War on Gold

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Here is the link to the Gold-Eagle article:

War on Gold


-- Ray (ray@totacc.com), May 11, 1999


If the price of gold is headed down, I'm buying. I'd love to get to the magic 10% of assets level as a hedge. At the very worst my wife will get some pretty baubles in the future if all is well.....

-- kozak (kozak@formerusaf.guv), May 11, 1999.

The price of gold has increased an average of .7 percent per year during the period the 1984 to 1994. During the same period silver declined by an average of 4.8 percent per year while the S&P 500 increased by an average of 14.4 percent per year. This does not include for the past five years where metals prices have been soft and the equities market has exploded.

Considering inflation (3.6 percent/year), metals have lost money during the money during the past 15 years.


-- Mr. Decker (kcdecker@worldnet.att.net), May 11, 1999.

Some war. Managed to cause failing gold prices for two, count them two, whole trading days. The last two London fixes (AM & PM) shows gold going back up again.

Perhaps it should be the Skirmish on Gold, or Recon on Gold?

-- Ken Seger (klenseger@earthlink.net), May 11, 1999.

Mr Decker,

Would you care to comment on the relative value of Gold, versus paper money over a somewhat longer time frame then your carefully chosen ten year window. Say 50 years, 100 or more?


-- kozak (kozak@formerusaf.guv), May 11, 1999.

Hey Decker, sounds like the kind of stats we get out of this Administration EVERYDAY. Any coincidence here?


-- Ray (ray@totacc.com), May 11, 1999.

... yawn ... London Fix 9-1-98 $277.70, 10-16-98 $300.45

This [insert a bushel basket of adjectives here] hasn't even moved gold outside its trading range of the last nine months.

Gosh, when the bullshit stops and the money starts to talk, which is the larger force, banks or the marketplace?

-- Ken Seger (kenseger@earthlink.net), May 11, 1999.

Hey Decker, you might want to look at the 30 year bond today, it's tanking again. been doing this for a few weeks now. keep your eye peeled!!


-- Ray (ray@totacc.com), May 11, 1999.

Decker, I picture you as a spare tire, nacho gobbling, wrestling watching, 401k lovin' kinda guy.Try Couchpotato.com.

-- Gia (Laureltree7@hotmail.com), May 11, 1999.

Well, Gia, those who attend the gathering in Northern VA next week can report on how I present in person. By the way, did you have point... other than a gratuitious insult?

On the gold issue, I can dig up research on the historical price of gold, but given the monetization of gold by the U.S. and other countries I am not sure the "market" price will be accurate. If I recall, gold did "float" during the civil war. The price from the early 70s on is more interesting... at least to me. After the $850 an ounce high water mark in the early 80s, I think gold dropped to its natural market level... and has stayed there.

[One trivia note, in the middle ages gold and black pepper were traded, ounce for ounce.]

The mercantilists thought gold was wealth. Spain locked tons in the vault and, as a country, faded away. Britain used it... and the sun never set on the British Empire. Gold has been an extremely poor investment for two decades. Gold may regain its luster, but I feel there are other inflation-proof investments with greater use value than gold and much more upside potential.

On long term interest rates... I'm not surprised. In truth, I don't think Greenspan is as worried about inflation as the huge speculative market bubble. I think he might hint rate hikes to shave the Dow back under 10,000. I'm in short-term bills, not long-term bonds.


-- Mr. Decker (kcdecker@worldnet.att.net), May 11, 1999.

Decker, here is a simple wager. I'll bet gold will be around a lot longer than a Federal Reserve Note and when the Note is worthless you'll still be able to buy plenty with the gold.


-- Ray (ray@totacc.com), May 11, 1999.

Mr. Decker commented:

"On long term interest rates... I'm not surprised. In truth, I don't think Greenspan is as worried about inflation as the huge speculative market bubble. I think he might hint rate hikes to shave the Dow back under 10,000. I'm in short-term bills, not long-term bonds. "

The last time Greenspan hinted the market was a bubble (Irrational Exuberance was his phrase) the Dow was at 6300. It never looked back.


-- Ray (ray@totacc.com), May 11, 1999.

In the short term, the "price" of gold vs. a currency is a useful measure for speculation. But since every currency in the world has eventually tanked, it is rather meaningless in the long term.

Just two examples:
The US$ itself is worth only a few pennies of its 1940s value, which was only a fraction of its starting value, and the next round of inflation should finish the job.
The British "pound" used to be a pound of silver. Now it might buy, what, one-quarter ounce of silver?

It is more instructive to take look at the purchasing power of, say an oz. of gold (ignoring its currency value. This is the "one oz. bought a good man's suit in 18xx, and still does today" bit.

Unfortunately purchasing power data is hard to come by, but it is the only data that has any meaning. Gold's (and silver's) "value" relative to currency is meaningless. One is real and the other is vapor.

-- A (A@AisA.com), May 11, 1999.


Let Greenspan announce an interest rate hike of a full point, the market would collapse as if sucker-punched. He has been "hands off," but I don't expect him to stay on the sidelines forever.

As far as U.S. currency, let me quote Keynes. In the long run, we are all dead. My perspective lasts one lifetime. I have assets other than currency... and one's with more use value than lumps of gold.

Ultimately, the most valuable commodity is knowledge. It was a thousand years ago, and it will be a thousand years hence. Look at the wealthiest people in America... how many became rich on gold?


-- Mr. Decker (kcdecker@worldnet.att.net), May 11, 1999.

With all due respect, Mr. Decker, asking how many became rich from gold fails to address the real value in precious metals - their usefulness as a hedge against inflation. I agree, few or none will become rich from gold, but many who have it will be able to retain their wealth.

-- . (.@...), May 11, 1999.

Mr. Decker, I respectfully submit that you are not taking into consideration the enormous value gold currently holds in today's international markets. Granted, it may not be evident to the average person that gold has considerable value, but that is more or less because it does not earn a return while it is sitting in your bank vault. This does not take away from it's historic ability to guard against economic upheaval.

"The volume of gold cleared every day in London represented nearly twice the production from South African mines in a year, Mr. Alan Baker, chairman of the association (London Bullion Market Association), pointed out."


"traders insisted the association's statistics were only part of the picture because matched orders are cleared without appearing in the statistics. Mr. Jeffrey Rhodes, of Standard Bank, London, said the 30m [million] ounces should be "multiplied by three, and possibly five, to give the full scope of the global market."


"In view of the humongous daily trading volume of gold by the LBMA, annual supply/demand dynamics may have little to NO INFLUENCE on the long-term price of the noble metal - albeit can cause short-term ripples one way or the other.

The formidable volume of daily trading strongly resembles that of currency trading -- indeed many world experts staunchly proclaim gold to be the universal currency... and history undeniably supports this assertion.

Fear of Central Bank sales of gold may be totally exaggerated - and may really have only a minuscule and temporary impact on gold prices.

The LBMA is a highly liquid gold environment, conducive for speculative trading - ESPECIALLY NOW THAT THE 'CAT IS OUT OF THE BAG.' Could this be the ulterior motive for breaking the secrecy code of ALMOST TWO CENTURIES?????????????

At the current daily trading rate, more than 100 TIMES THE ANNUAL WORLD'S GOLD PRODUCTION RATE IS TRADED ANNUALLY in the LBMA!!! Other than currencies, can anyone mention any commodity experiencing yearly trading volume of 100 times its annual production?! ANYONE?! Does this not pique your curiosity and question the reason or purpose of all this gold trading?!


Mr. Decker, I look forward to your comments...

-- (orwelliator@biosys.net), May 11, 1999.

Decker, I admit that you are right. Personality insults achieve nothing.Neither does your beligerant propoganda. What gov. branch are you with? Do they have an extra room for you at the "inn"?

-- Gia (Laureltree7@hotmail.com), May 11, 1999.

Everyone, Here's an excellent site for commentary about present gold situation: http://www.thestreet.com/markets/marketfeatures/744611.html

-- Gia (Laureltree7@hotmail.com), May 11, 1999.

Mr. Decker

Does not the Oracle of Omaha (Warren Buffet) have a few tons of silver? I wonder what he knows. He is right quite often.

-- Mike Lang (webflier@erols.com), May 11, 1999.

Gold is not the only hedge against inflation. And, no, I am not particularly interested in gold as an investment... nor do I collect antiques, art, stamps, etc.

In my experience, the most successful folks are the dealers in the metals, coins, rareties, etc. They make money buying and selling. That, I can understand.

And I try to limit my investing to areas I understand.

Gia, I do not work for the government. Were my interest propaganda, I'd find a larger audience.


-- Mr. Decker (kcdecker@worldnet.att.net), May 11, 1999.


Buffet admitted to his investors, during the last meeting of Berkshire, that they would have been better off if he had snuck out to the movies every day instead of working. In truth, Buffet has enough money to plate Omaha with silver, and I have no idea what he owns. Here's a return question... do you think he has a year's supply of food in his basement?


-- Mr. Decker (kcdecker@worldnet.att.net), May 11, 1999.

>>Were my interest propaganda, I'd find a larger audience.<<

Come on, Mr. Decker, "leverage" has more than one meaning.

-- Elbow Grease (Elbow_Grease@AutoShop.com), May 11, 1999.

I think most people, investors or not,are ignorant of the real determining factor in the price of gold for us. For Americans the real factor (besides central selling) is the strength of the dollar in relation to other world currencies.

It would be interesting to see what gold has done in native currencies like the Brazilian Real or Russian Rubble over the last 12-24 months. This is why you own gold. Our dollar is riding high. It may not be this way in the near or far future.

-- Jim the Window Washer (Rational@man.com), May 11, 1999.

Gold is a preserver of wealth, not a money maker. It will generate great wealth in upset conditions...such as what Y2K and a tanking stock market. But neither can be predicted. It might surge up, only to fall back faster than it rose, if fears prove to be unwarranted. I agree with Mr. Decker in that you won't get rich hoarding gold. give me a steak and a beer anyday. However, for those who don't want to lose it all, its a nice hedge. By the way....why does everyone always worry about inflation? Deflation is the real lurking giant.

-- rick shade (Rickoshade@aol.com), May 11, 1999.

Shade is correct... deflation is an ugly thing. (To borrow a phrase from Young Frankenstein.) Mr. Elbow Grease... do you really think I am a government shill? Here at 11:19 p.m. with a speech to deliver tomorrow? How many government employees do you know that are still working after 11 p.m? (laughter)


-- Mr. Decker (kcdecker@worldnet.att.net), May 11, 1999.

Mr. Decker,

Are you a government shill? I do not know. What I do know is that if *I* had to speak tomorrow, I would have to have a very compelling reason to be posting here at this time of night.

Mr. Elbow Grease

-- Elbow Grease (Elbow_Grease@AutoShop.com), May 12, 1999.

We're all watching you double-decker.

We're almost all of the opinion that you are a very BAD government shill - in that you annoy the hell out of us all whenever you post anything, obfuscating the truth. I would love to heckle your "speech" because you are a transparent phoney.

You are doing it on purpose, in your oily way.

You are having belly-laughs at our expense.

It is patently obvious.

You are a fraud, a charlatan and a hindrance to this ongoing process.

Yes you will "PRESENT" yourself to the folks in Virginia.

I think we all here have a different view of you're "presenting" - read a little Desmond Morris, are you on heat with your attempted manipulation of this forum? Getting aroused?

As my dad used to say you're "a queer eel."

-- Andy (2000EOD@prodigy.net), May 12, 1999.

Mr. Elbow Grease,

The speech will go well, O suspicious one. Have a good day. Andy... did you say something?


-- Mr. Decker (kcdecker@worldnet.att.net), May 12, 1999.

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