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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: The Fix who wrote (18618)	9/12/1998 7:19:00 PM
From: Mr Metals	Respond to of 116753

He said he forgives you for being the fIXER:-) Mr Metals

To: The Fix who wrote (18618)	9/13/1998 8:56:00 AM
From: Mr Metals	Respond to of 116753

As per EC's request. The Canadian Mining Newsletter Sept 04 1998 ***************************** US Dollars bid. Gold Silver Platinum Palladium Rhodium (Ask) 285.60 4.990 364.45 287.00 670.00 Dollars Bid Ask US in Canadian 1.5330 1.5410 Canadian in US .6489 .6523 Gold in CDN dollars 437.83 It is instructive to point out here that in Canadian Dollars the price of gold has not changed much since January. In fact it is up slightly. This price differential is keeping CDN miners at work. The average price to plan a mine at in the 90's was 500 CDN per ounce so it can be seen that we are not suffering as badly as the States. Gold is still moving with the market. This market is riding a psychological horse of a different colour. Gold is a hedge in a bad market slide and a dollar slide. It is not merely a commodity but an index of value. Right now it is tied to the dollar market value of the derivatives it is traded in. So it fluctuates with the market. True devaluation cannot occur without a decrease in the money supply. If the US bails out all its banks which will fail it will have inflated de facto. Worldwide devaluation cannot occur by fiat. You can only devalue by fiat relative to another currency. Or gold. Or some index. In other words not everyone can simultaneously devalue relative to one another...who would be the index? It is obvious that we need a standard of value. The gold standard is fine while governments do not print money secretly. What they do is create fiat dollars with low interest bonds in banks. Banks buy the bonds by getting increased loan-deposit ratios from governments. If a note was issued that corresponded to an amount of gold or any other commodity then you would always know what that note was worth. If gold rose so would the note and it would buy equally of all else. Roosevelt changed that by making deals with the reserve on war bonds and inflated like mad. So the reserve notes to pay the bearer would not buy what gold was held. The chickens in every pots were borrowed from the mortgage holder. When money was multiplied during the war the dollar weakened and his principal value increased. The gov't raised the money supply to pay the war debt and the money supply weakened still further. Mortgages went up when interest rates rose and so did salary demands. As principal values rise the interest rate has a tendency to rise because loans otherwise would stay open for longer than desirable. This would exacerbate a housing shortage as the mortgage money would be hard to get to buy the increased principal. The long terms causes a necessity of either higher rates or larger debt deposit rates for lenders. Otherwise the market for construction would wane and so would the the economy. In the end we had secret inflation as the real cost of living spiralled up with increasing salaries and costs and gradual increase in interest rates and particularly mortgage rates which were many times larger than the interest rates paid on savings. But gold after the war stayed at 35 times the the US dollar's value by the federal regulation. For 30 years not so secret inflation ran rampant as wealth increased but is was still outstripped by inflation and the money supply by many times. It was actually almost comical, as Copper approached 1/35 of the value of gold in the late 60's which was near the value of silver in relative terms always 30 to one to gold for 5,000 years. We are told by financiers that gold is just a commodity with no intrinsic value and to look elswhere for value. It is a new world order. Well what is the base or index of that order? the set interest rate? the unknown money supply? The man hour of loafing in an under-productive society? I don't know about that system that is being smoke and mirrored on me without even a vote. Look what happened in careful and controlled Japan. Easy money led to monster real estate values as the only collateral on easy money was commercial land. In the end it all collapsed. But what led the collapse? Why is the yen poor? Consumption. The markets are not there. The spending power is drying up. Inflation had leveled off. In the sixties every kid had a stereo worth several hundred dollars and a motorbyke worth about 500 or so. That is perhaps 6,000 in today's dollars. And that was pocket change then although salaries were not high, taxes were low. and work was "easily" available. We are in a bust cycle. Let there be no mistake. There is no demand left for financial instruments for products or for venture. People are pulling in their horns and the new youth is not that large a group to soak up supply with new demand. If the price of a commodity was let to float and was not controlled and a note was tied to that commodity then the note would always have the same buying power. What would that commodity be? S+P index points? silver? Diamond? Sugar?, steel? I don't think I would want to take home 50 tons of steel. But of course the price of the commodity would always be the same as we buy it in notes. Unless everybody tied their notes to the same commodity we would have a relative value index only internationally with other's money. We settled on gold as it had portability and did not degrade. It would not flake or rust and it was sufficiently compact due to its rarity that it was easiest handled as an index. As a metal its value is as much utility wise in our society as any other. In fact it is indispensible. Sugar or salt can be obtained naturally in many foods. Pork has substitutes. So does wheat. I can do without many plastics and wood can be replaced. It is hard to do without steel though. And I cannot build a computer without gold. Just can't do it. The circuits would be too unreliable. If governments could be trusted then the gold standard would be ok. It would regulate currency. But with it or without it they always seek to hide the money supply when they want some for their little projects. Like rebuilding eastern Europe, paying huge debts and a bloated civil service. Why is gold 285 dollars? Because as in the 50's the US government needs it there. To make their dollar look good. Compare the $ to anything else and it looks worse and worse every day. Compare it to the debt for instance. It cannot pay it. I can tell you exactly what gold is worth in real terms with some rough calculations. Lets take two miners in an underground stope that is running at breakeven in a mine in Canada in 1945. The miners are using two stoper and a jackleg and drilling in a shrinkage stope on a 6 foot wide vein. They drill off and break 6 feet into the back over a vein length of 200 feet. They and their 2 cross shifts work that stope for one lift of 6 feet in one week's time. The stope runs at a grade of .20 ounces per ton which is the average in Canada. The gold is being used to build the circuitry of radar bases in the Dew line as it has little Osmium in it and it easily smelts and makes excellent electrical surfaces for circuit boards. Let's see what it cost to mine that necessary gold at todays prices in US dollars. Tons mined (6 X 6 X 200) /12 = 600 tons. Ounces = 120 at .20 grade. 2 man days in 3 shifts for 6 days = 36 man days. $ 9,000 12 man days tramming 3,000 3 man days hoisting 1,000 10 man days milling $ 2,500 4 man days engineering $ 1,200 4 man days development $ 1,000 dynamite for 300 holes = 2400 sticks or 16 boxes powder. $6,400 crush and grind ore at 1.5 hp per ton day = 21,600 hp hours= 16,200 Kw hours = $ 2,430 Hoist and tram slush ore one day at 150 hp total at duty in one day. 150 hp times 24 hours 3600 hp hours = 2700 KW hours ===== $405 Reagants, cyanide, xanthate and other comsumables.. at 3 dollars per ton $1800 Pump slurry and water at 150 hp X 24 hours $405 Pump mine water at 150 hp X 24 hours $ 405 smelt and refine 1 man day + costs $ 500 Capital cost for 600 ton a day operation (St. Andrew) 38 million. at 7 year payback at 600 tons per day = 18 dollars per ton = $11,000 Bribe senator to get into production.. 1 dollar per ton $ 600 total $41,645 dollars for 600 tons of ore or 120 ounces. 69 dollars US a ton is slightly high for underground mining. It can be done for 80% of that. But that is an efficiency. I am trying to equate overall costs. So gold is worth 41,645/120 or $347.04 dollars an ounce. At least. If we argue the mine makes money then gold would be worth 30% more. Then the gold would be $451 US based upon historical profits in gold mines. Remember that are using multiple powerful and established indexes of real worth to equate to gold's worth. Let us not argue utility as who can say what anything's utility is? We might as well go into the asylum and seek the opinion of inmates what they would pay for things. People pay for what they need according to the money supply and their desires. I say that something's cost if it is balanced against energy, many commodities, labour, skilled manufacture and true rarity must be the arbiter of its worth better than any other index. The mining of it established that. What better index than the complex suite of variables in mining it. To ask a politician/madman/man on the street what the value, is as capricious as tossing a coin in the wind. What changed in man so suddenly to seek debasement of any single commodity? The question of want is a red herring. What happens, the politician says, if no one want's gold? So what does he do to establish that want? He drops the price! The price is the want. No one gets up hungry for gold in the morning unless the paper is worthless. The mechanism of the price drop was established by Black and Scholes. The wrote that a derivatives market would stabilize or control prices in commodities if it was opened up and values could be calculated easily. To this end they created a formula for pricing derivatives that was once thought to be not easily calculable because of the time factor. It is a "variation" on this deriviative, the future, that controlled prices on commodities exchanges for many years. With a monopoly the price can be set low against all forces. The buying forward at a higher price monopolizes the market. No one will sell to anyone else. So all the gold ends up in one group's hands financed by the gov't. And the price if you should sell or buy on the spot? Why the quoted price which was lower! So with this established monopoly they corner the market with cheap bank loans and sell the gold themselves by contract to end users and banks. Where all their money is made is on straddles on the derivatives market and on holding gold delivery contracts open for long periods where they can take advantage of a falling price. What would kill this market is if producers would not sell forward but let their gold be sold at auction on day of delivery. This would rob the monopolizer of his monopoly and force his derivatives market off keel. He could not guarantee price or delivery. The politicos can print many dollars by having a secret formula on the deposit to debt ratio. In other words the amount they can loan out according to the amount on deposit. It is supposed to be 20 to one but in fact it is not declared or known. It is known the bank of Canada and the Cabinet but no one else. Is this any way to run an economy? So banks can loan billions to buy gold and buy puts on gold. This method hides the value of the dollar. In fact the low interest rate and large debt should ring some bells. Obviously for banks to be making money they must have lots of it out. The large amount out in loans must mean the gov't has loads of bonds placed with the banks. Debt to deposit ratios must be about 30 or 40 to one, not the nominal 20 as is said. They put Michael Milliken in jail for creating money with junk paper. I don't see any politicians going to jail. What is instructive to look at is the inflation and gov't spending cycles and the price of gold as gov't established. Where the gov't had to inflate and keep the population's wage demands low they sought to keep gold low. Where gov'ts are not trusted at all as in Asia, gold has a high value. In India gold is black marketed at 700 dollars an ounce. Oh dear. I have proved here is it might be possible to mine gold at a profit! If we run dirt cheap in Canada we can mine gold at parity! ====================================================================== ***************************************************** The Canadian Mining Newsletter echarter@vianet.on.ca timmins.vianet.on.ca <img src="http://fotw.digibel.be/images/ca-1924.gif"> Resource Equity Analysis E. Charters, Box 1555 Timmins, ON. P4N-7W7 705-264-7110 free trial subscription ******************************************************* Mr Metals

To: The Fix who wrote (18618)	12/30/1999 4:07:00 PM
From: long-gone	Respond to of 116753

Thursday December 30, 2:51 pm Eastern Time (Note: this article is ``in progress'; there will likely be an update soon.) Italy says Y2K ready, maybe small power glitches By Steve Pagani ROME, Dec 30 (Reuters) - Italy said on Thursday its electricity network was largely in shape for Y2K but might suffer some local power cuts -- the sort of brief blackouts Italians are used to living with. Minor problems could also occur in gas and water supplies, the prime minister's office said in a statement, but were not expected to be anything out of the ordinary. Prime Minister Massimo D'Alema's office, co-ordinating millennium bug preparations, issued a inventory of readiness in key sectors for the computer effects of the year change to 2000. Enel -- the utility which produces 73 per cent of Italy's electricity and delivers 90 percent -- foresees no network disruptions over the New Year period, the statement said.(cont) biz.yahoo.com