Sunday, August 31, 2008

I Love This Intro

"Think now, if you are a person of "great worth" is it not better to acquire gold over years, at better prices? If you are one of "small worth", can you not follow in the footsteps of giants? I tell you, it is an easy path to follow!" --ANOTHER (THOUGHTS!) 1/10/98

"If ANOTHER's claims are true -- that a consortium of oil states has cornered the gold market (and given the impressive circumstantial evidence, this could very well be the case) -- these "footsteps of giants" become the most salient and persuasive case for gold ownership I have seen in the past decade, if not the full twenty-eight years I have been in the gold business." -- Michael J. Kosares, president of Centennial Precious Metals, Inc.; author of The ABCs of Gold Investing

When the once highly secretive London Bullion Market Association (LBMA) -- its venerable membership comprising the world's largest gold dealers -- published its daily clearing volume for the first time in January 1997, it rocked the tight-knit world of international gold traders and analysts.

According to this first of many subsequent LBMA press releases, thirteen hundred tonnes of gold (representing more than 50% of the world's annual mine production) changed hands daily in this fog-shrouded center of the global gold market. This figure represented over $10 billion per day and $4 trillion per year in bullion banking activity!

The gold market had always stood in austere, quiet contrast to the highly charged, mega-volume world of stocks and bonds. Now this first LBMA report forced analysts, investors, and brokers to reassess their understandings of the gold market. While some reveled in the glow of the large LBMA numbers, others began to raise some very important and rather unsettling questions. First, Why was this much gold on the move? Second, Where was all this gold going? And third, Where was all this gold coming from?

Then, in October of 1997 at the internet's only gold discussion forum of the day (hosted by Kitco), a series of remarkable postings began appearing under the pseudonym "ANOTHER", offering plausible answers to those questions. What followed in a seemingly incongruous stream of thought over many months was, in the fullness of time, seen to blend into a logical whole by many astute readers following the complete text. If you are not similarly moved to at least reassess your own view of the international financial scene after reading what's revealed below, then you are either firmly entrenched in your world view, or you've been numbed by too many hours of Wall Street's cheerleader (CNBC) and too many Friday nights with Louis Ruykeyser.

What matters most to us here at USAGOLD is ANOTHER's educational value to all who would take the time to read and think through his (at times) arcane and cryptic commentary of international economic dealings behind-the-scenes. ANOTHER demonstrates a feel for and understanding of the gold and oil markets that indicates connections at the highest echelons of international finance, yet for reasons having to do with his "position," as he has indicated, he wishes to remain anonymous. If his "THOUGHTS!" are theory; they are good theory. If they are speculation; they are reasonable speculation. If they are supposition; they are well-grounded supposition.

In the final analysis, ANOTHER offers one of the more plausible hypotheses for why the financial markets have acted as they have in the past few years, and therein lies his immense value to the reader, no matter who he is. Again, knowledge as is conveyed in his series of "THOUGHTS!" is rarely to be found outside the highest levels of international finance, and is seldom to be seen bandied about on the front pages of The Wall Street Journal or your favorite financial newsletter.

As explained by ANOTHER, an opportunistic arrangement for massive physical gold acquisition among important petroleum producing and exporting nations could be comfortably facilitated within these astronomical trading volumes now being publicly revealed via the LBMA. For the oil states this meant receiving real money (as opposed to government-sponsored paper) in payment for their depleting oil reserves. For the industrialized countries, this meant a continuing supply of cheap oil to fuel the economic boom already in progress. These transactions were to be cleared through the bustling London gold market. Up until late 1996, the volumes were a tightly kept secret so "the deal" proceeded without the knowledge of the general public.

When the LBMA went public with its figures, it raised the shroud off "the deal." But by then, according to ANOTHER, it no longer mattered. The oil states had already (almost inadvertently) cornered the gold market. As implied by ANOTHER's own words, his motivation for these postings was the discovery by "big traders" in the Far East of this opportune facility to buy gold at ever lower prices. Their subsequent heavy purchases of physical gold upset the delicate balance. Now there was no longer a reason to keep it secret, and hence, the revelation of this extraordinary tale.

His choice to use an Internet forum to tell his story is surely a "story" in itself. Many who have read ANOTHER's "THOUGHTS!" speculate why he would choose this particular venue for his revelations. Why not a magazine article? Or a book? Rather than turning this Foreword into a treatise on the merits of the Internet, let it suffice to say that if ANOTHER and his motives are as implied, then there is probably no better venue than the Internet; allowing his "THOUGHTS!" to be disseminated rapidly, anonymously, and without editing by intermediaries. In addition, they could be efficiently targeted to go directly to the core market audience -- the gold analysts, brokers and investors who frequent such Internet sites as this, devoted strictly to the yellow metal. And after all, as a utility, isn't this capacity for specialization and instant communication what the Internet is all about?

We encourage you to find time to read and consider these remarkable postings of ANOTHER with an open mind. In the field of gold and international economics, these posts are sure to remain as fascinating and worthy of careful study as anything you will find on the web today.

That is the forward to the archives of ANOTHER (THOUGHTS!) which was originally posted on Kitco's forum and then archived on the USAGold website. Then, in April of '98, this:

April 1998 Editor's Note:

I want to first of all welcome ANOTHER to the USAGOLD web site and thank him for electing to post here. ANOTHER has made an important on-going contribution to the discussion about gold in recent months and it is good to have him back in action. That he has surfaced here -- at the USAGOLD web site -- takes a backseat to the simple fact that ANOTHER will once again be offering up his mysterious and cryptic brand of market analysis to the delight of his many readers. His analysis goes beyond the surface representations which we have come to expect from mainstream sources and goes to the core of what is occurring in the world economy. ANOTHER is a teacher, but in our short private correspondence, I have found that he is also a seeker of wisdom -- a philosopher who offers substantially more than dry economic theory. He is also a consummate gentleman. Whether right or wrong, the one thing we can say about ANOTHER is that he makes us think, and perhaps, in the final analysis, that is his most fundamental goal. So we move forward with these THOUGHTS!

I would like to deal with the question of ANOTHERs identity from the outset. At all costs, ANOTHER wishes to remain anonymous. His contact with me has been through a third party who describes himself as "the firewall that breaks the electronic connection from the source." I have made no attempt to find out who ANOTHER is, nor do I want to know who he is. After long consideration of this situation, I have come to the rock-solid conclusion that it is not only in ANOTHER's best interest to remain anonymous; it is in our best interest as well. So, please, in your liaison with ANOTHER (which will be offered below) and with USAGOLD, do not waste your time or ours by making inquiries as to his identity, country of origin, etc. We simply do not know, nor do we want to know.

I would also like to put to rest any notion that I am ANOTHER; that I am an agent of ANOTHER; or that ANOTHER is an agent of USAGOLD, Centennial Precious Metals, or Michael Kosares. There is no connection between us (as you will see in these first postings) except that USAGOLD is providing a forum, the way a newspaper provides space for opinion columns, and ANOTHER is simply taking advantage of it. In the end, as I said in the Introduction to "IN THE FOOTSTEPS OF GIANTS":

"(The actual identity of ANOTHER) might not matter. What does matter is ANOTHER's educational value to all who would take the time to sift through his (at times) arcane and cryptic, but always thought provoking, look behind the scenes of international finance. If his THOUGHTS! are theory; they are good theory. If they are speculation; they are reasonable speculation. If they are supposition; they are well grounded supposition. In the final analysis, ANOTHER offers one of the more plausible hypotheses for why the financial markets have acted as they have in the past few years, and therein lies his immense value to the reader no matter who he is."

I would like to clarify one other aspect of ANOTHER's postings at the USAGOLD web site. There will be two people posting on this page. The first will be ANOTHER himself. From time to time his associate will also be posting. He will be identified here as the Friend of ANOTHER. There was some confusion over this dual role in the earlier Kitco postings. This will hopefully clarify the matter. The writings of both authors will be posted as I receive them without attempting to correct misspellings, punctuation, grammatical and/or textual errors so that analysts, researchers, and readers in general can study the text in its original form.

ANOTHER has graciously accepted my invitation to entertain questions from the public. Another has asked that in the interest of time that only a few questions be forwarded so I will do my best to pick and choose the most salient. This forum is not designed for, nor is it intended to deal with, specific investments and specific investment strategies.

As ANOTHER would say, "We watch this new gold market, yes?" Yes, we will. There is no formal time-table for ANOTHER's postings, so stay tuned. I think you are going to learn from and enjoy these initial exchanges which were originally intended to be private correspondence. On behalf of both ANOTHER and myself, we welcome you to this venue.


Michael J. Kosares/USAGOLD

If that doesn't make you want to read on, I don't know what will!


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