Gold Discussion for Investors and Market Analysts

Kitco Inc. does not exercise any editorial control over the content of this discussion group and therefore does not necessarily endorse any statements that are made or assert the truthfulness or reliability of the information provided.

(Wed Jul 30 1997 00:17)
it's bad...but then again...I'm the boob...
There once was a semi-demi called Newporter
Who played darts for dollars and a quarter
and then one day
pseudo EB took his cash AWAY!
and together they sold gold shorter and shorter

EB ;- )

(Wed Jul 30 1997 01:14)
Why Save @ Rainy Day
Boom-and-bust business cycle may be vanishing
July 30 1997
by: Bud Jorgensen - Economics Reporter The Financial Post
*Royal Bank Study*

Steven Weber, a professor at the centre for advanced study in Behavioral
Sciences at the University of California, pursues these issues in a paper
called " The end of the business cycle?" ( It is published in the latest
issue of Foreign Affairs, a public journal. )

If the business cycle is fading away, as Weber suggests, consumers will
be less concerned about saving for a rainy day.

(Wed Jul 30 1997 02:15)
has this been posted yet?
Will the Dow Dive to 400? One Analyst Thinks So...MONEY, TIME

Among the last of the stubborn bears, analyst Robert Prechter stands
out for his bold projection that the dow will plummet from 8,000 to 400.
Could it happen? Share your opinion in The Money Pit, and
read Time's take on how Wall Street's bracing for a fall.

(Wed Jul 30 1997 04:17)
orbiting innerspace
Hello? Is anyone here? It sure is dark in this place. I feel something warm and fuzzy. By the way, I'm lost - I need some directions. Can anyone help me? I think I made a wrong turn a couple of million miles back. I'm looking for the Internet Highway.

(Wed Jul 30 1997 04:26)
GEFF: Re "Balanced Budget" deal, the one party system is still buying votes. With OUR money! But the horse is about to open up because it is already inside.

(Wed Jul 30 1997 05:22)
@Beavers Den
Hey electron, the looney bin was the last turn off - you nut case moron! This is a gold site. Do you know what gold is?#!@% We humans value it very highly, we seek it, toil for it, detroy our Earth for it, sometimes worship it and more often than not would kill for it! Just stick around here and read some of the comments and you too can learn to be a civilized, intelligent human being. But be careful what you say, some here will attack you viciously if you do not please them!

(Wed Jul 30 1997 05:45)
You Earthlings ( especially you, Beaver ) are a strange crowd! But I will continue to study your ways for a few more minutes. Now for this gold thing you discuss - I have read everything posted on this Super Information Highway, and unfortunately I AM NOT IMPRESSED! Quite frankly, I am bored to tears, and thus I will be speeding off soon. But before I bid farewell, I will share a few insights upon this gold investing thing you do.

Rule#1. Always remember to ( are you sure you're ready for this? ) Okay listen very carefully because this is the SECRET to your dilemma, always remember to... ... ...


Okay, did everyone understand this? Let's all say it now:

BUY LOW and then SELL HIGH, BUY LOW and then SELL HIGH, BUY LOW ... SELL HIGH. Faster, faster, faster!!!


Rule#2. Okay, now listen extremely carefully! This is very important!!! Are you ready??? Okay then, here goes: Rule#2 is to never, and I mean never, ever, ever, ever forget Rule#1.

George Cole
(Wed Jul 30 1997 05:54)
BYRON: Agree absolutely. If XAU can penetrate 98 with conviction, 110 should be seen shortly. And if bullion can break through the recent double top around 330, then $340 is just around the corner. If we are indeed moving from bear to bull, XAU should break out before bullion. If bullion leads XAU, I would be very suspicious.

Foreign stock markets generally strong overnight as was the dollar.

(Wed Jul 30 1997 06:03)
GEORGE COLE: Do you have a list of the stocks that comprise the XAU? There is a silver angle to it also as I recall.

(Wed Jul 30 1997 06:10)
Joburg Gold Index down 1.08% at this hour.

(Wed Jul 30 1997 06:17)
Good mornin ALL....EBN Gold up 1.0 and Silver unch...European stox up big again...ditto Hang Seng...

(Wed Jul 30 1997 06:19)
Uranis, where areyou????
Okay, now that I've covered the important stuff, here are a few other trivial thoughts that I've had related to this gold thingy:

The bestess strategy is to buy stocks when they are down, then patiently
hold on and wait for the companies to come back into favor. Buy when the Wall Street pros are sellin. They're a bunch of imbosiles.

Buy those stocks when the crowd is sure you're wrong. And don't just be "contrary." Satisfy yourself through basic research that you're buying stock in well-managed companies, with bright golden futures. Sometimes Earthlings, it takes longer than expected, but you have not to be disappointed very often. More often than not, this strategy WILL produce outstanding results.

Gold mines are still out-of-favor on Wall Street and, therefore, should be very attractive to you.

Gold, as you may know being Earthlings and all, remains very weak. The strong stock market, the strong U.S. dollar, persistent low inflation ( hah-hah ) , and central bank selling of gold weigh heavily on the gold market. Holding gold has been a poor choice for investors like yourselves last year. You could have made more money in just about anything else. Buying stocks has been a clear winner over gold for over 15
years now.

The final blow to you goldbugs has been central bank gold sales. Central banks hoard 25% of the above-ground gold supply. Last
year, according to the Consolidated Goldfields report, central banks were net sellers of 239 tons, or 7% of total supply.

Central bank gold sales are no surprise to me. I could easily have told you a long time ago that this was going to happen. Gold used to be a source of confidence in a country's currency. No longer. Now, central banks need paper currency ( foreign reserves ) , to fight off
speculative attacks on their currency. In addition, central banks have come under pressure to earn interest, to pay down their costs. Gold, sitting in a vault, costs money and earns nothing. Central bankers have taken the challenge. They now sell their gold more
readily. They also lend gold, to raise money.

The change in attitudes about gold at central banks has been a brutal blow to gold investors. Some are ready to throw in the
towel. Goldfields, in its 1997 report, said: "A new generation of managers, without the reverence for gold, shown by their
predecessors," is running central banks today. ( To some, gold is still a "sacred" investment. )

Now, all the bad news is out, and in plain view. The gold market has changed temporarily.
With inflation seemingly low and the dollar seemingly strong, gold looks seemingly weak.

Given that dismal scenario, why should you own a gold mining company? The answer is very simple, but you Earthlings make is so complicated. It's because of the rise of consumers around the world, especially in Asia. Do I need to repeat this? I have been watching gold and gold mining
shares for exactly 7 minutes now. The goldbugs have been throwing in the towel as you're so fond of saying. So, after the Burp-X scandal, and central bank gold sales, I recommend adding high-quality gold mining companies to your buy list.

Yes RJ, gold could go lower. Gold has been below $300 a couple of times since 1982. But will gold fall back to $300, before starting a new trend to higher levels? I doubt it. Demand for gold jewelry
is strong and rising. Central bankers know that. They have little to gain by dumping lots more gold, and killing the market.
When gold is weak, they are likely to pull back and wait for a recovery above $350, before selling. Jewelers, on the other hand,
know their market is growing and will take advantage of any weakness to build inventories.

If the unlikely happened, and gold did plunge below $300, it would not stay there long. Demand from jewelers alone would
spark a quick recovery.

While I do not expect gold to shoot back above $400 anytime real soon, neither do I expect it to plunge below $300. More likely, gold
will flounder at or near current levels for the next several months. But I see this Fall and especially 1998 and following years to be exciting ones for gold.

Eventually, rising demand for gold jewelry will produce a trend to higher gold prices. A year from now, I will be surprised if
gold is not at, or close to, $500. In the long run, I believe $1,000+ gold is inevitable.

Gold mining shares are not helped when gold is weak. In fact, it is difficult for gold mining shares to rise while gold is sinking. But the link between the price for an ounce of gold and profits is not so direct or automatic. Gold
mining shares can rise even when gold remains stable.

There are two distinct markets-one for gold bullion and another for high-quality gold mining shares.

The slide in the price of gold, and a much greater slide in the price of mining shares, opened wide the window of opportunity
for top quality mining shares. Big mining companies can now buy up small exploration companies on the cheap. At some time in the not so distant future, gold mining shares' stock price will shine again. This is likely to start happening when gold is still down, and while the share prices for small exploration companies remain crushed.

The best strategy is to buy some quality mining shares now and average in on the upside or downside. Look at any
price weakness in a good company as your chance to accumulate a meaningful position.

Good Luck and Boner Voyage!!!

(Wed Jul 30 1997 06:26)
Mornin Donald: I only see one pure silver play in the XAU and that's HL..
The others are ASA,ABX,BMG.ECO,HM,NEM,PGU,PDG,GLD,and TVX...

George cole
(Wed Jul 30 1997 06:28)
DONALD: The XAU components are Barrick, Newmont,Homesake, ASA, and Placer, plus one or two smaller ones. Byron can probably give you a complete listing.

George Cole
(Wed Jul 30 1997 06:36)
in Florida

You said it all. Amen!

(Wed Jul 30 1997 06:36)
ELECTRON: Re buying stocks when they are down. Do you mean gold stocks? Are they down enough to buy now? Which ones?

(Wed Jul 30 1997 06:37)
As a regular lurker, I have observed that the most frequently used word on the site is....IF. For the sake of consistency, let me put the proposition to the many acknowledged experts at KITCO as follows:
IF...... we accept that the 'shorts'have no competition, then it follows that gold would go to zero and the shorts would make squillions as the price of gold continues to fall. But that wouldn't be rational. Therefore there must be a point when believers in gold cease to be scared off by all the bovine by-product about Central Bank selling and gold not having any real monetary value any more. At what ( buying ) point do the true believers in gold call the bluff of the shorts, exposing their naked positions thus forcing them to hock everything they own to take cover?
IF..... only the believers didn't believe that the non-believers could be right.
might we then see a sharp reversal of the index, exposing the naked position of the shorts. have to hock everything to cover their positions?

Mike Sheller
(Wed Jul 30 1997 06:48)
Morning becomes Electron
ELECTRON: Thanks. I guess you've said it all. What more could we lowly Kitcoites possibly add? Or were you just giving us a taste of the hilites of "THE BEST OF KITCO" soon to be released on CD Rom and Zip Disk?

(Wed Jul 30 1997 06:52)
ELECTRON: Re your comment "Gold sitting in a vault costs money and earns you nothing". Let me counter with the following:

Fire insurance on your house costs money and earns you nothing.
The belt holding up your pants costs money and earns you nothing.
The cop on your beat costs money and earns you nothing.
Military forces cost you money and earn you nothing.

Gold should be in the vault. It has a purpose equal to or greater than all of the above.

Mike Sheller
(Wed Jul 30 1997 06:59)
$2000 in 2000, & no IF's
The 340 gold price is not merely a factor relating to recent trading. A support line connecting the '85 gold bottom with the 92/93 gold bottom runs roughly through the 325 - 340 level at the present time/space segment of the long-term gold chart. ( We have to give it a generous range to compensate for time/space aberration that occurs in all very long term futures graphs ) The recent breakdown below this level may be a portent of things to come, or an aberration . A return upward will probably meet important resistance at 340ish, but any significant rise above that level would indicate a bottom formation in progress. The prominent Wall Street Journal article yesterday about the strained economics of gold mining and the woes of producers is a classic gloom and doom industry piece. It is highly reminiscent of the kind of press General Motors and also IBM got as it looked as tho they were each, in their turn, going to slide off the face of the earth. Retrospect ( my favorite kind of 'spect ) shows that those moments were PRECISELY the time for bold investors to step in and buy shares. Immedospect says that the bottom in gold is either here now, or not very far away. Get Real...Get Gold.

(Wed Jul 30 1997 07:06)
Bomb blast at open air market in least ten dead and many injured...

(Wed Jul 30 1997 07:11)
Mornin Mike...I read that article on gold mining in the WSJ yesterday and got the sams feeling that this is the kind of thing one reads at a market BOTTOM...Doom+Gloom...

(Wed Jul 30 1997 07:16)
President of Brazilian Central Bank resigns.

(Wed Jul 30 1997 07:29)
Evening news from Japan. Industrial output falls 3.1%, Stocks tumble.

(Wed Jul 30 1997 07:32)
18 now confirmed dead in Jerusalem bomb blast...

(Wed Jul 30 1997 08:03)
Jerusalem bombing... Http://

Mike Sheller
(Wed Jul 30 1997 08:04)
Mornin" Ted. Regret the news is so grisly, but thank you for delivering it. I've come to depend on you for instant updates on the cogent news every morning! RJ: Your precognizent prescience exceeds even that of Kitco's forlorn foregone feline. I awoke to find that Pepi had eaten up both rawhide laces in my favorite moccasins. ( No kidding!!! ) Perhaps you are in the wrong business, sir. Would you consider operating an empty storefront I have waiting just for you. What size turban do you wear? Franchises are still available. Bring your own cards. Will train.

(Wed Jul 30 1997 08:05)
Why ain't it in blue???

(Wed Jul 30 1997 08:06)
Bad dog!

(Wed Jul 30 1997 08:12)
CAn't wait for the actions?this one for you:
bye..happy trading

(Wed Jul 30 1997 08:14)
Fish & Beavers
Beaver, be eternally thankful to that you are a Beaver and not a fish, for with Electron's baiting technique, you might well be landed with his first cast.

(Wed Jul 30 1997 08:16)
Donald -- Try this site for information on the XAU

Try this for info on the HUI index

You will have to download ADOBE Acrobat reader for the HUI page, but the download is free...

(Wed Jul 30 1997 08:19)
Donald -- This will take you right to the XAU

Good morning TED! Great cooool Canadian air down here!

(Wed Jul 30 1997 08:19)
Ted: Try all lower case:

(Wed Jul 30 1997 08:21)
@more specific
Ted: The http part is case sensitive.

(Wed Jul 30 1997 08:31)
It seems our site is full of cheerful news this morn. ;- ) Mike, yesterday ALL that I was telling you to do was to give the dog a pat for me. The castle thing was just a unique gold story that I had been meaning to tell for some time. Mine oncle's reaction was certainly not typical of what would have taken place had any of the inmates around here found that coin. No?
RJ - Thanks for the massaging missive. Previously I was pitchkettled and was tending to misgloze your intent, however your philotimy has come shining through and we have thus avoided any melpomenish episode. My mulligrubs has thus passed and I now determine to desquamate any malingerer-type shroud that I may have been displaying.

(Wed Jul 30 1997 08:34)
Near the bottom
To Electron...I can't resist answering your question "Uranis where are you?" Answer is .....attached to your rectum.

(Wed Jul 30 1997 08:38)
It's amazing how other countries let the U.S. export inflation via currency devaluations. The one question that I have is this; Who is buying all of the U.S. Bonds? If everybody is heading in to stocks, who's left to buy bonds? It may be a moot question, but at some point I would have expected bonds to start canabolizing the stock market. There doesn't seem to be any overt evidence of that happening yet. This seems strange to me, but then again, I can't create money out of nothing. Well, at least my credit lines don't add up to spit when compared to big Bro'. :- ) )


(Wed Jul 30 1997 08:41)
6.351% on the long bond......... Really gone now............

(Wed Jul 30 1997 08:44)
RJ - Mike's latest made up word "Immedospect", is good enough to gain entry to the Mooney Dictionary, and can be defined as the modern short form of the previous commonly used phrase 'immediate inference'.

(Wed Jul 30 1997 08:46)
PANDA: Who is buying bonds? Some suspect the Fed is the big buyer of late.

(Wed Jul 30 1997 08:50)
ebn 328.25

(Wed Jul 30 1997 08:50)
@leaving for work
Time for a reality check? CNBC talking heads now optimistic that long term interest rates will hit 4.5%. Did I miss a memo?

(Wed Jul 30 1997 08:56)
SPEED: Did the talking heads check with Japan and China before they made that forecast?

(Wed Jul 30 1997 08:59)

Let me take you back in time. The year was 1989, the place Japan. All through the land people were making killings in the stock market, and the best thing about it is that the investments were 'safe'. You see the Japanese, in addition to having a lock on the worldwide production efficiency and know how, had concocted this great scheme which virtually ensured that stocks could not go down. The strategy was simple, every company owned stock in every other company and none would ever sell. With so much stock 'tied up' there was not really enough float to satisfy the ever growing retail demand, thus stocks could only go in one direction.

Fast forward to the present. Central banks have now adopted the very same scheme. They print lots of money and with it buy each others debt. Liquidity rises, and bond prices remain strong, because the CB's will never dispose of each others debt. Bond's, and their brethren financial instruments stocks have only one way to go, up.

Meanwhile, its just another boring day with the dollar surging and gold going up. We are creeping ever closer to a breakout in DM. Interestingly enough it is slightly over 1% from here or right around $330-331 at curreny exchange rates. When this one breaks, its going to be big and fast.

Will gold go down and make $300? I really don't thinks so. Even if it does it won't be before the curreny batch of shorts is hammered. There are just too many of them all looking towards the same savior, Mr. CB. Here at Kitco we now have 4 active shorters if one is to believe the posts. I believe this is an alltime record. Who do you suppose is long if those that frequent the GOLD bb are short?

(Wed Jul 30 1997 09:02)
Speed and ALL - If we can get anywhere near that rate of interest, buy as much property as you can, lock in the longest mortgage term possible, and sit back and enjoy the rst of your life!

(Wed Jul 30 1997 09:10)
A nerveous Andy Smith
...Andy Smith is quoted this morning, following gold's rise in Europe on physical buying . He's quoted as saying that Russia did not buy gold on the market but bought their own production. I haven't got the info. handy, but I believe that Russia's total yearly production is somewhere around 100 tons, and they purchased 197 last year. Perhaps somebody can confirm. If my statement is true, it would catch Andy in his own web of lies and vicious gold attacks to feed his short speculative position. And when your lies get bigger and bigger you begin to sweat..Its about time...

(Wed Jul 30 1997 09:11)
RJ - Add Au99.9's "squillions". I like it!

Bob M
(Wed Jul 30 1997 09:13)
I find it amusing that I believe yesterday the Dow hit its 74th new recoed for the year. Talk about becoming a non event! Day after day the same old thing, up, up, complacency not setting in? The higher this market goes, the less newsworthy event it becomes, it is taken for some real headline news would be a 20% correction!!

(Wed Jul 30 1997 09:19)
In the recent past, gold has had a hard time sustaining a rally when the U.S. 30 year bond rate keeps dropping. This morning it is still descending, now 6.35.

George Cole
(Wed Jul 30 1997 09:39)
As I pointed out yesterday, the refusal of gold stocks to follow bullion lower signalled that a strong rebound would begin very shortly. EBN gold up $2.20 this morning despite strong bonds and robust dollar. Very bullish action indeed. VERY BAD news being ignored. Good chance that $330 will be taken out decisively today.

Interesting how the talking heads can rationalize absurdly high stock valuations. If Dow should reach 10,000 this year ( very unlikely, but not impossible ) expect to hear talk about second coming of Christ,long-term bond yields headed for 3%, etc. .

(Wed Jul 30 1997 09:40)
D.A. Well said concerning Japan. And there is every reason that Japan has more downside to look forward to as per this story from the Tokyo evening news.

Tokyo stocks tumble on margin unwinding
Stock price falls gained momentum towards the close Wednesday on
the first section of the Tokyo Stock Exchange. Margin unwinding
pushed the Nikkei Stock Average down to the day's low of 20,170.82
shortly before the key index closed at 20,212.82, down 189.92. The
key index hit the day's high of 20,418.84 in the morning.

Recent market leader Sony dropped sharply mid-afternoon, prompting
speculators to sell other electrical machinery shares. Banks lost more
ground, while food and retailer stocks remained weak.

Morgan Stanley and some other foreign brokerages placed sell orders
for mainstay shares, making market players even more cautious.

Losers numbered 851. Volume was estimated at 364 million shares.

(Wed Jul 30 1997 09:41)
Larryn: As someone speculated earlier, maybe the Fed is doing the buying. That could explain gold up at the same time.

(Wed Jul 30 1997 09:44)
XAU off to a quick start...up .95....make that 1.02...Mornin Panda and thanks Speed...

(Wed Jul 30 1997 09:48)
@the scene
Nice so far in the gold. Currently watching the Dec contract. As I see it, if it doesn't break above 333, then odds are that it'll see 326.5 area. If it DOES break over, I'll be expecting to see about 339!

(Wed Jul 30 1997 09:58)
Comex report: Gold up 2.20;Silver up 5.5 cents;Platinum up 5.90;and Palladium up 3.10....Good afternoon JIN!...Time for some seakayaking....

(Wed Jul 30 1997 10:04)
D.A. -- As usual, very good points!

(Wed Jul 30 1997 10:06)
@Buying back the farm!
At anything any price up to $340, it will be the Aussie Treasury sheepishly buying back its gold.The embarrassment and public ridicule over its crazy decision to sell two thirds of the country's gold has been just too much to bear.

(Wed Jul 30 1997 10:07)
Good Morning to you and thanks for the URL's you post for us all.
re: Your 06:03 on the XAU components , I can recycle the following posted here by another kind Kitco dweller a few months back. Hope it's a start.^XAU+ASA+ABX+BMG+ECO+HL+HM+NEM+PGU+GLD+TVX&detailed=f&options=t
Normandy Mining closed unch today at $1.60. Heard of 3 Australian Gold Co's announced projects deferred/cancelled today due to low Gold price.
Happy Trading to all !

(Wed Jul 30 1997 10:41)
Ted - You lead a hard life, but I 'spouse someone's gotta do it.
Au99.9 - If the Canadian goovernment had announced all of a sudden that they had, in the last few months, disposed of 2/3's of the hoard all at once, I guess we could of had an uproar too. Trouble is they did it bit by bit on the sly. Your guys are not only redmod but but spiss and sloomy as well!

(Wed Jul 30 1997 10:57)
I was doing fine with your last posting till I got to the gaelic in the last line. Please interpret. As a ex Dubliner, my gaelic is a bit rusty. Slainte.

(Wed Jul 30 1997 10:57)
Morning Quickies
- I agree with the buy low sell high philosophy. I must admit to some surprise that a galactic traveler such as yourself would seem to have such linear thinking. I sold plenty of gold at $328 +, when gold retests the recent lows or, better yet, makes new lows, I will buy what I have sold. I love buying low and selling high. Im just not all that particular about which I do first.

Your comments about CBs reevaluating their hoards of gold as costly and non-earning is astute. I believe we have a fundamental change in the once sacred philosophy of holding large gold stores. They are coming to the realization that they have squandered squllions on this outdated notion. Gold simply does not have the same role as in bygone years. While this reapportionment of assets continues, gold will suffer. The added pressure of the EMU adds immediacy to this task.

- Fire insurance, your belt , the cop on your beat, and the military all employ the providers of these services. A lump of metal sitting in a vault employ only the guards of the vault. The vault maker? The vault would be made and purchased regardless of the amount of gold to eventually reside. The miners? Well mining has always been an iffy prospect at best. Prices go up, then they come down, only to rise again. Gold will do the same.

- Why the emotional resistance to fundamental market forces at work? Why does the Idea off lower gold prices offend you so? Gold is only worth what someone will pay you for it. If you doubt this, dig out a Maple Leaf and try to get $400 for it. This blind belief that gold is worth more than it is currently selling for, is nothing but a serious case of ignorality. When you ignore reality, it has the tendency to slap you in the face until noticed. I gotta go trade some metals.

(Wed Jul 30 1997 11:07)
Your comments make me fluppostic all over, gotta' go change my skirt......

(Wed Jul 30 1997 11:16)
Gott'a go!
Below is from CNN London today.

Data from the International Monetary Fund showing the Russian central bank bought 127 tonnes of gold in 1996 was noted by sources here, leading one analyst to comment: "The appearance of central banks does not always spell doom and gloom."

However, another analyst cautioned the seemingly positive data was "trying to make something bullish of nothing."

The information was presented by George Milling-Stanley of the World Gold Council, an organization representing producers which promotes gold use. He was speaking at the Diggers and Dealers forum in Kalgoorlie, Australia.

Andy Smith, analyst at UBS, said Russia regularly bought gold from its own miners in non-convertible rubles, a practice he described as "kidnapping local output." Smith cautioned Russia had not purchased the gold from the market or another central bank so it was not the kind of offtake that would absorb any future central bank sales.

George Cole
(Wed Jul 30 1997 11:26)
1929 and 1997
DA: I like your analogy comparing stock swapping by Japanese companies in the 1980s to debt swapping among CBs today. Of course, the Japanese stock swapping was a two-way street. Until recently, the foreign CBs were piling into U.S. debt, but the Fed was not acquiring foreign debt.

Seems to me that a key difference between the late 1920s and late 1990s is that much of the today's financial; establishment TRULY BELIEVES, the old rule don't apply anymore. Despite new era talk in the late 1920s, most of the financial establishment of that day never accepted it. Indeed the Fed began hiking rates well before the 1929 market crash.

The current line seems to be that the Fed may not have to hike rates until the next century and indeed may soon lower them. And if the Fed doesn't hike rate, a bear market cannot occur. I suspect the flaws in this line of reasoning will become evident shortly. We will have a hum dinger of a bear before long, but the cause almost certainly will NOT be rising rates. This probably will be the hook that keeps the crowd from selling until it is too late.

(Wed Jul 30 1997 11:31)

The point that the Russian CB is buying gold from its own producers and not from other CB's and therefore was not a source of demand to soak up other CB liquidation is absurd. When the supply and demand of gold is tallied up ALL consumption and ALL production is equivalent regardless of from where it comes. Taking the line of logic in this bizarre commentary to an extreme, I suppose that if the FED bought all the gold produced by US producers, and the CB of Austrailia bought all the gold produced by it s producers, and the CB's of Canada and South Africa did the same, and thus these CB's effectively bought most of worldwide production it also wouldn't count because they would not be buying gold supplied by other CB's and we could then expect further decline in gold prices.

If this is the best negative spin that the shorts have to offer, they are in deep trouble. The clock is still ticking.

(Wed Jul 30 1997 11:46)
Wishing I owned my own central bank
The following comments were sent to CNBC this am---Attn: Jim Rogers Every Central Bank in the entire world is running their money printing presses day and night,printing local currency to be used to buy US Bonds --- why ---they can exchange local currency for dollar denominated bonds that yield 6+% go up in value every day by reason of the dollar appreciating against their local currency and the bond itself appreciating every day. The FRB pours fuel on this inferno by adding liqiidity every day.
My question to you @ kitco, How will this eventually be terminated?

(Wed Jul 30 1997 11:48)
DA - 8:59 - You are tuned in bro!
I always read your posts over and over...many clues...thanks!

Quick story: Great coup in DMK7. Had a WORTHLESS spread until the very LAST day MAY9-turned my worthless into a cool $750net...oh my...only to give it back and watch it go south again. No worries though, I made the HUGE$ in JYM7...HUGE...HUGE...HUGE...remember that?

anyway, once bitten twice shy... I am w/w with you at DM...very soon..and big?


has everyone had there glasses of frozen concentrate this A.M? or how about 15,000 lbs?? oh my!

(Wed Jul 30 1997 11:50)
Hey, Tort, where are 'ya?
NASA Public Press Release

Tuesday, April 31, 1990 Audio: 202/555-1788

[Ed: By Tom Neff]

This is NASA Headline News for Tuesday, April 31.....

The Congressional Budget Explorer Module ( CBEM ) is scheduled for installation in the orbiter Titanic's payload bay this afternoon. Technicians resolved an earlier problem with hydraulic line pressure when it was discovered that several fragments of lobbyist had become stuck in a flapper valve. The 127-ton CBEM payload will mark the beginning of NASA's ambitious decade-long "Mission to Fort Knox."

A Flight Eagerness Review is scheduled for tomorrow and Thursday. The current target launch date is Friday, May 11. If no further problems are uncovered in the FER, the launch will probably be pushed back a few days anyway just for the heck of it. The CBEM launch window ends on Tuesday, May 21, when Venus rises in Aquarius and Neptune's influence is no longer balanced, violating critical Astral launch criteria.

Meanwhile, the Velikovsky spacecraft is in good health on its journey to Venus. It's now 122 million miles from Venus and about 28 feet from Earth. Engineers at the Jet Propulsion Laboratory report that failure to actually launch Velikovsky has had little impact on its ability to perform the primary pseudoscience missions. Earlier problems with voltage fluctuations in the Wide Eyed/Credulous Subject Scanner are being monitored carefully. "I'm pretending this is really exciting," says JPL team leader Geraldo R. Spencer.

In other planetary mission news, technicians at the Deep Space Network installation in Canberra, Australia have identified the probable cause of signal weakness in the primary 90-meter antenna: the dish was apparently mounted upside-down. A tentative schedule and budget estimate for correcting the mount is underway. DSN Australian Coordinator Michael J. Dundee was quoted in the Australian weekly "P*** Off Mate" as saying that this mystifying problem had never been encountered before, but was probably due to reliance on American antenna design parameters. "I'm still not convinced that anything's wrong, but we'll try it the other way and see."

Leak checks are underway on the Contractor Information Network ( CIN ) at Huntsville, Alabama. Technicians at the Huntsville Program Survival Facility ( PSF ) expect to begin CIN closeouts by Thursday. The system will then be purged for use.

Aerobuck Weekly reports that in testimony last Thursday before the House Space and Storm Door Subcommittee, NASA Administrator Roald Sagdeev testified that a recent re-re-reshuffling and "options devaluation" would enable Space Station to proceed despite the latest round of budget cuts, but warned this was "absolutely the last cut that can be sustained." Citing internal NASA studies, the publication listed several cost cutting measures under consideration, including a two year stretchout of the Ground Telerobotic Administrator ( GTA ) subsystem, and eliminating atmospheric pressure in the one remaining crew module, which would also be downsized from 23 feet to 16 feet. The name of the station would be officially changed from "Freedom" to "Fred" to fit the new bulkhead dimensions.

The Soviets and Japanese jointly announced a contract with Hilton Hotels last week, to provide a 335-room passenger module for the international Sakharov Space Station currently under construction in Earth orbit.

Malawi became the 78th nation in space Sunday, launching an 1820-pound satellite into orbit atop an Indonesian Merlata II booster. This launcher now has a record of 69 successes in 71 launches.

The last remaining Scout rocket was lost in a launch pad accident near Wallops Island Proving Ground last week, according to a NASA spokesman. Technicians apparently made an error in connecting a hydraulic feed line to the rocket as it awaited payload checkout, connecting it to the purge valve for a nearby Toxic Waste Holding Facility instead. The first stage appears to have partially dissolved and melted itself to the concrete apron; EPA officials have ordered the site sealed pending checkout by an Emergency Response team.

Here's the broadcast schedule for Public Affairs events on NASA Deflect TV. All times are Eastern.

Tuesday, April 31...

11:30 A.M. "Budget Cut Spinoffs" - classroom teaching aid

Monday, May 0...

9:00 A.M. Colloquium on Soviet Inferiority

10:00 A.M. Three Letter Acronym ( TLA ) List Update ( LU )

11:00 A.M. Pre-launch News Conference

12:00 A.M. Post-scrub News Conference

Friday, April 35...

4:00 A.M. Replay of the Administrator's Good Friday speech: "The Crucifixion: A Lesson for NASA?"

5:30 A.M. Livestock Report

6:00 A.M. Astronaut Aerobics/Morning Workout

All events and times and missions and appropriations are subject to change without notice.

These reports are filed daily, Monday through Friday, at 12 noon, EDT. My god, CNN, when do you want me to file? Last April?

A service of the Infernal Communications Branch, NASA HQ.

(Wed Jul 30 1997 11:57)
SWC Caught with its Hedges Down

NEW YORK, July 30 ( Reuter ) - Stillwater Mining Co of Denver, Colorado, the only U.S. producer of platinum group metals ( PGMs ) , said Wednesday the sharp rise in PGM prices this year has meant the company cannot roll its spot-deferred forward sales contracts this year to take advantage of higher spot market prices.
As a result Stillwater will be delivering against its current spot-deferred positions for palladium. "Delivery into the current contracts will diminish the percentage of future production that is hedged," chairman Ray Ballmer said in a statement.

(Wed Jul 30 1997 12:05)
DA!!! For crying out loud; please keep you comments to yourself, some of us are still buying. If you get the bears to step back and extract them selves from the gold hype, they might stop selling!!!! Then what will I do??

George ole
(Wed Jul 30 1997 12:27)
global ponzi scheme
Perplexed: At some point soon ( probably in August ) this global ponzi scheme will start to unravel.The scenario will involve some combination of falling global stock prices, rising interest rates. a swooning dollar and SOARING GOLD. Gold's refusal to tank despite recent strength in stocks, bonds, and the dollar, is a sign the game will not last much longer.

Bullion has sold off, but the gold stocks have not. The gold stocks should begin a much stronger bull phase shortly, but low XAU volume is signalling we will have to wait a little longer for the takeoff. August should be the month.

Bob A
(Wed Jul 30 1997 12:31)
SWC down about 3% on very low vol.

Prince of Tieradelfuegoistan.
(Wed Jul 30 1997 12:34)
@home in my castalice
I have ordered my secretery of the treasury to print one quadrillion bhatpesoafrancarands ( virtually worthless ) with which I will buy one trillion $ in T bonds. With the first uptick in treasury interest rates t Bonds now selling at 212 and yielding .00001% I will sell all the $ denominated T Bonds and buy three and 1/4 trillion ounces of gold ( gold now selling at 34 cents the ounce ) and with the remainder of the now virtually worthless Dollars I will bury the US,ali my late friend Nikita.

Ron Jett
(Wed Jul 30 1997 12:50)

more bad news for metal stocks

King of the Namib and the emirates.
(Wed Jul 30 1997 12:56)
In my Land Rover
Prince: , My secretary of the moneys tells me your plan no good, you must use leftover Dollars to buy Japan, they love Dollars and have all of the Platinum as the truck has finally arrived.

(Wed Jul 30 1997 13:00) RJ's perfect world his logic is absolutely perfect
RJ: You don't really believe that the markets are perfect and any price is the result of normal demand/supply decisions do you ? Ever hear of insider trading ? How about the insider trading you don't hear about ?

A classic case to describe the imperfection of the gold market price mechanism was the recent RBA announcement. The Wizards of OZ "had" sold about $2 B of gold in the first half of 1997.

Clearly, the market had absorbed the gold and price held in the $340-$350 range. The decline of about $27 ( to $313 low ) from the low range was attributed to the "announcement" not to the fundamentals.

In this case fear and clever frontrunning by professional traders - perhaps someone like you - determined where the market price would land - not the fundamental market dynamics of demand and supply for physical gold.

I respect your skill and market timing sense but you don't have to speak the 'party line' about market price perfection on this thread. We are all big boys and girls and know about the market birds and bees.

My take: the Golden Bear of 1996-97 is a production directed by well-financed shorts who feed-off the newsmaker machinery. The stk market can not be shorted in these days so the current game ( short target ) is the gold market. To be fair, the shorts have a helping hand from the broker-analyst-spin-doctors who know that 'early retirement planning' type BULLs come once in a career ( twice if you been around since 1982-87 ) so you eat what you kill and get out of the way before the retail killing fields begin to smell like dead IRAs.

Keep up the good posts but keep your skirt down otherwise you will attract flies.


(Wed Jul 30 1997 13:05)

Bad news for the metal stocks = good news for gold. Here we have another couple of mine startups that are going to be put on the shelf. The decline in supply which is undoubtedly on the way is going to be sneaky. Its not so much that we will se massive mine closures ( although certainly there will be some ) but there will be a whole host of new projects cancelled. The normal mine closures due to exhaustion of ore will continue as usual but the natural replacement cycle will be highly perturbed.

(Wed Jul 30 1997 13:10)
fjdk....: Get it done man. Time is of the essence. When the train leaves there will be few passengers. All aboard.

(Wed Jul 30 1997 13:21)
@...when all else fails
Think about fundamentals. Demand and supply for gold are a function of price. As price declines demand increases and supply gets constrained as the price closes high cost mine production. The lower the price still the more production is deferred. Simple and elegant and it always works. The only thing that could possibly distort this formula is if the five major CB's ( US, France, Italy, Germany, Switzerland ) decided to organize a fire sale over the next few years. The result would be a closure of significant mine capacities in RSA, US/Americas, Oz,and other 3rd world. ( BTW, recycled metal is "not" a factor until price rockets north. ) Mine and related jobs would be lost and the multiplier effect would kill off the food chain.

So, like I said many times before, stick to the fundamentals of the yellow metal.

It's mainly about demand, supply, and price. In the longterm price will need to reflect the cost of finding, mining, and refining. many claim to have found economic gold but the fact renmains that the metal is the extremely scarce. Do you ever hear anyone say 'precious' stocks ?


The speculative 'gold as global money' story only adds icing to the cake. Just don't forget the main meal is not the high-energy-caloric icing but the blander more wholesome cake.


(Wed Jul 30 1997 13:24)

For an interesting read head over to and take a look at their financials for fiscal 1997. Their after tax income was around $3.4B. They also spent about $3.1B to purchase their own stock to offset the shares issued through their ESOP. Not to be too cynical, but one way of looking at this is that the company really only made $300M last year because the money distributed to employees in the form of stock options could be thought of as an operating expense. From this perpsective the stock is selling at a trailing PE of around 650.

While their present accounting methods are fine under FASB one has to wonder. Carrying their compensation scheme to its logical conclusion, why don't they just pay all of their salaries as bonus through stock options. Then their operating earnings can really be stellar and a double from here would be in order, real quick.

Has anyone seen an estimate of the PE of the SP500 adjusted for this little gizmo?

(Wed Jul 30 1997 13:50)
@ Below The Line:
XAU lurking, like an alligator, just below the 50 Moving Average line. Waiting to chomp down on that resistence area between 97-98. Alligator getting very hungry.

(Wed Jul 30 1997 13:53)
Mooney ( 10:41 ) Somebody has got to the dirty a beautiful day and all is well with the world...The Dow up 66...Long bond yield all the way down to 6.32...Bank stox soarin...again! and even the XAU is up .71....can life get any better???? ....diversification works!
Tort: I repeat...Did you drown in the floods??

(Wed Jul 30 1997 13:54)
I see in a Barrons article by some Phd that inflation is deflation and
interest rates should go down since rates don't need an inflation kicker.
So bonds should soar and stocks tank. So what else is new? Anyway, I
don't understand this stuff and no doubt thats why I'm not weathly but
I just read that a 1937 loaf of bread ( l pound ) was 9 cents now it is easyily over a buck. In 1947 a milk shake ( real ice cream ) was 15 cents.
$2.50 now. Do economists ever go shopping? What world do they live in?
I guess they don't use empirical reason? And the blips on the radar
screen weren't Jap Zeros on 12/7/41 either. Gracious me.

(Wed Jul 30 1997 14:00)
Comex report: Gold @ unch; Silver up 4.5 cents; Platinum up 2.4 dollars and Palladium up 4.1 dollars...Saw a dolphin 100 feet from the! What happened to our Gold rally today??

(Wed Jul 30 1997 14:09)
@ Waiting:
Ted: by any chance, did you see any alligators? : )

(Wed Jul 30 1997 14:14)
All the News Fit to Print - and then some. If it isnt reported in our Daily News section, it AINT happened yet! From the USA & CANADA ( 27 ) , Europe ( 13 ) , South Africa ( 3 ) , Asia ( 16 ) , Australia ( 7 ) & South America ( 17 ) :

(Wed Jul 30 1997 14:19)
@The PL
about 10 minutes to the close on COMEX. Glenn: Tell us what's about to happen.

(Wed Jul 30 1997 14:23)
RJ: Huh? Mabye my message was not clear. I meant to respond to Electron that there are lots of things that cost us money and are worthwhile to own even though they earn us nothing. Fire insurance on your house is an example. Gold is fiscal insurance against hard times, both inflationary and deflationary hard times. Gold is "buying power" insurance. I would prefer that my Central Bank hold enough gold to redeem my paper dollars if I make that choice. If my Central Bank refuses to do that then I feel the need to become my own Central Bank just in case.

(Wed Jul 30 1997 14:39)
Something to Think About
NEM is at its highest level since March and above recent resistance.

(Wed Jul 30 1997 14:43)
50 Deaths @ Cape Breton, Nova Scotia
Ted @ 13:53 "Can life get any better ????"

Yes, it can Ted, but stay away from the Health Care System, stay healthy,
them medical folks, is killing off surplus humans.

July 30 1997 * MDs' claims unproven - experts unable to confirm health
cuts causes death *
By: Mary Ellen MacIntyre / Cape Breton Bureau
Glace Bay.....Charges by local doctors that health-care cuts have caused
as many as 50 deaths here over past two years.

(Wed Jul 30 1997 14:44)
To Donald: Your reply to huh seems a bit odd to me.
Did you have a written contract with your central banker to exchange
your paper money for gold??
Why should they exchange your money for gold? Why should anyone
exchange anything for anything else? Unless there is an previously agreed enforceable contract.

(Wed Jul 30 1997 14:56)
6PAK ( 14:43 ) Said tongue in cheek my friend!...and NO ONE is dying as a result of the health care system in Glace Bay...Glace Bay is a very ODD place and exaggeration ( bull shi$ting ) is the norm there...It ain't just me who is enjoying the "easy life" in Cape Breton...courtesy of the rest of Canada!

(Wed Jul 30 1997 14:58)
@ Closing In On That Line:
Skylark: If Newmont closes above resistence, can XAU be far behind.

(Wed Jul 30 1997 15:03)
Hi Byron ( 14:08 ) No gators!...XAU up 1.0....Dow up 86...

(Wed Jul 30 1997 15:04)
Hi Byron ( 14:08 ) No gators!...XAU up 1.0....Dow up 86...

(Wed Jul 30 1997 15:20)
Standing in the Mud
BYRON: One would hope so, but the problem is most if not all of the other stocks act as if they are standing in quick sand. Appears that NEM and ABX are the only "stocks of choice".

(Wed Jul 30 1997 15:24)
Byron -- FWIW NGC is trading at 41 3/4 at the moment NEM is at 40 3/4 ask.

(Wed Jul 30 1997 15:32)
My oh my what a difference a few days makes....

(Wed Jul 30 1997 15:56)
Ted @ 14:56
Only in Canada, you say, what a pity !

(Wed Jul 30 1997 15:58)
@the close
Buy imbalances showing up in the large caps. Panic buying anyone?

(Wed Jul 30 1997 16:00)

Ted my lad, since when is pushing a kayak across 8 miles of open ocean called the "easy life" ? Now if you had a SEADOO, I'd belive you !


(Wed Jul 30 1997 16:01)
to all
My Goodness ! Hepcat Lives ! ( maybe he knows Elvis ) . Just tune to Bart's Web Resource Link to hear the latest from the "Cat", in three parts !

(Wed Jul 30 1997 16:01)
@ Teasing Us:
Ted, Skylark, Panda: They are teasing us at the 50 M.A. line. Would prefer to see a strong move over. Will not know until later if we crossed. HUI's line looks about 145 and XAU 98.

(Wed Jul 30 1997 16:03)
to all
Sorry, make that four parts.

(Wed Jul 30 1997 16:04)
At the close HUI 145.15 UP 2.03 XAU 97.68 UP 1.75

(Wed Jul 30 1997 16:11)
George Cole: NOW are you happy??? XAU up 1.75 and gold @ unch....XAU really surged at the end!

(Wed Jul 30 1997 16:11)
Ted and 6pack;There is just as much bull around in the medical field as in the gold field.You can't believe what you hear or see and you have to make your own judgement everywhere you look.See gold is not going anywhere fast and I was hoping it would fall to 250$ to get a bargain!Who said it would fall?Have a good day all.

(Wed Jul 30 1997 16:12)
Strange things happen near the close. Take, for example, ECO ( Echo Bay Mines ) . The bid/ask size was 999X999 for a long time, then, in a blink of an eye, it became 100X500. Hmmmmm, where did all those buyers come from?

(Wed Jul 30 1997 16:15)
@ Last Call:
Panda: looks like a tease. Nothing very definite yet. Tomorrow is an important day at the XAU and HUI OK Correls. Believe it ( tomorrow is lst Delivery Day for August Gold also ) . Stay Tuned.

(Wed Jul 30 1997 16:17)
Hi Ali: I made my judgement on the health care system in Glace Bay by observing what happens in a town 12 miles away...Maybe if the overwhelming majority of the people there were NOT extremly obese and smoked cigarette's,they would have less to WHINE about...Another example of expecting the goverment to do ALL....

(Wed Jul 30 1997 16:24)
@ The Close:
Panda: There was some news today on ECO. See Yahoo. Wasn't me buying at the close. I had to sell some Monday ( eco ) because of that change in margin requirments by Scwabee.

(Wed Jul 30 1997 16:33)
Hi Front! Ain't life a bitch....

(Wed Jul 30 1997 16:44)
Byron;if I would buy a major gold producer it definitely wouldn't be Echo
Bay.Had a few bad experiences with them and got the feeling they don't know what they are doing most of the time.Why they would be suddenly in demand makes me wonder if there are more fools out there than I was believing.Sure would like to know how to put an honest evaluation on those major gold co.The small you can size up the management personally, but to the 'Biggies' the average investor has never a change to meet anyone above the girl at the front desk und you have to rely on the garbage the I R departments dish out.

(Wed Jul 30 1997 16:47)
@Cocktails "R" Us
FWIW: Not only did the XAU and HUI finish relatively well, considering the gold price. Several juniors ( admittedly volatile little suckers ) had some nice moves today...Orvana up 9.6 % after being DOWN most of the day...Bema ( US ) , Geomaque, and Miramar all up 2-3%. Someone must see something at the end of this black tunnel ( hope it's not the proverbial locomotive ) . Good day for DRIPs, Maritimer?

(Wed Jul 30 1997 16:57)
Byron @ Library
Thanks Byron, for the introduction to Albert Jay Nock.
Found material on the net, regarding Nock, and found it favourable.
*Our Enemy, The State*, by Albert Jay Nock. Introduction by Walter E.
Grinder ( reviewed by Roy A. Childs, jr. May 1989 )

State vs.Government
Nock is not an anarchist. He makes a distinction between the State and
Government. Government is an agency with strictly limited powers, devoted
to protecting individual rights to life, liberty and property. The State,
on the other hand is an offshoot of government that develops when some
people capture the machinery of government and *pervert* it, using its
powers not to protect rights, but to violate them, to exploit people by
confiscating their wealth, regulating their activities, and subjugating
them whenever necessary to enhance its own illicit power.

Thus it is that Government, a social institution necessary for the
peaceful cooperation of people in society, becomes *twisted* into the
State, an inherently anti-social institution that benefits some at the
expense of others.

Thanks again, Take care eh!

(Wed Jul 30 1997 17:00)
@ Follow The Crowd:
Ali: Not married to ECO but since the public seems to love it ( see the volumn leaders on Amex ) , I like to play it for the short term especially at the beginning of a move up. Like Sunshine Mining ( which I don't own ) , when the gold mining sector moves just about everybody does but some more than others. Last time I checked looked like Pegasus ( PDG ) was getting hit again. At one point was down 6%. New out about some selling by a large holder of the stock. Boy, has PGU taken a hit during this bear. But IF a fire is lit under the gold shares some people would like to make a speculation play on it and ECO and SSC. Just my opinion. Nothing carved in stone.

(Wed Jul 30 1997 17:13)
@ Nock, Nock. Who's There:
6pak: That's Nock. First was introduced to him in the mid 70's. That the 1970's. His best work is in "The Memoirs ( ? ) Of A Superfluous Man". Always surprised that he still shows up and now on the internet. He was a very private person. One of my favorite stories is how, at one time, his friends could only get in contract with him was by leaving a note under a particular rock in Central Park, NY. This of course was back in the early part of the century. ( before e-mail ) . : )

(Wed Jul 30 1997 17:20)
@ The Charts:
Eyeballing the XAU and HUI charts, it looks as thought both peaked their nose over the 50 moving average line but have not yet broken through resistence. Resistence being 98 for the XAU and about 147.50 for HUI. Game is not over. To be continued tomorrow.

(Wed Jul 30 1997 17:24)
Dividends? What Dividends??
D.A.'s 13:24 post got me thinking. Stock buy backs are considered a form of dividends these days. Your question about adjusting the S&P for this type of activity raised another one for me. In ancient times a dividend was actually considered sacroscant and companies would do anything to avoid lowering them. Savvy analysts used ratios of dividend to things like profits to see just how "solid" those dividends were. How quaint! :- ) I think this is still done to rate preferred shares, etc.

I wonder how solid dividends+buybacks would look in this perspective. Are there S&P companies out there essentially borrowing money to prop up their "dividends" for instance? And, as D.A. points out, what would a properly adjusted PE ratio actually look like? ( something I have always been curious about... )

(Wed Jul 30 1997 18:29)
new all time high for dow/gold ratio

read it
(Wed Jul 30 1997 18:37)
Jerry Favors:

(Wed Jul 30 1997 18:39)
Tomorrows numbers;

United States

( 8:30 a.m. )

Jobless Claims - week ending 07/26
GDP - Q2 ( advance )
APICS Survey - July

( 10 a.m. )
Chicago Purch. Index - July
Help-Wanted Index - June
Housing Affordability - Q2

( 3 p.m. )
Farm Prices - July

( 4:30 p.m. )
Money Supply ( M2 ) - week ending 07/21


( 8:30 a.m. )
Real GDP at Factor Cost - May

(Wed Jul 30 1997 18:52)
fyi: according to bb fisher's chart and my calculator, the dow/gold ratio was higher ( 28.61 ) in 1966.

(Wed Jul 30 1997 18:53)
WALT: Pull out a copy of the U.S. Constitution. Ref. to Article 1, Sections 8 and 10. There is no constitutional authority to print money, only gold and silver coin are legal tender. It is the government who has abrogated the contract. Those sections have not been repealed.

(Wed Jul 30 1997 18:55)
@ Interesting:
Just read the Jerry Favors Analysis. He discusses the Lindsay Standard Time Spans ( interesting ) and the Extended Basic Advance. Good reading.

(Wed Jul 30 1997 18:56)
FYI: Yes. I have it at 25.32 which exceeds the intraday high of July 7th by .02 and the July 11th closing by .10. Still un the upside of the spike I guess.

(Wed Jul 30 1997 18:56)
Novice ( 16:47 ) T'was a good day fer drip's....Maritimer!

(Wed Jul 30 1997 19:00)
I guess everyone's bailing out of Pegasus Gold ( PGU ) before they report their earnings tomorrow.

(Wed Jul 30 1997 19:04)
Ted: Today's action makes me very happy indeed. Gold stocks doing quiite nicely while the metal inches up just a tad. Starting to remind me of early 1993. One big differnce though -- bullion and gold stocks MUCH cheaper now relative to stocks overall.

(Wed Jul 30 1997 19:21)
AUROPHILE: How do you read the new high in the Dow/Gold Ratio from an Elliott Wave point of view? Is it technically considered a new high when it is such a tiny amount? It may be a moot point by tomorrow anyway the way the Dow is going.

(Wed Jul 30 1997 19:36)
BYRON: The weekly XAU/Gold Ratio chart. What day and time does it get updated?

(Wed Jul 30 1997 19:41)
Terrorist bombing Israel, 15 dead, 170 wounded

(Wed Jul 30 1997 19:43)
Research Institute predicts Korean slump.

(Wed Jul 30 1997 19:50)
Baht crisis
IMF solution is long-term...thus we have more short term effects of the devalution
While the entry of the IMF indicates a long-term
solution to Thailand's problems may be in the works,
the next few months may see a tightening of the
credit crunch which has squeezed Thai companies.

(Wed Jul 30 1997 19:53)
So there has been alot of questions on why I'm more bearish, about the XAU going up and about the Market in general. I'm very busy right now but I will try and make some comments here. Being over sold or support are meaningless in bear markets just like being overbought and resistence are meaningless in bull markets. Traders said that there was "Good" support at 325.00. Well we went from $333.00 to 324.00 in one day and then that same day rallied to $325.00. So the "Great" support we had at 325.00 was able to stop a several dollar decline on July 3rd on a closing basis. Of course we opened up $6 lower that Monday and went down some more. So in the end $325.00 was not so great after all. The point I am tring to make here is that there are very good reasons for stocks and bonds to go up and Gold to go down and support and resistence numbers will only give a temporary pause to the markets. I am not sure if or how badly the government is lying to us about the CPI and PPI but I go over them very carefully every month and there is currently little to no inflation. The budject is getting ballanced and Clinton is looking fair. The economy is growing but no too fast. Overall everything is great. I am not sure how long this will last and I do not believe it will last for years, but right now this is what it is. With this economic enviroment bonds are hitting highes on a daily basis. Stocks are going straight up and Gold has nowhere to go but down.

(Wed Jul 30 1997 19:54)
Another star is born (maybe).
George Cole - As I recall, you predicted Dow 8300 in August and that August would see the peak in the general stock market, and the beginning of the bull market in gold. Es verdad? It sure looks like you have a very real chance of joining the ranks of the elite few who can claim to have accurately predicted a significant market reversal, both time and level. Let us see. For sure the gold stocks are showing great strength - hope this is a leading indicator, as you have long claimed.

John Disney - Thanks for your update on RSA quarterly results. The Randgold results explain the weakness shown during Q2 in Durban Deep and the other stocks involved in the merger. They got hit much more than I expected ( more than you too expected, I'll wager ) . However, it was very encouraging to note that the prices actually increased, on balance, following the release of the poor quarterly results. Obviously the market has already factored in these results. Barring a break down of gold below $300, IMHO these stocks have seen ( and are still quite near ) their lows. One of the greatest bargains of all time.

All - SWC took a 3% hit today on the "news" that their hedges would not allow SWC to take advantage of current market prices, along with a 3% Q2 loss. Let's see. In Q2 SWC average selling price was $232/oz. This translates to roughly $380/oz for platinum and $190/oz. for palladium ( ratio of 1:3.5 ) . If they are forced to sell at the hedge prices of $382 and $134 respectively, the average price would be $189/oz or AN 18% DROP IN REVENUE PER OUNCE. The new news today was that they had added significant hedges for 1998 at the same prices. Roughly 2/3 of their 1998 palladium and 1/10 of their 1998 platinum are hedged. Seems their hedging policy has managed to turn a silk purse into a sow's ear. Can someone explain why "backwardation" prohibits SWC from "rolling its spot-deferred positions" and taking the higher market prices?

John Disney - Do you know if Rustenburg and Impala are hedged, and if so, how much?

(Wed Jul 30 1997 19:54)
Devaluations necessary to stay competitive
Currency slide takes toll
on Taiwan

(Wed Jul 30 1997 19:58)
Philippines new currency rules
To comply, banks would have to dump dollars for
pesos, strengthening demand for the domestic

(Wed Jul 30 1997 19:58)
Hitachi worried about safety of 50 billion yen in surplus cash.

(Wed Jul 30 1997 20:04)
Japans divesture of $US assets will lead to collapse in US bond market, devaluation of US dollar & increase in gold price. Insightful and prophetic. Guest Guru Milhouse:

(Wed Jul 30 1997 20:05)
currency devalations-collateral effect
Worry hits firms with
dollar debt

(Wed Jul 30 1997 20:06)
Part 2 ---
I realize that many traders including Jerry Favors ( Who I respect greatly ) believe that stocks will peak for good any day now. I believed that not to long ago but I have changed my mond with this current Bond rally. The current bond rally changes everything. With the bond market ralling stocks have no place to go but up and Gold has no place to go but down. I realize that one may think that Bonds could peak any day now also but I also believe that bonds shall peak a few weeks before the final peak in stocks so if bonds are hitting new highes today then stocks still have some more to go. It is looking more and more like a small deflationary time period is developing and that there shall not be meaningful correction in stocks nor meaningful rallies in gold until the final turn. This opinion could change at any time but I can not se it changing to soon. As a trader you MUST go with the current trend or get crushed. This is the current trend. No one in this group is more bullish on Gold then me. Trust me when I say that! I look at all the markets every day constantly and ask if this is the turning point and what it would take to turn these markets and what the turing point will look like. I sure hope that I will be able to spot the exact bottom in Gold, because I'll be so rich so quickly. I simply do not see it now. I am not sure what will happen next but I did buy some Sept 325 puts today. I was the only trade in them all day. I bought them for 160 and they settled at 200. If you want to buy some lottery tickets these are them. Don't do it because you think it is rational, do it because you want to make money. This entire move up in stocks is irational and this move down in gold is also.

(Wed Jul 30 1997 20:07)
@ No Problem:
Donald: I couldn't access the story on my text only computer at the library, but could you please e-mail Hitachi and let them know that they can deposit the 50 billion yen into my checking account. I will take good care of it for them.

(Wed Jul 30 1997 20:07)
Recent price action of August gold has set up a bearish triangle, which is a frequent feature of wave 4. An interpretation of this pattern projects prices as low as 304. Other price projection techniques suggest a target closer to the 310 -312 area for the 5th wave ( and final wave ) down. FWIW

(Wed Jul 30 1997 20:15)
As always your comments are appreciated. One thought, came to mind as I read your scenario, of the present state of the economy, believing if we may that they represent current conditions. Aren't market and market valuations an "eye to the future" rather refecting today's status? Is anybody listening to "Microsoft warnings" of stock overvaluation. Which brings me to my point. Gold represents "risk insurance", and as such the present prevailing bias and current trend in valuating both stocks and gold is going to extremes. Whilst I wouldn't disagree with you I believe the present scenario, fools investors and speculators to continue their path that often creates booms and busts.

(Wed Jul 30 1997 20:15)
@ Updating:
Donald: Y.Auger updates his charts on a weekly basis generally on Saturday. ( usually in the morning )

(Wed Jul 30 1997 20:16)
D.A. on DM...we.are.there...maybe...
You must have seen the possible 'Island Reversal' 7/25. The 14 day ADX is pushing to wonderful '40'. Fibonacci...well, he is fit to be tied... ( I would too if I built a leaning tower ) . Stochastics...ready. OI/VOL...looks pretty good. Volatility is low...Let's see what else do we need...hmmmmmmmm... oh yeah...Fundamentals...those doggone Germans...what to do... anyway, I'm going in softly if we continue sideways for a few days without setting the low...with eyes WIDE.

AWAY...on your Mark, get set...
EB :-$$ )

(Wed Jul 30 1997 20:17)
Part 3 -
I just want to cover gold stocks really quickly. I really believe ( Correct or not ) that the reason Gold stocks have not decline has noting to do with moning stocks "Leading" the advance like they did in 93. I believe that Mining stocks are not decline because many many traders are still bullish on gold and they bought the stocks with cash and do not have margin call forcing them to sell. This misplace optimism is more bearish than bullish. The bull market in Gold shall not begin until everyone has thrown in the towel and does not believe it will happen! I believe that the XAU is so over-valued compared to Gold that the best way to make money in the coming year is to buy XAU puts. The XAU should decline by atleast 50% before the bottom is in if not more. The XAU not declining means to me that alot of people are under water witht her position and are stating that they shall hold on until the rally comes and the rally shal make them "Hole" again. Well any rally we have in gold trades shall use to sell there gold stocks to cut there lossess.
I sure hope that I am wrong here and that the turning point in the financial markets starts tomorrow. Really. I am just not buying and gold stocks until I am 100% the low is in.

(Wed Jul 30 1997 20:21)
Sorry about all the typos

(Wed Jul 30 1997 20:25)
I do believe that the stock market is setting itself up for a huge over bought bubble but this bubble could last another 6-18 months.

(Wed Jul 30 1997 20:26)
Re: Gold stocks -shakeout
FWIW - Bre-X and a the current price of gold "has shaken" the tree pretty good her in Canada, some stocks such as RYO are at a bargain basement price. The majors, are being favoured as flight to quality, discounting the shakeout, streamlining, mergers etc., which the gold industry faces. The market always looks ahead. The time to buy gold stock is now.

(Wed Jul 30 1997 20:28)
Unless we see a large correction in the market on Friday, I expect to see the next lower level in the metals tested and a significant breakdown beginning this week end. "Tis fools folly to go against the tide" I asked the exorcist and she told me that - THIS MARKET IS CLEAN!!! Sure wish it weren't so Joe - but it tis!!

(Wed Jul 30 1997 20:37)
Germany: Turn-sign on road to Emu


By Wolfgang Munchau

The road to monetary union appears much less smooth and predictable
now that the Bundesbank has signalled a possible change in German
monetary policy. Such a shift could lead to higher interest rates.

Very few market observers had expected it. Most rooted for May next
year or even 1999 as the start of new cycle of monetary tightening.

What happened last week was a subtle warning by the Bundesbank that it
may change the way it injects money into the economy. Its favoured
instruments are the fortnightly securities repurchase tenders, which it
currently offers at a fixed rate of 3 per cent.

The Bundesbank did not raise this rate last week, but said it would only
commit itself to two more fixed-rate tenders. After that, it might switch to
variable-rate instruments, meaning it will accept the highest bids for any
given amount of money. The practical consequence of this is that financial
markets will probably bid up short-term interest rates from the current 3
per cent level.

Some currency experts believe the central bank may be bluffing. But
almost everybody agrees that the warning was intended to stop the
relentless slide of the D-Mark against the dollar, as speculation against the
German currency is increasingly seen as a one-way bet.

According to Mr Hermann Rempsberger, chief economist at BHF Bank in
Frankfurt, "the signals of German monetary policy changed last week. This
has created a shift in expectations. It is remarkable to see how open the
Bundesbank has been when it listed the factors that influence its decision,
starting from the domestic money supply to the external value of the
D-Mark against the dollar".

The view that German monetary policy may have changed last week is
shared by a series of currency strategists in London and New York. The
arguments in favour of a shift fall into three broad categories:

* The exchange rate. The Bundesbank perceives the D-Mark as
undervalued at current parities. But the real problem is not so much the
current level of the exchange rate as the possibility of a further slide.

* The domestic economy. The German economy has turned the corner
with a vengeance. It is already growing at a robust rate and may be
heading for 3 per cent next year, according to some forecasts. What
worries the Bundesbank is that inflation is heading above 2 per cent next

* The transfer of power from national central banks to the
European central bank. The argument for raising rates now is to relieve
the ECB from drastic action on rates during its first year of operation.
Higher rates would smooth the transfer.

For Emu, most analysts would agree, the shift in German monetary policy
carries more risks than opportunities.

Mr Rempsberger said higher interest rates were appropriate not only for
Germany but also for several other European Union countries ahead of
Germany in the business cycle. This is particularly so for Ireland, the
Netherlands, Spain and Portugal.

"I believe [a policy shift] is appropriate for a series of countries," he said.
"As far as France is concerned, I see a political problem, not an economic

Mr Avinash Persaud, head of currency research at J.P. Morgan in New
York, agrees. "There are risks for Emu especially if the French authorities
react in a negative way," he says. A rise in interest rates so soon after a
long period of sluggish growth might be seen in France as a reflection of
inflation paranoia, rather than an appropriate policy response.

Mr Persaud strongly favours a shift in German monetary policy because it
is justified by the strong domestic economy. He points out further that the
Bundesbank's warning may inject doubts into the market's overwhelming
belief that the euro, the planned single European currency, will invariably
end up as a weak currency.

"By the end of this summer, this argument will have run its course," he
believes. Without any counter-action by the Bundesbank, financial markets
might push the D-Mark to ever lower levels, and this could turn the notion
of a soft euro into a self-fulfilling prophecy.

However, the de facto devaluation of the D-Mark has been seen in the
markets partly as a consequence of persistent high EU unemployment.
Under Emu, a country will not be able to devalue its currency. The recently
agreed stability pact, which seeks to limit government deficits to 3 per cent
of gross domestic product, virtually rules out fiscal policy as a job-creating
mechanism. With relatively inflexible labour markets, there is little left but
the external exchange rate of the euro - or the D-Mark until 1999 - to act
as a shock-absorber.

If the Bundesbank were to drive up interest rates at this point, it might limit
the extent to which Germany and other countries in the Union can reduce
their persistently high rates of unemployment.

One senior strategist in a large US investment bank argues that a rise in
German interest rates could make financial markets even gloomier about
Germany that they are already. As a consequence, higher rates could
accelerate, rather than stop, the decline in the D-Mark.

There are risks involved with whatever action the Bundesbank takes at this
point. Without Emu, a shift in policy at this point in the cycle would have
been seen as overdue. But with Emu, the main question is how any policy
shift affects the fragile economic alliance between Germany and France.
This is impossible to predict.

(Wed Jul 30 1997 20:45)
Microsoft's outlook for next fiscal year, is sharpely lower growth. Current market valuations in both the Dow & Nasdaq have been "ignoring" this warning.

28 Jul 1997

Microsoft previews new

Company execs talk down fast-growth prospects for the coming

From Kenneth James in Seattle

HERE do you want to go today? Put the question, now
well-known as Microsoft Corp's premier marketing slogan,
to the software giant itself and the answer is surprising,
coming from one of the world's most profitable corporations. Today --
read this fiscal year which started July 1 -- Microsoft expects, almost
seems to want, to be where sharply slower growth is

(Wed Jul 30 1997 20:48)
@ The Public Library
Just took a look at the lastest copy of the Journal of Commerce newspaper here in the library. As of Friday, the Journa of Commerce Industrial Price Index numbers and chart are looking good. It is now back on the plus ( + ) side where it has only been a few times during the last year or so. The chart showing the movement during the last few weeks is pointed up quite strongly. .... Mr. Steve Kaplan, who does the daily gold update at his site, has a section in which he discusses the JOC Index with daily updates of the numbers. If this continues, another plus sign for gold and stuff in general.

(Wed Jul 30 1997 20:50)
ABN shown gold down a bit
THanks!GLENN,i printed out your both 3 comments,really worth to digest!

(Wed Jul 30 1997 20:54)
Washington Times has two articles relating to Clinton
Jones' attorneys
rally against

(Wed Jul 30 1997 20:57)
BYRON: Here is the Hitachi story. Before they wire this to your account they wanted to know what kind of TV you have at home.

Hitachi shunning investment in bond trust
Hitachi Ltd. will soon reduce its investment of excess funds in bond
trusts to nearly zero, from some 50 billion yen at the end of February.
The decision stems from the failure of brokerages and affiliated
investment advisory firms to provide sufficient information about the
instruments, company officials said.

Hitachi conducted a survey last summer of European and U.S.
investment management firms to determine the level and kind of
information disclosed to customers. It then demanded its brokers and
investment advisers inform it of all bonds in portfolios managed on behalf
of Hitachi as well as the appraisal profit/loss status of individual issues.
When they failed to do so, Hitachi began moving the extra funds out of
bond trusts and into large-lot time deposits.

But the company is swimming against the current, as bonds appear to be
a better investment with anticipated yields of 1.7% at investment trusts
compared with 0.45% interest on large-lot one-year deposits.

Asked about Hitachi's abandonment of bond trusts, Nomura Securities
Investment Trust Management Co. said it plans to gradually provide
more information to investors but could not comment on cases involving
individual clients.

MOF to order business suspensions from
Aug. at Nomura, DKB
The Ministry of Finance is expected Wednesday to order Nomura
Securities Co. to suspend stock trading on its own accounts as well as
other operations and to direct Dai-Ichi Kangyo Bank to suspend new
loan operations. The suspensions, to take effect in early August, are
administrative penalties for the involvement of the two firms in illegal
transactions with sokaiya corporate racketeers.

The suspensions, to be communicated directly to Nomura President
Junichi Ujiie and DKB President Katsuyuki Sugita, will likely run at least
four months. That is far longer than the previous record eight-week
suspension last year of Chiyoda Securities Co.

The penalization of DKB will be the first invocation of Article 27 of the
Banking Law. The bank's lending business will be shut down, but its
deposit operations will be allowed to continue to prevent disruption of
the business of DKB's retail customers. MOF officials are considering
suspending the bank from bond trading as well.

(Wed Jul 30 1997 21:00)
India news
Upcoming ( Aug 2nd Gold Banking Seminar )
Movers and Shakers -- Mody preparing
for gold banking seminar

July 29: Khursheeda Mody, country manager, World Gold Council,
is busy hosting the Gold Banking Seminar, which begins on August
2. Says she, ``The recent changes in the Exim policy and the
recommendations of the capital account convertibility report have
made gold banking an issue of utmost importance.''

The seminar will attempt to take the recent policy changes a step
further by bringing together opinion leaders, policy makers,
regulators and end users to discuss the regulatory and operational
issues relating to gold banking.

Enforcement Directorate officer on special duty

A P Kala, special director, Directorate of Enforcement, has been
appointed Officer on Special Duty ( OSD ) in the same organisation.
Kala is a 1973 Indian Revenue Service ( IRS ) officer. He joined the
ED in 1992 as special director and has been associated with several
high-profile and sensitive cases in the Directorate. Kala has also
served as deputy director, Revenue Intelligence, in Mumbai and in
the Customs in Gujarat.

Plummer appointed MD of Imation SingaporeIMATION Corp.
has appointed Brian Plummer as managing director of Imation
Singapore Pte Ltd, South Asia Region. Plummer will direct and
manage all four of the company's business units: data storage
products, printing and publishing systems, medical imaging systems
and customer service technology.Plummer has moved to Singapore
from his current position in Australia, where he managed Imation's
data storage business unit for the Australia and New Zealand
region. Singapore is the regional headquarters for the South Asia

Plummer, a post-graduate in business, has been with 3M and
Imation for 16 years. He was national sales manager of 3M's
Office Markets Group, which included the data storage portfolio,
when it was spun off to form Imation in 1996.

Shaw to visit India

DAVID E Shaw, chairman and CEO, D E Shaw & Co Inc, the
New York-based global investment bank, is to visit India on August
4-8, 1997. Significantly, Shaw is also advisor on science and
technology to the US president.

During his visit, Shaw will be delivering a number of lectures to
premier technological institutions and computer scientists and meet
members of major industry associations such as NASSCOM and
IACC. Shaw will also inaugurate D E Shaw India Software Pvt.
Ltd's new software development facility in Hyderabad.

Copyright  1997 Indian Express Newspapers ( Bombay ) Ltd.

(Wed Jul 30 1997 21:02)
NOMERCY: It is getting hard to count how many currency dominos have fallen so far. Let me know when we get up to the United Nations head count so I don't have to keep looking for these stories.

(Wed Jul 30 1997 21:03)
India-Gold Coins to mark 50th Anniversary
Some more physical buying ahead
Gold coins to mark 50 years of freedom

Nivedita Mookerji

July 29: At a time when hedging against inflation via investments in
gold is more of a myth, MMTC Ltd has decided to market gold
medallions, with India's 50 Years of Independence as its selling
point. Those fascinated by the glitter of gold will find the medallions
irresistible; those wanting real value for money may take a go at it,
too. And with the medallions due for release on August 15, MMTC
is on the job already.

Although the basic plans are more or less in place, minor details are
still being worked out. The crux of the matter is that the
government has allowed MMTC to market gold medallions, each
weighing 10 gms and incorporating the specially designed logo of
the 50th anniversary of India's Independence.The retail price for
the medallions has been fixed at Rs 5,800 per medallion in the
domestic market and at $ 165 abroad, says Preeti Chaturvedi,
general manager, public relations, MMTC Ltd. The medallions will
be issued with a certificate of purity and will come in tamper-proof

To be on sale only for a limited period, the target is to issue 50,000
to 1 lakh medallions, says Chaturvedi. Ultimately, public demand for
these `souvenirs' will determine the number, she adds. On the day
of inauguration, August 15, 10,000 medallions will be issued.
Thereafter, retail marketing will depend primarily on the bulk
bookings made in India and abroad. The scheme will be operational
till the end of October.

Within the country, the medallions will be available for purchase at
the Bank of India branches and also at the counters of MMTC's
regional offices. The medallions will be sold to foreigners and NRIs
through the MMTC foreign offices in Singapore, Tokyo, Dubai and
New York, explains Chaturvedi.

If interested in bulk bookings, you are required to pay Rs 1,000 in
India and $ 50 abroad as advance to MMTC. The payment can be
made in cash, cheque or demand draft.

Now that the buying modalities are quite clear, let's hear what
bullion experts have to say about the MMTC venture. Krishan
Goyal, general secretary, Delhi Bullion Merchants' Association,
says: ``It's not likely to be a large-scale success because the
medallions have been priced higher than the normal cost of 10
grams of gold.'' If they sell at all, adds Goyal, it's only because of
their emotional value. Secondly, stresses Goyal, if the medallions
are issued in large numbers ( as they are being ) , their antique value
may not appreciate much.

So, are the medallions only a short-term attraction or is there more
to them? As a mode of investment, other assets seem to be a better
choice, particularly because gold has hit a real low, floating in the
region of Rs 4,500.

Although gold appreciates approximately 25 times in 25 years, S R
Bharucha, senior economic advisor, Assocham, feels hedging
against inflation and investment in gold are more of a Western
orientation. In India, gold is synonymous with social security. ``A
very small percentage of Indians -- -around 10 per cent --treats
gold as an investment option. The remaining purchase gold as
jewellery,'' Bharucha adds.

Bharucha, however, says that India is graduating towards making
gold an alternative investment avenue. To reach that goal, many
reforms have to be implemented. For instance, a bullion exchange
needs to be set up to buy and sell gold to help standardise the
market practices. It may take anything from 5 to 15 years to
achieve these targets, but it will happen, says Bharucha.

In the context of meeting that goal, the retail marketing of gold
medallions by MMTC can be seen as a step towards gold being
viewed as an essential investment option.

(Wed Jul 30 1997 21:04)
US Constitution

Donald @ 18:53 Regarding: Ref. to Article 1, Sections 8 and 10. There is no
constitutional authority to print money, only gold and silver coin are legal tender.
My Reply:
Section 8 authorizes the federal government "To coin Money, regulate the value thereof." Used in this context, coin may mean, and has been determined to mean, to "invent or devise" - Oxford English Dictionary. That the authors of the constitution choose to capitalize the word "Money" puts the emphasis on "Money" and not "coin". Money is described as The official currency, coins, and negotiable paper notes issued by a government.

Many trot out section 10 which reads in part that, "No State shall..coin Moneymake any thing but gold and silver a Tender in Payment of Debts"
This section deals with prohibition of State powers. The use of this section to invent a limitation of the Federal Government to invent or devise Money is not supported by the statements within.

Finally, What do you use to pay the mortgage? Fill up you car with gas? For that matter, purchase your car in the first place? When you cease all use of dollars and conduct all your affairs in gold or silver, Ill listen to your arguments. Lacking that, please quote the US Constitution accurately. It is still the greatest political document ever written. Thanks.

(Wed Jul 30 1997 21:09)
Gurgle, Gurgle
Ted, I'm alive. Albuquerque was inundated by water today and I was off the internet most of the day because the lines were down. We are still getting flash flood warnings until the early pm tonight. I have my snorke on just in case. Hopefully I will be dried out enough to post a bit of humor in the morning. I hope that the increase in water will be as short lived as the increase in the dow today. There's a lot of euphamism in the air about this new tax act, budget surpluses and other fictions from the fertile mind of washington. I'm out of here. I have to get my seminar read for in the morning.

(Wed Jul 30 1997 21:20)
Tort: Welcome back! We were gettin worried about ya...EBN Gold down .65 and Silver down 2 cents...

(Wed Jul 30 1997 21:21)
@ It Too Late:
Donald: It's too late I already spent the money.! Well, since I have not own a TV in more than 20 years, I guess its no go. Now back at the graphic Netscape computer at the library. My 1 hr has come up.

To All: I just took a look at the daily updated XAU charts including todays update. When I look at the DBC 180 days Enhanced Chart using a line chart rather than a bar chart, it shows that todays line chart broke through the resistence area I was looking at. My interpretation of the line chart is that it is based on the closing price and today's closing price broke beyond the closing price of my resistence area. You need to go back several weeks when the XAU approached 98 to see what I mean.

I don't do any analysis using the LINE charts. If anyone out there does do you consider this a "buy" signal as it appears that a downtrend from the high of May has been broken. Any commentary is appreicated ( espeically if you say Yes, the downtrend is broken. ) : )

(Wed Jul 30 1997 21:22)
- I used to think you were another, "gold will go up" regardless of the facts cheerleader. I apologize. I took the advice of whoever recommended a review of the beginnings of this group in April, 1996. There you were, Glenn calling for gold to break $390 support. You even stated you intentions to short gold!!! Now, this evening, here you are acknowledging the probabilities of continued high equities and lower gold. I have always found your posts to be well considered and a wealth of accurate information. With those attributes, I was a bit befuddled that you called many times for a rally in gold, when the fundamentals, technicals, and psychological factors did not support your optimism.

You contention that "This entire move up in stocks is irrational and this move down in gold is also." belies your studied opinion. Every body is making money on stocks. I will accept exuberance, I will not accept irrational. As for the move down in gold, I believe that not only is it rational, but has been coming for years. As I stated this morning,, the traditional role of gold is undergoing a fundamental reevaluation. No telling how it will shake out, but your advice that "the trend is your friend" is well received.

I look forward to your posts, as I find you to be a clear thinker and a man who, "thinks the next thought". Thanks.

(Wed Jul 30 1997 21:25)
Glenn: I second what JIN said.....BRAVO!...

(Wed Jul 30 1997 21:26)
Something to Think About
If the bonds, dollar and stock market will continue to be strong and negative for gold, why is the XAU continuing to gain strength relative to bullion and why is not bullion going down.

(Wed Jul 30 1997 21:33)
RJ ( 21:22 ) As usual...good post!...

(Wed Jul 30 1997 21:36)
@... Day Traders dilema: Is it a Bear or a Bull, ?
Glenn: I understand your position but find it difficult to reconcile. You are both a Bear and Bull on gold depending on what the elves indicate what may be the best choice for a profitable day. Do you think that this very short-term view, "Is the trend my friend today ? ", dangerous to project ? I would think that even a local could get whipsawed in a well orchestrated sucker rally even in the worst of times.

Your XAU opinion is radical. Why do you think the index should decline 50% before you expect a bottom at these gold prices ? ( Did I miss something in the translation of your post ? )


(Wed Jul 30 1997 21:37)
RJ: Are you going to tell the gun owners that they can only keep their guns if they join "a well regulated militia"?

When the constitution was written the US had just gone through a horrible paper hyperinflation. They intended gold and silver coins to be money. Period. Their notes on discussion during debate reflect that. How can you require the states to comply with section 10 unless you have gold and silver coin available to do that? Gold and silver coin was required by the Coinage act of 1792 and that is what was issued and used. Soviet Russia had a constitution with wonderful words too. The words don't mean anything unless we act in the letter AND the spirit of the law. They chose to wink at it and look what it got them. Someday, probably sooner than we think, the Supreme Court will re-visit this argument out of desperation.

(Wed Jul 30 1997 21:37)
There is only one way to tell when the bubble will burst ( financials ) and that is when no one ( even the best ) think it will. Golds strength is occuring because of accumulation by BIG money who know it IS going to happen soon. We are on a gold bug channel and everyone respects the bear opine. The stk mkt is so out of control in relation to the debt laden declining fundamentals it can only compare to the tulip bulbs or 29. GOLD STKS are weak ESPECIALLY those dependent on higher gold prices/ this along with PUBLIC mutual fund redmptions show that bearishness is actually more rampant than we have ever seen. THE BULL IS NEAR!!
I love RJ's bearishness/ most peoples cautiousness and that includes Glenn. A BULL MKT CLIMBS A WALL OF WORRY!! NUF SAID!!!

(Wed Jul 30 1997 21:46)
@ Additional Info:
To Techkies: As a supplemental to my question re: the XAU LINE chart. Today's close broke the close of very early July. And on charts both the XAU and HUI moved above their 50 days moving average lines.

(Wed Jul 30 1997 21:56)
@ 53 % in 18 months...wheeeouf
The Dow-30 Index is showing a gain of 26.8 percent so far this year against a 26 percent rise for all of last year.
Vertigo someone...?

Glenn, I want to thank you for your great Posts.


(Wed Jul 30 1997 21:58)
Good night ALL...Scaterie Island bekons first thing in the AM....

(Wed Jul 30 1997 22:02)
In 1987 I was a member of the NY Futures Exchange. I did not trade on the floor actively but did visit for a few days in Dec 1987 when the stocks which everyone loves now and hated then retested the 1800 level after hitting 1670 in Oct. All traders in the KNOW were bearish there was no place for stks but to go lower or at least test life of contract lows. This was the sentiment yet none of the pervasive bearish thoughts came true and it was the greatest buying oppportunity of the century. The up moves were fitful yet continuous. Glenn sounds like one of my fellow NYFE traders at the 1987 lows before the bull. THEY WERE ALL TALKING ABOUT STKS LIKE THERE WAS NO POSSIBILITY OF A BULL!! HMMMM.

Ron Jett
(Wed Jul 30 1997 22:03)
There are some charts of the metals at this location.... please take a look.

(Wed Jul 30 1997 22:07)

I must object. This here gold bug has no respect for the bear case. It's as you once said 'news follows price'. Whats even stranger is that the bears have become even more adamant AFTER we have had a strong reversal. This leads me to believe that many of our ursine friends were not there to pick the low hanging fruit of the last decline. Because they are now certainly there, the talk gets stronger. Only now the fruit is gone and there are bulls on warpath.

You are right about the collapse of the bubble. It will come from nowhere and without warning. The telltale signs of other financial misadventures will not light the way for those foolish enough to play in this game. The music will stop, and there will be no chairs. All fall down.

(Wed Jul 30 1997 22:07)
@ The Public Library
Night All. Looking forward to tomorrow.

(Wed Jul 30 1997 22:22)
To Glenn,

Finally, someone respected in this discussion group is getting the
picture... I believe we are in Elliot wave 3 ( down ) and the fifth will take us
to approx. 40 XAU.. Would post a chart but seems only netscape users
can do this?

Thank you for your comments!

(Wed Jul 30 1997 22:27)

I think that Notagoldbug just dissed ya. I wouldn't take that lying down.

(Wed Jul 30 1997 22:37)
All ( And especially you bear types ) :

Sleep tight.
Don't let the gold bug bite!

(Wed Jul 30 1997 22:41)
There is nothing new under the sun. What is, will come to pass, and what has come to pass will be again!

(Wed Jul 30 1997 22:47)
@ Is Alan Greenspan a fraud?
Inflated Reputation?

By Robert J. Samuelson

Wednesday, July 30, 1997; Page A23
The Washington Post

P.S.: Put-call ratio: 0.39
The ratio of stock put options to call options traded last week on the Chicago Board Options Exchange. A low put-call ratio--under 0.40--can be construed as bearish because it indicates a high level of optimism, leaving a lot of room for disappointment.

(Wed Jul 30 1997 22:47)
Some Stuff
D.A. @ Hogwash 11:31

You surprise me. You shout Hogwash and then compare the currencies of the US, Australia, Canada, and South Africa, to the worthless ruble! Gold is only purchased by the exchange of something of value. The Ruble is universally scorned. You shout Hogwash and then present a soapy, dripping pig! I have come to expect more from you. You did disappoint this morn.

Bob @ 13:00 ( RJ's perfect world his logic is absolutely perfect ) :

Congratulations Bob! You have joined a growing group who has invented a line of thought and then pinned it on me. If you cant represent my statements accurately, leave my name out of it. Feel free to use anything I have ever written to support your 13:00. I was one of the first to point out that Australias announcement was a dirty trick timed to keep the US from responding for two full trading days, and that the announcement was simply an acknowledgment of sales already absorbed. Your trotting out of the old and moldy news demonstrates that you have not read my prior posts, or you are an avid reader of the WSJ. In any case catch up or be left behind, but do not ascribe to me your fanciful inventions. Thanks.

If you think gold will go up, mortgage your house and Ill be happy to sell you all the gold you want. Hey, it cost so much to mine, it must be worth more than any human will pay you for it today. Forget that there are enormous hordes of gold in virtually every spot on earth. Put your money where your mouth is, but dont look for sympathy when the bear that is obvious to all ( including Pepi ) knocks you silly and you find you have pissed away your future and your childrens birthright. Gold is going down. Look at a chart. Your ignorality is astonishing.

Donald @ 14:23

I understood you well in regards to gold as insurance. Its the first thing they teach all metals brokers at metals broker school. As for your preferring that your CB backs up your paper with gold, we all know that concept died in the distant past. Even the most conservative gold country in the world, Switzerland, has recently lowered the requirement that the franc is backed at least 40% by gold. This requirement was lowered two months ago to 25%. Any guess why? Who do you think will be selling gold soon? When the Swiss sell, look out below. Then, when the smoke clears, I will be very happy to join you in an orgy of gold buying. I love the stuff, I just think its priced to high now.

George Cole
(Wed Jul 30 1997 22:48)
DJ: My 8300 Dow projection may have been a bit too conservative. 8500 looks like a better bet. BB Fisher who I greatly respect, is looking for 8700-9200. But whatever the the exact top, WE ARE GOING TO GET THERE VERY SOON. And there will be very little time to get out when the jig is up.

Still think we now are making the big turn in gold. Unlike Goldman I do not envision $380 by the end of August. But $340 probably will be decisively taken out next month and $380 will be reached by October when the stock market should be down at least a thousand points from the peak.

(Wed Jul 30 1997 22:52)
To All
Pardon my harsh tone. I tend to bristle when someone misrepresents my statements. I also have little patience for arguments that lack foundation. I love a good debate and am quick to praise a well made point. When offered inanities, I usually just ignore them, but it was a quiet day in the markets, and I am feeling a bit testy.

(Wed Jul 30 1997 23:02)
I couldnt help the guilty pleasure of checking out the catboy on the Web Resources Links. His impotent barking reminds me of one of those mean but lusty little Chihuahuas who cant decide whether to bite your leg, or hump it.

(Wed Jul 30 1997 23:18)
( Oh God, here he goes again! ) I would like to point out that Comex eligible gold stocks have taken a dramatic drop the last two days. Yesterday, they fell about 68,000 ounces and today they fell another 5000 ounces to about 225,000 oz or so, against an open interest of 194,000 contracts. That means there is about 1.2 physical oz of gold pledged against each contract of 100 oz. Tomorrow is first notice day on August gold. That is the start of the 'put up or shut up rotine'. We could see a dramatic short covering rally if someone who is long August gold elects to take delivery. Yes, the other side of my arguement is that there is lots of gold around ( 600,000 oz on Comex and then the CB's ) BUT, the shorts don't own it!!!
Roughly 99 per cent of the shorts have sold gold they don't own, This is the lowest level in eligible gold stocks I have seen and believe it is the lowest level in twenty years. Rest well tonight, shorts!

(Wed Jul 30 1997 23:25)
RE: , RJ's bristling, I think he is starting to feel some pressure

(Wed Jul 30 1997 23:35)
DA: Prechtor, the bear, has been bearish on the stock market since Dow 1700. Prechtor is also negative on gold. As long as that guy is bearish
on stocks I'll stay long. As far as gold is concerned, I like having Prechtor on the other side of my trades.

It is my general thinking that bears are the people that always order vanilla ice cream because it's thought to be more sophisticated than chocolate

(Wed Jul 30 1997 23:37)

(Wed Jul 30 1997 23:37)

(Wed Jul 30 1997 23:38)
Sugar exchange
Glenn, how much are seats on the Sugar exchange going for? How about the comex?

(Wed Jul 30 1997 23:41)
que pasa?
Where's the Cherokee?

(Wed Jul 30 1997 23:42)
RJ, Is the pressure cooker cooking?

(Wed Jul 30 1997 23:54)
Donald @ RJ: Are you going to tell the gun owners that they can only keep their guns if they join "a well regulated militia"?

Donald, once again I wonder if you actually have a copy of the Constitution. Permit me to quote:

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

I read, a well regulated Militia, as being a reason that that the right to bear arms is inviolate. How you get membership in a militia being a requirement for gun ownership is beyond me. They are just words, and very plain words at that.

As for your wanting to live by the spirit of the words, that is a very frightening prospect. You can never know what was in the hearts of those who framed this great document, at best, you can understand the debate behind the framing. If you have not read the "Federalist Papers" explaining the new Constitution as written by James Madison, Alexander Hamilton, and John Jay. I suggest you start there.

No, I will not live, nor will abide under your perception of the "spirit of the words" that is a dangerous road which leads to suffering, spoil, and villainy. I am content to let 9 men good and true, over the years, first drag us to the left, and then to the right, but rarely straying so far as to be beyond repair. A very flawed method, but one that offers the greatest protection against tyranny that this world has ever seen. All precedent opposes your reading as , alas, do I.

I view the idea that we should somehow deduce some spirit of intent as a dangerous prospect. This is the very argument that has created the "right" to an abortion out of thin air. This is the same thinking that seems it will soon afford all the "right" not to be offended, in their gender, race, or sexuality. People are having their lives and careers ruined, because they have said something to offend another. I would like for any Constitutional scholar to show me where we have the right of protection against offending words. My reading of this wise and tested document shows that speech is protected, and this freedom against offense has been created by mongers of political correctness to exercise even greater control over free Americans. Additionally, This same idea that one can "know intent" has been held forth for all human history, in justification for countless atrocities, as the "Will of God".

I do not mean to offend you, and I offer this sincerely. I also am not associating you with the extremes I have mentioned here. I am railing against an idea. It might be an idea you hold, to what extent, only you know, but I do not proceed to then assume you are, or do, evil. In my youth, I held many ideas that I now consider dangerous.

If I have left any doubt, please accept, from what I have read in your posts, I have found you to be well reasoned and intelligent. I just get kind of wound up at certain things. This has been one of them.

(Wed Jul 30 1997 23:57)
Re: Nomercy's 21:03 post. I wouldn't get too excited about the
"physical buying ahead" for India's golden independence anniversary
commemorative coins. If they reach the upper end of their target-
100,000 coins, that amounts to less than 30,000 ounces.
Given that they are pricing at a 50 percent premium to the
international bullion price and about 30 percent premium to the
domestic price, they may have trouble reaching the lower end target
of 50,000 coins. I don't think that the average Indian has much
interest in gold other than for jewelry. Besides, they are fairly
sensitive to pricing.

(Wed Jul 30 1997 23:57)