-Caveat Lector- from: http://www.aci.net/kalliste/ <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabb</A>e ----- Today's Lesson From Gold: an Illustrated History by Vincent Buranelli We enjoy stage performances of a different type in Richard Wagner's Ring of the Nibelung, a monumental cycle of four music dramas about the curse of gold when it is the object of cupidity. Kirsten Flagstad, the foremost Wagnerian soprano of the twentieth century, made the part of Brunnhilde an experience for those lucky enough to have heard her in opera houses around the world, notably at the Metopolitan Opera in New York City. In the Rhinegold, a hideous Nibelung (gnome) steals the gold of the Rhine River from the Rhine Maidens (water nymphs) and makes it into a magic gold ring that causes fraud and violence among the gods. In The Valkyries, the king of the gods, Wotan, creates Brunnhilde, a woman warrior who is to be an instrument in ending the curse of the magic ring; but she betrays his trust and he puts her to sleep within a circle of fire to await a hero who can cross through the flames and waken her. In Siegfried, the hero who gives his name to the drama gains possession of the ring after killing the dragon guarding it, crosses through the flames, and awakens Brunnhilde. In The Twilight of the Gods, Siegfried is killed while wearing the ring, Brunnhilde immolates herself on his funeral pyre, and the Rhine rises over the ashes, allowing the Rhine maidens to regain their gold as they retrieve the magic ring. The curse of the gold culminates in the destruction of Valhalla, home of the gods. ===== TWA800 Radar Shows 'Getaway Boat' Fleeing Flight 800 Crash by Philip Weiss The third anniversary of the crash of Trans World Airlines Flight 800 is July 17, so it's a good time to look into what even the Government reluctantly concedes is a mystery about the crash: "the 30-knot track." The 30-knot track is the radar trail of a boat that was the closest vessel to the 747 when it exploded and that then headed out to sea on a beeline from right under the burning wreckage. "That boat is extremely suspect," said William S. Donaldson, a retired Navy commander who supports the missile theory of the plane's destruction. "He not only doesn't turn to render assistance, he runs." "It's like the getaway car," said Graeme Sephton, an electrical engineer who is active in an Internet researchers organization that is highly critical of the Federal investigation. The Government doesn't think the unidentified boat is such a big deal. "It does not intrigue me," said Peter Goelz, the National Transportation Safety Board managing director. F.B.I. spokesman Joseph Valiquette added, "In an ideal world, it would be nice to know everything, but I don't think the F.B.I. or the N.T.S.B. claims to know everything that happened in the crash." This is a convenient position for the F.B.I. to adopt now. The most unsettling thing about the 30-knot track is that the F.B.I. essentially suppressed knowledge of it when the crash was foremost on the public agenda. Two years ago, the F.B.I. closed its criminal investigation into the crash, and James Kallstrom, then the lead F.B.I. investigator, testified before Congress that the agency's "exhaustive" efforts had included "tracking of all air and waterborne vessels in the area at the time of the explosion followed by appropriate interviews." Mr. Kallstrom later held a lengthy press conference saying that agents had "left no stone unturned." He went into great detail about suspicious boats. "Who is there in the water? Who could be escaping in any direction?" he said. "We identified 371 vessels in the Long Island area and did investigation on those vessels. For the one-month period, we identified 20,000 records of vessels that entered New York Harbor and did an investigation of those vessels." The F.B.I. even seized some boats to inspect the flooring for burns characteristic of backfire from a shoulder-fired rocket. Mr. Kallstrom's press conference was aimed at discrediting the missile theory, and it worked. In an editorial titled "Conspiracy Inoculation," The New York Times congratulated him for an "extraordinary" performance. The F.B.I. had shared its "voluminous evidence" with "admirable thoroughness and openness." The closing of the criminal investigation allowed the N.T.S.B. to hold hearings on the crash, one month later, where it offered hundreds of exhibits, a few of which depicted a "30-knot track" 10 miles out in the Atlantic. Radar data collected during the last minute of the T.W.A. flight revealed the two closest objects to the plane, both between three and four miles away, as a Navy P-3 airplane and what the exhibit called simply a "30-knot target." Radar data for the next 20 minutes showed the mystery boat heading on a beeline out to sea, on a south-southwest course, even as other boats rushed to the crash to try to help out. It was nearly 9 o'clock at night, not the usual time for an excursion. "I looked at that and said, 'Wow, what is that guy doing leaving the scene?'" Commander Donaldson said. "And of course I assumed he was identified." Commander Donaldson called Steve Bongardt, an F.B.I. agent and fellow Navy veteran who was active in the investigation. "It was a pilot-to-pilot exchange," Commander Donaldson said. "I said, I want you to tell me if you have a 302 [interview] form for every single boat out there. He said, 'I can't answer that question without higher authority.' I said, 'Steve, you have answered the question.'" Commander Donaldson was then working closely with Representative James Traficant Jr., Democrat of Ohio, who was looking into the investigation for the House Aviation Subcommittee, and at the commander's prompting, Mr. Traficant sent a list of questions to the F.B.I. One asked if the F.B.I. has "been able to positively identify every single aircraft and surface vessel that was in the proximity of T.W.A. Flight 800 at the time of the accident." It took more than three months, but in July 1998 an acting assistant director answered the Representative: No. Lewis Schiliro acknowledged the presence of the mystery boat, which he said was at least 25 to 30 feet long and reached speeds of 35 knots, close to 40 miles per hour. "Despite extensive efforts, the F.B.I. has been unable to identify this vessel," he said. The response is somewhat alarming given the F.B.I.'s assurances that it had turned over every stone-and given the fact that many eyewitnesses on Long Island said they had seen a flarelike object streak up from the horizon before the explosion in the air. Yet the speeding mystery boat goes unmentioned in the mainstream press. I first learned about it in a scientific report on "anomalies" in the Government investigation that has been widely circulated on the Net. "I show this data to physicists and their jaws drop," said the report's author, Thomas Stalcup, a graduate student in physics at Florida State University who heads an Internet group of 40 people with a technical background, called Flight 800 Independent Researchers' Organization, or F.I.R.O. Mr. Sephton, a F.I.R.O. member, said, "It's really weird that there are no eyewitnesses reporting from that vessel. These are the people who are pulling out from under the flaming debris, and none of them calls the 800 number that is set up by the F.B.I." The N.T.S.B.'s Mr. Goelz disputes the suggestion that the boat was fleeing. "It's perfectly reasonable to assume, because they were on a direct course and the explosion didn't occur in front of them, that they didn't see it," he said. Given the boat's speed, those on board may have heard nothing over the engine noise. "They would have to be deaf, dumb and blind not to have seen something," Mr. Sephton said. Commander Donaldson pointed out that the explosion was "a huge physical event" that filled the night sky behind the boat with a curtain of burning fuel. "It would be like having the sun come up at midnight right behind you," he said. "You would feel heat on the back of your neck. And you're going to feel the concussion. The explosion rattled windows on the beach 10 miles away." It would seem that even the F.B.I. secretly regarded the 30-knot track as suspicious. For six months, the Government conducted a $5.5 million trawling operation of the waters surrounding the crash, using scallop boats. Commander Donaldson has obtained documents left by the F.B.I. on one scalloper, showing that the F.B.I. was specifically looking for shoulder-fired Stinger missile parts-notably a Stinger ejector motor-in what the F.B.I. called a "possible missile launch zone" 2.7 miles from the crash. That circle included the mystery boat. "If it's a legitimate criminal investigation, with a possibility of 230 homicides, how do you close the investigation when you haven't identified the boat that was within missile firing range?" said Commander Donaldson, who investigated a dozen crashes in the Navy. "To me that's egregious. I don't see how you justify it." An aide to Representative Traficant said the F.B.I. and N.T.S.B. should have been more open about the mystery boat. Paul Marcone said, "Kallstrom should have come out and said, Here are some things we haven't been able to explain." Now an executive with the banking company MBNA, Mr. Kallstrom said he had no intention of misleading anyone at his press conference. "I wish I knew who it was," he said of the 30-knot track. But there are always loose ends in any investigation, and mentioning them is not helpful: "If you say you're 99.9 percent sure, people think you're opening the door, or that you're playing games." Representative Traficant's report concluded there was no Government cover-up. Such a conspiracy would have required hundreds of participants, Mr. Marcone reasons. He interviewed 40 or 50 investigators and they all struck him as sincere. If there had been a cover-up, he added, "Why would the F.B.I. admit to a U.S. Congressman that they couldn't identify the 30-knot track?" Commander Donaldson said a cover-up wouldn't require those numbers. Tasks in the Flight 800 investigation were parceled out amid an air of state secrecy, with pre-emptive suggestions from on high that the Government had found no evidence of a missile. In this climate, individual teams' reports could be honest and insufficient, because technicians were not in a position to put what they had seen together with other evidence. For instance, the N.T.S.B. held public hearings on the crash, but refused to allow eyewitnesses to testify about what they'd seen. Meantime, the F.B.I. presented a C.I.A. animation of the plane's breakup that purported to explain what the eyewitnesses had seen, and merely infuriated them. It's not hard to imagine ways this investigation could have become politicized. The Atlanta Olympics were to start days after the crash. A leading terrorist was then on trial in New York. There were threats; three weeks before, an apartment complex in Saudi Arabia had been bombed, killing 19 American servicemen. And it was election year for an administration that has shown it will do just about anything to win. What if voters saw the country as being vulnerable to terrorists? The N.T.S.B. likes to point out that Commander Donaldson is a right-winger, funded by Accuracy in Media. Yes, and Mr. Stalcup and Mr. Sephton are lefties. They have lately obtained more radar data which they say challenges the Government findings. The real distinction here is between the old hierarchical information order and the new one. For some time now, the mainstream media has been able to write off Internet investigators as ill-trained, people who are unable to sort out rumor from fact, and, when they do have facts, have no sense of their proportion. This criticism has often been true, but the Internet gets less hysterical one month to the next, and meantime the mainstream media have found themselves in an odd position. They are corporate authorities, who tend to accept the word of other authorities at face value. They don't seem to see the revolution at the door: The Internet is a growing society of people who are comfortable challenging authority. "You're focusing on minutiae," the N.T.S.B.'s Mr. Goelz said to me. "Ninety-five percent of the wreckage of the plane has been recovered and it shows no missile." "Let's see," Commander Donaldson said, getting out a calculator. "Five percent of the wreckage is 8 tons. You can put a lot of holes in that much stuff. It's like saying the Empire State Building fell over and we've found all but five floors." New York Observer, July 7, 1999 Gold Market Gold: South Africa Sucks Wind More blather about poor countries, the need for inflation, and organizing the wives JOHANNESBURG - ''Gold Hits New 20-Year Low'' has gotten to be an almost numbingly familiar headline here in the past few months, but sometimes there are chains of events that cause the country to break out in a fresh cold sweat. On Tuesday, trading was suspended in the shares of East Rand Proprietary Mines, the first mine to go bankrupt as a result of the falling gold price; 5,000 workers will be laid off, possibly with no severance pay. Also the Bank of England has sold the first 25 tons of a planned 415-ton sell-off, triggering a plunge to another 20-year low. The National Union of Mineworkers said it would picket the British Embassy in Pretoria on Wednesday. On Sunday, the new president, Thabo Mbeki, reversed his position and came out firmly against the International Monetary Fund's plans to sell gold to help forgive the debt of desperately poor countries. Many South Africans, from the president and gold barons to union leaders and laid-off miners, are furious at the world's new disdain for the metal. As the black majority tries to claw its way out of poverty, the falling gold price is kicking its feet out from under it. Since 1997, the country has lost 103,000 gold mining jobs, according to the Chamber of Mines. Unemployment is at 40 percent and 68 percent of black South Africans live ''below the bread line'' defined by the University of South Africa - $170 a month for a family of four. Sampie Terreblanche, a political economist from the University of Stellenbosch, said that unemployment had been closer to 10 percent in the 1970s and the chief culprits are jobs lost in gold mining and corn farming. In Africa, even a country like desperately poor Mozambique right next door - which is in good order with the IMF and a prime candidate for debt-forgiveness - is afraid of the fund's gold-sale plan. The thousands of Mozambican miners here send $50 million home each year. Every miner has numerous dependents, and in rural villages, his salary may feed 20 people, so the prospect of more layoffs in South Africa is terrifying. According to the Chamber of Mines, eight of South Africa's 16 gold mines are rated ''marginal'' at $260 an ounce and two are running at losses, said Roger Baxter, the chamber's chief economist. Gold was fixed in London on Tuesday at $257.60. Mines here have cut production costs. The average cost of mining an ounce of gold has fallen from $342 in 1997 to nearly $250 now; South Africa went from the world's highest-cost producer to par with the United States, Canada and Australia, but the gold price has fallen faster than it can retool. The paradox, gold analysts say, is that world demand for gold outstrips supply, so if it were not for central bank selling and bearish speculators, the price would probably be going up. As Brenton Saunders, a gold analyst at the Fleming Martin investment house here pointed out, jewelers, dentists, electronics-makers and personal hoarders absorb about 4,000 tons of gold each year. The mines throughout the world produce only about 2,500 tons. The 1,500-ton shortfall is made up by recycled gold, forward sales by mines and sales by central banks. ''The market's ability to digest 25 tons is big, so theoretically, the Bank of England selling shouldn't create a problem,'' he said. But central banks have 35,000 tons of gold stored in their vaults - enough to keep jewelers and dentists happy for 9 years. If the market believes governments will demonetize that gold and sell it, the price can plummet. About 80 percent of the trading in gold futures is by speculators, not users, Mr. Saunders said. ''They're driven by sentiment, and for the last three years, they've been taking positions on the downside.'' Mr. Baxter agreed, saying, ''A 25-year-old in front of a computer in London who has never been down a gold mine has no idea of the impact of what he's doing.'' The sale has earned the Bank of England about $210 million, which it said it will use to buy euros, dollars and yen for ''portfolio rebalancing.'' The damage South Africa will suffer from that angers Mr. Terreblanche, who has an acute sense of history. ''In the 19th century, Britain profited enormously from South Africa's gold and diamond mines,'' he said. ''The Anglo-Boer war was a gold war - Britain was losing to Germany in the gold competition and saw our gold mines as the solution. Now it's the old colonial power that's giving South Africa another blow.'' James Motlatsi, head of the mineworkers union, expressed a thoroughly modern disappointment. ''It's very disappointing from Tony Blair, since his country colonized most of these countries that are being hurt,'' he said, referring to African gold producers that will be hurt by a drop in price. ''If he continues, I will have no choice but to organize the wives of those who will be laid off and march on British embassies.'' While the governor of the South African Reserve Bank has lobbied European banks to drop their sales plans, Bobby Godsell, chief executive of Anglogold, the world's biggest gold-mining company and Mr. Motlatsi of the mineworkers union jointly lobbied the U.S. Congress last month to oppose the IMF gold sale. In May, President Bill Clinton endorsed an IMF sale, so they received some sympathy from Congressional Republicans, Mr. Saunders said - not because Republicans care about impoverished Africans but because they want the IMF to give any assets it sells back to member countries. Speaking at the World Economic Forum's southern Africa meeting on Sunday, Mr. Mbeki said he favors debt forgiveness but opposes using gold sales to fund it. ''It can't be right to address one problem by creating another,'' he said. Of the 41 countries on the IMF's list of highly indebted poor countries, Mr. Baxter said, 30 have some sort of gold industry, including producers like Ghana, Mali, the Ivory Coast and Sierra Leone. The London-based World Gold Council, which represents the industry, calculates that while the IMF would raise $108 million a year by selling gold and buying interest-bearing instruments, those same poor countries have already lost $224 million from the $30 drop in the gold price of the past three months. International Herald Tribune, July 7, 1999 Gold Market Central Banks Dump an Unprofitable Asset Portfolios on bicycles For thousands of years, gold has been an integral part of the world's monetary system. At first it was the stuff from which money was made. Then, it backed up the value of paper money and formed the basis of global monetary systems. More recently, it has been held by central banks as a hedge against inflation and a fallback in times of emergency. Now, though, its role is looking increasingly anachronistic. Yesterday, the Bank of England held the first in a series of gold auctions which will eventually halve Britain's gold holdings. The auction itself went smoothly, but the political fallout has been tumultuous. Gordon Brown, the chancellor, has been accused of mismanaging the announcement of the sale; of masterminding an underhand attempt to get Britain into the euro; and of participating in a worldwide conspiracy to undermine the value of gold. The truth is less exciting. Gold is simply not a good investment prospect for central banks. Its price has been in the doldrums for two decades now, and the return on holding it is low (it can be lent out, but at an unexciting interest rate). With more official sales looming from the International Monetary Fund and Switzerland, prospects remain poor. The main attraction of gold is that as a real asset, it provides a hedge against inflation. But with global inflation on a firmly downward trend, this property has become less useful. Gold can be an important part of a balanced portfolio. And it remains the safest possible asset, its intrinsic value unaffected by the whims of the world's politicians and central bankers. But, as many countries have already realised, there is no reason why it should automatically form a high proportion of reserves. Mr Brown's decision to give advance notice of the British gold sale was unusual; most countries who have disposed of gold have done so secretly. Although it gave the markets a shock, the transparency is to be welcomed. Secret sales benefit insiders and create uncertainty. The rapid price fall is partly a panic reaction, given that the volume of the UK sales is fairly small relative to total gold production. One implication of central bank gold sales is worth worrying about: the impact on developing countries. If prices fall much further, some may need help in diversifying their economies to reduce their reliance on gold. Gold is still, as Alan Greenspan, the US Federal Reserve chairman, recently called it, "the ultimate form of payment in the world". But the cost of this security is high. Britain's decision to sell some of its gold reserves was sensible; but will others follow? The Financial Times, July 7, 1999 Oil Market International Petroleum Exchange Considers Plan B Bigger than Brent? The board of the International Petroleum Exchange meets today to decide how to proceed with turning the London-based exchange from a mutually owned organisation into a profit-making company. The decision will be far from simple. The board must consider whether there is enough support for its own proposal - known as Plan B - to sell a controlling stake to five European energy groups. In a consultative poll of members carried out last month, two-thirds of votes backed Plan B. But for the proposal to pass in a formal vote, it requires a 75 per cent majority. Last week, the board's decision was complicated further by an offer from the New York Mercantile Exchange to buy at least 55 per cent of the IPE. "The Nymex offer certainly makes the board meeting more complex," one IPE board member said. "It's no longer a question of whether the board supports Plan B, it will have to be prepared to consider alternatives." The London exchange began its task of developing a new structure last year, when it entered merger talks with Nymex. Those negotiations ended in March after IPE members asked for other options that would guarantee the exchange's independence. The result was Plan B, under which the IPE would become a limited company, with 70 per cent of its shares held by investors. Five groups emerged to take a stake: BG of the UK, oil and gas company Enron, Distrigas of Belgium, Nordic energy market Nord Pool and OM Group, which runs the Swedish stock exchange. However, some members have attacked the emphasis on developing the exchange as a broad energy market, whereas most of its income comes from the benchmark Brent blend crude futures contract. The five investors have no experience running a physically delivered oil market, critics argue. Nymex, on the other hand, trades the world's largest crude futures contract. "The Nymex offer provides much more added value than Plan B," said Tim Knight, a director of Paribas Futures Ltd, one of the IPE's member companies. "It a real partnership with a big player. We will certainly support it and I am sure others will, too." Supporters of Plan B contend that it is unclear how the IPE would develop under Nymex, and it is uncertain whether it would receive regulatory approval in the US or the UK. They also point out that one of the main objections to Plan B was that it valued the IPE too low at $35.7m. Yet the Nymex offer is based on the same valuation. Since the results of the poll on Plan B were announced last week, IPE executives have held talks with investors and members in an effort to resolve concerns and strengthen support for the proposal. The IPE leadership appears convinced that Plan B is the better offer. It will be keen to avoid the defeat of its recommendation by membership vote. However, if a significant group of members remains unconvinced by Plan B, finding a compromise could be tough. Though Nymex's offer allows the five Plan B investors to take part in the IPE's new structure, holding 5 per cent each, the signs are that the companies would not be satisfied with such a limited role. Peter Cox, chief executive of OM Group's London arm, said: "Our interest is in providing technical facilities for trading in energy markets. Plan B allows us to take a major role in the IPE. A smaller stake would make no sense." Nymex says it has received approaches from other companies interested in investing in the IPE, though it is also prepared to hold up to 70 per cent of the exchange itself. One option for the board today, say insiders, could be to proceed with a vote on the general concept of demutualising the IPE - likely to receive broad support. Another vote could be held later on which sell-off plan to adopt, with the intention of receiving more details of the Nymex proposal in the meantime. "Most of those who oppose Plan B would have voted for the original Nymex merger plan," one IPE member said yesterday. The Financial Times, July 7, 1999 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! 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