http://www.upside.com/texis/mvm/david_futrelle?id=37927b3d0

Giving Gold the Finger David Futrelle July 19, 1999 Occasionally, as I wander about Chicago's Loop on some fruitless expedition or another, I run across the LaRouchies. I don't know if they do this in your city as well, but here they've taken to driving around the main thoroughfares in a car with a loudspeaker attached to the top, a little bit like the supporters of the Replacement Party in the movie "Nashville." I can never quite make out what they're saying, and the signs they have plastered on the car are rather too text-rich for anyone on the sidewalk to be able to decipher them. But I suspect that, somehow, it involves the Trilateral Commission, the Queen of England and gold. The crazies, they always come back to gold.

It's fair to say that, for everyone other than the nuts and the goldbugs (not that these categories don't have a bit of overlap), gold has lost a bit of its luster in recent years. It's hard to imagine a modern-day Pussy Galore wasting her considerable talents, and those of her special flying squadron, on anything as manifestly unprofitable as an assault on Fort Knox. Hell, even the rappers have abandoned those giant gold chains they used to wear with such pride. And why not? After all, they're only worth their weight in gold--and that's not much these days.

Still, gold retains a powerful ideological appeal. It's probably the ultimate anti-technology investment--a favorite of crazy old codgers who think the world's gone all to hell since Richard Nixon took us off the gold standard in 1971. And gold is, of course, highly popular with the Y2K crowd; after you've stocked up on canned corned beef hash, the Y2Kers say you should throw what remains of your money into gold.

Back in May, when the price of gold was heading rapidly upwards, the World Gold Counsel launched a series of ads that was a not-so-subtle jab at the Netmania that grips investors. "A portfolio without gold is a luxury you can no longer afford," the ads suggested--contrasting speculative manias with the supposed security of gold. The ads encouraged "smart investors" to "keep a portion of their portfolios in the asset that retains its value over time: gold." Unfortunately, the timing of the ads was a little less than perfect: As the Wall Street Journal acidly observed, "gold hasn't even retained its value over the course of the ad campaign itself."

On May 7, only a few days into the ad campaign, the Bank of England announced that it would be selling off the bulk of its gold reserves over the next several years. Consequently, the price of gold plunged like that of an out-of-fashion tulip bulb, dropping from nearly $290 an ounce in early May to a 20-year low of $254 an ounce last week. Meanwhile, the NASDAQ index has risen well over 300 points.

You might think the gold types would live in self-imposed exile, punching out mimeographed newsletters on manual typewriters with ribbons worn nearly through in their basements. You'd think they'd be the last people on earth to make effective use of something as of-the-moment as the Internet.

But when you talk about gold these days, you almost inevitably end up talking about conspiracy--and not without reason. After all, the laws of supply and demand don't quite explain what's happened to gold in recent months: Almost all observers agree it's an overreaction. So why does something always happen when the price of gold (or POG, as the goldbugs like to put it) gets near $300 an ounce? Is the current sell-off the result of bad luck or something more sinister?

ematic campaign among a strange and powerful cabal of bankers and world leaders to keep down the price of gold, or at least to spike its rise when it starts to get too uppity. This conspiracy theory, most famously expounded by Bill Murphy, chairman of something called the Gold Antitrust Action Committee, is a vast one ... as most imaginary conspiracies tend to be. It suffices to say it involves what Murphy calls the "bullion banks" of Wall Street, with Goldman Sachs being singled out for special opprobrium. Alan Greenspan and (but of course!) the would-be hedge fund wizards of Long-Term Capital Management, Murphy claims, had a big short position in gold at the time of its, ahem, little troubles.

The goldbugs speak a language all their own--a melodramatic, moralistic melange of code words and private jokes. "'Something IS Rotten in the State of Denmark' and in Washington," writes someone calling himself Midas du Metropole, but who is in fact Bill Murphy, at the decidedly retro goldbug hot spot "Le Metropole," a self-described "cyberspace cafe for Investors and Intellectuals" that tries (a little too hard) to evoke the spirit of the Montparnasse in the '20s. "The people in the gold industry are paying the price for the errant ways of the financial community and what they have wrought. These ducks in Washington talk out of two sides of their mouths. They talk integrity, and practice hypocrisy and skullduggery. The 'Goon Squad' and fellow ducks had better start their buybacks soon though or they will be caught up in a 'Scandale Gold' of epic proportions down the road."

Other Metropoleans have their own explanations for gold's troubles--some of which, because all great conspiracy theories converge in the end, have to do with a little something called Y2K. "Maybe gold is not allowed to rise before the year 2000," suggests Metropolean Peter Jungbeck. "Why? Because it could start a self-reinforcing gold rally that in the end will lead people to withdraw their money from their accounts in panic. This coupled with the media can be the end of our financial system... Gold is rising, our paper money gets worthless, mass bankruptcies, people run for the exits.... Maybe they are trying to reassure people everything is fine before the Y2K, and the way of doing it is with the POG."

Outside Le Metropole, in online hot spots ranging from the Usagold Forum to comp.software.year-2000, other goldbugs and freelance conspiracy theorists attempt to nail down villains. "The Big Guns are playing the paper game," alleges Canuck on the Usagold Web page. "They're providing supplies to keep the price of gold down in their own self-interests; dare not the bubble burst. They are playing their game, I am playing mine. ... When the almighty Supply and Demand cycle reverses, I will gladly sell my 'reserves' to the [central banks] at a $1,000/oz. !!!!!"

Maybe he's got a point. True contrarians, of course, recommend investing at the point of maximum pessimism. If you believe this, now might just be the time. The British continued to unload their gold, and other countries from Switzerland to Canada are doing the same. Meanwhile, the International Monetary Fund is weighing plans to sell off even more of the international gold reserves to help offset the accumulated debts of some of the world's poorest nations. The World Gold Counsel, of course, has strenuously objected to all of these plans, and they may not all come to pass. But it is clear that today only the most fanatical goldbugs have much hope for recovery anytime soon, and even some of them are a bit dubious that gold will stage a comeback any time this century.

In the meantime, the goldbugs unwillingly continue to support the silicon economy they so distrust, logging onto the Net to convey their continued dissociation from a world that seems to have overthrown the reign of matter. Were she alive today (and not fictional), Pussy Galore would almost certainly appreciate the irony. Then she'd kick some butt.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999

Answers

Ahhhh... the smell of sour grapes wafting through the air again...

How about posting something a little bit RELEVANT for a change? Is that too difficult? Why only go back to July? Why not 1979? How about finding someone who can spell lustre?

Better still, how about saving us all a bit of bandwidth by controlling your incessant dribbling?

-- Holy Shhhh (you're@too.late), September 28, 1999.

Decker - your a dipshit. Why don't you wipe your ass with some of those treasured federal reserve notes?

-- Ed (decker_doesn't@get.it.com), September 28, 1999.

Gold has been unrealistically low in price for a very long time. There is a huge pent-up demand for gold that has been held in check by that low price. That price no longer applies and all those people who wanted to buy gold but didn't because it seemed like a bad investment are now buying in a frenzy. I know someone who was planning to buy 50 one oz. US Gold Eagle coins yesterday but decided to wait until today. When he saw how quickly the price was rising today he bought 100 of them. Tomorrow he'll probably wish he had bought 200. We could be looking at $1000 per oz. gold in the next month or so.

-- cody varian (cody@y2ksurvive.com), September 28, 1999.

I'll throw my money in the ring with Goldman Sachs every chance I get. When bubble.com bursts and the reality comes crashing home on y2k, money will be parked in something real and accepted worldwide. That something has always been gold. Good luck, Ken.

-- Bill (y2khippo@yahoo.com), September 28, 1999.

I am sure that the moron who wrote this, David Futrelle, is just having a WONDERFUL TIME with his portfolio this week. BWAHHHHHAAAAAAAAAAHHHAAAAAAA!!!!

-- King of Spain (madrid@aol.cum), September 28, 1999.

Former CNBC analyst says bear market in stocks has begun. Gold best performing.... http://www.cnbc.com/commentary/commentary_full_story_stocks.asp? StoryID=7275

-- (Gold@bestperforming.com), September 29, 1999.

Ken,

In case you havent noticed, gold is up and stocks are down....

"The fate of the world economy is now totally dependent on the growth of the U.S. economy, which is dependent on the stock market, whose growth is dependent on about 50 stocks, half of which have never reported any earnings..." Former Fed Chairman Paul Volcker, Friday, May 21, 1999

-- (1929@lloveragain.com), September 29, 1999.

Ken continues to prove what a know-nothing buffoon he is.

FWIW I've made money hand over fist with Prudent Bear as the markets slowly sink...

I've made money hand over fist on goldmine shares...

Profits have and are being taken - this is a game of musical chairs and the loser is the last one owning lots and lots of dollars...

And I've accumulated 300 ounces of yellow metal at firesale prices... by that I mean about $270 on average... again making money hand over fist... that's the best I can do at the moment...

While ddecker has been snickering and pontificating in his know- nothing way over the last year, I and my fellow INFORMED goldbugs and contrarian investors have been positioning ourselves for this denouement...

We are now collecting BIG TIME on the fiat funny money side...

BUT we have also provisoned ourselves with the real thing too...

Not only that we are ready and waiting NOW to move in the appropriate direction as all hell breaks loose as we approach y2k...

When the dollar collapses gold will become once again the de facto backing for the new world reserve currency, which will be the gold and oil-backed EURO,

And when the dust settles gold will be revalued at anywhere between $5-30,000 dollars an ounce - take your pick...

Decker you are so CLUELESS it's not even funny.

-- Andy (2000EOD@prodigy.net), September 30, 1999.

As an occassional Lurker, I'm fascinated as to why Mr Decker raises the hackles of more than a few regular posters.

Mr Decker appears intelligent, he doesn't indulge in abuse (that I've observed) his arguments, whether or not you agree with them, are generally concise, well thought out, articulate and rational. He has a point of view, and expresses it well.

BUT BOY, does he cop some flack from (some of) you guys!! Vitriolic is an understatement!! WHY? If you can only disagree by calling him an idiot and worse, then in my view, you've either lost it, or worse, don't have a real answer to his comments.

And BTW, before you flame me as one of your much loved 'Pollies', I'm prepared for total independance for me and mine for 6 months. However, whilst being comfortable with my decisions and preps., I aknowledge that I could be wrong, 'cause NOBODY KNOWS FOR SURE. Mr Decker won't make me change my mind, but I can read, disagree ( and sometimes gain from) his thoughtful and often insightful comments without screaming meaningless abuse.

Gentlemen and ladies, debate, don't abuse. The latter only makes you seem, well, desperate......

-- Lurking around (Lurking occassionally@hotmail.com), September 30, 1999.

Lurking,

you haven't been lurking long enough otherwise you would know what a cobescending scumbag decker is.

he's got for, previous, a record on this forum...

check back in the archives - we can't all be wrong :)

[case in point - 6 anti-gold articles in 2 days...]

-- Andy (2000EOD@prodigy.net), September 30, 1999.

Well. There you go again, Andy. "Scumbag" etc ! Is this rational, intelligent debate?

I read some of Mr Deckers' "anti gold" posts. I've been a gold bug since 1982 . I have a point of view, strongly held, but my mind is still open. Some of what Mr Decker says says makes sense. I can mix it with my own ideas, knowledge, experience, hopes & dreams and live with the result.

But what about you, Andy? So much loathing, so much ...hate? I'm worried about you Andy. Apart from your Decker -phobia, you seem a nice, regular, helpful, concerned sort of guy. What are you afraid of? (Being wrong, I suspect)

OK. Here's your chance, Andy. There's only you and me left on this thread, so don't be shy. In 100 lines or less, DEBUNK Mr Deckers' arguments. In you own words. Pull him to peices. Rip him to shreds. It doesn't have to be intellectual, just honest. Not copied. Not abusive. GO FOR IT, ANDY........!!!!!!!!!!!!!!

PS I'll check this thread in 24 hours. Got a feeling you won't show, Andy. And that'll be a shame..

-- Lurking around (Lurking occassionally@hotmail.com), October 01, 1999.

Lurking

are you dense or thick or what?

I have no time for ddecker - OK?

He has a history on this forum - I have tried to explain it to you. This is personal - OK?

Anyone else is not a problem for me - y2k pro, chicken little... harmless

ddecker is in another league.

Mind your own goddamn business friend :)

have a nice day :)

-- Andy (2000EOD@prodigy.net), October 01, 1999.

Less than 100 lines, Andy, but sorry old chap, you failed the challenge. Hardly the compelling case against Mr Decker's philosophy that I'd hoped for.

You're certainly right about Mr D being in another league. I think you've proved that conclusively.

What you may not appreciate, is that Mr D is playing intellectual games with you Doomers. He just logs on, has a bit of fun, stirs you up, gets you mad, then probably goes long on gold futures. Right, Mr D?

But from now on, I'll mind my own business, as requested.

-- Occassional Lurker (Lurking occassionally@hotmail.com), October 01, 1999.

Lurker,

YOU are the ignoramus who has proven himself too lazy and disingenuous to go back and find out just exactly WHY I might be just a tad annoyed with the old chap?

Or do you think I make a habit of getting on somebody's case perpetually for no apparent reason.

I don't have to justify myself to you, Mr. Annonymous.

Ddecker knows EXACTLY why I have taken my stance. And so I expect do many other long timers on this forum who know ddeckers antics and agenda all TOO well.

End of thread.

-- Andy (2000EOD@prodigy.net), October 01, 1999.

Lurker...

One the issues Andy clings to is my post on the "Debunking" forum months ago. This post was grossly misunderstand by Russ (aka Big Dog). Like a good fundamentalist, he read my tongue-in-cheek comments literally. He also ignored the part of my post that defended the "thoughtful pessimists." Of course, he also ignored the fact that I use my real name in both fora. In short, the forum bullies found it difficult to challenge my arguments so they simply increased the volume of their personal attacks.

Since that time, Andy has referred to me as "Double Decker." He (and his pals) have accused me of being a paid government operative and other rubbish. Oh, his personal favorite attack--a homophobic slur against anyone who agrees with me. I'm surprised he hasn't tarred you with this favorite brush... but give it time.

Given Andy's childish tactics and his obession with right-wing conspiracy fantasies, I find him a rather tedious read. He does demonstrate a capacity to cut-and-paste articles, particularly those on gold, but I have yet to see him exercise the ability to comment on them intelligently.

The unfortunate aspect of Andy (and pals)--their bully-boy tactics diminish the forum. Their antics deter some of the more mild- mannered folks from participating... and that is a shame. I detest bullies... and regret the probable reality that I will never have the chance to express the though to Andy personally. One of life's little disappoinments, I suppose.

I appreciate your thoughts, and hope to have a decent discussion with you about gold... on some occasion.

-- Ken Decker (kcdecker@worldnet.att.net), October 01, 1999.

Come come double D you may have fooled the lurker but you certainly haven't fooled the old timers on this forum.

My how your memory has failed you...

You came in as an agent provocateur and you continue to operate as one...

Your maunderings above cannot disguise this fact... you do not post with any feelings of altruism, no desire to help the dear readers...

So why are you here?

I know.

-- Andy (2000EOD@prodigy.net), October 02, 1999.

Andy,

You were an idiot before I arrived on this forum... and you will be after the forum is long gone and Y2K is just a distant memory. Normally, I am tolerant of folks who may not be the sharpest tool in the shed... but you are a mean-spirited little bully. In the American parlance... a punk. Don't be surprised when someone rational notices your coarse outbursts and comes to the same conclusion.

-- Ken Decker (kcdecker@worldnet.att.net), October 02, 1999.