OT?IF Y2k is such a threat why is gold/silver so cheap

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

If y2k is such an unknown and large potential threat why have the markets not responded to this threat. If there is a ?% chance that this problem can wreak havoc on finance/distribution of basic services etc. why has the market not responded. I have heard all the stories of market manipulation by the tptb, but this does not compute. Any sensible person would logically assume that if there was any serious threats and people are prepping then PM would be a part of the preps. If people are buying precious metals and tptb are manipulating the price of pm lower to keep the sheeple calm. Wouldn't that be a signal to all those people on this forum that the possibility that tswhtf is rather high and that by the government subsidizing the pm market it is creating a buy opportunity for those with the foresight to position themselves rather well for the financial turmoil that lies ahead. As Abe Lincoln once said "you can fool all of the people some of the time, and you can fool some of the people all of the time. But you can't fool all of the people all of the time" pretty much does it for me. If 10% what I have read on this forum in the last few months is half-way accurate than I would say that there is not going to be a BITR, but a full blown road block with flares and barricades. Now I can still be wrong and maybe my thinking process is deformed, but with the soon to arrive millennium two weeks away and the markets are not doing anything but maintaining regardless of the frb flood of liquidity makes me really wonder. Hmmmmm.

-- lindy (lindgren@kt.rim.or.jp), December 14, 1999


The markets are driven by what people THINK will happen, & most people have decided that y2k will be a big non-event. The media has achieved its goal of putting everyone to sleep. People have decided that dismissing y2k as "hype" is the clever thing to do.

If you're at all concerned about it, you're in the minority. For the time being, anyway.

-- fools are the ones (whoare@not.worried), December 14, 1999.

I learned about Y2K 3 1/2 years ago from an newsletter advertisement from Gary North. I pulled out all my retirement savings and bought silverdollars. They were $6.45 each at that time. Now they run over $9 each because they are getting scarce. People in the know have been buying silver dollars!

-- freddie (freddie@thefreeloader.com), December 14, 1999.

Risk/reward, Lindy. Risk/reward. Getting ahead of the crowd, first on fundamentals, and staying ahead when psychology takes over. Difficult enough w/o gov players. If gov is willing to spend public money intervening against PMs, or even if people THINK they are, what does that do to psychology? I think any of us could be forgiven for just about any position we might take.

The saying that "markets will do whatever it takes to fool the most people" is a pretty useful one to factor in. The stock market boom has benefited less than 20% of Americans, and most of those got most of their money in fairly recently. Wouldn't take much of a slide to make them losers. Now, who was it that sold them that stock at such high prices, and where are THEY putting their $. I don't think I've ever seen research that actually interviews numbers of people and tries to sort out the different strands of belief that come together in a market to create ONE price that everyone then has to decode the meaning of.

-- jor-el (jor-el@krypton.uni), December 14, 1999.

I will take a bit of a stab at this as gold has been in the Y2K spotlight more than once :o)

The biggest determining factor in the low price in Gold has to be the anounced sale of the Dutch gold which knocked off at least $10 an OZ.

The price of Gold did take a jump a while back but the stresses in the trade of paper Gold didn't occur and the price settled. Of course there are some that figure damage control stepped in before the POG took off.

Another major influence has been the success of the stockmarkets in staving off prerollover panic. Matter of fact the FED has increased money flow and alot of that excess credit maybe fueling the markets which is a better money maker than gold. This is a big mistake if this is the case IMHO.

I don't track the metals well enough to comment on silver but here is a few observations from my side of the screen.

My take on this is rather ill informed compared to some but hope it helps.

Lindy are you posting from Japan? It would be interesting to hear any observations that you have from over there.

-- Brian (imager@home.com), December 14, 1999.

Gold tends to do better when the stock market isn't doing as well. For the time being, the stock market's Y2K liquidity fears have been laid to rest.


Fed's Y2K liquidity measures keep markets calm

-- Trends (in@the.market), December 14, 1999.

Go Gold Eagle Website and read some of the editorials to get educated on what has been keeping gold prices artificially down for years.

-- Sheri (wncy2k@nccn.net), December 14, 1999.

That's why pollies have already claimed victory to a degree because we expected people to see and understand this huge threat and take SOME action, ANY action. The thinking, or lack of it, is that how could so many of these CEOs, engineers, programmers, just people in general be wrong? People seek the majority. In retrospect, we have given the masses too damn much credit for their thinking skills and personal responsiblity and were really unaware of the true power of spin and denial fused together. There's been precious metals buying, but Wall Street denial is powerful and the stock market is a new god. It should've tanked months ago. There should be a better prepared citizenry by now. I think we are just shocked by the disregard for knowing the real truth of anything important if it challenges our world. Many can't handle the truth.

-- PJC (paulchri@msn.com), December 14, 1999.


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-- lindy (lindgren@kt.rim.or.jp), December 14, 1999.

BTW, heard on Y2K News Radio today through John Anderson, the host, that Greenspan has none his estimated $4.5 million in this market. Last year he did. The smart money has left long ago.

-- PJC (paulchri@msn.com), December 14, 1999.



Sunday December 12 1:28 AM ET

Y2K Paranoia or Greenspan's Irrational Exuberance?

By Pierre Belec

NEW YORK (Reuters) - The stock market just keeps on climbing and Federal Reserve Chairman Alan Greenspan has been making a massive amount money available in the financial system.

Is it irrational exuberance or Y2K paranoia? Or Both?

Greenspan has permitted the biggest expansion of money supply in the Fed's history in the weeks leading up to the end of the year, when the so-called Y2K computer bug could disrupt financial systems.

The Fed's move has been explosive on Wall Street because a free flowing money faucet at the Fed boosts confidence in the financial system, and the economy at large, and is the stuff that makes bull markets get bigger.

M3, the Fed's broad definition of money, which includes currency, travelers' checks, bank deposits and money market mutual funds, has climbed $194 billion over the past 13 weeks -- the biggest increase ever. The money supply increased at an annualized rate of 15 percent, which is well above the Fed's target growth rate of only 5 percent.

Just a week ago, M3 went up a huge $36 billion, which would seem to indicate that the central bank is buying insurance against some possible disruptions as the calendar changes from 1999 to 2000, analysts said.

``The money supply has gone through the roof and the increase, adjusted for inflation, is the biggest in the nation's history,'' said Don Hays, president of The Hays Market Focus Advisory Group, an investment consulting firm.

``The Fed may be flooding the nation with cash because of jitters among central bankers that the Y2K computer bug could do more damage to the financial system than most people expect,'' he said.

``I just don't have another excuse other than Y2K to imagine why the Fed would flood the system, unless there is something that's happening behind the scenes that we don't know about,'' Hays said.

``This huge liquidity is the reason for the big rally in stocks since October,'' Hays said. ``It's a replay of the market's run-up exactly one year ago, when the Fed rushed to flood the system after the panic from the Russian loan default and the Long Term Capital Management hedge fund disaster.''

The Fed came to the rescue of the LTC fund, which teetered last year on the brink of bankruptcy due to the global market turmoil. The fund's losses threatened to slam the financial system, which in turn could have hurt the economy.

But the increase in money supply and financial system liquidity may also ``reflect Greenspan's thinking that the stock market is on a very unstable foundation because of valuations and Y2K might be the trigger that could keep it from coming down softly,'' Hays said.

One of Greenspan's goal's over the last four years of extraordinary gains in stocks has been to ``talk'' the market down, or to set the mood for the market to come down from its lofty levels in a gradual way and to avoid a panic on the Street, which would demoralize business confidence. But the market has not yet suffered a serious reversal.

And the Fed may fear that Y2K could be the thing that could yet punch a big hole in the market bubble, analysts said.

Three years ago, in December 1996, Greenspan sent global stock market reeling with a comment about investors' ''irrational exuberance,'' and Wall Streeters now say the Fed head is not practicing what he preaches.

There are few signs of panic in the run-up to the new year, when computers may confuse the year 2000 with 1900, messing up date- sensitive functions.

Corporate America says it is confident that it has fixed the Y2K problem, but the Fed is apparently not taking any chances.

The concern is that disruption on a large scale could stun corporate earnings, slam the stock market and drive the economy into recession, analysts said.

``We don't have the slightest idea how Y2K is going to play out,'' Hays said. ``From listening to all the 'informed' sources, I have to come to the conclusion that no one else does either.''

Paul Kasriel, chief U.S. economist for Northern Trust Co. in Chicago, said there is no doubt that the cash from the Fed has been the elixir for the market's rally.

``People are not borrowing just to stuff the money in their mattresses,'' he said. ``They borrow to spend and it ain't a coincidence that the stock market has picked up as the money supply has exploded.''

The Fed can boost confidence in the financial system and make the economy grow faster by making more money available to banks, which eventually leads to cheaper loans.

It can also discourage lending when the economy grows at a fast clip, and threatens to fuel inflation, by withdrawing money from the banking system, or by raising short-term interest rates.

Kasriel said the money supply growth was revved up in October, which is about the time that stocks began their recovery from a selloff that threw the Dow Jones industrial average for a loss of 1,300 points -- a classic correction of 10 percent -- between September and mid-October.

The other major market gauges were also battered, with the Standard & Poor's 500 index slumping 12 percent and the Nasdaq Composite index skidding more than 6 percent.

Since then, the Nasdaq has been rewriting the record books, making highs on an almost daily basis. In addition, the S&P last week hit a new high while the Dow Jones industrial average came within less than 50 points of beating its Aug. 25 record of 11,326.04.

``Without the money supply growth, I am convinced that the market would be in much weaker shape at this time,'' Hays said.

Kasriel said that things could get interesting for the market next year as a result of the Fed's action.

``The Fed may choose to ignore the rapid growth in credit and money that it has a hand in creating,'' he said. ``But investors ignore it at their own peril.''

Kasriel said that, unless the Fed can rope in credit demand, it will have to raise interest rates more than the half percentage point that he has been expecting in the year 2000. The Fed this year has already boosted interest rates by three quarters of a point.

``It is beyond me how the stock market could continue to be immune to further increases in both short-term and long-term interest rates,'' he said.

So the big question is: Will the 73-year old Greenspan leave his job the same way he came in, in 1987, with a stock market crisis?

For the week, the Dow Jones industrial average was down 61.48 points at 11,224.70. The Standard & Poor's 500 index was off 16.26 points at 1,417.04 and the Nasdaq Composite index was up 99.65 points at 3,620.25.

-- Trends (in@the.market), December 14, 1999.

Most areas in which people live are not as prone to natural disasters such as areas like Florida with it's huricanes and the mid west with it's tornadoes so they know little about what it takes to prepare for anything. Even then the majority of those people wait till the last second to prepare. I think the week between Christmas & New Years is when everyone will start to prepare. To Freddie: In regards to your silver dollars, I too was sucked into buying them for use as potential money to barter with and saw them go up in value to $12 each late last year. Since then, once the public fear (and mine) of y2k diminshed, they went down to they're present $9 value. If nothing happens with y2k, the masses who purchased them will rush to sell them back to the dealer and should drive their value down considerably. Since their now valued at $9, should you sell them now, after the dealers cut, you'd be lucky to get your $6 back. As far a gold and silver prices go...I tend to wonder if platinum might not be a better investment since Russia is the worlds largest (or second largest) provider of platinum and they are not even close to being y2k compliant. This could cause a major increase in the value of platinum should TSHTF in Russia.

-- Rich (rubeliever@webtv.net), December 14, 1999.

A. Some people perfer to use the H.I.T.S investment approach. (Head in the sand...)

-- Mad Monk (madmonk@hawaiian.net), December 14, 1999.

Hi Brian,

Yes I am posting from Japan. The strong yen has increased gold demand 171% over last years sales. I wonder how much of that can be attributed to y2k? As far as people here in Japan, everyone seems rather complacent. The Japanese gov issued several warnings and the Prime Minister went on tv and told people it would be wise to prepare for 3 days. Since new years is a time when all stores are closed , people usually have 3 days worth of food on hand so not much in the preps. There are many displays at super markets and dept. stores for "The year 2000 computer problem" as it is known here. But no panic. Another interesting thing is that the gov. announced that it would not be a bad idea to have ONE MONTHS worth of cash on hand for the rollover. I have friends that work in Japanese companies and a few said that Japan did too little too late and that they expect failure in distribution and manufacturing, but utilities and banking should be ok. However, 3 months ago my friend who works in a Western bank said the japanese banks were in big trouble, but now 3 months later he says they are all fine. Big trouble to fine in 3 months is rather good progress. Hope the Japanese programers are as efficient as my friend says they are.

-- lindy (lindgren@kt.rim.or.jp), December 15, 1999.

Why has the price of Gold/Siler remained low?

It is a matter of supply and demand in a nutshell.

When the demand for gold/silver increases the central bankers simply DUMP more product than the market can handle and maintain price stability. The feds could do the same with Milk or Butter or Grains. They've stockpiled sooo much. This way they can regulate market pricing if albeit in a remote control sort of manner.

That is a simplistic answer for the novice. As one becomes more educated on the markets and economics (esp. commodities mkts) one realizes the various complexities and vagaries that I've skipped over. I hope that helps some of you better understand the nutshell of it all.

-- Dick Moody (dickmoody@yahoo.com), December 15, 1999.

Mr. Moody,

I have read your posts before and what you have said about gold in the past turned out to be true. I am interested in gold for two reasons. One for y2k and the other because of the wild price swings in the yen/ dollar rates. Currently the yen is at 103= 1 $. Gold is selling for yen 931 a gram, except for mid-September it is currently at its lowest price in yen terms since 1974. You are right about the fed being able to control gold like the price of cheese. But with 45% currency fluctuations in the yen/dollar rates in 18 months they really can't have as much control as they think they have when thshtf. Japans banks are in real bad shape,($ 3 trillion in bad debts on banks books) and the economy just shrank another 1% in the last quarter, unemployment is at record highs, yet the yen remains strong against the dollar. This does not make sense and when I hear reports that the reason the yen is strong is that there is a lot of foreign currency coming into the Japanese Nikkei market, despite the fact that a strong yen hurts Japan's recovery and the companies listed have no profits. Proves that the US market is a bubble that is in serious danger of deflating, because Japan is not going to reach it's bottom for a few more years and the money that is coming into Japan is fleeing the risks of the US.

-- lindy (lindgren@kt.rim.or.jp), December 15, 1999.

The short answer is cattle don't start to get panicky until they are herded from the holding pens into the slaughterhouse (when they smell the blood). Of course, by then, it's WAY too late; they can't even stage an ineffectual stampede.

-- A (A@AisA.com), December 15, 1999.

Why is gold low? To answer this you must understand the role of the Rothschilds and their control of the gold markets:

The English House of Rothschild (N.M. Rothschild & Sons)

Of the two major Rothschild Houses (French and English), the London House (New Court ), founded by Nathan Mayer Rothschild and operating today as N.M. Rothschild and Sons, is undoubtedly the most influential, especially as it pertains to gold and currency trading. Twice daily a Rothschild agent sits in a cloistered room "fixing" the price of gold in the world's largest bullion trading market: the London Bullion Market Association ( LBMA ). Historically, N.M. Rothschild was owner and operator of England's Royal Mint Refinery and was the primary gold agent to the Bank of England.

The English House of Rothschild (N.M. Rothschild & Sons)

Of the two major Rothschild Houses (French and English), the London House (New Court ), founded by Nathan Mayer Rothschild and operating today as N.M. Rothschild and Sons, is undoubtedly the most influential, especially as it pertains to gold and currency trading. Twice daily a Rothschild agent sits in a cloistered room "fixing" the price of gold in the world's largest bullion trading market: the London Bullion Market Association ( LBMA ). Historically, N.M. Rothschild was owner and operator of England's Royal Mint Refinery and was the primary gold agent to the Bank of England.

To this day, N.M. Rothschild & Sons of London still lists as its primary business the selling and buying of treasuries and gold bullion. N.M. Rothschild helps fix the price of gold in London each day through the LBMA. A recent London Times articles explained that the gold price fix ceremony where five men (including a Rothschild) talk on their phones for 10 minutes, then lower tiny Union Jacks sitting on their desks, thereby fixing London's gold price each day. This ceremony takes place at 10:30 a.m. and 3 p.m., like clockwork, the same way, in the same place, and with mostly the same firms participating since the first gold fixing was enacted at Rothschild in St. Swithin's Lane on Friday Sept. 12, 1919. The company's name is also associated with many gold mining companies (e.g. Trillion Resources Ltd. and other Canadian mining companies).

Rothschild interests touch virtually every aspect of our lives. They helped found and finance Royal Dutch Shell and De Beers. Following World War II they invested in vast areas of resource rich properties in Canada, possibly gold rich deposits. Joey Smallwood, premier of Newfoundland, Canada, described the 50,000 square mile land purchase by Rothschild as the biggest land deal in Canadian history. Their influence extends to the Bank of England, Bank of France and the U.S. Federal Reserve, and possibly the IMF. They thus have enormous influence on the world's monetary policy.

The Rothschilds and the LBMA: The World's Central Bank?

Consider the Rothschild's profound position of influence in the LBMA and the transaction fees they are earning on each and every transaction of treasuries and 42 million ounces of gold transactions DAILY (recently reported volumes of physical, leased, forward sales). . The Rothschild business earns income from "transactions" (including transfers, calls, puts, trades, leases) and one can only begin to imagine the transaction costs associated with last reported trading of over 42 million ounces of gold per day through the LBMA (more than twice South Africa's annual gold production).

Also consider their involvement and influence over monetary policies exercised by the Bank of England and the Bank of France (and possibly the US Federal Reserve System) and in Geneva. Consider the world's above ground gold reserves is roughly 120,000 tons -- with roughly 40,000 tons or 33% held by central banks. How is the remaining "private" gold holdings distributed? Does anyone have such an account? Certainly not the World Gold Council and their statistics. If a single private owner held 5% of world's remaining gold, would that not constitute majority share holdings? If any player could have accumulated, and could afford a 5% holding of the world's gold supply over the last 200 years, it would be the Rothschilds. Could it be that the Rothschilds through their involvement in daily London gold trades are quietly amasing more of the precious metals in their private vaults, while the confidence game of the Central Banks tries desperately to avoid what Soros calls "unsustainable" fiat currency built on unsustainable debt? It was Mayer Amschel Rothschild who kept a secret subterranean vault full of gold beneath the House of Rothschild in Frankfurt in the 1770s (Morton, 1962) .

While the world is led to believe that gold is a barbaric relic of the past, a huge confidence game is being played out in fiat currency markets, illustrated by the events in Asia. In order to maintain confidence in inherently unsustainable fiat currencies and unsustainable debt, confidence in gold must be depressed, given that it is the only alternative store of value. The increasing volume of gold transacted through LBMA reflects the crescendo this confidence game has reached. These large volumes also suggest that gold is trading as currency and not as a barbaric commodity, as the press is apt to suggest. Could it be that the LBMA is being used as a testing ground for the establishment of a new gold-backed world currency system? If so, the Rothschilds are in a position of enormous influence over such a genesis process.

Consider these words of Stanley Fisher (WSJ, Nov. 12, 1997), IMF's Deputy Managing Director: "What is needed at this point in the world's economic affairs is leadership in setting up a SYSTEM more dependable than using IMF bailouts as a guide to the future value of money. Where that leadership comes from is a tough question."

Indeed, will the leadership and system Fisher is speaking come from the House of Rothschild through the central institution of the LBMA? Only time will tell.

If the Rothschilds, through the LBMA operations, are effectively cornering the world's gold supply they would undoubtedly be in a prime position to benefit from a currency crisis - which they and Soros undoubtedly expect, given Soro's claims that the Asian, and thus by implication all fiat currencies, are inherently unsustainable. This crisis of sustainability is already engaged in Asia and will undoubtedly wash over Europe, England and the U.S. And who recently announced another bailout package? The IMF, of course.

The Houses of Rothschild, more than any other players, knows the historical power of gold and importance of a gold-backed currency system. The English system they helped engineer remained resilient and sustainable for over 200 years until the early 1900s. The Rothschilds believe in gold as the ultimate store of value; always have and always will Undoubtedly they do not consider the metal a barbarous relic of the past.

Now finish the story by reading my posts in:

Has anyone else thought this explains all the terrorism/hacker warning?


The price is low because they like it low while they accumulate. When the institute the next phase, a world currency, they'll back it with gold.

Now before you think this is all bunf, read the thread linked above and learn just what power the Europen Banker Families have. What is presented is irrefutable proof from the laws of our and from our congressional record and the public positions of the Contitutional Framers, Jefferson, Jackson and many others.

-- Interested Spectator (is@aol.com), December 15, 1999.

Oops, forgot to provide the link to where the above was found.

http://www-douzzer.ai.mit.edu:8080/conspiracy/rothschild2.html#metato p

-- Interested Spectator (is@aol.com), December 15, 1999.

WRT to the Federal Reserve flooding the market with cash and the relevance of this. After reading my reply above and then all my replies in the linked thread just add the following news that just came out.

NASDAQ and NSYE have just changed the margin requirements for day traders from 75% to 25%. This is exactly what the Federal Reserve did just before the Crash in the 20s. They pumped in billions of dollars into the economy, pumped up the stockmarket, underwrote the banks so that stocks could be bought with 5% margin and then on one day, stopped all credit and caused the crash. Greenspan has just put in between $70-$500 B into the market (depending on who you read), we know the market has been pumped with this cash, and now the day trading margin requirements have been relaxed.

For the ignorant ostriches with their head in the sand there is a proverb:

Those who do not learn form history are doomed to repeat it.

The final piece of the puzzle is now in play. Sit back and enjoy the show folks. You have a ringside seat for the game of the millenium.

-- Interested Spectator (is@aol.com), December 15, 1999.

Granted that (pick one or more) the Rotschilds, Greenspan, The Bank of London, the Gnomes of Zurich... are manipulating the price of gold. Apparent demand is low, so the price is low.

But, think, if only those with above average income in the wealthiest countries of North America and Europe had, or were in the process of getting, just one ounce apiece -- one measly ounce -- the price would be in the stratosphere. Because the demand would far surpass the present demand. But, since they are so ignorant and ignorant of their ignorance, they are like the cattle I mentioned above.

-- A (A@AisA.com), December 15, 1999.

Confucious say: "He who bury head in sand get ass kicked".

-- A (A@AisA.com), December 15, 1999.

Very nice, proverb!!

Put mine with yours and they get kicked repeatedly (that must hurt, but since everybody is so high on beer and TV they don't feel it).

-- Interested Spectator (is@aol.com), December 15, 1999.

Spectator -- good posts. Yes, prices are being kept low so someone can accumulate.

All -- the time to buy is when prices are low. Then you sell high. Get it? Most people lose because they wait till the price is high, seeing everyone excited, and THEN they can't wait to jump on at a high price. Then when the sheep have tapped out by buying at a high price, demand dries up, and the price falls. The the sheep sell at a low, and the smart ones again buy at a low.

                   SMART ONE             DUMMY SHEEP
  PRICE HIGH     sells to SHEEP  -->  buys from SMART
                                      (because caught
                                       in mania)

  PRICE LOW      buys from SHEEP <--  sells to SMART
                                      (because discouraged)

  RESULT         a profit             a loss
                 each cycle           each cycle

BTW -- this is also how TPTB pick up real estate during recessions and depressions.

-- A (A@AisA.com), December 15, 1999.

PJC - if I understand your position, it is that 99%+ of IT workers, bosses, computer programmers, engineers, techs and companies can't be trusted? The other fraction are the ones who should engender trust, because they are telling you Y2K is an enormous problem?

Err - did you read the latest WRP? Ahem. Doesn't sound like Cory H. expects an INFOMAGIC scenario.

Have you noticed that Ed Yardeni, in his LATEST public statement, backed WAY off the depression prediction?

If EVERYONE backs off to a BITR by the middle of February, are you going to believe them then? Or will you still be listening to Gary North, who has no technical credentials whatsoever, but an abiding religous belief that the end is near?

What I am getting at here is this conviction that 'everyone who says Y2K is not a big deal is lying through their teeth'. WHY? Why is a statement from Scott McNealy less reliable than one from an anon poster who predicts 'big trouble with unreachable embedded'? What possible qualifications are you seeing that I am missing?

Hey, if this is a horse race, you pick your horses, and I'll pick mine. But you surely are picking the long shots.

-- Paul Davis (davisp1953@yahoo.com), December 15, 1999.

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