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"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.
Sincerely,
Michael J.
Kosares/USAGOLD
If that doesn't make
you want to read on, I don't know what will!
FOFOA
FOFOA is A Tribute to the Thoughts of Another
and his Friend
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