Gold Discussion for Investors and Market Analysts

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(Fri Jul 11 1997 00:07)
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 @ 5:20 p.m. EDT, Thursday, July 10, 1997.

COMMENTS OF THE DAY: Commodities were moderately lower on Thursday, while precious metals mostly rallied. Gold was up $1.90, silver
rose 6.3 cents, platinum gained sixty cents, while palladium bucked the trend by declining $6.35. Analysts' and investors' sentiment remains
strongly bearish, with nearly all commentators stating some variation on the theme that "gold rallied, but it is sure to fall rapidly to $300 an
ounce very soon." Small investors are surrendering gold mining holdings, as is evidenced by reports from gold fund managers reporting a record
number of liquidations of their smallest account holders. Thus, precious metals and their shares are moving from weak hands to strong. Anecdotal
personal confirmation: a buy order this morning of two thousand shares of Echo Bay Mines took five separate sell orders to fill. The "little guy"
always gives up at the bottom.

Open interest in COMEX gold futures increased by an additional 788 contracts on Wednesday to 218,754 contracts, the highest total in 18 months.
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 22.6 thousand contracts, commercials were net long 93.3 thousand contracts as of the close on Wednesday, July 9, 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!

Short-selling speculators have kept the one-month implied lease rate for gold at over two percent. With such a substantial annualized return at
even half these rates, those who are selling their physical gold to purchase other types of investments should investigate the possibility of lending
to short-selling speculators. Once the price rises, you can also have great fun putting the squeeze on them to make delivery.

On the New York Stock Exchange there were 290 new highs and 15 new lows, with 1764 stocks advancing and 1038 stocks declining. The index
put-call ratio was a neutral 1.23.

COMEX gold warehouse stocks climbed by 7,748 ounces to 865,961 ounces.

(Fri Jul 11 1997 00:09)
@4 U

SYDNEY, July 11 ( Reuter ) - Australian shares opened slightly

firmer on Friday as gold shares regained some gloss on their

recently tarnished prices, while the broader market was helped

by the rebound on Wall Street.

The All Ordinaries index was 7.2 points up at 2,701.6 with

trade turnover A$105 million ( US$78 million ) .

The Dow industrials rose 44 points to 7,887 on Thursday.

Australia's gold index was up four percent, which helped tip

the broader resources index into the positive zone, while

industrials were weaker as bank shares came off the boil after

Thursday's strong run on hopes of a further monetary easing.

Traders said they expected the market to trade in a narrow

range as expectations of a rate cut were dampended by Treasurer

Peter Costello on Thursday after the release of June's weak jobs

data. The figures had earlier sparked a rally in yield stocks.

``It looks like they are not going to do anything on that

( interest rate cut ) ,'' Hassett said. On Thursday, Costello said

the market should wait for previous rate cuts to take effect.

(Fri Jul 11 1997 00:25)
Scotty, thanks for the posted article. It makes it seem that the recent plunge in gold mining stock prices was a knee jerk overreaction, since the Australian gold sale is history and was not done abruptly.
Just because the central banks think paper is more valuable than gold, it doesn't make it true. I appreciate the opportunity to accumulate both gold and mining shares at bargain prices. If it drops more, I will keep buying more.

(Fri Jul 11 1997 00:32)
Today's activity produced a preliminary buy signal. The near term bottom is in.

For conspiracy buffs: The big gold market fall was on the same day as the Mars landing. The market fell because one of the rock evaluations determined that one of the rocks was pure gold. This is not known by many people outside a small ring of insiders, who quickly sold gold short and messed up the market. In a few days, they will realize that the rover cannot be made into a return vehicle and gold will return to 350.

Lan Man
(Fri Jul 11 1997 00:49)
Silver is where its at!
Talk about perfect timing! On tuesday rcvd the July 21st issue of "Insight" magazine and inside its covers were two separate full page adds that were selling U.S. Morgan Silver dollars. The next day rcvd another advertisment in the mail hawking Silver Eagles. The eagles were quoted at $11.95 ea ( 1997 ) and the Morgans were $19.40 ea and $43.00 ea BU grade ( complete set - 15 coins - is only $595 ) encased in a lucite capsule and accompanied by a numbered "Certificate of Authenticity" no less. And no Virginia, they are NOT graded by PCGS or NGC.

After seeing these advertisments, I thought to myself "Man! I'm in the wrong business." Wonder what kind of response these guys get from advertisments like these. Double or triple ( or more ) your cost - who says you can't make a killing in the pm's?

Lan Man
(Fri Jul 11 1997 00:50)
Awaiting More Info
Panda: Will get back to you asa facts are rcvd.

(Fri Jul 11 1997 01:01)
True, it can't be made into a return vehicle, but can't the Mars gold be leased without being brought back? T

Lan Man
(Fri Jul 11 1997 01:28)
Word is Out
2weeks - Don't give PMonk any ideas!

(Fri Jul 11 1997 01:47)
Shotgun approach to answers. Seems to save some time.

SCOTT @ 23:25 "WE GRIN AND JUST RETURN FIRE" - Excellent policy.

JACK @ 16:02 ( ABOUT 30 YEARS OF GOLD ) - I would rather concede the point than dig through endless gold numbers. I will not concede however, that gold moving from on stockpile to another is demand. I am talking about consumption. Just where is this 112 million ounces going every year? This is a more suspect number than my thirty years. If the gold is going to the mints to make coins, or being exchanged from one stockpile to another, it is not consumed. Gold is good for only three things now: Shorts, Women, and Mike Tysons teeth.

CEROKEE - Rufus who??? Shoot holes in JLH??? I gotta hear this guy!!!

BOB @ 1:39...RJ'S 30+ YR. GOLD SUPPLY - I agree that it is less important how much the CBs sell than their willingness to sell, and their timing. You comparisons to cars leave me befuddled. Gold changing hands is not consumption, it is accumulation. Every year, mining gets more efficient, more gold is mined, and most is then put in some vault. All this new gold will then spend the rest of its existence moving from one vault to another. The amount of gold aboveground is constantly increasing. Most platinum produced is consumed. The majority of silver is likewise consumed. The vast majority of gold is simply accumulated. Jewelry is consumption, electronics is consumption, Mike Tysons dentist is consumption.

(Fri Jul 11 1997 01:51)
Some news from OZ

From Austrialia, after this read, prepare to get sick from their editorial.

(Fri Jul 11 1997 01:55)
I just love a good conspiracy
Larryn @ ( Rallytime ) - Your rally may peak at $330 and then drop like a martian rock to $300.

As for returning the gold from Mars, dont be so sure. Why do you think they called the vehicle a "Rover"? Perhaps to fetch??? Hmmmmmmmmmm

(Fri Jul 11 1997 02:02)
Its all clear now.
I guess Spot, or Rex would have been to obvious

(Fri Jul 11 1997 02:14)
You are very polite
Schippi @ 05:47 - Just remember: Gold, like EBs "Vino", is best used in moderation.

(Fri Jul 11 1997 02:18)
Commodities, Humphh!!!
Jack @ 05:21 - I am not a commodities broker. I am a precious metals broker. All I do is metals. I dont hate anybody. Except maybe..

Mike Tyson
(Fri Jul 11 1997 02:23)
Hey RJ
You want some of me??? You just try to head butt me and I'll come lookin for bof yo ears!

(Fri Jul 11 1997 02:40)
Sorry about the afr problem___RJ

The failed article from the Austrailian Financial Review can be had using
Then hit their feature button. After reading, if you so desire, the editorial button is at the end of artical______also on front page.
RJ: I was a bit off, figure give was from the GFMS four year average, but it was for total demand. Actually the fabrication demand averages over 4 years to 101.6 million ounces annually or about 9.8+ years of CB reserves.
Gold and silver should be used as disciplines to prevent countries from issuing excessive credit and promises that cannot be honoured.

(Fri Jul 11 1997 02:40)
A call to arms
Mikey - I got bof yo ears hang......... Oh never mind.

(Fri Jul 11 1997 02:44)
Two to three glasses a day will keep the cancer away...
Have you not read the NEW studies lately? I mean the newer studies that came After the new studies. In a nutshell, and I read this in the newspaper, it says that Red wine "eats" cancerous cells. Or something like that. So I got together with the neighbors last night to start our new cancer fighting regiment. We pulled out some really GOOD bottles and started "working out". I gotta tell ya' though, I don't think I can make it to three glasses a night. Pocket book wise ( I don't like ripple ) OR brain cell wise. I was shaking the cob-webs out this a.m. I am a firm believer in moderation...I believe I touched on that in one of my first postings.

Moderation - Diversification



(Fri Jul 11 1997 02:53)
RJ and commodities...Uh oh! More BOMBAST??
I chuckled and winced when I read Jack's comment. I KNEW you had to say something regarding your disdain for futures. This is one eclectic group! Gotta love it!!

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


(Fri Jul 11 1997 02:59)
New England
RJ MOST gold is consumed into jewelry and industrial/ 85%. The small remainder is accumulated above ground. Although CB sales have also been often consumed into jewelry. Anyway, in comparison to the above ground growth and existance of paper debt and leverage through deriviatives / gold and the other precious metals are becoming scarcer by the day.

If gold is such a joke why do Andy and Ted get all hot and bothered about such a small inconsequential mkt. In reality, if this were the cold war Andy and Ted act like the the PMs are the USSR not the Rwanda type investment they claim it to be.

Nuf said just the facts!!

(Fri Jul 11 1997 03:05)
but one can understand why...
98% of all options expire worthless when you read posts like 777's.

Lurker777 - I mean absolutely no disrespect but you were just kidding about those DEC 410 calls, right? I think the math ( and this is under the wild assumption that gold will trade $190 higher by Nov. 14 ) is more close to $100,000. You are right, don't get greedy or you may end up IMPECUNIOUS.

AWAY...from trying to catch lightning in a bottle


(Fri Jul 11 1997 03:22)
Lost my two cents
EB - Perhaps Jack's apparent impecuniosity has clouded his judgment.

(Fri Jul 11 1997 03:33)
Let's call a spade, a spade.
WW - RE yours: "in comparison to the above ground growth and existence of paper debt and leverage through derivatives / gold and the other precious metals are becoming scarcer by the day"

What kind of hackneyed alchemy is this? Lets ask, how many ounces are aboveground today? Are there more than last year? The year before? As the CBs have apparently relegated gold reserves to a substantially less important status , it would seem that your above statement is misdirection at best.

Mike Tyson
(Fri Jul 11 1997 03:46)
I'm warning you!! Better knock off that racist slander or I'm comin to get yo.

(Fri Jul 11 1997 04:06)
I was born poor

While I don't hope to be the richest guy in the cemetary......RJ you has this wonnavul way wit woids......impecuniosity.
RJ: I have a question, can they print gold?
I know it sounds simple minded, but how can they print money and back it interest payments and continue this indefinately?
All currencies have fallen against gold and the US dollar against most of the currencies. Why?

(Fri Jul 11 1997 04:09)
closing comments...tv14...
Gunrunner - Cheeseburger's = Budweiser 97' Van Nuys, CA.
Pizza Man - I believe JO has already figured in the medfly wildcard w/ the spike in early May. JOX7 is still a decent trade, though, if you wait a while longer. Fundamentals: There are WAY to FREAKING many oranges ( they can say it on tv... )
Front - TTFN=Time To F*** Now?
Steve Perth - Thanks for the info. I have a plan to holiday ( as you say ) in Aus. one of these days. I always hear great things...
GOLD - Bad Boy, Bad Boy, What you gonna do? ( sung to that Cops song )
Cherokee - You are going on a limb, happy trading! Looks good
KGB - still waiting for those trucks...
RJ - Lymericks??
EB - GO TO BED!!! Ok



Has anyone seen Men in Black yet? Great flick! Different perspectives...

(Fri Jul 11 1997 04:10)
@New England
RJ: The gold deficits over the last seven years have been filled by CB selling. Much of this gold was consumed in fabrication of jewelry and industrial uses. Gold as A PERCENTAGE of CB reseves is at an all time low. Investor demand is practically zero so talk of demonetization is idiotic as it has already occurred. Further, through forward selling and option selling there is much gold sold which has yet to be produced. Further, the Wesrern Debt burdened countries have just about shot their wad. Russia China and Japan will be buyers. Finally, through the massive gold loans ( which are not offset against CB reserves ) much of the gold is probably gone.

I understand Wall St concern re gold A ) they are warehousers of exploding debt and lower gold makes investors more comfortable handing over their stash. B ) They have a stk mkt credit bubble second to none which can only last as long as goldilocks ( fake ) economy notion rules and thus the mislaid confidence of the masses continues to feed their coffers. Call it ALBANIA with a High Tech Twist!! With 24% of the work force unemployed or working part-time it is the growing credit bubble which is the threat.

As a percent of bank reserves and in comparison to Paper in circulation plus with gold loans and forward sales Gold has never known a greater comparative shortage situation. RJ the comparative notion is critical as we are talking about markets which are governed by supply and demand.
The only thing ( which may continue ) keeping gold down is the well timed and I believe becoming desparate Wall St. paper raids on gold to prevent ANY investor demand from developing. We all know how manipulation ends/ Just ask the Hunts and the Japanese,Taiwanese and Koreans about their Financial Community/Govt created STK mkt bubbles that burst!!

Enough said the facts speak loudly!!

(Fri Jul 11 1997 04:31)
UNDERSTANDING the Commitment-of-Traders report: Hedgers are not speculators. For example, in the gold market, to understand the position of the large commercials, you must distinguish between long-hedgers and short-hedgers.

Traders at gold mines who use the futures markets are generally short-hedgers. That is, they sell futures to lock-in a specific price for gold they anticipate mining at some distant date.

Gold dealers can be either long-hedgers or short-hedgers. An example of a commercial dealer is Englhard Minerals.

A commercial dealer becomes a short-hedger when the dealer buys physical gold from a mining company and cannot find a satisfactory outlet to sell the gold. In this case, the dealer "hedges" the exact number of ounces of gold-futures as he purchased from the mining company. At some later date, when a physical buyer emerges, the gold-hedger buys back the futures, and sells the physical gold. Hence, the hedge is liquidated.

A commercial dealer becomes a long-hedger in the reverse case from the above. If the dealer finds a physical buyer, but cannot locate physical gold, the dealer sells the physical gold ( for delivery by a specified date ) , and he buys the exact number of gold-futures to offset his risk. The long-hedger has an extra option in this case, if he still can't locate the physical gold to buy, he can "take delivery" of the gold at the Comex warehouse -- and thus obtain the physical gold. "Taking delivery" does not normally happen, but under unusual circumstanes, it guarantees the long-hedger a physical source for gold. When the long-hedger finds the physical gold, he buys the cash gold, and liquidates ( sells ) his gold-futures position.

Hence, from the most recent Commitment-of-Traders Report, it's virtually certain that the huge commercial long position is the result of activity by gold-dealers who have become long-hedgers. Specifically, these hedgers have sold physical-gold for delivery in the not-too-distant future, but they have been unable to buy enough nearby physical-gold to meet the demand. As a result, they have bought gold-futures to "hedge" themselves against a run-up in the gold price. A large commercial hedged-long represents mandatory future demand in the "physical" gold market.

Tomorrow, I will be leaving for a 1-week vacation in Cape Hatteras, NC. I will miss the postings here at Kitco. I'll probably check in one or two more times before I leave. Take care of the markets while I'm gone!!


(Fri Jul 11 1997 04:46)
WW makes sense

RJ: What WW said wrote at ( 4:10 ) makes a lot of sense. Now I will make a remark.
Has anyone ever seen all this gold, that is sloshing around the world???? Anyone???? Anybody???? Andy? Ted?, how about you Bubba?_______hmmmmmm.
On the otherhand, I can almost bet that most of the posters here can buy a car with their credit card ( s ) .
Now thats what I call creditable.
I can understand Prime Minister Hashimoto, the Japanese work their butts off. Their land is not endowned with natural resources. They have accomplished a real miracle.
But Yoshi Yakamoto "Japanese Engineer" he say. We have whole bunchee dollars.

The Last Goldbug
(Fri Jul 11 1997 05:59)
Tiger Fund

The statement Prime Minister Hashimoto made about selling US Government Bonds and buying gold was in reply to a question asked by an employee of "THE TIGER FUND". Interesting.

(Fri Jul 11 1997 06:09)
@Omega Minus One
Panda, Your Jul 10 23:03 The coming currency turmoil is the weak link in this whole bubble and will cause the blow up. I believe we have company with our friend Soros. If I wasn't full up I would buy more ingots here.

Mike Sheller
(Fri Jul 11 1997 06:48)
friday morning sermonette...
WW: ( 4:10 ) You liberals sure have a way with words! Well said. A well-deserved champion of the impecunious. ALL: Clearly a distinction must be made by now concerning the two essential factions ( hopefully not warring ) that occupy Kitco cybersoil. There are those who view gold essentially as just another commodity, subject to the general and specific laws of supply and demand. Like Wheat, corn, soybeans, or bizmuth. They are impatient with those who ascribe to the yellow metal any importance other than what others are willing to pay for it now, or, at most, a couple of months hence. Such folk are more likely to be short gold than others, and as likely to be short as long. And, as befits their philosophy this is proper and right. Their insights concerning market activity and human behavior in the midst thereof are usually underpinned by the wisdom of battle-scarred experience. They have much to tell us.

Then there are those who see gold as something more than just a commodity to be traded. They have integrated gold into a world-view that stretches beyond a few weeks, and a range of a few dollars, to extended times past and future. Times that span many lifetimes in either direction. Times that cumulatively offer up such wisdom as could be of no possible value to any speculator or investor, except to distant heirs. Great principles of human behavior and nation building reveal themselves to those who study the history of gold, and extrapolate its potential future. A cosmology, a world view, a philosophy cannot help but be galvanized and developed within such minds. The shoulders of giants become more accessible to those who stretch upward in such a direction, for the giants then deign to stoop for a moment for us to clamber upon them for a better view.

Forgoing a few dollars here, a few dollars there, those who take a long-term view of gold tie themselves to the unfolding drama of mankind upon the earth in ways that renumerate the mind and soul. It is not merely about money, and profit and loss of dollars and cents in an individual account. It is about the entire mystery of life, and an important segment thereof. That is a cosmic calling. In the end we all leave here as impecunious as we came. We can only take with us what we have developed in our spirit. If our life was expended on meaningless expediency, if our intelligence was wasted on superficiality, what does it profit us if we gained the world but lost our soul?

(Fri Jul 11 1997 07:27)
@commercial puetz
interesting post on long hedging steve, was naively thinking that
the commercial longs were speculative. Is it a possibilty that
industrial users are picking the current price as a low
and buying for future delivery at the current price and that the
present situation is not actually short of physical gold? It may
be cheaper for the commercials to do a call option than take
physical delivery and store the gold. If anybody had experience
of wether the commercials do in fact do this, it would be
intersting to know.
It also be interesting to see what the month/open interest
distribution is for the long's.
lease rates seem an interesting indicator, can one put in
a plug for platinum and palladium lease rates as well as
gold and silver on this the "best of the best" site?

(Fri Jul 11 1997 07:54)
Just a thought, but what if the PPI numbers came in BELOW expectations ( no change is expected ) ? Let's say that the PPI came in at small negative numbers, just enough to cause a deflationary scare. This would enable, even justify, a lowering of interest rates and the ADDITION of liquidity to the markets. Clearly there is currency turmoil in the PacRim area. A deflationary 'aura' must created so that the creation of inflation will be welcomed, even desired, to stave off the, 'deflation'.

A crazy scenario, but, it would see rising equity prices along with rising gold prices. This is to bizarre a thought, never mind.

Next, I'll be accused of being in da Nile river. I mean denial....

(Fri Jul 11 1997 08:17)
Lan Man -- Any info would be greatly appreciated.

And YES! I have successfully talked myself in to my previous scenario, at least for the next fifteen minutes or so.... :- ) I will adjust my reality as needed, and as often as needed. It seems to work for the dippies.

(Fri Jul 11 1997 08:23)
@DFW Airport
I just listened to a story on NPR about the New York subway system
transition to debit cards which will obsolete the 100 year old famous
NY city subway token. The same situation applies to gold. The physical
metal is being phased out and being replaced with electronic paper.

We are victims of our own computer revolution,

(Fri Jul 11 1997 08:26)
PANDA & SCOTTY, yours at 23:03 and 23:08. The Whiffff of currency crisis is real and a replay of the 30's. During that worldwide ordeal the US helped England which had to devalue its Pound. The English Pound was the reserve currency of the world. The US dollar and the US government was rock solid and the dollar began its role, which it still carries, as the accepted currency of world trade and reserve.

Things are enormously different now. There is no apparent successor to the dollar. A currency crisis now would reduce world trade to barter or to a cumbersome gold exchange system. Living standards worldwide would be reduced.

Mike Sheller
(Fri Jul 11 1997 08:26)
With its recent spike, PT has broken out of a 10 year Rhino price pattern downtrend since 1987. ( For the unimaginative, or graphically challenged, Let a kid look at the chart for you. He'll show you the Rhino ) . PT has come back and corrected in what looks like a classic return move, preparatory to another leg up. Inasmuch as a supply situation has decoupled PT from gold, we can shift our attention from Venus ( significator of gold in the NYSE horoscope ) to Neptune, classic significator of Platinum, & PG metals. Placed at 27 Libra, NYSE Neptune will be conjuncted by Mars during the 2nd week of August. Actually the 9th, 10th, 11th. This could be peak of activity, but we want to be watching to either side of this time window as well, for unusual Platinum activity.

Mike Sheller
(Fri Jul 11 1997 08:34)
pointless task?
URIS: You don't seem to get the point. Gold is not money because someone says its money. It's money like Wheat, or Tomatoes, or a new Lexus, or a shovel or a piece of land is money. It is a REAL thing that real people like, use, buy and sell. MONEY is REAL THINGS THAT HAVE A REAL USE. Paper receipts for real things, or electronic notations in a computer, or IOU's, or plastic cards are meaningless when you cant get a shovel, or a piece of land, or a Lexus when you need it because someone slipped you a phony piece of paper or a worthless string of numbers in your electronic account. When the Iraqis invaded Kuwait, they left the Kuwaitis with Zeroes in their electronic teller machines. Gold will be irrelevant as money when we no longer need physical bodies. While it is a state to perhaps be working toward, in some wise, it won't happen here. When the sh-t hits the fan and SAM goes belly up, would you prefer paper, or plastic? Or gold?

(Fri Jul 11 1997 08:40)
in TED's absence
dbc Market Monitor reports US PPI for June down .1%, core rate up .1%

(Fri Jul 11 1997 08:44)
Donald.....I'm usually not up this early....but I took a look at Kitco to see if gold was shaken. Not! Regarding your "reserve currency" scenario: although I agree in principle, I don't agree to the extent that a calamity is imminent. Bartering? Perhaps.....just in case, I have been quietly unloading all my rental real-estate. I will pay off my debts and keep accumulating gold eagles.

At these levels, I'm buying all I can afford -- without my wife finding out! So, instead of taking out a mortgage to buy gold, I'm just dumping everything. The final result is I have gold with no outstanding debt. Coooollll!!

Also, I'm off to a big coin show today. I'll snoop around with my coin dealer cohorts and see how they feel about the "big dump" in gold. I'll report back......

(Fri Jul 11 1997 08:50)
remember IBM?
Remember IBM not-too-long-ago? It was selling at $45 dollars a share? Everyone thought: "what a loser." Well, I bought a hundred shares ( am I a high roller or what? ) and watched them go to $138 or so and couldn't take it any more and exited with a cool tripling of my moola. IBM continued to $175 ( or so ) , went down a bit, then went up a bit and then split 2-1 a month or two ago.

My point? Gold is in that "loser" stage right now. Just like IBM, gold will never be a "loser." It may not be getting any respect right now, but it certainly is not a loser. IBM came back much stronger than even the blues blue chip analysts predicted. Once the fundies change ( say, like when paper is worthless or there is a crisis or everyone wants gold bracelets ) then gold will start moving up a-la IBM. Remember, you heard it here first!!!

(Fri Jul 11 1997 08:52)
to Mike Sheller
Mike, you make an excellent point which can be carried over to
also developing a food and goods storage program, gun and ammo
storage program, etc. Hopefully, you will never need it, but
it will always be there, it will always have inherent value,
and you can always use it even for non-emergency uses. What do
you recommend as the best way to hold gold bullion for storage

(Fri Jul 11 1997 09:10)
When paper becomes worthless and all transactions are done in gold there will be about a decade while the existing economy and cars and stoves and TV's wear out. Then we will have to move all the existing gold in the world around to make transactions. Commerce will not be able to function as we have developed during the past 200 years and businesses will collapse. Shortly we will all be living worse than the Cubans will nothing new in sight. The death rates will rise as the hospitals decline, children will die as the stores of vaccines run out as their manufacturers go out of business. Transportation will collapse as the governments will be unable to maintain the roads. Then with 150 years of pollution to handle we will find water taking on a new an unwanted value.
I prefer plastic and paper to oxcart and early death.

(Fri Jul 11 1997 09:24)

(Fri Jul 11 1997 09:37)
Larry: Forget Larry North. He is complely wrong with regard to PC's ability to get to year 2000. More BS. Windows 95 is ready for 2000 now.
Uris: Anti paper movement is underway. Canada has done away with the dollar bill and replaced it with the dollar coin. The reason. It is cheaper to make metal coins than paper. Hard to put that into the paper is worthless mantra.

(Fri Jul 11 1997 09:39)
Deflation, then inflation. You got to scare'em good!

(Fri Jul 11 1997 09:40)
Pl and Pa up
Panda...have you seen any news on Pl or Pa...both are up in the futures market this morning??? Think those Ruskii's trucks are loaded?

(Fri Jul 11 1997 09:41)
@what's this about?

(Fri Jul 11 1997 09:46)
BillD -- How heavy are those trucks? :- ) )

The 'game' is going to get interesting from here on in. How many of those twenty something stock jockeys realize what the PPI is saying? If there's no pricing power on the part of wholesalers, whither earnings?

The hell with the printing presses, get me a super computer with a bazillion Hertz CPU and start creating book entries everywhere! :- ) )

(Fri Jul 11 1997 09:47)
I must go, and increase my productivity now. :- ) )

(Fri Jul 11 1997 09:53)
You become a victim only if you want to become a victim - Mooney 1997.

(Fri Jul 11 1997 10:04)
Mike - Your 6:48 this A.M. was fantabulous! A keeper for all on this site!

(Fri Jul 11 1997 10:07)
@in hiding
Truk on mov now. Vill tak senik rout thru Albania. Siberia highvay is crowded vith heppy Russian vacationers. ( 50% Russians on "vacation" )

(Fri Jul 11 1997 10:12)
Mike's 6:48 A,
Mike & Mooney...yep whatta post...I actually printed it of a few that I want to really stop and take a hard look. I, too, thought it was fantabiousssss!

(Fri Jul 11 1997 10:27)
@DFW Airport
Mike Sheller: I totally agree that gold is a real thing that real people
like, myself included. What I dont like is the fact that the price of
gold is being manipulated by someone with a few keystrokes on a computer.

I think like you that the sh_t will hit the fan in the paper markets,
however I dont look for Sam to go belly up as long as the people doing
the manipulating have their computer.

(Fri Jul 11 1997 10:47)

STEVE - PERTH & SCOTTY : Thanks for posting the Australian news articles. I often find it difficult in HK keeping up with the latest from Oz. Please keep posting.

RJ and ALL : RJ's comment that gold is the only commodity which is not consumed is correct. This is simply because gold is money. You don't consume money, you accumulate it or you exchange it for something else of value or you blow it by investing in the Dow stocks at these levels. Another point to note - over 70% of the world's above ground stock of gold is held for monetary purposes, and of this monetary gold about 40% is held in the form of jewellery. Most of the gold sold to Asia and the Middle East is turned into monetary jewellery, not fashion jewellery. This jewellery is made of pure gold and is stored in safe places in the same way that gold bars are kept in the West.

STEVE PUETZ : Thanks for your 04:31 post - it fills a gap in my knowledge.

MIKE SHELLER : Thought your 06:48 post was great, but couldn't disagree more with your 08:34. You said that "gold is not money simply because someone says it is money". Actually, this is the reason why gold is money and the other items you mention, such as tomatos, are not. It is a value judgement made by billions of people throughout the history of the civilised world. The reasons why people say it is money is because it perfectly fits the criteria of the ideal form of money ( rare, indestructible, transportable, valuable, etc ) .

Regards, Milhouse

Steve - Perth
(Fri Jul 11 1997 10:55)
CHEROKEE: Thanks a MILLION for highlighting the DOW 8000 site. Excellent. You are right, it has well over 3 hours reading in it. All BRILLIANT!!!
Most of these ideas I have considered to be highly realistic. Gold will be doing well then!

(Fri Jul 11 1997 11:00)
@Mike 6:48
The ancient Egyptians were often burried with their wealth, beleiving they could take it into their afterlife. I man burried with 2 kilo's of
Gold was considered to be very rich. What will the wall streeters take with them today, a briefcase of paper, high yield bonds, or their american express.

(Fri Jul 11 1997 11:01)
Mr.Puetz, your 4:31 this morning was also a definite keeper; precise and informative. Thank-You. Have a great vacation! Cmax - Things are really shaking down your way. Hang-in! Lurker777 - I remember well your discussion about the kinebars. At least you got to take a stab with a limited downside. But check with Glenn before buying those Dec. 400's. Last fall and this winter many here thought that they would be good 'lottery tickets' but prices have eroded substantially since then. The situation has changed but not the concept. Perhaps other prices and months would now be more suitable for such a play.

Steve - Perth
(Fri Jul 11 1997 11:02)
On a tragic note, while you are counting your gold losses ( more to come ) , spare a thought for the guys who mine the stuff, and their widows. I discovered tonight that a good client of mine & a gold miner died a day or so ago in the Bounty mine owned by Forrestania Gold at Southern Cross, Western Australia. A strong earthquake hit, & the roof fell in. They say 450 tonnes of rock hit him, killing him instantly. It took nine hours to dig him out. As I do the family life insurance etc, I have the interesting task of assisting his widow with the financial aftermath. He leaves two teenagers. It was on the evening news tonight.
I note this, in response also to the Quake in Venezuela, which I noted from CMAX? a day or so ago. They featured the collapsed building. 200 died they said. The earthquakes are picking up lately.

(Fri Jul 11 1997 11:10)
Someone previously posted this URL for earthquakes, sorry, but I forgot who it was. Anyhow, if you can get in, it is interesting.

(Fri Jul 11 1997 11:21)
Fundy@09:10 Spare us the Save the Children crap "children will die as the stores of vaccines run out as their manufacturers go out of business". Probably the best thing to happen to the children will be a demise of the chemical/drug companies that are poisoning us all. Hope they ALL go out of business, and I for one will help to shutter their doors!

(Fri Jul 11 1997 11:22)
Back@Sunny Brisbane
Greetings All,
In the FWIW category, Normandy Mining Ltd ( NDY.ASX ) is
largest gold producer, producing 1.51 million ounces in
the year to June 30th. Prior to this weeks ( RBA inspired? )
fall in AU and AU stocks, it had touched a $1.54 low and
a $1.55 low.

Well on Tuesday morning it traded as low as $1.22...
( I believe Millhouse or one of our other OZ watchers said
it was a very good buy at $1.23. ) On Thursday it was the
highest volume stock on the ASX ( 20 million + ) , and today
it traded at least 12 million and closed around ( you
guessed it ) $1.55.

To George this the sort of price action the XAU
stocks should show when the bottom is signalled ?

Happy trading to All !

(Fri Jul 11 1997 11:29)
ANYBODY:So, this is not a quetion re wine , etc, but what are your
thoughts on the gold trend now? Holding before further
declines? Waffeling for a spell then up? What?

(Fri Jul 11 1997 11:30)
Toyota president has target for dollar-yen

John Disney
(Fri Jul 11 1997 11:43)
To All
Gold Fields group results are in for the quarter

East Dries produced 6518 kg vs 6354 prior quarter
West Dries produces 5956 Kg vs 5784 prior quarter

Cost before capex east dries 214 $/oz
Cost before capex west dreis 264 $/oz

profit .187 Rand /share versus .245 prior quarter.

Kloof results were much worse but more interesting

profit -.420 R/share versus -.04 prior quater

but on costs

Kloof itself produced 5572 KG versus 4851 prior
quarter at a cost of 281 $/oz
The leeudoorn division produced 1770 versus 1892
prior quarter at a cost of 450$/oz
The Libanon division produced 2391 versus 2645
prior quarter at a cost of 352 $/oz.

Thus Kloof ( by closing leeudoorn and libanon )
can breakeven on almost 60 % of total production
down to 280 $/oz.

Dries breaks even on all production to 264$/oz
and on about half to 214/oz.

For info RSA's highest cost platinum mine Northam
almost broke even last quarter. With a loss of only
620000 rand versus 18 million the prior quarter. It is
one of the world's great speculations IF you believe in

(Fri Jul 11 1997 11:53)
working on the problem
The WASHINGTON POST ( July 10 ) ran a long article: "Government Said to Move Too Slowly on Year 2000 Computer Problem." The subhead: "Partial Crash Poosible if Machines Aren't Able to Recognize Date, Specialists Warn." There are 4,500 "mission critical" computer systems that must be repaired. Only 6% are fixed. [That is, 6% have been said by someone, somewhere, to be fixed, sort of, if you know what I mean: "It's close
enough for government work."]
About 35% have undergone a systems analysis. This is the simplest step. [The California White Paper estimates that this is about 1% of the job.]
Thomas D. Oleson of International Data Corp., a y2k consulting firm, is quoted as saying the government's situation is "way behind the eight ball." Fixing it "is nearing the point of impossibility." Social Security: of those parts of its system that need repairing, "half have been fixed," says a government report. [This is significant. They have been working at SSA since 1991 to get this problem fixed. This is mid-1997. What does this tell you? What does it apparently NOT tell reporters who cover the y2k story?]
Defense: The agency has 4,000 systems. Over 2,700 need to be fixed. The agency is 23% done with renovation, and 8% have been tested.

Government Said to Move Too Slowly on Year 2000 Computer Problem
Partial Crash Possible if Machines Aren't Able to Recognize Date, Specialists Warn
By Rajiv Chandrasekaran
Washington Post Staff Writer
Thursday, July 10, 1997; Page E01
The Washington Post
The federal government could face a partial computer crash in the year 2000 because it is moving too slowly to fix its machines so they will understand dates that don't begin with "19," according to a growing number of technology specialists. Of the nearly 4,500 "mission-critical" computer systems the government needs to repair  which include those that handle defense, air traffic control and income tax functions -- only 6 percent have been fixed, according to an Office of Management and Budget report that will be released at a House subcommittee hearing today.
About 35 percent of those computers needing repairs have not even undergone a systems analysis, the first and simplest step in the renovation process, the report said.
"They're not on a time schedule that looks like it's going to be doable," said Ann K. Coffou, a research director at Giga Information Group, a Cambridge, Mass., industry research firm that specializes in so-called year 2000 issues. "They're suffering from `analysis paralysis.' There's too much work to be done . . . and at this point in the game, it's very, very distressing."
Most large computer systems use a two-digit dating system that assumes 1 and 9 are the first two digits of the year. Without specialized reprogramming, the systems will think the year 2000 -- or 00 -- is 1900, a glitch that is expected to make most of them go haywire unless the problem fixed. For the government, the year 2000 problem could result in computers that come to a sudden halt and others that generate erroneous data, such as wrong Medicare checks or tax bills, computer experts say. In a worst-case scenario, computers that control military defense systems or sensitive communications between federal agencies could be rendered inoperable, some specialists warn. Thomas D. Oleson, a year 2000 computer analyst at International Data Corp., a consulting firm in Framingham, Mass., characterized the government's situation as "way behind the eight ball." Fixing the government's computers on time, he said, "is nearing the point of impossibility." Oleson and other industry analysts expect the federal computer systems that handle the government's most critical functions to be fixed before the Dec. 31, 1999, deadline. But many others systems, including some that perform significant tasks for federal employees and ordinary people, could still be in the electronic repair shop in 2000, they warn. "It's become increasingly clear that agencies are not going to be able to correct everything before the year 2000," said Joel C. Willemssen, the director of information resources management at the General Accounting Office, the watchdog arm of Congress. "We're going to have to start making priorities among all the systems we view as critical." The specialists said it is too early to identify specific systems that might not be reprogrammed in time, but they said those would become clearer later this year as agencies begin focusing their efforts. In its report, which was produced at the behest of a congressional committee, the OMB maintains that the progress of federal agencies is generally on schedule and that the agencies "have made a good start in addressing the year 2000 problem." Of the 7,649 computer systems in the executive branch other than the Social Security Administration, 21 percent -- or 1,598 -- already comply with year 2000 requirements. An additional 9 percent will be fully replaced and 8 percent will be scrapped, the report said. At Social Security, long hailed as the federal agency that has been most attentive to year 2000 problems, 71 percent of its systems don't need to be fixed. Of those that do need repairing, half have been fixed, the report said. The report estimates the cost of renovating computers throughout the government at $2.8 billion, a $500 million increase from an estimate released by the OMB in February. OMB officials said yesterday that figure is expected to cross the $3 billion mark and could eventually grow to as much as $5 billion. "There's still a lot of work to be done, but I think we're on track," said Sally Katzen, OMB's director of information and regulatory affairs, who has been spearheading the government's year 2000 efforts. The report identifies the Agriculture, Education, Justice and Transportation departments as those that have about half their systems or more left to analyze. No department, except for Interior and Veterans Affairs, has more than 25 percent of its systems renovated. At the Department of Housing and Urban Development, which has 206 computer systems, 115 need to be repaired. Although the department is halfway through analyzing those 115 systems, it has only renovated 2 percent of them, the report said.
At the Defense Department, which has almost 4,000 systems, by far the most of any government agency, more than 2,700 of them need to be fixed. The agency is only 23 percent done with renovating the systems, and only 8 percent of them actually have been tested and are considered fully fixed, according to the document. The government's progress is expected to come under fire from members of the House Science Committee and the Government Reform and Oversight Committee, which are holding a joint hearing into the matter today, congressional aides said. In addition to questioning the pace of repair work, committee leaders will criticize several agencies' schedules for repairs, which call for finishing work in November and December 1999. "They haven't left themselves with a margin for error in case something goes wrong," said Rep. Constance A. Morella ( R-Md. ) , chairwoman of the Science Committee's technology subcommittee.
Committee members also will probe whether any government agencies are now buying software that is not year 2000 compliant, aides said.
STATE OF REPAIR: Status of Mission-Critical Systmes Being Repaired at
Selected Agencies

of Assessment Renovation Implementation
Agency systems % complete % complete % complete

Agriculture 469 41% 0% 0%

Commerce 162 75 7 5

Defense 2,752 64 23 8

Education 7 30 0 0

HUD 115 50 2 2

Justice 118 52 2 0

DOT 132 50 10 0

NASA 211 75 2 1

All federal 4,493 65 17 6

Source: Office of Management and Budget

Steve - Perth
(Fri Jul 11 1997 11:54)
PANDA: Huge favour to ask. Could you please post back on Kitco the URL for "09:12 RUSSIAN BANK HOLDS FIRST BULLION TRADING IN RUSSIA IN 70
YEARS. " Thanks very muchly. I have been searching in vain for it, but cannot find it.

(Fri Jul 11 1997 11:57)
cherokee @23:59

thanks for the cabbit story, and for
giving hep-cat a viable alternative


it works for me !; )

(Fri Jul 11 1997 12:04)
Cobol : Lucky I did the degree in information technology ( database systems ) . As 2000 nears, I will be worth more than the yellow stuff an hour! Strategy boys, strategy...

(Fri Jul 11 1997 12:15)
Steve - Perth -- Here's the URL, it's DBCs headlines.

(Fri Jul 11 1997 12:18)
If you havn't noticed yet, gold is currently crashing upwards. Check the XAU graph.$XAU.X&time_period=1-minute%20Bars&bars=600?wstype=480%20x%20360%20GIF&chart_type=Close%20Only&colors=Black%25%252C%20Green%20on%20Transparent&vol=Volume&study=Exponential%20moving%20average&ma_period=50&key=

(Fri Jul 11 1997 12:25)
What! The Japanese don't trust the Russian palladium supply line! How could this BE! :- ) )

Steve - Perth
(Fri Jul 11 1997 12:28)
Fed holds key to future of Gold Hoards.
An interesting column from Sydney. We all know about the Fed Paper he is referring to. I find it a bit unbelievable that Australia's Reserve Bank Governor hasn't read the "Gold is Dead" Fed paper. But then, maybe he doesn't know how to use the Net!!

(Fri Jul 11 1997 12:34)
perusing sgain
You know, it occurred to me a while ago ( as I was mowing the lawn ) ...if someone ( big ) was serious about building a substantial interest in gold; they would have to be an idiot to announce it. Sounds pretty simple doesn't it? ...too simple for me... Unless, of course, it was an Honor thing...en garde? We shall see.

(Fri Jul 11 1997 12:45)
Scott: Hold on to your hat. Someone just estimated that in europe the cost of fixing systems ( YEAR2000 ) will increase from 1 to $4. per line of code, as the millenium nears. Hourly rates for experienced programmers could well skyrocked. Already a shortage...

(Fri Jul 11 1997 12:47)
working on it
FROM July 11, 1997 USA Today

There is a 98% probability of this happenning VERY SOON. What will the investors do?????!!!!

Banks vulnerable to year 2000 glitch
WASHINGTON - Lost transaction records, funds suddenly made inaccessible, miscalculated interest and even failures of some banks. The financial industry is especially vulnerable to year 2000 computer
problems, yet only about 10% of banks and other companies have completed programs to handle them, an expert said Thursday. The potential computer crisis starting Jan. 1, 2000, could cause consumers
to lose faith in the security of their banks and the financial markets, several experts told a hearing of the Senate Banking subcommittee on financial services and technology. Sen. Christopher Dodd, D-Conn., said there likely would be "a deluge of litigation" against banks and financial companies by consumers who lose
money. The warnings came as the White House released a report concluding that the federal government could face a partial computer crash in 2000 because it is moving too slowly to fix the millennium problem. Of the nearly 4,500 critical computer systems the government must repair, including those for national defense, air traffic control and income taxes, only 6% have been fixed, according to the report by the Office of Management and Budget. When the forerunners of today's massive computer programs were first
designed, storage space was at a premium. To save memory space on the old-fashioned mainframes, code writers simply omitted the first two numbers of a date. That means 1998, for example, would read as 98, 1999 as 99, and so on. The year 2000 would be read as 00. Since the systems are coded to assume that all years begin with 19, computers will interpret 00 to mean 1900, if changes are not made.
The financial industry, too, is running out of time to repair the problem, the experts told the Senate panel.
Companies need to have a solution in place by the end of next year in order to allow a year for testing in 1999, said Larry Martin, president of Data Dimensions Inc., a consulting firm based in Bellevue, Wash.
"We have figured out a way," Martin said. "But is there time for everyone to get the job done? Not unless they start immediately." Otherwise, he warned, ***"there will be failures" ****of some financial
institutions. Martin estimated that only around 10% of the banking and financial industry is ready for 2000.
"The lack of concern and action on the part of the international banking community is particularly distressing," he testified. ****"The ability of international banks to operate effectively after the year 2000 is, in our estimate, seriously in question."***
If there are bank failures resulting from the year 2000 problem, taxpayers would ultimately foot the bill for any government bailout, noted Jeff Jinnett, president of LeBoeuf Computing Technologies.
One large U.S. bank, BankBoston NA, expects to spend some $50 million over four years to cope with its 2000 problems, said David Iacino, senior manager of the bank's Millennium Project. Even if a bank is prepared, it could be adversely affected by its close links to other financial institutions that are not, Iacino said. The parent of the Nasdaq Stock Market, the nation's second-largest, started its 2000 program in June 1996 at a cost of around $20 million, Nasdaq President Alfred R. Berkeley III told the subcommittee.
***Even if nearly all the nation's banks and financial institutions become prepared for 2000, a highly publicized computer system failure of one of them could have a negative impact on stocks of other financial companies, some experts believe.***

By The Associated Press

Steve - Perth
(Fri Jul 11 1997 12:47)
To further complete my previous rumour post. Some want the gold price down at 1974-76 levels of under US$135 for Gold. They idea is that Australia will be trading directly with Russia. Russia is also supposed to be bringing Libya into the picture somehow also. I find it interesting that Gold Bullion trading has JUST started in Russia. Highly interesting conjunture of information in one day from two separate source for me. Eventually gold will move back up to around $300 as a new longer term high. My Rothschild contact just got back from Europe. Is saying that gold will most likely move below $300. Quite possibly $270. But the feeling is that value is starting to kick in now. Snooping around for a few buys in the near future. Will be starting immediate project to re-value all gold mining stocks to see if they can weather life under $300 long term. A big job to do.

Steve - Perth
(Fri Jul 11 1997 12:48)
To further complete my previous rumour post. Some want the gold price down at 1974-76 levels of under US$135 for Gold. They idea is that Australia will be trading directly with Russia. Russia is also supposed to be bringing Libya into the picture somehow also. I find it interesting that Gold Bullion trading has JUST started in Russia. Highly interesting conjunture of information in one day from two separate source for me. Eventually gold will move back up to around $300 as a new longer term high. My Rothschild contact just got back from Europe. Is saying that gold will most likely move below $300. Quite possibly $270. But the feeling is that value is starting to kick in now. Snooping around for a few buys in the near future. Will be starting immediate project to re-value all gold mining stocks to see if they can weather life under $300 long term. A big job to do.

(Fri Jul 11 1997 12:48)
EZAU: Here is mine for what it is worth, an easy 330 followed by an iffy 340, followed by 290 over two months.

(Fri Jul 11 1997 12:53)
What do you attribute the increasing life span to? John Wayne or maybe better quailty flag material?

RF engr.
(Fri Jul 11 1997 12:56)
ion mover

You should look into HAARP a bit further. Its not a pop gun - the military is running the show.

Here are some background pages:

Heres the navys HAARP page, which presents the project in a "kinder, gentler" way:

(Fri Jul 11 1997 12:57)
They are trying real hard to get 8000 before the weekemd arn't they!

Gold having a "dead cat" rally...

Mike Sheller
(Fri Jul 11 1997 13:03)
catchup ketchup for lunch
FUNDY: It don't have to work that way. Just substitute "worthless paper" with "worthwhile paper." All that is needed to avoid your grim scenario is to BACK paper with gold. Then you can leave the wheelbarrow in your back yard. Gold's portability, liquidity, and surety will not be to blame for any financial and industrial catastrophe brought on by currency and debt manipulation. If currencies are not related to a specific, freely traded commodity that all may objectively assess, then you are whistling in the dark and playing with fire. It takes far less heat to ignite paper than it does to melt gold. GENERAL: I hope it doesn't come to the NEED for a home arsenal and survival situation, but you are right that some sort of provision for any unusual dislocation of normal services, and commerce, might be wise. Even a severe storm or natural disaster would require what you have described. I think gold bullion coins - 24 carat Maple Leafs, Philharmonics, Nuggets, etc, - are probably the best way for the average citizen to hold some reasonable amount of gold. WHERE it is stored is a whole 'nother subject. When your pants start falling down, it may be time for a safe, a vault, a bank, or a hole in the ground. There are all kinds of opinions on that one. MORE GOLD: Funny image - modern traders and financial execs buried with the paper!

(Fri Jul 11 1997 13:04)
Canadian Golds and juniors all having good moves up.
Not sure yet if this is a dead cat bounce, but im sure that one of these days the low will be made, and those buying will be geniuses.

Lan Man
(Fri Jul 11 1997 13:04)
@Venezuela & KRY
CVG president Ynaty's executive days are numbered...
Recently, AD itself has become somewhat "disenchanted" with the guy.
Fire him, fire him now!

Steve - Perth
(Fri Jul 11 1997 13:05)
Lessons for Gold in the story of Silver

(Fri Jul 11 1997 13:06)
When the average shmuck with his money in the stock market realizes the possible extent of y2k and its effect on the financial markets, the gold and silver will skyrocket. Already gold is changing from weak to strong hands. Smart money is buying gold. We all should be buying gold at these depressed prices.Do you think that Soros is quietly buying gold because he has nothing better to do?

(Fri Jul 11 1997 13:08)
August Gold : 322.0

(Fri Jul 11 1997 13:09)
Correction : 322.40 NOW !

(Fri Jul 11 1997 13:09)
Scary stuff:

(Fri Jul 11 1997 13:10)
Gold headed for 360 with a breather back to 340 before zooming. The train is leaving the station! FDPMX has to be up at least 3%, maybe more. Have a great weekend all!

Steve - Perth
(Fri Jul 11 1997 13:10)
Method in Central Bank "Schizophrenia"
Time for some wage rises I think!!

(Fri Jul 11 1997 13:13)
ZEKE: I saw another estimate that total liabilities in Year2000 lawsuits could exceed $2 Trillion. At this point these are estimates but they may be right.
The lawyers must be salivating....

(Fri Jul 11 1997 13:15)
Mike Sheller: If anyone thinks that the current level of live on the planet can be maintained by a global economy limited by the amount of gold that has been refined they are setting themselves up for a long term lack of satisfaction. Ain't going to happen. The guys in the log cabins with the boxes of freeze dried food and the boxes of cartridges are today's equivalent of the hermits of the dark ages. The world will pass them by and the travelling preachers pickups will be turned into Chip wagons. Salt goes over the left shoulder.

(Fri Jul 11 1997 13:17)
OK, who forgot to put the PA/PL on the boat to Japan! Ca mon, FESS up! :- ) )

(Fri Jul 11 1997 13:17)
@2 weeks
I hope Gold soars over 360. now, for the sole reason of exposing those
idiot Australian politicians who looted the vault and screwed their own people...

(Fri Jul 11 1997 13:22)
To MoreGold

Not sure where you're looking but not ALL of the Toronto Gold stuff is rising. As of 13:20 Viceroy -5% ; Euro-Nevada -3% ; Orvana -1% ; Franco-nevada -.4% .... All on the TSE ...

Where do you show the rises?


(Fri Jul 11 1997 13:25)
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:

(Fri Jul 11 1997 13:26)
M.S.-6:48 - Amen Brother! We are of the same philosophical soup.
You are a giant among men. Can I jump on Your shoulders?



i believe a person can be from Both schools...and...
are you knocking the libs?

(Fri Jul 11 1997 13:31)
ezau-2 to 3 glasses per day...
and I like question #2 with a slight revision. Waffleing to Tanking to Rising. IMHO, FWIW, DIMA?



(Fri Jul 11 1997 13:35)
Panda-it's not on the docked at Mir...and from their...
to the MOON!



(Fri Jul 11 1997 14:03)
To Strad:


I just heard on the news that they actually just found a Martian on Mars via the camera. Problem is he's dead. Seems the airbags exploded with such force ......


Bob A
(Fri Jul 11 1997 14:07)
Anything new with Plat or Pall, especially Stillwater?

(Fri Jul 11 1997 14:10)
Front: Blue chip Barrick +.65 Placer Dome +.60 KINROSS + .35 TVX now flat. This is after good moves yesterday.
Many juniors also up ex: Freewest +18% Western Pacific +10%.
Does anyone have the VSE index, should also be rising.

(Fri Jul 11 1997 14:16)
On Vancouver AMU -7% ; STS -21% ; the rest are between +28% and +1%.
Thanks for the other stuff on TSE. What's that 65 cents in percentage increase?


(Fri Jul 11 1997 14:17)
to Zeke, John, and Y2K
Zeke: I guess I am not the average shmuck when it comes to Y2K because
that's what I do for living ( at least for next few years ) I know how
bad it is and it's exactly the reason for me to be on this forum. To
learn as much as I can about gold because Y2K will drive it's price up.
All of you cyber and paper money worshipers beware - it ain't gona work.
I can't get you your money because computer is is telling me that your
last gain was realized 100 years ago and you lost it in 1929 crash ;- )

Fidelity Update
(Fri Jul 11 1997 14:22)
@2pm edt

FSAGX= $18.78 UP .20
FDPMX=$12.90 UP .22

(Fri Jul 11 1997 14:28)
Front: BARRICK $C 30.60 +2.1%, 52 week low ( this week ) 26.25.....
PLACER 21.05 +3.5%, 52 week low ( this week ) 19.00
I hope its not just short covering on Gold.

(Fri Jul 11 1997 14:32)
Can you believe these suckers? Sell them some lead bars painted yellow. Compaq up 5, Dell up 10! They are out of their heads!

COBOL: Regarding miscalculations on interest rates...this is not a new problem. I am only getting 2% on my passbook account. I was blaming Greenspan and I will apologize to him now that I know it was only a computer problem.

(Fri Jul 11 1997 14:36)
I have learned that most financial types have no appreciation of the magnitude of the problem. I am like you, after realizing what we are facing within next 2-3 years, I decide that for me the only answer is gold and silver.and that I need to learn from the experts at Kitco Luckily I am 2 steps ahead of majority investors who will be paying $600 and up when everyone realizes what is about to hit the markets by year 2000 maybe even sooner. Talking recently to some higher ups at a company I contracted with, I learned that many are taking early retirement starting this Fall. Some already know what is happening and want to avoid lawsuits and want to be as far away as they can be. This is just the beginning. It WILL get much worse.

(Fri Jul 11 1997 14:50)
AUSTRALIANS......2 questions for you. Have you ever heard of a goldmining company named Natural Resources or Southern Natural Resources???? It was a startup in the late 70s or early 80s..If so is it still mining??Has it been bought out ???? Is it belly up ????...And question #2....A friend called last night who had heard some rumor about a lot of NATO troops in Australia and firearms being confiscated from OZ citizens....Is there any truth to that rumor ????

(Fri Jul 11 1997 14:51)
Miro, Zeke, Y2K: Relax. I have it on good authority that the CB'S and their henchmen are going to foil the thieves who created the 2000 AD problem by doing to time what they have just done to gold. 2000 will never arrive. Since it is only a concept and not a property 2000 will be debased to 1999a and then backward 1998a 1997a 1996a. You should never believe you can fool these guys.

(Fri Jul 11 1997 14:59)

#1 : What's the symbols on Toronto for Barrick and Placer?
#2 : Everything ( XAU, TSGL,etc ) seems to be backing off. I'm not sure either but I've decided not to take the chance today. I'll let this one pass, collect a bit of profit from yesterday and maybe add on Monday. It seems to be a toss-up for the shorts as you mentioned. I get the feeling it may be just short covering for the weak stomached but the real shorts need a greater stymulus to move their butts off the fence. Thanks for the info...


(Fri Jul 11 1997 15:16)
BYRON: how many waves down now?

(Fri Jul 11 1997 15:25)
@4 U
JERUSALEM ( Reuter ) - The only two Arab states at peace with Israel blamed Prime Minster Benjamin Netanyahu on Friday for a breakdown in peacemaking which has spawned waves violence in the West Bank and Gaza Strip.

(Fri Jul 11 1997 15:29)
They have backed off a bit. I also am not buying yet, I think we may still have a down wave or two left. Steady as she goes.

(Fri Jul 11 1997 15:31)
Front: Barrick--ABX 30.50 and Placer--PDG 20.90. Both up +/- 50 cents.
The 20th century is running out of time. Put or call?

(Fri Jul 11 1997 15:51)
MoreGOld & Selby:

Thanks guys


(Fri Jul 11 1997 16:14)
What happened to George S. Cole. Is he on vacation or just decided not to post anymore?? anyone know?

(Fri Jul 11 1997 16:24)
George Cole is away for awhile. He has a laptop with him and said he will post from time to time.

(Fri Jul 11 1997 16:59)
Someone else posted this URL for the XAU intraday earlier. Quite a run at the close.$XAU.X&time_period=1-minute%20Bars&bars=600?wstype=480%20x%20360%20GIF&chart_type=Close%20Only&colors=Black%25%252C%20Green%20on%20Transparent&vol=Volume&study=Exponential%20moving%20average&ma_period=50&key=

(Fri Jul 11 1997 17:00)
ALL this chat re the year 2000 comp problems. Banks are
going to have to call in all the folks they let go and work
the comptometers. You know, it used to be done by hand in
rooms full of clerks, fingers flying, pencils pushed, even
the windows were open. The banks can either load up a bunch
of data sheets and ship them to the slave labor Chinese and
just do it by hand. Yes, it is possible. The world worked
before the PC

(Fri Jul 11 1997 17:46)
Assumet China does become a major economic power in another 15-20 years. Once the standard of living for China's several billion people reaches the point where they have a little disposable income and they all decide to buy a gold ring or chain for their loved one, how much gold will it take? Maybe 1/50 of an ounce times several billion Asians?

(Fri Jul 11 1997 17:50)
XAU action this week
Here's a good url to check out the XAU...not bad!!,15

Also...Bob A and Panda...did you check out the closing futures for PA and PL...up strong!!

(Fri Jul 11 1997 17:57)
SCOTTY: Re. your 8:44 You are right to get out of debt and get in gold, in that order if possible. Is my scenario imminent? I think it could be. I know most don't feel that way but when, not if, the dollar goes it will be quick from there. It is like buying stocks here. Could it go higher? Yes. But it is just too risky. A hundred year high, 90% since 1987, is such an unprecedented financial event that the odds of being right at this hour are getting no better than the Lotto. The survivors will be here at the Kitco site. Even those of us who saw it coming and planned carefully for it will be hurt. But we will be less hurt.

(Fri Jul 11 1997 17:59)
Since I was too busy to find Tort's joke this morning, I thought I'd contribute one:

A woman starts dating a doctor. Before too long, she becomes
pregnant and they don't know what to do with the baby. About
nine months later, just about the time she is going to give birth,
a priest goes into the hospital for a prostate gland infection.

The doctor says to the woman, "I know what we'll do. After
I've operated on the priest, I'll give the baby to him and
tell him it was a miracle."

"Do you think it will work?" she asks the doctor. "It's worth
a try," he says. So the doctor delivers the baby and then
operates on the priest. After the operation he goes in to the
priest and says, "Father, you're not going to believe this."

"What?" says the priest. "What happened?"

"You gave birth to a child."

"But that's impossible!"

"I just did the operation," insists the doctor. "It's a miracle!
Here's your baby."

About fifteen years go by, and the priest realizes that he must
tell his son the truth. One day he sits the boy down and says,
"Son, I have something to tell you. I'm not your father."

The son says, "What do you mean, you're not my father?" The
priest replies, "I'm your mother. The archbishop is your father."

(Fri Jul 11 1997 18:07)

Would someone please help me to understand this gold forward selling? A lot of the big gold mines have forward sold their production gold for the next few years at $400_$500 an ounce. Is this a contract that they will recieve this amount as it is produced and turned over to the buyer; or did they recieve this money up front ?
The big question is ; WHO are the people with the egg on their face that bought the gold at these prices??????

(Fri Jul 11 1997 18:16)
@in hiding
COMRADE PALLADIUM CUSTOMERS: Ve gif update on truk vat tak senik rout via Albania. Driver tired. Has stop Albania Truk Stop for nap. Ve haf hired vell qualified Albanian Sekurity Kompany, Wills Forego, to guard. Not to vorry.

(Fri Jul 11 1997 18:30)
to Ark on banks
ark: you said "You know, it used to be done by hand in rooms full of
clerks, fingers flying, pencils pushed, even the windows were open"
Ark, not anymore. Humanoids in local branch won't help it. It's
electronic commerce, check clearing house, overnight loans, etc..
everything goes through the wire in bits and bytes. Did you noticed that
your check clears much faster that decade ago? There is no physical
movement - just information bits through the telecom line. That's what is
so scary. When infrastructure stops working everything is dead. Sci-fi
 computer rules  but its so dumb  and when it gives up a lot of
things can't go back to "manual method"

(Fri Jul 11 1997 18:36)
Having lived in Japan for the past 5 years, I take a special interest in such keen comments on the situation here in Rising-sun-ville.

Oracle's latest is once again a must read:


"Only Solution Is To Dump U.S. Treasuries and Buy GOLD!"



From the article:

"If we are to believe that Prime Minister Hashimoto is a politician not prone to cavalier remarks in public, and does not lean toward childish bluffs regarding the welfare of his country, then we are forced to be of the opinion HE WILL NOT RISK LOSING POLITICAL-FACE BY BACKING AWAY FROM HIS VEILED THREAT TO SELL T-BONDS AND BUY GOLD, if the U.S. shies away from defending the greenback, and fails to increase interest rates. Relevant is the FOMC's recent decision to stand pat on rates, even while the dollar continues to slip. Looks like the ball is in Hashimoto's court."

(Fri Jul 11 1997 18:44)
Maybe 1/50 of an ounce times several billion Asians?
John@Home: That's a very intersting question. Here is the baisis for my calculations. China's population is 1.2 billion. If it experiences a low demographic annual growth of only 2%, China's teeming masses will be 1.6 billion strong within 15 years ( naturally, barring any devastating world wars ) . And let us assume that half the population buys a gold ring weighing 1/50 of a troy ounce for the other half in the year 2012. The amount of gold required will be 40 billion ounces, which is equivalent to 1,244,000 metric tonnes of the noble metal. Now if we assume the world's yearly production remains stable at approximately 2,300 metric tonnes, it would "ONLY" require 565 years of gold production ( that puts us in the year 2577 ) . Methinks we need not worry about the price of gold rising in the future. ( :- ) )

(Fri Jul 11 1997 18:52)
ooooOOOPS - multiplied by 50, instead of 1/50. Will be back shortly with CORRECTION!!!!

(Fri Jul 11 1997 18:58)
Oh God please let me enjoy it a little longer
Oh what a feeling. I just looked at my portfolio and instead of shrinking
by $1000 per day it's went up by $1000. Please God let it continue, my
only sin is that I bought some gold mutuals ;- )

Bob M
(Fri Jul 11 1997 18:59)
According to CNBC and Jimmy Rodgers this afternoon 4 billion ounces of gold in world right now with annual production at 83 million ounces per year..and the negatives keep on coming..pretty soon you will see car dealers and computer sales companies giving away gold with the purchase of their product.. Its coming gold will be treated one step above road gravel..then the bottom will be firmly in place...

(Fri Jul 11 1997 19:06)
BobM: I have a perfect solution. Mining Co. shareholders should present proposals to change company names. Just scratch out the word "mining" or "gold" and replace it with "computer". Then our mining stocks will go up. After the crash we can still buy them cheap because then no one will want "computer" companies. It works!

Bob M
(Fri Jul 11 1997 19:11)
Donald-its ridiculous, isnt it? The Invesco Gold Fund is down to $3.60 a share. The value of the companies alone has to far exceed that..the way I see it, most of the bad news is out on gold, but the worst is yet to come. Shortly our government will annouce that they are selling out most of Ft. Knox and the market will spiral down for its last down leg, with spot gold settling at around $250 or maybe a little less. I believe that the mining stocks are very close to bottom right now as bargain hunters are going to begin to move in..

(Fri Jul 11 1997 19:11)
(Maybe 1/50 of an ounce times several billion Asians? ):
John@Home: Firstly, the question has a slight error ( in addition to my hasty math ) . The cheapest gold ring ( the thinest ) weighs considerably more than 1/50 of an ounce. Consider that 1/50 of a troy once at tonight's gold price is only $6.40 - that would be a "gold" ring we might find in a Cracker-Jack candied popcorn box ( if they still exist ) . I have never weighed a gold ring, but I cannot believe it would weigh less than 1/2 an ounce. So we will use this figure for our experiment.

Again assume one half of the total Chinese population ( 800,000,000 ) in the year 2012 buys a gold ring for the fairer half. Obviously, we are talking 400,000,000 oz of the noble metal, which is equivalent to 12,440 metric tonnes. And at current world gold production rates, it would take 5.4 years just to satisfy the Chinese demand.

(Fri Jul 11 1997 19:17)
@ The Public Library
RT: Regards XAU bottom of the ninth. Within this ninth we are in #8 up currently and will have a final ninth down. Can not say the nature of the final ninth down, that is if it will just go below the prior low of this current ninth wave down or will do a "last Monday" on us. London Gold is definitely in ninth down now ( confirmed ) but again I can not say where the bottom is. But time wise, we are at the end of this bear move from back in early 1996. But as always, need to give a week or two leadway.... The CB'ers are trying to bury gold back into the ground from whence it came. But the Phoenix will rise again.

(Fri Jul 11 1997 19:18)
@Y2K Etc.
Miro, I hope your portfolio grows too.
I've been experiencing "PORTFOLIO PARALYSIS" for the last year or so.
There seems to be a lot of interest here in Year2000.
The following site has it all:

(Fri Jul 11 1997 19:19)
BobM: I bought Bema Gold today for US$5.375 at the open. It has a book value of $5.50. Snowplows got through today and the Refugio Mine is open.

George Cole
(Fri Jul 11 1997 19:20)
New Theme
These guys used to be wildly bullish. But they do have a good point. The gold mining industry will consolidate massively over the next 12 months. This will be all to the good. There are far too many companies mining gold today.

Today's action pretty good for a Friday. Is the bottom in in? Too soon to tell. We will have to see if recent lows hold on the next reaction.



July 11th, 1997 - Vol. 163-97


Lower gold prices have put mining-company investors literally in a hole over
the past few months.

But we believe that those few investors who can "handle" and deal with the
possibility of even lower gold prices in the months to come may actually
reap very strong benefits down the road, as the industry consolidates.
Though difficult and costly for various gold-mining companies, this
consolidation is expected to give sinking precious-metals stocks a much
needed boost.

This week, prices for gold ( and thus gold-mining companies ) went into a
severe 2-day drop after Australia's central bank announced it had sold
two-thirds of its gold reserve. Gold futures for August delivery lost $13
during Thursday and Monday trading but recovered Wednesday, gaining $2 at
the Comex division of the New York Mercantile Exchange to $321 an ounce.

Shares of Barrick Gold ( the largest North American gold producer ) tumbled
7.4% over the 2 trading days; Royal Oak Mines ( a high-cost producer ) fell
16%; Newmont Mining lost 8.4%; and Homestake Mining fell 5.2%.

Though showing sporadic signs of recovery, most gold stocks still have
fallen sharply since the beginning of the year. On Wednesday, for example,
the gold-share index on the Phildelphia Stock Exchange rebounded 3.1%, after
having lost more than 8% two days earlier.

Just last week, AMG Data Services ( a fund-tracking company ) showed that
investors in gold and natural-resource mutual funds pulled their money out
of those funds over a 3-week period ending July 2nd -- one day before the
Australian central-bank announcement. In fact, as a percentage of assets,
gold-fund investors took out more capital ( 3% of total assets ) than any
other mutual-fund sector during the last three weeks of June.

As our readers know by now, one of the major factors contributing to the 13%
year-to-date fall in gold-bullion prices has been a sequence of decisions by
numerous central banks to sell part of their gold reserves.

We feel that further central-bank selling could put a very heavy burden on
various mining companies' earnings and balance sheets. In fact, this alone
will most likely speed consolidation talks. For the next 6 to 12 months, we
anticipate tremendous opportunities for companies to strengthen themselves,
while we will also see many losers. More technologically advanced mining
companies will be looking to acquire smaller and less profitable ones.

Given current gold prices, higher-cost producers find it increasingly
difficult to show profits. At this rate, we could see hundreds of companies
literally disappearing through acquisitions ( or shutdowns ) . South Africa and
Australia ( with deeper mines ) are particularly endangered because of the
high costs involved in extracting gold from the ground.

We expect Homestake, for example, to carry on its purchases of smaller
"junior" mining companies - notably after the breakup of its friendly
agreement to acquire Santa Fe Pacific Gold earlier this year.

Meanwhile, a few gold companies have hedged part of their exposure to
falling commodity prices through forward sales. For those who are not
familiar with this strategy, forward-selling contracts are entered into to
lock in a price for future gold sales. Barrick, for instance, has committed
to forward contracts whereby it will sell its gold through the year 2000 at
a price of $420 an ounce. As a general rule of thumb, we feel companies that
have hedged will probably be less affected by falling bullion prices.

Overall, the combination of limited inflation and booming stock markets have
kept most gold stocks out of favor. This obviously leads to 2 questions:

( * ) Is it time to buy yet? ( to take advantage of bottom fishing opportunities )
( * ) What should I buy?

As you may know, at LGN Capital, we focus on growth and high-growth stocks,
and have an in-depth knowledge of precious metals and mining companies. Over
time, we have offered our readers and clients many opportunities to invest
in this industry and reap solid profits.

The key to making money here is:

( * ) Identify companies where the downside risk is minimized -- notably given
the high cost structure in the industry
( * ) Look for strong acquisition opportunities and candidates
( * ) Find companies stressing cost-cutting and low-cost production

. .

(Fri Jul 11 1997 19:26)
@New England
SHADOW: Forward selling is selling gold you dont presently have. CNBC is paid through advertising by the financial mkt peddlers so they will always knock gold. The statement that there is 4 billion ounces of gold in the world and growing at 83 milion per year is disingenuous on its face. 70 % of the existing supply and almost all new supply is used for jewelry and industry and is not at all convertible into tradeable gold at except maybe 700 or more per ounce. Thus, the tradeable and investable gold supply is shrinking especially when compared with paper expansion. As Wall St is the major paper underwritter they would, of course, encourage the false perception that the tradeable gold supply is expanding. Hard to believe a responsible network would create patent disinformation like the gold surplus story/ also Jimmy!! Patent misrepresentation of facts on CNBC/ Are they getting a little nervous?!?!

(Fri Jul 11 1997 19:26)
Reply to Fundy
As FUNDY says ( 13:15 ) , I feel certain that most Kitcoists don't really think that we will be using gold ( coins, bullion, wafers, dust? ) as currency anytime soon unless the economy has a total collapse ( almost impossible ) . Anyone who wants this must be out of his mind. He may have gold in his hand but he won't stay rich unless he has a weapon.

Deterioration in the value of the dollar is measured by other currencies and by commodity prices ( anything which can command a price in a free market such as gold/silver ) . If the U.S. economy starts to destruct due to market bubble, inflation, deflation, war, pestilence, drought, terrorism ... anything... the Feds will quickly issue more credit or paper to be used as currency. As a result, the dollar will reach a lower point of value, meaning that gold will have a higher price. The dollar can slowly lose value and gold can go sky high without the economy collapsing. Since 1945 we have already lost about 90% in the dollar value. We could do it again and still have a workable society. Meanwhile gold goes up. Gold is down now only because most investors ( even CB's ) want interest paying US debt instead. I don't think this will last much longer.

(Fri Jul 11 1997 19:41)
Interesting story, so interesting, that it was quoted twice! :- ) )

(Fri Jul 11 1997 19:54)
WW: Agree with you 100%. What stupid misinformation! What are we going to do, melt down all the wedding rings, chains, ancient coins, egyptian artifacts, crown jewels, teeth, watches etc. and then say there is a major oversupply of Gold. HAHAHA. We must be at the cyclical bottom when this kind of nonsense gets aired by our trusted media.

(Fri Jul 11 1997 19:57)
To buying Gold calls at $10 apiece. You can forget it. Today a small retail order came in to buy 4 Oct 370 calls for $30 each. They closed at $30 yesterday. Gold was down $0.50 at the time. The options traders just stood there "20 bid" "AT 40" with NO intent of being flexable. If you want an option that close at $10 you will pay $20. Well today I figures it was one of you guy's buying. I mean it was only 4 contract so I sold it to him. I figured what the heck. If Gold goes up $50 in 2 months I'll be long so much Gold, so I just buy 4 more contracts to hedge them. But in the future don't expect this type of fill. I'm not in the option pit to often and the other options traders are real inflexible about there bids and asking prices.

Gold did go up today but it was on very lite volume. Not much buying at all. I'm not sure yet what to make of it. I'm thinking of shorting the NYFE this coming week. DOW 8000 seems a like to tough for right now.

(Fri Jul 11 1997 20:30)

George Cole; Would you please address my question stated here on july 11 1807. I dont think anyone else knows the answer.

(Fri Jul 11 1997 20:42)
carson @

George Cole,
Would you please respond to my july 11, 18:07.... I dont think anyone else can. Thank you.

(Fri Jul 11 1997 20:44)
World Gold Council

Gold Economics & Demand Trends [Gold Flash Archive]
Gold News Flash 9 July 1997

Australian Gold Sales - Update


The following 6 points are being made by the Council to the
media in response to the recently announced sale of gold by the
Reserve Bank of Australia, a decision that has triggered heated
debate in Australia itself.

1.The Reserve Bank of Australia said it wanted to avoid disturbing the
market, but in fact the announcement has greatly disturbed the market
as shown in the sharp drop in the gold price. The central bank did not
expect this because they thought they could present this decision as
being in line with similar decisions by other central banks ( The
Netherlands, Belgium, Canada etc. ) as well as proposed Swiss and
German moves, whereas in fact the Australian decision is quite
different. Australia is the first central bank to acknowledge that they
are selling gold primarily for rate of return reasons. That is why it
has been taken so badly by the market.
2.The Australian decision has been motivated by narrow financial
considerations, whereas in fact it will have wider economic and
political implications. These wider implications were not taken into
account in the cost benefit analysis which they carried out before
taking the decision to sell. For the sake of increasing the return on
their international reserves by a few percentage points, the Australian
authorities are endangering key sectors of the Australian economy.
3.The reserve bank is taking an essentially short-term view of the
outlook for gold, whereas central banks are supposed to take the
long-term view and to safeguard the currency and the nation against
long-term dangers. They are supposed to look after the interests of
future generations. However, this decision does fit in with the current
management style of the Australian Central Bank which is perceived
by other central banks as adopting a risky and aggressive trading style
in the management of its currency reserves.
4.This action will increase the vulnerability of Australia to external
financial and political pressure. This is because assets which are
denominated in foreign currencies are subject to threats of being
frozen or blocked by the issuing country whereas gold reserves, if
appropriately located, are not vulnerable to such actions.
5.The Australians themselves accept the key arguments for gold: i ) that
it is a way of diversifying foreign reserves; ii ) that is relatively
immune from external political pressures . Their argument is that
because Australia has large reserves in the ground they do not need to
hold significant reserves above ground. This argument is erroneous
for a large number of reasons - the gold is hard to get at, it is owned
by private sector companies, and would doubtless command a very
high price if the Australian government wanted to mobilise it quickly.
6.To put this all in perspective, some central banks have continued to
acquire gold. GFMS statistics show that 19 countries were net buyers
of gold in 1996 compared with 16 countries that were net sellers and
also that the amount sold by Australia of 167 tonnes is very small
indeed when set against total world demand or supply. New mine
supply in 1996 was 2346 tonnes, fabrication demand was 3290 tonnes,
mainly jewellery ( 85% ) .


Contact: R. Pringle, Head, Centre for Public Policy , World Gold Council,
Kings House, 10 Haymarket, London SW1Y 4BP, U.K. Tel. +44.171.930
5171, Fax. +44.171.839.4314, or by e-mail:

[Gold Flash Archive]

The World Gold Council is a non-profit association of gold producers world-wide, with
headquarters in Geneva and offices in major markets around the world. The countries
monitored by the Council account for approximately 80% of global gold demand.

(Fri Jul 11 1997 20:51)
POLARBEAR: I like the analogy! But as you know, stalls are easy ( and fun ) if you know how to handle them! Problem is the pilot, co-pilot, navigator, and loadmaster for this aeroplane ( world economy ) full of passengers may have not practiced for a long time. My fear, however, is that they know exactly what they're doing and plan to bail out at the appropriate time, leaving the passengers to crash and burn. A massive crash and its aftermath would give "world leaders" the reason to create their "new world order". The scenario could be ugly in a number of ways ( as frequently hypothesized here at KITCO. )

MY HOPE is to gain enough knowlege here to fabricate myself a financial parachute.

And for everyone else at this site to do the same...

Knowlege is power...

George Cole
(Fri Jul 11 1997 20:52)
forward selling
Shadow : Others on this site such as Ted Butler know much more about the intracies of forward selling than I do.

(Fri Jul 11 1997 21:02)
@ Delphi
Could this current
be the beginning
of the end
of this time

John N.
(Fri Jul 11 1997 21:03)
The Times of London says of The Little Old Lady of Threadneedle Street:

Mortgage costs rise as Bank lifts


MILLIONS of homeowners face another rise in mortgage
costs after the Bank of England increased interest rates for
the third consecutive month yesterday.

Gordon Brown, the Chancellor, who gave control of rates to
the Bank soon after the election, defended its action as
necessary for an economy "in danger of becoming seriously
out of balance" because of the mistakes of the Tory
Government. He accused the previous administration of
failing to tackle the threat of inflation.


Let's move the Kitco 450 Gathering to Vancouver to avoid cold weather objections et la question de langue pour les Americans. D'accord, M. Bart?

(Fri Jul 11 1997 21:05)
crazy Russians
Steve-Perth.....couldn't find the info on the Russian Bank marketing gold. I did find why it's a crazy idea: it seems the Rooskies are buying beef from the Brits....

(Fri Jul 11 1997 21:05)
Apollo@Delphi: Thak sounds like Greek to me.

(Fri Jul 11 1997 21:36)
carson @

Mr. Ted Butler;
George Cole has passed the baton to you. Could you please answer my questions on forward gold buying on : July 11 18:07 Thank you.

(Fri Jul 11 1997 21:55)
Can anyone explain why the significance of the following article is favorable to gold in the second half of this year, as contended:

UK gold marking increases 7.8 percent at end June

LONDON, July 11 ( Reuter ) - The number of gold articles hallmarked in the UK during the quarter ended June 30 increased by 7.8 percent compared with the same period last year, according to the Assay Offices of Great Britain.

The total number of gold articles marked was 4,269,403.
An Assay Office spokesman said, ``The figures support the cautious optimism coming from the trade regarding prospects for the second half of this year.''

He added, ``The 14 carat standard although down for the quarter was 12.5 percent up for the
half year.''

Nine carat items dominated with over 3.7 million of which nearly 1.8 million items were manufactured outside the UK, a 13 percent rise on the 1996 quarter.

The weight of gold marked increased by 16.5 percent to nearly 19.5 million grams.

(Fri Jul 11 1997 22:00)
back from the coin show
I just got back from the first day of our local coin show here in Colorado Springs. I went during dealer setup to see which way the wind was blowing. I'm going back tomorrow to see what the public demand looks like.

Gold bullion.......only a couple dealers ready to deal at these levels. The biggest dealer was selling 1oz Eagles at spot plus $20. That's a fair spread -- but he wouldn't tell me how he can make money at these low levels ( in other words, he wouldn't tell me his gold source. The best I can guess is he is buying off the street in his shop at spot or below spot. )

The bulk of the dealers are selling rare coins, type coins and the such and therefore are not bothered by silver and gold prices. Interesting, I did not see anyone seriously offering silver bullion; though I did see a smattering of 1oz Eagles at higher than usual prices.

I saw some rare gold at give-away prices. And I just dumped a bunch of moola in my gold mutual fund. Rats! Rare gold will never be this low again. If anyone needs anything, let me know!

I'm going back tomorrow to finish up and maybe make a few bucks. I'll report back when it's all over. But for now, the wild gold market looks like a "non issue" to this particular group of numistatists.

(Fri Jul 11 1997 22:18)
Well, the Long Bond has broken to the downside on the ascending triangle. Whether this is a new trend or just an aberration, we will just have to wait and see. If this is a new trend, this could portend more short term trouble for gold. Then again, I am now more convinced than ever, I really don't know anything! :- ) )

(Fri Jul 11 1997 22:23)
@more salt in the wound.
Now for the really ugly chart. Of course, this depends on your point of view and whether you are long or short the yellow stuff.

But then again, if this were Compaq or Dell, the question would be, "When do I buy the dip?" :- ) )

(Fri Jul 11 1997 23:04)
WHEWW!!! Looks like we are all in big trouble.....if you believe this article about a massive European CB gold sell off......

(Fri Jul 11 1997 23:13)
Shadow: Best treatise you will find anywhere about intricacies of FORWARD SELLING was written by Ted Butler - posted at GOLD-EAGLE website. You may read it all at:

(Fri Jul 11 1997 23:31)
@ Delphi
No Greek here, until tomorrow.

There is a time for death, and a time for re-birth.
These are such times.

Calm seas do not make good skippers.