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To: CuriousGeorge who wrote (7708)	2/19/1998 2:11:00 PM
From: Michael	Respond to of 116762

CG, It seems that the west has agreed to 'demonitize' gold; and treat it as just another commodity in order to keep its price hovering around the cost of production, rather than it monetary value. I can agree with this. I think the profligacy of debt build up over the last thirty years is motive enough for the Cb's to downgrade gold's status.One of the most thought provoking statements I ever read was that the word 'Credit' comes from the Latin "credere" - to believe. If people started to believe that Gold was a better alternative to paper currencies then the Keynesian game that Western Governments have played would be well and truly over. However that does not imply that this has been done deliberately at the behest of OPEC. If the dollar lost its 'credibility' then Gold would be an obvious choice given its historical role. Oil could in theory also be a choice given that its a hard asset. However it doesn't have the psychological association. The US$ is today, backed by oil. How is this statement justified. The US certainly doesn't have enough resources of its own to back it. Do you think the CBs are selling gold to keep the dollar strong? They don't have to sell to accomplish that feat!. What else could they do ? There is only one oil state that counts! Only one! They have made it very clear how important gold is to them. If they had started buying outright, gold would have gone to $5,000+ in days. I have to assume this is Saudi Arabia. Their production capacity and reserves place them head and shoulders above the other producers. A lot of people still think that the Arabs are feelthy rich. The truth is anything but. A couple of years ago in fact they could not pay their government staff for months at a time. The Gulf war left them in a very parlous financial state and with the third highest population growth rate in the world they have been struggling in recent years. They simply do not have the money to drive gold to 5000$ an ounce. In fact in terms of financial leverage the group they most closely represent is the Gold Miners. <<think the oil producers made their point in the 70's. They have their hand on the financial jugular of the west. The current 'emergency' meetings are only IMO to discuss curtailing production, and to what level, how much by whom etc, because the Asian crisis has changed the demand portion of the price equation. >> I repeat my point. They could not do that today. 1. Oil production is not as concentrated now. For the last fifteen years OPEC has been struggling to get its members to stay within the quotas they themselves agreed to. their unwillingness to do this is the reason that oil today, in real terms, is back to the price it was before the embargo !. 2. The embargo was actuallly instigated by King Faisal as a retaliation for the US support for Israel during the 73 war. Given the strategic ties that have come about since then can you imagine the political will would exist to attempt a similar exercise. 3. The Arabs couldn't afford it. As I pointed out above nearly all the Gulf has been struggling financially since the war. Its simply not credible that they could endure the financial hardship that would come from an embargo that lasted long enough to bring the West to breaking point. Another's response to this is: They do not have to keep oil up in price to control it. One can gain more wealth by keeping oil down than by driving it up, much more! And what is the value of this type of manipulation? Eh Come again. Control the price by keeping it down?. You'll have to explain that one to me..slowly... Re: likelihood of Goverment confiscating gold. I agree this is possible, but it seems to me that if such a thing did happen it would be the culmination of the crisis and not the first response. What kind of situation could allow them to ride roughshod over shareholders right to such a degrees. Also what would be thier motive. Stabilising the currency ? With the finanicial systems of today the dollar assets would be long gone before this happened I would suspect. Recent experience in Asia has shown how feeble are the powers of Govenment now when the markets turn against them. Another's call on the gold bottom was striking but not actually accurate. Gold went up from 280 only to return and test the 276 level. "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! I guess the last line is the one I have the problem with, If "Oil" bid for gold, what would they bid with. They don't have the bucks to drive the price so high?? Still unconvinced. Regards

To: CuriousGeorge who wrote (7708)	2/19/1998 2:24:00 PM
From: gmweber	Respond to of 116762

CuriousGeorge Good comprehensible summation of ANOTHER THOUGHTS. If true makes one wonder what kind of spin this puts on the present IRAQ situation. If running out of options with gold, would they contemplate a military solution. Scary. regards gmweber

To: CuriousGeorge who wrote (7708)	2/19/1998 2:30:00 PM
From: Michael	Respond to of 116762

CG, It seems that the west has agreed to 'demonitize' gold; and treat it as just another commodity in order to keep its price hovering around the cost of production, rather than it monetary value. I can agree with thisi. I think the profligacy of fait money issue over the last thirty years is motive enough for the Cb's to downgrade gold's status.One of the most thought provoking statements I ever read was that the word 'Credit' comes from the Latin "credere" - to believe. If people started to believe that Gold was a better alternative to paper currencies then the Keynesian game that Western Governments have played would be well and truly over. However that does not imply that this has been done deliberately at the behest of OPEC. If the dollar lost its 'credibility' then Gold would be an obvious choice given its historical role. Oil could in theory also be a choice given that its a hard asset. However it doesn't have the psychological association. The US$ is today, backed by oil. How is this statement justified. The US certainly doesn't have enough resources of its own to back it. Do you think the CBs are selling gold to keep the dollar strong? They don't have to sell to accomplish that feat!. What else could they do ? There is only one oil state that counts! Only one! They have made it very clear how important gold is to them. If they had started buying outright, gold would have gone to $5,000+ in days. I have to assume this is Saudi Arabia. Their production capacity and reserves place them head and shoulders above the other producers. A lot of people still think that the Arabs are feelthy rich. The truth is anything but. A couple of years ago in fact thay could not pay their government staff for months at a time. The Gulf war left them in a very parlous financial state and with the tthird highest population growth rate in the world they have been struggling in recent years. They simply do not have the money to drive gold to 5000$ an ounce. In fact in terms of financial leverage the group they most closley represent is the Gold Miners. <<think the oil producers made their point in the 70's. They have their hand on the financial jugular of the west. The current 'emergency' meetings are only IMO to discuss curtailing production, and to what level, how much by whom etc, because the Asian crisis has changed the demand portion of the price equation. >> I repeat my point. They could not do that today. 1. Oil production is not as concentrated now. For the last fifteen years OPEC has been struggling to get its members to stay within the quotas they themselves agreed to. their unwillingness to do this is the reason that oil today, in real terms, is back to the price it was before the embargo !. 2. The embargo was actuallly instigated by King Faisal as a retaliation for the US support for Israel during the 73 war. Given the strategic ties that have come about since then can you imagine the political will would exist to attempt a similar exercise. 3. The Arabs couldn't afford it. As I pointed out above nearly all the Gulf has been struggling financially since the war. Its simply not credible that they could endure the financial hardship that would come from an embargo that lasted long enough to bring the West to breaking point. Another's response to this is: They do not have to keep oil up in price to control it. One can gain more wealth by keeping oil down than by driving it up, much more! And what is the value of this type of manipulation? Eh Come again. Control the price by keeping it down?. You'll have to explain that one to me..slowly... Re: likelihood of Goverment confiscating gold. I agree this is possible, but it seems to me that if such a thing did happen it would be the culmination of the crisis and not the first response. What kind of situation could allow them to ride roughshod over shareholders right to such a degrees. Also what would be thier motive. Stabilising the currency ? With the finanicial systems of today the dollar assets would be long gone before this happened I would suspect. Recent experience in Asia has shown how feeble are the powers of Govenment now when the markets turn against them. Another's call on the gold bottom was striking but not actually accurate. Gold went up from 280 only to return and test the 276 level. "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! I guess the last line is the one I have the problem with, If "Oil" bid for gold, what would they bid with. They don't have the bucks to drive the price so high?? Still unconvinced. Regards

To: CuriousGeorge who wrote (7708)	2/19/1998 2:53:00 PM
From: philv	Read Replies (1) \| Respond to of 116762

CG: Re: Another In trying to make some sense of the strange behavior of precious metals, one comes to the point of examining many explanations and theories, including all manner of conspiracies. IMO, all explanations are flawed, so when Another came along, and offered a new theory, it piqued my interest. I have been following his posts for quite some time and offered my own thoughts on the XAU thread. Message 3044761 Since then Another has been busy, but I am still bothered with his change in writing style. However, as it is so obvious, it lends credence to the belief that others are posting for him. I find Another to be an entertaining read, and much of what he says strikes a chord with me. I look forward to his posts. Phil

To: CuriousGeorge who wrote (7708)	2/19/1998 7:21:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116762

CG, With PDG costs of production of $260, it is easy to agree with "Another" that $280 is close to an absolute bottom... "The company expects to produce 2.6 million ounces of gold in 1998 for its account at a cash production cost of about $185 an ounce and a total production cost of about $260 an ounce." Also with a dismal report and no change in price PDG should now move-up sharply on any upside in POG... NEW YORK -(Dow Jones)- Canadian gold-mining firm Placer Dome Inc. Thursday reported its fourth-quarter net loss widened sharply on a drop in revenue and after the company took bigger charges than a year ago for the writedown of mining interests. Last month, Placer Dome said it would take various fourth-quarter writedowns caused by weak gold prices and slashed its annual dividend to 10 cents a share from 30 cents. The Vancouver, British Columbia-based company (PDG) Thursday posted a loss of $284 million, or $1.16 a share, including charges of $295 million. The per-share impact wasn't provided. Analysts surveyed by First Call had expected the company to earn 74 cents a share, excluding charges. In the year-ago quarter, the company posted a loss of $57 million, or 24 cents a share, on a charge of $90 million for the writedown of mining interests. Again, the per-share impact wasn't provided. Revenue, meanwhile, fell to $305 million from $338 million a year ago. Preferred share dividends were $3 million versus $1 million in the quarter and $13 million versus $1 million in the year. The company said gold production in its latest fourth quarter rose to 705,000 ounces from 476,000 ounces. For the year, gold production increased to 2.6 million ounces from 1.9 million ounces a year earlier. The company's cash flow from operations in 1997 rose to $269 million from $218 million a year earlier. The averaged realized price for gold was $358 an ounce compared with $406 an ounce in 1996. Placer Dome's gold hedging program has 35% of 1998 gold production sold forward at an average price of $460 an ounce. Placer Dome said its share of ore reserves rose to 31 million ounces in 1997. It said the most significant reserve additions came from a 31% increase at the Las Cristinas property in Venezuela, a 13% increase at the Porgera mine in Papua New Guinea, inclusion of the Mulatos development property in Mexico and its greater ownership interest in Porgera. Placer Dome's exploration expenses are expected to be about $115 million in 1998 on priority projects which include Aldebaran in Chile, Donlin Creek in Alaska, Cerro Crucitas in Costa Rica, Samira in Niger and projects in Peru and Canada. The company expects to produce 2.6 million ounces of gold in 1998 for its account at a cash production cost of about $185 an ounce and a total production cost of about $260 an ounce. Placer Dome also said its board has approved a shareholder rights plan to replace the existing plan that expires in 1998. The plan is now in effect, subject to shareholder approval, and is similar to the expiring plan. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved. -------