Wednesday, November 28, 2012
Regular Forum Archives 1998-2001
Two years ago, Martijn went through roughly 1,200 days-worth of the regular USAGOLD discussion forum and compiled (most of *) the intermittent comments by ANOTHER and FOA, along with a few others, into a 436 page pdf. That pdf is available for download on Scribd here.
But lately, the discussion forum archive on the USAGOLD website appears to be MIA. ANOTHER (THOUGHTS!) and The Gold Trail are still there, but not the regular forum. All we have at the moment is Martijn's pdf which is not covered when JR searches for applicable quotes on Google.
So I put those 436 pages of comments into two (search engine-friendly) pages linked in the side bar right under FOA. Blogger couldn't handle 436 pages in one post, but it was fine with 218 (my new post length limit ;). That's why I had to split it into A/FOA Discussion Forums 1 and 2.
There are some great posts in these archives. For example, my 2010 post FOA on Hyperinflation came entirely from the discussion forum, as did FOA to Martin Armstrong. Here's another good teaser for what you'll find in these archives. It's a post I happened across just the other day when Michael H posted it somewhere else (thx Michael H!):
FOA (10/14/99; 9:20:06MDT - Msg ID:16318)
Strad Master (10/12/99; 23:48:43MDT - Msg ID:16216)
---- My first question, though, is this: If gold should rise to, say, $30,000 per oz as FOA predicts, how, at that time could one's gold holdings be unwound? For what? $30,000 in paper money? Or would the actual gold bullion become the only negotiable currency? If so, what good would a one oz. bullion coin be? It can't be cut apart into small pieces with a pair of garden shears. Beyond that, Goldbugs are notorious for holding onto their physical holdings long past the time of maximum return. ----
(((NOTE: Strand: I find it interesting that goldbugs have become "notorious" for bad moves when their present universe has only existed some 20 years? and the lady has not sang the song yet?)))
---In fact, I'm sure that some older people who post at this forum have held gold through several (albeit relatively minor by comparison) upmoves in gold only to kick themselves for not having sold at or near the top.----
(((Note: I know people that have been buying through this entire span of time! True, they have timed their buying on a cost averaging basis, but that concept has made them almost even today. In the believe it or not department. Ask MK about "cost averaging" using a fixed dollar amount. Then I suggest you see the show "Rollover" with Jane Fonda. You would not believe how true it is!)))
I'm going to ramble on a bit, so I hope this helps your perspective.
Back in the early oil days I was very close to some of the largest oil men in the country. When in Texas we would visit at the country club and shared a lot of our perceptions. Usually over a poker table. Looking back, I find their (and mine) viewpoints had much in common with the gold outlook today.
When oil went from around $3.00 to $5.00 everyone that had local reserves thought they had made a fortune. You wouldn't believe how many sold off not only their storage barrels but their best (lowest cost production) reserves for cash. The feeling was that oil had just zoomed in price and would quickly go back down. The percentage gain on those leveraged assets was simply huge.
Then oil went up to around $8.00! Good god, we were so stupid to have sold. What a bunch of buying fools out there. Those idiots buying $8 are going to get killed. Everybody knows the major producers can pump for $1.00. Oh well, it just a political thing.
When oil hit $15, some of them knew they had missed out on a train to $20. But they still thought oil would one day return to around $5.00. So as not to miss out completely many of the early sellers jumped on the Natural Gas wagon, using everything they had gained from their first sale. At first this new move made money, big time. Then something funny happened, oil soared and later returned to a more normal $18 to $25 range, but gas plunged from the higher supplies. The "oil boys" turned "gas boys" lost it all. Even into today, gas has never returned.
Truly, they used the silver vs gold concept, thinking the more leveraged natural gas would out run oil and regain their fortunes. It made sense as gas (like silver) was more industrially useful and "CHEAPER". You might even say it was the "poor man's oil" (smile)! Also: Just like silver, gas proved to exist in much larger amounts that the "statistics" demonstrated. As its price "coat tailed" oil, it brought out the massive increase in production that wasn't needed as long as oil was available. Incredibly, this was the exact same story for silver. All the stories about people buying silver as gold went up saw them sell the silver and keep the gold because people just didn't need both of them. The same will happen when gold runs this time. People will keep the high unit cost gold in their vaults, use the digital currencies for trade and sell the silver as it floods out of the woodwork.
You see, oil in the early 70s is like seeing the prevalent gold concept today. The perception was that oil could never go up from the $1.00 production range into the $20s (just an unimaginable increase to those in the business) because such a price would flood the world with production. It was thought that there was so much unfound oil in the world that every home owner would have an oil drilling rig in their back yard at $20+. Just as $10,000 gold will have people taking gold from sea water.
Here is where reality gets in the way of concept based on perceived conditions. Yes, the $20 and $30 oil did bring out the rigs and production soared. But, even at the higher prices, the world found uses for this great new gusher of oil. The same human traits that dictate that "you can never have enough money in the bank" also said "we can never use too much oil"! If all the oil reserves in the world could produce at $2.00 then the price would return to $2 plus a profit. But, we want and use all oil produced from fields that pump from $2 cost on up to $30. Gold and oil are not like any other commodity, because under the right circumstances, people find both of their qualities useful and can never get enough of them at any price. It seems we accumulate assets until we die?!
The "paper boys" try and paint a picture of gold like "old oil men" looked at values "back then". They were wrong and so are the "paper boys" today. The Smiths and Arnolds of the world try to convince us that the supply of gold is never used up and creates a glut as it grows. They say that unlike oil that is consumed, gold holdings have become a stockpile that refining cannot use up. I bet these guys would have also sold their oil reserves in the mid 70s also.
Where they miss the boat is in their assumption that people will get enough gold. Not if it's money, they won't! People do consume money just like oil, rather it's just in the form of "savings consumption". Gold, just like money has an "unlimited demand". Again, have you ever seen anyone that said "I have too much money and have no more use for it". "No, don't give me any more of that cash, I've got a glut of it now, go away"! Yea, right!
Often, we read where people say, "oh what am I to do with all this gold if it hits, $30,000?".
Funny how Bill Gates never says "what am I to do with all these MS shares". Well, you too will act like anyone with too much cash or assets, just stash it away until you need to spend it. The old "what will I do with all this high priced gold I can't get change for" logic just doesn't compute when dealing in reality? Ever see someone in a flea market rolling around a cart full of $100 bills,,,and frantically trying to unload it because it buys so much and they can't get change? Help me out here, am I not seeing something?
I'm afraid that even the very poorest of people have a better grasp of spending and saving value than some of the "big time investors" present about gold. (I'm talking about the brokers, Strand)
Anyway: The amounts of gold in vaults today is nowhere near enough to represent the only circulating world money. It would have to be priced at $++++++ to do that. So, if mine production can continue, the world will take any and all they can produce. Be it 3,000 ton a year or 10,000 a year because the demand for money (even a parallel supplement money) is unlimited. Personally, I would take all of it (smile) and let the rest of you keep the paper.
The reality of this is that people hold cash in banks as it is lent out and earns interest. If no one lent their cash and just saved it (like gold) to spend in later years, it would take an enormous amount of paper money. This is why the US goes to great lengths to identify gold to the public as a commodity, not money. They want you to know that it must be sold as soon as it goes up. Trade it, don't save it. Most Western investors have bought into this and are going to pay dearly because of it. Again money demand is "unlimited". The same will be true for gold. As people begin to buy gold as a currency supplement, to be spent "as needed", the price could reach enormous levels.....and be seen just like oil......a useful asset you just can't get enough of.
On the road... ...FOA
Enjoy the archive!
* I will note that I think Martijn missed a few comments. One that stands out is FOA's Brown's Bottom comment which I inserted into my copy. So I don't know how many others might be missing. Hopefully USAGOLD will put the full archive back online soon…
A/FOA Discussion Forum 1
A/FOA Discussion Forum 2