I used to admire Paul Erdman (at least he wrote a few good thrillers...)

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From uncle Gazza

Comment:

Paul Erdman says that the fall in the price of gold is the result of the central banks' dumping of gold. He's wrong. It is the result of yet another threat by central bankers to sell gold one of these days.

Gold was stolen from private holders in this century by means of subterfuge or coercion. In the case of the United States, it was coercion: Roosevelt's unilateral confiscation in 1933, under the legal cover of wartime powers. The central banks wound up with the world's gold. They created fiat money to buy it from the governments, which had acted as the agents of the central banks. They bought it at fixed prices -- low -- without having to enter the free market to buy it, which would have raised gold's price. Now central banks -- quasi-private associations of commercial banks -- hold it for their purposes.

If you want to know how this was done, and how the game goes on, read the book by economist Murray Rothbard, The Case Against the Fed.

Y2K threatens this arrangement. It threatens central banking. The bankers have bet the future of their operations on computers. That bet is about to go sour.

A tiny percentage of the public will register its vote of no confidence in central bankers by buying gold. Gold is the ultimate liquid asset in a world where computers are down. So, to keep the futures traders from bidding up gold before January, the central banks threaten to sell their gold -- the only asset worth holding by a central bank in a y2k breakdown.

It's bunk. They will not sell their gold. But military regimes will probably confiscate it anyway, under martial law conditions. In a conflict between bankers and the military, bet on the military. Commanders have always seen to it that the troops get paid.

The army will spend the gold back into circulation. This will re-monetize gold.

If the banks sell it, gold will slowly be re-monetized, but without y2k, this might take a generation. Y2K will speed up this re-monetization process.

When I speak of re-monetization, I mean money in use by the general public. When Erdman speaks of it, he means money in use by the central banks. There is a difference. It is the difference between the free market and a government grant of monopoly privilege.

Karl Marx quoted Hegel on the relationship between grand social theories and historical conditions. Great theories of how a society functions become accepted in the final stages of the society in question. Hegel said, "The owl of Minerva flies only at dusk." The owl of Minerva was ancient Athens' symbol of reason.

Erdman is flying high. Don't get under him.

This appears on CBS MARKET WATCH (June 22).

* * * * * * * * * *

Gold.

One problem with discussing gold is that it seems to bring out the worst in people. Either they hate it - regard it as a "sterile" investment that does nothing to benefit society, or they see gold as a panacea which will solve all of mankind's problems provided we return to a "gold standard." All one can say to them today is: Dream on. But it will never happen.

Last Friday at the gold fixing in London the price was set at $258.95 an ounce, down 10 percent in a matter of five weeks and at its lowest level since 1979.. Why? Because gold is being demonetized and the process is irreversible. The stark facts bear this out.

The Bank of England is going to sell 415 tons of gold, or more than half of its gold reserves. This means that England, which invented the gold standard in the 19th century, is now getting out of the gold business.

Switzerland, traditionally a nation of gold bugs, is doing the same. In April the Swiss voted to sever the official link between gold and the Swiss franc. The Swiss National Bank intends to dump 500 of its 1,300 tons of gold to finance its "Solidarity Fund.", with the rest to follow later. According to the President of Switzerland's central bank: "Gold is no longer of any monetary importance."

London closing gold fix for past three months.

The International Monetary Fund plans to sell between five and ten million ounces of gold to relieve the debt burdens of the world's poorest nations. In this it has the full support of France, Germany and Japan - the remaining key holders of gold as part of their monetary reserves.

So now gold is just another commodity. As is silver. Its price dropped below $5 an ounce last week, no doubt affected by what was happening to gold prices. From now on, the prices of these metals which used to be set by edicts of Britain's Chancellor of the Exchequer or the President of the United States will be set by traders in the pits of the futures markets in Chicago or New York.

How the mighty metals have fallen.

Link:

http://cbs.marketwatch.com/news/current/erdman.htx?sour...

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I believe the ultimate scam is now being orchestrated and played out by the Central Bankers - gold at $260? Buy buy buy!

-- Andy (2000EOD@prodigy.net), June 28, 1999

Answers

Sorry, but I don't quite understand your post. Are you saying that the banks do or don't want the general public to buy gold?

I understand that they are not really getting out of the gold business. But what's the purpose of threatening with selling? Won't that make the public think that the price is going down lower when they do sell? And why would the public want to buy now if it is expected to go lower?

Maybe I'm suffering from Monday morning's brain malfunction...

-- The Outcast (Somewhere@southerneurope.eu), June 28, 1999.


####### I may be wrong but...#######

Sorry, but I don't quite understand your post. Are you saying that the banks do or don't want the general public to buy gold?

####### Yes they don't want gold in the hands of the hoi-polloi. They are protecting the gold carry trade and hedge funds. They don't want folks with call options expiring at the end of '99 to collect. Physical delivery for example would be impossible as there is not the physical available. Buying gold in a bank run situation would adversely exacerbate things for the fed and FDIC, although I suppose some buyers would use cash in exchange for gold which may or may not make it's way back to the banks via dealers, thereby increasing available cash for the banks to stave off any runs, a moot point. I'm as confused as you are but I'm trying to get to grips with what's going on - on the surface, and behind the scenes. My gut feeling is that gold is being driven down, when the bubble bursts those in the know will have cashed out of the markets and gone physical, leaving JQ Public to lose their collective shirts... am I making any sense? #######

I understand that they are not really getting out of the gold business. But what's the purpose of threatening with selling? Won't that make the public think that the price is going down lower when they do sell? And why would the public want to buy now if it is expected to go lower?

####### Precisely - which is why I am buying as much as I can justify. Yes I might be totally wrong and lose a bundle - however I'm trusting my instincts here - I smell a rat... #######

Maybe I'm suffering from Monday morning's brain malfunction...

You and me both :)

-- Andy (2000EOD@prodigy.net), June 28, 1999.


Forgot to say, in addition, the latest banking horseshit spread through their paid shills in the media and this forum (take a bow double-dupicitous-decker) is that gold is an anachronism in this day and age, a RELIC as these abominable shills are feeding their lacky's - the intention being to have folks keep their dollars IN the banks, where it is "safe"... no bank runs in THIS country...

-- Andy (2000EOD@prodigy.net), June 28, 1999.

Good posts, Andy. Maybe Erdman didn't have the staying power to hold onto longs, so now he's trying to promote a fall so he can short?

BTW, if the U.S. gov tries to confiscate again, they will find that ownership is less widespread, but that those owners aren't going to roll over and stick their butts in the air, like our parents/grandparents did for Roosevelt in 1932? 1933?

Smuggling gold in and out would become become big business, just like metals smuggling in/out of India and middle east. As I recall, Paul Erdman fictionalized that in "The Silver Bears." That might be worth a re-read.

-- A (A@AisA.com), June 28, 1999.


They shall cast their silver in the streets, and their GOLD shall be REMOVED: their silver and gold shall not be able to deliver them in the day of the wrath of the Lord. Ezk 7:19a

-- Joe Martin (no_spam@nospam.com), June 28, 1999.


Amen, Andy...

I am glad I'm not the only "kook" about gold around here. Now if I could just buy more....

gettin a drink...

The Dog

-- Dog (Desert Dog@-sand.com), June 28, 1999.


Joe I agree, but the gold and silver might keep you alive until he does come... at that point wealth will only be spiritual. In the meantime it is another security for my family.

If gold is worthless as a monetary unit, why do air force pilots have gold coins and gold jewelry in their survival packs on their parachutes???

DUH...

watchin' the boy eat...

The Dog

I would rather have gold instead of paper any day...

-- Dog (Desert Dog@-sand.com), June 28, 1999.


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