WW @22:57: Imperiled confidence. Absolutely. It's a drum that cannot be beaten too severely or too frequently. From this point forward into a distant future, it will take but one small event, of the right sort, and the game is finished. A truly great foundation for a solid monetary system.

EB @ 04:54 - I concur; PGMs to the moon - and soon! No not more poetry, I'll give that a rest for awhile. I guess I am feeling a bit more human. Must be the healthy So-Cal libido. I was sounding a bit like a Demi-God there for awhile. Just wait, I'll get cranked up again.......Wait.....Zombie, by The Cranberries is on the stereo, give me some time, I'm already feeling semi-Demi-Godish..........

Auric: re gold mkt. All of the CB gold in the world is worth about 375 billion. The gold mkt has become infintesimal in comparison to the world currency mkts. Consider it a gnat on the buttox of an elephant. The way it is being treated lately it is near the wrong part of the buttox.!

NAILZ: 00.25 Ofcourse you are right. My stock trading was
louzy. But I haven't managed to lose my principal yet. I
have lost, in relation to my net worth, a lot of money
using envelopes, stochastics ( sp? ) convergence/divergence, etc
But after one large zap decided to forget about it and use
my other methods. On the upside, I bought this fancy
computer to handle all the chart stuff. Maybe I just got
tired of it. Anyway, my vision was real and not a joke. I
was trained in psychic phenomenon in 1970 at the Chicago
Physic Center in the 1970s.

John C @ 11:55 - Wish I could offer some info, But I don't do options. More than 98% expire worthless, that really puts the trade at a disadvantage. I admit though, when an option hits, it hits big. But it seems you have to buy twenty to get one that hits. I don't do futures either, why be tied down to a delivery date? More times than not, you get caught in a squeeze. I work with leveraged physicals. Maybe Glen or D.A can offer some advise on options.

Why will gold go up? It is one the worthless commodities in today's world. What the heck is it used for other than jewelry and country's trying to raise cash ( like Belgium ) by minting coins? No offense intended.

"WHY WILL GOLD GO UP" First, the prevalence of comments like yours is a most supportive indicator and second, read below.

Thank you sir and good night.

RJ - I KNEW you were a good guy, but could not for the life of me figure out your main debilatating factor. When, just now, you admitted that you were leaving Kitco for a short while, to listen to the Cranberries, I did not need to know anymore. You poor, tortured, soul. All the best my friend.

WW @23:27: Most excellent. You tied all elements, of the recent fed jawboning, together into one neat package. The crap continues to flow and, as yet, the gold players fail to look for the exits. .... Who is more concerned? Us or them?

Auric: The total above-ground supply of gold now stands close to 3.766 million ounces. Valued at $340 / ounce, the world supply of gold is only worth $1.28 trillion. In the US, the market-value of all stocks in close to $12 trillion. The market-value of stocks and bonds combined is close to $25 trillion. But this is merely a measure of global supply of gold versus domestic supply of financial paper.

Globally, the supply of all stocks, notes, and bonds is estimated to be in excess of $100 trillion at market value. In other words, the supply of paper to gold is about 100-to-1. In the old, old days, this ratio was closer to 1-to-1.

WW - As I have said a few times in the recent past: - I don't believe how in sync with the majority, ( that's a political term - whoops ) , around here, that you are, when you stick to the main topic!

RJ: If I might say, in leveraging, that seems like a very intelligent way to go about it. But how does one go about doing that? Am I still floating on a boat by even asking this? I'm not particularly into trading, but I do like to learn methodogy and ways! Never know what might strike ones "fancy" you know. Knowledge is everything.

http:///www.gold-eagle.ios.com

Bob - Your words on gold ring true, and I agree gold will not move substantially until the equities stop taking all the $. I get calls all day long about gold; believe me, the interest is there if only they could believe gold will move. Unfortunately, most will chase the market and buy too high. Alas, nothing changes.

EARL All the jawboning by CB/G-7 and Wall ST. over something as infintesimal as gold and as unimportant as they would have us believe answers the ques. They are concerned we are impatient. When you really analyze the things they are saying about gold and their emphasis as though selling raises so much money ( which it doesnt ) the situation is bullish in the extreme. Making a big deal about selling all the CB gold and the price would fall only to 309 and raise a WHOLE 375 billion shows the absurdity of the bearish case. In fact this Fed sponsored study is bullish. It is the derivitive raids by Wall St houses that are keeping things at bay. CB sale talk is the prop. Again if even a scintilla of demand develops its outta here, This is why the jawboners are worried.

Peutz @ 00:29- What is your time frame for this gold
scenario to play itself out?

Mooney - Music list for tonight so far: The Doors, Mozarts Requiem, a little bit of The Barber of Seville, The Cranberries, now, John Lee Hooker. I dont suppose this mix will go very far in improving my reputation hereabouts, but I have varied tastes. I do draw the line at country though....

Ted - I miss John Belushi, and John Candy and John Lennon and John Kennedy too. Nothing we can do about it though. ( As for John Kennedy, I can hear the partisan BS snickering now: but as a non-American I can tell the rest of you that the rest of the world don't give a Flying _ uck about your BS politics, and JFK was the last and ONLY President that the rest of world respected in the last 35 years. How's that for telling it like it is! ) Goodnight Glenn wherever you might be!

Might add to Steve Peutz's comment on above ground supply. Much of that supply is in jewelry where the gold has been mixed with other alloys and is not readily tradeable. According to my sources it would cost upwards od 600 per oz. to get most of the jewelry stash back into tradeable form. So much for the bear refrain that all the gold that has ever been produced ACTUALLY exists as readily available supply. In fact, since most gold is now going into jewelry the investment grade stuff is getting even scarcer in relation to the ever expanding currency markets.

Sabot - Leverage is not for the squeamish, nor a good idea without some real world knowledge about these markets. Leverage is a sword that cuts two ways. Any further discussion must be away from the Kitco group.

RJ: May I recommend Lester Flatt and Earl Scruggs?

AAAAAHHHHHHHHHHHHHH!! : (

Auric: I believe the stock market will fall apart before the end of October -- this year. And when the stock market falls, the financial system starts its decline. Gold should begin its bull market at about the same time as the financial system starts failing -- sometime between July and October.

Actually, I am very fond of bluegrass, folk, or Cajun. I said Cajun, not Zydeko - did I spell that right? Cajun is down in the swamps, spoon bangin, knee slapin' fiddlin' in such fractured French, nobody outside Louisiana can understand a word of it. Thems good tunes..

Bob,

Saw your many posts of yesterday, haven't fully digested them all, but am prepared to step into the ring with you on a couple of points, and hope this won't be a 10 rounder.

You made the point "TA begins with the premise that the market is near perfect, and not party can combine to manage price or quantity. Where did you get such an absurd idea. TA probably means different things to different technicians. I for one have a basic fundamental premise from reading and experience, and a look back in history, that spending to the degree the world has spent, on credit ( borrowed against the future of the future generations ) is a selfish way of living, and eventually will end in disaster. Take your shot.
Further, getting back to TA, is nothing more than studying past data, in various forms, to try to see a picture of what is going on in the markets, and trying in various ways to interpret same. The markets, like people are not perfect, in fact far from it, but in the long run patterns do show that people repeat actions. Like a rythm, or waves on the seas, or a musical composition, the theme is there, and the variations appear, and soon patterns, that can be studied, appear, for those that enjoy interpreting them, or just listening to them, and seeing them.

Masses, herds, are somewhat predictable, I don't need to go into that, we've all seen what dictators do with the masses, and greed and fear can also be observed in mass psychology, so studying data, charts or figures, can be very helpful in predicting the future, with some amount of accuracy. Working as I do with long term TA, is much easier, and doen't take nerves of steel as with the traders, the successful ones, that work at systems on a daily basis. We have a few in our group, and they are a fascinating bunch. One must only realize one's weaknesses, and not try to involve himself with commodities, futures, options etc. unless they "know" what they're doing. I've tried, more than once, and failed.
Wish I could have the losses back. When I meet that GENIE, maybe that'll be my one wish.

Take a look, Bob, at long term Dow or S&P charts, say this century, and gold as far back as you can find a chart, check out some of the P/Es at the highs and lows, and an interesting bunch of info will appear. Patterns will begin to have more meaning. It ain't perfect, but then what is?

For Mr BOB
Talked with Mr Moto and read your repry his post.
Now you don talk so fancy Mr BOB. You talk straight
now. So you say US PRINT money to pay us when "debt
instument fancy talk" come due. Also I assume US also
print interest money too. That velly funny for me Mr
BOB. HaHa.
I can get better deal with Congo bonds - they
pay be much higher rate and buy paper, ink, etc from
same supplier. Also money velly pretty - pictures
birds, animals, nature scenes.
I dont think I won buy your debt MR BOB. Gold
is nicer. I know don pay intelest but what you call
intelest only printed paper - is worth nothing. You
think I crazy man.
Maybe you better not come China Mr BOB. I think you
run big SCAM. First you try sell me opium - now you
try sell me PAPER ?? I got enough Paper already.

Earl: In response to your last major opus, where do I start, lets start with you. If I had your intellect and gift of expression, I would have made one h..ll of an advocate. Yours and many other comments on the forum are way over my head.

Lets talk about money, since it is close to my wallet. How can governments demonitize gold except by decree prohibiting its use. The public has and continues to use gold as money defined as an "exchange medium" because of its singular desireable attributes for exchange. It is for this reason that gold is still highly prized and almost all gold that has been mined has been retained. By selling gold, a CB only enhances its value as money by making it more widely distributed. I can go almost anywhere in the world and exchange gold for other value. Therefore, the view of Andy Smith that by a CB selling gold, gold is demonitized has a smell of Bovine Species Pastoral.

And it is in this more important capacity as money that gold will be sought after or abandoned ( including being added to or subtracted from reserves ) in consideration of actual or perceived economic and political conditions and its relative value to other monetary alternatives. I would concur with the French CB, that gold will remain a part of a CB reserve asset base for the foreseeable future.

I have observed graphs of such selling from at least "82" by both developed and undeveloped countries. Moreover, the net selling in 96 and to the extent I can determine in 97 does not even come near the net selling that took place in 92-93 on year over year levels. Yet there was not the hue and cry then as there is today. And I wonder how much of this is attributed to current media attention brought about by the unusual "Swiss" sale and the views of Andy Smith and Ted Arnold which the media fasten on to as good copy.

Now having said this, I also question the need for every country to have gold as a reserve asset. I understand that Japan has a comparitively very low gold reserve component; yet their currency is very strong. I make no conclusion on this, only an observation for your comment.

RJ - I KNEW you were a good guy. John Lee Hooker once sat at my Feet for about an hour at a John Mayall concert at Toronto's U. of T. He, ( of course ) , had a couple of beautiful young babes on either side of him and as these volumptious young ladies were sitting on either side of him, ( and at my Feet ) , my young wife started to get annoyed, ( dare I say possessive, jealous and protective? ) , but can you blame her? We were in the front row, so that is why John Lee, ( when he walked in ) , plopped down in front of me. I could go on but at the risk of turning PB on again like the other day when I told him 1,000 young ( and old ) male Scots were Mooning him. Such is life. Carry on, up to Sudbury!

for WW
Hold it a minute. While I WISH it were true that it would cost
600 per oz to remove the copper alloy in gold jewellery, I dont
believe it. How can that be, WW ???? If it costs only about 300 an
oz to go several miles under ground to get the ore , then mill rocks,
then refine it to 99.9 whatever per cent.

Beyond that, you're doing just fine.

Reify: I think the point that Bob was making is similar to one I made several times in Feb. That is: ... Are MANIPULATED markets, especially one such as the present gold market, amenable to TA?

Since TA is a means of divining the future course of market via the actions of MANY participants, it has always seemed to me that TA would fail when a market was expressing the view of only a few dominant players. On the one hand we can gain some insight into the probable actions of the many; on the other we are unable to know the will of only a few. Sounds paradoxical; doesn't it. .... In any case Bob made a good point, that should at least be considered further.

Mooney - I didnt know you were Royalty. I truly envy you. I am a bit of a scholar on the Blues Greats and, even among some of the finest makers of music who ever lived, John Lee stands alone. In Fact I have a couple of CDs entitled "Alone", in which its Just JLH and his out of tune beat up steel string guitar. The reason the are so many recordings of JLH solo, is that he broke the rules so thoroughly, nobody could follow him. He was un-accompany-able. He would change keys - sometimes invent his own - pay 12 bars followed by 17 bars followed by 8 more. He is a Master Bluesman. I saw him last August at the Bumpershoot at the Seattle Center. How old is he now? 73, 75? He walked onstage in a black suit and black hat, tipped it ever so gently, sat down on a chair center stage, and did an hour and twenty minutes of music I will never forget. I looked around me at teenagers, who could have been his great grandchildren, caught up in the Blues, and I wondered if they realized how special the moment really was. JLH brings the blues across generations and delivers it unadulterated directly to our hearts, and our own ache with his. A Great Man. Oh yeah, he had a couple babes waiting sidestage. Some things are meant to be.

Puetz:

While I am sympathetic to your view on the ultimate hammering that bondholders will take, I think you miss the path as to how it will happen. You state correctly that large credit bubbles ultimately lead to large credit collapses. Whats very different this time is that the credit bubble around the world is a government credit bubble and the government controls both the terms of repayment and stuff ( very short term paper ) which must be repaid. Armed with these tools, governments are unlikely to fold their tents quietly. They will first do just what they have always done when faced with this situation, expand the supply of money, inducing inflation, so as to lower the real value of outstanding debt, and to simultaneously increase their tax take in nominal terms. A look at the worldwide M's shows that this policy is already in place. Todays release of broad money growth in the U.K. was a stunning surge to over 11% YoY. An increase in money growth will continue until such time as the i-word rears its ugly head. In this cycle I believe that this will take place with a considerable lag due to rejiggering of the yardsticks as governments must continue to market their paper. It is not that real inflation will not take place, but just that it will not be reported as such. ( The Bureau of Labor Statistics has a web site with some very instructive working papers as to this regard. In particular there is a piece in response to the Boskin commision's recommendations for lowering the CPI by ~1% per annum. Its long, but well worth the read ) Finally, when the bond buyers wake up and smell the coffee, or the palladium, or the fine art or whatever, the game will near its conclusion. I believe at the very end we will see 'work outs' where the government decress that bondholders will only get say 50% of their coupon rate and that the maturities will be lengthened considerably. This will occur at a time when governments are already running large primary surpluses so that all they really are doing in the debt markets is rolling and refinancing anyway. While it would be true that they would have a hard time borrowing again for many moons, it would also be true that they would have no need. The people who will get screwed the most will be the extremely wealthy who have large amounts of their wealth tied up in government paper believing it to be 'safe'. When WW, or someone of his ilk gets his hands on the steering wheel, the pitch for screwing the rich will sell smoothly and well.

Between now and then the stuff will do best.

I know a lot of you have been very disappointed in gold lately. I must now add my woeful cries unto your own......Oh, why did gold go up 1.50 today? I could use a little consoling here....Guys??? I will suffer alone.

RJ: I do know what you mean about leverage not being for the squeamish. Actually, I was more curious about how you go about that business in the physical metals markets rather than the paper futures markets. Seems to me there is a major distinction there. Also, you now have me going into the local CD shop and looking up a CD or two! Damnation! PS. Does this site seem slightly addictive to anyone else here?

Your response to the credit bubble is well reasoned. I have not read in these pages however, the reason Japan will continue to finance our debt. What choice do they have? We are their biggest market, they need us alive and healthy. Back in the Eighties, when the Japanese were buying up Pebble Beach and Rockafeller Center, I was a lone voice of approval. I heard calamitous shouts of nationalism, "we must protect our country from the foreign invaders". I told all who would listen - not many would - Let them buy it all up. They can't take it home with them. The more Japan has invested in the US the more vested its interest in our staying afloat. We are not the only game in town, but we are the biggest, and without the US, all will fall. As goes America, so goes the world.

RJ @ 01:38- Birth pangs.

Sabot - I dont know how other leverage programs work, I only know about the one I use, and I will not discuss it in any public forum, especially in these pages. This is not personal, but there is a credo of keeping the business away from these pages, to which I agree and adhere.

RJ:

I agree with you that the Japanese will not be confrontational with respect to our debt, but to view them as saviors I think is incorrect. Last I looked their balance sheet was in worse condition that ours. In addition their demographics are deteriorating faster than ours in so far as the ratio of aged to young. It may be that we will be called upon to bail them out.

RJ -- Truce if you will. You aren't alone in that! I was expecting these kind of lows last Friday/Monday, and perhaps a bit more. I'm still expecting more. 338 Aug anyway. Could this be a simple correction type bounce up with more down tomorrow? 340 is a rather important number, one which would warrant a bounce off of.

Mooney... ouch!

Sabot, Yes, this Kitco site is addicting.

Sabot:

RJ is a metals broker so he may be under some house rules as to what he may say on a public forum. I'm not, so here goes.

In short, leverage in the metals markets is not much different than leverage anywhere else in the world. Since the metal you buy can be used as collateral for a loan up to some percentage, you can borrow against what you have already bought so as to purchase some more. I would imagine that the margin requirements are similar to what could be obtained in the futures markets but my guess is that the borrowing rate will be much worse than what is implicitly available through futures. As a trading vehicle I suspect that the futures markets are generally less expensive. If you want a pile of stuff to leave in the vault or the bunker, the physicals are the way to go. One real value to owning the physical, or options on the physical is that you get positive exposure to squeezes and highly backward markets. You can get some of this action by constructing calendar spreads in the futures markets but the tracking is always off.

Hope this helps somewhat.

Earl: ( 01:26 ) Always felt that a group of dominant
players could possibly construct a chart patent by
various buy/sell actions and jaw boning; to draw
investors in or out of a particular investment.
To be "Politically Incorrect", I believe that governments
may hire, or train some to do so.

Nay savior, more like incestuous sister. Don't forget the 300 million in eastern Europe and Russia. Oh yeah, the 1.3 billion Chinese, almost forgot them. I have said it B4, Capitalism needs but one thing to work; Markets. We are staring in the face of enormous markets that will be open to us for the fist time. Vast lands with multitudes of consumers living amongst enormous natural resources. Never before in human history has such a prosperous future awaited mankind. Those of you waiting for the collapse, if you won't admit your error in ten years, or twenty, or.... oh well, by that time you will be a footnote. America still has the most productive workers on earth. Nobody can match our technology. Sure, the Japanese can copy it, but the US will lead the world into the 21st century which, if we can keep some nukes from flying, will be the greatest century this world has every seen. I remember seeing hippies in the sixties with signs proclaiming the apocalypse. Well we are still here, our standard of living is higher, and those hippies are either trading their own portfolios, or drinking bong water. Some of the doom I read here is reminiscent.

Hmmmmmm....

D.A.: Thanks for the explanation. I believe I see the light, and I don't believe I have that kind of inventory on hand. My hats off to those that do!

Vieserre: As usual, you are absolutely correct. Govts could not possibly demonetize anything without a total ban on public ownership. Enforced, as always, at the point of a gun. Though done once, I doubt that it's a realistic option for the future. .... Although, future gold ownership is likely to be enjoyed by only the few with vision, so it would be silly to not discount the willful effects of the many upon the few. As in: Who has the votes, eh? The demogogic possibilities become interesting, macabre and endless.

Except for those benighted regions of the world that have yet to discover the interesting possibilities that fiat funny money can offer, gold is not a common medium of everyday exchange. Given however, the possibility of no gold in da bank, even the those who write papers for the fed would begin to realize distinct differences between the two formats. One would be available in abundance. In a colorful array of denominations and all bearing sworn testimony that said piece of paper is backed by the full faith and credit of the issuer. The other would be somewhat in scarcity. Gresham's law.

As others have said, this evening, gold is a reserve behind every fiat currency. It may be beyond monetary redemption but IMO, it still serves as a psychological barrier to the emptiness that awaits its total removal. Unstated and reviled it may be but it serves nontheless. Remove it and paper will lose its value in effect, instantly. On that day, only the foolish will accept a promise over a fact.

Japan is currently be able to sustain its currency on the back of a reflected value. That is the market value of reserves whose value is a reflection of the world's view of those US govt assets. If the world view changes and the value of the assets are diminished in any significant way, the Yen is not likely to maintain its present value either. The same could be said for all currencies whose value is in some way related to US paper as a reserve.

In short, perception is reality and, for the moment, the perception is that US assets are solid and the US govt can be trusted to fulfill its promise of redemption. But what if ........ ?

Earl-
Are you saying that when cartels, as Bob suggests of CB's control of gold, drive prices one way or another, that TA fails in its value?
Remember what's been said here before about Asia, and China in particular. If CB's are selling someone is buying. And loans, such as those against golds in vaults, also must have a day of reckoning.
The credit game is nothing more than using future generations' wealth today. In days gone by, one would save for a desired article one wanted to purchase and when the money was there the purchase was made. Today one buys with the cute little cards we all posess, and live it up today, and pay tomorrow or the next day. But this has gotten so out of hand that even the CB,s are now looking to find ways to keep alive.
Think of past bank failures, or recently the Savings-loans scandel, this is small potatoes in comparison to the game the big guys are playing.
There's no easy way out, in fact no way out. The piper will be paid, you can bank on it. Pun intended.

RJ @ 02:18-- If that optimistic scenario plays out,
whither gold?

For Messieurs Mooney and RJ
You may find eet strange zat a troubadour lak
mahself born ovair 1000 years ago should lak zee
"blues" but ah can assure you zat eet ees true by gar.
Ah lov monsiour jean lee Hookair. Ah lov hees stoRIE of
zee grande floodings een tooplo, mizzippi.

RJ, Mooney, other Blues fans. Check out the new kid - Jonny Lang/ Lie To Me... you will like it. He is only sixteen give or take. The guys got it goin' on! Not to take anything from the great JLH...

AWAY!

EB

Well put regarding leverage. Yes costs can be higher on the longs, but nowhere is there a better way to short. Since any commodity is going sideways or down 80% of the time, the importance of selling short cannot be underestimated. One thing you did not mention, physicals , or leveraged physicals, are not tied to arbitrary expiration or delivery dates. If one would like an example, look no further that first delivery notice of June palladium. The shorts were forced into the spot market to pay whatever was asked to cover. Read my 6-5-97. Holders of leverage or physicals were able to ride that out, even the shorts; there was no calendar breathing down their neck. The similar problem exist with options. The people who write the options, get to keep your money if it expires. They also happen to be the same people who own the metal. 98 times out of 100, they can park it were they want. They count up the puts and calls, and park it where they make the most $. When you buy an option, you are investing with someone whose beat interest is that you lose your money, because they get to keep it. I will never buy a put or a call, I choose to be one of the less than 2 percent who avoid losses in options.

Whither gold? Gold may well wither.

D.A. @01:37: I am sympathetic to your views as well. Govt's will, to the best of their ability, follow exactly the course you have outlined. The only question I have is this: .. Will the wealthy, who are assumed to be astute investors, stand idly by and allow themselves to be raped in such an obvious fashion. It seems to me that many lessons should have been learned as result of the episode of the 70s.

Your stated course of events depends heavily upon these bondholders remaining somnelent or failing that, at least passive. Do you see a reason why they should be either?

Earl @ 02:23-- The amount of obligation that is
backed by the "Full Faith and Credit of the US
Government" is in the trillions. They better start
firing up the presses if they wish to honor those
debts, eh?

Your posts are like those of a sniper. You wait, you view, and then you shoot, always hitting the mark

The world is full of productive and inventive people. Even given the those in society that are not, and this includes governments and 'organizations', civilization has never-the-less been on an upward march towards betterment and an easier life. But given that the current 'major marketplace' in the world abides only because of debt, can this bode well for the well being of these people or those that are so dependent on the 'status quo'? How can it be that such debt does not matter? How can it be that an ever expanding debt does not weigh within any 'future' calculations? Could it be because it is simply paper or that we 'only owe it to ourselves'? Can it go on forever? There is 'something' fundamental here that needs answering!

OK. Truce. I don't expect for any NY longs to go into gold going into a weekend. Two continents will get to trade on monday B4 they do. $339, tomorrow.

Sabot-welcome. I am new here also. FNG's if you will.

When you are at the CD store check into the MIGHTY MIGHTY BOSTONES. I just started groovin to them. Good brass, good tunes.

AWAY!

EB

Where is CHEROKEE?? I need some smoke signals...

Reify: To clarify, I was only expressing the opinion that TA becomes less useful as a market reflects the views of few participants.

Get ready. I know you have doubting me. In SIX days
you will know if I speak true.

RJ: Recent history is on your side.

RJ -- Thanks! I too believe in the late Friday scenarios where many will not typically hold over the weekend.

RJ: I appreciate your belief that prosperous times await
our splendid planet.
But ask: When IBM and Caterpillar, to name just a few
major US companies, cut jobs in the tens, even hundreds
of thousands ( here ) and open simular plants in China and
elsewhere; will it really helps us?
Will these displaced workers be able to buy products to
keep our economy ( or the other economies ) going?
Will they ( our displaced workers ) be able to help pay the
interest on the debt that we owe the rest of the world?
PEACE

EB: Thankyou also for the welcome. I guess my trip to the CD store will not be in vain, should they be out of one or the other. Thankyou for the recommendation!

I suppose I'll have to go back aways to find out what this BT thing is about. Is that a correct supposition? Is it important?

Think back to the NAFTA debate and the "giant sucking sound from the south". Exports to Mexico a higher than ever, and there is no evidence of job loss. Quite the contrary all these new exports are creating American jobs and feeding American families. I don't believe that one must become wealthy at the expense of another. We can all improve our Lot.

Sabot @ 02:58--Good question about BT. I have no
clue if he/they are real. I guess we'll know a week
from now.

EB: I suppose I should be able to interpret "FNG's", but for the life of me, I cannot. Perhaps the lateness of the hour. But if you could or would interpolate it for me, I would appreciate it. Is there many of these abbreviations out there that might be good to know? Kind of new to this.

You are right, $339 is hardly a brave call. What if I said $330.... no, that would have some in Kitcoville jumping out of windows. Goodnight.

To All
I've heard all this stuff that the US media feeds us
about gold bein from notzis and if you like gold that
means that you're an-tie sometic and so on and a war
criminal to boot an it is jes not true.
In fack, Ill tell you whats happenen. Now that Black
African Powah has taken control of Gold Fields South
Africer and JCI, the US want everybody to stop usin
gold jes to hurt the Black people theah.
This whole thing is basicly RACIST

Let me guess, EB was in 'Nam, Sabot was not.

Ask one of the vet's or rent Forrest Gump again.

AWAY!

EB

RJ: Since Mexico is part of our trading block and by my
estimation; a good group of people; I will not comment
vehemently, but of the 350,000+/- vehicles they produced
in 1996, about 90% were imported by the US. Why can't
their government create conditions, such as to make them
able to buy that production?

EB, RJ: On board a carrier over there yes. Ashore, no. Damn, but that was a long time ago! I'm sure it'll come back to me at some wee hour in the middle of the night. Either that, or I will watch Forrest Gump again. In the mean time, don't any of you even dare tell me what it is!

RJ- although I do remember the sixties and the hippies ( and you hilarious comment about drinking BONG water ) I am just a puppy-relatively speaking of course. No NAM in my background...What a GREAT time for music though.

Regarding options trading you are right! I didn't think the numbers were that high-98% but yes most are losers. But, like any game... since I was able to pick up a baseball bat or golf club, I play to win. Winning IS everything. To win you must prepare and practice. Do not enter any arena unless you have done homework, studied, etc. Like leveraging, options trading is a very viable way to make a good or damn good living.

Be prepared! Oh, I was in the boy scouts...

AWAY!

EB

Jack -- If I might also comment on your post. First, think of return-on-investment. It would be most difficult to pay off multi-hundred million dollar plants buy trying to sell to those that have virtually subsistence income. The alternative is to sell to those that do have income. At the same time, start employing those so they too might have a disposable income. You are correct that very little is being done in that particular regard, and unless that does occur, the companys that move there will find very little, if any, overall benefit in having done so. Only short term profits that will be wind up being given back later as less and less market is available. These companys really need to begin emulating Henry Ford: Pay a wage where his workers could afford to buy that which they were making.

Hello to all! My gold stocks sent a chill down my spine today. Hey thats
life and at least Im totaled in reality and if it werent for Mercury
Falling I'd be sobbing into my lap. B.T. I'm a believer, six always
seems to work for me.

Eldorado: Been away trying to find verification of the
figures given, but couldn't find news artical, maybe
heard in on TV? RJ is a tough customer.
I believe that the 350,000 figure concerned production by
US owned companies, or by just Ford or GM indivigually.
Actually Mexican auto production is much higher and
should come close to 1 million vehicles.
I agree with your answer, but the Big Three shouldn't
coerce US labor, or better yet, DC should stand up for
its citizens.

US autos are now the cheapest and best quality in
the world. This is due, in part, to Japanese and
German companies setting up production in North
America.

6pak: Your Jun 19 21:54 post on Canadian economic history very interesting. I suspect most U.S. citizens fall in the same Quite,Consume, and Die mold as you think most Canadians fall. Somewhat related perhaps is a fact I remember from a history course: Only one third of the people supported the American Revolution, one third were neutral, and one third were actually Tories. Fits the mold.

Henry: The unemployment rate in Japan is relatively low,
this indicates that their manufactures are careful not to
stiff their own labor.
In other words; while they expand their markets
worldwide, they make sure that the Japanese economy is
not excessively hurt.
True, the Japanese are said to be in big trouble, but I
emphasize the word SAID, years of savings will probably
pull them thru.
This cannot be said for the US. Germany on the otherhand
has savings and a high jobless rate. This indicates that
they are stiffing their people.

This BT forecast is starting to look like Malachi
Martin's prediction of some sort of catastrophe from
the sky. Will this be another failed
prognostication? Stay tuned.

Henry: Forgot to mention, the strong US dollar not only
makes US made auto's less competitive, but it also
effects what most of us believe in. There are other
reasons that effect our beliefs, but I will not write a
book.

Jack-The strong dollar has forced US automakers to
slim down in order to be competitive. The Renault
is a prime example of the EMU automobile. The
Renault, like the EMU, is substandard.

EBN Gold down 1.15 ans Silver down 2 cents...Dollar strong ( thanks Bubba )
Tort: Thanks fer missive yesterday and will be back at ya later today!

Henry: I do not buy the slimming down nonsence, basically
it's to a show profit. Like taking large write-offs in
year one, so that years two and three will look good,
mostly because of the lower taxes, generated by the
write-offs. That ain't competition.
If they held those employees, they ( the employees ) would
buy more goods ( hopefully US goods ) .
Americans do not buy US goods because they have been
indoctrinated to some extent, to be the trendy in crowd.
More so it's because we cannot compete due to imposed
conditions. Remember; be the dollar high or low, we
always have a trade deficit.
This is not the fault of labor, but govermental and
industrial policy toward labor.

Jack 06:42- Agree that the auto industry is a
parasite to the US in many ways. The fact remains
that the auto industry in Europe is much worse. The
Renault is an expensive piece of junk.

It looks like gold and silver both melting this morning a bit. Here's a story to perk them up a tid. Morning Ted. I await incoming assaults.

There was a Pope who was greatly loved by all of his followers, a man who led with gentleness, faith and wisdom. His passing was grieved by the entire world, Catholic or not. As the Pope approached the gates of heaven, it was Saint Peter who greeted him in a firm embrace.
"Welcome your holiness, your dedication and unselfishness in serving your
fellow man during your life has earned you great stature in heaven. You may pass through the gates without delay and are granted free access to all parts of heaven."
"You are also granted an open door policy and may at your own discretion meet with any heavenly leader, including the Father without prior appointment."
"Is there anything which your holiness desires?"
"Well, yes," the Pope replied. "I have often pondered some of the mysteries which have puzzled and confounded theologians through the ages.
Are there perhaps any transcripts which recorded the actual conversations
between God and the prophets of old? I would love to see what was actually said, with-out the dimming of memories over time."
Saint Peter immediately ushered the Pope to the heavenly library and
explained how to retrieve the various documents. The Pope was thrilled and settled down to review the history of man's relationship with God.
Two years later a scream of anguish pierced the stacks of the library.
Immediately several of the Saints and Angels came running. There they found the Pope pointing to a single word on a parchment, repeating over and over, "There's an 'R', there's an 'R' -- it's celibRate!"

Tort: It's on the way....EBN Gold down 1.00 and Silver down 2 cents....
Gotta go weed the garden,mow the lawn,wash+wax the car,call Fidelity and see where the hell by bond check is,start packin,call newspaper and stop delivery,ditto Post Office,and make dinner fer our damn neighbors as they invited us over fer dinner???...I'm sure I've forgotten somethin...Toothbrush...TGIF TORT!

Novice: Will get somethin off to ya when I finish me chores...give me 5-10 minutes....S+P futures up 2.0....London Gold up .15....BYE!

WOW!...Hang Seng up 647 ( 4.6% ) gotta go or I'll be in deep do do...

WW: As usual you are right in target. The financial establishment is VERY WORRIED. With the most overvalued stock market in history, they cannot risk even a modest bounce in the gold price, lest it get out of control and help topple the house of cards. But I do think the spring has been pushed down almost as far as it can go.

The fact that bullion has held up relatively well in the face of an incredible amount of negative publicity is a very good sign. The risk/reward ration in gold and gold equities is as good today as stocks' risk/reward was in 1982 when the Dow was 800.

RJ,

Got your post from last nite. Thanks for the help - I need all I can get after yesterday's stop-out...

Hong Kong up nearly 5%. This would be equivalent to
a Dow gain of 375 points.

The G8 is meeting in Denver today. Any thoughts?

Test

Rev Jackson

I have been looking for this event to happen, but have no confirmation that "the New Randlord" Cyril Ramaphosa and his New Africa Investments have taken over Goldfields.

EBN Gold down 2.05. It's limbo time, how low will we go?

MOONEY: What's a volumptious young lady? And where does one get two of them? RJ: What did I tell you about Bernatz!

WW--00:39--The best of many outstanding posts last
night.

Swing high, swing low, next... soon, swing very high .... Don't be left short. D'day is approaching fast, the feds know it, just they can only stall for a short time.

What happens when you get speed wobbles on ya bike ?

RJ @ 1:30 - I got a wee bit mouthy last night :- ) , but to continue, I used to see the greats in the early 70's down at the Colonial Tavern on Yonge St., Toronto. Witnessed numerous up close performances by each of: Muddy Waters, Howlin' Wolf, John Lee Hooker, B.B. King and others. Pure Gold Man! :- ) Oh Yeah, one time my great uncle Mooney paid to have the family tree traced and it was discovered that we were indeed descended from the last Kings of Ireland.

This market is getting high .. I think .. I cashed out of the equity market ( stock funds ) end of day yesterday and placed it into wimp funds. That may mean the market goes up another 150 points : ) and I placed a few ( not much though ... I am strong proponet of placing money in wimp funds for awhile ) GTC orders to catch some falling anvils ( mining stocks ) . I put in my looseleaf paper support levels ( can a piece of paper catch a falling anvil without taking off my toes ... I hope so ) .
Have a nice day all ... : )

Mike Sheller - SEE. To this day I still stutter when I dwell on that memory! ( besides which, it was late and it is not a word that I use very much - unfortunately ) . Voluptuous, voluptuous, VOLUPTUOUS!

Ouch! Playing the long side of gold has felt like playing a losing game of leap frog with a unicorn.

You all know, a drop like this is a prelude to .... Expect Dow up major today... next week ... look out

My gut feeling is that like many of you gold is ready to hit its bottom and head up. The stock market on the other hand is being held in place by Elmer's glue, bailing wire and a whole lot of wishful thinking coupled with unprecedented greed. The euphoria will unravel like a cheap suit in the not too far distant future and dollars will evaporate like the hoar frost on a summer morn under the blaze of the rising sun. Like Don Williams crooned, there is gold in the morning sun.

G7 to open money spigot. Why, you ask? Because
they are staring face to face with deflation, and it
terrifies them. Look for CB's world wide to print
money and lots of it.

EB - They had FNGs in the boy scouts? $338 gold this morning, makes getting out of bed worth it.

XAU Jun 19 100.60 +1.28 +1.29%
Gold down a couple of bucks
Prediction---I see the worm as turning in the old financial apple. Gold will soon follow XAU

Can Someone, very knowledgeable about Gold Lease Rates, and their significance to the market, please answer the question directed to me on Kitco 2. I could take a stab but I, too, would like to see an in depth answer by an expert.

Gold and gold stocks down sharply this morning, BUT GOLD STOCK VOLUME IS RISING ALMOST EXPONENTIALLY. Looks like the selling climax is here. Big reversal likely next week. Don't write off BT yet.

Mooney--10:29--I believe the Gold Eagle Forum has
the gold lease rate. Just a guess here, but if gold
takes off, the lease rate will rise as the physical
metal becomes scarce. Look to Palladium and
Platinum as a model. Two down, two to go.

George, Where are you getting your quotes/volumes from this morning...my quote.yahoo is stuck on yesterday!! Thanks..

BILLD: You can get quotes from DBC at: http://www.dbc.com/

Actually just checked the volume on the majors -- very heavy in ABX and PDG, less intense but still good in HM and NEM.

Ted,have a nice travel and don't forget your e-mail adresses and ULR's to take along.There are lots of internet cafes around the country,so you don't have to miss what is going on at kitco and the gold market.Ali

Excellent Quotes..... http://www.quote.com/

Barrick ( ABX ) volume at 854300 already. 29 day average is 917000. Source is Pointcast. Platinum is moving back up. Where is the Russian metal?

A little mouthy?? Wow! Thanks for the good word thrown my way though. I was just doing my job. The VOLUPTUOUS babes were just a bonus. Sorry Jackie!

XAU - The XAU bottomed on 4/28, the high was on 5/12, 13 market days ( Fibonacci number ) . Monday will be 55 market days from the 4/28 low ( another Fib number ) . I believe we are in the window for a bottom today thru Tuesday. If you followed my posts on Aug. Gold you should be long GCQ7 at 340 or lower, maintain a 338 stop close only until Monday's close. Good Trading.

Next major support XAU will be 84/85...

OK, it's analogy time. Let's go back a few years to Dogpatch, USA, courtesy of the late Al Capp, to the base of Teeterin' Rock. Now folks, imagine there's a rope attached to the big ole' rock and hanging down close to the ground. Well, that rock represents the world financial system. And the height of the end of that rope above the ground represents the price of GOLD. As the rock teeters, a little this way, a little that way, the price flutters within a small range. And those of us who are thus affected, are affected ( read "poor" ) . But here's the secret - if that rock ever teeters just a _little_ too far, that rope is going to get yanked WAY WAY up in the air.

Of course, the brighter aficianados of this chat will note, well, 2, the rock could always fall this way, you know. Hey, no analogy is perfect, all right?

I love you all. We have entered an era of permanent prosperity, my friends.

Thanks John. Sorry everybody. I forgot that to mention my good friend John the Hepcat last night, but of course HE has not passed away yet and is therefore still with us.

Uncle RAY,

Thanks for the Blyvoors update. I can't imagine selling S.A. shares at this point--they're practically giving them away. I guess the people who think gold is really going to $200 are the ones selling. I can't help but thinking that what we're seeing now is the buy of the decade.

Do you have any more info on the big Durban Deep merger?

Mr. market is the final arbitrar of gold price. The gold paper market attracts speculative money. Speculators are influenced by TA - market dynamics and trends. TA presumes the market is open and perfect ( strong Efficient Market Hypothesis correlation ) . CB's hold about 25% of the above ground gold and substantially more of marketable ( certified bars ) gold. The CBs are a Money Cartel. The Money Cartel has told Mr. Market that they don't like to hold gold as much as in past. The Money Cartel has sold gold to Mr. Market to prove its conviction. Mr. Market got the message. TA got the message. Speculators got the message. Gold is in a protracted Bear funk. The long-term trend in gold price since $850 continues down irrespective of short-term rallys. This is what Mr. Market is telling us.

The theory that people will become disenchanted with paper and dump a sufficient portion to buy gold ( perhaps to diversify ) is possible but highly unlikely. The reason is simple. When in crisis rational people will act to preserve wealth not to chase a speculative rally in gold price. The fools rush in and distort the trend - as illustrated by The Madness of Crowds and, most recently, by Bre-X speculators "after" the fraud was disclosed ( many did not accept the truth and continued to invest in BXM until the delisting. ) .

Certainly, it only takes a reletively small concerted Bull action ( relative to S&P trade ) to churn a Gold Rally but the long-term trend is down. The Money Cartel knows it. Mr. Market believes it. The trend illustrates and confirms it.

I hope that we soon see a major gold rally ( 365+ ) that could be sustained long enough to lift our gold/stks out of funk.

Mr. Market is sending us all a clear message - Gold may rally but the long term trend is down and will likely continue accordingly.

BTW, a few replys to my recent posts were going off in unknown directions
( for example, 6pak June 19-21:54 ) and this type of discussion does not add value to the fundamental points I addressed: Gold as a commodity, usefulness of TA in determining gold prices, L-T gold price, CB Money Cartel, US$ supremacy/gold proxy, US leadership and economic dominance with particular reference to the IT revolution....all relating the the yellow relics prospects as a montary asset.

Cheers

for polarbear
Was told this morning that DDeep merger would go ahead as planned
many shareholders in blyvy and buffels selling out in fit of pique.
( did I say that?? ) . Thus those stocks trading well below conversion
to ddeep value . Ray if you have heard anything more please let me know.
I figure conversion value for blyvoor is about 3.4 and the adr are well
below that.

George Cole: Yes in deed .. this looks like the big sell off. Many juniors that I pay close attention to have huge volume versus their normal low volumes. It may be a good buying opportunities ( I did a little buying picking up some juniors including my favorite which I've never owned until today ) with the panickers running for the exits. I hope they're not closing out their mining stocks at the low to rush into the tops of the mainstream equities markets. I will weather the storm with my purchases today ( still under 10% of my total portfolio ) .

Canadian Precious Metals Mining Stocks Expert reviews most promising PURE SILVER PLAYS & others. See Goldbugs Weekly Comment - Click RELOAD at Gold Digest page:
http://www.gold-eagle.com/gold_digest.html

WHEN DOES THE PAIN STOP?

As of May 31, 1997, Lipper ranks these as the bottom 20 US fund for six month performance:

BULL&BEAR GOLD INVESTORS -23.5 %
US:GOLD SHARES -23.2 %
MORG STAN IN:GOLD;A -22.2 %
CALVERT FD:STRAT GRO;C -21.7 %
CALVERT FD:STRAT GRO;A -21.4 %
MIDAS FUND -20.1 %
IDS PRECIOUS METALS;B R -20.0 %
STEADMAN TECH & GROWTH X 20.0 %
VAN WAGONER:EMRG GROWTH -20.0 %
IDS PRECIOUS METALS;A -19.8 %
FONTAINE:GLBL GROWTH -19.5 %
VAN WAGONER:MID-CAP -18.8 %
INVESCO STRAT:GOLD -18.5 %
PIMCO PREC METALS;C R -16.0 %
GOVETT:SMALLER CO;A -15.9 %
PIMCO PREC METALS;A -15.5 %
AMER CENT:AC GL GOLD -15.3 %
RYDEX:URSA FUND -15.1 %
LEXINGTON STRAT INVMENTS -14.9 %
VAN ECK:GOLD OPPTY;A X -14.9 %

"When does the pain stop?".. The gold market is the exact opposite the overall
equity market.. When the bears stop shorting, and everyone becomes a bull, the
market will begin to top.. With gold, when this website is devoid of any thing positive, especially vronsky's unending relentless diatribe, things will begin to
look up. Look for more pain... 300.00 gold and 85 XAU looking good to me.

FASTEN YOUR SEATBELTS!!!

Howdy Y'all! Just back from western vacation and...frankly, I need some HELP......My favorite daily option quote site ( midstate ) has been 404'd. Can anyone supply me with a URL that posts daily option quotes for 1998 gold ( and or ) silver options? ( unfortunately, Kitco only lists '97 options ) Thanks in advice!!!

Gold spot at 337.70. Couple of months ago I saw a low of 325. for Gold,
and looks like we will at least have to touch that. Many developments since then like Belgium rearing their ugly heads, AGAIN. They seem to be commited to selling off all their CB Gold. What will they back their currency with in case of a crisis: Paper and more Paper. They have no other solution to their deficit, other than selling off their hard assets ( Gold )
and using the proceeds to reduce the amount somewhat, for the short term. What happens when the Gold is gone........
This is so incredible, that there is no political or civil opposition to this type of plan. That is the scariest part of this scenario.
Other european nations will see this quick short term fix, and join in.
Dealers/traders have little reason at the moment to be long Gold.

Not a goldbug : Dictionary meaning of the word "diatribe" is " A bitter and violent denunciation". It is not at all applicable to postings made by Vronsky. Would you please explain the reasoning behind your assertion of gold at $300.00 and xau at 85.

NJ: Well put about the dictionary meaning of diatribe. Sorry. Though it might
actually fit considering.. Anyway, my analysis is purely technical and this market
has just not capitulate yet. Central banks continue to sell, demand is strong
but not more than the selling pressure. What will get gold off the mat, I really don't
know... It is a little like asking, what will stop this raging bull market in equities..
Trying to pick a bottom in gold has and will ruin a lot of people. There are many
very intelligent people on this forum.. They try and try to analyze the gold market
forgetting that most investors purchase from the gut.. Pure emotion.. Who ever
picks the bottom of this one will be just lucky. Still, 85 XAU..

Bob- Ye nor thou of ye ilk shan't be espousing heresy hereabouts.

"When the truth confronts an orthodoxy, the orthodox beat
down the doubt in their hearts by beating down the heretic
in their midst."

- John Sullivan, editor of the National Review after
being saved from a pummelling by campus security after
a speech given at a college campus. The students were
displeased with a recent National Review magazine cover
lampooning the President in an unflattering caricature
deemed politically incorrect by students.

Myself, I added some FCX C&G silver-denominated depositary
preferred D shares and some more FDPMX today.

Here, where the unorthodox is orthodox, the occasional
goldbear wandering through is analogous to a PETA member
piping up at a meeting of the NRA stating, "OK, I'm game."

Ali: Thanks! I'll get something off to you tomorrow!..Tort ( 10:25 ) Bad prediction!...and I'll get somethin off to ya too...Looks like I didn't miss much today...Comex Gold down 2.80 and the XAU is down 3.09!!..and even the damn Dow is losin speed and is now only up +15...and fallin...

All : Interesting http://fast.quote.com/fq/quotecom/chart?symbols=$INDU&time_period=1-minute%20Bars&bars=600?wstype=480%20x%20360%20GIF&chart_type=Close%20Only&colors=Black%25%252C%20Green%20on%20Transparent&vol=Volume&study=Exponential%20moving%20average&ma_period=50&ke

B.T. = BROKE TRADER

Mooney: I miss John Belushi,John Candy, and Jim Morrison much more than JFK...actually have more respect fer "Old Joe"...crook or no crook!

Mooney: I miss John Belushi,John Candy, and Jim Morrison much more than JFK...actually have more respect fer "Old Joe"...crook or no crook!

Mooney: Just got done reading : Laughing On The Outside ( The life of John Candy ) by Martin Knelman...XAU down 3.18...Dow up 20...Diversification pays....

6 Pak: I noticed "Canucks Corner" got shorted before you posted me and I'll give Max HELL...so expect MORE in the future!...I'm on YOUR side...
and good history lesson!

Nasdaq volumn is at 967 million. Will they be able to put it over 1 billion before the close???

Why'd you do it!!!! and Bubba says he don't inhale..

Is BT Joe Camel????

If today was not the final selling climax, it's probably a fair intermediate orgasm on the way to the big, --- Oooh.

XAU down 3.20....Wonder how much of an embarrassment Bubba will be this weekend...

Earl, that was good for me too.

Yep, my prediction sucked worse than a bad Hoover cleaner. As soon as I can get home, eat and collect my thoughts I will direct my rocket launcher from my pad toward your area.

Well, if today wasn't the bottom of this wave down, Monday should be. Imho, the XAU looks waved out, and should begin a nice move up very soon, if not immediately. Pessimism is thick, also, which is good.

I personally added to my position just prior to today's close, so I'm putting my money where my mouth is.

Rocket launch countdown is approaching liftoff...

To all.Why is the swiss franc so solid?It is the gold in their vault!If the Europeans think they can establish a trust in their new EMU, they would be well advised to get a foundation of gold for the EMU too.The european political scene at the present is much to diverse as to make a common currency practical.Conclusion?Gold will find its rightful place yet.

Earl,
I just noticed you post. I didn't mean to plagiarize you. Perhaps we are just on the same wavelength ( pun intended ) .

Tort: A voice of reason in the wilderness....I'm off fer dinner ( mine ) at neighbor Eddie's but will be lookin forward ta your missive of wisdom on me return....how's that fer puttin pressure on ya....What ya eatin fer din din??? I make a wicked cheese+pepper enchilada....with a side dish of SPICY green beans...Eddie gets Macaroni+cheese....

Ali ( 16:52 ) I agree!...Will be interesting to see what the G-8 comes up with this weekend in Denver...Spinmasters will be hard at work...Time to go to Eddie's...and NO guff from you, Tarnished...

Try this: http://www.minot.com/~bohl/

AWAY!

EB

The Anglo-Saxon war against gold continues. Governments now entering the fray; not just CBs. I suspect this article was a big factor behind gold'd sharp move down today.


Britain proposes arms sale to SA be
paid for in gold

Stephen Laufer




A BRITISH defence industry consortium has proposed a gold-based arms deal with SA including
corvettes and submarines for the navy, jet fighters and trainers for the air force and tanks for the
army worth several billions of rands over two decades.

The proposal was made in the expectation of reopening the corvette tender by the defence
department following adoption of the defence review by the cabinet and Parliament. The review
establishes SA's future defence force design and will form the basis for all capital expenditure
decisions.

Government sources indicated that the financial arrangement was unlikely to find favour, possibly
because of fears of its effects on the gold price.

British and SA sources said the proposal was "in the concept stage". Presentations had been made
to a number of senior government and arms procurement officials.

The trade and industry department is understood to have asked German manufacturers to formulate
a similar global equipment package after French weapons makers responded to the British offer
with a combined hardware proposal of their own. All proposals included countertrade offers.

The British financing model is understood to involve the purchase by a London export bank of gold
from the Bank of England or some other holder of significant stocks of gold for sale on the world
market. The sale would generate the capital for the SA arms acquisitions over several years.

Rather than owe pounds or dollars, SA's debt would be denominated in gold, with repayment in
the metal or its prevailing sterling equivalent.

The overall British package, which includes up to 40 Saab Gripen advanced fighter jets marketed
by British Aerospace and valued at $45m each, could be worth more than R10bn.

The current international interest rate on gold is about 2,4%, significantly lower than the rate for
major foreign currencies. With gold prices said to be in long-term decline, a gold-denominated loan
would on the surface appear to be appealing because of minimal forward-cover risks compared
with dollar or sterling-denominated debt.

An arms industry source said the Reserve Bank and commercial lending institutions had been asked
for comment. The proposal looked like a soft loan, but there was a need to understand its
intricacies. As a novel idea, it had to be looked at very carefully.

SA's major fear would be that a deal of the magnitude of the British defence proposal would have
an adverse knock-on effect on the gold price. Even an announcement that gold worth R10bn was
headed for the market could put the price under further pressure.

Bob,

The internet is a wonderful thing. It allows one to state any case and preserve it indefinitely. I. for one, am grateful for the chance to state my opposition to metal leases. Time will tell if I'm right or wrong, just as time will judge your very eloquent bear case for gold. While I do agree that emotion should be eliminated from the equation and gold should be viewed as a commodity, I think you are off on a couple of points.

1. I don't understand the constant 850 reference point. While gold has been a lousy buy and hold investment for some time, the reality is that its price has been within 10% of 370 for 90% of the time for the past 10-15 years. 850 occurred in a millisecond. It would take a move to a level much below 850 ( say 500 or 600 ) to provide most gold investors with a windfall. Going forward, those numbers don't seem unreasonable to me, although the next $5 is hard to predict.

2.I don't think the CBs are the monolithic force you paint them as. The fact is the top five holders ( US, Germany, France, Switzerland and Italy ) haven't sold ( or lent ) an ounce in many years, and these countries account for more than 50% of CB holdings. While the Swiss are talking different now, talk may be cheap ( especially after they see what happened to the platinum and palladium lenders ) . The marginal CBs ( non Asian ) have sold and loaned with a reckless abandon and may be out of material, leaving only talk. Unless the Big 5 rush in fill the void, CB supply looks meager going forward.

3.A large amount of the selling you described by speculators and CBs is short selling. In fact, there is an accumulated equivalent short position of perhaps 200 million ounces or more ( when counting loans and mine hedges and options ) . A short sale does depress price when initiated, but the opposite when covered. Going forward, is it likely we will see massive additional new shorts and loans at these depressed prices? If so, from whom? A naked short position of the magnitude that exists in gold, would be an ultra bullish imperative in any traded item. In the case of gold, the mere cessation of additional shorts could ignite a rally, due to the structural deficit in supply and demand.

In sum, I think you are confusing what has been with what will be. By nature, the bearish case sounds most convincing at bottoms, and the bullish case invincible at tops. Can you imagine a world in which financial trends never reversed?

Never, in nearly 13 years of publishing a newsletter and well over 20 years of watching the market, have I seen such a "bearish consensus" on Gold as the one that holds sway right now. Even on the Aussie stock market, which is setting daily records, the Gold stock index was "gap down" on Friday ( June 20 ) . Don't forget, that was *before* the $US 2.80 Gold dive in the U.S..

My recent posting on an $A Gold bottom has been received ( as I expected ) with hoots of derision from the newsgroups. I have yet to receive a comment on the charts.

As I stated a long time ago ( way back in mid-1995 ) at The Privateer website: "Gold is a political metal". The $US Gold price action since then has shown just how "political" it is. The "spike" to $US 416 in Feb. 1996 co-incided with the end of a year of U.S. government infighting over balanced budget amendments and the US debt ceiling. Once a "deal" was struck on the budget in February and Mr Clinton raised the debt ceiling to its present level of $US 5.5 TRILLION in March 1996, it has been all downhill for Gold.

And nowhere has it been more "downhill" than in Aussie Dollar terms. The important Gold price is, of course, the $US price. The $US is the Reserve Currency. For 27 years, it was Gold's "surrogate". For 26 more years it has been Gold's "replacement". It is obvious that the financial world as it presently exists could not live with Gold as money, thus, the present state of the Gold price.

The $A is a "dollar bloc" currency and the sixth most traded currency in the world. It was a late entrant in the world's "floating currency" regime, joining it at the end of 1983. Ever since then, major bottoms in $US gold have been preceded by a bottom in $A gold. This $US Gold "bottom", when it occurs, is going to be a big one. The $A gold bottom is the first indicator I have seen since early 1993 that it is approaching. $US Gold is, of course, back to its early 1993 levels.

If you haven't looked at the chart comparing Gold in $A and $US - take a look at the one I just updated. It takes in the $US Gold fall on June 20. I think that you will agree that we are at a fascinating juncture here.

The charts are at http://www.the-privateer.com/chart/twogold.html

This is the commentary that accompanies the latest chart - taken verbatim from my website:

$A Gold has now broken out of the downtrend which has confined it since February 1996. In P&F terms, $A Gold would have to re-enter its down channel to negate the "buy signal". Technically, that is most unlikely.

$US Gold closed on June 20 at $US 337.70, down $US 2.80. This is a new post-1993 low for the Spot future price. This time, Asian buying around $US 340 did not stem the fall.

Please note that ,other things ( exchange rates ) being equal, if $A Gold comes back to its recently-established uptrend line around the $A 440 mark, it would still be "intact" technically. In the process though, we would get a downward "spike" on $US Gold. We shall see.

At both previous major bottoms for the Gold price, in 1985/86 and in 1993, the $A Gold price has signalled an upturn before the $US price. There is no hard and fast rule for the time lag, but the precedent is constant.

PDG volume 2.8 million today a huge anomoly looking back to last summer. There was increase in volume at start of Nov and Feb run-ups, but nothing like this. Anyone have any thoughts on this? On other hand, ABX volume just about average. ABX usually gives us a 3 million + day to herald good things. Spot/XAU differential ( Kaplan ) more bearish last few days at around 240. I noticed some of you went long today in stocks. I am still waiting for something a little more positive.

Before everyone gets all worked up about the volume in the precious metal stocks, please remember that today was a triple witching day. A lot of this volume could be, and probably is, related to expiring stock options, index options ( XAU, HUI ) , and index futures related trading expirations. With that said, the other factor also to be considered is the climax selling of PM stocks. I think the spot gold price over the next week will give us a better 'clue' as to where we might bottom out. I've bottomed fished before, and sometimes got lucky, but most times it's a losing proposition! I'd rather catch the begining of an uptrend than catch the "exact" bottom. Trying to catch that "exact" bottom has cost me too damn much money in the past. Enough said...

Richard Burke -- Patience. Even if you caught the, "bottom", how do you know how long it will take to bounce back up? Don't take offense at this, but have you ever sat on a stock for two years waiting for it to 'bounce' back up? I have, it's psychologically a bad thing to do. Remember, "The trend is your friend, LOOK for it!" The only thing worse, maybe, is to do the same with options! In futures, if you don't QUICKLY recognize the trend, you're dead.

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Mooney & Panda - thanks for keeping me ( & all of us ) abreast of the Prague conference. It is very interesting to read the likes of Andy Smith and his take on the role of ( or lack of ) gold in the future. I only wounder if his views are what he thinks is going to happen or is hoping?

Re: COMEX Gold calls with $5 increments - COMEX options are priced with $10 increments except for the first three months which have $5 increments. So the Dec97 options will be priced with $5 increment strike prices as soon as the Sept97 options expire.

Richard B., I had also noticed the PDG volume which was a partial factor in my adding to my position, today.

Panda, Yes, bottom fishing is risky. As such, I never use leverage when trying to catch THE bottom. If I'm wrong, then I can sit with my position and not lose sleep. I hope it doesn't take 2 years to come back if I'm wrong, but I can, and will, if I need to.

George Cole: An interesting commentary, that Brit/SA arms deal. We are now in a period where interest rates to borrow gold are far lower than rates for paper. .... and no one seems to pick up on the essential contradiction. The tone and implication of the article, on first reading, is negative but with a moment's thought a question arises: What is likely to happen if more and more commercial transactions are intermediated in terms of gold and not paper? Who knows, it may be the beginning of a trend. ....... Gold carries a lower interest rate that reflects its long term stability. Imagine that!

Polarbear & John D.- boy what a route today, the only share keepin me above water is KRY. Made a little money this week shorting Intel and Microsoft. John most of my former gold share money is in Rebhold, Polifin, Coronation, Richemont, Rambrandt and Sweet From Heaven and doin quite well. How do I participate in the Coke deal in SA.

Screw gold shares buy Stone Container, Wilhamite Ind. and the other
paper and wood prod. cos.

Tally Ho

PS- when the trend turns them g-shares will shine jest fine.
Happy Friday, off to watch the sunset iffin I can see through the humidity, you can cut it with a knife @96F.

Oldhand & Panda: I am waiting for more of a trend as panda suggests. Thank you both for your thoughts. I am going to watch Deaner's TA, abx volume and the spot/xau differential. I am also going back over the charts and see how the spot/xau differential has worked its way into position ( either 250 minus or 250 plus ) as the xau prepares to move up. My hypothesis is that spot gold must level off and the xau continue to decline to widen the gap from the bear range to the bull range. This must be so if the xau is to lead the gold up. If that is the case we have some down to go with the xau. I'll post the results of my look-back.

The following story remind me of the activity in the metals market today.

A circus owner walked into a bar to see everyone crowded about a table watching a little show. On the table was an upside down pot and a duck tap dancing on it. The circus owner was so impressed that he offered to buy the duck from its owner. After some wheelin' and dealin' they settled for $10000 for the duck and the pot.

Three days later the circus owner runs back to the bar in anger, "Your duck is a ripoff! I put him on the pot before a whole audience and he didn't dance a single step!"

"So?" asked the duck's former owner, "Did you remember to light the candle under the pot?"

Richard B.
Regarding spot/XAU ratios, take a look at:

http://www.mgl.ca/~yauger/Ratio.html

if you havent already seen it. Note that the ratio line is more distant from the XAU line than at any prior point on this chart. Note that when this happens, it seems to indicate a rally is due. Credit to Yvan Auger for the chart.

ATLAS COMES! ATLAS SHRUGS! THE WORLD WILL SHAKE!

Congrats/ The boys have broken 340/ we knew they would / rates fall inspite of huge TREAS rollovers coming and need for huge foreign demand/we know its true/ Sell all of the CB and world gold now before the hole 500 billion disappears. Such a surplus!!! Lets sell!!! BUY financials while Wall St still allows us!!!!1

Perhaps the powers that be want to demonstrate all is under control before the Denver summit. What better way than bashing gold. Doesn't this always happen before international meetings, or is it my imagination?

Thanks for the info...how were those pits today?? Any commentary for the bleeding souls? Anything anecdotal?

AWAY!

EB

ps
That BIG, BAD, MOTHER of a decling wedge is shaping up quite nicely. There is a BIG, BAD, BULL flag right at the end of it too... Hmmmmmmm...
The SPRING will SPROOOIIIING! ( me thinks someone famous said that )

Have not hear anything about this being Full Moon time and tomorrow being the first day of summer ( Solar Something ) .

Byron: Summer solstice? From there, the days grow shorter and so does the gold market. .... ( :- ) )

The times they are a changing A year ago Big Bad Wolf was continually beset for his bear position.Today Happy Bears can live side by side with Gold Bulls.Yes I know maybe it's a pipe dream but the diversification of ideas has made this the best gold page on the net.

Earl: Monday I guess that the low of London Gold fix of February will be taken out. I believe it was $336.90 and I expect that we are very close to filling the weekly gap that APH mentioned on the XAU. That gap is between 96-97. Once those two items are out of the way, I say we are off to the races. ( Uphill ) . ;+ )

Lights out at the library. Good night.

He that had wit would think that I had none
To bury so much gold under a tree
And never after to inherit it.
Let him that thinks of me so abjectly
Know that this gold must coin a stratagem
Which, cunningly effected, will beget
A very excellent piece of villainy:
And so repose, sweet gold, for their unrest.

a rising moon. the soulful mourning wail of the loon.
ted hacking in the pre-dawn musk of the morn. yes byron,
there is much to be said for the veiled ones that encircle
our orb. their veil is distance; their shroud, a vacuum of
infinite bitter cold.

gold has been surrounded by a vast paper desert, from which
it has been told, there is no escape. the dunes keep building
from the seemingly in-exhaustable supply of cellulose. the baby
paper-tigers are running amok with impunity, as they have for
the last 6 years. the taskmasters no longer have control
of the breeding stock, and duplicitous fornication is rampant.

easy earl---

the financial animals that have been herded ever so reluctantly, to
and fro, has out-grown its' cage. in fact, the "herd" has taken
control of the gilded ones' own vehicles. the taskmasters are not
used to going any direction, other than their own.

what a sight it will be, to see the kennedys', klintons', bildenburgers',
etc..., etc...., being run out of town on a rail!

to know the future, study the past.

what political entity, group, commodity, or ideology has, or can survive, the test of time??


GOLD and SILVER.

the metals are the ONLY ones to have stood the test of time!!

the metals are the ONLY ones to have stood the test of time!!

"if i have seen farther, it is because i have stood on the shoulders
of giants." isaac newton.

cherokee!; ) LONG-time user of soy-oil, and running SHORT on copper.

Poorboys,

Funny you should mention the Big Bad Wolf. I was just talking to him last week and he said we are within 90 days of the start of the bull run!!! He sure did call the downside right - do you think he might be right on the Bull Run. - - - - - - I DO!!!!

With your window on the soul of gold
And words of duplicitous fornication
Thou hast well and true spied
My plans for the weekend.

GLENN et al: The following is an interesting commentary on today's market for those who may not have read it. As I do not fully understand the meaning of the last comment, I would appreciate enlightenment.

"Spot gold's break back below $340 an ounce this week was viewed as
pretty bearish by a lot of folks," Bankers Trust vice president for
commodities, Scott Kerson said.

The good story is that there hasn't been a lot of fund
participation yet, but the bad story is also that there hasn't been
much fund selling yet, meaning there's still a lot of selling
capacity left in the market," he said.

"The rise in COMEX open interest this week reflects short term fund
and CTA selling," Kerson said. "But the thing to bear in mind is
that in the spot market a lot of people have been trading in tight
ranges, buying in the $340-341 range, with volatility getting sold
( in the options market ) , so that rather than the market being sold
for a break this week, it was probably actually long," he added.

John Disney,

You stated that the conversion rate for blyvoors to DDeep is 3.4 and the ADR is below that. I am having trouble deciphering this. Can you give your take on the conversion of blydy ADRs to DD.
Sorry to be so dense but I barely made it through Math For Everyday Living.

Thanks,
RL

For those about, it could be told, this
Useless metal, should be sold
Can it/will it, it will come back, the
King's still gold
( the frustrated poet )

For anyone who cares to look at it, Weekly Thirty Year Bond Chart. IF, this follows through as, "It could/should", then we should have rising interest rates in a week or two. Under this scenario, I would expect a breakout above 7.2% somtime in October ( ! ) . Of course, this is IMVHO! Take a look and form your own opinion!

Well, I guess gold broke out! To the down side, that is..... What's next? $330, $328, ( gulp ) $325? The only odd thing about this chart is that the breakdown should have happened about a month ago. Normally when a chart bounces this long in a triangle, the triangle becomes invalid and you wind up with a continuation pattern. Odd. So what else is new with gold?

OK, New tech analysis will be tried next week. I need to get about a half dozen live chickens first though..... I'll report the bloody details later.... :- ) )

Veteran Market Analyst provides sound common-sense advise of whether it is smarter to buy to buy low-priced stocks of high priced stocks. See The Dines Letter in Editorials:
http://www.gold-eagle.com/editorials.html

I see the goldbug spirit has been depressed! In order to avoid 'evaluation', I shall cease speaking to the ether. Least I be taken to the funny farm where every day is a happy day! Good night all............. Remember, keep your powder dry! When the buying opportunity arrives, it will be obvious to all. Be patient. Conserve cash. The first five to ten percent of the main move isn't that important. It's mostly an ego thing.

BOB June 20 12:28 Your remarks,*twigged* a need to comment, no other reason. Certainly did not expect, to re-direct, the skillful direction, that your comments were headed.

G.S.COLE@17:35 This sounds like Britian is considering gold
virtual money. Looks like EARL gets the same drift. Gosh,
what a novel idea, use gold as money. Next thing one hears
will be the tobacco companies crying uncle. Fun world, never
know whats going to happen next.
As to my golden butterfly...he got a little dew on his wings
today. Not to worry, when the sun dries him off...up he will
go. For those that deal in logic see B. BUCKLER'S post of
17:58. New stuff, for me anyway. And, yes, waiting for
two years for a stock to bounce in reeeeal tough on the
nerves. : {{

panda-bear-dude-----

your skin be-speaks of opposites. could the black be white
to someone who knows not?? is a word anymore than an utterance
of basic sounds, with-out being predicated and given meaning by
its' creator?

what's this got to do with anything??

nothing.

your chart showing a break down in the price of our beloved
metal is quite mesmerizing! what an incredible opportunity to
be able to play with the maker and breaker of cultures and
civilizations for a pittance!!!! we do indeed, live in quite
interesting times.

can the run-up of the mutual funds continue??
when will saturation be reached?
in the shadow of a financial diaspora, what will
the governments of the world do?

what will YOU do??

cherokee!; ) friend-of-the-wind, and purveyor of knowledge for
the enhancement of the smoke-signal-mobiles hyper-drive.

What if companies decided to buy gold at these low prices or
borrowed/leased the stuff in order to back their commercial
paper? Would this be a good idea? Wasn't this tried before?

I finally figured it out.....BT is actually a plant from the Merril Lynch gold call writing division.

Gold breakdown: I can see the financial stories tomorrow -- Gold breaks support at $340. Louis Reukeyser was gloating on Wall Street Week tonight about the 4-year low in gold. But, silver and platinum haven't broken into new low territory. This is called a non-confirmation. It's also called a bear-trap!!!

Vieserre: Traders "sell volatility" in the options market when they believe the market will be fairly stable. In that case, they may sell naked-calls and/or naked-puts to take advantage of the situation.

Bill Buckler: Capt'n, good to see you posting at Kitco. Give my regards to the crew.

Sorry to rattle the eyes at this late hour but one more thing
Was a whistle blown on BLACK MONDAY in '87 before the music
stopped? I wonder if folks are picking out their chairs?
One of these days a thirty something type or Xgeneration is
going to say, "well I might as well cash out and buy my
self a nice vacation and maybe a car, etc.

Now lets see, the value of the equities market is greater
than all the goods/services in the entire country. Hmmm,
I better get my piece of pie before it is all gone. Yumm, yum
scramble, scramble, ouch, don't shove, I was here first,
what do you mean you can't hold it any longer. You should
have thought of that before we left! Line up, we all can't
get through the door at once, children.
We have the greed when does the fear start? It will be terror.

D.A.: Government issuance of ever-increasing amounts of debt does not automatically imply prices will inflate as a result. If the free markets mark-down the value of that debt faster than the government issues it, deflation will occur. I believe we are fast approaching that state. Credit is already deflating in the low-end of the credit market as indicated by the massive increase in bankruptcies and defaults.

Once stocks crash, deflation will start at the high-end of the spectrum. When that happens, government action will become helpless in stopping the deflation.

All: Did anyone notice the 200 point break in London's FTSE stock index this week???? That's equivalent to about 350 points down in the DJIA. London often moves ahead of the US stock market. Could this be another forewarning????