SCOTTY@2304: I wonder how many shares short those buggers
are that are spreading the stories about EB selling gold?
The Aus's didn't tell anyone when they were selling theirs.
Gold price may have a political factor but the politicos
surely aren't dumb enough to blow a whistle when they tell
the EB to sell gold. But then, it is a strange world. It is
smoke and mirrors by the big whales that want to eat all of
us plankton. I'm on the side lines waiting but the S.African
stuff was looking good today. Maybe Monday I'll bait up a
line and see what happens.

Panda- your charts on gold, candle ( hammer bottom ) chart, as well as the bond chart breaking, I find very interesting. Have seen major resistance broken to shake the last do or die hangers on, many times in my life, only to see the charts reversing. I have felt for awhile, that bonds will look positive once more, before the big break, and now that it seems to be beginning, and gold may have bottomed, the final act, or scene, should begin.

As for 1/50 oz of gold being bought by many Chinese, of course, but why just Chinese, there's a big world out there, and the French, Arabs, Indians, just to mention a few, will also be buying gold in the future, for a number of reasons, not the least of which should be greed, and the desire to survive.

Am reading J. Adams global war comments. Interesting how each of us has a pet interest in a paricular subject, and we seem to see the world from our interest's perspective. I.e. a religious person, answers life's questions through his belief. A J. Adams, sees the potentials for war under every rock. A Mike Sheller, or A. Crawford, have their eyes to the heavens. Many here, like myself, with an ecomnomic background, or an interest in financial markets, see life unfolding from an economic upheavel. Together, we are all looking for problems developing in the future, as a result of what has transpired.
Our RJ's, Glenn's, Short Bulls's, Reif's, Oldman's see things unfolding short term, and wait to let the markets tell them, and may not necessarily care to speculate, like many here, on the future.

I have read comments, years ago, what happened in the markets, in the US, at the end of the last century, and I'm referring to the 1892-1896 bear market period, where the slow long topping action found the attitude of the populace decidedly pessemistic. Which is unusual for a top. Does this sound a little familiar, as we get closer to extremes??

Have a great weekend, one and all.

Good evening all. I just got in from work. Had a whole 12 hours away from the gold scene. My guess is the European gold selling stories will be a non event. I believe the gold price of $325 has anticipated this event. ( IMHO of course )

reify----

i find a lot of the points ( rocks ) to be well thought-out,
and extremely thought provoking.

what is your thoughts on the underground nuclear shelters
that russia is building, even as they are unable to pay
their civil servants? how about the iraq/russia connection?
ww11 started in the same location that is now a hot-bed of
ethnic civil-war, and the west ( nato ) is going to police these
murderous rogues. this is absolute madness. we may as well
try to keep baleen whales from eating plankton!

natos' incursion into russias' sphere of influence is one of
the worst mistakes that could have been made. their ( nato )
assignation of themselves as world-wide policemen is equally
dangerous. our ( usa ) armed forces have been decimated by base
closings, budget cutting, and downsizing due to the perceived
lessining of external threats. the threat is greater than ever.
greed, indeed, will be the wests' undoing.

gen george patton stood on the edge of the razor blade at the
end of ww11. he knew russia had to be defeated to insure our
safety. his opinion cost him his job. he should have followed his
heart.

time will tell, probably sooner than later, that russia is the
greatest deceiver, and manipulator, of all time.


the dow 8000 post from patriot is absolutely a must read.
the url will be made available on a regular basis. read it,
use your own judgement, and make your own call. there are giants
everywhere, ride, ride, ride! ( jo jo gunne )

cherokee!; ) burner of the snake oil, just for the hell of it.

Scotty ( 23:04 ) The author of the piece Kenneth Gooding is a Mining Correspondent whose articals frequently appear in the London Financial Times. I assume that he is their South African correspondent. Most of his work is generally positive toward gold.
In one of his FT pieces, a total was given for Eurpoean CB gold holdings, eligible for sales -it was much lower than "other's" estimates- probably a typo???? I cannot remember the figure, it was so low that it astounded me.

SCOTTY: re your 23:04...that story was from Dec. 01, 1996...click on Front Page to find date...and, it was encouraging!... he said probably the first few months of '97!!! ( that's over, and DONE with ) .

CHEROKEE: I was in the San Juans a couple weeks ago, and out in the middle of nowhere was a sign that read "Cherokee", with an arrow pointing down a long lane, to a log cabin.... Your Getaway place?...Seriously, do you think the bottom is in?

In USA Today; state news; Enterprise, Oregon: The Enterprise School Board has decided the high school's nickname,"the Savages", is not politically correct and must be changed. So, my surname of 45 years has been judged and found wanting for any political purposes...Guess I'll have to change it to Smith or Johnson or...Clinton...that's it! Just call me J.D.Clinton!!!

Savage @ 03:25--Join the club. My "handle" represents a barbarous relic from the past!

AURIC: like gold???...my sympathies. We are brothers in all things antiquated.

Cherokee- Have you heard the old tune that bears your name. Whistle it sometime and be "HAPPY". Nuclear shelters, the US military and government has a few holes to crawl into, and who knows about many other leaders on our little planet. I really prefer happier thoughts. Am a pessimist anyway, so why aggrevate ourselves with conjecture or speculations, even more.

Think happy thoughts, is my theme for the moment. Just married, looking for our favorite metal to keep rising, and learning more and more from all you sharp cookies out there.

Finally, after days of searching we found an earth internet provider that is in line with our thinking. Rover's communication system also works wonder's for us. Those airbags exploding scared the crap out of us, but now we are tracking you.

YES, WE DO LIKE GOLD________ and buy it all the time.

We take the earthling Andy Smith's remark as not politically correct and prejudicial to Mars.

Cherokee, do you do anything with El Nino forecasts since you are active in commodities. I'm looking for info coming winter. For forecast maps el nino/la nino check out: http://www.coaps.fsu.edu/lib/booklet/

RJ: go to http://usatoday.com
front page, top right. "NAFTA brings only modest US growth".
What was this about all the jobs it has created?

Those of us more fortunate, rising early to work on a beautiful summer weekend, salute the rest of you who have off. Poor devils. I get to move a million pounds of a "commodity" that is consumed, chocolate, today. Have a great weekend all. Down the rails and Happy Trails!

Savage--In the FWIW dept.--A colleague at work has been chiding me ( good naturedly ) about my gold outlook for the last year, or so. Today, he told me that his father and he bought heavily into gold. Shocked the "s" "h" double "t" out of me.

Bob Rubin appeared nervous when questioned about NAFTA tonight. Perhaps he felt that those guys didn't have it in them to understand high finance? Some info from F.T.
http://www.ft.com/hippocampus/7b092.htp.
Hippocampus? Is that what F.T. thinks of Congress?

Savage--They bought gold this week.

try http://www.ft.com/hippocampus/7b092/htm

try http://www.ft.com/hippocampus/7b092.htm

Panda and others interested:

click the icon to see the t-bond chart monthly from 1980. the pattern is quite eye opening. additionally my database goes back decades in some case like the dow 30 to 1901 if any of you have any requests post them or send me a note and i will try to oblige.

pardon the chart. something went wrong on the colors. i will attempt to figure it out and repost.
sorry

Dow-Gold ratio 24.58 on Friday close. Tuesday still stands as an historic high. Have we made a nearly two decade turn?

bb fisher: Do you have gold price data back to 1901 also, or back to when it was free market priced?

my gold data in byte form begins in 1974, silver in 1963, palladium in 1977, platinum in 1968. my share data in byte form depending on the share begins in 1970 and forward. my share data in papaer ( chart form0 begins depending on the company in 1934. i also have most futures only back to 1959 in byte form, further in paper.

can anyone tell me why uploaded tbond chart belwo is washed out of all colors, dates and text. the text and dates should be white, the backround should be black. only the line and those i have drawn show up.????

bb fisher: The background is white. No text shows on what I see here except red text at the top.

Gone to get Barron's. Back in 20 minutes.

BB FISHER, PANDA: Nice charts. Never tire looking at them. That bond chart back to '80 is a monster puzzle. Are we heading into a 5th wave? Is that a double top, soon to be challenged as a triple top? The bond is a big key, but so is the Dow Utility Average. BB - do you have a longterm chart of the Dow Jones Utilities? This is a wonderful leading indicator. Better than a crystal ball! PANDA: On your gold chart, the divergence between current price and the 30-day moving average is now so extreme, that even if this is not the ultimate bottom for the overall move, this is a resistance point that will likely hold for some weeks. I say this IS the dip.

Barron's has a VERY negative story on gold by Michael Santoli.

LARRYN: ( Friday 19:26 ) : Your confidence in a governmental sea of script to paper over a financial catastrophe ( government created no doubt ) belies an incomplete perspective on the past. Must have slept thru history. Check out the devastation to economies perpetrated by massive inflations everywhere. There's no lack of evidence showing how this just worsens the problem and staves off recovery. All the MORE reason to have some gold, or a shovel.
FUNDY: I am not a "survivalist" or a storer of weapons and food ( except for a few cans of tuna fish and some black bean soup ) . But I do not deride those who do. There's nothing wrong in being prepared for anything that could happen. As for expansion of currency to fuel economic growth, that is not economics. A gold backed currency need not have more put in circulation. As more gold is mined, the NATURAL rate of increase will suffice. If NO gold is ever mined again, the remaining gold becomes worth MORE and MORE as human productivity increases production and wealth. Work and production is the true wealth. The unit value of the gold just buys more as more is PRODUCED by human ingenuity. It is not gold, OR paper that creates wealth. It is people.

I will have to get Barron, then.
The more pessimism there is at this time, the better--- we will reach the true bottom for gold sooner than later and this maximum pessimism might tip us that the bottom might be in. A positive article in Barron would have had no effect on gold ( IMHO ) but a negative one is better ( IMHO again ) .
I remember Abelson ( Barron ) who, for 2 weeks in a row, discussed why compaq should not do well: over the next 8 weeks Compaq went from 80s to 125: not bad for talking a stock down.
Let's now watch the contrarians and risk takers buy bargain gold stocks.
Good luck all
Franois

I will have to get Barron, then.
The more pessimism there is at this time, the better--- we will reach the true bottom for gold sooner than later and this maximum pessimism might tip us that the bottom might be in. A positive article in Barron would have had no effect on gold ( IMHO ) but a negative one is better ( IMHO again ) .
I remember Abelson ( Barron ) who, for 2 weeks in a row, discussed why compaq should not do well: over the next 8 weeks Compaq went from 80s to 125: not bad for talking a stock down.
Let's now watch the contrarians and risk takers buy bargain gold stocks.
Good luck all
Franois

Donald and all--Here is a piece by Milton Freidman ( Friedman? ) . Talks about gold from 1948 to the present. http://www.gold-eagle.com/analysis/table.html I hope I copied this right!

Francois: There is a negative article about high-tech stocks also. They say that the Y2K problem is draining so much money out of budgets that there is no money for hardware.

My 07:35 post--That piece was NOT written by Dr. Freidman. My error. It still gives the relevant data.

Donald and all--History of gold prices from 1800"s to present, London fix. ( click on blue ) http://www.kitco.com/gold.londonfix.html

bb fisher: I am trying to construct a chart that shows the Dow-Gold ratio as far back as I can. For the years that gold was fixed at $20.67 or $35 that is no problem but I lack free market figures. The reason I like the ratio is because the Dow number alone is distorted by inflation. The CPI adjustments only go back part way, are suspect of government tampering and show an after the fact number. By using the actual market price of gold I believe we obtain a true reading of the inflationary expections of the economy. The expectations are more important than the final actual number because they give you an insight into the markets ahead of time. Investors act on expectations. On September 3, 1929, we had a ratio of 18.5, in 1966 it reached 29, in 1980 it was down to 1.0. Today it is 24.58. By tracking the number on a regular basis I think you get a feel for the trend. After the trend is determined you can adjust your portfolio to stocks vs: cash or gold accordingly. The ratio seems to show the level of mood and the mood trend. I think is will prove to be a valuable tool. I don't think that a daily reading is required. Monthly would seem to be sufficient. Let me know what you think.

Auric: The stuff at this site is fabulous! I had no idea that was there. Thanks. Now I need a rainy day to work on it.

until i can figure out why uploading my charts to the kitco server destroys all the graphic colors of the originals i will attempt to compensate ( rather poorly in my opinion ) for this deficiency. see the XAU chart for art the icon below for one possibility of the latest drop in bullion.

panada: I'd move the green bottom line down to fit the data. A fact is a fact; chart it. The rate rise back to 7.2% and then higher is a long way down the road, it appears. If the triangle turns into a banner this year, we could be in for a long wait. Aberration? Human psychology often is. Witness the Dow. But it is real, it is happening, and we need to chart it truthfully to let the picture help us diagnose it.

Mike Sheller: so lets say there is a hundred pounds of gold on the globe and it backs all currencies. You want to borrow $1 million dollars to build a new factory. Increase human productivity etc. Where do "they" get the money from? Do you wait until a million dollars worth of new gold is mined. Or does the existing 100 pounds get revalued by $1 million dollars to give you your loan?

donald:

one dow30/gold form 1974-friday in gif form. the weather here in the UK is wonderful time to work in the garden.

bb fisher: That is a wonderful chart, just what I had in mind. If I read it right it proves the point...the jig is up for the Dow.

When gold and gold stocks can ignore the bad news for a weeks the bottom will be in. Market reaction to news and sentiment is the key factor.

The following comments off a wire is beleived worth considering.

"While further shortcovering may ensue next week, as the gold market
works off its technically oversold condition, sentiment remains
bearish, analysts said. Long-term cycle analysts seen gold staying
weak into October this year, when the end of a 60 year cycle may
present a major buying opportunity for gold equities in particular."

"There is no question in our minds that gold stocks will be a
better buy than either gold or silver once the final lows are in
place," Gann-cycle analyst and "Past, Present, Futures" newsletter
editor, James Flanagan, said.

donald;

not necessarily. if gold stays in the 320-350 are for the next few months and the dow moves back towards its 1966 high watermark we might well see the dow reach 10,000 by autumn. then if the dow falls back to say, 10x gold next year what are we talking...gold at 400 and the dow at 4000. i do not intend to depress you only point up the witticism from benjamin disraeli 19th century british prime minister who stated:

"lies, dammned lies and statistics"

don't put too much fervor into the numbers. i certainly have and it hasn't always ended pretty. look at the whole picture.
oh, and by the way i am not a gold bull or gold bear. i do however think that the gold shares will make the sensible some nice profit towards the last 4 months of the year. where bullion is going i don't have a clue. as far as the gold shares to look at....find those that have not hit new lows....abx,glg,cbj,bgo,au come quickly to mind tho there must be others.

certain south africans look positively free like blyvoor, driesfontein and kloof.

To George S.C. regarding your news comment: The problem with judging how gold reacts to news is that there has been no hint of general agreement among investors as to if news is good or bad. For example Bre-X. When they announced that they didn't really have any gold to speak of ( theoretically a HUGE decrease in supply ) the bullion tanked. Just a casual read of this site alone tells me that there is no concensus regarding a news item being bullish or bearish, so I am inclined to think that your post on this indicator has little practical utility. Perhaps you could illustrate with some clear example ( s ) for the edification of those like myself who "don't get it".

Geff

bb fisher: Yes, there is no reason that we could not move back to the 1966 ratio of 29ish. But, let me point out that there was a sharp intra-day reversal at 10:30 AM on July 8th. We started that day at 24.67, spiked up to 25.06 and sharply reversed to 24.66. Just by a whisker it qualifies. The ratio has dropped since then. The next few days will be crucial. In any event, we are in rarefied air here. I feel safer with gold than with stocks by a long shot.

BILL BUCKLER: Excellent Editorial on Gold.
http://www.the-privateer.com/gold6.html As a financial planner, getting
my client's minds around that paper is not backed by the Government at all, is hard to break through. Question is, why the seed change all of a sudden?? The Bilderberger crowd aren't totally dumb. To destabilise the general population about their currency is pretty serious. ( even though we know it is a fact ) .
PANDA: I will hang fire on the charts. Let's see where the bonds go in a couple of weeks. Keep up the good work, chartists ALL. Greatly appreciated by the rest of us.

shadow,

Just read your excellent question on forward selling by mining cos. I am surprised more people don't question them. For the sake of all, I am not going to rehash the whole story here - as vronsky indicated, there's a lot on gold-eagle. But just to be clear, forward selling ( as it is practiced today ) is inherently corrupt. The mines only sell forward cause they get cash up front ( bribes ) from the cash proceeds of metal loans. The central banks couldn't lease out their metal unless there was some appearance of getting the metal returned. That's where the mining companies come in - they promise future production ( forward sales ) . Forward sales and metal leases are inseperable. Due to the extent of the volumes of each created, they are fraudulent because they can't possibly be collectively honored as called for. In addition, they are the main explanation for the current depressed prices and will be main explanation for the coming disorderly conditions to the upside.

A few points. In no other commodity ( just gold and silver ) would producers pre-sell such awesome quantities of future production. In fact, there used to be a key principle of commodity futures law that only allowed an exemption from a position limit ( the largest position one could hold ) for a real producer or consumer to hedge up to one years' actual production or consumption. The thinking was who could project beyond a full year and also more than that could unduly influence current prices. Since these forward sales are done off-board and are by definition secretive, those rules and thinking don't apply ( overlooked because metal leases generate cash up front ) . The simple question is would the mining companies be selling forward in such quantities if they weren't given cash up front?

Second, where do the mining companies get the prices they claim to have sold at? All I remember is gold being stuck at 10% of 370 for 10 years for 90% of the time, yet every mining company claims sales between 4-500. Why don't the earnings reports reflect that? As Glenn says, bullshit.

Lastly, I see no way the hedging mining cos won't get killed when prices finally explode. In sum, forward selling has hurt all the mining companies by depressing the price currently, and will hurt the hedgers in the end. Another great wall street financial innovation.

bb fisher -- Great Gold/Dow-30 ratio chart! I see that you're using Super Charts. Normally, what I do is click on the 'Copy active window to clipboard' icon, then open a drawing program that I have. I then paste from the clipboard to the drawing application. Next step is to export the file in a .gif format. This final file is what I upload to the Kitco ftp site. Hope this helps some.

TED BUTLER et al: There is reportedly a definitive book on gold hedging practices at the following site, in the event you may be interested and not aware of it.

http://www.pcquote-europe.co.uk/library/cat_4/03180.html

All -- Thanks for the positive comments on the charts.

ted butler -- Do you see this forward selling as a way to drive the higher cost mines under, or make them take over targets by the majors? It would be a hell of scheme to consolidate the mining industry. Could an oligopoly be coming in the gold mining industry?

I noticed the other day Echo Bay ( ECO ) went up about 15% in one day on heavy volume. It gave back most of those gains the next day. Kloof mines ( klofy ) has bounced up from very low levels. Most of my data dosen't go far back, but but a lot of the South African share are approaching their 1993 nadir. To me, this downturn in gold will probably spur a series of take overs of the higher cost mines for reserve purposes. There could be some SPECULATIVE plays here. As for the bottom in gold being in, I don't know, but the spike down sure looks impressive on the monthly chart.

auroelf -- I'll move those lines around and see how I can 'make 'the future' come out the way I want it to. :- ) )

Seriously, I'm not so sure that the spike down in bonds is a 'new trend'. There is too much talk of deflation in the financial press. If this deflation is real, it should scare the HELL out of everyone! I've talked to co-workers about this, and think it's great! "Lower prices", they say. To which, I ask, how do we get those lower prices? Usually, they mumble something about OTHER peoples wages going down ( not theirs, of course! ) . Which leads to my next question, "How do those wages get knocked down?" That's when I get the dumb look, again. The answer is simple, you fire the workers and in a year or two you ask them if they want a job... At half their former salary. It does work!

This is why I believe the Fed would fight very hard to prevent such an occurrence. Then again, built in to that assumption is that the Fed is acting 'correctly'. Given their history, that may not be a good bet. Politically, deflation/depression is an extremely unpopular thing. Therefore, I would expect lots of credit or paper to be created to forestall the inevitable. Just my humble opinion.

BBL

Panda: Your charts are great! Who is your data provider?

Vieserre - thanks for the info.

panda - I'm not as knowledgible as many here on the specifics of mining companies, but I don't think there is a conspiracy by any in the mining industry to use forward sales to intentionally drive the price lower to lower the cost of potential acquisitions. That's not to say some won't take advantage of the situation.

In fact, I'm not convinced of any conspiracy theory regarding forward sales and metal leases. While I think these devices have definitely manipulated and will manipulate prices of precious metals, I'm inclined to believe that it's a result of the excessive use of an idea not well thought out. Although I'm convinced the "arrangers" of these transactions have a pretty good handle on what's going on - I believe the CBs and Mining cos are just plain dumb. They are looking at a cash flow they never had before and have not thought thru the consequences. After all, they have a lot of company and nobody's complaining ( except me as far as I know )

Geff: You just proved my point. The BRE-X fiasco was very bullish for bullion, but gold went down regardless. Good news ignored. Another example was gold's failuer to rally much after Hashimoto's comments.
Potential good news ignored again. But bullion plunged after the Australian sale was made public -- it responded very quickly to bad news.


I think most on this site know what kind of news SHOULD BE bullish or bearish. And when bullion starts to rally on good news and ignore the bad news, that will be the time to bet the family farm. But until that happens the trend will be flat to down.

see icons for gold.gif 74-97, platinum.gif 68-97

i guess you can only load one file per post

George Cole--O.K. I see what you are getting at now. Thanks for the clarification.

Geff

As an ABX shareholder, I find Munk's statements extremely offensive. Not because what he states is true or untrue, not because he is not entitled to his personal beliefs, but because as a Chairman and Chief Executive Officer of one of the world's largest gold companies, Munk has a duty to not trumpet personal "opinions" on the world stage in his role as officer of the Company which are detrimental to ABX and its shareholders. Moreover, if he voices such opinions, he has an equal or greater duty to also disclose those reasons why one should be an investor in gold or his company, as he trumpeted in the ABX annual report only a short time back. The next headline I expect to read is " Gold Producer Advocates Selling Gold" Having breached this duty, I have lost respect for the man as well as the company which he represents.

As a side bar, it is interesting to note that NEM is outperforming ABX even though it is unhedged.

GEORGE.....Exactly !!!! In a bear market any news is bad news. In a bull market any news is good news....All you have to do is interpet for yourself how the reaction of news is for the DOW...Any news is interpeted as good news.....Some real crapola is interpeted as Super news....Then look at gold and the news....Its all interpeted as bad.....There is more to come....And then, someday, somehow, perceptions will change. BE READY !!!!

ALL: Many have posted good places to buy the physical - one in particular seemed easiest of all. A few $ over spot + s&h. Or they can even store it for you. Me pops has been talking to a "few guys" since this big bear run and now he is getting more and more interested.

One more thing...they are telling him the ways one should be diversified in the physical w/ numismatics to bars etc. I have heard it hear and elsewhere that the portfolio should be around 8% PM's. Can I get some opinions on this again?? Please? I know this is a FAQ. But stuff always gets re-hashed here anyway. Much obliged!

AWAY

eb

Knowledge is power?... how about

Doubt grows with Knowledge.

nailz: your comment about the news being interpreted good or bad depending upon whether the particular market is a bull or bear is just another point towards the argument in favor of TA. Fundamental analysis is useless as the news can be manipulated in any way that suits the market. The market will do what the market will do, period!

Well a negative piece on gold in BAROONS. Maybe this really is the bottom. Munk has spat in the eyes of all gold investors. Their arguments as to why gold will go to $250 could just as easily be used to explain why gold could go to, say, $25 or even lower !!
Does anyone have an estimate of the market cap of all gold mining companies in the world ? I have heard + or - 100 billion USD in the past. Must be a lot lower now. Just curious.

Hey, maybe we could all campaign for DeBeers to try to tie up all the gold mines in the world, and corner the market. These guys would put things right. Gold would surely sparkle again.

Just my interpretation of the bbfisher gold chart ( FWIW ) :

While I am not very knowledgeable in forward sales used by gold mining
companies I know more about this concept used by hi-tech industry. What
I see is very troubled waters ahead and a very negative impact on a stock
market. It is an accepted practice to book revenues with anticipation
that they will realize within a year ahead. E.g., system integrator gets
a large contract which will be executed over next few years. Part of
this is booked the rest of it goes into revenue projection. Integrator
signs a contract with hardware and software companies and they use the
same approach with booking and projecting their revenues. Hardware/software
companies close OEM agreements with other companies for
a few years ahead discounting the price based on anticipated volume. All
of them book these revenues and include them in projections. Companies
go ahead and borrow the money required for operating expenses and bubble
just grows.
This game goes into extremes due to inflated stock market and investors
anticipation and extreme pressure to fulfill these anticipation. If
anything goes wrong in this food supply chain and the revenue dont
realize the stock plummets. Even if nothing went wrong this approach is
highly sensitive to inflation. You booked your revenues a year ahead, if
inflation jumps by a few points that effectively eats up your revenues
and profit as inflation pushes your expenses up. I think thats one
reason for Feds trying to keep inflation down any increase in inflation
will burst this "book ahead" game and destroy the rosy picture about the
economy.

Events like the one described in Barrons article about high-tech stocks
saying that the Y2K problem is draining so much money out of budgets
that there is no money for hardware will burst this bubble. I see a lot
of "money reprogramming" where the existing contracts for the new
development are put on hold and money channeled into Y2K work.

The point I am trying to make is that the situation may be even worse
outside the gold mining industry and when the things start unfolding
there will be a lot of blood on a steer and the picture wont be pretty.

PANDA: Re your 10:29. The financial press has been talking about disinflation which seems to mean reduction in the rate of inflation from whatever it was, 14% in 1980, to zero. I don't think the press understands the difference. They haven't focused on the destruction that will take place with a 1930's type Honest-to-God deflation.

Skylark: Agree with your post. PMonk has been very unimpressive as an industry representative since he brought in the x-pres and pm for that indofolly takeover. And his current rumblings in Barrons as well as that spot on CNBC the other day, well, do I want to invest in a company that has a jerk like him in charge? Naw, almost wish that they were not such a big part of the XAU...

One question that I have been kicking around is why have we not heard from many other North Amer. CEOs? I think that the guys in Australia deserve a round of applause for at least appearing to standup for their industry and shareholders - re anger over AU-CB gold sales.

We can all vote the way we feel by keeping those ABX shares, or by selling as I did and buying other ones. Heck, ABX has already gone through their growth phase. The upside potential just isnt there, not compared to NEM etc.

savage--

the san juans? yes, i've been deer hunting and snow skiing many
times in that area of colorado. we used chama and tres' piedras
as base camps for the hunting trips. in fact, san antonio
mountain at 10908 feet was one of the most productive areas
of all. never left any trace of our incursions except tire
tracks. i do believe we are at, or very close the bottom.
i've been buying options ( dec 400 calls ) every chance i get.

reify--

being a student of history and the written word does not a fatalist
make. having two young children ( 6 & 9 ) symbolizes my hopes for the future. ALL things should be considered. stick your head in the sand,
and you may look-up and find your body is gone! my spiel on the
various conflagrations around the world does not mean happiness has
escaped me. quite the contrary. we live in an extremely complicated
environment, with too much diatribe and innuendo. happiness is having
god, family, and all the rest, in their proper order.

roebear--

i'm currently crawling out onto the proverbial limb with some
predictions about the up-coming el-nino, and possible effects.
they will be posted very soon. argentina has set aside millions
of $$$$$ to help pay for the up-coming weather related flux and chaos.
we should do the same. our current growing season for the grains has
been almost perfect, barring the late freeze we had. can we expect this to continue? i think not. the effects from el-nino are in-bound.
drought? floods? i believe we will see a heat wave, and accompanying
drought. "for every action, there is an equal, and opposite reaction."

scotty--

let the cb's sell all of their gold asap! this will only increase
the opportunities for ALL gold-bugs!! i hope gold goes to $200.00oz.
this will assure an exponentially larger re-bound. consider the
immutable law of nature again, for the nth time, ----

"for every action, there is an equal, and opposite reaction!!!"

this law of nature pertains to, and is evident in EVERYTHING.
consider the pendulum effect. does anything remain unchanged?
what happens in nature? there are great swings of feast and famine.
can it be perceived as changing due to mans' will? hell no!
manipulation will increase the force of the blow that is inbound
for the sellers and manipulators of money. ( paper and gold )

cherokee!; ) having more fun than is possible for some-one who delves
into political and world-wide turmoil! let the wind whistle,
let the storm shreik, cherokee is above it all in the
smoke-signal-mobile for the benefit of all who are "awake"
enough to realize, ------

no one KNOWS AS MUCH AS YOU think they do!!!!!!!!!!!!!!!

Your chart interpretation of bbfisher Gold Chart... Most interesting.. Maybe called the "sling-shot effect"..

For those interested in mine closings and gold prices here is a spot to start--- originally posted on K2.
http://www.northernminer.com/free/3.html

ALL.....AS I have said before, I believe that all the negative press and media coverage gold is getting right now will actually be bullish in the long run...Lots of people are looking for places to "park" some money for a while.... There seems to be a lot of money out there right now..."DOW MONEY"??? ..People may be up to their ears in debt, but they have money in their pockets...

I have several friends who own coin and jewelry shops and they tell me they cannot get enough bullion to sell....One said Thursday that he was selling about 10 times his usual rate.....The physicals are still hard to come by and the premium over spot has increased by up to $10.00....He said that no Eagles were walking into his store and he was having to place orders for coins every day....

The financial press these days is full of stories heralding victory in the war against inflation. I have long felt that such a victory declaration is a necessary ( but not sufficient ) condition for the next big gold bull,

Interesting that gold manaaged to rally Thursday and Friday despite an incredibly negative press and Peter Monk's assertion that the price could drop to $280. Gold will have to ignore much more bad news before anyone can say the bottom is in, but these could be straws in the wind.

AMUSED.... You sound like you are in the same camp with me. The markets will do what the markets will do. No financial disaster is needed for gold to rise. No war is needed. True enough, those things would assure a rise, and undoubtedly make the rise more volitile, but I do not believe they are the only way for a bull to begin.

I believe that an awful lot of "mom and pop" types are quietly laying aside a little gold and silver here and a little there. This "grassroots" accumulation should be good for the long haul as the base of holders is much wider than it was in say, 1980.

Best of luck to us all regardless of why we believe in the shiny yellow!!This stuff has been good to me and I hope to have another shot at a long bull to see if I have really learned something from history!!!!! Surely all these grey hairs are the result of some education.

GEORGE COLE: I am in accord with your views that a key factor to look for in the future direction of Gold is how it responds to news, both favorable and unfavorable news. As well known, a key ingredient of any bear market is the failure to respond to favorable news. And when this reverses, it may be a signal that a bottom is at hand. I am still impressed with the relative performance of the XAU, and a question needs to be addressed as to why the XAU is not leading gold to lower levels. I have found it interesting that in this secular decline, bullion has generally led the way right from the "get go". And I continue to ponder the significance, as the better performance of the XAU would appear to have bullish connotations.

Wanted- Paving company needs cheap gold to use as roadbase to ashphalt on top off. Roadbase life expanded by use on non deteriorating gold. There is so much supply in the world ( according to Jimmy Rodgers ) lets drive over it..

George Gold ( sic ;- ) Do you believe the CPI figures the Labor Dept is putting out? I shop with my wife for everything and I do not believe the 1.4% increase that they have put out so far this year. I belive the Clinton Adm. has turned these figures into an art form to promote the economy psychologically and they are succeeding in this area. The economy is doing well I will grant of course. The fact that taxes and other things are not in the CPI of course is a big laugh. And the core rate business is worth another big laugh as if energy and food are not really to be considered. And the media of course spouts this bit of insanity re energy and food as if it should be ignored. A laugh a minute I call it. The Labor Dept. admits they are making "ADJUSTMENTS" to lower the CPI doing what the congress did not do as enough people knew that was ridiculous. What a farce.

EB: A convenient way to trade the physical is CEF on the American Exchange. It is Central Fund of Canada and also listed in Barron's on the Closed End Fund page. They are 75% physical silver, 25% phusical gold. If you are looking for action though, look elsewhere. This stock is dullsville, but ultra safe.

Lan Man: I agree with you if I were buying today, and I might soon, I would buy NEM rather than ABX. However, I have a much better opionion of Peter Munk than you do. He can get a bit cocky at times but he has done a magnificant job with ABX over a short period of time. I am not selling my shares and it is my biggest holding. And there were many people fooled on the Bre-x scam a la J P Morgan, the funds which owned 71% of the shares, many brokers, PDG, etc etc.

LAN-MAN: I agree, I am already in NEM and intend to switch more into it at the next favorable opportunity. ABX does have a current favorable position with respect to its hedge, and that is what MUNK may be impliedly crowing about. But what he did not state is at the beginning of the year, he was also bragging about how the hedge position was reduced because of his expectation for a strong gold market, and the huge, huge loss ABX has taken because of this wrong call. Now who would want to give credence to his predictions now with that in the background is beyond me.

As to why others in industry have not responded, it is a good question. Probably most of them would like to keep to a low profile. And the negative sentiment in the marketplace discredits anyone who favors gold. But, I see management at RYO is touting their stock.

At least one knows where NEM stands regarding hedging. Those here who disfavor hedging by companies should consider swithing into this stock or other non-hedgers as a protest vote and put their money where their mouth is. It is no secret why NEM has replaced ABX on the institutional favorite list and why it recently has and will outperform ABX over the longer term.

Goldbugs Bureau of Investigation, recent 10 most wanted list.

1. Peter Munk
2. Jimmy Rodgers
3. Andy Smith
4. Ted Arnold
5. The Bilderburgers
6. The CFR
7. Senator Fonze D'Amato
8. The Whisky Salesman
9. RBA
10. hep-rat-cat

GOLDBUG, LAN MAN: I have held ABX for some time in view of Munk's reputation of bringing the company on as well as he did. But his recent judgment in Bre-x and now his recent comments call his judgment substantially into question. In Bre-x, not because he should have been aware of the lack of gold, but in the manner he attempted to gain control by political payoff, unlike PDG who proposed a direct offer to Bre-x. There is no doubt that the gold mining industry made note of that, and as a small community with long memories, it will not serve ABX well in the future. In addition, his most recent pronouncements must have turned heads in the industry as well. This lack of judgment is conspiculously glaring, does not speak well of the man, and IMO is not something that may be easily overlooked now or in the future by the industry.

NotaGoldbug @10:48

Daily data comes from Worden Brothers. I use DBC for real time data/news.

ted butler @10:52

I didn't mean to infer a conspiracy of sorts. It's just that sometimes, you can have a confluence of events that will lead to certain outcomes. Those who recognize those events early enough, can then use those events to their advantage and decide which outcomes are better for them. Something akin to being in the right place at the right time or recognizing historical opportunites falling in your lap.

I guess the point that I was trying to make is this; Some large mines or CBs started foward selling. Then other Central Banks and mines joined in as a way of getting revenue on a 'sterile asset' ( ? ) , or locking in future production. Lo and behold, most did not look at the larger picture as to what this derivatives game could lead to. Now we have much lower prices and lousy sentiment towards gold. So the speculators, seeing a well established trend, jump in the fray and push prices down further. The mines that lose are the high cost producers. They may shut down. How much does it cost to buy a closed mine? The high cost producers could be a source of added reserves when the commodity price rises due to a lack of supply. At some point, someone may figure this out and either sit back, or add to the fray ( say by, making comments in the press ) . No conspiracy here, just taking advantage of an opportunity presented by the 'market'.

Donald @13:35

They don't know the difference between a semi-automatic firearm and a fully automatic firearm with select fire capabilities. Why should they be any better at inflation, deflation, or 'dis-inflation'. :- ) )

Remember, if it bleeds it leads! Logic, reason, and intelligence got swapped for emotional response a while ago. Then again, what audience are they playing to? Something about the lowest common denominator is at work here.

nailz @14:08

Regarding coin shop friend, very interesting! The price keeps going down, but you can't buy the 'stuff' at the advertised price. What were those premiums called that you had to pay on those desirable imported cars a while back? ADMU, Added Dealer Mark Up? :- ) )

These are interesting times.

FUNDY: Now you're talkin". Simple - if there are only 100lbs of gold in the world, and it is used as money, then clearly a million "dollars" worth of gold would probably be less than an ounce in weight. To paraphrase Murray Rothbard, that great free market thinker, an increase in the money supply ( amount of gold in this case ) only dilutes the effectiveness of each gold ounce to do its work. The amazing, metaphysical truth is that IT DOES NOT MATTER WHAT THE SUPPLY OF MONEY IS. ANY supply will do as well as any other supply. The free market will simply adjust by changing the PURCHASING POWER, or EFFECTIVENESS of each gold unit. There is no need for a "planned" or "managed" increase in the money supply. More money does NOT supply more CAPITAL. It is NOT more productive. More "money" does not increase economic growth. It only dilutes the monetary unit already in place. So, therefore, which kind of bottom line monetary unit would you prefer? A paper dollar backed by actual stuff - gold - or a paper dollar that can be printed at any time, in any amount, at anyone's whim? That is the question.

This in from London.
Gold funds: Confidence slips away

SATURDAY JULY 12 1997

By Jonathan Guthrie

Confidence in gold is ebbing. Its price has tumbled to its lowest for 12
years, triggering a corresponding slump in the prices of unit trusts that
invest in gold mining companies.

But while gold has fallen by 17 per cent over the past year, some gold
share unit trusts have halved in value. Graham French, manager of the
21m M&G Gold & General trust, explains: "Production costs are pretty
static. So, if profits decline, this has a geared effect on earnings per share
and thus on the share price."

French adds that, as a general rule, "if the gold price drops 10 per cent,
gold shares drop 30 per cent". Save & Prosper's Gold & Exploration trust
has put this theory to the test. It has shed about 56 per cent of its value
over one year, according to HSW, the data company.

The 14m trust has been worst hit by gold's decline because it has a high
exposure to exploration companies - 40 per cent of its portfolio. These are
risky investments as share prices rocket or plummet depending on whether
a company strikes gold.

Exploration stocks - and the S&P trust - were buoyed earlier this year
when a Canadian exploration company, Bre-X, said it had discovered the
world's biggest gold deposit at Busang, in Indonesia. However, when the
claim was shown to be false, the shares and the fund began a steep
descent which has continued ever since.

French says the average producer breaks even when gold is at $317 a troy
ounce, just $3 less than the price at the end of this week. Companies in
countries where costs are high, such as South Africa, have been hit badly.

This helps explain the poor performance of the 200m Mercury Gold &
General fund, which is exposed heavily to South African stocks. It has
fallen by 46 per cent over a year, according to HSW.

The trusts that have best weathered the gold price drop are those that have
diversified into the shares of companies that extract other minerals.

M&G Gold & General would probably have slid more than 42 per cent
over a year without an increasing weighting towards copper production.
Gartmore Gold & International Resource, which includes oil companies in
its portfolio, has dropped just 23 per cent.

More cheer from London. Gold: Not quite so 'precious' any more

SATURDAY JULY 12 1997

Deborah Hargreaves examines the latest price plunge and finds
prospects gloomy

About of depression has enveloped the precious metals market as analysts
question whether gold, beset by tumbling prices, is losing its status as a
"safe haven".

Governments and private investors have traditionally turned to gold during
periods of inflation and economic instability. But, with many central banks
selling off reserves, a significant change in the way the metal is valued could
be under way.

The price drop of $14 a troy ounce over the past 10 days was sparked by
the announcement that Australia's Reserve Bank had sold two-thirds of its
gold holdings over the previous six months. Prices slipped to a 12-year
low of around $318 an ounce and, in spite of some consolidation since,
most analysts believe the market will go lower over the longer term.

"There is a genuine shock factor here," says Andy Smith, precious metals
analyst at UBS in London. "If Australia, as a leading producer, is not
interested in holding gold, who is?"

Australia is not alone. In recent years, central banks in Canada, the
Netherlands and Belgium have got rid of gold, while more recently there
was a serious row in Germany over a proposed revaluation of its reserves.
Moreover, Switzerland and Portugal have both said they will sell.

But what makes Australia's move such a blow to the market is that the
country's mining companies are important producers of gold and had
counted on the government to support prices.

Reaction to the Reserve Bank's action has been bitter. Australia's
Association of Mining and Exploration Companies said the cyclical
downturn in the market had been made worse than it would have been.
The World Gold Council added: "For a leading producer to take
unnecessary actions that prejudice the well-being of a key sector of its
economy suggests a lack of sensitivity to the factors impacting the market."

Explaining its reason for selling - a decision supported by the country's
prime minister - the Reserve Bank said: "While there was a case to hold
some gold as a contingency against unforeseen events, the previous
holdings - about 20 per cent of international reserves - were no longer
justified."

The Australian central bank hit out at its critics yesterday, blaming gold
miners and speculators for the fall in the gold price this year. It said the
money from the gold sale had been put to better use buying foreign
securities such as bonds.

If all central banks were to take the same approach, however, the market
would be awash with gold and the price would plunge.

The holdings of central banks differ widely. Around 73 per cent of US
foreign reserves - or 261.75m oz - are in gold but Australia and Canada
now have only about 5 per cent.

M. Murenbeeld & Associates, a Canadian precious metals consultant,
estimates that if most countries were to cut their holdings to 10 per cent of
foreign reserves, an additional 618m oz would come to market - almost
the same as eight years' new supply from mines.

Smith compares the present-day gold market with silver a century ago. In
1871, about 80 per cent of the world's population had currencies
redeemable in silver. Ten years later, silver's monetary value had been
nearly obliterated.

Demand for gold depends so much on its value as a "precious" metal and a
safe haven - it has few industrial uses - that its price could collapse if
bankers start to lose interest.

Technical analyst Brian Marber, who charts the price of gold, says an
important pattern is building up which shows the price hitting $150 an
ounce over the long term. Smith himself believes it will drop below $300
fairly quickly.

Over the short term, the price could bounce back, but most observers
believe the longer term trend is far from promising.

I hope that these Japanese pensioners had some gold socked away.

http://www.nikkei.co.jp/enews/TNKS/page/asiaset.html

That Japan thing didn't work. Here it is: Insurance group to extend 200 bln yen to
Nissan Mutual bailout unit
The Life Insurance Association of Japan officially decided Friday at an
extraordinary board meeting to extend 200 billion yen to the new entity
that will take over the operations of the defunct Nissan Mutual Life
Insurance Co. But the industry group confirmed that it will not offer any
additional support if the new entity faces financial difficulties.

Demands that rules be established to regulate bankruptcy bailouts are
likely to increase, as policyholders remain worried about their
investments, industry analysts said.

Nissan Mutual Life Insurance's 300 billion yen in losses will swell further
as the firm has contracted policies which include personal pension plans
with high returns of about 5.5%, for which guaranteed yields were
lowered to 2.75%. The insurer will pay the initial claim total on fixed
insurance to policyholders.

However, holders of personal pension policies and some life insurance
policies will receive smaller claim and pension payments than were
initially contracted. The extent to which claims will be reduced is still
uncertain.

ONE question for Jimmy Rodgers, Peter Munk, Andy Smith Etc. : At the height of the tulip bulb mania, how many ounces of gold could you get for one tulip bulb?

test

VIESERRE.........I believe your question was answered by your own comment as well as that of George Cole and me. The XAU is comprised of stocks...Stocks in general are in a bull market and they do not want to go down...They are being pressured down by the metal itself which is in a serious bear market....Now, ask yourself as I hope some others will do, do you wish to see the stock market tank ( turn bearish ) before gold begins its move upward ( turn bullish ) ....Should that happen, then the metals would have to drag the stocks upward. Remember what happens in a bear market ???All news is bad news. It will be the same for stocks as it is for gold now... Should both the metals and stocks be in a bull market at the same time, wonderful things could happen to those of us who hold mining shares.....BIG TIME PROFITS.....Come on gold bull...Begin before the end of the stock bull.....!!!!!!

Hello!

Panda, Thank you for the responce about your data provider.

Fidelity Select American Gold & Precious metals Charts
5 Years, 30 day comparison and hourly charts at:
http://www.geocities.com/WallStreet/5969
Click on Gold Sectors
PS: MILO....
We are in the SAME boat, so I will PRAY for you,
IF, you will PRAY for me!

NotaGoldbug -- Worden Brothers does primarily stocks and some indexes. They carry Comex ( NYMEX? ) silver and gold ( cash ) prices. One of the things that irritates me no end, is that they don't carry the HUI Amex gold Bugs index. HUI is the unhedged producers index, where as the XAU is predominantly hedged producers.

MIKE Sheller...
Good comments, but I must clarify my position. I find myself in agreement with FUNDY and PANDA.

I did not mean to say that excessive printing of money was a good thing, just that it will be done before a deflation becomes a depression. ( Keynesian? )

In modern history, currencies devalue through inflation when too much paper ( debt ) is produced. ( I think we agree )

As an economy expands/grows by people creating wealth ( I agree with you ) , there will be a physical limit to growth unless there is enough money in circulation to provide liquidity for investments. If there is not enough money ( there is not enough physical gold to go around ) then deflation will occur due to lack of investment capital. Therefore govts must produce some money through debt. Too much is inflationary and too little is deflationary. The social/economic situation must be right for this debt to be accepted.

All major deflationary periods in the US for the past century were preceded by an attempt to balance the budget and pay off the debt. The debt can be limited, but it will never ( as in NEVER ) be paid off. Deflationary trends mean loss of jobs and result in removal of politicians, so there will be a large amount of govt spending to 'save' us from a depression.

The lack of inflation today has been brought about by the demand of dollars overseas as a reserve currency ( gold down ) , conveniently supplied by our trade deficit. This removes any domestic inflationary forces and allows us to pour all excess capital into the stock market while foreigners pay for our budget deficit. If foreigners stop funding our debt, interest rates will go up, US investors will partially shift to bonds, and the Dow will slide. Gold will quickly look much better to those central banks holding depreciating T-bills.

Dollars are kept as reserves only because foreigners think the US govt will exist long enough, and we will honor our debts. The gold price reflects the inverse value of the dollar to the rest of the world, and right now gold is in second place.

To be prepared for a disaster is a good thing, but to wish for one so you can say you were the only one on the block who predicted it, is stupid. If someone finds himself cheering for financial collapse bringing on chaos and revolution, you have lost it; take a break, breathe deep and start over.

NAILZ, PANDA: I have had that Dow30/gold chart in my head for a while but never saw it in print until today. The more I look at it the more it rings true. Notice October, 1987. It is telling you to stay with stocks and not to worry. That was the right advise but I doubt that I would have had the stomach to take it. It would have had you out of stocks in the Nov. 1990, dip.

I am not stupid!I want no silver and I do not want any gold. All I want is paper from Bil Clinton and Bob Rubin.

What is the motivation behind all the gold in the world still exists so dont buy mentality come from? Correction needed/ almost all of the supply is in jewelry and industrial uses which can be converted back into tradeable gold at 600 or 700 per oz. Centrals have less metals than 1980/ where were Barron's Santoli and Jimmy Rodgers then? How much do they have in outstanding gold loans which are not reflected as a current reduction in stated inventory/ with mines bragging about selling three and four years forward I would bet it is a huge sum. Fact is with no investment demand and Central Bank dishoarding/lending and massive forward selling the demonetization is over the key ques is when does re monetization begin?

Santoli and Rodgers are being hand maidens for WAll St by not comparing gold to paper creation and not recognizing that when gold becomes jewelry or is used for industrial us it is CONSUMED unless prices rise substantially to make the process of returning to tradeable form profitable. About 30-35% istradeable if it hasnt already been loaned out or forward sold.

Rumors of Rubins resignation and his apparent nervous about NAFTA may indicate the imbalances may soon become uncontrollable and he wants out but they are begging him to stay. The incessant attack on a pathetic gold mkt WHICH NO ONES OWNS OR WANTS TO BUY IS INDICATIVE OF the extent to which anything can upset the apple cart of the bubble markets. ( YOU ONLY ATTACK SOMETHING YOU FEAR OR RESPECT NOT SOMETHING THAT IS WORTHLESS ) . When the applecart is tugged a flys amount of demand will drive gold thru the roof as just a few climb on. The Centrals can sell all their stash at once and drive it down 10 bucks as the massive short positions are covered. The more the financial people talk down gold the MORE THEY MUST BE WORRIED ABOUT IT AND THE FINANCIAL PONZI SCHEME!!

MIKEHARRY: The tulip called "Semper Augustus" sold in 1635 for 5500 Florins. A Florin is about half-dollar size. That would convert to US$2750 so my estimate is 137.5 ounces of gold. That is $43,862 today dollars. Got the tulip price from "Extraordinary Popular Delusions, the Madness of Crowds" by Charles Mackay, page 94 if you can get a copy. It is a great read.

MIKE.. Big disagreement with your 16.44:

The amount of money available is a major influence on an economy. No money ( barter ) will kill an economy. Too much is hyper-inflationary. Changes in between will affect growth, investment, deflation, inflation, and value of the currency. Please clarify at your convenience.

I don't mean to defend Jimmy Rogers ( not Rodgers ) too much, but he only said that he wasn't into gold right now. He would be later. Several months ago he said the time to buy would be when the CB's started to sell big. He certainly doesn't change his way of thinking to suit Wall Street, and is one of the truly independent talkers out there. He puts his money where his mouth is; more than most.

NAILZ: Thanks for the reply. I have earlier considered the issue raised by your comment, and I am compelled to conclude that your argument would have merit except that the Bre-x fallout and current extreme negative gold pessimism have already created a bear market in gold equities with corresponding fund redemptions. Of course there will always be those who may still hold gold equities who will be tempted to sell in any general market sell-off along with "index fund" liquidations, but IMO because of the liquidation in gold equities that has already occurred, any market sell-off should not prevent the gold equities from rising with a rise in bullion. Afterall, I presume that is one of the reasons that many stockholders are holding gold equities is to hedge against such a sell-off. And it is encouraging to note in this regard, gold equities have not responded to any recent general market sell-offs. Thus I disagree with Prechter et al in their theory that gold stocks will significantly sell off with a substantial downturn in the market notwithstanding a rise in bullion. I believe this will occur only if gold equities have a significant rally beforehand.

Barron's, page MW 10. Did anyone catch the part in the third column about the link between falling gold prices and T-Bill rates? The implication is that T-Bill rates will also decline from this point.

I read somewhere that during the last 3 weeks of June ( up to Jul 2 ) , gold fund redemptions were around 3%, the highest sector in mutual funds. The big selloff on July 7 most certainly was influenced by the need for some funds to sell stocks to build up cash to cover these same redemptions. Most gold funds are very close to fully invested ( 95-98% ) . If this was the case, an argument could be raised that the stocks were artificially depressed on 7,8 July, soon to recover.

Panda:

I actually saw one, I mean two...you know what I mean ( :- )

TTFN

Larryn: The CB s are down to their gold lows. If they really did sell all of their gold they would lose the ability to try to psychologically attempt to continue to control it. Further, there are indications that other CBs will buy. However, this is all cash mkt and the deriviative mkt controls the gold price. In one month the volume equals all the CB gold. CB gold talk is for psychological effect as its actual effect would truly be minimal. 1.5 years of gold sale talk is to keep buyers out and producers selling short with a sprinkle of CB selling followed by timely announcements for effect. All the gold is nearly sold/cb sales and loans+producer forward and option selling of what they dont currently have. CB sales are a propaganda attempt to keep money out as the paper mkt has absorbed much more selling than all the CBs possess. As the financial bubble gets more extreme the chances of greater anti gold rhetoric increase/ the liklihood of sales of the real stuff decreases/especially since it would have little effect on price since the cash mkt does not discover price but the much larger deriviative mkt where all the CB gold is traded in a month in volume. The latter is to the point that CB sale talk is pure propaganda to dampen demand. This will eventually be realized and its continuing effect nullified.
The timing of the Aussie annoucement midnite Aussie time smells of desparation!!

LARRYN: Please forgive me, but I think you did not understand what I was saying. It does not matter what the AMOUNT of money in circulation is. The UNIT VALUE of the money will fluctuate relative to the amount in circulation. So if there is MORE money, then each unit becomers worth LESS. If there are FEWER units ( dollar bills or gold ounces ) then each unit is worth MORE. The unit of money is what does the financial WORK. If there were only 100 lbs of gold in the world, AND it was considered MONEY, each gram would do the work of thousands of current paper dollars.. IT WOULD ALL BE THE SAME. You could have a great nite out on the town with 1 gram of gold in your pocket, instead of 1000 paper dollars. Capeesh?

LARRYN: By the way, I AGREE with you that in the event of a deflation, government will create more money to attempt a "reflation." Absolutely. This speaks for the dilution of the paper monetary unti ( which is being run off a printing press ) and the relative stability of the gold ounce unjit ( which must be sweatede out of the ground witrh much toil and expense. Capeesh?

LARRYN: Meant to say "unit."

Nailz ( Jul 12 14:08 ) That's exactly the kind of info I'm looking for. If you want to guage the effect of Gold being all over the media - all of a sudden - look at the demand for *physical* metal ( bullion coin etc. ) coming from the public.

I know that such demand was up tenfold in Oz in the immediate aftermath of the RBA announcement. I know that it rose strongly in Asia. Now am getting some anecdotal info that it is rising in North America too. Personally, I will be watching this closely. The last think that the Central Bankers et all wanted was to make Gold front page news, for *any* reason.

It will be interesting to see how long Gold stays in the news and what the effect is on "ordinary" people.

When silver was demonitized 100+/- years ago, they still used gold as the monetary reserve.

If the CB's sell their gold now, can US Treasuries or foreign treasuries support specific world currencies?

The US dollar like most currencies has not acted with any degree of stability and I constantly wonder if the switching back and forth from unstabile to stable currencies by the CB's; is the driving force behind this new era bullcrap.
It's a fact that competitive devaluations make the citizens of various countries happy, by increasing their econmic activity.

MIKE SHELLER: In 1933 when they needed to create money to reflate the economy they first had to change the dollar/gold ratio to $35.00 That worked only because gold still backed the dollar internationally. There was no resultant run out of the dollar. Since Nixon closed the gold window that confidence factor has been removed. A new attempt to reflate, without gold backing, would likely have a different result. My guess that there would be a run out of the dollar by all parties, other governments, corporations and individuals worldwide.

At the coin show.......Hi all.....just got back from a big Saturday at the Colorado Springs coin show. According to the regulars, it was "busy" and everyone seemed to be turning some inventory.

The two bullion and rare gold dealers were in good spirts -- and their prices reflected the market. 1oz gold Eagles were going for about $20 over spot; 1oz silver Eagles were going for about $6.50 ( 100 minimum ) . That seems fair in this market. If anyone has been thinking of buying any gold, the downside risk is pretty minimum. Silver Eagle pricing has always been spotty due to the number of people who buy them ( one-sie and two-sie ) for numismatic value; and also due to the number of people who buy them one or two at a time. I saw them go as high as $8 for a single silver eagle today.

I couldn't believe the price spread from a "plain" BU $20 Saint and an MS63 certified: $440 and 460 respectively! XF and VF gold was also selling at lows I've never seen before. MS64 was going for around $585. I picked up some good deals today.

So, what's the bottom line? I dunno. :- ) ) It seems that those I dealt with didn't think the gold/silver market was a big deal these days. They seem to be able to profit in either direction. No one seemed in a panic -- although when I asked one guy what his buy/sell spread was on 100 and 1000 silver eagles, he laid into me with the ol' "woe is me as silver is in the tank" sob story. I hate dealing with folks like that.

Everyone else seemed to be having fun -- I also noticed many young collectors fishing for good deals in the penny jars. That a *very* encouraging sign!! Drop me a line if you have any particular numismatic questions!!

We have removed Jimmy ( Rodgers ) Rogers from our 10 most wanted list. L's ( 18:25 ) was most convincing.
Munk's success was to a great extent provided by the fine Camflo Team that they picked up when they took over Camflo Mines. Luck also plays a part. He should thank god for Nevada and the good people on his staff.

VIESERRE..........OK, if negative sentiment and Bre X have already caused the XAU to be in a bear market, why is the XAU not at the levels it was in 1993, the last time gold was this low ( close anyway ) ???? The XAU was below 70 and now it is above 90. My contention is it is because of the strong bull market in stocks right now...I tend to agree with Prechter and others that if the stock market tanks before gold gets started up, then there is lots of room for downside in XAU ( and all mining stocks ) ....If however, we can get the gold bull to make a run before stocks tank, there should be a time of big boom in the gold stocks....I hope it happens this way, because it will give the owners of gold equities a double barreled approach to making money....Some reward for their patience, maybe ?????

MIKE SHELLER: More thoughts on my post of 19:10. The way they set the $35 price in 1933 is kind of interesting. After they made it illegal for citizens to hold gold or gold coins President Roosevelt and his buddy, Harold Ickies, would check the paper each day to see what the free market price was around the world. When it seemed to settle at the $35.00 level they did the deal. We have all been wondering why the Fed is not selling its own gold stockpile now. Could it be that they are preparing for another event like 1933? This time do a reverse. See what the gold market does after the initial crisis, then make the dollar fully redeemable to all at the market price. It would probably work. They would get a reflation that the public and overseas markets would accept.

DONALD: You have put your finger on a very important point. This is the first Kondratieff Wave ( 50-60 year business cycle of inflation/deflation ) where the currencies of the world are no longer tied to gold. It's a whole new ball game, and a potentially inflationary one if we can squeek by a deflation.. Actually, it could be said right now that all that's keeping the US out of a major cycle wave deflation is the chronic deficit spending.

DONALD: You must be a truly generous and forebearing soul to expect that government will ever voluntarily redeem paper for gold.
I think, in the case of a financial catastrophe ( which I DO NOT look forward to with any kind of relish ( ( or ketchup ) ) ) it will be more likely individual private organizations which will pioneer the return to a gold standard. Please be so kind as to indulge my latest Astrological Investor post at Gold-Eagle. http://www.gold-eagle.com

Hi,
I'm trying to find charts/graphs showing prices of gold from 1925-1935. Anyone know where I can find that information?

Panda, I would think you could build The HUI index using the various stocks..
I do not use your particular software but some will allow a basket of "your choice"
of stocks and then build a personal index.. I'm sure you have thought of this.

MIKE SHELLER: Humble & forebearing? No one ever called me that before, but it is a nice goal to strive for. It is not that I think they would do it voluntarily. Look at the options. Do nothing? Total collapse ala Steve Puetz, Dark Ages, barter etc.. Let another country do it? Ok US, you lose the world leadership role forever to that country. Trade in DM, SF, Yen, EMU or some sort of basket? Same result, loss of leadership role. Its the rock or hard place thing. One thing is certain. We will not see this drag on much longer. Tailand, Malaysia, Philipines, Burma are in currency turmoil these past two weeks. Japan is sending bankers to Tailand this week to try and patch something up. These things feed on themselves and drag in all the weak elements. Everything connects to everything. A small bank in Austria failing was all it took to bring the entire world into depression in the 30's. The old Domino Theory at work.

MIKE SCOTT: Try here.

http://www.kitco.com/gold.londonfix.html

The wholla nine of you:
Buttati in un mare pieno di merda come te?

Front @18:43 -- ROTFL :- ) ) :- ) )

You're a naughty boy! But I'm sure it was, 'by accident'... :- ) ) :- ) )

:- ) ) :- ) ) :- ) ) :- ) ) :- ) )

NotaGoldbug -- I've tried building such a chart, but the index is composed of more stocks than Super Charts will let you have on the screen at once. You can hide the individual charts, but you need to have them 'on screen' to sum and multiply by the index divisor.

NAILZ: I appreciate your viewpoint. As I see it, the fact that the XAU is in a bear market does not mean it has to perform to any prior historical pattern. As to why the XAU is at a substantially higher level now than what it was previously relative to gold is question I cannot answer, and I welcome other viewpoints. Your response of a higher DOW is what I presume most would attribute it to. I do not. One can speculate that equities are more reflective of a longer time frame and foresee price improvement over that time, as did the XAU in the 92-93 bottom when it bottomed prior to gold. And this view provides for a bullish outlook. Moreover, it would seem that if gold did head south for 250, the XAU has plenty of room to fall before it breaches its 92 lows so that it would probably not penetrate these lows unless it was expected that gold would remain at those lower levels for a substantial period. Again a favorable viewpoint. It could also be attributed to the better performing components of the XAU - NEM, ABX, HM - all have better reserves and earning power. But in any event, IMO the important point is to recognize that there almost a 30 basis point spread between where the XAU was in 92 and where it is now with gold at lower levels; that ABX, NEM and HM have during the past week recovered above prior trend lows notwithstanding a limited recovery in the price of bullion and a consensus opinon that gold is going lower; and there are reasons for this behavior. And it is not the type of behavior that suggests substantially lower gold prices over the intermediate or longer term. But at the same time, I do not contend that it will not happen and this pattern could certainly change. Similarly, as to whether gold stocks will fall, stabililze or go higher in the event of a market sell off with a rise in gold is also subject to different conditions, views, and opinions that make buyers and sellers.

Like you, I hope and have earlier contemplated there would be a rotation into gold stocks before this bull Dow market ended, but that looks grim at this time. As does, for that matter, a significant increase in the price of gold for fundamental reasons. But the bullish side is that with such an overwhelming short bias in the market, any positive surprise is more than likely to produce an immediate and very significant price rise due to latent technical demand and a rush by others to buy at perceived lows.

Mike Scott-gold prices were fixed by Roosevelt during thsat time frame..the price was totally controlled by Uncle Sam..it traded around $20.66 an ounce for most of the period then it settled at $35 during the depression. It is said that Roosevelt himself when he arose in the morning set the gold price.

BILL BUCKLER: I am taking this opportunity to thank you for your insightful and beneficial comments on your web site, and for the charts and other helpful material. It is all well done and appreciated.

panda: Have you called Peter, Chris, Jon, and Don Worden to aks for HUI to be added to Telechart 2000? Call 1-800-776-4940 Monday after 9 Eastern time and try. You will get a salesperson, but ask to have your request passed along to the top. Don Worden used to do a fun financial quiz show on WDNC radio in Durham, NC before he retired to help his sons at Worden Brothers. Always said he didn't understand gold, but then he made some good turning point calls on gold stocks using TA and gut feel.

Viserre ( Jul 12 21:58 ) Glad you like it. Thank you in turn for your many postings on Kitco. I have just posted a new Op-Ed on Central Bank Gold sales at http://www.the-privateer.com/corresp.html

I really do enjoy Kitco. I would like to participate more than I do but believe me, the combination of the website and the Privateer itself is a 25 hour a day job.

If I could in turn ask a favor of the participants at Kitco, I would appreciate getting any evidence you have - anecdotal or otherwise - of what the level of demand is for physical Gold ( bullion coin, small bars etc ) . That's my real e-mail address.

I am watching this closely as the best evidence obtainable of the *real* effect of Gold's recent elevation to newsworthy status.

VIESERRE and BILL BUCKLER and ALL.........Thanks to you both.....Vieserre for the well thought out reasoning and to Bill Buckler for the site......I go to the Privateer once a week and am always enlightened in some or many ways...ALL...The conversations here this weekend have been civil and somewhat intellectual....For all those who have enjoyed it, as I have, I hope you will take heed. When an idiot comes on this thread, as will always happen, ignore him. For the most part they want to see their name in headlines and feel they have challenged the group. We have lost too many good people to bickering. Note that I did not say to ignore all who happen to have a different view than you. Only the pompous asses who wish to destroy harmony rather than contribute to it should be ignored.....We should welcome those with differing views who will present those views in an articulate and tasteful way....An old saying goes "2 heads are better than one, even if one is a goats' head".....We can all learn from others and everyone has some valuable contribution to make to this group....Mine is the goats head......THANKS

Bill Buckler -- I don't want to get anyones hope up, but... I've actually had one person at work ask me about.... gold funds? Can you believe it? This persons' reasoning goes along the lines of, "The stuff has fallen so much." I explained that gold was in a bear market and that you stood a better chance of losing money than making money in a gold fund... Still, the questions persisted. The bottom line is, this person wants to take their profits from tech stocks and move some in to gold funds. Go figure. Most people still laugh if even mention the precious metals. I guess greed still rules. Maybe that's why S&P 500 index funds will go up for ever! :- ) ) Hey, thirty percent a year for the next two lifetimes is pretty good!

"Sunday" TV program, Channel 9, 13th July, 1997

IRAQ - CIA COVERT OPERATION

Channel Nine Australia has just re-broadcast a one hour documentary with Peter Jennings of the American ABC interviewing all of the parties involved in covert operations in Iraq for the past 6 years.

This is a very interesting revelation "out of the blue", so soon after the Bilderberger meeting in the US recently.

It was obviously a massive spin doctor effort. To the thinking person, the program certainly raised a lot more questions than it supplied answers.

The interviews tracked how the CIA supposedly wanted to oust Saddam Hussein through a covert operation, in co-operation with the Opposition Party, the Iraqi National Congress. The idea was to strengthen the INC, and attract some of Saddams rebel army units, leading to a coup. This was first intiated through President Bush, but carried on by President Clinton, through advice.

A CIA TV broadcasting outpost was established in the North of Iraq. Multi millions were spent over the years, both in Iraq, & in Anti-Saddam programs through London. An amount of $23 million dollars was shown as evidence as the amount spent in London against Saddam.

The interview showed how the CIA apparently split in to two camps. For and against. The CIA headquarters in London ( building shown ) clearly opposed the coup attempt.

The CIA later established a major outpost in Imman, Jordan. All the "ex" or "retired" CIA directors involved were interviewed ( of course ) .

During 1995, 14 of the 16 provinces were in rebellion in Iraq, & supposed Saddam was in danger. They supposed only had two days of Kalashnakov bullets left in Saddams possession. However, Saddams helicopter gun ships came in, overturning the insurrection.

In 1996, Saddams tanks attacked the INC in the North, killing over 150 of the INC. The INC expected air cover from the US, but this never came. All that happened was the firing of the missile at Saddams radar installation in the SOUTH. This supposedly was a major stuff up on the part of the CIA, so about 800 people were airlifted to the island of Guam, in August 1996 ( during the Presidential election campaign ) . Most of these people have now been re-located into the US, or into US Prisons as "spies".

The concluding remark from the Australian presenter was that the US feared that a more dangerous dictator may have emerged after Saddam, so they eventually gave up. A likely story.

ANALYSIS:

1. Is this one CIA outfit fighting another CIA outfit seeking more funds??
2. Why is the CIA all of a sudden becoming so "open" about their covert operatations.
3. Is the US Govt simply covering their butt over a so-called stuff up?
4. Is this a way of publicly walking away from the INC whom they theoretically supported, pre-empting the INC squealing to the United Nations?
5. Is the US Govt preparing the West for a build up they cannot control in the Middle East later this month? This occurred in a very similar fashion pre August 1990.
6. Is this a CIA/US Govt PR event designed to filter back to Israel, to placate or inform them that the US wont be supporting the Israelis, when Israel comes under certain fire in the near future?
7. Is Russia up to something?

Watching the Middle East scene for many years now, very little emerges from the media in a premeditated fashion like this, unless the Bilderberger outfit wants it known. I suppose it will become clearer soon. Nothing like a good "exogenous" event to boost the price of gold, eh??

Skylark - Re your 16:26 - Your comment about Munk reminded me that I wanted to point out Munk's obvious, ( to me anyway ) , and nefarious, motive ( Tortfeasor - is this slanderous? ) which I feel is his reasoned attempt to talk down the ( already bleeding ) market even further so that he can pick up the plums that he has his eyes on at all-time bargain basement prices. If anyone else here has already put forth this thesis, I apologize, I have been away from the PC for most of last 2-3 days and have not yet caught up on all the posts.