Gold Discussion for Investors and Market Analysts

Kitco Inc. does not exercise any editorial control over the content of this discussion group and therefore does not necessarily endorse any statements that are made or assert the truthfulness or reliability of the information provided.

(Mon Jun 23 1997 00:10)
Gold making a grand standing at the moment!

I think tonights ( American Monday ) rally should be something not to be missed! I think you will see gold rally back above 340-342 tonight...

(Mon Jun 23 1997 00:27)
ARDEN, Weird that you posted;
My personal suspicion is that China has
been accumulating the gold sold by European CB's with the excess US dollars from trade and that eventually,
this will be obvious to everyone. I can not believe that the Chinese will follow the example of Japan and buy
US bonds with the excess trade surplus. This will only continue to grow, as will their desire for gold. They do
not have to assault comex, it will happen when the shorts realize where to physical metal is, and yes, it is

As I've been thinking about the China thing this weekend, and concluded that the chinese with surplus earnings have been accumulating both gold and US Paper, the latter is a good way to have a lever against the US, when deemed useful.
Sorry about taking your posting out of context, but the point is similar.

There was much hype some years ago about the yellow peril, but that was usually meant for public consumption, in regards to the military threat, and was good for the military complex- industries. Now it seems the threat may become real, but may come in the form of an economic lever.
Ain't life stange?

(Mon Jun 23 1997 00:35)
Good points. It would also be discouraging that if sometime in the future a decent runup in the price of metals makes a country like China
much wealthier ( to buy more weapons and gain more leverage ) and paper
heavy countries in weaker positions.

(Mon Jun 23 1997 00:43)
sPEAKING TO MY BROKER on friday. I wanted a quote on a Dec. s&p 700 PUT. B4 he bothered to get a price ,he informed me that I was really fishing now. I asked why 700 by december of this year is such an outrageous level. His response.....It could never happen because it would mean a serious financial crisis!!!!!! Cause and effect?/Effect and cause? Logical and ilogical? What an incredible and yet so credible reply. Who says history does not repeat itself.

P.s. Anyone know of any good Short Mutual funds based in Canada?

(Mon Jun 23 1997 01:06)
REIFY ( 7:45 ) Credit contraction and deflationary collapse: Cash is king.
Inflationary collapse: cash is trash.

Credit does not become worthless, it dissappears.

(Mon Jun 23 1997 01:24)
TW 800 and JFK
To Panda, George Cole and GFD re: Downing of TWA-800 and Kennedy.

Panda: The version I heard was that it was extortion. The Gore committee quickly came up with proposals including matching EVERY bag with its owner. The airlines realized that would kill domestic air travel, so money changed hands, and the administration quietly dropped the plans.

George Cole: The story on the Kennedy assassination is going to finally come out this fall. Mr. Lawrence X. Cuskack, Jack Kennedy's lawyer, kept a box full of VERY important documents on Kennedy activities. It was discovered two years ago, and the documents were thoroughly checked out ( ABC took out a $1 billion bond that they were authentic ) . Laramie Productions is making a mini-series out of it, and Seymour Hirsch has the book already in galleys, tentatively titled: "The Dark Side of Camelot, The Untold Story of John F. Kennedy." However these won't be out until October or November ( Tom Cloud, a U.S. financial advisor is coordinating all this, and his customers have bought the documents, for auction after the publicity. )

GFD: This is what James Saunders says ( and Bo Gritz confirms in his newsletter ) : The U.S. had major damage from an anti-ship missile in the Gulf; it turned out their "state of the art" AEGIS missile cruisers had their defenses turned off -- so they turned them on, and shortly thereafter, downed an Iranian civil airliner. The U.S. Navy wanted to "fix" this problem, so they started an Advanced Technology Demonstrator called the "Cooperative Engagement Capability" ( CEC ) . Its purpose was to develop the capability "kill" a missile, with an anti-missile, in the presence of jamming, radar ground clutter, and "neutrals" such as airliners. This program was run by Admiral Edward K. Kristiansen. Before CEC could be declared operational, it had to undergo a final demonstration in which jamming, clutter and "neutrals" were present. An Army unit on Long Island launched the BQM-74E drone, and air national guard choppers were in the air monitoring the operation. The anti-missile, a Navy Standard IIIA or IV ( Saunders isn't sure which ) was launched over the horizon by a Navy AEGIS missile cruiser. The Standard was supposed to be guided by radio from the AEGIS, which was getting radar and IR information from a P-3 and several other sources closer to the drone, evaluating this data, and guiding the missile. Unfortunately, the drone's jamming was too good, and the AEGIS lost all target information. In the absence of command guidance, the Standard simply went for the biggest thing it could find.

Your "kalliste" postings are from people who do not have second-hand knowledge of the actual investigation. Sanders found someone inside the Calverton hangar that was involved in the investigation. The FBI took things out ( presumably including missile parts ) without any accountability. Saunders has copies of correspondence from the NTSB to the FBI asking for information about their results. Sanders even got material from the seats with the "red substance" that media reports said was adhesive. He had chemical analysis done that suggests it is rocket exhaust.

Of these two confidence-shaking disclosures, the TW 800 book is much nearer term -- the question is how well it will be suppressed. The Kennedy disclosures are of less concern to the current administration. My point is that IF the Sanders book takes off, there will be major repercussions to the government, and probably markets.

[For readers asking what this is about, please see the posting at Date: Sun Jun 22 1997 15:31 .]

(Mon Jun 23 1997 01:42)
Arden: "... why doesn't the rest of the world understand?" Because they don't want to. It's more important for our modern press, to maintain their access and continue to bask in the reflected glory, of our tarnished royalty. ..... Spud's earlier posted expands on the subject.

(Mon Jun 23 1997 01:47)
6pak @23:22: Think it will be any different this time around?

Strad Master
(Mon Jun 23 1997 02:25)
Missed ya!
ARDEN: It's nice to see you posting again. It's been a long while and I've missed your nightly COMEX stocks reports. ( Even though I can get the info. elsewhere, it was always nicer to have your commentaries. ) Please post more often. You always have much to say.

The Last Goldbug
(Mon Jun 23 1997 05:54)
China/Hong Kong

When Hong Kong is returned to China; does Hong Kong still
control their foreign currency reserves, or, are they to
be controlled by China? My belief; they will be China's.

Will the HK$ eventually become the Renibi ( I think that
is the Chinese currency is called ) or will the HK$ be
another medium of exchange for China to trade with?

I am sure that; if China were too quietly demand that
Hong Kong buy gold and keep it off the official
registers, that Hong Kong would have little choice, but
to do so. This, if it comes when gold is at its present
low price, makes some sense.

Or are the spin doctors trying to convince China and the
rest of the world, that gold no longer has a place as a
reserve asset? That is by the recent attacks on gold.

Or; are the shorts sweating it out?

(Mon Jun 23 1997 07:38)
DocDuke -- SM-2 Block IIIa and Block IV. That story has great plausibility.

(Mon Jun 23 1997 07:40)
I think an SM-2 found the air-ship gold. It's going down, $1.05.

(Mon Jun 23 1997 07:44)
Ok, the CBs have stuck the knife in, but do they have to turn it as well? Does anyone expect a bottom and a rally any time soon?

(Mon Jun 23 1997 07:47)
sinking gold prices;

Russia's gold reserves;

(Mon Jun 23 1997 07:51)
Scott -- based on the current mood, no. I'm looking for a selling climax here. I think that we are going to test the 1993 lows. The one fly in that ointment, is the large physical demand that seems to be coming from Asia?

(Mon Jun 23 1997 07:56)
OK, things are looking grim. Tortfeasor, where's the joke of the morning? Is everyone lurking and I'm talking to myself?

(Mon Jun 23 1997 07:59)
Frankfurt gold fix was $337.06 at 7:30 A.M. EDT

(Mon Jun 23 1997 08:00)
Panda: I'm here in Brisbane Australia tonight; waiting for NY gold to open and a further drop in gold. One eye on the footy on TV and other on Internet for any surprises like a stock crash ( Is that a dirty word? ) .

(Mon Jun 23 1997 08:01)
Panda: I'm here in Brisbane Australia tonight; waiting for NY gold to open and a further drop in gold. One eye on the footy on TV and other on Internet for any surprises like a stock crash ( Is that a dirty word? ) .

(Mon Jun 23 1997 08:02)
Truly, despondency has hit an extreme here.... What to short today? What to go long? Clearly gold is in the dumpster. I guess I'll have to wait for the safe to hit the ground, bounce, and when it is safe to do so, load it on the back of the truck for the cost of scrap metal. :- ) BBL.

(Mon Jun 23 1997 08:06)
Scott -- It should be interesting to see where the US Long Bond goes from here. Gold? Well... we know where they want it to go. I haven't checked the Globex yet, the half hour before the New York open is often telling.

Mike Sheller
(Mon Jun 23 1997 08:14)
catchup ketchup
REIFY: Hi Reify! Re: China - The "Yellow Peril" is gold. The Chinese are very smart. It's a no-brainer! They buy gold with all their trade dollars while it's in the pits. They not only build a base for the convertibility of the Yuan, but they position themselves to be the only solvent super power when the western paper circus blows out of town. ARDEN: Re: Hillary bucket slop -"If we know, why doesn't the rest of the world understand?" THAT is precisely why gold bullion should be on the shopping list of the wise. The rest of the world doesn't CARE about a lot of things - especially those things that make for a healthy civilization. Perhaps the moment goldbugs have always awaited is not far off. The end of Western Civ. as we know it. The barbarians are here. They are us. Agree with your sentiments about Kitco - it's the very pulse of gold!
6PAK: Your blast from the past ( 23:22 ) appreciated. RJ: Cogent analysis of the Hillary/Tyson under-the-table "hedge." THE BORG: I see you fancy yourself a warner. I usually don't bother taking out little snipers, but YOU are irrelevant, not Freedom. However, I will defend your right to "mouthe" innocuous platitudes.

(Mon Jun 23 1997 08:23)
Kitco Comodity page says NY gold up 95c but market not open yet !!!?

(Mon Jun 23 1997 08:29)
Kitco quote is still June 20th mmmmm KITCO YOU $%#$%$#

(Mon Jun 23 1997 08:35)

Bob A
(Mon Jun 23 1997 08:35)
If I was short gold I would be looking to cover this wk. BGO and SWC look very good to me, especially with another dip today. ECO maybe?

George S. Cole
(Mon Jun 23 1997 08:41)
August gold
August gold down 70 cents this morning. Will today be the final spike down? Only the shadow knows.

trader ed
(Mon Jun 23 1997 08:50)
CNBC's "California, the quiet boom", has not yet reached my corner of Southern California. The Palmdale-Lancaster area, population 200,000 to 250,000, has by a recent estimate, between 5000 and 6000 vacant foreclosed houses, with 20 t0 30 per week being added to the total.
About three years ago, an escrow officer told me that 100% of her residential escrows were "short-pays". A short pay is when a lender agrees to accept, as payment in full, an amount less than is owed on the mortgage. She said her "short-pays" were averaging about 70% of the mortagage balance, with some as much as 50% of the balance owed.
My residential rental vacancy rate is about 40%, which is better than the 50% vacancy rate I "enjoyed" a couple of years ago. My rental income is down about 65 to 70%, because of vacancies, and reduced rents. My net worth, because of the crash in real estate "values" is down well over 50%
For those of you who are stock market bulls, and believe that a crash cannot happen, take it from a survivor, ( so far ) of the real estate crash is California, it can and will, sooner or later, happen in the stock market as well.

The Borge
(Mon Jun 23 1997 08:57)
@renaissance Italy
Mike Sheller: There can be no doubt that when the Dow collapses, there will be massive social unrest, rioting & chaos in America; martial law imposed in most of the big east and west coast cities. No doubt the Feds have been planning for this eventuality for some time - suspension of the US Constitution "for a while, until order is restored" - and of course, it will become permanent. A token Congress to carry on the fascade of democracy - just like the Roman Senate post Caesar. This is the price we pay for allowing the informational poison to flow unchecked from Hollywood & television - they do absolutely influence and mold people's minds ( if they didn't, then commercials wouldn't be on the air, but they are, so commercials must work, and what is a commercial but a very short movie? ) . I agree that the mainland Chinese are probably buying gold cheaply & quitely at these low rates - they at least, are not duped by the prolefeed spinning out of The Tarnished House, ABC, CBS and NBC. The Yuan will be the new world currency, not the suitable-for-rolling-and -placing in your bathroom Federal Reserve Confidence Note.

(Mon Jun 23 1997 09:07)
Isn't it interesting that we are willing to believe that the Chinese are now the most intelligent investors on the globe and that they are, of course, buying gold at these prices, which we hope, are low. They have a recent history of 50 years of communism and dictatorship and currently are trying to get a national telephone system bought and installed to connect the piles of night soil guarded by what we would believe are shoeless gold barons.

(Mon Jun 23 1997 09:10)
Worry not about the price of gold. I have learned from a well conected source that western CBs and govs are scared! All the press releases, studies and posturing are not for us small gold traders, but for China!
For the last 12 months China has been buying up gold and demanding delivery. Western govs don't care about you and I they can manipulate us. But not China. Time is VERY short indeed. Gold is about to hit the moon.

(Mon Jun 23 1997 09:16)
DOCDUKE and TWA800... From my limited experience with missiles which shoot down aircraft, some of which were aimed at me, a Surface to Air missile ( SAM ) usually explodes just prior to impact and a zillion fragments are expelled at the target, making many holes and dooming the target to non-flight. Sometimes explosions result. However, such a missile would have left many signs all over the recovered aircraft fuselage parts, which it didn't. A heat seeking missile would have flown up an engine and exploded, which it did not. TW800 went down when the entire front half blew off from a large explosion. I still have heavy doubts about a missile doing that. Tell me more.

(Mon Jun 23 1997 09:18)
@Too good to be true
Mike Sheller, star gazers:

Why does Arch Crawford see inflation and p.metals increase at this point? I'm starting to see the equity markets gear up for their July swoon. But I don't see Gold moving for awhile. Clinton's bragging about our ( USA ) boom while us Dilberts know the despair in the corporate jungle. AG engineeered this boom and now he only knows how fragile it is. As I've said before, we've replaced bullion with the cult of AG. Guess maybe all the CBs will have to clone AG to keep their credit unworthy ships afloat. Wish I could sell AG futures on the Chicago BOT.

Chairman Mao
(Mon Jun 23 1997 09:18)
Little Beige Book
Fundy: Reality comes out of the mouth of a television. People will believe what our trusted mouthpieces spume forth: Rather,Jennings, Chun. If we say China is the new world power, and we support our talk with fawning sycophantic US government officials visits to appease China ala Chamberlain at Munich, why not?

(Mon Jun 23 1997 09:21)
Mega-Bear gives 20 advance signals calling for total liquidation of stocks - and taking refuge in gold & silver coins. See Steve Puetz Letter. Click RELOAD:

(Mon Jun 23 1997 09:35)
Chairman: I don't know what they put on your TV but here we see Chinese people living in what we think of a slums built before WWII, knee deep in rice paddies and getting ready to take over Hong Kong. No sign of gold teeth let alone great piles of bullion being exchanged for $US.

(Mon Jun 23 1997 09:41)
In the light of golds sickly performance for many months, Gold Seer Aurophile examines the noble metals history, symptoms & prognosis. See Analysis section:

Steve (Perth - Western Australia)
(Mon Jun 23 1997 10:03)
For all those forcasting 401k's etc being taxed to blazes, check these
latest budget announcements in the United Kingdom, care of Blair's Socialists.....

(Mon Jun 23 1997 10:24)
What the hell happened to gold UP $6.50 HUH!!!!!!!!!!!1

(Mon Jun 23 1997 10:33)
Gold straight up
What!!! Look at the gold spot chart...straight!!

(Mon Jun 23 1997 10:36)
Someone tell me its a error please, quickly.

(Mon Jun 23 1997 10:37)
@lease rates
Something is happening blokes,look at 1 month lease rates.

(Mon Jun 23 1997 10:42)
Where's my heart medicine? Mother! Come quickly! The day is here, at long last. Thank God Almighty, we're free at last!

(Mon Jun 23 1997 10:44)
Where is my Valium mmmmm 5mg ---- CLEAR --- CHECK PULSE

(Mon Jun 23 1997 10:45)


(Mon Jun 23 1997 10:50)
Can someone tell me what has happened. Is it a false alarm?

Steve (Perth-Western Australia)
(Mon Jun 23 1997 11:01)
Scott@the bank: Please post on Kitco the URL that you are looking at for the spot gold price. Thanks, Steve

George S. Cole
(Mon Jun 23 1997 11:02)
August gold
August gold up 80 cents a few minutes ago, according to DBC. But gold stock averages about flat. If the stocks don't follow bullion, this will be still another failed rally.

(Mon Jun 23 1997 11:02)
Joke of the morn
Ah yes, gold rises with the new sun and on such a lovely day. Maybe we will yet have our day, we die hard precious metal insects. And speaking of gold and speaking of gold metals into which gold is formed by the potter's hand I submit the following:

Our story begins at the Olympics, specifically the wrestling
event. It is narrowed down to the Russian or the American
for the gold medal. Before the final match, the American
wrestler's trainer comes to him and says, "Now don't
forget all the research we've done on this Russian. He's
never lost a match because of this "pretzel" hold he has.
Whatever you do, don't let him get you in this hold! If he
does, you're finished!" The wrestler nods in agreement.

Now, to the match: The American and the Russian circle
each other several times looking for an opening. All of a
sudden the Russian lunges forward, grabbing the
American and wrapping him up in the dreaded pretzel hold.
A sigh of disappointment goes up from the crowd, and the
trainer buries his face in his hands for he knows all is lost.
He can't watch the ending. Suddenly there's a scream, a
cheer from the crowd, and the trainer raises his eye just in
time to see the Russian flying up in the air. The Russian's
back hits the mat with a thud, and the American weakly
collapses on top of him, getting the pin and winning the

The trainer is astounded! When he finally gets the
American wrestler alone, he asks, "How did you ever get
out of that hold? No one has ever done it before!"

The wrestler answers, "Well, I was ready to give up when
he got me in that hold, but at the last moment, I opened my
eyes and saw this pair of male private parts right in front of my face. I
thought I had nothing to lose, so with my last ounce of
strength I stretched out my neck and bit those babies just as
hard as I could."

"You'd be amazed how strong you get when you bite your
own private parts!"

(Mon Jun 23 1997 11:04)
I was watching the kitco new york spot gold price and it said gold was up $6.50 giving a new spot price of $344. Its changed back to 338 now but check the "todays high" it says 344. It must be an error, but sure got me for a second!

(Mon Jun 23 1997 11:05)

EBN has gold up 60 cents at 11:00. ( sob )

(Mon Jun 23 1997 11:28)
EBN Gold up .90 and silver up .07

Steve (Perth-Western Australia)
(Mon Jun 23 1997 11:30)
Editorial in Australia's Business Review Weekly
One of the reasons Wall Street is so strong is that the
profit of many US companies has risen sharply and
justified much of their share-price rise. Some Australian
companies will need to achieve similar profit gains to
justify their share prices. This applies particularly to
companies whose earnings have declined, including
building-products groups such as Boral, Pioneer and
CSR. All the signs point to a strong rise in construction
activity in the next two years, so it is likely that they will
achieve the required profit rises. Indeed, the next two
years should produce some vintage profit performances
over a wide area.

The BRW poll of chief executives shows that more than
65% of Australia's big non-resource companies expect to
increase their profit in the year ahead, and more than a
quarter in the manufacturing and wholesale/retail sectors
can be expected to announce substantial profit rises.
The area in which chief executives are most guarded is
resources. They have been predicting profit rises for
many years and have disappointed the market. As a
result, no substantial increases are expected, and less
than half think profit will rise at all.

It is a big call, but I think the resources chiefs might be
wrong. Since December the Australian dollar has fallen
from just above US80 cents to US75 cents. Australia is
talking about further interest-rate reductions while the
United States is expecting increases. If that happens,
the Australian dollar will fall further. The only thing that
could push the dollar higher is a rise in commodity
prices. The miners can expect a boost either from the
currency or commodities. If the Australian market is to
follow the US upwards on the basis of fundamentals, as
distinct from movement in interest rates, then the BRW
chief executives poll has to be right.

(Mon Jun 23 1997 11:38)
XAU 11:37AM 96.38 -1.02 -1.05%

Not too impressive. Let's get a rally going.

George S. Cole
(Mon Jun 23 1997 11:59)
TORT: XAU weakness reflects heavy pressure on ABX and PDG. HUI about flat this morning.

(Mon Jun 23 1997 12:21)
Steve at Perth: Enough of the share price justifies the stock market talk. We have our own reality here and the stock market is way way over priced and about to crash. Gold will then go up and we will all be right. So cut out the justified share price stuff before you are backed into a corner and start telling us the economy is booming and inflation is low.

(Mon Jun 23 1997 12:30)
Veteran Market Analyst provides sound common-sense advise of whether it is smarter to buy low-priced stocks or high priced stocks. Dines Letter in Editorials:

(Mon Jun 23 1997 12:33)
XAU 95.0, falling past the gap.

For those fund investors wanting to see last week's fund damage, see

So far its only getting worse.

George s. Cole
(Mon Jun 23 1997 12:52)
ABX getting smashed today, off nearly 5%. But some juniors are moving up.

(Mon Jun 23 1997 12:53)
Gold has bottomed. Stocks have peaked. You heard it first here on Kitco!!

(Mon Jun 23 1997 12:59)
@ Maddag
Maddog: I'm curious. Did your broker let you buy the S&P puts?

George S. Cole
(Mon Jun 23 1997 13:06)
XAU off 3%, reflecting steep declines in ABX and PDG. But HUI down just 0.25%. An unusually wide divergence.

(Mon Jun 23 1997 13:08)
Gold stocks will not do as well as gold coins in a stock market crash. Gold could move sharply higher while gold-shares hold steady or even decline.

(Mon Jun 23 1997 13:13)
The silver chart looks good -- much better than the gold chart.

Mike Sheller
(Mon Jun 23 1997 13:13)
STEVE: Yeah, and you've heard it longest! FUNDY: It ain't the "shoeless" Chinese who are buyin' the gold. KOLORADO: I've been "seeing" a summer rally too, but time is running out. After late August, early September, the astro tide turns down again for gold. Winter bottom and THEN the big one. But I love & respect Arch. Astrologers are like tech analysts ( actually that's what they are ) two different ones can see different things in the same chart. THE BORGE: I essentially agree. LARRYN: I essentially agree. I have some experience with fragmentation as well.

Mike Sheller
(Mon Jun 23 1997 13:15)
outa here
PUETZ, ALL: Mentioning silver, has the gang noted Sunshine Mining today??? Off a steenth on nearly 3 million shares! Let's watch where this baby closes.

Pizza Man
(Mon Jun 23 1997 13:25)
All: I have been lurking at kitco for about 3 weeks and really enjoy
the postings. I am now a "gold bug" long on August Comex.
I need advice on going short on Sep. S&P or brief explanation on Mad Dog
strategy on his 06/23/97 00:43 post. Retired pizza man trying to sling
some new dough.

P.S. Sure do miss Ted's postings, Greeat jokes, Tort

Fidelity Update
(Mon Jun 23 1997 13:28)
@fidelity gold funds

FSAGX= $20.50 down .20 ( -.97% )
FDPMX=$14.56 down .12 ( -.82% )

ted butler
(Mon Jun 23 1997 13:39)
silver warehouse stocks
To all;

I'd like to submit a line of thinking on Comex silver stocks that I have not seen discussed anywhere before. To the average observer, the current stocks of silver in Comex approved warehouses look rather substantial at close to 200 million ozs. While there has been some recent shifting of a bookeeping nature involving the additional warehouse in Delaware, that's for a different discussion, for now let's call it 200 million ozs, or one billion $ worth. Silver stocks on an ounce by ounce comparison with gold, platinum or palladium, certainly look heavy or ample to the naked eye. But appearances can be deceiving.

One of the phenomenons witnessed regularly ( and discussed here ) in the commodity world the past few years is that big upside moves occur only after inventories approach zero. By this measure we'll be waiting a long time for silver to explode, which is exactly the bear case. However, I submit there is another way of interpreting how close silver inventories may be to zero effectively, rather than just a raw count of ounces reported on the Comex. My premise is based upon common sense and the arcane world of weights and measures. Compared to total production or use, the levels of gold, platinum and palladium in NY warehouses is miniscule. Aside from the very real shortage of Pt and Pa, this makes sense to me from an investor point of view. By that I mean if I were to hold physical metal that cost hundreds of dollars for each ounce, it would seem silly to pay cash for 100 oz of gold ( $34,000 ) and accept a piece of paper in return for leaving it in a warehouse. After all, most people would buy gold or other precious metals as a diversification from paper. Well for $34,000 you currently get about 7 whole pounds of gold. I don't think the average physical gold purchaser couldn't lug that amount to his safe deposit box or backyard or where ever, especially since there has been precidence for gold confiscation in this country. So, low warehouse levels of gold, Pt and Pa make sense to me.

But for the same $34,000 you could currently buy 7000 ozs of silver or approximately 500 pounds. Get my drift? Because you get so much for your money ( my way of explaining it ) you have a real logistical problem with silver - you have to have someone store it for you and give you a piece of paper that represents ownership. What's the best piece of silver paper? As much as it pains me to say it ( because of the Hunt Bros, etc. ) - the Comex is the best place by far. It's the most liquid and transparent market and cheapest and a silver warehouse certificate that is Comex approved is the industry standard. If you are going to put serious money into silver, you go to the Comex, and everybody has and does. It is my contention, that of the 200 million ozs in the Comex a very substantial per centage is held for investment purposes that is not available at anywhere near current prices. If you wanted to buy $100,000 worth of silver ( 1400 pounds ) for cash and demanded the cheapest ( transaction wise ) safest, most liquid method you would go to the Comex. If you did, even if you wouldn't sell at less than say $10 or $15, your stocks would be reported in the daily inventory totals. And the bears would point to your stocks as proof that we had plenty of available silver. We'll see.

(Mon Jun 23 1997 13:50)
@ One More Day:
London AM Fix was $336.90 and the PM Fix was $338.00. The Feb 11, l997 ( ? ) recent lows were AM $336.90 and PM $337.70. Thus today the London gold Fixes missed setting new lows by $.05 and $.30. I feel we need a new low at this time to bring an end to this bear market. A new low will also confirm my long awaited signal that London Gold has been in a 9th wave down ( but not necessarily bottomed ) . Hope we get this final piece of the puzzle tomorrow.... Do like HUI's action today.... Correction: Today's morning fix was $336.95 and not $336.90. : )

(Mon Jun 23 1997 13:51)
Anyone catch the article in the weekends Financial Post?
This is what I had mentioned that certain high cost Gold Mines will begin closing if price remains well under 340. This is the critical point for many mines to attain a bare minimum profitability. This is great for long term Gold prices. The CB's will supply the market and deplete their stocks, while the companies lower production.
The price will then have to rise well above the 340. level for these mines to restart producion, due to the high cost of shutdown and startup.
Short term pain, long term gain......

(Mon Jun 23 1997 13:53)
ABX is churning 1 3/4 million shares after 4 hours of trading. Down 1 1/8 a moment ago. Is this selling climax or does someone know something about ABX that we should all know ..... but don't?

(Mon Jun 23 1997 14:20)
@for U

LONDON, June 23 ( Reuter ) - Physical buying and short

covering as gold prices refused to fall below recent lows lifted

the market to near the top of Monday's narrow range by the

afternoon fixing.

Dealers said buying came as the price hovered between

$336.75 and $337.00 per ounce.

``It would have taken quite a push to get it down to $335.00

or so, and that just wasn't there,'' one dealer said.

Gold was fixed at $338.00 per ounce up from $336.95

this morning which was just five cents above the four-year low

struck on February 12.

Dealers said the weekend's Group of Seven conference was

seen to be dollar positive and the strength in the U.S. currency

was behind gold's shaky performance in the Far East and its

weaker tone in Europe this morning.

At the fixing the New York Comex August contract was

indicated up 40 cents at $339.80.

However dealers said the trend was still downwards and

today's support did not indicate a change in sentiment.

``If it gets back up to $340.00 or $341.50 we would see

selling bringing it back down and then we could be looking at

$330 or $325,'' a dealer said.

A move below February 12's low would take gold back to the

levels seen early in the brief 1993 rally when the well

publicised entry to the market of financiers George Soros and

James Goldsmith took the gold fix from a trough of $326.10 -- a

seven year low -- on March 10 to a high of $406.70 on August 2.

The firmer move in gold also raised silver prices which were

indicated at $4.77/$4.79 up three cents in a day's range of

$4.72-$4.80. Silver has failed twice so far this month to get

past $4.82-$4.92 on what dealers said were speculative plays.

``There is not that much happening in silver,'' one dealer

said and another said a further upward spike was forecast.

Platinum and palladium were mixed and volatile with both

prices moving in relatively wide ranges aided by a $5.00

bid-offer spread.

``They have lost a lot of their gains but have held on well

and there is a bit more left in them,'' one dealer said, adding

that neither price was to be trusted,.

Dealers said they were still looking for confirmation of a

start up of deliveries from Russia that have been delayed by

bureaucratic foul-ups since last December.

Platinum was at $418.50/$423.50 down $3.00 and palladium was

up $1.00 at $195.00/$200.00.

(Mon Jun 23 1997 14:22)
Pizza Man: The December 700 put on the S&P 500 stock index gives you the advantage of selling S&P futures at 700 anytime between now and December 20th. Other advantages are you don't have to put up margin money as you do if you sell futures, and you aren't subject to margin calls. However, you can easily lose all of you capital on an option. The disadvantages are limited time for the speculation to work, and the S&P must fall 190 points before you really make any money. You should only use money you can afford to lose when trading options and futures. Read and understand an option prospectus before trading options.

(Mon Jun 23 1997 14:36)
Mike S. - Sunshine
Mike...I was watching Sunshine and a 2.5 MILLION transaction took place at 11/16 then immediatedly popped back up to 12/16 ... 3/4. So someone moved a 2.5 million block at 1/16 under the market...!!! Big Move!!

Bob A
(Mon Jun 23 1997 14:42)
Lotsa stock changing hands in the following. ABX, SSC, and PDG

(Mon Jun 23 1997 14:59)
MoreGold: Did the Fin Post mention specific marginal mines that might close?

(Mon Jun 23 1997 15:04)
ALL: Gold has bottomed, silver looks great. The stock market has peaked. XAU has filled gaps. XAU may be ready to rally now, but gold will rally stronger than XAU.

(Mon Jun 23 1997 15:08)
Stock market now plunging. DJIA down 104 points. Gold up 1.60. Silver up 10.

(Mon Jun 23 1997 15:09)
Stock market now plunging. DJIA down 104 points. Gold up 1.60. Silver up 10.

(Mon Jun 23 1997 15:14)
TRIN = 1.60 TICK = -682 HMMMMMMM looks like some want to sell.

(Mon Jun 23 1997 15:14)
Our mania to win at any cost is a Ponzi-like game. Our burgeoning US debt is a cancerous malady infecting John Q. Public. The Cure? Monetizing the debt:

(Mon Jun 23 1997 15:17)

MoreGold: Once a mine shutters, you can count on 3 to 5
years -if ever- for a re-opening. Factors other than
just higher gold prices play their part, before they pull
their start up trigger.
The best joke at the Prague, ( Anti Gold Conference ) was
the one cracked by the astute Mining Journal. They said
that gold production would increase by 18.8 million
ounces annually over the next couple of years. They must
have been influenced by Wayne Angel.
I would like to see hard estimates on when Cerro Casale
will start production.

(Mon Jun 23 1997 15:21)
Steve Puetz- CONGRATULATIONS ON A GREAT CALL!! Hope you did not mind me sending that ALERT out to a few of my friends.

Tally Ho

Bart Kitner (Kitco)
(Mon Jun 23 1997 15:25)
TO SCOTT: Thank you for providing an example of why teaching social skills should be included as part of all early childhood education programs. Your observations have been noted.

Also Mooney : Lease rates are just another way to express the difference between the spot price and the future prices. Analyzing the degree of contango or backwardation is no different than analyzing lease rates. LR=L-FR where LR is lease rate, L is LIBOR or prime lending rate, and FR is forward rate.

To all non-veteran traders: NYMEX has an excellent glossary of trading terms at

(Mon Jun 23 1997 15:28)
Dow TICK approaching -1100, Dow is off 136.61. There was an interesting story in the headlines today about the US bonds being bought by Japan and Forex stability. Is it me, or is there a connection here?

(Mon Jun 23 1997 15:35)


Just heard on CNBC that a Japanese spokesperson, in answering a question, stated that unless the USA cooperates on they BOT then the Japanese would not look unkindly to selling USA bonds and buying GOLD!


(Mon Jun 23 1997 15:36)
CNBC just reported statement by Prime Minister Hashimoto, Japan may sell US treasuries and buy gold if Dollar Yen exchange rate not stabilized. He said this was also considered during negotiations with Mickey Kantor.

(Mon Jun 23 1997 15:39)
Front : That was no spokesperson. That was Hashimoto himself. They had a picture, speaking at Columbia U., if I caught it right

(Mon Jun 23 1997 15:44)


Stand corrected...but he wasn't speaking very good English so I didn't recognise his voice hahaha ... "god" has spoken? Will the USA allow itself to be pushed in public? Don't think so !!!!


(Mon Jun 23 1997 15:46)
Ahem, Cough, Cough
BART!! BART!!! Is your one month gold lease rate in error OR IS IT REALLY 5.69%!!!!!!!!!!! ( YES!!! BT RULES!!! )

(Mon Jun 23 1997 15:51)
@the market
NJ -- As a quick comment to the Hashimoto statement, I guess gold isn't that barbaric of a relic that some others claim it to be!

Steve Puetz -- Did a bit of 'wading' in the metals futures today. 'Water' still a little bit cool, but the 'rising sun' ought to heat it up just fine! There is still a cloud lurking out there that may cause me to get out fast though.

(Mon Jun 23 1997 15:54)


Does anyone else consider this a "Financial" Pearl Harbour?


(Mon Jun 23 1997 15:58)
Asian Gold Gangs
Re Hashimoto: Gold may well become the "Asian Solution".

( Where is that BART!!! )

(Mon Jun 23 1997 16:00)
Today's action was unexpectedly positive. But can it or will it last? Anyone willing to bet on downturn below 335 later in the week...?

Are there any good after-hour/overseas quotes for metals available? Sometimes Kitco doesn't update for hours. I'm also looking for a good source of quotes for foreign currencies after-hours. Anyone know of any?


(Mon Jun 23 1997 16:04)
@the scene
Gunrunner -- check out Barts web resource link button above. A marvelous button it is!

(Mon Jun 23 1997 16:09)
Stock market plunges 192 points today. Stock market has peaked. Gold and silver have bottomed.

(Mon Jun 23 1997 16:18)
Dow utilities
The dow utilities closed at 223.32 today putting in what is begining to look much like a double top. If this proxy for big long term money can close below 220. it is not going to look good for the stock longs. Those highly paid mutual fund managers are going to earn their money tonight.

(Mon Jun 23 1997 16:19)
Gunrunner -- Check out for commodities, for currency, for bonds, and for world stock indexs.

(Mon Jun 23 1997 16:19)
Hashimoto's statement is an indication of a riff between US and Japan. He realizes what is about to happen to global financial system.
All for themselves in times of crisis.
For him to make that statement in public is of HUGE significance! Prior to today all CBs and govs presented a united front when it came to gold. NO MORE. All countries will try to save themselves.
PUETZ is right. Today was a day of great importance.

(Mon Jun 23 1997 16:23)
For the newbies -- Checkout the WEB RESOURCES button at the top of the page. You will find many interesting and useful URLs there.

(Mon Jun 23 1997 16:24)
@overnight action
Well, If there was a reason to watch the overnight action, the Hashimoto statement has to be it.

(Mon Jun 23 1997 16:27)
@the market
Simple Man -- You don't suppose that some of these paper purchasers have had enough and are now going to leave the table do you? Perhaps the Hashimoto statement is the first 'belch' with others to quickly follow!

(Mon Jun 23 1997 16:29)
It's the end my friends
I totally agree with SimpleMan. Hashimoto's statement is absolutely not to be treated lightly even if he were a western PM. But a brutal statement like this coming from someone Japanese is virtually a declaration of war.

Confirming data would be an explosion in lease rates such as the little "pop" in one month rates that Bart has posted. If the figures are correct we could be seeing some real financial fireworks to celebrate the reunification of Hongkong to go along with the gunpowder kind...

George S. Cole
(Mon Jun 23 1997 16:30)
stock market outlook
Steve Puetz: Congratulations on an excellent call! Still not sure if this is the beginning of the end for the bull, but it sure as hell is the end of the beginning.

I would have been happier if this drop had occurred on no news though. If Hashimoto has a change of heart, market could rally strongly later in the week. Gold's action was disappointing in view of today's potentially very bullish news.

(Mon Jun 23 1997 16:36)
George S. Cole- Do you think the statement came too late in the day for gold to get a good reaction.

What do you say GLENN??

(Mon Jun 23 1997 16:41)
Hashimoto comment being reported again by CNBC. Earlier there were reports incorporation of Russia in G-7 was pressed for by Japan, so that Japan was not "isolated" in the Denver meeting. We are all well informed on the Western CBs relentless pressure on the price of gold. Today may well prove to be the day when the markets turned.

(Mon Jun 23 1997 16:43)
I agree with you. Hashimoto's statement should be shown to all mutual funds "30 something" managers and a question should be asked, "WHY GOLD?"

(Mon Jun 23 1997 16:46)
Now the question is: How does the worlds premier debtor, control its increasingly surly creditors? .... Of course the Japanese will have a devil of time clearing their substantial position in any short period of time. Where would the buyers come from? Especially when the major consumer of US debt is exiting.

It seems to me that the sudden loss of CB solidarity will be as much cause for US consternation as the threat itself. Does anyone here have the candle concession for the Federal Reserve?

Is there a pattern developing here? We draw closer to the day when the Brits turn over the Hong Kong keys to the PRC and the Japanese decide to break ranks with the western banks. Perhaps they have seen the future and it does not include the west. Where is the next shoe and when will it hit the floor?

(Mon Jun 23 1997 16:47)
@the scene
Simple Man -- What's your current thoughts about a further drop in the gold prices that you thought might happen before they turn? Re: the airplane posting.

George s. Cole
(Mon Jun 23 1997 17:05)
a long and black night for gold shorts
Ray: The overnight action will be crucial. No guarantees but it could be a long and black one for the gold shorts and the thundering herd of "long-term" equity bulls.

Will Wayne Angell and his disciples get their heads handed to them? Here's hoping.

(Mon Jun 23 1997 17:06)
STEVE PUETZ: Congratulations on your call yesterday. Perfect timing.

(Mon Jun 23 1997 17:08)
@the scene
Earl -- One way is to simply ask them if they want to continue marketing their toys here. Not that we particularly have many other places to buy some of them from. But if the paper goes to hell in a hand-basket, that'll be the least of our problems. Anymore, we must all be one big happy family. Not that it'll help in the end. Perhaps this is the end? Nah. Not yet. Well, who knows.

(Mon Jun 23 1997 17:09)
The asian economic machine may have problems. In many cases their banks and the foreign banks ( esp. Japanese ) that service them are vastly over extended. Should the boom slow, for what ever reason, many loans will go nonperforming ( many in China and other countries are currently nonperforming during the boom! ) . This could prove a nasty economic surprise for the global economy. China would then have a valid economic reason to sell tbonds.

George S. Cole
(Mon Jun 23 1997 17:11)
Big Trader
Big Trader: Beginning to look like you are on the mark. I hope to be able to extend the same congratulations to you that I extended to Steve Puetz today.

Steve (Perth - Western Australia)
(Mon Jun 23 1997 17:17)
FUNDY: No argument re gold over stocks. Just posted the latest
"thinking" by one of Australia's leading business editors. I have been
waiting for a LONG time now for stocks to die in the rear end. With
1000 clients, it is TOUGH being a bear in a bull market.

(Mon Jun 23 1997 17:22)
House prices
Intresting data out today. In 1940 the median house price was 2938.00. Adjusted for 1990 dollars it is 27,400.00. This gives you one of many downside targets for housing prices. House prices too are part of the mania.

(Mon Jun 23 1997 17:26)
on Hashimoto
Let's not forget that Mr. Hashimoto is a politician and therefore his words should not be trusted. George S. Cole could be right when he said that he could reverse his position before the end of the week. He's going to face incredible pressure in a very short time and I don't think he'll be singing the same song in a couple of days.

(Mon Jun 23 1997 17:33)

Lost my EBN url for overnite quotes. Anyone please post it.
This should be a sleepless night for any and all gold shorts.

(Mon Jun 23 1997 17:35)
HASHIMOTO: here is an address to Hashimoto's statements in case you have not already read it:
I don't think he will reverse himself too soon. Asians do not like to lose face. Isn't that great?

I like the line about haviing been tempted to sell US treasuries on several occasions in the past including the 1995 auto talks. The statement is brutal. The market has not yet fully digested the significance of this.

(Mon Jun 23 1997 17:35)
ALL: The financial plunge continues in after hours trading. Sept Bonds are down 7. S&P futures continued to sell off after the NYSE closed. Based on current trading in S&P futures on the Globex, the Dow should open 50 to 60 points lower tomorrow morning.

(Mon Jun 23 1997 17:38)
Everything is falling into place just as planned ( 6/9 18:23, 6/19 00:26 ) . Fidelity gold held up well today as the XAU dropped, if you followed these posts you should have been buying XAU calls today. I'm in the July and Aug 95's. ABX broke under 22-1/4 and should have been bought, the July 20 calls have almost no premium, keep stop at 21 as an open stop. The front month Gold ( JUNE ) hit 336.5 objective was 336. Aug. Gold should have been bought under 340 change stop to an open stop at 338. The lows for this down cycle should have been put in today for all these markets. We may go sideways for a few days but I expect to see up markets in gold for the next several weeks. At this point your risk is very low compared to the potential upside.

(Mon Jun 23 1997 17:38)
from outsider's bench
Hashimoto's statement may be just a confirmation of the trend described

Main points:
"Foreign purchases of U.S. securities weakened to an average $22.806
billion a month during the first quarter of this year from $30.089
billion in the final three months of last year, a Treasury Department
report on Monday indicated...
The United States depends upon strong foreign buying of U.S. government
securities, which are obligations to pay in future, to help finance the
total government debt that now exceeds $5 trillion."

As far as recent discussion about 401K money leaving ( or not ) the
mutual funds, the money does not have to get out of that pool before
the retirement time and still bring the market down. Most of the US
companies offer 401K plans where you can invest in a family of funds
and move money around without loosing your tax deferred status. Most
of these plans include some money market or gov. securities funds. If
the baby boomer saw the danger of loosing some of the "paper wealth" in
stock funds he can park the money in a money market fund ( and many of
them will ) . This means the money would leave stock funds without
leaving the 401K mutual funds pool.

In response to comments about disappointing reaction of gold to
todays development, lets be realistic. The gold market is highly
speculative. Most of the participants on this list believe in gold
but at the same time most of them wait until somebody else makes the
gold go up ( meaning somebody must be buying ) . Well, if believers
wait on the sidelines why should non-believers buy?

I see many posts searching for stock market /and financial system
crash triggers. Many of them are highly speculative with low
probability to happen. On the other side the event which WILL happen
with 100% certainty - year 2000 in computer infrastructure - is not
considered at all. Folks, financial systems, economy, etc. is not
able to function anymore without computers and they WILL fail. Just
last Friday I talk to somebody correcting Y2K problem in major
financial institution. In a process of conducting a test, they hit
the error and incorrectly credited $60 millions to various accounts.
Just go and ask guys on a floor, in banks, or in companies, how long
they can conduct the business without damn computers?! The estimated
cost of post Y2K litigation was just increased to $1 trillion. Do you
still think that it will be just a small dent into financial system?

(Mon Jun 23 1997 17:45)


(Mon Jun 23 1997 17:51)
Lease Rate Anomaly
DA [or anyone else]: Can you confirm the 1 month lease rate of 5.69% for today??

I am surprised that no one else has commented on this! Steve Puetz, Ted Butler, where are you guys?? Can you confirm this???

BTW Bart's historical data which extends back to 1988 would indicate that today's one month rates are at a 9 year high.

(Mon Jun 23 1997 18:00)
ALL: Larry Wachtel of Prudential Securities gave this analysis of today's stock market performance: "Bull markets are characterized by days like this, in proportion to the kind of advance we've had. If you're going to rise 600 points, then when you fall you're going to fall 192 points.... It's due for a little sell-off here. It's an ORDERLY DECLINE, but NOT AT ALL PANICKY. IT'S HEALTHY."

I wonder how big of a decline we will get when it does turn panicky?

(Mon Jun 23 1997 18:29)
corp. welfare
Hey WW - did you see TJ Rodgers article in today's WSJ editorial section? Check it out if you haven't...

(Mon Jun 23 1997 18:30)
JACK and ALL: I found the FP article. Sounds GOOD to me.
If we read it correctly: CB's liquidate their Gold = Major Gold mines will close. This should put a floor on the Gold price not much lower than where it is now, and totally open on the upside.
GOOD call Steve Puetz.....

Saturday, June 21, 1997

Gold slumps to four-year low

Mining Reporter The Financial Post
The price of gold slumped again on Friday, hitting its lowest level in more than four years.
Experts said it may not be long before some of the world's higher-cost gold mines begin curtailing production because of low prices.
Gold closed Friday at US$337.70 an ounce in New York, down US$2.80 from Thursday. Friday's price was the lowest since March 30, 1993, when it dipped to US$337.
Experts blamed the fear of more gold sales by central banks in Europe.
Earlier this week, the central bank of Belgium said it might sell more gold, sparking concerns European central banks are becoming more willing sellers.
Pierre Lassonde, president of Toronto-based Euro-Nevada Mining Corp., said the worry created by the expectation of central bank sales is usually not justified by the actual amount of gold put on the market.
However, gold traders said several large commodity funds sold bullion Friday, mainly on the fears of more gold becoming available from Belgium.
The low-inflation economic climate in western economies further dampens the prospects for stronger gold prices, the traders said.
"The game in town is the stock market," said John Ing, president of Maison Placements Inc. in Toronto.
Both Ing and Lassonde said the impact on gold producers is dramatic. "No one is making money," Ing said. "We are quickly approaching the time when we are going to see the closure of some high-cost mines."
Lassonde predicted mining companies will soon begin closing sections of mines, both open pit and underground, where production costs are higher.
"The producers are really going to be squeezed. At some point, production is going to be affected."
At Friday's gold price, Lassonde said, the 15 lowest-cost gold mines in South Africa are operating only at break-even levels.
The average cost of production in South Africa is US$429 an ounce, making most mines in the world's dominant gold-producing country uneconomic.
Worldwide, the average cost of production was US$317 in 1996.
Tina Messina, chief dealer at Royal Bank of Canada in Toronto, said in recent weeks, gold trading had shown a flurry of buying each time the price touched US$339.
When that threshold was broken on Friday, a sharp drop became inevitable.
Messina predicted gold may soon be selling for US$335 an ounce.
"A lot of put options have been bought, so it seems the sentiment is really going bearish," she noted
Put options allow investors to sell at a fixed price in the future. In effect, they are a bet gold prices will sink further.
"Right now, this market has no reason to go up and every reason to go down."

(Mon Jun 23 1997 18:32)
hashimoto "off the cuff"

(Mon Jun 23 1997 18:42)
Yes its possible that Hashimoto will reverse himself. However, what he said today came from his heart. He knows that one of the things the Fed and US gov fears most is the rise in value of gold ( foe obvious reasons ) .
For decades now the US has been treating Japan as its colony. Each day it becomes frightningly obvious that the US will never be able to repay their debt and that the US uses their allies to US advantage without any regard for their allies economic future.
Today two nations, China and Japan ( because of their holdings of US treasuries ) are nations that have most influence on the future of US economy. They each know that if one of them dumps treasuries it will affect the others holdings and that the first one to sell will be better off. Who will be first?
Probably Japan because Japan is scared! July 1, 1997 it will be isolated and surrounded by China in Asia. The US acts as if they are leaving Japan on their own. What is Japan to do? I think Japan is in a desperate situation and is attempting to force the US to help them. US will not. At this moment China is emerging as the most powerful player, and they ARE BUYING UP gold! Chinas leaders have one goal - political and economic WORLD DOMINATION! They will do whatever they have to to achieve this.
Hashimoto's statement revealed that Japan sees its situation as completely desperate!!! They are politically scared of China, and the US makes it plain that they have no concern for Japan economically.

ted butler
(Mon Jun 23 1997 18:46)
gold lease rate
GFD - it's gotta be a mistake, although I hope it's not.

(Mon Jun 23 1997 18:51)
NBC News just reported that Hillary was to be brought back for questioning and an indictment was highly possible.

(Mon Jun 23 1997 18:53)
BW: Who are the OTHER COUNTRIES? Indonesia, Philippines, Singapore, Taiwan?

You say, "The asian economic machine.... In many cases their banks...are vastly over extended. ..., many loans will go nonperforming ( MANY IN CHINA AND OTHER COUNTRIES [cap's mine] are currently nonperforming during the boom! ) "

There is a banking crisis in Thailand, yet two of their largest banks -- Bangkok Bank and Thai Farmers -- have bad loans that total roundly 6% and 7%, respectively, of their portfolios. And, they are well covered by reserves increased voluntarily earlier in the year.

So, if these OTHER COUNTRIES have financial institutions that are in risk of default, or at the least poor provisioning, let's have some names.

George S. Cole
(Mon Jun 23 1997 19:03)
Big Lies
Those tempted to take seriously the unprecedented anti-gold propaganda barrage of the western CBs and financial establishment should remember what Nazi propaganda minister Joseph Goebels had to say about lies and big lies. Namely the bigger the lie the easier it is to sell to the masses. And that includes most investors.

The frantic the efforts of the western CBs and their allies in the financial press to convince investors that gold is a barbarous relic with little value is merely the latest in along string of establishment Big Lies. A real whopper on a par with the oft repeated assertion that bear markets are extinct and bull markets are forever or the Bre-X gold find of the century.

(Mon Jun 23 1997 19:04)
JAPAN BETWEEN A ROCK AND A HARD SPOT: Only Solution Is To Dump U.S. Treasuries and Buy GOLD!!

EXTRA - EXTRA - Japans Prime Minister Hashimoto declares publicly that the Bank of Japan will sell T-Bonds AND BUY GOLD if the U.S./Yen exchange rate does not stabilize. IMHO this is only a ruse thrown out before the financial world in an attempt to shift the blame to the U.S. for the financial havoc which is about to be wrought.

If the Sumitomo Copper fiasco last year was any indication of how secretive the Nippon financial world operates ( i.e. a so-called rogue-trader lost about $3 billion in unauthorized Copper futures trading OVER A 10-YEAR PERIOD, UNBEKNOWNST TO HIS MANAGEMENT OR THE JAPANESE BANKING REGULATORS... gimme a break, brother!! ) , then it will not be too long before the world discovers that Japan has been accumulating gold for some time.

I think the situation demands that I renew my series of JAPAN BETWEEN A ROCK AND A HARD SPOT: Only Solution Is To Dump U.S. Treasuries and Buy GOLD!!

(Mon Jun 23 1997 19:07)
More Gold: Another in the string of articles that fairly scream that the bottom for gold is at hand. It was interesting to note the analyst's comments regarding the high put to call ratio. In every other market that marker would be viewed as bullish but apparently not in gold. ..... Wonder why? Hmmm?

(Mon Jun 23 1997 19:07)
To All:

The gentleman from Japan just undid years of anti Gold propaganda, he told the world that Gold is the only true money.

That is a paradigm shift of major proportions.

Major paradigm shifts are always greeted with heavy bouts of denial.

(Mon Jun 23 1997 19:12)
"BUMBLING BANKS From Beijing to Brazil to Bulgaria
TOM: Super Bear STEVE PUETZ LETTER includes Bank of China & India among host of other tottering banks - & western world financial systems Ponzi Scheme may topple markets:

(Mon Jun 23 1997 19:18)
ACW: You're absolutely correct and furthermore, for the moment, the Japanese do not even have to make good on the threat in order to improve the outlook for gold. They need only keep the issue on the front burner for awhile and let the heat the radiate out into the "greater investment community". ..... George: perhaps this is the beginning of your long awaited "paradigm shift". ...... All in all one of the better days in terms of fundamentals.

(Mon Jun 23 1997 19:18)
To:Bw re: House prices. That is 83.9 oz of gold for 1940. What is the median price today? How many oz?

(Mon Jun 23 1997 19:18)
Vronsky: Substantially less than "MANY IN CHINA AND OTHER COUNTRIES."

(Mon Jun 23 1997 19:23)
The UnLie
George S. Cole: I would say that given the apparent response by the market to Mr. Hashimoto's comments that the anti gold propoganda effort of the last several years has evaporated in an afternoon.

The key point here is Mr Hashimoto's implication that gold could act as a reserve currency in lieu of US dollars because it is politically neutral, giving dissident government/CB's alternatives to "US Currency Bondage" in current or future policy conflicts.

This changes the complexion of gold entirely.

Gold now becomes strategic insurance against US "Imperialistic Hegemony" - the "Anti Barbarian" metal. It also will act as insurance if ( or when ) the US economic system melts down. Those CB's with insufficient gold reserves will be seen to have put their country in a postition where it will be dragged down by an imploding US financial system.

(Mon Jun 23 1997 19:32)
@New England
The XAU going down while gold strengthens is the ULTIMATE BOTTOM indicator!!

For starter everyone thinks it is true that xau leads gold/if you followed that you would have been treated rudely for 9 out of 10 years including the last 4. The xau falling when gold rises is an indication that there is selling in the gold funds in anticipation of the next decline in gold which always follows and lately, and significantly in increasingly frequent fashion. The little strength in xau stks when gold weakens is the opposite phenomena. The stk or mutual fund or public money is exhibiting a bearishness I have never seen. That the bulls think the xau leads ( which it has in being misleading ) makes the falling xau all the more bullish as a contrary indicator when Gold and silver hold steady or strengthen. IE there is universal belief that these markets have no potential.

Clinton must have been unbearably arrogant at the G-7 summit for the Japanese Prime Minister to threaten bond sales. I am sure he wants to make Bill know who is boss. What is interesting is that Bill's Bluster shows he doesnt understand the situation. I have a Client in France and they were delighted when Chirac said the only part of the American Economic system he needed to import to improve the French economy was "optimistic media reporting on the economy." My client related a statement from a local French paper which stated that "the US Economy is robust on all front pages and television screens". I thought it humorous.

(Mon Jun 23 1997 19:33)
New Paradigm
ACW: Right on! We were reading each other's minds.

Earl: Well said. It is simply the threat that gold could be used in this fashion ( with possible covert accumulation off market ) that could change market perception of gold. More character development for the shorts!!

George S. Cole
(Mon Jun 23 1997 19:34)
Paradigm Shift
Earl and GFD: Fundamental paradigm shifts generally take time. But this probably is the beginning of the process. Convinces me more than ever that a new secular gold bull will begin this summer. Indeed it may already have begun.

I still doubt bullion will explode anytime soon. But $400 is going to be taken out decisively by mid-1998, and possibly considerably earlier.

(Mon Jun 23 1997 19:36)
@the scene
Earl -- That's right! The 'rising sun' will be heating the water! A most important item number 2 in my book is that my wife has decided to move her 401K stock money to safer harbors today. In facr, already done! 'Course, 'those' safer harbors ain't gonna help in a hurricane!

(Mon Jun 23 1997 19:37)
GFD: I'm sorry, but I don't have a good source for the daily gold-loan rate. I wish I did. I have lots of statistics packed away in my computer, but not that one. If you find a source, let me know.

ted butler
(Mon Jun 23 1997 19:37)
GFD - after the "statement", that could be the lease rate very soon. Godd calls - Steve Puetz and APH

(Mon Jun 23 1997 19:39)
@ Mood shift
Everyones spirits seemd to have turned 180 degrees from what I saw on Kitco this weekend. Anyone else notice????

(Mon Jun 23 1997 19:40)
WW: Clinton apparently tried to make Hashimoto wear cowboy boots at the G-7, which made Hashimoto very upset. We live in interesting times.

(Mon Jun 23 1997 19:41)
@ Prediction
Prediction: Gold opens over $1 higher in over-night trading. Brave, ain't I.

(Mon Jun 23 1997 19:46)
IS GOLD DEAD? (... in Japan it AIN'T)

In the light of golds sickly performance for many months, Gold Seer Aurophile examines the noble metals history, symptoms & prognosis. See Analysis section:

(Mon Jun 23 1997 19:50)
@New England
If Hashi made anti dollar and pro gold statements/and knowing he is an insider/ He knows where to hit to make it hurt. It is proof of the authorities ( at least Western ) obsession with the poor metals. Wearing them cowboy boots must have made that hombre plumb mad.

But think of how those leaders must have felt listening to Clinton instruct them when they know our std of living is falling and many of the "new" jobs are "temps" 19% of workforce and the others are McJobs. How many Econ Grads in France do menial work??

(Mon Jun 23 1997 19:54)
Aug, Gold up 1.50, has been up 2.10

(Mon Jun 23 1997 19:54)
Thank you Hashi, because of you no more lithium carbonate or tricyclics;
as Alex said in a Clockwork Orange, "I'm cured!" No more depression.

(Mon Jun 23 1997 19:55)
WW: Well put about the jobs. A minor point, however: Clinton tried to get H. to wear the boots. H. refused.

Mike Sheller
(Mon Jun 23 1997 19:56)
@cornucopia of euphoria
Hey, Hey! Keep the party down already. You'd think gold had risen ten bucks today. Maybe a visit to Kitco should be accompanied by some free doses of Lithium ( or maybe someone would go long the Lithium ) . Get a grip gang.

(Mon Jun 23 1997 19:59)
@the scene
WW -- Even more than that, think of what they really must be thinking of our 'promise to pay'; our ability to pay! The monetary system of the world may be currently based on our paper, but that can begin to change whenever any one of the major players simply says 'no more'! Who wants to be left holding the bag? That's how fast it can happen! So far, it's talk. Bad enough. Should it reach the point of fact, then the world changes!

(Mon Jun 23 1997 20:00)
Mike Sheller: Every forum deserves its irrational exuberance, don't you think?

(Mon Jun 23 1997 20:00)
@my compliments
to APH: my compliments; you are right on the money! Caught the dip on
ABX...looking for the upswing.

(Mon Jun 23 1997 20:04)
Who Needs Lithium??
Mike Sheller: Lithium NUTS!! I need nitro! A 300% boost in lease rates after all this BT stuff has me walking into walls and getting chest pains... ;- )

(Mon Jun 23 1997 20:06)
double bottom in cash gold on hillary day. i luvvv it. gone to toast the supreme court. bbl.

(Mon Jun 23 1997 20:12)
@New England
While Hashimoto's statements may suggests a paradigm shift and I think they do, remember that Merrill et al control th deriviative gold paper mkt in NYC. They will TRY to quell this like yesterdays bad fish. Remember they will try to create another paper induced situation where the price will not react to Japanese news. Well if it cant react to that it must be dead. If thats not the cast then notice how the xau fell in spite of the statements. ( i think this is bullish, see earlier post ) . Nevertheless, this development is important and will make Merrill's job much tougher and more precarious. The XAU investor non reaction to the news is a reflection of THE DEPTHS of BEARISH SENTIMENT REGARDING GOLD AND SILVER!!!

(Mon Jun 23 1997 20:17)
@the scene
Just be 'knowledgable' should you see Hashimoto in cowboy boots!

(Mon Jun 23 1997 20:18)
Mega-Bear gives 20 advance signals calling for total liquidation of stocks - and taking refuge in gold & silver coins. See Steve Puetz Letter. Click RELOAD:

Bart Kitner (Kitco)
(Mon Jun 23 1997 20:20)
My apologies if an erroneous lease rate has caused any confusion! Yes it's wrong - should read 1.14 NOT 5.69. The blank entry in the corresponding forward rate box should have been a tip-off that something was wrong. The problem? Someone mistakenly set the date on one of the computers to April 1, and so the machines felt that today they were entitiled.

(Mon Jun 23 1997 20:21)
EBN has gold at 340.35

(Mon Jun 23 1997 20:26)
WW: Oops. I re-read the article about the cowboy boots. Your instinct was right ( are you psychic? ) . It was KOHL who refused to wear the boots. Hashimoto ( no doubt reluctantly ) put them on. My apologies and I will keep my trap shut from here on out. I think some of us were meant to lurk.

(Mon Jun 23 1997 20:30)
Opinion-technical update Dow,SP= Bullish Gold = Bearish XAU = Bearish Dollar Poker-faced PUETZ Congrats!!! on the Dow,SP call.

(Mon Jun 23 1997 20:31)
Well, it was an ugly day for stox.

Now, what I'd like to see is gold up a few dollars tonight. The New York boyz may knock it down tomorrow, but the message will get through.

(Mon Jun 23 1997 20:40)
Platinum story. So when will the Russian's deliver?

(Mon Jun 23 1997 20:51)
Panda: Looks like everybody left for celebratory drinks. Stillwater fought back today. Now I wish I'd bought some more. The Russkies may not have much to sell!

(Mon Jun 23 1997 20:54)
PB: Keep posting. Indeed, please post a link to the article.

(Mon Jun 23 1997 21:00)
WW - I consider the analysis of the XAU vs Gold to be one of my most valuable indicators of future movement of Gold. It's a matter of how a trader interprets the XAU movement. The Xau tips the hand of gold's advances and declines over and over again. In 1993 the acceleration of the XAU told me to get into gold futures and it indicated to get out in early Aug. when gold was advancing and the xau suddenly stopped going up. Two days later gold dropped $20 on the opening. This year the XAU's most recent low on 4/28 has not been taken out while the low in gold on 4/16 has been. This divergence told me the downside was limited, if a new low were to be made in the xau, much lower gold prices could be anticapated. Over the last 10 years I would have been caught out on a ledge many times without it.

(Mon Jun 23 1997 21:02)
Mike--Thanks for the encouragement. I'll try to get my facts straight next time. Here's the link.

(Mon Jun 23 1997 21:09)
SunShine Mine took it under the chin today. There is NO news on it.
the Volume was very high.. Can someone find some answers?

(Mon Jun 23 1997 21:13)
Wild Euphoria, Expiration Pause, Quarter's End & Risk Loom (6/23/97)
CNBC Financial Celebrity believes market still not seen top - but its on tippy-toes. On Gold: ...this is what a bottom looks like. Gene Inger letter Forecast:

(Mon Jun 23 1997 21:25)
Sunshine volume
SSC's volume was a little above normal, PLUS, there was a 2.5 million share block trade at 11/16 ... which was 1/16 under the market. So the volume was not that extreme...what's happening with SSC, ?? who knows??

(Mon Jun 23 1997 21:29)
Has Bubba's ability to dodge deep do-do ( Bush-ism ) finally come to an end! Talk about teflon...Clinton has lived the charmed life of the millenium...more moves than a whirling dervish. Stranger things have happened because of slights and miscalculations. Does this open the flood gates? All this, of course, would bode poorly for the stock market. The market hates uncertainty and being doused with an unexpected cold pail of water. Conversely, could rekindle renewed interest in gold. As they say, "Domo arrigato, Mr. Hashimoto, domo!"

(Mon Jun 23 1997 21:31)
Mike Sheller and others reasonably postulate that gold will drop down to 320 or 330 per oz. as its bottom. However, as I have stated before on several occasions I think 340 is the bottom touchstone around which the bears will rally before being driven to the four winds by the bull stampede. I don't think it will go much below 340 for the reason that the difference between the 320 projected by Mike Sheller and his followers and 340 can be explained by the Orient appetite for gold. The DOW today and the other paper markets during the final two hours amply demonstrate that the market can and will go down much faster than it ever goes up. Some have stated that the drop in the market will carry gold down with it. Considering gold is lying in the financial gutter right now I don't see that as being what will happen. Today gold was strong, the market was week--I see today as being a microcosm of what the next two years will bring, except that gold stocks at some point will desert their raggedy paper fellow travelers.

(Mon Jun 23 1997 21:41)
Puetz @ Great Calls & Good Research.
GFD June 23 @ 19:23 : "Imperialistic Hegemony" and "US Currency Bondage"
Japan has the skills, to release the terror in the financial markets,
via, the threat of GOLD. But, will they ? That nation knows history.
Richard Whitney, President of the New York Stock Exchange but soon to be
a Sing Sing prisoner, testified before the Senate Committee, discribing
the way J.P. Morgan and Company forced up the price of German bonds
through the activities of a *POOL* while the bond issue was being sold to the public. The bonds were sold, then support of the *POOLS* was removed.
The day of his appearance before the Senate Committee, they were bringing
thirty-five cents to the dollar.

Mr. Whitney, somehow offended at Senatorial innuendo that there had been
dishonesty somewhere, protested that this technique of bond selling was
"an absolutely usual and customary method of merchandising and
distributing securities."

When the directorships of the Morgan allies were added, Morgan interests
controlled assets of approximately 74 billion dollars, sufficient to give
them an adequate voice in the country's policies.

The Morgans, their allies, the Rockefeller and Mellon interests, as well
as more than a few others, had investments of some 16 billion dollars
abroad. American financiers were quick to point out that they were not
engaged in *imperialism*, that no American ever were, but were merely
developing backward countries for the good of all concerned. As with
their operations on the stock market, they were only doing good by
accepted business methods.

Charges of *imperialism* were as difficult to understand as the charges
of graft in connection with Wall Street *POOLS*

The American capitalist found that dollar control could be more success-
fully hidden than outright political control of foreign territory. It
was more satisfactory to rule through a Haitian puppet, a complaisant
Cuban government, or a bought and paid for president of the Dominican
Republic or Nicaragua than to rule through the actual annexation of
other nations.

The American *imperialists* were in a position where they could denounce
and deny *imperialism* while praising the self-determination and
independence of peoples. They could have all the fruits of *imperialism*
while condemning it, particularly the *imperialism* of their British
rivals which they hoped to displace with their own more streamlined brand.

Nevertheless throughout the 1920's American armed force always followed
American investments, ousting governments favoring repudiation of Wall
Street loans, guarding American oil properties from expropriation,
squelching all attempts at genuine independence through the machine gun
and **bomb.**

Bill Buckler
(Mon Jun 23 1997 21:42)
Hashimoto was talking to GREENSPAN!
Consider that Mr Hashimoto, in his remarks concerning

selling U.S. debt and buying Gold, was most concerned

about the U.S. helping to maintain exchange stability.

What can the U.S. do to "maintain stability". That's


I have posted an update to this situtation at The

Privateer's website. Normally, this would go out to

subscribers only. This is truly a "biggie", though,

so I am making it available to all.

The URL is

This, BTW, is a startling development to follow so

closely on the heels of the first technical sign of

a Gold bottom. That is the Aussie Dollar gold chart

that I posted a week ago at

(Mon Jun 23 1997 21:55)
to Simple man
Your are presenting a very logical explanation on what might unfold in the Orient.
However,in spite of the possible positive implications of Hashimoto's statement for the precious metals, I keep reminding myself that politicians are ALWAYS grandstanding and almost never speak from the heart. Take note of the "if" that followed his introduction. He was speculating on what might happen if... That means that in between now and then he's hoping that the US will become more understanding towards some of the issues that concern his Country. Will he deliver on his threat? I doubt it very much, but this situation could be constructive for gold at least in the short term.

(Mon Jun 23 1997 22:04)
Speed -- I viewed SWC as a special case. The company is going in to full production ( supposedly ) this month. The are sitting on a huge pile of PA/PL reserves. I could go on, alright... Their float is something like 10 -11 million shares. A little bit of interest here will go a long way in their share price. Like everything else, a little luck helps to!

Well, I have to change brokers. Schwabee just doesn't cut it. I got burned in an option trade today. The initial loss was very small, it's just that Schwabee waited about four minutes to execute ( ! ) the sale. Funny, the fill ( which was LOUSY ) took less than thirty seconds. Lost almost a full point on the sale due to lousy execution. Tortfeasor, I KNOW your pain.

(Mon Jun 23 1997 22:06)
@ Hashimoto
Bloomberg News' 10:00 EDT report from Tokyo has Hashimoto recanting on his remarks at Columbia University this afternoon. Hashimoto claims that he was "misinterpreted." Hashimoto says he wants to maintain good relations with the United States.

(Mon Jun 23 1997 22:09)
Gold down ten cents on EBN. I think I'll call it a night. I think I've hit my limit with forgivness of brokers. Time to fill out some account transfer forms.

(Mon Jun 23 1997 22:15)
@ Contemplating ?????
Bill Buckler: You answered one of the many questions running through my mind these past few hours. What did Hashimoto mean by his comments? What effect would these comments have on the Fed members who meet at the FOMC gathering next week? Would the Fed raise interest rates to support the US Dollar, even though the economy is weakening very rapidly?

Within the past hour, the financial storm has calmed. S&P futures have recovered some. A few minutes after the NYSE close, the DJIA was indicated to open as much as 60 to 70 points lower. Now it looks like the DJIA will only open 20 to 30 lower. After being up $2.00 earlier tonight, gold is now up less than 1/2 dollar.

Nevertheless, hedge funds still hold 1/4 year of mined gold in short positions. Gold speculators hold 36,000 or more Comex gold contracts short. None of these traders have yet had time to react to the Hashimoto news. How comfortable will they feel with these huge short positions over the next few days? Should one hedge fund start to cover, the next probably won't be too far behind. Once a market starts to rise, rumors fly. What kind of rumors will surface to scare the shorts?

The gold bulls will probably be equally nervous. Most bulls are still shell-shocked after repeated downturns. How nervous do you suppose they will become the next time gold goes down for a day? The market will probably try to shake them out.

How will any future down-draft in the DJIA or the bond market effect the gold price? What kind of rumors will these financial down-drafts spark?

The are some of the factors that I believe will shape the markets during the next couple of weeks. It will make for interesting speculation.

(Mon Jun 23 1997 22:16)
WDL -- The threat has been made. Investors ignore the brewing storm at their own peril. The game is Russian Roulette, eventually the gun will fire. The only question is, when? Where will the accident occur? BTW, the Long bond chart is behaving nicely :- )

(Mon Jun 23 1997 22:35)
HASHIMOTO: interesting aspects of the Hashimoto threat are the lack of economic logic and its untimeliness:
1. Economic logic: A selloff of US treasury debt by the Japanese is going to drive the dollar lower. The Japanese won't make a profit on the goods they manufacture in Japan and ship to the US. Even the profits on the goods they manufacture in the US will shrink in Yen terms. Finally it would decrease the value of their remaining US treasuries.

2. The Dollar has risen quite a bit from its low against the Yen. This is a development favourable for Japan Inc.

Apparently the Japanese are very distraught with US efforts to muscle its way into Japanese markets, so distraught that they would be willing to suffer pain in order to inflict pain. We are looking at financial blackmail. I still believe that holders of large amounts of US debt are in a no win situation. They cannot really dump all of it without hurting themselves at least as much as the US. The only use seems to be as a means of blackmail. As such it remains effective as long as the US depends on foreign funds. The really interesting aspect is the undisguised declaration of such intent.

I believe that this is largely a bluff. Sometime ago Roebear drew our attention to "The Clash of Civilizations" by Samuel Huntington. It classifies Japan as a distint civilization. Moreover it is rather isolated and has to deal with China. Japanese attrocities against China have not been forgotten. A Japanese-Chinese alliance would certainly be a rather strained affair. In other words: the Japanese cannot afford to anger the US.

The idea to convert a major portion of their US debt into gold also strikes me as highly risky: We could have a repeat of the Hunt experience on a major scale: The price of gold explodes. Mines dig harder. Jewelry is molten down. Japan buys most of its gold at very high prices. Supply explodes. The price could come down. Its not so clear however. Japan is a little bigger than the Hunt Brothers. We do live in interesting times.

(Mon Jun 23 1997 22:37)

Had my face in the computer all day doing some systems work so this is the first I have heard of Mr. Hashimoto. Does anyone have a handle on what stability meant? Was he looking for the U.S. to support the dollar or the Yen? I guess he is concerned about a dollar decline, but I recall that a few weeks ago the whole reversal in dollar/yen was started when one of the Japanese ministers ( I've forgotten which one ) said something to the extent that 103 was the target. Maybe all this talk of currency stability is cover for the real agenda which is 'we have bought enough of your paper'. With the Japanese banks big players in the carry trade this last swing in the currency must be hurting. It is also interesting that the yen has rallied somewhere around 100 ticks since the statement. I don't know what to make of all this but it sure bears watching. Could it be possible that the action in stock market was related? Things are getting quite dicey.

Have to hit the hay. More in AM. Night All.

(Mon Jun 23 1997 22:44)
HASHIMOTO's T-BOMB (treasury-bomb)
GOLD-EAGLE would like to share some trivia - but significant - data. Since May 1, the number of accesses from JAPAN to our website has increased 150 PERCENT IN ONLY 7 WEEKS!!!!! This tremenduous increase in percent visitation is only surpassed by the visits to GOLD-EAGLE by the US governement. How do we know this??? All Internet visits have the equivalent of an Internet "DNA or finger-prints." Therefore, we can ID the category of the visitation. Personally, I find it exremely interesting that BOTH JAPAN & the US Government have SO much interest in what goes on in the GOLD MARKETS. SOMETHING IS COOKING... and since Gold is at historically low levels, one does not have to be a rocket scientist to surmise that the next BIG MOVE IS DEFINITELY UP. UP, UP!

(Mon Jun 23 1997 22:44)
overseas news coverage
To All: The London Financial Times made no mention of Hashimotos comments. The London Times mentioned the first part of selling Gov. securities, but omitted buying Gold with the proceeds.

Here is the quote taken from the Foxnews article.

Asked why the weakness of the dollar against the yen over the past
several years has not motivated Japan to sell billions of dollars of
U.S. government-issued securities it holds, Prime Minister Ryutaro
Hashimoto said, "On several occasions we've had pressure to sell

"We were tempted to sell off. ... It is true we have not really made
the advantageous choice,'' he said, adding that Japan could have
sold its U.S. treasury bonds and increased its gold holdings.

George S. Cole
(Mon Jun 23 1997 22:50)
Paradigm Shift
Even if the paper hangers manage to prevent gold from breaking out over the next few days and the Japanese do not buy any gold for the time being, the cat has been let out of the bag. The unthinkable is now thinkable. A once in a generation investment paradigm shift has begun.

(Mon Jun 23 1997 22:59)
Mike: YOU HAVE SOME SERIOUS FLAWS IN YOUR REASONING WITH THE FOLLOWING. Unfortunatly, I still have about 6 hours of work tonight, before I can hit the sack - so you can say I have no foundation to my opposite opinion. So be it! BUT I COULD NOT DISagree more with:

"The idea to convert a major portion of their US debt into gold also strikes me as highly risky: We could have a repeat of the Hunt experience on a major scale: The price of gold explodes. Mines dig harder. Jewelry is molten down. Japan buys most of its gold at very high prices.
Supply explodes. The price could come down. Its not so clear however. Japan is a little bigger than the Hunt Brothers. We do live in interesting times."

(Mon Jun 23 1997 23:01)
Cap'n Bill Buckler:
Thanks for the free issue and insight into Mr. Hashimotos's off-the-cuff remarks. I imagine that his remarks will be discredited, but they are "felt" if not functional. My free issue which went out to subscribers last night discusses all the reasons for gold's being on its ass, and why and how it will rise. Are the double bottom in cash and the Hashimoto and Hillary events today the spur to get it moving? $4.00 does not make a bull market, but I am hopeful that IF there is a syndicate wanting to push gold, THIS IS THE TIME. Cheers and happy trails!

George S. Cole
(Mon Jun 23 1997 23:07)
wishful thinking
Mike: While Japan undoubtedly does not want to anger the U.S., to assume they will never do so no matter what the U.S. does smacks of wishful thinking and chauvinism.

If Germany and France can be friends or Germany and Israel, why not Japan and China?

(Mon Jun 23 1997 23:09)
@ One big difference
Mike: There's one big difference between Japan ( or any central bank ) and the Hunt Brothers. A central bank would be getting out of intrinsically worthless financial paper and getting into real money. The Hunts were using leverage to buy silver. Running a market up on leverage is unsustainable, and it makes the market vulnerable to a crash.

You are right that holders of US debt are in a no-win situation. The big question is: How much longer will central banks bear the pain and hold this worthless paper without doing something.

Imagine 20 thirsty people sitting in a circle in 110 degree weather. In the center of this circle is one glass of water. A guard ( with one bullet in his gun ) threatens to shoot anyone that goes for the water. A some point, knowing that they will die from thirst anyway, someone will take the chance and make a break for the water anyway. And once the first person runs, the rest are likely to follow in hot persuit.

That's the way the gold market is now. All it will take is ONE central bank to move in that direction, and watch the mad-scramble begin.

Central banks moving into gold will be totally unlike the Hunts. Central banks will be exchanging worthless paper for something of value. And they have lots of these wortheless notes to sustain the buying for many years.

George s. Cole
(Mon Jun 23 1997 23:15)
The Privateer
Captain Bill: As usual you are a more than a few steps ahead of the crowd. Thanks for sharing your cogent and VERY SIGNIFICANT essay with us!

(Mon Jun 23 1997 23:18)
My understanding of Mr Hashimoto's comments is that Clinton/Rubin don't mind if the dollar's strength allows it to move again to the 124-126 yen area, which is too high for the Japanese. Remember, the dollar fell from 126 to 112 when the Japanese became serious about controlling the exchange rate, and they want a range somewhere between 103-116 ( take your pick ) . By selling T-bills, the Japanese would weaken the dollar and drive it lower, should the U.S. let it climb too much. However, I'm sure that the Japanese know that if they are not careful, they will cause an avalance and the dollar could fall too low, causing even worse volatility for the yen on the low end. Therefore, the retraction.

I think that the market will ignore this incident for now, but it is another very heavy straw for that camel.

The only two gold funds which went up today are heavily into other natural resources, too. At the current level, gold funds are still sliding, but when the rally comes, we will see 30-40% gain in some of these within 2 months. If you wait for gold to get to 400 to confirm a rally, you will miss out.

(Mon Jun 23 1997 23:20)
Feeling your pain
Panda, so you are getting screwed by commodity brokers? I know that feeling well. Who are you dumping? I dumped Siegle and probably will drop Stauss. I found neither to be other than commission hungry leaches. Enought of my financial blood has been let for this year.

(Mon Jun 23 1997 23:33)
Even if the Japanese just swap the US's very valuable IOU's ( bonds ) for that stupid gold to achieve to minimum mrkt disturbance; I think other big players on the international scene might choose to avoid Japan's current perdiciment by buying the gold that rubin is aching to sell.

This way everybody would be happy.

(Mon Jun 23 1997 23:43)
As much as I admire and appreciate Bill Buckner's opinions and The Privateer, if the Fed raises rates, that will strengthen the dollar and that is not what Mr. Hashimoto wants. I don't think that is what he is suggesting to Greenspan. There must be some other method to lower the overly excessive value of the dollar considering the balance of payments deficits the U.S. keeps piling up.

Mr Hashimoto's original statement ( I believe ) was out of frustration with the US ( Clinton/Rubin ) being so arrogantly satisfied when there is trouble ahead and Hashimoto can see it, and he realizes that Clinton is blindly and ignorantly cruising into the trainwreck and likely to take Japan with him.

This high value of the dollar is the inverse to the dropping price of gold. They are both about to reverse direction.