Gold Discussion for Investors and Market Analysts

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(Thu Jul 10 1997 01:25)
JIN - Feel free to contact me at above address.

(Thu Jul 10 1997 01:40)
1/2 goldbug
RJ... You shouldn't take it so personal and get so worked up when some of us think that gold actually has a slight chance of going up. After all, history has shown that when gold falls this fast in this limited time, and gold stocks and funds have fallen this far ( some 30% in two months ) , there is more than a 50/50 chance that a rally will occur. Actually, gold doesn't have to move much, but XAU and the funds could jump 10-15% without much effort. This has happened several times in the past.

(Thu Jul 10 1997 01:40)
Dear RJ. Please enlighten this group as to how you calculate your
projected 30 year stockpile. Since you have to know the projected
loss from estimated mine closures, please show us your math expertise
first hand. And since you infer you know these facts, I'll wait up
another 5 minutes or so I might peruse your mathematical logic.

(Thu Jul 10 1997 01:43)
Since the gold market crapped out on 7-7-97, I predict that it will rally on 7-11. I learned this investment method from a wise old sage in Las Vegas.

(Thu Jul 10 1997 01:58)
gold in Sanskrit
Just resumed lurking here since Monday, after a gap of
several months, and found most people as bullish as ever.
They will probably continue to be bullish, all the way to
170. As for me, my long awaited buy point of USD 311/oz
still seems to be elusive. That is a nice round number
in metric units - 10,000/Kg, and may be the reason it
has stopped the slide for now.

(Thu Jul 10 1997 02:11)
@option expiration
Check out Harry C's option force tables for gold
his work suggests Aug gold options most likely to expire at around 345.
$26 rally in two days???

(Thu Jul 10 1997 03:01)
Innocent (but interested) buy-stander
I have to once again use a sports analogy to fit this group. Some say gold is going up - some say, "No, you guys are idiots, gold is going way down."

Seems to me I've heard this discussion in a bar before.

"This is the year! New England and the AFC are going to kick Green Bay's butts!"

Then the two fans procede to have an all out shouting match over which team is better and what is DEFINITELY going to happen.

Like these two in the bar either a ) KNOW what is going to happen or b ) have any influence at all on the outcome, and yet they seem to take it personnally that that SOB would DARE disagree.

As for myself, I like the discussion ( both gold and sports ) but let's try and keep it in perspective. Unless George Soros is using a handle here, very few of us will actually influence the outcome of this game. Indeed, the time frame of the game is up for discussion - next week, month, year?

So, while I realize most everyone here has a personal ( financial ) stake in the price of gold, let's remember that neither me nor anyone else on this forum will substantively affect YOUR outcome - and all this talk, while entertaining AND enlightening, is just that - and nothing personal.


(Thu Jul 10 1997 03:23)
sipping sangiovese '95 Martin Bros. Paso Robles,CA
This is the GOLD of non-mortals and semi-demi grape hounds. And it is VERY CHEAP right now! BUY, BUY, BUY!!!!!!!!!!!! and a good red do have much in common...they both get you pretty TANKED!

Are there any Vino semi-demi's out there? Steve ( Perth ) , I understand that AUS. has been giving the wine world a run for there money. Of course it will be YEARS before they equal a good Central Cal. vino. yuk. yuk.

I know, I know...back to gold...didn't I mention the TANKING?



(Thu Jul 10 1997 03:52)

On CNBC the CEO of ABX told Mark they were hedged for the next three years on forward gold sales on all production at $450 per ounce. WHO is buying it at this price? Did I dream this or get something wrong?

who cares?
(Thu Jul 10 1997 03:55)
RJ & the Bear :)

Alas. I fear that *I* am to blame for RJ's outburst. : )

I thought he actually serious about what's going on with gold,
so I e-mailed him some historical dates to research.

He replied with scornful remarks about "credit bubble" hogwash,
after which I forwarded two documented sources that he could
check, if so desired.

As far as having "no real $$" in gold - I have almost $20K of
my personal savings in metals, mostly gold. I've currently lost almost $2K but it doesn't particularly bother me.

Citibank went bust in '93. James Grant shorted it then, and
he was right. In fact, he was *too* right. So right that the
powers that be propped Citibank up in secrecy.

Governments around the world have made promises that can NOT
be kept. Holders of paper promises WILL get screwed over. I
have zero doubt of that because I can add. If it takes another
year, or another five years, I don't really care.

The longer the CBs stall it off, the better for me. When they
finally bone, I'll be ready.

(Thu Jul 10 1997 04:04)
omega man and his rambling
Mark 20:21 the other day...short the markets then.
Tortfeaser - $25 million??? WHOA! Yen? or US...
Cherokee - KEEP ON KEEPIN' ON! Corn is also gearing...
RJ - more good stuff - PL thoughts? Have you checked out that Johnny Lang cat yet? Up and comer.
Kuston - July 12th, 10th, yep, I boobooed. The trucks...yes...they are EMPTY. The fat lady will have a bad case of laryngitis from all the screaming at the top of her ample lungs.
Gunrunner - there are Fins to the Left and Fins to the Right, Gold ain't the only game in town. J.B. is poetry. I am not.
and speaking of J.B...the other J.B.
Optionman - I agree with much what you say about volatility, except for the limited risk part...and being on the wrong side of a thin PL market when writing options. And especially in the days ahead. I guess the upside would be that PL has a daily limit...if that is an upside. Oh hell... I don't know. Good Luck

enough for now. Sorry all.


EB...lover of the ( ... )

(Thu Jul 10 1997 04:15)
before night-night
passing it on...
I find this service helpful to remind me of changes to my favorite sites. It is also good for vacations, moving, etc.

AWAAAAAAAAAAAYYYYYzzzzzzzzzzzzzzzzz........ ( snore )

(Thu Jul 10 1997 04:57)
Does anybody know?

Bob ( 20:10 ) About the 200,000 gold bars that left the New York Fed, do you have an idea of the weight per bar?
I assume that gold bars held for CB's probably weigh 1000 ounces troy. This might explain a good part of the gold loans, that the CB's have made.
As for Andy Smith's $15 billion annually; in interest earnings, that is if the CB's sold, no mention is made about foreign currency or other risks.
I bet if one would calculate the loss in the gold price since 1987 and add in P&I from gold sales and interst from gold loans, that the MR. Smith's argument would fail.
He must be using $35 as his base price to substantiate the reasons for new gold sales. I believe Canada used such reasoning?

(Thu Jul 10 1997 05:12)
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )

(Thu Jul 10 1997 05:16)
Out of the 300 tons of gold sold by Australia over the last year, 85% went to South Korea. Report in West Australian newspaper today. Maybe BT is Korean.

(Thu Jul 10 1997 05:21)

RJ: I'm sure that the main reasons why gold is going down is because, the financial markets___Stocks, Bonds and Currencies are so hot.
That the many foreigner's who sent their money into dollars -that is those who were early - are a major cause for this irrational mess; the mutual fund managers are just tagging with the trend.
That the whole thing can bust wide open is the other side of the coin. If that occurs, they deserve what's coming to them.
While you are both a realist and I believe a commodity broker________I think that you dislike them as much as we do.

(Thu Jul 10 1997 05:29)

John Disney ( 9/7 01:02 ) and Youngman ( 9/7 22:26 ) :

I second your comments on the Aust Govt. I invest heavily in Aust gold mining companies only because I understand them and have ready access to information on these companies. If I had greater knowledge of the RSA companies I would probably sell all my Aust investments and search for value in South Africa because there is far greater political risk in Aust. In addition to the sale of 60% of official gold reserves, the Native Title legislation in Aust is a complete shambles and has dramatically increased the costs and the risks of mining gold. Also, a few month's ago the West Aust govt ( WA has the highest gold production of the Aust states ) announced that it would start imposing a tax on every ounce of gold which was produced within that state.

I am an Aust who has moved to HK to get away from the Aust govt and its draconian tax system.

BTW, apparently the RSA Central Bank has announced that it may add gold to its reserves.

Regards, Milhouse

(Thu Jul 10 1997 05:47)
RJ ( Diehard Goldbugs ) :
Don't know about the rest of the Kitco players, but I don't look
at it as I'm buying Gold, But rather I'm getting out of paper. This Old
Horse, does not and will not TRUST paper backed up by HOT AIR.
My read of history, tells me that EVERY country that played this
paper game, went broke. By the way I have a draw full of Million
Dollar German Marks, guess what they are worth. Enjoy your posts,
Best Regards, Schippi

Japan 101
(Thu Jul 10 1997 05:50)
We have set up our Model

Our model which relates to the effect of selling a portion of our US Government Bonds and using our existing foreign currency reserves to purchase gold is now in operation.
This model includes possible loss of valued trading partners as well as forming new trade relations.
Keep an eye peeled on gold transactions related to the London hub.

(Thu Jul 10 1997 05:58)
@ Prices/Inflation

BW - re your 12:19 post on 8 July :

For money supply to increase, something has to be monetised. Only certain assets are allowed to be monetised by US financial institutions.

If oil prices increase, this in itself cannot create an increase in the quantity of dollars. Epstein's argument is that increasing oil prices result in an increase in the operating costs of business, which leads to higher debt levels and consequently higher money supply as the debt is monetised.

In reality, at any given time the supply and demand for all commodities is changing and prices need to change to balance the equation. However, these price changes ( up and down ) should not result in an increase in the money supply beyond an amount which is equal to the rate of real economic growth.

In one of his many contradictions Epstein actually manages to hit on one of the real causes of increasing money supply : the monetisation of debt to pay for the cancerous growth of government.

During the last 12 months we've seen stagnant oil and food prices, and yet the total quantity of dollars has increased by 8% ( another counter to Epstein's case ) . The reason is that the extra dollars have fuelled the inflation of financial assets or found a home overseas courtesy of the trade deficit.

I agree with you that the Fed will try to avoid inflation at all costs. IMHO, those who believe we will see deflation during the next couple of years are under-estimating the ability of the Fed and the US Govt to keep this thing going a bit longer via a massive injection of liquidity.

Regards, Milhouse

(Thu Jul 10 1997 06:03)
Aurator: Re Your Jul 8 @ 22:08: You are most welcome. Glad you made it safely home !

(Thu Jul 10 1997 06:18)
Gold = Money

Gold is money, it always has been and it probably always will be. To anyone who has some small understanding of monetary history this proposition is so obvious as to be axiomatic. What we have been witnessing in recent years is simply a shift in the ownership of that portion of the above ground stock of gold which is held for monetary purposes. The shift is from governments to private hands, and from the West to the East. The monetary demand for gold in the Middle East and Asia has risen relentlessly and the percentage of the above ground stock which is held by Central Banks has decreased.

The results of the above :

1. An accentuation of the shift of economic power to Asia

2. Significant depreciation of the national currencies which have lost their gold backing ( it is no coincidence that two of the weakest currencies in Europe are those of Belgium and the Netherlands )

3. Increasing impotence of Central Banks to exert any influence on exchange rates

The price of gold may drop further before it goes up, but this has got nothing to do with whether or not gold is money.

Regards, Milhouse

Mike Sheller
(Thu Jul 10 1997 06:21)
PATRIOT ( 22:50 ) : The astrological chart you point out on "spirit of truth" site is a horoscope for the day 07/04/1997. It shows where the Sun, Moon, planets and zodiacal house cusps all were on that day. Don't you just hate it when a computer program runs out a 'scope in that format. Looks like a train wreck. It's confusing even to me. Least J. Adams coulda done was to scan a round wheel. The author is illustrating what he calls a "6 planet alignment" and is comparing it to the "7 planet alignment" at the '87 top, and other mutiple planet alignments at other significant market peaks. The work is very nice, but don't you think there are too many financial astrologers already? I find it interesting that he concludes that the bearish blow to the stockmarket this time around will come from "global war." There are some very dramatic and cautionary astrological indications concerning the US and Israel in the year 2000. However we may not have to wait that long. At this angle of acceleration, it is doubtful the stockmarket overall can continue rising until then.

Goldbug 23
(Thu Jul 10 1997 06:22)
RJ: Keep posting, I always want to know what people who disagree with me are saying and why. I don't claim to know everything or to be able to forecast the future with any great success. Been wrong too often. Just glad whenever I have been right, and call it luck, altho their is something to the saying "we make our own luck." Most of us here I suspect own gold as an insurance policy and are diversified. Some are traders of course and that is a game with only the most astute surviving forever. Keep it coming, I for one appreciate your thots.

(Thu Jul 10 1997 06:42)
@New England
Mike Sheller: Re Astrological forecast/ There is more than one type of global war. How about global economic or trade war/ AS CLINTON threatened and HASHI returned the compliment.

(Thu Jul 10 1997 07:00)

RJ-I second Goldbug23's sentiments. You have written bearishly about gold recently. Do you still see $500 to $600 gold in the next 2 or 3 years?

(Thu Jul 10 1997 07:09)
What? Me worry about PA/PT deliveries? NAhhhhh!

Might have made a good story. Japan, with their version of Mexican Peso debacle.

(Thu Jul 10 1997 07:27)
RJ...there'll be a meltdown...the Dow
...RJ, look for the Dow to drop 1000-2000 within the next few months. Stock values are at ridiculous levels, ei ) Coca-Cola trading 25 times expected 1999 earnings, and 35 times 1998 earnings. High expectations indeed, the economy is not as hot as the "perception" created. The US statistical reporting on jobs, is not consistent with those of other countries. They include part-time jobs. Their unemployment is much higher than reported. The economy is being driven by technology, which displaces people. Cable, telephone, banking, software companies are not labour intensive. Yes, their earnings are formidable, at the expense of labour. Debts and defaults are on the increase, as the people are being "brainwashed" by the constant barrage of "how terrific things are".Morale boosters. Optimism is great, spending what you haven't earned and hoping to is not sound strategy. Inflation is not being measured properly. Its being manipulated to fulfil their means. Food costs are the only items which perhaps, their stats are applicable to. Autos, homes, home renovations products enormously more than the stated CPI for the last 10 years. When you start believing you're own lies...troubles lies ahead...the US markets depend on the constant inflows of foreign money. These funds are invested in Indexes ( top companies, ei ) Intel, Microsoft etc ) ...the secondary stocks haven't moved...Allan Greenspan had the right read...he's being handcuffed...he's worried about stocks value...The rich are getting richer...the poorer worse...the gap widening...educational system is inadequate...I've enjoyed your postings and hope you're going to stick around for the next 6-9 months....its fun and entertaining....but hope you dont take your predictions too serious...if you do well...would love to see the "shorties" dare a little more...we're waiting...

(Thu Jul 10 1997 07:50)
Joke of the morning
It looks from here that the gold and silver markets have bottomed; but then I said that when gold was at 340/oz. The following is a story which I may have posted before ( if I have excluse me please ) which demonstrates the revenge which we gold people will have on the paper people at some point.

For decades, two heroic statues, one male and one female, faced each other in a city park, until one day an angel came down from heaven. "You've been such exemplary statues, " he announced to them, "That I'm
going to give you a special gift. I'm going to bring you both to life for thirty minutes, in which you can do anything you want." And with a clap of his hands, the angel brought the statues to life.

The two approached each other a bit shyly, but soon dashed for the bushes, from which shortly emerged a good deal of giggling, laughter, and shaking of branches. Fifteen minutes later, the two statues emerged
from the bushes, wide grins on their faces.

"You still have fifteen more minutes," said the angel, winking at them. Grinning even more widely the female statue turned to the male statue and said, "Great! Only this time you hold the pigeon down and I'll crap on it's head."

(Thu Jul 10 1997 07:52)

What wine goes with cheeseburgers ( in paradise ) ? BTW, I prefer German whites ( Mosel region, Auslese or Beren Auslese ) . Haven't found any comparable California substitutes yet.

RJ - phone message but no E-mail. Try the alternate I gave you... I tried to post last nite, but couldn't get back on to Kitco...

(Thu Jul 10 1997 07:56)
Repeat after me, "There is no inflation, There is no inflation." Then say, "The central banks will take care of it. The central banks will take care of it."

(Thu Jul 10 1997 07:56)
Mike Sheller and Cherokee,thanks both for your comments.
I was told that that day will be explosive because of an avalanche of negative energy squares.

(Thu Jul 10 1997 07:59)
@waking up
A few more rays of light: gold moving up on the overseas markets.

(Thu Jul 10 1997 08:00)
Talk about a PC Euro! Even the colors are reminiscent of putrefaction.

(Thu Jul 10 1997 08:14)
NOMERCY: I love your post of 7:27. Coca-Cola has a market cap EQUAL TO ALL THE SHARES IN FRANCE. It reminds me of when Nippon Telephone was worth more than all the real estate in California or some garbage like that. We know what happened to investors in Japan who found no problem with that.

(Thu Jul 10 1997 08:17)
gunrunner - Your July 9, 23:10

There ARE Parrotheads here. I lurk mostly, but am a CONFIRMED Parrothead.

'Got a Carribbean soul I can barely control, and some Texas hidden here in my heart.'

(Thu Jul 10 1997 08:33)

Excuse please. What is Parrothead? Is that Bird Brain? hahaha

(Thu Jul 10 1997 08:45)

Any further news about Robert Rubin resigning? Also, Malachi Martin to be on Art Bell 7/11. Wonder what he will predict this time.

(Thu Jul 10 1997 08:48)
@the winds are blowing
The Bundesbank weighs in on stox and the Dollar;

(Thu Jul 10 1997 09:05)
Peter Munk of Barrick Gold is quoted in this morning's Wall Street Journal as seeing another $40 drop in the price of gold on continued central bank worry. That's near my back-of-the-envelope rough guess based on a fibonacci drop from 414, giving a current target of $275 plus or minus $3 before a longterm gold recovery is likely. This is not a wish. This is a possibility. Do any other methods project a figure near 27x?

jdfjosdhjgo aero
(Thu Jul 10 1997 09:07)
go g[out=0er98q3paer wet]0q345
to donald at 1808

"rsi" is Relative strength index take a look at investors business daily and look at the commodities page ( the section with the graphs )

(Thu Jul 10 1997 09:10)
Nomercy: Even worse, Coke is trading at 42 times 97 EXPECTED earnings.
Gotta drink a lot of this stuff.
Royal Oak closing a mine in Canada due to Low Gold price.
Kinross president is 100% sure Gold has bottomed, but not sure when it will go up.
Microsoft market cap $130 BILLION, GM worlds largest auto maker is only 42 Billion....

(Thu Jul 10 1997 09:12)
Compaq disappoints in earnings, oooppps!

(Thu Jul 10 1997 09:27)
The bond market is reacting differently than before to the employment figures. Instead of seeing the numbers as good for lower interest rates
it seems to have focused on credit quality instead.

(Thu Jul 10 1997 09:29)
shadow - Re: your 3:52, although I was only in the presence of Mr.Munk but once and therefore can not really speak for him, I would postulate that most of that production was sold forward early LAST year when gold was over $400. ( Seems eons ago, doesn't it? )

Pizza Man
(Thu Jul 10 1997 09:30)
All Orange Futures Traders:
Medfly has spread to 3 Florida Counties.

Lan Man
(Thu Jul 10 1997 09:33)
@Panda 7/9/97 22:32
Panda re UPS - Most ups units are connected to Novell or NT servers. Some will connect directly to a repeater, so that you can monitor a remote network closet. In these cases the mfg includes software to configure the ups - IP address, snmp agent and/or NLM. The one that is connected to this pc has "LAN" capability but this feature is useless since this pc is standalone. It does protect the equipt. from surges comming across the phone line though. I don't even think that Win95 is supported... The APC units at a client came with a diskette and manual etc. Which brand and model do you have? Maybe one of my techs is familiar with your unit. Although it does not look to promising...

(Thu Jul 10 1997 09:35)
auroelf Re: your 9:05 - If that report is true, then I'm lined up against Munk AND RJ - Think I'll go hide under a rock for the interim.

(Thu Jul 10 1997 09:37)
Psssst - auroelf - Don't tell them that Soros is on my side - O.K.?

(Thu Jul 10 1997 09:57)
ABX Forward Sales

To Mooney and Shadow,
I don't know much about Barrick, but it is likely that gold which is being sold into existing forward contracts at the moment was forward sold at least 3 years ago.
Actually, the prices at which ABX has forward sold their gold are not that attractive. Normandy Mining, a company which has a forward sales book of equivalent size to Barricks, will be getting an average of US$60 per ounce more for its gold over the next 3 years. ABX also made a big deal of closing out some forward sales contracts ( 1.5M oz if memory serves me correctly ) last Feb when gold hit 410. That mistake has probably cost them over $100M.

Regards, Milhouse

(Thu Jul 10 1997 10:02)
Gold Bottom

We won't really be sure that gold has bottomed until after the announcement that Germany has sold a large portion of its reserves.

(Thu Jul 10 1997 10:14)
CMAX - Good Friend! Just caught your 22:04 of last night. Here we are continuing our sometimes serious, sometimes senseless bickering over the price of Gold and here you are fighting mothernature and almost getting killed. Hows it going? Give us an update and may all be well with you and yours.

(Thu Jul 10 1997 10:17)
@...Peter Munk, CEO, ABX speaks and Wall Street listens
I had posted concern over Munk's attitude before a post ( below ) cited that Munk had stated ( in the US financial press ) that the CB selling climax may drive the price down a further $40 - or about $280.

He is trying to drive down the value of weaker gold miners with quality reserves so that he can buy them cheap.


(Thu Jul 10 1997 10:25)
Milhouse: Maybe the Germans will surprise and announce that they are buying gold. Any CB that sells now is going to look pretty dumb considering that they are selling after the Australians and others have already tanked the price.

(Thu Jul 10 1997 10:26)
Posting trouble. Say again, words twice:I'm picking up
what marbles I have left and waiting for the resurrection
and the light. Small rally going on as we speak.

(Thu Jul 10 1997 10:29)
If the big banks are buying brokerage companies, can the
Dow crash be far behind?

Steve - Perth
(Thu Jul 10 1997 10:30)
EB: Maybe we should all start investing in WINE! I notice that the old Australian Grange Hermitage is selling for about US$12000 a BOTTLE!!
Now THAT is a good 30 year investment! I think the WA Gold miners are imbibing a little bit much at the moment, to drown their sorrows.
Up at the farm we have about 20 acres of winegrapes. We have Chardonnay & Chenin Blanc, both nice light whites. We sell them to Evans & Tate, as well as Houghtons wines. One of our magnates over here, Jack Bendat has recently purchased Goundry's Wines, & is planting another 100 hectares. He is hoping to flood the UK market with up to 200,000 crates a year of wine grapes. Big stuff from this market. Will squeeze some boutique wine makers out from around Margaret River.

(Thu Jul 10 1997 10:30)
@...Germany's reserves ?
Millhouse: Are you speculating that Germany has sold reserves or have you sourced information and deduced a German gold dump ?

(Thu Jul 10 1997 10:37)
Tortfeasor--We received a post card from Ted when he was in Maine--seemed to be doing fine. He and K. really liked Swan's Island. On the subject of gold--did you read Auroelf's recent post?

(Thu Jul 10 1997 10:44)
@...Mars probe startled by new discovery
PASADENA, Calif. ( Heuters ) - The Mars rover carefully sidled up to another newly discovered "rock star", nosing close to a boulder nicknamed "Yogi" that scientists hope will deliver more clues about the Red Planet.
The rock, resembling gold, was named after Yogi the Bear.

Along side the rock was a path marked by what appeared to be human foot prints in sand. The Rover was ordered to follow the path and quickly came upon a mound resembling a fresh turn of dry arrid soil. At the top of the mound was a monolith with an enscription bearing the symbols, "RIP Guzman".

Pasendena scientisits, baffled by the new discovery, are still searching for answers.

(Thu Jul 10 1997 10:44)
THEY can't keep it ( the market ) propped up...Apres moi le deluge!
Predict big down day for DOW again today!

(Thu Jul 10 1997 10:45)
Germany's Reserves

Bob - no information, just trying to think of the ultimate in bad news for gold. The Germans probably do want to sell at the moment in order to help meet the Maastricht Treaty requirements. However, if they wait a while the EMU entrance requirements will have to be relaxed in order to enable France to participate, thus relieving the need for Germany to sell gold. In the mean time the cloud of further CB sales will continue to hang over this market.

GNFN, Milhouse

(Thu Jul 10 1997 10:46)
Dale & Liz, thanks for the news on Ted. The news on gold via Auroelf is not near so exciting. I won't have my big chunk to invest until August 1 so hopefully by then it will be where I will thank my lucky stars I didn't invest before. Interesting post. My sister's name is Liz and her husband's name is Dale. For a minute there I thought they might have found me lurking around this website and spending valuable time hanging out with the likes of all of you. Have a good day all. I am on my way to a family vacation in the wilds of southern Utah. Homemade root beer and ice cream and a whole lot of things that will expand my horizons and girth. Keeth the faith all.

(Thu Jul 10 1997 10:50)
Aeroelf.....Anywhere in that range up to 300.......GUNRUNNER...there are some parrotheads on here..Why just last week some of us sang a chorus or two.....

(Thu Jul 10 1997 10:51)
@Lan Man
Lan Man -- It's an apc 650 Pro PNP ( plug 'n Play ) with PowerChute software, version 1.1.1 ( ! )

E-mail here is It may work, or it may not. something about contractors getting outside e-mail... ( So keep this a secret and don't tell anyone! Shhh! ) :- ) )

Steve - Perth
(Thu Jul 10 1997 10:52)
YOUNGMAN: As a senior member of the Liberal Party in Western Australia, I can assure you that PM John Howard is definitely not in the higher IQ bracket. Both he & Costello take their marching order from the Fed Reserve & the US Govt virtually all the time, except on rare trading issues. However, on monetary policy, they haven't got the brains to do what they do, unless the CIA & Feds tell them. Let's face it, it seems Denmark & Belgium are in a similar boat to Australia.
BTW, the level of dissatisfaction WITHIN the Liberal Party in WA has been quite high. That was so well before this little ruckus over gold sales.

(Thu Jul 10 1997 11:04)
Gold Mining Outlook

by Steven Jon Kaplan

Andy Smith, a precious metals analyst at the Union Bank of Switzerland, said Monday morning as gold was at $314 per troy
ounce: "It would take a Martian to be bullish at this point."

Updated @ 5:30 p.m. EDT, Wednesday, July 9, 1997.

COMMENTS OF THE DAY: Commodities continued their rally on Wednesday, while precious metals began the
day sharply lower and ended the day moderately lower. Gold ended the day down $2.10, with silver losing 1.5 cents,
platinum falling $5.40, and palladium declining $9.00. Analysts' and investors' sentiment remains strongly bearish,
with the gold equity put-call ratio continuing to display abnormally high readings. James Cross, the deputy governor
of the South African Reserve Bank, said that his country not only has no plans to sell its gold reserves, there is
even the chance that it will add to its existing level of gold holdings as the foreign exchange portion of its reserves
continues to swell. The South African Reserve Bank wants to maintain between 20%-25% of its total reserves in
gold to provide liquidity for its marketing activity on behalf of local miners.

A few analysts claimed that yesterday's two-dollar rise in gold was caused by speculator short covering. NOT
TRUE! Open interest in COMEX gold futures INCREASED by 4,545 contracts on Tuesday, showing that
commercials are committed to accumulating at these low prices even on days in which gold is rising. This is the very
definition of a market establishing a bottom. It is also quite unusual for speculators to continue to sell heavily short
in a rising market. Based upon the July 1 COMEX traders' commitments indicating 70.7 thousand net long
commercial contracts, as well as the increase in open interest since then of 21.8 thousand contracts, commercials
were net long 92.5 thousand contracts as of the close on Tuesday, July 8, 1997, by far an all-time record. Those of
you who claim that gold is "just a commodity" should answer this question: would you go short or long ANY
commodity with nearly one hundred thousand net long commercial contracts!

On the New York Stock Exchange there were 352 new highs and 23 new lows, with 1141 stocks advancing and 1710
stocks declining. The index put-call ratio was a moderately pessimistic 1.65.

COMEX gold warehouse stocks fell by 23,534 ounces to 858,213 ounces.

(Thu Jul 10 1997 11:07)
To Earl:


Not to disagree, as I know what degrees of certitude you'd like, however, after having hit the ceiling at 7986 and then just over 8000 as a high, the mental 8000 seems to be holding. Sort of like "Well we did it, now let's head for cover" thinking. With the engulfing pattern, I'd be willing, if today's can't cover 8K, to call it a done deal. What say? Bet the farm ... no ... the wife ... maybe ( :- ) ...! ( now I'm in trouble! )


(Thu Jul 10 1997 11:08)
What country ( s ) bought Aussi gold or other sources?

(Thu Jul 10 1997 11:08)
Quick shots, no time.

No Mercy @ 07:27 - Believe it or not, I agree with most of what you say. I draw some different conclusions though.

Millhouse @ 06:18 - I agree completely

Jack @ 05:21 - What choice to the funds have? They have too much cash and nowhere else to put it.

Who Cares @ 03:55 - You where partly the reason for my ill mannered outburst, but anyone who has read my posts for long has seen long periods of rationality punctuated by occasional bouts of fever. Life is more fun this way.

Murray @ 01:40 - The 30 year supply is another one of those figures that has been bandied about so much as to become apocryphal. I have read various figures from enough reputable sources to feel comfortable quoting it. I would hazard a guess that if one actually did the math and subtracted total worldwide consumption of gold from worldwide above ground supplies, we would find there is enough gold stockpiled to last several decades. The vast majority of all gold ever mined still exists today. Unlike other industrial metals, gold is primarily mined for accumulation and, as such, worldwide stockpiles has always increased. Each year, there is more gold stockpiled than the year before. I dont have time to dig up the actual numbers. Perhaps someone else can help, or perhaps you will just dismiss my contentions are baseless.

Steve - Perth
(Thu Jul 10 1997 11:21)
Euro threatens a return to the 80's...

Steve - Perth
(Thu Jul 10 1997 11:25)
Normandy mining boss speaks out about Australian Reserve Bank

richard badauskas
(Thu Jul 10 1997 11:36)
To milhouse @HK please give me your email address. Am also Australian, escaped the land of Howard and Costello ( should read Abbott and Costello ) have many contacts within Australian mining industry and currently reside in the land of Clinton ( sleaze is more entertaining than high taxes ) . There is a very major gold project developing in North Queensland, is currently totally overlooked by the market. More in keeping with this thread I heard that the Australian govt has screwed up its finances and the sale of gold was akin to hocking your possessions at the pawn broker when in need of cash. Look at the A$, this is the only comedy show around where the entrance fee has dropped sharply recently! must agree they have great beaches, food, wine and fun people, pity about the politicians.

(Thu Jul 10 1997 11:39)
@...RJ's 30+ yr. gold supply
RJ: Would you agree that all the world's vehicles ever manufacturered still exist ? Perhaps you can agree that all cars exist is some form - scrap, recycled, etc. Cars are bought to use for a period and then resold for reuse, scrap or left rotting in fields. Vehicle manufacturers are affected by the used car market - directly by consumer buying attitude between new/used cars and indirectly through the cost of new factor inputs ( alluminum, steel, and plastic ) that contain recycled material.

Similarly, gold is bought for a period of time and eventually is recycled , passed down through the family or lost ( stolen ? ) .

Would you agree that cars have a shorter holding life than gold ?

Would you agree that recycled scrap gold is often listed in statistical disclosures of demand/supply by most reputable analysts ?

Your point that all gold mined exists and therefore available for re-entry into the market is only theoretically true - give or take spoilage and loss.

Gold price has tanked. Jewellry demand ( 70%-85% of gold demand ) is inelastic. Whether gold price increases or drops jewellry demand remains stable within a price range. This is probably because the quantity of gold in most jewellry is not the most significant factor cost in pricing the ornament. ( According to yesterday's Toronto Star, a jeweller was interviewed about the drop in gold price and jewellry costs and he indicated that - for example - a $200 pice of 'gold' jewellry may contain only $18 of gold, the remainder being the cost of labour, selling, admin. taxes, and profit. )

End users do not normally buy cars with the intention of re-selling ( dumping ) it when the price drops. Buyers of jewellry, likewise, are not normally conditioned to dump or smelt their ornamental gold on the market when the gold price tanks. Would you ?

It all boils down to utility characteristics of goods and services that fit into the demand/supply equation.

Bottom Line: Nice try but nobody is concerned about yor 30+ yrs. of supply. They are concerned about supply dumps by CBs. CB gold dumps are the "most" relevant factor ( fear ) in determining "available" marketable supply at this time in history. Do you agree ?


(Thu Jul 10 1997 11:54)

I KNEW you were out there! Anyone who quotes Buffet is O.K. with me.... To you financial wizards, that's JIMMY.... NOT Warren....

BTW, D-Mark hit a low of 5686 yesterday. After Bundesbank announced that the dollar had recovered "enough" & that they were monitoring stox, it has jumped as high as 5754 today..!!!.. ( $850 ) . If they do announce gold sales it should really go up ( short term ) . Lots to consider, though... I find the timing interesting. Germany hasn't been real happy with Klintoris lately ( especially after the G-7.499 meeting and the NATO summit ) ...

(Thu Jul 10 1997 11:56)
patriot @22:50 7-09-97

the url you gave was extra-ordinary! i read for 3 hrs. last
night and was barelay able to stop for some zzzzzzzzz's.
the scenario for the reasons behind the gulf war is more
than believable. this entire web location is excellent,
and MUST be read by all non-sleepwalkers. i've read some
literature propounding the same ideas, but not with such
clarity and forth-right analysis.

russia is definitely playing like the hog-nosed snake. she
is playing like she has died by rolling onto her back and
( supposedly ) exposing her belly.

the russians are still investing billions and billions of
$$$$$$ on a huge under-ground labyrnth to en-sure their
survivability during the next war ( nuclear ) . these are facts.
the russians cannot pay their civil servants, but THEY ARE
preparing for war using over 60% of their budget for these

thanks for the url------------knowledge is power! i am em-powered, again.

cherokee!; ) on-the-shoulders-of-giants

(Thu Jul 10 1997 11:56)
Thanks Steve. If you know Tom Plotts give him a hi for me. I'm U.S.A.

(Thu Jul 10 1997 12:01)
WDL: I feel the same way. Big selloff this PM but I did't want to say it because that would put the jinx on.

(Thu Jul 10 1997 12:10)
"Comodities in a world of trouble" : Australian Financial Review...

(Thu Jul 10 1997 12:29)

hey strad-man how's it going? you need to get a lap-top
so you can post, when out 'fiddlin with the boys.

bean oil has made a bottom formation that signals a reversal
of trend. we made a yearly low, and with this bottom formation
it is looking good ( at the moment ) . not only was this a yearly
low, it is a multi-year low!

yearly highs or lows, channels, and history are the mitigating
factors with my analysis. histo-tecnist could aptly describe

play some jefferson starship with papa john creech on fiddle---
dragonfly--"now we all fly away"---------yes, fly away--------

john lee hooker?? how about rufus thomas? he taught john lee
all he knows. rufus could shoot holes in ANY blues dude or dudette.
check him out to see who really played the blues! ( if you can find him )

cherokee!; ) rock-n-roller, rider-of-the-starship-for-aeons-upon-aeons--

(Thu Jul 10 1997 12:34)

hey strad-man how's it going? you need to get a lap-top
so you can post, when out 'fiddlin with the boys.

bean oil has made a bottom formation that signals a reversal
of trend. we made a yearly low, and with this bottom formation
it is looking good ( at the moment ) . not only was this a yearly
low, it is a multi-year low!

yearly highs or lows, channels, and history are the mitigating
factors with my analysis. histo-tecnist could aptly describe

play some jefferson starship with papa john creech on fiddle---
dragonfly--"now we all fly away"---------yes, fly away--------

john lee hooker?? how about rufus thomas? he taught john lee
all he knows. rufus could shoot holes in ANY blues dude or dudette.
check him out to see who really played the blues! ( if you can find him )

cherokee!; ) rock-n-roller, rider-of-the-starship-for-aeons-upon-aeons--

Strad Master
(Thu Jul 10 1997 12:48)
CHEROKEE: Rider of stars and spinner of smoke...Thanks for the info. Much appreciated. Gotta keep better track of that double post warrior, though. Seems he's been fluxing you lately! ( BTW, where's that e-mail photo? )

(Thu Jul 10 1997 12:48)

Any answers yet? No? What the hell, guess it's just you, me and Amateur!


Int'l dummy
(Thu Jul 10 1997 12:50)
@ westcoast
If CB selling off gold is such a good move , why did the Aussie dollar go from 78c to the current 73c ?

(Thu Jul 10 1997 13:07)
Front: what does TTNF mean?

(Thu Jul 10 1997 13:13)
@eagles breakfast
Taking a punt against the RBA!

(Thu Jul 10 1997 13:13)
To RJ:


"apocryphal" .... Thanks for the education. Didn't even know the word existed! Now I know why I love these food fights so much! The words you guys use are "astounding" ( heard that one from Earl! )


(Thu Jul 10 1997 13:14)
Please comment. If stk mkt breaks by 1--2k where will gold be?
avg. us income x no# employed x 10% / 12 = amount in funds monthly ?
what would a reasonable figure be ? thanks

(Thu Jul 10 1997 13:15)
To Bewildered:

I have no idea what TTNF means!


(Thu Jul 10 1997 13:35)
@ pondering:
Steve- Perth-------- Howard& Costello= Abbot & Costello reincarnated?

Fidelity Update
(Thu Jul 10 1997 13:53)
@one PM
Fidelity Update:

FSAGX= $18.53 UP .26
FDPMX=$12.66 UP .20

(Thu Jul 10 1997 13:58)
Satadard & Poors revising Gold Stock Ratings

(Thu Jul 10 1997 14:01)
@pooh bear
TTFN: ta ta for now

(Thu Jul 10 1997 14:06)
@...TVX Hedge Position at June 30/97

Strad Master
(Thu Jul 10 1997 14:25)
FRONT: Whatsa matter with you? TTNF = Ta Ta New Friend! I thought you knew all the official acronyms!

(Thu Jul 10 1997 14:47)
@don't have much faith in how much we save
jw: your comment about "avg. us income x no# employed x 10% / 12 = amount
in funds monthly ?" makes assumption that average person in US saves 10%
of salary.
That's way out of line. If I remember right it's more in 2% range and not
all of it goes to funds.
Don't forget the US is a nation of borrowers not savers!
10% of salary to 401K does not apply either. Not everybody's got it and
there is a ceiling on contribution ( IRS does not like tax havens ;- ) )

(Thu Jul 10 1997 14:51)
To Strad:(:-)
( :- )
OK I'll go with that one, only problem is, I didn't use it. I used TTFN and he wanted TTNF. Question of typing error? Maybe it was a joke? Question? "apocryphal" for sure !!!! ( :- )


(Thu Jul 10 1997 14:55)
To Tigger:

Actually the TTFN has been referred to by my wife as:


Gettin' "2-old" here in Cottage Country according to her and Earl and Strad!


Strad Master
(Thu Jul 10 1997 15:06)
Double negative?
FRONT: Upon reflection it seems to me that "Too Tired For Nothin'" translates as. "I have plenty of energy for everything!" Somehow, I suspect that's not what she means?

(Thu Jul 10 1997 15:10)

Let's put it this way....

If the double negative is right then I've got to cut the lawn ....

If it's wrong, she has to cut the lawn ....

The last time I felt like work, I had to sit down and rest for a bit until the feeling went away.

Now, who do think is going to cut the lawn? My kid of course !!!!


Strad Master
(Thu Jul 10 1997 15:19)
What are kids for?
FRONT: Yours is the perfect solution to a complex grammatical conundrum!

(Thu Jul 10 1997 15:27)
Strad, Earl, RJ

Geez what a day :

complex grammatical conundrum

Now all we need is gold to stay up! Should of stayed in bed, the wife saw the last post and the lawn still needs a cut! Ah well .....

(Thu Jul 10 1997 15:48)

Japan's U.S. Treasuries holdings top $300
WASHINGTON ( Nikkei ) - The Japanese government and private
firms held an aggregate $300.5 billion in U.S. Treasuries as of April 30,
shows a U.S. Treasury Department survey. The huge amount mainly
stems from foreign currency reserves acquired during government
dollar-buying operations.

Overseas entities held $1.21 trillion in U.S. Treasuries as of April 30.
The U.K. was the second largest holder at $220.5 billion.

The Japanese government invests most of its foreign reserves ( $219.8
billion as of June ) in U.S. Treasuries, international financial sources say.
That would mean the Japanese private sector holds about $100 billion.

Japan's U.S. Treasury holdings first surpassed $100 billion in 1989 and
topped $200 billion in 1995.

(Thu Jul 10 1997 15:48)
Bottom Picking
Well, since most others here have an opinion, I'll jump in. I think the bottom is IN ( at least for now ) for gold and probably for silver. But I'll be more concrete, so if I'm wrong, I can be verbally filleted in this court of public opinion.

Gold: We'll see 350 before 310. ( I know that isn't too high, but that's as high as I can "definitely" see. )

Silver: I don't see as clear cut a situation for silver, in fact it may have one more leg down left, but while I'm sticking my neck out, I'll say 470 before 400.

Main reasons: Increasing open interest on huge down move means the commercials are buying gold ( refer to my post a few days ago about manic selling by new shorts versus panic selling by longs ) . However, it is a little more cloudy in silver, because the commercials, even though they are at historically long levels, are still net short. If they were buying really heavy, and the small specs really selling, the open interest should decrease, at least at first. One possible explanation is that a lot of the pros in silver may not necessarily trade enough contracts to make them report as "Commercials" to the CFTC ( if anyone has any insight on that, I'd sure like to know ) .

Anyway, that's my view. To trade - it may chop around a while, but I think the downside risk in gold especially is pretty small - I think I'd like to see a little break out and a pull back before getting long - but this market may not do that - it may just go, especially if there is some major news.

I think I'm going to buy at least a little yellow at 318 and see what happens.


(Thu Jul 10 1997 16:02)
About 30 years of gold

RJ: If all gold mining was curtailed today, the 1 billion ounces reputed to be in CB reserves would last nine years. If demand held as in recent past. Demand over the last 4 years ending 1996 has averaged about 3480 tonne ( 112 million annual ounces ) ,

or: 1,000,000,000/112,000,000 = 8.9+years

This is just the math, logic says they will not do it, but today, who needs logic. We have Bob and Bubba.

Ted A. and Andy S. want to keep the public beleiving that the CB's will sell, it behoves their employers profits.

Just for general interest; Microsoft's market value is worth about 5.5 times the total value of annual gold production. Bet, many, many listed companies, have market values greater than AU's annual production value.
Something doesn't add-up?

(Thu Jul 10 1997 16:04)

Earl my lad... Get that barbeque goin' . This birds done. Turn 'er over and let's start the party ( Even if we're wrong, we'll be so looped we won't give a damn! )

(Thu Jul 10 1997 16:07)
Jack -- I think it's called irrational exuberance or tullip mania with a dose of Prozac thrown in. :- ) )

Since when does IBM + GM = INTC ?? ( market caps )

The Underground Waves
(Thu Jul 10 1997 16:31)
Purveyor of the Aboveboard Reports

Airwaves____North America, July 10,1997

It has come to our editor's attention that certain anti-gold analyst receive one half their compensation in gold bullion, when the price of gold falls below $320.

This is said to be their IRA bonus. An unnamed source said today, that they feel very secure with this arrangement. by Nuff Said__Cairo Branch.

(Thu Jul 10 1997 16:34)
N. Korea...war??
Here's something that you do not want to think about...from the CNN web apage....

N. Korea building up for WAR!!!

(Thu Jul 10 1997 16:51)
@...New York precious metals summary

(Thu Jul 10 1997 17:18)
@ The Public Library
To Fellow Chartists:

Here again is an update ( July 8, l997 ) of the S&P500 Chart in Constant ( 1997 ) Dollars with Trend Channel. Period of time is for 1871-1997. ( log scale ) .

Notice how much further the chart line has gone out and above the upper trend channel. ( i.e.- like in 1929 ) But this time it is different. : )

(Thu Jul 10 1997 17:18)

Well! we finally got rid of that knave, "Joe the Camel", soon we may have bigger worries about black market brands,i.e. Chinese and Mexican cigarettes.
Our new and more forceful agenda_____you quess it??______. I've been ordered and warned under the espionage laws to keep my mouth shut.

(Thu Jul 10 1997 17:21)
BillD re: N. Korea...war??

Old news but more confirmed intel for the Pentagonals. Check past copies of readily available weapons trade magazines ( to include the Commerce Business Daily announcements ) for the past three years. They claim to want to improve smart weapons from lessons learned during the 'Storm, but in addition ( without coming out and saying it ) they are searching for ways to counter NK weapons and tactics. NK is a wildcard. China still gives them limited assistance but they're concerned NK may screw up their "plan" for Asia. That part of the world is worth watching.

(Thu Jul 10 1997 17:23)
I'm not sure if I stated this but the trade I listed the other day to buy at 315.70 was for that day only. At this point if the market does get down there I'm not so sure I'll buy. I'm not turning bearish, I'm just alittle confused here. What a directionaless market today was. Very choppy. Silver looks weaker than gold. "IF" Gold does start down again silver will go down more. If gold does not drop silver may hold.

Strad Master
(Thu Jul 10 1997 17:26)
Big net longs?
ALL: In reference to the big net long position held by commercials. I was talking to someone today who is in metals a bit and he suggested that the figure may be somewhat misleading in that a lot of those are hedged positions. If so, they don't care which way the price goes. Does it make any sense?

(Thu Jul 10 1997 17:27)
@ Hedging My Bets:
To Hedging Experts:

Here is a business news story re: TVX Gold- Hedge Program Update as of June 30, l997.

Now if and when the price of gold rises, is this news story "good or bad news"??

(Thu Jul 10 1997 17:31)
N. Korea
Gunrunner...yep, I agree it is old news ( to us here at Kitco ) , but when they start printing it on CNN ... it's time to wonder why ... and what's behind the sudden PUBLIC announcements....time to get everybody all stirred up, huh? wonder if .......

(Thu Jul 10 1997 17:33)
Russia supplies about 60% of the worlds palladium and 20% of the worlds platinum...
blah blah blah...isn't it Funny how they ALWAYS end those PGM stories with that same line? It strikes me as funny anyway.

Oh yeah...the RUSSKIES will resume delivery of PL next week. Yeah Right...and those pigs will start flying again...FESS-UP RUSSKIES!!! Do you want some more Levi's?

PL to the moon...again...or Mars??!??? ok, i don't want to be trite. Because this group is Never trite...



mars bars - czars bars...hmmmmm

(Thu Jul 10 1997 17:38)
"North Korea building up for WAR!!!"
BillD & Gunnrunner: In the wee hours a month ago we received an anonymous email which talked about "WAR IN KOREA." See ANONYMOUS GURU:

(Thu Jul 10 1997 17:46)
Modern Artificial Control @ It Works,eh!
July 10 1997: Federal Reserve Board Appointments

"Individual Investment Accounts, Owned by Workers, But, Managed By The
Government "

(Thu Jul 10 1997 17:46)
Dow-Gold Ratio 24.66

31 year high remains 25.06 on July 8, 1997

(Thu Jul 10 1997 18:04)
6pak -- The name of the tax will be FICA and the investment program will called Social Security, SS for short. :- ) )

(Thu Jul 10 1997 18:11)
(re: Net Longs)
Stadt wrote:
"ALL: In reference to the big net long position held by commercials. I was talking to someone today who is in metals
a bit and he suggested that the figure may be somewhat misleading in that a lot of those are hedged positions. If so,
they don't care which way the price goes. Does it make any sense?"

Well, your friend probably knows more than me, but here's my take.

Generally speaking, the hedgers ( the commercial futures players ) are short the futures and long the underlying or actual commodity - in this case, it is probably mostly gold producers. In the grains , it's the farmers. They hedge to guarantee a rate of return, regardless of the weather, vagaries of government, whatever.

So, if you read the TVX article, you can see that their profit will be $470 ( give or take ) - minus the cost of production. So why should they care about the price of gold?

Well, let's say I've already sold you the gold in Aug 1998 for $470/ounce. If I can buy it from the Central Banks for $340/ounce today and store it for a year, I make 130 bucks an ounce and I haven't even lifted a shovel. No risk! That leaves that much more in the ground to mine and sell at market or to sell forward later.

Furthermore, if I ( as a producer ) was sure the price was going to drop even further, I'm pretty sure I would wait before I stepped in started buying.

The key here, of course, is we are assuming that the "commercials" know what they are doing more than the general public knows what it's doing.

This is most often, but not always, the case - witness what happened to coffee this year when the commercials got caught.


(Thu Jul 10 1997 18:13)
(re: Net Longs)
Stadt wrote:
"ALL: In reference to the big net long position held by commercials. I was talking to someone today who is in metals
a bit and he suggested that the figure may be somewhat misleading in that a lot of those are hedged positions. If so,
they don't care which way the price goes. Does it make any sense?"

Well, your friend probably knows more than me, but here's my take.

Generally speaking, the hedgers ( the commercial futures players ) are short the futures and long the underlying or actual commodity - in this case, it is probably mostly gold producers. In the grains , it's the farmers. They hedge to guarantee a rate of return, regardless of the weather, vagaries of government, whatever.

So, if you read the TVX article, you can see that their profit will be $470 ( give or take ) - minus the cost of production. So why should they care about the price of gold?

Well, let's say I've already sold you the gold in Aug 1998 for $470/ounce. If I can buy it from the Central Banks for $340/ounce today and store it for a year, I make 130 bucks an ounce and I haven't even lifted a shovel. No risk! That leaves that much more in the ground to mine and sell at market or to sell forward later.

Furthermore, if I ( as a producer ) was sure the price was going to drop even further, I'm pretty sure I would wait before I stepped in started buying.

The key here, of course, is we are assuming that the "commercials" know what they are doing more than the general public knows what it's doing.

This is most often, but not always, the case - witness what happened to coffee this year when the commercials got caught.


(Thu Jul 10 1997 18:20)
two poster
Sorry about the double post, guys. Not sure how that happened.


(Thu Jul 10 1997 18:26)
to Mooney
Thanks for the concern, Mooney.
Our quake yesterday afternoon was 6.5 richter, and about 200 died. ( We don't get earthquakes very often here. ) Water and power is back, surprisingly fast. Our buildings are not obviously very well designed for seismic conditions, but things here will never change. One of the large concrete docks at the shipyard came crashing down, taking a few vessels with it. luckily, all of our boats came out unscathed, but one crewman in the engine room "heard" the quake....they were only 5 miles from the epicenter at the time. To top things off, we have a hurricane 250 miles to the north.

(Thu Jul 10 1997 18:51)

man, who slaughtered that word? if the gov't operates like
it spells, we are in one hell of a mess!

i believe gold has bottomed also.
here is the rest --
long gold
long soy-oil
long corn
long wheat
long copper
short s&p
short nyse

nothing like crawling out on a limb, with the kitco for lunch
bunch playing with chain-saws!

the garbanzos are inflated beyond recognition, and hopefully
will keep expanding.


the significant other has promised to bury the hatchet quite
deeply into my cranium if any pictures are sent. will continue
to wrestle with that possibility. when is your next concert
at RICE UNIVERSITY? i'll be there if and when, and i'll introduce
you to my bud, the wind!

cherokee!; ) possible wearer of new types of permanently imbedded

(Thu Jul 10 1997 19:25)
Hey, if you guys aren't going to be using this discussion group, can we use it as a Star Trek discussion for a while? Live long and prosper!

(Thu Jul 10 1997 19:26)
Previews of Coming Attractions. Showing soon at an economy near you.

Asia Pacific: Bad debt scares keep the
pressure on Tokyo

Originally published: TUESDAY JULY 8 1997

TOKYO fell for the third straight session as the weaker dollar hit leading
exporters and as construction stocks continued to suffer from the
bankruptcy at general contractor Tokai Kogyo, writes Gwen Robinson.

The Nikkei 225 average fell 262.83 to 19,705.17 after moving between
19,678.27 and 19,931.89.

Traders said the market was ready for a rebound after losing more than
500 points in three days. However, with many foreign investors taking a
summer break, any upturn was likely to be limited.

In addition, Friday's collapse of Tokai Kogyo and the unexpectedly large
scale of its bad debts have reminded investors of the persistent financial
problems dogging many companies linked to the speculative "bubble
economy" era.

Volume shrank from Friday's 300m shares to an estimated 267m. Declines
overwhelmed advances 878 to 207 with 146 unchanged. The Topix index
of all first-section stocks fell 18.07 to 1,497.10 and the capital- weighted
Nikkei 300 was down 3.84 at 289.71.

In London, the ISE-Nikkei 50 index rose 2.51 to 1,580.58.

Investors dumped stocks of companies affected by bad loans, including
general contractors and banks. Aoki, a medium-sized contractor, was the
day's most active issue, falling 12 to 107 on growing concerns about its
ability to repay debts in spite of the company's statement that it was
proceeding with restructuring.

Among other second-tier contractors, Daisue Construction fell 24 to
158 and Tada 25 to 184. Banks fell nearly 2 per cent as a group on
bad debt concerns, regardless of Friday's announcement by the finance
ministry that banks' problem loans had diminished moderately.

Analysts said the market had taken the Tokai Kogyo case as a warning
that many more bad debts had not yet surfaced. Fuji Bank fell 50 to
1,560, Sumitomo Bank 50 to 1,770 and Dai-Ichi Kangyo 50 to

Blue-chip exporters were mixed on currency uncertainties. Honda slid
110 to 3,220, Toyota 90 to 3,190 and TDK 40 to 8,400. Nissan,
however, rose 10 to 847 and Hitachi gained 10 to 1,270. In Osaka,
the OSE average slid 224.35 to 20,733.41 in volume of 15m shares.

BANGKOK, up 24.6 per cent in the three previous sessions, ran into
profit-taking and the SET index fell 24.06 or 3.7 per cent to 633.03 in
heavy Bt10bn turnover. "This sort of thing was always on the cards. We
needed to be checked," said one broker. Worries about foreign exchange
losses seemed to spark the selling.

Since last week's effective devaluation of the baht, there has been
something of a stampede into Thai equities. Foreign funds have been very

(Thu Jul 10 1997 19:43)
Gold mining companies and hedging to protect them-selves against lower prices - BULLSHIT!

If Gold goes down for a short amount of time in a "V" formation then perhaps the mines are protected, BUT if Gold goes down many $$ like it has and does not go back up to soon then the Gold mining companies are NOT protected. After all if the forward sell 2 years ( 24 months ) worth of production like ABX claims then after one month goes by at lower prices they are either going to reduce there hedge by a month ( to 23 months ) or re-establish the hedge at much lower prices. Gold dropped below $380 in Nov96. At first I am going to guess that these companies thought that this was a short term event and did not re-establish there hedges for the first month. Anyway, Golds been down for many months and is at a very low over-all prices. These companies are protected for a while but if they are truly "HEDGING" they will also be selling as the prices goes UP locking them-selves into lower prices for the future.
I'm not sure if you can follow me here but the point I am tring to make is simply. Hedging can help a company again low prices for a short time but NOT again a major decline that lasts for a long time. We are currently in a major decline that has lasted quite some time and will last for many more months. Even if we did see the bottom ans rally this summer I believe that we could go to new lows later this year. Many people are talking about Gold under $300. I personnally do not believe that Gold will start it's bull market this year but that this capitulation in prices is the last and final thing needed for a true bull market to occure, perhaps next year. Of course I have been saying next year every year for a couple years now, but I do believe very strtongly that "Next Year" will happen one year. The Gold mining comapnies are going to get the life scared out of them and they will be selling forward for the next 5 years once we see $400 again. Then they will wake up and find Gold at $500 plus and they will be locked into gold at $400.

(Thu Jul 10 1997 19:51)
Thank you GLENN....Very Clear and very important!!

Bill Buckler
(Thu Jul 10 1997 19:53)
The first "support point" on the $A gold chart is in - a double bottom at $A 427 on the P&F chart. Please note that the multi-year low for the $A Gold price was $A 428, set on September 17, 1991. The new chart has been updated at

This is not - repeat NOT - any kind of "confirmation" that a bottom is in on the $A Gold price. It is merely an indication that a support point has been reached.

People in Australia are giving up looking for work. And, because people who are not looking for work are not classified as being "unemployed" on the official statistics ( it's a long, boring story having to do with something called the "participation rate" ) , the official rate is actually down. What's also down, though, is the approval rating of Mr Howard and his governing party.

Because of the concern about unemployment, there is rampant speculation about another RBA interest rate cut. That has spilled over into the market where yesterday ( July 10 ) the Ords bounced back from a 30 point dive intra-day to close down only 1.7. The main stocks leading the recovery were bank stocks, on the back of the interest rate rumours.

The Gold sale by the RBA was one in a series of moves made to lower Aussie rates in a desperate attempt to get people spending, business "investing", and economic growth increasing. The political imperative is to get the unemployment rate down.

I will be detailing this in an Op-Ed posted to my website either tomorrow or Sunday ( Australian time ) . Remember, the Gold sale itself was for the purpose of fostering economic growth. The *timing* of the sale announcement is another thing entirely.

(Thu Jul 10 1997 19:59)
Joke of the evening
It looks like Auroelf's prediction about the $270 gold didn't come true today anyway. Stock averages and the metals made some sort of weak move up today, but then we have seen these weak and temporary rallies in the past. The financial world is topsy turvy and those in charge should be summarily shot, hung, or at least put in the stocks for a week or two. Here is my submission for the evening, be it weak as it is.

After hearing a shot, Todd ran next door and found his friend Jason crying. "Say, what's wrong?" Todd asked. Jason sobbed, "I had to shoot my dog." Todd said, "My goodness! Was he mad?" Jason replied, "Well, he wasn't exactly thrilled."

(Thu Jul 10 1997 20:01)
...Barrick Gold
re: Barrick's total unwillingness to support gold. You know, I bet it hasn't occurred to ABX board that MANY of their shareholders also own some junior stocks; as well as physicals and long positions in the paper gold market. Their potential personal gains in mopping up the junior carnage will be at their shareholders expense ( in other equities, futures, options etc ) . Since we're into predictions is a prediction....MANY seats will change at the next ABX election!

(Thu Jul 10 1997 20:03)
Hedging - or not
So Glenn, are you saying that TVX is not really hedged for the next five years? They have been selling contracts and buying puts ( and probably selling covered calls ) for a long time ( apparently ) so their basis will maintain a profit vis a vis their production costs.

I'm not sure your point here.


(Thu Jul 10 1997 20:29)
But a very overdue meaningful correction is on the agenda. After all, stock market here is ONLY priced at something like 2.5 times gross world product ( of all nations ) . SEE:

(Thu Jul 10 1997 20:41)
I missed it "guys"...earlier in the prediction that the market would tank in the afternoon; however, spoke today with big investor...tells me
he's going to cash...pronto! Says market valuations, in his words, are

(Thu Jul 10 1997 20:48)
Germany decides to sell .... oil instead of gold... for now.

(Thu Jul 10 1997 20:55)
Visiting the US
I am from Japan, and I like gold very much.
I am not sure if I like Hashimoto.

(Thu Jul 10 1997 21:12)
German oil
panda : German sale of oil and expected sale of gold reserves is reminescent of the USSR sale of gold reserves prior to its collapse. German socialist economy is just as doomed as the Soviet communist economy was at that time. Sale of hard assets is a futile attempt to postpone the inevitable.

(Thu Jul 10 1997 21:13)
Anyone watching the gold lease rates? I am a novice in this area but they look substantially higher than a week or so ago. Also, the "yield curve" has virtually flattened.

(Thu Jul 10 1997 21:26)
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )

PS: For the record, I bought JUST before the July 4th wipe out,
bought after, and I'm still scaling UP.

(Thu Jul 10 1997 21:29)

REB @ 21:13--I had somehow overlooked the yield curve. Yes, a flattening yield curve is a good indicator of recession. Maybe we will be entering a period of "stagflation".

(Thu Jul 10 1997 21:35)
GLENN: re your 17:23,.....if your feeling a bit confused , just imagine how the rest of us feel!

(Thu Jul 10 1997 21:37)
Byron: some time ago ( at least a month ) you were looking for a final 9th wave down in London cash gold. Where are we now??

(Thu Jul 10 1997 21:48)
Auric: The yield curve I was referring to was the varying gold lease rates based on length of term. See Bart's tables.

Question for anyone: Are the lease rates shown for the varying terms all annual percentage equivalents?

(Thu Jul 10 1997 21:49)
U.S. Patent #4,686,605
Cherokee: ever hear of "High-Frequency Active Auroral Research Project"? Also known as HAARP. Magnetohydrodynamic generators which produce, according to U.S. Patent Number 4,686,605, one Billion to 100 Billion watts of energy. The patent also states that the ozone layer can be altered.

Imagine - an insider could go long on Heating Oil futures when he knows that the "Siberian Express" is coming back to the US this winter. He could also go long on Orange Juice futures when he knowns that the supply will be reduced by weather warfare.
Reference: and search on 4,686,605

Boy, would I like to read the Evironmental Impact Statement that was done for this project...FYI, the parent company of APTI is ARCO.

Bill Buckler
(Thu Jul 10 1997 21:52)
Auric ( Jul 10 21:29 ) and Reb: U.S. debt isn't the only yield curve that is flattening. Take a look at 1 month to 1 year Gold lease rates on Bart's page

Bill Buckler
(Thu Jul 10 1997 21:57)
Sorry, mis-spoke myself. Auric and Reb were talking about Gold lease rates. Just shows you what happens when you read something too fast.
Interesting develpment, though.

(Thu Jul 10 1997 21:58)
@ the golden moment
To all..... We are still buying gold!!! The day of reckoning has come upon these U.S wizards of manipulation.

(Thu Jul 10 1997 22:20)
Has Hong Kong been buying gold ? Seems to me that spot price goes up a couple of bob ( 10 cents ) as the markets open...

(Thu Jul 10 1997 22:35)
I'm sure one version, or another, of this story was already posted here. I just love the description of the 'gold screen jockeys'. :- ) )

(Thu Jul 10 1997 22:47)
Panda: I don't know if your Australian or not, but as an Australian, nobody listens to Tim Fisher as he usually is full of cr.p and some think has an IQ of bird droppings. The RBA is getting a good serving and Mr Fishers remarks are desperate and laughable.

(Thu Jul 10 1997 22:48)
The XAU is very strong and is far outperforming bullion which you would expect at a market bottom, bullion refuses to go lower, Germany sells oil instead of gold, and gold is up in HK - yet there is no joy in Kitcoville. The bottom really must be in.

(Thu Jul 10 1997 22:52)
Tortfeasor- I was talkin to this guy today and he had me rollin in the grass laughin. He said that he had lost so much money on those junior gold shares that he had to LIE to his wife to keep from being kicked out.

I'm lookin for some more of that REAL WEALTH Peter Monk was a talkin about.

Looks like the lows might be put in between now and October. Buyin time
iffin anyone issa interested in REAL WEALTH.

One way maybe to do it ride the wave, buy the unhedged majors, then the marginals then the juniors.

Tally Ho

(Thu Jul 10 1997 22:53)
Scott -- "24 year-old screen jockeys with braces", I love it! Guys who know that markets go only one way! In the case of gold, that's down. In the case of stox, that's up. :- ) )

BTW, located on East coast, USA.

(Thu Jul 10 1997 22:55)
I really want gold to go up to 460/oz just so RBA and Tim Fisher look like a real bunch of dic.heads.

(Thu Jul 10 1997 22:56)
Something I was told yesterday may be of interest here. There is likely a lot of new demand for gold that is not talked about. Mr. Cole may know when these numbers will start to show up. Last night while getting gas at my local One Stop - I mentioned to the owner ( a young Indian fellow - Asian ) that the drop in gold price was affecting my investments. He replied that it was killing him also - because his parents and all of his relatives were going overboard buying gold because it was now such a bargain. With the large numbers of Indians here in the US now - running many motels and convenience stores - this new demand is probably more than we might imagine. Also, this perception of bargain priced gold is probably worldwide. Maybe Bart could tell us if his sales are up markedly? I don't know when a sharp increase in jewelery and coin sales would be reflected in the shortage numbers - but I think that the manipulators are on a short string so to speak. :- )

(Thu Jul 10 1997 23:03)
Well, well, it looks like the Philippines' are moving to flexible exchange rates. Yes, the whifffffff of currency turmoil is in the air.

Schwabee update -- Well, it seems someone else is unhappy with Schwabee. It seems that a class action suit has been filed against them. Yup, these are interesting times. How did I find out? It was the little piece of paper tucked in with my monthly statement from them. :- ) )

If that isn't a sign of some sort of a top forming, then I don't know what is.

(Thu Jul 10 1997 23:05)
Question: So, Mr Fisher, why did the RBA sell gold for 2 billion to get better returns from bonds when the sale knocked off 2 billion of stocks?

Answer: Have you seen those rocks on Mars lately?

HA HA HA HA HA HE HE HE HA HA says it all!

(Thu Jul 10 1997 23:14)
ok weathercaster---

i believe i recognize your verbage. why, with innocuous
posts, are you reticent to use your real e-mail handle?

no, i have not heard of this device. if it is patented and
available for scrutiny, it probably is comparable to a pop-gun
compared to what the military has.

c'mon out of the closet and at the very least e-mail me, as
you DO have the address. ohw-----------------------

(Thu Jul 10 1997 23:16)
Scott: I'm not Austrailian either, but then no one's perfect !: ) ) I enjoy your posts from the other side of the globe. Good night all, 4AM is coming quick here on East Coast.

(Thu Jul 10 1997 23:17)
Gold spot 320.75

(Thu Jul 10 1997 23:25)
One thing you must learn about Australians. We say things in jest a lot of the time and usually in my native land we grin and just return fire! Serious people are hated the worst, along with those who think they are better than others. Yes, we all make errors but Fisher gives as good as he takes and for that he is liked!

(Thu Jul 10 1997 23:28)
More Thailand news......since gold is not making much of a mooooove....I thought I'd drop another tidbit of Pacific Rim news on everyone. It seems that even the biggest companies in Thailand are suffering on the recent Baht devaluation. Dunno what it means, but it appears bad news is following bad news....

(Thu Jul 10 1997 23:34)
more newpaper clippings
Even the Washington Post is "philosphical" about yesterday's 120 point drop. They call it eight thousanditis!! Over here for donuts!!

Lurker 777
(Thu Jul 10 1997 23:40)
go gold
Sold my kinebars yesterday for $360.00 oz and got myself a account with Jack Carl's futures. Tomorrow I do my first option trade and it is free. Hmmmm, how about 100 Dec. 410 calls at 10.00 each. Lets see here, that's $1,000.00 for 10,000 oz Hmmm if gold goes to $510.10 by Dec. I net $1,000,000.00!!!!!! Hey if the stock market can do it why not gold. Maybe I should buy 500 contracts. Naa Lets not get greedy, right.

(Thu Jul 10 1997 23:41)
Aussie gold secrets
Here's an article from the Sydney Morning Herald that details all the secrecy around the Aussie CB gold dump.

(Thu Jul 10 1997 23:43)
@ Ozmandia
floating exchange rates - decades ago
sinking currencies - lost in the throes
golden lifepreserver - ?
only heaven knows

(Thu Jul 10 1997 23:53)
@ Ozmandia
perhaps heaven

(Thu Jul 10 1997 23:55)
Scotty : Interesting posts, thanks : )

(Thu Jul 10 1997 23:59)
@hello-hello----100+MILLION MILES!!!

supposing those rocks are pure gold, how much do you
think it would cost to IMPORT them??? yes, it is laughable.
please, this calls for histrionics also!!

bill buckler---

did you ever get a response on your letter a regarding the gold lease
rates? are they going up? what is your "take" on the near term
for these rates?

the recent rash of "cat" scratching around here reminded me of
a true story regarding cats and rabbits. this is a true story!
i know a farmer down in s. texas that had a fondness for
cats and rabbits. the rabbits, domesticated, were allowed
to run loose on his farm until ready for harvesting. he had
several cats running around also. one summer, he was in the
barn and he saw one of his cats ( he thought ) half hopping, and
half walking. he thought it had been hurt so he caught it.

to his utter amazement, he saw the "cat" had elongated back
feet, very long ears, and a bobbed tail! ( i swear this is true )
the "cat" had the teeth of an ungulate. ( grass eater ) he took
the "cat" to the extension agent who said he had heard of in-breeding
between cats and rabbits, but had never believed the stories.
it was very evident that they had crossbred. a talkshow host of
a major radio station in houston carried this same story, and
the story was verified by some type of biologist. i suggest
we name this critter a cabbit

now, on to the chase----i wonder if cats and rats have cross-bred.
this seems highly probable, as we are graced with one calling
itself hep-cat. a little juxtaposition here, a little cheese there,
and what do you have???

HELL YES, YOU'VE GOT A HEP-RAT-CAT!!!!!!!!!!!!!!!!!!!!!!!!!!

cherokee!; ) en-route to pleidaes to see if they have anti-hep-rat-cat
serum. back in a flash-----------------