Gold Discussion for Investors and Market Analysts

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(Mon Jun 30 1997 00:00)
@ The BASH

Alan Greenspan: Most gracious of you, sir. We will give careful consideration to your generous offer.

(Mon Jun 30 1997 00:05)
PANDA@1946: The yahoo site has expired.

(Mon Jun 30 1997 00:08)
@the bash
Greenie: Seriously, aren't certain Board meetings open to the public by law? I think it's a great idea: meet at a Friday Board meeting, kick around on Saturday.

(Mon Jun 30 1997 00:22)
@Rock vs. Paper

Anyone remember the Dow in 1982? In the Spring and Summer of that year, there was as much pessimism on the stock market as there is on gold now. The Dow went from about 740 to about 840 in a week during August '82. It hit over 1000 within 3 or 4 months. I believe we are in a similar situation in the Summer of 1997 with respect to gold. It won't happen in exacly the same way, to be sure, but the gains will be just as rewarding--IMHO of course.

(Mon Jun 30 1997 00:47)
Auric: It's sobering to think that the Dow was 740 in 1982. It seems like only yesterday. Seven hundred forty is barely twice where the Dow was in 1929. And now the Dow is TEN times greater than it was in 1982, a growth rate about 64 times greater than during the 53 years from 1929-1982! I wonder if it really could happen again?

(Mon Jun 30 1997 01:08)
@the scene
Inflation/Delation! How about liberal doses of both? Right now we see deflation in most sectors while we see inflation in the paper sectors. That'll change as the deflation creeps forward towards the core and the government then finds it must 'compensate'. Too little and way too late, not that they know how to 'push a string' either. They are between a rock and a hard place anyway. The system is running out of credit-worthy borrowers. The same ones who are still repaying their monthly debts and removing currency from circulation by doing so. How else does money get into circulation but through consumer borrowing and/or government spending? The government will simply have to do more spending. There goes the so-called 'balanced budget' plan. But even at that, the credit-worthiness of the consumers will take years to repair. We'll see less and less goods being purchased that'll also cost more and more in terms of the dollars' purchasing power as the government attempts a massive reflation. Just think what the paper holders will be doing? This country is very near the time of both massive monetary implosion ( deflation ) and explosion ( massive inflation ) ! What a concept!

Lan Man
(Mon Jun 30 1997 01:20)
From Friday June 27, 1997
COMEX gold warehouse stocks dropped by 8,337 ounces to 844,994 ounces.

(Mon Jun 30 1997 01:22)
@the market
I'm expecting a pretty nice range Monday in the gold. Perhaps 7 or 8 bucks from low to high. Tuesday is currently a wait-and-see.

(Mon Jun 30 1997 01:25)
Don't forget the Hong Kong three day holiday!!!!

(Mon Jun 30 1997 01:25)
thinking about it
Eldorado: What'll they call it? When we had inflation and stagnation, it was called stagflation. But what'll they call simultaneous inflation and deflation? InDeGestion? Actually, it kinda sounds like a nova: The core implodes while the outer shell is blown off. Was that you talking about novae a few weeks ago?

(Mon Jun 30 1997 01:29)
I would expect all the action to occur towards the end of the week. Say around Thursday or Friday.

(Mon Jun 30 1997 01:31)
@the scene
Ron -- Yes. I find it helpful to view it in that 'light'. It all seems to add up in that direction.

(Mon Jun 30 1997 01:42)
@the scene
Scott -- Markets tend to drift lower into a holiday as many exit their positions. Of course, if they are covering short postions... But we'll see. Anything major will probably not happen until after the 4th of July holiday unless it happens 'over there'. I'll play it by the day.

(Mon Jun 30 1997 01:48)
Time to watch a movie on the backside of my eyelids.

(Mon Jun 30 1997 02:33)
USofA @ The cross of gold
Vieserre June 29 @ 22:11 Excellent post, and yes, a good deal to consider
in return. Enjoyed your thoughts, and yes, Americans are a resourceful

I do not accept at face value, the stated facts as presented, by these
referenced agencies. History, has value, and I will reference such.
Truth is difficult to come by, but, a balance is possible, with the use
of reasoning. This is my take on the subject.

By the turn of the century the United States had become the leading
industrial nation of the world, manufacturing almost twice as much as
Great Britain, its nearest rival. The value of its manufacturing products
came to more than eleven billion dollars a year. The number of its
workers in industry had increased from 1,310,000 in 1860 to 4,713,000 in
1900 while 14,000,000 immigrants were pouring into the country as the
population increased from 31,443,321 to 75,994,575.

It was this huge national plant that had come under the domination of a
small financial oligarchy whose members controlled the banks as well as
industry and who knew the power of unity.

With this giant centralization, this increasing merger of bank and
industrial capital into monopoly capital, something new came into
American life. So colossal was the capital gathered together that it
was becoming much more profitable to reinvest it in colonial areas.

Monopoly's plant at home had grown too large, constantly over-producing
and piling up surpluses which the American people, millions of whom were
hungry and ragged enough, could not buy. Monopoly had grown to such
gigantic size, spawned such mammoth profits that it had to expand or die,
reinvest or wither.

The export of capital and the sale of surpluses abroad had become a
necessity. Statesmen, always sensitive to the needs of their more
prominent constituents, began to speak of it being the will of
Almighty God that America should bring the blessings of civilization
to the benighted inhabitants of the Caribbean, the Pacific, Latin
America, and everywhere else that the heathen dwelled in darkness. God
was telling the American people, so Senator Beveridge of Indiana declared
" Ye have been faithful over a few things; I will make you ruler over
many things "

The common people were bitter and their bitterness was enough to make
even Morgan tremble. Laboring America could no longer be crucified upon
a cross of Gold. There were some millions who felt that in fact they
were being nailed to Wall Street's golden cross by such *phenomena* as
*unemployment* and *mortgages.*

Again there was a pentecostal uprising. A fury seemed to blaze across
the land which the Republicans worked to extinguish by a huge campaign
fund of close to 16 million dollars, as well as threats of universal
foreclosure of mortgages and closing of factories if Bryan was elected
over their candidate. McKinley 7,035,638 Bryan 6,467,946

Sooooo, the debts, are a tool, designed, and effective. Deflation, is
the next phase, and it will clear the deck for future expansion.
I expect, many Americans, do not want deflation or inflation, but, that
is not the choice of the American people. Why would anyone want to
inflict such hardship, caused by either ? Gold, is a nice balance,
between the madness of inflation, and pain of deflation.

(Mon Jun 30 1997 03:16)
Thanks to Ted Butler for the most recent short figures.They are astounding!...and yes Auric I do remember August '82 .Most markets
,I think ,are hated at major bottoms.The cake has been ate by the shorts
and now it's time for the borrowers to take a trip to the bakery ...
the sooner the better.

(Mon Jun 30 1997 03:37)
Date: Mon Jun 30 1997 01:08
Eldorado ( @the scene ) :
This ELDORADO, is what I've been saying right along. It's happened before, but it won't come all at once, this situation takes a while to unfold, and in its gradual unfolding it will catch most by surprise.
Eyes will open one day and look back, and ask how could we have allowed this sort of thing to happen. The answer is quite simple- greed! We all are willing to enjoy life to its fullest, even at the expense of borrowing against what rightfully is not ours, but our future generations right to some of those things we're wasting today. The key word is wasting, since this is what the world, and especially the USA, is doing.

(Mon Jun 30 1997 06:48)
ezau -- Search for my Sunday 20:32 post. The story is there.

(Mon Jun 30 1997 07:41)
This site was new to me.

(Mon Jun 30 1997 07:57)
Evening fellas'... getting ready for NY open. Boy golds looking a bit sick eh! I have know idea whats going to happen, but the gold sellers must be ready to turn their tune soon. Just how much gold do they have?

(Mon Jun 30 1997 08:25)
EMU in deep trouble

Latest on EMU and Germany--

(Mon Jun 30 1997 08:29)
Hi Scott: Mabye they are selling gold they don't own yet. He who sells what isn't 'hisn, pays it back or goes to prison.

(Mon Jun 30 1997 08:33)
My prediction
Today's close: $336.70

(Mon Jun 30 1997 08:33)
Well. I hope they get there fingers burnt!

(Mon Jun 30 1997 08:34)
My prediction: 337.20

(Mon Jun 30 1997 08:54)
Are Canadian financial markets closed tomorrow for Canada Day? With US markets closed Friday and Hong Kong reopening that day, this week offers ample opportunity for the Big Boys to play games between markets.

For those who would like to stop getting unwanted sales calls, Frank Capiello on Wall Street Week last Friday gave this advice: 1 ) When a broker calls, tell him you want to be put on his firm's NO CALL LIST. If you get another call from that firm, they are subject to a $500 fine under US law. 2 ) Write your name and phone number asking to be put on the NO CALL LIST at Telephone Preference Service, Direct Marketing Association, PO Box 9014, Farmingdale, NY 11735. That will take you temporarily off all lists sold by that group. Of course the next time you subscribe to a magazine or talk to a cold-call salesman willingly without asking to be off the list, you will put yourself right back in the pool, so you may have to write them again every year.

Earl: What is the name of Steve Nison's most recent book on Japanese Candlestick interpretation? I'll see if my library can borrow it for me.

When Big Trader spoke of the dagger last month, was he warning us not to try to catch a falling knife?

George S. Cole
(Mon Jun 30 1997 09:00)
Greenspan's Dilemma

Will Japan call the tune on Fed rate hike?


YOU have to feel a little bit sorry for Alan Greenspan this week. He's in one of those "damned if you do,
damned if you don't" situations. And it's got to be damned frustrating.

The Federal Reserve Board meets tomorrow to decide whether interest rates need to be raised. They really don't
from an economic point of view because every recent sign is that business in this country is slowing and another
rate hike would only make the situation worse.

And inflation has been barely noticeable, although not quite as invisible as the government's loopy numbers
would have you believe.

But there are two compelling reasons why rates should be increased.

First, the longer Greenspan lets the stock market expand into the greatest financial bubble known to mankind,
the worse it is going to be in the long run for this country and for the Fed chairman's own reputation.

Greenspan knows what is ultimately going to happen, and he's been warning Wall Street of its excesses for
more than two years. But investors, lost in their nothing-can-go-wrong trance, have ignored the caveats of the
Fed. They pretty much told Greenspan to go stick it.

Eventually, the Fed chairman will need to be courageous and tell people what's really going on: "I, Alan
Greenspan, am raising interest rates because you people have all gone nuts and think the stock market is a
get-rich-quick scheme. I am here to stop this nonsense." A statement like that would probably do it.

But the second reason for an interest rate hike is more compelling -- Japan wants one.

Yeah, yeah -- I agree, under normal circumstances we'd tell Japan to go to hell. But Boss Ryutaro Hashimoto,
the Japanese prime minister, put us on notice this week that it is time to pay the piper.

America decided in the early 1990s -- well before President Clinton and Treasury Secretary Robert Rubin were
on the spin scene -- that we needed the help of our Asian trading partner to keep interest rates down. So we
convinced Japan to buy enormous amounts of U.S. government securities.

And when Japan started getting nervous about these government bonds a few years ago, America blinked. We
promised if Japan ever wanted to get rid of the bonds en masse, the Federal Reserve would buy them. With

By selling our soul to the devil, the U.S. was able to keep interest rates lower than normal at a time when some
major banks needed cheap borrowing costs to stay afloat. The low interest rates also helped perk up a U.S.
economy that looked like it was down for the count. Today, our economy is doing much better than Japan's.

So it isn't surprising that Hashimoto decided to stop in New York last week and, when given the opportunity,
told the Federal Reserve exactly what he wanted.

He said Japan wanted stable currency rates -- which is just another way of saying, "Hey, Alan, the dollar is
falling because you don't have the guts to raise interest rates. So jack 'em up, ole friend, or we'll get rates up by
selling the dickens out of all the U.S. government bonds you made us buy."

It's interesting to look at the full transcript of Hashimoto's remarks at Columbia University last week.

Hashimoto was making a speech when someone asked him: "Do you think it is in the best interest of Japan and
its people to continue to accumulate U.S. securities?`

Before Hashimoto got into his threat to sell his U.S. bonds, he looked around the room and said, "I don't
suppose there's anyone here from the Federal Reserve System or the New York Fed?"

Don't worry, Mr. Prime Minister. Even if they weren't there, Greenspan got the message loud and clear.

Starting tomorrow, we'll know whether the Fed chairman will do what's proper ( and not raise rates ) or what
will keep Hashimoto happy. Wall Street thinks rates won't go up. I think it's 50/50.

Copyright 1997, N.Y.P. Holdings Inc.

(Mon Jun 30 1997 09:09)
Only a fool would make a prediction in this market, only a greater fool would act on mine. Past performance ( lousy ) is probably an indication of future performance ( also lousy )
My prediction: Dow will rally this AM to near 7800, during that period gold will drop to 332. Dow rally will fail and show a small loss for the day. August gold will close near 340.

(Mon Jun 30 1997 09:12)
At a time when people who called this correctly should be given more credence,
we instead have GSC posting 10-20 times/day, saying, "Hold on, hold on" or
"don't miss out". The zealotry of his posts makes me think he believes
he has received some kind of divine guidance. "Hold on, hold on" is
not useful advice currently, especially for the new people here. You are not
going to miss out if you don't buy gold now. The price is going to fall this
week, not rise. Yes, eventually gold will turn around, but the time is not now
to be thinking about investing in gold. Please, people, we know how much
everyone loves gold on this forum. Let's not alienate more people by
giving wrong advice. Sometimes the most important thing an apple represents
is itself. Instead of saying all of this bearish sentiment is a contraindicator
or a sign that the bottom is really in, can we take it at face value and say
that it is a representation of what is actually going on right now? What does
the morning London fix tell you to say? THINK

(Mon Jun 30 1997 09:15)
If I was selling a precious metal news letter I think this would be a good time to remind K-1 that I brought up the $250/oz possibility last fall. It seemed a little extreme then and for some reason even farther fetched now. My rationale was that when a commodity looses favour in its market it can go below its cost of production for a while. Gold was/is estimated to be produced at about $275 so a short dip below that figure is not unreasonable. Many high cost producers would shut down etc but a commodity selling below the cost of production is not new. Accepting this requires the acceptance of the possibility that gold can loose it's lustre for a period of time and that it can be a glut on the market. Hard to believe about gold.

(Mon Jun 30 1997 09:22)
Auroelf: Canadian markets will be closed Tuesday and probably will show a slowdown by about 2 pm Toronto time today. Seems like half the City has left for their cottages already. No traffic problems -no cars on the roads.

(Mon Jun 30 1997 09:24)
via Okinawa

World demand for gold higher than in past years -- Developing markets account for much of rise

Gold demand for the first three months of the year was 17% higher than in the same period in 1996, according to a survey conducted by the World Gold Council.

The record figures were bolstered by demand in developing countries in Asia, Latin America and the Middle East, which totalled 586.8 tonnes, a 22% increase over figures recorded in the first quarter of 1996.

Among developing nations, increased consumption was recorded in: Indonesia, where demand rose 44% to 42 tonnes as a result of a robust jewelry sector; Saudi Arabia, where demand also rose 44%, to 44 tonnes, as a result of greater prosperity stemming from higher oil prices; India, where demand rose 38% to 38 tonnes as a result of strong jewelry sales; and Vietnam, where demand rose 80% to 18 tonnes, owing to higher disposable incomes and currency devaluation.

Overall demand in developed markets, which include the U.S., Japan and Europe, rose 2% to 183.8 tonnes.

Increased jewelry and coin demand pushed demand in the U.S. to 82.9 tonnes, an increase of 9% over figures recorded in the first quarter of 1996. Demand in Japan, however, dropped 8% to 46.5 tonnes, owing in part to weak jewelry sales. Gold demand in Europe rose 3% to 54.5 tonnes. Demand was up 2% and 1%, respectively, in Germany and Italy, and 18% in Britain. French demand fell by 3%.

(Mon Jun 30 1997 09:28)
Redoubtable market seer George S. Cole foresees DOW 8500 in August followed by 20% decline - And Gold bear entering final panic stage. See June 30 report:

(Mon Jun 30 1997 09:29)
Rising demand and falling prices. I must have slept through atleast one more class than I thought.

(Mon Jun 30 1997 09:50)
@the window of opportunity
John: Let me guess, umm Vanadium. Because if the Japanese dont buy gold
they will be pumping money into something that will give them an edge
in new automative technology, eg. a battery that uses vanadium. However
my research suggests Vanadium is abundant.

Impartial Observer
(Mon Jun 30 1997 10:05)
John Hepcat: Re Your 9:12 - I think your remarks about George Cole ( assuming that is who you mean by "GSC" ) are unfair. George has been warning of lower prices in the short term as long as I have been watching this site. To that extent, he IS one of those who "called it correctly" and should be accorded due credence. There is some truth in the rest of your comments, however.

(Mon Jun 30 1997 10:11)

Impartial - Then let's have George set a deadline for the "raging turnaround"
and have him stick to it. I am not infallible, but George has miscalled the
end of the Dow/start of the gold bull once before, as he would be the first to admit.
Amnesty - Sorry, I'm not speaking in your tongue today. What is your frequency?

(Mon Jun 30 1997 10:18)
John: I take your point, but I am not here to defend George Cole ( I am sure he is quite capable of doing that himself ) . I just think there are better targets for the point of your argument.

(Mon Jun 30 1997 10:23)
Serious roller coaster on the Dow today. How about dem bondz.

(Mon Jun 30 1997 10:23)
Clinton's Speech
Fascinating to watch the Dow bug on CNBC during Clinton's five-minute speech. It was almost like watching one of those debates where everyone in the audience has a boo/bravo button: Hold down the bravo button while you like what you are hearing, hold down the boo button while you don't, and everyone gets to see a continuously updating chart of audience sentiment on a big screen.

"Good morning ladies and gentlemen," . . . Dow down 2 . . . "yada, yada, yada, reject trickle down," . . . down 3 . . . "in a way that won't hurt children," . . . down another point . . . "create economic empowerment zones in the inner city," . . . down 2 more. The cumulative drop during his speech was about 30 points. And it fell another 30 points within two minutes after he shut up. What goldbugs need is a Clinton fillibuster!

(Mon Jun 30 1997 10:24)

Impartial - I'm not trying to have the last word, in fact, you can have it if you
want, since I'm not going to post any more about it. I'm just saying when
you go to the Kitco buffet, it's hard to ignore the potato salad if every other
offering is potato salad. Volume ( AND VOLUME ) can also have a subtle
influence on who sways opinion. George has made his point repeatedly.
No one is in the dark on what he thinks.

Lan Man
(Mon Jun 30 1997 10:34)
@More Propaganda
From the front page of the L.A. Times Business section, Sunday June 29, 1997:

Gospel or Just Old Sermons? Investment Truisms May Not Always Hold True

But if everyone blithely believes in a particular financial strategy, can it still be valid? Perhaps - but with some caveats, as the following evaluations of five popular financial truisms will show:

1. To determine how much of your investments should be in stocks, subtract your age from 100, then invest that percentage in stocks. The rest should be in more stable bonds or cash accounts.

It's a handy rule of thumb, but it may be far to simple for most people. First of all, it ignores the single largest asset class for most Americans - real estate, meaning their homes. If you consider your home a fairly conservative and stable long-term investment, ( and perhaps it finally is again, in Southern California ) , shouldn't that allow you to be more agressive with your other investable long-term funds?

Also, for people in their 20's or early 30's, who potentially have a very long-term time horizon, there's a good argument that virtually all of their investable dollars belong in stocks, rather than just 70% to 80%. The real issue is time. If you need your money soon, it shouldn't be in stocks. But if you have 20, 30 or 40 years, it's hard to argue against stocks, versus bonds or cash.

2. Stocks will return about 10% annually over the long run.

Both bulls and bears love this truism. the bulls use it to justify investing heavily in stocks even at current heights. The bears use it to predict a period of very low stock returns ahead, because the market's gains have been so far above 10% a year over the past 20 years. From the bears' point of view, in other words, because stocks have returned about 17% a year since 1980, while average annual returns since 1930 has been 10%, at some point soon the market's returns should drop well below 10% for an extended period, to keep the long-term average in place.

Is the glass half-full or half-empty? The bears' mantra of "regression to the mean" sounds logical ( and scary ) enough. But it's not at all certain that 10% is the "normal" return on stocks, some analysts point out. That figure may well be too low, because it includes the Drepression-era returns, such as they were: From 1927 through 1944, the market's annual return was a mere 5.5%. If there's no equivalent economic depression in the next 20 years, who's to say that equity returns won't stay very high, in the process lifting the long-term average well above 10%?

3. Older people need to think more about capital preservation than capital appreciation.

To a certain extent this is true. But unless your days are clearly numbered, even at 65 you probably don't want to turn too many of your growth investments into more conservative income-producing investments. People are living longer than ever before, and odds are you will too. If at age 65 you live another 30 yeras, you will need a good portion of your nest egg to continue growing, rather than simply throwing off fully taxable income while your principle amount withers or stagnates.

4. You will need 80% of your final income to live comfortably in retirement.

Well, sure, 80% would be nice. But "need" is a fuzzy thing. Plenty of people spend far less in retirement than in their working years, whether by necessity or plan. For example, all of your major expenses may fall sharply when you retire. You may be able to cut housing costs by half if you choose to move to a cheaper locale, for instance. Other costs may be higher, including medical and travel. But overall, the idea that you must save a fortune now - and that Social Security payments will be to small to be worth much in retirement - may be exaggerating what will be reality for many people when they get older.

5. Always pay off large credit card debts before doing anything else with your money.

This one seems hard to argue with. Where else can you get a 12%, 14% or even a 21% guarenteed, tax-free return on your money? In effect, that's what you get when you pay off those credit cards. On the other hand, if you are in a 401 ( k ) or similar savings plan, and your employer matches 100%, 50% or even 25% of your contributions, that is a better return, at least on the face of it. The point is, debt isn't necessarily bad - you just have to manage it. Paying down heavy debts makes sense, but perhaps not at the expense of completely eliminating your savings program.


Well , there you have it, a newspaper reporter telling YOU how it really is. What to believe in, and how YOU should invest your hard earned money. And remember, DEBT IS GOOD!!!

(Mon Jun 30 1997 10:43)
John: OK, OK, Truce ! ( There, I did get the last word in !! ) .

(Mon Jun 30 1997 10:46)
Don't you know that your ruthless cold realism is not welcome here? Haven't you ever read "The Iceman Cometh" by O'Neill? You've come into our bar, smashed our icons, bringing your brand of objective truth from the outside world. Please, sidle up to the bar, have a drink, and muse with us about good things to come. Be supportive. Be encouraging. Nobody, you and I included, knows the future of the markets. We just know that soon, very soon now, gold will stage a dramatic turnaround into the high 400's and the Dow will get below 3000 and stay there until long after your youngest daughter is married. Is that cool with you? I mean, I'm not trying to bite your ear off or anything, OK?

Steve - Perth
(Mon Jun 30 1997 10:51)
( Can you teach me how to do that? How do you plug in the site you want
us to read? That is really neat. )
To insert another web article you have read onto this Kitco Discussion Group, simply highlight the URL or Location address at the top of your screen, & type "Control" & the "c" key at the SAME time, to save it in your pointer ( so to speak ) . Then position the pointer where you want it, and type "Control" & the "v" key at the SAME time. This is referred to as "cutting" and "pasting". It will only highlight on this site if you are inserting a location address. Hope this is the correct answer to your earlier question.

Steve - Perth
(Mon Jun 30 1997 10:58)
Talking to a Western Australian "Wheat Belt" farmer tonight. His farm has increased from A$300 per acre upto A$430 an acre in the last three months. How's that for inflation?? Perth real estate just starting to move up on interest rate drops. However, we mutually agreed that all is not right, & that a deflationary feeling seems to be in the air. The real estate pick up will be very short lived. It seems like we are marching into a very big black hole at the moment.

(Mon Jun 30 1997 10:59)
The faith placed in bonds is remarkable. Rising rates will slay any economic evil that comes are way! ( Meaning gold or inflation. ) The question remains, why are rates rising? What are they afraid of? :- ) )

Just this morning, a business commentator on the radio was poking fun at gold and gold bugs. His comments were to the effect that there are more Deflationary signs than inflationary signs. Gold was among those signs. Stocks were great though! Dose anyone see anything wrong with those comments? How can deflation be good for stocks? Something like, falling prices leading to falling earnings which lead to layoffs, which lead to... I don't think he realized what he was saying.

(Mon Jun 30 1997 11:07)
Panda: You said, "The faith placed in bonds is remarkable".
What is that suposed to mean? Your faith in gold is equally remarkable?!

(Mon Jun 30 1997 11:20)
NotaGoldbug -- Are you long in bonds? Did you read the rest of my post? I think I mentioned the deflation word.

(Mon Jun 30 1997 11:20)
VA gun org for va gun law info.

(Mon Jun 30 1997 11:26)
The Point of Maximum Optimism by Michael Belkin (Strategic Investment)
Internationally acclaimed Market Analyst asserts over-valuation, irrational exuberance, expanded risk-exposure & technical hyper over-extension will cause horrendous losses when bubble bursts. See Editorials:

(Mon Jun 30 1997 11:40)
In the FWIW category ... I just returned this weekend from the New River Gorge Area in WVa...a BIG MECCA for vacation river rafting, mountain bikes, etc....and the rafting business is OFF 30% this year from last year. Sure weather...etc...but the thinking is that people are just too much in cards too full ... to recreate ...wonder what that means...doesn't sound like inflation to me!

(Mon Jun 30 1997 11:47)
Panda: Yes I read the rest of your post and no I'm not long in bonds.. I do not
trade bonds but can see the yield, for some, attractive; considering the overall
inflation outlook.. I also do not see serious deflation.. Personally gold is not a
good proxy either way. Up to now the fundamentals in gold have been just plain
lousy and that is all there is to it.. I do not see the price weakness in gold the
precursor to deflation.. I do not do intramarket analysis, to me it is a waist of time.
Back in 1980 when rates soared precious metals collapsed deflation reigned..
Your looking for more in this market than it is going to give you..

(Mon Jun 30 1997 11:52)
BILLD: Re BIG MECCA. My wife and I went to Freeport, Maine two weeks ago, shopping Mecca, LL Bean etc. Same week that we were there 4 years in a row. Always packed before but not this year. We estimated 50% down. Empty stores that were never empty before. The weather was 85, extra hot for Maine but......

(Mon Jun 30 1997 12:06)
@NM Article - World Gold demand
This article demonstrates what I have been observing for quite some time. Developing countries ( Asia etc. ) are accumulating Gold ( +PM's ) , while the West ( US Canada Europe ) , are disposing, divesting. This is true for the official sector CB's, as well as private individuals/investors.
Basically we in the West ( excluding me and a few others of course ) , put our full trust and assets in the hands of the paper pushers, while the Asians are more suspicious of the system in general and are accumulating hard assets, and hedging their bets.
I know from personal contacts how very few in the West hold insurance ( PM's ) in case of disaster - ( almost nil ) .
I have to say that people in the industrialized nations are STUPID not to see this.
Who will be proven right in the end, I have little doubt.
There will be a massive redistribution of wealth and it won't be coming towards the West.
Anyone for paper recycling ???

(Mon Jun 30 1997 12:13)
August will be the crucial month for paperbugs and goldbugs. Will Dow collapse/ Will gold soar? Place your bets ladies and gentlemen and may the best man ( or woman ) win.

(Mon Jun 30 1997 12:47)
Oracle@japanese.SURVIVAL.Part - II (30 June 1997)
JAPAN BETWEEN A ROCK AND A HARD SPOT: Only Solution Is To Dump U.S. Treasuries and Buy GOLD! ( PART - II ) . Per global experts - Its Inevitable:

(Mon Jun 30 1997 13:31)
It's a dang pity I've already blown all my discretionary money on gold and silver when they were at higher levels or I would certainly be squandering it at thiese levels. In fact if I had any money I would be buying silver futures to the extent I had any money; but like the maid who spilt her milk I am left to cry over my spilt milk of bygone weeks.

(Mon Jun 30 1997 13:43)
Spin doctors at it again, no inflation. Notice how when the Long Bond dosen't 'act properly'... We are told not to worry, but to be happy! :- )

Don't worry Tort.... That stuff is worthless....
The new Gold is STOX, especially the S&P500 kind :- )

(Mon Jun 30 1997 13:47)
@tapped out!
Tortfeasor: I hear ya. I kept holding a little back to repurchase a timely dips to reaverage at a lower cost basis, but now I am fully invested and well past the point of absorbing my losses. no more funds to repurchase to bring down my cost basis more :- ( , so just hangin in there until the tide turns. I wonder how this experience will affect me trying to pick a spot to get out after the rally starts?

(Mon Jun 30 1997 13:51)
@...real politik
G.S.Cole: The mechanics of a Japanese sell-off of US govt debt would be muted unless the Japs also made a concerted effort to buy gold. The Japanese may instead buy Eurodollars + DM + basket of EU currencies for better 'real politik' results. The Japanese exchange of "most" of its US$ debt for European currencies would bid up the values of European paper ( versus YEN ) and stimulate ( amoung other things ) Japanaese exports to Europe. This strategy would permit the Japanese to play hardball with current ECU politics. The rationale for an EC paper exchange for US debt - instead of gold - would be to give notice to the US that if the Japanese can not 'morally persuade' the US FED to listen to its largest minority shareholder it may have better chances in Europe supporting monetary union and global currency stability from a Jap perspective.

The dynmamics - fundamental and speculative - of a Jap sell-off of US debt are exciting.

No doubt we both prefer that some of that Jap US debt - if it leaves - to flood the gold market.


(Mon Jun 30 1997 13:59)
Insurance premium
Tortfeaser 13:11 - Try not to think about it as discretionary income.

It is more like an insurance policy. Keep paying the "premiums"monthly.
Right along with your, TERM, death ( life ) insurance. Options are inexpensive now. Silver is in a tight corner. Can it get any lower?


EB...thinks not

golf jokes??

(Mon Jun 30 1997 14:08)
g.cole re:09:00----

your take of the pressures on bald-headed al and
his problems are to the point. this problem for
al is really an opportunity for big profits for all.

you call for a 50% chance that bald-headed al will
raise rates this week. merril lynch is saying 25%.
that is pretty good odds in my book.

sept eurodollar 9375 puts are 1 pt. ( $25.00 ) this
contract is in a super tight ( 9414 ) channel and will
drop like valkyrie on high if green-bean raises rates.
a $50.00 broker fee + $25.00 = $75.00 to be in position
IN CASE a move is made. this small gamble could easily return
10x or better. rates will have to be raised. we needed a catalyst.
the japanese have assumed this role quite admirably. so be it. eurodollar
puts are good investments before ANY meeting of the fomc for the foreseeable future.

cherokee!; ) hoarder of gold calls and eurodollar puts.

(Mon Jun 30 1997 14:12)
More Winston...Why not? He's Groovy Baby!
I pass with relief from the tossing sea of Cause and Theory to the firm ground of Result and Fact.
Sir Winston Spencer Churchill

John Hepcat - is this what you're talking about?



(Mon Jun 30 1997 14:12)
PANDA: So you are the guy I am selling my stocks to...nice to meet you. Thank you for your gold.

(Mon Jun 30 1997 14:14)

I'm so glad I didn't spend my money these past few months,
and I'm even more glad I'm not going to spend any on gold
for the next few weeks, since to do otherwise would be plum
foolish. Now is not the time to buy or to encourage others
to buy.

(Mon Jun 30 1997 14:19)
I am sick of this
Please, Please, Lord, Let there be another gold boom!!!!
I promise not to piss it away next time.

(Mon Jun 30 1997 14:27)
Puts are very nice for Sept. Euro. It looks as though ( from todays market movement ) the adjustments are already happening in anticipation of a rate change. But then you already jumped in friday anyway...oh sagacious one.

AWAY :- ) ) ( ( ) ) ( ( ) ) ( ( ) )


(Mon Jun 30 1997 14:42)
To All, As gold has gone down there have been many "conspiracy theories"
as to why. And, I must admit, they have some appeal. But truthfully, they
are usually a cover for the loser to rationalize his loses. Trading is hard work
and, for the serious investor, to blame anyone but himself for being on the wrong
side of any trade is almost ludicrous. If you say: I'm not a trader I'm and investor,
you are equally disillusioned.. All commodities and I mean "all" are only trading
vehicles. They have never been a good long term "hold" with as much as 20 to
40 year cycles. Now this is just my two cents worth for the novice investor. Gold
will have its day, but most here will be unable to enjoy it.. I will be silent now..

George s. Cole
(Mon Jun 30 1997 14:43)
Cherokee: The article I posted this morning was written by John Cruedel of the New York Post. Makes a lot of sense though.

Bob: You are correct. The Japanese may well sell T-bonds and purchase European currencies instead of gold. They might also put some of the proceeds into European currencies and some into gold. They probably will not buy much gold unless Rubin and Greenspan thumb their noses at Hashimoto's request to help stabilize the dollar/yen at a reasonable level.

Hong Kong turnover another non starter for bullion as many here anticipated. August gold off 90 cents. Gold will continue trending lower until the financial bull ends.

(Mon Jun 30 1997 14:50)
Belated joke of the day
Here's a little offering for those suffering from market fatigue and from getting beaten up by non-gold bugs on a daily basis.

A man was sat at home one night when there was a loud
knock at the door. The man answers angrily to find a 6 ft stag
beetle standing at the doorstep. "What the hell is this?" he
shouts, at which time the beetle launches into a frenzied and
vicious attack in a flurry of kicks and punches - then leaves.

The man crawls into his house and calls an ambulance, but
is naturally not keen to reveal the truth behind his injuries.

Finally, one day he tells a doctor, but surprisingly, the doctor
believes him and is sympathetic, "I understand," he says,
"there is a nasty bug going around at the moment..."

Winston Churchill
(Mon Jun 30 1997 15:01)
10 Downing St

"Those KITCOites are surley a humble bunch of souls.... With a lot to be humble about!"


(Mon Jun 30 1997 15:32)
don't call me Shirley.

(Mon Jun 30 1997 15:34)
To Steve Puetz, Following is a comment by Barry Riley of the London Financial Times:

But could a bolt from the blue emerge in the US corporate sector itself, in
the shape of earnings disappointments? There is, in particular, growing
controversy about a possible enormous error in corporate accounting

Many investors are uneasily aware that it is only the un-expected strength
of profits that keeps US stock prices in any sort of contact with historical
valuation ranges. On the basis of dividend yields, say, or price-to-book
ratios, share prices are in outer space. But when the trailing price-earnings
ratio on the S&P 500 Index reached 22 last Friday, falling to maybe 19 on
a prospective 1998 basis, it was not outrageously out of line with past
experience ( in bull markets, anyway ) .

There is deep concern, however, over the implications of stock options,
which are now a huge benefit - worth maybe $70bn ( 42.4bn ) a year, and
rising - to US executives and other employees. But because of an
accounting loophole these are not being charged against corporate

According to Andrew Smithers, a London-based economic consultant,
earnings may be overstated by 20 per cent, or even more. That trailing p/e
ratio could be 30.

(Mon Jun 30 1997 15:49)
I don't know what it is, Tort, but somehow when you tell a joke, it just seems funnier.

Maybe it's the juxtaposition with the state of the things, goldwise. How many days in a row can this continue? I mean, in Oklahoma they called in Burt Lancaster.

(Mon Jun 30 1997 15:51)
@ the crossroads
Re NJ Gov Whitman's Stock investment scheme....reminds me of the ancient warning..whom the
gods would destroy they first make mad. Get the same feeling watching many of todays TV ads
and so called popular programs. Reify: Greed and waste have always been with Man: The more
things change the more they remain the same ( as in human nature ) . For much of the time things
never get as bad as we fear or as good as we hope...but rather we spend most of our time in
that large grey area between the two extremes.And speaking of extremes Gold appears to be an
extremely goodbye...sorry good this point....just like last week and the week before.
Like most goldbugs I'm a perennial and tenacious Bull. The logical case for Gold is hard to
dismiss but the current reality makes it hard to keep the faith. However many years of
conditioning "hang me in there" if you'll pardon the expression ) If Gold looked good last year
over 400 it has to look even better today at 334 and tomorrow ( God forbid at 300 ) or what
ever..Is this also a case of whom the Gods would destroy .... as I continue to average down? I
sure as hell hope not because I seem to have passed the point of no return in this
adventure.Notagoldbug: you have offered some very valid points for us goldbugs to consider in
your postings.

(Mon Jun 30 1997 16:01)
To all: BillD's comment about rafting in WVa being down due to credit card exhaustion is probably the archetype for what will happen to the markets and the economy. Imagine the devastation that would happen if people "got religion" and started to REDUCE their debt by even 5% per year!! The same is even more true for the markets.

Richard Russel has said for years that the primary trend in a market will continue until it reaches a state of exhaustion.

With valuations so high, mathematics will tell you it takes more and more dollars to move the markets up a point. At some point, there just won't be enough dollars available to keep the markets moving up. I suspect we are at that point now.

(Mon Jun 30 1997 16:09)
@XAU +.23
Will wonders ever cease!!!....XAU finished on the plus side...hardbinger of rally mode rest of week?????????

(Mon Jun 30 1997 16:09)
I would say that with all the biblical quotes and religious commentary ( not to mention astrology ) in addition to the general bearishness in the last stronghold of the bugs that gold is no longer forming a secular bottom but is now forming a religious bottom! ;- )

George S. Cole
(Mon Jun 30 1997 16:14)
gold stocks
August gold down 60 cents today, but gold stocks staged a modest rally the last hour. XAU and HUI both up a bit after having been down around 1% most of the day. Given the extraordinarily downbeat mood on this forum of late, maybe the specialists figure this is as good a time as any to mark up their inventory.

(Mon Jun 30 1997 16:22)
NotaGoldbug : There is nothing wrong with presenting a minority opinion to a discussion group. The group invariably gains by that and this group is no exception. You were correct in your forecast of the gold market and deserve at least as much recognition as the analysts who, during the same time period, were recommending purchase of 'any' DJII stock following a dip in the market. My only objection is to the vitriol and personal attacks. Unless, of course, if you are looking for the Mike Tyson medal.

(Mon Jun 30 1997 16:25)
LURKER......ROTFLMAO......HA HA.....You are making the same prayer I have made a thousand times over !!!!!!!!! But I was much younger then, and more foolish....But wasn't it a lot of fun to piss it away ?????? I bet I know you !!!!!!! BEST LAUGH TODAY !!!! ( in sympathy ) ...

(Mon Jun 30 1997 16:30)
Those on this forum now gloating over the gold's miserable performance of late will soon discover that "he who laughs last laughs best".

(Mon Jun 30 1997 16:30)
Don't get me started with religion! Human life without external limit has been a problem for a long time. Adam was the first guy to run up his credit card. In Pico's oration, God addresses Adam: "You may have and possess whatever abode, form and functions that you might desire. The nature of all other beings is limited and constrained within the bounds of law prescribed by us. But you, constrained by no limits, in accordance with your own free will, in whose hand we have placed you, shall ordain for yourself the limits of your nature."

John N.
(Mon Jun 30 1997 16:32)

This is the finest of sites, gold at 33X or no. When gold betters US$450, let's get together in Montreal and wine and dine into the wee hours with Bart as our guest of honour.

George Cole
(Mon Jun 30 1997 17:13)
JOHN M: I'm game for that Montreal get together. Think we'll have to wait until 1998 but wouldn't object to some 1997 festivities.

(Mon Jun 30 1997 17:20)
Auroelf: Sorry for the delayed response. The latest from Steve Nison is "Beyond Candlesticks". John Wiley and Sons, pub. I bought a copy through Amazon.

(Mon Jun 30 1997 17:43)
JCandles, Canada Day
Earl: Thanks. The library is searching for it even now.

Selby: Thanks for the traffic report.

Happy Canada Day to y'all North of the Border. You and HongKong can celebrate independence together from now on.

(Mon Jun 30 1997 17:48)
Whatever happened to Dominion Day? That is the way I remember it.

(Mon Jun 30 1997 18:22)
Im in on that Montreal date.
Let's hope it will be sooner than later.
Things are going too well for paper, something has got to crack.
Not the Goldbugs I hope :- )

trader ed
(Mon Jun 30 1997 18:28)
John Disney, or anyone else in South Africa, the South African Gold stocks seemed to have crashed today, with U.S. Global Services Gold Fund down more than 5%. This fund is mainly in the South Africans. Was something in the news over there, or is there a political event which is not on the news over here? I would appreciate any information. Thanks.

(Mon Jun 30 1997 18:31)
The stock market sell-off in the last hour, and the XAU recovery during the same period was most likely the result of the completion of end-of-quarter window-dressing by portfolio managers. Now that they've gotton rid of their gold-related investments, these issues are likely to rally because sellin-pressure has abated. Now that they're loaded up on stock, so they can show everyone how heavily into blue-chips they are, no more buyers are likely to emerge the rest of the week.

After the close, S&P futures fell another 4 points, indicating a 40 point drop in the Dow Industrials tomorrow. Also after the close, technology bell-weather, Cyrix, indicated they would have a loss for the 2nd quarter. The earnings disapointments continue to mount.

George s. Cole
(Mon Jun 30 1997 18:47)
stock market
Steve Puetz: Steve Kaplan reports that gold equity put volume was exceedingly high again today.

The small cap stocks performed very well today despite the sell off in the big boys. Still think this seotor of the market, which still is way behind the Dow despite a better performance of late, will have a big run before things break down badly.

(Mon Jun 30 1997 18:49)
Ever since the 1930's an ongoing debate has roiled as to the cause of the great depression ( of the 1930s ) . Much flack flys over the various players and their parts. Most books still say "most experts cannot agree as to the root cause". But after living thru the last three decades or so it has become 100% clear to me as to the cause of the next great depression ( and in my mind the last as well ) . It is quite simply the human mind set that condones, encourages and revels in the feel good creation and growth of a credit bubble. Once you have created the credit bubble an economic depression follows as sure as night follows day.

(Mon Jun 30 1997 19:06)
I wish I had some good news but again I do not.

It seems that one trader who had been buying lately was selling some today. I guess even the well financed bulls can say uncle at some point.

The volume in the options market was 14,000 today. I was so happy thinking that someone big was buying lots of calls before they drove the price up and scared all the shorts but after talking to the options traders it seems that several large orders ( about 1500 contracts each ) were placed to BUY PUTS! Oh well maybe next week, because no matter how low we go this week the low simple will no be put in this week. Sell all rallies.

From a technical point of view I hope we hold 325 but it is not looking good right now.

(Mon Jun 30 1997 19:23)
We are seeing good news. Stop looking at it in dollar terms. The Dow is dropping more than gold. Today the Dow will only get you 22.87 ounces. I think our peak ( since 1966 ) is 23.5 ounces. This is a good sign. If 23.5 holds we have seen the top.

(Mon Jun 30 1997 19:34)
@trader ed
Unless there was other news, the reality of mine scalebacks and shutdowns is looming heavy on the stocks. SA is a very high cost producer of AU, and even with income from hedging and forward sales,
the current Gold price will leave many operations in the red.
Earnings of these companies will be hit very hard with these closings.
Basically the CB's will be replacing the mines as suppliers of AU.
To me , this is very bullish in the long term as it will take a much higher price to restart these mines, and the CB's will eventually be out of
the picture.
Of course for the immediate future, we're stuck with this horrible market,
that seems to be building momentum on the ugly side. Oh well, thats reality...

(Mon Jun 30 1997 19:45)
I would like to agree 100% with MoreGold. This drop in gold and the overall bear market it's in could extend into next year. At these prices for such an extended period of time will affect the long term financial well being of the gold mining industy setting us up for one grand bull market. If Alan's goal was price stability and low gold prices he's going to get more than what he bargon for. The cat's out of the bag and the governments are going to get screwed in the long term!

(Mon Jun 30 1997 20:07)
Redoubtable market seer George S. Cole foresees DOW 8500 in August followed by 20% decline - And Gold bear entering final panic stage. See June 30 report:

Mike Sheller
(Mon Jun 30 1997 20:28)
2WEEKS: Loved your Iceman Cometh analogy. One of my favorite plays. I'd lend an ear to that, any day. DONALD: God's address to Adam was before the Fall. The trick now is to work one's way back...carefully. JOHN ( Hepcat ) it's real cheap an' easy to bad mouth a true CONTRIBUTOR. Be careful than your own excessive slime may dislodge your footing in gratuitous confrontations with your betters.

(Mon Jun 30 1997 20:30)
It's Monday @ Jakes
I know how much everyone has been waiting on the edge of their seats for the Jake B. commentary. And now, without any further delays... Hit reload if it's not current. I know that everyone has already bookmarked this site... this is for the fortunate souls who are reading for the first time!

Away... fast and far :- ( )


(Mon Jun 30 1997 20:30)

Mike - I have been a contributor longer than George.
I have had to put up with a lot more crap than George.
Make sure you know what you're talking about before
you lecture me.

Peter Born Loser
(Mon Jun 30 1997 21:13)
Tuesday's Financial Times
Hi all, just thought I'd reproduce a few comments from today's
Financial Times ( London, 1st of July '97 ) . Best wishes,

Gold: Prices sink to four-year low
By Michael Peel and Laurie Morse

Gold plumbed its lowest depths for more than four years as south-east
Asian markets weakened. The morning gold fixing of $334.05 a troy
ounce was the lowest since March 30 1993. It closed in London at
$334.10, down $2.80.

There was evidence of increased hedging in Australian markets at the end
of the country's financial year. Meanwhile demand was softer in India and

Ms Rhona O'Connell, analyst for T. Hoare & Co, said: "Some of the
merchandisers in Hong Kong bought too much, in anticipation of increased
demand for the handover, which hasn't materialised." Physical demand was
also low because dealers were holding for the end of the meeting of the
Federal Open Market Committee tomorrow, she added.

(Mon Jun 30 1997 21:19)
EB: Thanks for Bernstein URL. Interesting comments regarding gold and silver. "Explosive" ...... But, as usual, it lacks a time table. T'was always thus.

(Mon Jun 30 1997 21:36)

GFD: Your line about Richard Russel sure was funny ( to me ) . I used to
subscribe to RR's Dow Theory Letters. For the first year, it was really
good. I learned alot. Then during the second year - each letter was
sounding very familar. I went back and reread earlier letters and found
that he had taken pages from earlier letters and just added changed the
date on the letterhead. This guy was just recycling old letters, he
wasn't even changing the sentence or paragraph structure. What a great
scam - he should of included it in his "the perfect business" lists.

I know some readers out there read "Strategic Investment", is there
anything new with International Thunderbird? Lately, the company hasn't
been taking my calls. Many thanks in advance.

(Mon Jun 30 1997 21:52)
I have been celebrating the rejoinder of HK to China. Many of my Chinese compadres who I love and respect love the celebration. They have told me to ignore the HK Democrats as they are an impediment to economic progress.. My more progressive friends indicated the need to maintain all benefits to the people is what is important in a Marx-Lenin sense. I have an invite to the Chineses Embassy in Wash DC for a celebration of the turnover next week!! What does this mean to Gold ?

(Mon Jun 30 1997 21:56)
July will be a brutal month in my view ( for stocks and metals; obviously with individual exceptions ) . A crash? I don't have a working crystal ball. July will a down month. Followed by an August rebound ( in metals and stocks ) . Following that, metals ( and metal stocks ) will continue to climb and stocks will decline through the end of the year and continuing into 98 ( stocks may have a rebound period here and there; but we are entering a bear market phase in July ) . It is the calm before the storm.
There are many people who think the market cannot crash or enter a bear market. The latter, in my opinion, is more likely. Forces will try to support the market from crashing. This is just the Predictor's opinion. If you don't agree, by all means, join the "sucker" rally. I've personally have moved almost all of my funds out of equities and into money market funds ( and a few select metals related investments ) . Another transaction to pull virtually all of my funds out of the equity markets will occur within the next two weeks. The person who thinks he cashed out too early may be the person who preserves most of his wealth.

(Mon Jun 30 1997 21:59)
@Japan / Bonds
Last week I wrote to a friend that the implications of Hashimoto's remarks were "staggering". Well, I am here now to say that I take it all back. It took me several days of reflecting to come to the conclusion that the worlds markets came to almost immediately: that his comments were rash, unprofessional, and downright stupid. This country that produces nary a barrel of oil nor an ounce of gold, with China breathing down their neck, is going to bring the US quaking to its knees with its threats to sell our bonds, which they apparently have been buying as a favor to us, simply because we want greater access to Japanese markets. How incredibly weak and revealing his comments were! I'm sure Clinton and Rubin told this guy to stuff it. Perhaps in addition to subsidizing their defense, securing their oil supplies, and granting them nearly unrestricted access to our markets, ( which is not reciprocated ) , they would also like us to just send them cash. Japan has far more to lose in this game than the US does. I think Hashimoto has damaged them immensly, in a political sense. If Japan were insane enough to carry out their threats, two things would happen. First, they would find the US economy to be remarkably resilient, ( unlike Japan's more restricted, centrally controlled economy ) , and second,

(Mon Jun 30 1997 22:01)
@got me again
.....second, The US Congress would see to it tha Japan never imported another automobile into this country again. Detroit would never have had so many friends in Washington.

(Mon Jun 30 1997 22:20)

Of course, for all this to happen, we'd have to avoid a Dow crash,
which everyone on this channel knows is going to happen in August
or September.
See: than those South of the Border billboards.html

George s. Cole
(Mon Jun 30 1997 22:30)
gold bear
MOREGOLD: No doubt there will be many mine closings if this gold bear continues much longer. I find it hard to believe the CBs and their allies would want to push bullion down so much as to virtually guarantee a huge rebound far beyond $400 a year or two down the road. But it looks like this is their goal.

Still think they will not be able to maintain the gold bear once the stock bull ends. But until then I must agree that the path of least resistence is DOWN.

(Mon Jun 30 1997 22:38)
WW: From your post: "My more progressive friends indicated the need to maintain all benefits to the people is what is important in a Marx-Lenin sense." ...... Ignoring additions to the "apparatchiks" fleet of Mercedes-Benz; what on earth could those benefits be?? ..... 5 years in the Gulag, making athletic shoes, instead of 10? ...... Ah, if only Marx and Lenin made sense. An oxymoron, like a loving and amiable wife.

(Mon Jun 30 1997 22:48)
John @Hepcat: John, you're in your 'cups', again, this evening. You know they will just have to increase the medication again. And you were doing so well. ... Lurking and lurking without so much as a fuss. And now. Just look what you are doing! Tsk! Tsk! .... Before you know it, you will be back to where you were in Nov and Dec. Remember?

(Mon Jun 30 1997 22:50)

Does the large scale put buying inform you to 'sell all rallies' or is there something else which colors your thinking. What you describe seems more to me like the capitulation found at the terminal phase of moves, rather than a situation which is unfolding.

Gold hit a low of around 340 a few months back and now we are 6 bucks lower with the dollar commensurately higher and yet the sentiment is radically poorer. Your reports of put buying are reflected in the put premiums which last I looked were higher than the call premiums. This is a significant change in the market structure and one that my casual observations have not seen since the bear market began almost a year and a half ago.

One thought that occurs to me which could have a salutory effect on the price of gold absent any wars or financial conflagrations is that the countries which are major gold producers may endeavor to do something to help out their mines. Rather than see their industries be decimated perhaps a little government intervention in the form of CB purchases may be in order. Since it appears that everyone wants to devalue their currencies why don't they just print some paper and buy some gold. Solves a lot of problems with ease.

A Loving and Amiable Wife
(Mon Jun 30 1997 22:54)
Earl: Ouch! Have I become an ox? A moron? If you cut me to the quick, do I not bleed? O how sharper than a serpent's tooth it is to have an ungrateful husband. Only gold is crueller. How has one hurt you so?

(Mon Jun 30 1997 23:00)
George Cole: Per your last post: I don't think it so much a conscious effort on the part of the 'powers that be' so much as it is the invocation of the law of unintended consequences compounded ( aided ) by ancillary forces that think that "if some is good, more is better". The entire climate surrounding the "grim stuff" has been so degraded that it is inevitable, IMO, that only production cuts and a severe widening of the spread between supply and demand will begin to ameliorate the situation. Ignoring, of course, the usual caveats regarding wars, acts of nature and other such unpleasantness.

(Mon Jun 30 1997 23:02)
George S. Cole:

Perhaps it is that the stock bull is already over. We have been looking for one more good rally so that we could establish a short position. Each day I watch, I see what looks like is going to be a move back to the highs and beyond and then failure. Todays action was typical of a failing market. Early decline on news, rally all day, sell off at the end. The actual amount of time the stocks spent going down was miniscule yet the result was down. This is the worst kind of action possible. With everyone complacent about rates, this Thursday's unemployment number may catch a lot of folks off guard. Due to very large seasonal adjustments in May the number was within reason. This month there will be payback on the statistical side. If we get a big headline number, it could be lights out for the bond market. Stocks will follow.

Because we are not yet short this is a high probability event. If we do manage to get short over the next two days rest assured that the bull market will continue. Our biannual sacrifice to the S&P gods is due. We do not want to offend anyone.

(Mon Jun 30 1997 23:05)
John: You know very well that trying to address 2 posts at one time always confuses you. For the evening, please refrain from doing so. You'll see. The medication will kick in and it will all be better in the morning.

Objective Observer
(Mon Jun 30 1997 23:12)
@ Alleycat
John/hepcat: Sir, a more appropriate handle than hepcat would be alleycat. Your vile and baseless attack on the proven market knowledge of George S. Cole prompt three thoughts to leap to mind. The first two delineate your lack of understanding of the dynamics of securities analysis, and your obvious paucity of character. And the last delineates the bold credibility of Mr. Coles generosity in sharing his market insights and analysis with the Kitco readership.

Alleycat, you very much remind of some unscrupulous Wall Street brokers I have read about. They make an appearance once every 3-4 months. They will tell 1/2 of their hapless prospects that the market will be UP during the next 3 months - and the other 1/2 are told the market will be DOWN in the next quarter. Not surprisingly, these deceitful brokers will only call back that 1/2 which were told the correct market trend. Then, as we have seen today they shamefully reappear to boast: See, I told you so. They offered no analysis, no insights, no logical thought process - just the deception of telling two groups opposite stories.

The second disagreeable thought which your groundless assault brings to mind demonstrates an acute lack of character on your part. Many of you ilk suffer with a malicious penchant to inventing faults in those who tirelessly share their work and competence with others - ON A REGULAR BASIS. Your purpose is painfully obvious: you hope to build your ego by attempting to tear-down or demean the well-deserved reputations of those seers who have earned the publics respect. Alleycat,... thats despicable... and you owe Mr. Cole a public apology.

My last thought reminds me not only of George S. Cole, but also of the many other Kitco analysts who dedicate many hours each month, analyzing and studying the markets - in order to unselfishly share their on-going labors and competence with those who may not have the time nor background to do the work for themselves. Teddy Roosevelt very eloquently expressed what my humble words are trying to say:

It is not the critic who counts, nor the man who points out how the strong man stumbles of where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena; whose face is marred by dust and sweat and blood; who strives valiantly; who errs and comes up short again and again; who knows great enthusiasms, the devotions, and spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement; and who at worst, if he fails, at least fails while daring greatly so that his place will never be with those cold and timid souls who know neither defeat nor victory.

- Theodore Roosevelt

(Mon Jun 30 1997 23:14)
Hi everyone......sheesh...I wish my day job was not so demanding!! I can't seem to find the time these last couple weeks to jump into these discussions. I should get a break in a couple weeks.

Tortfeasor.....loved your conclusion that the Congress won't let Japan sell a car in the US if they decided to dump their bonds! As a matter of fact, when the average Joe figures out what Japan did to his personal finances, he won't be too encouraged to buy, either! And don't forget that the price of oil is pegged to the dollar. If Japan starts dumping bonds, one could see a scenario of a $5 jump in a barrel of oil. That will hit Japan right in the ol' bread basket.

George Cole.....sorry to see you "bummed out" with the current entrenched bear. A few months ago we were all excited about a 10 buck jump! But you realism is refreshing and I enjoy reading your posts.

For what it's worth.....I've started a slow and methodical liquidation of my rental real-estate holdings. For one, I'm just tired of managing from afar; for two, my cash flow just isn't where it should be; and for three, I don't see that market getting any better. Any thoughts on that?

I'm very glad to see some folks admitting that they too are "all in" on the gold market. I hope they are positions that can hold on ( like Mutuals or raw stocks ) . As I've said before, I'll keep boosting up my mutuals in fits and starts as the market lanquishes. Shoot, it's gone down from $8.50 to 7.50 in the last couple months. I hate to see a decline, but love the math when I cost average everything down. Of course, I'm also trying to buy 3 gold eagles a month ( big spender here, eh? [G] However, I just got a new computer, so there goes a few eagles for this month!!

Scotty's recommendation for all.......don't quit your day jobs! :- ) )

(Mon Jun 30 1997 23:50)

the great stock crash of '29 and following depression was planned.

when all the dust cleared from the stock crash, there was a
congressional investigation into the cause. before the report
was completed, the congressman who was leading it was assassinated!
there always has been, and there always will be-------manipulation.

the really wealthy families---multi-billionaires-----------have
through strength of wealth, had the rest of the world in a hammer
lock from the start. the playing field has never been level, and
it never will. the next great harvest of wealth from the working
class is about to get underway. the up-coming food shortages will
fit right in with their taking of YOUR wealth with the second great
stock crash. it has happened before, and it will happen again.

gold at $300.00 or lower? please let it happen in my life-time!
i will scrub toilets and sell newspapers to help buy every last
shard of the glittering golden one! this would be a blessing in
disguise, as are the current low prices.

cherokee!; ) c'mon eagle-eye greenie---raise those rates!