oil producers will not keep all gold, as they do not keep any currency. Gold will move, but it will move with honor!

I ask you to read the ( Fri. Jan 23, 1998 22:57 ) written for me. It offers a true "feeling" for gold.

Thank You

Date: Thu Mar 26 1998 00:35
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Thu Mar 26 1998 00:14
Interesting Times ( reserve currency shift ( ANOTHER ) ) ID#423355:
"currency nuclear war"?

Sir,
If one closely follows "in the footsteps of giants" ( not the book ) , he will also be preparing for a "currency war"! Time passes, thoughts change, people consider and value is perceived differently. Persons say, "the seasons are all the same", but we know "the weather is never the same". A storm approaches YOUR SHORES from across the pacific!

Mr. Lurker 777,
You have much leverage with gold, yes? Your tomorrow, it does not come soon enough? Even some countries are as such! Gold will find a new range, if the CBs say so.

They say so!

I must be gone for a time.

Thank You, very much

Date: Tue Mar 31 1998 08:32
ANOTHER (THOUGHTS!) ID#60253:

All:
On March 18, the Belgian Central Bank said it sold 299 tonnes of gold last week. This sale/purchase was ongoing, completed and announced during the time frame of my post ( of Date: Mon. Mat 09, 1998, 07:55 )

This purchase was completed by the BIS for it's account and held in five CBs. It was made at appx $305us. As this transaction was made public within the 5 to 10 day time frame, did that mean gold would move to it's new range of $320/$260 in that time also? No. What it does show, is that the BIS has made a decision to "no longer support the LBMA gold paper with CB gold"!

The central underlying questions from the beginning of these "Thoughts", was always, "will the CBs become the primary gold suppliers in the continued support of low oil prices" and " will the oil producers accept a world gold market that supplies only "non-mined" gold"? In the process of traveling to this point in time, the world governments found this new oil/gold arrangement, so successful for "paper asset" prices ( Dow Jones? ) , that they allowed the markets to supply any and all "gold paper" possible! Now, with the world awash in "US dollars" and "gold paper", a new asset is being formed to "draw" the oil producers closer to Europe! The offer is the "exact opposite" of the "US dollar agreement", this new offer will drive gold to a value that will allow it to become "the world oil asset and currency" if the producers use the "Euro" as the "oil trading currency"! In this process the Euro will become as solid as the reserves that back it.

Gold in $320 to $360, will be a time of much concern for any and all US dollar and US dollar asset holders. At some point, oil may say "yes" to the EURO, even before it is official, and gold will break to into the thousands with no hold back by CBs. Oil prices in US dollars will explode, even as prices plunge for Euro based currencies, and the US economy will implode. The world US dollar based economy is about to change, and America will find "no point" for warships in the Gulf. I ask you now, "who will defend Arabia"?

Many metal traders see gold as "a lost value from the past" and "a poor investment for simple persons"! I say, these traders have no experience with this new market of gold, as it is as "none before"! Many will find this "asset" was "worth the time of waiting".

Thank you

Date: Tue Mar 31 1998 08:41
ANOTHER (THOUGHTS!) ID#60253:

ALL:
I will wish for thinking and reply, this day ( April 04 ) . Have been shown the article "Oracle Of Alberta" on "eagle site" and will reply!

Thank you

Date: Thu Apr 02 1998 06:24
ANOTHER (THOUGHTS!) ID#60253:

ALL:
Much is in progress now, and I must be away for a time. Will not post on April 04. Will write from another country if time will allow. There will be much thinking with gold, very soon. We will talk another time, yes?

Thank you

Date: Sat Apr 04 1998 19:55
ANOTHER (THOUGHTS!) ID#60253:

All:
I do try and go back to complete where we left off. This question was offered for thought:

" Date: Wed Mar 25 1998 23:31
ANOTHER ( THOUGHTS! ) ID#60253:

All: I ask you, why did the world go off the gold standard in the early 70s? You have an answer, yes? For all the problems this created, could the countries not just revalue gold upward, to say $300 ( back then ) ? What was the real reason the world entered a period of "freely traded" "managed gold"? "

This question has more impact on the gold market of today than it did then! In days past, it was held as good knowledge that the US stopped gold backing to protect the dollar and keep gold from leaving to other shores.

But, in the same time frame, all central banks did sell gold to all persons, even the US. All treasuries held gold and dollars as reserves. To what end did the world financial system gain with the dollar off gold backing, and then allowed to "dirty float" against all currencies? Would the world not have been better off to find gold revalued to, say $300 and then begin a "dirty float"? Noone would have lost, and the inflation would have , at best, not have been worse!

Truly, I tell the reason for this action. The US oil companies knew that the cheap reserves were found. The governments knew this also. The only low cost oil reserves in the world at this time were in the Middle East, and their cost to find and produce was very low. It was known, that, in time, ALL oil would come from this land. As much higher US dollar prices were needed to allow exploration and production of other reserves, worldwide. But, how to get crude prices, up, when the Gulf States were OK to pump and produce in exchange for "gold backed dollars"? I will not name the gentlemen that brought this thinking to the surface in that era, but it was discussed. It was known that oil liked gold. It was known that "local oil" would be used up without higher prices. What if, the US dollar was taken off the gold standard, and gold was managed "upward" to say, $208 per ounce? The dynamics of the market would force oil to rise and allow for much needed capital to search for the higher priced oil that was known to exist! The producers would find shelter in gold even as the price of oil was increased in terms of a now "non gold dollar"! Price inflation would rise, but gold and oil would also increase. The dollar would continue to be used as the only payment for oil, and in doing so replace gold as the backing for this "reserve currency". All would be fair.

The war in 1973 and the Iran problem did make markets "overshoot", but all did work to the correct end. The result was "a needed higher price for a commodity that was, as reserves, in much over supply by the wrong countries"! It was known that the public would never have accepted this "proposition" as fair. To this end, we have come.

And it is from this end, that the gold markets are managed for today! I do now take you to my post to Junior:

Date: Wed Mar 25 1998 23:58
ANOTHER ( THOUGHTS! ) ID#60253:
" You state: "The USA/IMF and its'Hegemoney currency could not withstand cheap oil prices." ?

" Mr. Junior,
Be very sure to understand this: They can "stand cheap oil prices". But, it is the loss of having the US$ removed as the "world reserve currency" that makes them "fight" a lower oil price, and the new "world oil currency" that it would bring. Bring this thought into focus and you will understand why Iran and Iraq did fight so long. And why Iraq invaded. The warships are an attempt to keep prices from "falling"! You think long and hard on this! "

All:
Look now and see if the US dollar does not "fight" for a high oil price! In every way, the question of supply disruptions is shown as the need for other suppliers. But, other suppliers cannot produce at a lower price? If the gulf states are allowed to bring oil "down" to it's true "fair" production price, in terms of a "correctly higher revalued" gold price, the US dollar would no longer be priced and backed by oil. Any paper trading currency would do. I would say, "if the Euro is strong in gold, and crude oil is allowed to be devalued by gold at $10,000 to $30,000, then all other paper currency reserves held against the EURO would be , "for show?"

"The world is going off the dollar standard as the dollar is going off the oil standard ", find this event "in your time"! We watch this new gold market, together, yes?

Date: Sat Apr 04 1998 20:42
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Tue Mar 31 1998 09:58
Allen ( USA ) ( ANOTHER ( THOUGHTS! ) ) ID#246224
" So the Euro will be an alternative to this? Its creators must have known that this 'inflation' of the USA and LBMA markets was not liked by oil. When was this recognized? Was this at the time of the Gulf War ( as you have implied in the past ) ? How was it recognized or communicated to Europe? Certainly the Euro has been built with this 'market' in mind? "

Allen,
The link to my writing was broken during our discussion. Some items were lost. I do now understand your thoughts. I will now reply, "as able, over time".

The Gulf War was the last insult! It was viewed as an attempt to show an "unstable area", but the war itself was not intentional, events were "out of control".

We must grasp that all commerce is done, at least, in the US dollar concept of "valuations of real things". In this way, " the true value of the purchase of real money" is hidden from view! Persons will say in the future, "how could gold be $500 one day and $5,000 the next"? I tell you now, it is already past that level, as in "present reserve currency dealings" it is not seen! Consider, that in all that you do and think, your "western values" are of paper concepts. From your birth, real things are not used to cross value themselves! When the battle to keep gold from devaluing oil ( in direct gold for oil terms ) is lost, the dollar will find "no problem" with $30,000 gold, as it will be seen as a "benefit for all" and "why did noone see this sooner"?

Thank you

Date: Sat Apr 04 1998 22:42
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 04 1998 20:57
sharefin ( How can this be? ) ID#284255:
ANOTHER
" How can they reprice gold to $30,000? "

Mr. Sharfin,
This question from you, it proves for my eyes what I have said. Indeed, if I viewed as a western person, gold money as $30,000 paper dollar credits, my thoughts would also show " this cannot be"! But, from another world, I view this US$ and say "how can it be of such value to all and have numbers as the stars in heaven"? Please understand, money as paper or metal is as "perception of value in the minds of people". If all the gold held by earth were placed in the hands as money, it would be used to revalue every "real thing" at a fair price. A tiny fraction of gold would buy much production of goods and services, on a basis equal for all men, not as a debt for later settlement, as currencies are now!

Thank you

Date: Sat Apr 04 1998 23:20
ANOTHER (THOUGHTS!) ID#60253:

REPLY,

Date: Thu Mar 26 1998 00:26
Myrmidon ( @ Another ) ID#345268:
" the US will confiscate gold coins and bullion some day? "

Sir,
I think, that gold will be viewed as money by the USA government. It's new, much higher price will offer a "way out" from many economic sins. In that day, persons will not try to "buy" gold, as it will already be used "as currency". To ask, "how can one afford $30,000 gold" would sound as today as "how can anyone afford $30,000 in savings account"? One does earn money, not afford it, yes?

Thank you

Date: Sat Apr 04 1998 23:52
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 04 1998 23:12
ALBERICH__A ( @Another: EURO - Who Defends Arabia ? ) ID#254112:
" I'm very interested in your thoughts about the future impact of the possibility of a temporarily imploding US economy, the breakdown of the US$ as a reserve currency, on the geopolitical situation, especially on the ME?"

Sir,
From the past, to this day, America has held the "reserve currency" for the world. In that time, it has been the economic fuel for all economies. This is as it should be. However, this fuel was supplied as debt, borrowed from the future of children yet unborn. Neither myself, or any other person should enrich their home by holding the assets that give "bondage upon future life". It is as a "trader" that plays any side, without recourse for who is destroyed! "An investment without honor brings no gain to ones life"!

When the dollar is displaced, it will be as a "leveling" of the world economy. A few will learn to walk without the luxury of holding a debt upon others, "as an asset for gain". But, for every one that is brought low, ten others will gain from the loss of this dollar burden. And when one gains more in life than before, that same does "buy more" and such will be the new engine for the world economy under a new currency. A golden future is "just ahead"!

We must wait to view this "geopolitical situation".

Thank you

Date: Sun Apr 05 1998 00:14
ANOTHER (THOUGHTS!) ID#60253:

REPLY,

Date: Sun Apr 05 1998 00:01
EJ ( ANOTHER: what do you expect as the timetable for the shift?

EJ,
With or without the Euro, we will change in the next few years or less!

"Money does never change, as do dreams of wealth

So we search for our future, but find out true worth from the past"

I will be gone for a time.

Thank you

Date: Sun Apr 05 1998 20:06
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sun Apr 05 1998 15:20
oris ( Fred ) ID#238422:

"Is it possible that gold will rise to $30,000/oz in the period of nearest 10 years?"

If you say to yourself: "Yes, it's possible!" then ask yourself a question: "But why? But how?".

To All:
This question, is asked much! To this I also add "what price is money?

Many look to gold and say, "at $30,000, every mine would produce so much that the price will not last", and "with cost to produce below $1,000, all persons would mine gold"! I say, you look at gold and see only a commodity. As world oil currency, it will not be this way. To offer the question:

Your US$, it does cost only one cent or less to produce. It is also a paper commodity, yes? Does the world go into the "paper dollar business" because it can be sold for a dollar and produced for "one cent"? I ask the Mr. Sharfin, "who would buy or who could afford this "dollar" at such a price? Would not every person sell these "paper dollars" as they are priced so far above production cost? No. And the world, today, does produce these paper pieces as "to no end", yet all persons hold dollars for value! Even reserves!

When any commodity becomes money, the free market is not allowed to produce such without laws to govern that production. As any person, worldwide can produce dollars and sell them as a business, it is "against the law". In the time to come, it will be this way with gold also.

The true value of gold, as a monetary currency, in today's current US$ values, is over $30,000. If all currencies were destroyed, and gold only was used, this value would be higher. However, currencies will be used in the future, as today, only their value in trade will change. They will no longer be held as reserves, without gold at their side!

The time is not that far away for all to learn this, we watch these changes together, yes?

Thank you

Date: Thu Apr 09 1998 19:22
ANOTHER (THOUGHTS!) ID#60253:

Mr. LGB,
I did come to Kitco with only my "THOUGHTS" to share. This thinking was offered to all and is "as free as the wind". Even as my writings were discussed by many, I did never find you to be a "fraud" or a "hoxier", as your words were offered with "good intent". Please, find my words "of record" that were spoken against you, and show them, "here"?

I find not the reason for your purpose of speech! It offers a nature of "confrontation" and "disruption" for persons of "simple ways" and "thoughts", such as I. As you have your "direction for life", I have a "purpose in life".

I wish you the blessing, "to walk tall with wealth, for all your days", "that one may complete the journey that is given for all to travel". I do instruct "another" to send my "thoughts" where "ears do not bite"!

Good Luck!

Thank You

Date: Thu Apr 16 1998 07:33
ANOTHER (THOUGHTS!) ID#60253:

All:
Together, we can talk of this new gold market. In a day, or two, we will have much to discuss. I look forward to this.

The Kitco Co., it offers more to the world than a business, "it provides a stage for minds to meet"! This service is of much value to all, yes?

Thank You

Date: Sat Apr 18 1998 19:18
ANOTHER (THOUGHTS!) ID#60253:

Mr. Sharfin, I thank you for saving my posts. Now I ask you?

Please read these words and consider:

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

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

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

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

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

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

I'll let Another explain:

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

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

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

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

Thank you

Date: Sat Apr 18 1998 20:52
ANOTHER (THOUGHTS!) ID#60253:

ALL:

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

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

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

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

Date: Sat Apr 18 1998 21:31
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 19:51
GOLDEN CHEESEHEAD
"then the true inflation of the US dollar over the last 20 years, since the last oil shock, would be clearly revealed"?

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

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

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

Thank you

Date: Sat Apr 18 1998 22:01
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 21:04
Carl ( @Another ) ID#341189:
Questions: Do you have a belief about whether the euro will be attractive to oil producers as an oil currency? If the price of gold in dollars begins to rise and the dollar also strengthens against other currencies, as you suggest, will not this accurate the purchase of gold by holders of other currencies?

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

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

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

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

thank you

Date: Sat Apr 18 1998 22:14
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 21:14
ForkLift__A ( Another ) ID#34194:
Will Iran stand for Saudi Arabia? Would they stand against the superpowers as equals in armaments? Would Kuwait be sensitive to such an alignment?

Mr. ForkLift,
I did not think we would ever see this. In the end, it may be seen that the "gold Dinar" may one day be a common currency for all the Gulf region. To this end, all will stand together! We must watch this possible change, as it could be a challenge to understand.

Thank You

Date: Sat Apr 18 1998 22:30
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 21:1
Pete ( All, ANOTHER-Who is selling gold? ) ID#222231

Mr. Pete,
These money printers, they do much and fool noone. "Follow in the footsteps of giants", as they take in real gold. Do so and the future will show your wisdom from today!

thank you

Date: Sat Apr 18 1998 22:36
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 21:44
Silverbaron ( ANOTHER ) ID#288295:
ANOTHER:In the past you have spoken of BIS gold purchases; can you tell us how much gold is owned by the BIS? Thank you.

Mr. Silverbaron, I will address a full post to this question. In a day or so. It is very interesting, this "Bank of Banks", yes?

thank you

Date: Sat Apr 18 1998 23:00
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 21:55
Donald__A ( @Another ) ID#26793:
Copyright © 1998 Donald__A/Kitco Inc. All rights reserved
Lesser countries with currencies of many zeroes do not operate well. If there are no citizens who will save those currencies then there can be no capital to construct factories, plant crops or build housing for a comfortable life. They will remain beggars forever. Worthless paper currencies are now used in every country of the world. There is no safe place to save. Thus there can be no capital and no capitalism. It is only a matter of time. What will there be available to use the trade receipts for? Who will need oil in such a world? Governments must return to gold or they will perish. It is only a matter of time.

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

Thank You

Date: Sat Apr 18 1998 23:17
ANOTHER (THOUGHTS!) ID#60253:

REPLY:
Date: Sat Apr 18 1998 22:07
Myrmidon ( @ ANOTHER on "REAL THINGS" ) ID#339212:
Copyright © 1998 Myrmidon/Kitco Inc. All rights reserved
"My question to you is this: The large anticipated rise of gold will it not be relative to currencies? Even if gold is priced relative to oil, even the price of oil is equated to currencies"?

Mr. Myrmidon,
The present digital money undervalues all real things in terms of "gold real money". This process hides the "current debt" that by default, encumbers all assets denominated in "digital currency"! It is to say " your wealth isn't as great as your currency says it is"!

For persons who "settle up" and convert to real things and gold, they have:

"taken two steps to the right, before the opponent has turned" In a Dual it is cheating, but in "life and death", it is a "good move", yes?

Thank you

Date: Sat Apr 18 1998 23:27
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 22:18
GOLDEN CHEESEHEAD ( HERR ANOTHER! ) ID#431263:
Copyright © 1998 GOLDEN CHEESEHEAD/Kitco Inc. All rights reserved
"why gold mining operators who pay their miners in devalued local currencies and sell production in US dollars will be harmed when gold revalues currencies? Won't gold be king at that point?"

Mr. GCH,
I think the governments will change the rules, just before you decide to sell. It is the way of life, yes? Is it not the "human nature" to rob the bank with the most money?

Time will prove all things!

Thank You

Date: Sat Apr 18 1998 23:46
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 22:25
Carl ( @Another ) ID#341189:
"How do you see a company like for example Barrick, which holds "gold in the ground" in several countries"? Will each country simply take their gold? If gold is to held for the public good in the future, how would oil be purchased by private companies?

Mr. Carl,
See my last reply for the GCH. I think Barrick is a large bank and will require many good robbers! These government treasuries, good minds they have, I have seen!

Gold for the public good will be in the form of "money in the hand". A Dinar and a Euro for oil? We will see?

Thank You

Date: Sun Apr 19 1998 00:08
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 22:31
LIBERTY__A ( Gold mining stocks and their golden path! ) ID#263379:
Copyright © 1998 LIBERTY__A/Kitco Inc. All rights reserved
Mr. Another,
"How do you envision gold availability at this level?
"can you be specific. Is this plan a viable one, and what caveats to you envision?

Mr. Liberty_A,
Sir, the plan is good, the question is, "how good is your broker"? Noone can know how this world change will come about, in specifics. The gold market may lock at $400? Or $4,000! When the public perception does come to understand, many entities I know of will not be buying "at the market" as your broker will. These ones, they will be "above the market", "well above the market"! Will you bid $1,000 when your broker screen shows $475? I myself, as a country will be "there"! You sir, will stand well behind most in line.

I tell my children, as you may tell yours:
"when a thousand hungry lions fight for one scrap of food, small dogs should hide with what's in their belly"

Thank You

Date: Sun Apr 19 1998 00:18
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 22:38
JTF ( Only US gold mines confiscated? )

Mr. JTF,
Please see my

Date: Sat Apr 18 1998 22:36
ANOTHER ( THOUGHTS! ) ID#60253:

Thank You

Date: Sun Apr 19 1998 00:43
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 18 1998 23:03
chas ( Another re currency flood ) ID#342282:

Mr. Chas, I do not understand your question?

Date: Sat Apr 18 1998 23:32
BillD ( @ANOTHER ) ID#261269:
When would you expect these events to start moving the price of gold upwards?

Mr. BillD,
When the Cbs lose control. $360? Perhaps?

Date: Sat Apr 18 1998 23:48
Allen ( USA ) ( ANOTHER ) ID#255190:
Copyright © 1998 Allen ( USA ) /Kitco Inc. All rights reserved
Appearantly the percentage will be revealed in early May along with the naming of the president of the ECB. Do you expect that this will be when this begins to change?

The EURO is not done yet, much political fighting yet. It may change again, after May!

What do you see as the sign or evidence that the first phase has commenced ( digital currency units being exchanged for real things ) ? Similarly what do you see as the sign or evidence that the second phase of dumping the US Dollar has commenced?

See my post to BillD.

"I wonder what avenue these people will take to secure physical property since most commodity contracts are really just more paper?

A problem for persons that do todays work, tomorrow!

Do you see the 4080 delivery notices for gold at the COMEX as a sign of this type of effort to take delivery of physical metal? Since there is only enough gold to accomodate 1475 contracts what will happen to the rest???

I think, good minds will find a way to work this problem out. We will watch!

Thank You, Mr. Allen

Date: Sun Apr 19 1998 14:14
ANOTHER (THOUGHTS!) ID#60253:

ALL, I could not finish from last post. Have time and will continue now for a short time.

REPLY:

Date: Sun Apr 19 1998 01:42
chas ( Another, rephrase of question ) ID#342282:
In reference to large volume oil producers' sales for currency ( paper ) , do they have to use this currency to buy the gold they prefer, or is there another method or methods to acquire the gold? The main question is, if there is another method"?

Mr Chas,
Yes. Many say, ME producers have no extra money for gold. They are in debt and "just making it". I say, they have much money, just not "your perception of money"! Many producers do not pump at "all out rate", and worlds largest proven reserves are in ground. In "gold market world", oil is wealth, and oil is money! It is the "good trade" to use "oil in ground" as backing to buy much paper "commitment for gold"! Future "currency" price of oil in ground is much unsure, but gold has world CB backing to be of great value, always! CB say, "your oil at $15 to $25, this is good as long as flowing", and say also " your oil pumps shut off, what price gold to turn back on?"

You see, in real world, gold is money, oil is money. But paper currency, it is only a receipt for commerce.

Thank you

Date: Sun Apr 19 1998 14:25
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sun Apr 19 1998 00:20
mozel ( @JTF ) ID#153102:
A man who dueled as ANOTHER proposes would have had no honor. He would have been shot down like a dog by the seconds. Without trustworthy, honorable seconds to enforce the law of dueling, there is not a duel, just a fight and shooting on sight.

Mr. Mozel,
You do understand the world, as it is, not as you are told! You thoughts offer much.

In the Duel of Gold and Currencies, this time, no seconds will stand! I think, they Duel also. But, your perception of 'Honor" I agree with!

Thank You

Date: Sun Apr 19 1998 15:09
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sun Apr 19 1998 03:38
Drifter ( ANOTHER'S Thoughts ) ID#270447

Date: Sun Apr 19 1998 14:18
OLD GOLD ( ) ID#238295:
There will be ample time for holders of gold bullion and gold shares to sell their holdings for huge profits. Drifter was right on target here. Let's worry about getting POG to $350 this year. We have a long way to go on the upside before confiscation and/or taxation becomes a realistic concern.

Mr. Drifter and Mr. Old Gold,
If you search the "thoughts" posts provided by Mr. Sharfin, many of your conclusions are addressed. Many do feel that if "the gold mines were safe in the past", "they will be safe in the future". I submit this persons thinking for your consideration:

"The Western public has always thought of gold as money. Even after the 70s and 80s, most private investors held a small side thought, that gold was still, somehow dollar money. It was only during the late 80s and 90s that people started to completely lose the connection of paper spending money and gold. Clearly, all evidence shows that prior to the 90s and particularly prior to the 50s, the push was to change the publics thinking away from gold money, to paper currency as money. In this political climate, gold mine investments were the correct move, as the business of gold was encouraged over the usage of gold as money! That is why the metal was called in and the mines were untouched.

However, today, the change will be counter to the prevailing public opinion, that gold "is not money". The world debt system and currency exchange, as we have know it will implode and leave little room for political maneuvering. The governments will revalue gold and "demand" that the public carry it and use it! It will be the source of all gold, the mines, that will be controlled! That's Controlled, with a capitol "C", not confiscated!"

Mr. Old Gold,
Sir, I do read your writings and consider your thoughts!

Thank You

Date: Sun Apr 19 1998 15:49
ANOTHER (THOUGHTS!) ID#60253:

Date: Sun Apr 19 1998 14:31
mozel ( @ANOTHER ) ID#153102:
" Was Gold Leasing by CB's an accidental mistake or an intentional mistake do you think?"

Mr. Mozel,
This world of money, it is a fierce one! I ask all, does anyone know a money manager with money for loan at 2%? No? Does not even the bank of Canada sell gold outright and receive "high" interest on cash? Is a CB that sells/leases gold dumb? NEVER!

If they sell gold, a way is clear to "bring gold back" for the nation! Canada has local mines, Australia has local mines, Belgium has South African mines! If they lease gold, it is for a purpose to buy "something" for the new supply to the market! The interest on the loan is for public view, as a "free gold loan" is not acceptable!

It truly started with Barrick, in Canada in the 80s. It was a "thin market", but grew big in oil. I think "intentional mistake" that was, as is said, "trial balloon"?

Thank You

Date: Sun Apr 19 1998 16:04
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sun Apr 19 1998 15:17
aurophile ( ANOTHER ( THOUGHTS ) ) ID#256326:
Many, perhaps all, of the mines will end up being owned by the lenders who have also lent mine management's rope for their own hanging. Although it is a special case, the Pegasus story is instructive in this regard.

Mr. Aurophile,
I think, in the years to come, many lenders, as Bullion Banks, will find much rope in great supply, offered to them, not the mines! These banks, are in middle with no way to settle, as national governments buy mine production! It is today, treasuries only can print currency, so will it be tomorrow that only government buy and give citizens real money, gold!

I will be gone for a time! We talk again, yes?

Thank You

Date: Sat Apr 25 1998 21:49
ANOTHER (THOUGHTS!) ID#60253:

Mr. TYoung,

Will the German government "sell" gold to the new ECB, or will they "transfer" it? A large difference, Yes? I send a post for this, this day.

Thank You

Date: Sat Apr 25 1998 22:55
ANOTHER (THOUGHTS!) ID#60253:

Mr TYoung:
Please read and consider this thinking person, as many do read your thoughts!

One must take this thought into consideration when deciding weather to hold dollars or the Euro. "The United States Government does not hold any reserves against it's currency". Truly, this can only be the case of the world reserve money. Indeed, all other currencies have reserves of US$ to back them, yet only the dollar has nothing! Yes, the USA does hold many billions in foreign exchange, to use in the defense of maintaining exchange rates against the dollar. However, these holdings are not reserves.

When the US government does not take in enough taxes to meet expenses, it sells treasury debt to make up the difference. When no one bids for this debt at an "acceptable" interest rate, the Federal Reserve bank buys the debt, outright! It gives printed cash to Washington and then, "holds the new treasury debt ( bond ) as backing for the issued cash!

Everyone understands the implications of this. Or do they? In reality, when the US government needs money, it doesn't sell debt! It "TRANSFERS" the obligation of it's citizens to pay future real production ( taxes ) as a "backing" for it's newly printed currency! As this process has been going on for decades, it has built up a debt of "real production payments" that it's citizens can never pay. Further, as the world reserve, this currency is held thru proxy "by every single person on this planet" that uses paper to trade anything!

It is true, that in times past when a currency is inflated ( over printed ) to a point of only 10% real gold backing, the government could revalue gold 90% upward and the currency was 100% backed again! A terrible blow to the holders of this paper, but at least the money system survived! Today, the worlds currency, the US$, by default, would require a gold price of many, many thousands to back it without using it's citizens as collateral! The only problem with this is the US gold stock is so small, that even at $10,000/oz, a large deflation would be necessary to decrease the outstanding US currency to this gold backing level!

Now, consider the Euro. It will have much real gold backing from the beginning. Even at 10% to 30%, the Euro will be the equivalent of a 100% gold backed dollar, when the world comes off the dollar standard! The selling of old dollar reserves, alone will reprice gold in US$ terms of at least $6,000/oz! It's present interbank reserve value.

Read the BONN report again:

""BT 1 APR 1998 BONN

Buba seen transferring gold to new Euro central bank

THE Bundesbank, which must provide about one-third of reserves of the new European Central Bank ( ECB ) , may decide to transfer most of its share in gold, providing a windfall for the German budget, analysts said.

Such a move would raise public confidence by backing the new currency with gold, and would support gold prices by reassuring investors the Bundesbank won't sell excess reserves on the market, an analyst said.

In addition, the transfer would be recorded at market prices, whereas the gold is now valued at less than one-third its market value. That would mean a multibillion-mark paper gain the government could book against debt.

"It would be a neat move," said Alison Cottrell, economist at PaineWebber International in London. "There's the psychology factor of the ECB holding gold, the government would benefit from a revaluation and it should, at the very least, put a floor under the gold price."

The European Central Bank will go into operation on Jan 1, the same day the euro becomes the currency for an expected 11 nations. Germany, because it's the European Union's largest economy and most populous country, will have to provide about one-third of the 50 billion Ecus ( S$86.5 billion ) the new bank will need in its role to set monetary policy.

The Bundesbank, Europe's largest holder of gold, has around 95 million ounces, valued on its books at 13.7 billion marks ( S$11.9 billion ) . The market value is about 55 billion marks.

A Bundesbank spokesman wouldn't comment on what the central bank's plans are, saying that won't happen until the member states for monetary union are named and the members of the European Central Bank are appointed. -- Bloomberg""

Mr. Young,
The German CB will not be selling gold to the new ECB for dollars! This "TRANSFER" will be in terms of "German Mark reserve requirements" that will soon be the "German Euro currency reserves"! Soon, European oil purchases will be made in, partial gold backed Euro's that "in US dollar terms", will be the same as 100% gold backed currency! As Another would say: Gold and oil will never flow in the same direction!

Sir,
you think long and hard on this: in USA , this paper currency, it show not the true wealth of persons assets!

Another

Thank You

Date: Sat Apr 25 1998 23:35
ANOTHER (THOUGHTS!) ID#60253:

All:

The Swiss, not dumb! There will come a time when gold and Euro are as "the same". Not in price or value, but as used for "real money". The Swiss will sell, just not as you think "sell". In that time, gold will be "transferred" to other Cbs as money or real reserves.

Money is not what you afford, you earn it! In the near future, gold money will buy more than dollar money, much more! It is as to compare a one dollar bill to a hundred dollar bill, both money, just one buys more!

Many think the only way gold can rise in dollar terms is if USA prints to many! Truly, they have printed to many already. Gold will rise in dollar terms, many thousands even if treasury inflates currency no more. This rise in price will cost London much! You have seen the Bank of England report of gold that does not come home?

We watch this new gold market together, yes?

Thank You

Date: Sun Apr 26 1998 00:06
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 25 1998 23:13
aurophile ( ANOTHER ) ID#256326:
The US does not "back" its currency with specific reserves as other nations do ( of necessity ) as a matter of policy, but it does have the reserves of gold and foreign currency. The German move, if it happens, is simply accounting legerdemain ( ledger-demain? ) , and is no more meaningful in reality than the Federal Reserve's monetizing of US debt.

Sir,
This "matter of policy", it is without reason? If US$ is reserve for all other currencies, how can other currencies be held as reserve for US$? When one ask question, "does chicken back egg, or egg back chicken ", a good reply comes as "matter of policy? Yes?

You state:

" In the modern system, gold is of far less usefulness to a currency's essential value than the political, legal, and military "currency" of its issuer."

Sir,
Fifty years of modern history do not show this to be true. Political, legal and military "currencies" do come and go with the "Seasons", but "gold currency" did keep promise for citizens of changing times!

Date: Sat Apr 25 1998 23:27
Auric ( EMU Question ) ID#255151:
Ok, let's say the EMU is 10% Gold backed. How do you know that in a year or two the CB of Europe won't change the rules in midstream. What's to stop them, say in the year 2000, from deciding that the EMU will only be 5% Gold backed? How firm is this promise?

Sir,
When physical gold trades by side of EURO, the rules will hold even at three fourths stream!

thank you

Date: Sun Apr 26 1998 00:39
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sat Apr 25 1998 23:53
PrivateInvestor ( Another thinks ) ID#225283:
Another please tell me what you think of the current situation in the world oil markets. Countries such as Mexico are seeing 50% of all government revenues dry up as the price of oil continues to go south...The same must be true of our gold holding friends in the middle east...What are your prognostications???

Sir,
We are close to "much change". The oil reserves of the middle east show a history of value delivered for currencies of "broken promises"! The supply of oil was never the problem, only the "market of oil" in "what kind of money" that caused much distrust. Today, many try to understand oil thru a currency that cannot offer a final payment of true value. I tell you, supply and demand mean nothing in this relm. The "fight", is to bring oil down in US$ terms, then convert to an "open" partial gold payment. With gold priced correctly, oil would be very cheap for western, non producers. But, the owners of "local reserves" as Mexico, would suffer as gold would not be allowed for payment to them. The Euro, it could be the result of this war.

If the Euro wins, the Gold Wars will begin at $360, and crude in US$ could be in the hundreds?

Much is still as "up in air", we watch for a while.

I must be gone for a time.

Thank You

Date: Sun Apr 26 1998 11:52
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sun Apr 26 1998 09:41
jonesy ( @ ANOTHER re. Gold Wars ) ID#251166:
In your last post ( today 00:39 ) you say, "If the Euro wins, the Gold Wars will begin at $360, and crude in US$ could be in the hundreds?"

Question: Re. Gold War -- What specific actions and reactions do you envision? In other words, What possible scenario ( s ) , blow-by-blow, may we look for in a Gold War?

Mr. Jonesy,
This battle of wealth began long before our eyes were open. It was born as a conflict of the human spirit. Many teach the way of "honest dealings" and "earn your own way", then force their neighbor to accept a currency debt receipt, as payment for "real commerce goods". The world reserve currency is held by "default" not choice. Today. every digital money is a product of the US$ by nature of "it being the book keeping reserve". To this extent, the US$ is the only world currency! To this end, noone can see the true size of the "mismatch" in gold as money in US$. No country, Japan included, can sell dollar reserves without destroying their own currency! The BIS does not recognize other currencies as reserves, as they are, in themselves, a dollar product!

This "new gold war", it will be as "none before". The BIS will bring gold into the $320 to $360 range for the Euro. The US will attack the Euro for what it has become, "a new world oil currency" offered to remove the oil backing from the US$. At first, the dollar will be partially sold by many Cbs, especially the ones with little local oil, Japan, Yes? As unneeded dollars are set free, the true value of real things will be seen in dollar terms, gold, cars, oil, etc.. In this light, one can see why many large buyers have been taking in gold, as it is held in terms of value of "after the war". Not the traded price of today.

Sir;
Your life passes, thoughts change and a persons perception of value does mature. The world, today does also mature! You will find a new financial future, in a value from the past. The world will embrace gold as "a better inheritance for our children" for it has now become a "lifetime holding". It is "the human nature" to be social, and many will not see this "new future" until it "has use from others".

"it is the way of people, some are part of the future, as they become the history of the past"

Thank You

Date: Sun Apr 26 1998 12:49
ANOTHER (THOUGHTS!) ID#60253:

REPLY:

Date: Sun Apr 26 1998 12:17
Haggis__A ( ANOTHER......... ) ID#398105:
This precise reason why the EURO has to be backed by GOLD. The boys on Wall Street and the USA will HAVE to fight this one. However, the key is for the Japanese and the Chinese currencies to be backed by GOLD. The Chinese may well be on their way, the Japanese a concern as they have as of July 97 0.5% of the Bank of Japan resources held in physical gold.

Mr. Haggis,
I think, China was buying a great deal of gold and gold commitments ( paper gold ) thru a HK trader. They became much of the "not enough physical gold " problem for the oil/gold trade. China dumped much of this paper and continued to take in gold even today. Japan is a story of "no happy ending" as they are seen as "not aligned with Europe" or the BIS way of things. The EURO may send Japan down with the USA dollar! Asia will be lead by China, as they do understand a "Euro world". The ECB does know that "all holes in earth, lead to china"!

Thank You

Date: Tue Apr 28 1998 07:19
ANOTHER (??) ID#60253:

Mr. RJ,
As RJ, you are known here as a company, not a person! Were you a private citizen, your thoughts find backing from your name only! However, our words as known to all as the "ways of ones employer"! It is the way of the business world, yes? As a broker, you have chosen to represent a company on this forum. Does this company chose these words, and stand it's reputation "behind such"? In my world, no businesses would allow such public representation, as future and present clients would demand better control of thoughts. Indeed, send your writings to the owner of your desk, and ask, "what price do we demand for this advertising to the entire earth"?

Thank you

Date: Tue Apr 28 1998 16:59
ANOTHER (THOUGHTS!) ID#60253:

ALL:
I see the USAGOLD company has found the EURO important! One does ask, what will this currency look like? It is very clear, yes? See my Date: "Sat Apr 25 1998 22:55 ANOTHER ( THOUGHTS! ) ID#60253:", and look to the BONN report! There the Germany does offer one answer. If they do "transfer" their reserves portion in gold, and Germany does make up one third of the reserves, then the Euro will have 30%+ gold backing by nature of Germany alone!

Also, Italy has shown the market of gold will be brought to $360 by nature of it's marking to this level. They state this publicly! They also ask for 30%+, publicly!

Also, the Bank of England does prepare it's public for this new gold market! A market that will deny the repayment of gold loaned, at US$ prices that will keep Bullion Banks alive! The Euro will be strong, indeed!

Also, the UBS does ask, "what will the Cbs do with all the left over gold"? I ask, "what will the Germans do with all the left over US$"? Truly, with the Euro about to win the price of oil, gold will grow large in the dollar!

As the BO England gold does not come home, the US$ reserves must "COME HOME"!

Thank You

As soon as able, I will write of the BIS.

Date: Tue Apr 28 1998 20:41
ANOTHER (THOUGHTS!) ID#60253:

ALL:
My post today of the Euro outcome, "Date: Tue Apr 28 1998 16:59 ANOTHER ( THOUGHTS! ) ID#60253:", will be the last for a many days. Much is happening now and time does not wait. I hope to return before the changes , as a move above $360 will show the world that oil has moved for the Euro currency. We will know soon!

Thank You

Mr. sharfin, I thank you

Page Four - May '98 - Sep '98

April 1998 Editor's Note:

I want to first of all welcome ANOTHER to the USAGOLD web site and thank him for electing to post here. ANOTHER has made an important on-going contribution to the discussion about gold in recent months and it is good to have him back in action. That he has surfaced here -- at the USAGOLD web site -- takes a backseat to the simple fact that ANOTHER will once again be offering up his mysterious and cryptic brand of market analysis to the delight of his many readers. His analysis goes beyond the surface representations which we have come to expect from mainstream sources and goes to the core of what is occurring in the world economy. ANOTHER is a teacher, but in our short private correspondence, I have found that he is also a seeker of wisdom -- a philosopher who offers substantially more than dry economic theory. He is also a consummate gentleman. Whether right or wrong, the one thing we can say about ANOTHER is that he makes us think, and perhaps, in the final analysis, that is his most fundamental goal. So we move forward with these THOUGHTS!

I would like to deal with the question of ANOTHERs identity from the outset. At all costs, ANOTHER wishes to remain anonymous. His contact with me has been through a third party who describes himself as "the firewall that breaks the electronic connection from the source." I have made no attempt to find out who ANOTHER is, nor do I want to know who he is. After long consideration of this situation, I have come to the rock-solid conclusion that it is not only in ANOTHER's best interest to remain anonymous; it is in our best interest as well. So, please, in your liaison with ANOTHER (which will be offered below) and with USAGOLD, do not waste your time or ours by making inquiries as to his identity, country of origin, etc. We simply do not know, nor do we want to know.

I would also like to put to rest any notion that I am ANOTHER; that I am an agent of ANOTHER; or that ANOTHER is an agent of USAGOLD, Centennial Precious Metals, or Michael Kosares. There is no connection between us (as you will see in these first postings) except that USAGOLD is providing a forum, the way a newspaper provides space for opinion columns, and ANOTHER is simply taking advantage of it. In the end, as I said in the Introduction to "IN THE FOOTSTEPS OF GIANTS":

"(The actual identity of ANOTHER) might not matter. What does matter is ANOTHER's educational value to all who would take the time to sift through his (at times) arcane and cryptic, but always thought provoking, look behind the scenes of international finance. If his THOUGHTS! are theory; they are good theory. If they are speculation; they are reasonable speculation. If they are supposition; they are well grounded supposition. In the final analysis, ANOTHER offers one of the more plausible hypotheses for why the financial markets have acted as they have in the past few years, and therein lies his immense value to the reader no matter who he is."

I would like to clarify one other aspect of ANOTHER's postings at the USAGOLD web site. There will be two people posting on this page. The first will be ANOTHER himself. From time to time his associate will also be posting. He will be identified here as the Friend of ANOTHER. There was some confusion over this dual role in the earlier Kitco postings. This will hopefully clarify the matter. The writings of both authors will be posted as I receive them without attempting to correct misspellings, punctuation, grammatical and/or textual errors so that analysts, researchers, and readers in general can study the text in its original form.

ANOTHER has graciously accepted my invitation to entertain questions from the public. Another has asked that in the interest of time that only a few questions be forwarded so I will do my best to pick and choose the most salient. This forum is not designed for, nor is it intended to deal with, specific investments and specific investment strategies.

As ANOTHER would say, "We watch this new gold market, yes?" Yes, we will. There is no formal time-table for ANOTHER's postings, so stay tuned. I think you are going to learn from and enjoy these initial exchanges which were originally intended to be private correspondence. On behalf of both ANOTHER and myself, we welcome you to this venue.

Sincerely,

Michael J. Kosares/USAGOLD

5/1/98 ANOTHER (THOUGHTS!)

Mr. Kosares, This "new gold market", it is interesting, yes? The Euro is about to create "much stress" for bulls and bears, in gold! Perhaps, we discuss the past and the future? You have a "more private" e-mail address, as it be for eyes of three, yours, mine and Another.

Thank You

5/1/98 USAGOLD

Yes, I would very much enjoy a liaison. It seems that you and I have much in common in our understandings.

If the shorts have taken upon themselves to run down gold in anticipation of the European conference becoming unglued, then I believe they have miscalculated. I will say though that the politics could get very interesting this weekend in Brussels. If they go with the French candidate, he will be pro-gold. If they go with the German (Dutch) candidate, he will be pro-gold. By logical extension, if they go with a compromise candidate, he will be pro gold. So the politics may not matter for gold owners. Your read on this? As you have said, the important question is what will the policy be on the dollar?? As an aside, a knowledgeable friend of mine mentioned to me yesterday that the United States was able to maintain convertibility (!) with 25% backing. He assures me that this is true, but I have not had a chance today to check his assertion.

I look forward to discussing the past and future with you, as we do live in interesting times.

I remain your friend, Michael Kosares

5/2/98 USAGOLD

(After some prelimary conversation about communication difficulties)
It is very interesting that rumors were planted that Belgium was to be a gold seller. This happened once before when false rumors were planted through London Financial Times and Reuters about EMI selling gold. Do you remember? This time the rumor was planted at FWN. Soon there will be nowhere to plant rumors because there's only so many bridges that can be burned. Then the short sellers will have no place to go with their fiction. As it is financial journalists had better check their sources or suffer the consequence of being played for fools. Perhaps COMEX and LBMA need to clamp down on this sort of thing as well. I had heard from one of my sources that Merrill Lynch was a major player at the end of the day on Thursday on the short side, but as always, such things are hard to verify. It makes sense though. All of this runs together somehow. Also tragic the story about the chairman of the Japanese central bank??? What is going on there?? I do not find comfort in such news. MK

5/3/98 ANOTHER (THOUGHTS!)

Mr. Kosares, Your friend thinks much of this gold owned by the USA. It could be used to back the dollar up to 25%, no? Many come to this thinking and hold a secure thought, that as last resort, this gold will save the day! I think, many persons never gained the understanding that the American gold is kept by the "Treasury", not the maker of your money, "The Federal Reserve". It is there for good reason, as the present world currency system is not a function of American law! If the US were to place gold in the hands of the US/CB as reserves for the dollar, the BIS could claim it! It is, as a point of contention and of no real use. I think not a war would come of this claim, if it should happen! As the world currencies are now, a "new dollar" would be needed if gold were used as reserves! The present dollar would then, truly be as "paper for the wall"!

The urgent drive to create a new "reserve currency" began in the early 80s, after the last small "gold war". The road to making this new Euro did never include gold in large amounts, until the last few years! Even one year ago, the news would say, 5% or less. Today, we speak of a much greater amount! This is interesting, yes? The BIS did "hatch" this deal in a very late fashion! The future of the Euro was found to be "weak", as the Middle East oil imports onto the continent would continue in dollars! This was so from the dollar being made strong in gold. Gold priced in dollars at near production cost, offered a "no switch currency" position, for oil. This position has been unstable for the last year, and the alternative of a switch to gold was in progress! You have read my "Thoughts" before. Now the BIS does offer to "change the rules of engagement", a real reserve currency is offered!

Few do grasp what is happening and why! They think the holding of gold reserves by the Euro is of a little point, as to what good are gold reserves? One cannot use gold as Marks or Yen to intervene in currency market to support the Euro. My friend, the BIS has played the, as you say, "big poker hand"! The holding of large reserves by the ECB and the withholding of sales from the market will not only bring the end of the London paper gold market, it will, thru a high USD gold price, "make the dollar weak in gold"! From this position, the dollar will lose the "oil backing" from the Middle East! At first, all oil for Europe will be in Euro's, then all producers want "strong currency"!

There is more: Many say, how to defend Euro without much currency reserves? If gold go to many thousands US, what will be used to bid for Euro as defense? I say, these persons will find a problem on their computer screens! You see, the Euro will start as "nothing", no holdings of size, anywhere! The dollar is held as reserves as "the stars in heaven"! It is to say, "the dollar will bid for the Euro", not "the Euro will bid for the dollar"! All currencies will "flow into the Euro for trade". But, if the Euro becomes so strong, how to compete in world trade? It will be the price of oil that will make the "trading field" level! The soaring US$ price of gold will make even a 10% Euro reserve be as 100% today, in USD! Oil will become, very, very cheap in Euros and allow that economy to do well! Many other countries will see this and also want to join the new "world reserve currency" that has become"the new world oil currency"!

The politics of the ECB? It is as a "side show"? We watch this new market, yes? Sir, my words take time. I did receive two E-mail's from you.

Thank you

5/3/98 Friend of ANOTHER

The Belgium story was the usual rumor stuff. It still had weight from the old CB deals and everyone still thinks more gold is coming to the market. These days, the big brokers look for any sign of gold movements by Bullion Banks. They don't really know what's going on, but any amount of CB gold trades are interpreted as the next big sale going down! Oh, gold is still moving, it's just moving from one CB to the next. The story from the BOE told the tale for the benefit of the public, the Euro is going to bring London some big loses! Merrill Lynch, et al, don'tgrasp the gold valuations by the BIS. Gold is valued by the number of outstanding claims against it. Kind of like a house for sale with ten bidders. Each bidder thinks the house is, in the bag because they have a valid bid ticket. Each one thinks he can have the house at any time,even thought nine others want it to, because all I have to do is bid alittle higher and take it! Insane, but that's what is going on! Somehow, the BIS and the major private gold holders know the total claims, as does Another. The Euro group is going to force those claims into real bids instead of just claims!

They brought the Chinese onto their side by neutralizing the rest of the Asian competition. China hates Japan and would like nothing better than to watch them die as they stick with the US and the dollar. China also picked up huge gold holdings these last few years with the help of the BIS. They will easily fit into the Euro world and enjoy a massive trading block with Europe!

As gold is allowed to drift upward to the $320/$360 area, the real gold wars will begin where they left off in the early 80s. The paper gold market is still controlled by London, and we will see tremendous paper spikes up and down as this monster is killed! That's why Warren broughtsilver for BH, it won't move anything like gold percentage wise, but it's the best they could do in a public company. The poor traders don't think physical can move much, so they trade for a few dollars up and down. Michael, We are looking at a sea change of biblical proportions, that, if it can take down London, it will most certainly eat any and all traders. CPMs included! Not a good thought, yes?

Thanks

5/3/98 USAGOLD

Good evening, ANOTHER. I just wanted to say that I received your correspondence today and that I will respond hopefully tonight or tomorrow. Thank you for telling me it takes time to formulate your words. It is good to know that I am not only one who labors over the written word. I understand. My questions, given the important subject matter, will take time as well. Thank you for contacting me, Michael Kosares.

5/3/98 USAGOLD

Dear ANOTHER & Friend of ANOTHER, I would like to begin by thanking you for taking the time to send your thoughts. They are very interesting to say the least. As you know I too believe that the introduction of the Euro is a seminal event -- one that will change the world financial landscape. I will try to ask questions in a logical framework for my own benefit as well as perhaps to help you to construct and add to your own thinking on these matters.

I would like to start with this because it troubles me at the moment: I have been working on this euro problem for some time -- trying to make Americans more aware of what the events you so eloquently describe will mean to their financial well-being. As I am sure you are fully aware, the American media has done a very poor job on these matters of earthshaking importance. I recently read a New York Times opinion piece on the subject and was surprised to see that the word "gold" did not even appear in the text. I was interviewed for a national network radio program recently and mentioned in our conversation that I thought the introduction of the euro would be viewed by historians in the future as the most important event of the last quarter of the 20th century (not the sexual antics of our troubled president). The press is only now beginning to understand the import of these events but still they treat it with surface analysis. With that as background, let me ask my first question and it is an important one:

It seems that both you and your friend believe that the world is splitting up into currency/trading blocks -- much as the world did for both World Wars. There has been much discussion around the world about the imposition of a NEW WORLD ORDER and international one world government. Simultaneously, we see another, opposing force at work -- regionalism, nationalism, even tribalism. What do you make of this? Is the euro a child of the forces of the New World Order, or the forces of regionalism/nationalism/tribalism? Is Europe (led behind the scenes by the BIS) an opponent to the United States? If so which countries are in which camp? Your associate seems to feel that Asia is split between the United States which has Japan as an ally, and Europe which has China as an ally ( a notion I found particularly intriguing). Where is Britain in this? Japan? And most importantly, the Gulf States, particularly Saudi Arabia?

Along these lines, I too believe that currency movements will flow through Europe because the euro currency will be gold backed. Where does that leave Japan with over $200 billion in dollar reserves, let alone its massive U.S. Treasuries' holding? Isn't it true that Japan imports nearly 100% of its oil? If what you say is true about future oil payments they will be forced to their own gold backed currency along the lines of Europe, and in the process unload the dollar as unwanted, unneeded currency. All of this, needless to say, is very bad for the dollar and perhaps you are right: A new, gold-backed dollar might be the necessary result. Your associate says that BIS helped China increase its gold holdings. Please tell me what the source of that information is, or is it simply a speculation on his part. One other item you might clarify for me is "Who is really behind BIS? The Swiss? The euro central banks? Who does BIS really represent? Why was Saudi Arabia just included in BIS? Has Saudi Arabia gone with Europe?

Please speak to these issues so that we might proceed.

I do not mean to sound naive but much of this is new to me and I would like to know who the players are and where they stand vis a vis the United States.

I remain your friend,

Michael Kosares

5/5/98 ANOTHER (THOUGHTS!)

[USAGOLD questions in italics]

Mr. Kosares,

A few thoughts for you, as the questions are asked?

** It seems that both you and your friend believe that the world is splitting up into currency/trading blocks -- much as the world did for both World Wars. There has been much discussion around the world about the imposition of a NEW WORLD ORDER and international one world government. Simultaneously, we see another, opposing force at work -- regionalism, nationalism, even tribalism. What do you make of this? Is the Euro a child of the forces of the New World Order, or the forces of regionalism/nationalism/tribalism? **

Sir,

I would say, "Old World Order" to return. To understand/explain better: " A very easy way to view this "order", would be to simply say that the American Experience is reaching the end! As we know, world war two left Europe and the world economy destroyed. Many thinkers of that period thought that the world was about to enter a decades long depression as it worked to rebuild real assets lost in the conflict. It was this war that so impacted the idea of looking positively toward the future. The past ideals of building solid, enduring, long term wealth were lost in the conception of a whole generation possibly doing without! In these fertile grounds people escaped reality with the New Idea of long term debt, being held as a money asset. Yes, here was born the American Experience that comes to maturity today.

New world order, regionalism and tribalism are but modern phases that denote "group retreat to avoid paying up". The worldwide currency system is truly a reflection of an economy built from war, using the American Experience, the US$ and the debt that it represents. But, for the American dollar to continue as the representative of the global financial system, in the form of being the reserve currency, maturing generations of all countries must accept it, and the tax on real production it clearly imposes! In the very same mind set, that people buy the best value for the lowest price (Japan cars in the late 70s), and leave an established producer to die, so will they escape the American currency and accept any competitor that offers a better deal. Because we are speaking of currencies here, the transition will be brutal!

As you ponder these thoughts, consider that; all economies today are truly equal in production as the exchange rates are the manufactures of profit!"

** Is Europe (led behind the scenes by the BIS) an opponent to the United States?**

Sir, Yes, but not in the ways of war, as it is in the feelings of "pride" and "we go our own way". The downfall of the Russia, did allow for the Euro and all that it will build. They now see the debt of the US$, as a reserve money can be escaped! As even the US citizen will leave it's own workers to die as products are purchased "overseas", how much less will the world also flee the dollar! Opponents? No, I would say they are learners of the "American Way" as they embrace the "American Idea" of a "free world market economy".

*** If so which countries are in which camp? Your associate seems to feel that Asia is split between the United States which has Japan as an ally, and Europe which has China as an ally ( a notion I found particularly intriguing). Where is Britain in this? Japan? And most importantly, the Gulf States, particularly Saudi Arabia? **

Sir, I feel he is correct in this thought. Europe does grasp for a relationship with Asia as the US did have with the Japan. It would build a mighty economy on a foundation of oil and gold as backing for new money. As China and Arabia was once a part of the Europe economy, in a small way. They may now return with no fear of Russia. Britain? A lost nation. Japan? This one is "of the American Economy" and is to live and die by it! They will seek your Alaska oil before loss of face with gold. A dead Yen be a dead Japan.

**Along these lines, I too believe that currency movements will flow through Europe because the Euro currency will be gold backed. Where does that leave Japan with over $200 billion in dollar reserves, let alone its massive U.S. Treasuries' holding? **

Perhaps, they be like Korea? Rich in paper until the world says, "this paper, it is not good"!

***Your associate says that BIS helped China increase its gold holdings. Please tell me what the source of that information is, or is it simply a speculation on his part. ***

The BIS is the gold broker for all interbank sales/purchases. Bullion Banks are for sales to other entities. I think, at first, China was leverage against the oil producers. Then Arabia was allowed into BIS for Euro.

**One other item you might clarify for me is "Who is really behind BIS?**

Perhaps, "who control them"?

**The Swiss?

Yes.

**The eurocentral banks?

Yes.

**Who does BIS really represent?

"old world, gold economy, as viewed thru modern eyes" or " way to move from US$ without war".

**Why was Saudi Arabia just included in BIS?

answered.

**Has Saudi Arabia gone with Europe?

Yes.

Sir, there is much more to this, but we talk over time, yes? I will be away for perhaps ten days. We speak again.

Thank You

5/5/98 USAGOLD

Dear ANOTHER, my great respect for you has just deepened further. Have a pleasant ten days and I will consider your words. Yes, we will talk over time. Thank you Mike Kosares

5/11/98 USAGOLD

Dear ANOTHER:

I read your last correspondence with a great deal of interest. One question that immediately comes to mind is what exactly do you mean by old world order reasserting itself? The old European aristocracy? Is the political/economic power in Europe as it was prior to World War I? Also, if Europe undermines U.S. does it not also undermine its own security? Is not the Russian bear far from dead but simply in hibernation? Is Europe able industrially to gear up its military defense industry quickly enough to replace U.S. protection? I would think that the same applies to the Gulf and Saudi Arabia. Iraq and Iran are not friendly countries and Europe cannot protect the region from unstable societies. One would think that the U.S. would protect corporate interests in that part of the world no matter what happens in Europe, but if America goes bankrupt it will have other concerns.

On the subject of gold: Do you have any information as to the backing on the euro percentage-wise? Does it actually make any difference if its 10%, 20%, 30%? Or is the psychology the important factor? Any gold backing would make the euro more appealing than the dollar.

This morning a Portuguese central bank governor implied that gold was drawing such a nice interest rate that Portugal would probably would not sell gold. Implied in that statement is a willingness to lend. What would happen if borrowing entities suddenly found themselves unable to pay back their gold loans. Wouldn't this undermine that nation's balance sheet not to mention their sovereignty? Do you know of any instance where central bank gold loans have gone bad? And by the way, just what do you as a central banker take for collateral on a gold loan? Is not gold the ultimate, liquid collateral? Do you take back a piece of paper representing the right to future gold delivery? What good is that. To me it is pure folly. I've never understood this idea of a gold loan from a practical point of view? By its nature, it must by necessity be an unsecured loan.

Along these lines I have one more related question, then I must go. How long do you think those playing this game of paper selling can continue? We have heard for many months that there will come a time when physical demand will force the shorts to bid up the price to cover. It has not happened. Why not? Can LBMA play this paper game forever? Are you and I underestimating their ability to play the magician in this regard and keep us all mystified?

Though we are in a new market because of the euro, there is still much of the old because of the Bank of England and LBMA -- do you agree?

Thank you

Michael Kosares

5/21/98 ANOTHER (THOUGHTS!)

Mr. Kosares,

I offer simple thoughts for hard questions.

"And by the way, just what do you as a central banker take for collateral on a gold loan?" (USAGOLD question)

Sir,

I think, the currency of a country does no longer hold "backing". This term, it is used often, but is not correct. Today, all modern money does have "reserves", and such is used only for "the dirty float" in currency warfare. As in war, the larger and better equipped army in "reserve" does rule over the lesser force. Perhaps we should think in this way: in "cold war" of modern exchange rates, "digital currencies from reserves are used", however, when "hot war" of major default does begin, "nuclear weapons of GOLD" are deployed!

As in real war defense, of today, some countries hold a much lesser army, and depend on "the alliance" with other stronger nations to defend them. Such it is with the currencies! Many states hold but a few "digital currencies" as reserves for currency wars and see no need for "gold nuclear weapons". They sell off these weapons and do join "the currency alliance" of stronger nations. We see this in Europe, yes?

Time does record, that many young persons do mature without a history of "currency defeat" in money wars. These same do attain positions of authority with respect, to handling the currency "reserves" of a nation. It is in their "education" that the private citizens do lose much wealth. We proceed to such a time today, as gold loans hold only paper collateral! The motives of all Central Banks be not the same, with respect to "gold loans". A small number do travel the road of "monetary union" and sell gold as a commodity for funds to reduce debt. These officials thatsell for this purpose alone will be viewed as "much the fool" by voters, as gold does become a "great value" in the future. Some CBs also "lend" gold for a small return, as they see little difference in this metal to holding the Yen reserves and also receiving , perhaps 2%! These Central Banks place the gold with a private Bullion Bank. The gold is sold and the proceeds wait in this BB and draw market interest. The CB does have a "letter" claim to this "proceeds" and views it as "the same" as other "lent out currency reserves". The BB uses this "proceeds" as collateral to create contract with gold mine for future purchase of "new mined gold". The CB does also "attach" this "future gold" and views it as "lent out bullion reserves". This "attach" , it could claim the entire assets of mine in default, yes? Perhaps, we can see that "default" can also occur from other than "low gold price"? In currency wars of future, workers walk from doing job, as in Indonesia? A mine of few workers has little value, but often we see banks do claim "things of little value".

The key for this "new gold market" is found not in the process of gold loans and sales, but in the "who is the new owner of this metal"? Noone did see clearly, "the other side of this". Always the view was, "see how the fools sell the gold and drive price low", not "who is buying all of this new supply at such cheap prices and giving up interest on currency also"? One should consider, "how much currency has flowed thru gold" over these past years! It is a great deal of wealth! Can not one see the clear view, "has not gold made the dollar strong as world reserve currency"? This happens in a time that all say the dollar would fail! Perhaps, "this new gold supply", it was for the purchase of "time".

If oil was about to go off the "dollar reserve standard" and allow pricing in all currencies, and "the physical gold currency" was to be the most economical way to purchase, then I would say, "time was a valued purchase", yes? It is in this "purchased time", the world finds the creation of a "new reserve currency". The dollar, is today, strong in nature of a low gold price. Tomorrow, it will be the Euro that will find strength in a low gold price! Perhaps, these dollar "gold loans" will be called in to become "Euro gold loans"? "Gold priced in the thousands of USDs does not change this currency, it changes your perception of wealth"

Thank You

Another

5/22/98 ANOTHER (THOUGHTS!)

Mr, Kosares, I offer these replies to all. Send the next group as able. Thank You

From Richard Burke: Another, thank you for your "Thoughts". At this point I would appreciate your opinion as to whether the following is what you mean about the above relationships. Assume that one $US = one $EU to start and that gold is $US300 and oil $US15. Then, 1 oz of gold will buy 20 bbls of oil. You say gold will rise very much in $US. Say gold rises to $US900, but is still $EU300 (or will gold rise but rise less in $EU because of the gold backing?). Then, oil will be $US45 and $EU15. Europe as you say will be able to developits industrial base on cheap oil while the US is stuck with high priced oil.

ANOTHER: Mr. Burke, You have written the general outcome! Also, note, three $US would then equal one $EU. However, the difference in gold, as expressed in each currency may be much, much greater! I would not say, the US would be stuck with "high priced oil", as a new US dollar could be formed much fashioned from the Euro. If US gold is "revalued" upward to the new true level, what persons, worldwide may be stuck with would be the "old US$" and all that it could not buy! Perhaps shareholders of gold mines will push for recall, as most gold loans today are in the US$ reserve currency! I think, much will be the battle in this area as investors think first to buy physical gold, not gold in ground contracted for delivery and payment in future bad currency.

It is to say, "the foot will be in the other shoe", yes? Thank You for this thinking.

From Johan Campher: It is only very recently that I started reading the discussions on the Kitco web site. I then picked up something about ANOTHER moving to the USAGOLD web site. This is how I discovered your site. Unfortunately, as a relative uninformed, I find reading ANOTHER'S thoughts very difficult,because of the many abbreviations and acronyms. For you, and others in the USA/Europe it might be common knowledge. For some, not so common. For instance, what is the BIS? Could you ask ANOTHER to spell out the full name with the abbreviation in brackets before using it further in the text? ... or is there a web site where all the abbreviations could be found? How about a list of important abbreviations your own website?

ANOTHER: Mss. Campher, Bank For International Settlements! The Kitco group has much on this. I do think many there, that I spoke with, have better minds than myself. They do much to search out the truth! I will have these proof- read in future for better understanding. Thank You

From Polloa: All of these movements and realignments depend upon an electronic system or systems to support the transactions. Yet the Year 2000 problem seems to threaten the entire world's systems. ANOTHER, has this been discussed or acted upon that you know of? And if so, what actions have been taken?

ANOTHER: Polloa, I think, many will "cross this bridge at the last moment". It is a well known, considered problem that, if not fixed, will take the "Western World" back in time many years. Perhaps, luxury will be lost, and many will live as "third world countries". Some may find this a "better outcome" in life? However: Our world economic system does survive many problems. Humankind must battle the war and distrust with great intensity. Always, we find, it is the honest person of simple means that leads the lost! These same citizens will find a security for the future that comes from the past. History has shown the physical gold does hold true against all odds. If gold can stand against war, it will carry your wealth during the time of Y2K.

Thank You

From Tom Young: Also, I found many of your prior posts to be, well, lets just say in need of interpretation. Your statements on $30,000. gold are improbable but not impossible. I agree with you on holding physical. As I have said so often I will judge your words next January. Not that this "judgment" affects you in any way. It is just my way of saying I don't disbelieve your thoughts or words and will let time tell if you speak true or not.

ANOTHER: Mr. Tom, Above, is only part of your questions/statements. I add this: All of life is "improbable but not impossible" and "in need of interpretation."! I offer these "Thoughts" to "open minds", such as yours, for "consideration and discussion". It is the "American Way", yes? This be not a good world, where secrets close doors and hide truths. I do feel ALL persons are very intelligent, and can understand the road maps of life. For many, "the answers are not found at the end of our travels, but along the trail we walk together"! We watch this new gold market, together, yes? Thank You and all of Kitco

From Lyle Montgomery: ANOTHER, If there is substantial backing of the Euro by physical gold the $US must certainly suffer. Enough physical is available if interests are pooled to make the Euro the preeminent money. Might this not precipitate a severe reaction from the US - possibly even covert action to in some way minimize potential backing by gold?

ANOTHER: Sir, Yes. I do look for much destruction of the gold market as this progresses. I think, much of this "fight of money" will happen between 1999 and 2000, as the "gold trading center" in the middle east will be completed by then. If the Euro does fail, gold will become the "world oil currency". We do know this full well, "the Central Banks will horde all gold and buy any offered if this new European currency does not work" and "debt currencies fail". If this does comes, no paper asset of world economic system will survive, nothing! Not a good thought, no?Thank You

From sharfin: You will have to do better than this. I have read all of another's writings and what I read now is a sham.

ANOTHER: Sir, Thank you for reading my thoughts, as I do read yours! As in all life, "events make truths", not the words of Another. "time will prove all things" Thank You

From PH in LA: As the Euro is phased in, how will individual member currencies fare in relation to the dollar? Will a fall in the dollar result in holders of European currencies, real assets (such as European real estate), and/or bonds (in euros) reaping a windfall vis a vis the dollar? Or will gold be the only way for Americans to safeguard assets in the coming turmoil?

ANOTHER: Sir, This change in "World reserve currency" will be "the unfolding event of our time"! As in conflict, the deployment of forces/assets is never a final decision! But, for persons of simple thought, such as I, we do well to "follow in the footsteps of giants"! Today, this trail does show deep prints from the weight of GOLD! For myself and my country, I stand with the proof from the past, I stand with gold! I thank you for your effort, "for all your days, walk tall with wealth"!

5/26/98 ANOTHER (THOUGHTS!)

Mr. Kosares,

I know you have also seen where the Rothschild prepares computers for a change , perhaps to Euro market gold! Much will be the commissions earned in this area. Some investors say "gold loses face in low price" and "gold is a dead asset". I say, a travel to London will offer much education, as the "city" trades more gold than exists!

Sir,

I offer this for consideration by all.

Do you know the value of gold?

From the day of our birth we are taught to value all things using the one factor alone, currency! Can one contemplate the value of all possessions in other terms? Do you not have to think first as to "how many dollars is that worth" then "how many dollars is this worth" to compare two items? If it is deep within our mind, that we can know value only in terms of paper, to this I ask, can one know value at all!

The Western mind does focus on "what I buy today for the lowest price". Yet, in this modern world economy, the lowest price is always the function of "the currency exchange rate"? The Yen, it is compared to the dollar today, and used to purchase goods. One year later and the Japan offers these goods for much less, as the Yen has fallen to the US$. The currency value of this purchase, was it "true " today or a year ago? Understand, all value judgments today are as subject to "exchange rate competition"! It is in "this exchange rate valuations" that the private citizen does denominate all net worth! A safe way to hold the wealth for your future, yes? You should ask a Korean or the Indonesian ?

One should grasp that "today, your wealth, is not what your currency say it is"! In this world, paper currency is for trade, only! It is for the buying, selling, earning and paying, not for knowing the value of your family holdings! Know this, "the printers of paper do never tell the owner that the money has less value, that judgment is reserved for the person you offer that currency to"! Again, I ask, how can we know a true value for our assets, when they are known only in currency that finds it's worth, as in the exchange rate for another currency?

Many will "think long and hard on this", but will find little reason for this position. For it is in your history to know only "things valued in paper terms". Some say, "I hold investments of great increase these past years, and am much ahead of the inflation, if it should come". I say, "your investments, worldwide, have moved little, as it has been the currencies that denominate your assets, that fall a great deal". The price inflation that comes, it is larger than your vision can see! Your past, holds little of knowing value outside of currencies, this does block the good view!

We watch the approach of this change, and discuss it, together, yes? It will truly be "a gold market as none before".

There is more: Today, the world reserve currency holds the exchange rate of one dollar equals one three hundredth of an ounce of gold! It is this rate, that makes the dollar, not as the Indonesian currency. Perhaps a secure thought? However, even this 1/300 rate is also subject to "exchange rate competition"! This new rate was purchased by the acceptance of the "new paper gold" as equal value to "the physical gold"! This large, new paper gold market was created to increase the supply of "traded gold". The physical gold supply alone could not be increased to bring the dollar into the mid to lower 300s exchange rate area, there by making it "strong in gold". But, as in all new markets, for the "traded gold arena" to accept a "paper gold item" in great amounts, it required new colatteral/assets to give this paper item "integrity"! That "integrity" was found in oil!

Some say, "gold fall because noone was buying it". I say, "gold fall because many were buying it"! They buy as the "trading market" was made "much fat" with added paper! Understand this: The US$ price of gold could only fall if a market existed for paper gold priced lower each time of offer! If the price did not fall, this paper market "could not function" as "it would not be profitable to the writer"! It was, for many years, in the good interest of all, for the dollar to find a gold price close to production cost. That time has now much passed!

One day soon, this "paper gold item" may lose it's "integrity from oil" by way of "competition" from a new reserve currency! In that day, "paper gold" will rush to become "physical gold" as "dollar gold contracts" rush to become "Euro gold contracts". You see, the value of the gold lost from the Euro CB sales will return in the form of a "Euro strong in gold". The "gold reserves" held for the EURO will offer strength, but it will be the total destruction of the dollar gold market that does make " this currency go home"!

When the future comes, and one holds asset values in dollar terms, many may discover, there wealth was not as this currency said it was! In that day, you will know your assets, as expressed in the real money of our fathers! This new dollar/gold exchange rate will end your search for the

"the true value of gold"

Thank you

Another

5/27/98 Friend of ANOTHER

Michael,

This article (see below) puts a different light on the Euro. I think a major effort was underway for many years to unseat the dollar. It was only after the gulf war politics that the EURO group saw a way to use gold to draw in the oil producer currency backing. It was clear that the dollar was going to someday fall from reserve currency status because of it's compounding debt load. With nothing to replace it, gold would become the world oil currency, as Another says.

Initially, they built the Euro with little talk of gold, all the while building a paper gold market that is dollar settlement based. By increasing the Gold Trading Market with paper gold, it not only drove the gold price down, but gave these contracts credibility as they could be settled in a strong dollar via gold. The hook came when they suddenly wanted gold as part of the reserves for the Euro! Now the BIS just stops supporting the London market with Central Bank gold loans and sales. By the time for the Euro to debut , gold starts to rise through the $360 area, there by breaking the entire dollar based paper gold market! Every oil state, and anyone else that is holding paper gold, will try to first exchange it for physical. After that guess who will be waiting with a brand new hard world reserve currency, ready made for converting dollar gold loans into Euro gold loans!

The dollar will not necessarily be destroyed by inflation at first, but you can be sure it will collapse in terms of gold. In this process, if everyone try's to spend their overseas dollars (presently Eurodollars), the US will no doubt invoke foreign exchange controls and most likely create a new currency. I think, that's where ANOTHER gets the $30,000+ business for existing (replaced) dollars and I don't doubt it one bit. This is why everybody keeps getting lost in the falling gold price. They keep working it like it's the old physical market years ago. It's not the same. Anyone that try's to leverage it in any way will just keep getting pounded as London prints gold for all their worth until the Euro takes effect. I think, sometime in 1999 or a little later, physical gold will stop all trading on US$ markets, it has to, no other way! The Euro gold market will exist, but selling it in Euros will, no doubt be an interesting process. But, a much better prospect than trying to convert mining shares or any other paper gold contracts.

To the best of my knowledge, this is my interpretation of the current market.

Best Regards

Friend Of ANOTHER

ATTACHMENT:

FORMER BRITISH DEFENSE SECRETARY WARNS AMERICA ABOUT A UNITED EUROPE
(As summarized by Friend of ANOTHER)

(May 27, 1998) In a speech yesterday at the American Enterprise Institute, a conservative think-tank, former British Secretary of State for Defense, Michael Portillo, warned that European monteary union and a unifed European foreign policy will erode the Amerian alliance with Europe. He said that a united Europe will benefit neither global security nor free trade saying that its future foreign policy could lead to the emergence of a bloc in opposition to the U.S. He said, "What I really want is for a debate to emerge in the U.S. about what the European movement is really about. Americans essentially are comitted to global free trade, while many in Europe are not. And I think they need to be careful about whether a common foreign policy in Europe might lead to a silencing of the British view, the emergence of a consensus to do nothing, and the emergence of a distinct view that there was a third way, a new and positively anti-American way."

5/28/98 USAGOLD

Dear Friend of ANOTHER: I didn't know the oil states were holding gold paper. I thought they were in physical metal. Reports show Saudi Arabian physical demand skyrocketing. Also do you have further reference on the Portillo comments? By the way World Gold Council recently published a graph on the level of estimated forwards and deferreds (in London) at over 2000 tons? Is ANOTHER aware of this figure? The name of the report for your interest is "Utilisation of Borrowed Gold by the Mining Industry" by Ian Cox and Ian Emsley. Cox is out of Samuel Montagu; and Emsley, Anglo-Gold. Personally, I think the bullion bank scheme is running out of gas simply because they are having a difficult time talking central banks into mobilizing. When the euro comes on line, we will know what is going to happen with reserves. Some say that mobilizations are already banned, or at least hampered through Maastricht. I would also like to find out more about the Swiss operations. Do you have access to the bill passed by the Swiss legislature yesterday?

Thanks

Michael Kosares

6/2/98 Friend of ANOTHER

Michael: The article was from a conference that was just completed. You may contact the institute or visit their web page: http://www.aei.org/

This item came from the web site:

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

THE NEW ATLANTIC INITIATIVE

America and Europe: Will European Monetary Union Fracture the Alliance?
By the Right Honorable Michael Portillo

Wednesday, May 27, 1998
5:30 p.m.
Wohlstetter Conference Center
Twelfth Floor, AEI

European elites are embracing federalism and European integration as the primary means to ensure post-cold war security on the Continent. Michael Portillo argues that this is the wrong route. European integration is being designed in such a way that it sharply reduces democratic control, stirs up nationalism, and endangers the transatlantic link. Only a renewed and revitalized atlanticism will, in Mr. Portillo's view, guarantee European security. Mr. Portillo was secretary of state for defense in Britain from 1995 to 1997.

Introduction: Jeane Kirkpatrick, AEI
Speaker: Michael Portillo
Comment: Richard Perle, AEI

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

Also:

I have a person in Washington that could find out more about this. However, I think this excerpt (I sent you) is open knowledge. It just has a nice connection to European thinking in regards to the new currency. The Middle Eastern bullion holdings are well hidden from official records. They control the gold market through the London/European gold paper markets. It was the BIS that handed them the market when it created the Central Bank lending deals. They were the prime buyers right off the bat! I didn't understand until about a year ago, how they were gaining control without cash. The answer is they don't buy the paper gold with cash! The Bullion Banks take oil reserves as collateral for it. The money that ends up in the account for a typical mining company forward deal is really a loan against oil in the ground. That's why the CBs lend the gold so cheap, it's not for the mines, it's for the producers! Now you know how we buy cheap oil prices. The world thinks the CBs are doing this for a 1% return. Truth is, the mining industry is going to pay full interest in the end. It's one hell of a complicated affair, with the politics and all. Needless to say, as the events open up and expose some of this, the public is going to be very interested. As for the SNB selling half of their gold. If they do, it will be for Euros, you can bet on it!

Thanks

Friend of ANOTHER (FOA)

6/4/98 ANOTHER (THOUGHTS!)

Mr. Kosares,
I wish to thank you for your effort in providing this forum. In this format, we explore this new gold market from another view. Perhaps, many will find they have considered "these changes" before they occur. Mr. Johan Campher had asked for improved "abbreviations and acronyms". Starting today, I hope to speak more clearly.

Thank You

Reply:

From George Cole:
ANOTHER: On Kitco some time ago you said that the BIS was seeking to nudge the gold price back into a $320-360 trading range. If this is so, why has the price fallen back to $300 after briefly touching $315?

Mr. Cole,
This question, it is important as many did not grasp the impact of the last Belgium gold sale. In the past many of my "Thoughts" were offered for open discussion and debate. When I posted that "a large purchase was in progress" and "we should see this in several days", the intent was to focus persons on the public announcement, soon to be released. I also offered that we would see $320 - $360. I add to this, for your question.

Many, not all, Central Banks offered gold loans in support of the expanding paper gold market. This major new trading market could not exist without some "addition" of existing gold, placed on the market from time to time. This addition of forward sales to the "existing physical gold market" expanded the "gold trading arena" .

Because the Central Bank loans and sales offered "credibility" to any outstanding "short gold paper", a large derivatives market was built around this "gold trading arena". The CBs, along with the Bank For International Settlements (BIS), wanted gold to fall into the low to mid $300 range as this made the dollar (US$) strong in gold. It also made much of the "old" gold paper "good for delivery" as the Bullion Banks could supply the physical by purchasing on the "outside market" at lower prices! Had many of the early paper buyers (year or so ago) called for delivery, there be no supply as the physical market was spoken for. A falling dollar gold price made good on past paper deals as existing private supply was made free. In this light, I think few do truly understand how much trading in done in the world "gold trading arena" by LBMA! To understand this, is to know, "the CBs could never supply it! To think that gold is not wanted or not traded or "is a dead asset", it does become the foolish thought, yes?

I think, over time, the gold derivatives market did "break" the control of the BIS. Gold is held by many world class entities, as a capital asset. These "Giants" did understand the purpose for $350 gold. In this range, the gold mining industry and many capital reserve gold assets would survive. Gold below $300 was not wanted, as even the BIS would be forced to move with the price much below $280. The last small gold war ended in the early 1980s, as the choice was to use the US$ or go to a gold based economy. No other reserve currency existed, and gold lost the war as all continued to buy dollar reserves.

Today, a new currency is formed. It offers a way to break the dollar valuation of gold without the total destruction of worldwide currency markets and economies. In time, oil producers can offer their low cost reserves at true valuations, that support industry and commerce in exchange for a revaluing of real money, gold, in a real currency, Euros!

The Belgium government did state " The National Bank does not intend to sell any further gold and this sale completes its programme of gold sales which started in 1989". Mr. Cole, in this statement you may read, that the "paper gold" of "the modern gold trading arena" will no longer be supported with "Euro Group Supply"! They did also state "After the start of European Economic and Monetary Union (EMU) in January 1999 Belgium will hold close to 300 tonnes of gold which is expected to be equivalent to around one third of its external reserves"! Sir, you may also read this as, once the Euro is formed, all "new" sales of "external reserve gold" will be done in: EUROs! They will have little use to sell gold for US$ reserves as they will have "much of that currency" already.

As events progress, all/most "external gold reserves" of the "Euro Group Countries" will move towards the ECB and be settled in Euros. As gold will always be traded and denominated in the world currency that settles oil sales. Even Swiss gold will be sold to European Central Bank (ECB) for Euros for defense against the falling dollar. Yes, most dollar derivatives will fail as "worldwide gold trading in US$" stops from "contract default"! Will the dollar be weak in gold? Indeed, it may not exist as a market for gold!

The Belgium CB does also state "gold will continue to play a role in the international financial system"! Some say these CBs are fools because they lower the value of their own reserve asset. This is done as a new world reserve oil currency is produced. Perhaps the perception of value is an ever changing, fools game? And to this I ask, what kind of fools are we?

Yes, the Central Banks now look for $360. But in time, "that too will pass as swift clouds on a moon less night"

Thank You
ANOTHER

6/14/98 ANOTHER (THOUGHTS!)

REPLIES:

From Lyle: Another, Much is beginning to be seen about the effects of hedging on the spot price of gold - to be more specific, that companies like ABX (Peter Munk) have destroyed the market. To be enabled to create a successful hedging program the cooperation to the holders of gold (CB's)must be necessary. Two questions

1) Is collusion possible (actual?).

2) Will non-hedged companies like NEM ultimately be gratified by their refusal to participate?

ANOTHER: Sir, To understand this process, one must see the mining companies for what they "do", not what they "are". These companies are in business not to make "gold", but to make "profits" in terms of currencies! As such, when currencies fail, the business and the profits do become destroyed, in shareholder terms. The modern "hedge" is a very much "all paper" operation. The mine does never see or touch the actual gold that is involved, nor can they know if physical gold was "actually sold". Find me the names of new physical gold buyers and show me here! I think you will look long and hard for this, without success, as much of this gold does lie "very still". After long search, what you may find will be a "paper deed" to gold, that is many times over "encumbered" from much use and travels through foreign hands!

Is collusion possible (actual?) In much of the world, what you call collusion, is "good business". However, on the producer side, this "good business" is to produce profit. On the lender side, the purpose is for changing currency valuations.

Will non-hedged companies like NEM ultimately be gratified by their refusal to participate? This question, you ask it with the mind of the past "physical gold market". Many investors buy "gold paper investments" today with the thought of the past as to be like the future. The conclusion of many years of gold manipulation will not offer the currency gains one seeks. Today, the entire "gold trading arena" requires a physical market and a much larger paper derivatives market for operation. If a mine sells only physical for currency profit, they will be hurt as the "physical settlement for US$s" market is destroyed! If they are hedged for currency profit, they will be hurt as the "derivatives settlement for US$s" market is destroyed. I think, perhaps, only physical coin and bullion dealers, that can convert to settle in Euros will still find a trading market. Please understand, this "gold trading arena", both physical and paper, will be subject to "GREAT" surges, up and down, in US$ pricing. The removal of the political "world dollar settlement" price of gold will revalue this asset in terms that noone of "western thinking" can understand. This "gold war" will leave a great landscape of burned and destroyed "gold companies" along with the investors who "stood for battle without real metal" as a shield!

Thank You

From PH in LA: Dear ANOTHER and Friend of ANOTHER, In Friend of ANOTHER's most recent post it was stated, "if everyone try's (sic) to spend their overseas dollars (presently Eurodollars), the US will no doubt invoke foreign exchange controls and most likely create a new currency." Can you clarify this? What do you mean by "everyone trying to spend their overseas dollars"? By buying gold? Also, what form would "currency controls" be likely to take? I assume that limits on dollars wishing to return to the United States would be set. Would limits be likely for US citizens? Would limits take the form of heavy taxation? Or would the "new currency to be created" take the form of distinguishing between domestic dollars circulated within the US and the eurodollars presently held as reserves by CBs?

In today's (June 4) post ANOTHER says that the market for gold in dollars might cease to exist. Does that mean that dollars would have to be traded for Euros before gold could be bought? Or conversely, would selling gold mean exchanging Euros for dollars after the sale? Or is he alluding to US government confiscation of gold (and silver?)? Or is this where currency controls would take effect? Restrictions (taxes) on dollars returning to the US from sale of Euros. Surely there will exist a market on which Euros can be exchanged for dollars for use in international trade, etc.?

Sincerely, PH in LA

ANOTHER: Sir, You ask, What do you mean by "everyone trying to spend their overseas dollars"? It is a very large question, yes? A simple answer would be: What else can a person of small wealth do with a currency but "spend it"! Outside your country, small persons, large traders and Central Banks hold the dollar, not for spending, but for the "reserves" and "store of value". It is held in much more quantity than exists inside your borders. Many of these persons think and know, that in last resort, the dollar, it can buy "oil" or "Gold" anywhere in world. In the real world, this is the "real backing" behind the dollar held in many lands! Today, the same "system" that makes this dollar "strong in gold and oil" does destroy the native currencies of many peoples! You may list for me, as perhaps the Canada, Mexico, Japan, Africas, all of Asia, come to mind! I ask you now, what gain these countries to maintain a "system" of "currency reserves", that breaks the local savings and economies? In a world that finds many nations "hungry" for a "reserve currency system" that correctly values "gold and oil" for the benifit of "local currencies", this Euro will change many thoughts.

In time, as the dollar does lose it's backing of oil and gold, thru a much higher price of these items, many "foreign dollars" will find "no other worth" but for "the spending of them for goods". The US economy cannot stand for these many digital units to "come home", as much will be the inflation should this result! I think, in this time, the great minds of your treasury will find many ways to "change the rules"! PH in LA, you have offered "some food for the thought" and "consideration" for them in your post. We watch this as it does progress, yes?

You ask, "Surely there will exist a market on which Euros can be exchanged for dollars for use in international trade, etc."? I find, the politics of gold will mature much differently than many feel. The transition from dollar reserve currency will bring a tremendous economic change for the country that issues this currency and it's world debt. In that time, the government will "encourage" citizens to hold an asset for personal "well-being" and "support", Gold! As the alternative will be the Euro, and this will be frowned upon. The gold will be seen as "American" and "walk tall with American Gold" and "carry your own weight, carry gold for the future of yourself and country"!

Remember, gold has a history many times your nations age. The last twenty years of transition do not represent the future of this world class money. I agree with what may be a common thought for local political gain, "follow in the footsteps of giants, and carry your future in both hands, carry gold"!

Thank you

From CMAX: ANOTHER, How pleasing to see you here. If I may ask again, there has been one question left unaddressed that I had posed to you many months ago..... that of your thoughts regarding the future % increase in the U.S. paper value of SILVER, as compared to gold. I appreciate your implication about WB having to maintain a certain face in a public company (thus obligating him to purchase silver), but maybe he decided that it may do better than gold? To my mind, it seems that gold and silver should rise TOGETHER and proportionally, no?

Thanking you in advance.
Cmax

ANOTHER: Sir, We meet again! I think, many buy the Silver (and platinum) for but one reason, it will increase always more percent than gold. It is always the thought of more leverage, yes? Even today, these metals have more use for the industry and find a better "concept of economic purpose" in the minds of investors. Many dealers say, this purpose is of better "investment reason" and as an aside, you also hold metal, like gold? I say, gold has "no investment reason" as it is "real money" that draws no interestfrom being "lent out". For this purpose, it is an asset that shows "the conclusion wealth" from our long life of investing in commerce! Given the option of investing for "economic purpose", there are and have been, many better items than silver (Dow Jones?). In future currency wars, silver will show a return, but it may prove as uncertain as the economy?

Remember, you buy "silver for purpose" but "trade currency for gold for conclusion". As the long history of gold does show, "time will prove all things".

Thank You

From Sam: BARON in May 6, 1998 article (HOT MONEY DOES NOT STAY IDLE LONG) on Gold-Eagle web site poses question of what happens to EMU currencies when Euro takes over. He strongly suggests 240 Billion of supplanted currencies will end up at the LBMA where 12 Billion in paper gold is traded daily. The arithmetic works out to an explosion in the gold price of US$300/oz (present day) to US$6000/oz if this 240 Billion in "hot money" finds its way to the LBMA. US$6000/oz is your figure for the present interbank value for gold. Is the RED BARON on to something ?

Please comment !

Also, For whatever percent backing by gold, will the Euro be convertible to physical gold, and by whom (i.e. all or limited) ?

Sam

ANOTHER: Sir, The history of "Hot" paper money does show it to "burn easily" from " much heat"! If you read my Thoughts in today's replies, we see much "fuel" in dollar derivatives trading in foreign markets. Much of this trading represents a "claim" on physical gold that may become "a transaction for physical gold" as dollar reserves are displaced. The $6,000 valuation of gold can only be true if currency deflation destroys enough dollars to bring it down to that range. Without deflation, the dollar will be devalued much lower than this (higher gold price)! Once the Euro is created and begins to effect world trade (late 1999 perhaps), the gold market will begin a transition as never before! I think it will be interesting to follow the politics of this change, yes?

Your question of Euro gold backing? The Euro will not be backed or fixed in gold. It will, as Michael Kosares (USAGOLD) notes, be the first "modern currency" to hold true "exchange reserves" in gold. It is important to understand that "exchange reserves" of gold are much more powerful a tool for currency defense than gold backing! In this system, gold must be traded in a "public physical market", in that currency, Euros! As such, the Euro can "devalue gold" (Euro price of gold falls) thereby making it strong in gold! In today's world, this will happen as a "strong Euro physical market" displaces and defaults " the old dollar settlement paper gold market"! The dollar will become"weak in gold"!

Thank You

EDITOR'S NOTE: As the one who processes ANOTHER's mail, I can tell you that he gets a large number of questions and comments and it would be impossible for him to answer them all. I do not know what criteria he uses in choosing what he answers. I just hope that all his readers keep submitting the questions. I think it stimulates his thinking, and in turn the thinking of all who visit this site. If you've sent a question and he hasn't anwered it, please do not let that stop you from asking another one. At first I was going to ask ANOTHER questions myself; but, when I saw the number of questions and varied subject matter, I realized that you, the readers, would probably ask what I would have asked anyway. Please keep those e-mails coming. Thanks MK/USAGOLD

6/17/98 Friend of ANOTHER

Michael,

Another believes the BIS has actually entered the gold physical market. It was purchased through a Euro bank, not UBS and is continuing. It is not for the account of any country, but for BIS capital. They may announce this outright through the news services before he can write next week? My understanding is it was not for Japan! They were used as a diversion. For what purpose, I do not know? It could be they see the banks in Japan are about to fall under the capitol ratio rules as their market and economy takes a hit? The BIS may need the gold to cover any unpaid GF (gold Franc) reserve capitol due from BOJ? This is most likely the reason. Besides, during a crisis, it will be to late to patch up reserve ratios. If Asia falls before the Euro is in effect, Jan 1, it will take oil down with it in currency terms, along with an ensuing major reallocation of assets into gold.

This could get very intriguing!

FOA

6/24/98 ANOTHER (THOUGHTS!)

Mr. Murphy,
I read at USAGold the "Frank Veneroso's Gold Commentary & Central Bank Watch" with much interest. It is good to see this market thru the eyes of others.

Mr. Kosares,
Your post of (6/23/98 Daily Market Report), it speaks of a market not of the past. I agree. Many persons in this industry try to analysis price movements using "supply and demand" of gold. This information is of public knowledge and shown to all. What cannot be seen is the "currency of gold" in the form of "derivative positions "market. The "supply and demand" in this trade, it is much different, yes? Many of these "positions" find not a beginning in the mine industry, but they do make the physical dollar price of the metal "much different"! The trading of this new currency as a form of "dollar/gold" cross was born in the Euro Central Banks. It was offered as a means to escape the "political" dollar valuations of major commodities. Oil?

The Central Banks make much news of their good use of gold thru lending and leasing. They often add an "also" to this thought in the form of "and this process adds liquidity to the market"! Many accept these statements as "for the mining industry", as it creates a good market for mining forward loans. I say, even the mine loans are part of the "adding of liquidity", as the "currency of gold" market is many times the "gold mined and sold as a commodity" market!

Some wish to see the "inside" of this "currency of gold" trading? It was somewhat shown to many with the LBMA trading volume. This volume has "no explanation" from any analysis? The "supply and demand", it does not work as "good reason" for this trading, yes? Soon, the true nature and use of this new gold market will be in "good view" with "good reason" for all to see. Even today, the Euro Group Central banks, thru the BIS are trading gold in Euros! I think Mr. Fava offers only the beginning of the fire that comes to London: ( a small part of this article)

"LONDON, June 23 (Reuters) London Bullion Marketing Association (LBMA) chairman Peter Fava earlier said in an interview with Reuters Television that he expected gold to reach $320 an ounce by the end of the year. Fava said this would be due to central banks becoming net buyers of gold."

Yes, the Euro already exists in the form of the currencies that are now part of the ECB. These currencies change little between themselves as Jan 1, 1999 approaches. This withdraw of "dollar liquidity" from the"currency of gold market" will begin to effect the dollar price of gold. It will be the "currency of gold" "derivative positions " that will be forced to convert to Euro positions, first! The existence of "exchange reserves" of gold in the ECB does increase the Euro currency value in dollar terms as the dollar falls against the "currency of gold derivative positions ". To hedge these positions, physical gold and Euros must be purchased. Today, the BIS does do both for ECB customers. No longer does the dollar price of gold fall for the benefit of oil, as the Euro has been chosen for oil settlement in future. The dollar price of oil will now move for a different story: "oil was priced to low in dollars and to high in ounces of gold"! I think, the price of gasoline will be a "good deal" in Europe soon.

We will now see China walk the trail to Berlin as the Japan does rush for the American dollar! Indeed, the Yen will seek much more US debt as they are , locked out! The Mr. Alan Greenspan will attend a board meeting of the Bank for International Settlements in Tokyo next month. I think the markets will see "much change" of spirit after this meeting. It will be the end of the past and the start of the future for trading gold! We watch this new market together, yes?

6/24/98 Replies

From James Turk, Freemarket Gold & Money Newsletter: How did you come by the handle "ANOTHER"?

ANOTHER: Sir, It was found far in the past. The true value of gold was often taken from view, with purpose. Today, paper debt currency does price gold as little and value all other assets as much. History has proven that " your assets never offer a return as great as your paper money say it does". As such, in time real money does always bring a true gain. Many will find our wealth of the future has been with them always, in Another form, Gold!

Thank You

From Dr. Woods, MD:

The copies of gold and silver inflated,
which after the theftwere thrown into the lake,
at the discovery that all is exhausted and dissipated by the debt.
All scrips and bonds will be wiped out.
-----Nostradamus

This reminds me of the future predicted by "Another". Are the paper gold contacts issued without adequate physical gold backing by the London Bullion Exchange in "ANOTHER"'s postings and the wipeout of U.S. dollar denominated Treasury bonds actually predictions of Nostradamus in 1530.

ANOTHER: Sir, I see this conclusion does come thru history as " unchanged". It has always been in the minds of men to make gains at the expense of others. The past has shown that honest money must be taken from a person using force, today, our assets are removed as we sleep! I believe Mr. Kosares used this Notradamus quote in his book ABCs of gold, to make a betterpoint. We watch the outcome together, yes?

Thank You

From Zama: "Another" , thank you for your insight; I pretty well agree with most of what you say;ie. physical gold, but what of such a country as Norway: is their fiat money so undesirable? As the second largest exporter of "black gold" they look pretty good to me, and they might have an initial advantage in staying out of the EMU for the time being. What are your thoughts?

ANOTHER: Zama, I think Norway is a fine country and strong people, but do they not also use the US$ as a reserve currency? In the future, if they sell "black gold" for "real gold" or the Euro, all will be well, except their banking system will fail from dollar holdings! They be not dumb, and will reach for the true values as will all others. To add to your words I offer: They may experience the: initial "Disadvantage" in staying out of the EMU for the time being, but time does change many thoughts!

Thank You

Another

6/29/98 ANOTHER (THOUGHTS!)

Mr. Michael Kosares,

These Thoughts for all!

The winds blow well on this cloudless night. All are asleep with the dreams of what tomorrow may bring. I have help to print these words for the future. Indeed, this be a "conversation of our Thoughts" for this quiet time of life. Yes, this is a fine evening to consider gold!

For many, the years have passed and this noble metal has not revealed the value it hides. Ones of western thought have held long and strong, with great demands that it should obtain a high price in American currency terms. Yet, in some two decades of time it was the dollar and paper investments that bring forth their hidden strengths. For you, this history has proven gold is without value in these modern world economies! I say, this thought is but a passing argument, as it is not "what we sell gold for, but rather how much gold can one buy" that produces wealth over time!

The last gold war of 1980 ended as the choice was between "gold as a currency" and the US dollar. The dollar was accepted as the world reserve and trading currency. Many did not believe this reserve would hold in the test of time. It was "expected" that from twenty years in the past, any inflation of dollar debt would send all persons in a run to gold. This be the "flaw" in thinking of many analysis and investors. For it was in this time that all the governments of the world began to "play a currency game". Yes, a contest for many, even most, but not all! This game was offered to the rich, the working and the poor. It was even for the wealthy to play as they watch to see who will remain the longest. But history has shown that as the sun sets in the east, so must also conclude games of men, these "games of chance".

Most citizens of this world have placed their life's efforts on one bet at the tables of Monte Carlo. Some wager for far into the future, but none will succeed. They bet, as you say, "the farm", even the full estate of the family on the only one outcome: " that paper currencies will continue to denominate the full value of their assets" and "continue to do so in a way that reflects the current relationship of paper assets against real things"!

Why must these private fortunes be lost to the "House of Carlo"? Why did they not run to gold in the long years that pass, as analysis believed? Why the "flaw" in thinking? I say, because the "game of currencies has not ended" and has produced "asset valuations" that would not exist if converted into real things. As such, the wealth of nations, that many believe they hold does not exist today, in dollar terms, nor will it exist tomorrow!

How long do persons continue to make these paper claims to "bonds", "stocks" and "currencies" that are produced in numbers as the leaves on the trees? These seasons of spring and summer of twenty years time, have offered a harvest to gather wealth that lasts for centuries. When the economy of the dollar, becomes as your "Autumn" and arrives suddenly, they will pause from this foolishness. In that time, the savings for the future of their children will be as these dried "leaves"of winter, blowing in the wind!

The wealth of gold, it does not change. It is hidden from view for the purpose of changing reserve currencies. The dollar has consumed the wealth of all who hold assets in these terms. The American debt is evidence of this consumption. The expansion of this debt now destroys the economies of countries that use the dollar as a reserve. The Euro will be forced to become a successful, hard reserve currency or "gold as a currency" will be backed by oil and take it's place! China and Arabia can force this outcome, as the Euro group will trade with China as the Japan has with America. China will devalue in time and break the American/Pacific economy as oil finds a "good price for commerce" in Euros. This is done as "intervention" into the oil markets, in dollar terms forces the oil price up! In this time the entire Euro Group /China / Middle Eastern economy will heat up to form the greatest demand for oil. All producers will rush to sell oil for Euros and dump dollars.

Gold will rise in dollar terms to values little understood to analysis of "supply and demand". As they know the commodity purpose for gold, little is thought of the "currency/wealth" purpose for gold. As "supply and demand" did not explain the dollar drop of gold for the past twenty years, it will not explain the dollar rise for the next decade! Soon, gold will rise "with the dollar", then the maker of your money will force this currency down in a effort to stop it from coming home.

Many do speak of supply and demand for reason of gold decline because of "extra leftover gold" held in ECB, however, they do not consider the "extra leftover currency reserves"? The Euro will hold forty to fifty billion in total exchange reserves, of that perhaps 15% in gold. This does leave perhaps forty billion in currency reserves to be held. The eleven Euro group countries now hold much more than forty billion in exchange currency. Do they sell these dollars at same time they sell leftover gold for dollars? I think all should talk to these new analysis about the "supply and demand" for dollars, not gold.

To close I offer the thought of a banker : "I would not sell gold for dollars when, as a district Central Banker, I could soon use it to purchase more Euros from the ECB. As all new local continent debt will now be issued in Euros, it is better to allow the new future Dollar / Euro exchange rate to pay old dollar debt. Yes, the coming American dollar inflation will make "good work" of this European debt problem, perceived by many to be "insurmountable! Even now as I ponder this thought, we may not even sell gold for Euros, as it is a true "exchange reserve" of our ECB! As oil will be priced in Euros, and a low dollar price of gold no longer necessary, perhaps, with it's future dollar value" increasing, I will purchase more gold with dollars for future payment of debt?"

We watch this new gold market together, yes?

Thank You

Another

7/19/98 ANOTHER (THOUGHTS!)

Mr. Kosares,

Why does the Euro start life with such small "exchange reserves" of other currencies? It is because they will have little need of them. For most nations, exchange reserves are used to defend the local currency, that is, buy on the open market your money with other countries money (dollars?). In the typical "operation" this would be done to raise value of the domestic currency. However, today, the Euro countries as a group will run little if any "account trading deficits" with other countries. Do compare to the dollar, with perhaps 14+ billion of trade deficit currency flowing out of America each month and we see what currency will need "defending"! Also, with perhaps 500 billion or more of dollars held as "exchange reserves" we do ask, "if these reserve dollars are to be sold to make room for a new reserve, who will trade Euros for them and at what "exchange rate"? The ECB and it's system CBs will not be in a position to buy dollars, as they will be holding to many "non reserve" dollars. With the American "payments deficit" having "no end", dollar assets have no "purchasing reality". They will quickly become a "nonreserve exchange liability"! One use for dollars may be to purchase ESCB gold, then sell this gold to the ECB for Euros. Another would be to purchase gold on the open market and hold this as matching the 15% gold reserves of the Euro basket. The end result will find to many deficit dollars outside of the US with no way to return home. These dollars will find gold and in doing so will drive up in value one of the ECBs main "exchange reserve assets" without exporting the coming American inflation into the Euro trading block. It is "the master plan" and comes to conclusion.

More to the purpose of maintaining the world economy, the BIS will now begin this act in concert with other CBs to devalue the dollar against gold! They have begun this already, by writing Euro notes for future delivery against these contracts. With LBMA trading 1,000 ton a month, there is much realignment to be done during the next year. I expect gold to cross $360 soon, as the floor is now established with billions of homeless dollars. Time grows short as the plan has been laid out with "no turnback". The ECB has said openly, "gold is now MONEY"! And this will change the dollar asset world you live in!

The US Federal Reserve will now have little choice but to raise interest rates as the dollar currency inflation of past years moves from "paper assets" into real things. With many other economies and nations (ME and China included) about to anchor themselves to the Euro Block, they will enjoy a rebirth of low inflation growth not seen sense before the dollar went off the gold standard! Many persons and nations will sell "dead, nonperforming dollar assets" as these will not show a real return for many, many years. Much as the way gold is viewed today!

I leave this small part of a news article for added thought:

TOKYO, July 6 (Reuters) - What if the Euro keeps rising after its launch, leaving the dollar far behind?

U.S. DEBTS THREATEN DOLLAR'S GLOBAL STATUS

Former presidential advisor Bergsten has forecast the net debtor position of the United States, which has already passed $1 trillion, will shortly exceed $1.5 trillion. In its annual report released in June, the Bank for International Settlements said: ''the BIS is concerned that the markets will lose patience with the accumulation of U.S. external debt and drive the dollar sharply lower.'' Analysts say the launch of the Euro may trigger a reversal in the dollar's current strength to reflect huge U.S. debts.

Another

7/19/98 ANOTHER (THOUGHTS!)

REPLYS:

From Q Ball: I would like to ask Another his opinion on this. What are his thoughts on what some people are predicting to be a dominance of OPEC nations in terms of oil production. Specifically forcasted in the following page says that OPEC production will surpass NON-OPEC in about the year 2006.

ANOTHER: QBall, This is true. The Middle East nations, in particular, have shown their reserves to be much greater than ever thought possible. These "new/ larger" reserves have come to be known about, only in the last eight years. It was the "possible existence" of this oil that created muchfear in the American Capitol, prior to the 1970s. In that time, it was known that the Western economy was growing on low priced energy. Thisgrowth would soon consume all "local / domestic" reserves that, in turn, would bring much dependence on low cost Middle East oil. The reserves in this region were, and now even more so, are the lowest cost to produce in the world. As all oil was sold in dollars, and US$s were then, still somewhat attached to gold, the ME producers had "no need" to raise prices! The political forces in the West needed much higher oil prices to "stimulate exploration" to avoid the "strategic problem" of "all oil supply from one region". Make no mistake, there is enough oil reserves in the ME to supply "all world" for "many grandchildren"! It was in this time that the events created by the "politics of dollar currency", allowed the decision to remove the gold backing from the US$. This move, broke the "gold bond to oil", and created a need for more dollars per barrel of ME oil. The oil producers, as expected, did create "Beirut Resolution titled XXI. 122"!

Partial reprint from report by others:

"Shortly after the gold window was closed in August 1971, OPEC called an emergency meeting with U.S. and other nations' finance ministers in Beirut. The result of the meeting was the Beirut Resolution titled XXI. 122. It called for adjustments to OPEC's crude oil pricing whenever the dollar had been devalued. The resolution called for OPEC's price adjustments to be triggered whether or not dollar devaluation was caused by government action or by market forces. If the dollar lost purchasing power, OPEC could raise its prices."

QBall, this was the beginning of a move by dollar advocates to raise this commodity price by inflating the "world reserve currency". As an "also", the ME was shown to be and caused to be "unstable" for dependence for oil production. Not all nations agreed with this move. The French and Germans did not, and by 1980, Europe was working with the BIS to implement a new "reserve currency". They did long for a "money" that would resolve "Beirut XXI" and allow for the purchase of low cost reserves, not the high US$ cost "world oil supply" , of perceived strategic importance to America alone.

The "new Euro" did take much longer to create, and the Gulf War did create a crisis of payment for oil. In this time, early 1990s, the currency of gold was brought "into use" as a "temporary" partial payment until the Euro could be presented. A paper gold market, of sufficient size, was created, that as such, it could hide discount payments to a few producers for oil. Today, if these claims on paper were converted into bids for physical, it would take all of the "tradable gold" in existence! It was this "leverage" that forced the Euro makers into gold. Gold backing for the Euro would not be enough! Only "exchange reserves of gold" would allow oil priced in Euros. We move to this end today. Tomorrow will see ME oil in good supply for a new trading block of nations.

Thank You

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From Gary: Dear Another, I have recently begun investing in gold and I find that your comments on the future of gold give me support in these dark time for gold investors. However, I was a little concerned recently when I read your writings in which you based your belief on the price of gold increasing on a comment from Peter Fava. As you noted, he is the Chairman of the London Bullion Marketing Association and he gave his opinion that the price of gold will rise to $320 by the end of the year.

ANOTHER: Sir, I do not base my Thoughts on the open discussion of "only the one", but on the actual commitments and actions of many. I would say these times, they are dark indeed for any form of paper investment in gold. However, the sun is at "midday" and shows the brightest period in your history, for real physical gold! The future will show a "great loss" for men of courage that invest formost in paper. Quiet minds will think: "I did not know dollar assets would find such a fate" and "had I known physical gold could hold such wealth, no other investment was needed"!

As such will be the world investment climate, you will see these thoughts "flow from community to community". LBMA? Often, changes in events are preceded by public announcements, done with much "conservative nature". The Bank Of England did also state a short time ago, that, gold trading loses were coming. In the past, I have found, "when a small nose appears under my tent, life will change before a good nights rest is at hand"!

Thank You

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From Ian Shaw: Sir, If I have interpreted your comments correctly, you take the view that the Euro will continue to fly after a successful launch. Supposing the Euro does not fly, but crashes to the ground after several years because of, for example, a Europe - wide economic policy applied by the ECB. What would be your views on gold in the event of such a happening?

ANOTHER: Mr. Shaw, This bird, you call a Euro, it is unlike any we have ever known! It has already crashed to the ground with the weight of metal! It will not fly and it cannot move, as it is built for "durability" and "stability", not erratic movements! It also has a "great appetite" for the food of it's choice, Gold! Unlike any currency of past, this Euro will eat gold reserves and not grow fat. A common past problem of foods with "gold backing"!

Sir, Between now and sometime next year, a great deal of paper gold commitments will be executed to purchase physical gold with dollars. This gold will then be sold to the ECB for Euros, as such, the ECB will hold the gold as "Exchange reserves" and the dollar selling entities will hold the Euros as "exchange reserves". All will rush for this new Europe trading block, as the perception will be: "this debt dollar, it's decades old balance of payments deficit has no end" and "see this new Euro, is this balance of payment positive, see them buy more gold reserves to prove it"! A golden door has been created, that will allow nations caught in dollar reserves to borrow gold in paper form, from the Euro makers. At first, this moved oil assets out of dollars, now it prepares the world for a change of reserve currencies. Look closely and see, "as the dollar/IMF world is brought closer to close, is not the borrowed gold offered more freely"? Do not the lease rates drop further? Do not the holders of Yen, outside of Japan, cross the Yen for borrowed gold as that currency falls? The Yen and the dollar/IMF are one in the same and soon fall together! Direct CB commitments for lent gold will be covered with Euros, but who will cover LMBA and with what? You see, Mr. Shaw, this market is not of a supply and demand world, and is much about the real world currency you have never known.

Thank You

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From David Powell: If China were to devalue the yuan, what effect would it likely have on the US$$ gold price and why? PS: Great website! Keep up the good work! (and THANK YOU!)

ANOTHER: Mr. Powell, In the time before us, China will trade in Europe with "great intensity"! As this trade develops, little use will be found for use of dollars in trade and little purpose for to devalue the yuan, except for the revenge against neighbor nations. A good purpose will be found to trade dollars for gold! The gold could be sold to ECB or gold could be held for reserve of 15% or higher to match Euro group reserve requirements! Much will be the future for this position! As such the Yuan may become part of Euro Group basket, yes?

I think, in the future, for one to make their currency lower against the dollar will be as:" trying to hold the hand one meter below a falling stone"?

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FromWilliam Hsieh: ANOTHER: I appreciate your emphasis on holding gold and Euros. My question is how do we hold Euros now when the currency is not yet born? Is the German mark today a reasonable proxy for the Euro? What will happen to currencies like the German mark, French franc, etc. when the Euro is finally introduced-- i.e. will they fall as people convert the European currencies for the Euro? Thanks.

ANOTHER: Mr. Hsieh, As the exchange rates move little in currencies of Euro group, before end of year, the Euro basket exists now. On Jan. 01, 1999, each currency will make up a fixed portion of a Euro. As a person within the country, you will purchase with the present currency, whatever it's portion of a Euro, it will buy. After a time, all eleven group moneys, will be converted into actual Euro currency. I see that the China will buy dollar debt issued in Europe, by Euro group countries as a means to obtain Euro reserves when that debt is converted. Perhaps, this be the answer you receive from a broker, concerning "unborn Euros", yes? Even today, the BIS trades gold in "unborn Euro form"!

Thank You

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From Michael Kosares: Something came up while you were gone. The head of the World Gold Council recently suggested to the Gulf Co-opeartion Council that it bring its gold reserves up to match the 15% to 20% reserve of the ECB. Do you think that the Euro might cause a domino effect around the globe as other economic blocs back their currencies with gold to compete ( or live in concert) with the Euro?

ANOTHER: Mr. Kosares, Thank you for your question. I think, this "domino effect" is in progress now. For some it is in the "thinking stage", but for others, I see the BIS is now much busy in the brokerage business. You are very correct to see the next currency devaluations as being "against gold"! Some countries will form "blocks" to compete, however, they will be cut off from the "unloading of falling dollars". To what CB will they sell? It will be as "the anchor that is around neck, yes? I think, we will see nations of small dollar holdings, attempt to match reserve status percentages of Euro. With, as you say, "the eye on joining" the "basket"!

All are much confused and upset that the dollar price of gold does not reflect this. It is sad that these persons are given to paper leverage with "no reward" as the value of a lifetime walks slowly before their estate! Our history will read, that persons of simple life, will find they have made the greatest leverage investment ever seen and thought of it as only the small trade. When gold moves from "bottom to top of world currencies", many will find their assets in the "Estate Of Kings"

Thank You

Another

[Editor's Note: Please read what's below carefully. This is an extraordinary analysis from the Friend of ANOTHER at a time of much confusion and uncertaintly in investment/currency markets. We are told at the outset that the largest pro-gold groups -- the Europeans and the Gulf states -- want a world currency "not subject to the performance of the American economy." In other words, a currency not tied to American treasury obligations, or the percpicacity of any other nation for that matter. That currency for those of us who have reached for the deeper truths of economy is called gold. As an American, I must say that I have never seen the concept of American hegemony explained in quite the same way before. Perhaps, my eyes were closed. I keep getting this feeling that Americans must necessarily begin to understand a new role for this country in a rapidly changing international political and economic environment -- a role for which our political and economic institutions appear ill-prepared. I will not be so presumptuous as to explain what the Friend of ANOTHER is saying, I will let you read for yourself. I do not think it could be said any better than Friend of ANOTHER says it. The fact that his analysis implies how one should design one's portfolio is a happy side benefit.]

8/10/98 Friend of ANOTHER

Michael Kosares,

It has taken some time to send this, but now I can also offer my thoughts to your questions.

Your statement: "As a matter of long term policy, do you believe that ECB will "sell" gold to defend the Euro or "buy" gold to defend the Euro? Each of course would entail a different course of action with respect to reserves of the new national bank. Along these lines,will ECB buy gold from its member treasuries, or will it simply force them to transfer it to ECB coffers if needed to defend the Euro? I am prompted to ask this question in view of your assertion that there will be much selling of Euros to defend the dollar. If the Euro, as you suggested, is being printed to buy dollars isn't this just another manifestation of the U.S. exporting its inflation? It appears to me that the Euro will need to be defended -- and not with dollars -- but with gold! "

Michael, I believe the most difficult part in understanding the modern gold market is overcome by seeing all the various political factions involved. Essentially and basically, the largest pro gold groups are those who want a world currency that is not subject to the performance of the American economy. At this moment and in this period of economic history, all currency reserves held by foreigners (non-Americans) is a debt of the US Government and by extenuation through tax collection, a debt based on the ability of the American economy to function profitability!

In essence, America has told the world that as long as the business of this country is functioning, your wealth, as represented in Marks, Yen, Pesos, etc. is backed with performing US debt. It's like saying, "as long as your neighbor, next door, does not loses his job, you will not lose all your money! Most people would be surprised at how clear this is, outside the USA sphere of influence. This, the largest of the pro gold group, is largely made up of countries with economies that have no need to sell most of their production to the US. The business of these communities would not totally fail without the American engine. Yes, they would slow down, but not collapse, as trade with other countries would continue. To add what was said before: If your neighbor loses his job, you can still trade with the other people in the town, as long as the currency system is not based on your neighbors debts!

This group, made up of much of Europe and the Middle East, is not looking for a return to the old Gold Standard, but perhaps something far better. They do not see any advantage in holding the currency bonds of one country, as a reserve asset of future payment, over holding physical gold as a reserve asset in full payment. The fact that the debt reserve asset pays interest is little more than a joke in these banking circles. Any paper currency, the dollar included, can fall in exchange value against your local currency far more than the interest received! In today's paper markets, the only true value in exchange reserves, held by a government as currency backing, is found in it's effectiveness for defending the local currency from falling against other currencies. In other words, use the reserves to buy your countries money. But, this is a self defeating action as sooner or later the reserves are used up! This fact is not lost on many, many countries around the world, as they watch their currencies plunge, lacking reserves as defense. Ask them how important the factor of earning interest on reserves is under these conditions.

On the other hand, buying gold on the open market, using your local currency, works as a far different dynamic from selling foreign bond\reserves. This action takes physical gold off the market, and in doing so increases it's value in dollar terms. Gold is and always has been the chief competitor with the dollar for exchange reserve status. The advantage here comes from the fact that governments do not run out of local currencies to use in buying gold, as opposed to selling foreign currency reserves to buy the local currency on the open market. Of course, the local price of gold goes sky high, however, in this action you are seen as taking in reserves, not selling them off.

Also, as gold begins to rise against the dollar, the local gold reserves are seen as assets of increasing value, backing the local currency. Under these conditions, with a stable currency, citizens will purchase more gold as it is seen as a positive asset. Not unlike a rising stock, everyone wants an increasing investment. Contrast this action against that in Korea, where everyone sold gold as it increased in an unstable currency!

Basically, this is the direction the Euro group is taking us. This concept was born with little regard for the economic health of Europe. In the future, any countries money or economy can totally fail and the world currency operation will continue. What is being built is a new currency system, built on a world market price for gold. Michael, you are absolutely correct in that the USA will see a hyper inflation of it's currency and a gold price in dollars that reflects it. Unfortunately, for most investors, the gold price rise will be sudden and also hyper fast. as it will occur just after a rapid plunge in dollar based assets including, stocks, debt and the entire banking system. This action will destroy virtually all gold based paper assets as they are also dependent on a functioning economic system. A local gold mine, in any country, must sell production to realize a profit. The contract system they deal with will not be functioning during this time. Contrary to many hopeful investor, local treasury officials will not allow miners to pay employees or buy equipment with physical gold. When the dust does clear for mining to continue, gold will be recognized worldwide as real money, and the mining of money will, no doubt, carry Extreme taxation. Stock prices of these operations, after being priced to zero, will then double or triple in price. Zero times three equals?

Back to your original question. The Euro will not replace gold, it will evolve into a gold transactional currency. It will also price Euro gold very high, perhaps $6,000 in current dollar terms buying power. However, in actual dollar terms of the future, $30,000 US will reflect the American debt as the negative reserve asset it truly is. The ECB will have an easy time issuing Euros to buy gold from the member banks. The real political warfare will be in trying to force them to sell the gold at all, once this ball starts rolling. The Euro has, in effect already been dispersed in the form of Gold Leases not gold sales. One has only to look at the official gold holdings of most central banks to see that physical gold sales are little more than the average, with a good amount of that coming from nonEuro countries. Gold is a funny thing, it can be sold many times and pass through many countries and still remain in a CB vault. Truth Be told, some 14,000 metric/ton have been sold this way. Far more than the street thinks. Using this amount it's easy to see how certain entities have moved off the dollar standard in the last few years. If we use a future price of $6,000+US, the move is about complete.

The process: An oil country (or others) goes to London and purchases one tonn of gold from a Bullion Bank. The BB borrowed this gold from the CB (leased). The one tonn gold certificate is transferred to the new owner. The gold stays in the CB vault and the owner goes home. The CB leased this gold to the BB and expects it to be returned plus interest. The BB financed the Actual Purchase of this gold mortgaging assets of the buyer. The BB, who created the loan, then uses the cash arranged in this venture to contract with a mining company (or anyone wanting a gold/cross financing deal) to purchase production gold, using this cash to pay for it. In the eyes of the mining company, the BB just sold gold on the open market, for cash, and will purchase future production at the contracted price. The mine does not know where the gold came from, only that it was sold and a fixed cash price is waiting. Of course, most of this made more sense when gold was higher. There were thousands of these deals, structured in every possible fashion. Look to the volume on LBMA and you see where the future reserve currency is traded today!

Now when we look at this picture, who is at risk here? The Euro CB Group still holds the physical gold and will buy it back from the new owners, if asked, using printed Euros. The new gold owner has just replaced his dollar reserves with either bargain priced gold, or Euros at an exchange rate never to be seen again! Some of this was done to buy the pricing of oil in Euros. The BB owe the CBs 14,000 tons of gold that they must collect inthe future from producers or currency speculators. And they must collect it by paying what will be a, then, ridiculous price of $300/$400US, while the world market price will be, well, a little higher.

With Canada, Australia, and perhaps England having sold much gold to hold US$, much of the English speaking, IMF/dollar world is about to change. Any country, Japan, Mexico, etc., that has locked their future by selling most of their production to the American economy , is headed for a depression. Another is answering some of your mail questions and is also sending a letter. Will send it on arrival.

Thanks Michael,

FOA

8/11/98 ANOTHER (THOUGHTS!)

Mr. Kosares,

Part of my replies:

From David J. Powell: If China were to devalue the yuan, what effect would it likely have on the US$$ gold price and why?

ANOTHER: Mr. Powell, In China, persons own gold for reasons that reach far from the past. They see the price of gold, in dollar and Yaun terms, not as gold value rising or falling but as these currencies rising or falling. As such, gold is viewed as "the stable wealth" and currencies as the "changing asset value"! Not unlike the Dow Jones stocks, always moving, so it is of the paper currencies of today. . Much is written of how gold does not come to China, as it is "expensive" and "citizens have no money to buy"! I say, they have money, just not your paper money, as they were taking in gold from before the birth of currency and will do so till the end of time! In that country, China, where gold was purchased in great quantities, from before the existence of America, this will not change if the Yuan is devalued.

What will change is the currency China uses in world trade. They have yet to "secure" the Euro against their US dollars held in Hong Kong. They will make this trade for the benefit of their "old trading partners" that ended with the "Orient Express"! If traders sell gold as the Yuan is devalued, I think that gold will ride this train route to Berlin, Yes?

Thank You

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FromTatusko: ANOTHER, What currency, besides gold, do you view the world from. Your statement "The $6,000 valuation of gold can only be true if currency deflation destroys enough dollars to bring it down to that range. Without deflation, the dollar will be devalued much lower than this (higher gold price)!"

An American perspective would appear to be "The only way the price of gold will stop at $6,000 is if the Federal Reserve is successful at stopping inflation at that price. If not, the inflation will be much worse, and the gold price will go much higher.

You speak in terms of what currency? Euro's, Swiss Francs, or ANOTHER? What is your future outlook for the Swiss Franc and Swiss Annuities? Will Swiss Francs continue to be the strongest currency?

Thanks. Sincerely,Don Tatusko a.k.a. ShortSellr

ANOTHER: Mr. Tatusko, At present, I, like you, must view the world thru dollar. The "world reserve trading currency" it remains! All persons hold dollars, be they as the "proxy" currencies of other countries, or other assets worldwide, all things find value thru the "debt securities" of American citizens! It is, the ability of the, "factory worker" in Detroit, to pay the mortgage that does make your, say "Pounds", of value in world trade. It is the way of the IMF, Yes?

I think, your "American perspective" does not see or know or understand, how the dollar is "already much inflated" worldwide. Your Western thought is only of the "dollar price of things" at present. It is to say, "if prices do not rise, there be no currency inflation", and "see the world competition for selling goods and services in dollars, this brings no price increase"! This results from the current world currency system that does force the "holding of dollar debt" as reserves. A new change in this system will release these reserves, for the spending and the buying! It is during this change that American persons will find a "new price inflation" from a "existing currency inflation". In this time, the "competition for selling goods and services" will become " the competition to buy goods and services" in Dollars! You see, it is as you say, "your chicken has roosted for some time, but only now you find he has come home"!

If a depression does arrive to America's main trading partners, Canada, Japan, little Asia, Mexico, etc., it could destroy many of these " roosted" dollars and hold the dollar price inflation to, "only extreme". Of this point, perhaps $6,000 gold will be enough to represent the extent of past "overprinting".

Also, you ask an additional question:

ANOTHER, You emphasize buying physical gold, and you have also said there may come a time when the US Dollar is not convertible into gold. What do you believe will happen to those who are long gold futures on the COMEX. Do you believe the COMEX will default, or will these people be able to pay off 10 lifetimes worth of 1998 US dollar denominated consumer debt?

Thank you. I enjoy your THOUGHTS very much.

Sincerely, Don Tatusko

Mr. Tatusko, In the event of a major increase in gold price, I do not think the persons on the other side of any large gold contract will have the resources to deliver cash in a settlement. Perhaps they may deliver the physical metal if it is in account? I ask, if you have "leveraged" an account for the "short side" by 200%, and the market moves against you, "overnight" by 1,000%. Could you complete the "most honorable" contract? " plan not your sail for the calm day, as a strong wind may change your landfall"

Thank You

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From Aragorn III: I recently posted the following for the Kitco Gold Discussion Group. I would be grateful to know its merit under the scrutiny of ANOTHER.

Date: Tue Jul 21 1998 20:19

Aragorn III ((THOUGHTS!) by ANOTHER...I certainly DO like the way the numbers play out) ID#212323:

Gold is effectively revalued to $1,800 per gram, or equivalently $56,000 per troy ounce ( ballpark figures ) . Perhaps that sounds preposterous to you, but I submit that it is not. What does sound preposterous is that an institution can take paper and ink with very little effort and assign/create whatever value they choose. What is to stop this same institution from throwing a little gold into the deal as an accounting tool---THOU SHALT NOT CREATE ( from this day forward ) A DOLLAR OF VALUE ON YOUR LEDGERS WITHOUT FIRST GAINING POSSESSION OF .00055 grams ( .000017 oz ) GOLD.

Think about it. The institutions (Central Banks...particularly the ECU) are free to do this, and what's to stop them. The citizens certainly wouldn't complain. Suddenly their paper money would have an inherent value, not just a confidence-based value. This scheme to end USDollar hegemony is nothing short of brilliant. Too often the forest is not seen because the trees do get in the way. Individuals often see a situation as us ( people ) against them ( Govts, CB's, etc ) when in fact the battle lines are drawn in unexpected places, allying us ( people ) with some of them ( CB's such as the ECB ) against the rest of them ( the US Govt ) . Accept it.

Any right-thinking individual should easily see that gold is the great equalizer in the world of international economics. No one can be cheated when value is exchanged for equal value in the marketplace--whether domestic or international. The problem we face today is that few people recognize value...they have for too long been lead to believe that paper with ink has value according to the design and country of origin. They do not recognize the true value of gold ( as money ) as a store of wealth for the future purchase of items in need.

I shall not mince words. When I refer to a Dollar value you may equate that with a Euro value as they are nearly at par with each other ( as currently perceived ) . There is approx. 1,400 Billion dollars of total currency value on account among the 11 European Monetary Union member nations. For the launch of the Euro, it was decided that approx. 50 Billion dollars in value would be held in the European Central Bank as foreign exchange reserves. ( Please notice that you don't hear much talk about what percentage will be held in any specific nation's fiat currency...all attention is on "How much will be gold," as all paper is for appearance only, as I will further explain ) . To announce that 15% of the reserves will be gold is to say that the ECB will hold approx. 25,000,000 ounces of gold ( 25 Million ) as backing for the 1,400,000,000,000 dollars of total currency value among the member nations.

The Euro will NOT be a fiat currency if this ratio is maintained for any future "creation" of Euro dollars by the ECU. Think in these terms: a new measuring system has been created for gold to supplant the troy ounce...it is called the Euro. The Euro is the mass equivalent to .00055 grams and also .000017 troy ounces of gold. As an individual, you may choose to hold your wealth in raw, bullion form, or for spending purposes you may exchange it for equivalent receipts ( called Euro's ) in coin or paper form. ( It is simply not practical to use physical gold as money...a coin of only one gram would be worth 1,800 Euro's (and notice here I do no longer state the value in dollars as the true USDollar would be worthless ) . ) Inflation is arrested as the gold reserves grow in proportion the circulating currency...the money in circulation, when tallied, represents the total weight in Euro's held by the ECU.

It had to be done in this round about way...both to buy time and to facilitate a smooth transition. Imagine the pandemonium if the ECU announced simply that 25 Million ounces of gold ( worth 7,500 Million dollars by today's misguided notions ) would be held as the sole exchangeable reserve ( payable on demand ) for 1,400,000 Million currency units called a Euro that each individually represent a modern-day purchasing power that is on par with a dollar. They would be ridiculed and laughed into extinction. Further, apparent disparity would result in a pricing turmoil. The typical citizen and shopkeeper do not know how to value things outside of the monetary system that they've grown accustomed to. If asked to price things in gold, they would make the mistake of using the spot price, which is currently far too low to be used for a worldwide monetary exchange rate. So instead, a grand production was made that approx. 50 Billion dollars of foreign exchange reserves would be held, and that 15% would be gold...that is to say, 25 million ounces. The citizens will be gently lead into the new age of a worldwide currency...gold as money. Nations with gold or abundant resources for international trade will no longer be held hostage to the nation with paper that is stronger than all other paper.

You will agree that gold as money could be accomplished smoothly in NO OTHER WAY THAN THIS. Meaningful wealth on the world stage would be predicated upon how much gold an individual or a nation owned. It is better to trade your dollars for gold now, at the misguided exchange rate of $300/oz, rather than move into the new era with only the paper in your wallet or the digits in your account. On the open market, with a Euro and a dollar's purchasing power on par ( initially ) , it would not take long for gold to reach the exchange rate of $56,000 per ounce as people tried to take advantage of the arbitrage opportunity.

Yes, I do like the way the numbers and the rationale add up. It wouldn't be me if I didn't ask... got gold?

[And a follow up post was directed to someone who felt that there would be a consumer pricing crisis; and also the possibility of another gold-rush whereby people would quit everything to try panning their own gold]

Date: Wed Jul 22 1998 10:26
Aragorn III () ID#212323:

I think it is quite possible that when orchestrated as I've crudely presented, an official monetization of gold does not necessarily lead to a pricing chaos as you've suggested...$400 for a gallon of milk, $200 for a dozen eggs, etc. The only arena in which the dollar plunges in purchasing power is with gold. The institutional assignment of the gold value could for all practical purposes be transparent to the average citizen and shopkeeper. Only those relatively few individuals who possess physical gold would see the world through altered eyes...rejoicing in their forethought to own gold while the rest of the world was enamored of paper.

It would be expected that nations would quickly establish restrictive mineral rights laws that would heavily tax or otherwise control the future mining of gold to the Govt's best interest. Mining operations could very well relieve citizens of their individual tax obligations. And no nation could continue with the practice of creating money value from thin air.
---------------------------------

Thank you for your effort to help "fill in the blanks" on gold's role in the esoteric realm of international economics and finance.

Aragorn III

ANOTHER: Mr. Aragorn, I offer my "Thoughts" to all and encourage persons to think, consider and discuss this new gold market. During our journey in life, it will be the "world events" that truly "fill in the blanks" as this "economic drama" unfolds! History does shown, that over time, wars are won with an ability to reconsider, and to move and change course. Perhaps this war of "money" is not located on the fixed ground of past thought, but will be waged in the fluid minds of men as they seek to defend their life's savings. I send your writing to the eyes of others, that they may also, engage this enemy, with the thought of keeping our families wealth!

Thank You

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From Terry: Michael, If the Euro is to be introduced at a one to one exchange rate with the USD, wouldn't it be in the rest of the worlds best interest to keep the dollar up, and keep the price of gold down (in USD terms) until the switch can be made to Euro's in '99. Since so many countries hold USD reserves, they wouldn't want to see a drop in their assets before they could convert them. It looks like the European CB's would have a huge interest in keeping gold low against the dollar, thereby making their currency very strong in gold terms at it's introduction. Then the Euro could (will) leave the USD in the dust. Is this paranoia on my part, or is it just to scary for the mainstream financial market to talk about?

God forbid, but this is the kind of stuff wars are made of.
Yours truly,
Terry

ANOTHER: Terry, Please read what is considered here. Ask others and counsel elders of past money wars. We will watch this new gold market together, yes?

Thank You

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From Carlsen: ANOTHER, my head is spinning reading your replies. I read them and I reread them. However, my question is. For us small investors sitting with losses from our investments in Gold Producing Mining Companies are there any hope for us to make any money on our investments or should we take the losses and buy the gold bullion?

ANOTHER: Carlsen, The gold has a history of many thousand years. It is not for "the investment", it is as the "conclusion of wealth". Other items will always rise and fall against gold. The value from investment in "commerce" is truly found in the production of people. This be not the same as the enduring wealth of a "world class money"! Gold in both hands lives by no rules of man, as does the business of trading nations. Portion your investments as you thinking will allow.

Thank You

ANOTHER: Mr. PH in LA, Sir, your letter asking of the Gold Carry Trade, I did read. Perhaps the letter from my good friend to Mr. Kosares as posted does help your thinking? Many persons do trade this gold currency for reasons and purpose we may never know! It is the ways of men to lose the "wealth of nations" for gain of the few. Always, some win this game of kings and show this prize as proof of direction. And always, as night becomes day, these gains are returned, in quiet hidden places where "eyes do not see"! As we watch this new gold market, we trust what is real, yes?

Yes!

Thank You

Another

8/19/98 ANOTHER (THOUGHTS!)

Supply And Demand for Gold; Does this change the value of this "Metal Currency"?

I ask, why do many look to the "commodity" supply and demand of this element for direction of price? The use of gold for jewelry and other fabricated forms is but a small amount of the buying and the selling. The mines do produce perhaps 2,500 tonnes a year, and "fabrication demand" does use perhaps 3,000 tonnes. Yet, all look closely to see if the usage does change and move the price up or down. However, the "fabrication demand" has been much greater of the mine supply for many years and the dollar price still falls!

Truly, the selling of 3,000+ tonnes of gold, for the making of things, does not influence the dollar price of an item of that trades 13,000 tonnes a year at LBMA alone! And the gold does trade much greater amounts in the small places of which you have little knowledge. Perhaps this "metal currency" is used for "the money transactions" as 20,000+ tonnes per year? The Central Banks still hold a billion ounces of gold:

Does your broker of "leverage gold" tell you these banks watch the "jewelry production" for the intent to value gold reserves in vault? Do the other holders of perhaps, two billion ounces of gold, held worldwide, also look for "fabrication demand" to raise the price? Do the billions and billions of currency/gold/swap transactions all see value only if "jewelry" is selling well?

My friends, events will change your thoughts. Often you are sold gold that is called "deliverable", yet the broker does lend you much percentage cash to buy. Perhaps this transaction is "deliverable after full payment" and as such the broker doer deliver "little real gold", yes? Much of the western world does "attach" to gold in this form. This metal is sold with the "modern concept" of "gold is the commodity for fabrication" and "is dead as money" in "this new era". This "concept" say that only "leverage" and "trading" does add to your estate. In this fashion, many have lost the long term benefits this "world class money" will soon bring. These persons wait for the event that does not come. In the future, many "salesmen of leverage" will tell stories of the fact that could not be. "The demand for gold "the element" will vanish, as the dollar price for "gold the money" does soar". What chart will be used to view this new high gold price, that will remain, for many years, "unaffordable" as a commodity, yet all bid for daily as the right to buy "money"? In this future time noone will deliver a leveraged commodity that has become, "leveraged money", no? The physical gold, it will trade by the dealer that has seen the Euro as the gold and oil settlement currency of worldwide use. Many will learn the price of gold in Euros, as even the American Eagle will be quoted as such!

Canada does continue to sell, however they lust not for the Euro! Perhaps the American dollar will change this thinking! Poland, the BIS did deliver them more gold for the future of their children. We watch, as the BIS does continue to buy gold under $360, for it's account, as they fill Central Banks with a new world currency reserve. Countries that now begin to think in Euro terms, find the dollar gold as "the good exchange rate" for joining the Euro Group in future! From spring of this year, this demand, makes gold be above $280? The ECB says, "this gold has been sold in dollar terms but has yet to replace the dollar reserves."

I think, now it comes time to sell the dollar. As the Belgian gold was purchased to replace dollars, it did announced the end of EMCB leases. Now the BIS transactions do create a gold market that is "not as before"!

We watch this new gold market together, yes?

Thank You

Another

9/3/98 ANOTHER (THOUGHTS!)

Replies (9/3/98):

From Stockdoc: Dear Mr. Kosares/ANOTHER, I am a stockbroker in Tacoma, Washington, and have been an avid follower of gold (my uncle started Strategic Investments, now Lexington Gold Funds, many years ago - so I come by my 'hard money' stance naturally). I have bought many gold equities for my clients over the years because I believed it was the conservative and prudent thing to do with a portion of their portfolios; only to have them gravely disappointed, and leaving me heartbroken. I am also finding myself feeling quite silly as I have watched the greatest bull market in history march on while my own portfolio is littered with money losing gold stocks.

My question, sirs, will gold stocks ever come to life, please? I read your website daily and look forward with great interest to your erudite updates. I wonder if by "paper" gold assets, you mean that gold stocks will not take part in the coming gold bull market. Any comment regarding gold stocks in general and specific mining companies in specific would be greatly appreciated.

Thank you.

ANOTHER: Mr. Stockdoc, I think, many looked in history of "performance" by gold stocks and reached for "events" that would happen again. However, the future of investing in "most paper gold assets" is not made with a short past that begins from only 1975! Perhaps, when persons add today's "performance" of gold stocks, they will view the future as: " truly, gold in the ground, this is a business, not the currency asset". If gold does rise slowly, these stocks will show a gain for a time.

However, never before in history has gold been cornered in currency terms. Not physical terms. Never before in history, has a world reserve currency, the dollar, been forced from a high gold valuation to a low gold valuation, along with a destruction of world gold market. Because gold is traded today, worldwide in dollar terms, the transition will destroy the capital assets of 99% of all mines. Please place yourself in " context of future events". Physical gold will not reach $30,000/oz because noone is buying it! It will come to this level because the dollar, today, is already inflated to level that will bring this price. The perception that this dollar is "no longer a good reserve", it will bring the flood of buying. This "already printed and in circulationtoday" currency will seek gold!

Governments will tax mines for the right to produce money and force them to sell production in terms of "whatever the new world reserve currency" is at that time. Euro? Because gold mines are the "unique" circumstance in world of investments, their owners will suffer a "unique" problem of definingwhat they really own!

Also, remember, gold will rise soon as world trading continues this course of change. However, at some point, when the dollar market is destroyed, noone will know the currency value of gold thru an official market. Paper gold will not do well as the currency world is at war! The true surge of gold in dollar terms will not show until perhaps a year has gone by. During this time of trouble, physical gold will prove to be "the investment and holding for a lifetime".

Thank You

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From David: Friend of Another. Your thoughts that the Euro price for gold could be set at perhaps $6000. As the US is the largest holder of gold reserves, wouldn't even the suggestion of them selling gold keep a lid on the gold price.

ANOTHER: Mr. David, Again, please place yourself in this time of change. Perhaps many banks have failed and most governments may seem as "Russia today". In this time, the US will not sell it's official gold for such a low price.

"a young man cannot see the future thru the illusion of day, always in the night of life we find the clear path"

Thank You

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From Gandalf the White: Hail MK, I certainly agreed with your AM post and was happy to see things going in the correct direction, UNTIL a few minutes ago when the NY Shorts removed about $2 from the Au Spot price ! Now a Question to you. Reading ANOTHER's latest message, (FIRST let me thank you again for making a sounding board for HE and Friend!) Does he no think that ONLY the "bullion type" gold will retain the realvalue ?

This would, I hope, include coins and other physical type items, BUT NOT mining company stocks and paper items such as XAU calls and options.

What are your thoughts on that concept.
Thanks|
GW

ANOTHER: Gw, I would say, all forms of physical gold is good to own. Even the rare ones offer the "art form", yes? Even in war, the art work is looted first, then the jewels, and always food. I prepare for not the war of men, but the war of currencies! This conflict will bring forth a new concept for many: "western governments will encourage people to hold physical gold "! When the Euro has defeated the Dollar, citizens will be asked to use gold as a savings, for holding the Euro will be frowned on. Gold will not bring your "capital gains tax" as the mines will be taxed to compensate.

Yes, rare gold will be good, but not as liquid as "bullion type" gold.

Thank You

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From Steve: On 8/10/98 Friend of Another commented that hyper inflation "will destroy virtually all gold based paper assets," and that "the contract system they deal with will not be functioning during this time." Could you help me understand the breakdown of the contract system on a global basis and why those companies with cash reserves will not be able to whether the initial economic system collapse and do you literally mean "zero" stock value for all gold stocks.

Do you foresee any interim period between now and hyper inflation where gold will go up enough to suggest that those holding gold paper assets will be able to sell at a higher value than the doldrums it presently holds?

Thank you for your insight.

ANOTHER: Mr. Steve, If you read my letters for today, I think this question is answered. Also, this new gold market is "ongoing" and "changing". The potential exists for the return of gold as the "only" reserve currency. This may result from a failure of the Euro, due to a massive upheaval. Oil states, they have the ability to force this outcome. During this result, all paper will burn and the world economy will start over. However, the BIS is buying gold for customer governments as they begin to lower the dollar. This action, began some months ago will bring gold up, perhaps to the middle $360 range. If the world paper markets do not destroy themselves, gold stocks may rise for a time. But, physical gold is the good hold for this time.

Thank You

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From Johnson: Another, your comments are fascinating!I am a small investor who was lead to gold by way of the Y2K computer and embedded chips/ infrastructure global crisis. How do you think that figures in to your projections? Also, how can a small investor take advantage of this knowledge? Gold calls? Gold coins? If the US is heading for this apparent disaster gold will be confiscated as it was during the depression. How aboutmining stocks? I understand they have sold future production in order to stay open!

These are interesting but troubling times.

ANOTHER: Mr. Johnson, I add only this: Many savers consider "no need for the gold". As spoken to Mr. Kosares, I think these investors of "young eyes" do not know the value of this insurance. Please add the amount you pay for the "Western insurance" of all personal things. The Automobile, House, Health, Life and Other. What is the "return on this investment"? It cannot be known until time to collect, yes? Perhaps, a fortunate person will find "never a return".

The physical gold, this money insurance, it will be collected in future. In that time, the return will be easy to see.

Thank You

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From Rod: Dear FOA (and/or Mr. Kosares), Upon reading your letter of 8/10/98 to Mr. Kosares, I have the following question. Is it not probable that, in the interest of preventing an administrative nightmare (not to mention the equivalent of another "drug business" in "black market" physical gold), the "powers-that-be" will create two forms of physical gold? One would be "street" gold (coins, jewelry, industrial products, natural resource reserves, etc.) valued approximately at current rates, the other would be "Central Bank" gold valued at some (high-"dollar") "reserve" exchange rate. The latter form of gold would NEVER leave the CB vaults in ANY WAY other than as "guaranteed genuine" paper certificates "directly representing" the physical metal).

The process of "reserve currency" conversion could happen "overnight" by deciding upon how much gold to take out of circulation and "pegging" the "exchange value" of all existing currencies at the same "point in time" (probably to the US dollar). Each currency would be "assigned" their relevant "share" of the CB gold "pool" at this time based on the current "value/amount" of that currency in "circulation". The process for a country to "add" to the "CB reserves" after the initial "creation" would need to be based on some "quantifiable" measure of the "true" increase in the "wealth" of the contributing nation (relative to the whole world?). Subsequent to this "point" all national currencies would "float" against the "CB gold-certificate reserve currency" based on the country's "economic health" [deja vu - shades of the "old" gold standard?].

The removal of the "CB" gold from circulation might cause a short-term spike in the price of "street" gold. However, "supply and demand" would soon find a true price for "street" gold. The current infra-structure for precious metals trading would not need to change since it could still be applied to the supply/demand for "street" gold.

Thank you for any commentary/enlightenment.

Rod Steel

P.S. A precise trace of radioactive isotope in each "bar" would segregate the two types and thus make it easy to tell if any "leaked" out of the CB vaults by "mistake".

ANOTHER: Mr. Steel, I add this to your thoughts. A currency losses value because persons do not want to use it for commerce or savings. During the times of "distress", this "value loss" does happen because citizens are selling the paper for other currencies or they are exchanging it for "things". In times past, a currency becomes "bad" because the government is no longer trusted to maintain the value of paper money. In your process, noone would take a paper gold receipt from a government if the gold could not be removed. Treasuries are known to cheat more than the once! If the paper receipts cannot bring gold, they become as "plain paper money". The Treasury say, "I print no more than amount equal to gold", but then they print more " as a temporary, emergency, measure", but then there be no end to emergencies, Yes?

My proposition: Revalue gold to represent all currencies. Perhaps many thousands US/oz. and all governments buy and sell gold for these currencies, in the open. In this outcome, we find no more "black market physical gold" than there be "black market physical currencies"!

Thank You

ANOTHER

9/3/98 ANOTHER (THOUGHTS!)

To All:

Will the Euro become as the dollar of days past?

If one hears the thoughts of present investors, they consider this new currency as "a horse to fat for the running"! I offer that life is but a series of choices that, in each case, expose the risk of saving our productive efforts for a later time. Each choice does hold the bad flavor if eaten in inappropriate combinations. Even the vintage history of wine does show the bad years of mistaken purchases.

Some make the great gamble by trading investments for profit by day. As the night of these assets approaches, they find the dull taste of gold as "a season for the food of others". It seems, only the hot spice of derivatives will fill them! Yet, suddenly, a conservative nature takes hold in discussion of currencies. These same then speak loudly of a "Euro of little future" with no backing. It is much overlooked that the dollar has held the dominate position, to this day, "with little backing! Even fifteen years have passed from a time that many said, " this dollar has the weight of debt and will fall soon". It has not, it did not! Noone did see that the weight of trillions was "of little luggage" for this dollar camel that found strength in Gold! A gold chart from 1970, turn it upside down for view, there we see the strong dollar beast. However, even gold will not support the lead pack animal that does become wild with power. It will be put down when the replacement arrives. Mr. Kosares, from my last letter you find the direction to unload this dollar, yes? It be time to remove your luggage, quickly! Events, "to defend a falling dollar", "in the form of rising interest rates", will show this as the currency soon to lose the backing of gold.

I think the mistake, for many, does come from their "eyes of youth". Even the old experienced mind does, at times, view the world with "eyes of trust". Few can, or will understand what makes a currency, a currency. Gold has not changed, nor has it lost it's place in the world as money. It is still the test of currencies, yesterday, today and tomorrow!

Thank You

Another

9/3/98 Friend of ANOTHER

Michael,

Poland and China are good customers for the BIS. This is real physical gold they are taking out of circulation, not the pay me back when you have a chance lease deals. They really do have the IMF/Dollar countries over the barrel. Under these conditions it's easy for them to drain the Canadian gold reserves. Soon, these goldless countries will be left with nothing but high yield US dollar treasury notes. Later, when new issues of this paper is yielding 15%-20% these Central Banks will wish for the day when they held an assetthat offered no return! Gold!

The world currency crisis is heading for resolution. I think most of the reallocation of reserve assets is complete. Now the war can commence. The Dollar NEEDS a lower gold price to keep it up. London tried to use the Russian gold story as an excuse to send it down. My understanding is that whatever collateral was freed up from the USSR , the BIS picked up for others. It left the brokers selling leases for almost nothing or 1/2% or so. No one was buying them so the rate just fell on no volume. This was a lucky move for them as the perception was that massive sales were taking place. I don't think the BIS wants to be seen as a currency destroyer so they are doing the buying quietly. Investors know now that $280 will come back rather quickly. I thought it would take a month or so!

Michael, I'm looking for a large default in the paper gold market. With the major CB only buying now something is about to give as the most extended shorts can not cover. A default is most likely part of a game plan to get the ball rolling. This spike in gold will no doubt crush the dollar. The next few months will offer the last period of time to roll out of dollar assets at a good price. Of course, all of this is my opinion from and for the most part, Another's.

Thanks

FOA

Editor Note: It was at this point in time (late September 1998) that USAGOLD successfully launched its Discussion Forum for wider public participation and interaction. Subsequent intermittant posts by ANOTHER and FOA can be found in the Archives and at the Gold Trail (see links below).