Gold Discussion for Investors and Market Analysts

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(Tue Jul 08 1997 00:05)

i must admit that from all the relevant info i've gained
from this forum, none compares with the 21:21 post with
graphic!!!!!!! thanks to you for your site, and oracle for
some dandy investigative reporting. the graphic is awesome,
and cannot be disputed, as one picture is worth a thousand

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

vronsky and oracle-- you both are to be commended for
allowing so many ( me included ) to stand on your shoulders,
and to see beyond our horizon! knowledge is power, and
kitco is a place of power.

thanks oracle, vronsky, and gsc. now, where is the broker
that laughs every-time i buy gold calls? i'm going to really
make him laugh tuesday. dec gold 400.00 calls for $10.00!
i'll laugh with him, thanks to some power given by some giants!!!

cherokee!; ) a spoke in the great wheel of life.

(Tue Jul 08 1997 00:07)
rally soon
Miro.. I consider that gold is not always priced just as a commodity. It is more or less an inverse measurement of the value of a currency. As the price of gold descends, it means that the dollar has more value ( it takes fewer to buy one oz ) , and vice versa. This applies somewhat to all currencies. The Australian central bank apparently would rather have dollar debt and the interest payment than have gold in the vault. However, now that we are near the production cost for new gold, and considering that gold consumption has exceeded production for the last 8 years, the fundamentals for gold will very soon stop the descent. The values of paper currencies have appreciated about 20% against gold since last year and I don't think that the dollar will go up ( gold down ) much further as US debt continues to increase.

Murray.. I agree with your post. The price of gold has been forced down with so much shorting that it is not the supply/demand for gold that is determining the price; it is a financially manipulated value created by selling of virtual gold which will have to be matched eventually by buying of the same. When the down trend slows and a few shorts cover, there will be minimum sellers and the rally will begin. The stampede to cover will be significant. Predicting the time is not easy.

Can you imagine the effect of one major central bank deciding to increase it's holding of gold at this price? All it would take would be a rumor.

(Tue Jul 08 1997 00:08)
RJ - Re: your 20:26 - Wrong Again! We will not see $275.

(Tue Jul 08 1997 00:09)

Yea, that be 1992 ( Clinton elected ) - from there out you need to watch his lips. Why do you think we insist on such high overseas sales for our government securities ( aka - BONDS ) . Once inflation is kicked in to balance the budget and pay of our dept with inflated dollars - WHO is holding those bags???

Strad Master
(Tue Jul 08 1997 00:11)
Makes no sense!
GEORGE S. COLE, OR ANYONE: I just got through reading your market report over at Gold Eagle and a question struck me. Maybe I'm naive in my understanding, but the price of gold tanked AFTER the announcement that Australia's CB sold off one third of its gold. If that is so, it would seem to me that the sale price had already been absorbed into the general market price and should have no effect either way. I other words, it is a fait accompli - the Aussies sold it, someone ( Koreans ) bought it. So what? Why should the price drop unless that isn't the real reason?
Along those lines, my wife, who is pretty good at TA, had been looking at the gold and silver charts for weeks and discerning a big descending triangle which she interpreted as extremely bearish. Sure enough! She bought a Gold Short about $20 ago so at least we're making a little on this move. ( Unless we screw it up! ) If her interpretation was right ( as it appears ) it was there for all to see!

(Tue Jul 08 1997 00:11)
Advertising message deleted......

(Tue Jul 08 1997 00:24)
How many have ever questioned the independent validity of $800 gold in 1980? A moot question now, perhaps but the following chart should at least plant a seed of doubt. ... Would gold have reached $800 if the Hunt Bro's had not been driving silver up to unheard of levels? What if silver had only reached $10 or $15 per ounce? Would gold have then reached $800 without the auxilliary help provided by silver?

I think it's an important question if some would project a future in the thousands for gold on the basis of a slim moment in 1980.

(Tue Jul 08 1997 00:25)
You're probably right
Mooney - I guess I could be wrong. It will probably blow right through $275 on the way to $250. Just wait until the Swiss and Germans wade into the fray. There will be no bottom. You will be paying people to take that ugly yellow crud off your hands. Doesnt anybody here realize that gold is only worth as much as people think it is? Apart from this crowd, they dont think much of it.

(Tue Jul 08 1997 00:29)
PS - Werent your telling folks to buy gold from $340 + ? I've been short the whole time. Covered a bit early, but who can pick a bottom, Oh, that's right, you can. So Tell me, where is the bottom now? Maybe you would like to buy some gold now. I know some Europeans who would oblige. Hell you can have mine for a halfway decent offer. I'll buy silver ant platinum with the $.

(Tue Jul 08 1997 00:31)
Like someone who has consumed quantities of libation, world
economies are on the verge of a deflationary hangover.
Where there is massive, uncontrolled debt, there becomes no room
to create more debt and the train stops and economies slump.
The current drop in gold prices indicates irrational motivation
to preserve the trains momentum. Additional, creative motivations
have and will continue to occur to escape this great the debt noose.
You see, debt serves a great purpose provided it does not get out of control. Unfortunately, the noose is around many necks.

(Tue Jul 08 1997 00:43)
Show me the $
Mooney - Spent some time reviewing some of your priors. You have been a wonderful cheerleader for gold, but your pom poms are becoming a bit frayed. I will stand by all my priors if you stand by yours. Who would have made more $ ?

(Tue Jul 08 1997 00:59)
and you think you have it bad
Looks like wild inflation has started in Thailand following the devaluation of the Baht last week. Perhaps some wise Thai's will be buying gold to help prop things up? Remember, you heard it here first!! :- ) )

(Tue Jul 08 1997 01:03)
Russian economy....
The Rooskies don't have it much better than the Thai's. But then, they don't have any gold left, either.

(Tue Jul 08 1997 01:04)

I for one can't believe that the real Mooney and the real RJ are
having this conversation. RJ has the feel of the right RJ and the
timing is right, but he is generally more eloquent out of the gate.
Mooney would have to be crazy to attack RJ so openly.
Not that I don't trust either of you, but can you give me some
distinguishing features?

Everybody - One of the reasons why I stooped so often to
provoking people on this site ( not the main one, but one anyway )
was in an attempt to distinguish people posting with their real handle
from people who had appropriated someone else's handle.
Also, I wanted to see whether I could identify interesting "generic" posters
( Lurker, Another Lurker, LurkerX ) from their "heat trace". It seems
to me that people have trouble keeping up an act when they are
angry. Anyway, I proved to be no better than just random guessing
at unmasking people, so we'll write that one off as a failed experiment.

(Tue Jul 08 1997 01:09)
$1,000,000,000,000,000,000,000,000,000.00 Gold
Earl - I agree that any talk of 1979 - 1980 is as relevant as talk of 1929. The unheard of prices of gold, silver, and platinum in 1980 were an aberration, a feeding frenzy in which the vast majority chased the market and lost their collective shirts. I find it interesting that the champions for 800 - 1000 gold, are the same who warn of the unheard of highs in the equities. Sounds like Deja Vu all over again

(Tue Jul 08 1997 01:14)
At least Gold is heading in the right direction at the moment! 320..

(Tue Jul 08 1997 01:15)
Anyone doubting any post with RJ attatched - I have reviewed them all - Feel free to e-mail me in private. I need no masks, nor do I need defenders. I do well to stand on my own.

(Tue Jul 08 1997 01:16)
Chris Sun, where do you get that figure of 120000 metric tons of gold from?If ever that much was produced it certainly is not available for trade,more certainly not, unless you kill of all the woman folk in the world and what would life be without a woman to boss you around? I bet there is not much 'free gold' in the trade channels other than CB's and most of that is political and as such limited too.Just read John Kaplans site today and see what the fight is all about:the shorts against the commercials and I don't care if they kill each other.If the gold comes down another step I just enter the fray and buy gold and feel rich for a while,if the gold does up,well that is good too,as I own shares in juniors with a lot of gold in the ground.I just can't loose!Just watch the fun and enjoy life.

(Tue Jul 08 1997 01:38)
RJ: I thought that one would catch your attention. I agree with you on the action of that period and its irrelavance to today. I was also prepared to argue with you on your 'two seven five' and reiterate a comment from earlier today. That gold would hold at long term lows of $320. That was until reading Oracle's #3.

Should the world's "smart money" conclude that it is time to take the foot off the throat of the gold market, in advance of severe currency turmoil; a sharp - "shake the tree" - drop to $250 would likely impress all, save those with a wooden post in their heritage. Even us diehards.

(Tue Jul 08 1997 01:41)
while I think anyone who thinks that gold has bottomed for all times at 319 is a complete jackasss I still believe that at least 10% belongs in every balanced investors portfolio./

(Tue Jul 08 1997 01:45)

Selby: I'm the Jack of the ( 19:13 post ) and ask if at any time in history; anywhere, if there has really been any harmony, either political or financial.
My point, is to be aware of what the powers are up to. Their methods have always been to rub one group against the other and thus create the fireworks that lead to their own dominance.

(Tue Jul 08 1997 01:45)
John @Handles????: Coming from someone who has displayed more handles than a fat man's casket; your concern for imposters is somewhat misplaced. Egads John. On you, righteousness is an ill fitting garment.

(Tue Jul 08 1997 01:52)


with the confession still fresh, there should be
a vote by all. a vote relegating 'it' to only
participating as a reader, not a poster.

(Tue Jul 08 1997 02:02)

you were too harsh! you should have left-out "complete."

(Tue Jul 08 1997 02:09)
(not Reify, he's a different guy)
Just been lurking the last few days and really enjoy the comments from the gold bugs. I never realized there was a group with such a passion for the yellow stuff, it's ( currently ) like rooting for the Cubs or the Red Sox.

I'm a trader, a pretty new one at that, and I have no particular wish for gold to go up or down, just that I am on the correct side of the move.

The trend IS down, but I see a few factors that warn that the bottom, if not in, is close.

All have been mentioned here in some form, but I'll try and be brief and tie them together.

1: The commercials are major net longs. These guys are in it for the big move, not the ticks. They can't buy 50,000 contracts at a time because the market would jump away from them, so they have to start buying before the bottom, and they have the deep pockets to handle an overshoot on their projected bottom.

2. The newspapers. The news is that gold is going down. That means every Tom, Dick and Mary who hasn't been paying attention is going to try and get on board with the down move ( I suspect the last two days have seen that. ) This sets the amatuers up for the whipsaw, and panic covering.

3. Open interest in Gold Thursday INCREASED ( 11,000 contracts - a full 5% ) - which means that was NOT panic selling by the longs ( closing contracts ) , but MANIC selling by the new shorts - and there were a lot of people happy to buy at those prices.

4. Divergence in the Bonds/S+P. Other indicators to me say tht the S+P is topping ( at least short term ) within a week or two. This will probably be the news that sets the weak shorts scrambling for cover, and has been mentioned, the longs will sit with their arms folded and watch the price go sky high.

I suspect that the bottom will not be a spike, it will take a couple of days, unless the S+P goes before the bottom starts to form.

As for me, I'm covering my shorts tomorrow, and will wait for the breakout to the upside before jumping in the other way.

Good Luck.


(Tue Jul 08 1997 02:10)
A Bit-O-Prose
As is so often the case with blowhards, when called to task, they content to hide naked in their raincoats as they crouch in the bushes with perverted hopes of flashing their brilliance.

Hows that for some eloquence? Not bad thinks I.

(Tue Jul 08 1997 02:16)

welcome back! how much did you make in beans?


you having ted withdrawl yet?

Strad Master
(Tue Jul 08 1997 02:18)
REIF: Welcome onboard! A most lucid and informative post! Thanks for sharing your thoughts. We can use a few more here who don't care which way the prices go so long as money is made in the process!

Strad Master
(Tue Jul 08 1997 02:21)
The wordsmith strikes again!
RJ: Loved your 2:10 Bit-O-Prose! To whom was that directed? I want an autographed copy of your first book! BTW, do you have a downside price target for silver?

(Tue Jul 08 1997 02:34)
@G/S Ratio
IDT: You may have it here with 313 gold and 4.29 silver. Still, if there's one metal more likely to hold than the other, its gold, as Armstrong sees this ratio ultimately heading way higher, way up beyond 100, up to 150.

(Tue Jul 08 1997 02:35)
Will we see $250??

1. It would certainly set an important base for a big move.
2. Long term support is just waiting to be broken.
3. What does long term support mean in a bear market???
4. It would not allow harvest of the spec shorts who would scale out on the way down.
5. Would it improve the gold lessor's prospects for getting their gold returned?
6. From anecdotal comments this weekend it would absolutely shake loose a lot of gold from weak hands and improve the prospects for #5 above.
7. Stocks like ABX have not had a good shakeout in their entire existence.
8. No help from silver IMO. Silver was $4.00 in the late '70s. It's still $4.00. .... At least gold is not at its late '70s price of $120. Yet.
9. If the Japanese have a problem with being short PGMs in a tight market, a discrediting of all PMs would likely help their position.
10. If the world will begin "disintermediating" ( love banker's words ) US debt, a thorough savaging of PMs would give CBs some extra wiggle room. ... A "burn their butts", so they won't touch it, strategy.
11. Events may make all manipulative gold strategies nonstarters. ie, market meltdown. Problem is: a market meltdown takes time to develop. $250 gold is just around the corner. A dozen 6 buck days and there you have it.
12. It would hurt the mining industry. ...Employing a tiny fraction of voters and the 'greens' would love it.

#1 reason why it won't go to $250: It would likely irritate, disenfranchise and otherwise injure, millions of well meaning gold bugs everwhere.

(Tue Jul 08 1997 02:39)
Jack to Jack

Jack ( 20:06 ) Keep buying that silver metal, it will definately help Prime Resources a bit in the long run. Can't believe that digital photograpy will take the upper hand for a long time to come. It's a big world, some of are poor and others like quality. Then I have the archaic belief that silver is money.

(Tue Jul 08 1997 02:44)
Reif ( not Reify ) : I second Strad's comments and retract my earlier post. It was that late hour serving of fruit cocktail that made me do it.

(Tue Jul 08 1997 02:45)
Silver up, gold down.
Strad - A shot in the dark. Anyway, I still like silver here, bought some more today. I think the commercials will stock up at this price. Look out for Kodak. Reif seems to have a very good handle on things. This guy has been around a bit more than he lets on. I wish I still had shorts to cover tomorrow. Hey Reif - where for art silver??

(Tue Jul 08 1997 02:51)
Jack to Jack

Jack ( 20:06 ) Keep buying that silver metal, it will
definately help Prime Resources a bit in the long run.

Can't believe that digital photograpy will take the upper hand for a long time to come. It's a big world, some
are poor and others like quality.

Then I have the archaic belief that silver is money.

Futures and options are scary - my last paragraph touches on that.

Can you believe, that with the stated shortages, that it can be driven to lows eqiuvalent ( inflation adjusted ) to those of the mid sixties?

(Tue Jul 08 1997 02:53)
Cherokee: If you still be up ( as in awake, that is ) ; do you see the grains beginning to form a bottom here somewhere. Looking at some long term charts the past few days, they are approaching some major lows.

Reif: If you're still lurking. What markets do you trade?

Strad Master
(Tue Jul 08 1997 02:59)
Difference of opinion
RJ: Today my broker unhedged 30 bars of silver to the downside and those have made 15 cents. He wanted me to pour more money into the pot to short another 10 bars but I declined since that strategic tack has ALWAYS resulted in disaster. His downside target is 3.70. My opinion is more in line with yours, and depending on what happens tomorrow I may try to cover those - if he'll let me.

(Tue Jul 08 1997 03:35)
It took character

It took character and a huge pair of cajones for Prime Minister Hashimoto to make his now forgotten statement about selling US Bonds and buying gold.
Perhaps Japanese exports to the US would have suffered if Japan did such "with their own money" and the value of its US bond portfolio will/may suffereds - but what else is new.
It's a big uncertain world no matter how we look at it.
I respect Mr. Hashimoto much more than most of our own leaders.

(Tue Jul 08 1997 03:35)
Really just a new guy
RJ and Strad: Thanks for the compliment but lest some here think I REALLY know what I'm doing or talking about, I have been at this less than a year. I have, however, ( hopefully ) been paying attention to people a lot more experienced and so I can talk a pretty good game.

Earl: I trade all the major ags and mess with the metals ( probably too much to follow - see? - amateur. )

As far as silver goes, I think it will follow gold, but not to the extreme because the small specs have not been selling like they have the gold, so there won't be as many to cover going back up. We'll have to wait until the open interest comes out tomorrow, but I suspect in contrast to gold there WERE a lot of weak longs shaken ( not stirred, Roebuck ) out Monday ( although not Friday ) in Silver. ( I haven't figured out yet why there always seems to be about 20,000 net long small specs, regardless of price flux. Maybe a lot of small dealers? ) . I try not to pick bottoms' and tops' prices ( although I am still guilty of it more than I should be ) but I suspect time wise gold and silver will put in the bottoms in the next two weeks. The theory is if you can get in on 70% of the trend, you don't need the 15% on either side.

Disclaimer: This commentary is free; sometimes you get what you pay for.


(Tue Jul 08 1997 03:39)
Sorry, I meant RoeBEAR, not Roebuck.


Strad Master
(Tue Jul 08 1997 03:57)
REIF: For a newcommer to this game you sure seem to know a lot. Wish I could have absorbed so much in so short a time. I've been at this for a bit more than a year and still manage to lose more than I make but insist on persevering, nonetheless. Us novices ought to stick together. I look forward to sharing information. E-mail me if you feel like it.

(Tue Jul 08 1997 03:58)

Hi all. I have read here for about 6 months. I haven't seen any thing like these last 3 days in a market since the Crash of '87. The shocked, disbelieving stares. The fear and denial. People clamouring to sell their stocks at the panic low. This gold market does not look like a bubble bursting. The bubble is elsewhere--currencies, derivatives, and Government obligations. Have these gone away since last weekend? Are they getting better? My plans are to continue to buy the PM sector at these bargain levels. I believe that strategy will be well rewarded. Good night and good fortune.

(Tue Jul 08 1997 04:21)

Just heard PRI may be on its way to defeat for the first time in modern Mexican democracy. The political shifts continue apace.

(Tue Jul 08 1997 05:14)
Bleeding heavily
Reported in paper today that George Soros predicting imminent collapse of stock markets. Must be long on gold?

(Tue Jul 08 1997 05:30)
@who crashed my puter
These events unfolding before our very eyes are about governments
manouvering for more economic freedom. Unfortunatly time will show
that Central Bank sell-offs will only lead to economic weakness. Has
Australia just sold its soul to the "The Great American Economic
Machine"?.The Aussie dollar seems to be following gold down at the moment
and one has to wonder whether there are a few in the RBA keeping their
fingers crossed that the dollar doesnt fall below 74c. Who's been blowing
in the ears of the weak Australian leadership? Is the 2.1 billion going
to be pumped into the US economy, and is it a form of protection payment? US forses have been getting used to the Aussie terrain and coastline,although Ross River fever gets them every time,and could we
see an increase in US presence here? These and other questions will no
doubt be answered in time.
Just remember everyone the Liberal Government of Australia stepped
out of the fifties and about all they can muster is Bo Peeps Sheep.

(Tue Jul 08 1997 06:09)
BAS: The Soros name can probably do it just by thinking out loud.

(Tue Jul 08 1997 06:52)
Nice post, KHH. My question: Did we ever really make it out of the 30s depression, or did we just paper over the problem? Is there really all that alleged health in today's economy? During the alleged roaring 20s, two banks failed every day. Where's the "bubble"? Is it in the precious metals, or in the international economy?

Bob A
(Tue Jul 08 1997 07:14)
at work
to BAS I'd like to read what G. Soros has to say, which newspaper please?

(Tue Jul 08 1997 07:42)
My first time on-so here goes.Well its been another bad day on the Aussie Gold Index dropping more than 8%.I'm hurting and so are many others.But speaking with brokers the majority of selling is forced selling due to heavy borrowings.In fact in the afternoon brokers reported bargain hunters coming in and picking up the very shares forced sellers left behind.
Everyone seems to be worried about more central bank selling.I cannot see it happening while the price is dropping when if you are the holder of tonnes of gold you are only going to kick yourself by driving the price even further down and therefore defeating yourself.What happened to the old adage of buying in gloom when everyone else is scared and panicked.I bought Lihir Gold Mine at $1.72 this morning when everyone was shitting themselves and they finished at $1.85.

By the way whoever is buying the so called crap gold must be confident of the future.Can anyone tell me who is buying it?

(Tue Jul 08 1997 07:51)
Gold down $40? I can handle it. PM stocks off 30%? Hey, pour it on - I can take it. Only 3 posts on Kitco in over two hours? Now _that_ bothers me.

(Tue Jul 08 1997 07:54)

Front - re your comments on the the digitising ( is this a word? ) of photography and the impact on silver usage. As you mentioned, one of the major benefits of digital cameras and video is your ability to subsequently transmit the images electronically and instantaneously to anywhere in the world. I can take a photo in Hong Kong, down load it to my PC, and within a few minutes my friends in Australia can be viewing the picture on their colour monitors. This new technology is not likely to significantly affect the demand for silver during the next 12 months, but it will completely alter the supply/demand dynamics of the silver market for all time.

RJ - I too am interested in why you are buying silver at the moment. As Mooney stated, this appears to be in total contradiction to your trading philosophy as previously outlined by yourself. Also, at what point do you admit a mistake ? When it goes below 4.00, or below 3.75, or 3.50 ? I'm genuinely interested.

(Tue Jul 08 1997 07:54)
whose money is it, anyway?
Strad: If he'll let you???? NEVER let a broker tell you what to do.

(Tue Jul 08 1997 07:57)
HI Cherokee, I'm doin' fine looking for a bottom now in grains, started
doing the daytrading SP 500......GOLD? boat sank & I ran out of paint to keep changing the waterline, currently welding up a submarine
to do some deep diving in the metals, HOW BE YOU?


(Tue Jul 08 1997 08:00)
Joke of the morn
Well, it looks like continuing bad news for my faltering options in gold and silver. Methinks that we stand on the precipice of big doings in the world and that the result will be a lot of people in the condition which we gold bugs find ourselves in, i. e. pretty much broke, at least on paper. But then I would rather be broke holding gold than in the same condition holding paper. Here's the joke of the morning for you Clinton haters like me.

A guy is sitting at a bar and orders a drink. At the same time the TV
go's on and there is Bill Clinton about to give a speech. The man
yells," There's a horses ass" A guy gets up and punches him.. And the
man left.. Then when Hilary Clinton came on he said the same, "There's a
horses ASS.. He then got punched again.. So he says to the bartender,
"What is this Clinton country.." The bartender says no, "Horse country"

(Tue Jul 08 1997 08:06)

At the moment, to a man with a hammer everything looks like a gold stock. Oz gold mining shares slaughtered again today. I must confess I couldn't resist the bargains today and jumped in to the market to pick up a swag of Normandy Mining ( NDY ) at $1.23 a share. Who would be stupid enough to sell NDY at 1.23 ? A month ago it was trading at 1.60, already a huge discount to the company's intrinsic value. Oh well, to quote Buffett, you should profit from folly, not participate in it.

Annual results for the 96/97 financial year should be posted for Aust gold companies during the next few weeks. Will be interesting to see how the real businesses are performing. Faced with some hard facts it is possible that logic and common sense will start to replace the current fear and loathing.

(Tue Jul 08 1997 08:39)
Sorry to inconvenience you all, but as a condition of continued participation in this forum you are required to read the 7/7/1997 2121 post by Vronsky.

(Tue Jul 08 1997 08:55)
Glamis Gold cost of production US$257 as of 3-31-97. Down from US$320 same period last year. Must be doing something right. It hardly slipped yesterday.

(Tue Jul 08 1997 08:59)
Milhouse I agree with your 07:54, will try to dig some figures for timing ( hopefully future ) that fundamental s/d shift.
Kev Welcome back. Reif Welcome Aboard, Roebuck was very close. Ted when are you coming back, look what happens when you are gone!

(Tue Jul 08 1997 09:01)
Oracle's views are again presented with detailed finality. I fear he is within $50 of being right. Back in the fall of '96 he was within $110 or so of being right. Once the allure of US paper is lost in the eyes of those who hold and more importantly continue to buy US paper--what a mess we will see.

(Tue Jul 08 1997 09:02)

I think I take gold off Diet now. I will to feed it much dollar. hahaha

(Tue Jul 08 1997 09:03)
Dead cat bounce or a rel ralley?

(Tue Jul 08 1997 09:04)
Hey, EBN says spot gold up $3.60, Silver up $.07.

(Tue Jul 08 1997 09:08)
@second place
IDT You are fast, related to Speed?
Panda Where is my morning newsflash, I miss'em!
All My family thinks monitor is permanently attached to me head!

Charleston Goldbug
(Tue Jul 08 1997 09:09)
@GoldBug Ave. Sullivans Island
It is my understanding that Soros said the large number
of inexperienced investors COULD, not would, precipitate a crash.

It is clear from the trading pattern of my customers ( I
am a broker ) , people are buying momentum stocks or funds and
have no or little interest in value or dividends. As soon as the bog mo stocks falter, we will likely see a very large selling wave in
the large cap stocks.

The persistent drop in gold is certainly the result of large scale
liquidation of holdings. The question is why? There must be some major
liquidity problem in the world financial markets behind this.

(Tue Jul 08 1997 09:10)
Roebear: Distant cousin but this part of the family calls him Pokey.

(Tue Jul 08 1997 09:10)
Consider the following sequence of events: ( 1 ) Hashimoto statement at Columbia; ( 2 ) Fed decision to leave interest rates alone; ( 3 ) collapse in gold market. The Fed could have helped the Japanese by raising interest rates, but did not do so. Did it help the Japanese by promoting a sharp decline in the gold price? That enables the Japanese to diversify their reserves into gold without having to unload enormous amounts of US Treasuries; it protects the US stock market, which is hypersensitive to a rise in domestic interest rates; and it strengthens the dollar, as Japan desires. Could there have been an agreement between the US and Japan to lower the gold price to a point at which Japan would need to sell only a specified quantity of US paper in order to accomplish its goals?

(Tue Jul 08 1997 09:11)
MILHOUSE: The bulk of photos taken are family snapshots that people pass around at the next picnic. They still want that. Digital cameras cost $1000 or so now, much cheaper later but it will be awhile before they compete with a good quality family type 35mm at $100-$150. Do they use silver to make the prints from a digitized image?

Lady Macbeth
(Tue Jul 08 1997 09:23)
Out damn spot
USA Today / Crystal Bay / EBN / Kitco:,31

(Tue Jul 08 1997 09:25)
Roebear -- I have gold disease problem, need to find my Prozac, just like da Wall Street boyz. Don't worry be happy... Where in the hell is that bottle! :- )

What was the '49rs tune, California or bust! Hmmm, I understand the latter now.

This is it for the PG metals, delivery is supposed to take place this week. We will see what we shall see!

(Tue Jul 08 1997 09:25)
the Digital Photographer !

Donald, In Hong Kong today you can buy a good digital camera for around US$500. They should be down to $300 within 12 months. BTW - have you played with a digital camera ? They are wonderful toys !
Regards, Milhouse

(Tue Jul 08 1997 09:32)
EBN 321.45 up 3.20, silver 4.38 up .09. Panda, I feel your pain! But we must carry on and the best medication in bottles comes from Tennessee.

(Tue Jul 08 1997 09:33)
MILHOUSE: No. I have a Leica CL in the shop for repairs. After deflation I will get the digital type.

(Tue Jul 08 1997 09:33)
Peter Munk, Chirman ABX was on CNBC. He says this is the time for serious wealth creation in the gold market. He feels present volatility due uncertainity over new European Bank's policy on gold. Expects that to be resolved in 6 to 9 months. Meanwhile, nothing wrong with supply and demand situation. Demand increasing throughout the world, supply shrinking because of shortage of funds for new exploration and development. Said gold has been around since Cleopatra and not likely to go out of fashion in our lifetimes.

(Tue Jul 08 1997 09:34)
Earl - I thought we were on the road to assuagement. But you are right.
I have used a lot of handles. Not so much on this channel, and not
so much of late. On SI, I had to keep using them every time I was disconnected.
Now I can't post at all without paying $75. ( Well, I could, but it's not worth
the effort. ) Everyone who was a member prior to 1997 was grandfathered in.
I was a member prior to 1997, but, well, you raise some questions about
somebody's Flag, and that's the thanks you get.
I didn't say I was complaining about other people using multiple handles.
I certainly wasn't the one who started it. I guess I got a little disillusioned
when I discovered that the same person would pose a question under
one handle and answer it under another. I certainly didn't do a good job
( or even attempt to do a good job ) of disguising myself. As I pointed
out before, you don't even have to examine what I'm saying, only the
placement of the hard returns, to tell it was me.
I would be the first to recommend that Bart institute a policy similar to SI,
where a person is forced to have a certain handle when they enter a comment.
Unfortunately, even that system is easily surmounted ( as I demonstrated ) ,
and so the multiple handle problem wouldn't go away, in fact, it would only be
exploited by people who could post under multiple handles.
The fact is, Bart hasn't instituted that policy yet, and whether it is because it
is difficult technically or some of the long-timers convinced him it wasn't a good idea on the last survey or whatever, the current situation is controlled chaos and
the alternative is a controlled chorus. Would you be able to turn a phrase
like "more handles than a fat man's casket" if you didn't have someone
like me at this site?
I have quieted down measurably over at K-2, and only started reposting
( under my real handle ) once RJ2 came back on ( under a different handle )
and started cranking up the projector. I have made it very clear over there
that I am derivative, that every one of their posts elicits one of mine.
They have a mission, why am I not allowed to have one?
Be careful what you wish for. A site where everyone must toe the party
line is a pretty uninteresting place. The true experts here would not tolerate
my boorishness for more than a couple days, they would form their own
chat group or communicate by E-mail. A lot of what is posted here
is by people who enjoy the sound of their own voice ( myself included ) .
Set the K-1 time traveler to any day in any month and see if the same things
aren't being posted about the bottom being just around the corner by the
same people. So if we're going to restrict it to level of aptitude, I should
hardly be the first to go.

(Tue Jul 08 1997 09:56)
Wet streets cause rain

To : Vieserre ( 7/7 23:46 )

I read Gene Epstein's article at the time it was published, and I remember thinking that he couldn't be serious. His hypothesis that rising prices CAUSE an increase in the money supply seemed like a joke. I've just re-read the article - here are some points :

- he states that the Fed expands the money supply by reacting to the increased need for debt. His point is that if prices are rising, business needs to borrow more to meet its obligations ( note - he doesn't say what would have caused the prices to rise in the first place )

- he then goes on to contradict himself by saying that money is printed to pay for the cancerous growth of govt and monetary expansion is carried on through the Fed purchase of treasury securities

- towards the end of the article he reiterates that an increase in the money supply is caused by increasing prices of oil, food and medical supplies. Once again he doesn't explain what caused the prices of these goods to rise in the first place and I would also like him to explain how the rate of money supply growth has increased even further during the last 6 months without any increase in the price of oil, food and medical supplies.

- perhaps the greatest of all contradictions is his admission that prices would not rise if we had a stable currency such as gold.

It is not just common sense that increasing the money supply will lead to higher prices. It has always done so in the past. Why is it so different this time around ?

BTW, it seems unlikely that the Fed does not use M3 as a measure of inflation, knowing what we know about AG, but the financial media certainly seem to be ignoring it. The Fed does not operate independently of politics and will therefore choose inflation as the lesser evil, even if it only provides a temporary reprieve. The financial press won't notice the high money supply growth rates until its effects are very obvious.

Regards, Milhouse

(Tue Jul 08 1997 10:06)
@..Strad Master's 00:11 point and question; Peter Munk's view and Gold Management - generallly
Agree. The OZ sale was conducted ( I understand ) over the previous six months and the supply was absorbed without material affect. The recent announcement confirmed the sale 'and then the price tanked'. Your wife's TA indicated a bear triangle pattern and the actual downdraft was sponsored not by the fundamentals ( demand / supply of gold ) but by speculative derivative traders who command the gold market. Other informed posts ( Reif ) had indicated that the commercials are net long and the Tom Dick and Mary's ( retail crowd ) have jumped on the downhill ride late in the game...they may be covering as I write.

Peter Munk ( CEO- ABX ) seems to be saying that he's not worried about price since ABX hedged 7.5 m.ozs. at avg. $420 until year 2000 and the company is lowest cost producer ( $200 ) . Great Peter, let Rome burn and see what price ABX shareholders get 'after' cashflow is discounted beyond year 2000. ABX share price isn't dropping only because of the current downdraft in gold price but also for the impending expectation that a contango trading range would settle at historically low prices going forward.

But why should Peter Munk be concerned ? He is a Big Time multimillionaire with a diversified portfolio of real assets - oil, real estate - and the goose that lays the golden eggs ( ABX ) had already made him his initial fortune.

The attitude of Gold Management during this Mother Bear speaks volumes.

For example, the management of BGO tried to slip in a management bonus option scheme to inflate shares ( fully diluted ) by about 10 million or so from existing 108 million. These programs are floated each time the stock tanks. It's a great business - the management gets paid big salaries, bonuses, and low strike options while the shareholders watch their NAV's erode through management strategies to steal more of the equity each time the stock tanks.

Finfing gold requires more luck than technical wizardry. Gold Management's role is to increase "shareholder" value not to line their collective pockets with shareholder "capital".

Call your Investor Relations dept.'s and tell them to keep their greedy hands out of the treasury and off the shareholder's equity !



(Tue Jul 08 1997 10:14)
Princeton Economics
Milhouse : Out of the services offered by Princeton Economics which ones do you find the most useful.

(Tue Jul 08 1997 10:14)
Warning sounds in London, Economic Mess in France, Recessionary Trend in Australia & Financial Crisis in Far-East, ALL BODE ILL FOR U.S. Stocks. Looming Crash heralds Gold & Silver bull market:

(Tue Jul 08 1997 10:19)
TO Donald, REIF, RJ

No, they don't need the photographic paper so the Silver isn't necessary to print pictures of excellent quality from a computer. All you need is glossy paper to print on in a colour ( even a bubblejet, not necessarily a lazer, but it helps ) printer. Nothing special. Milhouse is right of course. The immediate to 1~2 years demand for Silver will not be hurt by digitization techniques however, it's the thin edge of the wedge for the need for Silver in photography. Digital cameras are at the $1000 dollar range, however Video cameras are in the $400~1000 range. That makes the choice between an expensive 35mm and a video ( loaded with extras ) a non brainer.


Your 02:09 was excellent. Welcome from Canada as well.

RJ: ( :- )

Now how would you know all about guys in trench coats hiding in bushes with nothing on underneath? ( :- )


(Tue Jul 08 1997 10:31)

NJ - I am not interested in short term trading, so I just subscribe to their monthly publication called the World Capital Markets Review.

(Tue Jul 08 1997 10:36)
Milhouse and Vieserre : In his July forecast Stephen Leeb argues that inflation in 1997 is now a given. His reasons are, 1. Wages are rising at the fastes pace since the 1980s. 2. Global pressures under commodity prices. While demands are rising supplies are tight. 3. Forget the " Balanced Budget". Politicians have taken notice of the Republican party's decline in poularity to the exact day Newt came out for benefit reductions.4. Greenspan won't dare stop inflation now. Reason, a terrifying stock market collapse would savage not just the Wall Street, but Main Street as well. It will make instantly make most Americans feel poorer, and that would throw the economy into a devastating decline-a recession or maybe even worse.

(Tue Jul 08 1997 10:41)
"The way I see it, if you want the rainbow,
you gotta put up with the rain."
----Dolly Parton
RJ - I'll get back to you later, busy today!

(Tue Jul 08 1997 10:41)
"The way I see it, if you want the rainbow,
you gotta put up with the rain."
----Dolly Parton
RJ - I'll get back to you later, busy today!

(Tue Jul 08 1997 10:42)
Earl: ( :- )

Good Morning. Hope you realise that your $320 floor is looking good for the moment. I don't understand though. Here I go and ask you to take back the crown for a short time and loe and behold you "guess" right. Is there some correlation here? Or is it like an oxymoron as in "Postal Service" or "Smart Brokers"?


(Tue Jul 08 1997 10:42)
Princeton Economics
Milhouse : I too am not interested in short term trading. I was debating between the Review and the Armstrong Report. Are his opinions included in the review.

(Tue Jul 08 1997 10:46)
International market pundit Milhouse questions common-sense of Australias CB selling 2/3s of gold reserves at historically low prices. He foresees higher inflation & money supply - see Guest Guru Milhouse:

(Tue Jul 08 1997 10:55)
To Milhouse and Donald

Those prices are not different that Milhouse and I are discussing. Just in different dollars. The $400~$1000 for video is in Canadian dollars. The ~ $1000 for a digital camera is also in CDN $'s. No disagreement at all on the prices....Just to clarify.....


(Tue Jul 08 1997 11:12)

NJ - best thing to do is contact Princeton and ask them to send you a free sample of all the reports. They'll be happy to do this.

GNFN ( Good Night For Now )

(Tue Jul 08 1997 11:13)
gold stocks
Salomon Brothers says reaction to Australian gold sale over done. Sees present situation as a buying oppurtunity. Added several gold stocks to their Buy list.

(Tue Jul 08 1997 11:16)
Front: I would feel more sanguine about $320 if CNBC were not trumpeting major brokerage house buy recommendations on gold stocks, this morning. Somehow it seems like a repeat of Jan. '96 when positive rec's were flying everywhere before the golden nag had even cleared the gate. ...... Actually, it was only as prescient and oxymoronic as "military intelligence". ...... As original as well.

(Tue Jul 08 1997 11:17)
Paul Bagnell @ The Financial Post
July 08 1997- Millions Wiped Off Gold Stocks

(Tue Jul 08 1997 11:30)
To Amateur
Amateur at 9:10 :

I think you're onto something there!
Very, very possible !!!!

Good thinking!

Keep it up.


(Tue Jul 08 1997 11:34)
From reading some of the recent posts, I see we have a namesake, REIF, and he's a shorttermer, good, I'm a long termer.
Then there's Miro, hope I got the name right, he sounds like me, easy does it, keep the faith, etc.

Has anyone felt any shorts being squeeeeezed??? I think I have!!!

(Tue Jul 08 1997 11:51)
Typical Asian sell off at the moment before close. Every day at 11:30 same thing.... NY is quite bullish which is good!

(Tue Jul 08 1997 11:59)
I'm still very long XAU and very short Nasdaq. The fundamentals
are awesome for gold mining stocks and the semiconductor stocks
( except for Motorola, only because of their crackerjack cellular biz ) should get pounded due to weak earnings.
Nice to see my hero, George Soros, the greatest financial mind of our times IMHO, making an "appearance" here and in the press. He calls for an imminent crash of the markets because of the severe inexperience of the investing horde. Usually his comments are self-fulfilling, but the markets are not taking notice, yet. Soon enough.

(Tue Jul 08 1997 12:01)
ALL: Re. new gold bulls Salamon and First Albany. Like I said in a previous post over the weekend. "Greenspan has a price for gold in his head, $500 is too high, $200 is too low. Mabye he picks up the phone and makes a few phone calls to brokers etc".

(Tue Jul 08 1997 12:02)
in sack-o-tomatoes
This goldbug is on the verge of buying some puts. What scares me most is not the *fact* of the Aussie sale, but the Australian Central Bank's statement that it sees no reason to continue holding gold. It is sitting on another 90 tons, and the world's other central bankers are listening.

Tort: Your joke this morning had me in stitches. Thanks. Here's one I found this morning on usenet. Somehow it's relevant for gold, but I personally just can't quite make the stretch.

A lady is having a bad day at the roulette tables in 'Vegas. She's
down to her last $50. Exasperated, she exclaims, "What rotten luck!
What in the world should I do now?" A man standing next to her, trying
to calm her down, suggests, "I don't know... why don't you play your

He walks away. Moments later, his attention is grabbed by a great
commotion at the roulette table. Maybe she won! He rushes back to the
table and pushes his way through the crowd. The lady is lying limp on
the floor, with the table operator kneeling over her.

The man is stunned. He asks, "What happened? Is she all right?" The
operator replies, "I don't know. She put all her money on 29, and 36
came up. Then she just fainted!"

What is a man? A miserable little pile of secrets.
--Andre Malraux

God is dead, but fifty thousand social workers have risen to take his place.
--J.D. McCoughey

(Tue Jul 08 1997 12:14)
@ Contrarianism
I think the time has come to discuss this somewhat counterintuitive concept of the markets -- contrarianism. Contrarian thinking is definitely in vogue these days, with all this talk about maximum optimism/pessimism, put/call analyses, etc. The question is, why does it work. If the press is so negative around a bottom and there are very few buyers, why is it a "law" that the market in question must rebound? Is it possible that there are so many contrarians in the market these days that this type of strategy no longer works, i.e. "the put/call ratio is really high, so all of the contrarians are buying, so I will sell more by being the contrarian's contrarian?" The best mechanistic explanation that I have seen stems from Harry C's analysis, where it is implicit that the large market makers manipulate the markets to cause the maximum number of their sold contracts to expire out-of-the-money.

I realize that at a market extreme most people have been wrong about the direction of the market in the past, but this in itself is not enough to suggest that it will continue to be this way now and in the future. Since many people here use contrarian thinking as a basis for their premonitions of gold market rallies and stock market collapses, it is important to ascertain why this market "law" is valid.

(Tue Jul 08 1997 12:19)
Re: Milhouse, price rises
Milhouse: Here is a rational for price rises causing an increase in the money supply. I am not saying I buy all of it but it can be a consideration. Suppose as back in the 1970s a shock ( opec ect. ) causes a large price increase in a critical commodity ( oil ) . Now if the fed does nothing with the money supply the prices of many other things must fall to make up for the added money now going into oil ( the stock all other things being equal ) . However if the fed adds money in an equal amount as the increased money flowing into oil all other prices can remain the same. If the fed does not add many all other prices must undergo deflation ( which could be hard on the fed ) . Since the whole purpose of the fed is to inflate, they inflate.

(Tue Jul 08 1997 12:45)
THE $85 BILLION DOLLAR QUESTION (Feds 262 million oz. Gold at $325)
Why has the U.S. - fountainhead of antigold sentiment - NOT SOLD any of its gold while encouraging its allies to sell?? - Coles Market Insights poignant question:

(Tue Jul 08 1997 12:53)
The key is the US Bond Market and other bond markets. Rising gold prices would suck money out of these markets when cash is short. Pointcast news reports that physical gold has been short. Gold for delivery has been short and the price has gone down. Robert Rubin's continuing nightmare is that gold price will rise, sucking money out of bond markets and raising interest rates. The bond markets dwarfs all other financial markets combined. The world is running on borrowed money. Australia sold gold to invest in the American bond market. But as Aristotle pointed out one cannot for long pay interest on purely paper money because in one sense paper money doesn't really exist. One can only pay interest on assets. The Central Banks are playing a very dangerous game which could cause the collapse of the world's financial system.

(Tue Jul 08 1997 13:01)
Must read:
Milton Friedman has a must read article on page A14 of todays wsj. I have never seen him so mad. This is a sea change in his writing. In short, he says boldly we are not getting our moneys worth on the 50% of gnp we spend on gov! No minced words. He flat says it!

(Tue Jul 08 1997 13:10)
Just a thought, how many ounces are in metric ton? ( I'm not sure, but I think it is around 35,000 oz. ) If the Aussies sold 167 metric tons of gold, that would be about six million ounces, give or take. The LBMA claims to clear 30 million ounces a day plus other dealings. Conclusion, the Aussies dumped about a 1/5th of a days trading on the LBMA, assuming that the LBMA doesn't trade even HIGHER volumes of gold ( Bullion ) . The NYMEX ( COMEX ) claims about 3million ounces/day in paper. This is something to think about.

(Tue Jul 08 1997 13:15)
32,150 troy ounces/ metric tonne
Panda - FRI

(Tue Jul 08 1997 13:22)
@..Computing Canada July 7th .."Euro currency creating IT nightmare"
"AMERSTERDAM - The European Communtiy's plan to move to a single currency will cost IT departments millions more than what it is costing them to deal with the Year 2000 ( Y2K ) issue."

"According to Michael Donahue, who heads up KPMG Peat Marwick LLP's peoplesoft practice in the U.S., the Y2K issue will seem like a "walk in the park" when compared to what it will take organizations to become euro-compliant, especially for financial institutions."

"Euro conversion is costing Wall Street banks six times the investment of the Year 2000 issue", he said....

..."If you don't get caught in the Y2K trap, you might get caught in the euro trap", Michael Kleman, SAP AG's German director of corporate cross-application marketing, told Computing Canada at Sapphire '97, SAP's recent annual user conference held in Amsterdam."

[note -- SAP is a $2Billion+ U.S. global software provider of large enterprise business computing solutions]


bb fisher
(Tue Jul 08 1997 13:29)
you must remember that the stock in the stock market is only an investment to the long term holder. to the broker, the specialist and the other market makers "stock" is merely inventory, like tires, jars, or size 8 donna karans. STUFF that if you are in the stock business you "move".

So, when 2 stocks like placer dome and barrick gold tank like they did yesterday and trade enormous volume the market makers find themselves with gobs of inventory because the sells way outnumber the buys.

this is mainly the reason this morning someone from salomon was told to shill for these folks. an acute inventory imbalance had to be moved off the shelves. so, with baited breath leanne whatever her name is bit her lip and told the traumatized public to step up and buy gold shares. not just any gold share mind you but the 2 that traded over 6 millions shares each yesterday. the fact that they might or might be good buys at these levels is really immaterial when you've excess merchandise to move. ask any retailer!

it ain't never what it seems, it is usually much simpler!

(Tue Jul 08 1997 13:37)
Dana: Thanks for the comment -- July 7 @ 23:41 !!

Mike Sheller
(Tue Jul 08 1997 13:41)
@uncle Miltie, Digital Cameras
BW: Maybe Milton Friedman read The Astrological Investor. RE SILVER & Digital Cams: I would not go so far as to say it's the end of photography as we knew it, but digital photography is replacing a solid portion of commercial studio output. Catalogs, still lifes, studio setups of all kinds are no-brainers for the Didge. Also, bear in mind the stock photography business, which is becoming increasingly digitized. Instead of making silver-based film, print, or chrome dupes, cd's are increasingly becoming the medium for storage, duplication, and transmission of images for professionals. I would say, just off the top of my head, that silver has already lost at least 20% ( if not more ) of its applicability to photographic consumption.

(Tue Jul 08 1997 13:50) cost stats reported in mid-day NY commodity trade news on Yahoo
"As to supply and demand factors, bullion bankers indicate central bank mobilization of gold reserves is continuing, but at current prices around half of the world's gold mines could be operating at a loss, analysts said.

The average total costs of gold mining, including head office, exploration, depreciation and financing charges was around $317 an ounce in 1996, according to industry consultants, Goldfield Mineral Services ( GFMS ) in a report in May.

But average Australian gold mine total costs were $358 an ounce, while South African mines had average total costs of $334.00 an ounce, compared with $300 an ounce for U.S. mines. "


(Tue Jul 08 1997 13:58)
Stand Master: I got your e-mail message ( it was music to my ears ) . I will try to reply tonight.

Mike Sheller
(Tue Jul 08 1997 13:58)
Re my last post: By "stock photography" I of course mean pre existing, pre-catalogued images that are bought and sold for client use as graphics or illustrations where needed, rather than going out and shooting your own. One could, on a financial site, conjure images of a photographer urging "Now Philip, could you just move a little closer to Mrs. Morris... Great. Now let's get little Microsoft in the picture. Mike?""

(Tue Jul 08 1997 16:36)
Oracle AT JAPANESE SURVIVAL Part - III ( 7 July 1997 )

JAPAN BETWEEN A ROCK & HARD SPOT: Nippons To Dump U.S. Treasuries & Buy GOLD! This report displays the Bank of Japan's ( BOJ ) June 27 Balance Sheet and a chart of Foreign Central Bank Holdings of U.S. Treasury Bonds versus the S&P 500 Index:

International financial analyst, ORACLE, has expanded on initial findings of Barrons Randall W. Forsyth ( Barrons magazine ) and Internets Economist George S. Cole. The Land of the Rising Sun is plagued with financial difficulties, choking on U.S. T-Bond indigestion, exacerbated by a pittance gold position, and a must need to reduce excessive dollar exposure to stabilize Yen/Dollar parity. Due to the BOJs Balance Sheet and the chart of Foreign Central Bank Holdings of U.S. Treasuries, the website is a little slow to fully load - HOWEVER, I GUARANTEE YOUR PATIENCE WILL BE AMPLY REWARDED -- there is a starling revelation of the relationship of foreign T-Bond purchases and the speculative and relentless rise in the prices of Wall Street stocks.

Orson Welles
(Tue Jul 08 1997 16:38)
No Martians today. Maybe tomorrow. Sorry.

(Tue Jul 08 1997 16:52)
Inflation is not dead. Who says so? The Fed that's who.

(Tue Jul 08 1997 17:01)
I propose a poll. Who sold out, who went short, futures, puts+calls, and who bought more. I think this group would make an excellent indicator in itself. I held on gold and silver stocks, almost bought more HL but decided to wait. Did everyone else take their ( remaining ) marbles and go home?

(Tue Jul 08 1997 17:41)
I'm a conservative. I held my position ( stocks only ) .

(Tue Jul 08 1997 17:54)
I sent the broker a check. They'll have to drive the price negative to
stop me out now. Or raise the margin limits.

(Tue Jul 08 1997 19:29)
Roebear, I continue to hold all of my silver and gold call options, although I am feeling rather queezy with the prospects for them. I am not going to sell my gold mutual funds. I am going to be buying $25M more in United Service Gold fund as soon as a note matures on August 1. I am also probably going to buy some more call options. I guess I will live or die by the golden rule. Then that has the gold rules.

(Tue Jul 08 1997 19:30)
@not a good gambler
Roebear: I am holding my position in stocks - did not try to get out.
With my luck I would sell at law and missed the timing to get back in.
The heck I already took the beating so as a good scout I'll just ride it through

(Tue Jul 08 1997 19:32)
That was strange, didn't think that post went through. Hard time posting or reading posts today. Thanks 2weeks and kuston, everybody else, its safe to come back now!

(Tue Jul 08 1997 19:58)
It's tough getting into Kitco today for some reason. At least from here in the west. Have had error messages and no uploads all day. Don't even know if this will post.

Option Man
(Tue Jul 08 1997 19:59)
alias spread man for today
There's a great opportunity here on two fronts:

A. ) Platinum OCT 440 Calls were trading at $5.00 today. I didn't sell any today because I sold them a few weeks back but I would recommend it now as the volatilty in the PL may be beginning to wind down. These options are over $50.00 out of the money! The $5.00 premium is a handout.

b. ) Today I put on a spread I bought the October gold at $324.50 and I sold the equivalent ( in ounces ) of October platinum at $390.50. Why the spread? Because gold is near the lowest its been in one heck-of-a-long time and platinum is near the highest it's been in an equally long time. If this is not an opportunity staring at you in the face then I don't know what is.

(Tue Jul 08 1997 20:00)
Thoughts on Martian Economics
Reif: Your 02:09 post really puts a fine point on the situation as it exists today. Thanks! Of course it is hard to say exactly WHEN the shorts are going to cover.

On a different note I am surprised that Greenspan, et al are not more vigilant in supporting gold. Gold is currently giving a classic deflationary signal. Greenspan knows this. The US is in absolutely no condition to handle any type of deflation. Yet somehow the CB's seem to be trying to grease the skids for gold at every opportunity.

If you told someone 10 or 15 years ago what is happening today they would laugh at you - no CB would tolerate serious deflationary signals with the debt load that the US is carrying.

Steve Puetz may or may not be right but gold is sure acting as if he is. The absolutely astonishing part is that the CB's are working overtime to make it so.

(Tue Jul 08 1997 20:01)
@New England
When you bet against the trend often the changes in ones favor are unpredictable and dramatic. When I was a young lad back in 1987 II was a bond bull to the "max" ( 80s term ) and a dollar bull. I bought calls on the bonds throughout the summer and Fall of 87/ During that time it was never a right time to buy / the fall in bonds was from 94 to 76 in 4mos . My 18 options went to one ( 18 ) bid the day before the crash/ the morning after they were each worth $1500. This is the type of thing that will happen with gold and silver this time. The sentiment is similar in its hopelessness/ at the time, some may recall, ( being long calls makes you remember ) if econ strong/ bonds down b/c fed tightens and inflation/ if econ weak then $ weak so bonds weak as foreigners may sell and weaker dollar inflationary. Those were the DAYS!!

Today/ Gold to be sold by CBs for bonds to get interest no threat to bonds b/c no inflation. If inflation occurs rates will be raised thus bad for gold. The same bond hopelessness of of 87 exists for gold now. Obvious govt wanted bonds up which was positive in negative environment of the time. Now govts want gold down but lack of supply vis a vis currency and everyone is short more than they own is the silent offsetting fundamental for gold today. The change in gold will be sudden and dramatic and will give no one time to get on board. Staying on board before that wil be like being on the "ship of fools". These type of situations of extremes which test all are rare but occurring in our life time.

Example: A friend of mine said the McClellan ocsillator broke an unprecedented point which meant much higher prices and that the oscillator had never done this before. I asked him if it had been in existance in 1929. He looked at me increduously and just said no only since 1966.

(Tue Jul 08 1997 20:20)
Earl: Have been having problems all day posting or even reloading kitco, ever since that hepcat's last post. If this gets through by 20:21 EDT then its better.

(Tue Jul 08 1997 20:21)
Well the last few days have been quite painful for anyone long in the commodities markets. Why is it the shorts have had their way in most of these markets? Is it really true the world has change and the old rules no longer apply? The laws of supply and demand do exist and are in complete balance in todays markets.
The answer to these questions is in the flow of money. Money has shifted away from commodities and other physical assets and into financial assets. Until a fundamental shift occurs and money starts to flow back into the commodities markets we can expect to feel more and continued pain. The shift could begin at any time from a few days hence
to many years down the road.
Another reason as to the shorts having their way in the commodity markets over the past years and especially the past few months is seasonally of the commodity markets. Typically these markets will move up in the spring and begun to stumble if not out right fall as we go into the summer months. These markets will generally begin finding some sort of a bottom in the July/August period.
Over the past 15 years the financial market have received the majority of new moneys entering the investment community. It started slowly and has gained momentum as the financial markets have continued to move up in almost a straight line. Today nearly all new moneys are flowing in the financial assets arena, and their is now end in
What we have experienced over the short run ,since April of this years, is possibly the final washout of weak money out of the commodities markets in the financial markets. So many have lost money for so long they have begun to throw in the towel. Capitulation will set the stage for the bottoming process to begin. Were not there quite yet but a good dead cat bounce might be in the offing for the short run.
Markets will usually move to extremes before reversing and the blow off phase is already happening in both the commodities and financial markets. We may have quite a ways to go before both of these markets begin to reverse course. It is extremely difficult to pick market tops or bottoms for any market, let alone a cyclical top and bottom after a
15 year run.
A of possible signs to look for under our current conditions: Dow Jones Industrial Average / Gold last extreme 1965 @ 28.5 times with a of 1.5 in 1980. Current ratio 24.5 times. Under this scenario if gold held its current price of $321 and the market reached the 1965 high this would cap the Dow at around 9150. If Gold fell to $300 the same ratio would suggest a Dow in the area of 8550. In either seniors or many other possibilities this would suggest to Dow has more room to the up side.

Miguel de Guzman
(Tue Jul 08 1997 20:25)
@Mars Mining Resources, Ltd
Mars probe mineral samples test out with greenstone & quartzite beds yeilding upwards of 4.6 - 5.8 oz per tonne. Accepting limited partnerships with intention of IPO in the near future. E mail welcome at deimos/ Plenty iron ore too, but lots rusted.

Bill Buckler
(Tue Jul 08 1997 20:26)
Panda ( FYI ) According to my figures, 1 troy oz=31.1 grams. Therefore, 1 kilo ( 1000 grams ) =32.1543 troy oz. 1 Metric Tonne=32,154 troy oz. Can anyone ( Bart? ) confirm those figures?

(Tue Jul 08 1997 20:31)
WW: I am of similar persuasion re possibility of a sudden left turn of the gold price. ( No, I don't mean left turn to level off. ) I have formed a habit of getting up in the middle of the night to see if it has happened. A lot of strange stuff is in the wind.

(Tue Jul 08 1997 20:33)
All the News Fit to Print - and then some. If it isnt reported in Daily News section, it aint happened yet! From USA, Europe, South Africa, Asia, Australia & South America:

(Tue Jul 08 1997 20:51)
locked out

(Tue Jul 08 1997 21:11)
The funds are out of control. I'm not sure where they think they can push Gold to but Gold is down again right now on access. The COT report shows they are already streching the rubber band to the max. I do not think I have ever done this before but I'm going to list a specific trade recommendation. Buy Aug COMEX Gold at $315.70 with a stop at $313.20. Risk is $2.50. Raising your stop as you go along I believe we should see $335.00 easy. It may take some time but in the futures markets time is no problem. Of course I should state that trading futures contracts is very risky and bottom picking is the riskist trade of them all so this is only for the strong hearted. Risk only money you can loose and there is no garentee that this trade will work. There I think I covered all the basics.

(Tue Jul 08 1997 21:18)
Roebear: I moved out of my FSAGX fund and into two other sector funds on Monday @ the 10:00 NAV. I am hanging on to my gold and silver coins. When I believe that gold has turned, I'll be back in. Fidelity Select Electronics is up almost a dollar just since monday. It feels good to win once in a while. Bart's ISP is slow.

(Tue Jul 08 1997 21:24)

all the grains are making bottom formations. ( finally )
looking at the yearly trend for wheat, we should be very
close to the bottom for this year. yield estimates for beans
and corn are below expectations, while exports are at the high
end of expectations. all we need is for chaos and flux ( el nino )
to rear their ugly heads, and poof, we're off to the races.
the carryover is at historical lows. a drought, or early freeze
in the mid-west will send them sky-rocketing.

i seem to be pre-occupied with gold at the moment. the grains
look very appealing, but gold, like the talking head on cnbc said,
is positioned to build fortunes! every spare red nickel is going
into gold at the moment. the lowest prices in 14 years! to hell
with the idea that gold is good only as a hedge against inflation.
WE know the truth. gold is fixing to rise from the ashes as the
indestructable phoneix.---gold--- gold has ruled before, and it will rule again. the massive sell-off that many said was necessary for THE
bottom to be reached, has happened. what next? we know what is next,
only when, remains to be seen. imo, before this year is over.
dec '97 400 gold calls are 1 pt. or less! options are the way to
stay and play with the current conditions.

"the farther backward you can look, the farther forward you can see."
winston churchill

prophetic words to live by. a veritable time-machine, is recorded history!


what is YOUR opinion on the grains? where have you been?

cherokee!; ) smoke signals are being sent on all fronts. alas, the
sleepwalkers see only a world made from paper. too bad it is toilet
paper, and not the green of their dreams. confessions will not
elicit any sympathy or understanding. you are still an affront to all.

(Tue Jul 08 1997 21:25)
ROEBEAR: Still holding all my junior resource stocks. Picked up a little KRY as a bet yesterday.

(Tue Jul 08 1997 21:41)
Bill Buckler, vronsky -- Thanks for the info. Now if I could just get in to this site! I've been locked out for about eight hours. High tech reliability!

(Tue Jul 08 1997 21:42)
gold calls
Following up on Glenn's recommendation, for whatever it is worth, I see that someone bought 5251 October $335 calls today.

(Tue Jul 08 1997 21:46)
Glad we are back up! Copper down 4% today. Is it still the metal with the PhD in Economics?

(Tue Jul 08 1997 21:52)
TO Milhouse @ Deflation/Inflation
SORRY ! for the length of the material presented. This is my take on the
subject matter. Per, history research, to establish a trend that the
past will repeat, as in "Look Back...See Forward" All the economic tricks
have been used up, unfortunately, economic chickens, are coming home to roost. GOLD,is the International Bankers' Currency.

( 1739 ) "Treatise On Human Nature" by Scottish Philosopher David Hume, 28,
challenges the prevailing Monetary Doctrines of Mercantilism, notable the
Doctrine that a nation can continually increase her stock of GOLD and
Silver, and her prosperity, through surpluses in her Balance of Payments.

Hume questions whether action by government is necessary or even helpful
to maintenance of a nation's money supply.

( 1776 ) Adam Smith, 53, inquiry into "The Nature and Causes of the Wealth
of Nation's " Smith, of Kirkcaldy, Fifeshire, proposes a system of
Natural Liberty, in Trade, and Commerce.

"Consumption is the sole end, and purpose, of all production, and the
interest of the Producer ought to be attended to, only, so far as it may
be necessary for promoting that of the Consumer "

The Consumer in the long run has full control over what will and will not
be Produced, says Smith, who teaches at the University of Glasgow.

His massive work establishes the classical school of Political Economy
and will influence all future thinking on Politics and Economics, but, it
shows no awareness of the developing industrial revolution, and while it
espouses *Free-Trade* competition with limited government intervention it
regards *unemployment* as a necessary *evil* to keep costs-and therefore
prices - in check.

( 1811 ) Austria declares bankruptcy March 15, high military outlays have
produced *Inflation*

( 1811 ) Britain adopts paper money as currency May 10, to ease an economic
crisis. A Bullion Report issued by British Government Economists
establishes the intrinsic-value theory of money.

Banknotes may be useful medium of exchange, but, the notes must bear a
definite ratio to the amount of coin and bullion in the vaults.
Government cannot create money, which is rather a token of labour,

Government can acquire money only through taxation, or, by borrowing, and
for government to issue irredeemable paper money, is, to violate the
sanctity of Contracts, cheat Creditors, Increase prices, and disrupt

( 1817 ) David Ricardo, 45, English Economist, Economic Theorist, and
London Broker. " Principles of Political Economy " and " The High Price
of Bullion, A Proof of The Depreciation of Bank-Notes " Contributes to
Adam Smith's *Free-Trade* theory of ( 1776 ) with a Doctrine of
"Comparative Costs" and a "Labour Theory of Value"

Ricardo, postulates a basic antagonism, between, the landlords of England
"ESTABLISHMENT" and the "RISING" Lords of England Industry.

( 1929 ) Dow Jones Industrial Average reaches 381 in September, up from
88 in 1924, but, breaks in October following a drop in US iron and steel
production and a rise in British interest rates to 6.5 %, that has pulled
European Capital out of the US money market.

British *unemployment* tops 12.2 % with more miners and workmen idle then
in the General Strike of 1926.

( 1933 ) April 05 US Presidential Order requires that all private gold
holdings be surrendered to Federal Reserve Banks, in exchange for other
coin or currency ( Gold $31.36 per oz. .27 cents above world market )

15 million *unemployed*, those employed have hours and wages reduced 40 %
below 1929 wages......US Annual wages ( 1933 ) Congessmen $8,663,
Lawyer $4,218, Physician $3,382, Engineer $2,250, Public School Teacher
$1,227, Construction Worker $907, Servant $260, Farm Hand $216

( 1935 ) President Roosevelt, reports Internal Revenue Service figures for
the year, in a *Monopoly* message:::one-tenth of 1 %, of US Corporations
own 52 % of all Corporate assets reported, and earn 50 % of all Corporate
income. Less than 5 % own 87 % of all Corporate assets, and less than 4 %
earn 87 % of all net profits reported by all US Corporations.

( 1935 ) Fort Knox is established in Kentucky, to serve as a repository for
US GOLD BULLION. The Army guards the GOLD, and, the government assures
*FOREIGN BANKERS*, that they, can redeem every $35 in US paper currency
for an ounce of GOLD, from Treasury Department Stores, at Fort Knox.
( which, do not approach the STORES held for the accounts of various
NATIONS, in the vaults of the Federal Reserve Bank, in New York )

( 1997 ) Consumers, have much greater goods, then in ( 1776 ) ( 1935 ) , yet,
the economic issues, appear to be the same, Inflation/Deflation,
recession/depression, welfare/unemployed, wages/cutbacks,
longer hours/shorter hours, right wing/left wing ( it is a game, eh! )
Like Hockey, on side/off side, hooking/slashing

Take care.

(Tue Jul 08 1997 22:01)
I am in awe from all the responses to my poll request. Talk about courage under fire, grace under pressure. I am finding this extremely helpful and hope others are also. I would post more but currently when I post my browser and Barts server have a fight and I can't even read the site. So my posts will be few but I will be lurking learning and straining my addled brain and frying my browser to try and find something helpful to post. Now I really know what Cherokee means "standing on the shoulders of Giants" WOW!

(Tue Jul 08 1997 22:14)
Capt KEV: Welcome back. Please cheer us up with your bean tales.
Aussies: Please help me explain your govt's madness. Is Sydney joining the EC? Is your country broke? Is one senior producer trying to break the rest with the govt's help?

Goldbugs: Just to comfort you all, I'm still long ssrif and ABX as well as US World Gold. I hold these because I'm scared to death that my semiconductor, drug, biotek investments will turn. All of us equity longs are scared to sell. We can't afford the taxes. I've been planning to convert all assets to preferreds and REITS and oil but I'm only 1/3 out. I'm frozen in the bull saddle. The market is nuts and we all know it. Especially those that have made a few bucks and can't quit. Ride 'em until he breaks. Must be lots of Gold buyers out here in SD. The radio is full of Gold coin hawkers.

(Tue Jul 08 1997 22:16)
Advertising message deleted

(Tue Jul 08 1997 22:26)
carson @

Can someone please help me? today Getchel Gold GCO. went d
down 1 1/4 onthe AMEX to 30 3/4 It also went up 2.60 to 44.30 on the Toronto exchange. How can this happen?

(Tue Jul 08 1997 23:28)
To Shadow
Having trouble getting into Kitco tonight so I thought I'd answer
your question via e-mail but your address got rejected so .... GGO is priced in US$ and T.GGO in CDN
of course. Therefore the difference of the 1.35 or what ever the
Cdn and US $ rate is is the varing difference betweent the prices
at any proper time. However, you'll find that there may be days
when Toronto is ahead of US and so the US must catch up next day and visa versa. It'll catch up tomorrow as the US guys will play the spread.
There's a great game played by the US guys only ( since Canadians
can't get GGO on the US exchanges , only TOronto ) . They wait till
there's a difference just like you noted and buy the one that's
out of wack as they know the other one will correct by the next
day. Hope that helps...


Skinny gold bug
(Tue Jul 08 1997 23:40)
Just paid my grandsons ( 2 ) private school tuition. one is up 12% versus last year, the other is up a modest 5%. No inflation is it? This is the strangest deflationary period I ever saw.

Skinny gold bug
(Tue Jul 08 1997 23:40)
Just paid my grandsons ( 2 ) private school tuition. one is up 12% versus last year, the other is up a modest 5%. No inflation is it? This is the strangest deflationary period I ever saw.